SECOND AMENDED AND RESTATED LOAN AGREEMENT
This SECOND AMENDED AND RESTATED LOAN AGREEMENT, dated as of
August 8, 2007, by and between INTEGRAMED AMERICA, INC., a Delaware corporation
(the "Borrower"), and BANK OF AMERICA, N.A. (the "Bank").
R E C I T A L S
WHEREAS, the Borrower and the Bank entered into the Amended
and Restated Loan Agreement, dated as of September 28, 2001, as amended by a
First Amendment dated as of September 16, 2002, a Second Amendment dated as of
July 31, 2003, a Third Amendment dated as of November 14, 2003, a Fourth
Amendment dated as of March 21, 2005 and a Fifth Amendment dated as of December
23, 2005 (as so amended, the "Original Loan Agreement").
WHEREAS, the Borrower, IDVC Acquisition Co., a Delaware
corporation and a wholly-owned Subsidiary of the Borrower ("Acquisition Sub"),
and Vein Clinics of America, Inc., a Delaware corporation ("VCA"), have entered
into the VCA Acquisition Agreement (defined below), pursuant to which
Acquisition Sub will purchase (the "VCA Acquisition") all of the capital stock
of VCA for cash and shares of the Borrower. Following the consummation of the
VCA Acquisition, Acquisition Sub will be merged with and into VCA, with VCA as
the surviving entity.
WHEREAS, on the Effective Date (as defined below) (but before
giving immediate effect to this Agreement), (a) the Term Loan (as defined in the
Original Loan Agreement) in the principal amount of $7,738,095.22 is outstanding
under the Original Loan Agreement (the "Original Term Loan") and (b) the
Revolving Credit Loans (as defined in the Original Loan Agreement) in an
aggregate principal amount of $0 are outstanding under the Original Loan
Agreement.
WHEREAS, the Borrower desires (a) to create a class of a New
Term Loan (as defined below) in an aggregate principal amount of $25.0 million
(the proceeds of which shall be applied to repay in full the Original Term Loans
and to finance in part the Transactions (as defined below)), and (b) to make
certain other changes as provided herein.
WHEREAS, the parties hereto desire to amend and restate the
Original Credit Agreement in its entirety on the Effective Date on and subject
to the terms and conditions set forth herein (a) to provide for the New Term
Loan and the funding thereof, (b) to permit the consummation of the VCA
Acquisition and the other transactions contemplated thereby, (c) to continue to
provide for the $10.0 million revolving credit facility pursuant to which
Revolving Credit Loans (as defined below) may be made to the Borrower and
Letters of Credit (as defined below) may be issued thereunder for the account of
the Borrower or any Subsidiary of the Borrower and (d) to make certain other
changes as provided herein.
WHEREAS, the Obligations (as defined in the Original Loan
Agreement) of the Loan Parties under the Loan Documents (as defined in the
Original Loan Agreement (the "Original Documents") are secured by certain
collateral and are guaranteed or supported or otherwise benefited by the
Original Documents.
WHEREAS, the parties hereto intend that (a) the Obligations of
the Loan Parties under the Original Loan Documents that remain unpaid and
outstanding as of and after giving effect to the Amendment Effective Date (the
"Original Obligations") shall continue to exist under and be evidenced by this
Agreement and the other Loan Documents (as defined below), (b) any SBLC (as
defined in the Original Loan Agreement) outstanding under the Original Loan
Agreement as of the date of this Agreement (the "Existing LC") shall be a Letter
of Credit (as defined below) hereunder and (c) the "Collateral" (as such term is
defined in the Original Documents) shall continue to secure, guarantee, support
and otherwise benefit the Original Obligations and the Obligations (as defined
below) under this Agreement and the other Loan Documents.
WHEREAS, the proceeds of the Loans (defined below) are to be
used in accordance with Section 2.12.
WHEREAS, the Bank is willing to amend and restate the Original
Loan Agreement in its entirety and is willing to continue and extend such credit
to the Borrower and issue Letters of Credit for the account of the Borrower, and
the Borrower is willing to amend and restate the Original Loan Agreement in its
entirety, in each case on the terms and subject to the conditions set forth
herein.
NOW THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the Original Loan
Agreement is hereby amended and restated to read in its entirety as follows and,
accordingly, the parties hereto agree as follows:
ARTICLE 1. DEFINITIONS.
