Exhibit 10.18
CREDIT AGREEMENT
Dated as of November 30, 2001
among
AMERIPATH, INC.,
as Borrower,
CERTAIN SUBSIDIARIES AND AFFILIATES OF THE BORROWER,
as Guarantors,
THE LENDERS NAMED HEREIN,
BANK OF AMERICA, N.A.,
as Administrative Agent
and
FIRST UNION NATIONAL BANK and ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.,
as Co-Syndication Agents
Arranged by:
BANC OF AMERICA SECURITIES LLC and WACHOVIA SECURITIES LLC,
as Co-Lead Arrangers
and
BANC OF AMERICA SECURITIES LLC and ▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY INC.,
as Joint Book Managers
TABLE OF CONTENTS
Page
SECTION 1 DEFINITIONS.................................................................1
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1.1 Definitions...............................................................1
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1.2 Computation of Time Periods..............................................24
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1.3 Accounting Terms.........................................................24
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SECTION 2 CREDIT FACILITIES..........................................................25
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2.1 Commitments..............................................................25
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2.2 Method of Borrowing......................................................26
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2.3 Interest.................................................................27
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2.4 Repayment................................................................28
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2.5 Notes....................................................................28
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2.6 Additional Provisions relating to Letters of Credit......................28
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2.7 Additional Provisions relating to Swingline Loans........................32
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SECTION 3 OTHER PROVISIONS RELATING TO CREDIT FACILITIES.............................32
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3.1 Default Rate.............................................................32
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3.2 Continuation and Conversion..............................................33
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3.3 Prepayments..............................................................33
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3.4 Reduction and Termination of Commitments.................................34
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3.5 Fees.....................................................................34
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3.6 Capital Adequacy.........................................................35
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3.7 Limitation on Eurodollar Loans...........................................35
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3.8 Illegality...............................................................36
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3.9 Requirements of Law......................................................36
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3.10 Treatment of Affected Loans..............................................37
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3.11 Taxes....................................................................37
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3.12 Funding Losses...........................................................39
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3.13 Pro Rata Treatment.......................................................39
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3.14 Sharing of Payments......................................................40
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3.15 Payments, Computations, etc..............................................41
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3.16 Evidence of Debt.........................................................43
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SECTION 4 GUARANTY...................................................................43
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4.1 The Guaranty.............................................................43
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4.2 Obligations Unconditional................................................44
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4.3 Reinstatement............................................................45
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4.4 Certain Additional Waivers...............................................45
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4.5 Remedies.................................................................45
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4.6 Rights of Contribution...................................................45
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4.7 Guarantee of Payment; Continuing Guarantee...............................46
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SECTION 5 CONDITIONS.................................................................46
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5.1 Closing Conditions.......................................................46
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5.2 Conditions to all Extensions of Credit...................................49
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SECTION 6 REPRESENTATIONS AND WARRANTIES.............................................49
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6.1 Financial Condition......................................................50
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6.2 No Changes or Restricted Payments........................................50
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6.3 Organization; Existence; Compliance with Law.............................50
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6.4 Power; Authorization; Enforceable Obligations............................51
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6.5 No Legal Bar.............................................................51
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6.6 No Material Litigation and Disputes......................................52
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6.7 No Defaults..............................................................52
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6.8 Ownership and Operation of Property......................................52
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6.9 Intellectual Property....................................................52
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6.10 Taxes....................................................................52
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6.11 ERISA....................................................................53
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6.12 Governmental Regulations, etc............................................54
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6.13 Subsidiaries.............................................................55
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6.14 Purpose of Extensions of Credit..........................................55
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6.15 Environmental Matters....................................................55
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6.16 No Material Misstatements................................................56
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6.17 Labor Matters............................................................56
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6.18 Security Documents.......................................................56
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6.19 Location of Real Property and Leased Premises............................57
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6.20 Fraud and Abuse..........................................................57
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6.21 Licensing and Accreditation..............................................58
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6.22 Equity Contribution......................................................58
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SECTION 7 AFFIRMATIVE COVENANTS......................................................58
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7.1 Information Covenants....................................................58
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7.2 Preservation of Existence and Franchises.................................62
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7.3 Books and Records........................................................62
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7.4 Compliance with Law......................................................62
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7.5 Payment of Taxes and Other Indebtedness..................................62
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7.6 Insurance................................................................62
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7.7 Maintenance of Property..................................................63
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7.8 Performance of Obligations...............................................63
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7.9 Use of Proceeds..........................................................63
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7.10 Audits/Inspections.......................................................63
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7.11 Financial Covenants......................................................63
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7.12 Additional Guarantors....................................................64
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7.13 Pledged Assets...........................................................64
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7.14 Landlord Consents........................................................65
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SECTION 8 NEGATIVE COVENANTS.........................................................65
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8.1 Indebtedness.............................................................65
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8.2 Liens....................................................................66
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8.3 Nature of Business.......................................................66
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8.4 Merger and Consolidation, Dissolution and Acquisitions...................66
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8.5 Asset Dispositions.......................................................67
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8.6 Investments..............................................................68
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8.7 Restricted Payments......................................................68
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8.8 Modifications and Payments in respect of Funded Debt.....................68
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8.9 Transactions with Affiliates.............................................68
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8.10 Fiscal Year; Organizational Documents....................................69
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8.11 Limitation on Restricted Actions; No Further Negative Pledges............69
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8.12 Ownership of Subsidiaries................................................69
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8.13 Sale Leasebacks..........................................................69
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SECTION 9 EVENTS OF DEFAULT..........................................................69
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9.1 Events of Default........................................................69
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9.2 Acceleration; Remedies...................................................71
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SECTION 10 ADMINISTRATIVE AND COLLATERAL AGENT.......................................72
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10.1 Appointment and Authorization............................................72
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10.2 Delegation of Duties.....................................................73
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10.3 Liability................................................................73
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10.4 Reliance.................................................................73
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10.5 Notice of Default........................................................74
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10.6 Credit Decision; Disclosure of Information...............................74
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10.7 Indemnification..........................................................75
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10.8 Individual Capacity......................................................75
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10.9 Successor................................................................76
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10.10 Other Agents; Lead Managers..............................................76
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SECTION 11 MISCELLANEOUS.............................................................76
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11.1 Notices..................................................................76
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11.2 Right of Set-Off; Adjustments............................................77
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11.3 Successors and Assigns...................................................77
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11.4 No Waiver; Remedies Cumulative...........................................80
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11.5 Expenses; Indemnification................................................80
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11.6 Amendments, Waivers and Consents.........................................81
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11.7 Counterparts.............................................................82
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11.8 Headings.................................................................82
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11.9 Survival.................................................................82
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11.10 Governing Law; Submission to Jurisdiction; Venue.........................82
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11.11 Severability.............................................................83
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11.12 Entirety.................................................................83
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11.13 Binding Effect; Termination..............................................83
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11.14 Confidentiality..........................................................84
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11.15 Source of Funds..........................................................84
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11.16 Conflict.................................................................85
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SCHEDULES
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Schedule 2.1(a) Lenders and Commitments
Schedule 2.1(d) Form of Lender Joinder Agreement
Schedule 2.2(a)(i) Form of Notice of Borrowing
Schedule 2.2(a)(ii) Form of Notice of Request of Letter of Credit
Schedule 2.5 Form of Revolving Note
Schedule 2.6(b) Existing Letters of Credit
Schedule 3.2 Form of Notice of Continuation/Conversion
Schedule 5.1(h)(v) Form of Officer's Certificate
Schedule 6.6 Litigation
Schedule 6.8 Liens
Schedule 6.9 Intellectual Property
Schedule 6.13 Subsidiaries
Schedule 6.17 Labor Matters
Schedule 6.19(a) Locations of Owned and Leased Real Property
Schedule 6.19(b) Locations of Tangible Personal Property
Schedule 6.19(c) Locations of Chief Executive Office/Principal Place of Business
Schedule 7.1(c) Form of Officer's Compliance Certificate
Schedule 7.6 Insurance
Schedule 7.12 Form of Joinder Agreement
Schedule 8.1(b) Indebtedness
Schedule 8.1(f) Form of Subordination Agreement
Schedule 8.6 Investments
Schedule 11.1 Lenders' Addresses
Schedule 11.3(b) Form of Assignment and Acceptance
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of November 30, 2001 (the "Credit
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Agreement"), is by and among AMERIPATH, INC., a Delaware corporation (the
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"Borrower"), the Subsidiaries and Affiliates of the Borrower identified as
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Guarantors on the signature pages hereto and such other Subsidiaries and
Affiliates of the Borrower as may from time to time become Guarantors hereunder
in accordance with the provisions hereof (the "Guarantors"), the lenders named
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herein and such other lenders as may become a party hereto (the "Lenders"), BANK
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OF AMERICA, N.A., as Administrative Agent for the Lenders (in such capacity, the
"Administrative Agent"), and FIRST UNION NATIONAL BANK and ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
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INC., as Co-Syndication Agents for the Lenders.
W I T N E S S E T H
WHEREAS, the Credit Parties have requested that the Lenders provide $140
million in credit facilities for the purposes hereinafter set forth; and
WHEREAS, the Lenders have agreed to make the requested credit facilities
available to the Borrower on the terms and conditions hereinafter set forth;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS
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1.1 Definitions.
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As used in this Credit Agreement, the following terms shall have the
meanings specified below unless the context otherwise requires:
"Acquisition", by any Person, means the purchase or acquisition by
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such Person of any Capital Stock of another Person other than a Credit
Party or all or any substantial portion of the Property (other than Capital
Stock) of another Person other than a Credit Party, whether or not
involving a merger or consolidation with such other Person.
"Adjusted Base Rate" means the Base Rate plus the Applicable
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Percentage.
"Adjusted Eurodollar Rate" means the Eurodollar Rate plus the
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Applicable Percentage.
"Administrative Agent" shall have the meaning provided in the heading
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hereof, together with any successors or assigns.
"Administrative Agent's Fee Letter" means that certain letter
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agreement, dated as of September 19, 2001, between the Administrative Agent
and the Borrower, as amended, modified, restated or supplemented from time
to time.
"Affiliate" means, with respect to any Person, any other Person (i)
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directly or indirectly controlling or controlled by or under direct or
indirect common control with such Person or (ii) directly or indirectly
owning or holding five percent (5%) or more of the Capital Stock in such
Person. For purposes of this definition, "control" when used with respect
to any Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agent-Related Persons" means the Administrative Agent (including any
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successor administrative agent), together with its Affiliates (including,
in the case of Bank of America in its capacity as the Administrative Agent,
BAS), and the officers, directors, employees, agents and attorneys-in-fact
of such Persons and Affiliates.
"Aggregate Revolving Committed Amount" shall have the meaning provided
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in Section 2.1(a).
"Applicable Lending Office" means, for each Lender, the office of such
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Lender (or of an Affiliate of such Lender) as such Lender may from time to
time specify to the Administrative Agent and the Borrower by written notice
as the office by which its Eurodollar Loans are made and maintained.
"Applicable Percentage" means, for any day, the rate per annum set
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forth below opposite the applicable Consolidated Total Leverage Ratio then
in effect, it being understood that the Applicable Percentage for (i) Base
Rate Loans shall be the percentage set forth under the column "Base Rate
Margin", (ii) Eurodollar Loans shall be the percentage set forth under the
column "Eurodollar Margin and Letter of Credit Fee", (iii) the Letter of
Credit Fee shall be the percentage set forth under the column "Eurodollar
Margin and Letter of Credit Fee", and (iv) the Commitment Fee shall be the
percentage set forth under the column "Commitment Fee":
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Consolidated Total Eurodollar Margin and
Pricing Level Leverage Ratio Base Rate Margin Letter of Credit Fee Commitment Fee
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I LESS THAN OR EQUAL TO 1.5:1.0 0.00% 1.50% 0.375%
...............................................................................................................
II >1.5:1.0 but
GREATER THAN OR EQUAL TO 2.0:1.0 0.25% 1.75% 0.500%
...............................................................................................................
III >2.0:1.0 0.50% 2.00% 0.500%
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The Applicable Percentage shall be determined and adjusted on each of the
following dates (each a "Rate Determination Date") (a) five Business Days
after the date by which each annual and quarterly compliance certificates
and related financial statements and information are required in accordance
with the provisions of Sections 7.1(a), (b) and (c), as appropriate, and
(b) five Business Days after the date on which any Permitted Acquisition
closes; provided that:
(i) the initial Applicable Percentages shall be based on the
Consolidated Total Leverage Ratio as of September 30, 2001 (calculated
to give effect to the Follow-On Offering on a Pro Forma Basis), and
shall remain in effect at such pricing level (or any higher (more
expensive) pricing level as would otherwise apply) until the first
Rate Determination Date to occur in connection with the delivery of
the quarterly financial statements and appropriate compliance
certificate for the first fiscal quarter ending after the Closing
Date, and
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(ii) notwithstanding the foregoing, in the event an annual or
quarterly compliance certificate and related financial statements and
information are not delivered timely to the Administrative Agent and
the Lenders by the date required by Section 5.1(j) or Section 7.1(a),
(b) or (c), as appropriate, the Applicable Percentages shall be based
on pricing level III until the date five Business Days after the
appropriate compliance certificate and related financial statements
and information are delivered, whereupon the applicable pricing level
shall be adjusted based on the information contained in such
compliance certificate and related financial statements and
information.
Subject to the qualifications set forth above, each Applicable Percentage
shall be effective from a Rate Determination Date until the next Rate
Determination Date. The Administrative Agent shall determine the
appropriate Applicable Percentages in the pricing matrix promptly upon
receipt of the quarterly or annual compliance certificate and related
financial information and shall promptly notify the Borrower and the
Lenders of any change thereof. Such determinations by the Administrative
Agent shall be conclusive absent manifest error. Adjustments in the
Applicable Percentages shall be effective as to existing Extensions of
Credit as well as new Extensions of Credit made thereafter.
"Approved Fund" means any Fund that is administered or managed by (a)
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a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of
an entity that administers or manages a Lender.
"Asset Disposition" shall mean and include (i) the sale, lease or
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other disposition of any Property by any member of the Consolidated Group
(including the Capital Stock of a Subsidiary), but for purposes hereof
shall not include, in any event, (A) the sale of inventory in the ordinary
course of business, (B) the sale, lease or other disposition of machinery
and equipment and leasehold interests no longer used or useful in the
conduct of business and (C) a sale, lease, transfer or disposition of
Property to a Credit Party, and (ii) receipt by any member of the
Consolidated Group of any cash insurance proceeds or condemnation award
payable by reason of theft, loss, physical destruction or damage, taking or
similar event with respect to any of its Property.
"Bank of America" means Bank of America, N.A., and its successors.
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"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the United
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States Code, as amended, modified, succeeded or replaced from time to time.
"Bankruptcy Event" means, with respect to any Person, the occurrence
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of any of the following with respect to such Person: (i) a court or
governmental agency having jurisdiction in the premises shall enter a
decree or order for relief in respect of such Person in an involuntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of such Person or
for any substantial part of its Property or ordering the winding up or
liquidation of its affairs; or (ii) there shall be commenced against such
Person an involuntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or any case, proceeding or
other action for the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of such Person or
for any substantial part of its Property or for the winding up or
liquidation of its affairs, and such involuntary case or other case,
proceeding or other action shall remain undismissed, undischarged or
unbonded for a period of sixty consecutive days; or (iii) such Person shall
commence a voluntary case under
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any applicable bankruptcy, insolvency or other similar law now or hereafter
in effect, or consent to the entry of an order for relief in an involuntary
case under any such law, or consent to the appointment or taking possession
by a receiver, liquidator, assignee, custodian, trustee, sequestrator (or
similar official) of such Person or for any substantial part of its
Property or make any general assignment for the benefit of creditors or
shall take any action for the purpose of effecting any of the foregoing; or
(iv) such Person shall be unable to, or shall admit in writing its
inability to, pay its debts generally as they become due.
"BAS" means Banc of America Securities LLC.
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"Base Rate" means for any day a fluctuating rate per annum equal to
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the higher of (a) the Federal Funds Rate in effect on such day plus one
half of one percent (0.5%) and (b) the Prime Rate in effect on such day.
"Base Rate Loan" means any Loan bearing interest at a rate determined
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by reference to the Base Rate.
"Borrower" means AmeriPath, Inc., a Delaware corporation, its
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successors and permitted assigns.
"Business Day" means a day other than a Saturday, Sunday or other day
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on which commercial banks in Charlotte, North Carolina or New York, New
York are authorized or required by law to close, except that, when used in
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connection with a Eurodollar Loan, such day shall also be a day on which
dealings between banks are carried on in Dollar deposits in London,
England.
"Capital Lease" means, as applied to any Person, any lease of any
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Property by that Person as lessee which, in accordance with GAAP, is or
should be accounted for as a capital lease on the balance sheet of that
Person.
"Capital Stock" means (i) in the case of a corporation, capital stock,
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(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated)
of capital stock, (iii) in the case of a partnership, partnership interests
(whether general or limited), (iv) in the case of a limited liability
company, membership interests and (v) any other interest or participation
that confers on a Person the right to receive a share of the profits and
losses of, or distributions of assets of, the issuing Person.
"Cash Equivalents" means (a) securities issued or directly and fully
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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 twelve
months from the date of acquisition, (b) Dollar denominated time deposits
and certificates of deposit of (i) any Lender, (ii) any domestic commercial
bank of recognized standing having capital and surplus in excess of $500
million or (iii) any bank whose short-term commercial paper rating from S&P
is at least A-1 or the equivalent thereof or from ▇▇▇▇▇'▇ is at least P-1
or the equivalent thereof (any such bank being an "Approved Bank"), in each
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case with maturities of not more than 270 days from the date of
acquisition, (c) commercial paper and variable or fixed rate notes issued
by any Approved Bank (or by the parent company thereof) or any variable
rate notes issued by, or guaranteed by, any domestic corporation rated A-1
(or the equivalent thereof) or better by S&P or P-1 (or the equivalent
thereof) or better by Moody's and maturing within six months of the date of
acquisition, (d) repurchase agreements entered into by any Person with a
bank or trust company (including any of the Lenders) or recognized
securities dealer having capital and surplus in excess of $500 million for
direct obligations issued by or fully guaranteed by the United States in
which such Person shall have a perfected first priority security interest
(subject to no other Liens) and having, on the date of purchase thereof, a
fair market value of at least one hundred percent (100%) of the amount of
the
4
repurchase obligations, and (e) Investments, classified in accordance with
GAAP as current assets, in money market investment programs registered
under the Investment Company Act of 1940, as amended, that are administered
by reputable financial institutions having capital of at least $500 million
and the portfolios of which are limited to Investments of the character
described in the foregoing subdivisions (a) through (d).
"CHAMPUS" means the United States Department of Defense Civilian
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Health and Medical Program of the Uniformed Services.
"Change of Control" means the occurrence of any of the following
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events: (i) any Person or two or more Persons acting in concert shall have
acquired beneficial ownership, directly or indirectly, of, or shall have
acquired by contract or otherwise, or shall have entered into a contract or
arrangement that, upon consummation, will result in its or their
acquisition of or control over, Voting Stock of the Borrower (or other
securities convertible into such Voting Stock) representing thirty-five
percent (35%) or more of the combined voting power of all Voting Stock of
the Borrower or (ii) during any period of up to twenty-four consecutive
months, commencing after the Closing Date, individuals who at the beginning
of such twenty-four month period were directors of the Borrower (together
with any new director whose election by the Borrower's board of directors
or whose nomination for election by the Borrower's shareholders was
approved by a vote of at least two-thirds of the directors then still in
office who either were directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for
any reason to constitute a majority of the directors of the Borrower then
in office. As used herein, "beneficial ownership" shall have the meaning
provided in Rule 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act.
"Closing Date" means the date hereof.
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"Collateral" means a collective reference to the collateral that is
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identified in, and at any time will be covered by, the Collateral
Documents.
"Collateral Agent" means the collateral agent for the Lenders as
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referenced and defined in the Collateral Documents, together with any
successors and assigns.
"Collateral Documents" means a collective reference to the Security
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Agreement, the Pledge Agreement, the Mortgages and such other documents
executed and delivered in connection with the attachment and perfection of
the Administrative Agent's security interests and liens arising thereunder,
including, without limitation, UCC financing statements and patent and
trademark filings.
"Commitment" means the Revolving Commitment, the LOC Commitment and
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the Swingline Commitment.
"Commitment Fee" shall have the meaning provided in Section 3.5(a).
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"Commitment Period" means the period from and including the Closing
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Date to but not including the earlier of (i) the Termination Date or (ii)
the date on which the Commitments terminate in accordance with the
provisions of this Credit Agreement.
"Committed Amount" means any or all of the Revolving Committed Amount,
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the LOC Committed Amount the Swingline Committed Amount.
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"Consolidated Capital Expenditures" means, for any period for the
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Consolidated Group, without duplication, all expenditures (whether paid in
cash or other consideration) during such period that, in accordance with
GAAP, are or should be included in additions to property, plant and
equipment or similar items reflected in the consolidated statement of cash
flows for such period; provided, that Consolidated Capital Expenditures
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shall not include, for purposes hereof, expenditures of proceeds of
insurance settlements, condemnation awards and other settlements in respect
of lost, destroyed, damaged or condemned assets, equipment or other
property to the extent such expenditures are made to replace or repair such
lost, destroyed, damaged or condemned assets, equipment or other property
or otherwise to acquire assets or properties useful in the business of the
members of the Consolidated Group.
"Consolidated EBITDA" means, for any period for the Consolidated
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Group, the sum of (i) Consolidated Net Income, plus (ii) to the extent
----
deducted in determining net income, (A) Consolidated Interest Expense, (B)
taxes and (C) depreciation and amortization, in each case on a consolidated
basis determined in accordance with GAAP. Except as otherwise expressly
provided, the applicable period shall be the four consecutive fiscal
quarters ending as of the date of determination.
"Consolidated EBITDAR" means, for any period for the Consolidated
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Group, the sum of (i) Consolidated EBITDA, plus (ii) rent and lease
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expense, minus (iii) Consolidated Capital Expenditures, minus (iv) cash
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taxes paid, in each case determined on a consolidated basis in accordance
with GAAP. Except as otherwise expressly provided, the applicable period
shall be the four consecutive fiscal quarters ending as of the date of
determination.
"Consolidated Fixed Charge Coverage Ratio" means, as of the last day
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of each fiscal quarter, the ratio of Consolidated EBITDAR for the period of
four consecutive fiscal quarters ending as of such day to Consolidated
Fixed Charges for the period of four consecutive fiscal quarters ending as
of such day.
"Consolidated Fixed Charges" means, for any period for the
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Consolidated Group, the sum, without duplication, of (i) the cash portion
of Consolidated Interest Expense, plus (ii) rent and lease expense, plus
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(iii) current maturities of Consolidated Total Funded Debt (including, for
purposes hereof, current scheduled reductions in commitments), plus (iv)
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all mandatory prepayments of Consolidated Total Funded Debt (other than
those required under this Credit Agreement), plus (v) all payments on
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deferred purchase price obligations (including, without limitation,
earn-out payments and contingent note obligations), plus (vi) Restricted
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Payments, in each case on a consolidated basis determined in accordance
with GAAP. Except as otherwise expressly provided, the applicable period
shall be the four consecutive fiscal quarters ending as of the date of
determination.
"Consolidated Group" means the Borrower and its consolidated
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subsidiaries, as determined in accordance with GAAP.
"Consolidated Interest Coverage Ratio" means, as of the last day of
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each fiscal quarter, the ratio of Consolidated EBITDA for the period of
four consecutive fiscal quarters ending as of such day to Consolidated
Interest Expense for the period of four consecutive fiscal quarters ending
as of such day.
"Consolidated Interest Expense" means, for any period for the
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Consolidated Group, all interest expense, including the amortization of
debt discount and premium, the interest component under Capital Leases, in
each case on a consolidated basis determined in accordance
6
with GAAP, but including, in any event, the implied interest component
under Securitization Transactions. Except as expressly provided otherwise,
the applicable period shall be the four consecutive fiscal quarters ending
as of the date of determination.
"Consolidated Net Income" means, for any period for the Consolidated
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Group, net income (or loss) determined on a consolidated basis in
accordance with GAAP, but excluding for purposes of determining the pricing
level for the Applicable Percentage and the financial covenants contained
in Sections 7.11(a), (b), (c) and (d), (i) any extraordinary gains and
related tax effects thereon, (ii) non-cash non-recurring charges taken
after the Closing Date on the write-off of goodwill, intangibles and
existing Investments of (A) up to $4 million taken by the Borrower's
Alabama practice and (B) up to $16 million otherwise taken by members of
the Consolidated Group in the aggregate from the Closing Date, and (iii)
one-time non-recurring charges taken after the Closing Date of (A) up to
$13 million taken in connection with the termination of Hedging Agreements
entered in connection with prior financings and (B) up to $1.6 million
taken in connection with unamortized financing costs and expenses related
to prior financings. Except as otherwise expressly provided, the applicable
period shall be the four consecutive fiscal quarters ending as of the date
of determination.
"Consolidated Total Funded Debt" means Funded Debt of the Consolidated
------------------------------
Group determined on a consolidated basis in accordance with GAAP.
"Consolidated Total Leverage Ratio" means, as of the last day of each
---------------------------------
fiscal quarter, the ratio of Consolidated Total Funded Debt on such day to
Consolidated EBITDA for the period of four consecutive fiscal quarters
ending as of such day.
"Continue", "Continuation", and "Continued" shall refer to the
-------- ------------ ---------
continuation pursuant to Section 3.2 hereof of a Eurodollar Loan from one
Interest Period to the next Interest Period.
"Contract Provider" means any Person or any employee, agent or
-----------------
subcontractor of such Person who provides professional health care services
under or pursuant to any contract with any member of the Consolidated
Group.
"Contractual Obligation" means, as to any Person, any provision of any
----------------------
security issued by such Person or of any material agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Convert", "Conversion", and "Converted" shall refer to a conversion
------- ---------- ---------
pursuant to Section 3.2 or Sections 3.7 through 3.12, inclusive, of a Base
Rate Loan into a Eurodollar Loan.
"Credit Documents" means, collectively, this Credit Agreement, the
----------------
Notes, the LOC Documents, the Collateral Documents, the Administrative
Agent's Fee Letter, and all other related agreements and documents issued
or delivered hereunder or thereunder or pursuant hereto or thereto.
"Credit Party" means any or all of the Borrower and the Guarantors.
------------
"Debt Transaction" means, with respect to any member of the
----------------
Consolidated Group, any sale, issuance, placement, assumption or guaranty
of Funded Debt, whether or not evidenced by promissory note or other
written evidence of indebtedness, except for Funded Debt permitted to be
incurred pursuant to clauses (a) through (h) of Section 8.1.
7
"Default" means any event, act or condition which with notice or lapse
-------
of time, or both, would constitute an Event of Default.
"Defaulting Lender" means, at any time, any Lender that (a) has failed
-----------------
to make a Loan or purchase a Participation Interest required pursuant to
the terms of this Credit Agreement within one Business Day of when due, (b)
other than as set forth in (a) above, has failed to pay to the
Administrative Agent or any Lender an amount owed by such Lender pursuant
to the terms of this Credit Agreement within one Business Day of when due,
unless such amount is subject to a good faith dispute or (c) has been
deemed insolvent or has become subject to a bankruptcy or insolvency
proceeding or with respect to which (or with respect to any of the assets
of which) a receiver, trustee or similar official has been appointed.
"Dollars" and "$" means dollars in lawful currency of the United
------- -
States.
"Domestic Credit Party" means a Credit Party that is incorporated or
---------------------
organized under the laws of any state of the United States or the District
of Columbia.
"Domestic Subsidiary" means any Subsidiary that is incorporated or
-------------------
organized under the laws of any state of the United States or the District
of Columbia.
"Eligible Assignee" means (i) a Lender; (ii) an Affiliate of a Lender;
-----------------
(iii) an Approved Fund; and (iv) any other Person (other than a natural
Person) approved by the Administrative Agent and, unless (A) such Person is
taking delivery of an assignment in connection with physical settlement of
a credit derivatives transaction or (B) an Event of Default has occurred
and is continuing, the Borrower (each such approval not to be unreasonably
withheld or delayed).
"Eligible Subsidiary" means any Domestic Subsidiary of the Borrower
-------------------
other than those entities that are Subsidiaries solely pursuant to a
Management Services Agreement.
"Eligible Real Property" means, with respect to any member of the
----------------------
Consolidated Group, including any Person that becomes a member of the
Consolidated Group after the Closing Date as contemplated by Section 7.12,
any real property which (i) is located in the United States or (to the
extent deemed material by the Administrative Agent or the Required Lenders
in its or their sole reasonable discretion) located outside of the United
States, (ii) is owned or (to the extent deemed material by the
Administrative Agent or the Required Lenders in its or their sole
reasonable discretion) leased by such member of the Consolidated Group and
(iii) is not Excluded Property.
"Environmental Laws" means any and all lawful and applicable federal,
------------------
state, local and foreign statutes, laws, regulations, ordinances, rules,
judgments, orders, decrees, permits, concessions, grants, franchises,
licenses, agreements and other governmental restrictions relating to the
environment or to emissions, discharges, releases or threatened releases of
Materials of Environmental Concern into the environment including, without
limitation, ambient air, surface water, ground water, or land, or otherwise
relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport, or handling of Materials of Environmental
Concern.
"Equity Transaction" means, with respect to any member of the
------------------
Consolidated Group, any issuance or sale of shares of its capital stock or
other equity interest, other than an issuance (i) to a member of the
Consolidated Group, (ii) in connection with a conversion of debt securities
to equity, (iii) in connection with a stock incentive plan, stock option
plan or other equity-based compensation plan or arrangement and (iv) of
Capital Stock of the Borrower in connection with a Permitted Acquisition.
8
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended, and any successor statute thereto, as interpreted by the rules and
regulations thereunder, all as the same may be in effect from time to time.
References to sections of ERISA shall be construed also to refer to any
successor sections.
"ERISA Affiliate" means an entity that is under common control with
---------------
any member of the Consolidated Group within the meaning of Section
4001(a)(14) of ERISA, or is a member of a group that includes any member of
the Consolidated Group and that is treated as a single employer under
Sections 414(b) or (c) of the Internal Revenue Code.
"ERISA Event" means (i) with respect to any Plan, the occurrence of a
-----------
Reportable Event or the substantial cessation of operations (within the
meaning of Section 4062(e) of ERISA); (ii) the withdrawal by any member of
the Consolidated Group or any ERISA Affiliate from a Multiple Employer Plan
during a plan year in which it was a substantial employer (as such term is
defined in Section 4001(a)(2) of ERISA), or the termination of a Multiple
Employer Plan; (iii) the distribution of a notice of intent to terminate or
the actual termination of a Plan pursuant to Section 4041(a)(2) or 4041A of
ERISA; (iv) the institution of proceedings to terminate or the actual
termination of a Plan by the PBGC under Section 4042 of ERISA; (v) any
event or condition that might constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to
administer, any Plan; (vi) the complete or partial withdrawal of any member
of the Consolidated Group or any ERISA Affiliate from a Multiemployer Plan;
(vii) the conditions for imposition of a lien under Section 302(f) of ERISA
exist with respect to any Plan; or (viii) the adoption of an amendment to
any Plan requiring the provision of security to such Plan pursuant to
Section 307 of ERISA.
"Eurodollar Loan" means any Loan bearing interest at a rate determined
---------------
by reference to the Eurodollar Rate.
"Eurodollar Rate" means, for any Eurodollar Loan for any Interest
---------------
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of one percent (0.01%) determined by the Administrative Agent
to be equal to the quotient obtained by dividing (a) the Interbank Offered
Rate for such Eurodollar Loan for such Interest Period by (b) one minus the
Eurodollar Reserve Requirement for such Eurodollar Loan for such Interest
Period.
"Eurodollar Reserve Requirement" means, at any time, the maximum rate
------------------------------
at which reserves (including, without limitation, any marginal, special,
supplemental, or emergency reserves) are required to be maintained under
regulations issued from time to time by the Board of Governors of the
Federal Reserve System (or any successor) by member banks of the Federal
Reserve System against "Eurocurrency liabilities" (as such term is used in
Regulation D). Without limiting the effect of the foregoing, the Eurodollar
Reserve Requirement shall reflect any other reserves required to be
maintained by such member banks with respect to (i) any category of
liabilities that includes deposits by reference to which the Eurodollar
Rate is to be determined, or (ii) any category of extensions of credit or
other assets that include Eurodollar Loans. The Eurodollar Rate shall be
adjusted automatically on and as of the effective date of any change in the
Eurodollar Reserve Requirement.
"Event of Default" shall have the meaning provided in Section 9.1.
----------------
"Excluded Property" means, with respect to any member of the
-----------------
Consolidated Group, including any Person that becomes a member of the
Consolidated Group after the Closing Date as contemplated by Section 7.12,
any Property of such member of the Consolidated Group which, subject to the
terms of Section 8.11, is subject to a Lien of the type described in clause
(viii) of
9
the definition of "Permitted Liens" pursuant to documents which prohibit
such member of the Consolidated Group from granting any other Liens in such
Property.
"Exclusion Event" means an event or related events resulting in the
---------------
exclusion of one or more members of the Consolidated Group from
participation in any Medical Reimbursement Program.
"Existing Letters of Credit" means those letters of credit outstanding
--------------------------
on the Closing Date and identified on Schedule 2.6(b).
---------------
"Extension of Credit" means, as to any Lender, the making of, or
-------------------
participation in, a Loan by such Lender (including Continuations and
Conversions thereof) or the issuance or extension of, or participation in,
a Letter of Credit by such Lender.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
------------------
upwards, if necessary, to the nearest 1/100th of one percent (0.01%)) equal
to the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by federal
funds brokers on such day, as published by the Federal Reserve Bank on the
Business Day next succeeding such day; provided that (a) if such day is not
--------
a Business Day, the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Business Day as so published on the
next succeeding Business Day, and (b) if no such rate is so published on
such next succeeding Business Day, the Federal Funds Rate for such day
shall be the average rate charged to Bank of America on such day on such
transactions as determined by the Administrative Agent.
"Fees" means all fees payable pursuant to Section 3.5.
----
"Follow-On Offering" means the October 2001 underwritten public
------------------
offering by the Borrower of not less than 4,125,000 and not greater than
4,743,750 shares of common stock, $0.01 par value per share, pursuant to a
Registration Statement on Form S-3 (Registration No. 333-69526) at a public
offering price of $26.00 per share.
"Foreign Subsidiary" means a Subsidiary that is not a Domestic
------------------
Subsidiary.
"Fund" means any Person (other than a natural Person) that is (or will
----
be) engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course of
its business.
"Funded Debt" means, with respect to any Person, without duplication,
-----------
all (i) obligations for borrowed money, (ii) obligations evidenced by bonds
debentures, notes or similar instruments or upon which interest payments
are customarily made, (iii) purchase money indebtedness (including, for
purposes hereof, indebtedness and obligations in respect of conditional
sales and title retention agreements relating to property purchased (other
than customary reservation or title retention arrangements under agreements
entered into in the ordinary course of business with suppliers), and the
deferred purchase price of property or services acquired (other than trade
debt incurred in the ordinary course of business and due within six months
of the incurrence thereof) that would constitute, and be accounted for as,
a liability under GAAP, (iv) the attributed principal amount of obligations
owing under Capital Leases, (v) the maximum amount available to be drawn
under standby letters of credit and bankers' acceptances issued or created
for its account, (vi) the attributed principal amount of Securitization
Transactions, (vii) the attributed principal amount of obligations owing
under Synthetic Leases, (viii) the Funded Debt of any
10
partnership or joint venture or other similar entity in which such Person
is a general partner or joint venturer and, as such, has personal liability
for such obligations, but only to the extent there is recourse to such
Person for payment thereof, (ix) Support Obligations in respect of Funded
Debt of another Person, and (x) Funded Debt of another Person secured by a
Lien on any of its Property, whether or not such Funded Debt has been
assumed, provided, however, for purposes hereof, the amount of such Funded
--------
Debt shall be limited to the amount of Funded Debt as to which there is
recourse or to the fair market value of the property that is the subject of
such lien, if less.
