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EXHIBIT 10.36
EXECUTION COPY
$100,000,000
CREDIT AGREEMENT
Dated as of July 31, 1998
among
MEDCATH INTERMEDIATE HOLDINGS, INC.,
as Borrower,
THE INITIAL LENDERS
AND INITIAL ISSUING BANK
NAMED HEREIN,
as Initial Lenders and Initial Issuing Bank,
and
NATIONSBANK, N.A.
as Administrative Agent and Collateral Agent,
and
NATIONSBANC XXXXXXXXXX SECURITIES LLC,
as Arranger and as Syndication Agent
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TABLE OF CONTENTS
PAGE
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ARTICLE I DEFINITIONS
Section 1.01. Certain Defined Terms.............................................1
Section 1.02. Computation of Time Periods......................................26
Section 1.03. Accounting Terms.................................................26
ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES AND LETTERS OF CREDIT
Section 2.01. The Advances.....................................................26
Section 2.02. Making the Advances..............................................27
Section 2.03. Issuance of and Drawings and Reimbursement Under Letters of
Credit.....................................................29
Section 2.04. Repayment of Advances............................................31
Section 2.05. Termination or Reduction of the Commitments......................32
SECTION 2.06. Prepayments......................................................33
SECTION 2.07. Interest.........................................................34
SECTION 2.08. Fees. 35
SECTION 2.09. Conversion of Advances...........................................35
SECTION 2.10. Increased Costs, Etc.............................................37
SECTION 2.11. Payments and Computations........................................39
SECTION 2.12. Taxes............................................................40
SECTION 2.13. Sharing of Payments. Etc.........................................42
SECTION 2.14. Use of Proceeds..................................................43
SECTION 2.15. Defaulting Lenders...............................................43
ARTICLE III CONDITIONS PRECEDENT
SECTION 3.01. Conditions of Initial Credit Extensions..........................46
SECTION 3.02. Conditions Precedent to Each Borrowing and Issuance..............50
SECTION 3.03. Determinations Under Section 3.01................................50
ARTICLE IV REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower...................50
ARTICLE V COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants............................................55
SECTION 5.02. Negative Covenants...............................................58
SECTION 5.03 Reporting Requirements...........................................66
SECTION 5.04. Financial Covenants..............................................69
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ARTICLE VI EVENTS OF DEFAULT
SECTION 6.01. Events of Default................................................71
SECTION 6.02. Actions in Respect of the Letters of Credit upon Default.........74
ARTICLE VII THE AGENTS
SECTION 7.01. Authorization and Action.........................................74
SECTION 7.02. Administrative Agent's Reliance. Etc.............................75
SECTION 7.03. NationsBank, NMS and Affiliates..................................76
SECTION 7.04. Lender Party Credit Decision......................................76
SECTION 7.05. Indemnification..................................................76
SECTION 7.06. Successor Administrative Agent...................................78
ARTICLE VIII MISCELLANEOUS
SECTION 8.01. Amendments, Etc..................................................79
SECTION 8.02. Notices, Etc.....................................................79
SECTION 8.03. No Waiver; Remedies..............................................80
SECTION 8.04. Costs, Expenses..................................................80
SECTION 8.05. Right of Set-off.................................................81
SECTION 8.06. Binding Effect...................................................82
SECTION 8.07. Assignments and Participations...................................82
SECTION 8.08. Replacements of Lenders Under Certain Circumstances..............85
SECTION 8.09. Execution in Counterparts........................................85
SECTION 8.10. No Liability of the Issuing Bank.................................85
SECTION 8.11. Confidentiality..................................................86
SECTION 8.12. Jurisdiction, Etc................................................86
SECTION 8.13. Governing Law....................................................87
SECTION 8.14. Waiver of Jury Trial.............................................88
SCHEDULES
Schedule I Commitments and Applicable Lending Offices
Schedule 2.01(b) Existing Letters of Credit
Schedule 3.01(c) Surviving Debt
Schedule 4.01(b) Subsidiaries
Schedule 4.01(d) Approvals
Schedule 5.02(a) Liens
Schedule 5.02(b) Intercompany Debt
Schedule 5.02(e) Investments
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EXHIBITS
Exhibit A Form of Working Capital Note
Exhibit B Form of Notice of Borrowing
Exhibit C Form of Assignment and Acceptance
Exhibit D Form of Notice of Conversion
Exhibit E Form of Pledge Agreement
Exhibit F Form of Guaranty
Exhibit G-1 Form of Legal Opinion of Xxxxx & Xxx Xxxxx
Exhibit G-2 Form of Legal Opinion of Simpson, Thacher & Xxxxxxxx
Exhibit G-3 Form of Legal Opinion of Mariscal, Weeks, XxXxxxxx &
Xxxxxxxxxxx, P.A.
Exhibit H Form of Solvency Certificate
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CREDIT AGREEMENT
CREDIT AGREEMENT, dated as of July 31, 1998, among Medcath
Intermediate Holdings, Inc., a Delaware corporation (the "Borrower"), the
several financial institutions from time to time party to this Agreement
(collectively, the "Initial Lenders", and, individually, an "Initial Lender"),
the bank listed on the signature pages hereof as the Initial Issuing Bank (the
"Initial Issuing Bank"), NationsBank, N.A. ("NationsBank"), as administrative
and collateral agent (together with any successor administrative and collateral
agent appointed pursuant to Article VII, the "Administrative Agent") for the
Lender Parties (as hereinafter defined), and NationsBanc Xxxxxxxxxx Securities
LLC ("NMS"), as arranger and syndication agent (the "Syndication Agent";
together with the Administrative Agent, the "Agents") for the Lender Parties.
PRELIMINARY STATEMENTS:
(1) Kohlberg Kravis Xxxxxxx & Co., L.P. and/or its Affiliates
(as hereinafter defined) (collectively, "KKR") and WCAS organized MedCath
Holdings, Inc., a newly created single purpose Delaware corporation (the
"Parent") that, in turn, organized the Borrower and MCTH Acquisition, Inc.
("MCTH"), a North Carolina corporation, the latter to be merged with and into
Medcath Incorporated, a North Carolina corporation.
(2) Pursuant to the Agreement and Plan of Merger dated March
12, 1998 (as amended (as defined in Section 1.02), the "Merger Agreement") among
MCTH, the Parent and the Borrower, the Borrower has agreed to consummate a
merger (the "Merger") with MCTH in which the Borrower will be the surviving
corporation.
(3) The Borrower has requested that, concurrently with the
consummation of the Merger, the Lender Parties lend to the Borrower up to
$33,000,000 to pay to the holders (other than the Borrower) of the Company Stock
(as hereinafter defined) a portion of the cash consideration for their shares in
the Merger, pay transaction fees and expenses and refinance in part certain
Existing Debt (as hereinafter defined), and that, from time to time, the Lender
Parties lend to the Borrower and issue Letters of Credit (as hereinafter
defined) for the account of the Borrower to provide working capital for the
Borrower and its Subsidiaries. The Lender Parties have indicated their
willingness to agree to lend such amounts on the terms and conditions of this
Agreement.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements contained herein, the parties hereto hereby
agree as follows:
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ARTICLE I
DEFINITIONS
Section 1.01. Certain Defined Terms. The following terms have
the following meanings:
"Additional Hospital" means the hospital designated as the
"Additional Hospital" by the Borrower in accordance with the provisions of
Section 5.02(j).
"Administrative Agent" has the meaning specified in the
recital of parties to this Agreement.
"Administrative Agent's Account" means the account of the
Administrative Agent maintained by the Administrative Agent with NationsBank at
its office at 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, Account
No. 000650550269, Attention: Xxxxxxx X. Xxxxxxxxx, or such other account
maintained by the Administrative Agent and designated by the Administrative
Agent as such in a written notice to the Borrower and each of the Lender
Parties.
"Advance" means a Working Capital Advance or a Letter of
Credit Advance, as the context may require.
"Affiliate" means, with respect to any Person, any other
Person that, directly or indirectly, controls, is controlled by or is under
common control with such Person or is a director or officer of such Person. For
purposes of this definition, the term "control" (including the terms
"controlling", "controlled by" and "under common control with") of a Person
means the possession, direct or indirect, of the power to vote 10% or more of
the Voting Interests of such Person or to direct or cause the direction of the
management and policies of such Person, whether through the ownership of Voting
Interests, by contract or otherwise.
"Agents" has the meaning specified in the recital of parties
to this Agreement.
"Agreement Value" means, for any Hedge Agreement on any date
of determination, an amount equal to the greater of (a) the amount, if any, that
would be payable by any Loan Party, or any of its Subsidiaries in respect of
"agreement value" as though such Hedge Agreement were terminated on such date,
calculated as provided in the International Swap Dealers Association Inc. Code
of Standard Wording, Assumptions and Provisions for Swaps, 1992 Edition, and (b)
xxxx-to-market, in which the unrealized gain (or loss) on such Hedge Agreement
is calculated as the amount by which the present value of the future cash flows
to be received exceeds (or is less than) the present value of the future cash
flows to be paid pursuant to such Hedge Agreement.
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"Applicable Lending Office" means (a) with respect to the
Issuing Bank, the Issuing Bank's Base Rate Lending Office for all purposes of
this Agreement and (b) with respect to each other Lender Party, such Lender
Party's Base Rate Lending Office in the case of a Base Rate Advance and such
Lender Party's Eurodollar Lending Office in the case of a Eurodollar Rate
Advance.
"Applicable Margin" means (a) at any time during the period
from the date of this Agreement through the date on which the Consolidated
financial statements of the Borrower and its Subsidiaries for the fiscal quarter
of the Borrower ending December 31, 1998 are delivered to the Lender Parties
pursuant to Section 5.03(c), 0.75% per annum for Base Rate Advances and 2.00%
per annum for Eurodollar Rate Advances and (b) at any time and from time to time
thereafter, a percentage per annum equal to the applicable percentage set forth
below for the Performance Level set forth below:
------------------------- --------------------------- -----------------------
EURODOLLAR RATE
PERFORMANCE LEVEL BASE RATE ADVANCES ADVANCES
------------------------- --------------------------- -----------------------
I 0.00% 0.875%
------------------------- --------------------------- -----------------------
II 0.00% 1.00%
------------------------- --------------------------- -----------------------
III 0.00% 1.25%
------------------------- --------------------------- -----------------------
IV 0.25% 1.50%
------------------------- --------------------------- -----------------------
V 0.50% 1.75%
------------------------- --------------------------- -----------------------
VI 0.75% 2.00%
------------------------- --------------------------- -----------------------
VII 1.00% 2.25%
------------------------- --------------------------- -----------------------
For purposes of clause (b) of the immediately preceding sentence, the Applicable
Margin for each Advance shall be determined by reference to the Performance
Level in effect from time to time.
"Applicable Percentage" means, with respect to the Commitment
Fee, (a) at any time during the period from the date of this Agreement through
the date on which the Consolidated financial statements of the Borrower and its
Subsidiaries for the fiscal quarter of the Borrower ending December 31, 1998 are
delivered to the Lender Parties pursuant to Section 5.03(c), 0.375% per annum
and (b) at any time and from time to time thereafter, a percentage per annum
equal to the applicable percentage set forth below for the Performance Level set
forth below:
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---------------------------------- ----------------------------------
PERFORMANCE LEVEL COMMITMENT FEE
---------------------------------- ----------------------------------
I 0.25%
---------------------------------- ----------------------------------
II 0.25%
---------------------------------- ----------------------------------
III 0.25%
---------------------------------- ----------------------------------
IV 0.325%
---------------------------------- ----------------------------------
V 0.375%
---------------------------------- ----------------------------------
VI 0.375%
---------------------------------- ----------------------------------
VII 0.425%
---------------------------------- ----------------------------------
For purposes of clause (b) of the immediately preceding sentence, the Applicable
Percentage for the Commitment Fee shall be determined by reference to the
Performance Level in effect from time to time.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender Party and an Eligible Assignee, and accepted by the
Administrative Agent, in accordance with Section 8.07 and in substantially the
form of Exhibit C hereto.
"Available Additional Amount" means, as of any date of
determination, an amount equal to (a) the sum of (i) the amount of any capital
contributions and proceeds of equity issuances received in cash by the Borrower
during the period from the Closing Date to such date and (ii) 50% of cumulative
Consolidated Net Income of the Borrower for the period from the Closing Date to
the end of the fiscal quarter most recently ended prior to such date for which
financial statements have been delivered pursuant to Section 5.03(b) or (c),
less (b) any of the foregoing amounts used prior to such date for investments
pursuant to Section 5.02(e)(xii).
"Available Amount" of any Letter of Credit means, at any time,
the maximum amount available to be drawn under such Letter of Credit at such
time (assuming compliance at such time with all conditions to drawing).
"Bank Hedge Agreement" means any interest rate Hedge Agreement
required or permitted under Article V that is entered into by and between the
Borrower and any Hedge Bank.
"Bankruptcy Code" means the Federal Bankruptcy Reform Act of
1978 (11 U.S.C.ss.101, et seq.).
"Base Rate" means a fluctuating interest rate per annum in
effect from time to time, which rate per annum shall at all times be equal to
the higher of:
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(a) the rate of interest established by NationsBank from time
to time as its prime rate (which rate of interest may not be the lowest
rate of interest charged by NationsBank to its customers); and
(b) the Federal Funds Rate plus 0.50%.
"Base Rate Advance" means an Advance that bears interest as
provided in Section 2.07(a)(i).
"Base Rate Lending Office" means, with respect to each of the
Lender Parties, the office of such Lender Party specified as its "Base Rate
Lending Office" opposite its name on Schedule I hereto or in the Assignment and
Acceptance pursuant to which it became a Lender Party, as the case may be, or
such other office of such Lender Party as such Lender Party may from time to
time specify to the Borrower and the Administrative Agent for such purpose.
"Borrower" has the meaning specified in the recital of the
parties to this Agreement.
"Borrower's Account" means the account of the Borrower
maintained by the Borrower with NationsBank at its office at Xxxxxxxxx, XX,
00000, Account No. 000650728761, Reference: 053000196, Attention: Xxxxx Xxxx, or
such other account of the Borrower as is agreed from time to time in writing
between the Borrower and the Administrative Agent.
"Borrower's Percentage" means, with respect to an Included
Entity on any date of determination, the aggregate percentage of the Capital
Stock of such Included Entity owned (directly or indirectly) by the Borrower and
its Subsidiaries on such date or, if greater, the percentage of such Included
Entity's Debt represented by the portion thereof included in Consolidated Total
Debt of the Borrower.
"Business Day" means a day of the year on which banks are not
required or authorized by law to close in Charlotte, North Carolina and, if the
applicable Business Day relates to any Eurodollar Rate Advances, on which
dealings are carried on in the London interbank market.
"Capital Expenditures" means, for any period, the aggregate of
all expenditures (whether paid in cash or accrued as liabilities and including
in all events all amounts expended or capitalized under Capitalized Leases, but
excluding any amount representing capitalized interest) by the Borrower and its
Subsidiaries during such period that, in conformity with GAAP, are or are
required to be included as additions during such period to property, plant or
equipment reflected in the Consolidated balance sheet of the Borrower and its
Subsidiaries; provided, however, that the term "Capital Expenditures" shall not
include (a) expenditures made in connection with the replacement, substitution
or restoration of assets to the extent financed (i) from insurance
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proceeds paid on account of the loss of or damage to the assets being replaced
or restored and to the extent such replacement, substitution or restoration
occurs within 12 months of the related loss or damage or (ii) with awards of
compensation arising from the taking by eminent domain or condemnation of the
assets being replaced, (b) the purchase price of equipment that is purchased
simultaneously with the trade-in of existing equipment to the extent that the
gross amount of such purchase price is reduced by the credit granted by the
seller of such equipment for the equipment being traded at such time, (c) the
purchase of plant, property or equipment made within 12 months of the sale of
any asset to the extent purchased with the proceeds of such sale and (d) any
additions to plant, property or equipment resulting from Permitted Acquisitions.
"Capital Stock" means, with respect to any Person, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock of, or ownership interests in, such Person,
including if such Person is a partnership, partnership interests (whether
general or limited) and any other similar 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, such partnership.
"Capitalized Lease" means any lease with respect to which the
lessee is required to record a capital lease obligation in accordance with GAAP.
"Capitalized Lease Liabilities" means all obligations under
Capitalized Leases of the Borrower or any of its Subsidiaries, in each case
taken at the amount thereof accounted as a capital lease obligation in
accordance with GAAP.
"Cash Equivalents" means any of the following types of
Investments, to the extent owned by the Borrower or any of its Subsidiaries free
and clear of all Liens (other than Liens created under the Collateral
Documents):
(a) securities issued or unconditionally guaranteed by the
United States government or any agency or instrumentality thereof, in
each case having maturities of not more than 24 months from the date of
acquisition thereof;
(b) securities issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof having maturities of not more than 24 months
from the date of acquisition thereof, and at the time of acquisition,
having an investment grade rating generally obtainable from either
Rating Agency (or, if at any time neither Rating Agency shall be rating
such obligations, then from another nationally recognized rating
agency);
(c) commercial paper issued by any Lender or any holding
company owning any Lender;
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(d) commercial paper maturing no more than 12 months after the
date of creation thereof and, at the time of acquisition, having a
rating of at least A-2 or P-2 from either Rating Agency (or if at any
time neither Rating Agency shall be rating such obligations, then from
another nationally recognized rating agency);
(e) domestic and eurodollar certificates of deposit or
banker's acceptances maturing no more than one year after the date of
acquisition thereof issued by any Lender or any other banks having
combined capital and surplus of not less than $250,000,000 (or, in the
case of foreign banks, the Dollar equivalent thereof);
(f) repurchase agreements with a term of not more than 30 days
for underlying securities of the type described in clauses (a), (b) and
(e) above entered into with any bank meeting the qualifications
specified in clause (e) above or securities dealers of recognized
national standing; and
(g) shares of investment companies that are registered under
the Investment Company Act of 1940 and invest solely in one or more of
the types of securities described in clauses (a) through (f) above.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended from time to time.
"CERCLIS" means the Comprehensive Environmental Response,
Compensation and Liability Information System maintained by the U.S.
Environmental Protection Agency.
"Change of Control" means and shall be deemed to have occurred
if (a)(i), KKR, WCAS, their Affiliates and the management of the Borrower shall
at any time not own, in the aggregate, directly or indirectly, beneficially and
of record, at least 35% of the outstanding Voting Stock of the Borrower (other
than as of the result of one or more widely distributed offerings of common
stock of the Borrower or Parent, in each case whether by the Parent or the
Borrower or by KKR, WCAS, their Affiliates or the management of the Borrower)
and/or (ii) any person, entity or "group" (within the meaning of Section 13(d)
or 14(d) of the Securities Exchange Act of 1934, as amended) shall at any time
have acquired direct or indirect beneficial ownership of a percentage of the
outstanding Voting Stock of the Borrower that exceeds the percentage of such
Voting Stock then beneficially owned, in the aggregate, by KKR, WCAS, their
Affiliates and the management of the Borrower unless in the case of either
clause (i) or (ii) above, KKR, WCAS, their Affiliates and the management of the
Borrower have, at such time, the right or the ability by voting power, contract
or otherwise to elect or designate for election a majority of the Board of
Directors of the Borrower; or (b) at any time Continuing Directors shall not
constitute a majority of the Board of Directors of the Borrower.
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"Closing Date" means the date on the which the initial Working
Capital Borrowing is first made hereunder or, if earlier, the date on which the
initial Letter of Credit is first issued hereunder.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, and the regulations promulgated and the rulings issued
thereunder.
"Collateral" means all of the "Collateral" as defined in the
Collateral Documents.
"Collateral Documents" means, collectively, the Pledge
Agreement and each of the other agreements that creates or purports to create a
Lien in favor of the Administrative Agent for the benefit of the Secured
Parties.
"Commitment" means a Working Capital Commitment or a Letter of
Credit Commitment, as the context may require.
"Commitment Fee" has the meaning specified in Section 2.08(a).
"Company Stock" means the common stock, par value $.01 per
share, of the Borrower.
"Confidential Information" has the meaning specified in
Section 8.11.
"Confidential Information Memorandum" means the information
memorandum dated June 1998, used by the Syndication Agent in connection with the
syndication of the Commitments.
"Consolidated" refers to the consolidation of accounts in
accordance with GAAP.
"Consolidated EBITDA" means, with respect to any Person for
any Period, the sum for such period of (a) Consolidated Net Income plus (b) to
the extent deducted in arriving at such Consolidated Net Income, the sum,
without duplication, of (i)cash and non-cash interest expense, (ii) taxes
computed on the basis of income, (iii) depreciation expense, (iv) amortization
expense, including amortization of deferred financing fees, (v) any expenses or
charges resulting from the Merger or from any equity offering or incurrence of
Debt, (vi) non-cash charges, (vii) any deduction for minority interest expense,
(viii) any fees and expenses related to Permitted Acquisitions and (ix)
non-recurring charges minus (c) to the extent included in such Consolidated Net
Income, the sum, without duplication, of (i) non-recurring gains and (ii)
non-cash gains, in each case as determined on a consolidated basis for such
Person and its Subsidiaries in accordance with GAAP; provided, however, that
there shall be included in determining Consolidated EBITDA for any period, with
respect to any Person, business or assets acquired in connection with a
Permitted Acquisition during such period, the amount that would have been
calculated as
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"Consolidated EBITDA" for such Person, business or assets as if such Permitted
Acquisition had been consummated on the first day of such period.
"Consolidated Interest Expense" means, with respect to any
Person for any period, cash interest expense (including that attributable to
Capitalized Leases in accordance with GAAP), net of cash interest income, of
such Person on a consolidated basis with respect to all outstanding Debt of such
Person, including all commissions, discounts and other fees and charges owed
with respect to letters of credit and banker's acceptance financing and net
costs under Hedge Agreements, but excluding, however, amortization of deferred
financing costs and any other amounts of non-cash interest, all as calculated on
a consolidated basis in accordance with GAAP; provided, however, that
"Consolidated Interest Expense" shall not include any such cash interest expense
in respect of a hospital until the earlier of (i) the twelve-month anniversary
of the date on which Medicare certification shall have been received by the
Borrower or its Subsidiaries or an Included Entity in respect of such hospital
and (ii) the twenty-seven month anniversary of the date of the acquisition of,
or the commencement of construction in respect of, such hospital.
"Consolidated Net Income" means, with respect to any Person
for any period, the aggregate of the net income of such Person for such period
on a consolidated basis, determined in accordance with GAAP; provided, however,
that (i) any net after-tax extraordinary gains or losses (less all fees and
expenses relating thereto) shall be excluded, (ii) any net after-tax gains or
losses (less all fees and expenses relating thereto) attributable to asset
dispositions other than in the ordinary course of business shall be excluded,
(iii) the net income for such period of any Person that is not a Subsidiary of
such Person (other than any Included Entity) in respect of whom the calculation
is being made or that is accounted for by the equity method of accounting shall
be included only to the extent of dividends or distributions or other payments
paid in cash (or to the extent converted into cash) to such Person or a wholly
owned Subsidiary (except for directors' qualifying shares) of such Person in
respect of such period, (iv) the net income for such period of any Included
Entity shall be excluded and (v) any net currency loss (gain) shall be excluded.
"Consolidated Total Debt" means, with respect to any Person at
any time, the sum of all amounts comprising items (a), (c), (e), (f) (to the
extent in respect of drawn but unreimbursed letters of credit or matured but
unreimbursed banker's acceptances) and (h) (to the extent such amounts relate to
items (a), (c), (e) and (f) (to the extent in respect of drawn but unreimbursed
letters of credit or matured but unreimbursed banker's acceptances) of the
definition of "Debt" for an Included Entity and its Subsidiaries at such time)
of the definition of "Debt" for such Person and its Subsidiaries at such time,
determined on a consolidated basis in accordance with GAAP; provided, however,
that "Consolidated Total Debt" shall not include any such Debt in respect of the
acquisition or construction of a hospital until the earlier of (i) the
twelve-month anniversary of the date on which the relevant Subsidiary or
Included Entity shall have received Medicare Certification in respect of such
hospital and (ii) the twenty-seven month anniversary of the date of such
acquisition or the commencement of such construction.
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"Constitutive Documents" means, with respect to any Person,
the certificate of incorporation or registration, articles of incorporation or
association, memorandum of association, charter, bylaws, partnership agreement,
trust agreement, joint venture agreement, limited liability company operating or
members agreement, joint venture agreement or one or more similar agreements,
instruments or documents constituting the organization or formation of such
Person.
"Contingent Obligation" means any Debt described in item (h)
of the definition of "Debt".
"Continuing Director" means, at any date, an individual (a)
who is a member of the Board of Directors of the Parent or the Borrower on the
Closing Date, (b) who, as at such date, has been a member of such Board of
Directors for at least the 12 preceding months (or, for the period comprising
the first 12 months after the Closing Date, has been a member of such Board of
Directors at least since the Closing Date), or (c) who has been nominated to be
a member of such Board of Directors, directly or indirectly, by KKR, WCAS, or
Persons nominated by KKR or WCAS or has been nominated to be a member of such
Board of Directors by a majority of the other Continuing Directors then in
office.
"Contractual Obligation" means, as to any Person, any
provision of any security issued by such Person or of any agreement,
undertaking, contract, indenture, mortgage, deed of trust or other instrument,
document or agreement to which such Person is a party or by which it or any of
its property is bound.
"Conversion", "Convert" and "Converted" each refer to a
conversion of Advances of one Type into Advances of the other Type pursuant to
Section 2.09.
"Credit Extension Date" means any date on which a Working
Capital Borrowing or the issuance of a Letter of Credit occurs under Section
2.02 or 2.03, respectively.
"Debt" means, with respect to any Person (without
duplication), (a) all indebtedness of such Person for borrowed money, (b) all
Obligations of such Person for the deferred purchase price of property or
services (other than trade payables incurred in the ordinary course of such
Person's business), (c) all Obligations of such Person evidenced by notes,
bonds, debentures or other similar instruments, (d) all Obligations of such
Person created or arising under any conditional sale or other title retention
agreement with respect to property acquired by such Person (even though the
rights and remedies of the seller or lender under such agreement in the event of
default are limited to repossession or sale of such property), it being
understood that if such Person has not assumed or otherwise become liable for
such Obligations, the amount of the Debt of such Person in connection therewith
shall be limited to the lesser of the face amount of the related Obligations or
the fair market value of all property securing such Obligations, (e) all
Capitalized Lease Liabilities, (f) all Obligations, contingent or otherwise, of
such Person under acceptance, letter of credit or similar facilities, (g) all
Obligations of such Person in respect of Hedge Agreements, take-or-pay
agreements or other similar arrangements, (h) all Debt of others
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referred to in clauses (a) through (g) above or clause (i) below guaranteed
directly or indirectly in any manner by such Person, or in effect guaranteed
directly or indirectly by such Person through an agreement (i) to pay or
purchase such Debt or to advance or supply funds for the payment or purchase of
such Debt, (ii) to purchase, sell or lease (as lessee or lessor) property, or to
purchase or sell services, primarily for the purpose of enabling the debtor to
make payment of such Debt or to assure the holder of such Debt against loss,
(iii) to supply funds to, or in any other manner invest in, the debtor
(including any agreement to pay for property or services irrespective of whether
such property is received or such services are rendered) or (iv) otherwise to
assure a Creditor against loss; provided that any such guaranteed Obligations
shall not include endorsements of instruments for deposit or collection in the
ordinary course of business, and (i) all Debt referred to in clauses (a) through
(h) above of another Person secured by (or for which the holder of such Debt has
an existing right, contingent or otherwise, to be secured by) any Lien on
property (including, without limitation, accounts and contract rights) owned by
such Person, even though such Person has not assumed or become liable for the
payment of such Debt; provided, however, that the amount of Debt of such Person
under clauses (h) and (i) above shall (subject to any Obligation set forth
therein) be deemed to be the principal amount of the Debt guaranteed or secured
thereby and, with respect to any Lien on property of such Persons described in
clause (i) above, if such Person has not assumed or otherwise become liable for
any such Debt, the amount of the Debt of such Person in connection therewith
shall be limited to the lesser of the face amount of such Debt or the fair
market value of all property of such Person securing such Debt.
"Default" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be given or
time elapse or both.
