XXXXXXXXXX HEALTHCARE CORPORATION
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of March 30, 1998
$180,000,000 Reducing Revolving Credit Facility
$75,000,000 Term Loan Facilities
BANQUE PARIBAS,
as Agent,
TORONTO DOMINION (TEXAS), INC.
as Documentation Agent
and
BANK OF MONTREAL,
as Administrative Agent
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TABLE OF CONTENTS
PAGE
ARTICLE 1 Definitions 2
Section 1.1 Definitions 2
Section 1.2 Other Definitional Provisions 37
Section 1.3 Accounting Terms and Determinations 38
ARTICLE 2 Loans 38
Section 2.1 Commitments 38
Section 2.2 Notes 39
Section 2.3 Repayment of Loans 40
Section 2.4 Interest 41
Section 2.5 Borrowing Procedure 42
Section 2.6 Optional Prepayments, Commitment Terminations and
Reductions, Conversions and Continuations of
Loans 42
Section 2.7 Mandatory Prepayments 43
Section 2.8 Minimum Amounts 45
Section 2.9 Certain Notices 45
Section 2.10 Use of Proceeds 47
Section 2.11 Fees 47
Section 2.12 Computations 48
Section 2.13 Reduction or Termination of Commitments 48
Section 2.14 Letters of Credit 48
ARTICLE 3 Payments 52
Section 3.1 Method of Payment 52
Section 3.2 Pro Rata Treatment 53
Section 3.3 Sharing of Payments, Etc 53
Section 3.4 Non-Receipt of Funds by the Agent 54
Section 3.5 Withholding Taxes 54
Section 3.6 Withholding Tax Exemption 55
ARTICLE 4 Yield Protection and Illegality 56
Section 4.1 Additional Costs 56
Section 4.2 Limitation on Types of Loans 57
Section 4.3 Illegality 58
Section 4.4 Treatment of Affected Loans 59
Section 4.5 Compensation 59
Section 4.6 Capital Adequacy 60
Section 4.7 Additional Interest on Eurodollar Loans 61
Section 4.8 Substitution of Lender 61
ARTICLE 5 Security 62
Section 5.1 Collateral 62
Section 5.2 Guaranties 64
Section 5.3 New Subsidiaries 65
Section 5.4 Release of Collateral and Termination of Guarantees 65
Section 5.5 Setoff 66
Section 5.6 Certain Collateral 66
ARTICLE 6 Conditions Precedent 69
Section 6.1 Initial Extension of Credit 69
Section 6.2 All Extensions of Credit 73
Section 6.3 Closing Certificates 74
ARTICLE 7 Representations and Warranties 74
Section 7.1 Corporate Existence 74
Section 7.2 Financial Statements 74
Section 7.3 Corporate Action; No Breach 75
Section 7.4 Operation of Business 76
Section 7.5 Intellectual Property 76
Section 7.6 Litigation and Judgments 76
Section 7.7 Rights in Properties; Liens 77
Section 7.8 Enforceability 77
Section 7.9 Approvals 77
Section 7.10 Debt 77
Section 7.11 Taxes 77
Section 7.12 Margin Securities 78
Section 7.13 ERISA 78
Section 7.14 Disclosure 79
Section 7.15 Subsidiaries 79
Section 7.16 Agreements 80
Section 7.17 Compliance with Laws 80
Section 7.18 Investment Company Act 80
Section 7.19 Public Utility Holding Company Act 80
Section 7.20 Environmental Matters 80
Section 7.21 Labor Disputes and Acts of God 82
Section 7.22 Material Contracts 82
Section 7.23 Outstanding Securities 82
Section 7.24 Subordination 83
Section 7.25 Solvency 83
Section 7.26 Employee Matters 83
Section 7.27 Insurance 83
Section 7.28 Fraud and Abuse 83
ARTICLE 8 Affirmative Covenants 85
Section 8.1 Reporting Requirements 85
Section 8.2 Maintenance of Existence; Conduct of Business 92
Section 8.3 Maintenance of Properties 92
Section 8.4 Taxes and Claims 93
Section 8.5 Insurance 93
Section 8.6 Inspection Rights 94
Section 8.7 Keeping Books and Records 94
Section 8.8 Compliance with Laws 95
Section 8.9 Compliance with Agreements 95
Section 8.10 Further Assurances 95
Section 8.11 ERISA 95
Section 8.12 Borrower's Treatment of Subsidiaries 95
Section 8.13 Environmental Matters 96
Section 8.14 Accounts Receivable Securitization Program 97
ARTICLE 9 Negative Covenants 97
Section 9.1 Debt 97
Section 9.2 Limitation on Liens 99
Section 9.3 Limitation on Fundamental Changes 99
Section 9.4 Limitation on Investment 100
Section 9.5 Limitation on Business Acquisitions 101
Section 9.6 Limitation on Loans and Credit 104
Section 9.7 Limitation on Contracts, Etc 104
Section 9.8 Subsidiaries 104
Section 9.9 Contingent Obligations 104
Section 9.10 Restricted Payments 105
Section 9.11 Limitation on Issuance of Capital Stock 106
Section 9.12 Disposition of Property 107
Section 9.14 Certain Transactions and Agreements 109
Section 9.15 Modification of Other Agreements 110
Section 9.16 ERISA 110
Section 9.17 Compensation Paid to Affiliates 111
ARTICLE 10 Financial Covenants 111
Section 10.1 Senior Leverage Ratio 111
Section 10.2 Minimum Net Worth 112
Section 10.3 Ratio of Total Debt to Adjusted EBITDA 112
Section 10.4 Fixed Charge Coverage Ratio 113
Section 10.5 Minimum Adjusted EBITDA 113
ARTICLE 11 Default 113
Section 11.1 Events of Default 113
Section 11.2 Remedies 118
Section 11.3 Cash Collateral 119
Section 11.4 Performance by the Agent 119
ARTICLE 12 The Agent 120
Section 12.1 Appointment, Powers and Immunities 120
Section 12.2 Rights of Agent as a Lender 121
Section 12.3 Defaults 121
Section 12.4 INDEMNIFICATION 121
Section 12.5 Independent Credit Decisions 122
Section 12.6 Several Commitments 123
Section 12.7 Successor Agent 123
Section 12.8 Documentation Agent and 123
ARTICLE 13 Miscellaneous 124
Section 13.1 Expenses 124
Section 13.2 INDEMNIFICATION 125
Section 13.3 Limitation of Liability 126
Section 13.4 No Duty 126
Section 13.5 No Fiduciary Relationship 127
Section 13.6 No Waiver; Cumulative Remedies 127
Section 13.7 Successors and Assigns 127
Section 13.8 Survival 131
Section 13.9 ENTIRE AGREEMENT 131
Section 13.10 Amendments 131
Section 13.11 Maximum Interest Rate 132
Section 13.12 Notices 134
Section 13.13 GOVERNING LAW; SUBMISSION TO JURISDICTION; SERVICE OF
PROCESS 134
Section 13.14 Counterparts 135
Section 13.15 Severability 135
Section 13.16 Headings 135
Section 13.17 Construction 135
Section 13.19 WAIVER OF JURY TRIAL 136
Section 13.20 Approvals and Consent 136
i
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INDEX TO EXHIBITS
EXHIBIT DESCRIPTION OF EXHIBIT SECTION
A Form of Assignment and Acceptance 1.1
B Copy of Park Hospital Subordinated Note 1.1
C-1 Form of Revolving Credit Loans Note 1.1
C-2 Form of Tranche A Term Note 1.1
C-3 Form of Tranche B Term Note 1.1
D Form of Back-Up Letter of Credit 1.1
E Form of Master Guaranty with Joinder Agreement 1.1
F Form of Amended and Restated Security and Pledge
Agreement 1.1
G Form of Amended and Restated Subsidiary Security
and Pledge Agreement 1.1
H Forms of Notice of Borrowing and Notice of
Conversion/Continuation; Notice of Termination/
Commitment; and Notice of Reduction/Prepayment 2.9
I Form of Opinion of Vice President-Legal Affairs
of Borrower 6.1
J Form of Opinion of Outside Counsel to Borrower 6.1
K Form of Assignment, Assumption and Acceptance
Agreement 6.1
INDEX TO SCHEDULES
SCHEDULE DESCRIPTION OF SCHEDULE
1.1(a) Excluded Subsidiaries
1.1(b) Existing Letters of Credit
1.1(c) Permitted Liens
1.1(d) Commitments
1.1(e)(i) Environmental Questionnaires
1.1(e)(ii)Environmental Reports
1.1(g) Mortgages
7.6 Litigation and Judgments
7.10 Existing Debt
7.11 Taxes
7.13 Plans
7.15 Subsidiaries
7.22 Material Contracts
7.25 Solvency
7.26 Employee Matters
7.27 Insurance
7.28 Fraud and Abuse
9.4 Investments
9.12 Specified Asset Dispositions
9.12(e) Closed Facilities
ii
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AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of March 30, 1998,
is among XXXXXXXXXX HEALTHCARE CORPORATION, a corporation organized under the
laws of the State of California (the "BORROWER"), each of the banks or other
lending institutions which is a party hereto (as evidenced by the signature
pages of this Agreement) or which may from time to time become a party hereto
or any successor or assignee thereof in accordance with the terms hereof
(individually, a "LENDER" and, collectively, the "LENDERS"), and BANQUE
PARIBAS, a bank organized and existing under the laws of the Republic of France
("BANQUE PARIBAS"), as lead agent for the Lenders (in such capacity, together
with its successors in such capacity, the "AGENT") and as the Issuing Bank,
TORONTO DOMINION (TEXAS), INC., a Delaware corporation, as documentation agent
for the Lenders (in such capacity, the "DOCUMENTATION AGENT") and BANK OF
MONTREAL, a Canadian chartered bank, as administrative agent for the Lenders
(in such capacity, the "ADMINISTRATIVE AGENT").
RECITALS:
A. The Borrower, Bank of America National Trust and Savings
Association ("B OF A"), as Agent, Banque Paribas, as Documentation Agent,
NationsBank of Texas, N.A., as Managing Agent, and the lending institutions
parties thereto (collectively, the "EXISTING LENDERS"), are parties to a Credit
Agreement dated as of August 16, 1996, as amended by a First Amendment to
Credit Agreement dated effective as of April 14, 1997, a Second Amendment to
Credit Agreement dated effective as of August 14, 1997 and a Third Amendment to
Credit Agreement dated effective as of August 14, 1997 (as so amended, the
"EXISTING CREDIT AGREEMENT").
B. The Lenders have purchased from the Existing Lenders, and the
Existing Lenders have sold to the Lenders, all of the Loans (as such term is
defined in the Existing Credit Agreement; hereinafter, the "EXISTING LOANS")
held by such Existing Lenders at the Closing Date and B of A has assumed and
acquired from the Existing Lenders, and the Existing Lenders have assigned and
transferred to B of A, all Letter of Credit Liabilities (as such term is
defined in the Existing Credit Agreement; hereinafter, the "EXISTING LETTER OF
CREDIT LIABILITIES") outstanding at the Closing Date, and thereby (a) the
Lenders have become parties to the Existing Credit Agreement as the Lenders
thereunder, in the place and stead of the Existing Lenders, all of which have
ceased to be parties thereto and (b) no Existing Letter of Credit Liabilities
remain outstanding under the Existing Credit Agreement.
C. Giving effect to the foregoing transactions, B of A has resigned
as Agent under the Existing Credit Agreement and the
Lenders have appointed Banque Paribas as successor Agent, which has agreed
to act in such capacity under this Agreement.
D. Giving effect to the foregoing transactions, the Borrower, the
Agent, the Documentation Agent, the Administrative Agent and the Lenders desire
to amend and restate the Existing Credit Agreement in its entirety, among other
things to extend to the Borrower a reducing revolving credit facility, with a
letter of credit subfacility, and term loan facilities.
E. Giving effect to the foregoing transactions, Banque Paribas, as
the Issuing Bank hereunder, has agreed to issue its irrevocable "direct pay"
letter of credit hereunder for the benefit of B of A, in the form of that
attached hereto as EXHIBIT D hereto (the "BACK-UP LETTER OF CREDIT").
F. Concurrently with the Closing Date, the obligations under the
Existing Credit Agreement will be deemed renewed and extended in full, as
amended and restated pursuant to the terms of this Agreement and the Back-Up
Letter of Credit will be issued on the Closing Date pursuant to SECTION
2.14(J).
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.1 DEFINITIONS. As used in this Agreement, the following
terms have the following meanings:
"ADDITIONAL COSTS" means as specified in SECTION 4.1(A).
"ADJUSTED EBITDA" means, on a consolidated basis without duplication
for the Borrower and its Subsidiaries for any period the Net Income (Loss) for
such period taken as a single accounting period (excluding the cumulative
effect of a non-cash change in accounting and discontinued operations), PLUS
(a) the sum of the following amounts for the Borrower and its Subsidiaries for
such period determined on a consolidated basis in conformity with GAAP to the
extent included in the determination of Net Income (Loss): (i) Interest
Expense, (ii) depreciation expense, (iii) amortization expense, (iv) non-cash
impairment charges, (v) income tax expense and (vi) extraordinary losses MINUS
extraordinary gains, (vii) any debt refinancing charges or gains to the extent
such charges or gains are not included in extraordinary gains or losses, in
each case (subject to the proviso below) measured on a twelve (12) month basis
and calculated as of the last day of the fiscal quarter most recently ended,
PLUS, (b) any one-time shut-down charge relating to the closure of Xxxxxxxxxx
PHC Regional Medical Center, Inc. for the fiscal quarter ended June 30, 1997,
in an aggregate amount not to exceed $3,500,000, PLUS (c) any one-time
corporate restructuring charges for the fiscal quarter ended June 30, 1997, in
an aggregate amount not to exceed $2,500,000 PLUS (d) any one-time litigation
settlement charges for the fiscal quarter ended December 31, 1997, in an
aggregate amount not to exceed $3,000,000, PLUS (e) any one-time charges to
establish government program reserves for the fiscal quarter ended December 31,
1997, in an aggregate amount not to exceed $5,809,000, MINUS (f) any one-time
gain recorded on the reversal of the PacifiCare/FHP loss contract accrual in
the fiscal quarter ended December 31, 1997, in an aggregate amount not to
exceed $15,509,000 MINUS (g) corporate overhead costs charges against the
PacifiCare/FHP loss contract accrual in the quarter ended June 30, 1997, in an
aggregate amount not to exceed $765,000, PLUS (h) EBITDA of DHHS for such
period (as adjusted consistent with the foregoing CLAUSE (A) MINUS (I) equity
in earnings of DHHS MINUS (j) gains or losses on asset sales determined on a
consolidated basis in conformity with GAAP PLUS (k) with respect to the
acquisition by the Borrower or a Subsidiary of the Borrower (excluding the
acquisition of Dakota's partnership interest in DHHS by the Borrower or a
Subsidiary of the Borrower) which has not been owned or effective for a full
fiscal quarter, Adjusted EBITDA (as calculated pursuant to CLAUSES (A) AND (J)
preceding) shall be computed based on the actual period owned or effective and
the number of months prior thereto necessary to total twelve months and, upon
being owned or effective one full fiscal quarter, Adjusted EBITDA will be
computed based on annualized results, MINUS (l) with respect to any divestiture
of any entity (corporation, partnership, limited liability company or joint
venture) by the Borrower or a Subsidiary of the Borrower, the Borrower will
exclude from Adjusted EBITDA any amounts attributable to such entity in the
computation of Adjusted EBITDA pursuant to CLAUSES (A) AND (J) preceding for
the twelve-month period following the divestiture.
"ADJUSTED EURODOLLAR RATE" means, for any Eurodollar Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if necessary, to
the nearest 1/16 of 1%) determined by the Agent to be equal to the Eurodollar
Rate for such Eurodollar Loan for such Interest Period divided by 1 minus the
Reserve Requirement for such Eurodollar Loan for such Interest Period.
"ADMINISTRATIVE AGENT'S FEE LETTER" means the letter agreement dated
March 30, 1998 between the Borrower and the Administrative Agent.
"AFFILIATE" means, as to any Person, any other Person (a) that directly
or indirectly, through one or more intermediaries, controls or is controlled
by, or is under common control with, such Person; (b) that directly or
indirectly beneficially owns or holds ten percent or more of any class of
voting stock of such Person; or (c) ten percent or more of the voting stock of
which is directly or indirectly beneficially owned or held by the Person in
question. The term "control" means the possession, directly or indirectly, of
the power to direct or cause direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise; PROVIDED, HOWEVER, in no event shall the Agent, the Documentation
Agent, the Administrative Agent or any Lender be deemed an Affiliate of the
Borrower or any of its Subsidiaries.
"AGENT" means as specified in the introductory paragraph of this
Agreement.
"AGENT'S FEE LETTER" means the letter agreement dated March 30, 1998
among the Borrower, the Agent and the Syndication Agent.
"AGREEMENT" means this Amended and Restated Credit Agreement and any
and all amendments, modifications, supplements, renewals, extensions or
restatements hereof.
"APPLICABLE BASE RATE MARGIN" means, for any day, the percentage per
annum set forth below opposite the Borrower's applicable Senior Leverage Ratio,
as calculated as of the last day of the fiscal quarter last ended; PROVIDED,
HOWEVER, that in the event a change in the Applicable Base Rate Margin is to be
made, such change shall be effective on the later of (i) the first day
following the fiscal quarter with respect to which the Agent has received
financial statements and a certificate reflecting a change in the Senior
Leverage Ratio warranting such a change and (ii) the first day following the
fiscal quarter most recently ended as of the date of delivery of such financial
statements and certificate; provided, further, that until the date of delivery
of the certificate referred to in SECTION 8.1(D) and related financial report
referred to in SECTION 8.1(B) for the fiscal quarter ended March 31, 1998, the
Applicable Base Rate Margin shall be 1.25% per annum.
Applicable
SENIOR LEVERAGE RATIO BASE RATE MARGIN
Less than 1.00:1.00 0.00% per annum
Greater than or equal to 1.00:1.00 and less than 1.50:1.00 0.25% per annum
Greater than or equal to 1.50:1.00 and less than 2.00:1.00 0.75% per annum
Greater than or equal to 2.00:1.00 and less than 2.50:1.00 1.00% per annum
Greater than or equal to 2.50:1.00 1.25% per annum
"APPLICABLE COMMITMENT COMMISSION PERCENTAGE" means, for any day, the
percentage per annum set forth below opposite the Borrower's applicable Senior
Leverage Ratio, as calculated as of the last day of the fiscal quarter last
ended; PROVIDED, HOWEVER, that in the event a change in the Applicable
Commitment Commission Percentage is to be made, such change shall be effective
on the first day following the fiscal quarter with respect to which the Agent
has received financial statements or a certificate reflecting a change in the
Senior Leverage Ratio warranting such a change; PROVIDED, FURTHER, that until
the date of delivery of the certificate referred to in SECTION 8.1(D) and
related financial report referred to in SECTION 8.1(B) for the fiscal quarter
ended March 31, 1998, the Applicable Commitment Commision Percentage shall be
.500% per annum.
Applicable Commitment
SENIOR LEVERAGE RATIO COMMISSION PERCENTAGE
Less than 1.00:1.00 0.250% per annum
Greater than or equal to 1.00:1.00 and less than 2.00:1.00 0.375% per annum
Greater than or equal to 2.00:1.00 0.500% per annum
"APPLICABLE EURODOLLAR MARGIN" means, for any day, the percentage per
annum set forth below opposite the Borrower's applicable Senior Leverage Ratio,
as calculated as of the last day of the fiscal quarter last ended; PROVIDED,
HOWEVER, that in the event a change in the Applicable Eurodollar Margin is to
be made, such change shall be effective on the later of (i) the first day
following the fiscal quarter with respect to which the Agent has received
financial statements and a certificate reflecting a change in the Senior
Leverage Ratio warranting such a change and (ii) the first day following the
fiscal quarter most recently ended as of the date of delivery of such financial
statements and certificate and PROVIDED, FURTHER, that until the date of
delivery of the certificate referred to in SECTION 8.1(D) and related financial
report referred to in SECTION 8.1(B) for the fiscal quarter ended March 31,
1998, the Applicable Eurodollar Margin shall be 2.75% per annum:
Applicable
SENIOR LEVERAGE RATIO EURODOLLAR MARGIN
Less than 1.00:1.00 1.25% per annum
Greater than or equal to 1.00:1.00 and less than 1.50:1.00 1.75% per annum
Greater than or equal to 1.50:1.00 and less than 2.00:1.00 2.25% per annum
Greater than or equal to 2.00:1.00 and less than 2.50:1.00 2.50% per annum
Greater than or equal to 2.50:1.00 2.75% per annum
"APPLICABLE LENDING OFFICE" means for each Lender and each Type of
Loan, the Lending Office of such Lender (or of an Affiliate of such Lender)
designated for such Type of Loan below its name on the signature pages hereof
(or, with respect to a Lender that becomes a party to this Agreement pursuant
to an assignment made in accordance with SECTION 13.7, in the Assignment and
Acceptance executed by it) or such other office of such Lender (or of an
Affiliate of such Lender) as such Lender may from time to time specify to the
Borrower and the Agent as the office by which its Loans of such Type are to be
made and maintained.
"APPLICABLE MARGIN" means, as the context requires, the Applicable Base
Rate Margin, the Applicable Eurodollar Rate Margin or the Applicable Tranche B
Margin.
"APPLICABLE MATURITY DATE" means, as the context requires, the
Revolving Credit Loans Maturity Date, the Tranche A Term Loans Maturity Date or
the Tranche B Term Loans Maturity Date.
"APPLICABLE TRANCHE B MARGIN" means, for any day, a percentage per
annum equal to (a) during the period from the Closing Date through March 31,
1999, 2.75% for Tranche B Loans that are Eurodollar Loans and 1.25% for Tranche
B Loans that are Base Rate Loans and (b) thereafter, (i) when the Senior
Leverage Ratio is less than 2.00:1.00, 2.50% for Tranche B Loans that are
Eurodollar Loans and 1.00% for Tranche B Loans that are Base Rate Loans and
(ii) when the Senior Leverage Ratio is greater than or equal to 2.00:1.00,
2.75% for Tranche B Loans that are Eurodollar Loans and 1.25% for Tranche B
Loans that are Base Rate Loans, PROVIDED, HOWEVER, that in the event a change
in the Applicable Tranche B Margin is to be made, such change shall be
effective on the later of (i) the first day following the fiscal quarter with
respect to which the Agent has received financial statements and a certificate
reflecting a change in the Senior Leverage Ratio warranting such a change and
(ii) the first day following the fiscal quarter most recently ended as of the
date of delivery of such financial statements and certificate.
"ASSET DISPOSITION" means the disposition, from and after the Closing
Date, of any or all of the Property (irrespective of whether such Property is
owned or acquired before, on or after the Closing Date) of the Borrower or any
of its Subsidiaries, whether by sale, lease, transfer, assignment, condemnation
or otherwise, and including any involuntary disposition resulting from casualty
damage to Property (irrespective of whether such Property is owned or acquired
before, on or after the Closing Date), in each case in excess of $500,000;
PROVIDED, HOWEVER, that none of the following shall constitute an Asset
Disposition: (a) the issuance and sale by a Person of its own Capital Stock;
(b) any Operating Lease by the Borrower or any of its Subsidiaries, as lessor,
of equipment where, in the case of Collateral, the lessee expressly
subordinates its rights in such Collateral to the Liens under the Security
Documents; (c) any Operating Lease by the Borrower, or any of its Subsidiaries,
as lessor, of any medical office building, or portion thereof; and (d) any
lease by the Borrower or any of its Subsidiaries of any Facility now closed, or
portion thereof, excluding PHC Regional Hospital.
"ASSIGNEE" means as specified in SECTION 13.7(B).
"ASSIGNING LENDER" means as specified in SECTION 13.7(B).
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance entered
into by a Lender and its Assignee and accepted by the Agent and consented to by
the Borrower (such consent not to be unreasonably withheld) pursuant to SECTION
13.7(E), in substantially the form of EXHIBIT A hereto.
"BACK-UP LETTER OF CREDIT" means as specified in Paragraph E of the
Recitals hereto.
"BANKRUPTCY CODE" means as specified in SECTION 11.1.
"BANQUE PARIBAS" means as specified in the initial paragraph of this
Agreement.
"BASE RATE" means, for any day, the higher of (a) the rate of interest
in effect for such day as publicly announced from time to time by Banque
Paribas in New York, New York as its "base rate"; and (b) 0.50% per annum plus
the latest Federal Funds Rate. The "base rate" is a rate set by Banque Paribas
based upon various factors including Banque Paribas's costs and desired return,
general economic conditions, and other factors, and is used as a reference
point for pricing some loans which may be priced at, above, or below the
announced rate. Any change in the Base Rate shall take effect at the opening
of business on the day specified in the public announcement of such change, or,
if there is not such public announcement, on the date of such change.
"BASE RATE LOANS" means Loans that bear interest at rates based upon
the Base Rate.
"BASLE ACCORD" means the proposals for risk-based capital framework
described by the Basle Committee on Banking Regulations and Supervisory
Practices in its paper entitled "International Convergence of Capital
Measurement and Capital Standards" dated July 1988, as amended, supplemented
and otherwise modified and in effect from time to time, or any replacement
thereof.
"B OF A" means as specified in Paragraph A of the Recitals hereto.
"BORROWER" means as specified in the initial paragraph of this
Agreement.
"BUSINESS ACQUISITIONS" means acquisitions of Facilities, health
related businesses, or related lines of business (including acquisitions of all
or substantially all of the Capital Stock of an entity owning or leasing any of
the foregoing) by the Borrower or any Subsidiary of the Borrower.
"BUSINESS DAY" means (a) any day on which commercial banks are not
authorized or required to close in Houston, Texas and New York, New York and
(b) with respect to all borrowings, payments, Conversions, Continuations,
Interest Periods and notices in connection with Eurodollar Loans, any day which
is a Business Day described in CLAUSE (A) above and which is also a day on
which dealings in Dollar deposits are carried out in the London interbank
market.
"CAPITAL EXPENDITURES" means, for any period, expenditures (including
the aggregate amount of Capital Lease Obligations incurred during such period)
made by the Borrower or any of its Subsidiaries to acquire or construct fixed
assets, plant or equipment (including renewals, improvements or replacements,
but excluding repairs) during such period and which, in accordance with GAAP,
are classified as capital expenditures.
"CAPITAL LEASE OBLIGATIONS" means, as to any Person, the obligations of
such Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) real and/or personal Property, which obligations
are classified as a capital lease on a balance sheet of such Person under GAAP.
"CAPITAL STOCK" means corporate stock and any and all shares,
partnership interests, membership interests, equity interests, participations,
rights or other equivalents (however designated) of corporate stock issued by
any entity (whether a corporation, a partnership or another entity).
"CASH EQUIVALENTS" means (a) marketable direct obligations issued or
unconditionally guaranteed by the United States government or issued by an
agency thereof and backed by the full faith and credit of the United States of
America, maturing within 180 days after the date of acquisition thereof; (b)
marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within 180 days after the date of acquisition
thereof and, at the time of acquisition, having the highest rating obtainable
from either Standard & Poor's Ratings Group ("S&P") or Xxxxx'x Investors
Service, Inc. ("MOODY'S"); (c) commercial paper, other than commercial paper
issued by Borrower or any of its Affiliates, maturing no more than 180 days
after the date of creation thereof and, at the time of acquisition, having a
rating of at least A-1 or P-1 from either S&P or Moody's; (d) domestic
certificates of deposit or time deposits or bankers' acceptances maturing
within 180 days after the date of acquisition thereof or investments in money
market or mutual funds or accounts, in each case issued or managed by any
commercial bank or other financial institution organized under the laws of the
United States of America or any state thereof or the District of Columbia or by
any foreign bank which is a Lender, and in any case having combined capital and
surplus of not less than $100,000,000; (e) deposits in any financial
institution insured by the Federal Deposit Insurance Corporation; and (f) any
of the foregoing marketable direct obligations, commercial paper, certificates
of deposit or bankers' acceptances, regardless of maturity, acquired from a
securities brokerage firm or financial institution reasonably believed to be
financially sound pursuant to a repurchase contract which requires that such
securities be repurchased by such securities brokerage firm or financial
institution, as the case may be, within 180 days of their original acquisition.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended, 42 U.S.C. 9601 ET SEQ.
"CHAMPION" means PHC/CHC Holdings, Inc., a Delaware corporation and
Wholly-Owned Subsidiary of the Borrower, the survivor of the merger of PC
Merger Sub, Inc. into CHC pursuant to the Agreement and Plan of Merger, dated
April 12, 1996, by and among the Borrower, CHC and PC Merger Sub, Inc., as
amended and restated on May 29, 1996.
"CHANGE OF CONTROL" means the existence or occurrence of any of the
following: (a) any Person or two or more Persons (other than the Permitted
Holders) acting as a group (as defined in Section 13d-3 of the Securities
Exchange Act of 1934, as amended), becomes the "beneficial owner" (within the
meaning of Rule 13d-3 and/or Rule 13d-5 under the Securities Exchange Act of
1934, as amended, except that a Person shall be deemed to have "beneficial
ownership" of all shares that such Person has the right to acquire without
condition, other than the passage of time, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of more
than thirty percent (30%) or more of the combined voting power of all
securities of the Borrower entitled to vote in the election of directors, other
than securities having such power only by reason of the happening of a
contingency (other than the passage of time); or (b) individuals who, as of the
Closing Date, constitute the Board of Directors of the Borrower (the "BORROWER
INCUMBENT BOARD") cease for any reason to constitute at least a majority of the
Board of Directors of the Borrower; PROVIDED, HOWEVER, that any individual
becoming a director of the Borrower subsequent to the Closing Date who was
elected, or whose nomination for election by the Borrower's shareholders was
approved by, a vote of at least a majority of the directors then comprising the
Borrower Incumbent Board, shall be considered as though such individual were a
member of the Borrower Incumbent Board, but excluding, for this purpose, any
such individual whose initial assumption of office occurs as a result of either
an actual or threatened election contest (as such terms are used in Rule 14a-11
of Regulation 14A promulgated under the Securities Exchange Act of 1934, as
amended) or other actual or threatened solicitation of proxies or contest by or
on behalf of a Person other than the Board of Directors of the Borrower.
"CHC" means Champion Healthcare Corporation, a Delaware corporation.
"CLOSING DATE" means the date of this Agreement as specified in the
introductory paragraph of this Agreement.
"CODE" means the Internal Revenue Code of 1986, as amended, and the
regulations promulgated and rulings issued thereunder.
"COLLATERAL" means all Property and interests in Property and proceeds
thereof now owned or hereafter acquired by Borrower and/or its Subsidiaries in
or upon which a Lien now or hereafter exists in favor of the Lenders, or the
Agent on behalf of the Lenders, whether under this Agreement or under any other
agreement, document or instrument executed by any such Persons and delivered to
Agent, the Documentation Agent, the Administrative Agent or any Lender in
connection herewith as security for the Obligations or any portion thereof.
(For purposes of this definition, Property owned by a Subsidiary shall not be
deemed to be Collateral solely by virtue of the fact that the Capital Stock of
such Subsidiary is pledged as Collateral.)
"COMMITMENT FEE" means as specified in SECTION 2.11(A).
"COMMITMENT PERCENTAGE" means, as to any Lender, the percentage
equivalent of such Lender's Revolving Credit Loans Commitment, Tranche A Term
Loan Commitment or Tranche B Term Loan Commitment divided by the total
Revolving Loan Commitments, Tranche A Term Loan Commitments and Tranche B Term
Loan Commitments of all of the Lenders, as adjusted from time to time in
accordance with SECTION 13.7.
"COMMITMENTS" means the Revolving Credit Loans Commitments, the Tranche
A Term Loan Commitments and the Tranche B Term Loan Commitments and
"COMMITMENT" means, for any Lender, such Lender's Revolving Credit Loans
Commitment, Tranche A Term Loan Commitment or Tranche B Term Loan Commitment,
as applicable.
"CONSOLIDATED ASSETS" means the total assets of the Borrower and its
Subsidiaries, determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED TANGIBLE ASSETS" means Consolidated Assets less all
intangible assets of Borrower and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP.
"CONTINUE", "CONTINUATION" and "CONTINUED" shall refer to the
continuation pursuant to SECTION 2.6 of a Eurodollar Loan as a Eurodollar Loan
of the same Type from one Interest Period to the next Interest Period.
"CONTRACT RATE" means as specified in SECTION 13.11(A).
"CONVERT", "CONVERSION" and "CONVERTED" shall refer to a conversion
pursuant to SECTION 2.6 or ARTICLE 4 of one Type of Loan into the other Type of
Loan.
"CURRENT DATE" means a date occurring no more than 30 days prior to the
Closing Date or such earlier date which is reasonably acceptable to the Agent.
"DAKOTA" means Dakota Foundation, a North Dakota non-profit
corporation.
"DEBT" means as to any Person at any time (without duplication): (a)
all obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, notes, debentures, or other similar instruments, (c)
all obligations of such Person to pay the deferred purchase price of Property
or services, except trade accounts payable of such Person arising in the
ordinary course of business, (d) all Capital Lease Obligations of such Person,
(e) all Debt and Operating Leases of others Guaranteed by such Person (other
than (x) Guarantees of Operating Leases in effect at the Closing Date, if any
and (y) Guarantees of Operating Leases entered into after the Closing Date that
are not material in the aggregate), (f) all obligations (other than trade
accounts payable permitted under CLAUSE (C) above) of others to the extent
secured by a Lien existing on Property owned by such Person, whether or not the
obligations secured thereby have been assumed by such Person or are
non-recourse to such Person, (g) all reimbursement obligations of such Person
(whether contingent or otherwise) in respect of letters of credit, bankers'
acceptances, surety or other bonds and similar instruments (other than
reimbursement obligations to B of A with respect to the Existing Letter of
Credit Liabilities up to the undrawn face amount of the Back-up Letter of
Credit), and (h) all obligations and liabilities of such Person under Interest
Rate Protection Agreements, and all liabilities of such Person in respect of
unfunded vested benefits under any Pension Plan; PROVIDED, HOWEVER, that "Debt"
does not include any obligations pursuant to receivables financing that are not
required by GAAP to be booked as liabilities on the balance sheet of the
Borrower and its Subsidiaries. Without limitation of the foregoing, the
obligations of Champion and Xxxxxxxxxx-Fargo under Section 3.03(g) of the DHHS
Partnership Agreement shall be deemed to constitute Debt of the Borrower. For
purposes of the preceding CLAUSE (E), an Operating Lease obligation shall equal
the sum of all future rentals due thereunder during the term thereof,
discounted at a rate equal to the yield on U.S. Treasury Securities having a
remaining term to maturity closest to the remaining term of such lease, as
reported on page PX1 of the Bloomberg Financial Market Services Screen (or, if
not available, any other nationally recognized trading screen reporting on-line
intraday trading) at 4:00 p.m. (New York time) on the Business Day prior to the
date of calculation.
"DEBT ISSUANCE" means any issuance by the Borrower or any Subsidiary of
any Debt.
"DEFAULT" means an Event of Default or the occurrence of an event or
condition which with notice or lapse of time or both would become an Event of
Default.
"DEFAULT RATE" means, in respect of any principal of any Loan, any
Reimbursement Obligation or any other amount payable by the Borrower under this
Agreement or any other Loan Document which is not paid when due (whether at
stated maturity, by acceleration or otherwise), a rate per annum during the
period commencing on the due date until such amount is paid in full equal to
the sum of two percent (2%) plus the Base Rate as in effect from time to time
plus the Applicable Margin for Base Rate Loans; PROVIDED, HOWEVER, that if such
amount in default is principal of a Eurodollar Loan and the due date is a day
other than the last day of an Interest Period therefor, the "Default Rate" for
such principal shall be, for the period from and including the due date and to
but excluding the last day of the Interest Period therefor, two percent (2%)
plus the interest rate for such Eurodollar Loan for such Interest Period as
provided in SECTION 2.4(A)(II) hereof and, thereafter, the rate provided for
above in this definition.
"DHHS" means Dakota/Champion Partnership d/b/a Dakota Heartland Health
System, a North Dakota general partnership.
"DHHS PARTNERSHIP AGREEMENT" means that certain Amended and Restated
Partnership Agreement of Dakota/Champion Partnership dated as of December 21,
1994 entered into by and between Dakota and Xxxxxxxxxx-Fargo, as the same may
be amended or otherwise modified from time-to-time.
"DOCUMENTATION AGENT'S FEE LETTER" means the letter agreement dated
March 30, 1998 between the Borrower and the Documentation Agent.
"DOLLARS" and "$" mean lawful money of the U.S.
"EBITDA" means, on a consolidated basis without duplication for any
Person and its consolidated Subsidiaries for any period, the Net Income (Loss)
for such period taken as a single accounting period (excluding the cumulative
effect of a non-cash change in GAAP and discontinued operations), PLUS, the sum
of (a) (i) Interest Expense, (ii) depreciation expense, (iii) amortization
expense, (iv) income tax expense and (v) extraordinary losses, in each case
measured on a twelve (12) month basis and calculated as of the last day of the
fiscal quarter most recently ended, PLUS (b) with respect to any operations
acquired by such Person or a Subsidiary of such Person during such period
referred to in CLAUSE (A) preceding, the EBITDA of such operations (as
calculated pursuant to CLAUSE (A) preceding) for the portion of such period
prior to the respective date of acquisition, PLUS (c) EBITDA demonstrated and
certified by such Person, to the reasonable satisfaction of the Agent, as
attributable to newly acquired businesses during such period referred to in
CLAUSE (A) preceding, MINUS (d) extraordinary gains and other gains on asset
sales not otherwise included in extraordinary gains determined on a
consolidated basis in conformity with GAAP.
"ELIGIBLE ASSIGNEE" means (a) a commercial bank organized under the
laws of the United States, or any state thereof; or (b) a commercial bank
organized under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development (the "OECD"), or a
political subdivision of any such country provided that such bank is acting
through a branch or agency in the United States, and, in the case of each of
(a) and (b), having combined capital and surplus of at least $100,000,000; or
(c) a Person that is primarily engaged in the business of commercial banking
and that is (i) a Subsidiary of a Lender, (ii) a Subsidiary of a Person of
which a Lender is a Subsidiary, or (iii) a Person of which a Lender is a
Subsidiary, or (d) any other commercial bank, savings and loan association,
savings bank, finance company, insurance company, pension fund, mutual fund or
other financial institution (whether a corporation, partnership or other
entity) acceptable to the Agent and the Borrower, such acceptance not to be
unreasonably withheld or delayed.
"ENVIRONMENTAL CLAIM" means, as of the date of determination, any
written accusation, allegation, notice of violation, action, claim,
Environmental Lien, demand, order, injunction, judgment, decree, ruling,
assessment or arbitration award by any Governmental Authority or any other
Person for personal injury (including sickness, disease or death), property
damage, damage to the environment, nuisance, pollution, contamination or other
adverse effects on the environment, or for fines, penalties or restrictions,
resulting from or based upon (a) the existence, or the continuation of the
existence, of a Release (including, without limitation, sudden or non-sudden
accidental or non-accidental Releases) of, or exposure to, any Hazardous
Material or odor, audible noise or other nuisance, in, into or onto the
environment (including, without limitation, the air, soil, surface water or
groundwater) at, in, by, from or related to any Property owned, operated or
leased by the Borrower or any of its Subsidiaries or any activities or
operations thereof; (b) the environmental aspects of the transportation,
storage, treatment or disposal of Hazardous Materials in connection with any
Property owned, operated or leased by the Borrower or any of its Subsidiaries
or their operations or facilities; or (c) the violation, or alleged violation,
of any Environmental Laws, orders, injunctions, judgments, decrees, rulings,
assessments or arbitration awards or any Permit in each case required under any
applicable Environmental Laws of or from any Governmental Authority relating to
environmental matters connected with any Property owned, leased or operated by
the Borrower or any of its Subsidiaries, in the case of each of CLAUSES (A)
through (C) above, on or before each date of determination.