"GAAP" means generally accepted accounting principles in the United
----
States applied on a consistent basis and subject to the terms of Section
1.3.
"Governmental Authority" means any federal, state, local or foreign
----------------------
court or governmental agency, authority, instrumentality or regulatory
body.
"Governmental Reimbursement Program Cost" means with respect to and
---------------------------------------
payable by the Borrower and its Subsidiaries the sum of:
(i) all amounts (including punitive and other similar amounts)
agreed to be paid or payable (A) in settlement of claims or (B) as a
result of a final, non-appealable judgment, award or similar order, in
each case, relating to participation in Medical Reimbursement
Programs;
(ii) all final, non-appealable fines, penalties, forfeitures or
other amounts rendered pursuant to criminal indictments or other
criminal proceedings relating to participation in Medical
Reimbursement Programs; and
(iii) the amount of final, non-appealable recovery, damages,
awards, penalties, forfeitures or similar amounts rendered in any
litigation, suit, arbitration, investigation or other legal or
administrative proceeding of any kind relating to participation in
Medical Reimbursement Programs.
"Guaranteed Obligations" means, without duplication, (i) all of the
----------------------
obligations of the Borrower to the Lenders (including the Issuing Lender
and the Swingline Lender), the Administrative Agent and the Collateral
Agent, whenever arising, under this Credit Agreement, the Notes, the
Collateral Documents or any of the other Credit Documents (including,
without limitation, any interest accruing after the occurrence of a
Bankruptcy Event with respect to any Credit Party, regardless of whether
such interest is an allowed claim under the Bankruptcy Code) and (ii) all
liabilities and obligations, owing from any Credit Party to any Lender, or
any Affiliate of a Lender, whenever arising, under any Hedging Agreement
relating to the Obligations to the extent permitted hereunder.
"Guarantor" means each Person identified as a "Guarantor" on the
---------
signature pages hereto and each other Person that joins as a Guarantor
pursuant to Section 7.12, together with their successors and permitted
assigns.
"HCFA" means the United States Health Care Financing Administration
----
and any successor thereof, including the Centers for Medicare and Medicaid
Services.
"Hedging Agreements" means any interest rate protection agreement or
------------------
foreign currency exchange agreement.
11
"HHS" means the United Sates Department of Health and Human Services
---
and any successor thereof.
"Indebtedness" means, with respect to any Person, without duplication,
------------
all (i) Funded Debt, (ii) obligations under take-or-pay or similar
arrangements or under commodities agreements, (iii) obligations under
Hedging Agreements, (iv) the Midpoint Amount of contingent obligations
(including earn-out and like payments) owing in respect of Acquisitions or
dispositions or divestitures, (v) Indebtedness of any partnership or joint
venture or other similar entity in which such Person is a general partner
or joint venturer and, as such, has personal liability for such
obligations, but only to the extent there is recourse to such Person for
payment thereof, (vi) Support Obligations in respect of Indebtedness of
another Person, and (vii) Indebtedness of another Person secured by a Lien
on any of its Property, whether or not such Indebtedness has been assumed.
"Indemnified Liabilities" shall have the meaning provided in Section
-----------------------
11.5.
"Indemnitees" shall have the meaning provided in Section 11.5.
-----------
"Interbank Offered Rate" means, for any Eurodollar Loan for any
----------------------
Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100th of one percent (0.01%)) in each case
determined by the Administrative Agent to be equal to:
(a) the offered rate that appears on the Dow ▇▇▇▇▇ Telerate
Screen Page 3750 (or any successor page) that displays an average
British Bankers Association Interest Settlement Rate for deposits in
Dollars (for delivery on the first day of the applicable Interest
Period) for a term equivalent to the applicable Interest Period at
approximately 11:00 A.M. (London, England time) two Business Days
prior to the first day of the applicable Interest Period; or
(b) if for any reason the foregoing rate in clause (a) is
unavailable or undeterminable, the offered rate on such other page or
other service that displays an average British Bankers Association
Interest Settlement Rate for deposits in Dollars (for delivery on the
first day of the applicable Interest Period) for a term equivalent to
the applicable Interest Period at approximately 11:00 A.M. (London,
England time) two Business Days prior to the first day of the
applicable Interest Period; or
(c) if for any reason the foregoing rates in clauses (a) and (b)
are unavailable or undeterminable, the rate of interest at which
deposits in Dollars for delivery on the first day of the applicable
Interest Period in same day funds in the approximate amount of the
applicable Eurodollar Loan for a term equivalent to the applicable
Interest Period would be offered by the London branch of Bank of
America to major banks in the offshore Dollar market at approximately
11:00 A.M. (London, England time) two Business Days prior to the first
day of the applicable Interest Period.
"Interest Payment Date" means (i) as to any Base Rate Loan and any
---------------------
Swingline Loan, the last day of each March, June, September and December,
and the Termination Date, and (ii) as to any Eurodollar Loan, the last day
of each Interest Period for such Loan, the date of repayment of principal
of such Loan and the Termination Date, and in addition where the applicable
Interest Period is more than three months, then also on the date three
months from the beginning of the Interest Period, and each three months
thereafter. If an Interest Payment Date falls on a date that is
12
not a Business Day, such Interest Payment Date shall be deemed to be the
next succeeding Business Day.
"Interest Period" means (i) as to any Eurodollar Loan, a period of
---------------
one, two or three months duration, as the Borrower may elect, in each case
commencing on the date of the borrowing (including Conversions,
Continuations and renewals) and (ii) as to any Swingline Loan, a period of
such duration as the Borrower may request and the Swingline Lender may
agree in accordance with the provisions hereof, in each case commencing on
the date of borrowing; provided, however, (A) if any Interest Period would
--------
end on a day that is not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day (except in the case of
Eurodollar Loans where the next succeeding Business Day falls in the next
succeeding calendar month, then on the next preceding Business Day), (B) no
Interest Period shall extend beyond the Termination Date, and (C) in the
case of Eurodollar Loans, where an Interest Period begins on a day for
which there is no numerically corresponding day in the calendar month in
which the Interest Period is to end, such Interest Period shall end on the
last day of such calendar month.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
---------------------
amended, and any successor statute thereto, as interpreted by the rules and
regulations issued thereunder, in each case as in effect from time to time.
References to sections of the Internal Revenue Code shall be construed also
to refer to any successor sections.
"Investment" in any Person means (i) the acquisition (whether for
----------
cash, property, services, assumption of Indebtedness, securities or
otherwise) of Capital Stock, bonds, notes, debentures, partnership, joint
ventures or other ownership interests or other securities of such Person,
(ii) any deposit with, or advance, loan or other extension of credit to,
such Person (other than deposits made in connection with the purchase of
equipment or other assets in the ordinary course of business) or (iii) any
other capital contribution to or investment in such Person, including,
without limitation, any Support Obligations (including any support for a
letter of credit issued on behalf of such Person) incurred for the benefit
of such Person, but excluding any Restricted Payment to such Person.
"Issuing Lender" means Bank of America.
--------------
"Issuing Lender Fee" shall have the meaning provided in Section
------------------
3.5(b).
"Joinder Agreement" means a joinder agreement substantially in the
-----------------
form of Schedule 7.12 hereto executed and delivered by a Subsidiary in
-------------
accordance with the provisions of Section 7.12.
"Lenders" means each of the Persons identified as a "Lender" on the
-------
signature pages hereto and each other Person that joins as a Lender
pursuant to Section 2.1(d), together with their successors and assigns.
"Letter of Credit" means any Existing Letter of Credit and any standby
----------------
letter of credit issued by the Issuing Lender for the account of the
Borrower in accordance with the terms of Section 2.1(b).
"Letter of Credit Fee" shall have the meaning provided in Section
--------------------
3.5(b).
"Licenses" means all licenses, permits and other grants of authority
--------
obtained or required to be obtained from any Governmental Authorities in
connection with the management or operation of the business of the members
of the Consolidated Group or the ownership, lease, license or use of any
Property of the members of the Consolidated Group.
13
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
----
arrangement, security interest, encumbrance, lien (statutory or otherwise),
preference, priority or charge of any kind (including any agreement to give
any of the foregoing, any conditional sale or other title retention
agreement, any financing or similar statement or notice filed under the
Uniform Commercial Code as adopted and in effect in the relevant
jurisdiction or other similar recording or notice statute, and any lease in
the nature thereof).
"Loan" or "Loans" means any or all of the Revolving Loans and the
---- -----
Swingline Loans, and the Base Rate Loans and Eurodollar Loans comprising
such Loans.
"LOC Commitment" means, with respect to the Issuing Lender, the
--------------
commitment of the Issuing Lender to issue, and to honor payment obligations
under, Letters of Credit and, with respect to each Lender, the commitment
of such Lender to purchase Participation Interests in the Letters of Credit
up to such Lender's LOC Committed Amount.
"LOC Committed Amount" shall have the meaning provided in Section
--------------------
2.1(b).
"LOC Documents" means, with respect to any Letter of Credit, such
-------------
Letter of Credit, any amendments thereto, any documents delivered in
connection therewith, any application therefor, and any agreements,
instruments, guarantees or other documents (whether general in application
or applicable only to such Letter of Credit) governing or providing for (i)
the rights and obligations of the parties concerned or at risk or (ii) any
collateral security for such obligations.
"LOC Obligations" means, at any time, the sum of (i) the maximum
---------------
amount that is, or at any time thereafter may become, available to be drawn
under Letters of Credit then outstanding, assuming compliance with all
requirements for drawings referred to in such Letters of Credit plus (ii)
the aggregate amount of all drawings under Letters of Credit honored by the
Issuing Lender but not yet reimbursed.
"Management Services Agreements" means the long-term management
------------------------------
agreements entered into by the Borrower or any of its Subsidiaries with a
professional association or corporation that employs or contracts with
physicians engaged in a pathology practice.
"Material Adverse Effect" means a material adverse effect on (i) the
-----------------------
condition (financial or otherwise), operations, business, assets,
liabilities or prospects of the Consolidated Group taken as a whole, (ii)
the ability of any member of the Consolidated Group to perform any material
obligation under any Credit Document to which it is a party or (iii) the
material rights and remedies of the Administrative Agent and the Lenders
under the Credit Documents.
"Materials of Environmental Concern" means any gasoline or petroleum
----------------------------------
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as
such in or under any Environmental Laws, including, without limitation,
asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.
"Medicaid" means that means-tested entitlement program under Title
--------
XIX, P.L. 89-87, of the Social Security Act that provides federal grants to
states for medical assistance based on specific eligibility criteria, as
set forth at Section 1396, et seq. of Title 42 of the United Sates Code, as
amended.
"Medicaid Regulations" means, collectively, (i) all federal statutes
--------------------
(whether set forth in Title XIX of the Social Security Act or elsewhere)
affecting the medical assistance program
14
established by Title XIX of the Social Security Act and any statutes
succeeding thereto; (ii) all applicable provisions of all federal rules,
regulations, manuals and orders of all Governmental Authorities promulgated
pursuant to or in connection with the statutes described in clause (i)
above and all federal administrative, reimbursement and other guidelines of
all Governmental Authorities having the force of law promulgated pursuant
to or in connection with the statutes described in clause (i) above; (iii)
all state statutes and plans for medical assistance enacted in connection
with the statutes and provisions described in clauses (i) and (ii) above;
and (iv) all applicable provisions of all rules, regulations, manuals and
orders of all Governmental Authorities promulgated pursuant to or in
connection with the statutes described in clause (iii) above and all state
administrative, reimbursement and other guidelines of all Governmental
Authorities having the force of law promulgated pursuant to or in
connection with the statutes described in clause (ii) above, in each case
as may be amended, supplemented or otherwise modified from time to time.
"Medical Reimbursement Programs" means a collective reference to the
------------------------------
Medicare, Medicaid and CHAMPUS programs and any other health care program
operated by or financed in whole or in part by any foreign or domestic
federal, state or local government.
"Medicare" means that government-sponsored entitlement program under
--------
Title XVIII, P.L. 89-87, of the Social Security Act that provides for a
health insurance system for eligible elderly and disabled individuals, as
set forth at Section 1395, et seq. of Title 42 of the United States Code,
as amended.
"Medicare Regulations" means, collectively, all federal statutes
--------------------
(whether set forth in Title XVIII of the Social Security Act or elsewhere)
affecting the health insurance program for the aged and disabled
established by Title XVIII of the Social Security Act and any statutes
succeeding thereto; together with all applicable provisions of all rules,
regulations, manuals and orders and administrative, reimbursement and other
guidelines having the force of law of all Governmental Authorities
(including, without limitation, HCFA, HHS, OIG, or any person succeeding to
the functions of any of the foregoing) promulgated pursuant to or in
connection with any of the foregoing having the force of law, as each may
be amended, supplemented or otherwise modified from time to time.
"Midpoint Amount" means the amount of contingent payments (including
---------------
earn-out payments) that the Borrower projects it will ultimately actually
have to pay in connection with an Acquisition; it being understood that the
Midpoint Amount shall be within a range of projected contingent payments
developed by the Borrower and shall not be less than Pro Forma Adjusted
EBITDA for such Acquisition, and such Midpoint Amount shall be determined
by the Borrower in accordance with its past custom and practice.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., or any successor or
-------
assignee of the business of such company in the business of rating
securities.
"Mortgaged Property" means the Property that is the subject of a
------------------
Mortgage as referenced therein.
"Mortgages" means those mortgages, deeds of trust, security deeds or
---------
like instruments, if any, given to the Administrative Agent, for the
ratable benefit of the Lenders, to secure the obligations of the Credit
Parties under the Credit Documents, as such mortgages, deeds of trust,
security deeds or like instruments may be amended and modified from time to
time.
15
"Multiemployer Plan" means a Plan that is a "multiemployer plan" as
------------------
defined in Section 3(37) or 4001(a)(3) of ERISA.
"Multiple Employer Plan" means a Plan (other than a Multiemployer
----------------------
Plan) to which any member of the Consolidated Group or any ERISA Affiliate
and at least one employer other than the members of the Consolidated Group
or any ERISA Affiliate are contributing sponsors.
"Net Cash Proceeds" means the aggregate proceeds paid in cash or Cash
-----------------
Equivalents received by any member of the Consolidated Group in connection
with any Asset Disposition, Equity Transaction or Debt Transaction, net of
(a) direct costs (including, without limitation, legal, accounting and
investment banking fees, and sales commissions), (b) taxes paid or payable
as a result thereof; it being understood that "Net Cash Proceeds" shall
include, without limitation, any cash or Cash Equivalents received upon the
sale or other disposition of any non-cash consideration received by any
such member of the Consolidated Group in any Asset Disposition, Equity
Transaction or Debt Transaction, (c) any reserve or contingency amount that
a member of the Consolidated Group establishes in the event of a breach, or
alleged breach, of a representation or warranty made by such member in
connection with such Asset Disposition and (d) the repayment of any
Indebtedness that such member is required to repay to effect such Asset
Disposition that is secured by the assets subject to such Asset Disposition
or which are otherwise initially incurred to acquire such assets.
"Note" or "Notes" means any or all of the Revolving Notes.
---- -----
"Notice of Borrowing" means a written notice of borrowing in
-------------------
substantially the form of Schedule 2.2(a)(i), as required by Section
------------------
2.2(a).
"Notice of Continuation/Conversion" means the written notice of
---------------------------------
Continuation or Conversion in substantially the form of Schedule 3.2, as
------------
required by Section 3.2.
"Obligations" means the Revolving Loans, LOC Obligations and Swingline
-----------
Loans.
"OIG" means the Office of Inspector General of HHS and any successor
---
thereof.
"Operating Earnings" means, with respect to any Person, the sum of (i)
------------------
net income plus (ii) to the extent deducted in determining net income, (A)
interest expense, (B) taxes, (C) depreciation and amortization, (D)
normalized salaries, benefits, and other compensation to be paid to
physicians employed by, or serving as consultants or independent
contractors to, such Person.
"Operating Lease" means, as applied to any Person, any lease
---------------
(including, without limitation, leases that may be terminated by the lessee
at any time) of any Property that is not a Capital Lease other than any
such lease in which that Person is the lessor.
"Other Taxes" shall have the meaning provided in Section 3.11.
-----------
"Participation Interest" means the purchase by a Lender of a
----------------------
participation in LOC Obligations as provided in Section 2.6(b), in
Swingline Loans as provided in Section 2.7 and in Loans as provided in
Section 3.14.
"PBGC" means the Pension Benefit Guaranty Corporation established
----
pursuant to Subtitle A of Title IV of ERISA and any successor thereof.
16
"Permitted Acquisition" means any Acquisition by a member of the
---------------------
Consolidated Group; provided that (i) the Person to be acquired is in the
--------
business of providing pathology or laboratory services or other activities
or services incident thereto, and is located in the United States of
America, (ii) the Property acquired (or the Property of the Person
acquired) in such Acquisition shall be used or useful in the same or
similar line of business as the members of the Consolidated Group on the
Closing Date, (iii) all Property to be acquired in connection with such
Acquisition shall be located in the United States of America, (iv) in the
case of an Acquisition of the Capital Stock of another Person, the board of
directors (or other comparable governing body) of such other Person shall
have duly approved such Acquisition, (v) no Default or Event of Default
shall exist immediately after giving effect to such Acquisition, (vi) any
Management Services Agreement executed and delivered in connection with
such Acquisition shall provide that one hundred percent (100%) of the
Operating Earnings of the acquired entity be payable to a Credit Party,
(vii) not later than five days prior to such Acquisition, the Borrower
shall have delivered to the Administrative Agent a compliance certificate
signed by a Responsible Officer (A) demonstrating compliance with the
financial covenants hereunder after giving effect to the subject
Acquisition on a Pro Forma Basis, and including therewith detail for
historical EBITDA and proposed adjustments thereto for purposes of
determining Pro Forma Acquired EBITDA), (B) attaching a true and complete
copy of the due diligence report provided to the board of directors of the
Borrower with respect to such Acquisition and (C) attaching a true and
complete copy of the draft acquisition agreement (including all schedules,
exhibits and attachments) for such Acquisition, (viii) not later than ten
days following such Acquisition, the Borrower shall have delivered to the
Administrative Agent a compliance certificate signed by a Responsible
Officer (A) attaching a true and complete copy of the final executed
acquisition agreement (including all schedules, exhibits and attachments)
with respect to such Acquisition, (B) certifying that such Acquisition has
been consummated, in all material respects, on terms and conditions
substantially in compliance with the proposed terms provided to the
Administrative Agent, (C) reaffirming that the representations and
warranties made hereunder are true and correct in all material respects as
of such date and (D) certifying that all material consents, authorizations,
orders or approvals required by applicable law in connection with such
Acquisition have been obtained and are in full force and effect, (ix) if
the Acquisition involves an interest in a partnership and a requirement
that a member of the Consolidated Group be a general partner, the general
partner shall be a newly formed special purpose Subsidiary of the Borrower,
(x) the cash consideration (including, without limitation, the amount of
any Indebtedness assumed and the Midpoint Amount) paid in connection with
any Acquisition (or series of related Acquisitions) shall not exceed $20
million, and (xi) the total consideration (cash and non-cash (including,
without limitation, the amount of any Indebtedness assumed, the Midpoint
Amount and the fair value of any Capital Stock of the Borrower issued in
connection therewith)) paid in connection with any Acquisition (or series
of related Acquisitions) shall not exceed $40 million. The Administrative
Agent will promptly send copies of the foregoing information to the
Lenders, and in the case of proposed adjustments to historical EBITDA by
the Borrower for purposes of determining Pro Forma Acquired EBITDA, the
Lenders shall be deemed to have accepted all such proposed adjustments
unless they notify the Administrative Agent and the Borrower of their
objection within five Business Days of delivery to such Lender of such
proposed adjustments.
"Permitted Investments" means Investments that are (i) cash and Cash
---------------------
Equivalents; (ii) accounts receivable created, acquired or made in the
ordinary course of business and payable or dischargeable in accordance with
customary trade terms; (iii) Investments consisting of Capital Stock,
obligations, securities or other Property received in settlement of
accounts receivable (created in the ordinary course of business) from
bankrupt obligors; (iv) Investments made prior to the Closing Date and set
forth in Schedule 8.6; (v) advances or loans to directors, officers and
------------
employees that do not exceed $1 million in the aggregate at any one time
outstanding; (vi) Investments existing
17
on the Closing Date by members of the Consolidated Group in their
Subsidiaries and Affiliates, (vii) Investments by members of the
Consolidated Group in and to Domestic Credit Parties; (viii) Investments
that constitute Permitted Acquisitions and (ix) other Investments in an
amount not to exceed $10 million in the aggregate at any time outstanding.
"Permitted Liens" means:
---------------
(i) Liens in favor of the Administrative Agent to secure the
obligations of the Credit Parties under the Credit Documents;
(ii) Liens in favor of a Lender or an Affiliate of a Lender pursuant
to a Hedging Agreement permitted hereunder, but only (A) to the extent such
Liens secure obligations under such agreements permitted under Section 8.1,
(B) to the extent such Liens are on the same collateral as to which the
Lenders hereunder also have a Lien, and (C) so long as the obligations
under such Hedging Agreement and the loans and obligations hereunder and
under the other Credit Documents shall share pari passu in the collateral
subject to such Liens;
(iii) Liens (other than Liens created or imposed under ERISA) for
taxes, assessments or governmental charges or levies not yet due or Liens
for taxes being contested in good faith by appropriate proceedings for
which adequate reserves determined in accordance with GAAP have been
established (and as to which the Property subject to any such Lien is not
yet subject to foreclosure, sale or loss on account thereof);
(iv) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, materialmen and suppliers and other Liens imposed by law or
pursuant to customary reservations or retentions of title arising in the
ordinary course of business, provided that such Liens secure only amounts
--------
not yet due and payable or, if due and payable, are unfiled and no other
action has been taken to enforce the same or are being contested in good
faith by appropriate proceedings for which adequate reserves determined in
accordance with GAAP have been established (and as to which the Property
subject to any such Lien is not yet subject to foreclosure, sale or loss on
account thereof);
(v) Liens (other than Liens created or imposed under ERISA) incurred
or deposits made by any member of the Consolidated Group in the ordinary
course of business in connection with workers' compensation, unemployment
insurance and other types of social security, or to secure the performance
of tenders, statutory obligations, bids, leases, government contracts,
performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money);
(vi) Liens in connection with attachments or judgments (including
judgment or appeal bonds), provided that the judgments secured shall,
--------
within thirty days after the entry thereof, have been discharged or
execution thereof stayed pending appeal, or shall have been discharged
within thirty days after the expiration of any such stay;
(vii) easements, rights-of-way, covenants, restrictions (including
zoning restrictions), minor defects or irregularities in title and other
similar charges or encumbrances not, in any material respect, impairing the
use of the encumbered Property for its intended purposes;
(viii) Liens on Property of any Person securing purchase money and
sale/leaseback Indebtedness (including Capital Leases and Synthetic Leases)
of such Person to the extent permitted under Section 8.1(c), provided that
--------
any such Lien attaches only to the Property financed or leased and such
Lien attaches concurrently with or within ninety days after the acquisition
thereof;
18
(ix) leases or subleases granted to others not interfering in any
material respect with the business of any member of the Consolidated Group;
(x) any interest or title of a lessor under, and Liens arising from
UCC financing statements (or equivalent filings, registrations or
agreements in foreign jurisdictions) relating to, leases permitted by this
Credit Agreement;
(xi) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods;
(xii) Liens created or deemed to exist in connection with a
Securitization Transaction permitted hereunder (including any related
filings of any financing statements), but only to the extent that any such
Lien relates to the applicable Securitization Receivables actually sold,
contributed, financed or otherwise conveyed or pledged pursuant to such
transaction;
(xiii) Liens deemed to exist in connection with Investments in
repurchase agreements that constitute Permitted Investments;
(xiv) normal and customary rights of setoff upon deposits of cash in
favor of banks or other depository institutions;
(xv) Liens of a collection bank arising under Section 4-210 of the
Uniform Commercial Code on items in the course of collection;
(xvi) Liens created or deemed to exist by the establishment of trusts
for the purpose of satisfying (A) Governmental Reimbursement Program Costs
and (B) other claims or actions pertaining to the same or related matters;
provided that the Borrower, in each case, shall have established adequate
--------
reserves for such claims or actions; and
(xvii) Liens existing as of the Closing Date and set forth on Schedule
--------
6.8, provided that (A) no such Lien shall at any time be extended to or
--- --------
cover any Property other than the Property subject thereto on the Closing
Date and (B) the principal amount of the Indebtedness secured by such Liens
shall not be increased and shall not be extended, renewed, refunded or
refinanced on terms and conditions less favorable to the Credit Parties
than for such existing Indebtedness.
"Person" means any individual, partnership, joint venture, firm,
------
corporation, limited liability company, association, trust or other
enterprise (whether or not incorporated) or any Governmental Authority.
"Plan" means any employee benefit plan (as defined in Section 3(3) of
----
ERISA) that is covered by ERISA and with respect to which any member of the
Consolidated Group or any ERISA Affiliate is (or, if such plan were
terminated at such time, would under Section 4069 of ERISA be deemed to be)
an "employer" within the meaning of Section 3(5) of ERISA.
"Pledge Agreement" means the pledge agreement dated as of the Closing
----------------
Date given by the Credit Parties to the Collateral Agent to secure the
obligations of the Credit Parties under the Credit Documents, as such
pledge agreement may be amended and modified from time to time.
"Prime Rate" means, for any day, the rate per annum in effect for such
----------
day as publicly announced from time to time by Bank of America as its
"prime rate." Such rate is a rate set by
19
Bank of America based upon various factors including Bank of America's
costs and desired return, general economic conditions and other factors,
and is used as a reference point for pricing some loans, which may be
priced at, above, or below such announced rate. Any change in such rate
announced by Bank of America shall take effect at the opening of business
on the day specified in the public announcement of such change.
"Pro Forma Basis" means, for purposes of determining the applicable
---------------
pricing level under the definition of "Applicable Percentage" and
determining compliance with the financial covenants hereunder, that,
subject to the qualifications provided herein, the subject transaction
shall be deemed to have occurred as of the first day of the period of four
consecutive fiscal quarters ending as of the end of the most recent fiscal
quarter for which annual or quarterly financial statements shall have been
delivered in accordance with the provisions hereof. For purposes hereof:
(i) the Follow-On Offering shall be given pro forma effect from
the Closing Date, with adjustment to Consolidated EBITDA on account
thereof assuming an annual interest expense savings of $9.711 million
(or $2.427 million each quarter for the fiscal quarters ending March
31, 2001, June 30, 2001 and September 30, 2001) for the applicable
period from the date of the Follow-On Offering;
(ii) in the case of an Acquisition, (A) the Borrower shall
calculate pro forma EBITDA relating thereto based on historical EBITDA
for the applicable period, but giving effect to such adjustments
(including non-GAAP adjustments) as are acceptable to the
Administrative Agent and the Required Lenders (the "Pro Forma Acquired
------------------
EBITDA"), (B) in the case of Acquisitions made less than six months
------
prior to the date of the most recent financial statements delivered in
accordance with the provisions hereof, the pro forma adjustment shall
be made to include in Consolidated EBITDA the ratable portion of Pro
Forma Acquired EBITDA attributable to the period that predates the
date of acquisition (i.e., on a quarterly or monthly basis, the
product of (I) the difference of twelve minus the number of months
from the date of acquisition divided by twelve, multiplied by (II) Pro
Forma Acquired EBITDA attributable thereto), and (C) in the case of
Acquisitions made six months or more but less than twelve months prior
to the date of the most recent financial statement delivered in
accordance with the provisions hereof, the pro forma adjustment shall
be made for inclusion to Consolidated EBITDA by annualizing actual
EBITDA experienced by the Borrower from the date of acquisition (i.e.,
on a quarterly or monthly basis, the product of (I) the difference of
twelve minus the number of months from the date of acquisition,
multiplied by (II) actual EBITDA attributable thereto experienced from
the date of acquisition divided by the number of months from the date
of acquisition);
(iii) in the case of an Asset Disposition, (A) income statement
items (whether positive or negative) attributable to the property,
entities or business units that are the subject of disposition shall
be excluded to the extent relating to any period prior to the date of
the subject transaction, and (B) Indebtedness paid or retired in
connection with the subject transaction shall be deemed to have been
paid and retired as of the first day of the applicable period;
(iv) in connection with the incurrence of any Funded Debt, such
Funded Debt shall be deemed to have been incurred as of the first day
of the applicable period and pro forma adjustment shall be made to
Consolidated EBITDA giving effect to increased interest expense on
account thereof for the portion of the period predating the incurrence
20
thereof assuming the entire amount of Funded Debt is outstanding for
applicable period bearing at the rate applicable in respect of such
Funded Debt on the date of determination.
"Pro Forma Acquired EBITDA" shall have the meaning provided in the
-------------------------
definition of Pro Forma Basis.
"Property" means any interest in any kind of property or asset,
--------
whether real, personal or mixed, or tangible or intangible.
"Rate Determination Date" shall have the meaning provided in the
-----------------------
definition of "Applicable Percentage".
"Register" shall have the meaning provided in Section 11.3(c).
--------
"Regulation D, O, T, U, or X" means Regulation D, O, T, U or X,
---------------------------
respectively, 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.
"Reportable Event" means any of the events set forth in Section
----------------
4043(c) of ERISA, other than those events as to which the notice
requirement has been waived by regulation.
"Required Financial Information" means the annual and quarterly
------------------------------
compliance certificates and related financial statements and information
required by the provisions of Sections 7.1(a), (b) and (c).
"Required Lenders" means, at any time that (i) the Commitments
----------------
hereunder are less than $160 million, Lenders having at least sixty-six and
two-thirds percent (66-2/3%) of the Commitments or, if the Commitments have
been terminated, Lenders having at least sixty-six and two-thirds percent
(66-2/3%) of the aggregate principal amount of the Obligations outstanding
(taking into account in each case Participation Interests or obligations to
participate therein) and (ii) the Commitments hereunder are $160 million or
greater, Lenders having more than fifty percent (50%) of the Commitments
or, if the Commitments have been terminated, Lenders having more than fifty
percent (50%) of the aggregate principal amount of the Obligations
outstanding (taking into account in each case Participation Interests or
obligations to participate therein); provided in each case that the
--------
Commitments of, and outstanding principal amount of Obligations (taking
into account Participation Interests or obligations to participate therein)
owing to, a Defaulting Lender shall be excluded for purposes hereof in
making a determination of Required Lenders.
"Requirement of Law" means, as to any Person, the certificate of
------------------
incorporation and by-laws or other organizational or governing documents of
such Person, and any law, treaty, rule, regulation or ordinance (including,
without limitation, Environmental Laws) or determination of an arbitrator
or a court or other Governmental Authority, in each case applicable to or
binding upon such Person or to which any of its material Property is
subject.
"Responsible Officer" of any Person means the chief executive officer,
-------------------
chief operating officer, president, vice president, chief financial officer
or treasurer of such Person.
"Restricted Payment" means (i) any dividend or other payment or
------------------
distribution, direct or indirect, on account of any shares of any class of
Capital Stock of any member of the Consolidated
21
Group, now or hereafter outstanding (including, without limitation, any
payment in connection with any dissolution, merger, consolidation or
disposition involving any member of the Consolidated Group), or to the
holders, in their capacity as such, of any shares of any class of Capital
Stock of any member of the Consolidated Group, now or hereafter outstanding
(other than dividends or distributions payable in the same class of Capital
Stock of the applicable Person or dividends or distributions payable to any
Credit Party (directly or indirectly through Subsidiaries)), (ii) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of
Capital Stock of any member of the Consolidated Group, now or hereafter
outstanding, and (iii) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of Capital Stock of any member of the Consolidated
Group, now or hereafter outstanding.
"Revolving Commitment" means, with respect to each Lender, the
-------------------
commitment of such Lender to make Revolving Loans in an aggregate principal
amount up to such Lender's Revolving Commitment Percentage at such time of
the Aggregate Revolving Committed Amount at such time.
"Revolving Commitment Percentage" means, for each Lender, a fraction
-------------------------------
(expressed as a percentage) the numerator of which is the Revolving
Committed Amount of such Lender at such time and the denominator of which
is the Aggregate Revolving Committed Amount at such time. The initial
Revolving Commitment Percentage of each Lender is set forth on Schedule
--------
2.1(a).
-----
"Revolving Committed Amount" means, with respect to each Lender, the
--------------------------
amount of such Lender's Revolving Commitment. The initial Revolving
Committed Amount of each Lender is set forth on Schedule 2.1(a).
---------------
"Revolving Loan" shall have the meaning provided in Section 2.1(a).
--------------
"Revolving Note" or "Revolving Notes" means the promissory notes in
-------------- ---------------
favor of each of the Lenders evidencing the Revolving Loans and Swingline
Loans in substantially the form attached as Schedule 2.5, individually or
------------
collectively, as appropriate, as such promissory notes may be amended,
modified, supplemented, extended, renewed or replaced from time to time.
"S&P" means Standard & Poor's Ratings Group, a division of The McGraw
---
Hill Companies, Inc., or any successor or assignee of the business of such
division in the business of rating securities.
"Sale and Leaseback Transaction" means any arrangement pursuant to
------------------------------
which any member of the Consolidated Group, directly or indirectly, becomes
liable as lessee, guarantor or other surety with respect to any lease,
whether an Operating Lease or a Capital Lease, of any Property that (a)
such member of the Consolidated Group has sold or transferred (or is to
sell or transfer) to, or arranged the purchase by, a Person that is not a
member of the Consolidated Group or (b) such member of the Consolidated
Group intends to use for substantially the same purpose as any other
Property that has been sold or transferred (or is to be sold or
transferred) by such member of the Consolidated Group to another Person
that is not a member of the Consolidated Group in connection with such
lease.
"Securities Exchange Act" means the Securities Exchange Act of 1934.
-----------------------
"Securitization Transaction" means any financing transaction or series
--------------------------
of financing transactions that have been or may be entered into by a member
of the Consolidated Group pursuant to which such member of the Consolidated
Group may sell, convey or otherwise transfer
22
to (i) a Subsidiary or affiliate (a "Securitization Subsidiary"), or (ii)
-------------------------
any other Person, or may grant a security interest in, any accounts
receivable, notes receivable, rights to future lease payments or residuals
or other similar rights to payment (the "Securitization Receivables")
--------------------------
(whether such Securitization Receivables are then existing or arising in
the future) of such member of the Consolidated Group, and any assets
related thereto, including, without limitation, all security interests in
merchandise or services financed thereby, the proceeds of such
Securitization Receivables, and other assets that are customarily sold or
in respect of which security interests are customarily granted in
connection with securitization transactions involving such assets.
"Security Agreement" means the security agreement dated as of the
------------------
Closing Date given by the Credit Parties to the Collateral Agent to secure
the obligations of the Credit Parties under the Credit Documents, as such
security agreement may be amended and modified from time to time.
"Social Security Act" means the Social Security Act of 1965 as set
-------------------
forth in Title 42 of the United States Code, as amended, and any successor
statute thereto, as interpreted by the rules and regulations issued
thereunder, in each case as in effect from time to time. References to
sections of the Social Security Act shall be construed to refer to any
successor sections.
"Single Employer Plan" means any Plan that is covered by Title IV of
--------------------
ERISA, but that is not a Multiemployer Plan or a Multiple Employer Plan.