"Defaulted Advance" means, with respect to any Lender Party at
any time, the portion of any Advance required to be made by such Lender Party to
the Borrower pursuant to Section 2.01 or 2.02 at or prior to such time which has
not been made by such Lender Party or by the Administrative Agent for the
account of such Lender Party pursuant to Section 2.02(e) as of such time. In the
event that a portion of a Defaulted Advance shall be deemed made pursuant to
Section 2.15(a), the remaining portion of such Defaulted Advance shall be
considered a Defaulted Advance originally required to be made pursuant to
Section 2.01 on the same date as the Defaulted Advance so deemed made in part.
"Defaulted Amount" means, with respect to any Lender Party at
any time, any amount required to be paid by such Lender Party to the
Administrative Agent, the Borrower or any other Lender Party hereunder or under
any other Loan Document at or prior to such time which has not been so paid as
of such time, including, without limitation, any amount required to be paid by
such Lender Party to (a) the Issuing Bank pursuant to Section 2.03(c) to
purchase a portion of a Letter of Credit Advance made by the Issuing Bank, (b)
the Administrative Agent pursuant to Section 2.02(e) to reimburse the
Administrative Agent for the amount of any Advance made by the Administrative
Agent for the account of such Lender Party, (c) any other Lender Party pursuant
to Section 2.13 to purchase any participation in Advances owing to such other
Lender Party and (d) the Administrative Agent or the Issuing Bank pursuant to
Section 7.05 to
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reimburse the Administrative Agent or the Issuing Bank for such Lender Party's
ratable share of any amount required to be paid by the Lender Parties to the
Administrative Agent or the Issuing Bank as provided therein. In the event that
a portion or a Defaulted Amount shall be deemed paid pursuant to Section
2.15(b), the remaining portion of such Defaulted Amount shall be considered a
Defaulted Amount originally required to be paid hereunder or under any other
Loan Document on the same date as the Defaulted Amount so deemed paid in part.
"Defaulting Lender" means, at any time, any Lender Party that,
at such time, (a) owes a Defaulted Advance or a Defaulted Amount or (b) shall
take any action or be the subject of any action or proceeding of a type
described in Section 6.0 l(f).
"Diagnostics" means MedCath Diagnostics, Inc., a North
Carolina corporation.
"Dollars", "dollars" and "$" each mean lawful money of the
United States.
"Eligible Assignee" means and includes each Lender (and any
Affiliate thereof), any commercial bank, any financial institution, any fund
that is regularly engaged in making, purchasing or investing in loans or any
Person that would satisfy the requirements of an "accredited investor" (as
defined in SEC Regulation D, but excluding a natural person), in each case which
is not a direct competitor of the Borrower or engaged in the same or similar
business as the Borrower or any of its respective Subsidiaries and is not an
Affiliate of any such competitors of the Borrower or any of its respective
Subsidiaries.
"Environmental Action" means any action, suit, written demand,
demand letter, written claim, notice of noncompliance or violation, notice of
liability or potential liability, investigation, proceeding, consent order or
consent agreement relating in any way to any Environmental Law, any
Environmental Permit or Hazardous Materials or arising from alleged injury or
threat to health as relating to the environment, including, without limitation,
(a) by any Governmental Authority for enforcement, cleanup, removal, response,
remedial or other actions or damages and (b) by any Governmental Authority or
any other Person for damages, contribution, indemnification, cost recovery,
compensation or injunctive relief.
"Environmental Law" means any applicable federal, state, local
or foreign statute, law, ordinance, rule, regulation, code, order, writ,
judgment, injunction or decree relating to pollution or protection of the
environment, health as relating to the environment, including, without
limitation, those relating to the use, handling, transportation, treatment,
storage, disposal, release or discharge of Hazardous Materials.
"Environmental Permit" means any permit, approval,
identification number, license or other authorization required under any
Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and the
rulings issued thereunder.
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Section references to ERISA are to ERISA as in effect on the date of this
Agreement and any subsequent provisions of ERISA amendatory thereof,
supplemental thereto or substituted therefor.
"ERISA Affiliate" means each person (as defined in Section
3(9) of ERISA) that together with any Loan Party would be deemed to be a "single
employer" within the meaning of Section 414(b) or (c) of the Internal Revenue
Code or, solely for purposes of Section 302 of ERISA and Section 412 of the
Internal Revenue Code, is treated as a single employer under Section 414 of the
Internal Revenue Code.
"ERISA Event" means (a) (i) the occurrence of a reportable
event, within the meaning of Section 4043 of ERISA, with respect to any Plan
unless the 30-day notice requirement with respect to such event has been waived
by the PBGC or (ii) the requirements of paragraph (1) of Section 4043(b) of
ERISA (without regard to paragraph (2) of such Section) are met with respect to
a contributing sponsor, as defined in Section 4001(a)(13) of ERISA, of a Plan,
and an event described in paragraph (9), (10), (11), (12) or (13) of Section
4043(c) of ERISA could reasonably be expected to occur with respect to such Plan
within the following 30 days; (b) the application for a minimum funding waiver
with respect to a Plan; (c) the provision by the administrator of any Plan of a
notice of intent to terminate such Plan pursuant to Section 4041(a)(2) of ERISA
(including any such notice with respect to a plan amendment referred to in
Section 4041(e) of ERISA); (d) the cessation of operations at a facility of any
Loan Party or any ERISA Affiliate in the circumstances described in Section
4062(e) of ERISA; (e) the partial or complete withdrawal by any Loan Party or
any ERISA Affiliate from a Multiple Employer Plan during a plan year for which
it was a substantial employer, as defined in Section 4001 (a)(2) of ERISA, (f)
the conditions for imposition of a lien under Section 302(f) of ERISA shall have
been met with respect to any Plan; (g) the adoption of an amendment to a Plan
requiring the provision of security to such Plan pursuant to Section 307 of
ERISA; or (h) the institution by the PBGC of proceedings to terminate a Plan
pursuant to Section 4042 of ERISA, or the occurrence of any event or condition
described in Section 4042 of ERISA, that constitutes grounds for the termination
of, or the appointment of a trustee to administer, such Plan.
"Eurocurrency Liabilities" has the meaning specified in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"Eurodollar Lending Office" means, with respect to each of the
Lenders, the office of such Lender specified as its "Eurodollar Lending Office"
opposite its name on Schedule I hereto or in the Assignment and Acceptance
pursuant to which it became a Lender, as the case may be (or, if no such office
is specified, its Base Rate Lending Office), or such other office of such Lender
as such Lender may from time to time specify to the Borrower and the
Administrative Agent for such purpose.
"Eurodollar Rate" means, for any Interest Period for all
Eurodollar Rate Advances comprising part of the same Working Capital Borrowing,
an interest rate per annum equal to the
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rate per annum at which deposits in U.S. dollars appear on page 3750 (or any
successor page thereto) of the Dow Xxxxx Telerate Screen two Business Days
before the first day of such Interest Period and for a term comparable to such
Interest Period or, if such rate does not so appear on the Dow Xxxxx Telerate
Screen on any date of determination, on the Reuters Screen LIBO Page two
Business Days before the first day of such Interest Period and for a term
comparable to such Interest Period; provided, however, that if the Reuters
Screen LIBO Page is being used to determine the Eurodollar rate at any date of
determination and more than one rate is specified thereon from deposits in U.S.
dollars, the applicable rate shall be the average of all such rates (rounded
upward, if necessary, to the nearest whole multiple of 1/100 of 1% per annum).
"Eurodollar Rate Advance" means an Advance that bears interest
as provided in Section 2.7(a)(ii).
"Eurodollar Rate Reserve Percentage" for any Interest Period
for the Eurodollar Rate Advances made by a Lender means the reserve percentage
applicable two Business Days before the first day of such Interest Period under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum reserve
requirement (including, without limitation, any emergency, supplemental or other
marginal reserve requirement) for such Lender, if a member bank of the Federal
Reserve System, with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities (or with respect to any other category of liabilities
that includes deposits by reference to which the interest rate on Eurodollar
Rate Advances is determined) having a term equal to such Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, and
regulations promulgated thereunder.
"Existing Debt" means Debt of the Borrower and its
Subsidiaries outstanding immediately before giving effect to the Merger.
"Facility" means the Working Capital Facility or the Letter of
Credit Facility, as the context may require.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates (rounded upward, if necessary, to the nearest whole
multiple of 1/100 of 1% per annum) on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the
immediately preceding Business Day) by the Federal Reserve Bank of New York, or,
if such rate is not so published for any day that is a Business Day, the average
of the quotations for such day for such transactions
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received by the Administrative Agent from three federal funds brokers of
recognized standing selected by it.
"Fiscal Quarter" means any quarter of a Fiscal Year.
"Fiscal Year" means, with respect to the Borrower or any of
its Subsidiaries, the period commencing on October 1 in any calendar year and
ending on the next succeeding September 30.
"FRB" means the Board of Governors of the Federal Reserve
System, and any Governmental Authority succeeding to any of its principal
functions.
"GAAP" has the meaning specified in Section 1.03.
"Governmental Authority" means any nation or government, any
state, province, city, municipal entity or other political subdivision thereof,
and any governmental, executive, legislative, judicial, administrative or
regulatory agency, department, authority, instrumentality, commission, board or
similar body, whether federal, state, provincial, territorial, local or foreign.
"Guarantee Supplement" has the meaning specified in Section
7(b) of the Guaranty.
"Guarantor Subsidiary" means Diagnostics, Physician Management
and each other Subsidiary of the Borrower (other than a Subsidiary that owns,
operates or manages a hospital, medical practice or diagnostic facility) which
is not a "controlled foreign corporation" under Section 957 of the Code and in
respect of which the Borrower or any of its Subsidiaries own (directly or
indirectly) at least 80% of the Capital Stock of such Subsidiary.
"Guarantors" means, collectively, at any time, each Guarantor
Subsidiary of the Borrower at such time.
"Guaranty" has the meaning specified in Section 3.01 (h)(vii).
"Hazardous Materials" means (a) petroleum or petroleum
products, by-products or breakdown products, radioactive materials,
asbestos-containing materials, polychlorinated biphenyls and radon gas and (b)
any other chemicals, materials or substances designated, classified or regulated
as hazardous or toxic or as a pollutant or contaminant under any Environmental
Law.
"Hedge Agreements" means, collectively, interest rate swap,
cap or collar agreements, interest rate future or option contracts, currency
swap agreements, currency future or option contracts and other similar
agreements.
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"Hedge Bank" means any Lender Party or an Affiliate of a
Lender Party in its capacity as a party to a Bank Hedge Agreement.
"Included Entity" means each Person (other than a Subsidiary
of the Borrower) that directly owns, operates or manages heart hospitals and
related facilities or diagnostic facilities in which the Borrower or one or more
of its Subsidiaries owns and controls beneficially, either directly or
indirectly, a portion of the Capital Stock of such Person.
"Indemnified Party" has the meaning specified in Section
8.04(b).
"Initial Issuing Bank" has the meaning specified in the
recital of parties to this Agreement.
"Initial Lenders" has the meaning specified in the recital of
parties to this Agreement.
"Insufficiency" means, with respect to any Plan, the amount,
if any, of its unfunded benefit liabilities, as defined in Section 4001 (a)(18)
of ERISA.
"Interest Coverage Ratio" means, at any date of determination,
the ratio of (a) the sum of Consolidated EBITDA of the Borrower and its
Subsidiaries for the four Fiscal Quarters ended at the end of the most recently
ended Fiscal Quarter of the Borrower for which financial statements are required
to be delivered to the Lender Parties pursuant to Section 5.03(b) or (c) plus,
in respect of each Included Entity on such date, an amount equal to the
Borrower's Percentage of the Consolidated EBITDA of such Included Entity and its
Subsidiaries for such four Fiscal Quarter period, to (b) the sum of Consolidated
Interest Expense of the Borrower and its Subsidiaries for such four Fiscal
Quarter period plus, in respect of each Included Entity on such date, an amount
equal to the Borrower's Percentage of the Consolidated Interest Expense of such
Included Entity and its Subsidiaries for such four Fiscal Quarter period;
provided, however, that the amount referred to in clause (a) above shall not
include any Consolidated EBITDA in respect of any hospital until the earlier of
(i) the twelve-month anniversary of the date on which Medicare certification
shall have been received by the Borrower or its Subsidiaries or an Included
Entity in respect of such hospital and (ii) the twenty-seven month anniversary
of the date of the acquisition of, or the commencement of construction in
respect of, such hospital.
"Interest Period" means, for each Eurodollar Rate Advance
comprising part of the same Working Capital Borrowing, the period commencing on
the date of such Eurodollar Rate Advance or the date of the Conversion of any
Base Rate Advance into such Eurodollar Rate Advance, and ending on the last day
of the period selected by the Borrower pursuant to the provisions below and,
thereafter, each subsequent period commencing on the last day of the immediately
preceding Interest Period and ending on the last day of the period selected by
the Borrower pursuant to the provisions below. The duration of each such
Interest Period shall be one, two, three or six months or, if available to all
of the Lender Parties, nine or twelve months,
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as the Borrower may, upon notice received by the Administrative Agent not later
than 11:00 A.M. (Charlotte, North Carolina time) on the third Business Day prior
to the first day of such Interest Period, select; provided, however, that:
(a) the Borrower may not select any Interest Period with
respect to any Eurodollar Rate Advance that ends after the Termination
Date;
(b) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall be extended to occur on the next succeeding
Business Day, provided, however, that, if such extension would cause
the last day of such Interest Period to occur in the next following
calendar month, the last day of such Interest Period shall occur on the
immediately preceding Business Day; and
(c) whenever the first day of any Interest Period occurs on a
day of an initial calendar month for which there is no numerically
corresponding day in the calendar month that succeeds such initial
calendar month by the number of months equal to the number of months in
such Interest Period, such Interest Period shall end on the last
Business Day of such succeeding calendar month.
"Investment" means, with respect to any Person, any loan or
advance to such Person, any purchase or other acquisition of Capital Stock of,
or other obligations or other securities of, such Person, any capital
contribution to such Person or any other investment in such Person, including,
without limitation, any arrangement pursuant to which the investor incurs Debt
of the types referred to in clause (h) or (i) of the definition of "Debt" set
forth in this Section 1.01 in respect of such Person.
"Issuing Bank" means the Initial Issuing Bank and each other
Person to which the Letter of Credit Commitment hereunder has been assigned
pursuant to Section 8.07.
"KKR" has the meaning specified in the Preliminary Statements
to this Agreement.
"L/C Related Documents" has the meaning specified in Section
2.03(c)(ii)(A).
"Legal Requirements" means all applicable laws, roles, orders
and regulations made by any governmental body or regulatory authority having
jurisdiction over the Borrower or a Subsidiary.
"Lender Party" means any Lender or Issuing Bank.
"Lenders" means, collectively, the Initial Lenders and each
Person that becomes a Lender pursuant to Section 8.07.
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"Letter of Credit" has the meaning specified in Section 2.01
(b).
"Letter of Credit Advance" means an advance made by the
Issuing Bank or any Lender pursuant to Section 2.03(c).
"Letter of Credit Agreement" has the meaning specified in
Section 2.03(a).
"Letter of Credit Commitment" means, with respect to the
Issuing Bank at any time, the amount set forth opposite the Issuing Bank's name
on Schedule I hereto under the caption "Letter of Credit Commitment" or, if the
Issuing Bank has entered into one or more Assignments and Acceptances, the
amount set forth for the Issuing Bank in the Register maintained by the
Administrative Agent pursuant to Section 8.07(d) as the Issuing Bank's "Letter
of Credit Commitment", as such amount may be reduced at or prior to such time
pursuant to Section 2.05.
"Letter of Credit Facility" means, at any time, an amount
equal to the amount of the Issuing Bank's Letter of Credit Commitment at such
time, as such amount may be reduced at or prior to such time pursuant to Section
2.05.
"Leverage Ratio" means, at any date of determination, the
ratio of (a) Consolidated Total Debt of the Borrower and its Subsidiaries as of
the end of the most recently ended Fiscal Quarter of the Borrower for which
financial statements are required to be delivered to the Lender Parties pursuant
to Section 5.03(b) or (c) to (b) the sum of Consolidated EBITDA of the Borrower
and its Subsidiaries for the four Fiscal Quarters ended at the end of such
Fiscal Quarter plus, in respect of each Included Entity on such date, an amount
equal to the Borrower's Percentage of the Consolidated EBITDA of such Included
Entity and its Subsidiaries for such four Fiscal Quarter period; provided,
however, that the amount referred to in clause (b) above shall not include any
EBITDA in respect of any hospital until the earlier of (i) the twelve-month
anniversary of the date on which Medicare certification shall have been received
by the Borrower or its Subsidiaries or an Included Entity in respect of such
hospital and (ii) the twenty-seven month anniversary of the date of the
acquisition of, or the commencement of construction in respect of, such
hospital.
"Lien" means, with respect to any Person, any mortgage, deed
of trust, pledge, security interest, hypothecation, charge, lien (statutory or
other), escrow or similar encumbrance of any kind, or any other type of similar
preferential arrangement (including any agreement to give any of the foregoing,
an conditional sale or other title retention agreement or any lease in the
nature thereof).
"Loan Documents" means, collectively, (i) this Agreement, (ii)
the Working Capital Notes, (iii) the Guaranty, (iv) the Collateral Documents and
(v) each Letter of Credit Agreement, in each case as amended, supplemented or
otherwise modified hereafter from time to time in accordance with the terms
thereof and Section 8.01.
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"Loan Parties" means, collectively, the Parent, the Borrower
and each of the Guarantors.
"Margin Stock" has the meaning specified in Regulation U.
"Material Adverse Change" means any material adverse change in
the business, assets, operations, properties or financial condition of the
Borrower and its Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on
(a) the business, assets, operations, properties or financial condition of the
Borrower and its Subsidiaries taken as a whole, (b) the rights and remedies of
the Administrative Agent or any Lender Party under any Loan Document or any
Related Document, taken as a whole or (c) the ability of the Loan Parties to
perform their Obligations under the Loan Documents and taken as a whole.
"Measurement Period" means, at any date of determination, the
most recently completed four consecutive fiscal quarters of the Borrower on or
immediately prior to such date or, if less than four consecutive fiscal quarters
of the Borrower have commenced and been completed since the initial Credit
Extension Date, the full fiscal quarters of the Borrower that have commenced and
been completed since such date, in each case for which financial statements have
been delivered to the Lender Parties pursuant to Section 5.03(b) or (c).
"Merger" has the meaning specified in the Preliminary
Statements to this Agreement.
"Merger Agreement" has the meaning specified in the
Preliminary Statements to this Agreement.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" means a multiemployer plan (as defined in
Section 4001(a)(3) of ERISA) to which any Loan Party or any ERISA Affiliate is
making or accruing an obligation to make contributions, or has within any of the
preceding five plan years made or accrued an obligation to make contributions.
"Multiple Employer Plan" means a single employer plan (as
defined in Section 4001(a)(15) of ERISA) that (a) is maintained for employees of
any Loan Party or any ERISA Affiliate and at least one Person other than the
Loan Parties and the ERISA Affiliates or (b) was so maintained and in respect of
which any Loan Party or any ERISA Affiliate could reasonably be expected to have
liability under Section 4064 or 4069 of ERISA in the event such plan has been or
were to be terminated.
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"NationsBank" has the meaning specified in the recital of
parties to this Agreement.
"Net Cash Proceeds" means, with respect to any sale, lease,
transfer or other disposition of any property or asset (other than any property
or assets expressly permitted to be sold, leased, transferred or otherwise
disposed of pursuant to clause (i), (ii) or (iv) of Section 5.02(d)), or the
incurrence or issuance of any Debt (other than Debt expressly permitted to be
incurred or issued pursuant to Section 5.02(b)), by the Borrower or any
Subsidiary (that is not a Restricted Entity) or receipt by the Borrower or any
Subsidiary (that is not a Restricted Entity) from a Subsidiary that is a
Restricted Entity or from an Included Entity of dividends or distributions or
any other payments in respect of any such sale, lease, transfer or other
disposition of property or assets owned by such Restricted Entity or Included
Entity or any such incurrence or issuance of any Debt, the aggregate amount of
cash received from time to time (whether as initial consideration or through
payment or disposition of deferred consideration, but only as and when received)
by or on behalf of such Person for its own account in connection with any such
transaction, after deducting therefrom only (without duplication):
(a) fees, commissions, expenses, issuance costs, discounts and
other costs paid by the Borrower or any of its Subsidiaries in
connection with such transaction;
(b) the amount of taxes paid or estimated to be payable in
connection with or as a result of such transaction;
(c) the amount of the outstanding principal amount of, premium
or penalty, if any, and interest on any Debt (other than pursuant to
the Facilities) that is required to be repaid under the terms thereof
as a result of any such transaction; and
(d) the amount of any proceeds received from the sale, lease,
transfer or other disposition of any assets pursuant to Section 5.02(d)
to the extent that such proceeds are reinvested in the business within
18 months following such sale, lease, transfer or other disposition;
provided, however, that in the event the amount of any estimated tax payable
described in clause (b) above exceeds the amount actually paid, the Borrower or
the applicable Subsidiary shall be deemed to have received Net Cash Proceeds in
an amount equal to such excess or reduction, at the time of payment of such
taxes; provided further that any portion of any proceeds received from the sale,
lease, transfer or other disposition of any assets pursuant to Section 5.02(d)
that has not been reinvested within such 18-month period shall (i) be deemed to
be Net Cash Proceeds of such sale, lease, transfer or disposition occurring on
the last day of such 18-month period and (ii) will be applied in accordance with
Section 2.06(b)(i).
"NMS" has the meaning specified in the recital of parties to
this Agreement.
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"Notice of Borrowing" has the meaning specified in Section
2.02(a).
"Notice of Conversion" has the meaning specified in Section
2.09(a).
"Notice of Issuance" has the meaning specified in Section
2.03(a).
"Notice of Renewal" has the meaning specified in Section
2.01(b).
"Notice of Termination" has the meaning specified in Section
2.01(b).
"Obligation" means, with respect to any Person, any payment
obligation of such Person of any kind, including, without limitation, any
liability of such Person on any claim, whether or not the right of any creditor
to payment in respect of such claim is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, disputed, undisputed, legal,
equitable, secured or unsecured, and whether or not such claim is discharged,
stayed or otherwise affected by any proceeding referred to in Section 6.01(f).
Without limiting the generality of the foregoing, the Obligations of the Loan
Parties under the Loan Documents include (a) the obligation to pay principal,
interest, Letter of Credit commissions, charges, expenses, fees, attorneys' fees
and disbursements, indemnities and other amounts payable by any Loan Party under
any Loan Document and (b) the obligation of any Loan Party to reimburse any
amount in respect of any of the foregoing that any Lender Party, in its sole
discretion, may elect to pay or advance on behalf of such Loan Party.
"Other Taxes" has the meaning specified in Section 2.12(b).
"Parent" has the meaning specified in the Preliminary
Statements to this Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation, or any
Governmental Authority succeeding to any of its principal functions under ERISA.
"Performance Level" means Performance Level I, Performance
Level II, Performance Level III, Performance Level IV, Performance Level V,
Performance Level VI or Performance Level VII, as the context may require. For
purposes of determining the Performance Level at any date of determination, no
change in the Performance Level shall be effective until three Business Days
after the date on which the Administrative Agent receives Consolidated financial
statements of the Borrower and its Subsidiaries pursuant to (and satisfying all
of the requirements of) Section 5.03(b) or (c) reflecting such change; provided,
however, that, if the Borrower has not submitted to the Administrative Agent all
of the information required under this clause (b) within three Business Days
after the date on which such information is otherwise required under Section
5.03(b) or (c), as the case may be, the Performance Level shall be deemed to be
at Performance Level VII for so long as such information has not been submitted.
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"Performance Level I" means, at any date of determination,
that the Borrower shall have maintained a Leverage Ratio of less than 1.5:1 for
the most recently completed Measurement Period prior to such date.
"Performance Level II" means, at any date of determination,
that (a) the Performance Level does not meet the requirements of Performance
Level I and (b) the Borrower shall have maintained a Leverage Ratio of less than
or equal to 2.0:1 for the most recently completed Measurement Period prior to
such date.
"Performance Level III" means, at any date of determination,
that (a) the Performance Level does not meet the requirements of Performance
Level I or Performance Level II and (b) the Borrower shall have maintained a
Leverage Ratio of less than or equal to 2.5:1 for the most recently completed
Measurement Period prior to such date.
"Performance Level IV" means, at any date of determination,
that (a) the Performance Level does not meet the requirements of Performance
Level I, Performance Level II or Performance Level III and (b) the Borrower
shall have maintained a Leverage Ratio of less than or equal to 3.0:1 for the
most recently completed Measurement Period prior to such date.
"Performance Level V" means, at any date of determination,
that (a) the Performance Level does not meet the requirements of Performance
Level I, Performance Level II, Performance Level III or Performance Level IV and
(b) the Borrower shall have maintained a Leverage Ratio of less than or equal to
3.5:1 for the most recently completed Measurement Period prior to such date.
"Performance Level VI" means, at any date of determination,
that (a) the Performance Level does not meet the requirements of Performance
Level I, Performance Level II, Performance Level III, Performance Level IV or
Performance Level V and (b) the Borrower shall have maintained a Leverage Ratio
of less than or equal to 4.0:1 for the most recently completed Measurement
Period prior to such date.
"Performance Level VII" means, at any date of determination,
that the Performance Level does not meet the requirements of Performance Level
I, Performance Level II, Performance Level III, Performance Level IV,
Performance Level V or Performance Level VI.
"Permitted Acquisition" means an acquisition consummated in
compliance with the provisions of Section 5.02(e)(x).
"Permitted Liens" means such of the following Liens as to
which no execution, foreclosure or similar proceeding shall have been commenced
which, if determined adversely to the Borrower or any of its Subsidiaries would,
either individually or together with all other such Liens, reasonably be
expected to have a Material Adverse Effect: (a) Liens for taxes, assessments and
governmental charges or levies to the extent not required to be paid under
Section 5.01 (b)
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hereof, (b) Liens imposed by law, such as materialmen's, mechanics', carriers',
workmen's and repairmen's Liens and other similar Liens arising in the ordinary
course of business outstanding at any time; (c) Liens arising from judgments or
decrees in circumstances not constituting an Event of Default under Section
6.01(g); (d) Liens incurred or deposits made in connection with workers'
compensation, unemployment insurance and other types of social security, or to
secure the performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, government contracts, performance and return-of-money bonds
and other similar obligations incurred in the ordinary course of business; (e)
ground leases in respect of real property on which facilities owned or leased by
the Borrower or any of its Subsidiaries are located; (f) easements,
rights-of-way, restrictions, minor defects or irregularities in title and other
similar charges or encumbrances not interfering in any material respect with the
business of the Borrower and its Subsidiaries taken as a whole; (g) any interest
or title of a lessor or secured by a lessor's interest under any lease permitted
by this Agreement and any Liens arising from any financing statement filed in
connection with such lease; (h) 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; and (i) leases or subleases granted to
others not interfering in any material respect with the business of the Borrower
and its Subsidiaries, taken as a whole.
"Person" means an individual, partnership, corporation
(including a business trust), limited liability company, unlimited liability
company, joint stock company, trust, unincorporated association, joint venture
or other entity, or a government or any political subdivision or agency thereof.
"Physician Management" means MedCath Physician Management,
Inc., an Arizona corporation.
"Plan" means any multiemployer or single-employer plan, as
defined in Section 4001 of ERISA and subject to Title IV of ERISA, that is or
was within any of the preceding five plan years maintained or contributed to by
(or to which there is or was an Obligation to contribute or to make payments of)
any Loan Party or an ERISA Affiliate.
"Pledge Agreement" has the meaning specified in Section
3.01(h)(vi).
"Pledge Agreement Supplement" has the meaning specified in
Section 16(c) of the Pledge Agreement.
"Pledged Debt" has the meaning specified in the Pledge
Agreement.
"Preferred Stock" means, with respect to any corporation,
capital stock issued by such corporation that is entitled to a preference or
priority over any other capital stock issued by such corporation upon any
distribution of such corporation's assets, whether by dividend or upon
liquidation.
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"Pro Rata Share" of any amount means, with respect to any
Lender at any time, a fraction the numerator of which is the amount of such
Lender's Commitment under the Working Capital Facility at such time and the
denominator of which is the aggregate amount of the Working Capital Facility at
such time.