"ENVIRONMENTAL LAW" means any federal, state, local or foreign law,
statute, code or ordinance, principle of common law, rule, regulation or other
legally binding requirement, as well as any Permit, order, decree or
injunction, issued, promulgated, approved or entered by a Governmental
Authority applicable to the Borrower or any of its Subsidiaries, relating to
pollution or the protection, cleanup or restoration of the environment or
natural resources, or to the public health or safety, or otherwise governing
the generation, use, handling, collection, treatment, storage, transportation,
recovery, recycling, discharge or disposal of Hazardous Materials, including,
without limitation, CERCLA, the Superfund Amendment and Reauthorization Act of
1986, 99-499, 100 Stat. 1613, the Resource Conservation and Recovery Act of
1976, 42 U. S. C. 6901 ET SEQ., the Occupational Safety and Health
Act, 29 U.S.C. 651 ET SEQ., the Clean Air Act, 42 U.S.C.
7401 ET SEQ., the Clean Water Act, 33 U.S.C. 1251 ET SEQ.,
the Emergency Planning and Community Right to Know Act, 42 U.S.C.
11001 ET SEQ., the Federal Insecticide, Fungicide and Rodenticide
Act, 7 U.S.C. 136 ET SEQ., and the Toxic Substances Control Act, 15
U.S.C. 2601 ET SEQ., and any state or local counterparts.
"ENVIRONMENTAL LIABILITIES" means, as to any Person, all liabilities,
obligations, responsibilities, Remedial Actions, losses, damages, punitive
damages, consequential damages, treble damages, costs and expenses (including,
without limitation, all reasonable fees, disbursements and expenses of counsel,
expert and consulting fees and costs of investigation and feasibility studies),
fines, penalties, sanctions and interest incurred as a result of any claim or
demand, by any Person, whether based in contract, tort, implied or express
warranty, strict liability or criminal or civil statute, including, without
limitation, any Environmental Law or Permit, order, decree or injunction with
any Governmental Authority or other Person, arising from environmental, health
or safety conditions or the Release or threatened Release of a Hazardous
Material into the environment.
"ENVIRONMENTAL LIEN" means any Lien in favor of any Governmental
Authority filed of record under any Environmental Law.
"ENVIRONMENTAL QUESTIONNAIRES" means the environmental questionnaires
listed on SCHEDULE 1.1(E)(I), which relate to certain Collateral identified in
SECTION 5.6.
"ENVIRONMENTAL REPORTS" means the environmental reports listed on
Schedule 1.1(e)(ii).
"EQUITY INTERESTS" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock or securities convertible into Capital
Stock (but excluding any debt security that is convertible into, or
exchangeable for Capital Stock).
"EQUITY ISSUANCE" means (a) any issuance by the Borrower or any of its
Subsidiaries of any Capital Stock of the Borrower or any such Subsidiary or
(b) the receipt by the Borrower or any of the Subsidiary Guarantors of any
capital contribution (whether or not evidenced by any security representing
Capital Stock issued by the recipient of such contribution), excluding in the
case of either CLAUSE (A) or CLAUSE (B) Investments permitted pursuant to
SECTION 9.4(C) or SECTION 9.4(G).
"EQUITY OFFERING" has the meaning specified in SECTION 2.7(D).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations and published interpretations
thereunder.
"ERISA AFFILIATE" means any corporation or trade or business which is a
member of a group of entities, organizations or employers of which a Loan Party
is also a member and which is treated as a single employer within the meaning
of Sections 414(b), (c), (m) or (o) of the Code.
"EURODOLLAR LOANS" means Loans that bear interest at rates based upon
the Adjusted Eurodollar Rate.
"EURODOLLAR RATE" means, for any Eurodollar Loan for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/16 of 1%) quoted by the Reference Lender at approximately 11:00 a.m.
London time (or as soon thereafter as practicable) two Business Days prior to
the first day of such Interest Period for the offering by the Reference Lender
to leading banks in the London interbank market of Dollar deposits in
immediately available funds having a term comparable to such Interest Period
and in an amount comparable to the principal amount of the Eurodollar Loan made
by the Reference Lender to which such Interest Period relates. If the
Reference Lender is not participating in any Eurodollar Loans during any
Interest Period therefor (whether as a result of SECTION 4.4 or for any other
reason), the Eurodollar Rate and the Adjusted Eurodollar Rate for such Loans
for such Interest Period shall be determined by reference to the amount of the
Loans which the Reference Lender would have made had it been participating in
such Loans.
"EVENT OF DEFAULT" has the meaning specified in SECTION 11.1.
"EXCLUDED SUBSIDIARIES" means, as of any date, as follows:
(a) any Subsidiary of the Borrower designated as an Excluded
Subsidiary by the Borrower, including, but not limited to, any
Subsidiary that is a partnership or owns a partnership interest, if
(but only if) at all times the aggregate book value (without
duplication) of the total Property (whether now owned or hereafter
acquired) of all Excluded Subsidiaries of the Borrower under this
CLAUSE (A) at no time exceeds five percent (5%) of the book value of
the total Property (whether now owned or hereafter acquired) of the
Borrower (determined on a consolidated basis for the Borrower and all
of its Subsidiaries) and the aggregate EBITDA for all such Excluded
Subsidiaries of the Borrower at no time exceeds five percent (5%) of
Adjusted EBITDA. The Excluded Subsidiaries under this CLAUSE (A) as of
the Closing Date are listed on SCHEDULE 1.1(A) hereto.
(b) In addition, the following are Excluded Subsidiaries:
(i) DHHS (until such time as the Borrower's Equity
Interests therein exceeds 50%);
(ii) Metropolitan Hospital, L.P.;
(iii) Monrovia Community Hospital, a California limited
partnership;
(iv) PHC Funding Corp. and any comparable off-balance
sheet financing entity formed in connection with any of the PHC
Funding Sale Documents;
(v) Hospital Assurance Company, Ltd., a Cayman Island
corporation;
(vi) Lincoln Community Medical, L.L.C. and Los Angeles
Community Hospital, L.L.C.; and
(vii) any other Subsidiary designated as an Excluded
Subsidiary under this CLAUSE(B) by the Required Lenders.
All changes in the designation, from time to time, of Excluded Subsidiaries
after the Closing Date shall be by written notice from Borrower to the Agent.
"EXISTING CREDIT AGREEMENT" means as specified in Paragraph A of the
Recitals hereto.
"EXISTING LENDERS" means as specified in Paragraph A of the Recitals
hereto.
"EXISTING LETTER OF CREDIT LIABILITIES" means as specified in Paragraph
B of the Recitals hereto.
"EXISTING LETTERS OF CREDIT" means those certain letters of credit
issued by B of A for the account of Borrower or a Subsidiary pursuant to the
Existing Credit Agreement and listed on SCHEDULE 1.1(B).
"EXISTING LOANS" means as specified in Paragraph B of the Recitals
hereto.
"FACILITY" means a hospital or other medical or healthcare facility or
an assisted living facility where the respective land and improvements are
owned or leased one hundred percent (100%) by Borrower and/or one or more
Wholly-Owned Subsidiaries of Borrower, Majority-Owned Subsidiaries of Borrower
or Majority-Owned Joint Ventures.
"FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest one-sixteenth of one percent (1/16 of
1%)) equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published by the Federal Reserve Bank of New York
on the Business Day next succeeding such day, PROVIDED, HOWEVER, that (a) if
the day for which such rate is to be determined is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day
and (b) if such rate is not so published on such next succeeding Business Day,
the Federal Funds Rate for any day shall be the average rate charged to the
Reference Lender on such day on such transactions as determined by the Agent.
"FEE LETTERS" means the Agent's Fee Letter, the Documentation Agent's
Fee Letter and the Administrative Agent's Fee Letter.
"FIXED CHARGE COVERAGE RATIO" means, on a consolidated basis without
duplication for the Borrower and its Subsidiaries, as of the end of any fiscal
quarter and in each case measured on a twelve (12) month basis and calculated
as of the last day of such fiscal quarter, the ratio of (a) (i) Adjusted EBITDA
MINUS (ii) Routine Capital Expenditures excluding Routine Capital Expenditures
for any acquisition by the Borrower or a Subsidiary of the Borrower for the
period prior to acquisition), PLUS with respect to any disposition by the
Borrower or a Subsidiary of the Borrower, any Routine Capital Expenditures
incurred by operations divested by the Borrower or a Subsidiary of the
Borrower, PLUS (iii) Operating Lease Expense, to the extent treated as an
expense under GAAP for purposes of calculating the Borrower's Net Income (Loss)
and Adjusted EBITDA MINUS (iv) net federal and state income taxes paid in cash
(less federal and state taxes paid in cash from gains or losses on asset sales)
to (b) the sum of (i) Interest Expense, PLUS (ii) the actual interest expense
incurred by any operations acquired by the Borrower or a Subsidiary of the
Borrower for such twelve-month period to the extent such interest expense was
incurred on Debt assumed by the Borrower or a Subsidiary of the Borrower in
conjunction with such acquisition, PLUS (iii) PRO FORMA interest expense with
respect to borrowings under the Revolving Credit Loans and/or Term Loans used
to acquire operations by the Borrower or a Subsidiary of the Borrower based on
a weighted average interest rate in effect for that portion of the twelve month
period then ended prior to acquisition of such operations MINUS (iv) actual
interest expense incurred by any operations divested by the Borrower or a
Subsidiary of the Borrower MINUS (v) PRO FORMA interest expense with respect to
any repayment of the Revolving Credit Loans and/or Term Loans from the Net
Proceeds of such divestiture based on a weighted average interest rate in
effect for that portion of the twelve month period then ended prior to
divestiture of such operations by the Borrower or a Subsidiary of the Borrower
PLUS (vi) all scheduled payments of principal with respect to any Debt to the
extent such payments of principal are not refinanced with Debt with a maturity
date one year or more from the date of such refinancing MINUS (vii) scheduled
payments of principal on the REBOS litigation settlement MINUS (viii) with
respect to any disposition by the Borrower or a Subsidiary of the Borrower, any
scheduled historical principal payments incurred by operations divested by the
Borrower or a Subsidiary of the Borrower PLUS (ix) Operating Lease Expense, to
the extent treated as an expense under GAAP for purposes of calculating the
Borrower's Net Income (Loss) and Adjusted EBITDA.
"GAAP" means generally accepted accounting principles, applied on a
consistent basis, as set forth in Opinions of the Accounting Principles Board
of the American Institute of Certified Public Accountants and/or in statements
of the Financial Accounting Standards Board and/or their respective successors
or such other statements by such other entity as may be approved by a
significant segment of the accounting profession of the United States, and
which are applicable in the circumstances as of the date in question.
Accounting principles are applied on a "consistent basis" when the accounting
principles applied in a current period are comparable in all material respects
to those accounting principles applied in a preceding period.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to
government.
"GOVERNMENTAL REQUIREMENT" means any law, statute, code, ordinance,
order, rule, regulation, judgment, decree, injunction, franchise, Permit or
other directive or requirement of any federal, state, county, municipal,
parish, provincial or other Governmental Authority or any department,
commission, board, court, agency or any other instrumentality of any of them.
"GUARANTEE" means, as to any Person, any obligation of such Person
guaranteeing or intended to guarantee any Debt, leases, dividends or other
obligations ("primary obligations") of any other Person (the "primary obligor")
in any manner, whether directly or indirectly, including, without limitation,
any obligation of such Person, whether or not contingent, (a) to purchase any
such primary obligation or any property constituting direct or indirect
security therefor, including the obligation to make take-or-pay or similar
payments; (b) to advance or supply funds (i) for the purchase or payment of any
such primary obligation, or (ii) to maintain working capital or equity capital
of the primary obligor or otherwise to maintain the financial condition, net
worth or solvency of the primary obligor; (c) to purchase property, securities
or services primarily for the purpose of assuring the holder of any such
primary obligation of the ability of the primary obligor to make payment of
such primary obligation; or (d) otherwise to assure or hold harmless the holder
of such primary obligation against loss in respect thereof, including without
limitation with respect to letter of credit obligations, currency swap
agreements, foreign exchange contracts and other derivative or similar
agreements; PROVIDED, HOWEVER, that the term Guarantee shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding meaning. The
amount of any Guarantee shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Guarantee is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such Person is required to
perform thereunder as determined by such Person in good faith, but in each case
without duplication of any such primary obligation).
"HAZARDOUS MATERIAL" means, at any date, any substance, product, waste,
pollutant, chemical, contaminant, insecticide, pesticide, constituent or
material which, as of such date, is listed or regulated under or which forms
the basis of liability under any Environmental Law, including, without
limitation, asbestos, dioxin, petroleum or petroleum byproducts, underground
storage tanks (whether empty or containing any substance), polychlorinated
biphenyls and any medical waste.
"INDENTURE" means the Indenture dated as of August 16, 1996 by and
between the Borrower and AmSouth Bank of Alabama, as Trustee, related to
$325,000,000 of ten percent (10%) Senior Subordinated Notes due 2006 issued by
the Borrower.
"INTELLECTUAL PROPERTY" means any U.S. or foreign patents, patent
applications, trademarks, trade names, service marks, brand names, logos and
other trade designations (including unregistered names and marks), trademark
and service xxxx registrations and applications, copyrights and copyright
registrations and applications, inventions, invention disclosures, protected
formulae, formulations, processes, methods, trade secrets, computer software,
computer programs and source codes, manufacturing research and similar
technical information, engineering know-how, customer and supplier information,
assembly and test data drawings or royalty rights.
"INTEREST EXPENSE" means, for any period, all interest expense on Debt
of the Borrower and its Subsidiaries paid or accrued during such period,
including the interest portion of payments under Capital Lease Obligations.
"INTEREST PERIOD" means, with respect to any Eurodollar Loan, each
period commencing on the date such Loan is made or Converted from a Base Rate
Loan or (if Continued) the last day of the next preceding Interest Period with
respect to such Loan, and ending on the numerically corresponding day in the
first, second, third or sixth and, if available, ninth or twelfth calendar
month thereafter, as the Borrower may select as provided in SECTION 2.9 hereof,
except that each such Interest Period which commences on the last Business Day
of a calendar month (or on any day for which there is no numerically
corresponding day in the appropriate subsequent calendar month) shall end on
the last Business Day of the appropriate subsequent calendar month.
Notwithstanding the foregoing: (a) each Interest Period which would otherwise
end on a day which is not a Business Day shall end on the next succeeding
Business Day (or, if such succeeding Business Day falls in the next succeeding
calendar month, on the next preceding Business Day); (b) any Interest Period
which would otherwise extend beyond an applicable Maturity Date shall end on
such Maturity Date; (c) no more than ten (10) Interest Periods for Eurodollar
Loans shall be in effect at the same time; (d) no Interest Period shall have a
duration of less than one month and, if the Interest Period for any Eurodollar
Loans would otherwise be a shorter period, such Loans shall not be available
hereunder; and (e) each Interest Period shall be interpreted in accordance with
the customs and practices of the international interbank markets.
"INTEREST RATE PROTECTION AGREEMENTS" means, with respect to any
Person, an interest rate swap, cap or collar agreement or similar arrangement
between such Person and one or more Lenders that are parties to this Agreement
providing for the transfer or mitigation of interest rate risks either
generally or under specified contingencies.
"INVESTMENT FUND" means (a) any single customer account, pooled
separate account or general account of an insurance company, or any other
account, the assets of which could be considered "plan assets" of any Plan
under any of Xxxxxxxx 0, 000 xx 000 xx XXXXX, (x) any individual trust or
common, collective or group trust maintained by any bank, or any other trust,
the assets of which could be considered "plan assets" of any Plan under any of
Sections 3, 401 or 403 of ERISA, or (c) any entity or fund not previously
mentioned whose underlying assets include "plan assets" of any Plan by reason
of the investment in the entity or fund by an "employee benefit plan" (within
the meaning of Section 3(3) of ERISA) or a "plan" (within the meaning of
Section 4975(e)(1) of the Code) and the application of the U.S. Department of
Labor's "plan asset regulation".
"INVESTMENTS" means as specified in SECTION 9.4.
"ISSUING BANK" means Banque Paribas or such other Lender which shall
issue Letters of Credit pursuant to SECTION 2.14.
"JOINDER AGREEMENTS" means the agreements executed by each Subsidiary
after the Closing Date (other than Excluded Subsidiaries) whereby such
Subsidiary becomes a party to the Master Guaranty.
"XXXXXXXXXX" means Xx. Xxxxxxx Xxxxxx Xxxxxxxxxx, an individual.
"LA METRO HOSPITALS" means the following hospitals (located in or near
Los Angeles, California): (a) Monrovia Community Hospital, (b) Bellwood
General Hospital, (c) Hollywood Community Hospital of Hollywood and Hollywood
Community Hospital of Van Nuys, (d) Los Angeles Community Hospital and Los
Angeles Community Hospital of Norwalk, and (e) Orange County Community Hospital
of Buena Park.
"LEGAL PROCEEDINGS" means any judicial, administrative or arbitral
actions, suits, proceedings (public or private), or governmental proceedings.
"LENDER" and "LENDERS" means as specified in the initial paragraph of
this Agreement.
"LETTER OF CREDIT" means any standby letter of credit issued or deemed
issued by the Issuing Bank for the account of the Borrower pursuant to this
Agreement, or the Back-Up Letter of Credit.
"LETTER OF CREDIT AGREEMENT" means, with respect to each Letter of
Credit to be issued by the Issuing Bank, the letter of credit application and
reimbursement agreement which such Issuing Bank requires to be executed by the
Borrower in connection with the issuance of such Letter of Credit.
"LETTER OF CREDIT LIABILITIES" means, at any time, the aggregate
undrawn face amounts of all outstanding Letters of Credit and all unreimbursed
drawings under Letters of Credit, MINUS, in the case of the Back-Up Letter of
Credit, the aggregate face amounts of Letters of Credit issued in partial
replacement thereof pursuant to this Agreement.
"LEVERAGE RATIO" means as of any date, the ratio of (a) Total Debt to
(b) Adjusted EBITDA for the twelve (12) months ending with the last day of the
fiscal quarter most recently ended.
"LIEN" means any lien, mortgage, security interest, tax lien, pledge,
charge, hypothecation or other encumbrance of any kind or nature whatsoever
(including, without limitation, any conditional sale or title retention
agreement), whether arising by contract, operation of law or otherwise.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Security
Documents, the Fee Letters, the Letters of Credit, the Letter of Credit
Agreements and all other agreements, documents and instruments now or hereafter
executed and/or delivered by any Loan Party to the Agent, the Documentation
Agent, the Administrative Agent, the Issuing Bank or any Lender pursuant to or
in connection with any of the foregoing, and any and all amendments,
modifications, supplements, renewals, extensions or restatements thereof.
"LOAN PARTY" means the Borrower, each of the Subsidiaries (other than
Excluded Subsidiaries) of the Borrower and any other Person who is or becomes a
party to any agreement, document or instrument that Guarantees or secures
payment or performance of the Obligations or any part thereof.
"LOANS" means the Revolving Credit Loans and the Term Loans.
"MAJORITY-OWNED JOINT VENTURE" means any partnership or joint venture:
(a) in which a majority of the Equity Interests is owned by Borrower and/or a
Wholly-Owned Subsidiary of Borrower; (b) in which Borrower and/or a Wholly-
Owned Subsidiary of Borrower is the sole general partner; and (c) that operates
a Facility and is properly licensed to do so.
"MAJORITY-OWNED SUBSIDIARY" means a Subsidiary of Borrower which is
reported with Borrower on a consolidated basis under GAAP and the rules and
regulations of the Securities and Exchange Commission.
"MASTER GUARANTY" means the Amended and Restated Master Guaranty
substantially in the form of EXHIBIT E dated of even date herewith entered into
(i) on the Closing Date, by and among all of the existing Subsidiaries (except
the Excluded Subsidiaries), and (ii) after the Closing Date, by the execution
of Joinder Agreements by all newly-formed or newly-acquired Subsidiaries
(except Excluded Subsidiaries) as well as Subsidiaries that were formerly but
no longer remain Excluded Subsidiaries.
"MATERIAL ADVERSE EFFECT" means (a) any event that has a material and
adverse effect on (i) the condition (financial or otherwise), assets or
business operations of the Borrower and its Subsidiaries, taken as a whole,
(ii) the ability of Borrower and its Subsidiaries to perform their obligations
under the Loan Documents or (iii) the validity, enforceability, perfection or
intended priority of the Liens created or intended to be created under the
Security Documents or the rights or remedies of the Agent or the Lenders
thereunder (other than as permitted by this Agreement), (b) any material and
adverse change in (x) the condition (financial or otherwise), assets or
business, or results of operations of Borrower and its Subsidiaries, taken as a
whole, or (y) the ability of Borrower and its Subsidiaries to perform their
obligations under the Loan Documents or (c) as specified in Schedule 1.1(f).
"MATERIAL CONTRACTS" means, as to any Person, any supply, purchase,
service, employment (including all contracts with physicians), tax, indemnity,
Majority-Owned Joint Venture, shareholder or other agreements or contracts for
which the aggregate amount or value of services performed or to be performed
for or by, or funds or other Property transferred or to be transferred to or
by, such Person or any of its Subsidiaries party to such agreement or contract,
or by which such Person or any of its Subsidiaries or any of their respective
Properties (whether now owned or hereafter acquired) are otherwise bound,
during any fiscal year of the Borrower exceeds $5,000,000, and any and all
amendments, modifications, supplements, renewals or restatements thereof.
"MATURITY DATE" means, as the context requires, the Revolving Credit
Loans Maturity Date, the Tranche A Term Loans Maturity Date or the Tranche B
Term Loans Maturity Date.
"MAXIMUM RATE" means the maximum non-usurious interest rate, if any,
that any time or from time to time may be contracted for, taken, reserved,
charged or received with respect to the particular Obligations as to which such
rate is to be determined, payable to any Lender or any other Person pursuant to
this Agreement or any other Loan Document, under laws applicable to such Lender
or other Person which are presently in effect or, to the extent allowed by law,
under such applicable laws which may hereafter be in effect and which allow a
higher maximum non-usurious interest rate than applicable laws now allow. The
Maximum Rate shall be calculated in a manner that takes into account any and
all fees, payments and other charges in respect of the Loan Documents that
constitute interest under applicable law. Each change in any interest rate
provided for herein based upon the Maximum Rate resulting from a change in the
Maximum Rate shall take effect without notice to the Borrower at the time of
such change in the Maximum Rate.
"MORTGAGES" means the documents listed on SCHEDULE 1.1(G), including
each such Deed of Trust, Assignment of Rents and Leases, Security Agreement and
Financing Statement for Fixture Filing, and each other document listed on
SCHEDULE 1.1(G), in each case as amended by the respective Amendment No. 1 to
Deed of Trust, Assignment of Rents and Leases, Security Agreement and Financing
Statement for Fixture Filing dated as of the date of this Agreement and listed
on SCHEDULE 1.1(G).
"MULTIEMPLOYER PLAN" means a multiemployer plan defined as such in
Section 3(37) of ERISA to which contributions have been made by or are required
from any Loan Party or any ERISA Affiliate within six (6) years of the time in
question and which is covered by Title IV of ERISA.
"NET INCOME (LOSS)" means, for any Person for any period, the aggregate
of net income (or loss) from continuing operations of such Person and its
Subsidiaries for such period, determined on a consolidated basis in conformity
with GAAP.
"NET PROCEEDS" means, with respect to any Asset Disposition, Debt
Issuance or Equity Issuance, (a) the gross cash proceeds as and when received
by the Borrower or any of its Subsidiaries from such Asset Disposition, Debt
Issuance or Equity Issuance (including, without limitation, cash as and when
received in payment of notes as receivables, PROVIDED, HOWEVER, that such notes
as receivables and appropriate endorsements thereto shall be promptly delivered
to the Agent and pledged as Collateral to secure payment of the Obligations
pursuant to agreements reasonably satisfactory in form and substance to the
Agent), MINUS (b) the amount, if any, of all taxes paid or payable by the
Borrower or any of its Subsidiaries directly resulting from such Asset
Disposition, Debt Issuance or Equity Issuance (including the amount, if any,
estimated by the Borrower in good faith at the time of such Asset Disposition,
Debt Issuance or Equity Issuance for taxes payable by the Borrower or any of
its Subsidiaries on or measured by net income or gain resulting from such Asset
Disposition, Debt Issuance or Equity Issuance (after giving effect to any
available loss and tax credit carry-forwards to the applicable period)), MINUS
(c) the reasonable out-of-pocket costs and expenses (or, if not readily
determinable, the Borrower's good faith estimate thereof) incurred by the
Borrower or such Subsidiary in connection with such Asset Disposition, Equity
Issuance or Debt Issuance (including, if applicable, reasonable brokerage fees
paid to a Person other than an Affiliate of the Borrower and reasonable
expenditures associated with the termination of the PHC Funding Sale Documents
as they relate to accounts sold in connection with an Asset Disposition and the
amounts of any Medicare recapture) excluding any fees or expenses paid to an
Affiliate of the Borrower. "NET PROCEEDS" with respect to any Asset
Disposition shall also include (to the extent of the Borrower's or any of its
Subsidiary's rights, titles or interests therein) proceeds (after deducting any
amounts specified in CLAUSES (B) and (C) of the preceding sentence) of
insurance with respect to any actual or constructive loss of Property, or an
agreed or compromised loss of Property or the taking of any Property under the
power of eminent domain and condemnation awards and awards in lieu of
condemnation for the taking of Property under the power of eminent domain
(irrespective of whether such Property, in each case, is owned or acquired
before, on or after the Closing Date), except such proceeds and awards as are
released to and used by the Borrower in accordance with SECTION 8.5. In no
event shall any item be included in "Net Proceeds" in respect of any joint
venture or partnership to the extent it shall exceed the Borrower's direct or
indirect share of the earnings from such joint venture or partnership.
"NET WORTH" means, at any particular time, all amounts which, in
conformity with GAAP, would be included as stockholders' equity on a
consolidated balance sheet of the Borrower and its Subsidiaries.
"NOTES" means the promissory notes made by the Borrower evidencing the
Revolving Credit Loans and the Term Loans, in the form of EXHIBITS C-1, C-2 and
C-3 hereto.
"OBLIGATIONS" means any and all (a) indebtedness, liabilities and
obligations of the Loan Parties, or any of them, to the Agent, the Issuing
Bank, the Documentation Agent, the Administrative Agent and the Lenders, or any
of them, evidenced by and/or arising pursuant to any of the Loan Documents, now
existing or hereafter arising, whether direct, indirect, related, unrelated,
fixed, contingent, liquidated, unliquidated, joint, several or joint and
several, including, without limitation, (i) the obligations of the Loan Parties
to repay the Loans and the Reimbursement Obligations, to pay interest on the
Loans and Reimbursement Obligations (including, without limitation, interest
accruing after any, if any, bankruptcy, insolvency, reorganization or other
similar filing) and to pay all fees, indemnities, costs and expenses (including
attorneys' fees) provided for in the Loan Documents and (ii) the indebtedness
constituting the Loans, the Reimbursement Obligations and such fees,
indemnities, costs and expenses, and (b) indebtedness, liabilities and
obligations of the Borrower under any and all Interest Rate Protection
Agreements.
"OPERATING LEASE" means, with respect to any Person, any lease, rental
or other agreement for the use by that Person of any Property which is not a
Capital Lease Obligation.
"OUTSTANDING REVOLVING CREDIT" means, at any particular time, the sum
of (a) the outstanding principal amount of the Revolving Credit Loans and
(b) the Letter of Credit Liabilities.
"XXXXXXXXXX-FARGO" means Xxxxxxxxxx Healthcare Corporation of North
Dakota, Inc., a Wholly-Owned Subsidiary of Borrower.
"PARK HOSPITAL SUBORDINATED NOTE" means that certain 6.51% subordinated
note due August 30, 2006 issued by the Borrower to Park Hospital GmbH in the
aggregate principal amount of $7,185,467, a copy of which is attached hereto as
EXHIBIT B, and any and all amendments, modifications, supplements, renewals,
extensions or restatements thereof not prohibited by this Agreement.
"PAYOR" means as specified in SECTION 3.4.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to all or any of its functions under ERISA.
"PC MERGER SUB, INC." means PC Merger Sub, Inc., a Delaware
corporation.
"PENSION PLAN" means an employee pension benefit plan as defined in
Section 3(2) of ERISA (excluding any Multiemployer Plan) which is subject to
the funding requirements under Section 302 of ERISA or Section 412 of the Code,
in whole or in part, and which is maintained or contributed to currently or at
any time within six years of the time in question, by the Borrower or any ERISA
Affiliate for employees of the Borrower or any ERISA Affiliate.
"PERMIT" means any permit, certificate, approval, license or other
authorization issued by a Governmental Authority.
"PERMITTED ACQUISITIONS" means as specified in SECTION 9.5.
"PERMITTED HOLDERS" means (a) any Person employed by the Borrower and
its Subsidiaries in a management capacity as of the Closing Date, (b)
Xxxxxxxxxx, (c) any 80% or more owned Subsidiary of Xxxxxxxxxx, or a spouse or
immediate family member of Xxxxxxxxxx and (d) any trust, corporation,
partnership or other entity, the beneficiaries, stockholders, partners, owners
or Persons beneficially holding a controlling interest of which consist of
Xxxxxxxxxx and/or any such other Persons referred to in clause (c) above,
including the estate of Professor Xx. Xxxxxxx Xxxxxxxxxx and any executors or
co-executors of the estate of Professor Xx. Xxxxxxx Xxxxxxxxxx.
"PERMITTED LIENS" means:
(b) Liens disclosed on SCHEDULE 1.1(C) hereto and all Liens
disclosed on the Schedules and Exhibits to the Mortgages;
(c) Liens securing the Obligations in favor of the Agent (for
the benefit of the Agent and the Lenders or the Issuing Bank) pursuant
to the Loan Documents;
(d) Encumbrances consisting of easements, zoning restrictions or
other restrictions on the use of real Property or minor imperfections
to title which do not (individually or in the aggregate) materially
affect the value of the Property encumbered thereby or materially
impair the ability of the Borrower or any of its Subsidiaries to use
such Property in its businesses, and none of which is violated in any
material respect by existing or proposed structures or land use;
(e) Liens for current taxes, assessments or other governmental
charges which are not yet due or which are being contested in good
faith and for which adequate reserves have been provided on the books
of the Borrower or such Subsidiary, as the case may be;
(f) Liens of mechanics, materialmen, warehousemen, carriers,
landlords (including contractual landlords Liens) or other similar
statutory Liens securing obligations that are not yet due and are
incurred in the ordinary course of business or which are being
contested in good faith and for which adequate reserves have been
established;
(g) Liens resulting from good faith deposits to secure payment
of worker's compensation (or to participate in any fund in connection
with worker's compensation insurance), unemployment insurance, pension
or other social security programs or to secure the performance of
tenders, statutory obligations, taxes, customs, duties or other
charges, surety and appeal bonds, bids, contracts (other than for
payment of Debt) or leases, all in the ordinary course of business;
(h) Liens incurred in connection with Capital Lease Obligations
permitted by SECTION 9.1(C);
(i) Purchase-money Liens on any Property now owned or hereafter
acquired or the assumption after the Closing Date of any Lien on
Property existing at the time of such acquisition (and not created in
contemplation of such acquisition), or a Lien incurred prior to or
after the Closing Date in connection with any conditional sale or other
title retention agreement other than Capital Lease Obligations;
PROVIDED, HOWEVER, that:
(i) any Property subject to the foregoing is or was
acquired by the Borrower or any of its Subsidiaries or the
Person from which the Borrower or a Subsidiary acquires such
Property in the ordinary course of its respective business and
the Lien on the Property attaches concurrently or within 90 days
after the acquisition thereof;
(ii) the Debt secured by any Lien so created, assumed or
existing shall not exceed the lesser of the cost or fair market
value at the time of acquisition of the Property covered
thereby;
(iii) each such Lien shall attach only to the Property so
acquired and the proceeds thereof; and
(iv) the Debt secured by all such Liens shall not exceed
three percent (3%) of the book value of the total Property at
any time of the Borrower and all of its Subsidiaries;
(j) Liens against the Property and Capital Stock of any Excluded
Subsidiary;
(k) judgment Liens on appeal if and only if (i) the amount,
applicability or validity thereof is currently (at the time in
question) being contested in good faith by appropriate action promptly
and diligently conducted and adequate cash reserves (segregated to the
extent required by GAAP) have been set aside therefor, (ii) levy and
execution thereon have been stayed and continue to be stayed and (iii)
they do not in the aggregate materially detract from the value of the
Property (whether now owned or hereafter acquired) of the Person in
question or materially impair the use of such Property in such Person's
business;
(l) other Liens consented to by the Required Lenders;
(m) other Liens so long as the obligations secured thereby do
not exceed $1,000,000 in the aggregate at any one time outstanding; and
(n) Any extension, renewal or replacement of any of the
foregoing, PROVIDED, HOWEVER, that Liens permitted under this clause
(m) shall not be extended or spread to cover any additional Debt or
Property (whether now owned or hereafter acquired);
PROVIDED, HOWEVER, that none of the Permitted Liens (except those in favor of
the Agent and except for Liens permitted under CLAUSE (D) of this definition)
may attach or relate to the Capital Stock of or any other ownership interest in
any Subsidiary of the Borrower (other than the Excluded Subsidiaries), or the
proceeds thereof.
"PERSON" means any individual, corporation, trust, association,
company, partnership, joint venture, limited liability company, Governmental
Authority or other entity.
"PHC FUNDING CORP." means PHC Funding Corp. II, a California
corporation.
"PHC FUNDING SALE DOCUMENTS" means all documents, instruments and
agreements executed and delivered by PHC Funding Corp. as of April 16, 1993,
together with any documents, instruments and agreements executed and delivered
in connection with any amendment, modification, extension or change thereto,
and including any similar documentation entered into between a third-party
lender and a Subsidiary of the Borrower established for the special purpose of
obtaining accounts receivable financing.
"PHC SALT LAKE HOSPITAL" means the assets relating to FHP Hospital, a
125-bed acute care hospital and its surrounding campus in Salt Lake City, Utah.
"PLAN" means any employee benefit plan as defined in Section 3(3) of
ERISA established or maintained or contributed to by any Loan Party or any
ERISA Affiliate, including any Pension Plan.
"PRINCIPAL OFFICE" means the principal office of the Agent and the
Syndication Agent in New York, New York, presently located at The Equitable
Tower, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
"PROHIBITED TRANSACTION" means any transaction set forth in Section 406
of ERISA or Section 4975 of the Code.
"PROJECTIONS" means the Borrower's forecasted consolidated balance
sheet and income statement, together with appropriate supporting details and a
statement of underlying assumptions, for fiscal years 1997 through 2001, which
the Borrower delivered to the Agent and the Lenders on or about March 10, 1998.
"PROPERTY" means property or assets of all kinds, real, personal or
mixed, tangible or intangible (including, without limitation, all rights
relating thereto), and including all stock and other equity interests.
"QUARTERLY DATE" means the last day of each March, June, September and
December of each year, the first of which shall be June 30, 1998.
"REFERENCE LENDER" means Banque Paribas.
"REGISTER" means as specified in SECTION 13.7(D).
"REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System as the same may be amended or supplemented from time to
time.
"REGULATORY CHANGE" means, with respect to any Lender, any change after
the Closing Date in any U.S. federal or state or foreign laws or regulations
(including Regulation D) or the adoption or making after such date of any
interpretations, directives or requests applying to a class of lenders
including such Lender of or under any U.S. federal or state or foreign laws or
regulations (whether or not having the force of law) by any Governmental
Authority charged with the interpretation or administration thereof.
"REIMBURSEMENT OBLIGATION" means the obligation of the Borrower to
reimburse the Issuing Bank for any drawing under a Letter of Credit.
"RELEASE" means, at any date, any release, spill, emission, leaking,
pumping, injection, deposit, disposal, disbursement, leaching or migration of
Hazardous Materials into the indoor or outdoor environment or into or out of
Property (whether owned, acquired, operated or leased on or before such date),
including, without limitation, the movement of Hazardous Materials through or
in the air, soil, surface water or ground water.
"REMEDIAL ACTION" means all actions required by Environmental Law to
(a) clean up, remove, respond to, treat or otherwise address Hazardous
Materials in the indoor or outdoor environment, (b) prevent the Release or
threat of Release or minimize the further Release of Hazardous Materials so
that they do not migrate or endanger or threaten to endanger public health or
welfare or the indoor or outdoor environment, (c) perform studies and
investigations on the extent and nature of any actual or suspected
contamination, the remedy or remedies to be used or health effects or risks of
such contamination, or (d) perform post-remedial monitoring, care or remedy of
a contaminated site.
"REPORTABLE EVENT" means any of the events set forth in Section 4043(b)
or (c) of ERISA other than a Reportable Event as to which the provision of 30
days' notice to the PBGC is waived under applicable regulations.
"REQUIRED LENDERS" means, at any date of determination, Lenders having
in the aggregate at least 51% (in dollar amount as to any one or more of the
following) of the sum of the aggregate outstanding Commitments (or, if all such
Commitments have terminated or expired, the aggregate outstanding principal
amount of the Loans and the aggregate Letter of Credit Liabilities).
"REQUIRED PAYMENT" means as specified in SECTION 3.4.
"RESERVE REQUIREMENT" means, for any Eurodollar Loan of any Lender for
any Interest Period therefor, the maximum rate at which reserves (including any
marginal, supplemental or emergency reserves) are required to be maintained
during such Interest Period under any regulations of the Board of Governors of
the Federal Reserve System (or any successor) by such Lender for deposits
exceeding $100,000,000 against "Eurocurrency Liabilities" as such term is used
in Regulation D.
"RESPONSIBLE OFFICER" means, as to any Loan Party, the chief financial
officer, chief operating officer, chief executive officer, treasurer or general
counsel of such Person.
"RESTRICTED PAYMENT" means (a) any dividend or other distribution
(whether in cash, Property or obligations), direct or indirect, on account of
(or the setting apart of money for a sinking or other analogous fund for) any
shares of any class of Capital Stock of the Borrower or any of its Subsidiaries
(other than the Excluded Subsidiaries) now or hereafter outstanding, except a
dividend payable solely in shares of stock or cash payments in lieu of
fractional shares; (b) any redemption, conversion, exchange, retirement,
sinking fund or similar payment, purchase or other acquisition for value,
direct or indirect, of any shares of any class of Capital Stock of the Borrower
or any of its Subsidiaries now or hereafter outstanding; (c) any payment or
prepayment of principal of, premium, if any, or interest on, or any redemption,
conversion, exchange, purchase, retirement, redemption or defeasance of, or
payment with respect to, any Subordinated Debt; and (d) any payment made to
retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire shares of any class of Capital Stock of the Borrower or
any of its Subsidiaries now or hereafter outstanding; PROVIDED, HOWEVER, that
the term "Restricted Payment" shall not include (i) any of the foregoing made
solely in the form of shares of the Borrower's Capital Stock, options, warrants
or other rights to acquire shares of the Borrower's Capital Stock or securities
convertible into, or exchangeable for, shares of the Borrower's Capital Stock
other than Debt securities that are convertible into, or exchangeable for,
shares of the Borrower's Capital Stock, (ii) payments under the service
agreement and the insurance agreement with Xxxxxxxxxx contemplated by the
Agreement and Plan of Merger, dated April 12, 1996, by and among the Borrower,
CHC and PC Merger Sub, Inc., as amended and restated on May 29, 1996 or
(iii) any payments under Section 3.03(g) of the DHHS Partnership Agreement.
"REVOLVING CREDIT LOANS" means as specified in SECTION 2.1(A).
"REVOLVING CREDIT LOANS COMMITMENT" means, as to any Lender, the
obligation of such Lender to make or continue Revolving Credit Loans and incur
or participate in Letter of Credit Liabilities hereunder in an aggregate
principal amount at any one time outstanding up to but not exceeding the amount
set forth opposite the name of such Lender on SCHEDULE 1.1(D) hereto under the
heading "Revolving Credit Loans Commitment" or, if such Lender is a party to an
Assignment and Acceptance, the amount set forth in the most recent Assignment
and Acceptance of such Lender, as the same may be reduced or terminated
pursuant to SECTIONS 2.6, 2.13 or 11.2, and "REVOLVING CREDIT LOANS
COMMITMENTS" means such obligations of all Lenders; PROVIDED, HOWEVER, that the
Revolving Credit Loans Commitments shall be permanently reduced by $12,000,000
on each Quarterly Date commencing with March 31, 2000 and such reductions
pursuant to this proviso shall be applied ratably to the respective Revolving
Credit Loans Commitment of each Lender in accordance with its respective
Commitment Percentage.