"▇▇▇▇▇ I and II" means Section 1877 of the Social Security Act as set
--------------
forth at Section 1395nn of Title 42 of the United States Code, as amended,
and any successor statute thereto, as interpreted by the rules and
regulations issued thereunder, in each case as in effect from time to time.
"Subordinated Debt" means any Indebtedness of a member of the
-----------------
Consolidated Group that by its terms is expressly subordinated in right of
payment to the prior payment of the obligations of the Credit Parties under
the Credit Documents (i) in the case of Subordinated Debt issued or
incurred in connection with a Permitted Acquisition, on terms and
conditions substantially identical to those set forth in Schedule 8.1(f)
---------------
attached hereto (or on terms and conditions more favorable to the Lenders
as holders of the senior debt in respect thereof), or (ii) otherwise, on
terms and conditions and evidenced by documentation satisfactory to the
Administrative Agent.
"Subsidiary" means, as to any Person at any time, (a) any corporation
----------
more than fifty percent (50%) of whose Capital 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 such time, any class or classes of such corporation shall have or
might have voting power by reason of the happening of any contingency) is
at such time owned by such Person directly or indirectly through
Subsidiaries, (b) any partnership, association, joint venture or other
entity of which such Person directly or indirectly through Subsidiaries
owns at such time more than fifty percent (50%) of the Capital Stock, and
(c) any entity under the control of such Person pursuant to a Management
Services Agreement. Unless otherwise provided, "Subsidiary" shall refer to
a Subsidiary of the Borrower.
"Support Obligations" means, with respect to any Person, without
-------------------
duplication, any obligations of such Person (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or
collection) guaranteeing or intended to guarantee any Indebtedness of any
other Person in any manner, whether direct or indirect, and including,
without limitation, any obligation, whether or not contingent, (i) to
purchase any such Indebtedness or any Property constituting security
therefor, (ii) to advance or provide funds or other support for the payment
or
23
purchase of any such Indebtedness or to maintain working capital, solvency
or other balance sheet condition of such other Person (including, without
limitation, keep-well agreements, maintenance agreements, comfort letters
or similar agreements or arrangements) for the benefit of any holder of
Indebtedness of such other Person, (iii) to lease or purchase Property,
securities or services primarily for the purpose of assuring the holder of
such Indebtedness, or (iv) to otherwise assure or hold harmless the holder
of such Indebtedness against loss in respect thereof. The amount of any
Support Obligation hereunder shall (subject to any limitations set forth
therein) be deemed to be an amount equal to the outstanding principal
amount (or maximum principal amount, if larger) of the Indebtedness in
respect of which such Support Obligation is made.
"Swingline Commitment" means, with respect to the Swingline Lender,
--------------------
the commitment of the Swingline Lender to make Swingline Loans in an
aggregate principal amount at any time outstanding up to the Swingline
Committed Amount and, with respect to each Lender, the commitment of such
Lender to purchase Participation Interests in Swingline Loans up to such
Lender's Revolving Commitment Percentage.
"Swingline Committed Amount" shall have the meaning provided in
--------------------------
Section 2.1(c).
"Swingline Lender" means Bank of America.
----------------
"Swingline Loan" shall have the meaning provided in Section 2.1(c).
--------------
"Synthetic Lease" means any synthetic lease, tax retention operating
---------------
lease, off-balance sheet loan or similar off-balance sheet financing
product where such transaction is considered borrowed money indebtedness
for tax purposes but is classified as an Operating Lease under GAAP.
"Taxes" shall have the meaning provided in Section 3.11.
-----
"Termination Date" means November 30, 2006 or such later date as to
----------------
which all of the Lenders may in their sole discretion by written consent
agree.
"Voting Stock" means, with respect to any Person, Capital Stock issued
------------
by such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even though the right so to
vote has been suspended by the happening of such a contingency.
"Wholly Owned Subsidiary" of any Person means any Subsidiary one
-----------------------
hundred percent (100%) of whose Voting Stock is at the time owned by such
Person directly or indirectly through other Wholly Owned Subsidiaries.
1.2 Computation of Time Periods.
---------------------------
For purposes of computation of periods of time hereunder, the word "from"
means "from and including" and the words "to" and "until" each mean "to but
excluding".
1.3 Accounting Terms.
----------------
Except as otherwise expressly provided herein, all accounting terms used
herein shall be interpreted, and all financial statements and certificates and
reports as to financial matters required to be delivered to the Lenders
hereunder shall be prepared, in accordance with GAAP applied on a consistent
basis. All calculations made for the purposes of determining compliance with
this Credit Agreement shall (except as
24
otherwise expressly provided herein) be made by application of GAAP applied on a
basis consistent with the most recent annual or quarterly financial statements
delivered pursuant to Section 7.1 (or, prior to the delivery of the first
financial statements pursuant to Section 7.1, consistent with the annual audited
financial statements referenced in Section 6.1(a)); provided, however, if (a)
--------
the Borrower shall object to determining such compliance on such basis at the
time of delivery of such financial statements due to any change in GAAP or the
rules promulgated with respect thereto or (b) the Administrative Agent or the
Required Lenders shall so object in writing within sixty days after delivery of
such financial statements, then such calculations shall be made on a basis
consistent with the most recent financial statements delivered by the Credit
Parties to the Lenders as to which no such objection shall have been made.
Notwithstanding anything herein to the contrary, determinations of (i) the
applicable pricing level under the definition of "Applicable Percentage" and
(ii) compliance with the financial covenants hereunder shall be made on a Pro
Forma Basis.
SECTION 2
CREDIT FACILITIES
-----------------
2.1 Commitments.
-----------
(a) Revolving Commitment. During the Commitment Period, subject to the
--------------------
terms and conditions hereof, each Lender severally agrees to make revolving
credit loans (the "Revolving Loans") to the Borrower in Dollars from time to
---------------
time in the amount of such Lender's Revolving Commitment Percentage of such
Revolving Loans for the purposes hereinafter set forth; provided that (i) with
--------
regard to the Lenders collectively, the aggregate principal amount of
Obligations outstanding at any time shall not exceed ONE HUNDRED FORTY MILLION
DOLLARS ($140,000,000) (as such amount may be increased or reduced from time to
time in accordance with the provisions hereof, the "Aggregate Revolving
-------------------
Committed Amount"), and (ii) with regard to each Lender individually, such
----------------
Lender's Revolving Commitment Percentage of Obligations outstanding at any time
shall not exceed such Lender's Revolving Committed Amount. Revolving Loans may
consist of Base Rate Loans or Eurodollar Loans, or a combination thereof, as the
Borrower may request, and may be repaid and reborrowed in accordance with the
provisions hereof.
(b) Letter of Credit Commitment. During the Commitment Period, in reliance
---------------------------
upon the agreements of the Lenders set forth in Section 2.6 and subject to the
terms and conditions hereof and of the LOC Documents, if any, and such other
terms and conditions that the Issuing Lender may reasonably require, the Issuing
Lender shall issue, and the Lenders shall participate in, such Letters of Credit
in Dollars as the Borrower may request for its own account or for the account of
another Credit Party as provided herein, in a form acceptable to the Issuing
Lender, for the purposes hereinafter set forth; provided that (i) the aggregate
--------
principal amount of LOC Obligations shall not at any time exceed TWELVE MILLION
DOLLARS ($12,000,000) (as such amount may be reduced from time to time in
accordance with the provisions hereof, the "LOC Committed Amount"), (ii) with
--------------------
regard to the Lenders collectively, the aggregate principal amount of
Obligations outstanding at any time shall not exceed the Aggregate Revolving
Committed Amount, and (iii) with regard to each Lender individually, such
Lender's Revolving Commitment Percentage of Obligations outstanding at any time
shall not exceed such Lender's Revolving Committed Amount. No Letter of Credit
shall have an expiry date, whether as originally issued or by extension,
extending beyond the Termination Date. Each Letter of Credit shall comply with
the related LOC Documents. The issuance date of each Letter of Credit shall be a
Business Day.
25
(c) Swingline Commitment. During the Commitment Period, subject to the
--------------------
terms and conditions hereof, the Swingline Lender agrees to make certain
revolving credit loans (the "Swingline Loans") to the Borrower in Dollars from
---------------
time to time for the purposes hereinafter set forth; provided that (i) the
--------
aggregate principal amount of Swingline Loans shall not at any time exceed TEN
MILLION DOLLARS ($10,000,000) (as such amount may be reduced from time to time
in accordance with the provisions hereof, the "Swingline Committed Amount"), and
--------------------------
(ii) with regard to the Lenders collectively, the aggregate principal amount of
Obligations outstanding at any time shall not exceed the Aggregate Revolving
Committed Amount. Swingline Loans shall consist of Base Rate Loans, and may be
repaid and reborrowed in accordance with the provisions hereof.
(d) Increase in Revolving Commitments. Subject to the terms and conditions
---------------------------------
set forth herein, the Borrower may, upon written notice to the Administrative
Agent, increase the Aggregate Revolving Committed Amount to not more than TWO
HUNDRED MILLION DOLLARS ($200,000,000); provided that:
--------
(i) the Borrower shall obtain commitments for the amount of the
increase from existing Lenders or other commercial banks or financial
institutions reasonably acceptable to the Administrative Agent, which other
commercial banks and financial institutions shall join in this Credit
Agreement as Lenders by joinder agreement substantially in the form of
Schedule 2.1(d) attached hereto or other arrangement reasonably acceptable
---------------
to the Administrative Agent,
(ii) any such increase shall be in a minimum aggregate principal
amount of $5 million and integral multiples of $1 million in excess thereof
(or the remaining amount, if less),
(iii) notwithstanding any term of this Credit Agreement to the
contrary, the Administrative Agent and the Borrower may agree to increase
the rate of interest hereunder,
(iv) if any Revolving Loans are outstanding at the time of any such
increase, the Borrower shall make such payments and adjustments on the
Revolving Loans (including payment of any break-funding amounts owing under
Section 3.12) as may be necessary to give effect to the revised commitment
percentages and commitment amounts, and
(v) the conditions to the making of a Revolving Loan set forth in
Section 5.2 shall be satisfied.
In connection with any such increase in the Revolving Commitments, Schedule
--------
2.1(a) shall be revised to reflect the modified commitments and commitment
------
percentages of the Lenders, and the Borrower shall provide supporting corporate
resolutions, legal opinions, promissory notes and other items as may be
reasonably requested by the Administrative Agent and the Lenders in connection
therewith.
2.2 Method of Borrowing.
-------------------
(a) Notice of Request for Extensions of Credit. The Borrower shall request
------------------------------------------
an Extension of Credit by written notice (or telephonic notice promptly
confirmed in writing) as follows:
(i) Revolving Loans. In the case of Revolving Loans, to the
---------------
Administrative Agent not later than 12:00 Noon (Charlotte, North Carolina
time) on the Business Day prior to the date of the requested borrowing in
the case of Base Rate Loans, and on the third Business Day prior to the
date of the requested borrowing in the case of Eurodollar Loans. Each such
request for borrowing shall be irrevocable and shall specify (A) that a
Revolving Loan is requested, (B) the date of the requested borrowing (which
shall be a Business Day), (C) the aggregate principal amount to be
26
borrowed, and (D) whether the borrowing shall be comprised of Base Rate
Loans, Eurodollar Loans or a combination thereof, and if Eurodollar Loans
are requested, the Interest Period(s) therefor. A form of Notice of
Borrowing is attached as Schedule 2.2(a)(i). The Administrative Agent shall
------------------
give notice to each Lender promptly upon receipt of each Notice of
Borrowing pursuant to this Section 2.2(a)(i), the contents thereof and each
Lender's share of any borrowing to be made pursuant thereto.
(ii) Letters of Credit. In the case of Letters of Credit, to the
-----------------
Issuing Lender with a copy to the Administrative Agent not later than 12:00
Noon (Charlotte, North Carolina time) on the third Business Day prior to
the date of the requested issuance or extension (or such shorter period as
may be agreed by the Issuing Lender). Each such request for issuance or
extension of a Letter of Credit shall be irrevocable and shall specify,
among other things, (A) that a Letter of Credit is requested, (B) the date
of the requested issuance or extension, (C) the type, amount, expiry date
and terms on which the Letter of Credit is to be issued or extended, and
(D) the beneficiary. A form of Notice of Request for Letter of Credit is
attached as Schedule 2.2(a)(ii).
-------------------
(iii) Swingline Loans. In the case of Swingline Loans, to the
---------------
Swingline Lender with a copy to the Administrative Agent not later than
12:00 Noon (Charlotte, North Carolina time) on the Business Day of the
requested borrowing. Each such request for borrowing shall be irrevocable
and shall specify (A) that a Swingline Loan is requested, (B) the date of
the requested borrowing (which shall be a Business Day), (C) the aggregate
principal amount to be borrowed, and (D) the interest rate option and
maturity requested therefor. A form of Notice of Borrowing is attached as
Schedule 2.2(a)(i). Each Swingline Loan shall have a maturity date as the
------------------
Borrower may request and the Swingline Lender may agree.
(b) Minimum Amounts. Each Revolving Loan advance shall be (i) in the case
---------------
of Eurodollar Loans, in a minimum principal amount of $3 million and integral
multiples of $250,000 in excess thereof and (ii) in the case of Base Rate Loans,
$500,000 (or, if less, the remaining Aggregate Revolving Committed Amount) and
integral multiples of $250,000 in excess thereof. Each Swingline Loan advance
shall be in a minimum principal amount of $50,000 and integral multiples of
$50,000 in excess thereof (or the remaining amount of the Swingline Committed
Amount, if less).
(c) Information Not Provided. If in connection with any such request for a
------------------------
Revolving Loan, the Borrower shall fail to specify (i) an applicable Interest
Period in the case of a Eurodollar Loan, the Borrower shall be deemed to have
requested an Interest Period of one month, or (ii) the type of loan requested,
the Borrower shall be deemed to have requested a Base Rate Loan.
(d) Maximum Number of Eurodollar Loans. Revolving Loans may be comprised of
----------------------------------
no more than six Eurodollar Loans outstanding at any time. For purposes hereof,
Eurodollar Loans with separate or different Interest Periods will be considered
as separate Eurodollar Loans even if their Interest Periods expire on the same
date.
2.3 Interest.
--------
Subject to Section 3.1, the Loans shall bear interest at a per annum rate,
payable in arrears on each applicable Interest Payment Date (or at such other
times as may be specified herein), as follows:
(a) Base Rate Loans. During such periods as the Loans shall be
---------------
comprised of Base Rate Loans, the Adjusted Base Rate; and
(b) Eurodollar Loans. During such periods as the Loans shall be
----------------
comprised of Eurodollar Loans, the Adjusted Eurodollar Rate.
27
2.4 Repayment.
---------
(a) Revolving Loans. The principal amount of all Revolving Loans shall
---------------
be due and payable in full on the Termination Date.
(b) Swingline Loans. The principal amount of all Swingline Loans shall
---------------
be due and payable in full on the earlier of (A) the maturity date agreed
to by the Swingline Lender and the Borrower with respect to such Swingline
Loan, or (B) the Termination Date.
2.5 Notes.
-----
The Revolving Loans and Swingline Loans shall be evidenced by the Revolving
Notes.
2.6 Additional Provisions relating to Letters of Credit.
---------------------------------------------------
(a) Reports. The Issuing Lender will provide to the Administrative Agent
-------
for dissemination to the Lenders at least quarterly, and more frequently upon
request, a detailed summary report on its Letters of Credit and the activity
thereon, including, among other things, the Credit Party for whose account the
Letter of Credit is issued, the beneficiary, the face amount, and the expiry
date. The Issuing Lender will provide copies of the Letters of Credit to the
Administrative Agent and the Lenders promptly upon request.
(b) Participation. Each Lender, with respect to the Existing Letters of
-------------
Credit, hereby purchases a Participation Interest in Existing Letters of Credit,
and with respect to Letters of Credit issued on or after the Closing Date, upon
issuance of a Letter of Credit, shall be deemed to have purchased without
recourse a risk participation from the Issuing Lender in such Letter of Credit
and the obligations arising thereunder, in each case in an amount equal to its
pro rata share of the obligations under such Letter of Credit (based on the
respective Revolving Commitment Percentages of the Lenders) and shall
absolutely, unconditionally and irrevocably assume, as primary obligor and not
as surety, and be obligated to pay to the Issuing Lender therefor and discharge
when due, its pro rata share of the obligations arising under such Letter of
Credit. Without limiting the scope and nature of each Lender's participation in
any Letter of Credit, to the extent that the Issuing Lender has not been
reimbursed as required hereunder or under any such Letter of Credit, each Lender
shall pay to the Issuing Lender its pro rata share of such unreimbursed drawing
in same day funds on the day of notification by the Issuing Lender of an
unreimbursed drawing pursuant to the provisions of subsection (d) hereof. The
obligation of each Lender to so reimburse the Issuing Lender shall be absolute
and unconditional and shall not be affected by the occurrence of a Default, an
Event of Default or any other occurrence or event. Any such reimbursement shall
not relieve or otherwise impair the obligation of the Borrower to reimburse the
Issuing Lender under any Letter of Credit, together with interest as hereinafter
provided.
(c) Reimbursement. In the event of any drawing under any Letter of Credit,
-------------
the Issuing Lender will promptly notify the Borrower. Unless the Borrower shall
immediately notify the Issuing Lender that the Borrower intends to otherwise
reimburse the Issuing Lender for such drawing, the Borrower shall be deemed to
have requested that the Lenders make a Revolving Loan in the amount of the
drawing as provided in subsection (d) hereof on the related Letter of Credit,
the proceeds of which will be used to satisfy the related reimbursement
obligations. The Borrower promises to reimburse the Issuing Lender on the day of
drawing under any Letter of Credit (either with the proceeds of a Revolving Loan
obtained hereunder or otherwise) in same day funds. If the Borrower shall fail
to reimburse the Issuing Lender as provided hereinabove, the unreimbursed amount
of such drawing shall bear interest at a per annum rate equal to the Adjusted
Base Rate plus two percent (2%). The Borrower's reimbursement obligations
hereunder shall be absolute and
28
unconditional under all circumstances irrespective of any rights of setoff,
counterclaim or defense to payment the Borrower may claim or have against the
Issuing Lender, the Administrative Agent, the Lenders, the beneficiary of the
Letter of Credit drawn upon or any other Person, including, without limitation,
any defense based on any failure of the Borrower or any other Credit Party to
receive consideration or the legality, validity, regularity or unenforceability
of the Letter of Credit. The Issuing Lender will promptly notify the
Administrative Agent (who will promptly notify the other Lenders) of the amount
of any unreimbursed drawing and each Lender shall promptly pay to the
Administrative Agent for the account of the Issuing Lender in Dollars and in
immediately available funds, the amount of such Lender's Revolving Commitment
Percentage of such unreimbursed drawing. Such payment shall be made on the day
such notice is received by such Lender from the Issuing Lender if such notice is
received at or before 2:00 P.M. (Charlotte, North Carolina time) otherwise such
payment shall be made at or before 12:00 Noon (Charlotte, North Carolina time)
on the Business Day next succeeding the day such notice is received. If such
Lender does not pay such amount to the Issuing Lender in full upon such request,
such Lender shall, on demand, pay to the Administrative Agent for the account of
the Issuing Lender interest on the unpaid amount during the period from the date
of such drawing until such Lender pays such amount to the Issuing Lender in full
at a rate per annum equal to, if paid within two Business Days of the date that
such Lender is required to make payments of such amount pursuant to the
preceding sentence, the Federal Funds Rate and thereafter at a rate equal to the
Base Rate. Each Lender's obligation to make such payment to the Issuing Lender,
and the right of the Issuing Lender to receive the same, shall be absolute and
unconditional, shall not be affected by any circumstance whatsoever and without
regard to the termination of this Credit Agreement or the Commitments hereunder,
the existence of a Default or Event of Default or the acceleration of the
obligations of the Borrower hereunder and shall be made without any offset,
abatement, withholding or reduction whatsoever. Simultaneously with the making
of each such payment by a Lender to the Issuing Lender, such Lender shall,
automatically and without any further action on the part of the Issuing Lender
or such Lender, acquire a participation in an amount equal to such payment
(excluding the portion of such payment constituting interest owing to the
Issuing Lender) in the related unreimbursed drawing portion of the LOC
Obligation and in the interest thereon and in the related LOC Documents, and
shall have a claim against the Borrower with respect thereto.
(d) Repayment with Revolving Loans. On any day on which the Borrower shall
------------------------------
have requested, or been deemed to have requested, a Revolving Loan advance to
reimburse a drawing under a Letter of Credit, the Administrative Agent shall
give notice to the Lenders that a Revolving Loan has been requested or deemed
requested by the Borrower to be made in connection with a drawing under a Letter
of Credit, in which case a Revolving Loan advance comprised of Base Rate Loans
(or Eurodollar Loans to the extent the Borrower has complied with the procedures
of Section 2.2(a)(i) with respect thereto) shall be promptly made to the
Borrower by all Lenders (notwithstanding any termination of the Commitments
pursuant to Section 9.2) pro rata based on the respective Revolving Commitment
Percentages of the Lenders (determined before giving effect to any termination
of the Commitments pursuant to Section 9.2) and the proceeds thereof shall be
paid directly to the Issuing Lender for application to the respective LOC
Obligations. Each such Lender hereby irrevocably agrees to make its Revolving
Commitment Percentage of each such Revolving Loan promptly upon any such request
or deemed request in the amount, in the manner and on the date specified in the
preceding sentence notwithstanding (i) the amount of such borrowing may not
comply with the minimum amount for advances of Revolving Loans otherwise
required hereunder, (ii) whether any conditions specified in Section 5.2 are
then satisfied, (iii) whether a Default or an Event of Default then exists, (iv)
failure for any such request or deemed request for Revolving Loan to be made by
the time otherwise required hereunder, (v) whether the date of such borrowing is
a date on which Revolving Loans are otherwise permitted to be made hereunder or
(vi) any termination of the Commitments relating thereto immediately prior to or
contemporaneously with such borrowing. In the event that any Revolving Loan
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 or any Credit Party), then each
such Lender hereby agrees that it shall forthwith purchase (as of the date such
borrowing would otherwise have
29
occurred, but adjusted for any payments received from the Borrower on or after
such date and prior to such purchase) from the Issuing Lender such participation
in the outstanding LOC Obligations as shall be necessary to cause each such
Lender to share in such LOC Obligations ratably (based upon the respective
Commitment Percentages of the Lenders (determined before giving effect to any
termination of the Commitments pursuant to Section 9.2)), provided that in the
event such payment is not made on the day of drawing, such Lender shall pay in
addition to the Issuing Lender interest on the amount of its unfunded
Participation Interest at a rate equal to, if paid within two Business Days of
the date of drawing, the Federal Funds Rate, and thereafter at the Base Rate.
(e) Designation of other Credit Parties as Account Parties. Notwithstanding
------------------------------------------------------
anything to the contrary set forth in this Credit Agreement, including, without
limitation, Sections 2.1(c) and 2.2(a)(ii) hereof, a Letter of Credit issued
hereunder may contain a statement to the effect that such Letter of Credit is
issued for the account of a Credit Party other than the Borrower, provided that
notwithstanding such statement, the Borrower shall be the actual account party
for all purposes of this Credit Agreement for such Letter of Credit and such
statement shall not affect the Borrower's reimbursement obligations hereunder
with respect to such Letter of Credit.
(f) Renewal, Extension. The renewal or extension of any Letter of Credit
------------------
shall, for purposes hereof, be treated in all respects the same as the issuance
of a new Letter of Credit hereunder.
(g) Applicability of ISP98 and UCP. Unless otherwise expressly agreed by
------------------------------
the Issuing Lender and the Borrower when a Letter of Credit is issued, the rules
of the "International Standby Practices 1998" published by the Institute of
International Banking Law & Practice (or such later version thereof as may be in
effect at the time of issuance) shall apply to each Letter of Credit.
(h) Indemnification; Nature of Issuing Lender's Duties.
--------------------------------------------------
(i) In addition to its other obligations under this Section 2.6, the
Borrower hereby agrees to protect, indemnify, pay, save and hold the
Issuing Lender and the Lenders harmless from and against any and all
claims, demands, liabilities, damages, losses, costs, charges and expenses
(including reasonable attorneys' fees and expenses and the allocated cost
of internal counsel) that the Issuing Lender or any Lender may incur or be
subject to as a consequence, direct or indirect, of (A) the issuance of any
Letter of Credit or (B) the failure of the Issuing Lender to honor a
drawing under a Letter of Credit as a result of any act or omission,
whether rightful or wrongful, of any present or future de jure or de facto
government or governmental authority (all such acts or omissions, herein
called "Government Acts").
---------------
(ii) As between the Borrower and the Issuing Lender, the Borrower
shall assume all risks of the acts, omissions or misuse of any Letter of
Credit by the beneficiary thereof. The Issuing Lender shall not be
responsible: (A) for the form, validity, sufficiency, accuracy, genuineness
or legal effect of any document submitted by any party in connection with
the application for and issuance of any Letter of Credit, even if it should
in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged; (B) for the validity or sufficiency of
any instrument transferring or assigning or purporting to transfer or
assign any Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, that may prove to be invalid or
ineffective for any reason; (C) for errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable,
telegraph, telex or otherwise, whether or not they be in cipher; (D) for
any loss or delay in the transmission or otherwise of any document required
in order to make a drawing under a Letter of Credit or of the proceeds
thereof; and (E) for any consequences arising from causes beyond the
control of the Issuing Lender, including, without limitation, any
30
Government Acts. None of the above shall affect, impair, or prevent the
vesting of the Issuing Lender's rights or powers hereunder.
(iii) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted by
the Issuing Lender, under or in connection with any Letter of Credit or the
related certificates, if taken or omitted in good faith, shall not put such
Issuing Lender under any resulting liability to the Borrower or any other
Credit Party. It is the intention of the parties that this Credit Agreement
shall be construed and applied to protect and indemnify the Issuing Lender
against any and all risks involved in the issuance of the Letters of
Credit, all of which risks are hereby assumed by the Borrower (on behalf of
itself and each of the other Credit Parties), including, without
limitation, any and all Government Acts. The Issuing Lender shall not, in
any way, be liable for any failure by the Issuing Lender or anyone else to
pay any drawing under any Letter of Credit as a result of any Government
Acts or any other cause beyond the control of the Issuing Lender.
(iv) Nothing in this subsection (h) is intended to limit the
reimbursement obligations of the Borrower contained in subsection (d)
above. The obligations of the Borrower under this subsection (h) shall
survive the termination of this Credit Agreement. No act or omissions of
any current or prior beneficiary of a Letter of Credit shall in any way
affect or impair the rights of the Issuing Lender to enforce any right,
power or benefit under this Credit Agreement.
(v) Notwithstanding anything to the contrary contained in this
subsection (h), the Borrower shall have no obligation to indemnify the
Issuing Lender in respect of any liability incurred by the Issuing Lender
(A) arising solely out of the gross negligence or willful misconduct of the
Issuing Lender, as determined by a court of competent jurisdiction, or (B)
caused by the Issuing Lender's failure to pay under any Letter of Credit
after presentation to it of a request strictly complying with the terms and
conditions of such Letter of Credit, as determined by a court of competent
jurisdiction, unless such payment is prohibited by any law, regulation,
court order or decree.
(i) Responsibility of Issuing Lender. It is expressly understood and agreed
--------------------------------
that the obligations of the Issuing Lender hereunder to the Lenders are only
those expressly set forth in this Credit Agreement and that the Issuing Lender
shall be entitled to assume that the conditions precedent set forth in Section
5.2 have been satisfied unless it shall have acquired actual knowledge that any
such condition precedent has not been satisfied; provided, however, that nothing
set forth in this Section 2.6 shall be deemed to prejudice the right of any
Lender to recover from the Issuing Lender any amounts made available by such
Lender to the Issuing Lender pursuant to this Section 2.6 in the event that it
is determined by a court of competent jurisdiction that the payment with respect
to a Letter of Credit constituted gross negligence or willful misconduct on the
part of the Issuing Lender.
(j) Limitation on Obligation of the Issuing Lender. Notwithstanding
----------------------------------------------
anything contained herein to the contrary, the Issuing Lender shall not be under
any obligation to issue, renew or extend any Letter of Credit if (i) any order,
judgment or decree of any Governmental Authority or arbitrator shall by its
terms purport to enjoin or restrain the Issuing Lender from issuing a Letter of
Credit, or any applicable law, rule or regulation or any request or directive
(whether or not having the force of law) from any Governmental Authority with
jurisdiction over the Issuing Lender shall prohibit, or request that the Issuing
Lender refrain from, the issuance of letters of credit generally or any such
Letter of Credit in particular, or shall impose upon the Issuing Lender with
respect to any such Letter of Credit any restriction, reserve or capital
requirement (for which the Issuing Lender is not otherwise compensated
hereunder) not in effect on the Closing Date, or shall impose upon the Issuing
Lender any unreimbursed loss, costs or expense which was not applicable on the
Closing Date and which the Issuing Lender should
31
deem material to it in good faith, or (ii) the issuance, renewal or extension
would violate or otherwise contravene its internal policy.
(k) Conflict with LOC Documents. In the event of any conflict between this
---------------------------
Credit Agreement and any LOC Document (including any letter of credit
application), this Credit Agreement shall control.
2.7 Additional Provisions relating to Swingline Loans.
-------------------------------------------------
The Swingline Lender may, at any time, in its sole discretion, by written
notice to the Borrower and the Lenders, demand repayment of its Swingline Loans
by way of a Revolving Loan advance, in which case the Borrower shall be deemed
to have requested a Revolving Loan advance comprised solely of Base Rate Loans
in the amount of such Swingline Loans; provided, however, that any such demand
--------
shall be deemed to have been given one Business Day prior to the Termination
Date and on the date of the occurrence of any Event of Default described in
Section 9.1 and upon acceleration of the indebtedness hereunder and the exercise
of remedies in accordance with the provisions of Section 9.2. Each Lender hereby
irrevocably agrees to make its Revolving Commitment Percentage of each such
Revolving Loan in the amount, in the manner and on the date specified in the
preceding sentence notwithstanding (a) the amount of such borrowing may not
---------------
comply with the minimum amount for advances of Revolving Loans otherwise
required hereunder, (b) whether any conditions specified in Section 5.2 are then
satisfied, (c) whether a Default or an Event of Default then exists, (d) failure
of any such request or deemed request for Revolving Loan to be made by the time
otherwise required hereunder, (e) whether the date of such borrowing is a date
on which Revolving Loans are otherwise permitted to be made hereunder or (f) any
termination of the Commitments relating thereto immediately prior to or
contemporaneously with such borrowing. In the event that any Revolving Loan
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 or any other Credit Party), then
each Lender hereby agrees that it shall forthwith purchase (as of the date such
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 Lender such Participation Interests in the outstanding Swingline Loans
as shall be necessary to cause each such Lender to share in such Swingline Loans
ratably based upon its Revolving Commitment Percentage (determined before giving
effect to any termination of the Commitments pursuant to Section 3.4), provided
--------
that (i) all interest payable on the Swingline Loans shall be for the account of
the Swingline Lender until the date as of which the respective Participation
Interest is funded and (ii) at the time any purchase of Participation Interests
pursuant to this sentence is actually made, the purchasing Lender shall be
required to pay to the Swingline Lender, to the extent not paid to the Swingline
Lender by the Borrower in accordance with the terms of Section 2.4(b), interest
on the principal amount of Participation Interests purchased for each day from
and including the day upon which such borrowing would otherwise have occurred to
but excluding the date of payment for such Participation Interests, at the rate
equal to the Federal Funds Rate.
SECTION 3
OTHER PROVISIONS RELATING TO CREDIT FACILITIES
----------------------------------------------
3.1 Default Rate.
------------
Upon the occurrence, and during the continuance, of an Event of Default,
(i) the principal of and, to the extent permitted by law, interest on the Loans
and any other amounts owing hereunder or under the other Credit Documents shall
bear interest, payable on demand, at a per annum rate two percent (2%) greater
than the rate which would otherwise be applicable (or if no rate is applicable,
whether in respect of interest, fees or
32
other amounts, then the Adjusted Base Rate plus two percent (2%)) and (ii) the
Letter of Credit Fee shall accrue at a per annum rate two percent (2%) greater
than the rate which would otherwise be applicable.
3.2 Continuation and Conversion.
---------------------------
The Borrower shall have the option, on any Business Day, to extend existing
Loans into a subsequent permissible Interest Period or to convert Loans into
Loans of another interest rate type; provided, however, that (i) except as
--------
provided in Section 3.8, Eurodollar Loans may be converted into Base Rate Loans
or extended as Eurodollar Loans for new Interest Periods only on the last day of
the Interest Period applicable thereto, (ii) Eurodollar Loans may be extended,
and Base Rate Loans may be converted into Eurodollar Loans, only if the
conditions precedent set forth in Section 5.2 are satisfied on the date of
Continuation or Conversion, (iii) Loans extended as, or converted into,
Eurodollar Loans shall be subject to the terms of the definition of "Interest
Period" and shall be in such minimum amounts as provided in Section 2.2(b), and
(iv) any request for Continuation or Conversion of a Eurodollar Loan which shall
fail to specify an Interest Period shall be deemed to be a request for an
Interest Period of one month. Each such Continuation or Conversion shall be
effected by the Borrower by giving a Notice of Continuation/Conversion (or
telephonic notice promptly confirmed in writing) to the office of the
Administrative Agent specified in Section 11.1, or at such other office as the
Administrative Agent may designate in writing, prior to 11:00 A.M. (Charlotte,
North Carolina time), on the Business Day of, in the case of the Conversion of a
Eurodollar Loan into a Base Rate Loan, and on the third Business Day prior to,
in the case of the Continuation of a Eurodollar Loan as, or Conversion of a Base
Rate Loan into, a Eurodollar Loan, the date of the proposed Continuation or
Conversion, specifying the date of the proposed Continuation or Conversion, the
Loans to be so extended or converted, the types of Loans into which such Loans
are to be converted and, if appropriate, the applicable Interest Periods with
respect thereto. Each request for Continuation or Conversion shall be
irrevocable and shall constitute a representation and warranty by the Borrower
of the matters specified in Section 5.2. In the event the Borrower fails to
request Continuation or Conversion of any Eurodollar Loan in accordance with
this Section, or any such Conversion or Continuation is not permitted or
required by this Section, then such Eurodollar Loan shall be automatically
converted into a Base Rate Loan at the end of the Interest Period applicable
thereto. The Administrative Agent shall give each Lender notice as promptly as
practicable of any such proposed Continuation or Conversion affecting any
Revolving Loan.
3.3 Prepayments.
-----------
(a) Voluntary Prepayments. The Loans may be repaid in whole or in part
---------------------
without premium or penalty; provided that (i) Eurodollar Loans may be prepaid
-------------
only upon three Business Days prior written notice to the Administrative Agent
and must be accompanied by payment of any amounts owing under Section 3.12, (ii)
partial prepayments on Revolving Loans shall be minimum principal amounts of $3
million, in the case of Eurodollar Loans, and $500,000, in the case of Base Rate
Loans, and in integral multiples of $250,000 in excess thereof and (iii) partial
prepayments on Swingline Loans shall be minimum principal amounts of $50,000 and
in integral multiples of $50,000 in excess thereof
(b) Mandatory Prepayments.
---------------------
(i) Committed Amounts. If at any time (A) the aggregate principal
-----------------
amount of Obligations shall exceed the Aggregate Revolving Committed
Amount, (B) the aggregate amount of LOC Obligations shall exceed the LOC
Committed Amount or (C) the aggregate principal amount of Swingline Loans
shall exceed the Swingline Committed Amount, the Borrower shall immediately
make payment on the Revolving Loans, on the Swingline Loans and/or to a
cash collateral account in respect of the LOC Obligations, in an amount
sufficient to eliminate the difference.