"Rating Agency" means S&P or Xxxxx'x; collectively, the
"Rating Agencies".
"Redeemable" means, with respect to any Capital Stock, any
such Capital Stock that (a) the issuer has undertaken to redeem at a fixed or
determinable date or dates, whether by operation of a sinking fund or otherwise,
or upon the occurrence of a condition not solely within the control of the
issuer or (b) is redeemable at the option of the holder.
"Reduction Amount" has the meaning specified in Section
2.06(b)(iv).
"Register" has the meaning specified in Section 8.07(d).
"Related Documents" means the Merger Agreement and all other
agreements, instruments and documents entered into in connection with the
Transaction.
"Required Lenders" means, at any time, Lenders holding at
least a majority in interest of the Working Capital Commitments or, if they have
been terminated in full, Lenders owed or holding at least a majority in interest
of the sum of (a) the aggregate principal amount of the Advances outstanding at
such time and (b) the aggregate Available Amount of all Letters of Credit
outstanding at such time; provided, however, that if any Lender shall be a
Defaulting Lender at such time, there shall be excluded from the determination
of Required Lenders at such time (A) the aggregate principal amount of the
Advances owing to such Lender (in its capacity as a Lender) and outstanding at
such time, (B) such Lender's Pro Rata Share of the aggregate Available Amount of
all Letters of Credit issued by such Lender and outstanding at such time, and
(C) the Unused Working Capital Commitment of such Lender at such time. For
purposes of this definition, the aggregate principal amount of Letter of Credit
Advances owing to the Issuing Bank and the Available Amount of each Letter of
Credit shall be considered to be owed to the Lenders ratably in accordance with
their respective Working Capital Commitments.
"Requirements of Law" means, with respect to any Person, all
laws, constitutions, statutes, treaties, ordinances, rules and regulations, all
orders, writs, decrees, injunctions, judgments, determinations or awards of an
arbitrator, a court or any other Governmental Authority, and all governmental
authorizations, binding upon or applicable to such Person or to any of its
properties, assets or businesses.
"Responsible Officer" means, with respect to the Borrower or
any of its Subsidiaries, the chief executive officer, the president, the chief
financial officer, the principal accounting officer or the treasurer (or the
equivalent of any of the foregoing) or any other officer, partner or member (or
person performing similar functions) of the Borrower or any such
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Subsidiary responsible for overseeing the administration of, or reviewing
compliance with, all or any portion of this Agreement or any of the other Loan
Documents.
"Restricted Entity" means any Subsidiary of the Borrower that
is not a Guarantor Subsidiary.
"S&P" means Standard & Poor's Ratings Group, a division of The
XxXxxx-Xxxx Companies, Inc.
"SEC" means the Securities and Exchange Commission, or any
Governmental Authority succeeding to any of its principal functions.
"Secured Obligations" has the meaning specified in Section 2
of the Pledge Agreement.
"Secured Parties" means, collectively, the Agents, the Lender
Parties and the Hedge Banks.
"Single Employer Plan" means a single employer plan (as
defined in Section 4001 (a)(15) of ERISA) that (a) is maintained for employees
of any Loan Party or any ERISA Affiliate and no Person other than the Loan
Parties and the ERISA Affiliates or (b) was so maintained and in respect of
which any Loan Party or any ERISA Affiliate could have liability under Section
4069 of ERISA in the event such plan has been or were to be terminated.
"Solvent" and "Solvency" mean, with respect to any Person on
any date of determination, that on such date (a) the fair value of the property
of such Person is greater than the total amount of liabilities, including,
without limitation, contingent liabilities, of such Person, (b) the present fair
salable value of the assets of such Person is not less than the amount that will
be required to pay the probable liability of such Person on its debts as they
become absolute and matured, (c) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person's ability to
pay such debts and liabilities as they mature and (d) such Person is not engaged
in business or a transaction, and is not about to engage in business or a
transaction, for which such Person's property would constitute an unreasonably
small capital. The amount of contingent liabilities at any time shall be
computed as the amount that, in the light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
"Standby Letter of Credit" means any Letter of Credit issued
under the Letter of Credit Facility, other than a Trade Letter of Credit.
"Subordinated Debt" means any Debt of the Borrower that is
subordinated to the Obligations of the Borrower under the Loan Documents on, and
that otherwise contains, terms and conditions satisfactory to the Required
Lenders.
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"Subsidiary" of any Person means any corporation, partnership,
joint venture, limited liability company, unlimited liability company, trust or
estate of which (or in which) more than 50% of (a) the issued and outstanding
shares of Capital Stock having ordinary voting power to elect a majority of the
board of directors of such corporation (irrespective of whether at the time
Capital Stock of any other class or classes of such corporation shall or might
have voting power upon the occurrence of any contingency), (b) the interest in
the capital or profits of such partnership, joint venture, limited liability
company or unlimited liability company or (c) the beneficial interest in such
trust or estate, is at the time directly or indirectly owned or controlled by
such Person, by such Person and one or more of its other Subsidiaries or by one
or more of such Person's other Subsidiaries.
"Supermajority Lenders" means, at any time, Lenders holding at
least 67% of the Working Capital Commitments, or if they have been terminated in
full, Lenders owed or holding at least 67% of the sum of (a) the aggregate
principal amount of the Advances outstanding at such time and (b) the aggregate
Available Amount of all Letters of Credit outstanding at such time; provided,
however, that if any Lender shall be a Defaulting Lender at such time, there
shall be excluded from the determination of Supermajority Lender at such time
(A) the aggregate principal amount of the Advances owing to such Lender (in its
capacity as a Lender) and outstanding at such time, (B) such Lender's Pro Rata
Share of the aggregate Available Amount of all Letters of Credit issued by such
Lender and outstanding at such time, and (C) the Unused Working Capital
Commitment of such Lender at such time. For purposes of this definition, the
aggregate principal amount of Letter of Credit Advances owing to the Issuing
Bank and the Available Amount of each Letter of Credit shall be considered to be
owed to the Lenders ratably in accordance with their respective Working Capital
Commitments.
"Syndication Agent" means NMS, in its capacity as syndication
agent for the Lenders hereunder and under the other Loan Documents.
"Taxes" has the meaning specified in Section 2.12(a).
"Termination Date" means the earlier of (a) January 31, 2005
and (b) the date of termination in whole of the Letter of Credit Commitments and
the Working Capital Commitments pursuant to Section 2.05 or 6.01.
"Trade Letter of Credit" means any Letter of Credit that is
issued under the Letter of Credit Facility for the benefit of a supplier of
inventory to the Borrower or any of its Subsidiaries to effect payment for such
inventory.
"Transaction" means, collectively, (a) the organization of the
Parent and the Borrower, (b) the consummation of the Merger, (c) the entering
into by the Loan Parties and their applicable Subsidiaries of the Loan Documents
and the Related Documents to which they are or are intended to be a party and
(d) the payment of the fees and expenses incurred in connection with the
consummation of the foregoing.
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"Type" refers to the distinction between Advances bearing
interest at the Base Rate and Advances beating interest at the Eurodollar Rate.
"Unfunded Current Liability" of any Plan means the amount, if
any, by which the present value of the accumulated benefits under the Plan as of
the close of its most recent plan year, determined in accordance with Statement
of Financial Accounting Standards No. 87 as in effect on the date hereof, but
based upon the actuarial assumptions that would be used by the Plan's actuary in
a termination of the Plan, exceeds the fair market value of the assets allocable
thereto.
"United States" and "U.S." each means the United States of
America.
"Unused Working Capital Commitment" means, with respect to any
Lender at any time, (a) such Lender's Working Capital Commitment at such time
minus (b) the sum of (i) the aggregate principal amount of all Working Capital
Advances and Letter of Credit Advances made by such Lender (in its capacity as a
Lender) and outstanding at such time and (ii) such Lender's Pro Rata Share of
(A) the aggregate Available Amount of all Letters of Credit outstanding at such
time and (B) the aggregate principal amount of all Letter of Credit Advances
made by the Issuing Bank pursuant to Section 2.03(c) and outstanding at such
time.
"Voting Interests" means shares of Capital Stock issued by a
corporation, or equivalent Capital Stock in any other 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 if the right so to vote has been suspended by the happening of such a
contingency.
"WCAS" means Welsh, Carson, Xxxxxxxx & Xxxxx and/or its
Affiliates.
"Withdrawal Liability" has the meaning specified in Part I of
Subtitle E of Title IV of ERISA.
"Working Capital Advance" has the meaning specified in Section
2.01(a).
"Working Capital Borrowing" means a borrowing consisting of
simultaneous Working Capital Advances of the same Type made by the Lenders.
"Working Capital Commitment" means, with respect to any Lender
at any time, the amount set forth opposite such Lender's name on Schedule I
hereto under the caption "Working Capital Commitment" or, if such Lender has
entered into one or more Assignments and Acceptances, the amount set forth for
such Lender in the Register maintained by the Administrative Agent pursuant to
Section 8.07(d) as such Lender's "Working Capital Commitment", as such amount
may be reduced at or prior to such time pursuant to Section 2.05.
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"Working Capital Facility" means, at any time, the aggregate
amount of the Lenders' Working Capital Commitments at such time.
"Working Capital Note" means a promissory note of the Borrower
payable to the order of any Lender, in substantially the form of Exhibit A
hereto, evidencing the aggregate indebtedness of the Borrower to such Lender
resulting from the Working Capital Advances made by such Lender.
Section 1.02. Computation of Time Periods. In this Agreement,
in the computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and "until"
each mean "to but excluding."
Section 1.03. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles consistent with those applied in the preparation
of the Consolidated financial statements of the Borrower and its Subsidiaries
referred to in Section 4.01(g) ("GAAP").
ARTICLE II
AMOUNTS AND TERMS OF THE
ADVANCES AND LETTERS OF CREDIT
Section 2.01. The Advances. (a) The Working Capital Advances.
Each Lender severally agrees, on the terms and conditions hereinafter set forth,
to make advances (each a "Working Capital Advance") in U.S. dollars to the
Borrower from time to time on any Business Day during the period from the date
hereof until the Termination Date, in each case in an amount not to exceed the
Unused Working Capital Commitment of such Lender at such time. Each Working
Capital Borrowing shall be in an aggregate amount of $1,000,000 or an integral
multiple of $500,000 in excess thereof (other than a Working Capital Borrowing
the proceeds of which shall be used solely to repay or prepay in full
outstanding Letter of Credit Advances) or, if less the amount of the aggregate
Unused Working Capital Commitments at such time. Each Working Capital Borrowing
shall consist of Working Capital Advances made simultaneously by the Lenders in
accordance with their respective Pro Rata Shares of the Working Capital
Facility. Within the limits of each Lender's Unused Working Capital Commitment
in effect from time to time, the Borrower may borrow under this Section 2.01(a),
prepay pursuant to Section 2.06(a) and reborrow under this Section 2.01(a).
(b) Letters of Credit. The Issuing Bank agrees, on the
terms and conditions hereinafter set forth, to issue letters of credit (the
"Letters of Credit") in U.S. dollars for the account of the Borrower from time
to time on any Business Day during the period from the date hereof until 5 days
before the scheduled Termination Date (i) in an aggregate Available Amount for
all Letters of Credit not to exceed at any time the Issuing Bank's Letter of
Credit Commitment
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at such time and (ii) in an Available Amount for each such Letter of Credit not
to exceed the lesser of (A) the Letter of Credit Facility at such time and (B)
the aggregate Unused Working Capital Commitments of the Lenders at such time. No
Trade Letter of Credit shall have an expiration date later than the earlier of
(1) 180 days after the issuance thereof and (2) 5 days prior to the scheduled
Termination Date. No Standby Letter of Credit shall have an expiration date
(including all rights of the Borrower or the beneficiary of such Standby Letter
of Credit to require renewal) later than the earlier of (x) 5 days prior to the
scheduled Termination Date and (y) one year after the date of issuance thereof,
but any such Standby Letter of Credit may by its terms be renewable annually
upon notice (a "Notice of Renewal") given to the Issuing Bank and the
Administrative Agent on or prior to any date for notice of renewal set forth in
such Letter of Credit but in any event at least three Business Days prior to the
date of the proposed renewal of such Standby Letter of Credit and upon
fulfillment of the applicable conditions set forth in Article III unless such
Issuing Bank has notified the Borrower (with a copy to the Administrative Agent)
on or prior to the date for notice of termination set forth in such Letter of
Credit but in any event at least 30 Business Days prior to the date of automatic
renewal of its election not to renew such Standby Letter of Credit (a "Notice of
Termination"); provided that the terms of each Standby Letter of Credit that is
automatically renewable annually (I) shall require the Issuing Bank to give the
beneficiary of such Standby Letter of Credit notice of any Notice of
Termination, (II) shall permit such beneficiary, upon receipt of such notice, to
draw under such Standby Letter of Credit prior to the date such Standby Letter
of Credit otherwise would have been automatically renewed and (III) shall not
permit the expiration date (after giving effect to any renewal) of such Standby
Letter of Credit in any event to be extended to a date later than 5 days prior
to the scheduled Termination Date. If either a Notice of Renewal is not given by
the Borrower or a Notice of Termination is given by the Issuing Bank pursuant to
the immediately preceding sentence, such Standby Letter of Credit shall expire
on the date on which it otherwise would have been automatically renewed;
provided, however, that in the absence of receipt of a Notice of Renewal the
Issuing Bank may in its discretion, unless instructed to the contrary by the
Administrative Agent or the Borrower, deem that a Notice of Renewal had been
timely delivered and, in such case, a Notice of Renewal shall be deemed to have
been so delivered for all purposes under this Agreement. The letters of credit
described on Schedule 2.01(b) hereto shall be "Letters of Credit" for all
purposes of the Loan Documents. Within the limits of the Letter of Credit
Facility, and subject to the limits referred to above, the Borrower may request
the issuance of Letters of Credit under this Section 2.01(b), repay any Letter
of Credit Advances resulting from drawings thereunder pursuant to Section
2.03(c) and request the issuance of additional Letters of Credit under this
Section 2.01(b).
Section 2.02. Making the Advances. (a) Except as otherwise
provided in Section 2.03 or in respect of any Working Capital Borrowing
requested to be made on the Closing Date, in which case notice will be given on
such date, each Working Capital Borrowing shall be made on notice, given not
later than 11:00 A.M. (Charlotte, North Carolina time) on the third Business Day
prior to the date of the proposed Working Capital Borrowing in the case of a
Working Capital Borrowing comprised of
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Eurodollar Rate Advances, or on the date of the proposed Working Capital
Borrowing in the case of a Working Capital Borrowing comprised of Base Rate
Advances, by the Borrower to the Administrative Agent, which shall give prompt
notice thereof to each Lender by telex or telecopier. Each notice of a Working
Capital Borrowing (a "Notice of Borrowing") shall be by telephone, confirmed
immediately in writing, or by telex or telecopier, in substantially the form of
Exhibit B hereto, shall be duly executed by a Responsible Officer of the
Borrower, and shall specify therein: (i) the requested date of such Working
Capital Borrowing (which shall be a Business Day); (ii) the Type of Advances
requested to comprise such Working Capital Borrowing; (iii) the requested
aggregate amount of such Working Capital Borrowing; and (iv) in the case of a
Working Capital Borrowing comprised of Eurodollar Rate Advances, the requested
duration of the initial Interest Period for each such Advance. Each Lender
shall, before 11:00 A.M. (Charlotte, North Carolina time) on the date of such
Working Capital Borrowing, make available for the account of its Applicable
Lending Office to the Administrative Agent at the Administrative Agent's
Account, in same day funds, such Lender's Pro Rata Share of such Working Capital
Borrowing. After the Administrative Agent's receipt of such funds and upon
fulfillment of the applicable conditions set forth in Article III, the
Administrative Agent will make such funds available to the Borrower by crediting
the Borrower's Account; provided, however, that, in the case of any Working
Capital Borrowing, the Administrative Agent shall first make a portion of such
funds equal to the aggregate principal amount of any Letter of Credit Advances
made by the Issuing Bank and by any Lender and outstanding on the date of such
Working Capital Borrowing, plus accrued and unpaid interest thereon to and as of
such date, available to the Issuing Bank and such other Lenders for repayment of
such Letter of Credit Advances.
(b) Anything in subsection (a) of this Section 2.02 to
the contrary notwithstanding, (i) the Borrower may not select Eurodollar Rate
Advances for (A) the initial Working Capital Borrowing hereunder or (B) any
Working Capital Borrowing if the aggregate amount of such Working Capital
Borrowing is less than $5,000,000 or if the obligation of the Lenders to make
Eurodollar Rate Advances shall then be suspended pursuant to Section 2.09 or
2.10. In addition, Eurodollar Rate Advances may not be outstanding as part of
more than 10 separate Borrowings.
(c) Each Notice of Borrowing shall be irrevocable and
binding on the Borrower. In the case of any Working Capital Borrowing that the
related Notice of Borrowing specifies is to be comprised of Eurodollar Rate
Advances, the Borrower shall indemnify each Lender against any loss, cost or
expense incurred by such Lender as a result of any failure to fulfill on or
before the date specified in such Notice of Borrowing for such Working Capital
Borrowing the applicable conditions set forth in Article III, including, without
limitation, any loss, cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund the
Advance to be made by such Lender as part of such Working Capital Borrowing when
such Advance, as a result of such failure, is not made on such date.
(d) Unless the Administrative Agent shall have received
notice from a Lender prior to the date of any Working Capital Borrowing that
such Lender will not make available to
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the Administrative Agent such Lender's Pro Rata Share of such Working Capital
Borrowing, the Administrative Agent may assume that such Lender has made the
amount of such Pro Rata Share available to the Administrative Agent on the date
of such Working Capital Borrowing in accordance with subsection (a) of this
Section 2.02 and the Administrative Agent may, in reliance upon such assumption,
make available to the Borrower on such date a corresponding amount. If and to
the extent that such Lender shall not have so made the amount of such Pro Rata
Share available to the Administrative Agent, such Lender and the Borrower
severally agree to repay or to pay to the Administrative Agent forthwith on
demand such corresponding amount, together with interest thereon, for each day
from the date such amount is made available to the Borrower until the date such
amount is repaid or paid to the Administrative Agent, at (i) in the case of the
Borrower, the interest rate applicable at such time under Section 2.07 to
Advances comprising such Working Capital Borrowing and (ii) in the case of such
Lender, the Federal Funds Rate. If such Lender shall pay to the Administrative
Agent such corresponding amount, such amount so paid shall constitute such
Lender's Advance as part of such Working Capital Borrowing for all purposes
under this Agreement.
(e) The failure of any Lender to make the Advance to be
made by it as part of any Working Capital Borrowing shall not relieve any other
Lender of its obligation, if any, hereunder to make its Advance on the date of
such Working Capital Borrowing, but no Lender shall be responsible for the
failure of any other Lender to make the Advance to be made by such other Lender
on the date of any Working Capital Borrowing.
Section 2.03. Issuance of and Drawings and Reimbursement Under
Letters of Credit. (a) Request for Issuance. Each Letter of Credit shall be
issued upon notice, given not later than 11:00 A.M. (Charlotte, North Carolina
time) on the fifth Business Day prior to the date of the proposed issuance of
such Letter of Credit (or such later day as the Issuing Bank in its sole
discretion shall agree), by the Borrower to the Issuing Bank, which shall give
to the Administrative Agent and each Lender prompt notice thereof by telex or
telecopier. Each notice of issuance of a Letter of Credit (a "Notice of
Issuance") shall be by telephone, confirmed immediately in writing, or by telex
or telecopier, shall be duly executed by a Responsible Officer of the Borrower,
and shall specify therein: (i) the requested date of such issuance (which shall
be a Business Day); (ii) the requested Available Amount of such Letter of
Credit; (iii) the requested expiration date of such Letter of Credit (which
shall comply with the requirements of Section 2.01(b)); (iv) the name and
address of the proposed beneficiary of such Letter of Credit; and (v) the
proposed form of such Letter of Credit, and shall be accompanied by such
application and agreement for letter of credit as the Issuing Bank may specify
to the Borrower for use in connection with such requested Letter of Credit (a
"Letter of Credit Agreement"). If the requested form of such Letter of Credit is
acceptable to the Issuing Bank in its reasonable discretion (taking into account
its customary practices), the Issuing Bank will, upon fulfillment of the
applicable conditions set forth in Article III, make such Letter of Credit
available to the Borrower at its office referred to in Section 8.02 or as
otherwise agreed with the Borrower in connection with such issuance. If and to
the extent that the provisions of any Letter of Credit Agreement shall conflict
with this Agreement, the provisions of this Agreement shall govern.
(b) Letter of Credit Reports. The Issuing Bank shall
furnish (i) to the Administrative Agent on the first Business Day of each week a
written report summarizing
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issuance and expiration dates of Letters of Credit issued during the previous
week and drawings during such week under all Letters of Credit, (ii) to each
Lender on the first Business Day of each month a written report summarizing
issuance and expiration dates of Letters of Credit issued during the immediately
preceding month and drawings during such month under all Letters of Credit and
(iii) to the Administrative Agent and each Lender on the first Business Day of
each calendar quarter a written report setting forth the average daily aggregate
Available Amount during the immediately preceding calendar quarter of all
Letters of Credit.
(c) Drawing and Reimbursement. (i) The payment by the
Issuing Bank of a draft drawn under any Letter of Credit shall constitute for
all purposes of this Agreement the making by the Issuing Bank of a Letter of
Credit Advance, which shall be a Base Rate Advance, in the amount of such draft.
Upon demand by the Issuing Bank, with a copy of such demand to the
Administrative Agent, each Lender shall purchase from the Issuing Bank, and the
Issuing Bank shall sell and assign to each such Lender, such Lender's Pro Rata
Share of such outstanding Letter of Credit Advance as of the date of such
purchase, by making available for the account of its Applicable Lending Office
to the Administrative Agent for the account of the Issuing Bank, at the
Administrative Agent's Account, in same day funds, an amount equal to the
portion of the outstanding principal amount of such Letter of Credit Advance to
be purchased by such Lender. Promptly after receipt thereof, the Administrative
Agent shall transfer such funds to the Issuing Bank. The Borrower hereby agrees
to each such sale and assignment. Each Lender agrees to purchase its Pro Rata
Share of an outstanding Letter of Credit Advance on (A) the Business Day on
which demand therefor is made by the Issuing Bank so long as notice of such
demand is given not later than 11:00 A.M. (Charlotte, North Carolina time) on
such Business Day or (B) the first Business Day next succeeding such demand if
notice of such demand is given after such time. Upon any such assignment by the
Issuing Bank to any other Lender of a portion of a Letter of Credit Advance, the
Issuing Bank represents and warrants to such other Lender that the Issuing Bank
is the legal and beneficial owner of such interest being assigned by it, free
and clear of any liens, but makes no other representation or warranty and
assumes no responsibility with respect to such Letter of Credit Advance, the
Loan Documents or any Loan Party. If and to the extent that any Lender shall not
have so made the amount of such Letter of Credit Advance available to the
Administrative Agent, such Lender agrees to pay to the Administrative Agent
forthwith on demand such amount together with interest thereon, for each day
from the date of demand by the Issuing Bank until the date such amount is paid
to the Administrative Agent, at the Federal Funds Rate for its account or the
account of the Issuing Bank, as applicable. If such Lender shall pay to the
Administrative Agent such amount for the account of the Issuing Bank on any
Business Day, such amount so paid in respect of principal shall constitute a
Letter of Credit Advance made by such Lender on such Business Day for purposes
of this Agreement, and the outstanding principal amount of the Letter of Credit
Advance made by the Issuing Bank shall be reduced by such amount on such
Business Day.
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(ii) The Obligation of each Lender to purchase its Pro
Rata Share of each outstanding Letter of Credit Advance on demand by the Issuing
Bank therefor pursuant to clause (i) of this Section 2.03(c) shall be absolute,
unconditional and irrevocable, and shall be made strictly in accordance with the
terms of clause (i) of this Section 2.03(c) under all circumstances, including,
without limitation, any of the following circumstances:
(A) any lack of validity or enforceability of any Loan
Document, any Letter of Credit Agreement, any Letter of Credit or any
other agreement or instrument relating thereto (all of the foregoing
being, collectively, the "L/C Related Documents");
(B) the existence of any claim, set-off, defense or other
right that such Lender may have at any time against any beneficiary or
any transferee of a Letter of Credit (or any Persons for whom any such
beneficiary or any such transferee may be acting), the Issuing Bank,
the Borrower or any other Person, whether in connection with the
transactions contemplated by the L/C Related Documents or any unrelated
transaction;
(C) the occurrence and continuance of any Default or Event of
Default; or
(D) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing.
(d) Failure to Make Letter of Credit Advances. The
failure of any Lender to make the Letter of Credit Advance to be made by it on
the date specified in Section 2.03(c) shall not relieve any other Lender of its
obligation hereunder to make its Letter of Credit Advance on such date, but no
Lender shall be responsible for the failure of any other Lender to make the
Letter of Credit Advance to be made by such other Lender on such date.
Section 2.04. Repayment of Advances. (a) Working Capital
Advances. The Borrower shall repay to the Administrative Agent for the ratable
account of the Lenders on the Termination Date the aggregate principal amount of
the Working Capital Advances outstanding on such date.
(b) Letter of Credit Advances. (i) The Borrower shall
repay to the Administrative Agent for the account of the Issuing Bank and each
Lender that has made a Letter of Credit Advance the principal amount of each
Letter of Credit Advance made by each of them on the earlier of demand and the
Termination Date.
(ii) The Obligations of the Borrower under this Agreement,
any Letter of Credit Agreement and any other agreement or instrument relating to
any Letter of Credit shall be unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement, such Letter of Credit
Agreement and such other agreement or instrument under all circumstances,
including, without limitation, the following circumstances (it being understood
that any such payment by the Borrower is without prejudice to, and does not
constitute a waiver of,
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any rights the Borrower might have or might acquire as a result of the payment
by the Issuing Bank of any draft or the reimbursement by the Borrower thereof):
(A) any lack of validity or enforceability of any L/C Related
Document;
(B) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Obligations of the Borrower in
respect of any L/C Related Document or any other amendment or waiver of
or any consent to departure from all or any of the L/C Related
Documents;
(C) the existence of any claim, set-off, defense or other
right that the Borrower may have at any time against any beneficiary or
any transferee of a Letter of Credit (or any Persons for whom any such
beneficiary or any such transferee may be acting), the Issuing Bank or
any other Person, whether in connection with the transactions
contemplated by the L/C Related Documents or any unrelated transaction;
(D) any statement or any other document presented under a
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(E) payment by the Issuing Bank under a Letter of Credit
against presentation of a draft or certificate that does not
substantially comply with the terms of such Letter of Credit;
(F) any exchange, release or non-perfection of any Collateral
or other collateral, or any release or amendment or waiver of or
consent to departure from the Guaranty or any other guarantee, for all
or any of the Obligations of the Borrower in respect of the L/C Related
Documents; or
(G) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing, including, without limitation, any
other circumstance that might otherwise constitute a defense available
to, or a discharge of, the Borrower or a guarantor.
Section 2.05. Termination or Reduction of the Commitments. (a)
Optional. The Borrower may, upon at least three Business Days' notice to the
Administrative Agent, terminate in whole or reduce in part the unused portions
of the Letter of Credit Facility and the Unused Working Capital Commitments;
provided, however, that each partial reduction of a Facility shall be in an
aggregate amount of $2,000,000 or an integral multiple of $500,000 in excess
thereof or, if less, the aggregate amount of such Facility.
(b) Mandatory. (i) The Working Capital Facility shall be
automatically and permanently reduced on each date on which the prepayment of
Working Capital Advances
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outstanding thereunder is required to be made pursuant to Section 2.06(b)(i) by
an amount equal to the applicable Reduction Amount.
(ii) The Letter of Credit Facility shall be permanently
reduced on the date of each reduction in the Working Capital Facility by an
amount equal to the amount, if any, by which (A) the Letter of Credit Facility
on such date exceeds (B) the Working Capital Facility after giving effect to
such reduction of the Working Capital Facility.
(c) Application of Commitment Reductions. Upon each
reduction of a Facility pursuant to this Section 2.05, the Commitment of each
Lender under such Facility shall be reduced by such Lender's Pro Rata Share of
the amount by which such Facility is reduced.