1.1 Defined Terms. As used herein the following terms shall have the
following meanings:
"Accounts" shall mean those accounts arising out of the sale or lease
of goods or the rendition of services by the Borrower.
"Account Debtor" shall mean the Person who is obligated on or under an
Account.
"Acquisition" shall mean, with respect to any Person, the acquisition
by purchase or otherwise (a) of the business or assets of or Capital Stock of
another Person (other than any then existing Specified Person) and/or (b) of the
right to manage and/or service certain aspects of the business of a Practice
Group, whether pursuant to a Management Agreement or otherwise.
"Acquisition Cost" shall mean with respect to any otherwise Permitted
Acquisition, the sum of (i) all cash consideration paid or agreed to be paid by
the acquiror to make such Acquisition (inclusive of payments by such person of
the seller's professional fees and expenses and other out-of-pocket expenses in
connection therewith), plus (ii) the fair market value of all non-cash
consideration paid by such Person in connection therewith, plus (iii) an amount
equal to the principal or stated amount of all liabilities assumed or incurred
by such Person in connection therewith, plus (iv) any optional or mandatory
capital contributions made to such entity by such Person. The principal or
stated amount of any liability assumed or incurred by an acquiror in connection
with an Acquisition which is a contingent liability shall be an amount equal to
the stated amount of such liability or, if the same is not stated, the maximum
reasonably anticipated amount payable by such person in respect thereof as
determined by such person in good faith.
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"Acquisition Cost Individual Threshold Amount" shall mean, with respect
to any Acquisition consummated at any time during the period set forth in the
table below, the amount set forth below opposite such period:
Period Amount
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From and including the Effective Date through and including July 31, 2008 $2,500,000
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From and including August 1, 2008 through and including July 31, 2009 $5,000,000
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From and including August 1, 2009 through and including July 31, 2010 $5,500,000
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From and including August 1, 2010 and any time thereafter $6,000,000
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"Acquisition Cost Aggregate Threshold Amount" shall mean, with respect
to all Acquisitions consummated at any time during the period set forth in the
table below, the amount set forth below opposite such period:
Period Amount
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From and including the Effective Date through and including July 31, 2008 $5,000,000
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From and including August 1, 2008 through and including July 31, 2009 $10,000,000
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From and including August 1, 2009 through and including July 31, 2010 $11,000,000
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From and including August 1, 2010 and any time thereafter $12,000,000
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"Acquisition Sub" shall have the meaning set forth in the recitals
hereto.
"Adjusted Net Income" shall mean, with respect to the Borrower and its
Subsidiaries on a consolidated basis for any period, the net income (or loss) of
the Borrower and its Subsidiaries on a consolidated basis for such period,
excluding extraordinary items, as determined in accordance with GAAP.
"Affiliate" as applied to any Person shall mean any other Person
directly or indirectly through one or more intermediaries controlling,
controlled by, or under common control with, that Person. For the purposes of
this definition, "control" (including with correlative meanings, the terms
"controlling", "controlled by" and "under common control with"), as applied to
any Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of that Person,
whether through the ownership of voting securities or by contract or otherwise.
"Agreement" shall mean this Second Amended and Restated Loan Agreement,
as the same may be amended, amended and restated, supplemented or otherwise
modified from time to time.