33
(ii) Asset Dispositions. The Obligations shall be immediately prepaid
------------------
as hereafter provided in an amount equal to one hundred percent (100%) of
the Net Cash Proceeds received from any Asset Disposition to the extent (A)
such Net Cash Proceeds are not reinvested in the same or similar property
or assets within twelve months of the date of such Asset Disposition, and
(B) the aggregate amount of such Net Cash Proceeds not reinvested in
accordance with the foregoing clause (A) shall exceed $500,000 in any
fiscal year.
(iii) Debt Transactions. The Obligations shall be immediately prepaid
-----------------
as hereafter provided in an amount equal to one hundred percent (100%) of
the Net Cash Proceeds in excess of $100 million received from Debt
Transactions in the aggregate from the Closing Date.
(iv) Equity Transactions. The Obligations shall be immediately prepaid
-------------------
as hereafter provided in an amount equal to one hundred percent (100%) of
the Net Cash Proceeds received from any Equity Transaction.
(c) Application. Voluntary prepayments shall be applied as specified by the
-----------
Borrower or, if not so specified, first to Base Rate Loans, then to Eurodollar
Loans in direct order of Interest Period maturities and then to a cash
collateral account to secure LOC Obligations. Mandatory prepayments shall be
applied first to Base Rate Loans, then to Eurodollar Loans in direct order of
Interest Period maturities and then to a cash collateral account to secure LOC
Obligations (with a corresponding reduction in the Aggregate Revolving Committed
Amount in an aggregate amount of prepayments required in respect of Asset
Dispositions and Debt Transactions under clauses (ii) and (iii) of Section
3.3(b) hereof).
3.4 Reduction and Termination of Commitments.
----------------------------------------
(a) Voluntary Reduction of Commitments. The Commitments may be terminated
----------------------------------
or permanently reduced in whole or in part by the Borrower upon three Business
Days prior written notice to the Administrative Agent, provided that (i) after
giving effect to any voluntary reduction the aggregate amount of Obligations
shall not exceed the Aggregate Revolving Committed Amount, as reduced, and (ii)
partial reductions shall be in a minimum principal amount of $5 million, and in
integral multiples of $1 million in excess thereof.
(b) Mandatory Reduction of Commitments. The Aggregate Revolving Committed
----------------------------------
Amount automatically shall be permanently reduced from time to time in an amount
equal to the amount of any prepayment required by Sections 3.3(b)(ii) and (iii).
(c) Termination of Commitments. The Commitments shall terminate on the
--------------------------
Termination Date.
3.5 Fees.
----
(a) Commitment Fee. Beginning December 3, 2001, in consideration of the
--------------
Revolving Commitments, the Borrower agrees to pay to the Administrative Agent
for the ratable benefit of the Lenders a commitment fee (the "Commitment Fee")
--------------
equal to the Applicable Percentage per annum on the average daily unused amount
of the Aggregate Revolving Committed Amount for the applicable period. The
Commitment Fee shall be payable quarterly in arrears on the last day of each
March, June, September and December for the immediately preceding quarter (or a
portion thereof). If the last day of such month is not a Business Day, such fee
shall be paid on the next succeeding Business Day. For purposes of computation
of the Commitment Fee, (i) Swingline Loans shall not be counted toward or
considered usage of the Aggregate Revolving Committed Amount and (ii) LOC
Obligations shall be counted toward and considered usage of the Aggregate
Revolving Committed Amount.
34
(b) Letter of Credit Fees.
---------------------
(i) Letter of Credit Issuance Fee. In consideration of the issuance of
-----------------------------
Letters of Credit, the Borrower promises to pay to the Administrative Agent
for the account of each Lender a fee (the "Letter of Credit Fee") on such
--------------------
Lender's Revolving Commitment Percentage of the average daily maximum
amount available to be drawn under each Letter of Credit computed at a per
annum rate for each day from the date of issuance to the date of expiration
equal to the Applicable Percentage. The Letter of Credit Fee shall be
payable quarterly in arrears on the last day of each March, June, September
and December for the immediately preceding quarter (or a portion thereof).
If the last day of such month is not a Business Day, such fee shall be paid
on the next succeeding Business Day.
(ii) Issuing Lender Fees. In addition to the Letter of Credit Fee, the
------------------
Borrower promises to pay to the Administrative Agent for the account of the
Issuing Lender without sharing by the other Lenders (i) a letter of credit
fronting fee (the "Issuing Lender Fee") of one-eighth of one percent
------------------
(0.125%) on the average daily maximum amount available to be drawn under
each Letter of Credit computed at a per annum rate for each day from the
date of issuance to the date of expiration and (ii) the customary charges
from time to time of the Issuing Lender with respect to the issuance,
amendment, transfer, administration, cancellation and conversion of, and
drawings under, Letters of Credit. The Issuing Lender Fee hereunder shall
be payable quarterly in arrears on the last day of each March, June,
September and December for the immediately preceding quarter (or portion
thereof) and on the Termination Date. If the last day of such month is not
a Business Day, such fee shall be paid on the next succeeding Business Day.
(c) Administrative Fees. The Borrower agrees to pay to the Administrative
-------------------
Agent, for its own account, the fees referred to in the Administrative Agent's
Fee Letter.
3.6 Capital Adequacy.
----------------
If any Lender has determined, after the date hereof, that the adoption or
the becoming effective of, or any change in, or any change by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof in the interpretation or administration of, any
applicable law, rule or regulation regarding capital adequacy, or compliance by
such Lender 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
Lender's (including, for purposes hereof, the parent company of such Lender)
capital or assets as a consequence of its commitments or obligations hereunder
to a level below that which such Lender could have achieved but for such
adoption, effectiveness, change or compliance (taking into consideration such
Lender's policies with respect to capital adequacy), then, upon notice from such
Lender to the Borrower, the Borrower shall be obligated to pay to such Lender
such additional amount or amounts as will compensate such Lender for such
reduction. Each determination by any such Lender of amounts owing under this
Section shall, absent manifest error, be conclusive and binding on the parties
hereto.
3.7 Limitation on Eurodollar Loans.
------------------------------
If on or prior to the first day of any Interest Period for any Eurodollar
Loan:
(a) the Administrative Agent determines (which determination shall be
conclusive) that by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the Eurodollar
Rate for such Interest Period; or
35
(b) the Required Lenders determine (which determination shall be
conclusive) and notify the Administrative Agent that the Eurodollar Rate
will not adequately and fairly reflect the cost to the Lenders of funding
Eurodollar Loans for such Interest Period;
then the Administrative Agent shall give the Borrower prompt notice thereof, and
so long as such condition remains in effect, the Lenders shall be under no
obligation to make additional Eurodollar Loans, Continue Eurodollar Loans, or to
Convert Base Rate Loans into Eurodollar Loans with respect to the affected
currency.
3.8 Illegality.
----------
Notwithstanding any other provision of this Credit Agreement, in the event
that it becomes unlawful for any Lender (or its Applicable Lending Office) to
make, maintain, or fund Eurodollar Loans hereunder, then such Lender shall
promptly notify the Borrower thereof and such Lender's obligation to make or
Continue Eurodollar Loans and to Convert Base Rate Loans into Eurodollar Loans
shall be suspended until such time as such Lender may again make, maintain, and
fund Eurodollar Loans (in which case the provisions of Section 3.10 shall be
applicable).
3.9 Requirements of Law.
-------------------
If, after the date hereof, the adoption of any applicable law, rule, or
regulation, or any change in any applicable law, rule, or regulation, 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 any Lender (or its Applicable Lending
Office) with any request or directive (whether or not having the force of law)
of any such Governmental Authority, central bank, or comparable agency:
(a) shall subject such Lender (or its Applicable Lending Office) to
any tax, duty, or other charge with respect to any Eurodollar Loans, its
Notes, or its obligation to make Eurodollar Loans, or change the basis of
taxation of any amounts payable to such Lender (or its Applicable Lending
Office) under this Credit Agreement or its Notes in respect of any
Eurodollar Loans (other than taxes imposed on the overall net income of
such Lender by the jurisdiction in which such Lender has its principal
office or such Applicable Lending Office);
(b) shall impose, modify, or deem applicable any reserve, special
deposit, assessment, or similar requirement (other than the Eurodollar
Reserve Requirement utilized in the determination of the Eurodollar Rate)
relating to any extensions of credit or other assets of, or any deposits
with or other liabilities or commitments of, such Lender (or its Applicable
Lending Office), including the Commitment of such Lender hereunder; or
(c) shall impose on such Lender (or its Applicable Lending Office) or
the London interbank market any other condition affecting this Credit
Agreement or its Notes or any of such extensions of credit or liabilities
or commitments;
and the result of any of the foregoing is to increase the cost to such Lender
(or its Applicable Lending Office) of making, Converting into, Continuing, or
maintaining any Eurodollar Loans or to reduce any sum received or receivable by
such Lender (or its Applicable Lending Office) under this Credit Agreement or
its Notes with respect to any Eurodollar Loans, then the Borrower shall pay to
such Lender on demand such amount or amounts as will compensate such Lender for
such increased cost or reduction. If any Lender requests compensation by the
Borrower under this Section 3.9, the Borrower may, by notice to such Lender
(with a copy to the Administrative Agent), suspend the obligation of such Lender
to make or Continue Eurodollar
36
Loans, or to Convert Base Rate Loans into Eurodollar Loans, until the event or
condition giving rise to such request ceases to be in effect (in which case the
provisions of Section 3.10 shall be applicable); provided that such suspension
--------
shall not affect the right of such Lender to receive the compensation so
requested. Each Lender shall promptly notify the Borrower and the Administrative
Agent of any event of which it has knowledge, occurring after the date hereof,
which will entitle such Lender to compensation pursuant to this Section 3.9 and
will designate a different Applicable Lending Office if such designation will
avoid the need for, or reduce the amount of, such compensation and will not, in
the judgment of such Lender, be otherwise disadvantageous to it. Any Lender
claiming compensation under this Section 3.9 shall furnish to the Borrower and
the Administrative Agent a statement setting forth the additional amount or
amounts to be paid to it hereunder which shall be conclusive in the absence of
manifest error. In determining such amount, such Lender may use any reasonable
averaging and attribution methods.
3.10 Treatment of Affected Loans.
---------------------------
If the obligation of any Lender to make any Eurodollar Loan or to Continue,
or to Convert Base Rate Loans into, Eurodollar Loans shall be suspended pursuant
to Section 3.8 or 3.9 hereof, such Lender's Eurodollar Loans shall be
automatically Converted into Base Rate Loans on the last day(s) of then current
Interest Period(s) for such Eurodollar Loans (or, in the case of a Conversion
required by Section 3.8 hereof, on such earlier date as such Lender may specify
to the Borrower with a copy to the Administrative Agent) and, unless and until
such Lender gives notice as provided below that the circumstances specified in
Section 3.8 or 3.9 hereof that gave rise to such Conversion no longer exist:
(a) to the extent that such Lender's Eurodollar Loans have been so
Converted, all payments and prepayments of principal that would otherwise
be applied to such Lender's Eurodollar Loans shall be applied instead to
its Base Rate Loans; and
(b) all Loans that would otherwise be made or Continued by such Lender
as Eurodollar Loans shall be made or Continued instead as Base Rate Loans,
and all Base Rate Loans of such Lender that would otherwise be Converted
into Eurodollar Loans shall remain as Base Rate Loans.
If such Lender gives notice to the Borrower (with a copy to the Administrative
Agent) that the circumstances specified in Section 3.8 or 3.9 hereof that gave
rise to the Conversion of such Lender's Eurodollar Loans pursuant to this
Section 3.10 no longer exist (which such Lender agrees to do promptly upon such
circumstances ceasing to exist) at a time when Eurodollar Loans made by other
Lenders are outstanding, such Lender's Base Rate Loans shall be automatically
Converted, on the first day(s) of the next succeeding Interest Period(s) for
such outstanding Eurodollar Loans, to the extent necessary so that, after giving
effect thereto, all Loans held by the Lenders holding Eurodollar Loans and by
such Lender are held pro rata (as to principal amounts, interest rate basis, and
Interest Periods) in accordance with their respective Commitments.
3.11 Taxes.
-----
(a) Any and all payments by any Credit Party to or for the account of any
Lender or the Administrative Agent hereunder or under any other Credit Document
shall be made free and clear of and without deduction for any and all present or
future taxes, duties, levies, imposts, deductions, charges or withholdings, and
all liabilities with respect thereto, excluding, in the case of each Lender and
the Administrative Agent, taxes imposed on its income, and franchise taxes
imposed on it, by the jurisdiction under the laws of which such Lender (or its
Applicable Lending Office) or the Administrative Agent (as the case may be) is
organized or any political subdivision thereof (all such non-excluded taxes,
duties, levies, imposts, deductions, charges, withholdings, and liabilities
being hereinafter referred to as "Taxes"). If any Credit Party shall be required
-----
by law to deduct or withhold any Taxes from or in respect of any sum payable
under this Credit Agreement or any other Credit Document to any Lender or the
Administrative Agent, (i)
37
the sum payable shall be increased as necessary so that after making all
required deductions and withholdings (including deductions and withholdings
applicable to additional sums payable under this Section 3.11) such Lender or
the Administrative Agent receives an amount equal to the sum it would have
received had no such deductions been made, (ii) such Credit Party shall make
such deductions and withholdings, (iii) such Credit Party shall pay the full
amount deducted or withheld to the relevant taxation authority or other
authority in accordance with applicable law, and (iv) such Credit Party shall
furnish to the Administrative Agent, at its address referred to in Section 11.1,
the original or a certified copy of a receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any and all present or future
stamp or documentary taxes and any other excise or property taxes or charges or
similar levies which arise from any payment made under this Credit Agreement or
any other Credit Document or from the execution or delivery of, or otherwise
with respect to, this Credit Agreement or any other Credit Document (hereinafter
referred to as "Other Taxes").
-----------
(c) The Borrower agrees to indemnify each Lender and the Administrative
Agent for the full amount of Taxes and Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed or asserted by any jurisdiction on
amounts payable under this Section 3.11) paid by such Lender or such
Administrative Agent (as the case may be) and any liability (including
penalties, interest, and expenses) arising therefrom or with respect thereto.
(d) Each Lender that is not a United States person under Section
7701(a)(30) of the Internal Revenue Code, on or prior to the date of its
execution and delivery of this Credit Agreement in the case of each Lender
listed on the signature pages hereof and on or prior to the date on which it
becomes a Lender in the case of each other Lender, and from time to time
thereafter if requested in writing by the Borrower or the Administrative Agent
(but only so long as such Lender remains lawfully able to do so), shall provide
the Borrower and the Administrative Agent with (i) Internal Revenue Service Form
W-8 BEN or W-8 ECI, as appropriate, or any successor form prescribed by the
Internal Revenue Service, certifying that such Lender is entitled to benefits
under an income tax treaty to which the United States is a party which reduces
to zero the rate of withholding tax on payments of interest or certifying that
the income receivable pursuant to this Credit Agreement is effectively connected
with the conduct of a trade or business in the United States, (ii) Internal
Revenue Service Form W-8 or W-9, as appropriate, or any successor form
prescribed by the Internal Revenue Service, and/or (iii) any other form or
certificate required by any taxing authority (including any certificate required
by Sections 871(h) and 881(c) of the Internal Revenue Code), certifying that
such Lender is entitled to an exemption from tax on payments pursuant to this
Credit Agreement or any of the other Credit Documents.
(e) For any period with respect to which a Lender has failed to provide the
Borrower and the Administrative Agent with the appropriate form pursuant to
Section 3.11(d) (unless such failure is due to a change in treaty, law, or
regulation occurring subsequent to the date on which a form originally was
required to be provided), such Lender shall not be entitled to indemnification
under Section 3.11(a) or 3.11(b) with respect to Taxes imposed by the United
States; provided, however, that should a Lender, which is otherwise exempt from
--------
or subject to a reduced rate of withholding tax, become subject to Taxes because
of its failure to deliver a form required hereunder, the Borrower shall take
such steps as such Lender shall reasonably request to assist such Lender to
recover such Taxes.
(f) If any Credit Party is required to pay additional amounts to or for the
account of any Lender pursuant to this Section 3.11, then such Lender will agree
to use reasonable efforts to change the jurisdiction of its Applicable Lending
Office so as to eliminate or reduce any such additional payment which may
thereafter accrue if such change, in the judgment of such Lender, is not
otherwise disadvantageous to such Lender.
38
(g) Within thirty days after the date of any payment of Taxes, the
applicable Credit Party shall furnish to the Administrative Agent the original
or a certified copy of a receipt evidencing such payment.
(h) Without prejudice to the survival of any other agreement of the Credit
Parties hereunder, the agreements and obligations of the Credit Parties
contained in this Section 3.11 shall survive the repayment of the Loans, LOC
Obligations and other obligations under the Credit Documents and the termination
of the Commitments hereunder.
3.12 Funding Losses.
--------------
Upon demand of any Lender (with a copy to the Administrative Agent) from
time to time, the Borrower shall promptly compensate such Lender for and hold
such Lender harmless from any loss, cost or expense incurred by it as a result
of:
(a) any continuation, conversion, payment or prepayment of any Loan
other than a Base Rate Loan on a day other than the last day of the
Interest Period for such Loan (whether voluntary, mandatory, automatic, by
reason of acceleration, or otherwise); or
(b) any failure by the Borrower (for a reason other than the failure
of such Lender to make a Loan) to prepay, borrow, continue or convert any
Loan other than a Base Rate Loan on the date or in the amount notified by
the Borrower;
including any loss of anticipated profits and any loss or expense arising from
the liquidation or reemployment of funds obtained by it to maintain such Loan or
from fees payable to terminate the deposits from which such funds were obtained.
The Borrower shall also pay any customary administrative fees charged by such
Lender in connection with the foregoing. For purposes of calculating amounts
payable by the Borrower to the Lenders under this Section 3.12, each Lender
shall be deemed to have funded each Eurodollar Loan made by it at the Interbank
Offered Rate for such Loan by a matching deposit or other borrowing in the
applicable offshore Dollar interbank market for a comparable amount and for a
comparable period, whether or not such Eurodollar Loan was in fact so funded.
3.13 Pro Rata Treatment.
------------------
Except to the extent otherwise provided herein:
(a) Loans. Each Revolving Loan advance, each payment or prepayment of
-----
principal of any Revolving Loan (other than Swingline Loans) or
reimbursement obligations arising from drawings under Letters of Credit,
each payment of interest on any Revolving Loan, and each payment of
interest thereon, each payment of the Commitment Fee, each payment of the
Letter of Credit Fee, each reduction of Aggregate Revolving Committed
Amount, and each conversion or extension of Revolving Loan shall be
allocated pro rata among the Lenders according to the respective Revolving
Commitment Percentages of the Lenders.
(b) Advances.
--------
(i) No Lender shall be responsible for the failure or delay by
any other Lender in its obligation to make its ratable share of a
borrowing hereunder; provided, however, that the failure of any Lender
to fulfill its obligations hereunder shall not relieve any other
Lender of its obligations hereunder.
39
(ii) Unless the Borrower or any Lender has notified the
Administrative Agent prior to the date any payment is required to be
made by it to the Administrative Agent hereunder, that the Borrower or
such Lender, as the case may be, will not make such payment, the
Administrative Agent may assume that the Borrower or such Lender, as
the case may be, has timely made such payment and may (but shall not
be so required to), in reliance thereon, make available a
corresponding amount to the Person entitled thereto. If and to the
extent that such payment was not in fact made to the Administrative
Agent in immediately available funds, then:
(A) if the Borrower failed to make such payment, each Lender
shall forthwith on demand repay to the Administrative Agent the
portion of such assumed payment that was made available to such
Lender in immediately available funds, together with interest
thereon in respect of each day from and including the date such
amount was made available by the Administrative Agent to such
Lender to the date such amount is repaid to the Administrative
Agent in immediately available funds, at the Federal Funds Rate
from time to time in effect; and
(B) if any Lender failed to make such payment, such Lender
shall forthwith on demand pay to the Administrative Agent the
amount thereof in immediately available funds, together with
interest thereon for the period from the date such amount was
made available by the Administrative Agent to the Borrower to the
date such amount is recovered by the Administrative Agent (the
"Compensation Period") at a rate per annum equal to the Federal
-------------------
Funds Rate from time to time in effect. If such Lender does not
pay such amount forthwith upon the Administrative Agent's demand
therefor, the Administrative Agent may make a demand therefor
upon the Borrower, and the Borrower shall pay such amount to the
Administrative Agent, together with interest thereon for the
Compensation Period at a rate per annum equal to the rate of
interest applicable to the applicable Borrowing.
Nothing herein shall be deemed to relieve any Lender from its
obligation to fulfill its Commitment or to prejudice any rights that the
Administrative Agent or the Borrower may have against any Lender as a
result of any default by such Lender hereunder. A notice of the
Administrative Agent to any Lender with respect to any amount owing under
this subsection (b)(ii)(B) shall be conclusive, absent manifest error.
3.14 Sharing of Payments.
-------------------
(a) Lenders. The Lenders agree that, in the event that any Lender shall
-------
obtain payment in respect of any Revolving Loan, LOC Obligation or any other
obligation owing to such Lender under this Credit Agreement through the exercise
of a right of setoff, banker's lien or counterclaim, or pursuant to a secured
claim under Section 506 of the Bankruptcy Code or other security or interest
arising from, or in lieu of, such secured claim, received by such Lender under
any applicable bankruptcy, insolvency or other similar law or otherwise, or by
any other means, in excess of its pro rata share of such payment as provided in
this Credit Agreement, such Lender shall promptly purchase from the other
Lenders a Participation Interest in such Revolving Loan, LOC Obligation and
other obligations in such amounts, and make such other adjustments from time to
time, as shall be equitable to the end that all the Lenders share such payment
in accordance with the respective Revolving Commitment Percentages of the
Lenders, as provided in this Credit Agreement. The Lenders further agree that if
payment to any such Lender obtained by such Lender through the exercise of a
right of setoff, banker's lien, counterclaim or other event as aforesaid shall
be rescinded or
40
must otherwise be restored, each Lender which shall have shared the benefit of
such payment shall, by repurchase of a Participation Interest theretofore sold,
return its share of that benefit (together with its share of any accrued
interest payable with respect thereto) to each such Lender whose payment shall
have been rescinded or otherwise restored. The Borrower agrees that any Lender
so purchasing such a participation may, to the fullest extent permitted by law,
exercise all rights of payment, including setoff, banker's lien or counterclaim,
with respect to such participation as fully as if such Lender were a holder of
such Revolving Loan, LOC Obligation or other obligation in the amount of such
participation. If under any applicable bankruptcy, insolvency or other similar
law, any Lender receives a secured claim in lieu of a setoff to which this
Section 3.14 applies, such Lender shall, to the extent practicable, exercise its
rights in respect of such secured claim in a manner consistent with the rights
of the Lenders under this Section 3.14 to share in the benefits of any recovery
on such secured claim.
(b) Lenders and Administrative Agent. Except as otherwise expressly
--------------------------------
provided in this Credit Agreement, if any Lender or the Administrative Agent
shall fail to remit to the Administrative Agent or any other Lender an amount
payable by such Lender or the Administrative Agent to the Administrative Agent
or such other Lender pursuant to this Credit Agreement on the date when such
amount is due, such payments shall be made together with interest thereon for
each date from the date such amount is due until the date such amount is paid to
the Administrative Agent or such other Lender at a rate per annum equal to the
Federal Funds Rate.
3.15 Payments, Computations, etc.
---------------------------
(a) Generally. Except as otherwise specifically provided herein, all
---------
payments shall be made to the Administrative Agent in Dollars in immediately
available funds, and shall be made without condition or deduction for any
counterclaim, defense, recoupment or setoff, at the Administrative Agent's
office specified in Section 11.1 not later than 2:00 P.M. (Charlotte, North
Carolina time). Payments received after such time shall be deemed to have been
received on the next succeeding Business Day. The Administrative Agent may (but
shall not be obligated to) debit the amount of any such payment that is not made
by such time to any ordinary deposit account of the Borrower maintained with
such Administrative Agent (with notice to the Borrower). The Borrower shall, at
the time it makes any payment under this Credit Agreement, specify to the
Administrative Agent the Loans, LOC Obligations, Fees, interest or other amounts
payable by the Borrower hereunder to which such payment is to be applied (and in
the event that it fails so to specify, or if such application would be
inconsistent with the terms hereof, the Administrative Agent shall distribute
such payment to the Lenders in such manner as the Administrative Agent may
determine to be appropriate in respect of obligations owing by the Borrower
hereunder, subject to the terms of Section 3.14(a) and Section 3.15(b)). The
Administrative Agent will distribute such payments to the Lenders if any such
payment is received prior to 12:00 Noon (Charlotte, North Carolina time or
London, England time, as appropriate) on a Business Day in like funds as
received prior to the end of such Business Day and otherwise such Administrative
Agent will distribute such payment to the Lenders entitled thereto on the next
succeeding Business Day. Whenever any payment hereunder shall be stated to be
due on a day that is not a Business Day, the due date thereof shall be extended
to the next succeeding Business Day (subject to accrual of interest and Fees for
the period of such extension). Except as expressly provided otherwise herein,
all computations of interest and fees shall be made on the basis of the actual
number of days elapsed over a year of 360 days, except with respect to
computation of interest on Base Rate Loans determined by reference to the Prime
Rate, which shall be calculated based on a year of 365 or 366 days, as
appropriate. Interest shall accrue from and include the date of borrowing, but
exclude the date of payment.
(b) Allocation of Payments After Event of Default. Notwithstanding any
---------------------------------------------
other provisions of this Credit Agreement to the contrary, after the occurrence
and during the continuance of an Event of Default, all amounts collected or
received on or in respect of the Obligations (or other amounts owing under the
Credit Documents in connection therewith) shall be paid over or delivered as
follows:
41
FIRST, to the payment of all reasonable out-of-pocket costs and
expenses (including, without limitation, reasonable attorneys' fees and
expenses and the allocated cost of internal counsel) of the collateral
agent incurred in connection with the execution of its duties as collateral
agent in exercising or attempting to exercise rights and remedies in
respect of the collateral and all protective advances made with respect
thereto;
SECOND, to the payment of all reasonable out-of-pocket costs and
expenses (including, without limitation, reasonable attorneys' fees and
expenses and the allocated cost of internal counsel) of the Administrative
Agent in connection with enforcing the rights and remedies of the Lenders
under the Credit Documents and any protective advances made with respect
thereto;
THIRD, to payment of any fees owed to the Administrative Agent;
FOURTH, to the payment of all reasonable out-of-pocket costs and
expenses (including, without limitation, reasonable attorneys' fees and
expenses and the allocated cost of internal counsel) of each of the Lenders
hereunder in connection with enforcing its rights under the Credit
Documents or otherwise with respect to the Obligations owing to such
Lender;
FIFTH, to the payment of all accrued interest and fees on or in
respect of the Obligations;
SIXTH, to the payment of the outstanding principal amount of the
Obligations (including the payment or cash collateralization of the
outstanding LOC Obligations) and to the payment of any principal amounts
outstanding under Hedging Agreements permitted hereunder;
SEVENTH, to all other Obligations and other obligations which shall
have become due and payable under the Credit Documents otherwise and not
repaid pursuant to clauses "FIRST" through "SIXTH" above; and
EIGHTH, to the payment of the surplus, if any, to whoever may be
lawfully entitled to receive such surplus.
In carrying out the foregoing, (i) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; and (ii) except as otherwise provided, the Lenders shall
receive amounts ratably in accordance with their respective pro rata share
(based on the proportion that then outstanding Obligations held by such Lenders
bears to the aggregate amount of Obligations then outstanding) of amounts
available to be applied pursuant to clauses "FOURTH", "FIFTH" and "SEVENTH"
above; (iii) except as otherwise provided, to the extent that any amounts
available for distribution pursuant to clause "SIXTH" above are attributable to
obligations under Hedging Agreements permitted hereunder held by Lenders or
their Affiliates, the Lenders and their Affiliates shall receive amounts ratably
in accordance with their respective pro rata share (based on the proportion that
then outstanding Obligations and obligations under Hedging Agreements permitted
hereunder held by such Lenders or their Affiliates bear to the aggregate amount
of Obligations then outstanding) of amounts available to be applied pursuant to
clause "SIXTH" above; and (iv) to the extent that any amounts available for
distribution pursuant to clause "SIXTH" above are attributable to the issued but
undrawn amount of outstanding Letters of Credit, such amounts shall be held by
the Administrative Agent in a cash collateral account and applied (A) first, to
reimburse the Issuing Lender for any drawings under such Letters of Credit and
(B) then, following the expiration of all Letters of Credit, to all other
obligations of the types described in clauses "FIFTH" and "SIXTH" above in the
manner provided in this Section 3.15(b).
42
3.16 Evidence of Debt.
----------------
(a) Each Lender shall maintain an account or accounts evidencing each
Revolving Loan made by such Lender to the Borrower from time to time, including
the amounts of principal and interest payable and paid to such Lender from time
to time under this Credit Agreement. Each Lender will make reasonable efforts to
maintain the accuracy of its account or accounts and to promptly update its
account or accounts from time to time, as necessary.
(b) The Administrative Agent shall maintain the Register pursuant to
Section 11.3(c), and a subaccount for each Lender, in which Register and
subaccounts (taken together) shall be recorded (i) the amount, type and Interest
Period of each such Revolving Loan hereunder, (ii) the amount of any principal
or interest due and payable or to become due and payable to each Lender
hereunder and (iii) the amount of any sum received by the Administrative Agent
hereunder from or for the account of the Borrower and each Lender's share
thereof. The Administrative Agent will make reasonable efforts to maintain the
accuracy of the subaccounts referred to in the preceding sentence and to
promptly update such subaccounts from time to time, as necessary.
(c) The entries made in the accounts, Register and subaccounts maintained
pursuant to subsection (b) of this Section 3.16 (and, if consistent with the
entries of the Administrative Agent, subsection (a)) shall be prima facie
evidence of the existence and amounts of the obligations of the Credit Parties
therein recorded; provided, however, that the failure of any Lender or the
--------
Administrative Agent to maintain any such account, such Register or such
subaccount, as applicable, or any error therein, shall not in any manner affect
the obligation of the Credit Parties to repay the Obligations and other amounts
owing hereunder to such Lender.
SECTION 4
GUARANTY
--------
4.1 The Guaranty.
------------
(a) Each of the Guarantors hereby jointly and severally guarantees to the
Administrative Agent and to each of the holders of Guaranteed Obligations, as
hereinafter provided, as primary obligor and not as surety, the prompt payment
of the Guaranteed Obligations in full when due (whether at stated maturity, as a
mandatory prepayment, by acceleration, as a mandatory cash collateralization or
otherwise) strictly in accordance with the terms thereof. The Guarantors hereby
further agree that if any of the Guaranteed Obligations are not paid in full
when due (whether at stated maturity, as a mandatory prepayment, by
acceleration, as a mandatory cash collateralization or otherwise), the
Guarantors will, jointly and severally, promptly pay the same, without any
demand or notice whatsoever, and that in the case of any extension of time of
payment or renewal of any of the Guaranteed Obligations, the same will be
promptly paid in full when due (whether at extended maturity, as a mandatory
prepayment, by acceleration, as a mandatory cash collateralization or otherwise)
in accordance with the terms of such extension or renewal.
(b) Notwithstanding any provision to the contrary contained herein or in
any other of the Credit Documents or Hedging Agreements, to the extent the
obligations of a Guarantor shall be adjudicated to be invalid or unenforceable
for any reason (including, without limitation, because of any applicable state,
provincial or federal law relating to fraudulent conveyances or transfers or the
granting of financial assistance) then the obligations of each Guarantor under
this Credit Agreement and the other Credit Documents shall be limited to the
maximum amount that is permissible under applicable law (whether federal, state
or provincial and including, without limitation, the Bankruptcy Code). In such
case or
43
otherwise at the request of the Administrative Agent, each Credit Party
shall take such action and shall execute and deliver all such further documents
required by the Administrative Agent to cause the obligations of such Guarantor
to be enforceable to the extent required by this Credit Agreement.
4.2 Obligations Unconditional.
-------------------------
The obligations of the Guarantors under Section 4.1 are joint and several,
absolute and unconditional, irrespective of the value, genuineness, validity,
regularity or enforceability of any of the Credit Documents or Hedging
Agreements, or any other agreement or instrument referred to therein, or any
substitution, release, impairment or exchange of any other guarantee of or
security for any of the Guaranteed Obligations, and, to the fullest extent
permitted by applicable law, irrespective of any other circumstance whatsoever
that might otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor, it being the intent of this Section 4.2 that the
obligations of the Guarantors hereunder shall be absolute and unconditional
under any and all circumstances. Each Guarantor agrees that such Guarantor shall
have no right of subrogation, indemnity, reimbursement or contribution against
the Borrower or any other Guarantor for amounts paid under this Section 4 until
such time as the holders of the Guaranteed Obligations have been paid in full in
respect of all Guaranteed Obligations, all Commitments under this Credit
Agreement have been terminated and no Person or Governmental Authority shall
have any right to request any return or reimbursement of funds from the Lenders
in connection with monies received under the Credit Documents or Hedging
Agreements between any member of the Consolidated Group and any Lender, or any
Affiliate of a Lender. Without limiting the generality of the foregoing, it is
agreed that, to the fullest extent permitted by law, the occurrence of any one
or more of the following shall not alter or impair the liability of any
Guarantor hereunder which shall remain absolute and unconditional as described
above:
(a) at any time or from time to time, without notice to any Guarantor,
the time for any performance of or compliance with any of the Guaranteed
Obligations shall be extended, or such performance or compliance shall be
waived;
(b) any of the acts mentioned in any of the provisions of any of the
Credit Documents, any Hedging Agreement between any member of the
Consolidated Group and any Lender or any Affiliate of a Lender, or any
other agreement or instrument referred to in the Credit Documents or such
Hedging Agreements shall be done or omitted;
(c) the maturity of any of the Guaranteed Obligations shall be
accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right under any of the
Credit Documents, any Hedging Agreement between any member of the
Consolidated Group and any Lender or any Affiliate of a Lender, or any
other agreement or instrument referred to in the Credit Documents or such
Hedging Agreements shall be waived or any other guarantee of any of the
Guaranteed Obligations or any security therefor shall be released, impaired
or exchanged in whole or in part or otherwise dealt with;
(d) any Lien granted to, or in favor of, the Administrative Agent or
any Lender or Lenders as security for any of the Guaranteed Obligations
shall fail to attach or be perfected; or
(e) any of the Guaranteed Obligations shall be determined to be void
or voidable (including, without limitation, for the benefit of any creditor
of any Guarantor) or shall be subordinated to the claims of any Person
(including, without limitation, any creditor of any Guarantor).
With respect to its obligations hereunder, each Guarantor hereby expressly
waives diligence, presentment, demand of payment, protest and all notices
whatsoever, and any requirement that the Administrative Agent or
44
any Lender exhaust any right, power or remedy or proceed against any Person
under any of the Credit Documents, any Hedging Agreement between any member of
the Consolidated Group and any Lender, or any Affiliate of a Lender, or any
other agreement or instrument referred to in the Credit Documents or such
Hedging Agreements, or against any other Person under any other guarantee of, or
security for, any of the Guaranteed Obligations.