SECTION 2.06. Prepayments. (a) Optional. The Borrower may,
upon at least one Business Day's notice in the case of Base Rate Advances and
three Business Days' notice in the case of Eurodollar Rate Advances, in each
case to the Administrative Agent stating the proposed date and aggregate
principal amount of the prepayment, and if such notice is given the Borrower
shall, prepay the aggregate principal amount of the Advances comprising part of
the same Working Capital Borrowing and outstanding on such date, in whole or
ratably in part; provided, however, that (i) each partial prepayment shall be in
an aggregate principal amount of $1,000,000 or an integral multiple of $500,000
in excess thereof and (ii) if any such prepayment of a Eurodollar Rate Advance
is made on a date other than the last day of an Interest Period therefor, the
Borrower shall also pay any amounts owing in respect of such Eurodollar Rate
Advance pursuant to Section 8.04(c).
(b) Mandatory. (i) The Borrower shall, on the date of
receipt of the Net Cash Proceeds by the Borrower or any of the Subsidiary
Guarantors, prepay on aggregate principal amount of the Working Capital Advances
comprising part of the same Working Capital Borrowing and the Letter of Credit
Advances equal to 100% of the amount of such Net Cash Proceeds. Each prepayment
of Advances pursuant to this clause (i) shall be applied to the Working Capital
Facility in the manner set forth in clause (iv) of this Section 2.06(b).
(ii) The Borrower shall, on each Business Day, prepay an
aggregate principal amount of the Working Capital Advances comprising part of
the same Working Capital Borrowing and the Letter of Credit Advances equal to
the amount by which (A) the sum of (1) the aggregate principal amount of all
Working Capital Advances and Letter of Credit Advances outstanding on such
Business Day and (2) the aggregate Available Amount of all Letters of Credit
outstanding on such Business day exceeds (B) the Working Capital Facility on
such Business Day (after giving effect to any permanent reduction thereof
pursuant to Section 2.05 on such Business Day) on such Business Day.
(iii) The Borrower shall, on each Business Day, pay to the
Administrative Agent for deposit into a cash collateral account in favor of the
Collateral Agent on terms and conditions satisfactory to the Administrative
Agent an amount sufficient to cause the aggregate
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amount on deposit in such cash collateral account on such Business Day to equal
the amount by which (A) the aggregate Available Amount of all Letters of Credit
outstanding on such Business Day exceeds (B) the Letter of Credit Facility on
such Business Day (after giving effect to any permanent reduction thereof
pursuant to Section 2.05 on such Business Day).
(iv) Prepayments of the Working Capital Facility made
pursuant to clause (i) or (ii) of this Section 2.06(b) shall be, first, applied
to prepay Letter of Credit Advances outstanding at such time until all Letter of
Credit Advances are paid in full, and second, applied to prepay Working Capital
Advances comprising part of the same Working Capital Borrowing and outstanding
at such time until all Working Capital Advances are paid in full; and, in the
case of prepayments of the Working Capital Facility required pursuant to clause
(i) of this Section 2.06(b), the amount remaining, if any, after the prepayment
in full of all Advances outstanding at such time (the sum of such prepayment
amounts and remaining amount being, collectively, the "Reduction Amount") may be
retained by the Borrower and the Working Capital Facility shall be automatically
and permanently reduced as set forth in Section 2.05(b)(i).
(c) Prepayments to Include Accrued Interest. All
prepayments under Section 2.06(b) shall be made together with (i) accrued and
unpaid interest to the date of such prepayment on the principal amount so
prepaid and (ii) in the case of any such prepayment of a Eurodollar Rate Advance
on a date other than the last day of an Interest Period therefor, any amounts
owing in respect of such Eurodollar Rate Advance pursuant to Section 8.04(c).
SECTION 2.07. Interest. (a) Scheduled Interest. The Borrower
shall pay interest on the unpaid principal amount of each Advance owing to each
Lender Party from the date of such Advance until such principal amount shall be
paid in full, at the following rates per annum:
(i) Base Rate Advances. During such periods as such Advance is
a Base Rate Advance, a rate per annum equal at all times to the sum of
(A) the Base Rate in effect from time to time and (B) the Applicable
Margin in effect from time to time, payable in arrears quarterly on the
last Business Day of each March, June, September and December during
such periods and on the date such Base Rate Advance shall be Converted
or paid in full.
(ii) Eurodollar Rate Advances. During such periods as such
Advance is a Eurodollar Rate Advance, a rate per annum equal at all
times during each Interest Period for such Advance to the sum of (A)
the Eurodollar Rate for such Advance for such Interest Period and (B)
the Applicable Margin in effect from time to time, payable in arrears
on the last day of such Interest Period and, if such Interest Period
has a duration of more than three months, on each day that occurs
during such Interest Period every three months from the first day of
such Interest Period and on the date such Eurodollar Rate Advance shall
be Converted or paid in full.
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(b) Default Interest. If all or a portion of (i) the
principal amount of any Advance or (ii) any interest payable thereon or fees or
other amounts payable under this Agreement shall not be paid when due (whether
at the stated maturity, by acceleration or otherwise), such overdue amounts
shall bear interest, payable on demand, at a rate per annum that is (x) in the
case of overdue principal, the rate that would otherwise be applicable thereto
plus 2% per annum or (y) in the case of any overdue interest, fees or other
amounts payable, to the extent permitted by applicable law, the rate determined
pursuant to Section 2.07(a)(i) plus 2% per annum, in each case, from the date of
such non-payment to the date on which such amount is paid in full (after as well
as before judgment).
(c) Notice of Interest Rate. Promptly after receipt of a
Notice of Borrowing pursuant to Section 2.02(a), the Administrative Agent shall
give notice to the Borrower and each Lender of the applicable interest rate
determined by the Administrative Agent for purposes of clause (i) or (ii) of
Section 2.07(a), as applicable.
SECTION 2.08. Fees. (a) Commitment Fee. The Borrower shall pay
to the Administrative Agent for the account of the Lenders a commitment fee,
from the date hereof in the case of each Initial Lender and from the effective
date specified in the Assignment and Acceptance pursuant to which it became a
Lender in the case of each other Lender until the Termination Date, payable in
arrears on the date of the initial Credit Extension Date hereunder, thereafter
quarterly on the last Business Day of each March, June, September and December,
commencing on September 30, 1998, and on the Termination Date, at the Applicable
Percentage in effect from time to time on the average daily Unused Working
Capital Commitment of each Lender; provided, however, that any commitment fee
accrued with respect to any of the Commitments of a Defaulting Lender during the
period prior to the time such Lender became a Defaulting Lender and unpaid at
such time shall not be payable by the Borrower so long as such Lender shall be a
Defaulting Lender except to the extent that such commitment fee shall otherwise
have been due and payable by the Borrower prior to such time; and provided
further that no commitment fee shall accrue on any of the Commitments of a
Defaulting Lender so long as such Lender shall be a Defaulting Lender.
(b) Letter of Credit Fees. Etc. (i) The Borrower shall
pay to the Administrative Agent for the account of each Lender a commission,
payable in arrears quarterly on the last Business Day of each March, June,
September and December, commencing September 30, 1998, and on the earliest to
occur of the full drawing, expiration, termination or cancellation of any such
Letter of Credit and on the Termination Date, on such Lender's Pro Rata Share of
the average daily aggregate Available Amount of all Letters of Credit
outstanding from time to time during such quarter at the rate per annum equal to
the excess of the Applicable Margin then in effect for Eurodollar Rate Advances
over 1/8 of 1.0%.
(ii) The Borrower shall pay to the Administrative Agent
for the account of the Issuing Bank a fronting fee, payable in arrears quarterly
on the last Business Day of each March, June, September and December; commencing
September 30, 1998, and on the earliest to occur of
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the full drawing, expiration, termination or cancellation of any such Letter of
Credit and on the Termination Date, on the average daily aggregate Available
Amount of all Letters of Credit outstanding from time to time during such
quarter at a rate per annum equal to 1/8 of 1.0%.
(c) Agent's Fees. The Borrower shall pay to the
Administrative Agent for the account of the Agents such fees as may from time to
time be agreed between the Borrower and the Administrative Agent.
SECTION 2.09. Conversion of Advances. (a) Optional. The
Borrower may on any Business Day, upon notice given to the Administrative Agent
not later than 11:00 A.M. (Charlotte, North Carolina time) on the third Business
Day prior to the date of the proposed Conversion in the case of a Conversion of
Base Rate Advances into Eurodollar Rate Advances or of Eurodollar Rate Advances
of one Interest Period into Eurodollar Rate Advances of another Interest Period,
or 11:00 A.M. (Charlotte, North Carolina time) on the Business Day immediately
preceding the date of the proposed Conversion in the case of a Conversion of
Eurodollar Rate Advances into Base Rate Advances, and subject to the provisions
of Sections 2.07 and 2.10, Convert all or any portion of the Advances of one
Type comprising the same Working Capital Borrowing into Advances of the other
Type; provided, however, that:
(i) any Conversion of Eurodollar Rate Advances into Base Rate
Advances shall be made only on the last day of an Interest Period for
such Eurodollar Rate Advances;
(ii) any Conversion of Base Rate Advances into Eurodollar Rate
Advances may not be made if a Default under Section 6.01(a) or 6.01 (f)
or Event of Default shall have occurred and be continuing and shall be
in an amount not less than the minimum amount specified in Section
2.02(b);
(iii) no Conversion of any Advances shall result in more
separate Borrowings comprised of Eurodollar Advances than permitted
under Section 2.02(b); and
(iv) each Conversion of Advances comprising part of the same
Working Capital Borrowing shall be made among the Lenders in accordance
with their respective Pro Rata Shares of such Working Capital
Borrowing.
Each notice of a Conversion (a "Notice of Conversion") shall be delivered by
telephone, confirmed immediately in writing, or by telex or telecopier, in
substantially the form of Exhibit D hereto, shall be duly executed by a
Responsible Officer of the Borrower, and shall, within the restrictions set
forth in the immediately preceding sentence, specify therein:
(A) the requested date of such Conversion (which shall be a
Business Day);
(B) the Advances requested to be Converted; and
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(C) if such Conversion is into Eurodollar Rate Advances, the
requested duration of the Interest Period for such Eurodollar Rate
Advances.
The Administrative Agent shall give each of the Lenders prompt notice of each
Notice of Conversion received by it, by telex or telecopier. Each Notice of
Conversion shall be irrevocable and binding on the Borrower.
(b) Mandatory. (i) On the date on which the aggregate
unpaid principal amount of Eurodollar Rate Advances comprising any Working
Capital Borrowing shall be reduced, by payment or prepayment or otherwise, to
less than $5,000,000, such Advances shall automatically Convert into Base Rate
Advances.
(ii) If the Borrower shall fail to select the duration of
any Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.01, the
Administrative Agent will forthwith so notify the Borrower and the Lenders,
whereupon each such Eurodollar Rate Advance will automatically, on the last day
of the then existing Interest Period therefor, Convert into a Base Rate Advance.
(iii) Upon the occurrence and during the continuance of any
Default under Section 6.01(a) or 6.01(f) or any Event of Default, (A) each
Eurodollar Rate Advance will automatically, on the last day of the then existing
Interest Period therefor, Convert into a Base Rate Advance and (B) the
obligation of the Lenders to make, or to Convert Advances into, Eurodollar Rate
Advances shall be suspended.
SECTION 2.10. Increased Costs, Etc. (a) In the event that, due
to either (i) the introduction of or any change (including any change by way of
imposition or increase of reserve requirements included in the Eurodollar Rate
Reserve Percentage) in or in the interpretation or administration of any
applicable law or regulation after the Closing Date, (ii) the compliance with
any applicable guideline or request from any central bank or other governmental
authority (whether or not having the force of law) or (iii) any other
circumstance affecting the interbank Eurodollar Market or the position of any
Lender Party in such market that leads such Lender Party to reasonably determine
that the Eurodollar Rate for any Interest Period for any Eurodollar Rate Advance
made by such Lender Party will not adequately reflect the cost to such Lender of
making, funding or maintaining such Eurodollar Rate Advance for such Interest
Period, there shall be any increase in the cost to or reduction in the amount
received or receivable by any Lender Party as a result of agreeing to make or of
making, funding or maintaining any Eurodollar Rate Advances, or of agreeing to
issue or of issuing or maintaining Letters of Credit or of agreeing to make or
of making or maintaining Letter of Credit Advances (excluding for purposes of
this Section 2.10 any such increased costs resulting from any taxes (as to which
Section 2.12 shall govern), then the Borrower shall from time to time upon
demand by such Lender Party (with a copy of such demand to the Administrative
Agent), pay to the Administrative Agent for the account of such Lender Party
additional amounts (in the form of an increased rate of, or a different method
of calculating, interest or otherwise as such Lender Party, in its reasonable
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discretion, shall determine) sufficient to compensate such Lender Party for such
increased cost; provided, however, that a Lender Party claiming additional
amounts under this Section 2.10(a) agrees to use reasonable efforts (consistent
with its internal policy and legal and regulatory restrictions) to designate a
different Applicable Lending Office for any Advances affected by such event if
the making of such a designation would avoid the need for, or reduce the amount
of, such increased cost that may thereafter accrue; provided further that such
designation is made on terms that such Lender Party and its Applicable Lending
Office suffer no economic, legal or regulatory disadvantage, with the object of
avoiding the consequence of the event giving rise to the operation of this
subsection (a). A certificate as to the amount of such increased cost and
showing in reasonable detail the basis for the calculation thereof, submitted to
such Borrower by such Lender Party at the time of demand, shall be conclusive
and binding for all purposes, absent manifest error.
(b) If, due to either (i) the introduction of or any
change in or in the interpretation or administration of any applicable law or
regulation after the Closing Date or (ii) the compliance with any applicable
guideline or request from any central bank or other Governmental Authority
(whether or not having the force of law), there shall be any increase in the
amount of capital required or expected to be maintained by any Lender Party or
any corporation controlling such Lender Party which has or would have the effect
of reducing the rate of return of such Lender Party's capital or assets as a
result of or based upon the existence of such Lender Party's commitments and
obligations under this Agreement to a level below that which such Lender Party
could have achieved but for such change or compliance (taking into consideration
such Lender Party's or any corporation controlling such Lender Party's policies
with respect to capital advances), then, upon demand by such Lender Party (with
a copy of such demand to the Administrative Agent), the Borrower shall pay to
the Administrative Agent for the account of such Lender Party, from time to time
specified by such Lender Party, additional amounts sufficient to compensate such
Lender Party in the light of such circumstances, it being understood and agreed
that a Lender Party shall not be entitled to such compensation as a result of
such Lender Party's compliance with, or pursuant to any request or directive to
comply with, any such law, regulation, guideline or request in effect on the
Closing Date. Any amount payable pursuant to this Section 2.10(b) shall be
payable only to the extent that such Lender Party reasonably determines such
increase in capital to be allocable to the existence of such Lender Party's
commitment to lend or to issue Letters of Credit hereunder or to the issuance or
maintenance of any Letters of Credit. A certificate as to such amounts and
showing in reasonable detail the basis for the calculation thereof submitted to
such Borrower by such Lender Party at the time of demand shall be conclusive and
binding for all purposes, absent manifest error.
(c) Notwithstanding any other provision of this Agreement, if
any central bank or other Governmental Authority shall assert that it is
unlawful for any Lender or its Eurodollar Lending Office to perform its
obligations hereunder to make Eurodollar Rate Advances or to continue to fund or
maintain Eurodollar Rate Advances hereunder, with respect to any Eurodollar Rate
Advance affected by circumstances described in this subsection (c), such
Borrower will, and with respect to any Eurodollar Rate Advance affected by
circumstances described in subsections
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(a) or (b) above, such Borrower may either (i) on the last day of the then
existing Interest Period therefor Convert each Eurodollar Rate Advance affected
by such circumstances into a Base Rate Advance or (ii) if the affected
Eurodollar Rate Advance is then being made pursuant to a Borrowing, cancel such
Borrowing by giving the Administrative Agent telephonic notice (confirmed
promptly in writing) thereof on the same date that such Borrower was notified by
a Lender Party pursuant to subsection (a) or (b) above or this subsection (c)
(as applicable); provided that, if more than one Lender Party is affected at any
time, then all affected Lender Parties must be treated in the same manner
pursuant to this Section 2.10(c). In the event of an illegality as described in
clause (i) of this subsection (c), the obligation of the Appropriate Lenders to
make, or to Convert Advances into, Eurodollar Rate Advances shall be suspended
until the Administrative Agent shall notify the Borrower that such Lender has
determined that the circumstances causing such suspension no longer exist;
provided, however, that, before making any such demand, such Lender Party agrees
to use reasonable efforts (consistent with its internal policy and legal and
regulatory restrictions) to designate a different Applicable Lending Office for
any Advances affected by such event if the making of such a designation would
allow such Lender Party or its Applicable Lending Office to continue to perform
its obligations to make Eurodollar Rate Advances or to continue to fund or
maintain Eurodollar Rate Advances; provided further that such designation is
made on terms that such Lender Party and its Applicable Lending Office suffer no
economic, legal or regulatory disadvantage, with the object of avoiding the
consequence of the event giving rise to the operation of this subsection.
(d) Anything in this Agreement to the contrary
notwithstanding, to the extent any notice under Section 2.10 or 2.12 is given by
any Lender Party more than 180 days after such Lender Party has knowledge (or
should have had knowledge) of the occurrence of the event giving rise to the
additional cost, reduction in amounts, loss tax or other additional amounts
described in such Section 2.10 or 2.12, as the case may be, such Lender Party
shall not be entitled to compensation under such Section for any such amounts
incurred or accruing prior to the giving of such notice to the Borrower.
SECTION 2.11. Payments and Computations. (a) The Borrower
shall make each payment hereunder and under the Working Capital Notes,
irrespective of any right of counterclaim or set-off (except as otherwise
provided in Section 2.15), not later than 12:00 Noon (Charlotte, North Carolina
time) on the day when due in U.S. dollars to the Administrative Agent at the
Administrative Agent's Account in same day funds. The Administrative Agent will
promptly thereafter cause like funds to be distributed (i) if such payment by
the Borrower is in respect of principal, interest, commitment fees or any other
Obligation then payable hereunder and under the Working Capital Notes to more
than one Lender Party, to such Lender Parties for the account of their
respective Applicable Lending Offices ratably in accordance with the amounts of
such respective Obligations payable to such Lender Parties at such time and (ii)
if such payment by the Borrower is in respect of any Obligation then payable
hereunder to one Lender Party, to such Lender Party for the account of its
Applicable Lending Office, in each case to be applied in accordance with the
terms of this Agreement. Upon its acceptance of an Assignment and Acceptance and
recording of the information contained therein in the Register pursuant to
Section
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8.07(d), from and after the effective date of such Assignment and Acceptance,
the Administrative Agent shall make all payments hereunder and under the Working
Capital Notes in respect of the interest assigned thereby to the Lender Party
assignee thereunder, and the parties to such Assignment and Acceptance shall
make all appropriate adjustments in such payments for periods prior to such
effective date directly between themselves.
(b) The Borrower hereby authorizes each Lender Party, if
and to the extent payment owed to such Lender Party is not made when due
hereunder or, in the case of a Lender, under the Working Capital Note held by
such Lender, to charge from time to time against any or all of the Borrower's
accounts with such Lender Party any amount so due.
(c) All computations of interest, fees and commissions
shall be made by the Administrative Agent on the basis of a year of 360 days, in
each case for the actual number of days (including the first day but excluding
the last day) occurring in the period for which such interest, fees or
commissions are payable; provided, however, that (i) interest in respect of
which the rate of interest is calculated on the basis of clause (a) of the
definition of "Base Rate" contained in Section 1.01 and (ii) commitment fees
payable pursuant to Section 2.08(a) shall be calculated on the basis of a year
of 365 (or 366, as the case may be) days for the actual number of days elapsed.
Each determination by the Administrative Agent of an interest rate, fee or
commission hereunder shall be conclusive and binding for all purposes, absent
manifest error.
(d) Whenever any payment hereunder or under the Working
Capital Notes shall be stated to be due on a day other than a Business Day, such
payment shall be made on the next succeeding Business Day, and such extension of
time shall in such case be included in the computation of payment of interest or
commitment fee, as the case may be; provided, however, that, if such extension
would cause payment of interest on or principal of Eurodollar Rate Advances to
be made in the next succeeding calendar month, such payment shall be made on the
immediately preceding Business Day.
(e) Unless the Administrative Agent shall have received
notice from the Borrower prior to the date on which any payment is due to any
Lender Party hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each such Lender Party
on such due date an amount equal to the amount due such Lender Party on such
date. If and to the extent the Borrower shall not have so made such payment in
full to the Administrative Agent, each such Lender Party shall repay to the
Administrative Agent forthwith on demand such amount distributed to such Lender
Party, together with interest thereon, for each day from the date such amount is
distributed to such Lender Party until the date such Lender Party repays such
amount to the Administrative Agent, at the Federal Funds Rate.
SECTION 2.12. Taxes. (a) Any and all payments by the Borrower
hereunder or under any of the other Loan Documents shall be made, in accordance
with Section 2.11, free and
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clear of and without deduction for any and ail present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect
thereto, excluding, in the case of each Lender Party and each Agent, taxes that
are imposed as a result of a present or former connection between the Lender
Party or the Administrative Agent and the jurisdiction of the Governmental
Authority imposing such taxes or any political subdivision or taxing authority
thereof or therein (other than a connection relating to or arising solely from
the Lender Party or the Administrative Agent holding a Working Capital Note or
having executed, delivered or performed its obligations or received or otherwise
collected payment under, or enforced or otherwise exercised its rights under
this Agreement or any of the other Loan Documents) (all such nonexcluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities in respect of
payments hereunder or under the other Loan Documents being, collectively,
"Taxes"). If the Borrower shall be required under applicable Requirements of Law
to deduct any Taxes from or in respect of any sum payable hereunder or under any
Working Capital Note to any Lender Party or any Agent, (i) the sum payable shall
be increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
2.12) such Lender Party or such Agent, as the case may be, receives an amount
equal to the sum it would have received had no such deductions been made, (ii)
the Borrower shall make such deductions and (iii) the Borrower shall pay the
full amount deducted to the relevant taxation authority or other Governmental
Authority in accordance with applicable Requirements of Law.
(b) In addition, the Borrower shall pay any present or
future stamp, recording, documentary, excise, property or similar taxes, charges
or levies that arise from any payment made hereunder or under the Working
Capital Notes or from the execution, delivery or registration of, any
performance under, or otherwise with respect to, this Agreement or the Working
Capital Notes (collectively, "Other Taxes").
(c) The Borrower shall indemnify each Lender Party and
each Agent for the full amount of Taxes and Other Taxes, and for the full amount
of taxes of any kind imposed by any jurisdiction on amounts payable under this
Section 2.12, imposed on or paid by such Lender Party or such Agent, as the case
may be, and any liability (including penalties, additions to tax, interest and
expenses) arising therefrom or with respect thereto. The indemnity by the
Borrower provided for in this subsection (c) shall apply and be made whether or
not the Taxes or Other Taxes for which indemnification hereunder is sought have
been correctly or legally asserted; provided, however, that such Lender or such
Agent seeking such indemnification shall take all reasonable actions (consistent
with its internal policy and legal and regulatory restrictions) requested by the
Borrower to assist the Borrower in recovering the amounts paid thereby pursuant
to this subsection (c) from the relevant taxation authority or other
Governmental Authority. Amounts payable by the Borrower under the indemnity set
forth in this subsection (c) shall be paid within 30 days from the date on which
the applicable Lender or Agent, as the case may be, makes written demand
therefor.
(d) If the Administrative Agent or any Lender Party
receives a refund in respect of Taxes paid by the Borrower, which in the
reasonable judgment of such Lender Party is
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allocable to such payment, it shall promptly pay such refund, together with any
other amounts paid by the Borrower in connection with such refunded Taxes, to
the Borrower, net of all out-of-pocket expenses of such Lender Party incurred in
obtaining such refund, provided, that the Borrower agrees to promptly return
such refund to the Administrative Agent or the applicable Lender Party, as the
case may be, if it receives notice from the Administrative Agent or the
applicable Lender Party that such Administrative Agent or Lender Party is
required to repay such refund.
(e) Within 30 days after the date of any payment of
Taxes, the Borrower shall furnish to the Administrative Agent, at its address
referred to in Section 8.02, the original or a certified copy of a receipt
evidencing payment thereof, to the extent such a receipt is issued therefor, or
other written proof of payment thereof that is reasonably satisfactory to the
Administrative Agent.
(f) Each Lender Party organized under the laws of a
jurisdiction outside the United States shall, on or prior to the date of its
execution and delivery of this Agreement in the case of each Initial Lender or
Initial Issuing Bank, as the case may be, and on the date of the Assignment and
Acceptance pursuant to which it becomes a Lender Party in the case of each other
Lender Party, and from time to time thereafter as reasonably requested in
writing by the Borrower (but only so long thereafter as such Lender Party
remains lawfully able to do so), provide each of the Administrative Agent and
the Borrower with two original Internal Revenue Service forms 1001 or 4224 or
any successor or other form prescribed by the Internal Revenue Service,
certifying that such Lender Party is exempt from or entitled to a reduced rate
of United States withholding tax on payments pursuant to this Agreement or the
other Loan Documents. If the forms provided by a Lender Party at the time such
Lender Party first becomes a party to this Agreement or at the time the Lender
Party changes the jurisdiction of its Applicable Lending Office or designates a
different Applicable Lending Office indicates a United States interest
withholding tax rate in excess of zero, withholding tax at such rate shall be
considered excluded from Taxes unless and until such Lender Party provides the
appropriate form certifying that a lesser rate applies, whereupon withholding
tax at such lesser rate only shall be considered excluded from Taxes for periods
governed by such form; provided, however, that, if at the date of a change in
the jurisdiction of the Applicable Lending Office or designation of a new
Applicable Lending Office of a Lender Party, such Lender Party was entitled to
payments under subsection (a) in respect of withholding tax with respect to
interest paid immediately before the change in the Applicable Lending Office,
then, to such extent, the term Taxes shall include (in addition to withholding
taxes that may be imposed in the future or other amounts otherwise includable in
Taxes) withholding tax, if any, applicable with respect to such new Applicable
Lending Office on such date; provided further that, if at the date of the
Assignment and Acceptance pursuant to which a Lender Party becomes a party to
this Agreement, the Lender Party assignor was entitled to payments under
subsection (a) in respect of withholding tax with respect to interest paid at
such date, then, to such extent, the term Taxes shall include (in addition to
withholding taxes that may be imposed in the future or other amounts otherwise
includable in Taxes) withholding tax, if any, applicable with respect to the
Lender Party assignee on such date.
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(g) For any period with respect to which a Lender Party
has failed to provide the Borrower with the appropriate form, certificate or
other document described in subsection (e) of this Section 2.12 (other than if
such failure is due to a change in the applicable Requirements of Law, or in the
interpretation or application thereof, occurring after the date on which a form,
certificate or other document originally was required to be provided or if such
form, certificate or other document otherwise is not required under subsection
(e) of this Section 2.12), such Lender Party shall not be entitled to
indemnification under subsection (a) or (c) of this Section 2.12 with respect to
Taxes imposed by the United States by reason of such failure; provided, however,
that should a Lender Party become subject to Taxes because of its failure to
deliver a form, certificate or other document required hereunder, the Borrower
shall, at such Lender Party's sole expense, take such steps as such Lender Party
shall reasonably request to assist such Lender Party in recovering such Taxes.
(h) Any Lender Party claiming any additional amounts
payable pursuant to this Section 2.12 agrees to use reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions) to
change the jurisdiction of its Applicable Lending Office or designate a
different Applicable Lending Office if the making of such a change or
designation would avoid the need for, or reduce the amount of, any such
additional amounts that may thereafter accrue, provided that such change or
designation is made on terms that such Lender Party and its Applicable Lending
Office suffer no economic, legal or regulatory disadvantage, with the object of
avoiding the consequence of the event giving rise to the operation of subsection
(a) or (c) above.
(i) Each Lender Party represents and agrees that, on the
date hereof and at all times during the term of this Agreement, it is not and
will not be a conduit entity participating in a conduit financing arrangement
(as defined in United States Treasury regulations Section 881-3) with respect to
the Borrowings hereunder (other than a conduit financing arrangement in which
the Borrower, or an Affiliate thereof, is a financing entity) unless the
Borrower has consented to such arrangement prior thereto.