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"Applicable Margin" shall mean, for any day, with respect to any
Revolving Credit Loans and the New Term Loan, as the case may be, the applicable
percentage per annum set forth in the applicable grid below opposite the
applicable Pricing Level and under the applicable column:
(a) Pricing Grid For Revolving Credit Loans:
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Pricing Level Prime Rate LIBOR Rate
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Pricing Level I 0.00% 2.50%
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Pricing Level II 0.00% 2.25%
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Pricing Level III -0.25% 2.00%
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Pricing Level IV -0.50% 1.50%
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(b) Pricing Grid For New Term Loan:
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Pricing Level Prime Rate LIBOR Rate
-------------------------------- ---------------- -------------
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Pricing Level I 0.00% 2.75%
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Pricing Level II 0.00% 2.50%
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Pricing Level III 0.00% 2.25%
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Pricing Level IV -0.25% 2.00%
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In each of the above cases, each change in the Applicable Margin resulting from
a change in the Pricing Level shall take effect, and be effective with respect
to all Loans and Letters of Credit outstanding, on and after the date of the
delivery to the Bank of the financial statements and certificate required to be
delivered pursuant to Sections 5.2(a)(i) or 5.2(a)(ii) and 5.2(b), respectively,
indicating such change is required and shall continue until the date immediately
preceding the next date of delivery of such financial statements and
certificates indicating another such change is required. Notwithstanding the
foregoing, (i) Pricing Level II shall apply during the period commencing on the
Effective Date and ending on and including February 8, 2008, and (ii) the
Pricing Level that shall apply for the period from and including February 9,
2008, to but excluding the date of delivery of the financial statements and
certificate covering the fiscal period of the Borrower ending on March 31, 2008,
shall be that Pricing Level determined based on the financial statements and
certificate delivered pursuant to Sections 5.2(a)(i) and 5.2(b) for the fiscal
quarter ending September 30, 2007. Notwithstanding the foregoing, if, at any
time and from time to time, the Borrower shall be in Default, Pricing Level I
(as increased pursuant to Section 2.11(h)) shall apply until such Default is
cured.
"Assignee" shall have the meaning set forth in Section 10.9(b).
"Blocked Person Annex" shall have the meaning set forth in Section
3.26.
"Board of Directors" shall mean, with respect to any Person, (a) in the
case of any corporation, the board of directors of such Person, (b) in the case
of any limited liability company, the board of managers of such Person, (c) in
the case of any partnership, the Board of Directors of the general partner of
such Person and (d) in any other case, the functional equivalent of the
foregoing.
"Borrower Pledge Agreement" shall have the meaning set forth in Section
4.1(b).
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"Borrowing" shall mean Loans of the same Class and Type, made,
converted or continued on the same date and, in the case of LIBOR Loans, as to
which a single Interest Period is in effect.
"Borrowing Base" shall mean at any time (a) 55% of the Borrower's
Eligible Accounts Receivable at such time, minus (B) the aggregate amount of
reserves, if any, established by the Bank under Section 2.17.
"Borrowing Base Certificate" shall mean a certificate substantially in
the form of Exhibit C hereto.
"Business Day" shall mean a day other than a Saturday, Sunday or other
day on which commercial banks in the State of New York are authorized or
required to close under the laws of the State of New York and, if the applicable
day relates to a LIBOR Loan or an Interest Period for a LIBOR Loan, "Business
Day" shall mean the day on which dealings in Dollar deposits are also carried in
the London interbank market and banks are open for business in London and to the
extent "Business Day" is used in the context of any other specific city it shall
mean any date on which commercial banks are open for business in that city.
"Capital Expenditures" shall mean for any period, the additions to
property, plant and equipment and other capital expenditures of such Person for
such period as the same are or would be set forth in a consolidated statement of
cash flows of such Person for such period (or the notes thereto) prepared in
accordance with GAAP.
"Capitalized Lease" shall mean any lease the obligations to pay rent or
other amounts under which constitute Capitalized Lease Obligations.
"Capitalized Lease Obligations" shall mean 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 required to be capitalized under GAAP and, for purposes of this
Agreement, the amount of such obligations shall be the capitalized amount
thereof that would appear on a balance sheet of such Person prepared as of such
date in accordance with GAAP.
"CapitalSource Credit Facility" shall mean the Credit Agreement, dated
as of August 10, 2006, by and among VCA, CapitalSource Finance LLC, as agent,
the lenders parties thereto, and each document, agreement and instrument
executed in connection therewith or pursuant thereto, as each of the foregoing
may be amended.
"Capital Stock" shall mean as to any Person, all shares, interests,
partnership interests, limited liability company interests, participations,
rights in or other equivalents (however designated) of such Person's equity
(however designated) and any rights, warrants or options exchangeable for or
convertible into such shares, interests, participations, rights or other equity.