"REVOLVING CREDIT LOANS MATURITY DATE" means March 31, 2003.
"REVOLVING CREDIT LOANS NOTES" means the promissory note made by the
Borrower evidencing the Revolving Credit Loans, in the form of EXHIBIT C-1
hereto.
"ROUTINE CAPITAL EXPENDITURES" means, for any period, total Capital
Expenditures MINUS Capital Expenditures made to (a) consummate Business
Acquisitions, (b) complete the construction of, and purchase equipment for, new
or expanded improvements to real Property and (c) implement information systems
for the Borrower and its Subsidiaries to the extent such expenditures are used
in the construction and/or acquisition of a wide area network, data center,
host computers and related application software licenses in an amount under
this CLAUSE (C) not to exceed $8,800,000 in the aggregate through December 31,
1999.
"SECURITY AGREEMENT" means the Amended and Restated Security and Pledge
Agreement substantially in the form of EXHIBIT F executed by Borrower in favor
of the Agent for the benefit of the Agent and the Lenders, and any and all
amendments, modifications, supplements, renewals, extensions or restatements
thereof.
"SECURITY DOCUMENTS" means the Mortgages, the Security Agreement, the
Subsidiary Security Agreement and the Master Guaranty, as they may be amended,
modified, supplemented, renewed, extended or restated from time to time, and
any and all other agreements, deeds of trust, mortgages, chattel mortgages,
security agreements, pledges, guaranties, assignments of proceeds, assignments
of income, assignments of contract rights, assignments of partnership
interests, assignments of royalty interests, assignments of performance or
other collateral assignments, completion or surety bonds, standby agreements,
subordination agreements, undertakings and other agreements, documents,
instruments and financing statements now or hereafter executed and/or delivered
to or for the benefit of the Agent and the Lenders by any Loan Party in
connection with or as security or assurance for the payment or performance of
the Obligations or any part thereof.
"SENIOR LEVERAGE RATIO" means, as of any date, the ratio of (a) Total
Debt MINUS Subordinated Debt to (b) Adjusted EBITDA for the twelve (12) months
ending with the last day of the fiscal quarter most recently ended.
"SENIOR SUBORDINATED NOTE DOCUMENTS" means the Indenture and the Senior
Subordinated Notes issued and authenticated thereunder, including all exhibits
thereto.
"SENIOR SUBORDINATED NOTES" means the 10% Senior Subordinated Notes due
2006 issued by the Borrower in the original aggregate principal amount of
$325,000,000 under and pursuant to the Indenture.
"SOLVENT" means, with respect to any Person as of the date of any
determination, that on such date (a) the fair value of the Property of such
Person (both at fair valuation and at present fair saleable value) is greater
than the total liabilities, including, without limitation, contingent
liabilities, of such Person, (b) the present fair saleable 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 is able to realize upon its assets and pay its debts
and other liabilities, contingent obligations and other commitments as they
mature in the normal course of business, (d) such Person does not intend to,
and does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities mature, and (e) 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
unreasonably small capital after giving due consideration to current and
anticipated future capital requirements and current and anticipated future
business conduct and the prevailing practice in the industry in which such
Person is engaged. In computing the amount of contingent liabilities at any
time, such liabilities shall be computed at the amount which, in light of the
facts and circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
"SPECIFIED ASSET DISPOSITIONS" means as specified in Section 9.12A.
"SUBORDINATED DEBT" means (a) the Debt of the Borrower under the Senior
Subordinated Notes and the Park Hospital Subordinated Note, (b) Debt incurred
to refinance the Subordinated Debt in existence as of the Closing Date
PROVIDED, HOWEVER, that (i) the proceeds of such Debt are used solely to
retire, replace or refinance the Subordinated Debt (and the transaction costs
relating thereto), (ii) such Debt is subordinated to the Obligations on terms
and conditions that are no less favorable to the Agent and the Lenders than the
Subordinated Debt being refinanced, as reasonably determined by the Agent, and
(iii) the terms of such Debt do not provide for scheduled payments of any
principal of such Debt (including scheduled repayments or sinking fund
payments) prior to August 31, 2006, and are not more restrictive on the
Borrower or any of its Subsidiaries than the terms of the Subordinated Debt
being refinanced, including, without limitation, with respect to sales of
assets, incurrence of Debt, interest rate, change of control or the granting of
Liens, as reasonably determined by the Required Lenders, and (c) any and all
other current or future Debt of the Borrower or any Subsidiary of the Borrower
which is subordinated to all or any portion of the Obligations and which is
approved in writing by the Required Lenders.
"SUBORDINATED DEBT DOCUMENTS" means (a) the Senior Subordinated Note
Documents and the Park Hospital Subordinated Note, and (b) any and all other
agreements, documents and instruments now or hereafter evidencing or governing
any Subordinated Debt.
"SUBORDINATED NOTES" means the Senior Subordinated Notes and the Park
Hospital Subordinated Note, and any and all amendments, modifications,
supplements, renewals, extensions or restatements of such Subordinated Notes.
"SUBSIDIARY" means, with respect to any Person, any corporation or
other entity of which at least a majority of the outstanding Equity Interests
or other ownership interests having by the terms thereof ordinary voting power
to elect a majority of the board of directors (or Persons performing similar
functions) of such corporation or entity (irrespective of whether or not at the
time, in the case of a corporation, Equity Interests of any other class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time directly or indirectly owned
or controlled by such Person or one or more of its Subsidiaries or by such
Person and one or more of its Subsidiaries and, with respect to Xxxxxxxxxx-
Fargo, DHHS, but not any subsidiary or partnership owned or controlled by DHHS
unless and until DHHS becomes a Subsidiary of the Borrower.
"SUBSIDIARY GUARANTOR" means each current and future Subsidiary of
Borrower (other than an Excluded Subsidiary).
"SUBSIDIARY PLEDGOR" means each Subsidiary that has executed a
Subsidiary Security Agreement pledging certain Capital Stock to the Agent for
the benefit of the Lenders.
"SUBSIDIARY SECURITY AGREEMENT" means the Amended and Restated
Subsidiary Security and Pledge Agreement substantially in the form of EXHIBIT F
executed by each Subsidiary Pledgor in favor of the Agent for the benefit of
the Agent and the Lenders, and any security agreement executed pursuant to
SECTION 5.3 hereof, and any and all amendments, modifications, supplements,
renewals, extensions or restatements thereof.
"SYNDICATION AGENT" means Paribas Capital Markets, Inc.
"TERM LOANS" means the Tranche A Term Loans and the Tranche B Term
Loans.
"TERM LOANS COMMITMENT" means, as to any Lender, the obligation of such
Lender to make or continue Term Loans hereunder in an aggregate principal
amount at any one time outstanding up to but not exceeding the amount set forth
opposite the name of such Lender on SCHEDULE 1.1(D) hereto under the heading
"Term Loans Commitment" or, if such Lender is a party to an Assignment and
Acceptance, the amount set forth in the most recent Assignment and Acceptance
of such Lender, as the same may be reduced or terminated pursuant to SECTION
11.2, and "TERM LOANS COMMITMENTS" means such obligations of all Lenders. The
Term Loans Commitment as to each Lender is comprised of its Tranche A Term Loan
Commitment and its Tranche B Term Loan Commitment.
"TERM NOTES" means the Tranche A Term Notes and the Tranche B Term
Notes.
"TOTAL DEBT" means, at any particular time, the aggregate principal
amount of all Debt of the Borrower and its Subsidiaries outstanding, determined
on a consolidated basis, excluding only Debt of an unconsolidated partnership
or an unconsolidated joint venture for which a Subsidiary is contingently
liable solely because of its status as a general partner or joint venturer
therein, unless and until any such Debt becomes a direct obligation of the
Subsidiary liable therefor.
"TRANCHE A TERM LOAN" means as specified in SECTION 2.1(B).
"TRANCHE A TERM LOAN COMMITMENT" means as specified in SECTION 2.1(B).
"TRANCHE A TERM LOANS MATURITY DATE" means March 31, 2003.
"TRANCHE A TERM NOTES" means the promissory notes made by the Borrower
evidencing the Tranche A Term Loans, in the form of EXHIBIT C-2 hereto.
"TRANCHE B TERM LOAN" means as specified in SECTION 2.1(C).
"TRANCHE B TERM LOAN COMMITMENT" means as specified in SECTION 2.1(C).
"TRANCHE B TERM LOANS MATURITY DATE" means March 31, 2004.
"TRANCHE B TERM NOTES" means the promissory notes made by the Borrower
evidencing the Tranche B Term Loans, in the form of EXHIBIT C-3 hereto.
"TYPE" means any type of Loan (i.e., a Base Rate Loan or Eurodollar
Loan).
"UCC" means the Uniform Commercial Code as in effect in the State of
New York and/or any other jurisdiction, the laws of which may be applicable to
the creation, perfection or priority of any Lien on any Property created
pursuant to any Security Document.
"UCP" means as specified in SECTION 2.14(B).
"U.S." means the United States of America.
"U.S. PERSON" means a citizen or resident of the U.S., a corporation,
partnership or other entity created or organized in or under any laws of the
U.S. or any estate or trust that is subject to U.S. Federal income taxation
regardless of the source of its income.
"U.S. TAXES" means any present or future tax, assessment or other
charge or levy imposed by or on behalf of the U.S. or any taxing authority
thereof.
"WHOLLY-OWNED SUBSIDIARY" means, with respect to any Person, a
Subsidiary of such Person all of whose outstanding Capital Stock (other than
directors' qualifying shares, if any) shall at the time be owned by such Person
and/or one or more of its Wholly-Owned Subsidiaries.
Section 1.2 OTHER DEFINITIONAL PROVISIONS. All definitions contained
in this Agreement are equally applicable to the singular and plural forms of
the terms defined. The words "hereof", "herein" and "hereunder" and words of
similar import referring to this Agreement refer to this Agreement as a whole
and not to any particular provision of this Agreement. Unless otherwise
specified, all Article and Section references pertain to this Agreement. Terms
used herein that are defined in the UCC, unless otherwise defined herein, shall
have the meanings specified in the UCC.
Section 1.3 ACCOUNTING TERMS AND DETERMINATIONS.
(a) All accounting terms not specifically defined herein shall be
construed in accordance with GAAP consistent with such accounting principles
applied in the preparation of the audited financial statements referred to in
SECTION 7.2(A). All financial information delivered to the Agent pursuant to
SECTION 8.1 shall, unless otherwise specified herein, be prepared in accordance
with GAAP applied on a basis consistent with such accounting principles applied
in the preparation of the audited financial statements referred to in SECTION
7.2(A) or in accordance with SECTION 8.7. The parties acknowledge and agree
that all calculations made to determine compliance with covenants contained in
this Agreement, including the financial covenants set forth in ARTICLE 10,
shall be made on a consolidated basis for Borrower and its Subsidiaries.
(b) The Borrower shall deliver to the Lenders at the same time as
the delivery of any annual or quarterly financial statement under SECTION 8.1
(i) a description, in reasonable detail, of any material variation between the
application of GAAP employed in the preparation of the next preceding annual or
quarterly financial statements and (ii) reasonable estimates of the difference
between such statements arising as a consequence thereof.
(c) To enable the ready and consistent determination of compliance
with the covenants set forth in this Agreement (including ARTICLE 10 hereof),
the Borrower will not, without giving the Agent at least 90 days advance
written notice thereof, change the last day of its fiscal year from December
31, or the last days of the first three fiscal quarters of the Borrower in each
of its fiscal years from that existing on the Closing Date and any such change
of the last day of its fiscal year or a fiscal quarter shall not be made if it
has the effect of circumventing any of the financial covenants contained in the
Loan Documents.
ARTICLE 2
LOANS
Section 2.1 COMMITMENTS.
(a) REVOLVING CREDIT LOANS. Subject to the terms and conditions of
this Agreement, each Lender severally agrees to make one or more revolving
credit loans to the Borrower from time to time from and including the Closing
Date to but excluding the Revolving Credit Loans Maturity Date up to but not
exceeding the amount of such Lender's Revolving Credit Loans Commitment as
then in effect. (Such revolving credit loans now or hereafter made by the
Lenders to the Borrower from and including and after the Closing Date are
hereinafter collectively called the "REVOLVING CREDIT LOANS".) Subject to the
foregoing limitations and the other terms and conditions of this Agreement, the
Borrower may borrow, repay and reborrow the Revolving Credit Loans.
(b) Subject to the terms and conditions of this Agreement, each
Lender severally agrees to make a term loan (each a "TRANCHE A TERM LOAN") to
the Borrower on the Closing Date, in an amount not to exceed the amount set
opposite such Lender's name on SCHEDULE 1.1(D) hereto as its Tranche A Term
Loan Commitment (such Lender's "TRANCHE A TERM LOAN COMMITMENT"). Amounts
prepaid under SECTION 2.7 may not be reborrowed under this SECTION 2.1(B).
(c) Subject to the terms and conditions of this Agreement, each
Lender severally agrees to make a term loan (each a "TRANCHE B TERM LOAN") to
the Borrower on the Closing Date, in an amount not to exceed the amount set
opposite such Lender's name on SCHEDULE 1.1(D) hereto as its Tranche B Term
Loan Commitment (such Lender's "TRANCHE B TERM LOAN COMMITMENT"). Amounts
prepaid under SECTION 2.7 may not be reborrowed under this SECTION 2.1(C).
(d) CONTINUATION AND CONVERSION OF LOANS. Subject to the terms and
conditions of this Agreement, the Borrower may borrow the Loans as Base Rate
Loans or Eurodollar Loans and, until the Maturity Date, the Borrower may
Continue Eurodollar Loans or Convert Loans of one Type into Loans of the other
Type.
(e) LENDING OFFICES. Loans of each Type made by each Lender shall
be made and maintained at such Lender's Applicable Lending Office for Loans of
such Type.
Section 2.2 NOTES. The Revolving Credit Loans made by each Lender
shall be evidenced by a single promissory note of the Borrower in substantially
the form of EXHIBIT C-1 hereto, dated the Closing Date, payable to the order of
such Lender in a principal amount equal to its Revolving Credit Loans
Commitment as originally in effect and otherwise duly completed; the Tranche A
Term Loans made by each Lender shall be evidenced by a single promissory note
of the Borrower in the form of EXHIBIT C-2 hereto, dated the Closing Date,
payable to the order of such Lender in a principal amount equal to its Tranche
A Term Loan Commitment as originally in effect and otherwise duly completed;
and the Tranche B Term Loans made by each Lender shall be evidenced by a single
promissory note of the Borrower in the form of EXHIBIT C-3 hereto, dated the
Closing Date, payable to the order of such Lender in a principal amount equal
to its Tranche B Term Loan Commitment as originally in effect and otherwise
duly completed. Each Lender is hereby authorized by the Borrower to endorse on
the schedule (or a continuation thereof) attached to each Note of such Lender,
to the extent applicable, the date, amount and Type of and the Interest Period
for each Loan made by such Lender to the Borrower hereunder and the amount of
each payment or prepayment of principal of such Loan received by such Lender;
PROVIDED, HOWEVER, that any failure by such Lender to make any such endorsement
shall not affect the obligations of the Borrower under such Note or this
Agreement in respect of such Loan.
Section 2.3 REPAYMENT OF LOANS.
(a) The Borrower shall pay to the Agent for the account of each
applicable Lender the outstanding principal of the Revolving Credit Loans (and
the outstanding principal of the Revolving Credit Loans shall be due and
payable) on the Revolving Credit Loans Maturity Date.
(b) The Borrower shall pay to the Agent for the account of each
applicable Lender the Tranche A Term Loans at the dates and in the amounts set
forth below:
June 30, 1998 $ 600,000
September 30, 1998 600,000
December 31, 1998 600,000
March 31, 1999 600,000
June 30, 1999 800,000
September 30, 1999 800,000
December 31, 1999 800,000
March 31, 2000 800,000
June 30, 2000 1,200,000
September 30, 2000 1,200,000
December 31, 2000 1,200,000
March 31, 2001 1,200,000
June 30, 2001 1,400,000
September 30, 2001 1,400,000
December 31, 2001 1,400,000
March 31, 2002 1,400,000
June 30, 2002 2,000,000
September 30, 2002 2,000,000
December 31, 2002 2,500,000
March 31, 2003 2,500,000
PROVIDED, HOWEVER, that the Borrower will repay the entire unpaid principal
amount of the Tranche A Term Loans on the Tranche A Term Loans Maturity Date.
(c) The Borrower shall pay to the Agent for the account of each
applicable Lender the Tranche B Term Loans at the dates and in the amounts set
forth below:
March 31, 1999 $ 500,000
March 31, 2000 500,000
March 31, 2001 500,000
March 31, 2002 500,000
March 31, 2003 500,000
March 31, 2004 47,500,000
PROVIDED, HOWEVER, that the Borrower will repay the entire unpaid principal
amount of the Tranche B Term Loans on the Tranche B Term Loans Maturity Date.
Section 2.4 INTEREST.
(a) INTEREST RATE. The Borrower shall pay to the Agent for the
account of each Lender interest on the unpaid principal amount of each Loan
made by such Lender for the period commencing on the date of such Loan to but
excluding the date such Loan shall be paid in full, at the following rates per
annum:
(i) during the periods such Loan is a Base Rate Loan, the Base
Rate PLUS the Applicable Base Rate Margin (or in the case of Tranche B
Loans, the Applicable Tranche B Margin); and
(ii) during the periods such Loan is a Eurodollar Loan, the
Adjusted Eurodollar Rate PLUS the Applicable Eurodollar Margin (or in
the case of Tranche B Loans, the Applicable Tranche B Margin).
(b) PAYMENT DATES. Accrued interest on the Loans shall be due and
payable as follows:
(i) in the case of Base Rate Loans, on each Quarterly Date;
(ii) in the case of each Eurodollar Loan, on the last day of the
Interest Period with respect thereto and, in the case of an Interest
Period greater than three months, at three-month intervals after the
first day of such Interest Period;
(iii) upon the payment or prepayment of any Eurodollar Loan or
the mandatory prepayment of Base Rate Loans, or upon the Conversion of
any Eurodollar Loan to a Loan of the other Type (but only on the
principal amount so paid, prepaid or Converted); and
(iv) on the Maturity Date for such Loan.
(c) DEFAULT INTEREST. Notwithstanding the foregoing, the Borrower
will pay to the Agent for the account of each Lender interest at the applicable
Default Rate on any principal of any Loan made by such Lender, any
Reimbursement Obligation and (to the fullest extent permitted by law) any other
amount payable by the Borrower under this Agreement or any other Loan Document
to or for the account of such Lender, which is not paid in full when due
(whether at stated maturity, by acceleration or otherwise), for the period from
and including the due date thereof to but excluding the date the same is paid
in full. Interest payable at the Default Rate shall be payable from time to
time on demand by the Agent.
Section 2.5 BORROWING PROCEDURE. The Borrower shall give the Agent
written notice of each borrowing hereunder in accordance with SECTION 2.9. Not
later than 12:00 p.m. (Houston time) on the date specified for each borrowing
hereunder or in the case of Base Rate Loans made on the same date as a notice
of borrowing is given, 10:00 a.m. (Houston time), each Lender will make
available the amount of the Loan to be made by it on such date in immediately
available funds to Agent at the Agent's account at Bankers Trust Company, New
York, ABA No. 000000000, for Account No. 00000000, Banque Paribas with a
reference to Xxxxxxxxxx Healthcare Corporation, or at such other address as
Agent may designate. The amount so received by the Agent shall, subject to the
terms and conditions of this Agreement and unless Agent determines that any
applicable condition precedent set forth in ARTICLE 6 has not been satisfied or
waived, be made available to the Borrower no later than 11:00 a.m. (Houston
time) where notice has been given in accordance with SECTION 2.9, but no later
than 3:30 p.m. (Houston time) where Base Rate Loans are made on the same day as
notice has been given, each by wire transfer of immediately available funds to
an account as designated in writing from time to time to the Agent by the
Borrower.
Section 2.6 OPTIONAL PREPAYMENTS, COMMITMENT TERMINATIONS AND
REDUCTIONS, CONVERSIONS AND CONTINUATIONS OF LOANS. The Borrower shall have
the right from time to time to prepay the Loans, to terminate or reduce the
Commitments in whole or in part, to Convert all or part of a Loan of one Type
into a Loan of another Type or to Continue Eurodollar Loans; PROVIDED, HOWEVER,
that: (a) the Borrower shall give the Agent notice of each such prepayment,
termination, reduction, Conversion or Continuation as provided in SECTION 2.9,
(b) Eurodollar Loans may only be Converted on the last day of the Interest
Period and (c) except for Conversions of Eurodollar Loans into Base Rate Loans,
no Conversions or Continuations shall be made while a Default has occurred and
is continuing. Any optional termination or reduction of Commitments by the
Borrower shall be permanent.
Section 2.7 MANDATORY PREPAYMENTS.
(a) The Borrower shall, unless otherwise agreed by the Required
Lenders from time to time in connection with any particular Asset Disposition,
Equity Issuance or Debt Issuance, pay (if feasible in each case, concurrently
with the consummation of each such Asset Disposition, Equity Issuance or Debt
Issuance or, in the case of an Asset Disposition, if such Asset Disposition is
a lease, concurrently with each actual or constructive receipt of any Net
Proceeds thereof, or, if not so feasible in each case, substantially
concurrently therewith and in any event within one Business Day thereafter) to
the Agent, for the benefit of the Lenders, as a prepayment of the Loans (or, if
the Loans are then paid in full and all Commitments have terminated, as cash
collateral for 100% of any outstanding Letter of Credit Liabilities), an
aggregate amount equal to 100% of (i) the Net Proceeds from all Asset
Dispositions other than the Asset Dispositions permitted by CLAUSE (B), (C),
(D) or (F) of SECTION 9.12A; (ii) the Net Proceeds from all Equity Issuances
other than (A) Equity Issuances in connection with Permitted Acquisitions, to
the extent such Net Proceeds are used to fund Permitted Acquisitions and
(B) Equity Issuances in connection with the settlement or other satisfaction of
the Stockholders' Litigation described on SCHEDULE 7.6 or related claims; and
(iii) the Net Proceeds from all Debt Issuances, other than the Net Proceeds of
a Debt Issuance permitted under SECTION 9.1.
(b) Except as provided in CLAUSES (C) and (D) below, all prepayments
under CLAUSE (A) above shall be applied to reduce ratably (i) the aggregate
outstanding Revolving Credit Loans, (ii) the aggregate outstanding Tranche A
Term Loans and (iii) the aggregate outstanding Tranche B Term Loans, and in the
case of the Term Loans, such prepayments shall be applied to the remaining
installments of the outstanding principal amounts thereof in the inverse order
of their respective maturities, unless and until the Revolving Credit Loans are
paid in full, in which case such proceeds shall be applied to prepay ratably
(i) the outstanding Tranche A Term Loans and (ii) the outstanding Tranche B
Term Loans, and any such prepayments of the Term Loans shall be applied to the
remaining installments of the outstanding principal amounts thereof in the
inverse order of their respective maturities.
(c) Notwithstanding the foregoing CLAUSE (B), unless there shall
have occurred and be continuing a Default (in which case CLAUSE (B) above shall
govern), all Net Proceeds of Specified Asset Dispositions received prior to
January 1, 1999 shall be applied as a prepayment of the Revolving Credit Loans.
(d) Notwithstanding the foregoing CLAUSE (B), unless there shall
have occurred and be continuing a Default (in which case CLAUSE (B) above shall
govern), all Net Proceeds of Equity Issuances in the form of a public offering
under the Securities Act of 1933, as amended or a private placement exempt from
the registration requirements thereof (an "EQUITY OFFERING") required to be
applied as prepayments under CLAUSE (A) received at any time when the Leverage
Ratio is greater than or equal to 4.75 to 1:00 shall be applied as a prepayment
of the Revolving Credit Loans, unless and until the Revolving Credit Loans are
paid in full, in which case such proceeds shall be applied to prepay ratably
(i) the outstanding Tranche A Term Loans and (ii) the outstanding Tranche B
Term Loans, and any such prepayments of the Term Loans shall be applied to the
remaining installments of the outstanding principal amounts thereof in the
inverse order of their respective maturities. At all other times, 50% of such
Net Proceeds shall be retained by the Borrower or its applicable Subsidiary,
and 50% of such Net Proceeds shall be applied as a prepayment of the Revolving
Credit Loans, unless and until the Revolving Credit Loans are paid in full, in
which case the proceeds otherwise required to be applied as a prepayment
thereof shall be applied to prepay ratably (A) the outstanding Tranche A Term
Loans and (B) the outstanding Tranche B Term Loans, and any such prepayments of
the Term Loans shall be applied to the remaining installments of the
outstanding principal amounts thereof in the inverse order of their respective
maturities. Notwithstanding the foregoing, at such time as the Borrower
receives Net Proceeds from the consummation of Equity Offerings in excess of
$75,000,000 required to be applied as prepayments pursuant to SECTION 2.7(A),
all such Net Proceeds (and all Net Proceeds of subsequent Equity Offerings)
required to be applied as prepayments pursuant to SECTION 2.7(A) shall be
applied to reduce ratably (i) the aggregate outstanding Revolving Credit Loans,
(ii) the aggregate outstanding Tranche A Term Loans and (iii) the aggregate
outstanding Tranche B Term Loans, and in the case of the Term Loans, such
prepayments shall be applied to the remaining installments of the outstanding
principal amounts thereof in the inverse order of their respective maturities,
unless and until the Revolving Credit Loans are paid in full, in which case
such proceeds shall be applied to prepay ratably (i) the outstanding Tranche A
Term Loans and (ii) the outstanding Tranche B Term Loans, and any such
prepayments of the Term Loans shall be applied to the remaining installments of
the outstanding principal amounts thereof in the inverse order of their
respective maturities.
(e) Any holder of a Term Note may waive the Borrower's obligation to
prepay the Term Loan evidenced thereby when otherwise required pursuant to
CLAUSES (B) or (D) of this SECTION 2.7, in the event of such waiver the Net
Proceeds attributable thereto shall be applied as a prepayment of the Revolving
Credit Loans, unless and until the Revolving Credit Loans are paid in full, in
which case such proceeds shall be applied to reduce ratably (i) the outstanding
Tranche A Term Loans (other than any such Loans held by the Lender granting the
waiver) and (ii) the outstanding Tranche B Term Loans (other than any such
Loans held by the Lender granting the waiver), and any prepayments of the Term
Loans shall be applied to the remaining installments of the outstanding
principal amounts thereof in the inverse order of their respective maturities.
(f) If at any time the Outstanding Revolving Credit exceeds the
amount of the Revolving Credit Loans Commitment at such time, the Borrower
shall immediately pay to the Agent the amount of such excess as a prepayment of
the Revolving Credit Loans.
(g) No prepayment made under this SECTION 2.7 shall reduce any
Revolving Credit Loans Commitment of any Lender hereunder.
Section 2.8 MINIMUM AMOUNTS. Except for Conversions and prepayments
pursuant to SECTION 2.7 and ARTICLE 4, each borrowing, each Conversion and each
prepayment of principal of the Loans shall be in an amount at least equal to
$1,000,000 or an integral multiple of $1,000,000 in excess thereof (borrowings,
prepayments or Conversions of or into Loans of different Types or, in the case
of Eurodollar Loans, having different Interest Periods at the same time
hereunder shall be deemed separate borrowings, prepayments and Conversions for
purposes of the foregoing, one for each Type or Interest Period).
Section 2.9 CERTAIN NOTICES. Notices by the Borrower to the Agent of
terminations or reductions of Commitments, of borrowings, Conversions,
Continuations and prepayments of Loans and of the duration of Interest Periods
shall be irrevocable and shall be effective only if received by the Agent not
later than 11:00 a.m. (Houston time) on the same Business Day in the case of
certain Base Rate Loans or on the Business Day prior to the date of the
relevant termination, reduction, borrowing, Conversion, Continuation or
prepayment or the first day of such Interest Period, in each case specified
below:
NOTICE
Number of
BUSINESS DAYS PRIOR
Borrowing of Revolving Credit Loans which are Base Rate Loans 1*
Borrowing of Revolving Credit Loans which are Eurodollar Loans 3
Conversions or Continuations of Loans 3
Prepayments of Revolving Credit Loans which are Base Rate Loans 1
Prepayments of Revolving Credit Loans which are Eurodollar Loans 3
* If notice is timely received by 11:00 a.m. (Houston time), Agent shall make
Base Rate Loans on same day as notice. If notice is received after 11:00 a.m.
(Houston time), the Agent shall make Base Rate Loans on the Business Day
following such notice.
Each such notice of termination or reduction shall specify the amount of the
Commitments to be terminated or reduced. Each such notice of borrowing,
Conversion, Continuation or prepayment shall specify the Loans to be borrowed,
Converted, Continued or prepaid and the amount (subject to SECTION 2.8 hereof)
and Type of the Loans to be borrowed, Converted, Continued or prepaid (and, in
the case of a Conversion, the Type of Loans to result from such Conversion) and
the date of borrowing, Conversion, Continuation or prepayment (which shall be a
Business Day) and the duration of the Interest Period selected, if applicable.
In the event the Borrower fails to select the Loans to be prepaid or the Types
of Loans to be prepaid in the case of a prepayment pursuant to SECTION 2.6, the
prepayment will be applied first, to the Revolving Credit Loans and as a
repayment of such Loans used for working capital needs and second, to such
Loans used for purposes permitted by SECTION 2.10(A) other than working capital
needs; and if all such Loans are prepaid in full, ratably to the aggregate
outstanding Tranche A Term Loans and the aggregate outstanding Tranche B Term
Loans, to the remaining installments of the principal amounts thereof in the
inverse order of their respective maturities. Such prepayments as to each
class of Loans specified in the preceding sentence shall be applied within each
such class first to Base Rate Loans until all such Loans within the class are
prepaid in full and then to Eurodollar Loans until all such Loans within the
class are prepaid in full. Notices of termination or reductions of
Commitments, borrowings, Conversions, Continuations or prepayments shall be in
the form of EXHIBIT G hereto, appropriately completed as applicable. Each such
notice of the duration of an Interest Period shall specify the Loans to which
such Interest Period is to relate. The Agent shall promptly notify the Lenders
of the contents of each such notice. In the event the Borrower fails to select
the Type of Loan, or the duration of any Interest Period for any Eurodollar
Loan, within the time period and otherwise as provided in this SECTION 2.9, or
fails to satisfy the conditions precedent set forth in SECTION 6.2(B), such
Loan (if outstanding as a Eurodollar Loan) will be automatically Converted
(without any need to comply with the conditions precedent set forth in SECTION
6.2) into a Base Rate Loan on the last day of the preceding Interest Period for
such Loan or (if outstanding as a Base Rate Loan) will remain as, or (if not
then outstanding) will be made as, a Base Rate Loan.
Section 2.10 USE OF PROCEEDS.
(a) The Borrower represents and warrants that the proceeds of the
Loans to be made on and, in the case of Revolving Credit Loans, after the
Closing Date shall be used in accordance with the terms and conditions of this
Agreement by the Borrower and only for expenses associated with this Credit
Agreement, general business purposes, including working capital needs,
Permitted Acquisitions permitted under SECTION 9.5 and Capital Expenditures;
PROVIDED, HOWEVER, in no event will proceeds of Revolving Credit Loans made
after the date hereof in excess of $50,000,000 at any one time outstanding be,
or shall have been, used by the Borrower for working capital needs.
(b) None of the proceeds of any Loan have been or will be used to
acquire any security in any transaction that is subject to Section 13 or 14 of
the Securities Exchange Act of 1934, as amended, or to purchase or carry any
margin stock (within the meaning of Regulations G, T, U or X of the Board of
Governors of the Federal Reserve System).
Section 2.11 FEES.
(a) The Borrower agrees to pay to the Agent for the account of each
Lender a commitment fee (the "COMMITMENT FEE") on the daily average unused or
unfunded amount of such Lender's Revolving Credit Loans Commitment, for the
period from and including the Closing Date to and including the Revolving
Credit Loans Maturity Date, at the rate per annum equal to the Applicable
Commitment Commission Percentage, which accrued commitment fees shall be
payable in arrears on each Quarterly Date beginning on June 30, 1998 and on the
Revolving Credit Loans Maturity Date.
(b) The Borrower agrees to pay to the Agent, the Documentation Agent
and the Administrative Agent such fees as are specified in their respective Fee
Letters, which fees shall be payable in such amounts and on such dates as are
specified therein.
Section 2.12 COMPUTATIONS. Interest and fees payable by the Borrower
under this Agreement and under the other Loan Documents on all Loans, other
than interest on Base Rate Loans, shall be computed on the basis of a year of
360 days and the actual number of days elapsed (including the first day but
excluding the last day) occurring in the period for which payable unless, in
the case of any amount constituting interest under applicable law, such
calculation would result in a usurious rate, in which case such amount of
interest shall be calculated on the basis of a year of 365 or 366 days, as the
case may be. Interest payable by the Borrower hereunder and under the other
Loan Documents on Base Rate Loans shall be computed on the basis of a year of
365 or 366 days, as the case may be.
Section 2.13 REDUCTION OR TERMINATION OF COMMITMENTS. The Borrower
shall have the right to permanently terminate or reduce in part the unused
portion of the Revolving Credit Loans Commitments at any time and from time to
time, without premium or penalty, PROVIDED, HOWEVER, that (a) the Borrower
shall give notice of each such termination or reduction as provided in SECTION
2.9, (b) each partial reduction shall be in an aggregate amount of at least
$1,000,000 and in integral multiples of $1,000,000 in excess thereof, and shall
be applied ratably to the respective Revolving Credit Loans Commitment of each
Lender in accordance with its respective Commitment Percentage, (c) in no event
shall the Revolving Credit Loans Commitments be reduced below the amount of the
Outstanding Revolving Credit without a simultaneous payment of Revolving Credit
Loans and all accrued interest thereon such that the amount of the Outstanding
Revolving Credit does not exceed the remaining aggregate Revolving Credit Loans
Commitments after being so reduced, and (d) no Eurodollar Loans shall be
prepaid other than on the last day of the applicable Interest Period unless
such prepayment is in accordance with SECTION 4.5 hereof. The Revolving Credit
Loans Commitments may not be reinstated after they have been terminated or (if
applicable) reduced.
Section 2.14 LETTERS OF CREDIT.
(a) Subject to the terms and conditions of this Agreement, the
Borrower may utilize the Revolving Credit Loans Commitments by requesting that
the Issuing Bank issue Letters of Credit; PROVIDED, HOWEVER, that the aggregate
amount of outstanding Letter of Credit Liabilities shall not at any time exceed
the lesser of (i) $25,000,000 and (ii) the Revolving Credit Loans Commitments
less the then outstanding and unpaid Revolving Credit Loans. Such utilization
shall be deemed utilization for working capital needs for purposes of SECTION
2.10. Upon the date of issue of each Letter of Credit, the Issuing Bank shall
be deemed, without further action by any party hereto, to have sold to each
Lender, and each Lender shall be deemed, without further action by any party
hereto, to have purchased from the Issuing Bank, a participation to the extent
of such Lender's Commitment Percentage in such Letter of Credit.
(b) The Borrower shall give the Issuing Bank (with a copy to the
Agent) at least five Business Days irrevocable prior notice (effective upon
receipt) specifying the date of each Letter of Credit and the nature of the
transactions to be supported thereby. Upon receipt of such notice the Agent
shall promptly notify each applicable Lender of the contents thereof and of
such Lender's Commitment Percentage of the amount of the proposed Letter of
Credit. Each Letter of Credit shall have an expiration date that does not
exceed one year from the date of issuance and that does not extend beyond the
Revolving Credit Loans Maturity Date, shall be payable in Dollars, shall
support a transaction entered into in the course of the Borrower's business,
shall be satisfactory in form and substance to the Issuing Bank, and shall be
issued pursuant to such agreements, documents and instruments (including a
Letter of Credit Agreement) as the Issuing Bank may reasonably require, none of
which shall be inconsistent with this Agreement. Without limiting the
generality of the foregoing, no provision of any Letter of Credit Agreement
shall give the Agent, the Issuing Bank or any Lender any rights or remedies
that are greater than the rights or remedies such Person would otherwise have
under this Agreement. Each Letter of Credit shall (i) provide for the payment
of drafts presented for, on or thereunder by the beneficiary in accordance with
the terms thereof, when such drafts are accompanied by the documents (if any)
described in the Letter of Credit and (ii) to the extent not inconsistent with
the terms hereof or any applicable Letter of Credit Agreement, be subject to
the Uniform Customs and Practice for Documentary Credits (1993 Revision),
International Chamber of Commerce Publication No. 500 (together with any
subsequent revision thereof approved by a Congress of the International Chamber
of Commerce and adhered to by the Issuing Bank, the "UCP"), and shall, as to
matters not governed by the UCP, be governed by, and construed and interpreted
in accordance with, the laws of the State of New York.
(c) The Borrower agrees to pay to the Agent a nonrefundable Letter
of Credit fee on the face amount of each Letter of Credit calculated at a rate
per annum equal to the Applicable Eurodollar Margin. The Letter of Credit fee
shall be payable quarterly in arrears on the first Business Day of the calendar
quarter following the date any Letter of Credit is issued commencing with the
calendar quarter beginning on April 1, 1998 (pro rated in the case of Letters
of Credit issued on or before March 31, 1998 based upon the number of days in
such quarter commencing with the date of issuance, through and including
March 31, 1998), for the period through the earliest of the expiry date of each
Letter of Credit, the last day of such calendar quarter or the Revolving Credit
Loans Maturity Date, to the Agent for the ratable benefit of the Lenders.
Changes in the Letter of Credit fee shall be determined in the same manner, and
effective at the same time, as changes to the Applicable Eurodollar Margin are
determined. The Agent agrees to pay to each Lender, promptly after receiving
any payment of letter of credit fees referred to above in this CLAUSE (C), such
Lender's Commitment Percentage of such fees.
(d) The Borrower also agrees to pay to the Issuing Bank for its own
account, on the date of issuance or any renewal of any Letter of Credit, a
nonrefundable Letter of Credit issuance/renewal fee with respect to each Letter
of Credit issued by the Issuing Bank hereunder in an amount equal to (i) one-
quarter of one percent (0.25%) per annum, multiplied by (ii) the face amount of
the Letter of Credit. In addition to the foregoing fees, the Borrower shall
pay or reimburse the Issuing Bank for such normal and customary costs and
expenses, including, without limitation, administrative, issuance, amendment,
payment and negotiation charges, as are incurred or charged by the Issuing Bank
in issuing, effecting payment under, amending or otherwise administering any
Letter of Credit.
(e) Upon receipt from the beneficiary of any Letter of Credit of any
demand for payment or other drawing under such Letter of Credit, the Issuing
Bank shall promptly notify the Borrower, the Agent and each Lender as to the
amount to be paid as a result of such demand or drawing and the respective
payment date. If at any time the Issuing Bank shall make a payment to a
beneficiary of a Letter of Credit pursuant to a drawing under such Letter of
Credit, each Lender will pay to the Issuing Bank, immediately upon the Issuing
Bank's demand at any time commencing after such payment until reimbursement
therefor in full by the Borrower, an amount equal to such Lender's Commitment
Percentage of such payment, together with interest on such amount for each day
from the date of such payment to the date of payment by such Lender of such
amount at a rate of interest per annum equal to the Federal Funds Rate.
(f) In the event the Borrower shall fail to reimburse the Issuing
Bank for the account of the Issuing Bank the full amount of any drawing by
11:00 a.m. (Houston time) on the same date such drawing is honored by the
Issuing Bank under any Letter of Credit, the Issuing Bank shall promptly notify
Agent and the Agent shall as promptly as possible notify each Lender thereof
and the Borrower shall be deemed to have requested that Base Rate Loans be made
by the Lenders to be disbursed on the date of payment by the Issuing Bank under
such Letter of Credit, without requiring the Borrower to satisfy the conditions
of SECTION 6.2. Any notice given by the Issuing Bank or the Agent pursuant
hereto may be oral if immediately confirmed in writing (including telex);
PROVIDED, HOWEVER, that the lack of such an immediate confirmation shall not
affect the conclusiveness and binding effect of such notice.