SECTION 2.13. Sharing of Payments. Etc. If any Lender Party
shall obtain at any time any payment (whether voluntary, involuntary, through
the exercise of any right of setoff, or otherwise) (a) on account of Obligations
due and payable to such Lender Party under or in respect of this Agreement or
any of the other Loan Documents at such time in excess of its ratable share
(according to the proportion of (i) the amount of such Obligations due and
payable to such Lender Party at such time (other than pursuant to Section 2.10,
2.12, 8.04 or 8.07)
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to (ii) the aggregate amount of the Obligations due and payable to all Lender
Parties at such time) of payments on account of the Obligations due and payable
to all Lender Parties under or in respect of this Agreement and the other Loan
Documents at such time obtained by all the Lender Parties at such time or (b) on
account of Obligations owing (but not due and payable) to such Lender Party
under or in respect of this Agreement or any of the other Loan Documents at such
time in excess of its ratable share (according to the proportion of(i) the
amount of such Obligations owing to such Lender Party at such time (other than
pursuant to Section 2.10, 2.12, 8.04 or 8.07) to (ii) the aggregate amount of
the Obligations owing (but not due and payable) to all Lender Parties under or
in respect of this Agreement and the other Loan Documents at such time) of
payments on account of the Obligations owing (but not due and payable) to all
Lender Parties under or in respect of this Agreement and the other Loan
Documents at such time obtained by all of the Lender Parties at such time, such
Lender Party shall forthwith purchase from the other Lender Parties such
participations in the Obligations due and payable or owing to them, as the case
may be, as shall be necessary to cause such purchasing Lender Party to share the
excess payment ratably with each of them; provided, however, that if all or any
portion of such excess payment is thereafter recovered from such purchasing
Lender Party, such purchase from each other Lender Party shall be rescinded and
such other Lender Party shall repay to the purchasing Lender Party the purchase
price to the extent of such Lender Party's ratable share (according to the
proportion of (A) the purchase price paid to such Lender Party to (B) the
aggregate purchase price paid to all Lender Parties) of such recovery, together
with an amount equal to such Lender Party's ratable share (according to the
proportion of (1) the amount of such other Lender Party's required repayment to
(2) the total amount so recovered from the purchasing Lender Party) of any
interest or other amount paid or payable by the purchasing Lender Party in
respect of the total amount so recovered. The Borrower hereby agrees that any
Lender Party so purchasing a participation from another Lender Party pursuant to
this Section 2.13 may, to the fullest extent permitted under applicable
Requirements of Law, exercise all its rights of payment (including the right of
set-off) with respect to such participation as fully as if such Lender Party
were the direct creditor of the Borrower in the amount of such participation.
SECTION 2.14. Use of Proceeds. The proceeds of the Advances
and issuances of Letters of Credit shall be available (and the Borrower agrees
that it shall use such proceeds and Letters of Credit) to pay to the holders of
Company Stock (other than MCTH) the cash consideration for their shares in the
Merger, to refinance certain Debt of the Borrower and its Subsidiaries
outstanding on the initial Credit Extension Date, to pay fees and expenses
incurred in connection with the consummation of the Transaction and to provide
working capital from time to time to the Borrower and its Subsidiaries;
provided, however, that no more than $33 million of the proceeds of the Advances
shall be used to pay the holders of Company Stock the cash consideration for
their shares in the Merger, to refinance certain Existing Debt and to pay fees
and expenses incurred in connection with the consummation of the Transaction.
SECTION 2.15. Defaulting Lenders. (a) In the event that, at
any one time, (i) any Lender Party shall be a Defaulting Lender, (ii) such
Defaulting Lender shall owe a Defaulted Advance to the Borrower and (iii) the
Borrower shall be required to make any payment hereunder or under any other Loan
Document to or for the account of such Defaulting
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Lender, then the Borrower may, so long as no Default shall occur or be
continuing at such time and to the fullest extent permitted by applicable law,
set off and otherwise apply the Obligation of the Borrower to make such payment
to or for the account of such Defaulting Lender against the obligation of such
Defaulting Lender to make such Defaulted Advance. In the event that, on any
date, the Borrower shall so set off and otherwise apply its obligation to make
any such payment against the obligation of such Defaulting Lender to make any
such Defaulted Advance on or prior
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to such date, the amount so set off and otherwise applied by the Borrower shall
constitute for all purposes of this Agreement and the other Loan Documents an
Advance by such Defaulting Lender made on the date under the Facility pursuant
to which such Defaulted Advance was originally required to have been made
pursuant to Section 2.01. Such Advance shall be a Base Rate Advance and shall be
considered, for all purposes of this Agreement, to comprise part of the
Borrowing in connection with which such Defaulted Advance was originally
required to have been made pursuant to Section 2.01, even if the other Advances
comprising such Borrowing shall be Eurodollar Rate Advances on the date such
Advance is deemed to be made pursuant to this subsection (a). The Borrower shall
notify the Administrative Agent at any time the Borrower exercises its right of
set-off pursuant to this subsection (a) and shall set forth in such notice (A)
the name of the Defaulting Lender and the Defaulted Advance required to be made
by such Defaulting Lender and (B) the amount set off and otherwise applied in
respect of such Defaulted Advance pursuant to this subsection (a). Any portion
of such payment otherwise required to be made by the Borrower to or for the
account of such Defaulting Lender which is paid by the Borrower, after giving
effect to the amount set off and otherwise applied by the Borrower pursuant to
this subsection (a), shall be applied by the Administrative Agent as specified
in subsection (b) or (c) of this Section 2.15.
(b) In the event that, at any one time, (i) any Lender
Party shall be a Defaulting Lender, (ii) such Defaulting Lender shall owe a
Defaulted Amount to the Administrative Agent or any of the other Lender Parties
and (iii) the Borrower shall make any payment hereunder or under any other Loan
Document to the Administrative Agent for the account of such Defaulting Lender,
then the Administrative Agent may, on its behalf or on behalf of such other
Lender Parties and to the fullest extent permitted by applicable law, apply at
such time the amount so paid by the Borrower to or for the account of such
Defaulting Lender to the payment of each such Defaulted Amount to the extent
required to pay such Defaulted Amount. In the event that the Administrative
Agent shall so apply any such amount to the payment of any such Defaulted Amount
on any date, the amount so applied by the Administrative Agent shall constitute
for all purposes of this Agreement and the other Loan Documents payment, to such
extent, of such Defaulted Amount on such date. Any such amount so applied by the
Administrative Agent shall be retained by the Administrative Agent or
distributed by the Administrative Agent to such other Lender Parties, ratably in
accordance with the respective portions of such Defaulted Amounts payable at
such time to the Administrative Agent and such other Lender Parties and, if the
amount of such payment made by the Borrower shall at such time be insufficient
to pay all Defaulted Amounts owing at such time to the Administrative Agent and
the other Lender Parties, in the following order of priority:
(i) first, to the Administrative Agent for any Defaulted
Amount then owing to the Administrative Agent; and
(ii) second, to any other Lender Parties for any Defaulted
Amounts then owing to such other Lender Parties, ratably in accordance
with such respective Defaulted Amounts then owing to such other Lender
Parties.
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Any portion of such amount paid by the Borrower for the account of such
Defaulting Lender remaining, after giving effect to the amount applied by the
Administrative Agent pursuant to this subsection (b), shall be applied by the
Administrative Agent as specified in subsection (c) of this Section 2.15.
(c) In the event that, at any one time, (i) any Lender
Party shall be a Defaulting Lender, (ii) such Defaulting Lender shall not owe a
Defaulted Advance or a Defaulted Amount and (iii) the Borrower, the
Administrative Agent or any other Lender Party shall be required to pay or
distribute any amount hereunder or under any other Loan Document to or for the
account of such Defaulting Lender, then the Borrower or such other Lender Party
shall pay such amount to the Administrative Agent to be held by the
Administrative Agent, to the fullest extent permitted by applicable law, in
escrow or the Administrative Agent shall, to the fullest extent permitted by
applicable law, hold in escrow such amount otherwise held by it. Any funds held
by the Administrative Agent in escrow under this subsection (c) shall be
deposited by the Administrative Agent in an account with NationsBank, in the
name and under the control of the Administrative Agent, but subject to the
provisions of this subsection (c). The terms applicable to such account,
including the rate of interest payable with respect to the credit balance of
such account from time to time, shall be NationsBank's standard terms applicable
to escrow accounts maintained with it. Any interest credited to such account
from time to time shall be held by the Administrative Agent in escrow under, and
applied by the Administrative Agent from time to time in accordance with the
provisions of, this subsection (c). The Administrative Agent shall, to the
fullest extent permitted by applicable law, apply all funds so held in escrow
from time to time to the extent necessary to make any Advances required to be
made by such Defaulting Lender and to pay any amount payable by such Defaulting
Lender hereunder and under the other Loan Documents to the Administrative Agent
or any other Lender Party, as and when such Advances or amounts are required to
be made or paid and, if the amount so held in escrow shall at any time be
insufficient to make and pay all such Advances and amounts required to be made
or paid at such time, in the following order of priority:
(i) first, to the Administrative Agent for any amount then due
and payable by such Defaulting Lender to the Administrative Agent
hereunder;
(ii) second, to any other Lender Parties for any amount then
due and payable by such Defaulting Lender to such other Lender Parties
hereunder, ratably in accordance with such respective amounts then due
and payable to such other Lender Parties; and
(iii) third, to the Borrower for any Advance then required to
be made by such Defaulting Lender pursuant to a Commitment of such
Defaulting Lender.
In the event that any Lender Party that is a Defaulting Lender shall, at any
time, cease to be a Defaulting Lender, any funds held by the Administrative
Agent in escrow at such time with respect to such Lender Party shall be
distributed by the Administrative Agent to such Lender Party and applied by such
Lender Party to the Obligations owing to such Lender Party at such
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time under this Agreement and the other Loan Documents ratably in accordance
with the respective amounts of such Obligations outstanding at such time.
(d) The rights and remedies against a Defaulting Lender
under this Section 2.15 are in addition to other rights and remedies that the
Borrower may have against such Defaulting Lender with respect to any Defaulted
Advance and that the Administrative Agent or any Lender Party may have against
such Defaulting Lender with respect to any Defaulted Amount.
ARTICLE III
CONDITIONS PRECEDENT
SECTION 3.01. Conditions of Initial Credit Extensions. The
obligation of each Lender to make an Advance on the initial Credit Extension
Date and the obligation of the Issuing Bank to issue a Letter of Credit on the
initial Credit Extension Date are subject to the satisfaction of the following
conditions precedent before or concurrently with the making of such Advance or
the issuance of such Letter of Credit:
(a) The Merger shall have been consummated in accordance with
the terms of the Merger Agreement without any waiver or amendment
thereto (unless such amendment or waiver is not materially adverse to
the interests of the Lender Parties), and in compliance with all
applicable laws. The aggregate purchase price shall not be in excess of
approximately $276 million, including the refinancing of existing debt
and transaction expenses.
(b) The Borrower shall have received a net capital
contribution (including the rollover of existing equity interests by
WCAS and members of the Borrower's management) of at least $228.5
million in common equity (which shall consist of a net capital
contribution of at least (x) approximately $105.75 million in common
equity by KKR, (y) approximately $105.75 million in common equity by
WCAS and physician investors and (z) approximately $16.5 million in
common equity by members of the Borrower's management.
(c) The Administrative Agent shall be reasonably satisfied
that all Existing Debt, other than the Debt identified on Schedule
3.01(c) or permitted under Section 5.02(b)(i), (ii), (iv), (v), (viii),
(ix) or (x) (the "Surviving Debt"), has been prepaid, redeemed or
defeased in full or otherwise satisfied and extinguished.
(d) Before giving effect to the Merger and the other
transactions contemplated by this Agreement, there shall have occurred
no material adverse change in the business,
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assets, properties, operations, financial condition or prospects of the
Borrower and its Subsidiaries, taken as a whole, since September 30,
1997.
(e) There shall exist no action, suit, investigation,
litigation or proceeding affecting any Loan Party or any of its
Subsidiaries pending or threatened before any court, governmental
agency or arbitrator that (i) would reasonably be likely to have a
Material Adverse Effect or (ii) purports to affect the legality,
validity or enforceability of the Merger, this Agreement, any Working
Capital Notes or any other Loan Document or is reasonably likely to
impose materially burdensome conditions on the consummation of the
transactions contemplated hereby.
(f) All governmental and third party consents and approvals
necessary in connection with the Merger, the Loan Documents and the
Related Documents and the transactions contemplated thereby shall have
been obtained (without the imposition of any condition that is
reasonably likely to impose materially burdensome conditions on the
consummation of the transactions contemplated hereby) and shall remain
in effect except for any such consents and approvals, the absence of
which, either individually or in the aggregate, would not reasonably be
likely to have a Material Adverse Effect; all applicable waiting
periods under applicable law shall have expired without any action
being taken by any competent authority; and no law or regulation shall
be applicable that restrains, prevents or imposes materially adverse
conditions upon the Merger, the Loan Documents and the Related
Documents and the transactions contemplated thereby.
(g) The Administrative Agent shall have received the fees
referred to a separate letter agreement dated as of March 12, 1998
between the Borrower and the Administrative Agent.
(h) The Administrative Agent shall have received on or before
the initial Credit Extension Date the following, each dated such day
(unless otherwise specified), in form and substance reasonably
satisfactory to the Administrative Agent (unless otherwise specified)
and (except for the Working Capital Notes) in sufficient copies for
each Lender Party:
(i) if requested by a Lender prior to the Closing
Date, a Working Capital Note payable to the order of such
Lender.
(ii) Certified copies of the resolutions of the Board
of Directors of the Borrower and each other Loan Party
approving each Loan Document and Related Document to which it
is or is to be a party and the transactions contemplated
thereby, and of all documents evidencing other necessary
corporate action and governmental and other third party
approvals and consents, if any, with respect to the Merger,
this Agreement, the Working Capital Notes and each other Loan
Document.
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(iii) A copy of a certificate of the Secretary of
State of the jurisdiction of its incorporation, dated
reasonably near the initial Credit Extension Date, listing the
charter of the Borrower and each other Loan Party and each
amendment thereto on file in his office and certifying that
(A) such amendments are the only amendments to the Borrower's
or such other Loan Party's charter on file in his office, (B)
if applicable, the Borrower and each such other Loan Party
have paid all franchise taxes to the date of such certificate
and (C) if applicable, the Borrower and each other Loan Party
are duly incorporated and in good standing under the laws of
the State of the jurisdiction of its incorporation.
(iv) A certificate of the Borrower and each other
Loan Party, signed on behalf of the Borrower and such other
Loan Party by its President or a Vice President and its
Secretary or any Assistant Secretary, dated the initial Credit
Extension Date (the statements made in which certificate shall
be true on and as of the date of the initial Credit Extension
Date), certifying as to (A) the absence of any amendments to
the charter of the Borrower or such other Loan Party since the
date of the certificate referred to in Section 3.01 (h)(iii),
(B) a true and correct copy of the bylaws of the Borrower and
such other Loan Party as in effect on the date of the initial
Credit Extension Date, (C) the absence of any proceeding for
the dissolution or liquidation of the Borrower or such other
Loan Party, (D) the truth and accuracy of the representations
and warranties contained in the Loan Documents in all material
respects as though made on and as of the date of the initial
Credit Extension Date, (E) the absence of any event occurring
and continuing, or resulting from the initial Credit Extension
Date, that constitutes a Default.
(v) A certificate of the Secretary or an Assistant
Secretary of the Borrower and each other Loan Party certifying
the names and true signatures of the officers of the Borrower
and such other Loan Party authorized to sign this Agreement,
the Working Capital Notes, each other Loan Document and each
Related Document to which they are or are to be parties and
the other documents to be delivered hereunder and thereunder.
(vi) A pledge agreement in substantially the form of
Exhibit E hereto (together with each other pledge agreement or
Pledge Agreement Supplement delivered pursuant to Section
5.01(h), in each case as amended, supplemented or otherwise
modified from time to time in accordance with its terms, the
"Pledge Agreement"), duly executed by the Parent, the Borrower
and each Guarantor, together with:
(A) certificates representing 100% of the
issued and outstanding Capital Stock owned by the
Borrower and the Guarantors of all of the Guarantor
Subsidiaries, accompanied by undated stock powers
executed in
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blank, and instruments evidencing the Pledged Debt
referred to therein indorsed in blank,
(B) copies of proper financing statements,
to be duly filed on or before the initial Credit
Extension Date under the Uniform Commercial Code of
all jurisdictions that the Administrative Agent may
deem necessary or desirable in order to perfect and
protect the first priority liens and security
interests created under the Pledge Agreement,
covering the Collateral described in the Pledge
Agreement,
(C) completed requests for information,
dated on or before the initial Credit Extension Date,
listing all other effective financing statements
filed in the jurisdictions referred to in clause (B)
above that name the Parent, the Borrower or any other
Loan Party as debtor, together with copies of such
other financing statements,
(D) evidence of the completion of all other
recordings and filings of or with respect to the
Pledge Agreement that the Administrative Agent may
reasonably deem necessary or desirable in order to
perfect and protect the Liens created thereby, and
(E) evidence that all other action that the
Administrative Agent may reasonably deem necessary or
desirable in order to perfect and protect the first
priority liens and security interests created under
the Pledge Agreement has been taken.
(vii) A guaranty in substantially the form of Exhibit
F hereto (together with each other guaranty or Guaranty
Supplement delivered pursuant to Section 5.0 l(h), in each
case as amended, supplemented or otherwise modified from time
to time in accordance with its terms, the "Guaranty"), duly
executed by each of the Guarantors.
(viii) Certified copies of each of the Related
Documents, duly executed by the parties thereto and in form
and substance satisfactory to the Lender Parties, together
with all material agreements, instruments and other documents
delivered in connection therewith.
(ix) A pro forma balance sheet of the Borrower and
its Subsidiaries as of March 31, 1998 after giving effect to
the Merger and the other transactions contemplated hereby and
reflecting estimated purchase price accounting adjustments,
and such other information relating to the Merger as the
Administrative Agent may reasonably require.
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(x) Certificates, in substantially the form of
Exhibit H hereto, respectively, attesting to the Solvency of
each of the Loan Parties after giving effect to the Merger and
the other transactions contemplated hereby, from the chief
financial officer of the Borrower or a nationally recognized
valuation firm satisfactory to the Administrative Agent.
(xi) (A) A favorable opinion of Xxxxx & Xxx Xxxxx,
counsel for the Loan Parties, in substantially the form of
Exhibit G-1 hereto, (B) a favorable opinion of Simpson,
Thacher & Xxxxxxxx, special counsel for the Loan Parties, in
substantially the form of Exhibit G-2 hereto and (C) a
favorable opinion of Mariscal, Weeks, XxXxxxxx & Xxxxxxxxxxx,
P.A., special Arizona counsel for the Loan Parties, in
substantially the form of Exhibit G-3 hereto.
(xii) A favorable opinion of Shearman & Sterling,
counsel for the Administrative Agent, in form and substance
satisfactory to the Administrative Agent.
SECTION 3.02. Conditions Precedent to Each Borrowing and
Issuance. The obligation of each Lender to make an Advance (other than a Letter
of Credit Advance made by the Issuing Bank or a Working Capital Lender pursuant
to Section 2.03(c) on the occasion of each Borrowing (including the initial
Credit Extension Date), and the obligation of the Issuing Bank to issue a Letter
of Credit (including the initial issuance) or renew a Letter of Credit, shall be
subject to the further conditions precedent that on the date of such Borrowing
or issuance or renewal (a) the following statements shall be true in all
material respects (and each of the giving of the applicable Notice of Borrowing,
Notice of Issuance or Notice of Renewal and the acceptance by the Borrower of
the proceeds of such Borrowing or of such Letter of Credit or the renewal of
such Letter of Credit shall constitute a representation and warranty by the
Borrower that both on the date of such notice and on the date of such Borrowing
or issuance or renewal such statements are true):
(i) the representations and warranties contained in each Loan
Document are correct in all material respects on and as of such date,
before and after giving effect to such Borrowing or issuance or renewal
and to the application of the proceeds therefrom, as though made on and
as of such date, other than any such representations or warranties
that, by their terms, refer to a specific date other than the date of
such Borrowing or issuance or renewal, in which case, as of such
specific date; and
(ii) no Default has occurred and is continuing, or would
result from such Borrowing or issuance or renewal or from the
application of the proceeds therefrom.
SECTION 3.03. Determinations Under Section 3.01. For purposes
of determining compliance with the conditions specified in Section 3.01, each
Lender Party shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or
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other matter required thereunder to be consented to or approved by or acceptable
or satisfactory to the Lender Parties unless an officer of the Administrative
Agent responsible for the transactions contemplated by the Loan Documents shall
have received notice from such Lender Party prior to the initial Credit
Extension Date specifying its objection thereto and, if a Borrowing occurs on
the initial Credit Extension Date, such Lender Party shall not have made
available to the Administrative Agent such Lender Party's ratable portion of
such Borrowing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower.
The Borrower represents and warrants as follows:
(a) Loan Parties - Due Organization. Good Standing: Corporate
Power and Authority: Capital Stock. Each Loan Party (i) is a
corporation duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation, (ii) is duly
qualified and in good standing as a foreign corporation in each other
jurisdiction in which it owns or leases property or in which the
conduct of its business requires it to so qualify or be licensed except
where the failure to be so qualified or in good standing could not be
reasonably expected to have a Material Adverse Effect and (iii) has all
requisite corporate power and authority (including, without limitation,
all material governmental licenses, permits and other approvals) to own
or lease and operate its properties and to carry on its business as now
conducted and as proposed to be conducted except to the extent that the
absence of such requisite corporate power and authority could not be
reasonably expected to have a Material Adverse Effect. All of the
outstanding capital stock of the Borrower has been validly issued, is
fully paid and non-assessable and is owned by the Parent free and clear
of all Liens, except those created under the Collateral Documents.
(b) Loan Parties' Subsidiaries - Due Organization; Good
Standing; Corporate Authorization and Authority; Capital Stock. Set
forth on Schedule 4.01(b) hereto is a complete and accurate list of all
Subsidiaries of each Loan Party, showing as of the date hereof (as to
each such Subsidiary) the jurisdiction of its incorporation, the number
of shares of each class of capital stock authorized, and the number
outstanding, on the date hereof and the percentage of the outstanding
shares of each such class owned (directly or indirectly) by such Loan
Party and the number of shares covered by all outstanding options,
warrants, rights of conversion or purchase and similar rights at the
date hereof. Each Loan Party's Subsidiary (i) is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, (ii) is duly qualified and in good
standing as a foreign corporation in each other jurisdiction in which
it owns or leases property or in which the conduct of its business
requires it to so qualify or be
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licensed except where the failure to be so qualified or in good
standing could not be reasonably expected to have a Material Adverse
Effect and (iii) has all requisite corporate power and authority
(including, without limitation, all governmental licenses, permits and
other approvals) to own or lease and operate its properties and to
carry on its business as now conducted and as proposed to be conducted
except to the extent that the absence of such requisite corporate power
and authority could not be reasonably expected to have a Material
Adverse Effect.
(c) Due Authorization of Loan Documents; Non-Contravention,
Etc. The execution, delivery and performance by each Loan Party of each
Transaction Document to which it is or is to be a party, and the
consummation of the Merger and the other transactions contemplated
hereby, are within such Loan Party's corporate powers, have been duly
authorized by all necessary corporate action, and do not (i) contravene
such Loan Party's Constitutive Documents, (ii) violate any applicable
provision of any material Requirement of Law applicable to such Loan
Party or any of its material properties, or any material order,
injunction, writ or decree of any Governmental Authority to which such
Loan Party or any of its material properties is subject, (iii) conflict
with or result in the breach of, or constitute a default under, any
loan agreement, indenture, mortgage, deed of trust or other financial
instrument, or any material contract or agreement, binding on or
affecting any Loan Party, any of its Subsidiaries or any of their
material properties or (iv) except for the Liens created under the Loan
Documents, result in or require the creation or imposition of any Lien
upon or with respect to any of the properties of any Loan Party or any
of its Subsidiaries.
(d) Governmental and Third Party Approvals. No authorization
or approval or other action by, and no notice to or filing with, any
Governmental Authority or any other third party is required for (i) the
due execution, delivery, recordation, filing or performance by any Loan
Party of any Related Document to which it is or is to be a party, or
for the consummation of the Merger or the other transactions
contemplated by the Transaction Documents, (ii) the grant by any Loan
Party of the Liens granted by it pursuant to the Collateral Documents,
(iii) the perfection or maintenance of the Liens created under the
Collateral Documents (including the first priority nature thereof) or
(iv) the exercise by the Administrative Agent or any Lender Party of
its rights under the Loan Documents or the remedies in respect of the
Collateral pursuant to the Collateral Documents, except for the
authorizations, approvals, actions, notices and filings listed on
Schedule 4.01 (d) hereto, all of which have been duly obtained, taken,
given or made and are in full force and effect.
(e) Due Execution and Delivery: Binding Obligation. Each of
the Related Documents has been, duly executed and delivered by each
Loan Party party thereto and is the legal, valid and binding obligation
of each Loan Party party thereto, enforceable against such Loan Party
in accordance with its terms, except as may be limited by
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bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditor's rights generally or by general principles of
equity.
(f) Litigation. Etc. There is no action, suit, investigation,
litigation or proceeding affecting any Loan Party or any of its
Subsidiaries, including any Environmental Action, pending or, to the
knowledge of the Borrower, threatened before any court, governmental
agency or arbitrator that has or could reasonably be expected to have a
Material Adverse Effect.
(g) Historical Financial Statements. The Consolidated balance
sheet of the Borrower and its Subsidiaries as at September 30, 1997,
and the related Consolidated statement of income and Consolidated
statement of cash flows of the Borrower and its Subsidiaries for the
fiscal year then ended, accompanied by an unqualified opinion of Ernst
& Young LLP, independent public accountants, and the Consolidated
balance sheet of the Borrower and its Subsidiaries as at March 31,
1998, and the related Consolidated statement of income and Consolidated
statement of cash flows of the Borrower and its Subsidiaries for the
six months then ended, duly certified by the chief financial officer of
the Borrower, copies of which have been furnished to each Lender Party,
fairly present in all material respects, subject, in the case of said
balance sheet as at March 31, 1998, and said statements of income and
cash flows for the six months then ended, to year-end audit
adjustments, the Consolidated financial condition of the Borrower and
its Subsidiaries as at such dates and the Consolidated results of
operations of the Borrower and its Subsidiaries for the periods ended
on such dates, all in accordance with generally accepted accounting
principles applied on a consistent basis, and since September 30, 1997,
there has been no Material Adverse Change.
(h) Pro Forma Financial Statements. The Consolidated pro forma
balance sheet of the Borrower and its Subsidiaries as at March 31,
1998, certified by the chief financial officer of the Borrower, copies
of which have been furnished to each Lender Party, fairly present in
all material respects the Consolidated pro forma financial condition of
the Borrower and its Subsidiaries as at such date, giving effect to the
Merger and the other transactions contemplated hereby.
(i) Forecasts. The Consolidated forecasted balance sheet,
statement of income and statement of cash flows of the Borrower and its
Subsidiaries delivered to the Lender Parties pursuant to Section 5.03
were prepared in good faith on the basis of the assumptions stated
therein, which estimates and assumptions were believed to be reasonable
and fair in the light of conditions existing at the time made, it being
understood by the Lender Parties that such projections as to future
events are not to be viewed as facts and that actual results during the
period or periods covered by any such projections may differ from the
projected results.
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(j) Other Information. Neither the Information Memorandum nor
any other information, exhibit or report furnished on or prior to the
Closing Date by any Loan Party to the Administrative Agent or any
Lender Party in writing in connection with the negotiation of the Loan
Documents or pursuant to the terms of the Loan Documents, taken as a
whole, contained any untrue statement of a material fact or omitted to
state a material fact necessary to make the statements made herein and
therein, taken as a whole, not misleading at such time in light of the
circumstances in which the same were made, it being understood that for
purposes of this Section 4.01(j), such factual information does not
include projections and pro forma financial information.