4.3 Reinstateent.
------------
The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Guaranteed Obligations is rescinded
or must be otherwise restored by any holder of any of the Guaranteed
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Administrative Agent and each Lender on demand for all reasonable costs and
expenses (including, without limitation, reasonable attorneys' fees and expenses
and the allocated cost of internal counsel) incurred by the Administrative Agent
or such Lender in connection with such rescission or restoration, including any
such costs and expenses incurred in defending against any claim alleging that
such payment constituted a preference, fraudulent transfer or similar payment
under any bankruptcy, insolvency or similar law.
4.4 Certain Additional Waivers.
--------------------------
Each Guarantor agrees that such Guarantor shall have no right of recourse
to security for the Guaranteed Obligations, except through the exercise of
rights of subrogation pursuant to Section 4.2 and through the exercise of rights
of contribution pursuant to Section 4.6.
4.5 Remedies.
--------
The Guarantors agree that, to the fullest extent permitted by law, as
between the Guarantors, on the one hand, and the Administrative Agent and the
Lenders, on the other hand, the Guaranteed Obligations may be declared to be
forthwith due and payable as provided in Section 9.2 (and shall be deemed to
have become automatically due and payable in the circumstances provided in said
Section 9.2) for purposes of Section 4.1 notwithstanding any stay, injunction or
other prohibition preventing such declaration (or preventing the Guaranteed
Obligations from becoming automatically due and payable) as against any other
Person and that, in the event of such declaration (or the Guaranteed Obligations
being deemed to have become automatically due and payable), the Guaranteed
Obligations (whether or not due and payable by any other Person) shall forthwith
become due and payable by the Guarantors for purposes of Section 4.1. The
Guarantors acknowledge and agree that their obligations hereunder are secured in
accordance with the terms of the Collateral Documents and that the Lenders may
exercise their remedies thereunder in accordance with the terms thereof.
4.6 Rights of Contribution.
----------------------
The Guarantors hereby agree, as among themselves, that if any Guarantor
shall become an Excess Funding Guarantor (as defined below), each other
Guarantor shall, on demand of such Excess Funding Guarantor (but subject to the
succeeding provisions of this Section 4.6), pay to such Excess Funding Guarantor
an amount equal to such Guarantor's Pro Rata Share (as defined below and
determined, for this purpose, without reference to the properties, assets,
liabilities and debts of such Excess Funding Guarantor) of such Excess Payment
(as defined below). The payment obligation of any Guarantor to any Excess
Funding Guarantor under this Section 4.6 shall be subordinate and subject in
right of payment to the prior payment in full of the obligations of such
Guarantor under the other provisions of this Section 4, and such Excess Funding
Guarantor shall not exercise any right or remedy with respect to such excess
until payment and
45
satisfaction in full of all of such obligations. For purposes hereof, (a)
"Excess Funding Guarantor" shall mean, in respect of any obligations arising
------------------------
under the other provisions of this Section 4 (hereafter, the "Guarantied
----------
Obligations"), a Guarantor that has paid an amount in excess of its Pro Rata
-----------
Share of the Guarantied Obligations; (b) "Excess Payment" shall mean, in respect
--------------
of any Guarantied Obligations, the amount paid by an Excess Funding Guarantor in
excess of its Pro Rata Share of such Guarantied Obligations; and (c) "Pro Rata
--------
Share", for the purposes of this Section 4.6, shall mean, for any Guarantor, the
-----
ratio (expressed as a percentage) of (i) the amount by which the aggregate
present fair saleable value of all of its assets and properties exceeds the
amount of all debts and liabilities of such Guarantor (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the
obligations of such Guarantor hereunder) to (ii) the amount by which the
aggregate present fair saleable value of all assets and other properties of the
Borrower and all of the Guarantors exceeds the amount of all of the debts and
liabilities (including contingent, subordinated, unmatured, and unliquidated
liabilities, but excluding the obligations of the Borrower and the Guarantors
hereunder) of the Borrower and all of the Guarantors, all as of the Closing Date
(if any Guarantor becomes a party hereto subsequent to the Closing Date, then
for the purposes of this Section 4.6 such subsequent Guarantor shall be deemed
to have been a Guarantor as of the Closing Date and the information pertaining
to, and only pertaining to, such Guarantor as of the date such Guarantor became
a Guarantor shall be deemed true as of the Closing Date).
4.7 Guarantee of Payment; Continuing Guarantee.
------------------------------------------
The guarantee in this Section 4 is a guaranty of payment and not of
collection, is a continuing guarantee, and shall apply to all Guaranteed
Obligations whenever arising.
SECTION 5
CONDITIONS
----------
5.1 Closing Conditions.
------------------
The obligation of the Lenders to enter into this Credit Agreement and to
make the initial Extensions of Credit shall be subject to satisfaction of the
following conditions (in form and substance acceptable to the Lenders):
(a) Executed Credit Documents. Receipt by the Administrative Agent of
-------------------------
(i) multiple counterparts of this Credit Agreement, (ii) a Revolving Note
for each Lender and (iii) multiple counterparts of the Collateral
Documents, in each case executed by a duly authorized officer of each party
thereto and in each case conforming to the requirements of this Credit
Agreement.
(b) Legal Opinions. Receipt by the Administrative Agent of multiple
--------------
counterparts of opinions of counsel for the Credit Parties relating to the
Credit Documents and the transactions contemplated therein, in form and
substance satisfactory to the Administrative Agent and the Lenders, and
including, among other things, opinions regarding enforceability of the
Credit Documents and the perfection of the security interests created
thereby.
(c) Financial Information. Receipt by the Lenders of such financial
---------------------
information regarding the members of the Consolidated Group as may be
requested by, and in each case in form and substance satisfactory to, the
Administrative Agent and the Lenders.
(d) Personal Property Collateral. Receipt by the Administrative Agent
----------------------------
of the following:
46
(i) UCC Financing Statements. UCC financing statements for each
------------------------
jurisdiction as is necessary or appropriate, in the Collateral Agent's
discretion, to perfect the security interests in the Collateral.
(ii) Certificated Interests. Original certificates evidencing the
----------------------
Capital Stock pledged pursuant to the Collateral Documents, together
with undated stock transfer powers executed in blank.
(iii) Intellectual Property. Such patent, trademark and copyright
---------------------
notices and filings as necessary or appropriate, in the Collateral
Agent's discretion, to perfect the security interests in Intellectual
Property.
(e) Real Property Collateral. With respect to all Eligible Real
------------------------
Property, if any, receipt by the Administrative Agent of the following:
(i) Surveys. Copies of recent ALTA surveys of each of the
-------
Mortgaged Properties by registered engineers or land surveyors, in
form and detail (including the location of special flood hazard areas)
acceptable to the Collateral Agent.
(ii) Title Policies. Standard ALTA mortgagee polices insuring the
--------------
priority of the Mortgages in amounts and from companies acceptable to
the Collateral Agent and the Lenders. The title policies shall include
only such exceptions as are acceptable to the Collateral Agent. Copies
of recorded documentation relating to all such exceptions shall be
provided to the Collateral Agent.
(iii) Local Counsel Opinions. Executed legal opinions from local
----------------------
counsel regarding the enforceability of the Mortgages under local law
in form and substance acceptable to the Collateral Agent and the
Lenders.
(iv) Appraisals. Appraisals of all of the Mortgaged Properties,
----------
in form and content satisfactory to the Collateral Agent.
(v) Environmental Reports. Copies of environmental reports and
---------------------
other environmental documentation, if any, relating to the Mortgaged
Properties and other real property leased by members of the
Consolidated Group, which reports and documentation shall be in form
and detail satisfactory to the Collateral Agent.
(f) Evidence of Insurance. Receipt by the Administrative Agent of
---------------------
insurance certificates or policies evidencing casualty insurance (including
builders' risk and all-risk permanent policies) and liability (and with
respect to Eligible Real Property, if any, flood hazard insurance for
improvements located in areas having "special flood hazards"), conforming
to the requirements of this Credit Agreement and the other Credit
Documents, showing the Collateral Agent as sole loss payee with respect to
the casualty insurance and as additional insured with respect to liability
insurance, in each case together with evidence of payment of premiums
thereon.
(g) Absence of Legal Proceedings. There shall not exist any action,
----------------------------
suit, investigation or proceeding pending in any court or before any
arbitrator or Governmental Authority which could reasonably be expected to
have a Material Adverse Effect.
47
(h) Corporate Documents. Receipt by the Administrative Agent of the
-------------------
following (or the equivalent) for each of the Credit Parties:
(i) Charter Documents. Copies of the articles or certificates of
-----------------
incorporation or other charter documents of such Credit Party
certified to be true and complete as of a recent date by the
appropriate Governmental Authority of the state or other jurisdiction
of its incorporation and certified by a secretary or assistant
secretary of such Credit Party to be true and correct as of the
Closing Date.
(ii) Bylaws. A copy of the bylaws, operating agreement or
------
equivalent of such Credit Party certified by a secretary or assistant
secretary of such Credit Party to be true and correct and in force and
effect as of the Closing Date.
(iii) Resolutions. Copies of resolutions of the board of
-----------
directors of such Credit Party approving and adopting the Credit
Documents to which it is a party, the transactions contemplated
therein and authorizing execution and delivery thereof, certified by a
secretary or assistant secretary of such Credit Party to be true and
correct and in force and effect as of the Closing Date.
(iv) Good Standing. Certificates of good standing, existence or
-------------
its equivalent certified as of a recent date by the appropriate
governmental authorities of the state of incorporation and each other
state in which the failure to so qualify and be in good standing would
be reasonably likely to have a material adverse effect on the business
or operations in such state.
(v) Officer's Certificate. An officer's certificate for each of
---------------------
the Credit Parties dated as of the Closing Date substantially in the
form of Schedule 5.1(h)(v) with appropriate insertions and
------------------
attachments.
(i) Priority of Liens. The Administrative Agent shall have received
-----------------
satisfactory evidence that (i) the Collateral Agent, on behalf of the Lenders,
holds a perfected, first priority Lien on all Collateral and (ii) none of the
Collateral is subject to any Liens other than Permitted Liens.
(j) Officer's Closing Certificate. The Administrative Agent shall have
-----------------------------
received a certificate or certificates executed by a Responsible Officer of the
Borrower as of the Closing Date, in form and substance satisfactory to the
Administrative Agent, attaching the computation of the Consolidated Total
Leverage Ratio as of September 30, 2001 (calculated to give effect to the
Follow-On Offering on a Pro Forma Basis) and stating that (A) each Credit Party
is in compliance with all existing financial obligations, (B) all governmental,
shareholder and third party consents and approvals, if any, with respect to the
Credit Documents and the transactions contemplated thereby have been obtained
and are in full force and effect, and all applicable waiting periods shall have
expired without any action that could have a Material Adverse Effect on the
transactions contemplated hereby being taken by any authority, (C) no action,
suit, investigation or proceeding is pending or threatened in any court or
before any arbitrator or governmental instrumentality that purports to affect
any Credit Party or any transaction contemplated by the Credit Documents, if
such action, suit, investigation or proceeding could have a Material Adverse
Effect, and no order, decree, judgment, ruling or injunction restrains the
consummation of the transactions contemplated in the Credit Documents, (D)
immediately after giving effect to the initial Loans made and Letters of Credit
issued on the Closing Date, (1) no Default or Event of Default exists, (2) all
representations and warranties contained herein and in the other Credit
Documents are true and correct in all material
48
respects and (3) the Credit Parties are in compliance on a Pro Forma Basis with
each of the financial covenants set forth in Section 7.11 (assuming for purposes
hereof that such financial covenants were measured as of, and for the
twelve-month period ending on, such date) and (E) the computation of the
Consolidated Total Leverage Ratio attached to such certificate is true and
correct in all material respects and has been prepared in accordance with GAAP
applied on a consistent basis, subject to changes resulting from normal year-end
audit adjustments.
(k) Corporate Structure. Receipt by the Administrative Agent of the
-------------------
corporate capital and ownership structure of the members of the Consolidated
Group.
(l) Fees and Expenses. Payment by the Credit Parties of all fees and
-----------------
expenses owed by them to the Lenders, the Administrative Agent and the
Collateral Agent, including, without limitation, payment to the Administrative
Agent of the fees set forth in the Administrative Agent's Fee Letter.
5.2 Conditions to all Extensions of Credit.
--------------------------------------
Extensions of Credit hereunder (including the initial Extension of Credit
to be made hereunder) are subject to the satisfaction of the following
conditions precedent:
(a) Representations and Warranties. The representations and warranties
------------------------------
made by the Credit Parties herein and in the other Credit Documents and
that are contained in any certificate furnished at any time under or in
connection herewith shall be true and correct in all material respects on
and as of the date of such Extension of Credit as if made on and as of such
date (except for those that expressly relate to an earlier date).
(b) No Default or Event of Default. No Default or Event of Default
------------------------------
shall have occurred and be continuing on the date of such Extension of
Credit or after giving effect to such Extension of Credit unless such
Default or Event of Default shall have been waived in accordance with this
Credit Agreement.
(c) Other Conditions. The Borrower shall have satisfied the conditions
----------------
set forth in Section 2 and, in the case of Continuations and Conversions,
Section 3.2.
Each request for an Extension of Credit (including Continuations and
Conversions) and each acceptance by the Borrower of an Extension of Credit
(including Continuations and Conversions) shall be deemed to constitute a
representation and warranty by the Borrower as of the date of such Extension of
Credit that the applicable conditions in this Section 5.2 have been satisfied.
SECTION 6
REPRESENTATIONS AND WARRANTIES
------------------------------
To induce the Lenders to enter into this Credit Agreement and to make the
Extensions of Credit hereunder, each of the Credit Parties hereby represents and
warrants to the Administrative Agent and to each Lender that:
49
6.1 Financial Condition.
-------------------
Each of the financial statements described below (copies of which have
heretofore been provided to the Administrative Agent for distribution to the
Lenders) have been prepared in accordance with GAAP consistently applied
throughout the periods covered thereby, are complete and correct in all material
respects and present fairly the financial condition (including disclosure of all
material liabilities, contingent or otherwise) and results from operations of
the entities and for the periods specified, subject in the case of interim
company-prepared statements to normal year-end adjustments and the absence of
footnotes:
(a) the audited consolidated balance sheets of the Borrower and its
consolidated subsidiaries dated as of December 31, 1998, December 31, 1999
and December 31, 2000, together with the related audited statements of
income, stockholders' equity and cash flows for the respective fiscal years
then ended, certified by Deloitte & Touche, certified public accountants;
(b) the unaudited, company-prepared consolidated and consolidating
balance sheets of the Borrower and its consolidated subsidiaries dated as
of September 30, 2001, together with the related unaudited,
company-prepared consolidated and consolidating statements of income,
stockholders' equity and cash flows for the fiscal quarter then ended; and
(c) after the Closing Date, the annual and quarterly financial
statements provided in accordance with Sections 7.1(a) and (b).
6.2 No Changes or Restricted Payments.
---------------------------------
Since the date of the most recent annual audited financial statements
referenced in Section 6.1(a):
(a) for the period to the Closing Date, except as previously disclosed
in writing to the Administrative Agent and the Lenders, (i) there have been
no material sales, transfers or other dispositions of any material part of
the business or property of the members of the Consolidated Group, nor have
there been any material purchases or other acquisitions of any business or
property (including the Capital Stock of any other person) by the members
of the Consolidated Group, which are not reflected in the annual audited or
company-prepared quarterly financial statements referenced in Section
6.1(a) and (b) hereof, and (ii) no Restricted Payments have been declared
or paid by members of the Consolidated Group; and
(b) there has been no circumstance, development or event relating to
or affecting the members of the Consolidated Group which has had or could
reasonably be expected to have a Material Adverse Effect.
6.3 Organization; Existence; Compliance with Law.
--------------------------------------------
Each of the members of the Consolidated Group (a) is duly organized,
validly existing in good standing under the laws of the jurisdiction of its
incorporation or organization, (b) has the corporate or other necessary power
and authority, and the legal right to own and operate its Property, to lease the
Property it operates as lessee and to conduct the business in which it is
currently engaged, (c) is duly qualified as a foreign entity and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of Property or the conduct of its business requires such
qualification, other than in such jurisdictions where the failure to be so
qualified and in good standing would not, in the aggregate, have a Material
Adverse Effect, and (d) is in compliance with all Medicare Regulations, Medicaid
Regulations and all Requirements
50
of Law (including without limitation Environmental Laws) applicable to it, or to
its properties, except to the extent that the failure to comply therewith could
not, in the aggregate, be reasonably expected to have a Material Adverse Effect.
Without limiting the generality of the foregoing, with respect to each member of
the Consolidated Group (and in each case, except as would not be reasonably
expected to have a Material Adverse Effect):
(i) There is (A) no member of the Consolidated Group or individual
employed by any member of the Consolidated Group that could reasonably be
expected to have criminal culpability or to be excluded from participation
in any Medical Reimbursement Program for corporate or individual actions or
failures to act where such culpability or exclusion has resulted or could
reasonably be expected to result in an Exclusion Event; and (B) no officer
continuing to be employed by the Consolidated Group who may reasonably be
expected to have individual culpability for matters under investigation by
the OIG or other Governmental Authority unless such officer has been,
within a reasonable period of time after discovery of such actual or
potential culpability, either suspended or removed from positions of
responsibility related to those activities under challenge by the OIG or
other Governmental Authority or otherwise dealt with in a manner consistent
with the corporate compliance program referred to in Section 7.15 hereof;
(ii) Current billing policies, arrangements, protocols and
instructions comply with requirements of Medical Reimbursement Programs and
are administered by properly trained personnel, except where any such
failure to comply could not reasonably be expected to result in an
Exclusion Event;
(iii) Current medical director compensation arrangements comply with
state and federal anti-kick back, fraud and abuse, and ▇▇▇▇▇ I and II
requirements, except where any such failure to comply could not reasonably
be expected to result in an Exclusion Event.
6.4 Power; Authorization; Enforceable Obligations.
---------------------------------------------
Each of the Credit Parties has the corporate or other necessary power and
authority, and the legal right, to make, deliver and perform the Credit
Documents to which it is a party and has taken all necessary corporate or other
action to authorize the execution, delivery and performance by it of the Credit
Documents to which it is a party. No consent or authorization of, filing with,
notice to or other act by or in respect of, any Governmental Authority or any
other Person is required in connection with acceptance of Extensions of Credit
or the making of the guaranties hereunder or with the execution, delivery or
performance of any Credit Documents by the Credit Parties (other than those
which have been obtained, such filings as are required by the Securities and
Exchange Commission and to fulfill other reporting requirements with
Governmental Authorities) or with the validity or enforceability of any Credit
Document against the Credit Parties (except such filings as are necessary in
connection with the perfection of the Liens created by such Credit Documents).
Each Credit Document to which it is a party constitutes a legal, valid and
binding obligation of such Credit Party enforceable against such Credit Party in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).
6.5 No Legal Bar.
------------
The execution, delivery and performance of the Credit Documents, the
borrowings hereunder and the use of the Extensions of Credit will not violate
any Requirement of Law or any Contractual Obligation of any member of the
Consolidated Group (except those as to which waivers or consents have
51
been obtained), and will not result in, or require, the creation or imposition
of any Lien on any of its respective properties or revenues pursuant to any
Requirement of Law or Contractual Obligation other than the Liens arising under
or contemplated in connection with the Credit Documents.
6.6 No Material Litigation and Disputes.
-----------------------------------
(a) No claim, litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to the best knowledge of the
Credit Parties, threatened by or against, any members of the Consolidated Group
or against any of their respective properties or revenues that (i) relate to the
Credit Documents or any of the transactions contemplated hereby or thereby or
(ii) if adversely determined, could reasonably be expected to have a Material
Adverse Effect. Set forth on Schedule 6.6 is a summary of all claims,
------------
litigation, investigations and proceedings pending or, to the best knowledge of
the Credit Parties, threatened by or against the members of the Consolidated
Group or against any of their respective properties or revenues, and none of
such actions, individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect.
(b) No default exists and, to the best knowledge of the Credit Parties, no
default has been asserted, under any Contractual Obligations to which any
members of the Consolidated Group are party that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
6.7 No Defaults.
-----------
No Default or Event of Default has occurred and is continuing.
6.8 Ownership and Operation of Property.
-----------------------------------
Except as would not be reasonably expected to have a Material Adverse
Effect, each of the members of the Consolidated Group (i) has good record and
marketable title to, or a valid leasehold interest in, all its real property,
and good title to, or a valid leasehold interest in, all its other property, and
none of such property is subject to any Lien, except for Permitted Liens, and
(ii) has obtained all licenses, permits, franchises or other certifications,
consents, approvals and authorizations, governmental or private, necessary to
the ownership of its Property and to the conduct of its business.
6.9 Intellectual Property.
---------------------
Each of the members of the Consolidated Group owns, or has the legal right
to use, all United States trademarks, tradenames, copyrights, patents,
technology, know-how and processes, if any, necessary for each of them to
conduct its business as currently conducted (the "Intellectual Property") except
---------------------
for those the failure to own or have such legal right to use would not be
reasonably expected to have a Material Adverse Effect. Set forth on Schedule 6.9
------------
is a list of Intellectual Property owned and used by members of the Consolidated
Group. No claim has been asserted and is pending by any Person challenging or
questioning the use of any such Intellectual Property or the validity or
effectiveness of any such Intellectual Property, nor does any Credit Party know
of any such claim, and the use of such Intellectual Property by the members of
the Consolidated Group does not infringe on the rights of any Person, except for
such claims and infringements that, in the aggregate, would not be reasonably
expected to have a Material Adverse Effect.
6.10 Taxes.
-----
Each of the members of the Consolidated Group has filed or caused to be
filed all income tax returns (federal, state, local and foreign) and all other
material tax returns that are required to be filed and has paid (i) all amounts
shown therein to be due (including interest and penalties) and (ii) all other
taxes, fees,
52
assessments and other governmental charges (including mortgage recording taxes,
documentary stamp taxes and intangibles taxes) owing, except for such taxes that
are not yet delinquent or as are being contested in good faith by appropriate
proceedings for which adequate reserves determined in accordance with GAAP have
been established unless the failure to make any such payment could give rise to
an immediate right to foreclose on a Lien securing such amounts. No tax claim or
assessment has been asserted against members of the Consolidated Group which if
adversely determined could reasonably be expected to have a Material Adverse
Effect.
6.11 ERISA.
-----
Except as could not reasonably be expected to have a Material Adverse
Effect:
(a) During the five-year period prior to the date on which this
representation is made or deemed made: (i) no ERISA Event has occurred,
and, to the best knowledge of the Credit Parties, no event or condition has
occurred or exists as a result of which any ERISA Event could reasonably be
expected to occur, with respect to any Plan; (ii) no "accumulated funding
deficiency," as such term is defined in Section 302 of ERISA and Section
412 of the Internal Revenue Code, whether or not waived, has occurred with
respect to any Plan; (iii) each Plan has been maintained, operated, and
funded in compliance with its own terms and in material compliance with the
provisions of ERISA, the Internal Revenue Code, and any other applicable
federal or state laws; and (iv) no lien in favor of the PBGC or a Plan has
arisen or is reasonably likely to arise on account of any Plan.
(b) The actuarial present value of all "benefit liabilities" (as
defined in Section 4001(a)(16) of ERISA), whether or not vested, under each
Single Employer Plan, as of the last annual valuation date prior to the
date on which this representation is made or deemed made (determined, in
each case, in accordance with Financial Accounting Standards Board
Statement 87, utilizing the actuarial assumptions used in such Plan's most
recent actuarial valuation report), did not exceed as of such valuation
date the fair market value of the assets of such Plan.
(c) No member of the Consolidated Group nor any ERISA Affiliate has
incurred, or, to the best knowledge of the Credit Parties, could be
reasonably expected to incur, any withdrawal liability under ERISA to any
Multiemployer Plan or Multiple Employer Plan. No member of the Consolidated
Group nor any ERISA Affiliate would become subject to any withdrawal
liability under ERISA if any member of the Consolidated Group or any ERISA
Affiliate were to withdraw completely from all Multiemployer Plans and
Multiple Employer Plans as of the valuation date most closely preceding the
date on which this representation is made or deemed made. No member of the
Consolidated Group nor any ERISA Affiliate has received any notification
that any Multiemployer Plan is in reorganization (within the meaning of
Section 4241 of ERISA), is insolvent (within the meaning of Section 4245 of
ERISA), or has been terminated (within the meaning of Title IV of ERISA),
and no Multiemployer Plan is, to the best knowledge of the Credit Parties,
reasonably expected to be in reorganization, insolvent, or terminated.
(d) No prohibited transaction (within the meaning of Section 406 of
ERISA or Section 4975 of the Internal Revenue Code) or breach of fiduciary
responsibility has occurred with respect to a Plan which has subjected or
may subject any member of the Consolidated Group or any ERISA Affiliate to
any liability under Sections 406, 409, 502(i), or 502(l) of ERISA or
Section 4975 of the Internal Revenue Code, or under any agreement or other
instrument pursuant to which any member of the Consolidated Group or any
ERISA Affiliate has agreed or is required to indemnify any person against
any such liability.
53
(e) No member of the Consolidated Group nor any ERISA Affiliates has
any material liability with respect to "expected post-retirement benefit
obligations" within the meaning of the Financial Accounting Standards Board
Statement 106. Each Plan which is a welfare plan (as defined in Section
3(1) of ERISA) to which Sections 601-609 of ERISA and Section 4980B of the
Internal Revenue Code apply has been administered in compliance in all
material respects of such sections.
(f) Neither the execution and delivery of this Credit Agreement nor
the consummation of the financing transactions contemplated thereunder will
involve any transaction which is subject to the prohibitions of Sections
404, 406 or 407 of ERISA or in connection with which a tax could be imposed
pursuant to Section 4975 of the Internal Revenue Code. The representation
by the Credit Parties in the preceding sentence is made in reliance upon
and subject to the accuracy of the Lenders' representation in Section 11.15
with respect to their source of funds and is subject, in the event that the
source of the funds used by the Lenders in connection with this transaction
is an insurance company's general asset account, to the application of
Prohibited Transaction Class Exemption 95-60, 60 Fed. Reg. 35,925 (1995),
compliance with the regulations issued under Section 401(c)(1)(A) of ERISA,
or the issuance of any other prohibited transaction exemption or similar
relief, to the effect that assets in an insurance company's general asset
account do not constitute assets of an "employee benefit plan" within the
meaning of Section 3(3) of ERISA of a "plan" within the meaning of Section
4975(e)(1) of the Internal Revenue Code.
6.12 Governmental Regulations, etc.
-----------------------------
(a) No part of the proceeds of the Extensions of Credit hereunder will be
used, directly or indirectly, for the purpose of purchasing or carrying any
"margin stock" within the meaning of Regulation U, or for the purpose of
purchasing or carrying or trading in any other securities. If requested by any
Lender or the Administrative Agent, the Borrower will furnish to the
Administrative Agent and each Lender a statement to the foregoing effect in
conformity with the requirements of FR Form U-1 referred to in said Regulation
U. No indebtedness being reduced or retired out of the proceeds of the
Extensions of Credit hereunder was or will be incurred for the purpose of
purchasing or carrying any "margin stock" within the meaning of Regulation U or
any "margin security" within the meaning of Regulation T. "Margin stock" (within
the meaning of Regulation U) does not constitute more than twenty-five percent
(25%) of the value of the consolidated assets of the Borrower and its
Subsidiaries. None of the transactions contemplated by this Credit Agreement
(including, without limitation, the direct or indirect use of the proceeds of
the Loans) will violate or result in a violation of the Securities Act of 1933,
as amended, or the Securities Exchange Act of 1934, as amended, or regulations
issued pursuant thereto, or Regulation T, U or X.
(b) None of the members of the Consolidated Group is subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act or
the Investment Company Act of 1940, each as amended. In addition, none of the
members of the Consolidated Group is (i) an "investment company" registered or
required to be registered under the Investment Company Act of 1940, as amended,
and is not controlled by such a company, or (ii) a "holding company", or a
"subsidiary company" of a "holding company", or an "affiliate" of a "holding
company" or of a "subsidiary" of a "holding company", within the meaning of the
Public Utility Holding Company Act of 1935, as amended.
(c) No director, executive officer or principal shareholder of any member
of the Consolidated Group is a director, executive officer or principal
shareholder of any Lender. For the purposes hereof the terms "director",
"executive officer" and "principal shareholder" (when used with reference to any
Lender) have the respective meanings assigned thereto in Regulation O.
54
6.13 Subsidiaries.
------------
Set forth on Schedule 6.13 (as the same may be updated by the Borrower from
-------------
time to time) are all of the Subsidiaries of the Borrower, including the
jurisdiction of organization, classes of Capital Stock (including options,
warrants, rights of subscription, conversion and exchangeability and other
similar rights), ownership and ownership percentages thereof and identifying
those entities that are Subsidiaries solely pursuant to Management Services
Agreements. The outstanding shares of Capital Stock shown have been validly
issued, fully paid and are non-assessable and owned free of Liens other than
Permitted Liens. The outstanding shares of Capital Stock shown are not the
subject of buy-sell, voting trust or other shareholder agreement except as
identified on Schedule 6.13.
-------------
6.14 Purpose of Extensions of Credit.
-------------------------------
Extensions of Credit hereunder will be used by the Borrower (i) to
refinance existing Indebtedness and (ii) to finance working capital, capital
expenditures and other corporate purposes of the Borrower and its Subsidiaries
(including, without limitation, Permitted Acquisitions).
6.15 Environmental Matters.
---------------------
Except as could not reasonably be expected to have a Material Adverse
Effect:
(a) Each of the facilities and properties owned, leased or operated by
the members of the Consolidated Group (the "Subject Properties") and all
------------------
operations at the Subject Properties are in compliance with all applicable
Environmental Laws, and there is no violation of any Environmental Law with
respect to the Subject Properties or the businesses operated by the members
of the Consolidated Group (the "Businesses"), and there are no conditions
----------
relating to the Businesses or Subject Properties that could give rise to
liability under any applicable Environmental Laws.
(b) None of the Subject Properties contains, or has previously
contained, any Materials of Environmental Concern at, on or under the
Subject Properties in amounts or concentrations that constitute or
constituted a violation of, or could give rise to liability under,
Environmental Laws.
(c) None of the members of the Consolidated Group has received any
written or verbal notice of, or inquiry from any Governmental Authority
regarding, any violation, alleged violation, non-compliance, liability or
potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the Subject Properties or the
Businesses, nor does any member of the Consolidated Group have knowledge or
reason to believe that any such notice will be received or is being
threatened.
(d) Materials of Environmental Concern have not been transported or
disposed of from the Subject Properties, or generated, treated, stored or
disposed of at, on or under any of the Subject Properties or any other
location, in each case by or on behalf any members of the Consolidated
Group in violation of, or in a manner that would be reasonably likely to
give rise to liability under, any applicable Environmental Law.
(e) No judicial proceeding or governmental or administrative action is
pending or, to the best knowledge of any Credit Party, threatened, under
any Environmental Law to which any member of the Consolidated Group is or
will be named as a party, nor are there any consent decrees or other
decrees, consent orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under any Environmental
Law with respect to any member of the Consolidated Group, the Subject
Properties or the Businesses.
55
(f) There has been no release or, threat of release of Materials of
Environmental Concern at or from the Subject Properties, or arising from or
related to the operations (including, without limitation, disposal) of any
member of the Consolidated Group in connection with the Subject Properties
or otherwise in connection with the Businesses, in violation of or in
amounts or in a manner that could give rise to liability under
Environmental Laws.
6.16 No Material Misstatements.
-------------------------
None of (i) the information contained in the Confidential Offering
Memorandum dated as of October 2001, or (ii) the information, reports, financial
statements, exhibits or schedules, taken as a whole, furnished by or on behalf
of any member of the Consolidated Group to the Administrative Agent or any
Lender in connection with the negotiation of the Credit Documents or included
therein or delivered pursuant thereto contained, contains or will contain any
material misstatement of fact or omitted, omits or will omit to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were, are or will be made, not materially
misleading, provided that to the extent any such information, report, financial
--------
statement, exhibit or schedule was based upon or constitutes a forecast or
projection, each of the Credit Parties represents only that it acted in good
faith and utilized reasonable assumptions and due care in the preparation of
such information, report, financial statement, exhibit or schedule.
6.17 Labor Matters.
-------------
Except as could not reasonably be expected to have a Material Adverse
Effect:
(a) There are no strikes or lockouts against any members of the
Consolidated Group pending or, to the best knowledge of the Credit Parties,
threatened;
(b) The hours worked by and payments made to employees of the
Consolidated Group have not been in violation of the Fair Labor Standards
Act or any other applicable federal, state, local or foreign law dealing
with such matters in any case where a Material Adverse Effect could
reasonably be expected to occur as a result of the violation thereof;
(c) All payments due from members of the Consolidated Group, or for
which any claim may be made against a member of the Consolidated Group, on
account of wages and employee health and welfare insurance and other
benefits, have been paid or accrued as a liability on the books of the
respective members of the Consolidated Group; and
(d) None of the members of the Consolidated Group is party to a
collective bargaining agreement.
Set forth on Schedule 6.17 is a summary of all labor matters pending or, to
-------------
the best knowledge of the Credit Parties, threatened by or against the members
of the Consolidated Group, and none of such labor matters, individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect.
6.18 Security Documents.
------------------
(a) Security Agreement. The Security Agreement is effective to create
------------------
in favor of the Collateral Agent, for the ratable benefit of the holders of
the Secured Obligations identified therein, a legal valid and enforceable
security interest in the Collateral identified therein owned by the Credit
56
Parties and, when financing statements in appropriate form are filed in the
appropriate offices for the locations specified in the schedules to the
Security Agreement, the Security Agreement shall constitute a fully
perfected Lien on, and security interest in, all right, title and interest
of the grantors thereunder in such Collateral that may be perfected by
filing, recording or registering a financing statement under the Uniform
Commercial Code as in effect, in each case prior and superior in right to
any other Lien on any Collateral other than Permitted Liens.
(b) Pledge Agreement. The Pledge Agreement is effective to create in
favor of the Collateral Agent, for the ratable benefit of the holders of
the Secured Obligations identified therein, a legal valid and enforceable
security interest in the Collateral identified therein and, when such
Collateral is delivered to the Collateral Agent, the Pledge Agreement shall
constitute a fully perfected first priority Lien on, and security interest
in, all right, title and interest of the pledgors thereunder in such
Collateral, in each case prior and superior in right to any other Lien.
(c) Intellectual Property. The Security Agreement together with the
---------------------
Notice of Grant of Security Interest in Trademarks and the Notice of Grant
of Security Interest in Patents filed with the United States Patent and
Trademark Office, and the Notice of Grant of Security Interest in
Copyrights filed with the United States Copyright Office will constitute a
fully perfected Lien on, and security interest in, all right, title and
interest of the grantors thereunder in all Patents and Patent Licenses,
Trademarks and Trademark Licenses and Copyrights and Copyright Licenses
(each as defined in the Security Agreement) and in which a security
interest may be perfected by filing, recording or registration of a Notice
in the United States Patent and Trademark Office and the United States
Copyright Office, in each case prior and superior in right to any other
Lien other than Permitted Liens.
(d) Mortgages. The Mortgages, in any, are effective to create in favor
---------
of the Collateral Agent, for the ratable benefit of the holders of the
Secured Obligations identified therein, a legal, valid and enforceable Lien
on all of the respective grantors' right, title and interest in and to the
Mortgaged Properties thereunder and the proceeds thereof, and when the
Mortgages are recorded in the appropriate offices and the proper amount of
mortgage recording or similar taxes (if any) are paid and when the
financing statements are duly filed in the appropriate public records, the
Mortgages shall constitute a fully perfected Lien on, and security interest
in, all right, title and interest of the grantors in such Mortgaged
Properties and the proceeds thereof, in each case prior and superior in
right to any other Lien other than Permitted Liens.