(g) The Borrower shall be irrevocably and UNCONDITIONALLY obligated
to immediately reimburse the Issuing Bank for any amounts paid by the Issuing
Bank upon any drawing under any Letter of Credit, without presentment, demand,
protest or other formalities of any kind. The Issuing Bank will pay to each
Lender such Lender's Commitment Percentage of all amounts received from or on
behalf of the Borrower for application in payment, in whole or in part, of the
Reimbursement Obligation in respect of any Letter of Credit, but only to the
extent such Lender has made payment to the Issuing Bank in respect of such
Letter of Credit pursuant to CLAUSE (E) above. Outstanding Reimbursement
Obligations shall bear interest at the Default Rate and such interest shall be
payable on demand.
(h) The Reimbursement Obligations of the Borrower under this
Agreement and the other Loan Documents shall be absolute, unconditional and
irrevocable, and shall be performed strictly in accordance with the terms of
this Agreement and the other Loan Documents under all circumstances whatsoever,
including, without limitation, the following circumstances:
(i) Any lack of validity or enforceability of any Letter of
Credit or any other Loan Document;
(ii) Any amendment or waiver of or any consent to departure from
any Loan Document other than an amendment, waiver or consent which
directly affects such Reimbursement Obligations;
(iii) The existence of any claim, setoff, counterclaim, defense
or other right which any Loan Party or other Person may have at any
time against any beneficiary of any Letter of Credit, the Agent, the
Issuing Bank, the Lenders or any other Person, whether in connection
with this Agreement or any other Loan Document or any unrelated
transaction;
(iv) Any statement, draft or other document presented under any
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient (other than insufficiency on the face of such draft or
other document) in any respect or any statement therein being untrue or
inaccurate in any respect whatsoever;
(v) Payment by the Issuing Bank under any Letter of Credit
against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, PROVIDED, HOWEVER, that such
payment shall not have constituted gross negligence or willful
misconduct of the Issuing Bank; and
(vi) Any other circumstance whatsoever, whether or not similar
to any of the foregoing, PROVIDED, HOWEVER, that such other
circumstance or event shall not have been the result of the gross
negligence or willful misconduct of the Issuing Bank.
(i) The Borrower assumes all risks of the acts or omissions of any
beneficiary of any Letter of Credit with respect to its use of such Letter of
Credit. 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.
(j) The Back-Up Letter of Credit shall be issued on the Closing
Date. Promptly following the Closing Date, the Borrower and the Issuing Bank
shall endeavor to enter into Letter of Credit Agreements pursuant to which
substitute Letters of Credit for those previously issued by B of A under the
Existing Credit Agreement will be issued, and upon issuance and delivery to and
acceptance by the respective beneficiaries, such existing letters of credit
will be canceled and returned to B of A. The terms of the new Letter of Credit
Agreements with the Issuing Bank contemplated hereunder will be substantially
the same as the terms of the existing Letter of Credit Agreements entered into
pursuant to the Existing Credit Agreement. No Letter of Credit issuance fee
under CLAUSE (D) of this Section 2.14 shall be due in the case of Letters of
Credit which, upon issuance, reduce the undrawn face amount of the Back-up
Letter of Credit.
ARTICLE 3
PAYMENTS
Section 3.1 METHOD OF PAYMENT. All payments of principal, interest,
fees and other amounts to be made by the Borrower under this Agreement and the
other Loan Documents shall be made to the Agent at the Agent's account at
Bankers Trust Company, New York, ABA No. 00000000, for Account No. 00000000,
Banque Paribas, with a reference to Xxxxxxxxxx Healthcare Corporation, or at
such other address as Agent may designate, for the account of each Lender in
Dollars and in immediately available funds, without setoff, deduction or
counterclaim, not later than 12:00 p.m. (Houston time) on the date on which
such payment shall become due (each such payment made after such time on such
due date to be deemed to have been made on the next succeeding Business Day).
The Borrower shall, at the time of making each such payment, specify to the
Agent the sums payable by the Borrower under this Agreement and the other Loan
Documents to which such payment is to be applied (and in the event that the
Borrower fails to so specify, or if an Event of Default has occurred and is
continuing, the Agent may apply such payment to the Obligations in such order
and manner as the Agent may elect, subject to SECTION 3.2.) Upon the
occurrence and during the continuation of an Event of Default, all proceeds of
any Collateral may be applied by the Agent to the Obligations in such order and
manner as the Agent may elect, subject to SECTION 3.2. Each payment received
by the Agent under this Agreement or any other Loan Document for the account of
a Lender shall be paid promptly to such Lender, in immediately available funds,
for the account of such Lender's Applicable Lending Office. Whenever any
payment under this Agreement or any other Loan Document shall be stated to be
due on a day that is not a Business Day, except as may be contemplated by the
definition of Interest Period, such payment may be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of the payment of interest and the Commitment Fee, as the case may
be.
Section 3.2 PRO RATA TREATMENT. Except to the extent otherwise
provided in this Agreement: (a) each Loan shall be made by the Lenders under
SECTION 2.1, pro rata according to the respective Commitments; (b) each payment
of Commitment Fees under SECTION 2.11(A) shall be made for the account of the
Lenders, and each termination or reduction of the Revolving Credit Loans
Commitments under SECTION 2.13 shall be applied to the Revolving Credit Loans
Commitments of the Lenders, pro rata according to the respective unused
Revolving Credit Loans Commitments; (c) the making, Conversion and Continuation
of Loans of a particular Type (other than Conversions provided for by
SECTION 4.4) shall be made pro rata among the Lenders holding Loans of such
Type according to the amounts of their respective Commitments; (d) each payment
and prepayment by the Borrower of principal of or interest on Loans of a
particular Type shall be made to the Agent for the account of the Lenders
holding Loans of such Type pro rata in accordance with the respective unpaid
principal amounts of such Loans held by such Lenders; (e) Interest Periods for
Loans of a particular Type shall be allocated among the Lenders holding Loans
of such Type pro rata according to the respective principal amounts held by
such Lenders; and (f) the Lenders (other than the Issuing Bank) shall purchase
participations in the Letters of Credit pro rata in accordance with their
Commitment Percentages of the aggregate Revolving Credit Loans Commitments.
Section 3.3 SHARING OF PAYMENTS, ETC. If a Lender shall obtain
payment of any principal of or interest on any of the Obligations due to such
Lender hereunder through the exercise of any right of setoff, banker's lien,
counterclaim or similar right, or otherwise, it shall promptly purchase from
the other Lenders participations in the Obligations held by the other Lenders
(to the extent such Obligations represent, or directly relate to, an interest
or interests in the same Obligations in which the exercising Lender holds an
interest or interests) in such amounts, and make such adjustments from time to
time as shall be equitable to the end that all the Lenders shall share pro rata
in accordance with the unpaid principal and interest on such Obligations then
due to each of them. To such end, all of the Lenders shall make appropriate
adjustments among themselves (by the resale of participations sold or
otherwise) if all or any portion of such excess payment is thereafter rescinded
or must otherwise be restored. The Borrower agrees, to the fullest extent it
may effectively do so under applicable law, that any Lender so purchasing a
participation in such Obligations may exercise all rights of setoff, banker's
lien, counterclaim or similar rights with respect to such participation as
fully as if such Lender were a direct holder of Obligations in the amount of
such participation. Nothing contained herein shall require any Lender to
exercise any such right or shall affect the right of any Lender to exercise,
and retain the benefits of exercising, any such right with respect to any other
indebtedness or obligation of the Borrower.
Section 3.4 NON-RECEIPT OF FUNDS BY THE AGENT. Unless the Agent shall
have been notified in writing by a Lender or the Borrower (the "PAYOR") prior
to the date on which such Lender is to make payment to the Agent of the
proceeds of a Loan to be made by it hereunder or the Borrower is to make a
payment to the Agent for the account of one or more of the Lenders, as the case
may be (such payment being herein called the "REQUIRED PAYMENT"), which notice
shall be effective upon receipt, that the Payor does not intend to make the
Required Payment to the Agent, the Agent may assume that the Required Payment
has been made and may, in reliance upon such assumption (but shall not be
required to), make the amount thereof available to the intended recipient on
such date and, if the Payor has not in fact made the Required Payment to the
Agent, the recipient of such payment shall, on demand, pay to the Agent the
amount made available to it together with interest thereon in respect of the
period commencing on the date such amount was so made available by the Agent
until the date the Agent recovers such amount at a rate per annum equal to the
Federal Funds Rate for such period.
Section 3.5 WITHHOLDING TAXES. All payments by the Borrower of
principal of and interest on the Loans and of all fees and other amounts
payable under the Loan Documents shall be made free and clear of, and without
deduction by reason of, any present or future taxes, duties, imposts,
assessments or other charges levied or imposed by any Governmental Authority
(other than taxes on or measured by or calculated on the basis of the overall
net income or capital of any Lender). If any such taxes, duties, imposts,
assessments or other charges are so levied or imposed, the Borrower will make
additional payments in such amounts so that every net payment of principal of
and interest on the Loans and of all other amounts payable by it under the Loan
Documents, after withholding or deduction for or on account of any such present
or future taxes, duties, imposts, assessments or other charges (other than any
tax imposed on or measured by or calculated on the basis of net income or
capital of a Lender attributable to payments made to or on behalf of a Lender
pursuant to this SECTION 3.5 and any penalties or interest attributable to such
payments), will not be less than the amount provided for herein or therein
absent such withholding or deduction, PROVIDED, HOWEVER, that the Borrower
shall have no obligation to pay such additional amounts to any Lender to the
extent that such taxes, duties, imposts, assessments or other charges are
levied or imposed by reason of the failure of such Lender to comply with the
provisions of SECTION 3.6. The Borrower shall furnish promptly to the Agent
for distribution to each affected Lender, as the case may be, upon the
reasonable request of such Lender, official receipts evidencing any such
withholding or reduction.
Section 3.6 WITHHOLDING TAX EXEMPTION. Each Lender that is not
incorporated or otherwise formed under the laws of the U.S. or a state thereof
agrees that it will, prior to or on the Closing Date or the date upon which it
becomes a party to this Agreement and if it is legally able to do so, deliver
to the Borrower and the Agent two duly completed copies of U.S. Internal
Revenue Service Form 1001, 4224 or W-8, as appropriate, certifying in any case
that such Lender is entitled to receive payments from the Borrower under any
Loan Document without deduction or withholding of any U.S. federal income
taxes. Each Lender which so delivers a Form 1001, 4224 or W-8 further
undertakes to deliver to Borrower and the Agent two additional copies of such
form (or a successor form) on or before the date such form expires or becomes
obsolete or after the occurrence of any event requiring a change in the most
recent form so delivered by it, and such amendments thereto or extensions or
renewals thereof as may be reasonably requested by the Borrower or the Agent,
in each case certifying that such Lender is entitled to receive payments from
the Borrower under any Loan Document without deduction or withholding of any
U.S. federal income taxes, unless an event (including without limitation any
change in treaty, law or regulation) has occurred prior to the date on which
any such delivery would otherwise be required which renders all such forms
inapplicable or which would prevent such Lender from duly completing and
delivering any such form with respect to it and such Lender advises the
Borrower and the Agent that it is not capable of receiving such payments
without any deduction or withholding of U.S. federal income tax.
ARTICLE 4
YIELD PROTECTION AND ILLEGALITY
Section 4.1 ADDITIONAL COSTS.
(a) The Borrower shall pay directly to each Lender from time to
time, promptly upon the request of such Lender, the costs incurred by such
Lender which such Lender reasonably determines are attributable to its making
or maintaining of any Eurodollar Loans hereunder or its obligation to make any
of such Loans hereunder, or any reduction in any amount receivable by such
Lender hereunder in respect of any such Loans or such obligation (such
increases in costs and reductions in amounts receivable being herein called
"ADDITIONAL COSTS"), in each case resulting from any Regulatory Change which:
(i) changes the basis of taxation of any amounts payable to
such Lender under this Agreement or its Note in respect of any of such
Loans (other than taxes imposed on or measured by or calculated on the
basis of the overall net income or capital of such Lender or its
Applicable Lending Office for any of such Loans);
(ii) imposes or modifies any reserve, special deposit, minimum
capital, capital ratio or similar requirement relating to any
extensions of credit or other assets of, or any deposits with or other
liabilities or commitments of, such Lender (including any of such Loans
or any deposits referred to in the definition of "Eurodollar Rate" in
SECTION 1.1 hereof, but excluding the Reserve Requirement to the extent
it is included in the calculation of the Adjusted Eurodollar Rate); or
(iii) imposes any other condition affecting this Agreement or the
Notes or any of such extensions of credit or liabilities or
commitments.
Each Lender will notify the Borrower (with a copy to the Agent) of any event
occurring after the Closing Date which will entitle such Lender to compensation
pursuant to this SECTION 4.1(A) as promptly as practicable after it obtains
knowledge thereof and determines to request such compensation, and (if so
requested by the Borrower) will designate a different Applicable Lending Office
for the Eurodollar Loans of such Lender if such designation will avoid the need
for, or reduce the amount of, such compensation and will not, in the sole
opinion of such Lender, violate any law, rule or regulation or be in any way
disadvantageous to such Lender, PROVIDED, HOWEVER, that such Lender shall have
no obligation to so designate an Applicable Lending Office located in the U.S.
Each Lender will furnish the Borrower with a certificate setting forth the
basis and the amount of each request of such Lender for compensation under this
SECTION 4.1(A). If any Lender requests compensation from the Borrower under
this SECTION 4.1(A), the Borrower may, by notice to such Lender (with a copy to
the Agent), suspend the obligation of such Lender to make or Continue making,
or Convert Base Rate Loans into, Eurodollar Loans until the Regulatory Change
giving rise to such request ceases to be in effect (in which case the
provisions of SECTION 4.4 hereof shall be applicable).
(b) Without limiting the effect of the foregoing provisions of this
SECTION 4.1, in the event that, by reason of any Regulatory Change, any Lender
either (i) incurs Additional Costs, that the Borrower has indicated it will not
pay, based on or measured by the excess above a specified level of the amount
of a category of deposits or other liabilities of such Lender which includes
deposits by reference to which the interest rate on Eurodollar Loans is
determined as provided in this Agreement or a category of extensions of credit
or other assets of such Lender which includes Eurodollar Loans or (ii) becomes
subject to restrictions on the amount of such a category of liabilities or
assets which it may hold, then, if such Lender so elects by notice to the
Borrower (with a copy to the Agent), the obligation of such Lender to make or
Continue making, or Convert Base Rate Loans into, Eurodollar Loans hereunder
shall be suspended until such Regulatory Change ceases to be in effect (in
which case the provisions of SECTION 4.4 hereof shall be applicable).
(c) Determinations and allocations by any Lender for purposes of
this SECTION 4.1 of the effect of any Regulatory Change on its costs of
maintaining its obligation to make Loans or of making or maintaining Loans or
on amounts receivable by it in respect of Loans, and of the additional amounts
required to compensate such Lender in respect of any Additional Costs, shall be
conclusive in the absence of manifest error, PROVIDED, HOWEVER, that such
determinations and allocations are made on a reasonable basis.
Section 4.2 LIMITATION ON TYPES OF LOANS. Anything herein to the
contrary notwithstanding, if with respect to any Eurodollar Loans for any
Interest Period therefor:
(a) The Agent determines on a reasonable basis (which
determination shall be conclusive absent manifest error) that
quotations of interest rates for the relevant deposits referred to in
the definition of "Eurodollar Rate" in SECTION 1.1 hereof are not being
provided in the relative amounts or for the relative maturities for
purposes of determining the rate of interest for such Loans as provided
in this Agreement; or
(b) Required Lenders determine on a reasonable basis (which
determination shall be conclusive absent manifest error) and notify the
Agent that the relevant rates of interest referred to in the definition
of "Eurodollar Rate" or "Adjusted Eurodollar Rate" in SECTION 1.1
hereof on the basis of which the rate of interest for such Loans for
such Interest Period is to be determined do not accurately reflect the
cost to the Lenders of making or maintaining such Loans for such
Interest Period;
then the Agent shall give the Borrower prompt notice thereof and, so long as
such condition remains in effect, the Lenders shall be under no obligation to
make Eurodollar Loans or to Convert Base Rate Loans into Eurodollar Loans and
the Borrower shall, on the last day(s) of the then current Interest Period(s)
for the outstanding Eurodollar Loans, either prepay such Loans or Convert such
Loans into Base Rate Loans in accordance with the terms of this Agreement.
During the 30 days next succeeding the giving of such notice by the Agent to
the Borrower, the Borrower, the Agent and each of the Required Lenders shall
negotiate in good faith in order to arrive at a mutually satisfactory interest
rate for the rates of interest referred to in the definition "Eurodollar Rate"
or "Adjusted Eurodollar Rate" for proposed Eurodollar Loans. If within such 30
day period the Borrower, the Agent and the Required Lenders shall agree in
writing upon a substitute interest rate and the effective date thereof, such
substituted interest rate shall be applicable to all requests by the Borrower
for proposed Eurodollar Loans. During any period when the borrowing of
Eurodollar Loans is suspended or when an alternative interest rate is in force
pursuant to this subsection, the Agent, in consultation with the Lenders, shall
periodically, at least once a month, determine whether circumstances are such
that the interest rates referred to in the definitions of "Eurodollar Rate" or
"Adjusted Eurodollar Rate" may again be determined. If such a determination is
made, the Agent shall forthwith give written notice to the Borrower and each
Lender, whereupon the Agent, the Borrower and the Lenders shall begin
redetermining the "Eurodollar Rate" and the "Adjusted Eurodollar Rate" in
accordance with the terms of the definition thereof.
Section 4.3 ILLEGALITY. Notwithstanding any other provision of this
Agreement, but subject however to the provisions of SECTION 4.1(A), in the
event that it becomes unlawful for any Lender or its Applicable Lending Office
to (a) honor its obligation to make Eurodollar Loans hereunder or (b) maintain
Eurodollar Loans hereunder, then such Lender shall promptly notify the Borrower
(with a copy to the Agent) thereof and such Lender's obligation to make or
maintain Eurodollar Loans and to Convert Base Rate Loans into Eurodollar Loans
hereunder shall be suspended until such time as such Lender may again make and
maintain Eurodollar Loans (in which case the provisions of SECTION 4.4 hereof
shall be applicable).
Section 4.4 TREATMENT OF AFFECTED LOANS. If the obligation of any
Lender to make or Continue, or to Convert Base Rate Loans into, Eurodollar
Loans is suspended pursuant to SECTION 4.1, 4.2 or 4.3 hereof, such Lender's
Eurodollar Loans shall be automatically Converted into Base Rate Loans on the
last day(s) of the then current Interest Period(s) for the Eurodollar Loans
(or, in the case of a Conversion required by SECTION 4.1(B) or 4.3 hereof, on
such earlier date as such Lender may specify to the Borrower with a copy to the
Agent) and, unless and until such Lender gives notice as provided below that
the circumstances specified in SECTION 4.1 or 4.3 hereof which gave rise to
such Conversion no longer exist:
(a) To the extent that such Lender's Eurodollar Loans have been
so Converted, all payments and prepayments of principal which would
otherwise be applied to such Lender's Eurodollar Loans shall be applied
instead to its Base Rate Loans; and
(b) All Loans which would otherwise be made or Continued by such
Lender as Eurodollar Loans shall be made as or Converted into Base Rate
Loans and all Loans of such Lender which would otherwise be Converted
into Eurodollar Loans shall be Converted instead into (or shall remain
as) Base Rate Loans.
If such Lender gives notice to the Borrower (with a copy to the Agent) that the
circumstances specified in SECTION 4.1 or 4.3 hereof which gave rise to the
Conversion of such Lender's Eurodollar Loans pursuant to this SECTION 4.4 no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Eurodollar Loans are outstanding, such
Lender's Base Rate Loans shall be automatically Converted, on the first day(s)
of the next succeeding Interest Period(s) for such outstanding Eurodollar
Loans, to the extent necessary so that, after giving effect thereto, all Loans
held by the Lenders holding Eurodollar Loans and by such Lender are held pro
rata (as to principal amounts, Types and Interest Periods) in accordance with
their respective Commitments.
Section 4.5 COMPENSATION. The Borrower shall pay to the Agent for the
account of each Lender, promptly upon the request of such Lender through the
Agent, such amount or amounts as shall be sufficient (in the reasonable opinion
of such Lender) to compensate it for any loss, cost or expense incurred by it
as a result of:
(a) Any payment, prepayment or Conversion of a Eurodollar Loan
for any reason (including, without limitation, the acceleration of the
outstanding Loans pursuant to SECTION 11.2) on a date other than the
last day of an Interest Period for such Loan; or
(b) Any failure by the Borrower for any reason (including,
without limitation, the failure of any conditions precedent specified
in ARTICLE 6 to be satisfied) to borrow, Convert or prepay a Eurodollar
Loan on the date for such borrowing, Conversion or prepayment specified
in the relevant notice of borrowing, Conversion or prepayment under
this Agreement; PROVIDED, HOWEVER, that where such failure is solely
attributable to the circumstances set forth in SECTIONS 4.1(B)(II) or
4.3 with respect to such Lender's inability to make such Eurodollar
Loans, then no such compensation shall be required.
Section 4.6 CAPITAL ADEQUACY. If, after the Closing Date, any Lender
shall have determined that the adoption or implementation of any applicable
law, rule or regulation regarding capital adequacy (including, without
limitation, any law, rule or regulation implementing the Basle Accord), or
after the Closing Date any change therein, or after the Closing Date any change
in the interpretation or administration thereof by any central bank or other
Governmental Authority charged with the interpretation or administration
thereof, or compliance by such Lender (or its parent) with any guideline,
request or directive regarding capital adequacy (whether or not having the
force of law) of any central bank or other Governmental Authority issued after
the Closing Date (including, without limitation, any guideline or other
requirement implementing the Basle Accord), has or would have the effect of
reducing the rate of return on such Lender's (or its parent's) capital as a
consequence of its obligations hereunder or the transactions contemplated
hereby to a level below that which such Lender (or its parent) could have
achieved but for such adoption, implementation, change or compliance (taking
into consideration such Lender's policies with respect to capital adequacy) by
an amount deemed by such Lender to be material, then from time to time, within
ten Business Days after demand by such Lender (with a copy to the Agent), the
Borrower shall pay to such Lender such additional amount or amounts as will
compensate such Lender (or its parent) for such reduction. A certificate of
such Lender claiming compensation under this SECTION 4.6 and setting forth the
additional amount or amounts to be paid to it hereunder shall be conclusive
absent manifest error, PROVIDED, HOWEVER, that the determination thereof is
made on a reasonable basis. In determining such amount or amounts, such Lender
may use any reasonable averaging and attribution methods.
Section 4.7 ADDITIONAL INTEREST ON EURODOLLAR LOANS. The Borrower
shall pay, directly to each Lender from time to time, additional interest on
the unpaid principal amount of each Eurodollar Loan held by such Lender, from
the date of the making of such Eurodollar Loan until such principal amount is
paid in full, at an interest rate per annum determined by such Lender in good
faith equal to the positive remainder (if any) of (a) the Adjusted Eurodollar
Rate applicable to such Eurodollar Loan MINUS (b) the Eurodollar Rate
applicable to such Eurodollar Loan. Each payment of additional interest
pursuant to this SECTION 4.7 shall be payable by the Borrower on each date upon
which interest is payable on such Eurodollar Loan pursuant to SECTION 2.4(B);
PROVIDED, HOWEVER, that the Borrower shall not be obligated to make any such
payment of additional interest until the first Business Day after the date when
the Borrower has been informed (i) that such Lender is subject to a Reserve
Requirement and (ii) of the amount of such Reserve Requirement (after which
time the Borrower shall be obligated to make all such payments of additional
interest, including, without limitation, such payments of additional interest
that otherwise would have been payable by the Borrower on or prior to such time
had the Borrower been earlier informed).
Section 4.8 SUBSTITUTION OF LENDER. If (a) the obligation of any
Lender to make or Continue or Convert Loans into Eurodollar Loans has been
suspended pursuant to SECTION 4.1(B) or 4.3, (b) any Lender has demanded
compensation under SECTIONS 4.1, 4.5, 4.6 or 4.7, (c) any Lender has notified
the Borrower that it is not capable of receiving payments without deduction or
withholding for taxes pursuant to SECTION 3.6, or (d) any individual Lender(s)
has determined to exercise its rights under SUBCLAUSE (B) of CLAUSE (II) of the
proviso to SECTION 5.1(B), the Borrower may replace such Lender by designating
in a notice given to the Agent an Eligible Assignee to replace such Lender, and
the Agent may assist the Borrower in finding Eligible Assignees willing to
replace such Lender. If the Borrower so designates an Eligible Assignee, then
the Agent shall give notice thereof to the Lender to be replaced, and thereupon
and concurrently with the payment in full to such Lender of all amounts owed to
such Lender, such Lender shall promptly consummate an assignment, in accordance
with SECTION 13.7, of such Lender's Commitment, Loans, Notes, participations in
Letters of Credits and other rights and obligations hereunder relative to the
Commitment of such Lender.
ARTICLE 5
SECURITY
Section 5.1 COLLATERAL. (a) To secure the full and complete payment
and performance of the Obligations (or, with respect to any Lien granted by any
Subsidiary of the Borrower in accordance with SUBCLAUSE (I) or CLAUSE (B)
succeeding, to secure the full and complete payment and performance of all
Debt, liabilities and obligations of each Subsidiary Guarantor under its
Guarantee of the Obligations), (i) the Borrower will, and will cause each of
the Subsidiary Pledgors to, reaffirm and grant to the Agent for the benefit of
the Agent and the Lenders (as successors, respectively, to B of A, as Agent and
the Existing Lenders under the Existing Credit Agreement) a perfected, first
priority Lien on all of its right, title and interest in and to all Capital
Stock of the Subsidiaries of the Borrower that are corporations (except for
Excluded Subsidiaries) owned by the Borrower or any Subsidiary (except for
Excluded Subsidiaries) of the Borrower whether now owned or hereafter acquired,
pursuant to the Security Documents and (ii) subject to the succeeding
provisions of this SECTION 5.1, the Borrower will, and will cause each of its
Subsidiaries (other than Excluded Subsidiaries) to, reaffirm and grant to the
Agent for the benefit of the Agent and the Lenders (as successors,
respectively, to B of A, as Agent and the Existing Lenders under the Existing
Credit Agreement) a perfected, first priority Lien (subject only to Permitted
Liens, if any, which are permitted in accordance with this Agreement) on all of
its right, title and interest in and to (A) the real Properties (or interests
therein) described in SECTION 5.6, and tangible personal Properties consisting
of equipment and inventory located thereon or used in connection therewith, in
each case whether now owned or hereafter acquired, and (B) any other real
Properties (or interests therein), and tangible personal Properties consisting
of equipment and inventory located therein or used in connection therewith, in
each case whether now owned or hereafter acquired, of the Borrower and/or its
Subsidiaries (other than Excluded Subsidiaries) as may be so requested and
selected by the Agent or the Required Lenders, which Liens shall be granted
pursuant to and evidenced and accompanied by the Mortgages and such other
agreements, documents or instruments consistent with this Agreement as the
Agent or the Required Lenders may reasonably request; PROVIDED, HOWEVER, that
Liens referred to in SUBCLAUSE (B) preceding shall (unless otherwise agreed by
the Required Lenders) be required to be granted promptly upon the request (and,
in any event unless the Required Lenders otherwise agree, within ten Business
Days after such request) of the Agent or the Required Lenders, which request
may be made only upon (but at any time after) the occurrence and during the
continuation of a payment Default or an Event of Default.
(b) In connection with the execution of any Mortgage or other
agreement, document or instrument referred to in CLAUSE (A) of this SECTION 5.1
or referred to in SECTION 9.5 that creates or evidences a Lien on any real
Property or any interest therein, the Borrower will, or will cause its
appropriate Subsidiary to, as applicable, deliver or cause to be delivered to
the Agent each of the following if requested by the Agent or the Required
Lenders at any time or from time to time, or with respect to CLAUSES (I), (II)
or (III) below, any Lender that reasonably believes such is required by
applicable law or applicable regulatory authorities, in each case subject to
the proviso below in this CLAUSE (B), each of which will be in form and
substance reasonably satisfactory to the Agent and all of which shall be
delivered to the Agent, unless the Required Lenders from time to time agree to
a later date or dates, within 75 days after such request (or 90 days with
respect to appraisals and environmental surveys):
(i) a commitment for a mortgagee policy of title insurance (or,
if such insurance is not available in the jurisdiction in question, a
title opinion issued by a law firm satisfactory to the Agent) issued by
a nationally recognized title insurance company in the name of the
Agent for and on behalf of the Lenders insuring that such Lien is valid
and enforceable and of the required priority, which insurance shall be
in an amount reasonably acceptable to the Agent (but not to exceed the
estimated fair market value of the real Property affected by such Lien)
and, as soon as practical thereafter, a mortgagee policy of title
insurance issued in accordance with such commitment;
(ii) an appraisal of such real Property issued by an appraiser
reasonably acceptable to the Agent which complies with Title XI - Real
Estate Appraisal Reform, Amendments to the Financial Institution
Reform, Recovery and Enforcement Act of 1989 and all other regulatory
requirements of the Lenders;
(iii) a reasonably current environmental assessment of such real
Property in a form acceptable to the Lenders and the Agent, indicating
the absence of material environmental liabilities;
(iv) a reasonably current survey of such real Property;
(v) information relating to zoning affecting such real
Property; and
(vi) with respect to any such real Property which is a leasehold
interest, waivers of landlords' Liens and other agreements of landlords
and their lenders as may be feasible to obtain, and copies of relevant
lease agreements;
PROVIDED, HOWEVER, that the Agent and the Lenders do not presently intend to
require delivery of policies of title insurance, appraisals or environmental
surveys and none of such title insurance, appraisals or environmental surveys
shall be required to be delivered at the expense of the Borrower with respect
to any of such mortgaged Properties unless either (i) a payment Default or an
Event of Default has occurred and is continuing, (ii) (A) the Required Lenders
reasonably believe that such title insurance, appraisal or environmental survey
(as applicable) is necessary to comply with prudent banking practices or
(B) any Lender reasonably believes that such title insurance, appraisal or
environmental survey (as applicable) is required by applicable law or
applicable regulatory authorities, or (iii) such title insurance, appraisal or
environmental survey (as applicable) is required to be delivered after April 1,
1999. In addition, such title insurance, appraisals and environmental surveys
may be required to be delivered by the Borrower on or before the dates
specified above as the result of a request of the Agent or the Required Lenders
made at any time if the same is to be provided at the expense of the Agent
(subject to its right of reimbursement or indemnification from the Lenders)
and/or the Lenders. Except as referred to in the immediately preceding
sentence, all such title insurance, appraisals and environmental surveys shall
be provided at the expense of the Borrower.
Notwithstanding anything to the contrary contained in this SECTION 5.1,
the Borrower's failure to deliver, or to cause any such Subsidiary to deliver,
(A) any of the agreements, documents or instruments referred to in CLAUSE (A)
preceding which evidence or create a Lien on any leasehold interest within ten
Business Days after request as provided in this SECTION 5.1 preceding or (B)
any agreements, documents or instruments referred to in CLAUSES (I), (II),
(III), (IV), (V) or (VI) of CLAUSE (B) preceding within 75 days after request
(or 90 days with respect to appraisals and environmental surveys) as provided
in this CLAUSE (B) preceding, shall not constitute a Default or an Event of
Default if (but only if) (1) such failure is due to the practical inability
(for whatever reason) of the Borrower or such Subsidiary to so comply
notwithstanding the best efforts of the Borrower and its Subsidiaries to so
comply, and (2) the Borrower and its Subsidiaries (other than Excluded
Subsidiaries) continue to use their best efforts to promptly deliver all such
agreements, documents and instruments referred to in this SECTION 5.1(B).
Section 5.2 GUARANTIES. The Borrower shall cause each Subsidiary
Guarantor to reaffirm and guarantee the payment and performance of the
Obligations pursuant to the Master Guaranty. In all events Pioneer Valley
Hospital, Inc. shall not be required to execute and deliver the Master Guaranty
or a Joinder Agreement, but so long as the Capital Stock of Xxxxxxxxxx Pioneer
Valley Hospital, Inc. is pledged as collateral security to the Agent, for the
benefit of the Agent and the Lenders, Xxxxxxxxxx Pioneer Valley Hospital, Inc.
shall not be an Excluded Subsidiary for any purpose of this Agreement.
Section 5.3 NEW SUBSIDIARIES. Substantially contemporaneously with
the creation or acquisition of any Subsidiary (other than Excluded
Subsidiaries) of the Borrower after the Closing Date, or the designation after
the Closing Date of any Excluded Subsidiary as a Subsidiary, and in no event
later than the next Business Day thereafter, the Borrower shall:
(a) grant or cause to be granted to the Agent, for the benefit
of the Agent and the Lenders, a perfected, first priority security
interest in all Capital Stock or other ownership interests in such
Subsidiary owned by the Borrower or owned by any other Subsidiary
(other than an Excluded Subsidiary) of the Borrower (to the extent such
Capital Stock or other ownership interests are already not so pledged
to the Agent); and
(b) cause each such Subsidiary (other than an Excluded
Subsidiary) to guaranty the payment and performance of the Obligations
by executing and delivering to the Agent a Joinder Agreement and
thereby becoming a party to the Master Guaranty.
All changes in the designation, from time to time, of Excluded Subsidiaries to
Subsidiaries after the Closing Date shall be by written notice from the
Borrower to the Agent.
Section 5.4 RELEASE OF COLLATERAL AND TERMINATION OF GUARANTEES. Upon
(a) any sale, transfer or other disposition of Collateral that is expressly
permitted under SECTION 9.12 or (b) any designation by the Borrower of Excluded
Subsidiaries by which a Subsidiary Guarantor becomes an Excluded Subsidiary,
and, in each case, upon five Business Days prior written request by the
Borrower, the Agent shall execute at the Borrower's expense such documents as
may be necessary to evidence the release by the Agent of its Liens on such
Collateral, including the pledge of the Equity Interests of any such
redesignated Subsidiary, and appropriate releases of any Subsidiary Guarantor
where such release is required in connection with the transfer or
redesignation; PROVIDED, HOWEVER, that (a) the Agent shall not be required to
release any Lien on any Collateral or any Subsidiary Guarantor if a Default
shall have occurred and be continuing, (b) the Agent shall not be required to
execute any such document on terms which, in the Agent's reasonable opinion,
would expose the Agent to liability or create any obligation not reimbursed by
the Borrower or entail any consequences other than the release of such Lien or
such Subsidiary Guarantor without recourse or warranty, and (c) such release
shall not in any manner discharge, affect or impair any of the Obligations or
any of the Agent's Liens on any Collateral retained by the Borrower or any of
its Subsidiaries, including, without limitation, its Liens on the proceeds of
any such sale, transfer or other disposition (except for the Equity Interests
of any newly designated Excluded Subsidiary), or any other Subsidiary
Guarantor.
Section 5.5 SETOFF. If an Event of Default shall have occurred and be
continuing, each Lender is hereby authorized at any time and from time to time,
without notice to the Borrower (any such notice being hereby expressly waived
by the Borrower), to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Lender 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, such Lender's Notes or any
other Loan Document, irrespective of whether or not the Agent or such Lender
shall have made any demand under this Agreement, such Lender's Notes or any
such other Loan Document and although such Obligations may be unmatured. Each
Lender agrees promptly to notify the Borrower (with a copy to the Agent) after
any such setoff and application, PROVIDED, HOWEVER, that the failure to give
such notice shall not affect the validity of such setoff and application. The
rights and remedies of each Lender hereunder are in addition to other rights
and remedies (including, without limitation, other rights of setoff) which such
Lender may have.
Section 5.6 CERTAIN COLLATERAL. Pursuant to SECTION 5.1, to secure
the full and complete payment and performance of the Obligations (or, with
respect to any Lien granted by any Subsidiary of the Borrower, to secure the
full and complete payment and performance of all indebtedness, liabilities and
obligations of each Subsidiary Guarantor under its Guarantee of the
Obligations), the Borrower will, or will cause its appropriate Subsidiary to,
as applicable, reaffirm and grant to the Agent for the benefit of the Agent and
the Lenders (as successors, respectively, to B of A, as Agent and the Existing
Lenders under the Existing Credit Agreement), a perfected (upon appropriate
recording or filing thereafter), first priority Lien (subject only to Permitted
Liens, if any, which are permitted in accordance with this Agreement) on all of
its right, title and interest in and to the following real Properties and
related personal Property (whether now owned or hereafter acquired) consisting
of equipment and inventory, which Liens shall be granted pursuant to the
Mortgages, the Amendments thereto referred to in SECTION 6.1(H) and such other
documents or instruments consistent with this Agreement as the Agent may
reasonably request:
1. Xxxxx Hospital and Medical Center (located in or near Layton,
Utah), which the Borrower represents and warrants is owned by
Xxxxxxxxxx Xxxxx Hospital, Inc.;
2. Salt Lake Regional Medical Center (located in or near Salt Lake
City, Utah), which the Borrower represents and warrants is owned
by PHC - Salt Lake City, Inc.;
3. Jordan Valley Hospital (located in or near West Jordan, Utah),
which the Borrower represents and warrants is owned by PHC -
Jordan Valley, Inc.;
4. BayCoast Medical Center (located in or near Baytown, Texas),
which the Borrower represents and warrants is owned by Baytown
Medical Center, Inc.;
5. Westwood Medical Center (located in or near Midland, Texas),
which the Borrower represents and warrants is owned by PHC - B
of Midland, Inc.;
6. Xxxxxxxx County General Hospital (located in or near Jamestown,
Tennessee) (which Lien shall secure only $34,300,000 of the
principal amount of the Obligations for purposes of applicable
mortgage taxes), which the Borrower represents and warrants is
owned by Xxxxxxxxxx Real Estate Corporation, as to real
Property, and Xxxxxxxxxx Xxxxxxxx County General Hospital, Inc.,
as to other assets;
7. Metropolitan Hospital (located in or near Richmond, Virginia),
which the Borrower represents and warrants is owned by
Metropolitan Hospital, L.P.;
8. Lancaster Community Hospital (located in or near Lancaster,
California), which the Borrower represents and warrants is owned
by Xxxxxxxxxx Real Estate Corporation, as to real Property, and
Lancaster Hospital Corporation, as to other assets;
9. The Mesquite Hospital (located in or near Mesquite, Texas),
which the Borrower represents and warrants is owned by
Xxxxxxxxxx Mesquite Hospital, Inc.;
10. PHC Regional Hospital and Medical Center (located in or near
Salt Lake City, Utah), which the Borrower represents and
warrants is owned by Xxxxxxxxxx - PHC Regional County Medical
Center, Inc.;
11. Cumberland River Hospital - North (located in or near Celina,
Tennessee) (which Lien shall secure only $16,000,000 of the
principal amount of the Obligations for purposes of applicable
mortgage taxes), which the Borrower represents and warrants is
owned by Xxxxxxxxxx Healthcare Corporation, as to real Property,
and Xxxxxxxxxx Clay County Hospital, Inc., as to other assets;
and
12. each of the LA Metro Hospitals (located in or near Los Angeles,
California), which the Borrower represents and warrants is owned
by (1) as to Monrovia Community Hospital, Xxxxxxxxxx Real Estate
Corporation, as to real Property, and Monrovia Community
Hospital, L.P., as to other assets, (2) as to Bellwood General
Hospital, Xxxxxxxxxx Real Estate Corporation, as to real
Property, and Bellwood Medical Corporation, as to fixtures,
furniture and equipment, and Lincoln Community Medical, LLC as
to other assets, (3) as to Hollywood Community Hospital of
Hollywood and Hollywood Community Hospital of Van Nuys,
Xxxxxxxxxx Real Estate Corporation, as to real Property, and
Hollywood Community Hospital Medical Center, Inc., as to other
assets, (4) as to Los Angeles Community Hospital and Los Angeles
Community Hospital of Norwalk, Xxxxxxxxxx Real Estate
Corporation, as to real Property, and Xxxxxxxxxx Los Angeles
Community Hospital, Inc., as to other assets, and (5) as to
Orange County Community Hospital of Buena Park, Xxxxxxxxxx Real
Estate Corporation, as to real Property, and Lincoln Community
Medical Corporation, as to fixtures, furniture and equipment,
and Lincoln Community Medical, LLC as to other assets;
PROVIDED, HOWEVER, that (a) the Lien on Metropolitan Hospital shall be required
to secure only that certain Promissory Note dated August 14, 1997, in the
maximum original principal amount of $20,000,000 made by Metropolitan Hospital,
L.P. payable to the order of Xxxxxxxxxx Healthcare Holdings, Inc., which note
and such Lien securing it shall be collaterally assigned by Xxxxxxxxxx
Healthcare Holdings, Inc. to the Agent and possession of such note shall be
delivered to the Agent, together with an endorsement thereto in favor of the
Agent, (b) no Lien shall be required to be granted with respect to the
equipment and inventory related to Monrovia Community Hospital owned by
Monrovia Community Hospital, L.P. and (c) the Lien on the personal Property
relating to Bellwood General Hospital and Orange County Community Hospital of
Buena Park shall not be required to be granted to the extent that such personal
Property is owned by Lincoln Community Medical, LLC as of June 30, 1997 or, if
and to the extent acquired in the ordinary course of business from other than
an Affiliate of the Borrower and not indirectly from such Affiliate,
thereafter.