(k) Compliance with Margin Retaliations. The Borrower is not
engaged in the business of extending credit for the purpose of
purchasing or carrying Margin Stock, and following application of the
proceeds of each Advance or drawing under each Letter of Credit, not
more than 25 percent of the value of the assets (either of the Borrower
only or of the Borrower and its Subsidiaries on a Consolidated basis)
subject to the provisions of Section 5.02(a) or 5.02(d) or subject to
any restriction contained in any agreement or instrument between the
Borrower and any Lender Party or any Affiliate of any Lender Party
relating to Debt within the scope of Section 6.01 (e) will be Margin
Stock.
(l) Investment Company Act. The Borrower is not an "investment
company," as such term is defined in the Investment Company Act of
1940, as amended.
(m) ERISA Compliance. Each Plan is in compliance with the
terms thereof and the applicable provisions of ERISA, the Code and any
applicable Requirement of Law; no Reportable Event has occurred (or is
reasonably likely to occur) with respect to any Plan; no Plan is
insolvent or in reorganization (or is reasonably likely to be insolvent
or in reorganization), and no written notice of any such insolvency or
reorganization has been given to the Borrower, any Subsidiary or any
ERISA Affiliate; no Plan (other than a multiemployer plan) has an
accumulated or waived funding deficiency (or is reasonably likely to
have such a deficiency); neither any Loan Party nor any ERISA Affiliate
has incurred (or is reasonably expected to incur) any liability to or
on account of a Plan pursuant to Section 409, 502(i), 502(1), 515,
4062, 4063, 4064, 4201 or 4204 of ERISA or Section 4971 or 4975 of the
Code or has been notified in writing that it will incur any liability
under any of the foregoing Sections with respect to any Plan; no
proceedings have been instituted (or are reasonably likely to be
instituted) to terminate or to reorganize any Plan or to appoint a
trustee to administer any Plan, and no written notice of any such
proceedings has been given to any Loan Party or any ERISA Affiliate;
and no lien imposed under the Internal Revenue Code or ERISA on the
assets of any Loan Party or any ERISA Affiliate exists on account of
any Plan (or is reasonably likely to exist) nor has any Loan Party or
any ERISA Affiliate been notified in writing that such a lien will be
imposed on the assets of any Loan Party or any ERISA Affiliate on
account of any Plan, except to the extent that a breach of any of the
foregoing representations and warranties in this Section 4.01 (m) would
not result, individually or in the aggregate, in an amount of
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liability that would be reasonably likely to have a Material Adverse
Effect. No Plan (other than a multiemployer plan) has an Unfunded
Current Liability that would, individually or when taken together with
any other liabilities referenced in this Section 4.01 (m), be
reasonably likely to have a Material Adverse Effect. With respect to
Plans that are multiemployer plans (as defined in Section 3(37) of
ERISA), the representations and warranties in this Section 4.01 (m),
other than any made with respect to (a) liability under Section 4201 or
4204 of ERISA or (b) liability for termination or reorganization of
such Plans under ERISA, are made to the best knowledge of the Borrower.
(n) Environmental Matters. (i) Other than instances of
noncompliance that could not reasonably be expected to have a Material
Adverse Effect, the Borrower and its Subsidiaries are in compliance
with all Environmental Laws in all jurisdictions in which the Borrower
and each of its Subsidiaries are currently doing business (including,
without limitation, having obtained all material Environmental Permits
required under Environmental Laws.
(ii) Neither the Borrower nor any of its Subsidiaries has
treated, stored, transported or disposed of Hazardous Materials at or
from any currently or formerly owned real estate or facility relating
to its business in a manner that could reasonably be expected to have a
Material Adverse Effect.
(o) Title to Properties. The Borrower and each of its
Subsidiaries has good title to, or leasehold interests in, all property
necessary for the conduct of their respective businesses free and clear
of all Liens (other than any Liens permitted by this Agreement), except
where the failure to have such good title or leasehold interests could
not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(p) Taxes. The Borrower, its Subsidiaries and all other
corporations with whom the Borrower or any Subsidiary join in the
filing of a consolidated return have filed all Federal income tax
returns and other material tax returns and reports, domestic and
foreign, required to be filed, and have paid all material taxes,
assessments, fees and other governmental charged levied or imposed upon
them or their properties, income or assets otherwise due and payable,
except those not yet delinquent or which are being contested in good
faith. The Borrower, each of its Subsidiaries and each such other
corporation with whom the Borrower or any Subsidiary joins in the
filing of a consolidated return have paid, or have provided adequate
reserves (in the good faith judgment of the management of the Borrower)
in accordance with GAAP for the payment of all such material taxes,
assessments, fees and charges relating to all prior taxable years and
the current taxable year of the Borrower, each of its Subsidiaries and
each such other corporation with whom the Borrower or any Subsidiary
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joins in the filing of a consolidated return. To the best knowledge of
the Borrower, there is no proposed tax assessment against the Borrower,
any Subsidiary or any such other corporation with whom the Borrower or
any Subsidiary joins in the filing of a consolidated return that could
reasonably be expected to have a Material Adverse Effect.
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any Advance or
any other Obligation of any Loan Party under any Loan Document shall remain
unpaid, any Letter of Credit shall be outstanding or any Lender Party shall have
any Commitment hereunder, the Borrower will:
(a) Compliance with Laws. Etc. Comply, and cause each of its
Subsidiaries to comply, in all material respects, with all applicable
statutes, regulations and other Requirements of Law, such compliance to
include, without limitation, compliance with ERISA and Environmental
Laws, except such as may be contested in good faith or as to which a
bona fide dispute may exist and except to the extent that noncompliance
therewith could not reasonably be expected to have a Material Adverse
Effect.
(b) Payment of Taxes. Etc. Pay and discharge, and cause each
of its Subsidiaries to pay and discharge, before the same shall become
delinquent, (i) all material taxes, assessments and governmental
charges or levies imposed upon it or upon its property prior to the
date on which material penalties attach thereto and (ii) all lawful
material claims that, if unpaid, might by law become a material Lien
upon its property; provided, however, that neither the Borrower nor any
of its Subsidiaries shall be required to pay or discharge any such tax,
assessment, charge or claim that is being contested in good faith and
by proper proceedings and as to which appropriate reserves (in the good
faith judgment of the management of the Borrower or such Subsidiary)
are being maintained in accordance with GAAP, unless and until any Lien
resulting therefrom attaches to its property and an execution,
foreclosure or similar proceeding shall have been commenced which, if
determined adversely to the Borrower or any of its Subsidiaries would,
either individually or together with all other such Liens, reasonably
be expected to have a Material Adverse Effect.
(c) Maintenance of Insurance. Maintain, and cause each of its
Subsidiaries to maintain, insurance with insurance companies or
associations that the Borrower believes are responsible and reputable
at the time the relevant coverage is placed or renewed, in such amounts
and covering such risks (and with such risk retentions) as is usually
carried by companies engaged in similar businesses and owning similar
properties in the same general areas in which the Borrower or such
Subsidiary operates.
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(d) Preservation of Corporate Existence. Etc. Preserve and
maintain, and cause each of its Subsidiaries to preserve and maintain,
its existence, corporate rights and franchises, except to the extent
that failure to do so could not reasonably be expected to have a
Material Adverse Effect; provided, however, that the Borrower and its
Subsidiaries may consummate the Merger and any other merger or
consolidation permitted under Section 5.02(c) or any sale or
disposition permitted under Section 5.02(d); provided further that
neither the Borrower nor any of its Subsidiaries shall be required to
preserve any right, permit, license, approval, privilege or franchise
if the Board of Directors of the Borrower or such Subsidiary shall
determine that the preservation thereof is no longer desirable in the
conduct of the business of the Borrower or such Subsidiary, as the case
may be, and that the loss thereof is not disadvantageous in any
material respect to the Borrower, such Subsidiary or the Lender
Parties.
(e) Visitation Rights. At any reasonable time and from time to
time, upon reasonable notice and during normal business hours, permit
officers and designated representatives of the Administrative Agent or
the Required Lenders, to examine and make copies of and abstracts from
the records and books of account of, and visit the properties of, the
Borrower and any of its Subsidiaries, and to discuss the affairs,
finances and accounts of the Borrower and any of its Subsidiaries with
any of their officers or directors and with their independent certified
public accountants, provided that the Borrower may, if it so chooses,
be present at or participate in any such discussion.
(f) Maintenance of Properties, Etc. Maintain and preserve, and
cause each of its Subsidiaries to maintain and preserve, all of its
properties that are used or useful in the conduct of its business in
good working order and condition, ordinary wear and tear excepted, in
each case consistent with past practice, and will from time to time
make or cause to be made all appropriate repairs, renewals and
replacements thereof, except where the failure to do so would not
reasonably be likely to have a Material Adverse Effect.
(g) Transactions with Affiliates. Conduct, and cause each of
its Subsidiaries to conduct, all transactions otherwise permitted under
the Loan Documents with any of their Affiliates (other than any
Subsidiary or Included Entity) on terms that are fair and reasonable
and no less favorable to the Borrower or such Subsidiary than it would
obtain in a comparable arm's-length transaction with a Person not an
Affiliate, other than (i) reasonable and customary fees paid to members
of the board of directors of the Borrower and/or its Subsidiaries and
(ii) the payment of customary annual fees to KKR and/or its Affiliates
for management, consulting and financial services rendered to the
Borrower and its Subsidiaries and investment banking fees paid to KKR
and/or its Affiliates for services rendered in connection with
divestitures, acquisitions and financings and other transactions.
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(h) Covenant to Guarantee Obligations and Give Security. Upon
the formation or acquisition of any new direct or indirect Guarantor
Subsidiaries by any Loan Party, then the Borrower shall, in each case
at the Borrower's expense:
(i) in connection with the formation or acquisition
or a Guarantor Subsidiary, within 20 days after such formation
or acquisition, cause each such Guarantor Subsidiary, to duly
execute and deliver to the Administrative Agent a Guaranty
Supplement under which such Subsidiary guarantees payment of
all of the obligations of the Borrower under the Loan
Documents,
(ii) within 20 days after any such formation or
acquisition, cause the Borrower or the applicable Subsidiary
to pledge the stock of such Guarantor Subsidiary and to
execute and deliver a Pledge Agreement Supplement covering
such stock or a new pledge agreement in substantially the form
of the Pledge Agreement or otherwise in form and substance
satisfactory to the Administrative Agent, pledging 100% of the
issued and outstanding Capital Stock owned by the Borrower and
its Subsidiaries in such Guarantor Subsidiary, together with
delivery to the Administrative Agent of certificates
representing such pledged stock accompanied by undated stock
powers executed in blank,
(iii) within 20 days after such request, take
whatever action (including, without limitation, the filing of
Uniform Commercial Code financing statements, the giving of
notices and the endorsement of notices on title documents) as
may be reasonably necessary or advisable in the opinion of the
Administrative Agent to vest in the Administrative Agent (or
in any representative of the Administrative Agent designated
by it) valid and subsisting Liens on the properties purported
to be subject to the Pledge Agreement Supplement or pledge
agreement delivered pursuant to this Section 5.01 (h),
enforceable against all third parties in accordance with their
terms, and
(iv) within 60 days after such request, deliver to
the Administrative Agent a signed copy of a favorable opinion,
addressed to the Administrative Agent, of counsel for the
Borrower reasonably acceptable to the Administrative Agent as
to the matters contained in clauses (i), (ii) and (iii) above,
as to such guarantees and pledge agreements being legal, valid
and binding obligations of the Borrower and its Subsidiaries
enforceable in accordance with their terms and as to such
other matters as the Administrative Agent may reasonably
request.
(i) Change in Business. The Borrower shall, and shall cause
its Subsidiaries to, taken as a whole, engage primarily in (a) the
lines of business carded on by the Borrower and its Subsidiaries on the
Closing Date and/or (b) businesses or activities reasonably similar
thereto or a reasonable extension, development or expansion thereof or
ancillary thereto.
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SECTION 5.02. Negative Covenants. So long as any Advance or
any other Obligation of any Loan Party under any Loan Document shall remain
unpaid, any Letter of Credit shall be outstanding or any Lender Party shall have
any Commitment hereunder, the Borrower will not, at any time:
(a) Liens, Etc. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to
exist, any Lien on or with respect to any of its properties of any
character (including, without limitation, accounts) whether now owned
or hereafter acquired, except:
(i) Liens created under the Loan Documents;
(ii) Permitted Liens;
(iii) Liens existing on the date hereof and described
on Schedule 5.02(a) hereto;
(iv) purchase money Liens upon or in real property or
equipment acquired or held by the Borrower or any of its
Subsidiaries to secure the purchase price of such property or
equipment or Liens to secure Debt incurred solely for the
purpose of financing the acquisition, construction or
improvement of any such property or equipment to be subject to
such Liens, or Liens existing on any such property or
equipment at the time of acquisition (other than any such
Liens created in contemplation of such acquisition that do not
secure the purchase price), or extensions, renewals or
replacements of any of the foregoing for the same or a lesser
amount; provided, however, that no such Lien shall extend to
or cover any property other than the property or equipment
being acquired, constructed or improved (except that, in the
case of Debt of a Subsidiary that owns, operates or manages a
hospital, medical practice or diagnostic facility (other than
Diagnostics and Physician Management), the holder of such Debt
may have a Lien on the other assets of such hospital, medical
practice or diagnostic facility (as the case may be), and no
such extension, renewal or replacement shall extend to or
cover any property not theretofore subject to the Lien being
extended, renewed or replaced; provided further, that if such
Lien is incurred by the Borrower, the aggregate principal
amount of the Debt secured by such Liens shall not exceed the
aggregate amount permitted under Section 5.02(b)(iv);
(v) Liens arising in connection with Capitalized
Leases permitted under Section 5.02(b)(v); provided that no
such Lien shall extend to or cover any Collateral or assets
other than the assets subject to such Capitalized Leases;
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(vi) Liens on assets of any Subsidiary that owns,
operates or manages a hospital, medical practice or diagnostic
facility securing Debt under a working capital facility for
such Subsidiary;
(vii) Liens on property of a Person existing at the
time such Person is merged into or consolidated with the
Borrower or any Subsidiary of the Borrower or becomes a
Subsidiary of the Borrower; provided that such Liens were not
created in contemplation of such merger, consolidation or
investment and do not extend to any assets other than those of
the Person merged into or consolidated with the Borrower or
such Subsidiary or acquired by the Borrower or such
Subsidiary;
(viii) other Liens affecting property with an
aggregate fair value not to exceed $15,000,000, provided that
no such Lien shall extend to or cover any Collateral; and
(ix) the replacement, extension or renewal of any
Lien permitted hereunder upon or in the same property
theretofore subject thereto or the replacement, extension or
renewal (without increase in the amount or change in any
direct or contingent obligor) of the Debt secured thereby
(except as expressly permitted hereunder).
(b) Debt. Create, incur, assume or suffer to exist, or permit
any of its Subsidiaries to create, incur, assume or suffer to exist,
any Debt, except:
(i) Debt in respect of Hedge Agreements designed to
hedge against fluctuations in interest rates incurred in the
ordinary course of business and consistent with prudent
business practice;
(ii) (A) Debt owed to any other Loan Party, which
Debt (x) shall constitute Pledged Debt and (y) shall be
evidenced by promissory notes and such promissory notes shall
be pledged as security for the Obligations under the Loan
Documents of the holder thereof and delivered to the
Administrative Agent pursuant to the terms of the Pledge
Agreement; and (B) Debt set forth on Schedule 5.02(b)
(iii) Debt under the Loan Documents;
(iv) (A) in the case of Liens permitted by Section
5.02(a)(iv) and Section 5.02(a)(vi) and incurred by a
Subsidiary of the Borrower (other than Diagnostics and
Physician Management), Debt secured by such Liens and (B) in
the case of other Liens permitted by Section 5.02(a)(iv)
incurred by the Borrower,
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Debt not to exceed (together with the Debt permitted by clause
(xi) below) an aggregate amount equal to $25,000,000 at any
time outstanding;
(v) Capitalized Leases entered into by Subsidiaries
of the Borrower (other than Diagnostics and Physician
Management), provided that each such Capitalized Lease relates
to the equipment used in a hospital, medical practice or
diagnostic facility;
(vi) the Surviving Debt, and any Debt extending the
maturity of, or refunding or refinancing, in whole or in part,
any Surviving Debt, provided that the principal amount of such
Surviving Debt shall not be increased above the principal
amount thereof outstanding immediately prior to such
extension, refunding or refinancing, and the direct and
contingent obligors therefor shall not be changed, as a result
of or in connection with such extension, refunding or
refinancing;
(vii) Debt of any Person existing at the time such
Person is merged into or consolidated with, or acquired by,
the Borrower or any Subsidiary or becomes a Subsidiary of the
Borrower in accordance with the provisions of Section
5.02(e)(x); provided, however, that such Debt was not incurred
in contemplation of such merger, consolidation or investment;
provided further that neither the Borrower nor any Subsidiary
(other than such Person or the Subsidiary with which such
Person is merged) is liable for such Debt (except as otherwise
permitted by the other provisions of this Section 5.02(b));
(viii) endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary
course of business;
(ix) Debt consisting of Contingent Obligations in the
ordinary course of business in respect of the Obligations of
suppliers, customers, franchisees and licensees of the
Borrower and its Subsidiaries;
(x) Debt consisting of Contingent Obligations in
respect of Debt of the Subsidiaries of the Borrower (to the
extent such Debt is permitted under the terms of this
Agreement) and the Included Entities;
(xi) other Debt of the Borrower (together with the
Debt permitted by clause (iv)(B) above) outstanding in an
aggregate amount not to exceed $25,000,000 at any time
outstanding;
(xii) other Debt of the Borrower outstanding in an
aggregate amount not to exceed $50,000,000 at any time
outstanding, provided that the proceeds of such Debt shall be
advanced by the Borrower to its Subsidiaries for the
acquisition or construction of a hospital, medical practice or
diagnostic facility or shall be used to
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refinance Debt assumed in connection with the acquisition of a
hospital, medical practice or diagnostic facility;
(xiii) Debt of Diagnostics and Physician Management
in an aggregate principal amount not to exceed $20,000,000;
and
(xiv) other Debt (other than intercompany Debt) of
the Subsidiaries of the Borrower (other than Diagnostics and
Physician Management).
(c) Mergers. Etc. Merge into or consolidate with any Person or
permit any Person to merge into it, or permit any of its Subsidiaries
to do so, except that (i) the Borrower and its Subsidiaries may
consummate the Merger, (ii) any Subsidiary of the Borrower may merge
into or consolidate with any other Subsidiary of the Borrower, provided
that, in the case of any such merger or consolidation, the Person
formed by such merger or consolidation shall be a Subsidiary, (iii) in
connection with any acquisition permitted under Section 5.02(e), any
Subsidiary of the Borrower may merge into or consolidate with any other
Person or permit any other Person to merge into or consolidate with it;
provided that the Person formed by such merger or consolidation shall
be a Subsidiary of the Borrower, and (iv) any of the Borrower's
Subsidiaries may merge into the Borrower; provided, however, that in
each case, immediately after giving effect thereto, no event shall
occur and be continuing that constitutes a Default and, in the case of
any such merger or consolidation to which any Loan Party is a party,
the corporation formed by such consolidation or into which such Loan
Party shall be merged shall, at the effective time of such merger or
consolidation, (A) assume such Loan Party's Obligations under the Loan
Documents and performance of such Loan Party's covenants under the Loan
Documents to which it is a party in a writing satisfactory in form and
substance to the Required Lenders and (B) if a party to the Pledge
Agreement, take or have taken all action required by Section 6 of the
Pledge Agreement, and take or have taken such other action as may be
necessary or desirable, or as the Administrative Agent may request, in
order to preserve the Lien, and continue the perfection thereof with
the same priority, as granted and provided for or purported to be
granted and provided for by the Pledge Agreement.
(d) Sales, Etc., of Assets. Sell, lease, transfer or otherwise
dispose of, or permit any of its Subsidiaries to sell, lease, transfer
or otherwise dispose of, any assets, or grant any option or other right
to purchase, lease or otherwise acquire any assets, except:
(i) sales, transfers or other dispositions of used or
surplus equipment, vehicles, inventory or other assets in the
ordinary course of its business,
(ii) in a transaction authorized by subsection (c) of
this Section,
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(iii) (A) sales of assets for fair value in an
aggregate amount not to exceed $65,000,000 during the term of
this Agreement and (B) the sale of the hospital located in
Tucson, Arizona, and
(iv) any Subsidiary may sell or otherwise transfer
its assets (upon voluntary liquidation or otherwise) to the
Borrower, the Borrower or any Loan Party may sell or otherwise
transfer its assets (upon voluntary liquidation or otherwise)
to any Loan Party and any Subsidiary (other than a Loan Party)
may sell or otherwise transfer its assets (upon voluntary
liquidation or otherwise) to the Borrower or any Subsidiary,
provided that in the case of sales of assets pursuant to clause (iii) above, the
Borrower shall, on the date of receipt by the Borrower or any of its
Subsidiaries of the Net Cash Proceeds from such sale, prepay the Advances
pursuant to, and in the amount set forth in, Section 2.06(b)(i), as specified
therein.
(e) Investments in Other Persons. Make or hold, or permit any
of its Subsidiaries to make or hold, any Investment in any Person,
except,
(i) Investments existing on the date hereof and
described on Schedule 5.02(e) and any extensions, renewals or
reinvestments thereof, so long as the aggregate amount of all
Investments pursuant to this clause is not increased at any
time above the amount of such Investments existing on the date
hereof;
(ii) (A) loans and advances to employees in the
ordinary course of the business of the Borrower and its
Subsidiaries as presently conducted in an aggregate principal
amount for all such loans and advances not to exceed
$5,000,000 at any time outstanding and (B) other loans and
advances to employees for the purchase of capital stock of the
Borrower;
(iii) Investments by the Borrower and its
Subsidiaries in Cash Equivalents;
(iv) Investments in Hedge Agreements permitted under
Section 5.02(b)(i);
(v) Investments consisting of intercompany Debt
permitted under Section 5.02(b)(ii);
(vi) Investments received in connection with the
bankruptcy or reorganization of suppliers or customers and in
settlement of delinquent obligations of, and other disputes
with customers arising in the ordinary course of business;
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(vii) (A) Investments (other than Investments
consisting of loans or advances) in Subsidiaries and (B)
Investments by the Borrower and any other Loan Party in
Subsidiaries consisting of loans or advances to Subsidiaries
so long as, in the case of any Subsidiary that operates or
manages a hospital, such Investment (x) shall constitute
Pledged Debt and (y) shall be evidenced by promissory notes
and such promissory notes shall be pledged as security for the
obligations under the Loan Documents of the holder thereof and
delivered to the Administrative Agent pursuant to the terms of
the Pledge Agreement;
(viii) Investments by the Borrower or any other Loan
Party in Included Entities consisting of loans or advances to
Included Entities so long as such Investment (x) shall
constitute Pledged Debt and (y) shall be evidenced by
promissory notes and such promissory notes shall be pledged as
security for the obligations under the Loan Documents of the
holder thereof and delivered to the Administrative Agent
pursuant to the terms of the Pledge Agreement;
(ix) Investments (other than Investments consisting
of loans or advances) in Included Entities in an aggregate
amount for each Included Entity of up to $10,000,000;
(x) Investments constituting the acquisition (by
merger or otherwise) of a Person or the assets or a business
unit thereof so long as such Person becomes a direct or
indirect Subsidiary of the Borrower or a direct or indirect
Subsidiary of the Borrower holds such assets or business unit;
provided, however, that with respect to all such Investments
(x) immediately before and after giving effect thereto, no
Default shall have occurred and be continuing or would result
therefrom, (y) any business acquired or invested in pursuant
to this clause shall comply with the requirements of Section
5.01 (i), and (z) immediately after giving effect to the
acquisition of a company or a business pursuant to this
clause, the Borrower and its Subsidiaries shall be in pro
forma compliance with the covenants contained in Section 5.04,
calculated based on the relevant financial statements
delivered pursuant to Section 5.03(b) or (c), as though such
acquisition had occurred at the beginning of the Measurement
Period covered thereby, as evidenced by a certificate of the
chief financial officer of the Borrower furnished to the
Lender Parties demonstrating such compliance;
(xi) Investments constituting non-cash proceeds of
asset sales and dispositions to the extent permitted by
Section 5.02(d)(iii); and
(xii) additional Investments in an aggregate amount
not to exceed the sum of $25,000,00 plus the Available
Additional Amount outstanding at such time (after giving
effect to returns of capital thereon prior to the time of the
determination thereof).
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(f) Restricted Payments. Declare or pay any dividends,
purchase, redeem, retire, defease or otherwise acquire for value any
Capital Stock or any warrants, rights or options to acquire such
Capital Stock, now or hereafter outstanding, return any capital to its
stockholders as such, or permit any of its Subsidiaries to do any of
the foregoing or permit any of its Subsidiaries to purchase, redeem,
retire, defease or otherwise acquire for value any Capital Stock of the
Borrower or any warrants, rights or options to acquire such Capital
Stock, except that, so long as no Default shall have occurred and be
continuing at the time of any action described below or would result
therefrom:
(i) the Borrower may (A) declare and pay dividends
and distributions payable only in common stock of the Borrower
and (B) redeem in whole or in part any Capital Stock of the
Borrower for another class of Capital Stock or rights to
acquire Capital Stock of the Borrower for another class of
Capital Stock or rights to acquire Capital Stock of the
Borrower or with proceeds from substantially concurrent equity
contributions or issuances of new shares of Capital Stock,
provided that such other class of Capital Stock contains terms
and provisions at least as advantageous to the Lender Parties
as those contained in the Capital Stock redeemed thereby,
(ii) the Borrower or any Subsidiary may, and may pay
dividends to the Parent to, repurchase shares of its Capital
Stock (and/or options or warrants in respect thereof) held by
its officers, directors and employees so long as such
repurchase is pursuant to, and in accordance with the terms
of, management and/or employee stock plans, stock subscription
agreements or shareholder agreements, provided that any such
dividends paid to the Parent shall be used solely for such
purpose,
(iii) the Borrower may declare and pay cash dividends
to the Parent in amounts required for the Parent to pay taxes
and to pay administrative and similar expenses incurred in
connection with its ownership of the Borrower in an aggregate
amount, in the case of administrative and similar expenses,
not to exceed $1,000,000 in any Fiscal Year,
(iv) any wholly-owned Subsidiary of the Borrower may
declare and pay cash dividends to any Person entitled thereto,
(v) any non-wholly-owned Subsidiary may declare and
pay pro rata cash dividends and distributions to its
stockholders and/or equity owners, and
(vi) any non-wholly owned Subsidiary may repurchase
any portion of its Capital Stock pursuant to the terms of any
management, partnership, equity or other agreement affecting
the ownership or control of such Subsidiary.
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(g) Prepayments, Etc., of Debt. Prepay, redeem, purchase,
defease or otherwise satisfy prior to the scheduled maturity thereof in
any manner, or make any payment in violation of any subordination terms
of, any Subordinated Debt of the Borrower.
(h) Partnerships, Etc. Become a general partner in any general
or limited partnership or joint venture which is not a limited
liability entity.
(i) Speculative Transactions. Engage, or permit any of its
Subsidiaries to engage, in any transaction involving commodity options
or futures contracts or any similar speculative transactions other than
in the ordinary course of business.