6.19 Location of Real Property and Leased Premises.
---------------------------------------------
Set forth on Schedule 6.19(a) is a complete and correct list of all real
----------------
property located in the United States and owned or leased by any member of the
Consolidated Group with street address and state where located. Set forth on
Schedule 6.19(b) is a list of all locations where any tangible personal property
----------------
of any member of the Consolidated Group is located, including street address and
state where located. Set forth on Schedule 6.19(c) is the chief executive office
----------------
and principal place of business of each member of the Consolidated Group.
6.20 Fraud and Abuse.
---------------
Except as would not reasonably be expected to constitute a Material Adverse
Effect, to the knowledge of the Responsible Officers of the Credit Parties, no
member of the Consolidated Group or any of their respective officers, directors
or Contract Providers have engaged in any activities that are prohibited under
Medicare Regulations or Medicaid Regulations or that are prohibited by binding
rules of professional conduct, including, without limitation, (i) knowingly and
willfully making or causing to be made a false statement or a misrepresentation
of any material fact in any application for any benefit or
57
payment; (ii) knowingly and willfully making or causing to be made any false
statement or a misrepresentation of any material fact for use in determining
rights to any benefit or payment; (iii) failing to disclose knowledge by a
claimant of the occurrence of any event affecting the initial or continued right
to any benefit or payment on its own behalf or on behalf of another, with intent
to secure such benefit or payment fraudulently; (iv) knowingly and willfully
soliciting or receiving any remuneration (including any kickback, bribe or
rebate), directly or indirectly, overtly or covertly, in cash or in kind or
offering to pay such remuneration (A) in return for referring an individual to a
Person for the furnishing or arranging for the furnishing of any item or service
for which payment may be made in whole or in part by Medicare, Medicaid or other
applicable third party payors, or (B) in return for purchasing, leasing or
ordering or arranging for or recommending the purchasing, leasing or ordering of
any good, facility, service, or item for which payment may be made in whole or
in part by Medicare, Medicaid or other applicable third party payors.
6.21 Licensing and Accreditation.
---------------------------
Except as would not reasonably be expected to constitute a Material Adverse
Effect, each member of the Consolidated Group and, to the knowledge of the
Credit Parties, each Contract Provider, has, to the extent applicable: (i)
obtained (or been duly assigned) all required certificates of need or
determinations of need as required by the relevant state Governmental Authority
for the acquisition, construction, expansion of, investment in, operation of or
management of its businesses as currently operated; (ii) obtained and maintains
in good standing all required licenses, permits, authorizations and
qualifications required under applicable law in connection with the ownership,
operation or management of each of its Subsidiaries; (iii) to the extent prudent
and customary in the industry in which it is engaged, obtained and maintains
accreditation from all generally recognized accrediting agencies; and (iv)
entered into and maintains in good standing its status as a Medicare Supplier
and as a Medicaid Supplier. Except as would not reasonably be expected to
constitute a Material Adverse Effect, to the knowledge of the Credit Parties,
each Contract Provider is duly licensed by each state, state agency, commission
or other Governmental Authority having jurisdiction over the provisions of such
services by such Person in the locations where the members of the Consolidated
Group conduct business, to the extent such licensing is required to enable such
Person to provide the professional services provided by such Person and
otherwise as is necessary to enable the Consolidated Group to operate as
currently operated and as contemplated to be operated, and all such required
licenses are in full force and effect on the date hereof and have not been
revoked or suspended or otherwise limited.
6.22 Equity Contribution.
-------------------
The Borrower has received not less than $80 million in net cash proceeds in
connection with the Follow-On Offering.
SECTION 7
AFFIRMATIVE COVENANTS
Each Credit Party hereby covenants and agrees that so long as this Credit
Agreement is in effect or any amounts payable hereunder or under any other
Credit Document shall remain outstanding or any Letter of Credit is outstanding,
and until all of the Commitments hereunder shall have terminated:
7.1 Information Covenants.
---------------------
The Credit Parties will furnish, or cause to be furnished, to the
Administrative Agent and each of the Lenders:
58
(a) Annual Financial Statements. As soon as available, and in any
---------------------------
event within ninety-five days after the close of each fiscal year of the
members of the Consolidated Group, a consolidated and consolidating balance
sheet and income statement of the members of the Consolidated Group as of
the end of such fiscal year, together with related consolidated and
consolidating statements of operations and retained earnings and of cash
flows for such fiscal year, in each case setting forth in comparative form
consolidated and consolidating figures for the preceding fiscal year, all
such financial information described above to be in reasonable form and
detail and audited by independent certified public accountants of
recognized national standing reasonably acceptable to the Administrative
Agent and whose opinion shall be to the effect that such financial
statements have been prepared in accordance with GAAP (except for changes
with which such accountants concur) and shall not be limited as to the
scope of the audit or qualified as to the status of the members of the
Consolidated Group as a going concern or any other material qualifications
or exceptions, or in any manner which, in the reasonable judgment of the
Required Lenders, is unacceptable.
(b) Quarterly Financial Statements. As soon as available, and in any
------------------------------
event within fifty days after the close of each fiscal quarter of the
members of the Consolidated Group (other than the fourth fiscal quarter, in
which case ninety days after the end thereof) a consolidated and
consolidating balance sheet and income statement of the members of the
Consolidated Group as of the end of such fiscal quarter, together with
related consolidated and consolidating statements of operations and
retained earnings and of cash flows for such fiscal quarter, in each case
setting forth in comparative form consolidated and consolidating figures
for the corresponding period of the preceding fiscal year, all such
financial information described above to be in reasonable form and detail
and reasonably acceptable to the Administrative Agent, and accompanied by a
certificate of a Responsible Officer of the Borrower to the effect that
such quarterly financial statements fairly present in all material respects
the financial condition of the members of the Consolidated Group and have
been prepared in accordance with GAAP, subject to changes resulting from
audit and normal year-end audit adjustments.
(c) Officer's Certificate. At the time of delivery of the financial
---------------------
statements required by Sections 7.1(a) and 7.1(b) above, a certificate of a
Responsible Officer of the Borrower substantially in the form of Schedule
7.1(c), (i) demonstrating compliance with the financial covenants contained
in Section 7.11 by calculation thereof as of the end of each such fiscal
period and (ii) stating that no Default or Event of Default exists, or if
any Default or Event of Default does exist, specifying the nature and
extent thereof and what action the Credit Parties propose to take with
respect thereto.
(d) Annual Business Plan and Budgets. Beginning with the fiscal year
--------------------------------
ending December 31, 2001, within five Business Days of approval by the
board of directors, and in no event later than thirty days after the end of
each fiscal year of the Borrower, an annual business plan and budget of the
members of the Consolidated Group containing, among other things, pro forma
financial statements for the next fiscal year.
(e) Accountant's Certificate. Within the period for delivery of the
------------------------
annual financial statements provided in Section 7.1(a), a certificate of
the accountants conducting the annual audit stating that they have reviewed
this Credit Agreement and stating further whether, in the course of their
audit, they have become aware of any Default or Event of Default and, if
any such Default or Event of Default exists, specifying the nature and
extent thereof.
(f) Auditor's Reports. Promptly upon receipt thereof, a copy of any
-----------------
other report or "management letter" submitted by independent accountants to
any member of the Consolidated Group in connection with any annual, interim
or special audit of the books of such Person.
59
(g) Reports. Promptly upon transmission or receipt thereof, (i) copies
-------
of any filings and registrations with, and reports to or from, the
Securities and Exchange Commission, or any successor agency, and copies of
all financial statements, proxy statements, notices and reports as any
member of the Consolidated Group shall send to its shareholders or to a
holder of any Indebtedness owed by any member of the Consolidated Group in
its capacity as such a holder, and (ii) upon the request of the
Administrative Agent, all reports and written information to and from the
United States Environmental Protection Agency, or any state or local agency
responsible for environmental matters, the United States Occupational
Health and Safety Administration, or any state or local agency responsible
for health and safety matters, or any successor agencies or authorities
concerning environmental, health or safety matters.
(h) Notices. Upon any Responsible Officer of a Credit Party obtaining
-------
knowledge thereof, the Credit Parties will give written notice to the
Administrative Agent immediately of (i) the occurrence of an event or
condition consisting of a Default or Event of Default, specifying the
nature and existence thereof and what action the Credit Parties propose to
take with respect thereto, and (ii) the occurrence of any of the following
with respect to any member of the Consolidated Group: (A) the pendency or
commencement of any litigation, arbitral or governmental proceeding against
such Person which, if adversely determined, could reasonably be expected to
have a Material Adverse Effect, (B) the institution of any proceedings
against such Person with respect to, or the receipt of notice by such
Person of potential liability or responsibility for violation, or alleged
violation of any federal, state or local law, rule or regulation,
including, without limitation, Environmental Laws, the violation of which
could reasonably be expected to have a Material Adverse Effect, (C) the
institution of any investigation or proceeding against such Person (or, to
the knowledge of the Credit Parties, any Contract Provider) to suspend,
revoke or terminate (or that may result in the termination of) its status
as a Medicaid Supplier or its status as a Medicare Supplier, or any such
investigation or proceeding that may result in an Exclusion Event, (D) a
copy of any notice of intent to exclude, any notice of proposal to exclude
issued by the OIG or any other Exclusion Event, or (E) all notices of loss
or threatened loss of accreditation, loss of participation under any
reimbursement program or loss of applicable health care license or
certificate of authority, and all other material deficiency notices,
compliance orders or adverse reports issued by any Governmental Authority
or private insurance company pursuant to a provider agreement that, if not
promptly complied with or cured, could result in the suspension or
forfeiture of any license, certification, or accreditation necessary for
the Borrower or any of its Subsidiaries to carry on its business as then
conducted or the termination of any insurance or reimbursement program
available to the Borrower or any of its Subsidiaries.
(i) ERISA. Upon any Responsible Officer of a Credit Party obtaining
-----
knowledge thereof, the Credit Parties will give written notice to the
Administrative Agent promptly (and in any event within five Business Days)
of: (i) any event or condition, including, without limitation, any
Reportable Event, that constitutes, or might reasonably lead to, an ERISA
Event; (ii) with respect to any Multiemployer Plan, the receipt of notice
as prescribed in ERISA or otherwise of any withdrawal liability assessed
against the Credit Parties or any ERISA Affiliates, or of a determination
that any Multiemployer Plan is in reorganization or insolvent (both within
the meaning of Title IV of ERISA); (iii) the failure to make full payment
on or before the due date (including extensions) thereof of all amounts
which any member of the Consolidated Group or any ERISA Affiliate is
required to contribute to each Plan pursuant to its terms and as required
to meet the minimum funding standard set forth in ERISA and the Internal
Revenue Code with respect thereto; or (iv) any change in the funding status
of any Plan that could have a Material Adverse Effect, together with a
description of any such event or condition or a copy of any such notice and
a statement by a Responsible Officer of the Borrower briefly setting forth
the details regarding such event, condition,
60
or notice, and the action, if any, which has been or is being taken or is
proposed to be taken by the Credit Parties with respect thereto. Promptly
upon request, the Credit Parties shall furnish the Administrative Agent and
the Lenders with such additional information concerning any Plan as may be
reasonably requested, including, without limitation, copies of each annual
report/return (Form 5500 series), as well as all schedules and attachments
thereto required to be filed with the Department of Labor and/or the
Internal Revenue Service pursuant to ERISA and the Internal Revenue Code,
respectively, for each "plan year" (within the meaning of Section 3(39) of
ERISA).
(j) Environmental.
-------------
(i) Upon the reasonable written request of the Administrative Agent
following the occurrence of any event or the discovery of any condition
which the Administrative Agent or the Required Lenders reasonably believe
has caused (or could be reasonably expected to cause) the representations
and warranties set forth in Section 6.16 to be untrue in any material
respect, the Credit Parties will furnish or cause to be furnished to the
Administrative Agent, at the Credit Parties' expense, a report of an
environmental assessment of reasonable scope, form and depth, (including,
where appropriate, invasive soil or groundwater sampling) by a consultant
reasonably acceptable to the Administrative Agent as to the nature and
extent of the presence of any Materials of Environmental Concern on any
Subject Properties (as defined in Section 6.16) and as to the compliance by
any member of the Consolidated Group with Environmental Laws at such
Subject Properties. If the Credit Parties fail to deliver such an
environmental report within seventy-five (75) days after receipt of such
written request then the Administrative Agent may arrange for same, and the
members of the Consolidated Group hereby grant to the Administrative Agent
and their representatives access to the Subject Properties to reasonably
undertake such an assessment (including, where appropriate, invasive soil
or groundwater sampling). The reasonable cost of any assessment arranged
for by the Administrative Agent pursuant to this provision will be payable
by the Credit Parties on demand and added to the obligations secured by the
Collateral Documents.
(ii) The members of the Consolidated Group will conduct and complete
all investigations, studies, sampling, and testing and all remedial,
removal, and other actions necessary to address all Materials of
Environmental Concern on, from or affecting any of the Subject Properties
to the extent necessary to be in compliance with all Environmental Laws and
with the validly issued orders and directives of all Governmental
Authorities with jurisdiction over such Subject Properties to the extent
any failure could have a Material Adverse Effect.
(k) Additional Patents and Trademarks. At the time of delivery of the
---------------------------------
financial statements and reports required by Section 7.1(a), a report
signed by a Responsible Officer of the Borrower setting forth (i) a list of
registration numbers for all patents, trademarks, service marks, tradenames
and copyrights awarded to any member of the Consolidated Group since the
last day of the immediately preceding fiscal year and (ii) a list of all
patent applications, trademark applications, service ▇▇▇▇ applications,
tradename applications and copyright applications submitted by any member
of the Consolidated Group since the last day of the immediately preceding
fiscal year and the status of each such application, all in such form as
shall be reasonably satisfactory to the Administrative Agent.
(l) Other Information. With reasonable promptness upon any such
-----------------
request, such other information regarding the business, properties or
financial condition of any member of the Consolidated Group as the
Administrative Agent or the Required Lenders may reasonably request.
61
7.2 Preservation of Existence and Franchises.
----------------------------------------
Each Credit Party will, and will cause each of its Subsidiaries to,
continue to engage in business of the same general type as conducted by it on
the date hereof and similar or related businesses, and except as a result of or
in connection with a dissolution, merger or disposition of a Subsidiary
permitted under Section 8.4 or 8.5, preserve, renew and keep in full force and
effect its corporate existence and take all reasonable action to maintain all
rights, privileges, licenses and franchises necessary or desirable in the normal
conduct of its business.
7.3 Books and Records.
-----------------
Each Credit Party will, and will cause each of its Subsidiaries to, keep
complete and accurate books and records of its transactions in accordance with
good accounting practices on the basis of GAAP (including the establishment and
maintenance of appropriate reserves).
7.4 Compliance with Law.
-------------------
Each Credit Party will, and will cause each of its Subsidiaries to, comply
with all laws, rules, regulations and orders, and all applicable restrictions
imposed by all Governmental Authorities, applicable to it and its Property if
noncompliance with any such law, rule, regulation, order or restriction could
reasonably be expected to have a Material Adverse Effect. Specifically, but
without limiting the foregoing, and except where any such failure to comply
could not reasonably be expected to result in either an Exclusion Event or a
loss of 5% or more of the annual consolidated revenues of the Consolidated
Group: (i) billing policies, arrangements, protocols and instructions will
comply with reimbursement requirements under Medicare and other Medical
Reimbursement Programs and will be administered by properly trained personnel;
and (ii) medical director compensation arrangements will comply with state and
federal anti-kick back/fraud and abuse, and ▇▇▇▇▇ I and II, requirements.
7.5 Payment of Taxes and Other Indebtedness.
---------------------------------------
Each Credit Party will, and will cause each of its Subsidiaries to, pay and
discharge (a) all taxes, assessments and governmental charges or levies imposed
upon it, or upon its income or profits, or upon any of its properties, before
they shall become delinquent, (b) all lawful claims (including claims for labor,
materials and supplies) that, if unpaid, might give rise to a Lien upon any of
its properties, and (c) except as prohibited hereunder, all of its other
Indebtedness as it shall become due; provided, however, that no member of the
--------
Consolidated Group shall be required to pay any such tax, assessment, charge,
levy, claim or Indebtedness that is being contested in good faith by appropriate
proceedings for which adequate reserves determined in accordance with GAAP have
been established, unless the failure to make any such payment (i) could give
rise to an immediate right to foreclose on a Lien securing such amounts or (ii)
could reasonably be expected to have a Material Adverse Effect.
7.6 Insurance.
---------
Each Credit Party will, and will cause each of its Subsidiaries to, at all
times maintain in full force and effect insurance (including workers'
compensation insurance, liability insurance, casualty insurance and business
interruption insurance) in such amounts, covering such risks and liabilities and
with such deductibles or self-insurance retentions as are in accordance with
normal industry practice (or as otherwise required by the Collateral Documents).
The Collateral Agent shall be named as loss payee or mortgagee, as its interest
may appear, and/or additional insured with respect to any such insurance
providing coverage in respect of any Collateral, and each provider of any such
insurance shall agree, by endorsement upon the
62
policy or policies issued by it or by independent instruments furnished to the
Collateral Agent, that it will give the Collateral Agent thirty days prior
written notice before any such policy or policies shall be altered or canceled,
and that no act or default of any member of the Consolidated Group or any other
Person shall affect the rights of the Collateral Agent or the Lenders under such
policy or policies. The present insurance coverage of the members of the
Consolidated Group is outlined as to carrier, policy number, expiration date,
type and amount on Schedule 7.6.
------------
7.7 Maintenance of Property.
-----------------------
Each Credit Party will, and will cause each of its Subsidiaries to,
maintain and preserve its properties and equipment material to the conduct of
its business in good repair, working order and condition, normal wear and tear
and casualty and condemnation excepted, and will make, or cause to be made, in
such properties and equipment from time to time all repairs, renewals,
replacements, extensions, additions, betterments and improvements thereto as may
be needed or proper, to the extent and in the manner customary for companies in
similar businesses.
7.8 Performance of Obligations.
--------------------------
Each Credit Party will, and will cause each of its Subsidiaries to, perform
in all material respects all of its obligations under the terms of all material
agreements, indentures, mortgages, security agreements and other debt
instruments to which it is a party or by which it is bound.
7.9 Use of Proceeds.
---------------
The Borrower will use the proceeds of Extensions of Credit solely for the
purposes set forth in Section 6.15.
7.10 Audits/Inspections.
------------------
Upon reasonable notice and during normal business hours (or, following the
occurrence and during the continuation of an Event of Default, at any time
without notice), each Credit Party will, and will cause each of its Subsidiaries
to, permit representatives appointed by the Administrative Agent, including,
without limitation, independent accountants, agents, attorneys, and appraisers
to visit and inspect its property, including its books and records, its accounts
receivable and inventory, its facilities and its other business assets, and to
make photocopies or photographs thereof and to write down and record any
information such representative obtains and shall permit the Administrative
Agent or its representatives to investigate and verify the accuracy of
information provided to the Lenders and to discuss all such matters with the
officers, employees and representatives of such Person. The Credit Parties agree
that the Administrative Agent, and its representatives, may conduct an annual
audit of the Collateral, at the expense of the Credit Parties.
7.11 Financial Covenants.
-------------------
(a) Consolidated Total Leverage Ratio. As of the end of each fiscal
---------------------------------
quarter, the Consolidated Total Leverage Ratio shall be not greater than
2.50:1.0.
(b) Consolidated Fixed Charge Coverage Ratio. As of the end of each fiscal
----------------------------------------
quarter, the Consolidated Fixed Charge Coverage Ratio shall be not less than
1.25:1.0.
(c) Consolidated Interest Coverage Ratio. As of the end of each fiscal
------------------------------------
quarter, the Consolidated Interest Coverage Ratio shall be not less than
5.00:1.0.
63
(d) Consolidated Net Income. As of the end of each fiscal quarter,
-----------------------
Consolidated Net Income shall be not less than zero
($0).
7.12 Additional Guarantors.
---------------------
(a) Domestic Subsidiaries. If any Person becomes a direct or indirect
---------------------
Eligible Subsidiary of any Credit Party, the Borrower shall (i) notify the
Administrative Agent thereof within ten days after a Responsible Officer has
knowledge thereof, and (ii) within forty-five days thereafter, (A) cause each
such Eligible Subsidiary to become a Guarantor by execution of a Joinder
Agreement, (B) deliver with the Joinder Agreement such supporting resolutions,
incumbency certificates, corporate formation and organizational documentation
and opinions of counsel as the Administrative Agent may reasonably request, and
(C) deliver stock certificates and related pledge agreements or pledge joinder
agreements evidencing the pledge of one hundred percent (100%) of the Capital
Stock of each direct or indirect Domestic Subsidiary of the Borrower and
sixty-five percent (65%) (or such greater percentage which would not result in
material adverse tax consequences) of the issued and outstanding Capital Stock
entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) and
one hundred percent (100%) of the issued and outstanding Capital Stock not
entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) of
each Foreign Subsidiary directly owned by each such Eligible Subsidiary to
secure the obligations of the Guarantors under the Credit Documents, together
with undated stock transfer powers executed in blank.
(b) Foreign Subsidiaries. If any Person becomes a direct Foreign Subsidiary
--------------------
of any Credit Party, the Borrower shall (a) notify the Administrative Agent
thereof within ten days after a Responsible Officer has knowledge thereof, and
(b) within forty-five days thereafter, cause (i) delivery of supporting
resolutions, incumbency certificates, corporation formation and organizational
documentation and opinions of counsel as the Administrative Agent may reasonably
request, and (ii) delivery of stock certificates (where required for perfection
under local law) and a related pledge agreement or pledge joinder agreement
evidencing the pledge of sixty-five percent (65%) (or such greater percentage
which would not result in material adverse tax consequences) of the issued and
outstanding capital stock entitled to vote (within the meaning of Treas. Reg.
Section 1.956-2(c)(2)) and one hundred percent (100%) of the issued and
outstanding Capital Stock not entitled to vote (within the meaning of Treas.
Reg. Section 1.956-2(c)(2)) of such Foreign Subsidiary to secure the obligations
of the Credit Parties under the Credit Documents.
7.13 Pledged Assets.
--------------
Each Credit Party will cause (i) all of its owned personal property located
in the United States other than Excluded Property and (ii) all of its Eligible
Real Property to be subject at all times to first priority, perfected and, in
the case of real property (whether leased or owned), title insured Liens in
favor of the Collateral Agent to secure the Guaranteed Obligations pursuant to
the terms and conditions of the Collateral Documents or, with respect to any
such Property acquired subsequent to the Closing Date, such other additional
security documents as the Collateral Agent shall reasonably request, subject in
any case to Permitted Liens. With respect to any Eligible Real Property acquired
by any Credit Party subsequent to the Closing Date and required by this Section
7.13 to be pledged to the Collateral Agent, such Person will cause to be
delivered to the Collateral Agent with respect to such Eligible Real Property
all documents, instruments and other items of the types required to be delivered
pursuant to Section 5.1(f) in form acceptable to the Collateral Agent. Without
limiting the generality of the above, the Credit Parties will cause (i) one
hundred percent (100%) of the issued and outstanding
64
Capital Stock of each Domestic Subsidiary and (ii) sixty-five percent (65%) (or
such greater percentage which would not result in material adverse tax
consequences) of the issued and outstanding Capital Stock entitled to vote
(within the meaning of Treas. Reg. Section 1.956-2(c)(2)) and one hundred
percent (100%) of the issued and outstanding Capital Stock not entitled to vote
(within the meaning of Treas. Reg. Section 1.956-2(c)(2)) of each Foreign
Subsidiary directly owned by the Borrower or any Domestic Subsidiary of the
Borrower to be subject at all times to a first priority, perfected Lien in favor
of the Collateral Agent pursuant to the terms and conditions of the Collateral
Documents or such other security documents as the Collateral Agent shall
reasonably request.
If, subsequent to the Closing Date, a Credit Party shall acquire any
Property required to be pledged to the Collateral Agent as Collateral by this
Section 7.13 or by any of the Collateral Documents, the Credit Parties shall
promptly notify the Collateral Agent of same and each Credit Party shall, and
shall cause each of its Subsidiaries to, take such action (including, without
limitation, the actions set forth in Sections 5.1(e) and (f)) at its own expense
as requested by the Collateral Agent to ensure that the Collateral Agent has a
first priority, perfected Lien to secure the Guaranteed Obligations in (i) all
owned personal property of the Credit Parties located in the United States other
than Excluded Property and (ii) all Eligible Real Property, subject in each case
only to Permitted Liens. Each Credit Party shall, and shall cause each of its
Subsidiaries to, adhere to the covenants regarding the location of personal
property as set forth in this Credit Agreement and the Security Agreement.
7.14 Landlord Consents.
-----------------
The Credit Parties will use their best efforts to obtain landlord consents,
estoppel letters or consents and waivers in respect of Collateral held on leased
premises, in form and substance satisfactory to the Administrative Agent, and
will promptly deliver such documents to the Collateral Agent upon receipt.
SECTION 8
NEGATIVE COVENANTS
------------------
Each Credit Party hereby covenants and agrees that so long as this Credit
Agreement is in effect or any amounts payable hereunder or under any other
Credit Document shall remain outstanding or any Letter of Credit is outstanding,
and until all of the Commitments hereunder shall have terminated:
8.1 Indebtedness.
------------
The Credit Parties will not permit any member of the Consolidated Group to
contract, create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness existing or arising under this Credit Agreement or
the other Credit Documents;
(b) Indebtedness of the Borrower and its Subsidiaries existing on the
Closing Date and set forth on Schedule 8.1(b), and renewals, refinancings
---------------
and extensions thereof on terms and conditions no less favorable to such
Person than such existing Indebtedness;
(c) purchase money Indebtedness (including obligations in respect of
Capital Leases or Synthetic Leases) hereafter incurred or assumed by the
Borrower or any of its Subsidiaries to finance the purchase of fixed assets
provided that (i) the total of all such Indebtedness for the Borrower and
--------
its Subsidiaries taken together shall not exceed an aggregate principal
amount of $10 million at any one time outstanding; (ii) such Indebtedness
when incurred shall not exceed the purchase price of the
65
asset(s) financed; and (iii) no such Indebtedness shall be refinanced for a
principal amount in excess of the principal balance outstanding thereon at
the time of such refinancing;
(d) obligations of the Borrower or any of its Subsidiaries owing under
interest rate, commodities and foreign currency exchange protection
agreements entered into in the ordinary course of business to manage
existing or anticipated risks and not for speculative purposes;
(e) unsecured intercompany Indebtedness owing by a member of the
Consolidated Group to another member of the Consolidated Group (subject,
however, to the limitations of Section 8.6 in the case of the member of the
Consolidated Group extending the loan, advance or credit);
(f) Subordinated Debt of the Borrower in connection with, and only to
the extent allowed in connection with, a Permitted Acquisition;
(g) Indebtedness arising or existing with respect to Governmental
Reimbursement Program Costs;
(h) other unsecured Funded Debt of the Borrower in an aggregate
outstanding principal amount of up to $5 million at any time;
(i) other Subordinated Debt of the Borrower and unsecured senior
Funded Debt, so long as no Default or Event of Default shall exist
immediately prior to or immediately after giving effect thereto on a Pro
Forma Basis (and a Responsible Officer of the Borrower shall deliver a
compliance certificate in connection with any such incurrence demonstrating
compliance with the financial covenants on a Pro Forma Basis after giving
effect thereto and affirming the absence of Defaults or Events of Default);
and
(j) Support Obligations of any Credit Party with respect to any
Indebtedness of a Credit Party permitted under this Section 8.1.
8.2 Liens.
-----
The Credit Parties will not permit any member of the Consolidated Group to
contract, create, incur, assume or permit to exist any Lien with respect to any
of its Property, whether now owned or after acquired, except for Permitted
Liens.
8.3 Nature of Business.
------------------
The Credit Parties will not permit any member of the Consolidated Group to
substantively alter the character or conduct of the business conducted by such
Person as of the Closing Date.
8.4 Merger and Consolidation, Dissolution and Acquisitions.
------------------------------------------------------
(a) No member of the Consolidated Group will enter into any
transaction of merger or consolidation, except that:
(i) a Credit Party may be party to a transaction of merger or
consolidation with another Credit Party, provided that if the Borrower
--------
is a party to such transaction, it shall be the surviving entity;
66
(ii) a Foreign Subsidiary may be party to a transaction of merger
or consolidation with a Subsidiary of the Borrower, provided that (A)
--------
if a Domestic Subsidiary is a party thereto, it shall be the surviving
entity and (B) if a Foreign Subsidiary is a party thereto and a
Domestic Subsidiary is not a party thereto, the surviving entity shall
be a Foreign Subsidiary;
(iii) a Domestic Subsidiary of the Borrower may be a party to a
transaction of merger or consolidation with a Person other than a
member of the Consolidated Group, provided that (A) the surviving
--------
entity shall be a Domestic Subsidiary of the Borrower, (B) no Default
or Event of Default shall exist immediately after giving effect
thereto, and (C) the transaction shall otherwise constitute a
Permitted Acquisition;
(iv) a Subsidiary of the Borrower may enter into a transaction of
merger or consolidation in connection with an Asset Disposition
permitted under Section 8.5.
(b) No member of the Consolidated Group, other than a Wholly Owned
Subsidiary of the Borrower (and then only if no Material Adverse Effect
could reasonably be expected to result on account thereof), may dissolve,
liquidate or wind up its affairs (or, if not Wholly Owned, such dissolution
shall constitute an Asset Disposition to the extent of the value of the
Capital Stock not owned, directly or indirectly, by the Borrower).
(c) No member of the Consolidated Group shall make any Acquisition,
unless:
(i) in the case of an acquisition of Capital Stock of another
Person,
(A) if, after giving effect to the Acquisition, such Person
will not be a Subsidiary, such Acquisition shall be a Permitted
Investment; and
(B) if, after giving effect to the Acquisition, such Person
will be a Subsidiary, such Acquisition shall be a Permitted
Acquisition;
(ii) in the case of an Acquisition of all or any substantial
portion of the Property (other than Capital Stock) of another Person,
such Acquisition shall be a Permitted Acquisition.
8.5 Asset Dispositions.
------------------
The Credit Parties will not permit any member of the Consolidated Group to
make any Asset Disposition (including, without limitation, any Sale and
Leaseback Transaction), unless (i) at least seventy-five percent (75%) the
consideration paid therefor shall consist of cash and Cash Equivalents, (ii) if
the subject transaction is a Sale and Leaseback Transaction, such transaction
shall be permitted by Section 8.13, (iii) the aggregate net book value of all
assets sold, leased or otherwise disposed of shall not exceed $3 million in the
aggregate from the Closing Date, (iv) no Default or Event of Default shall exist
immediately after giving effect thereto, (v) the Borrower shall have delivered
to the Administrative Agent a compliance certificate signed by a Responsible
Officer demonstrating compliance with the financial covenants hereunder after
giving effect to the subject disposition on a Pro Forma Basis and reaffirming
that the representations and warranties made hereunder are true and correct in
all material respects as of such date, and (vi) the Borrower shall have given
written notice to the Administrative Agent at least thirty days in advance of
the prospective disposition, and the terms thereof, in sufficient detail as to
the book value and consideration to be paid, terms of disposition, and net
proceeds expected therefrom and intended application thereof.
67
The Administrative Agent will promptly deliver to the Borrower upon
request, at the Borrower's expense, such release documentation (including
delivery of applicable stock certificates) as may be reasonably requested to
give effect to the release of subject Property from the security interests
securing the obligations hereunder in connection with Asset Dispositions
permitted hereunder.
8.6 Investments.
-----------
The Credit Parties will not permit any member of the Consolidated Group to
make or permit to exist Investments in or to any Person, except for Permitted
Investments.
8.7 Restricted Payments.
-------------------
The Credit Parties will not make, or permit any member of the Consolidated
Group to make, any Restricted Payment, unless (i) no Default or Event of Default
shall exist immediately after giving effect thereto and (ii) the Borrower shall
have delivered to the Administrative Agent a compliance certificate signed by a
Responsible Officer demonstrating compliance with the financial covenants
hereunder after giving effect to the subject Restricted Payment on a Pro Forma
Basis and reaffirming that the representations and warranties made hereunder are
true and correct in all material respects as of such date.
8.8 Modifications and Payments in respect of Funded Debt.
----------------------------------------------------
None of the members of the Consolidated Group will:
(a) After the issuance thereof, amend or modify (or permit the amendment or
modification of) the material terms of any Funded Debt in a manner adverse in
any material respect to the interests of the Lenders (including specifically
shortening any maturity or average life to maturity or requiring any payment
sooner than previously scheduled or increasing the interest rate or fees
applicable thereto);
(b) Amend or modify, or permit or acquiesce to the amendment or
modification (including waivers) of, any material provisions of any Subordinated
Debt, including any notes or instruments evidencing any Subordinated Debt and
any indenture or other governing instrument relating thereto;
(c) Make any payment in contravention of the terms of any Subordinated
Debt; or
(d) Except in connection with a refinancing or refunding permitted
hereunder, make any prepayment, redemption, defeasance or acquisition for value
of (including, without limitation, by way of depositing money or securities with
the trustee with respect thereto before due for the purpose of paying when due),
or refund, refinance or exchange of any Subordinated Debt (other than the
Indebtedness under the Credit Documents and intercompany Indebtedness permitted
hereunder) other than regularly scheduled payments of principal and interest on
such Subordinated Debt.
8.9 Transactions with Affiliates.
----------------------------
The Credit Parties will not permit any member of the Consolidated Group to
enter into or permit to exist any transaction or series of transactions with any
officer, director, shareholder, Subsidiary or Affiliate of such Person other
than (i) advances of working capital to any Credit Party other than the
Borrower, (ii) transfers of cash and assets to any Credit Party other than the
Borrower, (iii) transactions permitted by Section 8.1, Section 8.4, Section 8.5,
Section 8.6, or Section 8.7, (iv) normal compensation and reimbursement of
expenses of officers and directors and (v) except as otherwise specifically
limited in this Credit Agreement, other transactions which are entered into in
the ordinary course of such Person's business on terms and conditions
substantially as favorable to such Person as would be obtainable by it in a
68
comparable arms-length transaction with a Person other than an officer,
director, shareholder, Subsidiary or Affiliate.
8.10 Fiscal Year; Organizational Documents.
-------------------------------------
The Credit Parties will not permit any member of the Consolidated Group to
change its fiscal year or amend, modify or change its articles of incorporation
(or corporate charter or other similar organizational document) or bylaws (or
other similar document) without the prior written consent of the Required
Lenders.
8.11 Limitation on Restricted Actions; No Further Negative Pledges.
-------------------------------------------------------------
The Credit Parties will not permit any member of the Consolidated Group to,
directly or indirectly, create or otherwise cause or suffer to exist or become
effective any encumbrance or restriction on the ability of any such Person to
(i) pay dividends or make any other distributions on its Capital Stock or with
respect to any other interest or participation in, or measured by, its profits,
(ii) pay the Indebtedness evidenced hereby, (iii) make loans, advances or
capital contributions, (iv) sell, lease or otherwise transfer any of its
properties or assets, or (v) act as a guarantor or ▇▇▇▇▇ ▇ ▇▇▇▇ on or a pledge
of its assets, except for such encumbrances or restrictions existing under or by
reason of (A) this Credit Agreement and the other Credit Documents, (B) pursuant
to the terms of any purchase money or other Indebtedness permitted by Section
8.1(c) to the extent such limitations relate only to the property that is the
subject of such financing and (C) joint venture agreements or like agreements
relating to Permitted Investments.