ARTICLE 6
CONDITIONS PRECEDENT
Section 6.1 INITIAL EXTENSION OF CREDIT. Each of the obligations of
each Lender to make its initial Loan under this Agreement and the obligation of
the Issuing Bank to issue the initial Letter of Credit under this Agreement are
subject to the conditions precedent that the Agent shall have received, on or
before the Closing Date or such later date (if any) as may be specified in this
SECTION 6.1 below, all of the following in form and substance reasonably
satisfactory to the Agent and, in the case of actions to be taken, evidence
that the following required actions have been taken to the satisfaction of the
Agent:
(a) RESOLUTIONS. Resolutions of the Board of Directors of each
Loan Party, certified by its Secretary or an Assistant Secretary, which
authorize the execution, delivery and performance by such Loan Party of
the Loan Documents to which it is or is to be a party;
(b) INCUMBENCY CERTIFICATE. A certificate of incumbency
certified by the Secretary or an Assistant Secretary of each Loan Party
certifying the name of each officer of such Loan Party (i) who is
authorized to sign the Loan Documents to which such Loan Party is or is
to be a party (including any certificates contemplated therein),
together with specimen signatures of each such officer, and (ii) who
will, until replaced by other officers duly authorized for that
purpose, act as its representative for the purposes of signing
documents and giving notices and other communications in connection
with the Loan Documents and the transactions contemplated thereby;
(c) ARTICLES OR CERTIFICATE OF INCORPORATION, ETC. The articles
or certificate of incorporation, certificate of formation, certificate
of limited partnership, partnership agreement or other applicable
constitutional document of each Loan Party certified by the Secretary
or Assistant Secretary of such Loan Party;
(d) BYLAWS. The bylaws of each Loan Party certified by the
Secretary or an Assistant Secretary of such Loan Party;
(e) GOVERNMENTAL CERTIFICATES. Short form certificates of
appropriate officials as to the good standing of each Loan Party in
their respective jurisdictions of incorporation or organization and any
and all jurisdictions where such Loan Party is qualified to do business
as a foreign corporation or other entity and where the failure to so
qualify could reasonably be expected to have a Material Adverse Effect,
each such certificate to be dated as of a Current Date;
(f) NOTES. The Notes duly completed and executed by the
Borrower;
(g) MASTER GUARANTY. The Master Guaranty executed by each of
the Subsidiary Guarantors;
(h) AMENDMENTS TO REAL PROPERTY LIENS. Amendments to all
existing Liens on real and tangible personal Properties of the Borrower
or its Subsidiaries currently subject to the Mortgages to evidence the
transactions effected by this Agreement;
(i) SECURITY AGREEMENT. The Security Agreement executed by the
Borrower;
(j) SUBSIDIARY SECURITY AGREEMENT. A Subsidiary Security
Agreement executed by each of the Subsidiary Pledgors;
(k) INSURANCE POLICIES. Certificates of, or, upon request
therefor by Agent, copies of insurance policies required by this
Agreement and the other Loan Documents, together with loss payable
endorsements naming the Agent as loss payee under all such casualty
insurance policies and the Agent as an additional insured party under
all such liability policies;
(l) STOCK CERTIFICATES. The stock certificates representing all
of the issued and outstanding Capital Stock pledged to the Agent by the
Borrower and each of the Subsidiary Pledgors accompanied by appropriate
stock powers signed in blank, except to the extent that such Capital
Stock is not required to be pledged in accordance with SECTION 5.1(A);
(m) FINANCING STATEMENTS. UCC-1 financing statements executed
by the Loan Parties necessary to perfect, and/or UCC-3 financing
statements executed by B of A for the Existing Lenders necessary to
transfer and assign, the Liens created and/or continued pursuant to the
Security Documents or otherwise requested by the Agent;
(n) LIEN RELEASES. Within thirty (30) days of the Closing Date,
duly executed releases of Liens and UCC-3 financing statements in
recordable form, as may be necessary to reflect that the Liens created
by the Security Documents are first priority Liens subject only to
Permitted Liens;
(o) [Intentionally omitted.]
(p) LETTER OF CREDIT AGREEMENT. Subject to SECTION 2.14(J),
with respect to the issuance of the Back-Up Letter of Credit, a Letter
of Credit Agreement in the form required by the Issuing Bank with
respect thereto executed by the Borrower, PROVIDED, HOWEVER, that in
the event of any conflict between the terms thereof and the terms
hereof, the terms hereof shall control;
(q) PAYMENT OF INTEREST, FEES AND EXPENSES. The Borrower shall
have paid all interest and fees accrued to the Closing Date and not
previously paid with respect to the Existing Loans and the Existing
Letter of Credit Liabilities, and the Borrower shall have paid all fees
due on or before the Closing Date as specified in this Agreement or in
the Fee Letters and all fees and expenses of or incurred by the Agent,
the Documentation Agent, the Administrative Agent and their counsel,
Weil, Gotshal & Xxxxxx LLP and billed to the Agent (with a copy
forwarded to the Borrower) prior to the Closing Date;
(r) COMPLIANCE WITH LAWS. Each Loan Party that is a party to
this Agreement or any of the other Loan Documents shall have complied
in all material respects with all Governmental Requirements applicable
to such Person and necessary to consummate the transactions
contemplated by this Agreement and the other Loan Documents.
(s) NO PROHIBITIONS. No Governmental Requirement shall prohibit
the consummation of the transactions contemplated by this Agreement, or
any other Loan Document, and no order, judgment or decree applicable to
any of the Loan Parties of any Governmental Authority or arbitrator
shall, and no litigation or other proceeding shall be pending or
threatened against any of the Loan Parties which would, enjoin,
prohibit, restrain or could otherwise reasonably be expected to have a
material adverse effect with respect to the consummation of the
transactions contemplated by this Agreement or the other Loan
Documents;
(t) NO MATERIAL ADVERSE CHANGE. No material adverse change
shall have occurred with respect to the financial condition, business,
results of operations, capitalization, liabilities or prospects of
Borrower and its Subsidiaries taken as a whole since December 31, 1997,
and there shall have occurred no other event or events and there shall
not exist any circumstance or circumstances that individually or in the
aggregate could reasonably be expected to have a Material Adverse
Effect;
(u) WIRING INSTRUCTIONS. A letter of direction from the
Borrower to the Agent with respect to the disbursement of the proceeds
of the Loans;
(v) FINANCIAL STATEMENTS. Copies of each of the financial
statements referred to in SECTION 7.2;
(w) OPINIONS OF COUNSEL. The written opinion of the Vice
President-Legal Affairs of the Borrower and the written opinion of
Mayor, Day, Xxxxxxxx & Xxxxxx, L.L.P., special counsel for the Loan
Parties, with respect to the Borrower and its Subsidiaries and with
respect to the Loan Documents, in each case dated the Closing Date, in
substantially the form of EXHIBITS I and J, respectively;
(x) CERTIFICATE AS TO HEALTH CARE REGULATORY MATTERS. A
certificate, dated the Closing Date, signed by a Responsible Officer of
the Borrower, to the effect that, other than as disclosed to the Agent
in writing on or before the Closing Date and to the best knowledge of
the officer signing such certificate, there has been no claim,
complaint, notice or request for information received by the Borrower
or any of its Facilities, Subsidiaries or Majority-Owned Joint Ventures
with respect to compliance with health care regulatory requirements
that could reasonably be expected to have a Material Adverse Effect
(other than malpractice claims, but including claims relating to
patient dumping, in the case of the operation of an emergency
department), including, but not limited to, any alleged violation of
any federal, state or local statute, regulation or ordinance relating
to the delivery of medical services, and payment made thereof,
including, but not limited to the requirements applicable under federal
Medicare and Medi-Cal (or Medicaid) statutes, 42 U.S.C.
1320a-7, 1320a-7(a) and 1320a-7b, or the regulations
promulgated pursuant to such statutes or related state or local
statutes or regulations;
(y) ADDITIONAL DOCUMENTATION. The Agent shall have received
such additional approvals, opinions, agreements, documents and
instruments as the Agent may reasonably request;
(z) PHC FUNDING CORP. The Agent shall have received evidence
reasonably satisfactory to it that the PHC Funding Sale Documents and
the accounts receivable securitization program established thereunder
shall have been extended, in substantially their current form and
substance, until at least April 16, 1999; and
(27) ASSIGNMENT, ASSUMPTION AND ACCEPTANCE AGREEMENT. An
Assignment, Assumption and Acceptance Agreement in the form of that attached
hereto as EXHIBIT K shall have been duly executed and delivered by all parties
thereto and the transactions contemplated thereby shall be consummated
simultaneously with the consummation of the transactions contemplated hereby.
Upon the request of the Borrower, the Agent shall inform the Borrower in
writing as to the status of satisfaction of the conditions precedent set forth
in this SECTION 6.1.
Section 6.2 ALL EXTENSIONS OF CREDIT. Except as otherwise provided in
SECTIONS 2.9 and 2.14 the obligation of each Lender to make any Loan (including
the initial Loan) and the obligation of the Issuing Bank to issue any Letter of
Credit (including the initial Letter of Credit) under this Agreement are
subject to the satisfaction of each of the conditions precedent set forth in
SECTION 6.1 (except to the extent that, in accordance with SECTION 6.1, such
conditions are to be satisfied as of a date later than the proposed date of the
making of the subject Loan or the issuance of the subject Letter of Credit) and
each of the following additional conditions precedent:
(a) NO DEFAULT. No Default shall have occurred and be
continuing, or would result from such Loan or Letter of Credit;
(b) REPRESENTATIONS AND WARRANTIES. Except in the case of
Continuations, and Conversions of Eurodollar Loans to Base Rate Loans
(in each case where no new borrowings are requested), all of the
representations and warranties of the Borrower and the other Loan
Parties contained in ARTICLE 7 hereof and in the other Loan Documents
shall be true and correct on and as of the date of such Loan or Letter
of Credit with the same force and effect as if such representations and
warranties had been made on and as of such date except for any such
representations and warranties as are expressly stated to be made as of
a particular date; and
(c) USE OF PROCEEDS CERTIFICATE. In the case of a Revolving
Credit Loan or Loans, the Agent shall have received a certification
included within the relevant notice of borrowing to the effect that the
amount of such Loan allocable to working capital needs, together with
the outstanding principal amount of Revolving Credit Loans previously
made after the date hereof for such purposes, does not exceed
$50,000,000 (giving effect to the requested borrowing).
Except as otherwise provided in this Agreement, each notice of borrowing or
request for the issuance of a Letter of Credit by the Borrower hereunder shall
constitute a representation and warranty by the Borrower that the conditions
precedent set forth in SECTIONS 6.2(A) and 6.2(B) have been satisfied (both as
of the date of such notice and, unless the Borrower otherwise notifies the
Agent prior to such borrowing or Letter of Credit, as of the date of such
borrowing or Letter of Credit).
Section 6.3 CLOSING CERTIFICATES. The Borrower shall, concurrently
with the execution and delivery of this Agreement, execute and deliver to the
Agent a Closing Certificate, in form and substance satisfactory to the Agent,
certifying as to the satisfaction of each of the conditions precedent set forth
in SECTION 6.1 (other than SUBCLAUSE (II) of SECTION 6.1(T)) and 6.2 which are
required to be satisfied on or before the Closing Date; PROVIDED, HOWEVER, that
with respect to SECTIONS 6.1(M), 6.1(N) AND 6.1(P), no certification shall be
required with respect to whether the evidence or the Documents referenced
therein were, in fact, satisfactory to the Agent.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Agent and the Lenders that
the following statements are true, correct and complete:
Section 7.1 CORPORATE EXISTENCE. Each Loan Party (a) is a
corporation, partnership, or a limited liability company, duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation or organization, (b) has all requisite power and authority to own
its Properties and carry on its business as now being or as proposed to be
conducted, and (c) is qualified to do business in all jurisdictions in which
the nature of its business makes such qualification necessary and where the
failure to so qualify would have a Material Adverse Effect. Each Loan Party
has the power and authority to execute, deliver and perform its obligations
under the Loan Documents to which it is a party.
Section 7.2 FINANCIAL STATEMENTS.
(a) The Borrower has delivered to the Agent (i) audited consolidated
statements of operations and statements of cash flows of the Borrower for the
fiscal years ended December 31, 1994, 1995 and 1996 and audited consolidated
balance sheets of the Borrower as of December 31, 1995 and 1996, in each case
as included in the Borrower's Annual Report on Form 10-K as filed with the
Securities and Exchange Commission for the fiscal year of the Borrower ended
December 31, 1996, (ii) unaudited consolidated statements of operations and
statements of cash flows and consolidated balance sheets of the Borrower for
the fiscal quarters ended March 31, 1997, June 30, 1997 and September 30, 1997
in each case as included in the Borrower's respective Quarterly Report on Form
10-Q as filed with the Securities and Exchange Commission for the fiscal
quarter of the Borrower ended on each such date and (iii) a draft of the
audited consolidated statements of operations and statements of cash flows of
the Borrower for the fiscal years ended December 31, 1995, 1996 and 1997 and
audited consolidated balance sheets of the Borrower as of December 31, 1996 and
1997, in each case as included in the Borrower's Annual Report on Form 10-K in
the form to be filed with the Securities and Exchange Commission on or before
March 31, 1998 for the fiscal year of the Borrower ended December 31, 1997.
Such financial statements are true and correct, have been prepared in
accordance with GAAP and fairly and accurately present the financial condition
of the Borrower and its consolidated Subsidiaries and the results of operations
for the respective periods indicated therein. There has not occurred, as of
any date after December 31, 1997, with respect to the Borrower and its
consolidated Subsidiaries, any material adverse change in the business,
condition (financial or otherwise), operations, prospects or Properties of the
Borrower and its consolidated Subsidiaries since December 31, 1997, as
reflected in the audited financial statements of the Borrower and its
consolidated Subsidiaries as of and for the fiscal year ended December 31, 1997
as included in the Borrower's Annual Report on Form 10-K to be filed with the
Securities and Exchange Commission on or before March 31, 1998 for the fiscal
year of the Borrower ended December 31, 1997.
(b) The Projections were prepared by the Borrower on a basis
substantially consistent with the financial statements referred to in
SECTION 7.2(A). The Projections represent, as of the Closing Date, the good
faith estimate of the Borrower and its senior management concerning the
probable financial condition and performance of the Borrower and its
Subsidiaries based on assumptions believed to be reasonable at the time made.
Section 7.3 CORPORATE ACTION; NO BREACH. The execution, delivery and
performance by each Loan Party of the Loan Documents to which it is a party and
compliance with the terms and provisions hereof and thereof have been duly
authorized by all requisite corporate or other entity action on the part of the
Loan Parties and do not and will not (a) violate or conflict with, or result in
a breach of, or require any consent, except as may have been obtained under
(i) the articles or certificates of incorporation or bylaws (or, with respect
to any Loan Party that is not a corporation, certificate of formation or other
organizational documents) of any Loan Party the violation of, conflict with, or
breach of, which could reasonably be expected to have a Material Adverse
Effect, (ii) any Governmental Requirement or any order, writ, injunction or
decree of any arbitrator the violation of, conflict with, or breach of, which
could reasonably be expected to have a Material Adverse Effect, or (iii) any
material agreement, document or instrument to which any Loan Party is a party
or by which any Loan Party or any of its Property is bound or subject, the
violation of, conflict with, or breach of, which could reasonably be expected
to have a Material Adverse Effect, or (b) constitute a default under any such
material agreement, document or instrument which default could reasonably be
expected to have a Material Adverse Effect, or result in the creation or
imposition of any Lien (except under the Security Documents as provided in
ARTICLE 5 and except for Permitted Liens) upon any of the revenues or Property
of any Loan Party.
Section 7.4 OPERATION OF BUSINESS. The Loan Parties possess all
Permits and franchises necessary to conduct their respective businesses
substantially as now conducted and as presently proposed to be conducted except
where the failure to so possess would not cause a Material Adverse Effect.
None of such Persons is in material violation of any such Permits or
franchises.
Section 7.5 INTELLECTUAL PROPERTY. The Loan Parties own or possess
(or will be licensed or have the full right to use) all Intellectual Property
which is necessary for the operation of their respective businesses as
presently conducted and as proposed to be conducted except where the failure to
do so could not reasonably be expected to have a Material Adverse Effect,
without any known conflict with the rights of others that could reasonably be
expected to have a Material Adverse Effect. The consummation of the
transactions contemplated by this Agreement and the other Loan Documents will
not materially alter or impair, individually or in the aggregate, any of such
rights of such Persons where such alteration or impairment could reasonably be
expected to have a Material Adverse Effect. No product of the Loan Parties
infringes upon any Intellectual Property owned by any other Person, and no
claim or litigation is pending or, to the knowledge of the Borrower, threatened
against any Loan Party or any such Person contesting its right to use any
product or material, in each case which could reasonably be expected to have a
Material Adverse Effect. There is no violation by any Loan Party of any right
of such Loan Party with respect to any material Intellectual Property owned or
used by such Loan Party, in each case, that could reasonably be expected to
have a Material Adverse Effect.
Section 7.6 LITIGATION AND JUDGMENTS. Except as is disclosed on
SCHEDULE 7.6, as of the Closing Date, there are no actions, suits,
investigations or proceedings before or by any Governmental Authority or
arbitrator pending or, to the knowledge of the Borrower, threatened against or
affecting any Loan Party which, if adversely determined, could reasonably be
expected to have a Material Adverse Effect. As of the Closing Date, there are
no outstanding judgments against any Loan Party or their respective
Subsidiaries that could reasonably be expected to have a Material Adverse
Effect.
Section 7.7 RIGHTS IN PROPERTIES; LIENS. Each of the Loan Parties has
good and indefeasible title to or, except as expressly stated to the contrary
on SCHEDULE 1.1(C), valid leasehold interests in its Properties and assets,
real and personal, including as of the Closing Date the Properties, assets and
leasehold interests reflected in the financial statements described in SECTION
7.2(A), and none of the Properties or leasehold interests of any Loan Party or
any of its Subsidiaries is subject to any Lien, except Permitted Liens.
Section 7.8 ENFORCEABILITY. The Loan Documents and the Subordinated
Debt Documents have been duly and validly executed and delivered by each of the
Loan Parties that is a party thereto and constitute the legal, valid and
binding obligations of such Loan Parties, enforceable against such Loan Parties
in accordance with their respective terms, except as limited by bankruptcy,
insolvency or other laws of general application relating to the enforcement of
creditors' rights and general principles of equity.
Section 7.9 APPROVALS. No authorization, approval or consent of, and
no filing or registration with or notice to, any Governmental Authority is or
will be necessary for the execution, delivery or performance by any Loan Party
of any of the Loan Documents to which it is a party or for the validity or
enforceability thereof in respect of any Loan Party, except for such consents,
approvals and filings as have been validly obtained or made and are in full
force and effect. None of the Loan Parties has failed to obtain any
governmental consent, Permit or franchise necessary for the ownership of any of
its Properties or the conduct of its business except where the failure to do so
could not reasonably be expected to have a Material Adverse Effect.
Section 7.10 DEBT. As of the Closing Date, the Loan Parties and their
Subsidiaries have no Debt except for (a) the Obligations, (b) the Debt
evidenced by the Subordinated Notes, (c) the Debt disclosed on the most recent
balance sheets referred to in SECTION 7.2(A) and (d) the Debt disclosed on
SCHEDULE 7.10 or permitted under SECTION 9.1. As of the Closing Date, a
maximum of $333,333,333 of Debt in the aggregate is permitted by CLAUSE (B) of
the preceding sentence.
Section 7.11 TAXES. The Loan Parties have filed all tax returns
(federal, state and local) required to be filed, including all income,
franchise, employment, Property and sales tax returns, and have paid all of
their respective liabilities for taxes, assessments, governmental charges and
other levies that are shown to be due and payable on such returns except for
any of the foregoing which are not the subject of any recorded tax Lien and do
not involve amounts in excess of $1,000,000 in the aggregate. The Borrower is
not aware of any pending investigation of any Loan Party or any Subsidiary of a
Loan Party by any taxing authority or of any pending but unassessed tax
liability of any Loan Party or any Subsidiary of a Loan Party, other than with
respect to (a) ad valorem or other real property taxes not in excess of
$1,000,000 as to any such Person and (b) other taxes in an aggregate amount as
to any such Person which could not, if an adverse determination is made with
respect to such taxes, reasonably be expected to materially and adversely
affect such Person, and (c) taxes, assessments, governmental charges and other
levies, which are currently being contested in good faith by appropriate
proceedings diligently conducted by or on behalf of such Person and as to
which, if required by GAAP, such Person has established adequate reserves. No
tax Liens (other than Permitted Liens) have been filed and, except as disclosed
on SCHEDULE 7.11, no claims are being asserted as of the Closing Date against
any Loan Party or any Subsidiary of a Loan Party, with respect to any taxes.
Except as disclosed on SCHEDULE 7.11 hereto, as of the Closing Date, none of
the U.S. income tax returns of the Loan Parties or any Subsidiary of a Loan
Party are under audit. The charges, accruals and reserves on the books of the
Loan Parties in respect of taxes or other governmental charges are in
accordance with GAAP.
Section 7.12 MARGIN SECURITIES. None of the Loan Parties or any of
their respective Subsidiaries is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulations G, T, U
or X of the Board of Governors of the Federal Reserve System), and no part of
the proceeds of any Loan will be used to purchase or carry any margin stock or
to extend credit to others for the purpose of purchasing or carrying margin
stock.
Section 7.13 ERISA. As of the Closing Date, neither any Loan Party nor
any ERISA Affiliate maintains or contributes to, or has any obligation under,
any Pension Plan other than the Pension Plans identified on SCHEDULE 7.13.
Each Plan of each Loan Party is in compliance in all material respects with all
applicable provisions of ERISA and the Code. Neither a Reportable Event nor,
to the knowledge of the Borrower, a Prohibited Transaction has occurred within
the last 60 months with respect to any Pension Plan. No notice of intent to
terminate a Pension Plan has been filed, nor has any Pension Plan been
terminated. No circumstances exist which constitute grounds entitling the PBGC
to institute proceedings to terminate, or appoint a trustee to administer, a
Pension Plan, nor has the PBGC instituted any such proceedings. As of the
Closing Date, neither any of the Loan Parties nor any ERISA Affiliate has
completely or partially withdrawn from a Multiemployer Plan. Each Loan Party
and each ERISA Affiliate has met its minimum funding requirements under ERISA
and the Code with respect to all of its Pension Plans subject to such
requirements, and, as of the Closing Date except as specified on SCHEDULE 7.13,
the present value of all vested benefits under each funded Pension Plan does
not and will not exceed the fair market value of all such Pension Plan assets
allocable to such benefits, as determined on the most recent valuation date of
such Pension Plan and in accordance with ERISA. As of the Closing Date,
neither any of the Loan Parties nor any ERISA Affiliate has incurred any
liability to the PBGC under ERISA (other than any required insurance premiums,
all of which that have become due prior to the Closing Date have been paid).
As of the Closing Date, no litigation is pending or, to the knowledge of any
Loan Party, threatened concerning or involving any Pension Plan. There are no
unfunded or unreserved liabilities relating to any Pension Plan that could,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect if such Loan Party were required to fund or reserve such
liability in full. As of the Closing Date, no funding waivers have been or
will have been requested or granted under Section 412 of the Code with respect
to any Pension Plan. No unfunded or unreserved liability for benefits under
any Pension Plan or Pension Plans (exclusive of any Multiemployer Plans)
exceeds $1,500,000 with respect to any such Plan or $3,000,000 with respect to
all such Plans in the aggregate as of the Closing Date.
Section 7.14 DISCLOSURE. Since November 30, 1997, no written
statement, information, report, representation or warranty made to the Agent or
any Lender by any Loan Party in any Loan Document or furnished to the Agent or
any Lender by any Loan Party in connection with the Loan Documents or any
transaction contemplated hereby or thereby contains any untrue statement of a
material fact or omits to state any material fact necessary to make the
statements herein or therein in light of the circumstances in which they were
made not misleading as of the respective dates thereof. No material adverse
change has occurred with respect to the financial condition, business,
operations, capitalization, liabilities or prospects of the Borrower and its
Subsidiaries taken as a whole since December 31, 1997.
Section 7.15 SUBSIDIARIES. SCHEDULE 7.15 correctly sets forth the name
of each Subsidiary of the Borrower and a statement of the ownership of the
Capital Stock or other interest of each such Subsidiary as of the date hereof.
All outstanding Capital Stock of each Subsidiary of Borrower that has been
pledged to the Agent has been validly issued, is fully paid and is
nonassessable and is free and clear of all Liens, charges and encumbrances
(except the Liens in favor of Agent, for the ratable benefit of Lenders, and
for Permitted Liens).
Section 7.16 AGREEMENTS. None of the Loan Parties is in default in any
respect in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any agreement, document or
instrument binding on it or its Properties, except for instances of
noncompliance that, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
Section 7.17 COMPLIANCE WITH LAWS. None of the Loan Parties is in
violation of any Governmental Requirement, except for instances of non-
compliance that, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
Section 7.18 INVESTMENT COMPANY ACT. None of the Loan Parties is an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
Section 7.19 PUBLIC UTILITY HOLDING COMPANY ACT. None of the Loan
Parties is a "holding company" or a "subsidiary company" of a "holding company"
or an "affiliate" of a "holding company" or a "public utility" within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
Section 7.20 ENVIRONMENTAL MATTERS.
(a) Except as specifically disclosed (A) in the Environmental
Questionnaires or (B) in the Environmental Reports and except for instances of
noncompliance with or exceptions to any of the following representations and
warranties that (x) individually, could not reasonably be expected to result in
the Borrower and/or its Subsidiaries incurring Environmental Liabilities in
excess of $2,500,000, or (y) in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect:
(i) To the Borrower's knowledge, the Loan Parties and all of
their respective Properties and operations are in full compliance with
all Environmental Laws. The Borrower is not aware of, nor has the
Borrower received written notice of, any past, present or future
conditions, events, activities, practices or incidents which may
interfere with or prevent the compliance or continued compliance by any
Loan Party with all Environmental Laws;
(ii) The Loan Parties have obtained all Permits that are
required under applicable Environmental Laws, and all such Permits are
in good standing and all such Persons are in compliance with all of the
terms and conditions thereof;
(iii) To the Borrower's knowledge, no Hazardous Materials exist
on, about or within or have been or are being used, generated, stored,
transported, disposed of on or Released from any of the Properties of
the Loan Parties except in compliance with applicable Environmental
Laws. The use which the Loan Parties make and intend to make of their
respective Properties will not result in the use, generation, storage,
transportation, accumulation, disposal or Release of any Hazardous
Material on, in or from any of their Properties except in compliance
with applicable Environmental Laws;
(iv) Neither the Loan Parties nor any of their respective
currently to the Borrower's knowledge, previously owned, operated or
leased Properties or operations is subject to any outstanding or, to
the Borrower's knowledge, threatened order from or agreement with any
Governmental Authority or other Person or subject to any judicial or
administrative proceeding with respect to (A) any failure to comply
with Environmental Laws, (B) any Remedial Action, or (C) any
Environmental Liabilities;
(v) To the Borrower's knowledge, there are no conditions or
circumstances associated with the currently or previously owned,
operated or leased Properties or operations of the Loan Parties that
could reasonably be expected to give rise to any Environmental
Liabilities or claims resulting in any Environmental Liabilities. To
the Borrower's knowledge, none of the Loan Parties is subject to any
Environmental Liabilities, and none of the Loan Parties has received
written notice of any claim from any Person alleging that any of the
Loan Parties is, or will be, subject to any Environmental Liabilities;
(vi) None of the Properties of the Loan Parties is a treatment
facility (except for the recycling of Hazardous Materials generated
onsite and the treatment of liquid wastes subject to the Clean Water
Act), storage facility (except for temporary storage of Hazardous
Materials generated onsite prior to their disposal offsite) or disposal
facility requiring a permit under the Resource Conservation and
Recovery Act, 42 U.S.C. 6901 ET SEQ., regulations thereunder
or any comparable provision of state law. The Loan Parties and their
Subsidiaries are in compliance with all applicable financial
responsibility requirements of all Environmental Laws;
(vii) None of the Loan Parties has filed any notice required
under any applicable Environmental Law reporting a Release nor are the
Loan Parties, or any of them, aware of any Release that should have
been reported, but was not reported;
(viii) No Lien arising under any Environmental Law has and remains
attached or to the Borrower's knowledge, is reasonably likely to
attach, to any Property or revenues of any Loan Party; and
(ix) To the Borrower's knowledge, there is not now, nor has
there been in the past, on, in, or under any real Property leased,
owned or operated by the Borrower or any of its Subsidiaries or any of
their predecessors (A) any underground storage tanks or surface tanks,
dikes or impoundments, (B) any asbestos-containing materials, (C) any
polychlorinated biphenyls or (D) any radioactive substances.
(b) As of the respective dates thereof, except as specifically
disclosed in the Environmental Reports the facts stated in response to the
Environmental Questionnaires were true in all material respects, in each case
subject to the same qualifications and as otherwise set forth therein and no
event, fact or circumstance has come to the attention of the Borrower since
such respective dates that, were such questionnaires completed and dated as of
the Closing Date, would be required to be disclosed in such questionnaires in
order for the facts stated in response to such questionnaires to be true in all
material respects as of the Closing Date, in each case subject to the same
qualifications and as otherwise set forth therein.
Section 7.21 LABOR DISPUTES AND ACTS OF GOD. Neither the business nor
the Properties of any Loan Party are affected by any fire, explosion, accident,
strike, lockout or other labor dispute, drought, storm, hail, earthquake,
embargo, act of God or of the public enemy or other casualty (whether or not
covered by insurance) that is having or could reasonably be expected to have a
Material Adverse Effect.
Section 7.22 MATERIAL CONTRACTS. Attached hereto as SCHEDULE 7.22 is a
complete list, as of the Closing Date of all Material Contracts of the Loan
Parties, other than the Loan Documents and the Subordinated Debt Documents. As
of the Closing Date, all of the Material Contracts are in full force and effect
and none of the Loan Parties is in default under any Material Contract and, to
the best of the Borrower's knowledge after due inquiry, no other Person that is
a party thereto is in default under any of the Material Contracts, in each
case, in any material respect. None of the Material Contracts prohibit the
transactions contemplated under the Loan Documents. The Borrower will, upon
the Agent's request therefor, deliver to the Agent a complete and current copy
of each Material Contract requested by the Agent in a reasonably prompt fashion
after the request therefor.
Section 7.23 OUTSTANDING SECURITIES. Subject to the matters described
in "Stockholders' Litigation" on SCHEDULE 7.6, as of the Closing Date, all
outstanding securities (as defined in the Securities Act of 1933, as amended,
or any successor thereto, and the rules and regulations of the Securities and
Exchange Commission thereunder) of the Loan Parties have been offered, issued,
sold and delivered in compliance in all material respects with all applicable
Governmental Requirements.
Section 7.24 SUBORDINATION. The Loans and all other Obligations of the
Borrower to the Agent and the Lenders under the Loan Documents constitute
"Senior Indebtedness" of the Borrower (as such term is defined in the
Indenture), and the holders thereof from time to time shall be entitled to all
of the rights of a holder of "Senior Indebtedness" (as such term is defined in
the Indenture) pursuant to the Indenture.
Section 7.25 SOLVENCY. The Borrower and, except as disclosed on
SCHEDULE 7.25, each of the Subsidiary Guarantors as separate corporate entities
and on a consolidated basis, are Solvent, after giving effect to the Loans.
Section 7.26 EMPLOYEE MATTERS. Except as set forth on SCHEDULE 7.26,
as of the Closing Date, (a) none of the Loan Parties or any of their respective
Subsidiaries other than Excluded Subsidiaries or any of their respective
employees, is subject to any collective bargaining agreement, and (b) no
petition for certification or union election is pending with respect to the
employees of any Loan Party or any of their respective Subsidiaries other than
Excluded Subsidiaries, and no union or collective bargaining unit has sought
such certification or recognition with respect to the employees of any of the
Loan Parties or any of their respective Subsidiaries other than Excluded
Subsidiaries. There are no strikes, slowdowns, work stoppages or controversies
pending or, to the best knowledge of the Borrower after due inquiry, threatened
against, any of the Loan Parties or any of their respective Subsidiaries, and
their respective employees, which could reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect.
Section 7.27 INSURANCE. SCHEDULE 7.27 sets forth a complete and
accurate description of all policies of insurance that will be in effect as of
the Closing Date for the Borrower and its Subsidiaries. To the extent such
policies, have not been replaced, no notices of cancellation have been received
for such policies, and the Borrower and its Subsidiaries are in compliance in
all material respects with all of the terms and conditions of such policies.
Section 7.28 FRAUD AND ABUSE. Except as disclosed in SCHEDULE 7.28,
the Borrower, its Subsidiaries and all Majority-Owned Joint Ventures, and their
respective officers and directors, and Persons who provide professional
services under agreements with any of the Borrower, its Subsidiaries and all
Majority-Owned Joint Ventures, have not engaged in any activities which are
prohibited under federal Medicare and Medi-Cal (or Medicaid) statutes, 42
U.S.C. 1320a-7, 1320a-7(a) and 1320a-7b, or the regulations
promulgated pursuant to such statutes or related state or local statutes or
regulations, including but not limited to the following: (a) knowingly and
willfully making or causing to be made a false statement or representation of a
material fact in any application for any benefit or payment; (b) knowingly and
willfully making or causing to be made any false statement or representation of
a material fact for use in determining rights to any benefit or payment;
(c) knowingly presenting or causing to be presented a claim for reimbursement
for services under Medicare, Medi-Cal (or Medicaid), or other state health care
program that is (1) for an item or service that is known or should be known to
be not provided as claimed, or (2) knows or should have known is false or
fraudulent; (d) concealing or failing to disclose knowledge by a claimant of
the occurrence of any event affecting the initial or continued right to any
benefit or payment on its own behalf or on behalf of another on whose behalf
payment has been applied for or on whose behalf such benefit or payment is
received, with intent to fraudulently secure such benefit or payment;
(e) knowingly and willfully soliciting or receiving any remuneration (including
any kickback, bribe, or rebate but excluding any activities which come within a
"safe harbor" under federal law), directly or indirectly, overtly or covertly,
in cash or in kind (1) in return for referring an individual to a Person for
the furnishing or arranging for the furnishing of any item or service for which
payment may be made in whole or in part by Medicare or Medi-Cal (or Medicaid),
or other state health care program, or (2) in return for purchasing, leasing,
or ordering or arranging for or recommending purchasing, leasing, or ordering
any good, facility, service, or item for which payment may be made in whole or
in part by Medicare or Medi-Cal (or Medicaid) or other state health care
program but excluding any activities which come within a "safe harbor" under
federal law; (f) knowingly making a payment, directly or indirectly, to a
physician as an inducement to reduce or limit services to individuals who are
under the direct care of the physician and who are entitled to benefits under
Medicare, Medi-Cal (or Medicaid), or other state health care program but
excluding any activities which come within a "safe harbor" under federal law;
(g) knowingly giving or causing to be given to any Person information that is
known or should be known to be false or misleading that could reasonably be
expected to influence the decision when to discharge a Person from the
hospital; (h) knowingly and willfully making or causing to be made or inducing
or seeking to induce the making of any false statement or representation of a
material fact with respect to (1) the conditions or operations of a facility in
order that the facility may qualify for Medicare, Medi-Cal (or Medicaid) or
other state health care program certifications, or (2) information required to
be provided under 1124A of the Social Security Act (42 U.S.C.
1320a-3); (i) knowingly and willfully (1) submitting or causing to be
submitted bills or requests for payment for items for services furnished
substantially in excess of an individual or entity's usual charges (or, in
applicable cases, substantially in excess of such individual or entity's costs)
for such items or services, unless the Secretary of the Department of Health
and Human Services finds there is good cause for such bills or requests
containing such charges or costs, or (2) charging, soliciting, accepting or
receiving, in addition to amounts paid by Medi-Cal (or Medicaid), any gift
money, donation or other consideration (other than a charitable, religious or
other philanthropic contribution from an organization or from a Person
unrelated to the patient) when the cost of the services provided therein to the
patient is paid for (in whole or in part) under the State plan (x) as a
precondition of admitting the patient, or (y) as a requirement for the
patient's continued stay in the facility. The Borrower, its Subsidiaries and
all Majority-Owned Joint Ventures and their respective officers and directors,
and Persons who provide professional services under agreements with any of the
Borrower, its Subsidiaries and all Majority-Owned Joint Ventures, in the case
of a hospital with a hospital emergency department, provide for an appropriate
medical screening examination within the capacity of the hospital's emergency
department, including ancillary services routinely available to the emergency
department, if any individual (whether or not eligible for Medicare benefits)
comes to the emergency department and a request is made on the individual's
behalf for examination or treatment for a medical condition, to determine
whether or not an emergency medical condition exists. Representations and
warranties set forth in this SECTION 7.28 shall not be deemed breached unless
any such activity or failure to provide services could reasonably be expected
to have a Material Adverse Effect on the Borrower and its Subsidiaries, taken
as a whole.