"Cash Equivalents" shall mean (a) securities with maturities of one
year or less from the date of acquisition issued or fully guaranteed or insured
by the United States Government or any agency thereof, (b) certificates of
deposit or eurodollar time deposits with maturities of one year or less from the
date of acquisition and overnight bank deposits of any commercial bank organized
under the laws of the United States of America or any State thereof which has a
combined capital and surplus and undivided profits of not less than
$500,000,000, (c) repurchase obligations of any commercial bank satisfying the
requirements of clause (b) of this definition, having a term not more than seven
days with respect to securities issued or fully guaranteed or insured by the
United States Government, (d) commercial paper of a domestic issuer rated at
least A-1 or the equivalent thereof by Standard & Poor's Ratings Group ("S&P")
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or P-1 or the equivalent thereof by Xxxxx'x Investors Services, Inc. ("Moody's")
and in either case maturing within one year from the date of acquisition, (e)
securities with maturities of one year or less from the date of acquisition
issued or fully guaranteed by any state, commonwealth or territory of the United
States, by any political subdivision or taxing authority of any such state,
commonwealth or territory or by any foreign government, the securities of which
state, commonwealth, territory, political subdivision, taxing authority or
foreign government (as the case may be) are rated at least A by S&P or A by
Moody's, (f) securities with maturities of one year or less from the date of
acquisition backed by standby letters of credit issued by any commercial bank
satisfying the requirements of clause (b) of this definition or (g) shares of
money market mutual or similar funds which invest exclusively in assets
satisfying the requirements of clauses (a) through (f) of this definition.
"Change of Control" shall mean an event or series of events by which:
(a) any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Exchange Act, but excluding any employee benefit plan of
such person or its subsidiaries, and any person or entity acting in its capacity
as trustee, agent or other fiduciary or administrator of any such plan) is or
becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that for purposes of this clause such person or group shall
be deemed to have "beneficial ownership" of all securities that such person or
group has the right to acquire, whether such right is exercisable immediately or
only after the passage of time (such right, an "option right")), directly or
indirectly, of 40% or more of the equity securities of the Borrower entitled to
vote for members of the board of directors or equivalent governing body of the
Borrower on a fully-diluted basis (and taking into account all such securities
that such "person" or "group" has the right to acquire pursuant to any option
right); or
(b) during any period of 12 consecutive months, a majority of the
members of the board of directors or other equivalent governing body of the
Borrower cease to be composed of individuals (i) who were members of that board
or equivalent governing body on the first day of such period, (ii) whose
election or nomination to that board or equivalent governing body was approved
by individuals referred to in clause (i) above constituting at the time of such
election or nomination at least a majority of that board or equivalent governing
body or (iii) whose election or nomination to that board or other equivalent
governing body was approved by individuals referred to in clauses (i) and (ii)
above constituting at the time of such election or nomination at least a
majority of that board or equivalent governing body (excluding, in the case of
both clause (ii) and clause (iii), any individual whose initial nomination for,
or assumption of office as, a member of that board or equivalent governing body
occurs as a result of an actual or threatened solicitation of proxies or
consents for the election or removal of one or more directors by any person or
group other than a solicitation for the election of one or more directors by or
on behalf of the board of directors); or
(c) any Person or two or more Persons acting in concert shall have
acquired by contract or otherwise, or shall have entered into a contract or
arrangement that, upon consummation thereof, will result in its or their
acquisition of the power to exercise, directly or indirectly, a controlling
influence over the management or policies of the Borrower, or control over the
equity securities of the Borrower entitled to vote for members of the board of
directors or equivalent governing body of the Borrower on a fully-diluted basis
(and taking into account all such securities that such Person or Persons have
the right to acquire pursuant to any option right) representing 40% or more of
the combined voting power of such securities.
"Class" when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are Revolving Credit
Loans or the New Term Loan.
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"Cleanup Laws" shall mean any federal, state or local statute or
regulation relating to hazardous or toxic wastes or substances or the removal
thereof.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral" shall mean the collateral described in Section 9 and
includes all of the collateral referred to or described in the Security
Documents and all of the other property that is or is intended under the terms
of the Loan Documents to be subject to Liens in favor of the Bank.
"Commitment" shall mean the Revolving Commitment or the Term
Commitment, as the context may require.
"Commitment Letter" shall mean the amended and restated letter
agreement between the Borrower and the Bank dated July 18, 2007, as amended,
amended and restated, supplemented or otherwise modified from time to time.
"Consolidated" or "consolidated" shall mean the Borrower and its
Subsidiaries on a consolidated basis in accordance with GAAP.