(j) Capital Expenditures. Make, or permit any of its
Subsidiaries to make, any Capital Expenditures that would cause the
aggregate of all such Capital Expenditures made by the Borrower and its
Subsidiaries in any period set forth below to exceed the amount set
forth below for such period:
RELEVANT PERIOD AMOUNT
Closing Date - 9/30/98 $50,000,000
10/1/98 - 9/30/99 $100,800,000
10/1/99 - 9/30/00 $121,900,000
10/1/00 - 9/30/01 $125,500,000
10/1/01 - 9/30/02 $129,100,000
10/1/02 - 9/30/03 $132,700,000
10/1/03 - 9/30/04 $136,300,000
Notwithstanding anything to the contrary contained in this Section
5.02(j), to the extent that Capital Expenditures made by the Borrower
and its Subsidiaries during any Fiscal Year are less than the maximum
amount permitted to be made for such Fiscal Year in accordance with the
foregoing, 100% of such unused amount (each such amount, a
"carry-forward amount") may be carried forward to the immediately
succeeding Fiscal Year and utilized to make Capital Expenditures in
such succeeding Fiscal Year in the event the amount permitted in
accordance with the foregoing in such succeeding Fiscal Year has been
used (it being understood and agreed that no carry-forward amount may
be carried forward beyond the Fiscal Year immediately succeeding the
Fiscal Year in which it arose and that no portion of the carry-forward
amount for any Fiscal Year may be used until the entire amount of
Capital Expenditures permitted to be made in such Fiscal Year (without
giving effect to such carry-forward amount) shall be made). The
Borrower and its Subsidiaries may also make Capital Expenditures in any
Fiscal Year, in addition to the maximum amount permitted to be made for
such Fiscal Year in accordance with the foregoing, in an amount equal
to 50% of the maximum amount (each such amount, a "carry-back amount")
permitted to be made for the immediately succeeding Fiscal Year in
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accordance with the foregoing chart (it being understood and agreed
that the maximum amount of Capital Expenditures permitted to be made in
such next succeeding Fiscal Year, in accordance with the foregoing
chart, shall be reduced by the carry-back amount used in such prior
Fiscal Year). The Borrower and its Subsidiaries may also make Capital
Expenditures in respect of the Additional Hospital in an aggregate
amount not to exceed $60,000,000; provided, however, that, prior to the
making of any Capital Expenditure by the Borrower and its Subsidiaries
in respect of the Additional Hospital, the Borrower shall have
delivered to the Administrative Agent a certificate of a Responsible
Officer designating a specific hospital as the "Additional Hospital"
for purposes of this Section 5.02(j) and certifying as to the amount of
Capital Expenditures made by the Borrower and its Subsidiaries in
respect of the Additional Hospital.
(k) Formation of Subsidiaries. Organize or invest, or permit
any Subsidiary to organize or invest, in any new Subsidiary other than
(x) the organization of or investment in a Guarantor Subsidiary and (y)
the organization of or investment by a Guarantor Subsidiary, or a
Subsidiary that is a direct or indirect Subsidiary of a Guarantor
Subsidiary, in another Subsidiary.
SECTION 5.03. Reporting Requirements. So long as any Advance
or any other Obligation of any Loan Party under any Loan Document shall remain
unpaid, any Letter of Credit shall be outstanding or any Lender Party shall have
any Commitment hereunder, the Borrower will furnish to the Agent and the Lender
Parties:
(a) Default Notice. Promptly upon any Responsible Officer of
the Borrower or any of its Subsidiaries obtaining knowledge thereof,
notice of the occurrence of (i) each Default or (ii) any litigation or
governmental proceeding pending against the Borrower or any of its
Subsidiaries that could reasonably be expected to have a Material
Adverse Effect continuing on the date of such statement, a statement of
a Responsible Officer of the Borrower setting forth details of such
Default and the action that the Borrower has taken and proposes to take
with respect thereto.
(b) Annual Financials. (i) As soon as available and in any
event within 90 days after the end of each Fiscal Year in respect of
the Borrower, a copy of the annual audit report for such year for the
Borrower and its Subsidiaries, including therein Consolidated and
consolidating balance sheets of the Borrower and its Subsidiaries as of
the end of such Fiscal Year and Consolidated and consolidating
statements of income and a Consolidated statement of cash flows of the
Borrower and its Subsidiaries for such Fiscal Year, accompanied, in the
case of such Consolidated financial statements, by an opinion (which
shall be unqualified as to going concern and scope of audit) of Ernst &
Young LLP or other independent public accountants of recognized
standing, (ii) as soon as available and in any event within 90 days
after the end of each fiscal year of an Included Entity which has
received Medicare certification, a copy of the annual audit report for
such year for such Included Entity, including therein a Consolidated
balance sheet of such Included
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Entity and its Subsidiaries as of the end of such Fiscal Year and a
Consolidated statement of income and a Consolidated statement of cash
flows of such Included Entity and its Subsidiaries for such Fiscal
Year, accompanied by an opinion (which shall be unqualified as to going
concern and scope of audit) of independent public accountants of
recognized standing, and (iii) as soon as available and in any event
within 90 days after the end of each fiscal year of an Included Entity
which has not received Medicare certification, a copy of the annual
report for such Included Entity, including therein a Consolidated
balance sheet of such Included Entity and its Subsidiaries as of the
end of such Fiscal Year and a Consolidated statement of income and a
Consolidated statement of cash flows of such Included Entity and its
Subsidiaries for such Fiscal Year, duly certified by an officer of such
Included Entity in accordance with GAAP, together, in the case of
clause (i), with (x) a statement of such accounting firm to the Lender
Parties stating that in the course of the regular audit of the business
of the Borrower and its Subsidiaries, which audit was conducted by such
accounting firm in accordance with generally accepted auditing
standards, such accounting firm has obtained no knowledge that a
Default has occurred and is continuing, or if, in the opinion of such
accounting firm, a Default has occurred and is continuing, a statement
as to the nature thereof, (y) a schedule in form satisfactory to the
Administrative Agent of the computations used by such accountants in
determining, as of the end of such Fiscal Year, compliance with the
covenants contained in Section 5.04, provided that in the event of any
change in GAAP used in the preparation of such financial statements,
the Borrower shall also provide, if necessary for the determination of
compliance with Section 5.04, a statement of reconciliation conforming
such financial statements to GAAP and (z) a certificate of a
Responsible Officer of the Borrower stating that no Default has
occurred and is continuing or, if a default has occurred and is
continuing, a statement as to the nature thereof and the action that
the Borrower has taken and proposes to take with respect thereto.
(c) Quarterly Financials. (i) As soon as available and in any
event within 60 days after the end of each of the first three quarters
of each Fiscal Year in respect of the Borrower, Consolidated and
consolidating balance sheets of the Borrower and its Subsidiaries as of
the end of such quarter and Consolidated and consolidating statements
of income and a Consolidated statement of cash flows of the Borrower
and its Subsidiaries for the period commencing at the end of the
previous fiscal quarter and ending with the end of such fiscal quarter
and Consolidated and consolidating statements of income and a
Consolidated statement of cash flows of the Borrower and its
Subsidiaries for the period commencing at the end of the previous
Fiscal Year and ending with the end of such quarter, setting forth in
each case in comparative form the corresponding figures for the
corresponding period of the preceding Fiscal Year, all in reasonable
detail and duly certified (subject to year-end audit adjustments) by a
Responsible Officer of the Borrower as having been prepared in
accordance with GAAP (subject to year-end adjustments) and (ii) as soon
as available and in any event within 60 days after the end of each of
the first three quarters of each fiscal year of an Included Entity, a
Consolidated balance sheet of such Included Entity and its Subsidiaries
as of the end of such quarter and a Consolidated
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statement of income and a Consolidated statement of cash flows of such
Included Entity and its Subsidiaries for the period commencing at the
end of the previous fiscal quarter and ending with the end of such
fiscal quarter and a Consolidated statement of income and a
Consolidated statement of cash flows of such Borrower and its
Subsidiaries for the period commencing at the end of the previous
Fiscal Year and ending with the end of such quarter, setting forth in
each case in comparative form the corresponding figures for the
corresponding period of the preceding Fiscal Year, all in reasonable
detail and duly certified (subject to year-end audit adjustments) by an
officer of such Included Entity in accordance with GAAP, together, in
the case of clause (i), with (x) a certificate of said officer stating
that no Default has occurred and is continuing or, if a Default has
occurred and is continuing, a statement as to the nature thereof and
the action that the Borrower has taken and proposes to take with
respect thereto and (y) a schedule in form satisfactory to the
Administrative Agent of the computations used by the Borrower in
determining compliance with the covenants contained in Section 5.04,
provided that in the event of any change in GAAP used in the
preparation of such financial statements, the Borrower shall also
provide, if necessary for the determination of compliance with Section
5.04, a statement of reconciliation conforming such financial
statements to GAAP.
(d) Annual Forecasts. As soon as available and in any event no
later than 30 days after the beginning of each Fiscal Year, forecasts
prepared by management of the Borrower, in reasonable detail and in
form customarily prepared by management of the Borrower for its
internal use and setting forth an explanation for the principal
assumptions on which such forecasts were based, of balance sheets,
income statements and cash flow statements (in each case of the
Borrower and its Subsidiaries and the Included Entities) on a quarterly
basis for each Fiscal Year thereafter until the Termination Date.
(e) Securities Reports. Promptly after the sending or filing
thereof, copies of all regular, periodic and special reports, and all
registration statements, that any Loan Party or any of its Subsidiaries
files with the Securities and Exchange Commission or any governmental
authority that may be substituted therefor, or with any national
securities exchange (in each case to the extent not theretofore
delivered to the Lender Parties pursuant to this Agreement), and with
reasonable promptness such other information (financial or otherwise)
as the Administrative Agent on its own behalf or on behalf of any
Lender party may reasonably request in writing from time to time.
(f) ERISA. Promptly after any Loan Party or any ERISA
Affiliate obtains knowledge of the occurrence of any of the following
events that individually or in the aggregate, would be reasonably
likely to result in liability that would have a Material Adverse
Effect, a certificate of a Responsible Officer of the Borrower setting
forth details as to such occurrence and the action, if any, that any
Loan Party or any ERISA Affiliate is required or proposes to take,
together with any notices (required, proposed or otherwise) given to or
filed with or by or received by any Loan Party, any ERISA Affiliate,
the PBGC, a Plan participant (other than notices relating to an
individual
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participant's benefits) or the Plan administrator with respect thereto
that an ERISA Event has occurred or is reasonably likely to occur.
(g) Environmental Conditions. Promptly after obtaining
knowledge of any one or more of the following environmental matters,
unless such environmental matters would not, individually or when
aggregated with all other such matters, be reasonably expected to
result in a Material Adverse Effect:
(i) notice of any pending or threatened Environmental
Action against the Borrower or any of its Subsidiaries or any
Real Estate (as defined below);
(ii) notice of any condition or occurrence on any
Real Estate that (x) results in noncompliance by the Borrower
or any of its Subsidiaries with any applicable Environmental
Law or (y) could reasonably be anticipated to form the basis
of an Environmental Action against the Borrower or any of its
Subsidiaries or any Real Estate;
(iii) notice of any condition or occurrence on any
Real Estate that could reasonably be anticipated to cause such
Real Estate to be subject to any restrictions on the
ownership, occupancy, use or transferability of such Real
Estate under any Environmental Law; and
(iv) notice of the taking of any removal or remedial
action in response to the actual or alleged presence of any
Hazardous Material on any Real Estate.
All such notices shall describe in reasonable detail the nature of the
claim, investigation, condition, occurrence or removal or remedial
action and the Borrower's response thereto. The term "Real Estate"
shall mean land, buildings and improvements owned or leased by the
Borrower or any of its Subsidiaries, but excluding all operating
fixtures and equipment, whether or not incorporated into improvements.
SECTION 5.04. Financial Covenants. So long as any Advance or
any other Obligation of any Loan Party under any Loan Document shall remain
unpaid, any Letter of Credit shall be outstanding or any Lender Party shall have
any Commitment hereunder, the Borrower will:
(a) Leverage Ratio. Maintain at the end of each fiscal quarter
of the Borrower a Leverage Ratio of not more than the amount set forth
below for each four Fiscal Quarter period ending in the month set forth
below:
PERIOD ENDING IN RATIO
---------------- -----
September 1998 4.50:1
December 1998 4.75:1
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March 1999 4.75:1
June 1999 4.75:1
September 1999 4.75:1
December 1999 5.00:1
March 2000 4.75:1
June 2000 4.75:1
September 2000 4.50:1
December 2000 4.50:1
March 2001 4.50:1
June 2001 4.50:1
September 2001 4.25:1
December 2001 4.00:1
March 2002 4.00:1
June 2002 4.00:1
September 2002 4.00:1
December 2002 3.50:1
March 2003 3.50:1
June 2003 3.50:1
September 2003 3.50:1
December 2003 3.50:1
March 2004 3.50:1
June 2004 3.50:1
September 2004 3.50:1
December 2004 3.50:1
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(b) Interest Coverage Ratio. Maintain at the end of each
fiscal quarter of the Borrower an Interest Coverage Ratio of not less
than the amount set forth below for each four Fiscal Quarter period
ending in the month set forth below:
PERIOD ENDING RATIO
------------- -----
September 1998 3.25:1
December 1998 3.10:1
March 1999 3.10:1
June 1999 3.10:1
September 1999 2.70:1
December 1999 2.25:1
March 2000 2.25:1
June 2000 2.20:1
September 2000 2.25:1
December 2000 2.25:1
March 2001 2.25:1
June 2001 2.25:1
September 2001 2.25:1
December 2001 2.25:1
March 2002 2.25:1
June 2002 2.25:1
September 2002 2.50:1
December 2002 2.50:1
March 2003 2.50:1
June 2003 2.50:1
September 2003 2.50:1
December 2003 2.50:1
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March 2004 2.50:1
June 2004 2.50:1
September 2004 2.50:1
December 2004 2.50:1
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following
events ("Events of Default;") shall occur and be continuing:
(a) (i) the Borrower shall fail to pay any principal of any
Advance when the same shall become due and payable or (ii) the Borrower
shall fail to pay any interest on
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any Advance, or any Loan Party shall fail to make any other payment
under any Loan Document, in each case under this clause (ii) within
five days after the same becomes due and payable; or
(b) any representation or warranty made by any Loan Party (or
any of its officers) under or in connection with any Loan Document
shall prove to have been incorrect in any material respect on the date
as of which made or deemed made; or
(c) the Borrower shall fail to perform or observe any term,
covenant or agreement contained in Section 5.01(h), 5.02, 5.03(a)(i) or
5.04; or
(d) any Loan Party shall fail to perform or observe any other
term, covenant or agreement contained in any Loan Document on its part
to be performed or observed if such failure shall remain unremedied for
30 days after the date on which written notice thereof shall have been
given to the Borrower by the Administrative Agent or any Lender Party;
or
(e) any Loan Party or any of its Subsidiaries shall fail to
pay any principal of, premium or interest on or any other amount
payable in respect of any Debt that is outstanding in a principal
amount (or in the case of any Hedge Agreement, an Agreement Value) of
at least $10,000,000 either individually or in the aggregate (but
excluding Debt outstanding hereunder) of such Loan Party or such
Subsidiary (as the case may be), when the same becomes due and payable
(whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise), and such failure shall continue after the
applicable grace period, if any, specified in the agreement or
instrument relating to such Debt; or any other event shall occur or
condition shall exist under any agreement or instrument relating to any
such Debt and shall continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such event
or condition is to accelerate, or to permit the acceleration of, the
maturity of such Debt or otherwise to cause, or to permit the holder
thereof to cause, such Debt to mature; or any such Debt shall be
declared to be due and payable or required to be prepaid or redeemed
(other than by a regularly scheduled required prepayment or redemption
or a prepayment or redemption required thereunder other than as a
result of a default thereunder), purchased or defeased, or an offer to
prepay, redeem, purchase or defease such Debt shall be required to be
made, in each case prior to the stated maturity thereof; or
(f) any Loan Party or any of its Subsidiaries shall generally
not pay its debts as such debts become due, or shall admit in writing
its inability to pay its debts generally, or shall make a general
assignment for the benefit of creditors; or any proceeding shall be
instituted by or against any Loan Party or any of its Subsidiaries
seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an
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order for relief or the appointment of a receiver, trustee, or other
similar official for it or for any substantial part of its property
and, in the case of any such proceeding instituted against it (but not
instituted by it) that is being diligently contested by it in good
faith, either such proceeding shall remain undismissed or unstayed for
a period of 60 days or any of the actions sought in such proceeding
(including, without limitation, the entry of an order for relief
against, or the appointment of a receiver, trustee, custodian or other
similar official for, it or any substantial part of its property) shall
occur; or any Loan Party or any of its Subsidiaries or any Included
Entity shall take any corporate action to authorize any of the actions
set forth above in this subsection (f); or
(g) any judgment or order for the payment of money in excess
of $10,000,000 shall be rendered against any Loan Party or any of its
Subsidiaries (to the extent not paid or fully covered by insurance
provided by a carrier not disputing coverage) and any such judgments or
decrees shall not have been satisfied, vacated, discharged or stayed or
bonded pending appeal within 60 days from the entry thereof; or
(h) any provision of any Loan Document after delivery thereof
pursuant to Section 3.01 or 5.01(h) shall for any reason cease to be
valid and binding on or enforceable against any Loan Party to it, or
any such Loan Party shall so state in writing; or
(i) any Collateral Document after delivery thereof pursuant to
Section 3.01 or 5.01 (h) shall for any reason (other than pursuant to
the terms thereof) cease to create a valid and perfected first priority
lien on and security interest in the Collateral purported to be covered
thereby; or
(j) a Change of Control shall occur; or
(k) (i) any Plan shall fail to satisfy the minimum funding
standard required for any plan year or part thereof or a waiver of such
standard or extension of any amortization period is sought or granted
under Section 412 of the Internal Revenue Code; any Plan is or shall
have been terminated or is the subject of termination proceedings under
ERISA (including the giving of written notice thereof); an event shall
have occurred or a condition shall exist in either case entitling the
PBGC to terminate any Plan or to appoint a trustee to administer any
Plan (including the giving of written notice thereof); any Plan shall
have an accumulated funding deficiency (whether or not waived); or any
Loan Party or any ERISA Affiliate has incurred or is likely to incur a
liability to or on account of a Plan under Section 409, 502(i), 502(1),
515, 4062, 4063, 4064, 4069, 4201 or 4204 of ERISA or Section 4971 or
4975 of the Internal Revenue Code (including the giving of written
notice thereof); and (ii) there results from any event or events set
forth in clause (i) of this Section 701(1) the imposition of a lien,
the granting of a security interest, or a liability; and (iii) such
lien, security interest or liability will or would be reasonably likely
to result in a liability of any Loan Party or any ERISA Affiliate of
$20,000,000 or more;
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then, and in any such event, the Administrative Agent (i) shall at the request,
or may with the consent, of the Required Lenders, by notice to the Borrower,
declare the Commitments of each Lender Party and the obligation of each Lender
Party to make Advances (other than Letter of Credit Advances by the Issuing Bank
or a Lender pursuant to Section 2.03(c)) and of the Issuing Bank to issue
Letters of Credit to be terminated, whereupon the same shall forthwith
terminate, and (ii) shall at the request, or may with the consent, of the
Required Lenders, (A) by notice to the Borrower, declare the Working Capital
Notes, all interest thereon and all other amounts payable under this Agreement
and the other Loan Documents to be forthwith due and payable, whereupon the
Notes, all such interest and all such amounts shall become and be forthwith due
and payable, without presentment, demand, protest or further notice of any kind,
all of which are hereby expressly waived by the Borrower and (B) by notice to
the Issuing Bank, direct the Issuing Bank to deliver a Termination Notice to the
beneficiary of each Standby Letter of Credit issued by it, and the Issuing Bank
shall deliver such Termination Notices; provided, however, that in the event of
an actual or deemed entry of an order for relief with respect to any Loan Party
under the Federal Bankruptcy Code, (x) the Commitments of each Lender Party and
the obligation of each Lender Party to make Advances (other than Letter of
Credit Advances by the Issuing Bank or a Lender pursuant to Section 2.03 (c))
and of the Issuing Bank to issue Letters of Credit shall automatically be
terminated and (y) the Working Capital Notes, all such interest and all such
amounts shall automatically become and be due and payable, without presentment,
demand, protest or any notice of any kind, all of which are hereby expressly
waived by the Borrower.
SECTION 6.02. Actions in Respect of the Letters of Credit upon
Default. If any Event of Default shall have occurred and be continuing, the
Agent may, or shall at the request of the Required Lenders, irrespective of
whether it is taking any of the actions described in Section 6.01 or otherwise,
make demand upon the Borrower to, and forthwith upon such demand the Borrower
will, pay to the Agent on behalf of the Lender Parties in same day funds at the
Agent's office designated in such demand, for deposit in a cash collateral
account, securing the Obligations of the Borrower in respect of the Letter of
Credit Facility, in favor of the Collateral Agent on terms and conditions
satisfactory to the Administrative Agent, an amount equal to the aggregate
Available Amount of all Letters of Credit then out standing. If at any time the
Agent determines that any funds held in such cash collateral account are subject
to any right or claim of any Person other than the Agent and the Lender Parties
or that the total amount of such funds is less than the aggregate Available
Amount of all Letters of Credit, the Borrower will, forthwith upon demand by the
Agent, pay to the Agent, as additional funds to be deposited and held in such
cash collateral account, an amount equal to the excess of (a) such aggregate
Available Amount over (b) the total amount of funds, if any, then held in such
cash collateral account that the Administrative Agent determines to be free and
clear of any such right and claim. Upon the drawing of any Letter of Credit for
which funds are on deposit in such cash collateral account, such funds shall be
applied to reimburse the Issuing Bank or Lenders, as applicable, to the extent
permitted by applicable law.
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ARTICLE VII
THE AGENTS
SECTION 7.01. Authorization and Action. (a) Each Lender Party
(in its capacities as a Lender, the Issuing Bank (if applicable) and a potential
Hedge Bank) hereby appoints and authorizes the Administrative Agent to take such
action as agent on its behalf and to exercise such powers and discretion under
this Agreement and the other Loan Documents as are delegated to the
Administrative Agent by the terms hereof and thereof, together with such powers
and discretion as are reasonably incidental thereto. As to any matters not
expressly provided for by the Loan Documents (including, without limitation,
enforcement or collection of the Working Capital Notes), the Administrative
Agent shall not be required to exercise any discretion or take any action, but
shall be required to act or to refrain from acting (and shall be fully protected
in so acting or refraining from acting) upon the instructions of the Required
Lenders, and such instructions shall be binding upon all Lender Parties and all
holders of Working Capital Notes; provided, however, that the Administrative
Agent shall not be required to take any action (i) that exposes the
Administrative Agent to personal liability or that is contrary to this Agreement
or applicable Requirements of Law or (ii) as to which the Administrative Agent
has not received adequate security or indemnity (whether pursuant to Section
7.05 or otherwise). If the security or indemnity furnished to the Administrative
Agent for any purpose under or in respect of the Loan Documents shall, in the
good faith opinion of the Administrative Agent, be insufficient or become
impaired, then the Administrative Agent may require additional security or
indemnity and cease, or not commence, to follow the directions or take the
actions indemnified against until such additional security or indemnity is
furnished. The Administrative Agent hereby agrees to give to each Lender Party
prompt notice of each notice given to it by the Borrower pursuant to the terms
of this Agreement.
(b) The Administrative Agent shall also act as the
"collateral agent" under the Loan Documents, and each of the Lender Parties (in
its capacities as a Lender, the Issuing Bank (if applicable) and a potential
Hedge Bank) hereby appoints and authorizes the Administrative Agent to act as
the agent of such Lender for purposes of acquiring, holding and enforcing any
and all Liens on Collateral granted by any of the Loan Parties to secure any of
the Secured Obligations, together with such powers and discretion as are
reasonably incidental thereto. The Administrative Agent may from time to time in
its discretion appoint any of the other Lender Parties or any of the Affiliates
of a Lender Party to act as its co-agent or sub-agent for purposes of holding or
enforcing any Lien on the Collateral (or any portion thereof) granted under the
Collateral Documents or of exercising any rights and remedies thereunder at the
direction of the Administrative Agent. In this connection, the Administrative
Agent, as "collateral agent", and such co-agents and sub-agents shall be
entitled to the benefits of all provisions of this Article VII (including,
without limitation, Section 7.05, as though such co-agents or sub-agents were
the "collateral agent" under the Loan Documents) as if set forth in full herein
with respect thereto.
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(c) The Syndication Agent shall not have any powers or
discretion under this Agreement or any of the other Loan Documents other than
those bestowed upon it as a co-agent or sub-agent from time to time by the
Administrative Agent pursuant to subsection (b) of this Section 7.01, and each
of the Lender Parties hereby acknowledges that the Syndication Agent shall not
have any liability under this Agreement or any of the other Loan Documents.
SECTION 7.02. Administrative Agent's Reliance. Etc. Neither
the Administrative Agent nor any of its directors, officers, agents or employees
shall be liable for any action taken or omitted to be taken by it or them under
or in connection with the Loan Documents, except for its or their own gross
negligence or willful misconduct as determined in a final, nonappealable
judgment by a court of competent jurisdiction. Without limitation of the
generality of the immediately preceding sentence, the Administrative Agent: (a)
may treat the payee of any Working Capital Note as the holder thereof until the
Administrative Agent receives and accepts an Assignment and Acceptance entered
into by the Lender that is the payee of such Working Capital Note, as assignor,
and an Eligible Assignee, as assignee, as provided in Section 8.07; (b) may
consult with legal counsel (including counsel for any Loan Party), independent
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken in good faith by it in accordance with
the advice of such counsel, accountants or experts; (c) makes no warranty or
representation to any Lender Party and shall not be responsible to any Lender
Party for any statements, warranties or representations (whether written or
oral) made in or in connection with the Loan Documents; (d) shall not have any
duty to ascertain or to inquire as to the performance or observance of any of
the terms, covenants or conditions of any Loan Document on the part of any Loan
Party or to inspect the property or assets (including the books and records) of
any Loan Party; (e) shall not be responsible to any Lender Party for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of, or the perfection or priority of any lien or security interest created or
purported to be created under or in connection with, any Loan Document or any
other instrument or document furnished pursuant thereto; and (f) shall incur no
liability under or in respect of any Loan Document by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telegram,
telecopy or telex) believed by it to be genuine and signed or sent by the proper
party or parties.
SECTION 7.03. NationsBank, NMS and Affiliates. With respect to
its Commitments, the Advances made by it and the Working Capital Note or Working
Capital Notes issued to it, NationsBank shall have the same rights and powers
under the Loan Documents as any other Lender and may exercise the same as though
it were not the Administrative Agent; and the term "Lender Party" or "Lender
Parties" shall, unless otherwise expressly indicated, include NationsBank in its
individual capacity. NationsBank, NMS and their respective affiliates may accept
deposits from, lend money to, act as trustee under indentures of, accept
investment banking engagements from and generally engage in any kind of business
with, any Loan Party, any of its Subsidiaries and any Person who may do business
with or own securities of any Loan Party or any such Subsidiary, all as if
NationsBank and NMS were not the Agents and without any duty to account therefor
to the Lender Parties.
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SECTION 7.04. Lender Party Credit Decision. Each Lender Party
acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender Party and based on the financial
statements referred to in Section 4.01 and such other documents and information
as it has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement. Each Lender Party also acknowledges that it will,
independently and without reliance upon the Administrative Agent or any other
Lender Party and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement.
SECTION 7.05. Indemnification. (a) Each Lender Party severally
agrees to indemnify the Administrative Agent (to the extent not promptly
reimbursed by the Borrower) from and against such Lender Party's ratable share
(determined as provided below) of any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever that may be imposed on, incurred by, or
asserted against the Administrative Agent in any way relating to or arising out
of the Loan Documents or any action taken or omitted by the Administrative Agent
under the Loan Documents; provided, however, that no Lender Party shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the Administrative Agent's gross negligence or willful misconduct as
determined in a final, nonappealable judgment by a court of competent
jurisdiction. In the case of any claim, investigation, litigation or proceeding
for which indemnity under this Section 7.05(a) applies, such indemnity shall
apply whether or not such claim, investigation, litigation or proceeding is
brought by the Administrative Agent, any of the other Agents, any of the Lender
Parties or a third party. Without limitation of the foregoing, each Lender
severally agrees to reimburse the Administrative Agent promptly upon demand for
its ratable share of any costs and expenses (including, without limitation, fees
and expenses of counsel) payable by the Borrower under Section 8.04, to the
extent that the Administrative Agent is not promptly reimbursed for such costs
and expenses by the Borrower. For purposes of this Section 7.05(a), the Lender
Parties' respective ratable shares of any amount shall be determined, at any
time, according to the sum of (i) the aggregate principal amount of the Advances
outstanding at such time and owing to the respective Lender Parties, (ii) their
respective Pro Rata Shares of the aggregate Available Amount of all Letters of
Credit outstanding at such time and (iii) their respective Unused Working
Capital Commitments at such time; provided that the aggregate principal amount
of Letter of Credit Advances owing to the Issuing Bank shall be considered to be
owed to the Lenders ratably in accordance with their respective Working Capital
Commitments. If any Defaulted Advance shall be owing by any Defaulting Lender at
any time, such Lender's Commitment with respect to the Facility under which such
Defaulted Advance was required to have been made shall be considered to be
unused for purposes of this Section 7.05(a) to the extent of the amount of such
Defaulted Advance. The failure of any Lender Party
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to reimburse the Administrative Agent promptly upon demand for its ratable share
of any amount required to be paid by the Lender Party to the Administrative
Agent as provided herein shall not relieve any other Lender Party of its
obligation hereunder to reimburse the Administrative Agent for its ratable share
of such amount, but no Lender Party shall be responsible for the failure of any
other Lender Party to reimburse the Administrative Agent for such other Lender
Party's ratable share of such amount. Without prejudice to the survival of any
other agreement of any Lender Party hereunder, the agreement and obligations of
each Lender Party contained in this Section 7.05(a) shall survive the payment in
full of principal, interest and all other amounts payable hereunder and under
the other Loan Documents.