8.12 Ownership of Subsidiaries.
-------------------------
Notwithstanding any other provisions of this Credit Agreement to the
contrary, the Credit Parties will not permit any member of the Consolidated
Group to (i) permit any Subsidiary of the Borrower to issue any shares of
preferred Capital Stock or (ii) permit, create, incur, assume or suffer to exist
any Lien on any Capital Stock of any Subsidiary of the Borrower, except for
Permitted Liens.
8.13 Sale Leasebacks.
---------------
The Credit Parties will not permit any member of the Consolidated Group to
enter into any Sale and Leaseback Transaction unless such Sale and Leaseback
Transaction constitutes purchase money Indebtedness permitted by Section 8.1(c).
SECTION 9
EVENTS OF DEFAULT
-----------------
9.1 Events of Default.
-----------------
An Event of Default shall exist upon the occurrence of any of the following
specified events (each an "Event of Default"):
----------------
(a) Payment. There shall occur a:
-------
(i) default in the payment when due of any principal of any of
the Loans or of any reimbursement obligations arising from drawings
under Letters of Credit, or
69
(ii) default, and such default shall continue for three or more
Business Days, in the payment when due of any interest on the Loans or
on any reimbursement obligations arising from drawings under Letters
of Credit, or of any Fees or other amounts owing hereunder, under any
of the other Credit Documents or in connection herewith or therewith;
or
(b) Representations. Any representation, warranty or statement made or
---------------
deemed to be made by any Credit Party herein, in any of the other Credit
Documents, or in any statement or certificate delivered or required to be
delivered pursuant hereto or thereto shall prove untrue in any material
respect on the date as of which it was deemed to have been made; or
(c) Covenants. There shall occur a:
---------
(i) default in the due performance or observance of any term,
covenant or agreement contained in Sections 7.2, 7.9, 7.11, 7.12, 7.13
or 8.1 through 8.13, inclusive;
(ii) default in the due performance or observance of any term,
covenant or agreement contained in Sections 7.1(a), (b), (c), (d) or
(h)(i) and such default shall continue unremedied for a period of at
least five days after the earlier of a Responsible Officer of a Credit
Party becoming aware of such default or notice thereof by the
Administrative Agent; or
(iii) default in the due performance or observance by it of any
term, covenant or agreement (other than those referred to in
subsections (a), (b), (c)(i) or (c)(ii) of this Section 9.1) contained
in this Credit Agreement or any other Credit Document and such default
shall continue unremedied for a period of at least thirty days after
the earlier of a Responsible Officer of a Credit Party becoming aware
of such default or notice thereof by the Administrative Agent; or
(d) Other Credit Documents. (i) Any Credit Party shall default in the
----------------------
due performance or observance of any term, covenant or agreement in any of
the other Credit Documents (subject to applicable grace or cure periods, if
any) or (ii) except as a result of or in connection with a dissolution,
merger or disposition of a Subsidiary permitted under Section 8.4 or
Section 8.5, any Credit Document shall fail to be in full force and effect
or to give the Administrative Agent and/or the Lenders the Liens, rights,
powers and privileges purported to be created thereby, or any Credit Party
shall so state in writing; or
(e) Guaranties. Except as the result of or in connection with a
----------
dissolution, merger or disposition of a Subsidiary permitted under Section
8.4 or Section 8.5, the guaranty given by any Guarantor (including any
Person that becomes a Guarantor after the Closing Date in accordance with
Section 7.12) or any provision thereof shall cease to be in full force and
effect, or any Guarantor (including any Person that becomes a Guarantor
after the Closing Date in accordance with Section 7.12) or any Person
acting by or on behalf of such Guarantor shall deny or disaffirm such
Guarantor's obligations under such 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 any guaranty; or
(f) Bankruptcy, etc. Any Bankruptcy Event shall occur with respect to
---------------
any member of the Consolidated Group that, individually or in the aggregate
for all such members, (i) constitutes more than five percent (5%) of
consolidated assets for the Consolidated Group as of the end of the
immediately preceding fiscal quarter or (ii) generates more than five
percent (5%) of consolidated
70
revenues for the Consolidated Group for the period of four consecutive
fiscal quarters ending as of the end of the immediately preceding fiscal
quarter; or
(g) Defaults under Other Agreements. With respect to any Indebtedness
-------------------------------
(other than Indebtedness outstanding under this Credit Agreement) in excess
of $5 million in the aggregate for the members of the Consolidated Group
taken as a whole, (i) any member of the Consolidated Group shall (A)
default in any payment (beyond the applicable grace period with respect
thereto, if any) with respect to any such Indebtedness, or (B) the
occurrence and continuance of a default in the observance or performance
relating to such Indebtedness or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event or condition
shall occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit, the holder or holders of such
Indebtedness (or trustee or agent on behalf of such holders) to cause
(determined without regard to whether any notice or lapse of time is
required), any such Indebtedness to become due prior to its stated
maturity; or (ii) any such Indebtedness shall be declared due and payable,
or required to be prepaid other than by a regularly scheduled required
prepayment, prior to the stated maturity thereof; or
(h) Judgments. One or more judgments, settlements or decrees involving
---------
a liability of (i) $3 million or more individually or (ii) $5 million or
more in the aggregate in any fiscal year (in each case to the extent not
paid or fully covered by insurance provided by a carrier who has
acknowledged coverage and has the ability to perform) that have not been
vacated, discharged or stayed or bonded pending appeal within thirty days
from the entry thereof, shall be entered against or agreed to by one or
more of the members of the Consolidated Group; or
(i) ERISA. Any of the following events or conditions, if such event or
-----
condition could involve possible taxes, penalties, and other liabilities in
an aggregate amount in excess of $5 million: (i) any "accumulated funding
deficiency," as such term is defined in Section 302 of ERISA and Section
412 of the Internal Revenue Code, whether or not waived, shall exist with
respect to any Plan, or any lien shall arise on the assets of any member of
the Consolidated Group or any ERISA Affiliate in favor of the PBGC or a
Plan; (ii) an ERISA Event shall occur with respect to a Single Employer
Plan, which is, in the reasonable opinion of the Administrative Agent,
likely to result in the termination of such Plan for purposes of Title IV
of ERISA; (iii) an ERISA Event shall occur with respect to a Multiemployer
Plan or Multiple Employer Plan, which is, in the reasonable opinion of the
Administrative Agent, likely to result in (A) the termination of such Plan
for purposes of Title IV of ERISA, or (B) any member of the Consolidated
Group or any ERISA Affiliate incurring any liability in connection with a
withdrawal from, reorganization of (within the meaning of Section 4241 of
ERISA), or insolvency (within the meaning of Section 4245 of ERISA) of such
Plan; or (iv) any prohibited transaction (within the meaning of Section 406
of ERISA or Section 4975 of the Internal Revenue Code) or breach of
fiduciary responsibility shall occur which may subject any member of the
Consolidated Group or any ERISA Affiliate to any liability under Sections
406, 409, 502(i), or 502(l) of ERISA or Section 4975 of the Internal
Revenue Code, or under any agreement or other instrument pursuant to which
any member of the Consolidated Group or any ERISA Affiliate has agreed or
is required to indemnify any person against any such liability; or
(j) Ownership. There shall occur a Change of Control.
---------
9.2 Acceleration; Remedies.
----------------------
Upon the occurrence of an Event of Default, and at any time thereafter
unless and until such Event of Default has been waived by, or cured to the
satisfaction of, the requisite Lenders (pursuant to the voting
71
requirements of Section 11.6), the Administrative Agent shall, upon the request
and direction of the Required Lenders, by written notice to the Credit Parties
take any of the following actions:
(a) Termination of Commitments. Declare the Commitments terminated,
--------------------------
whereupon the Commitments shall be immediately terminated.
(b) Acceleration. Declare the unpaid principal of and any accrued
------------
interest in respect of all Loans, any reimbursement obligations arising
from drawings under Letters of Credit and any and all other indebtedness or
obligations of any and every kind owing by the Credit Parties to the
Administrative Agent and/or any of the Lenders hereunder to be due
whereupon the same shall be immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Credit Parties.
(c) Cash Collateral. Direct the Credit Parties to pay (and the Credit
---------------
Parties agree that upon receipt of such notice, or upon the occurrence of
an Event of Default under Section 9.1(f), they will immediately pay) to the
Administrative Agent additional cash, to be held by the Administrative
Agent, for the benefit of the Lenders, in a cash collateral account as
additional security for the LOC Obligations in respect of subsequent
drawings under all then-outstanding Letters of Credit in an amount equal to
the maximum aggregate amount that may be drawn under all then-outstanding
Letters of Credits.
(d) Enforcement of Rights. Enforce any and all rights and interests
---------------------
created and existing under the Credit Documents including, without
limitation, all rights and remedies existing under the Collateral
Documents, all rights and remedies against a Guarantor and all rights of
set-off.
Notwithstanding the foregoing, if an Event of Default specified in Section
9.1(f) shall occur with respect to the Borrower, then the Commitments shall
automatically terminate and all Loans, all reimbursement obligations arising
from drawings under Letters of Credit, all accrued interest in respect thereof,
all accrued and unpaid Fees and other indebtedness or obligations owing to the
Administrative Agent and/or any of the Lenders hereunder automatically shall
immediately become due and payable without the giving of any notice or other
action by the Administrative Agent or the Lenders.
SECTION 10
ADMINISTRATIVE AND COLLATERAL AGENT
-----------------------------------
10.1 Appointment and Authorization.
-----------------------------
(a) Each Lender hereby irrevocably (subject to Section 10.9) appoints,
designates and authorizes each of the Administrative Agent and the Collateral
Agent to take such action on its behalf under the provisions of this Credit
Agreement and each other Credit Document and to exercise such powers and perform
such duties as are expressly delegated to it by the terms of this Credit
Agreement or any other Credit Document, together with such powers as are
reasonably incidental thereto. Each Lender further authorizes and directs each
of the Administrative Agent and the Collateral Agent to execute and deliver
releases (or similar agreements) to give effect to the provisions of this Credit
Agreement and the other Credit Documents, including specifically, without
limitation, the provisions of Section 8.1 and Section 8.5. Notwithstanding any
provision to the contrary contained elsewhere herein or in any other Credit
Document, neither the Administrative Agent nor the Collateral Agent shall have
any duties or responsibilities, except those expressly set forth herein, and
neither shall have or be deemed to have any fiduciary relationship with any
Lender or participant, and no implied covenants, functions,
72
responsibilities, duties, obligations or liabilities shall be read into this
Credit Agreement or any other Credit Document or otherwise exist against either
the Administrative Agent or the Collateral Agent. Without limiting the
generality of the foregoing sentence, the use of the term "agent" herein and in
the other Credit Documents with reference to the Administrative Agent or the
Collateral Agent is not intended to connote any fiduciary or other implied (or
express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties.
(b) The Issuing Lender shall act on behalf of the Lenders with respect to
any Letters of Credit issued by it and the documents associated therewith until
such time (and except for so long) as the Administrative Agent may agree at the
request of the Required Lenders to act for the Issuing Lender with respect
thereto; provided, however, that the Issuing Lender shall have all of the
--------
benefits and immunities (i) provided to the Administrative Agent in this Section
10 with respect to any acts taken or omissions suffered by the Issuing Lender in
connection with Letters of Credit issued by it or proposed to be issued by it
and the application and agreements for letters of credit pertaining to the
Letters of Credit as fully as if the term "Administrative Agent" as used in this
Section 10 included the Issuing Lender with respect to such acts or omissions,
and (ii) as additionally provided herein with respect to the Issuing Lender.
10.2 Delegation of Duties.
--------------------
Each of the Administrative Agent and the Collateral Agent may execute any
of its duties under this Credit Agreement or any other Credit Document by or
through agents, employees or attorneys-in-fact and shall be entitled to advice
of counsel and other consultants or experts concerning all matters pertaining to
such duties. Neither the Administrative Agent nor the Collateral Agent shall be
responsible for the negligence or misconduct of any agent or attorney-in-fact
that it selects in the absence of gross negligence or willful misconduct.
10.3 Liability.
---------
No Agent-Related Person shall (a) be liable for any action taken or omitted
to be taken by any Agent-Related Person under or in connection with this Credit
Agreement or any other Credit Document or the transactions contemplated hereby
(except for its own gross negligence or willful misconduct in connection with
its duties expressly set forth herein), or (b) be responsible in any manner to
any Lender or participant for any recital, statement, representation or warranty
made by any Credit Party or any officer thereof, contained herein or in any
other Credit Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by the Administrative Agent
or the Collateral Agent under or in connection with, this Credit Agreement or
any other Credit Document, or the validity, effectiveness, genuineness,
enforceability or sufficiency of this Credit Agreement or any other Credit
Document, or for any failure of any Credit Party or any other party to any
Credit Document to perform its obligations hereunder or thereunder. No
Agent-Related Person shall be under any obligation to any Lender or participant
to ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Credit Agreement or any other
Credit Document, or to inspect the properties, books or records of any Credit
Party or any Affiliate thereof.
10.4 Reliance.
--------
(a) Each of the Administrative Agent and the Collateral Agent shall be
entitled to rely, and shall be fully protected in relying, upon any writing,
communication, signature, resolution, representation, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including
73
counsel to any Credit Party), independent accountants and other experts selected
by the Administrative Agent or the Collateral Agent. Each of the Administrative
Agent and the Collateral Agent shall be fully justified in failing or refusing
to take any action under any Credit Document unless it shall first receive such
advice or concurrence of the Required Lenders as it deems appropriate and, if it
so requests, it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. Each of the Administrative
Agent and the Collateral Agent shall in all cases be fully protected in acting,
or in refraining from acting, under this Credit Agreement or any other Credit
Document in accordance with a request or consent of the Required Lenders or all
the Lenders, if required hereunder, and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders and
participants. Where this Credit Agreement expressly permits or prohibits an
action unless the Required Lenders otherwise determine, the Administrative Agent
or the Collateral Agent, as appropriate, shall, and in all other instances, the
Administrative Agent or the Collateral Agent, as appropriate, may, but shall not
be required to, initiate any solicitation for the consent or a vote of the
Lenders.
(b) For purposes of determining compliance with the conditions specified in
Section 5.1, each Lender that has signed this Credit Agreement shall be deemed
to have consented to, approved or accepted or to be satisfied with, each
document or other matter either sent by the Administrative Agent or the
Collateral Agent to such Lender for consent, approval, acceptance or
satisfaction, or required thereunder to be consented to or approved by or
acceptable or satisfactory to a Lender.
10.5 Notice of Default.
-----------------
Neither the Administrative Agent nor the Collateral Agent shall be deemed
to have knowledge or notice of the occurrence of any Default or Event of
Default, except with respect to defaults in the payment of principal, interest
and fees required to be paid to the Administrative Agent or the Collateral
Agent, as appropriate, for the account of the Lenders, unless such agent shall
have received written notice from a Lender or the Borrower referring to this
Credit Agreement, describing such Default or Event of Default and stating that
such notice is a "notice of default." Such agent will notify the Lenders of its
receipt of any such notice. Each of the Administrative Agent and the Collateral
Agent shall take such action with respect to such Default or Event of Default as
may be directed by the Required Lenders in accordance with Section 9; provided,
--------
however, that unless and until the Administrative Agent and the Collateral Agent
have received any such direction, each of the Administrative Agent and the
Collateral Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable or in the best interest of the Lenders.
10.6 Credit Decision; Disclosure of Information.
------------------------------------------
Each Lender acknowledges that no Agent-Related Person has made any
representation or warranty to it, and that no act by the Administrative Agent or
the Collateral Agent hereinafter taken, including any consent to and acceptance
of any assignment or review of the affairs of any Credit Party or any Affiliate
thereof, shall be deemed to constitute any representation or warranty by any
Agent-Related Person to any Lender as to any matter, including whether
Agent-Related Persons have disclosed material information in their possession.
Each Lender represents to the Administrative Agent and the Collateral Agent that
it has, independently and without reliance upon any Agent-Related Person and
based on such
74
documents and information as it has deemed appropriate, made its own appraisal
of and investigation into the business, prospects, operations, property,
financial and other condition and creditworthiness of the Credit Parties and
their respective Subsidiaries, and all applicable bank or other regulatory laws
relating to the transactions contemplated hereby, and made its own decision to
enter into this Credit Agreement and to extend credit to the Borrower and the
other Credit Parties hereunder. Each Lender also represents that it will,
independently and without reliance upon any Agent-Related Person and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Credit Agreement and the other Credit Documents,
and to make such investigations as it deems necessary to inform itself as to the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Borrower and the other Credit Parties. Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by the Administrative Agent or the Collateral Agent under the Credit
Documents, neither the Administrative Agent nor the Collateral Agent shall have
any duty or responsibility to provide any Lender with any credit or other
information concerning the business, prospects, operations, property, financial
and other condition or creditworthiness of any of the Credit Parties or any of
their respective Affiliates which may come into the possession of any
Agent-Related Person.
10.7 Indemnification.
---------------
Whether or not the transactions contemplated hereby are consummated, the
Lenders shall indemnify upon demand each Agent-Related Person (to the extent not
reimbursed by or on behalf of any Credit Party and without limiting the
obligation of any Credit Party to do so), pro rata, and hold harmless each
Agent-Related Person from and against any and all Indemnified Liabilities
incurred by it; provided, however, that no Lender shall be liable for the
payment to any Agent-Related Person of any portion of such Indemnified
Liabilities resulting from such Person's gross negligence or willful misconduct;
provided, however, that no action taken in accordance with the directions of the
Required Lenders shall be deemed to constitute gross negligence or willful
misconduct for purposes of this Section. Without limitation of the foregoing,
each Lender shall reimburse each of the Administrative Agent and the Collateral
Agent upon demand for its ratable share of any costs or out-of-pocket expenses
(including reasonable attorneys' fees and expenses and the allocated cost of
internal counsel) incurred by it in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Credit Agreement, any other
Credit Document, or any document contemplated by or referred to herein, to the
extent that the Administrative Agent or the Collateral Agent, as appropriate, is
not reimbursed for such expenses by or on behalf of the Borrower. The
undertaking in this Section shall survive termination of the Commitments, the
payment of all Obligations hereunder and the resignation or replacement of
either or both of the Administrative Agent and the Collateral Agent.
10.8 Individual Capacity.
-------------------
Bank of America and its Affiliates may make loans to, issue letters of
credit for the account of, accept deposits from, acquire equity interests in and
generally engage in any kind of banking, trust, financial advisory, underwriting
or other business with each of the Credit Parties and their respective
Affiliates as though Bank of America were not the Administrative Agent, the
Collateral Agent or the Issuing Lender hereunder and without notice to or
consent of the Lenders. The Lenders acknowledge that, pursuant to such
activities, Bank of America or its Affiliates may receive information regarding
any Credit Party or its Affiliates (including information that may be subject to
confidentiality obligations in favor of such Credit Party or such Affiliate) and
acknowledge that each of the Administrative Agent, the Collateral Agent and the
Issuing Lender shall be under no obligation to provide such information to them.
With respect to its Loans, Bank of America shall have the same rights and powers
under this Credit Agreement as any other Lender and may exercise such rights and
powers as though it were not the Administrative Agent, the Collateral Agent or
the Issuing Lender, and the terms "Lender" and "Lenders" include Bank of America
in its individual capacity.
75
10.9 Successor.
---------
Either or both of the Administrative Agent and the Collateral Agent may
resign upon thirty days notice to the Lenders. If either the Administrative
Agent or the Collateral Agent resigns, the Required Lenders shall appoint from
among the Lenders a successor administrative agent or collateral agent, as
appropriate, for the Lenders, which successor administrative agent or collateral
agent shall be consented to by the Borrower at all times other than during the
existence of an Event of Default (which consent of the Borrower shall not be
unreasonably withheld or delayed). If no successor administrative agent or
collateral agent is appointed prior to the effective date of the resignation of
the Administrative Agent or the Collateral Agent, such resigning agent may
appoint, after consulting with the Lenders and the Borrower, a successor
administrative agent or collateral agent, as appropriate, from among the
Lenders. Upon the acceptance of its appointment as successor administrative
agent or collateral agent hereunder, such successor agent shall succeed to all
the rights, powers and duties of the resigning Administrative Agent or
Collateral Agent, as appropriate, and thereafter the term "Administrative Agent"
or "Collateral Agent", as appropriate, shall mean such successor administrative
agent or collateral agent, as appropriate, and the resigning agent's
appointment, powers and duties as Administrative Agent or Collateral Agent shall
be terminated. After any such resignation hereunder, the provisions of this
Section 10 and Sections 11.4 and 11.9 shall inure to the benefit of such
resigning agent as to any actions taken or omitted to be taken by it while it
was Administrative Agent or Collateral Agent hereunder. If no successor has
accepted appointment as administrative agent or collateral agent, as
appropriate, by the date thirty days following such resigning agent's notice of
resignation, the resigning agent's resignation shall nevertheless thereupon
become effective and the Lenders shall perform all of the duties of the
Administrative Agent or the Collateral Agent, as appropriate, under the Credit
Documents until such time, if any, as the Required Lenders appoint a successor
agent as provided above.
10.10 Other Agents; Lead Managers.
---------------------------
None of the Lenders identified on the facing page or signature pages of
this Credit Agreement as a "syndication agent", "documentation agent",
"co-agent" or "lead manager" shall have any right, power, obligation, liability,
responsibility or duty under this Credit Agreement other than those applicable
to all Lenders as such. Without limiting the foregoing, none of the Lenders so
identified shall have or be deemed to have any fiduciary relationship with any
Lender. Each Lender acknowledges that it has not relied, and will not rely, on
any of the Lenders so identified in deciding to enter into this Credit Agreement
or in taking or not taking action hereunder.
SECTION 11
MISCELLANEOUS
-------------
11.1 Notices.
-------
Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (a) when
delivered, (b) when transmitted via telecopy (or other facsimile device) to the
number set out below, (c) the Business Day following the day on which the same
has been delivered prepaid to a reputable national overnight air courier
service, or (d) the third Business Day following the day on which the same is
sent by certified or registered mail, postage prepaid, in each case to the
respective parties at the address, in the case of the Credit Parties and the
Administrative Agent, set forth below, and, in the case of the Lenders, set
forth on Schedule 11.1, or at such other address as such party may specify by
-------------
written notice to the other parties hereto:
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if to any Credit Party:
AmeriPath, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Administrative Agent:
Bank of America, N.A., as Administrative Agent
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Agency Services
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Bank of America, N.A., as Administrative Agent
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇/▇▇/ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Financial Strategies Group
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
11.2 Right of Set-Off; Adjustments.
-----------------------------
Upon the occurrence and during the continuance of any Event of Default,
each Lender (and each of its Affiliates) is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender (or any
of its Affiliates) to or for the credit or the account of any Credit Party
against any and all of the obligations of such Person now or hereafter existing
under this Credit Agreement, under the Notes, under any other Credit Document or
otherwise, irrespective of whether such Lender shall have made any demand under
hereunder or thereunder and although such obligations may be unmatured. Each
Lender agrees promptly to notify any affected Credit Party after any such
set-off and application made by such Lender; provided, however, that the failure
--------
to give such notice shall not affect the validity of such set-off and
application. The rights of each Lender under this Section 11.2 are in addition
to other rights and remedies (including, without limitation, other rights of
set-off) that such Lender may have.
11.3 Successors and Assigns.
----------------------
(a) The provisions of this Credit Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
each Lender (and any attempted assignment or transfer by the Borrower without
such consent shall be null and void). Nothing in this Credit Agreement,
expressed or implied, shall be construed to
77
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby and, to the extent expressly
contemplated hereby, the Indemnitees) any legal or equitable right, remedy or
claim under or by reason of this Credit Agreement.
(b) Any Lender may assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Credit Agreement (including all
or a portion of its Commitment and the Loans (including for purposes of this
subsection (b), participations in LOC Obligations and in Swingline Loans) at the
time owing to it); provided that (i) except in the case of an assignment of the
--------
entire remaining amount of the assigning Lender's Commitment and the Loans at
the time owing to it or in the case of an assignment to a Lender or an Affiliate
of a Lender or an Approved Fund with respect to a Lender, the aggregate amount
of the Commitment (which for this purpose includes Loans outstanding thereunder)
subject to each such assignment, determined as of the date the Assignment and
Acceptance with respect to such assignment is delivered to the Administrative
Agent, shall not be less than $5 million unless each of the Administrative Agent
and, so long as no Event of Default has occurred and is continuing, the Borrower
otherwise consents (each such consent not to be unreasonably withheld or
delayed), (ii) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and obligations under
this Credit Agreement with respect to the Loans or the Commitment assigned,
except that this clause (ii) shall not apply to rights in respect of outstanding
Swingline Loans, and (iii) the parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Acceptance substantially
in the form of Schedule 11.3(b) hereto, together with a processing and
----------------
recordation fee of $3,500. Subject to acceptance and recording thereof by the
Administrative Agent pursuant to subsection (c) of this Section, from and after
the effective date specified in each Assignment and Acceptance, the Eligible
Assignee thereunder shall be a party hereto and, to the extent of the interest
assigned by such Assignment and Acceptance, have the rights and obligations of a
Lender under this Credit Agreement, and the assigning Lender thereunder shall,
to the extent of the interest assigned by such Assignment and Acceptance, be
released from its obligations under this Credit Agreement (and, in the case of
an Assignment and Acceptance covering all of the assigning Lender's rights and
obligations under this Credit Agreement, such Lender shall cease to be a party
hereto but shall continue to be entitled to the benefits of Sections 11.5 and
11.9). Upon request, the Borrower (at its expense) shall execute and deliver new
or replacement Notes to the assigning Lender and the assignee Lender. Any
assignment or transfer by a Lender of rights or obligations under this Credit
Agreement that does not comply with this subsection shall be treated for
purposes of this Credit Agreement as a sale by such Lender of a participation in
such rights and obligations in accordance with subsection (d) of this Section.
(c) The Administrative Agent, acting solely for this purpose as an agent of
the Borrower, shall maintain at its office in Charlotte, North Carolina a copy
of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amount of the Loans and LOC Obligations owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The entries in
--------
the Register shall be conclusive, and the Borrower, the Administrative Agent and
the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Credit Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower and any Lender, at any reasonable time
and from time to time upon reasonable prior notice.
(d) Any Lender may, without the consent of, or notice to, the Borrower or
the Administrative Agent, sell participations to one or more banks or other
entities (a "Participant") in all or a portion of such Lender's rights and/or
-----------
obligations under this Credit Agreement (including all or a portion of its
Commitment and/or the Loans (including such Lender's participations in LOC
Obligations and/or Swingline Loans) owing to it); provided that (i) such
--------
Lender's obligations under this Credit Agreement
78
shall remain unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations and (iii) the
Borrower, the Administrative Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Credit Agreement. Any agreement or instrument pursuant to
which a Lender sells such a participation shall provide that such Lender shall
retain the sole right to enforce this Credit Agreement and to approve any
amendment, modification or waiver of any provision of this Credit Agreement;
provided that such agreement or instrument may provide that such Lender will
not, without the consent of the Participant, agree to any amendment, waiver or
other modification that would (i) postpone any date upon which any payment of
money is scheduled to be paid to such Participant, (ii) reduce the principal,
interest, fees or other amounts payable to such Participant or (iii) release all
or substantially all of the Guarantors from their obligations under the Credit
Documents. Subject to subsection (e) of this Section, the Borrower agrees that
each Participant shall be entitled to the benefits of Sections 3.6, 3.9, 3.11
and 3.12 to the same extent as if it were a Lender and had acquired its interest
by assignment pursuant to subsection (b) of this Section. To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 11.2 as though it were a Lender, provided such Participant agrees to be
--------
subject to Section 3.14 as though it were a Lender.
(e) A Participant shall not be entitled to receive any greater payment
under Section 3.6, 3.9 or 3.11 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrower's prior written consent. A Participant that would be a foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 3.11 unless
the Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with Section
3.11(d) as though it were a Lender.
(f) Any Lender may at any time pledge or assign a security interest in all
or any portion of its rights under this Credit Agreement (including under its
Notes, if any) to secure obligations of such Lender, including any pledge or
assignment to secure obligations to a Federal Reserve Bank; provided that no
--------
such pledge or assignment shall release a Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.
(g) If the consent of the Borrower to an assignment or to an Eligible
Assignee is required hereunder (including a consent to an assignment which does
not meet the minimum assignment threshold specified in clause (i) of the proviso
to the first sentence of Section 11.3(b), the Borrower shall be deemed to have
given its consent five Business Days after the date notice thereof has been
delivered by the assigning Lender (through the Administrative Agent) unless such
consent is expressly refused by the Borrower prior to such fifth Business Day.
(h) Notwithstanding anything to the contrary contained herein, if at any
time Bank of America assigns all of its Commitment and Loans pursuant to
subsection (b) above, Bank of America may, (i) upon thirty days notice to the
Borrower and the Lenders, resign as Issuing Lender and/or (ii) upon five
Business Days notice to the Borrower, resign as Swingline Lender. In the event
of any such resignation as Issuing Lender or as Swingline Lender, the Borrower
shall be entitled to appoint from among the Lenders a successor Issuing Lender
or Swingline Lender hereunder; provided, however, that no failure by the
--------
Borrower to appoint any such successor shall affect the resignation of Bank of
America as Issuing Lender or as Swingline Lender, as the case may be. Bank of
America shall retain all the rights and obligations of the Issuing Lender
hereunder with respect to all Letters of Credit outstanding as of the effective
date of its resignation as Issuing Lender and all LOC Obligations with respect
thereto (including the right to require the Lenders to make Base Rate Loans or
fund participations in Letters of Credit pursuant to Section 2.6(b)). If Bank of
America resigns as Swingline Lender, it shall retain all the rights of the
Swingline Lender provided hereunder with respect to Swingline Loans made by it
and outstanding
79
as of the effective date of such resignation, including the right to require the
Lenders to make Base Rate Loans or fund participations in outstanding Swingline
Loans pursuant to Section 2.7.
11.4 No Waiver; Remedies Cumulative.
------------------------------
No failure or delay on the part of the Administrative Agent or any
Lender in exercising any right, power or privilege hereunder or under any other
Credit Document and no course of dealing between the Administrative Agent or any
Lender and any of the Credit Parties 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 and remedies provided herein are cumulative and not
exclusive of any rights or remedies which the Administrative Agent or any Lender
would otherwise have. No notice to or demand on any Credit Party in any case
shall entitle the Credit Parties to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the rights of the
Administrative Agent or the Lenders to any other or further action in any
circumstances without notice or demand.
11.5 Expenses; Indemnification.
-------------------------
(a) The Borrower agrees to pay on demand all reasonable costs and expenses
of the Administrative Agent in connection with the syndication, preparation,
execution, delivery, administration, modification, and amendment of this Credit
Agreement, the other Credit Documents, and the other documents to be delivered
hereunder, including, without limitation, reasonable attorneys' fees and
expenses with respect thereto and with respect to advising the Administrative
Agent as to its rights and responsibilities under the Credit Documents. The
Borrower agrees to pay on demand all costs and expenses of the Administrative
Agent and the Lenders, if any (including, without limitation, reasonable
attorneys' fees and expenses), in connection with the enforcement (whether
through negotiations, legal proceedings, or otherwise) of the Credit Documents
and the other documents to be delivered thereunder. The Borrower further agrees
to permit the Administrative Agent to perform inventory and accounts receivable
field audits at the Borrower's expense following the occurrence and during the
continuance of an Event of Default.
(b) Whether or not the transactions contemplated hereby are consummated,
the Borrower agrees to indemnify, save and hold harmless each Agent-Related
Person, each Lender and their respective Affiliates, directors, officers,
employees, counsel, agents and attorneys-in-fact (collectively the
"Indemnitees") from and against: (a) any and all claims, demands, actions or
-----------
causes of action that are asserted against any Indemnitee by any Person (other
than the Administrative Agent or any Lender) relating directly or indirectly to
a claim, demand, action or cause of action that such Person asserts or may
assert against any Credit Party, any Affiliate of any Credit Party or any of
their respective officers or directors; (b) any and all claims, demands, actions
or causes of action that may at any time (including at any time following
repayment of the Obligations and the resignation or removal of the
Administrative Agent or the replacement of any Lender) be asserted or imposed
against any Indemnitee, arising out of or relating to, the Credit Documents, any
predecessor Credit Documents, the Commitments, the use or contemplated use of
the proceeds of any Extension of Credit, or the relationship of any Credit
Party, the Administrative Agent and the Lenders under this Credit Agreement or
any other Credit Document; (c) any administrative or investigative proceeding by
any Governmental Authority arising out of or related to a claim, demand, action
or cause of action described in subsection (a) or (b) above; and (d) any and all
liabilities (including liabilities under indemnities), losses, consequential
damages, costs or expenses (including reasonable fees and costs of counsel) that
any Indemnitee suffers or incurs as a result of the assertion of any foregoing
claim, demand, action, cause of action or proceeding, or as a result of the
preparation of any defense in connection with any foregoing claim, demand,
action, cause of action or proceeding, in all cases, whether or not arising out
of the negligence of an Indemnitee, and whether or not
80
an Indemnitee is a party to such claim, demand, action, cause of action or
proceeding (all the foregoing, collectively, the "Indemnified Liabilities");
provided that no Indemnitee shall be entitled to indemnification for any claim
caused by its own gross negligence or willful misconduct or for any loss
asserted against it by another Indemnitee. The agreements in this Section shall
survive the termination of the Commitments and repayment of all the other
Obligations.
(c) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 11.5 shall survive the repayment of the Loans, LOC Obligations and
other obligations under the Credit Documents and the termination of the
Commitments hereunder.
11.6 Amendments, Waivers and Consents.
--------------------------------
Neither this Credit Agreement nor any other Credit Document nor any of the
terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is in
writing entered into by, or approved in writing by, the Required Lenders and the
Borrower, provided, however, that:
--------
(a) without the consent of each Lender affected thereby, neither this
Credit Agreement nor any other Credit Document may be amended to:
(i) extend the Termination Date or the final maturity of any Loan
or of any reimbursement obligation, or any portion thereof, arising
from drawings under Letters of Credit,
(ii) reduce the rate or extend the time of payment of interest
(other than as a result of waiving the applicability of any
post-default increase in interest rates) thereon or Fees hereunder,
(iii) reduce or waive the principal amount of any Loan or of any
reimbursement obligation, or any portion thereof, arising from
drawings under Letters of Credit,
(iv) increase the Commitment of a Lender over the amount thereof
in effect (it being understood and agreed that a waiver of any Default
or Event of Default or mandatory reduction in the Commitments shall
not constitute a change in the terms of any Commitment of any Lender),
(v) except as the result of or in connection with a dissolution,
merger or disposition of a member of the Consolidated Group permitted
under Section 8.4, release the Borrower or all or substantially all of
the Guarantors from its or their obligations under the Credit
Documents,
(vi) except as the result of or in connection with an Asset
Disposition permitted under Section 8.5, release all or substantially
all of the Collateral,
(vii) amend, modify or waive any provision of this Section 11.6
or Section 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14, 3.15,
9.1(a), 11.2, 11.3, 11.5 or 11.9,
(viii) reduce any percentage specified in, or otherwise modify,
the definition of Required Lenders, or
81
(ix) consent to the assignment or transfer by the Borrower or all
or substantially all of the other Credit Parties of any of its or
their rights and obligations under (or in respect of) the Credit
Documents except as permitted thereby;
(b) without the consent of the Administrative Agent and the Collateral
Agent, no provision of Section 10 may be amended;
(c) without the consent of the Issuing Lender, no provision of Section
2.1(b), 2.2(a)(ii) and 2.6 may be amended; and
(d) without the consent of the Swingline Lender, no provision of
Section 2.1(c), 2.2(a)(iii) and 2.7 may be amended.