ARTICLE 8
AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that, as long as the Obligations or
any part thereof are outstanding or any Lender has any Commitment hereunder or
any Letter of Credit remains outstanding hereunder, the Borrower will perform
and observe, or cause to be performed and observed, the following covenants:
Section 8.1 REPORTING REQUIREMENTS. The Borrower will furnish to the
Agent:
(a) ANNUAL FINANCIAL STATEMENTS. As soon as available, and in
any event within 120 days after the end of each fiscal year of the
Borrower, beginning with the fiscal year ending December 31, 1997,
(i) a copy of the annual audit report of the Borrower and its
consolidated Subsidiaries as of the end of and for such fiscal year
then ended containing, on a consolidated basis, balance sheets and
statements of income, retained earnings and cash flow, in each case
setting forth in comparative form the figures for the preceding fiscal
year, all in reasonable detail and audited and certified by Ernst &
Young or any other "Big Four" accounting firm, or other independent
certified public accountants of recognized standing reasonably
acceptable to the Agent and containing no qualification thereto except
as may be reasonably acceptable to the Agent, to the effect that such
report has been prepared in accordance with GAAP and (ii) a certificate
of such independent certified public accountants to the Agent stating
that to their knowledge no Default has occurred and is continuing or,
if in their opinion a Default has occurred and is continuing, stating
the nature thereof;
(b) QUARTERLY FINANCIAL STATEMENTS. As soon as available, and
in any event within forty-five (45) days after the end of each fiscal
quarter of each fiscal year of the Borrower or, with respect to the
last fiscal quarter, within one hundred twenty (120) days after the end
of such fiscal quarter, beginning with the fiscal quarter ending
March 31, 1998, a copy of an unaudited financial report of the Borrower
and its consolidated Subsidiaries as of the end of such fiscal quarter
and for the fiscal year or the portion of the fiscal year then ended
(as applicable) containing, on a consolidated and consolidating (with
respect to balance sheets and statements of income and retained
earnings only) basis, balance sheets and statements of income, retained
earnings and cash flow, in each case (with respect to consolidated
financial information only) setting forth in comparative form the
figures for the corresponding period of the preceding fiscal year, all
in reasonable detail certified by a Responsible Officer of the Borrower
to have been prepared in accordance with GAAP and to fairly and
accurately present (subject to year-end audit adjustments) the
financial condition and results of operations of the Borrower and its
consolidated Subsidiaries, on a consolidated and consolidating basis,
at the date, and for the periods indicated therein;
(c) MONTHLY FINANCIAL STATEMENTS. As soon as available, and in
any event within forty-five (45) days after the end of each month,
beginning with the month ending March 31, 1998, a copy of (i) an
unaudited financial report of the Borrower and its consolidated
Subsidiaries as of the end of such month and for the portion of the
fiscal year then ended containing, on a consolidated and consolidating
(with respect to balance sheets and statements of income and retained
earnings only) basis, balance sheets and statements of income, retained
earnings and cash flow, and (ii) a schedule reflecting the EBITDA and
net revenues of the material operating Subsidiaries of the Borrower for
such month and the portion of the fiscal year then ended in a format
substantially identical to that previously provided to the Lenders and,
in the case of CLAUSE (II) preceding, in each case setting forth in
comparative form the figures for the corresponding period of the
preceding fiscal year and the figures for the then current budget, all
in reasonable detail certified by a Responsible Officer of the Borrower
to have been prepared in accordance with GAAP and to fairly and
accurately present (subject to year-end audit adjustments) the
financial condition and results of operations of the Borrower and its
consolidated Subsidiaries, on a consolidated and consolidating basis,
at the date, and for the periods indicated therein;
(d) CERTIFICATE OF NO DEFAULT. Concurrently with the delivery
of each of the financial statements referred to in SECTIONS 8.1(A) and
8.1(B) and, with respect to CLAUSE (I) succeeding, SECTION 8.1(C), a
certificate of a Responsible Officer of the Borrower (i) stating that,
to the best of such officer's knowledge, no Default has occurred and is
continuing or, if a Default has occurred and is continuing, stating the
nature thereof and the action that has been taken and is proposed to be
taken with respect thereto, (ii) showing (with respect to each
certificate delivered concurrently with the delivery of each of the
financial statements referred to in SECTION 8.1(A) or 8.1(B)) in
reasonable detail the calculations demonstrating compliance with
ARTICLE 10;
(e) APPLICABLE COMMITMENT COMMISSION PERCENTAGE AND APPLICABLE
MARGINS CERTIFICATE. Concurrently with the delivery of each of the
financial statements referred to in SECTIONS 8.1(A) and 8.1(B), a
certificate of a Responsible Officer of the Borrower showing in
reasonable detail the calculation of the Applicable Commitment
Commission Margin and the Applicable Margins;
(f) BUDGET. As soon as available and in any event no later than
sixty (60) days after the beginning of each fiscal year of the
Borrower, commencing with the fiscal year beginning January 1, 1998, a
copy of the budget of the Borrower and its Subsidiaries for such fiscal
year (segregated by entity and month and setting forth all material
assumptions), which budget shall have been presented to and reviewed
and approved by the Board of Directors of the Borrower and which is
subject to year-end adjustments; PROVIDED, HOWEVER, that the
requirement to provide the budget as described in this SECTION 8.1(F)
shall terminate on the first to occur of (i) the second anniversary of
the Closing Date or (ii) the earliest date on which the ratio of Total
Debt to Adjusted EBITDA is equal to or less than 2.50:1.00;
(g) NOTICE OF LITIGATION. Promptly and in any event within five
(5) days after the Borrower's obtaining knowledge of the threat or
commencement thereof or otherwise becoming aware thereof, written
notice of all of the following: (i) any action, suit or proceeding
before any Governmental Authority or arbitrator affecting any Loan
Party which, if adversely determined to any such Person, could
reasonably be expected to have a Material Adverse Effect, (ii) any
action, suit or proceeding before any Governmental Authority or
arbitrator to which the Borrower or any of its Subsidiaries is a
defendant or other potentially liable party which alleges an amount in
controversy of $3,000,000 or more and is not covered by insurance or in
which injunctive or similar relief is sought, or (iii) any final
disposition by judgment or settlement of any action, suit or proceeding
before any Governmental Authority or arbitrator against the Borrower or
any of its Subsidiaries involving a liability (to the extent not paid
or covered by insurance) to the Borrower or any of its Subsidiaries of
$3,000,000 or more; PROVIDED, HOWEVER, that nothing in this CLAUSE (G)
shall require disclosure of matters which could reasonably be expected
to result in a waiver of the attorney-client privilege or work product
protection of the Borrower or any of its Subsidiaries or a violation of
an obligation of the Borrower or any of its Subsidiaries imposed by
court order or otherwise imposed by law.
(h) NOTICE OF DEFAULT. Promptly and in any event within five
days after the Borrower's knowledge of the occurrence of any Default, a
written notice setting forth the details of such Default and the action
that the Borrower has taken and proposes to take with respect thereto;
(i) ERISA REPORTS. Promptly, and in any event within ten
Business Days after any such Person knows or has reason to know that
any Multiemployer Plan is insolvent, or that any Reportable Event or
Prohibited Transaction has occurred with respect to any Pension Plan or
Multiemployer Plan, or that the PBGC, any Loan Party or any ERISA
Affiliate has instituted or will institute proceedings under ERISA to
terminate or withdraw from or reorganize any Pension Plan or
Multiemployer Plan, written notice of a Responsible Officer of the
Borrower setting forth the details as to such insolvency, withdrawal,
Reportable Event, Prohibited Transaction or termination and the action
that the Borrower has taken and proposes to take with respect thereto;
(j) REPORTS TO OTHER CREDITORS. Promptly after the furnishing
thereof, a copy of any notice furnished by the Borrower to the Trustee
under the Indenture as to the occurrence of a default or event of
default thereunder and not otherwise required to be furnished to the
Agent pursuant to any other subsection of this SECTION 8.1;
(k) NOTICE OF MATERIAL ADVERSE EFFECT. Within five Business
Days after the Borrower becomes aware thereof, written notice of any
matter that could reasonably be expected to have a Material Adverse
Effect;
(l) PROXY STATEMENTS, ETC. As soon as available, one copy of
each financial statement, report, notice or proxy statement sent by the
Borrower to its stockholders generally and one copy of each regular,
periodic or special report, registration statement or prospectus filed
by the Borrower with any securities exchange or the Securities and
Exchange Commission or any successor agency, and of all press releases
made by the Borrower to the public containing material developments in
its business;
(m) NOTICE OF NEW SUBSIDIARIES. Concurrently with the delivery
of each of the financial statements referred to in SECTIONS 8.1(A) and
8.1(B), notice of the creation or acquisition of any Subsidiary of the
Borrower after the Closing Date, or the designation after the Closing
Date of any Excluded Subsidiary as a Subsidiary, and subsequent to the
last delivery of such information;
(n) PLAN INFORMATION. From time to time, as reasonably
requested by the Agent or any Lender, such books, records and other
documents relating to any Pension Plan or Multiemployer Plan as the
Agent or any Lender shall specify; prior to any termination, partial
termination or merger of a Pension Plan, or a transfer of assets of a
Pension Plan, written notification thereof;
(o) GENERAL INFORMATION. Promptly, such other information
concerning the Loan Parties and their respective Subsidiaries as the
Agent or any Lender may from time to time reasonably request;
(p) NOTICES REGARDING SUBORDINATED DEBT. (i) Promptly upon the
Borrower's or any Subsidiary's receipt thereof, a true and correct copy
of any written notice or other communication (exclusive of immaterial
notices or communications of an administerial nature) given by or to
the Trustee under the Indenture or any holder of any Subordinated Debt
(in such holder's capacity as such) in any way relating to any
Subordinated Debt or any agreement, document or instrument evidencing
or governing any Subordinated Debt; and (ii) immediately prior to or
concurrently with the making of any payment on or with respect to any
Subordinated Debt, a certificate executed by a Responsible Officer on
behalf of the Borrower stating that no Default exists or will exist at
the time of such payment or will result from such payment;
(q) AUDITOR'S MANAGEMENT LETTER. Promptly upon the delivery of
such management letter to the Borrower or its management, a copy of the
auditor's management letter relating to the audited financial
statements referred to in SECTION 8.1(A);
(r) NOTICES RELATING TO PHC FUNDING SALE DOCUMENTS. Promptly
upon the delivery thereof to the Borrower, a copy of (i) each notice or
other written communication regarding the occurrence or existence (or
alleged occurrence or existence) of any default (no matter how used or
defined), event of default (no matter how used or defined), Early
Amortization Event or Exclusion Event under the PHC Funding Sale
Documents, (ii) each amendment or modification of the PHC Funding Sale
Documents (other than amendments relating solely to the addition of
additional Subsidiaries of the Borrower to the program evidenced by the
PHC Funding Sale Documents pursuant to Sale and Servicing Agreements
substantially identical to those in effect with respect to Subsidiaries
of the Borrower participating in such program at the Closing Date) and
(iii) each waiver relating to the PHC Funding Sale Documents, and
promptly upon the occurrence thereof, notice regarding any expiration
or termination of the PHC Funding Sale Documents (whether in accordance
with their contemplated term or otherwise) or the transactions
contemplated thereby.
(s) ENVIRONMENTAL NOTICES. Promptly and in any event within ten
(10) days of the Borrower's knowledge of any of the following not
specifically disclosed in the Environmental Questionnaires or in the
Environmental Reports, written notice thereof to the Agent:
(i) the Release or threatened Release of any Hazardous
Material on or from any Property now, heretofore or hereafter
owned, operated or leased by the Borrower or any of its
Subsidiaries and any written order, notice, permit, application
or other written communication or report received by the
Borrower or any of its Subsidiaries in connection with or
relating to any such Release or threatened Release, in each case
where such Release or threatened Release would reasonably be
expected to subject the Borrower or any of its Subsidiaries to
Environmental Liabilities of $1,000,000 or more;
(ii) any notice or claim to the effect that the Borrower
or any of its Subsidiaries is or may be liable as a Potentially
Responsible Party under CERCLA or any state or local
Environmental Law to any Person, or any other notice or claim to
the effect that the Borrower or any of its Subsidiaries is or
may be liable, in each case as a result of the Release or
threatened Release of any Hazardous Material that would
reasonably be expected to subject the Borrower or any of its
Subsidiaries to Environmental Liabilities of $1,000,000 or more;
(iii) receipt by the Borrower or any of its Subsidiaries of
notification that any real or personal Property (irrespective of
whether owned or acquired before, on or after the Closing Date)
of the Borrower or any of its Subsidiaries is subject to an
Environmental Lien of record;
(iv) any Remedial Action taken by the Borrower or any of
its Subsidiaries or any other Person in response to any Release
of a Hazardous Material on, under or about any real Property
now, heretofore or hereafter owned, operated or leased by the
Borrower or any of its Subsidiaries, where such Remedial Action
would reasonably be expected to subject the Borrower or any of
its Subsidiaries to Environmental Liabilities of $1,000,000 or
more;
(v) receipt by the Borrower or any of its Subsidiaries of
any notice of violation of, or knowledge by the Borrower or any
of its Subsidiaries that there exists a condition which would
reasonably be expected to result in a violation by the Borrower
or any of its Subsidiaries of, any Environmental Law currently
or hereafter in effect, where such violation would reasonably be
expected to subject the Borrower to Environmental Liabilities of
$1,000,000 or more;
(vi) any proposed Capital Expenditure by the Borrower or
any of its Subsidiaries intended or designed to implement any
existing or additional Remedial Action, in each case where such
proposed expenditures for such Remedial Action would reasonably
be expected to exceed $1,000,000;
(vii) the commencement of any Legal Proceeding or
investigation alleging a violation of any Environmental Law,
where such alleged violation would reasonably be expected to
subject the Borrower or any of its Subsidiaries to Environmental
Liabilities of $1,000,000 or more; or
(viii) any proposed Business Acquisition, or any proposed
leasing of Property by the Borrower, or any of its Subsidiaries,
where such action would reasonably be expected to subject the
Borrower and its Subsidiaries to Environmental Liabilities in
excess of $1,000,000; and
(t) ENVIRONMENTAL UPDATES. Upon reasonable written request by
the Required Lenders through the Agent, a report providing an update of
the status of any Environmental Claim, Remedial Action or any other
issue, in each case identified in any notice or report required
pursuant to SECTION 8.1(S).
(u) DELIVERY OF NOTICES. Any notice required to be delivered
under this SECTION 8.1 on a day that is not a Business Day will be
deemed timely delivered if it is delivered on the next following day
that is a Business Day.
Section 8.2 MAINTENANCE OF EXISTENCE; CONDUCT OF BUSINESS. The
Borrower will, and will cause each of its Subsidiaries (other than the Excluded
Subsidiaries) to, preserve and maintain its corporate existence (except for
mergers and dissolutions of Subsidiaries permitted by SECTION 9.3 and
Subsidiaries substantially all the assets of which have been disposed of
pursuant to SECTION 9.12) and all of its material leases, privileges, licenses,
Permits, franchises, qualifications and rights that are necessary in the
ordinary conduct of its business, except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect. The Borrower will,
and will cause each of its Subsidiaries to, conduct its business in an orderly
and efficient manner in accordance with good business practices and use its
best efforts to cause the material computer software, computer hardware and
other similar or related items of computerized or automated systems, in any
case used by it or its subsidiaries in the conduct of their business, to
process correctly (and otherwise without malfunction or interruption) dates
prior to, during and after the calendar year 2000.
Section 8.3 MAINTENANCE OF PROPERTIES. The Borrower will, and will
cause each of its Subsidiaries to, maintain, keep and preserve all of its
Properties (irrespective of whether such Properties are owned or acquired
before, on or after the Closing Date) necessary in the proper conduct of its
business in good repair, working order and condition (ordinary wear and tear
excepted and other than Facilities closed and held for disposition) and make
all necessary repairs, renewals, replacements, betterments and improvements
thereof.
Section 8.4 TAXES AND CLAIMS. The Borrower will, and will cause each
of its Subsidiaries to, pay or discharge at or before maturity or before
becoming delinquent (a) all taxes, levies, assessments and governmental charges
imposed on it or its income or profits or any of its Property and (b) all
lawful claims for labor, material and supplies, which, if unpaid, might become
a Lien upon any of its Property (in each case, irrespective of whether such
Property is owned or acquired before, on or after the Closing Date); PROVIDED,
HOWEVER, that neither the Borrower nor any of its Subsidiaries shall be
required to pay or discharge any tax, levy, assessment or governmental charge
or claim for labor, material or supplies (i) so long as the aggregate of such
taxes, levies, assessments, charges or claims for which Liens have been
recorded do not exceed $1,000,000 or (ii) whose amount, applicability or
validity is being contested in good faith by appropriate proceedings being
diligently pursued and for which adequate reserves have been established under
GAAP; PROVIDED, HOWEVER, that with respect to the Liens described in SUBSECTION
(I) of this SECTION 8.4, if such Liens have not been discharged within 60 days
of the time of their filing, then the Subsidiary against whose Property the
Liens have been recorded shall become an Excluded Subsidiary, after such 60-day
period.
Section 8.5 INSURANCE. (a) The Borrower will, and will cause each of
its Subsidiaries to, keep insured by financially sound and reputable insurers,
including, but not limited to Hospital Assurance Company, Ltd., all Property of
the Borrower and its Subsidiaries (irrespective of whether such Property is
owned or acquired before, on or after the Closing Date) of a character usually
insured by responsible corporations engaged in the same or a similar business
similarly situated against loss or damage of the kinds and in the amounts
customarily insured against by such corporations and carry such other insurance
as is usually carried by such corporations all in amounts and of the type
currently carried by Borrower and its Subsidiaries. The Agent, for the benefit
of itself and the other Lenders, shall be named as loss payee with respect to
casualty insurance policies covering all or any part of the Collateral to the
extent of the interests of the Lenders in the Collateral (other than Capital
Stock) and shall be named as additional insured with respect to the general
liability insurance policies of the Borrower and its Subsidiaries to the extent
of the interests of the Lenders in the Collateral (other than Capital Stock).
(b) If no Event of Default or payment Default shall have occurred
and be continuing, the Borrower may use each insurance recovery to repair,
restore or replace the Property that was the subject of such insurance
recovery.
(c) If an Event of Default or payment Default shall have occurred
and be continuing, the Borrower will cause all proceeds of insurance paid on
account of the loss of or damage to any Property of the Borrower or any of its
Subsidiaries and all awards of compensation for any Property of the Borrower or
any of its Subsidiaries taken by condemnation or eminent domain to be paid
directly to the Agent to be applied against or held as security for the
Obligations, at the election of the Agent and the Required Lenders and, to the
extent such proceeds of insurance are applied against the Obligations, there
shall be a prepayment of the Loans.
Section 8.6 INSPECTION RIGHTS. The Borrower will, and will cause each
of its Subsidiaries to, permit representatives and agents of the Agent and each
Lender, during normal business hours and upon reasonable notice to the
Borrower, to examine, copy and make extracts from its books and records except
confidential patient records, to visit and inspect its Properties (whether now
owned or hereafter acquired) and to discuss its business, operations and
financial condition with its officers and independent certified public
accountants; PROVIDED, HOWEVER, that prior to a Default, discussions with the
Borrower's independent certified public accountants shall only take place in
the presence of a Responsible Officer unless the Borrower otherwise consents.
Following the occurrence of a Default or Event of Default, the Agent and each
Lender may meet with the Borrower's independent certified public accountants
without any Responsible Officer of the Borrower present. By this provision,
the Borrower hereby authorizes such accountants to discuss with the Agent and
the Lenders and their agents and representatives, the affairs, finances and
accounts of the Borrower and its Subsidiaries in accordance with this
SECTION 8.6.
Section 8.7 KEEPING BOOKS AND RECORDS. The Borrower will, and will
cause each of its Subsidiaries to, maintain appropriate books of record and
account in accordance with GAAP consistently applied in which true, full and
correct entries will be made of all their respective dealings and business
affairs. If any material changes in accounting principles from those used in
the preparation of the financial statements referenced in SECTION 8.1 are
hereafter required or permitted by GAAP and are adopted by the Borrower or any
of its Subsidiaries with the concurrence of its independent certified public
accountants and such changes in GAAP result in a change in the method of
calculation or the interpretation of any of the financial covenants, standards
or terms found in SECTION 8.1 or ARTICLE 10 or any other provision of this
Agreement, the Borrower and the Required Lenders agree to amend any such
affected terms and provisions so as to reflect such changes in GAAP with the
result that the criteria for evaluating the Borrower's or such Subsidiaries'
financial condition shall be the same after such changes in GAAP as if such
changes in GAAP had not been made; PROVIDED, HOWEVER, that until any necessary
amendments have been made, the certificate required to be delivered under
SECTION 8.1(D) hereof demonstrating compliance with ARTICLE 10 shall include
calculations setting forth the adjustments from the relevant items as shown in
the current financial statements based on the changes to GAAP to the
corresponding items based on GAAP as used in the financial statements
referenced in SECTION 7.2(A), in order to demonstrate how such financial
covenant compliance was derived from the current financial statements.
Section 8.8 COMPLIANCE WITH LAWS. The Borrower will, and will cause
each of its Subsidiaries to, comply in all respects with all applicable
Governmental Requirements except where the failure to so comply would have a
Material Adverse Effect.
Section 8.9 COMPLIANCE WITH AGREEMENTS. The Borrower will, and will
cause each of its Subsidiaries to, comply with all agreements, contracts and
instruments binding on it or affecting its Properties (whether now owned or
hereafter acquired) or business, except for instances of noncompliance that
could not be reasonably expected to have, individually or in the aggregate, a
Material Adverse Effect. The Borrower will comply with all terms and
provisions of Article 12 of the Indenture which are intended to benefit the
holders of any "Senior Indebtedness" (as such term is defined in the
Indenture).
Section 8.10 FURTHER ASSURANCES. The Borrower will, and will cause
each of its Subsidiaries to, execute and deliver such further agreements,
documents and instruments and take such further action as may be reasonably
requested by the Agent to carry out the provisions and purposes of this
Agreement and the other Loan Documents, to evidence the Obligations and to
create, preserve, maintain and perfect the Liens of the Agent for the benefit
of itself and the Lenders in and to the Collateral and the required priority of
such Liens.
Section 8.11 ERISA. The Borrower will, and will employ reasonable
efforts to cause each of its ERISA Affiliates to, comply with all minimum
funding requirements and all other material requirements of ERISA, if
applicable, so as not to give rise to any liability thereunder.
Section 8.12 BORROWER'S TREATMENT OF SUBSIDIARIES. In consideration of
the Loans made hereunder and the execution and delivery of the Master Guaranty
by each Subsidiary Guarantor, Borrower hereby agrees that it and each of its
Subsidiaries (other than the Excluded Subsidiaries or Subsidiaries identified
on Schedule 7.25) and DHHS (while it remains in existence) will remain Solvent
at all times. Determinations of compliance with this SECTION 8.12 shall be
made by computing the amount of contingent liabilities at any time at the
amount which, in light of the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.
Section 8.13 ENVIRONMENTAL MATTERS. (a) The Borrower shall comply
in all material respects, and shall cause each of its Subsidiaries to comply in
all material respects, with all applicable Environmental Laws currently or
hereafter in effect; PROVIDED, HOWEVER, that the Borrower shall not be deemed
in default of this SECTION 8.13(A) if all such non-compliances in the aggregate
would not result in a Material Adverse Effect.
(b) If the Agent or the Required Lenders at any time have a
reasonable basis to believe that there may be a material violation of any
Environmental Law by the Borrower or any of its Subsidiaries related to any
real Property now, heretofore or hereafter owned, leased or operated by the
Borrower or any of its Subsidiaries, or real Property adjacent to such real
Property, or, if any Event of Default occurs and is continuing, then the
Borrower agrees, upon request from the Agent, to provide the Agent, at the
Borrower's expense, with such reports, certificates, engineering studies or
other written material or data as the Agent or the Required Lenders may
reasonably require so as to reasonably satisfy the Agent and the Required
Lenders that the Borrower or such Subsidiary is in material compliance with all
applicable Environmental Laws; PROVIDED, HOWEVER, that should the Borrower fail
to provide such reports, certifications, engineering studies or other written
material or data within 90 days of the Agent's request, or as otherwise agreed
by the Agent, the Agent, its employees and agents shall have the right, at the
Borrower's sole cost and expense, to conduct such environmental assessments or
investigations as may reasonably be required to satisfy the Agent and the
Required Lenders that the Borrower or its Subsidiary is in material compliance
with all applicable Environmental Laws. Furthermore, the Agent shall have the
right to inspect during normal business hours any real Property owned, leased
or operated by the Borrower or any of its Subsidiaries if at any time the Agent
or the Required Lenders have a reasonable basis to believe that there may be
such a material violation of Environmental Law. To the extent the Agent
undertakes to perform such assessments, investigations or inspections, the
Agent shall pass through (without recourse) any insurance coverage and
indemnity protections available from its agents to the Borrower and its
Subsidiaries (it being understood that the obtaining of any such coverage or
protections are matters within the sole discretion of the Agent).
(c) The Borrower shall, and shall cause each of its Subsidiaries to,
address in good faith, and in a manner reasonably appropriate under the
circumstances, any Environmental Claim, Remedial Action or other matter for
which notice is in each case required to be given to the Agent pursuant to
SECTION 8.1(S) hereof.
Section 8.14 ACCOUNTS RECEIVABLE SECURITIZATION PROGRAM. The Borrower
and its Subsidiaries will maintain in full force and effect an accounts
receivables securitization program, taking into account any reduction in the
size of such program resulting from any Asset Disposition otherwise permitted
hereunder, without any lapse or suspension for any period of 30 or more
consecutive days, as contemplated by the PHC Funding Sale Documents as in
effect as of the Closing Date without any material amendment or modification
thereto subsequent to the Closing Date that is materially adverse to the
Borrower and its Subsidiaries.
ARTICLE 9
NEGATIVE COVENANTS
The Borrower covenants and agrees that, as long as the Obligations or
any part thereof are outstanding or any Lender has any Commitment hereunder, or
any Letter of Credit remains outstanding hereunder, the Borrower will perform
and observe, or cause to be performed and observed, the following covenants:
Section 9.1 DEBT. The Borrower will not, and will not permit any of
its Subsidiaries to, incur, create, assume or permit to exist any Debt, except:
(a) Debt of the Borrower and its Subsidiaries to the Lenders
pursuant to the Loan Documents;
(b) Existing Debt described on SCHEDULE 7.10 hereto;
(c) Subordinated Debt;
(d) Capital Lease Obligations;
(e) Debt incurred in payment for the acquisition of goods,
supplies or merchandise on normal trade credit in the ordinary course
of its respective business;
(f) Purchase money Debt secured by purchase money Liens, which
Debt and Liens are permitted under and meet all of the requirements of
CLAUSE (H) of the definition of Permitted Liens contained in SECTION
1.1;
(g) (i) Pre-existing Debt assumed by the Borrower or a
Subsidiary as a condition to a Business Acquisition permitted under
SECTION 9.5, or (ii) pre-existing Debt of an entity acquired by the
Borrower or a Subsidiary in a Business Acquisition, PROVIDED, HOWEVER,
that any such Debt shall be (x) Subordinated Debt and shall be
unsecured, unless the related collateral is only Property of an
Excluded Subsidiary, (y) constitute Capital Lease Obligations or (z)
constitute Debt secured by purchase-money Liens;
(h) Intercompany Debt between or among the Borrower and any of
its Majority-Owned or Wholly-Owned Subsidiaries (other than an Excluded
Subsidiary), subject to the following requirements: any and all of the
Debt permitted pursuant to this SECTION 9.1(H) shall be unsecured
(unless the security for such Debt shall be collaterally assigned to
the Lenders), shall be evidenced, at the Borrower's option, either on
the books and records of the Borrower and the relevant Subsidiary or by
instruments reasonably satisfactory to the Agent and all such Debt
shall be subordinated to the Obligations pursuant to the Master
Guaranty or by separate agreement;
(i) Intercompany Debt between or among the Excluded Subsidiaries
permitted under SECTION 9.4;
(j) The transactions contemplated by the PHC Funding Sale
Documents permitted by SECTION 9.12A(C);
(k) The Borrower or any of its Subsidiaries may make loans or
advances to DHHS; PROVIDED, HOWEVER, that unless DHHS becomes a Wholly-
Owned Subsidiary of the Borrower, such loans and advances may only be
made so long as (a) DHHS has (i) agreed not to permit any Liens (other
than Permitted Liens and other than those in favor of one or more of
the Lenders as hereinafter provided and those securing Capital Lease
Obligations, to the extent that such Liens attach only to the Property
leased and such Capital Lease Obligations are permitted under the terms
of this Agreement) to attach to any of the Property (whether now owned
or hereafter acquired) of DHHS, (ii) agreed not to enter into a
negative pledge in favor of any Person other than the Agent and the
Lenders except in connection with Permitted Liens, and (iii) agreed not
to incur any Debt other than (x) Capital Lease Obligations and (y) Debt
owed to one or more of the Lenders as hereinafter provided, and (b)
such amounts do not exceed the product obtained by multiplying three
(3) times that portion of the EBITDA of DHHS which is attributable to
Xxxxxxxxxx-Fargo's EBITDA distribution percentage under the DHHS
Partnership Agreement. The foregoing restrictions on loans and
advances shall not apply to any loan transaction DHHS may enter into
with one or more of the Lenders as long as the terms and conditions of
such loan transaction have been approved by the Required Lenders (which
approval shall not be unreasonably withheld), and are not inconsistent
with the representations, warranties and covenants set forth in this
Agreement. Except as expressly contemplated above, notwithstanding
anything to the contrary contained herein or any other Loan Document,
the Loan Documents do not permit DHHS to incur Debt other than that
described above and other Debt permitted by SECTION 9.1;
(l) Debt owed to the Borrower or any of its Majority-Owned
Subsidiaries or Wholly-Owned Subsidiaries by any Person which is not a
Majority-Owned Subsidiary or Wholly-Owned Subsidiary of Borrower, so
long as the aggregate amount of such Debt, together with Investments
permitted by SECTION 9.4(D), does not exceed five percent (5%) of
Consolidated Tangible Assets;
(m) contingent obligations permitted by SECTION 9.9;
(n) Other unsecured Debt of the Borrower and its Subsidiaries in
an aggregate principal amount not to exceed $10,000,000 at any time
outstanding;
(o) any other Debt expressly permitted by the Required Lenders;
and
(p) All extensions or renewals of the above-referenced Debt
which do not increase the outstanding principal amount of such Debt.
Notwithstanding anything to the contrary contained in this SECTION 9.1, the
aggregate of the Debt of the Borrower and its Subsidiaries referred to in
CLAUSES (D), (F), (G) and (N) of this SECTION 9.1 preceding which may be
incurred on or after December 31, 1997, shall not exceed an aggregate amount at
any one time outstanding (i) as long as the Leverage Ratio is greater than
4.75:1.00, the greater of $20,000,000 and 2% of Consolidated Assets and (ii) at
all other times, the greater of $30,000,000 and 2% of Consolidated Assets.
Section 9.2 LIMITATION ON LIENS. The Borrower will not, and will not
permit any of its Subsidiaries to, incur, create, assume or permit to exist any
Lien (including, without limitation, the Lien of an attachment, judgment or
execution) upon any of its Property or revenues, whether now owned or hereafter
acquired, except Permitted Liens.
Section 9.3 LIMITATION ON FUNDAMENTAL CHANGES. Except as otherwise
permitted under SECTION 9.11 or SECTION 9.12, the Borrower will not, and will
not permit any of its Subsidiaries (other than Excluded Subsidiaries, excluding
DHHS) to, become a party to a merger, consolidation, partnership, joint
venture, or other combination, or wind-up, dissolve or liquidate itself, or
sell, lease or dispose of all or a substantial portion of its business or
assets; PROVIDED, HOWEVER, that any Wholly-Owned Subsidiary may merge into,
consolidate with or transfer its business or assets to Borrower or any other
Wholly-Owned Subsidiary if (a) in such a merger, consolidation or transfer, the
Borrower or such other Wholly-Owned Subsidiary (other than an Excluded
Subsidiary) survives and in the case of such a Subsidiary, remains a Wholly-
Owned Subsidiary of Borrower, and (b) no Default or Event of Default occurs and
is continuing after giving effect to such merger, consolidation or transfer;
PROVIDED, FURTHER, that the Borrower and its Subsidiaries shall be permitted to
form partnerships and joint ventures which, after formation, are Subsidiaries
and are otherwise permitted by this Agreement, and the requirements of SECTION
9.9(D) are satisfied with regard thereto; and PROVIDED, FURTHER, HOWEVER, that
Subsidiaries substantially all of the assets of which have been disposed of in
accordance with this Agreement may wind up, dissolve and liquidate. The
Borrower will not, nor will it permit any of its Subsidiaries to, form any
Subsidiary that would be a second-tier Subsidiary of the Borrower that would
not be an Excluded Subsidiary unless the Borrower's Subsidiaries shall not be
prohibited by the terms and conditions of any contract or agreement to which
the Borrower or any of its Subsidiaries is a party, including without
limitation the Indenture, to pledge the Capital Stock of such second-tier
Subsidiary to the Agent for the benefit of the Lenders in accordance with the
provision of SECTION 5.3.
Section 9.4 LIMITATION ON INVESTMENT. The Borrower will not, nor will
it permit any of its Subsidiaries to, make or permit to remain outstanding any
loan, extension of credit or capital contribution to or investment in any
Person, or purchase or own any Equity Interests or Debt (whether in the form of
stock, uncertificated ownership interests, bonds, notes, debentures or other
securities) of any Person, or acquire or purchase the assets or business of any
other Person, or acquire or purchase securities or become a joint venturer with
or partner of any Person (all such transactions being herein called
"INVESTMENTS"), other than:
(a) Cash Equivalents;
(b) Investments permitted by SECTION 9.5;
(c) Investments (whether in cash or Property) in Wholly-Owned
Subsidiaries or Majority-Owned Subsidiaries of the Borrower made
consistent with past practices and not prohibited by SECTION 9.12A, in
either event so long as such Wholly-Owned Subsidiaries or Majority-
Owned Subsidiaries are not Excluded Subsidiaries;
(d) other Investments (whether in cash or Property, and, in the
case of Investments in Persons other than Excluded Subsidiaries and if
in Property, valued at its then current appraised value) made on or
after the Closing Date in any Person, including Excluded Subsidiaries,
in an aggregate amount (together with Debt permitted by SECTION 9.1(L)
and together with Investments in Excluded Subsidiaries referred to in
SCHEDULE 9.4) not to exceed five percent (5%) of Consolidated Tangible
Assets;
(e) other Investments made by Hospital Assurance Company, Ltd.,
a Wholly-Owned Subsidiary of Borrower, in investment grade securities;
(f) receivables owing to it, if created in the ordinary course
of business or dischargeable in accordance with customary trade terms;
(g) Investments between and among the Excluded Subsidiaries;
(h) loans and extensions of credit permitted by SECTIONS 9.1(H),
(I), (K) and (L) and SECTION 9.6; and
(i) existing Investments (other than the Investments covered
under CLAUSES (A) through (G) above) identified on SCHEDULE 9.4 hereto;
PROVIDED, HOWEVER, that, no Investments may be made by the Borrower or any of
its Subsidiaries pursuant to CLAUSES (B) or (D) preceding if an Event of
Default exists at the time of such Investment or would result therefrom.
Section 9.5 LIMITATION ON BUSINESS ACQUISITIONS. The Borrower will
not, and will not permit any of its Subsidiaries (other than DHHS, so long as
DHHS is an Excluded Subsidiary, or any other partnership or joint venture) to,
make expenditures or Investments or incur or assume any obligations, or consent
to make expenditures or Investments or incur or assume obligations, to make, or
otherwise in connection with, Business Acquisitions (including, without
limitation, all Capital Lease Obligations, Operating Lease obligations and
other indebtedness, liabilities and obligations to be assumed by the Borrower
or any of its Subsidiaries and all payments made or to be made for covenants
not to compete), except as follows (the acquisitions permitted under this
SECTION 9.5 are sometimes referred to herein as "PERMITTED ACQUISITIONS"): (a)
expenditures or Investments made and obligations incurred or assumed in
connection with the acquisitions of Facilities, health related businesses or
related lines of business where the total of the expenditures or Investments
made and obligations incurred or assumed in connection with any such
acquisition is less than $5,000,000, and (unless the acquisition is effected by
an Excluded Subsidiary) the real Property and tangible personal Property
consisting of inventory and equipment comprising such Facilities or businesses
(or the assets thereof), and if the acquisition is effected through the
purchase or acquisition of Capital Stock, such Capital Stock (unless such
Capital Stock is issued by an Excluded Subsidiary) are, not later than 30 days
following the consummation of the particular acquisition, made subject to a
perfected, first priority Lien in favor of the Agent for the benefit of the
Lenders, subject to Permitted Liens, PROVIDED, HOWEVER, that no Default exists
at the time of such acquisition or would result therefrom (and the Borrower
shall so certify in writing to the Agent promptly upon consummation of such
acquisition) and PROVIDED, FURTHER, that the aggregate of all expenditures or
Investments made and obligations incurred or assumed in connection with all
acquisitions permitted under this CLAUSE (A) shall not exceed $15,000,000
during the term of this Agreement; (b) where the total of the expenditures or
Investments made and obligations incurred or assumed in connection with any
such acquisition is greater than $5,000,000, only if the following conditions
are satisfied: (i) the acquired entity or business shall have generated
positive EBITDA for the most recently ended twelve-month period prior to
consummation of such acquisition (subject to adjustment for pro forma expense
elimination based on reasonable assumptions prepared by the Borrower and
certified as such to the Agent, which adjustment shall be subject to reasonable
validation and approval by the Agent), (ii) giving effect to the acquisition as
if it were consummated at the beginning of the most recently ended twelve-month
period prior to consummation of such acquisition for which the Borrower was
required to demonstrate compliance with each financial covenant set forth in
ARTICLE 10, the Borrower, on a pro forma basis, would have been in compliance
with such covenants as in effect at the time of such acquisition (subject to
adjustment for pro forma expense elimination based on reasonable assumptions
prepared by the Borrower and certified as such to the Agent, which adjustment
shall be subject to reasonable validation and approval by the Agent), (iii)
unless approved in writing by the Required Lenders prior to the consummation
thereof, the total of the expenditures or Investments proposed to be made and
obligations proposed to be incurred or assumed in connection with such
acquisition does not exceed $25,000,000, (iv) unless approved in writing by the
Agent and the Required Lenders prior to the consummation thereof, the total of
the expenditures or Investments proposed to be made and obligations proposed to
be incurred or assumed in connection with such acquisition does not exceed
eight times (8.0X) EBITDA of the entity or business proposed to be acquired for
the most recently ended twelve-month period prior to the scheduled date of
consummation of such acquisition (subject to adjustment for (x) pro forma
expense elimination based on reasonable assumptions prepared by the Borrower
and certified as such to the Agent, which adjustment shall be subject to
reasonable validation and approval by the Agent, and (y) other matters approved
by the Agent), (v) no Default exists at the time of such acquisition or would
result therefrom (and the Borrower shall so certify in writing to the Agent
promptly upon consummation of such acquisition) and (vi) unless the acquisition
is effected by an Excluded Subsidiary, the real Property and tangible personal
Property consisting of equipment and inventory comprising the Facilities,
businesses and/or assets acquired, and if the acquisition is effected through
the purchase or acquisition of Capital Stock, such Capital Stock (unless such
Capital Stock is issued by an Excluded Subsidiary) are, substantially
concurrently with the consummation of the particular acquisition, made subject
to a perfected, first priority Lien in favor of the Agent for the benefit of
the Lenders, subject to Permitted Liens; (c) expenditures in connection with
the acquisition of all outstanding Capital Stock in DHHS pursuant to Section
3.03(g) of the DHHS Partnership Agreement, PROVIDED, HOWEVER, that
substantially concurrently with the consummation thereof, (i) DHHS will execute
a Joinder Agreement and (ii) DHHS's real Property and tangible personal
Property consisting of equipment and inventory, and the Capital Stock of all
Subsidiaries of DHHS (other than any Excluded Subsidiary), will be made subject
to a perfected, first priority Lien in favor of the Agent for the benefit of
the Lenders in accordance with SECTION 5.1; and (d) other expenditures or
Investments made and obligations incurred or assumed in connection with
Business Acquisitions that are approved in writing by the Agent and the
Required Lenders prior to the consummation thereof. In connection with each
Permitted Acquisition involving $15,000,000 or more in total consideration paid
or payable (in whatever form), the Borrower shall have submitted to the Lenders
proforma financial forecasts in the form of projected financial statements,
based upon projections (based on good faith estimates of the Borrower and its
senior management based on assumptions believed to be reasonable at the time
made), demonstrating projected compliance through the Tranche B Term Loans
Maturity Date with all financial covenants and agreements of the Borrower
pursuant to this Agreement after giving effect to such proposed acquisition,
all in form and substance reasonably satisfactory to the Required Lenders. Any
acquisition permitted under this SECTION 9.5 shall have been approved by the
appropriate officers, or, if required, by the Board of Directors or other
governing body, of the company or business to be acquired or holding the assets
to be acquired. In no event may the total of expenditures or Investments made
and obligations incurred or assumed in connection with Permitted Acquisitions
(excluding the acquisition of all outstanding Capital Stock of DHHS pursuant to
Section 3.03(g) of the DHHS Partnership Agreement) exceed $50,000,000 in any
twelve-month period commencing on or after the Closing Date unless approved in
writing by the Required Lenders prior to consummation of any acquisition that,
but for such approval, would cause this covenant to be violated.
Section 9.6 LIMITATION ON LOANS AND CREDIT. The Borrower will not,
nor will it permit any of its Subsidiaries to, make any loans or extend any
credit, except:
(a) extensions of credit in the ordinary course of its
respective health care related business;
(b) to employees of Borrower or its Subsidiaries, and to
physicians associated with operating entities of Borrower and its
Subsidiaries not in excess of $1,000,000 for loans and extensions of
credit to any such employee or physician; PROVIDED, HOWEVER, that all
such loans and extensions of credit, when added to the guaranties made
to health care professionals pursuant to SECTION 9.9(C), may not exceed
$10,000,000 in the aggregate at any one time outstanding for the
Borrower and its Subsidiaries; and
(c) loans and/or extensions of credit permitted under SECTIONS
9.1(H), (I), (K) and (L), SECTION 9.4 and SECTION 9.9.