(b) Each Lender severally agrees to indemnify the Issuing
Bank (to the extent not promptly reimbursed by the Borrower) from and against
such Lender's Pro Rata Share of any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever that may be imposed on, incurred by, or
asserted against the Issuing Bank in any way relating to or arising out of the
Loan Documents or any action taken or omitted by the Issuing Bank under the Loan
Documents; provided, however, that no Lender shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the Issuing Bank's gross
negligence or willful misconduct as determined in a final, nonappealable
judgment by a court of competent jurisdiction. In the case of any claim,
investigation, litigation or proceeding for which indemnity under this Section
7.05(b) applies, such indemnity shall apply whether or not such claim,
investigation, litigation or proceeding is brought by the Issuing Bank, any of
the other Lender Parties or a third party. Without limitation of the foregoing,
each Lender severally agrees to reimburse the Issuing Bank promptly upon demand
for its Pro Rata Share of any costs and expenses (including, without limitation,
fees and expenses of counsel) payable by the Borrower under Section 8.04, to the
extent that the Issuing Bank is not promptly reimbursed for such costs and
expenses by the Borrower. The failure of any Lender to reimburse the Issuing
Bank promptly upon demand for its Pro Rata Share of any amount required to be
paid by the Lenders to the Issuing Bank as provided herein shall not relieve any
other Lender of its obligation hereunder to reimburse the Issuing Bank for its
Pro Rata Share of such amount, but no Lender shall be responsible for the
failure of any other Lender to reimburse the Issuing Bank for such other
Lender's Pro Rata Share of such amount. Without prejudice to the survival of any
other agreement of any Lender hereunder, the agreement and obligations of each
Lender contained in this Section 7.05(b) shall survive the payment in full of
principal, interest and all other amounts payable hereunder and under the other
Loan Documents.
SECTION 7.06. Successor Administrative Agent. The
Administrative Agent may resign at any time by giving written notice thereof to
the Lender Parties and the Borrower and may be removed at any time with or
without cause by the Required Lenders. Upon any such resignation or removal, the
Required Lenders shall have the right to appoint a successor Agent. If no
successor Administrative Agent shall have been so appointed by the Required
Lenders, and shall have accepted such appointment, within 30 days after the
retiring Administrative Agent's giving of notice of resignation or the Required
Lenders' removal of the retiring Administrative Agent, then the retiring
Administrative Agent may, on behalf of the Lender Parties, appoint a successor
Administrative Agent, which shall be a commercial bank organized under the laws
of the United States or of any state thereof and having a combined capital and
surplus of at least
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$250,000,000. If within 45 days after written notice is given of the retiring
Administrative Agent's resignation or removal under this Section 7.06 no
successor Administrative Agent shall have been appointed and shall have accepted
such appointment, then on such 45th day (a) the retiring Administrative Agent's
resignation or removal shall become effective, (b) the retiring Administrative
Agent shall thereupon be discharged from its duties and obligations under the
Loan Documents and (c) the Required Lenders shall thereafter perform all duties
and obligations of the retiring Administrative Agent under the Loan Documents
until such time, if any, as the Required Lenders appoint a successor
Administrative Agent as provided above in this Section 7.06. Upon the acceptance
of any appointment as Administrative Agent hereunder by a successor
Administrative Agent and upon the execution and filing or recording of such
financing statements, or amendments thereto, and such amendments or supplements
to the Mortgages, and such other instruments or notices, as may be necessary or
desirable, or as the Required Lenders may request, in order to continue the
perfection of the Liens granted or purported to be granted by the Collateral
Documents, such successor Administrative Agent shall succeed to and become
vested with all the rights, powers, discretion, privileges and duties of the
retiring Administrative Agent, and the ret Administrative Agent shall be
discharged from its duties and obligations under the Loan Documents. After any
retiring Administrative Agent's resignation or removal hereunder as
Administrative Agent, the provisions of this Article VII shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the Working Capital Notes or any other Loan
Document, nor consent to any departure by the Borrower therefrom, shall in any
event be effective unless the same shall be in writing and signed (or, in the
case of the Collateral Documents, consented to) by the Required Lenders, and
then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given; provided, however, that no amendment,
waiver or consent shall, unless in writing and signed by each Lender directly
adversely affected thereby (other than any Lender that is, at such time, a
Defaulting Lender), do any of the following at any time: (i) waive any of the
conditions specified in Section 3.01 or, in the case of the initial Borrowing or
the initial issuance of a Letter of Credit, Section 3.02, (ii) change the number
of Lenders or the percentage of (x) the Commitments, (y) the aggregate unpaid
principal amount of the Advances or (z) the aggregate Available Amount of
outstanding Letters of Credit that, in each case, shall be required for the
Lenders or any of them to take any action hereunder, (iii) amend this Section
8.01, (iv) increase the Commitment of such Lender or subject such Lender to any
additional Obligations, (v) reduce the principal of, or interest on, the Working
Capital Notes or any fees payable hereunder or (vi) postpone any date fixed for
any scheduled payment of principal, or interest on, the Working Capital Notes or
any fees payable hereunder; provided further that no amendment, waiver or
consent shall, unless in writing and signed by the Supermajority Lenders, (x)
release all or substantially all of the Collateral in any transaction or series
of related transactions (other than any transaction permitted by this Agreement)
or (y)
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reduce or limit the Obligations of any Guarantor under Section 1 of the Guaranty
or otherwise limit such Guarantor's liability with respect to the Obligations
owing to the Agents and the Lender Parties (other than by virtue of a release of
such Guarantor as permitted by the Guaranty); provided further that no
amendment, waiver or consent shall, unless in writing and signed by the Issuing
Bank, in addition to the Lenders required above to take such action, affect the
rights or obligations of the Issuing Bank under this Agreement.
SECTION 8.02. Notices, Etc. All notices and other
communications provided for hereunder shall be in writing (including
telegraphic, telecopy or telex communication) and mailed, telegraphed,
telecopied, telexed or delivered, if to the Borrower, to its address at 0000
Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, XX 00000, Attn: Xxxxxxx X. Post, with a
copy to KKR at 0000 Xxxx Xxxx Xxxx, Xxxxx 000, Xxxxx Xxxx, XX 00000, Attn:
Xxxxxx X. Xxxxxxx and a copy to WCAS at 000 Xxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx,
XX 00000, Attn: Xxxx X. Xxxxxxx; if to any Initial Lender or the Initial Issuing
Bank, to its Base Rate Lending Office specified opposite its name on Schedule I
hereto; if to any other Lender Party, to its Base Rate Lending Office specified
in the Assignment and Acceptance pursuant to which it became a Lender Party; and
if to the Administrative Agent, to its address at 000 Xxxxx Xxxxx Xxxxxx,
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, Attention: Xxxxxxx X. Xxxxxxxxx; or, as to the
Borrower or the Administrative Agent, to such other address as shall be
designated by such party in a written notice to the other parties and, as to
each other party, at such other address as shall be designated by such party in
a written notice to the Borrower and the Administrative Agent pursuant to this
Section 8.02. All such notices and communications shall, when mailed,
telegraphed, telecopied or telexed, be effective when deposited in the mails,
delivered to the telegraph company, transmitted by telecopier or confirmed by
telex answerback, respectively, except that notices and communications to the
Administrative Agent pursuant to Sections 2.02, 2.03, 2.05, 2.06(a) and (b) and
2.09 and with respect to selected Interest Periods in respect of Eurodollar Rate
Advances shall not be effective until received by the Administrative Agent.
Delivery by telecopier of an executed counterpart of any amendment or waiver of
any provision of this Agreement or the Working Capital Notes or of any Exhibit
hereto to be executed and delivered hereunder shall be effective as delivery of
a manually executed counterpart thereof.
SECTION 8.03. No Waiver; Remedies. No failure on the part of
any Lender Party or the Administrative Agent to exercise, and no delay in
exercising, any right hereunder or under any Working Capital Note shall operate
as a waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
SECTION 8.04. Costs, Expenses. (a) The Borrower agrees to pay
on demand (i) all reasonable out-of-pocket costs and expenses of the
Administrative Agent in connection with the preparation, execution, delivery,
administration, modification and amendment of the
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Loan Documents (including, without limitation, (A) all due diligence, collateral
review, syndication, transportation, computer, duplication, appraisal, audit,
insurance, consultant, search, filing and recording fees and expenses and (B)
the reasonable fees and expenses of counsel for the Administrative Agent with
respect thereto, with respect to advising the Administrative Agent as to its
rights and responsibilities, or the perfection, protection or preservation of
rights or interests, under the Loan Documents, with respect to negotiations with
any Loan Party or with other creditors of any Loan Party or any of its
Subsidiaries arising out of any Default or any events or circumstances that may
give rise to a Default and with respect to presenting claims in or otherwise
participating in or monitoring any bankruptcy, insolvency or other similar
proceeding involving creditors' rights generally and any proceeding ancillary
thereto) and (ii) all costs and expenses of the Administrative Agent and the
Lender Parties in connection with the enforcement of the Loan Documents, whether
in any action, suit or litigation, any bankruptcy, insolvency or other similar
proceeding affecting creditors' rights generally (including, without limitation,
the reasonable fees and expenses of counsel for the Administrative Agent and
each Lender Party with respect thereto).
(b) The Borrower agrees to indemnify and hold harmless
the Administrative Agent, each Lender Party and each of their Affiliates and
their officers, directors, employees, agents and advisors (each, an "Indemnified
Party") from and against any and all claims, damages, losses, liabilities and
expenses (including, without limitation, reasonable fees and expenses of
counsel) that may be incurred by or asserted or awarded against any Indemnified
Party, in each case arising out of or in connection with or by reason of
(including, without limitation, in connection with any investigation, litigation
or proceeding or preparation of a defense in connection therewith) (i) the
Facilities, the actual or proposed use of the proceeds of the Advances or the
Letters of Credit, the Loan Documents or any of the transactions contemplated
thereby, or (ii) the actual or alleged presence of Hazardous Materials on any
property of any Loan Party or any of its Subsidiaries or any Environmental
Action relating in any way to any Loan Party or any of its Subsidiaries, except
to the extent, in each case, such claim, damage, loss, liability or expense (i)
results from such Indemnified Party's gross negligence or willful misconduct or
(ii) arises from disputes among the Agents and/or the Lender Parties. In the
case of an investigation, litigation or other proceeding to which the indemnity
in this Section 8.04(b) applies, such indemnity shall be effective whether or
not such investigation, litigation or proceeding is brought by any Loan Party,
its directors, shareholders or creditors or an Indemnified Party or any
Indemnified Party is otherwise a party thereto and whether or not the
transactions contemplated hereby are consummated. It is understood that this
subsection (b) does not preclude the Borrower from making any claim for breach
of this Agreement against any Lender.
(c) If any payment of principal of, or Conversion of, any
Eurodollar Rate Advance is made by the Borrower to or for the account of a
Lender Party other than on the last day of the Interest Period for such Advance,
as a result of a payment or Conversion pursuant to Section 2.09, acceleration of
the maturity of the Working Capital Notes pursuant to Section 6.01 or for any
other reason, the Borrower shall, upon demand by such Lender Party
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(with a copy of such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Lender Party any amounts required
to compensate such Lender Party for any additional losses, costs or expenses
that it may reasonably incur as a result of such payment, including, without
limitation, any loss, cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by any Lender Party to fund or
maintain such Advance.
(d) If any Loan Party fails to pay when due any costs,
expenses or other amounts payable by it under any Loan Document, including,
without limitation, fees and expenses of counsel and indemnities, such amount
may be paid on behalf of such Loan Party by the Administrative Agent or any
Lender Party, in its sole discretion.
(e) Without prejudice to the survival of any other
agreement of any Loan Party hereunder or under any other Loan Document, the
agreements and obligations of the Borrower contained in Sections 2.10 and 2.12
and this Section 8.04 shall survive the payment in full of principal, interest
and all other amounts payable hereunder and under any of the other Loan
Documents.
SECTION 8.05. Right of Set-off. Upon (a) the occurrence and
during the continuance of any Event of Default and (b) the making of the request
or the granting of the consent specified by Section 6.01 to authorize the
Administrative Agent to declare the Working Capital Notes due and payable
pursuant to the provisions of Section 6.01, each Lender Party and each of its
respective Affiliates is hereby authorized at any time and from time to time, to
the fullest extent permitted by law, to set off and otherwise 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 Party or such
Affiliate to or for the credit or the account of the Borrower against any and
all of the Obligations of the Borrower now or hereafter existing under this
Agreement and the Working Capital Note or Working Capital Notes (if any) held by
such Lender Party, irrespective of whether such Lender Party shall have made any
demand under this Agreement or such Working Capital Note or Working Capital
Notes and although such obligations may be unmatured. Each Lender Party agrees
promptly to notify the Borrower after any such set-off and application;
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 Party and
its respective Affiliates under this Section are in addition to other rights and
remedies (including, without limitation, other rights of set-off) that such
Lender Party and its respective Affiliates may have.
SECTION 8.06. Binding Effect. This Agreement shall become
effective when it shall have been executed by the Borrower and the
Administrative Agent and when the Administrative Agent shall have been notified
by each Initial Lender and the Initial Issuing Bank that such Initial Lender and
the Initial Issuing Bank has executed it and thereafter shall be binding upon
and inure to the benefit of the Borrower, the Administrative Agent and each
Lender Party and their respective successors and assigns, except that the
Borrower shall not have the right to assign its rights hereunder or any interest
herein without the prior written consent of the Lender Parties.
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SECTION 8.07. Assignments and Participations. (a) Each Lender
may, with the consent of the Administrative Agent, and, so long as no Event of
Default has occurred and is continuing, with the consent of the Borrower (in
each case, such consent not to be unreasonably withheld), assign to one or more
Eligible Assignees all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its Commitment or
Commitments, the Advances owing to it and the Working Capital Note or Working
Capital Notes held by it); provided, however, that no consent by the Borrower or
the Administrative Agent shall be required for an assignment to any Person who
is an Affiliate of such Lender; provided further that (i) each such assignment
shall be of a uniform, and not a varying, percentage of all rights and
obligations under and in respect of the Facilities, (ii) except in the case of
an assignment to a Person that, immediately prior to such assignment, was a
Lender or an assignment of all of a Lender's rights and obligations under this
Agreement, the amount of the Commitment of the assigning Lender being assigned
pursuant to each such assignment (determined as of the date of the Assignment
and Acceptance with respect to such assignment) shall in no event be less than
$5,000,000 (or integral multiples of $1,000,000 in excess thereof), (iii) each
such assignment shall be to an Eligible Assignee, and (vi) the parties to each
such assignment shall execute and deliver to the Administrative Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance, together
with any Working Capital Note or Working Capital Notes subject to such
assignment and, other than in the case of an assignment to an Affiliate of such
Lender, a processing and recordation fee of $3,500.
(b) Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in such Assignment and
Acceptance, (x) the assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such Assignment and Acceptance, have the rights and obligations of a Lender
or Issuing Bank, as the case may be, hereunder and (y) the Lender or Issuing
Bank assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Lender's or Issuing Bank's rights and obligations under
this Agreement, such Lender or Issuing Bank shall cease to be a party hereto).
(c) By executing and delivering an Assignment and
Acceptance, the Lender Party assignor thereunder and the assignee thereunder
confirm to and agree with each other and the other parties hereto as follows:
(i) other than as provided in such Assignment and Acceptance, such assigning
Lender Party makes no representation or warranty and assumes no responsibility
with respect to any statements, warranties or representations made in or in
connection with this Agreement or any other Loan Document or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of, or the
perfection or priority of any lien or security interest created or purported to
be created under or in connection with, this Agreement or any other Loan
Document or any other instrument or document furnished
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pursuant hereto or thereto; (ii) such assigning Lender Party makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or any other Loan Party or the performance
or observance by any Loan Party of any of its obligations under any Loan
Document or any other instrument or document furnished pursuant thereto; (iii)
such assignee confirms that it has received a copy of this Agreement, together
with copies of the financial statements referred to in Section 4.01 and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance; (iv)
such assignee will, independently and without reliance upon the Administrative
Agent, such assigning Lender Party or any other Lender Party and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement; (v) such assignee confirms that it is an Eligible Assignee; (vi) such
assignee appoints and authorizes the Administrative Agent to take such action as
agent on its behalf and to exercise such powers and discretion under the Loan
Documents as are delegated to the Administrative Agent by the terms hereof,
together with such powers and discretion as are reasonably incidental thereto;
and (vii) such assignee agrees that it will perform in accordance with their
terms all of the obligations which by the terms of this Agreement are required
to be performed by it as a Lender or Issuing Bank, as the case may be.
(d) The Administrative Agent, acting for this purpose
(but only for this purpose) as the agent of the Borrower, shall maintain at its
address referred to in Section 8.02 a copy of each Assignment and Acceptance
delivered to and accepted by it and a register for the recordation of the names
and addresses of the Lender Parties and the Commitment under each Facility of,
and principal amount of the Advances owing under each Facility to, each Lender
Party from time to time (the "Register"). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Administrative Agent and the Lender Parties shall treat each
Person whose name is recorded in the Register as a Lender Party hereunder for
all purposes of this Agreement. The Register shall be available for inspection
by the Borrower or any Lender Party at any reasonable time and from time to time
upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender Party and an assignee, together with any Working
Capital Note or Working Capital Notes subject to such assignment, the
Administrative Agent shall, if such Assignment and Acceptance has been completed
and is in substantially the form of Exhibit C hereto, (i) accept such Assignment
and Acceptance, (ii) record the information contained therein in the Register
and (iii) give prompt notice thereof to the Borrower. In the case of any
assignment by a Lender, within five Business Days after its receipt of such
notice, the Borrower, at its own expense, shall execute and deliver to the
Administrative Agent in exchange for the surrendered Working Capital Note or
Working Capital Notes a new Working Capital Note to the order of such Eligible
Assignee in an amount equal to the Commitment assumed by it under a Facility
pursuant to such Assignment and Acceptance and, if the assigning Lender has
retained a Commitment hereunder under such Facility, a new Working Capital Note
to the
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order of the assigning Lender in an amount equal to the Commitment retained by
it hereunder. Such new Working Capital Note or Working Capital Notes shall be in
an aggregate principal amount equal to the aggregate principal amount of such
surrendered Working Capital Note or Working Capital Notes, shall be dated the
effective date of such Assignment and Acceptance and shall otherwise be in
substantially the form of Exhibit A.
(f) The Issuing Bank may, with the consent of the
Administrative Agent, and, so long as no Event of Default shall have occurred
and be continuing, with the consent of the Borrower (such consent not to be
unreasonably withheld), assign to an Eligible Assignee all of its rights and
obligations under the undrawn portion of its Letter of Credit Commitment at any
time; provided, however, that (i) each such assignment shall be to an Eligible
Assignee and (ii) the parties to each such assignment shall execute and deliver
to the Administrative Agent, for its acceptance and recording in the Register,
an Assignment and Acceptance, together with a processing and recordation fee of
$3,500.
(g) Each Lender Party may sell participations to one or
more Persons (other than any Loan Party or any of its Affiliates) in or to all
or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitments, the Advances owing to
it and the Working Capital Note or Working Capital Notes (if any) held by it);
provided, however, that (i) such Lender Party's rights and obligations under
this Agreement (including, without limitation, its Commitments) shall remain
unchanged, (ii) such Lender Party shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) such Lender Party
shall remain the holder of any such Working Capital Note for all purposes of
this Agreement, (iv) the Borrower, the Administrative Agent and the other Lender
Parties shall continue to deal solely and directly with such Lender Party in
connection with such Lender Party's rights and obligations under this Agreement,
(v) no participant under any such participation shall have any right to approve
any amendment or waiver of any provision of any Loan Document, or any consent to
any departure by any Loan Party therefrom, except to the extent that such
amendment, waiver or consent would reduce the principal of, or interest (other
than increased interest following Default pursuant to Section 2.07(b) on, the
Working Capital Notes or any fees or other amounts payable hereunder, in each
case to the extent subject to such participation, postpone any Termination Date,
or date fixed for payment of interest on, the Working Capital Notes or any fees
or other amounts payable hereunder, in each case to the extent subject to such
participation, or release all or substantially all of the Collateral, and (vi)
the Borrower shall not be subject to any increased liability to any Lender Party
pursuant to this Agreement by virtue of such participation.
(h) Any Lender Party may, in connection with any
assignment or participation or proposed assignment or participation pursuant to
this Section 8.07, disclose to the assignee or participant or proposed assignee
or participant, any information relating to the Borrower furnished to such
Lender Party by or on behalf of the Borrower; provided, however, that, prior to
any such disclosure, the assignee or participant or proposed assignee or
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participant shall agree to preserve the confidentiality of any Confidential
Information received by it from such Lender Party.
(i) Notwithstanding any other provision set forth in this
Agreement, any Lender Party may at any time create a security interest in all or
any portion of its rights under this Agreement (including, without limitation,
the Advances owing to it and the Working Capital Note or Working Capital Notes
held by it) in favor of any Federal Reserve Bank in accordance with Regulation A
of the Board of Governors of the Federal Reserve System.
SECTION 8.08. Replacements of Lenders Under Certain
Circumstances. The Borrower shall be permitted to replace any Lender that (a)
requests reimbursement for amounts owing pursuant to Section 2.10 or 2.12, (b)
is affected in the manner described in Section 2.10(d) and as a result thereof
any of the actions described in such Section is required to be taken or (c)
becomes a Defaulting Lender, with a replacement bank or other financial
institution, provided that (i) such replacement does not conflict with any
Requirement of Law, (ii) no Event of Default shall have occurred and be
continuing at the time of such replacement, (iii) the Borrower shall repay (or
the replacement bank or institution shall purchase, at par) all Advances and
other amounts (other than any disputed amounts), pursuant to Section 2.10 or
2.12, as the case may be) owing to such replaced Lender prior to the date of
replacement, (iv) the replacement bank or institution, if not already a Lender,
and the terms and conditions of such replacement, shall be reasonably
satisfactory to the Administrative Agent, (v) the replaced Lender shall be
obligated to make such replacement in accordance with the provisions of Section
8.07 (provided that the Borrower shall be obligated to pay the registration and
processing fee referred to therein) and (vi) any such replacement shall not be
deemed to be a waiver of any rights that the Borrower, the Administrative Agent
or any other Lender Party shall have against the replaced Lender.
SECTION 8.09. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 8.10. No Liability of the Issuing Bank. The Borrower
assumes all risks of the acts or omissions of any beneficiary or transferee of
any Letter of Credit with respect to its use of such Letter of Credit. Neither
the Issuing Bank nor any of its officers or directors shall be liable or
responsible for: (a) the use that may be made of any Letter of Credit or any
acts or omissions of any beneficiary or transferee in connection therewith; (b)
the validity, sufficiency or genuineness of documents, or of any endorsement
thereon, even if such documents should prove to be in any or all respects
invalid, insufficient, fraudulent or forged; (c) payment by the Issuing Bank
against presentation of documents that do not comply with the terms of a Letter
of Credit, including failure of any documents to bear any reference
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or adequate reference to the Letter of Credit; or (d) any other circumstances
whatsoever in making or failing to make payment under any Letter of Credit,
except that the Borrower shall have a claim against the Issuing Bank, and the
Issuing Bank shall be liable to the Borrower, to the extent of any direct, but
not consequential, damages suffered by the Borrower that the Borrower proves
were caused by (i) the Issuing Bank's willful misconduct or gross negligence in
determining whether documents presented under any Letter of Credit comply with
the terms of the Letter of Credit or (ii) the Issuing Bank's willful failure to
make lawful payment under a Letter of Credit after the presentation to it of a
draft and certificates strictly complying with the terms and conditions of the
Letter of Credit. In furtherance and not in limitation of the foregoing, the
Issuing Bank may accept documents that appear on their face to be in order,
without responsibility for further investigation, regardless of any notice or
information to the contrary.
SECTION 8.11. Confidentiality. The Administrative Agent and
each Lender shall hold all non-public information furnished by or on behalf of
the Borrower in connection with such Lender's evaluation of whether to become a
Lender hereunder or obtained by such Lender or the Administrative Agent pursuant
to the requirements of this Agreement ("Confidential Information"), in
accordance with its customary procedure for handling confidential information of
this nature and (in the case of a Lender that is a bank) in accordance with safe
and sound banking practices. Neither the Administrative Agent nor any Lender
Party shall disclose any Confidential Information to any Person without the
consent of the Borrower, other than (a) to the Administrative Agent's or such
Lender Party's Affiliates and their officers, directors, employees, agents and
advisors and to actual or prospective Eligible Assignees and participants, and
then only on a confidential basis, (b) as required by any law, rule or
regulation or judicial process and (c) as requested or required by any state,
federal or foreign authority or examiner regulating such Lender Party or the
Administrative Agent.
SECTION 8.12. Jurisdiction, Etc. (a) Each of the parties
hereto hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or any of the other Loan Documents to which it is a
party, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in any such
New York State court or, to the extent permitted by law, in such federal court.
The Borrower irrevocably consents to the service of any and all process in any
such action or proceeding by the mailing of copies of such process by registered
or certified mail (or any substantially similar form of mail), postage prepaid,
to the Borrower at its address specified in Section 8.02 and agrees that nothing
herein shall affect the right to effect service of process in any other manner
permitted by law or shall limit the right to xxx in any other jurisdiction. Each
of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions
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by suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that any party may otherwise have to bring any
action or proceeding relating to this Agreement or any of the other Loan
Documents in the courts of any jurisdiction.
(b) Each of the parties hereto irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection that it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement or
any of the other Loan Documents to which it is a party in any New York State or
federal court. Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
SECTION 8.13. Governing Law. This Agreement and the Working
Capital Notes shall be governed by, and construed in accordance with, the laws
of the State of New York, United States.
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SECTION 8.14. Waiver of Jury Trial. Each of the Borrower, the
Administrative Agent and the Lender Parties irrevocably waives all right to
trial by jury in any action, proceeding or counterclaim (whether based on
contract, tort or otherwise) arising out of or relating to any of the Loan
Documents, the Advances or the actions of the Administrative Agent or any Lender
Party in the negotiation, administration, performance or enforcement thereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
MEDCATH INTERMEDIATE HOLDINGS, INC.
By /s/ Xxxxxxx X. Post
-----------------------------------
Name: Xxxxxxx X. Post
Title: Chief Financial Officer
NATIONSBANK, N.A., as Administrative
Agent and as Collateral Agent
By /s/ Xxxxxxx X. Xxxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Senior Vice President
NATIONSBANC XXXXXXXXXX
SECURITIES LLC, as Arranger and
Syndication Agent
By /s/ Xxxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Sr. Managing Director
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INITIAL LENDERS
NATIONSBANK, N.A.
By /s/ Xxxxxxx X. Xxxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Senior Vice President
CENTURABANK
By /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Corporate Banking Officer
BANKERS TRUST COMPANY
By /s/ Xxxx Xx Xxxxx
-----------------------------------
Name: Xxxx Xx Xxxxx
Title: Assistant Vice President
CREDITANSTALT CORPORATE FINANCE, INC.
By /s/ Xxxxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Executive Vice President
By /s/ Xxxx X. Xxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxx
Title: Senior Associate
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COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK BA
"RABOBANK NEDERLAND",
NEW YORK BRANCH
By /s/ Xxxxxxx Xxxxx
-----------------------------------
Name: Xxxxxxx Xxxxx
Title: Vice President
By /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
THE FUJI BANK, LIMITED,
NEW YORK BRANCH
By /s/ Xxxxxxx Xxxxxxx
-----------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President and Manager
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