Notwithstanding the fact that the consent of all the Lenders is
required in certain circumstances as set forth above, (x) each Lender is
entitled to vote as such Lender sees fit on any bankruptcy reorganization
plan that affects the Loans, and each Lender acknowledges that the
provisions of Section 1126(c) of the Bankruptcy Code supersedes the
unanimous consent provisions set forth herein and (y) the Required Lenders
may consent to allow a Credit Party to use cash collateral in the context
of a bankruptcy or insolvency proceeding.
11.7 Counterparts.
------------
This Credit Agreement may be executed in any number of counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall constitute one and the same instrument. It shall not be necessary in
making proof of this Credit Agreement to produce or account for more than one
such counterpart for each of the parties hereto. Delivery by facsimile by any of
the parties hereto of an executed counterpart of this Credit Agreement shall be
as effective as an original executed counterpart hereof and shall be deemed a
representation that an original executed counterpart hereof will be delivered.
11.8 Headings.
--------
The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Credit Agreement.
11.9 Survival.
--------
All indemnities set forth herein, including, without limitation, in Section
2.6(h), 3.11, 3.12, 10.7 or 11.5 shall survive the execution and delivery of
this Credit Agreement, the making of the Loans, the issuance of the Letters of
Credit, the repayment of the Loans, LOC Obligations and other obligations under
the Credit Documents and the termination of the Commitments hereunder, and all
representations and warranties made by the Credit Parties herein shall survive
delivery of the Notes and the making of the Loans hereunder.
11.10 Governing Law; Submission to Jurisdiction; Venue.
------------------------------------------------
(a) THIS CREDIT AGREEMENT AND, UNLESS OTHERWISE EXPRESSLY PROVIDED THEREIN,
THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA. Any legal action or
proceeding with respect to this Credit Agreement or any other Credit Document
may be brought in the state or federal courts located in Charlotte, North
Carolina, and, by execution and delivery of this Credit Agreement, each of the
Credit Parties hereby irrevocably accepts for itself and in respect of its
82
property, generally and unconditionally, the nonexclusive jurisdiction of such
courts. Each of the Credit Parties further irrevocably consents 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 it at the address set out for notices pursuant to Section
11.1, such service to become effective three days after such mailing. Nothing
herein shall affect the right of the Administrative Agent or any Lender to serve
process in any other manner permitted by law or to commence legal proceedings or
to otherwise proceed against any Credit Party in any other jurisdiction.
(b) Each of the Credit Parties hereby irrevocably waives 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
Credit Agreement or any other Credit Document brought in the courts referred to
in subsection (a) above and hereby further irrevocably waives 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 PARTY TO THIS CREDIT AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT
TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER
ANY CREDIT DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE
DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY CREDIT
DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING
OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND
EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY
PARTY TO THIS CREDIT AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF
THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
11.11 Severability.
------------
If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
11.12 Entirety.
--------
This Credit Agreement together with the other Credit Documents represent
the entire agreement of the parties hereto and thereto, and supersede all prior
agreements and understandings, oral or written, if any, including any commitment
letters or correspondence relating to the Credit Documents or the transactions
contemplated herein and therein.
11.13 Binding Effect; Termination.
---------------------------
(a) This Credit Agreement shall become effective at such time on or after
the Closing Date when it shall have been executed by each Credit Party and the
Administrative Agent, and the Administrative Agent shall have received copies
hereof (telecopied or otherwise) which, when taken together, bear the signatures
of each Lender, and thereafter this Credit Agreement shall be binding upon and
inure to the benefit of each Credit Party, the Administrative Agent and each
Lender and their respective successors and assigns.
(b) The term of this Credit Agreement shall be until no Loans, LOC
Obligations or any other amounts payable hereunder or under any of the other
Credit Documents shall remain outstanding, no Letters
83
of Credit shall be outstanding, all of the Guaranteed Obligations have been
irrevocably satisfied in full and all of the Commitments hereunder shall have
expired or been terminated.
11.14 Confidentiality.
---------------
Each of the Administrative Agent and the Lenders agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its and its Affiliates' directors, officers, employees
and agents, including accountants, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential); (b) to the extent requested by any regulatory
authority; (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process; (d) to any other party to this Credit
Agreement; (e) in connection with the exercise of any remedies hereunder or any
suit, action or proceeding relating to this Credit Agreement or the enforcement
of rights hereunder; (f) subject to an agreement containing provisions
substantially the same as those of this Section, to (i) any Eligible Assignee of
or Participant in, or any prospective Eligible Assignee of or Participant in,
any of its rights or obligations under this Credit Agreement or (ii) any direct
or indirect contractual counterparty or prospective counterparty (or such
contractual counterparty's or prospective counterparty's professional advisor)
to any credit derivative transaction relating to obligations of the Borrower;
(g) with the consent of the Borrower; (h) to the extent such Information (i)
becomes publicly available other than as a result of a breach of this Section or
(ii) becomes available to the Administrative Agent or any Lender on a
nonconfidential basis from a source other than the Borrower; or (i) to the
National Association of Insurance Commissioners or any other similar
organization or any nationally recognized rating agency that requires access to
information about a Lender's or its Affiliates' investment portfolio in
connection with ratings issued with respect to such Lender or its Affiliates.
For the purposes of this Section, "Information" means all information received
-----------
from the Borrower relating to the Borrower or its business, other than any such
information that is available to the Administrative Agent or any Lender on a
nonconfidential basis prior to disclosure by the Borrower; provided that, in the
--------
case of information received from the Borrower after the date hereof, such
information is clearly identified in writing at the time of delivery as
confidential. Any Person required to maintain the confidentiality of Information
as provided in this Section shall be considered to have complied with its
obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such Information as such Person would accord to
its own confidential information.
11.15 Source of Funds.
---------------
Each of the Lenders hereby represents and warrants to the Borrower that at
least one of the following statements is an accurate representation as to the
source of funds to be used by such Lender in connection with the financing
hereunder:
(a) no part of such funds constitutes assets allocated to any separate
account maintained by such Lender in which any employee benefit plan (or
its related trust) has any interest;
(b) to the extent that any part of such funds constitutes assets
allocated to any separate account maintained by such Lender, such Lender
has disclosed to the Borrower the name of each employee benefit plan whose
assets in such account exceed ten percent (10%) of the total assets of such
account as of the date of such purchase (and, for purposes of this
subsection (b), all employee benefit plans maintained by the same employer
or employee organization are deemed to be a single plan);
84
(c) to the extent that any part of such funds constitutes assets of an
insurance company's general account, such insurance company has complied
with all of the requirements of the regulations issued under Section
401(c)(1)(A) of ERISA; or
(d) such funds constitute assets of one or more specific benefit plans
that such Lender has identified in writing to the Borrower.
As used in this Section 11.15, the terms "employee benefit plan" and "separate
account" shall have the respective meanings provided in Section 3 of ERISA.
11.16 Conflict.
--------
To the extent that there is a conflict or inconsistency between any
provision hereof, on the one hand, and any provision of any Credit Document, on
the other hand, this Credit Agreement shall control.
[signature pages to follow]
85
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this Credit Agreement to be duly executed and delivered as of the date first
above written.
BORROWER: AMERIPATH, INC.,
-------- a Delaware corporation
By:
-----------------------------------------
Name:
Title:
GUARANTORS: [ELIGIBLE SUBSIDIARIES OF THE BORROWER]
----------
By:
-----------------------------------------
Name:
Title:
of each of the foregoing
ADMINISTRATIVE AGENT: BANK OF AMERICA, N.A.,
-------------------- in its capacity as Administrative Agent
By:
-----------------------------------------
Name:
Title:
LENDERS: BANK OF AMERICA, N.A.,
------- individually in its capacity as a Lender
By:
-----------------------------------------
Name:
Title:
FIRST UNION NATIONAL BANK
By:
-----------------------------------------
Name:
Title:
CITICORP USA, INC.
By:
-----------------------------------------
Name:
Title:
CREDIT SUISSE FIRST BOSTON
By:
-----------------------------------------
Name:
Title:
Schedule 2.1(a)
---------------
LENDERS AND COMMITMENTS
Revolving Commitments
---------------------
Revolving Revolving LOC
Commitment Committed Committed
Lender Percentage Amount Amount
------ ---------- ------------ -------------
Bank of America, N.A. 28.571429% $ 40,000,000 $3,428,571.48
First Union National Bank 28.571429% $ 40,000,000 $3,428,571.48
CitiCorp USA, Inc. 28.571429% $ 40,000,000 $3,428,571.48
Credit Suisse First Boston 14.285713% $ 20,000,000 $1,714,285.56
--------- ------------ -------------
Total 100.00% $140,000,000 $ 12,000,000
Schedule 2.1(d)
--------------
Form of Lender Joinder Agreement
THIS LENDER JOINDER AGREEMENT (this "Agreement") dated as of ,
--------- ----------
200 to the Credit Agreement referenced below is by and among [NEW LENDER] (the
--
"New Lender"), AMERIPATH, INC., a Delaware corporation (the "Borrower"), certain
---------- --------
Subsidiaries and Affiliates of the Borrower, as Guarantors, and BANK OF AMERICA,
N.A., as administrative agent (in such capacity, the "Administrative Agent") for
--------------------
the Lenders. All of the defined terms of the Credit Agreement are incorporated
herein by reference.
W I T N E S S E T H
WHEREAS, pursuant to that Credit Agreement dated as of November 30, 2001
(as amended and modified from time to time, the "Credit Agreement") among the
----------------
Borrower, the Guarantors, the Lenders and the Administrative Agent, the Lenders
have agreed to provide the Borrower with a $ million revolving credit
--
facility;
WHEREAS, pursuant to Section 2.1(d) of the Credit Agreement, the Borrower
has requested that the New Lender provide an additional Revolving Commitment
under the Credit Agreement; and
WHEREAS, the New Lender has agreed to provide the additional Revolving
Commitment on the terms and conditions set forth herein and to become a "Lender"
under the Credit Agreement in connection therewith;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. The New Lender hereby agrees to provide Commitments to the Borrower in
the amounts set forth on Schedule 2.1(a) to the Credit Agreement as attached
---------------
hereto. The Revolving Commitment Percentage of the New Lender shall be as set
forth on Schedule 2.1(a).
---------------
2. The New Lender shall be deemed to have purchased without recourse a risk
participation from the Issuing Lender in all Letters of Credit issued or
existing under the Credit Agreement (including Existing Letters of Credit) and
the obligations arising thereunder in an amount equal to its pro rata share of
the obligations under such Letters of Credit (based on the Revolving Commitment
Percentages of the Lenders as set forth on Schedule 2.1(a) as attached hereto),
---------------
and shall absolutely, unconditionally and irrevocably assume, as primary obligor
and not as surety, and be obligated to pay to the Issuing Lender therefor and
discharge when due, its pro rata share of the obligations arising under such
Letter of Credit.
3. The New Lender (a) represents and warrants that it is a commercial
lender, other financial institution or other "accredited" investor (as defined
in SEC Regulation D) that makes or acquires loans in the ordinary course of
business and that it will make or acquire Loans for its own account in the
ordinary course of business, (b) confirms that it has received a copy of the
Credit Agreement, together with copies of the financial statements referred to
in Section 7.1 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Agreement; (c) agrees that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Agreement; (d)
appoints and authorizes the Administrative Agent to take such action as agent on
its behalf and to exercise such powers and discretion under the Credit Agreement
as are delegated to the Administrative Agent by the terms thereof, together with
such powers and discretion as are reasonably incidental thereto; and (e) agrees
that, as of the date hereof, the New Lender shall (i) be a party to the Credit
Agreement and the other Credit Documents, (ii) be a "Lender" for all purposes of
the Credit Agreement and the other Credit Documents, (iii) perform all of the
obligations that by the terms of the Credit Agreement are required to be
performed by it as a "Lender" under the Credit Agreement and (iv) shall have the
rights and obligations of a Lender under the Credit Agreement and the other
Credit Documents.
4. Each of the Borrower and the Guarantors agrees that, as of the date
hereof, the New Lender shall (i) be a party to the Credit Agreement and the
other Credit Documents, (ii) be a "Lender" for all purposes of the Credit
Agreement and the other Credit Documents, and (iii) have the rights and
obligations of a Lender under the Credit Agreement and the other Credit
Documents.
5. The address of the New Lender for purposes of all notices and other
communications is , , Attention of
------------------ --------------------------
(Facsimile No. ).
-------------- ---------------
6. This Agreement may be executed in any number of counterparts and by the
various parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one contract. Delivery of an executed counterpart of this Agreement
by telecopier shall be effective as delivery of a manually executed counterpart
of this Agreement.
7. This Agreement shall be governed by and construed and interpreted in
accordance with the laws of the State of New York.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed by a duly authorized officer as of the date first above written.
NEW LENDER: [NEW LENDER],
----------
as New Lender
By:
-----------------------------------------
Name:
Title:
BORROWER: AMERIPATH, INC., a Delaware corporation
--------
By:
-----------------------------------------
Name:
Title:
GUARANTORS: AMERIPATH ALABAMA, INC.,
----------
a
By:
-----------------------------------------
Name:
Title:
of each of the foregoing
Accepted and Agreed:
-------------------
BANK OF AMERICA, N.A.,
as Administrative Agent
By:
-----------------------------------------
Name:
Title:
Schedule 2.2(a)(i)
------------------
FORM OF NOTICE OF BORROWING
Bank of America, N.A., as Administrative Agent
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, 15th Floor
NC1-001-15-04
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Agency Services
Re: Credit Agreement dated as of November 30, 2001 (as amended, modified,
supplemented, increased and extended from time to time, the "Credit
------
Agreement") among AmeriPath, Inc., a Delaware corporation (the
---------
"Borrower"), certain Subsidiaries and Affiliates of the Borrower, as
--------
guarantors, the Lenders identified therein and Bank of America, N.A.,
as Administrative Agent. Terms used but not otherwise defined herein
shall have the meanings provided in the Credit Agreement.
Ladies and Gentlemen:
The Borrower hereby gives notice pursuant to Section 2.2 of the Credit
Agreement that it requests a [Revolving Loan] [Swingline Loan] advance under the
Credit Agreement and in connection therewith sets forth below the terms on which
such advance is requested to be made:
(A) Date of Borrowing (which is a Business Day)
-----------------------
(B) Principal Amount of Borrowing
-----------------------
(C) Interest rate basis
-----------------------
(D) Interest Period and the last day thereof
-----------------------
In accordance with the requirements of Section 5.2, the Borrower hereby
represents and warrants that each of the conditions specified in Section 5.2 of
the Credit Agreement have been satisfied as of the date hereof.
AMERIPATH, INC.,
a Delaware corporation
By:
----------------------------
Name:
Title:
Schedule 2.2(a)(ii)
-------------------
FORM OF NOTICE OF REQUEST OF LETTER OF CREDIT
Bank of America, N.A., as Administrative Agent
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, 15th Floor
NC1-001-15-04
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Agency Services
Re: Credit Agreement dated as of November 30, 2001 (as amended, modified,
supplemented, increased and extended from time to time, the "Credit
------
Agreement") among AmeriPath, Inc., a Delaware corporation (the
---------
"Borrower"), certain Subsidiaries and Affiliates of the Borrower, as
--------
guarantors, the Lenders identified therein and Bank of America, N.A.,
as Administrative Agent. Terms used but not otherwise defined herein
shall have the meanings provided in the Credit Agreement.
Ladies and Gentlemen:
The Borrower hereby gives notice pursuant to Section 2.2 of the Credit
Agreement that it requests a the issuance of a Letter of Credit under the Credit
Agreement as follows:
(1) Account Party:
(2) For use by:
(3) Beneficiary:
(4) Face Amount of Letter of Credit:
(5) Date of Issuance:
Delivery of Letter of Credit should be made as follows:
In accordance with the requirements of Section 5.2, the Borrower hereby
represents and warrants that each of the conditions specified in Section 5.2 of
the Credit Agreement have been satisfied as of the date hereof.
Very truly yours,
AMERIPATH, INC.,
a Delaware corporation
By:
-------------------------
Name:
Title:
Schedule 2.5
------------
FORM OF NOTE
November 30, 2001
FOR VALUE RECEIVED, undersigned Borrower hereby promises to pay to the
order of , its successors and assigns (the "Lender"), on
---------------------- ------
or before the Termination Date to the office of the Administrative Agent in
immediately available funds as provided in the Credit Agreement,
(i) in the case of Revolving Loans, the Lender's Revolving Committed
Amount or, if less, the aggregate unpaid principal amount of all Revolving
Loans owing to the Lender; and
(ii) in the case of Swingline Loans, if the Lender is the Swingline
Lender, the Swingline Committed Amount or, if less, the aggregate unpaid
principal amount of all Swingline Loans owing to the Swingline Lender;
together with interest thereon at the rates and as provided in the Credit
Agreement.
This Note is one of the Notes referred to in the Credit Agreement dated as
of the date hereof (as amended, modified, supplemented, increased and extended
from time to time, the "Credit Agreement") among the Borrower, the Guarantors
----------------
and Lenders identified therein, and Bank of America, N.A., as Administrative
Agent. Capitalized terms used but not otherwise defined herein shall have the
meanings provided in the Credit Agreement.
The holder may endorse and attach a schedule to reflect borrowings
evidenced by this Note and all payments and prepayments thereon; provided that
--------
any failure to endorse such information shall not affect the obligation of the
Borrower to pay amounts evidenced hereby.
Upon the occurrence of an Event of Default, all amounts evidenced by this
Note may, or shall, become immediately due and payable as provided in the Credit
Agreement without presentment, demand, protest or notice of any kind, all of
which are waived by the Borrower. In the event payment of amounts evidenced by
this Note is not made at any stated or accelerated maturity, the Borrower agrees
to pay, in addition to principal and interest, all costs of collection,
including reasonable attorneys' fees and expenses and the allocated cost of
internal counsel.
This Note and the Loans and amounts evidenced hereby may be transferred
only as provided in the Credit Agreement.
This Note shall be governed by, and construed and interpreted in accordance
with, the law of the State of North Carolina.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed
by its duly authorized officer as of the day and year first above written.
AMERIPATH, INC.,
a Delaware corporation
By:
------------------------
Name:
Title:
Schedule 3.2
FORM OF NOTICE OF CONTINUATION/CONVERSION
Bank of America, N.A., as Administrative Agent
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, 15th Floor
NC1-001-15-04
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn:
-------------
Agency Services
Re: Credit Agreement dated as of November 30, 2001 (as amended, modified,
supplemented, increased and extended from time to time, the "Credit
------
Agreement") among AmeriPath, Inc., a Delaware corporation (the "Borrower"),
--------- --------
certain Subsidiaries and Affiliates of the Borrower, as guarantors, the
Lenders identified therein and Bank of America, N.A., as Administrative
Agent. Terms used but not otherwise defined herein shall have the meanings
provided in the Credit Agreement.
Ladies and Gentlemen:
Pursuant to Section 3.2 of the Credit Agreement, the Borrower hereby
requests an Continuation or Conversion of a Revolving Loan outstanding under the
Credit Agreement, and in connection therewith sets forth below the terms on
which such Continuation or Conversion is requested to be made:
(A) Loan Type
--------------
(B) Date of Continuation or Conversion
(which is the last day of the applicable Interest Period)
--------------
(C) Principal Amount of Continuation or Conversion
--------------
(D) Interest rate basis
--------------
(E) Interest Period and the last day thereof
--------------
In accordance with the requirements of Section 5.2, the Borrower hereby
represents and warrants that each of the conditions specified in Section 5.2 of
the Credit Agreement have been satisfied as of the date hereof.
AMERIPATH, INC.,
a Delaware corporation
By:
------------------------------
Name:
Title:
Schedule 5.1(h)(v)
------------------
Form of Officer's Certificate
Pursuant to Section 5.1(h)(v) of the Credit Agreement (the "Credit
------
Agreement"), dated as of November 30, 2001, by and among AmeriPath, Inc., a
---------
Delaware corporation (the "Borrower"), certain Subsidiaries and Affiliates of
--------
the Borrower, as guarantors, the Lenders identified therein and BANK OF AMERICA,
N.A., as Administrative Agent, the undersigned, , Secretary of
-----------
(the "Corporation"), hereby certifies as follows:
--------------- -----------
1. Attached hereto as Annex I is a true and complete copy of resolutions
duly adopted by the board of directors of the Corporation on
, 200 . The attached resolutions have not been rescinded
----------------------- --
or modified and remain in full force and effect. The attached resolutions are
the only corporate proceedings of the Corporation now in force relating to or
affecting the matters referenced therein.
2. Attached hereto as Annex II is a true and complete copy of the Bylaws of
the Corporation as in effect on the date hereof.
3. Attached hereto as Annex III is a true and complete copy of the
Certificate of Incorporation of the Corporation and all amendments thereto as in
effect on the date hereof.
4. Each of the following persons is now a duly elected and qualified
officer of the Corporation, holding the office(s) indicated, and the signature
appearing opposite his/her name below is his/her true and genuine signature, and
such officer is duly authorized to execute and deliver on behalf of the
Corporation, the Credit Agreement, the Notes and the other Credit Documents and
to act as a Responsible Officer on behalf of the Corporation under the Credit
Agreement.
Name Title Signature
---- ----- ---------
------------------
------------------
------------------
IN WITNESS WHEREOF, the undersigned has hereunto set his/her name and
affixed the corporate seal of the Corporation.
------------------
Secretary
Date:
-----------------------
(CORPORATE SEAL)
I, , [Title] of the Corporation, hereby certify that
---------------------
, whose genuine signature appears above, is, and has been at all
---------------
times since , a duly elected, qualified and acting Secretary of
--------------
the Corporation.
------------------------------
[Title]
Date:
---------------
Schedule 7.1(c)
---------------
FORM OF OFFICER'S COMPLIANCE CERTIFICATE
For the fiscal quarter ended , .
----------------- ---
I, , [Title] of AmeriPath, Inc. (the "Borrower")
---------------------- --------
hereby certify that, to the best of my knowledge and belief, with respect to
that certain Credit Agreement dated as of November 30, 2001 (as amended,
modified, supplemented, increased and extended from time to time, the "Credit
------
Agreement"; all of the defined terms in the Credit Agreement are incorporated
---------
herein by reference) among the Borrower, the Guarantors and Lenders party
thereto, and Bank of America, N.A., as Administrative Agent:
a. The company-prepared financial statements which accompany this
certificate are true and correct in all material respects and have
been prepared in accordance with GAAP applied on a consistent basis,
subject to changes resulting from normal year-end audit adjustments.
b. Since (the date of the last similar certification, or, if
-----------
none, the Closing Date) no Default or Event of Default has occurred
under the Credit Agreement.
Delivered herewith are detailed calculations demonstrating compliance by
the Credit Parties with the financial covenants contained in Section 7.11 of the
Credit Agreement as of the end of the fiscal period referred to above.
This day of , 200 .
------ ----------- -
AMERIPATH, INC.,
a Delaware corporation
By:
---------------------------
Name:
Title:
Attachment to Officer's Certificate
-----------------------------------
Computation of Financial Covenants
Schedule 7.12
-------------
FORM OF JOINDER AGREEMENT
THIS JOINDER AGREEMENT (the "Agreement"), dated as of , ,
------------- ---
is by and between , a (the
--------------------- -------------------
"Subsidiary"), and Bank of America, N.A., in its capacity as Administrative
----------
Agent under that certain Credit Agreement (as amended, modified, supplemented,
increased and extended from time to time, the "Credit Agreement"), dated as of
----------------
November 30, 2001, among AmeriPath, Inc., a Delaware corporation (the
"Borrower"), certain Subsidiaries and Affiliates of the Borrower, as guarantors,
--------
the Lenders identified therein and Bank of America, N.A., as Administrative
Agent. All of the defined terms in the Credit Agreement are incorporated herein
by reference.
The Credit Parties are required by Section 7.12 of the Credit Agreement to
cause the Subsidiary to become a "Guarantor".
---------
Accordingly, the Subsidiary hereby agrees as follows with the
Administrative Agent, for the benefit of the Lenders:
1. The Subsidiary hereby acknowledges, agrees and confirms that, by its
execution of this Agreement, the Subsidiary will be deemed to be a party to the
Credit Agreement and a "Guarantor" for all purposes of the Credit Agreement, and
shall have all of the obligations of a Guarantor thereunder as if it had
executed the Credit Agreement. The Subsidiary hereby ratifies, as of the date
hereof, and agrees to be bound by, all of the terms, provisions and conditions
applicable to the Guarantors contained in the Credit Agreement. Without limiting
the generality of the foregoing terms of this paragraph 1, the Subsidiary hereby
jointly and severally together with the other Guarantors, guarantees to each
Lender and the Administrative Agent, as provided in Section 4 of the Credit
Agreement, the prompt payment and performance of the Guaranteed Obligations in
full when due (whether at stated maturity, as a mandatory prepayment, by
acceleration or otherwise) strictly in accordance with the terms thereof.
2. The Subsidiary hereby acknowledges, agrees and confirms that, by its
execution of this Agreement, the Subsidiary will be deemed to be a party to the
Security Agreement, and shall have all the obligations of an "Grantor" (as such
term is defined in the Security Agreement) thereunder as if it had executed the
Security Agreement. The Subsidiary hereby ratifies, as of the date hereof, and
agrees to be bound by, all of the terms, provisions and conditions contained in
the Security Agreement. Without limiting generality of the foregoing terms of
this paragraph 2, the Subsidiary hereby grants to the Administrative Agent, for
the benefit of the Lenders, a continuing security interest in, and a right of
set off against any and all right, title and interest of the Subsidiary in and
to the Collateral (as such term is defined in Section 2 of the Security
Agreement) of the Subsidiary. The Subsidiary hereby represents and warrants to
the Administrative Agent that:
(i) The Subsidiary's chief executive office and chief place of
business are (and for the prior four months have been) located at the
locations set forth on Schedule 1 attached hereto and the Subsidiary keeps
----------
its books and records at such locations.
(ii) The type of Collateral owned by the Subsidiary and the location
of all Collateral owned by the Subsidiary is as shown on Schedule 2
----------
attached hereto.
(iii) The Subsidiary's legal name is as shown in this Agreement and
the Subsidiary has not in the past four months changed its name, been party
to a merger, consolidation or other change in structure or used any
tradename except as set forth in Schedule 3 attached hereto.
----------
(iv) The patents and trademarks listed on Schedule 4 attached hereto
----------
constitute all of the registrations and applications for the patents and
trademarks owned by the Subsidiary.
3. The Subsidiary hereby acknowledges, agrees and confirms that, by its
execution of this Agreement, the Subsidiary will be deemed to be a party to the
Pledge Agreement, and shall have all the obligations of a "Pledgor" thereunder
as if it had executed the Pledge Agreement. The Subsidiary hereby ratifies, as
of the date hereof, and agrees to be bound by, all the terms, provisions and
conditions contained in the Pledge Agreement. Without limiting the generality of
the foregoing terms of this paragraph 3, the Subsidiary hereby pledges and
assigns to the Administrative Agent, for the benefit of the Lenders, and grants
to the Administrative Agent, for the benefit of the Lenders, a continuing
security interest in any and all right, title and interest of the Subsidiary in
and to Pledged Shares (as such term is defined in Section 2 of the Pledge
Agreement) listed on Schedule 5 attached hereto and the other Pledged Collateral
----------
(as such term is defined in Section 2 of the Pledge Agreement).
4. The address of the Subsidiary for purposes of all notices and other
communications is , , Attention
-------------------- ----------------------------
of (Facsimile No. ).
-------------- ------------
5. The Subsidiary hereby waives acceptance by the Administrative Agent and
the Lenders of the guaranty by the Subsidiary under Section 4 of the Credit
Agreement upon the execution of this Agreement by the Subsidiary.
6. This Agreement may be executed in two or more counterparts, each of
which shall constitute an original but all of which when taken together shall
constitute one contract.
7. This Agreement shall be governed by and construed and interpreted in
accordance with the laws of the State of North Carolina.
IN WITNESS WHEREOF, the Subsidiary has caused this Joinder Agreement to be
duly executed by its authorized officers, and the Administrative Agent, for the
benefit of the Lenders, has caused the same to be accepted by its authorized
officer, as of the day and year first above written.
[SUBSIDIARY]
By:
---------------------------
Name:
Title:
Acknowledged and accepted:
BANK OF AMERICA, N.A.,
as Administrative Agent
By:
---------------------------
Name:
Title:
Schedule 8.1(f)
---------------
FORM OF SUBORDINATION AGREEMENT
Schedule 11.1
LENDERS' ADDRESSES
CREDIT CONTACT ADMINISTRATIVE CONTACT
-------------- ----------------------
BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT
Bank of America, N.A., Bank of America, N.A.,
One Financial Plaza, 13th Floor ▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Financial Strategies Group Agency Services
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
FIRST UNION NATIONAL BANK
First Union National Bank First Union National Bank
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Attention: ▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
CREDIT SUISSE FIRST BOSTON
Credit Suisse First Boston Credit Suisse First Boston
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Attention: ▇▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
CITICORP USA, INC.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. Citibank, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇ #▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇ Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Schedule 11.3(b)
----------------
FORM OF ASSIGNMENT AND ACCEPTANCE
THIS ASSIGNMENT AND ACCEPTANCE, dated as of , (this
-------------- -----
"Assignment"), is entered into between THE LENDER IDENTIFIED ON THE SIGNATURE
----------
PAGES AS THE "ASSIGNOR" (the "Assignor") and THE PARTY IDENTIFIED ON THE
SIGNATURE PAGES AS "ASSIGNEE" ("Assignee").
Reference is made to the Credit Agreement dated as of November 30, 2001 (as
amended, modified, supplemented, increased and extended from time to time, the
"Credit Agreement") among AmeriPath, Inc., a Delaware corporation (the
----------------
"Borrower"), certain Subsidiaries and Affiliates of the Borrower, as guarantors,
--------
the Lenders identified therein and Bank of America, N.A., as Administrative
Agent. Terms defined in the Credit Agreement are used herein with the same
meanings.
1. The Assignor hereby sells and assigns to the Assignee, without recourse
and without representation or warranty except as expressly set forth herein, and
the Assignee hereby purchases and assumes from the Assignor, effective as of the
effective date set forth in paragraph 9(c) hereof (the "Effective Date"), those
--------------
rights and interests of the Assignor under the Credit Agreement and the other
Credit Documents identified on Schedule 1 hereto (the "Assigned Interests"),
---------- ------------------
together with unpaid interest and fees relating to the Assigned Interests
accruing from the Effective Date. After giving effect to such sale and
assignment, the Commitment of, and the amount of the Loans owing to, the
Assignor and the Assignee will be as set forth on Schedule 1 hereto. Schedule
---------- --------
2.1(a) is deemed modified and amended to the extent necessary to give effect to
------
this Assignment.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit Documents
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Documents or any other instrument or document furnished
pursuant thereto; (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Credit Party or
the performance or observance by any Credit Party of any of its obligations
under the Credit Documents or any other instrument or document furnished
pursuant thereto; and (iv) attaches the Notes held by the Assignor and requests
that the Administrative Agent exchange such Notes for new Notes payable to the
order of the Assignee in an amount equal to the Commitment assumed by the
Assignee pursuant hereto and to the Assignor in an amount equal to the
Commitment retained by the Assignor, if any, as specified on Schedule 1 hereto.
3. The Assignee (i) confirms that it has received a copy of the Credit
Documents, together with copies of the financial statements referred to in
Section 7.1 of the Credit Agreement and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision to enter
into this Assignment; (ii) agrees that it will, independently and without
reliance upon the Administrative Agent, the Assignor or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Credit Agreement and the other Credit Documents; (iii) confirms that
it is an Eligible Assignee; (iv) appoints and authorizes the Administrative
Agent to take such action as agent on its behalf and to exercise such powers and
discretion under the Credit Agreement and the other Credit Documents as are
delegated to the Administrative Agent by the terms thereof, together with such
powers and discretion as are reasonably incidental thereto; (v) agrees that it
will perform in accordance with their
terms all of the obligations that by the terms of the Credit Agreement are
required to be performed by it as a Lender; and (vi) attaches any U.S. Internal
Revenue Service or other forms required under Section 3.11.
4. Following the execution of this Assignment, it will be delivered to the
Administrative Agent for acceptance and recording by the Administrative Agent.
The effective date for this Assignment shall be the Effective Date.
5. Upon such acceptance and recording by the Administrative Agent, as of
the Effective Date, (i) the Assignee shall be a party to the Credit Agreement
and, to the extent provided in this Assignment, have the rights and obligations
of a Lender thereunder and (ii) the Assignor shall, to the extent provided in
this Assignment, relinquish its rights and be released from its obligations
under the Credit Agreement.
6. Upon such acceptance and recording by the Administrative Agent, from and
after the Effective Date, the Administrative Agent shall make all payments under
the Credit Agreement and the Notes in respect of the interest assigned hereby
(including, without limitation, all payments of principal, interest and
commitment fees with respect thereto) to the Assignee. The Assignor and Assignee
shall make all appropriate adjustments in payments under the Credit Agreement
and the Notes for periods prior to the Effective Date directly between
themselves.
7. This Assignment shall be governed by, and construed in accordance with,
the laws of the State of North Carolina.
8. This Assignment may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of
Schedule 1 to this Assignment by telecopier shall be effective as delivery of a
manually executed counterpart of this Assignment.
9. Terms of Assignment
(a) Legal Name of Assignor: SEE SIGNATURE PAGE
(b) Legal Name of Assignee: SEE SIGNATURE PAGE
(c) Effective Date of Assignment: ,
------------- ---
See Schedule I attached for a description of the Loans, Obligations and
----------
Commitments (and the percentage interests therein and relating thereto) which
are the subject of this Assignment.
10. The fee payable to the Administrative Agent in connection with this
Assignment is enclosed.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Assignment to be executed by their officers thereunto duly authorized as of the
date hereof.
, as Assignor
--------------------
By:
--------------------------------
Name:
Title:
, as Assignee
--------------------
By:
--------------------------------
Name:
Title:
Notice address of Assignee:
--------------------------
--------------------------
Attn:
--------------------
Telephone: ( )
--- --------
Telecopy: ( )
--- --------
CONSENTED TO AND ACCEPTED:
BANK OF AMERICA, N.A.,*
as Administrative Agent
By:
---------------------------------------------
Name:
Title:
AMERIPATH, INC.,
a Delaware corporation **
By:
---------------------------------------------
Name:
Title:
--------
* Required if the Assignee is an Eligible Assignee solely by reason of clause
(iii) of the definition of "Eligible Assignee."
** Required if no Event of Default has occurred and is continuing.
SCHEDULE I
----------
TO ASSIGNMENT AND ACCEPTANCE
A. REVOLVING LOANS AND LOC OBLIGATIONS PRIOR TO ASSIGNMENT:
Revolving Revolving Revolving LOC LOC
Commitment Committed Loans Committed Obligations
Percentage Amount Outstanding Amount Outstanding
---------- --------- ----------- --------- -----------
ASSIGNOR
--------
ASSIGNEE
--------
---------- --------- ----------- --------- -----------
% $ $ $ $
B. REVOLVING LOANS AND LOC OBLIGATIONS SUBJECT TO ASSIGNMENT:
Revolving Revolving Revolving LOC LOC
Commitment Committed Loans Committed Obligations
Percentage Amount Outstanding Amount Outstanding
---------- --------- ----------- --------- -----------
ASSIGNOR
--------
ASSIGNEE
--------
---------- --------- ----------- --------- -----------
% $ $ $ $
C. REVOLVING LOANS AND LOC OBLIGATIONS AFTER ASSIGNMENT:
Revolving Revolving Revolving LOC LOC
Commitment Committed Loans Committed Obligations
Percentage Amount Outstanding Amount Outstanding
---------- --------- ----------- --------- -----------
ASSIGNOR
--------
ASSIGNEE
--------
---------- --------- ----------- --------- -----------
% $ $ $ $