Section 7.c LIMITATION ON CONTRACTS, ETC. Borrower will not, nor will
it permit any of its Subsidiaries engage in any business activities or
operations substantially different from or not related to the healthcare
industry.
Section 9.8 SUBSIDIARIES. Borrower will not dispose of or agree to
dispose of any Equity Interests of any Subsidiary of Borrower (other than
Excluded Subsidiaries) if such disposition would result in Borrower's owning
less than a majority of the outstanding Capital Stock of such Subsidiary or
failure to otherwise control such Subsidiary, except pursuant to SECTION 9.3.
Majority-Owned Subsidiaries of the Borrower and Wholly-Owned Subsidiaries of
the Borrower will engage in no business other than the health care business or
a related line of business.
Section 9.9 CONTINGENT OBLIGATIONS. The Borrower will neither
directly enter into any partnership or joint venture, nor enter into any
agreement pursuant to which it directly assumes any liabilities of any joint
venture or partnership entered into by any of its Subsidiaries. In addition,
the Borrower will not, after the Closing Date, and will not permit any of its
Subsidiaries to, Guarantee any Debt or indebtedness of any other Persons,
including, without limitation, any Affiliate, except:
(a) Guarantees by endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary course of
business;
(b) pursuant to the Master Guaranty;
(c) each of the Borrower's Subsidiaries may Guarantee the income
or debts of individual health care professionals (or of professional
corporations or partnerships owned one hundred percent (100%) by
individual health care professionals) associated with its respective
health care institution; PROVIDED, HOWEVER, that all such guaranties,
when added to the loans and extensions of credit made pursuant to
SECTION 9.6(B), may not exceed $10,000,000 in the aggregate at any one
time outstanding for the Borrower and its Subsidiaries;
(d) each of the Borrower's Wholly-Owned Subsidiaries the sole
asset of which is a joint venture interest acquired after the Closing
Date in a less than one hundred percent (100%) owned Subsidiary of the
Borrower permitted by SECTION 9.4(D), may assume, Guarantee, endorse or
otherwise become directly or contingently liable in connection with any
Debt or indebtedness of such joint venture, PROVIDED, HOWEVER, that
prior to any such Subsidiary becoming so obligated for the Debt or
indebtedness of such joint venture, the Borrower shall furnish to
Agent, (i) a certificate of a Responsible Officer of the Borrower
stating that all reasonable steps have been taken in the opinion of the
Borrower to insulate the Borrower from any liability for the Debts of
such Subsidiary, and (ii) such other documents as the Agent and the
Required Lenders shall reasonably request to confirm that reasonable
steps have been taken to so insulate the Borrower from any liability
for the Debts of such Subsidiary; and
(e) any liability, contingent or otherwise, and any Guaranty of
Debt, permitted pursuant to SECTION 9.1.
Section 9.10 RESTRICTED PAYMENTS. Except as permitted by SECTION 9.1,
the Borrower will not, and will not permit any of its Subsidiaries (other than
Excluded Subsidiaries) to, make any Restricted Payments, except:
(a) Subject to the subordination provisions relating thereto,
the Borrower and its Subsidiaries may make regularly scheduled payments
of interest on the Subordinated Notes and on any other Subordinated
Debt approved in writing by the Required Lenders;
(b) The Borrower may pay cash dividends with respect to its
Capital Stock previously agreed, on or about December 1994, to be paid
in connection with the acquisition of AmeriHealth, Inc. by CHC in an
aggregate amount not to exceed $250,000;
(c) Subsidiaries of the Borrower may make Restricted Payments to
the Borrower or Wholly-Owned Subsidiaries or Majority-Owned
Subsidiaries (in either event other than Excluded Subsidiaries) of the
Borrower;
(d) Subsidiaries of the Borrower that are joint ventures or
partnerships in whatever form, including Lincoln Community Medical,
L.L.C., may make Restricted Payments to their joint venturers or
partners in accordance with their respective joint venture agreements
or partnership agreements;
(e) The Borrower or any Subsidiary may redeem or repurchase any
Equity Interests of the Borrower or any Subsidiary held by any
officers, directors or employees of the Borrower (or any of its
Subsidiaries) whose employment has been terminated or who have died or
become disabled, so long as the aggregate amount of payments for all
such redemptions or repurchases in any fiscal year does not exceed
$1,000,000;
(f) The Borrower may purchase Equity Interests in the Borrower
held in lots of 99 or fewer, PROVIDED, HOWEVER, that the amount paid
for such Interests shall not exceed $250,000 in the aggregate; and
(g) The Borrower may refinance any Subordinated Debt (including,
without limitation, Debt under the Senior Subordinated Notes) with (and
only with) other Subordinated Debt referred to in CLAUSE (B) or
CLAUSE (C) of the definition of such term and on terms no less
restrictive than currently exist thereunder, which terms shall be
subject to approval by the Agent;
PROVIDED, HOWEVER, that no Restricted Payments may be made, except pursuant to
CLAUSES (B), (C), (D), (E) and (F) preceding, if a Default exists at the time
of such Restricted Payment or would result therefrom.
Section 9.11 LIMITATION ON ISSUANCE OF CAPITAL STOCK. The Borrower
will not permit any of its Subsidiaries (other than the Excluded Subsidiaries,
excluding DHHS) to, at any time issue, sell, assign or otherwise dispose of any
of its Equity Interests; PROVIDED, HOWEVER, that, if and to the extent not
otherwise prohibited by this Agreement or the other Loan Documents any
Subsidiary of the Borrower (other than DHHS) may issue additional shares of its
Capital Stock if and to the extent that the Borrower and its Subsidiaries
continue to own a majority of the shares of such Capital Stock; and PROVIDED,
FURTHER, that all of such additional shares of Capital Stock referred to in the
foregoing proviso that are issued to the Borrower or any Subsidiary Pledgor
(other than the shares of Excluded Subsidiaries) shall be pledged to the Agent,
on behalf of the Agent and the Lenders, as security for the Obligations
pursuant to a pledge agreement substantially similar to the Subsidiary Security
Agreements delivered pursuant to SECTION 6.1.
Section 9.12 DISPOSITION OF PROPERTY.
A. Except as permitted by SECTION 9.4 or in connection with the
formation of partnerships or joint ventures permitted by SECTION 9.3, the
Borrower will not, and will not permit any of its Subsidiaries to, sell, lease,
assign, transfer or otherwise dispose of any of its Property (irrespective of
whether such Property is owned or acquired before, on or after the Closing
Date), except for the following which are permitted if and to the extent that
the Agent receives any and all prepayments (if any) required from the proceeds
thereof in accordance with SECTION 2.7(A):
(a) the Specified Asset Dispositions, PROVIDED, HOWEVER, that,
without the prior written consent of the Required Lenders, (i) each of
the Specified Asset Dispositions shall be for fair consideration paid
or payable to the transferor as determined by the transferor in good
faith, (ii) except as permitted by SECTION 9.12A(B) succeeding, none of
the Specified Asset Dispositions may include Asset Dispositions by the
Borrower or any of its Subsidiaries to a Subsidiary of the Borrower,
and (iii) none of the Specified Asset Dispositions may include a lease
of Property;
(b) Asset Dispositions by the Borrower or its Subsidiaries to
the Borrower or any Wholly-Owned Subsidiary or Majority-Owned
Subsidiary of the Borrower other than an Excluded Subsidiary if no
Default exists at the time of or will result from such Asset
Disposition; PROVIDED, HOWEVER, that Asset Dispositions permitted in
accordance with this CLAUSE (B) (i) shall not include any Asset
Disposition of a hospital or other Facility unless such Asset
Disposition is approved by the Required Lenders and (ii) shall not
include any related personal Property (irrespective of whether such
Property is owned or acquired before, on or after the Closing Date)
consisting of equipment or inventory unless such Asset Disposition of
equipment or inventory (A) is approved by the Required Lenders, (B) (1)
in the case of inventory, is owned by Xxxxxxxxxx PHC Regional Hospital,
Inc. and, in the case of equipment, is owned by Xxxxxxxxxx PHC Regional
Hospital, Inc. as of the Closing Date or (2) is transferred to
Xxxxxxxxxx PHC Regional Hospital, Inc. and, concurrently with such
transfer under this CLAUSE (2), is subject to a perfected Lien in favor
of the Agent as security for the Obligations, or (C) when combined with
all other Asset Dispositions of equipment or inventory which have
occurred under this CLAUSE (C) subsequent to December 31, 1997, does
not involve Property having an aggregate book value in excess of
$10,000,000;
(c) the sale of accounts receivable under the PHC Funding Sale
Documents in an amount sufficient to derive Net Proceeds of no more
than $65,000,000;
(d) dispositions of Property, other than dispositions of a
Facility, no longer used or useful in the ordinary course of business;
(e) dispositions of a Facility listed on SCHEDULE 9.12A(E), all
of which are closed at the date of this Agreement;
(f) subject to the proviso contained in this CLAUSE (F) below,
sales, leases, assignments, transfers or other dispositions otherwise
expressly permitted under this Agreement (including, without
limitation, any transfer of the Capital Stock or Property of an
Excluded Subsidiary permitted under SECTION 9.3 and any grant of a Lien
which constitutes a Permitted Lien permitted in accordance with this
Agreement), PROVIDED, HOWEVER, that sales, leases, assignments,
transfers or other dispositions of a Facility or any related personal
Property (whether now owned or hereafter acquired) consisting of
equipment or inventory shall be excluded for purposes of this CLAUSE
(F) preceding unless such Facility or personal Property is owned by an
Excluded Subsidiary; and
(g) Asset Dispositions by DHHS, at such time as it is a
Majority-Owned Subsidiary or Wholly-Owned Subsidiary, to the Borrower
or a Wholly-Owned Subsidiary;
PROVIDED, HOWEVER, that, notwithstanding anything to the contrary contained in
this Agreement, (i) except for the consummation of any transactions at the time
subject to a definitive agreement of purchase and sale, no Asset Disposition
may be made by the Borrower or any of its Subsidiaries (other than Excluded
Subsidiaries) pursuant to CLAUSE (A) preceding if an Event of Default exists at
the time of such Asset Disposition or would result therefrom, and (ii) unless
otherwise agreed by the Required Lenders, none of the hospitals (including real
Property and related personal Property, in each case whether now owned or
hereafter acquired) or any Capital Stock of the entities owning such hospitals
or related Property identified with Specified Asset Dispositions may be sold
(A) for other than cash and/or the assumption of Debt (for which Debt the
Borrower or the Subsidiary of the Borrower liable therefor is fully and
unconditionally released) without the prior written consent of the Required
Lenders; PROVIDED, HOWEVER, that so long as the total of cash and such
assumption of Debt exceeds the relevant minimum amount referred to in the
following SUBCLAUSE (B), the Borrower or such Subsidiary may accept promissory
notes from the purchaser as part of the Specified Asset Disposition or (B) for
less than the amounts of cash and assumption of Debt (for which Debt the
Borrower or the Subsidiary of the Borrower liable therefor is fully and
unconditionally released) specified (if any is specified) in SCHEDULE 9.12.
B. Subject to the proviso contained in this SECTION 9.12B below, in
connection with an Asset Disposition permitted under this SECTION 9.12 of any
Properties which constitute Collateral, the Agent hereby agrees to release (and
shall have the authority to release without the further consent of any Lenders)
such Collateral (at the expense of the Borrower) as may be required to
effectuate such permitted Asset Disposition, PROVIDED, HOWEVER, that (i) all
Net Proceeds of such Asset Disposition which are required to be paid to the
Agent pursuant to SECTION 2.7(A) shall be so paid to the Agent as a condition
to such release, (ii) the Agent shall not, and shall not be obligated to,
release any such Collateral in connection with any Asset Disposition to the
Borrower or any Subsidiary of the Borrower, and (iii) the Agent shall not, and
shall not be obligated to, release any such Collateral in connection with any
Asset Disposition if such Asset Disposition is permitted or approved subject to
the condition that the Liens thereon securing the Obligations or any portion
thereof shall not be released.
Section 9.13 [Intentionally omitted.]
Section 9.14 CERTAIN TRANSACTIONS AND AGREEMENTS. Except as may be
expressly permitted or required by the Loan Documents, the Borrower will not,
and will not permit any of its Subsidiaries to, create or otherwise cause or
permit to exist or become effective any consensual encumbrance or restriction
of any kind on the ability of the Borrower, any Subsidiary or DHHS (other than
any of the foregoing in existence as of the Closing Date relating to DHHS and
other than any of the foregoing relating to any other Excluded Subsidiary) to
(a) pay dividends or make any other distribution to the Borrower or any of its
Subsidiaries in respect of such Subsidiary's Capital Stock or with respect to
any other interest or participation in, or measured by, the profits of such
Subsidiary, (b) pay any Debt owed to the Borrower or any of its Subsidiaries,
(c) make any loan or advance to the Borrower or any of its Subsidiaries, or
(d) sell, lease or transfer any of its Property (whether now owned or hereafter
acquired) to the Borrower or any of its Subsidiaries, or grant any Lien on any
of its Properties (whether now owned or hereafter acquired), except (with
respect to this CLAUSE (D) only) an encumbrance or restriction (i) with respect
to (A) Properties subject to Permitted Liens referred to in CLAUSES (A), (C),
(F), (G), (H), (I) or (K) of the definition of such term which are permitted in
accordance with this Agreement if and to the extent that the agreements or
documents creating such Liens include such an encumbrance or restriction and
such encumbrance or restriction is required by the parties thereto other than
the Borrower and its Subsidiaries, (B) accounts receivable which are subject to
any accounts receivable securitization facility in effect and permitted in
accordance with this Agreement and (C) Properties subject to purchase and sale
agreements relating to Asset Dispositions permitted by this Agreement, (ii) to
the extent that any such encumbrance or restriction is contained in the
Indenture as in existence as of the Closing Date, and (iii) to the extent that
any such encumbrance or restriction relates to accounts of any Subsidiary that
is a party to the PHC Funding Sale Documents and is contained in the PHC
Funding Sale Documents.
Section 9.15 MODIFICATION OF OTHER AGREEMENTS. The Borrower will not,
and will not permit any of its Subsidiaries to, consent to or implement any
termination, amendment, modification, supplement or waiver of (a) the
subordination provisions of the Subordinated Debt Documents, and (b) the
certificate of incorporation or bylaws (or analogous constitutional documents)
of the Borrower or any of the Borrower's Subsidiaries (other than Excluded
Subsidiaries) if the same could reasonably be expected to have a Material
Adverse Effect or otherwise could reasonably be expected to be materially
adverse to the Agent or the Lenders, or (c) any other Material Contract to
which it is a party or any Permit which it possesses if the same could
reasonably be expected to have a Material Adverse Effect. Without limiting the
generality of and in addition to the foregoing, except as otherwise permitted
in this Agreement, the Borrower will not consent to or implement any
termination, amendment, modification, supplement or waiver of the Subordinated
Debt Documents (i) to increase the principal amount of any Subordinated Debt,
(ii) to shorten the maturity of, or any date for the payment of any principal
of or interest on, any Subordinated Debt, (iii) to increase the rate of
interest on or with respect to any Subordinated Debt, (iv) to otherwise amend
or modify the payment or subordination terms of any Subordinated Debt, (v) to
provide any Collateral or security for payment or collection of any
Subordinated Debt, or (vi) in any other respect that could reasonably be
expected to have a Material Adverse Effect or to be materially adverse to the
Agent and the Lenders.
Section 9.16 ERISA. The Borrower will not:
(a) allow or take or to the extent, after the Borrower employs
reasonable efforts, such action is within the Borrower's effective
control, permit any ERISA Affiliate to take, any action which would
cause any unfunded or unreserved liability for benefits under any
Pension Plan (exclusive of any Multiemployer Plan) to exist or to be
created that exceeds $1,500,000 with respect to any such Pension Plan
or $3,000,000 with respect to all such Pension Plans in the aggregate;
and
(b) with respect to any Multiemployer Plan, allow, or take or to
the extent, after the Borrower employs reasonable efforts, such action
is within the Borrower's effective control, permit any ERISA Affiliate
to take, any action which would cause any unfunded or unreserved
liability for benefits under any Multiemployer Plan to exist or to be
created with respect to the Borrower or any ERISA Affiliate, either
individually as to any such Multiemployer Plan or in the aggregate as
to all such Multiemployer Plans, that could, upon any partial or
complete withdrawal by the Borrower or any ERISA Affiliate from or
termination of any such Multiemployer Plan or Plans, reasonably be
expected to have a Material Adverse Effect.
Section 9.17 COMPENSATION PAID TO AFFILIATES. The Borrower will not,
and will not permit any of its Subsidiaries to, pay (or agree to pay), on or
after the date hereof, compensation for services rendered in whatever form
(other than Capital Stock of the Borrower) (a) to any Affiliate of the Borrower
which, when aggregated with compensation paid to all other Affiliates of such
Affiliate, exceeds $250,000 in aggregate amount during any fiscal year or (b)
to all Affiliates of the Borrower which, in the aggregate, exceeds $1,000,000
during any fiscal year; PROVIDED, HOWEVER, that customary fees and expenses
paid to members of the Board of Directors of the Borrower or any of its
Subsidiaries for services as a director shall be excluded for purposes of
determining compliance with the aforesaid maximum amounts if and to the extent
that such fees do not exceed such fees, and such expenses are of the type, paid
to any other director of the Borrower or such Subsidiary.
ARTICLE 10
FINANCIAL COVENANTS
The Borrower covenants and agrees that, as long as the Obligations or
any part thereof are outstanding or any Lender has any Commitment hereunder or
any Letter of Credit remains outstanding, the Borrower will perform and observe
the following covenants:
Section 10.1 SENIOR LEVERAGE RATIO. The Borrower will not permit the
Senior Leverage Ratio at the end of any fiscal quarter to exceed, during the
following time periods, the following respective ratios:
Calendar Year Quarters Ending Maximum Permitted
DURING THE FOLLOWING PERIODS Senior Leverage
RATIO
January 1, 1998 through March 31, 1998 2.75:1.00
April 1, 1998 through June 30, 1998 2.70:1.00
July 1, 1998 through September 30, 1998 2.65:1.00
October 1, 1998 through March 31, 1999 2.60:1.00
April 1, 1999 through June 30, 1999 2.45:1.00
July 1, 1999 through September 30, 1999 2.25:1.00
October 1, 1999 and at all times thereafter 2.00:1.00
Section 10.2 MINIMUM NET WORTH. As of the close of each fiscal quarter
ending on or after March 31, 1998, the Borrower will not permit Net Worth to be
less than the sum of (a) the greater of (i) 90% of Net Worth as of December 31,
1997 and (ii) $36,000,000, PLUS (b) for each quarter on a cumulative basis
ending on or after the fiscal quarter after the fiscal quarter ending December
31, 1997 or thereafter, seventy-five percent (75%) of the positive Net Income,
if any of the Borrower, plus (c) ninety percent (90%) of all Net Proceeds from
any Equity Issuance following the Closing Date; PROVIDED, HOWEVER, that the
amount determined in accordance with this SECTION 10.2 shall be reduced by the
after-tax effect of (i) the aggregate amount of the amortization or write-off
of the deferred financing costs in connection with the Existing Credit
Agreement and with respect to this Agreement to the extent deducted in
determining Net Income (Loss) and (ii) any charges incurred with respect to any
amendment to the Existing Credit Agreement and with respect to this Agreement
to the extent deducted in determining Net Income (Loss); PROVIDED, FURTHER,
HOWEVER, that in no event shall the amount determined in accordance with this
SECTION 10.2 be less than $32,500,000.
Section 10.3 RATIO OF TOTAL DEBT TO ADJUSTED EBITDA. The Borrower will
not permit the ratio, calculated as of the end of each fiscal quarter ending
during the periods below, of (i) Total Debt to (ii) Adjusted EBITDA for the
period then ended, to exceed the ratio set forth below:
PERIOD RATIO
January 1, 1998 through March 31, 1998 6.50:1.00
April 1, 1998 through September 30, 1998 6.35:1.00
October 1, 1998 through March 31, 1999 6.15:1.00
April 1, 1999 through September 30, 1999 5.75:1.00
October 1, 1999 through March 31, 2000 5.40:1.00
April 1, 2000 through September 30, 2000 5.20:1.00
October 1, 2000 through March 31, 2001 4.75:1.00
April 1, 2001 and at all times thereafter 4.50:1.00
Section 10.4 FIXED CHARGE COVERAGE RATIO. The Borrower will not permit
the Fixed Charge Coverage Ratio, calculated as of the end of each fiscal
quarter ending during the periods below, to be less than the ratio set forth
below:
PERIOD RATIO
January 1, 1998 through December 31, 1998 1.10:1.00
January 1, 1999 through December 31, 1999 1.15:1.00
January 1, 2000 through December 31, 2000 1.20:1.00
January 1, 2001 and at all times thereafter 1.25:1.00
Section 10.5 MINIMUM ADJUSTED EBITDA. As of the last day of each
fiscal quarter ending on or after March 31, 1998, but prior to January 1, 1999,
the Borrower will not permit Adjusted EBITDA, in each case for the twelve (12)
month period then ended, to be less than the amount set forth below:
Calendar Year Quarters Ending Minimum Permitted
DURING THE FOLLOWING PERIODS ADJUSTED EBITDA
January 1, 1998 through March 31, 1998 $90,800,000
April 1, 1998 through June 30, 1998 $90,800,000
July 1, 1998 through September 30, 1998 $90,800,000
October 1, 1998 through December 31, 1998 $93,000,000
January 1, 1999 and at all times thereafter not applicable
; PROVIDED, HOWEVER, that each of the minimum permitted Adjusted EBITDA amounts
set forth in the preceding table shall be, on a cumulative basis (a) increased
by, in connection with an acquisition by the Borrower or a Subsidiary of the
Borrower which has not been owned or effective for a full fiscal year, EBITDA
of such acquired entity or attributable to such acquired assets for the
completed four fiscal quarters immediately preceding the date of such
acquisition and (b) reduced by, in connection with any divestiture of an entity
(corporate, partnership or joint venture) by the Borrower or a Subsidiary of
the Borrower, EBITDA of such divested entity attributable to such entity for
the completed four fiscal quarters immediately preceding the date of such
divestiture.
ARTICLE 11
DEFAULT
Section 11.1 EVENTS OF DEFAULT. Each of the following shall be deemed
an "EVENT OF DEFAULT":
(a) The Borrower shall fail to pay, repay or prepay within one
(1) day after the due date thereof any amount of principal, and within
five (5) days after the due date thereof any interest, fees or other
amount or other Obligation owing to the Agent or any Lender pursuant to
this Agreement or any other Loan Document.
(b) Any representation or warranty made or deemed made by the
Borrower or any Loan Party in any Loan Document or in any certificate,
report, notice or financial statement furnished at any time in
connection with this Agreement or any other Loan Document shall be
false, misleading or erroneous in any material respect when made or
deemed to have been made; PROVIDED, HOWEVER, for purposes of this
CLAUSE (B), any noncompliance with the representations and warranties
contained in SECTION 7.20 shall constitute an Event of Default only if
the instances of noncompliance with such representations and
warranties, or exceptions thereto, individually or in the aggregate
result in a Material Adverse Effect.
(c) The Borrower shall fail to perform, observe or comply, or to
cause any of its Subsidiaries to perform, observe or comply, with any
covenant, agreement or term contained in this Agreement (other than
covenants and agreements pertaining to payment of the Obligations which
shall be governed by SECTION 11.1(A)), or the Borrower, any Subsidiary
of the Borrower or any other Loan Party shall fail to perform, observe
or comply with any covenant, agreement or term contained in the other
Loan Documents; and such failure is not remedied to the sole
satisfaction of Agent and the Required Lenders or waived in writing by
Agent and the Required Lenders within 30 days after any officer of the
Borrower has knowledge that, or Agent has given Borrower notice that,
such failure occurred. Notwithstanding the foregoing, there shall be
NO grace period in the event of (i) the breach of any financial
covenant under ARTICLE 10, or (ii) the failure of any Loan Party to
comply with the provisions of the first sentence of SECTION 8.2
(MAINTENANCE OF EXISTENCE) or SECTION 8.5 (INSURANCE) or SECTION 8.14
(ACCOUNTS RECEIVABLE SECURITIZATION PROGRAM).
(d) Any of the Loan Parties shall admit in writing its inability
to, or be generally unable to, pay its debts as such debts become due.
(e) Any Loan Party shall (i) apply for or consent to the
appointment of, or the taking of possession by, a receiver, custodian,
trustee, examiner, liquidator or the like of itself or of all or any
substantial part of its Property (whether now owned or hereafter
acquired), (ii) make a general assignment for the benefit of its
creditors, (iii) commence a voluntary case under the United States
Bankruptcy Code (as now or hereafter in effect, the "BANKRUPTCY CODE"),
(iv) institute any proceeding or file a petition seeking to take
advantage of any other law relating to bankruptcy, insolvency,
reorganization, liquidation, dissolution, winding-up or composition or
readjustment of debts, (v) fail to controvert in a timely and
appropriate manner, or acquiesce in writing to, any petition filed
against it in an involuntary case under the Bankruptcy Code, or
(vi) take any corporate or similar such action for the purpose of
authorizing any of the foregoing.
(f) A proceeding or case shall be commenced, without the
application, approval or consent of any of the Loan Parties in any
court of competent jurisdiction, seeking (i) its reorganization,
liquidation, dissolution, arrangement or winding-up, or the composition
or readjustment of its debts, (ii) the appointment of a receiver,
custodian, trustee, examiner, liquidator or the like of any of the Loan
Parties or of all or any substantial part of its Property (whether now
owned or hereafter acquired), or (iii) similar relief in respect of any
of the Loan Parties under any law relating to bankruptcy, insolvency,
reorganization, winding-up or composition or adjustment of debts, and
such proceeding or case shall continue undismissed, or an order,
judgment or decree approving or ordering any of the foregoing shall be
entered and continue unstayed and in effect, for a period of 60 or more
days; or an order for relief against any of the Loan Parties shall be
entered in an involuntary case under the Bankruptcy Code.
(g) Any of the Loan Parties shall fail to discharge within a
period of 30 days after the commencement thereof any order of
attachment, sequestration, forfeiture or similar order or orders
involving an aggregate amount of $1,000,000 or more against any of its
Properties (whether now owned or hereafter acquired).
(h) Any one or more judgments, settlements or decrees shall be
entered against, or agreed to by, the Borrower or any of its
Subsidiaries involving an aggregate liability in the aggregate amount
at any time of $5,000,000 or more in excess of any amounts covered by
insurance, and all of such judgments, settlements and decrees shall not
have been vacated, discharged, stayed or bonded pending appeal, or paid
or otherwise discharged, within ten days from the date of entry thereof
or agreement thereto or, with respect to matters subject to appeal,
within the later to occur of such ten days or within the time period
available for appeal under applicable law.
(i) (i) Any of the Loan Parties shall fail to pay when due,
after taking into account any applicable cure or grace periods, any
principal of or interest on any Debt (other than the Obligations and
Debt under the Park Hospital Subordinated Note) having (either
individually or in the aggregate) a principal amount of at least
$5,000,000, or (ii) the maturity of any such Debt shall have been
accelerated, or (iii) (x) other than in connection with a redemption or
defeasance pursuant to a refinancing of Subordinated Debt permitted by
SECTIONS 9.1(C) OR 9.10(G), any such Debt shall have been required to
be prepaid prior to the stated maturity thereof, or (y) any event shall
have occurred (and shall not have been waived or otherwise cured) that
permits after taking into account any applicable cure or grace periods
any holder or holders of such Debt or any Person acting on behalf of
such holder or holders to accelerate the maturity thereof or require
any such prepayment.
(j) This Agreement or any other Loan Document shall cease to be
in full force and effect or shall be declared null and void or the
validity or enforceability thereof shall be contested or challenged by
any Loan Party or any of its shareholders, or any Loan Party shall deny
that it has any further liability or obligation under any of the Loan
Documents, or any Lien created by the Loan Documents shall for any
reason not permitted by this Agreement cease to be a valid, first
priority perfected Lien (subject only to Permitted Liens) upon any of
the Collateral purported to be covered thereby.
(k) Any of the following events shall occur or exist with
respect to any Loan Party or any ERISA Affiliate: (i) any Prohibited
Transaction involving any Plan; (ii) any Reportable Event with respect
to any Pension Plan; (iii) the filing under Section 4041 of ERISA of a
notice of intent to terminate any Pension Plan or the termination of
any Pension Plan; (iv) any event or circumstance that might constitute
grounds entitling the PBGC to institute proceedings under Section 4042
of ERISA for the termination of, or for the appointment of a trustee to
administer, any Pension Plan, or the institution by the PBGC of any
such proceedings; (v) any "accumulated funding deficiency" (as defined
in Section 406 of ERISA or Section 412 of the Code), whether or not
waived, shall exist with respect to any Pension Plan; or (vi) complete
or partial withdrawal under Section 4201 or 4204 of ERISA from a
Multiemployer Plan or the reorganization, insolvency or termination of
any Pension Plan or Multiemployer Plan; and in each case above, such
event or condition, together with all other events or conditions, if
any, have subjected or could in the reasonable opinion of Required
Lenders subject any Loan Party or any ERISA Affiliate to any tax,
penalty or other liability to a Plan, a Multiemployer Plan, the PBGC or
otherwise (or any combination thereof) which in the aggregate exceed or
could reasonably be expected to exceed $1,500,000.
(l) The occurrence of a Change of Control.
(m) If, at any time, (i) the subordination provisions of any of
the Subordinated Notes, the Indenture or any other Subordinated Debt
Documents shall be invalidated or shall otherwise cease to be in full
force and effect or (ii) any Restricted Payment, as defined in CLAUSE
(C) of the definition of such term, of principal shall be made with
respect to any Subordinated Debt except as may be expressly permitted
by SECTION 9.10.
(n) If, at any time, (i) any acceleration of the maturity of the
Park Hospital Subordinated Note shall occur for any reason or (ii) the
Borrower shall initiate or give any election or notice relating to any
redemption or other prepayment of any such Subordinated Debt (other
than in connection with a refinancing thereof permitted by SECTIONS
9.1(C) OR 9.10(G)).
(o) The Borrower and/or its Subsidiaries shall fail to deliver
to the Agent, for the ratable benefit of the Lenders, certificates
evidencing outstanding certificated Capital Stock of the Subsidiaries
as required by this Agreement, the Security Agreement and each of the
Subsidiary Security Agreements.
(p) Any involuntary Lien or Liens securing in the aggregate at
any time the sum of $1,000,000 or more, of any kind or character, other
than Permitted Liens or any other Lien being contested in good faith by
appropriate proceedings or any Lien for taxes due but not in default,
and, in either case, for which adequate reserves, in the reasonable
opinion of the Agent, have been provided on the books of the Borrower
or its Subsidiary, as the case may be, shall attach to any assets or
property of the Borrower or any Subsidiary of the Borrower, which Lien
or Liens shall not have been removed or the performance of such Lien
obligation bonded for an amount equal to such Lien obligations within
thirty (30) days after said attachment.
(q) An event or condition shall occur that results in a Material
Adverse Effect.
(r) The Borrower shall not have delivered to the Agent, on or
before April 16, 1998, audited financial statements of the Borrower and
its consolidated Subsidiaries as of and for the period ended December
31, 1997; or if the Borrower shall have delivered such financial
statements, such financial statements shall either (i) not have been
audited by Ernst & Young LLP; (ii) not be accompanied by an audit
opinion of such accountants in form and substance reasonably
satisfactory to the Agent; or (iii) not be essentially identical in
form and substance to the draft of such financial statements previously
delivered to the Agent.
Section 11.2 REMEDIES. If any Event of Default shall occur and be
continuing, the Agent may (subject to SECTION 13.10 with respect to CLAUSES (A)
and (B) below) and, if directed by the Required Lenders, the Agent shall do any
one or more of the following:
(a) ACCELERATION. Declare all outstanding principal of and
accrued and unpaid interest on the Loans and all other amounts payable
by the Borrower under the Loan Documents immediately due and payable,
and the same shall thereupon become immediately due and payable,
without notice, demand, presentment, notice of dishonor, notice of
acceleration, notice of intent to accelerate, protest or other
formalities of any kind, all of which are hereby expressly waived by
the Borrower;
(b) TERMINATION OF COMMITMENTS. Terminate the Commitments
(including, without limitation, the obligation of the Issuing Bank to
issue Letters of Credit) without notice to the Borrower;
(c) JUDGMENT. Reduce any claim to judgment;
(d) FORECLOSURE. Foreclose or otherwise enforce any Lien
granted to the Agent for the benefit of the Agent and the Lenders to
secure payment and performance of the Obligations in accordance with
the terms of the Loan Documents; or
(e) RIGHTS. Exercise any and all rights and remedies afforded
by the laws of the State of New York or any other jurisdiction, by any
of the Loan Documents, by equity or otherwise, including, but not
limited to, its right of offset with respect to all bank accounts of
Borrower and its Subsidiaries;
PROVIDED, HOWEVER, that upon (i) the occurrence of an Event of Default under
SECTION 11.1(E) or SECTION 11.1(F), the Commitments of all of the Lenders
(including, without limitation, the obligation of the Issuing Bank to issue
Letters of Credit) shall immediately and automatically terminate, and the
outstanding principal of and accrued and unpaid interest on the Loans and all
other amounts payable by the Borrower under the Loan Documents shall thereupon
become immediately and automatically due and payable, and (ii) upon and
concurrently with the occurrence of an Event of Default under SECTION 11.1(M)
or CLAUSE (II) of SECTION 11.1(N), the outstanding principal of and accrued and
unpaid interest on the Loans and all other amounts payable by the Borrower
under the Loan Documents shall thereupon become immediately and automatically
due and payable, all (with respect to each of CLAUSE (I) and (II) preceding)
without notice, demand, presentment, notice of dishonor, notice of
acceleration, notice of intent to accelerate, protest or other formalities of
any kind, all of which are hereby expressly waived by the Borrower; PROVIDED,
FURTHER, HOWEVER, that the automatic acceleration of the Loans and such other
amounts upon the occurrence of an Event of Default under SECTION 11.1(M) as
referred to in CLAUSE (II) preceding shall not be deemed to have occurred if
the Required Lenders expressly agree in writing, within thirty (30) days after
any such occurrence, that such acceleration has not occurred.
Section 11.3 CASH COLLATERAL. If an Event of Default shall have
occurred and be continuing the Borrower shall, if requested by the Agent or the
Required Lenders, pledge to the Agent as security for the Obligations an amount
in immediately available funds equal to the then outstanding Letter of Credit
Liabilities, such funds to be held in a cash collateral account satisfactory to
the Agent without any right of withdrawal by the Borrower.
Section 11.4 PERFORMANCE BY THE AGENT. If any Loan Party shall fail to
perform any covenant or agreement in accordance with the terms of the Loan
Documents, the Agent may, at the direction of the Required Lenders, during the
continuance of an Event of Default, perform or attempt to perform such covenant
or agreement on behalf of such Loan Party. In such event, the Borrower shall,
at the request of the Agent, promptly pay any reasonable amount expended by the
Agent or the Lenders in connection with such performance or attempted
performance to the Agent at the Principal Office, together with interest
thereon at the applicable Default Rate from and including the date of such
expenditure to but excluding the date such expenditure is paid in full.
Notwithstanding the foregoing, it is expressly agreed that neither the Agent
nor any Lender shall have any liability or responsibility for the performance
of any obligation of the Borrower or any other Loan Party under this Agreement
or any of the other Loan Documents.
ARTICLE 12
THE AGENT
Section 12.1 APPOINTMENT, POWERS AND IMMUNITIES. Each Lender hereby
irrevocably appoints and authorizes the Agent to act as its agent hereunder and
under the other Loan Documents with such powers as are specifically delegated
to the Agent by the terms of this Agreement and the other Loan Documents,
together with such other powers as are reasonably incidental thereto. Neither
the Agent nor any of its Affiliates, officers, directors, employees, attorneys
or agents shall be liable for any action taken or omitted to be taken by any of
them hereunder or otherwise in connection with this Agreement or any of the
other Loan Documents except for its or their own gross negligence or willful
misconduct. Without limiting the generality of the preceding sentence, the
Agent (a) may treat the payee of any Note as the holder thereof until the Agent
receives written notice of the assignment or transfer thereof signed by such
payee and in form satisfactory to the Agent, (b) shall have no duties or
responsibilities except those expressly set forth in this Agreement and the
other Loan Documents, and shall not by reason of this Agreement or any other
Loan Document be a trustee or fiduciary for any Lender, (c) shall not be
required to initiate any litigation or collection proceedings hereunder or
under any other Loan Document except to the extent requested by the Required
Lenders, (d) shall not be responsible to the Lenders for any recitals,
statements, representations or warranties contained in this Agreement or any
other Loan Document, or any certificate or other document referred to or
provided for in, or received by any of them under, this Agreement or any other
Loan Document, or for the value, validity, effectiveness, enforceability or
sufficiency of this Agreement or any other Loan Document or any other document
referred to or provided for herein or therein or for any failure by any Person
to perform any of its obligations hereunder or thereunder, (e) 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, 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 reasonably believed by it
to be genuine and signed or sent by the proper party or parties. As to any
matters not expressly provided for by this Agreement, the Agent shall in all
cases be fully protected in acting, or in refraining from acting, hereunder in
accordance with instructions signed by the Required Lenders, and such
instructions of the Required Lenders and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders; PROVIDED, HOWEVER,
that the Agent shall not be required to take any action which exposes the Agent
to liability or which is contrary to this Agreement or any other Loan Document
or applicable law.
Section 12.2 RIGHTS OF AGENT AS A LENDER. With respect to its
respective Commitments, the Loans made by it and the Notes issued to it, Banque
Paribas (and any successor acting as Agent) in its capacity as a Lender
hereunder shall have the same rights and powers hereunder as any other Lender
and may exercise the same as though it were not acting as the Agent, and the
term "Lender" or "Lenders" shall, unless the context otherwise indicates,
include the Agent in its individual capacity. The Agent and its Affiliates may
(without having to account therefor to any Lender) accept deposits from, lend
money to, act as trustee under indentures of, provide merchant banking services
to, own securities of, and generally engage in any kind of banking, trust or
other business with, the Loan Parties or any of their Affiliates and any other
Person who may do business with or own securities of the Loan Parties or any of
their Affiliates, all as if it were not acting as the Agent and without any
duty to account therefor to the Lenders.
Section 12.3 DEFAULTS. The Agent shall not be deemed to have knowledge
or notice of the occurrence of a Default (other than the non-payment of
principal of or interest on the Loans or of commitment fees) unless the Agent
has received notice from a Lender or the Borrower specifying such Default and
stating that such notice is a "Notice of Default". In the event that the Agent
receives such a notice of the occurrence of a Default, the Agent shall give
prompt notice thereof to the Lenders (and shall give each Lender prompt notice
of each such non-payment). The Agent shall (subject to SECTION 12.1 and
SECTION 13.10) take such action with respect to such Default as shall be
directed by the Required Lenders, PROVIDED that unless and until the Agent
shall have received such directions, the Agent may (but shall not be obligated
to) take such action, or refrain from taking such action, with respect to such
Default as it shall seem advisable and in the best interest of the Lenders.
SECTION 12.4 INDEMNIFICATION. EACH LENDER HEREBY AGREES TO INDEMNIFY
THE AGENT, THE DOCUMENTATION AGENT AND THE ADMINISTRATIVE AGENT FROM AND HOLD
THE AGENT, THE DOCUMENTATION AGENT AND THE ADMINISTRATIVE AGENT HARMLESS
AGAINST (TO THE EXTENT NOT REIMBURSED UNDER SECTIONS 13.1 AND 13.2, BUT WITHOUT
LIMITING THE OBLIGATIONS OF THE BORROWER UNDER SECTIONS 13.1 AND 13.2), RATABLY
IN ACCORDANCE WITH THEIR PRO RATA SHARES (CALCULATED ON THE BASIS OF THE
COMMITMENT PERCENTAGES), ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES,
PENALTIES, ACTIONS, JUDGMENTS, DEFICIENCIES, SUITS, COSTS, EXPENSES (INCLUDING
ATTORNEYS' FEES) AND DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER WHICH MAY
BE IMPOSED ON, INCURRED BY OR ASSERTED AGAINST THE AGENT, THE DOCUMENTATION
AGENT OR THE ADMINISTRATIVE AGENT IN ANY WAY RELATING TO OR ARISING OUT OF ANY
OF THE LOAN DOCUMENTS OR ANY ACTION TAKEN OR OMITTED TO BE TAKEN BY THE AGENT,
THE DOCUMENTATION AGENT OR THE ADMINISTRATIVE AGENT UNDER OR IN RESPECT OF ANY
OF THE LOAN DOCUMENTS; PROVIDED, FURTHER, THAT NO LENDER SHALL BE LIABLE FOR
ANY PORTION OF THE FOREGOING TO THE EXTENT CAUSED BY, RESPECTIVELY, THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF THE PERSON TO BE INDEMNIFIED. WITHOUT
LIMITATION OF THE FOREGOING, IT IS THE EXPRESS INTENTION OF THE LENDERS THAT
THE AGENT, THE DOCUMENTATION AGENT AND THE ADMINISTRATIVE AGENT SHALL BE
INDEMNIFIED HEREUNDER FROM AND HELD HARMLESS AGAINST ALL OF SUCH LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, DEFICIENCIES,
SUITS, COSTS, EXPENSES (INCLUDING ATTORNEYS' FEES) AND DISBURSEMENTS OF ANY
KIND OR NATURE DIRECTLY OR INDIRECTLY ARISING OUT OF OR RESULTING FROM THE SOLE
OR CONTRIBUTORY NEGLIGENCE OF THE AGENT, THE DOCUMENTATION AGENT OR THE
ADMINISTRATIVE AGENT, AS THE CASE MAY BE (EXCEPT TO THE EXTENT THE SAME ARE
CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE PERSONS TO BE
INDEMNIFIED). WITHOUT LIMITING ANY OTHER PROVISION OF THIS SECTION 12.4, EACH
LENDER AGREES TO REIMBURSE THE AGENT, THE DOCUMENTATION AGENT AND THE
ADMINISTRATIVE AGENT, AS APPROPRIATE, PROMPTLY UPON DEMAND FOR ITS PRO RATA
SHARE (CALCULATED ON THE BASIS OF THE COMMITMENT PERCENTAGES) OF ANY AND ALL
OUT-OF-POCKET EXPENSES (INCLUDING ATTORNEYS' FEES) INCURRED BY THE AGENT, THE
DOCUMENTATION AGENT OR THE ADMINISTRATIVE AGENT IN CONNECTION WITH THE
PREPARATION, EXECUTION, DELIVERY, ADMINISTRATION, MODIFICATION, AMENDMENT OR
ENFORCEMENT (WHETHER THROUGH NEGOTIATIONS, LEGAL PROCEEDINGS OR OTHERWISE) OF,
OR LEGAL ADVICE IN RESPECT OF RIGHTS OR RESPONSIBILITIES UNDER, THE LOAN
DOCUMENTS, TO THE EXTENT THAT THE AGENT, THE DOCUMENTATION AGENT OR THE
ADMINISTRATIVE AGENT IS NOT PROMPTLY REIMBURSED FOR SUCH EXPENSES BY THE
BORROWER.
Section 12.5 INDEPENDENT CREDIT DECISIONS. Each Lender agrees that it
has independently and without reliance on the Agent, the Documentation Agent,
the Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own credit analysis of the
Borrower and the other Loan Parties and its own decision to enter into this
Agreement and that it will, independently and without reliance upon the Agent,
the Documentation Agent, the Administrative Agent or any other Lender, and
based upon such documents and information as it shall deem appropriate at the
time, continue to make its own analysis and decisions in taking or not taking
action under this Agreement or any of the other Loan Documents. The Agent
shall not be required to keep itself informed as to the performance or
observance by any Loan Party of this Agreement or any other Loan Document or to
inspect the Properties or books of any Loan Party. Except for notices, reports
and other documents and information expressly required to be furnished to the
Lenders by the Agent hereunder or under the other Loan Documents, the Agent
shall not have any duty or responsibility to provide any Lender with any credit
or other financial information concerning the affairs, financial condition or
business of any Loan Party (or any of their Affiliates) which may come into the
possession of the Agent or any of its Affiliates.
Section 12.6 SEVERAL COMMITMENTS. The Commitments and other
obligations of the Lenders under this Agreement are several. The default by
any Lender in making a Loan in accordance with its Commitment shall not relieve
the other Lenders of their obligations under this Agreement. In the event of
any default by any Lender in making any Loan, each nondefaulting Lender shall
be obligated to make its Loan but shall not be obligated to advance the amount
which the defaulting Lender was required to advance hereunder. In no event
shall any Lender be required to advance an amount or amounts with respect to
any of the Loans which would in the aggregate exceed such Lender's Commitment
with respect to such Loans. No Lender shall be responsible to the Agent or any
other Lender for any act or omission of any other Lender.
Section 12.7 SUCCESSOR AGENT. Subject to the appointment and
acceptance of a successor Agent as provided below, the Agent may resign at any
time by giving notice thereof to the Lenders and the Borrower and the Agent may
be removed at any time with cause by the Required Lenders. Upon any such
resignation or removal, the Required Lenders will have the right to appoint
another Lender as a successor Agent. If no successor Agent shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Agent's giving of notice of resignation or
the Required Lenders' removal of the retiring Agent, then the retiring Agent
may, on behalf of the Lenders, and with the consent of the Borrower, which
consent shall not be unreasonably withheld, appoint a successor Agent, which
shall be a commercial bank organized under the laws of the U.S. or any state
thereof or of a foreign country if acting through its U.S. branch and having
combined capital and surplus of at least $100,000,000. Upon the acceptance of
its appointment as successor Agent, such successor Agent shall thereupon
succeed to and become vested with all rights, powers, privileges, immunities
and duties of the resigning or removed Agent, and the resigning or removed
Agent shall be discharged from its duties and obligations under this Agreement
and the other Loan Documents. After any Agent's resignation or removal as
Agent, the provisions of this ARTICLE 12 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was the Agent.
Section 12.8 DOCUMENTATION AGENT AND ADMINISTRATIVE AGENT. The
Documentation Agent and Administrative Agent, as such, shall have no duties or
obligations whatsoever under this Agreement or any Loan Document or any other
document or any matter related hereto or thereto (but shall have the duties and
obligations of a Lender), but shall nevertheless be entitled to all of the
indemnities and other protection afforded to the Agent under this ARTICLE 12.
ARTICLE 13
MISCELLANEOUS
Section 13.1 EXPENSES. Whether or not the transactions contemplated
hereby are consummated, the Borrower hereby agrees, on demand, to pay or
reimburse the Agent, the Documentation Agent, the Administrative Agent and each
of the Lenders (as applicable) for: (a) all reasonable out-of-pocket costs and
expenses of the Agent, the Documentation Agent and the Administrative Agent in
connection with the preparation, negotiation, execution, administration and
delivery of this Agreement and the other Loan Documents, and any and all
amendments, modifications, renewals, extensions and supplements thereof and
thereto, and the syndication of the Loans, including, without limitation, the
reasonable fees and expenses of legal counsel and (subject to the provisions
regarding expenses contained in SECTIONS 5.1 and 5.6) other professionals for
the Agent, the Documentation Agent and the Administrative Agent (and including,
without limitation, in the case of in-house counsel to the Agent, the allocated
fees and expenses of such counsel), (b) all out-of-pocket costs and expenses of
the Agent in connection with any Default, any Event of Default, the exercise
thereafter of any right or remedy and the enforcement (including, without
limitation, by way of collection, bankruptcy, insolvency or other enforcement
proceedings) of this Agreement or any other Loan Document or any term or
provision hereof or thereof, including, without limitation, the fees and
expenses of legal counsel and (subject to the provisions regarding expenses
contained in SECTIONS 5.1 and 5.6) other professionals for the Agent (and
including, without limitation, in the case of in-house counsel to the Agent,
the allocated fees and expenses of such counsel), (c) all out-of-pocket costs
of expenses of the Documentation Agent, the Administrative Agent and the
Lenders in connection with any Event of Default, the exercise thereafter of any
right or remedy and the enforcement (including, without limitation, by way of
collection, bankruptcy, insolvency or other enforcement proceedings) of this
Agreement or any other Loan Document or any term or provision hereof or
thereof, including, without limitation, the fees and expenses of legal counsel
for any such Person and (subject to the provisions regarding expenses contained
in SECTIONS 5.1 and 5.6) other professionals for the Documentation Agent and
the Administrative Agent (and including, without limitation, in the case of in-
house counsel to the Documentation Agent and the Administrative Agent, the
allocated fees and expenses of such counsel), (d) subject to ARTICLES 3 and 4
hereof, all out-of-pocket transfer, stamp, documentary or other similar taxes,
assessments or charges levied by any Governmental Authority in respect of this
Agreement or any of the other Loan Documents, (e) all reasonable costs,
expenses, assessments and other charges incurred by the Agent, the
Documentation Agent or the Administrative Agent in connection with any filing,
registration, recording or perfection of any Lien contemplated by this
Agreement or any other Loan Document, and (f) all reasonable out-of-pocket
costs and expenses incurred by the Agent, the Documentation Agent and the
Administrative Agent in connection with due diligence, computer services,
copying, appraisals, surveys, collateral audits, insurance, consultants and
search reports. For purposes of this SECTION 13.1, the term "professionals"
means, collectively, all attorneys, accountants, consultants,
paraprofessionals, appraisers, auditors, inspectors, engineers, title insurance
companies and environmental experts employed, retained or internally used by
any applicable Person specified in this SECTION 13.1 in performing any of its
duties or obligations or in asserting any of its rights or remedies under this
Agreement or any other Loan Document.
SECTION 13.2 INDEMNIFICATION. WHETHER OR NOT THE TRANSACTIONS
CONTEMPLATED HEREBY ARE CONSUMMATED, THE BORROWER SHALL INDEMNIFY THE AGENT,
THE DOCUMENTATION AGENT, THE ADMINISTRATIVE AGENT AND EACH LENDER AND EACH
AFFILIATE THEREOF AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES,
ATTORNEYS AND AGENTS FROM, AND HOLD EACH OF THEM HARMLESS AGAINST, ANY AND ALL
LOSSES, LIABILITIES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS,
COSTS AND EXPENSES (INCLUDING REASONABLE ATTORNEYS' AND CONSULTANTS' FEES BUT
SUBJECT TO THE PROVISIONS OF SECTION 13.1) TO WHICH ANY OF THEM MAY BECOME
SUBJECT WHICH DIRECTLY OR INDIRECTLY ARISE FROM OR RELATE TO (A) THE
NEGOTIATION, EXECUTION, DELIVERY, PERFORMANCE, ADMINISTRATION OR ENFORCEMENT OF
ANY OF THE LOAN DOCUMENTS, (B) ANY OF THE TRANSACTIONS CONTEMPLATED BY THE LOAN
DOCUMENTS, (C) ANY BREACH BY ANY LOAN PARTY OF ANY REPRESENTATION, WARRANTY,
COVENANT OR OTHER AGREEMENT CONTAINED IN ANY OF THE LOAN DOCUMENTS, (D) THE USE
OR PROPOSED USE OF ANY LOAN OR LETTER OF CREDIT, (E) SUBJECT TO ARTICLES 3 AND
4 HEREOF, ANY AND ALL TAXES, LEVIES, DEDUCTIONS AND CHARGES IMPOSED ON THE
AGENT, THE ISSUING BANK OR ANY LENDER IN RESPECT OF ANY LOAN OR LETTER OF
CREDIT, (F) THE PRESENCE, RELEASE, THREATENED RELEASE, DISPOSAL, REMOVAL OR
CLEANUP OF ANY HAZARDOUS MATERIAL LOCATED ON, ABOUT, WITHIN OR AFFECTING ANY OF
THE PROPERTIES (IRRESPECTIVE OF WHETHER SUCH PROPERTIES ARE OWNED, ACQUIRED,
LEASED OR OPERATED ON, BEFORE OR AFTER THE CLOSING DATE) OF ANY LOAN PARTY,
EXCEPT TO THE EXTENT THAT THE LOSS, DAMAGE OR CLAIM UNDER THIS CLAUSE (F) IS
DIRECTLY ATTRIBUTABLE TO (i) AN INTENTIONAL AND AFFIRMATIVE ACT BY ANY PERSON
TO BE INDEMNIFIED THAT CONSTITUTES NEGLIGENCE OR OTHER MISCONDUCT OF SUCH
PERSON, OR (ii) ANY ACTION OR INACTION OF ANY PERSON TO BE INDEMNIFIED
SUBSEQUENT TO THE EXERCISE OF VOTING OR OTHER OWNERSHIP RIGHTS OR THE TAKING OF
ANY FORECLOSURE ACTION WITH RESPECT TO THE CAPITAL STOCK OF SUCH LOAN PARTY
THAT CONSTITUTES NEGLIGENCE OR OTHER MISCONDUCT OF SUCH PERSON, TO THE EXTENT
SUCH PERSON IS A "PERSON IN CONTROL" UNDER ANY ENVIRONMENTAL LAW, OR (G) ANY
INVESTIGATION, LITIGATION OR OTHER PROCEEDING, INCLUDING, WITHOUT LIMITATION,
ANY THREATENED INVESTIGATION, LITIGATION OR OTHER PROCEEDING RELATING TO ANY OF
THE FOREGOING; BUT EXCLUDING ANY OF THE FOREGOING TO THE EXTENT ATTRIBUTABLE TO
THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE PERSON TO BE INDEMNIFIED.
WITHOUT LIMITING ANY PROVISION OF THIS AGREEMENT OR OF ANY OTHER LOAN DOCUMENT,
IT IS THE EXPRESS INTENTION OF THE PARTIES HERETO THAT (EXCEPT AS PROVIDED IN
SUBCLAUSE (F) ABOVE AND EXCEPT FOR ANY VIOLATION OF SECTION 13.18) EACH PERSON
TO BE INDEMNIFIED UNDER THIS SECTION 13.2 SHALL BE INDEMNIFIED FROM AND HELD
HARMLESS AGAINST ANY AND ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES, PENALTIES,
JUDGMENTS, DISBURSEMENTS, COSTS AND EXPENSES (INCLUDING REASONABLE ATTORNEYS'
FEES) ARISING OUT OF OR RESULTING FROM THE SOLE OR CONTRIBUTORY NEGLIGENCE OF
SUCH PERSON. THE OBLIGATIONS OF THE BORROWER UNDER THIS SECTION 13.2 SHALL
SURVIVE THE REPAYMENT OF THE LOANS.
Section 13.3 LIMITATION OF LIABILITY. None of the Agent, the
Documentation Agent, the Administrative Agent, any Lender or any Affiliate,
officer, director, employee, attorney or agent thereof shall be liable for any
error of judgment or act done in good faith, or be otherwise liable or
responsible under any circumstances whatsoever (including such Person's
negligence, except as contemplated by SECTION 13.2(F)), except for such
Person's gross negligence, willful misconduct, intentional fraud or violation
of the law. None of the Agent, the Documentation Agent, the Administrative
Agent, any Lender or any Affiliate, officer, director, employee, attorney or
agent thereof shall have any liability with respect to, and the Borrower hereby
waives, releases and agrees not to xxx any of them upon, any claim for any
special, incidental or consequential damages suffered or incurred by the
Borrower or any other Loan Party in connection with, arising out of or in any
way related to this Agreement or any of the other Loan Documents, or any of the
transactions contemplated by this Agreement or any of the other Loan Documents.
The Borrower hereby waives, releases and agrees not to xxx the Agent, the
Documentation Agent, the Administrative Agent or any Lender or any of their
respective Affiliates, officers, directors, employees, attorneys or agents for
exemplary or punitive damages in respect of any claim in connection with,
arising out of or in any way related to this Agreement or any of the other Loan
Documents, or any of the transactions contemplated by this Agreement or any of
the other Loan Documents.
Section 13.4 NO DUTY. All attorneys, accountants, appraisers and other
professional Persons and consultants retained by the Agent, the Documentation
Agent, the Administrative Agent and the Lenders shall have the right to act
exclusively in the interest of the Agent, the Documentation Agent, the
Administrative Agent and the Lenders and shall have no duty of disclosure, duty
of loyalty, duty of care or other duty or obligation of any type or nature
whatsoever to the Borrower or any of the Borrower's shareholders or any other
Person other than the Agent, the Documentation Agent, the Administrative Agent
and the Lenders.
Section 13.5 NO FIDUCIARY RELATIONSHIP. The relationship between the
Borrower and each Lender is solely that of debtor and creditor, and neither the
Agent, the Documentation Agent, the Administrative Agent nor any Lender has any
fiduciary or other special relationship with the Borrower or any other Loan
Party, and no term or condition of any of the Loan Documents shall be construed
so as to deem the relationship between the Borrower and any Lender, or any
other Loan Party and any Lender, to be other than that of debtor and creditor.
No joint venture or partnership is created by this Agreement among the Lenders
or among the Borrower or any other Loan Party and the Lenders.
Section 13.6 NO WAIVER; CUMULATIVE REMEDIES. No failure on the part of
the Agent or any Lender to exercise and no delay in exercising, and no course
of dealing with respect to, any right, power or privilege under this Agreement
or any other Loan Document shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, power or privilege under this
Agreement or any other Loan Document preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies provided for in this Agreement and the other Loan Documents are
cumulative and not exclusive of any rights and remedies provided by law.
Section 13.7 SUCCESSORS AND ASSIGNS.
(a) This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns in accordance
with this Agreement. Except in the case of assignments or transfers that
result by operation of law from transactions permitted by SECTION 9.3, neither
the Borrower nor any other Loan Party may assign or transfer any of its rights
or obligations under this Agreement or any other Loan Document without the
prior written consent of the Agent and all of the Lenders. Any Lender may sell
participations in all or a portion of its rights and obligations under this
Agreement and the other Loan Documents (including, without limitation, all or a
portion of its respective Commitments and the Revolving Credit Loans and Term
Loans owing to it); PROVIDED, HOWEVER, that (i) such Lender's obligations under
this Agreement and the other Loan Documents (including, without limitation, its
respective Commitments) shall remain unchanged, (ii) such Lender shall remain
solely responsible to the Borrower for the performance of such obligations,
(iii) such Lender shall remain the holder of its Note for all purposes of this
Agreement, (iv) the Borrower and the Agent shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents, and (v) such
Lender shall not sell a participation that conveys to the participant the right
to vote or give or withhold consents under this Agreement or any other Loan
Document, other than (if and to the extent that such Lender so agrees) the
right to vote upon or consent to the following, to the extent any of the
following affect the rights of such participant: (A) any increase of such
Lender's respective Commitments (other than an increase resulting from an
assignment to or in favor of such Lender from another Lender in accordance with
this Agreement); (B) any reduction of the principal amount of, or interest to
be paid on, the Loans of such Lender; (C) any reduction of any commitment fee
or other amount payable to such Lender under any Loan Document if and to the
extent that such reduction would decrease the fee or other amount payable to
the participant; (D) any postponement of any date for the payment of any amount
payable in respect of the Loans of such Lender (it being understood that no
action taken by the Required Lenders under SECTIONS 2.7 OR 9.12 shall be
deemed, in and of itself, to constitute an action covered by this SUBCLAUSE
(D)); (E) any release of a material portion of the Collateral from the Liens
created by the Security Documents and not otherwise expressly authorized by the
Loan Documents; and (F) any release of any Loan Party from liability under the
Loan Documents other than as expressly authorized by the Loan Documents.
(b) The Borrower and each of the Lenders agree that any Lender (the
"ASSIGNING LENDER") may at any time assign to one or more Eligible Assignees
all, or a proportionate part of all, of its rights and obligations under this
Agreement and the other Loan Documents (including, without limitation, its
respective Commitments, Loans and Letters of Credit) (each an "ASSIGNEE");
PROVIDED, HOWEVER, that (i) except with respect to a Lender's assignment to any
of its bank Affiliates (other than any Investment Fund) or to another Lender,
each of the Agent and the Issuing Bank and, unless there have occurred and be
continuing a Default or Event of Default, the Borrower, has consented to such
assignment, which consents shall not be unreasonably withheld, (ii) each such
assignment may be of a varying percentage of the Assigning Lender's rights and
obligations under this Agreement and the other Loan Documents and may relate to
some but not all of such rights and/or obligations, (iii) except in the case of
an assignment of all of a Lender's rights and obligations under this Agreement
and the other Loan Documents, the amount of the respective Commitments and
Loans of the Assigning Lender being assigned pursuant to each assignment
(determined as of the date of the Assignment and Acceptance with respect to
such assignment), shall in no event be less than the lesser of (A) an aggregate
amount equal to $5,000,000 (calculated based upon the sum of the respective
Commitments assigned (or, if such Commitments have terminated or expired, the
aggregate outstanding principal amount of the Loans and the Letter of Credit
Liabilities assigned), or (B) an aggregate amount equal to five percent (5%) of
the sum of the aggregate outstanding Commitments (or, if such Commitments have
terminated or expired, the aggregate outstanding principal amount of the Loans
and the Letter of Credit Liabilities), and (iv) the parties to each such
assignment shall execute and deliver to the Agent for its acceptance and
recording in the Register (as defined below), an Assignment and Acceptance,
together with the Note subject to such assignment, and the Assigning Lender
and/or the Assignee shall pay the Agent a processing and recordation fee of
$2,500. Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in each Assignment and Acceptance, which
effective date shall be at least five Business Days after the execution
thereof, or, if so specified in such Assignment and Acceptance, the date of
acceptance thereof by the Agent, (1) the Assignee thereunder shall be a party
hereto as a "Lender" 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 hereunder and under the Loan Documents, and
(2) the Assigning Lender thereunder shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights, from and after the effective date of such
Assignment and Acceptance, and be released from its obligations under this
Agreement and the other Loan Documents (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of a Lender's rights and
obligations under the Loan Documents, such Lender shall cease to be a party
thereto, PROVIDED, HOWEVER, that such Lender's rights under ARTICLE 4, SECTION
13.1 and SECTION 13.2 accrued through the date of assignment shall continue).
(c) By executing and delivering an Assignment and Acceptance, the
Assigning Lender 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 makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Loan Documents or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Loan Documents or any other instrument
or document furnished pursuant thereto; (ii) such Assigning Lender makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of any Loan Party or the performance or observance by any
Loan Party of its obligations under the Loan Documents; (iii) such Assignee
confirms that it has received a copy of the other Loan Documents, together with
copies of the financial statements referred to in SECTION 7.2 and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (iv) such
Assignee will, independently and without reliance upon the Agent or such
Assigning Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement and the other Loan Documents; (v) such
Assignee confirms that it is an Eligible Assignee; (vi) such Assignee appoints
and authorizes the Agent to take such action as agent on its behalf and
exercise such powers under the Loan Documents as are delegated to the Agent by
the terms thereof, together with such powers as are reasonably incidental
thereto; and (vii) such Assignee agrees that it will perform in accordance with
their terms all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender and (viii) confirmation that it is
not an Investment Fund.
(d) The Agent shall maintain on behalf of the Lenders at its
Principal Office 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 Lenders and the Commitments of, and principal amount of the Loans owing to,
each Lender 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 Agent and the Lenders may treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes under the Loan
Documents. The Register shall be available for inspection by the Borrower or
any Lender at any reasonable time and from time to time upon reasonable prior
notice. Upon Borrower's request therefor, from time to time, Agent will
provide Borrower with a list of the Lenders who are then Loan Parties as set
forth in the Register and the respective Commitments of such Lenders.
(e) Upon its receipt of an Assignment and Acceptance executed by an
Assigning Lender and Assignee representing that it is an Eligible Assignee,
together with the Note subject to such assignment, the Agent shall, if such
Assignment and Acceptance has been completed and is in substantially the form
of EXHIBIT A hereto, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register, and (iii) give prompt written
notice thereof to the Borrower. Within five Business Days after its receipt of
such notice, the Borrower, at its expense, shall execute and deliver to the
Agent in exchange for each surrendered Note evidencing particular Loans, a new
Note evidencing such Loans payable to the order of such Eligible Assignee in an
amount equal to such Loans assigned to it and, if the Assigning Lender has
retained any Loans, a new Note evidencing such Loans payable to the order of
the Assigning Lender in the amount of such Loans retained by it (each such
promissory note shall constitute a "Note" for purposes of the Loan Documents).
Such new Notes shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form of EXHIBIT C-1,
EXHIBIT C-2 and/or EXHIBIT C-3 hereto, as applicable.
(f) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this SECTION
13.7, disclose to the Assignee or participant or proposed Assignee or
participant any information relating to the Borrower or any of its Subsidiaries
furnished to such Lender by or on behalf of the Borrower or any of its
respective Subsidiaries; PROVIDED, HOWEVER, that each such actual or proposed
Assignee or participant shall agree to be bound for the benefit of the Borrower
by the provisions of SECTION 13.18.
Section 13.8 SURVIVAL. All representations and warranties made or
deemed made in this Agreement or any other Loan Document or in any document,
statement or certificate furnished in connection with this Agreement shall
survive the execution and delivery of this Agreement and the other Loan
Documents and the making of the Loans, and no investigation by the Agent or any
Lender or any closing shall affect the representations and warranties or the
right of the Agent or any Lender to rely upon them. Without prejudice to the
survival of any other obligation of the Borrower hereunder, the obligations of
the Borrower under ARTICLE 4 and SECTIONS 13.1 and 13.2 shall survive repayment
of the Loans and Reimbursement Obligations and termination of the Commitments.
SECTION 13.9 ENTIRE AGREEMENT. THIS AGREEMENT, THE NOTES AND THE OTHER
LOAN DOCUMENTS REFERRED TO HEREIN EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE
PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS,
REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE
SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE
PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES
HERETO.
Section 13.10 AMENDMENTS. No amendment or waiver of any provision of
this Agreement, the Notes or any other Loan Document, nor any consent to any
departure therefrom, shall in any event be effective unless the same shall be
agreed or consented to in writing by the Required Lenders and each Loan Party
which is a party thereto, and each such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given;
PROVIDED, HOWEVER, that no amendment, waiver or consent shall, unless in
writing and signed by all of the Lenders and the Borrower, do any of the
following: (a) increase the Commitments of the Lenders or subject the Lenders
to any additional obligations; (b) reduce the principal of, or interest on, the
Loans, the Reimbursement Obligations or any fees or other amounts payable
hereunder to the Lenders; (c) postpone any scheduled date fixed for any payment
(including, without limitation, any mandatory prepayment) of principal of, or
interest on, the Loans, the Reimbursement Obligations or any fees or other
amounts payable hereunder to the Lenders (it being understood that no action
taken by the Required Lenders under SECTIONS 2.7 OR 9.12 shall be deemed, in
and of itself, to constitute an action covered by this CLAUSE (C)); (d) change
the Commitment Percentages or the aggregate unpaid principal amount of the
Loans or the number or interests of the Lenders which shall be required for the
Lenders or any of them to take any action under this Agreement; (e) change any
provision contained in SECTION 3.2, SECTION 9.15 or this SECTION 13.10 or
modify the definition of "Required Lenders" contained in SECTION 1.1; or
(f) except as expressly authorized in SECTIONS 5.4 AND 9.12 of this Agreement,
release any Collateral from any of the Liens created by the Security Documents
in a transaction that would constitute an Asset Disposition, or release any
Guarantee of all or any portion of the Obligations; and PROVIDED, FURTHER,
HOWEVER, that, except in the case of the automatic acceleration of maturity of
the Loans and the automatic termination of the Commitments pursuant to
SECTION 11.2 as a result of the occurrence of an Event of Default under
SECTION 11.1(E) or SECTION 11.1(F), after any acceleration of the maturity of
the Loans by the Agent pursuant to SECTION 11.2(A) or any termination of the
Commitments by the Agent pursuant to SECTION 11.2(B) without the consent of the
Required Lenders, the acceleration of the maturity of the Loans may be
rescinded and the Commitments may be reinstated with the prior written consent
of (i) all of the Lenders where the acceleration of the maturity of the Loans
resulted from an Event of Default under SECTION 11.1(A), and (ii) the Required
Lenders in all other circumstances. Notwithstanding anything to the contrary
contained in this SECTION 13.10, no amendment, waiver or consent shall be made
with respect to ARTICLE 12 hereof without the prior written consent of the
Agent.
Section 13.11 MAXIMUM INTEREST RATE.
(a) No interest rate specified in this Agreement or any other Loan
Document shall at any time exceed the Maximum Rate nor shall the amount of
interest contracted for, charged, received, taken, collected, reserved or
applied exceed the maximum amount permitted by applicable law. If at any time
the interest rate (the "CONTRACT RATE") for any Obligation shall exceed the
Maximum Rate, thereby causing the interest accruing on such Obligation to be
limited to the Maximum Rate, then, to the extent permitted by law, any
subsequent reduction in the Contract Rate for such Obligation shall not reduce
the rate of interest on such Obligation below the Maximum Rate until the
aggregate amount of interest accrued on such Obligation equals the aggregate
amount of interest which would have accrued on such Obligation if the Contract
Rate for such Obligation had at all times been in effect.
(b) Notwithstanding anything to the contrary contained in this
Agreement or the other Loan Documents, none of the terms and provisions of this
Agreement or the other Loan Documents shall ever be construed to create a
contract or obligation to pay interest at a rate in excess of the Maximum
Rate; and neither the Agent, the Documentation Agent, the Administrative Agent,
the Syndication Agent, the Issuing Bank nor any Lender nor any other Person
shall ever charge, receive, take, collect, reserve or apply, as interest on the
Obligations, any amount in excess of the Maximum Rate or the maximum amount
permitted by applicable law or any unearned interest in violation of applicable
law. The parties hereto agree that any interest, charge, fee, expense or other
obligation provided for in this Agreement or in the other Loan Documents which
constitutes interest under applicable law shall be, IPSO FACTO and under any
and all circumstances, limited or reduced to an amount equal to the lesser of
(i) the amount of such interest, charge, fee, expense or other obligation that
would be payable in the absence of this SECTION 13.11(B) or (ii) an amount,
which when added to all other interest payable under this Agreement and the
other Loan Documents, equals the Maximum Rate and in no event exceeds the
maximum amount permitted by applicable law. If, notwithstanding the foregoing,
the Agent, the Documentation Agent, the Administrative Agent, the Syndication
Agent, the Issuing Bank or any Lender ever contracts for, charges, receives,
takes, collects, reserves or applies as interest any amount in excess of the
Maximum Rate, such amount which would be deemed excessive interest shall be
deemed a partial payment or prepayment of principal of the Obligations and
treated hereunder as such; and if the Obligations, or applicable portions
thereof, are paid in full, any remaining excess shall promptly be paid to the
Borrower. In determining whether the interest paid or payable, under any
specific contingency, exceeds the Maximum Rate, the Borrower, the Agent, the
Documentation Agent, the Administrative Agent, the Syndication Agent, the
Issuing Bank and the Lenders shall, to the maximum extent permitted by
applicable law, (i) characterize any nonprincipal payment as an expense, fee or
premium rather than as interest, (ii) exclude voluntary prepayments and the
effects thereof and (iii) amortize, prorate, allocate and spread in equal or
unequal parts the total amount of interest throughout the entire contemplated
term of the Obligations, or applicable portions thereof, so that the interest
rate does not exceed the Maximum Rate at any time during the term of the
Obligations; PROVIDED, HOWEVER, that, if the unpaid principal balance is paid
and performed in full prior to the end of the full contemplated term thereof,
and if the interest received for the actual period of existence thereof exceeds
the Maximum Rate to the maximum extent permitted by applicable law, the Agent,
the Documentation Agent, the Administrative Agent, the Syndication Agent, the
Issuing Bank and/or the Lenders, as appropriate, shall refund to the Borrower
the amount of such excess and, in such event, the Agent, the Documentation
Agent, the Administrative Agent, the Syndication Agent, the Issuing Bank and
the Lenders shall not be subject to any penalties provided by any laws for
contracting for, charging, receiving, taking, collecting, reserving or applying
interest in excess of the Maximum Rate.
(c) Pursuant to Article 15.10(b) of Chapter 15, Subtitle 79, Revised
Civil Statutes of Texas 1925, as amended, the Borrower agrees that such Chapter
15 (which regulates certain revolving credit loan accounts and revolving tri-
party accounts) shall not govern or in any manner apply to the Obligations.
Section 13.12 NOTICES. All notices and other communications provided
for or in connection with this Agreement and the other Loan Documents to which
the Borrower is a party shall be given or made by telecopy or in writing and
telecopied, mailed by certified mail, return receipt requested, or delivered to
the intended recipient at the "Address for Notices" specified below its name on
the signature pages hereof (or, with respect to a Lender that becomes a party
to this Agreement pursuant to an assignment made in accordance with SECTION
13.7, in the Assignment and Acceptance executed by it); or, as to any party, at
such other address as shall be designated by such party in a notice to each
other party given in accordance with this SECTION 13.12. Notices by the
Borrower under this Agreement may be given to the Agent on behalf of all
Lenders at the Agent's then most current address specified in accordance
herewith. Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given when transmitted by
telecopy or personally delivered or, in the case of a mailed notice, upon
receipt, in each case given or addressed as aforesaid; PROVIDED, HOWEVER, that
notices with respect to Borrowings to the Agent shall be deemed given when
received by the Agent.
SECTION 13.13 GOVERNING LAW; SUBMISSION TO JURISDICTION; SERVICE OF
PROCESS. EXCEPT AS MAY BE EXPRESSLY STATED TO THE CONTRARY IN CERTAIN LOAN
DOCUMENTS, THIS AGREEMENT, THE NOTES AND THE OTHER LOAN DOCUMENTS SHALL BE
GOVERNED BY, CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK (WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES) AND APPLICABLE LAWS
OF THE U.S. THE BORROWER HEREBY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF
THE U.S. DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW
YORK STATE COURT, FOR THE PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY. THE BORROWER IRREVOCABLY CONSENTS TO THE
SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING
BY CERTIFIED MAIL ADDRESSED TO THE CHIEF FINANCIAL OFFICER OR GENERAL COUNSEL
OF THE BORROWER OF COPIES OF SUCH PROCESS TO THE BORROWER AT ITS ADDRESS SET
FORTH UNDERNEATH ITS SIGNATURE HERETO. THE BORROWER IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT
AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT
IN AN INCONVENIENT FORUM.
Section 13.14 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 13.15 SEVERABILITY. Any provision of this Agreement held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Agreement and the effect thereof shall be
confined to the provision held to be invalid or illegal.
Section 13.16 HEADINGS. The headings, captions and arrangements used in
this Agreement are for convenience only and shall not affect the interpretation
of this Agreement.
Section 13.17 CONSTRUCTION. Each of the Borrower, the Agent, the
Documentation Agent, the Administrative Agent, the Issuing Bank and the
Syndication Agent and each Lender acknowledges that it has had the benefit of
legal counsel of its own choice and has been afforded an opportunity to review
this Agreement and the other Loan Documents with its legal counsel and that
this Agreement and the other Loan Documents shall be construed as if jointly
drafted by the parties hereto.
Section 13.18 CONFIDENTIALITY. (a) Subject to SECTION 13.18(B), each of
the Agent, the Documentation Agent, the Administrative Agent and each Lender
(each a "RECIPIENT") shall keep non-public information delivered or made
available to it by or on behalf of any Loan Party or any other Recipient who
received such information directly from a Loan Party or other Recipient
confidential and shall use such information solely in evaluating, approving,
structuring or administering the Loans.
(b) SECTION 13.18(A) shall not prevent a Recipient from disclosing
such non-public information (i) to Persons employed by such Recipient who are
or are expected to become engaged in evaluating, approving, structuring or
administering the Loans and who are advised of the need to comply with the
provisions of this SECTION 13.18; (ii) to such Recipient's legal counsel,
independent auditors and Affiliates who are advised of the need to comply with
the provisions of this SECTION 13.18 and who agree to use the information
solely in assisting the Recipient in evaluating, approving, structuring or
administering the Loans; (iii) to any other Recipient for use in accordance
with SECTION 13.18(A); (iv) to any actual or proposed participant or Assignee
of all or any part of such Recipient's rights hereunder, so long as such actual
or proposed participant or Assignee agrees to be bound for the benefit of the
Borrower by the provisions of this SECTION 13.18; (v) that has been publicly
disclosed by a Person other than a Recipient or any other Person to whom such
information is furnished subject to the restrictions of this SECTION 13.18;
(vi) to the extent reasonably required in connection with the exercise of any
remedy under the Loan Documents; (vii) (A) to the extent required by law
(including without limitation the order of a court or administrative agency or
the demand of any bank regulatory agency) or (B) to the extent otherwise
reasonably deemed necessary in connection with any litigation to which such
Recipient or its Affiliates may be a party; PROVIDED, HOWEVER, that, to the
extent practicable and not prohibited by any Governmental Requirement, any
Recipient disclosing any non-public information pursuant to CLAUSE (VII) shall
endeavor in good faith to give the Borrower prior written notice of such
disclosure, to impose a confidentiality obligation, by a protective order or
otherwise, on the Person (other than a bank regulatory authority in the course
of conducting inspections onsite) to receive such information, and in
connection with SUBCLAUSE (A) of CLAUSE (VII), to interpose the confidentiality
obligation of this SECTION 13.18 as a valid basis for refusing to make the
disclosure.
SECTION 13.19 WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND EXPRESSLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
(WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO
ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY OR THE
ACTIONS OF THE AGENT, THE DOCUMENTATION AGENT, THE ADMINISTRATIVE AGENT OR ANY
LENDER IN THE NEGOTIATION, ADMINISTRATION OR ENFORCEMENT THEREOF.
Section 13.20 APPROVALS AND CONSENT. In any instance under this
Agreement or the other Loan Documents where the approval, consent or exercise
of judgment of the Agent or any Lender is requested or required, no approval or
consent of the Agent or any Lender shall be effective unless the same shall be
in writing and the same shall be effective only in the specific instance and
for the specific purpose for which given.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
BORROWER:
XXXXXXXXXX HEALTHCARE CORPORATION
By:
Xxxxxxx X. Xxxxxxxxxx
Senior Vice President and Treasurer
ADDRESS FOR NOTICES:
000 Xxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Telephone No.: 000-000-0000
Telecopy No.: 000-000-0000
Attention: Xxxxx X. XxxXxxxxxxx
Senior Executive Vice President
and Chief Financial Officer
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LENDERS:
BANQUE PARIBAS, as the Agent, as the Issuing
Bank and as a Lender
By:
Xxxxxxx X. Xxxxxx
Managing Director
By:
Xxxxx X. Xxxxxx
Director
ADDRESS FOR NOTICES:
Banque Paribas
The Equitable Tower
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: 000-000-0000
Telecopy No.: 000-000-0000
Attention: Corporate Banking Group
with a copy to:
Banque Paribas
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Telephone No.: 000-000-0000
Telecopy No.: 000-000-0000
Attention: Corporate Banking Group
LENDING OFFICE FOR BASE RATE LOANS:
Banque Paribas
The Equitable Tower
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X'Xxxxx/Xxxx Xxxxxx
Operations Officers
LENDING OFFICE FOR EURODOLLAR LOANS:
Banque Paribas
The Equitable Tower
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X'Xxxxx/Xxxx Xxxxxx
Operations Officers
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TORONTO DOMINION (TEXAS), INC., as
Documentation Agent and as a Lender
By:
Name:
Title:
ADDRESS FOR NOTICES:
000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Telephone: 000-000-0000
Telecopy: 000-000-0000
Attention:
LENDING OFFICE FOR BASE RATE LOANS:
Attention:
LENDING OFFICE FOR EURODOLLAR LOANS:
Attention:
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BANK OF MONTREAL, as Administrative Agent and
as a Lender
By:
Name:
Title:
ADDRESS FOR NOTICES:
Telephone:
Telecopy:
Attention:
LENDING OFFICE FOR BASE RATE LOANS:
Attention:
LENDING OFFICE FOR EURODOLLAR LOANS:
Attention:
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