"Consolidated Debt" shall mean, at any date of determination, the
aggregate amount of all Indebtedness of the Borrower and its Subsidiaries,
determined on a consolidated basis in accordance with GAAP.
"Consolidated Debt Service" shall mean, at any date of determination,
the sum of (a) Consolidated Interest Expense for the Test Period in respect of
such date, and (b) all scheduled payments of principal on Consolidated Debt
required to be made during the Test Period in respect of such date, including
payments made on account of Capitalized Leases.
"Consolidated EBITDA" shall mean, for any period, the sum of (a)
Adjusted Net Income for such period, plus (b) Consolidated Interest Expense for
such period, plus (c) depreciation, amortization and other non-cash charges for
such period, plus (d) the provision for Federal, state and local income taxes
for such period, minus (e) income from discontinued operations and extraordinary
items for such period, plus (f) losses from discontinued operations and
extraordinary items for such period, in each case, with respect to clauses (a)
through and including (f) above, of the Borrower and its Subsidiaries on a
consolidated basis for such period, computed in accordance with GAAP.
Components of Consolidated EBITDA shall be calculated on a Pro Forma
Basis to give effect to the VCA Acquisition and any Permitted Acquisition
consummated at any time on or after the first day of the Test Period thereof as
if the VCA Acquisition and each such Permitted Acquisition had been effected on
the first day of such period.
"Consolidated Interest Expense" shall mean, for any period, the total
consolidated interest expense of the Borrower and its Subsidiaries for such
period determined on a consolidated basis in accordance with GAAP.
"Consolidated Leverage Ratio" shall mean, at any date of determination,
the ratio of (a) Consolidated Debt as of such date to (b) Consolidated EBITDA
for the Test Period in respect of such date.
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"Consolidated Senior Debt" shall mean, at any date of determination,
the Consolidated Debt as of such date less the aggregate amount of Subordinated
Debt of the Borrower and its Subsidiaries as of such date, in each case
determined on a consolidated basis in accordance with GAAP.
"Consolidated Senior Leverage Ratio" shall mean, at any date of
determination, the ratio of (a) Consolidated Senior Debt as of such date to (b)
Consolidated EBITDA for the Test Period in respect of such date.
"Contemplated Acquisition" shall mean the proposed acquisition of
Center for Reproductive Medicine, P.A., located in Orlando, Florida.
"Continuation/Conversion Notice" is defined in Section 2.9(a).
"Contractual Obligations" shall mean as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Controlled" and "Control" shall mean any partnership, corporation or
other entity of which the Borrower, alone, or the Borrower and/or one or more of
its Subsidiaries, either has the power to direct the management or the power to
direct at least a majority of the voting interests.
"Credit Extension" shall mean each of the following: (a) a Borrowing
and (b) an LC Extension.
"Debtor Relief Laws" shall mean the Bankruptcy Code of the United
States, and all other liquidation, conservatorship, bankruptcy, assignment for
the benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief laws of the United States, any state
thereof or other applicable jurisdictions from time to time in effect and
affecting the rights of creditors generally.
"Default" shall mean any of the events specified in this Agreement
under "Events of Default", whether or not any requirement for the giving of
notice, the lapse of time, or both, has been satisfied.
"Disposition" or "Dispose" shall mean the sale, transfer, license,
lease or other disposition (including any sale and leaseback transaction) of any
property or asset by any Person (or the granting of any option or other right to
do any of the foregoing), including any sale, assignment, transfer or other
disposal, with or without recourse, of any notes or accounts receivable or any
rights and claims associated therewith.
"Dollars" and "$" shall mean dollars in lawful currency of the United
States. "Effective Date" shall have the meaning ascribed to it in
Section 10.15.
"Effective Date Guaranty Agreements" means, collectively, the RPI
Guaranty Agreement, the Acquisition Sub Guaranty Agreement, the VCA Guaranty
Agreement, FPI Guaranty Agreement and the MPI Guaranty Agreement, as each such
term is defined in Section 4.1(b).
"Effective Date Pledge Agreements" means, collectively, the Borrower
Pledge Agreement, the Acquisition Sub Pledge Agreement and the VCA Pledge
Agreement, as each such term is defined in Section 4.1(b).
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"Effective Date Security Agreements" means, collectively, the Borrower
Security Agreement, the RPI Security Agreement, the Acquisition Sub Security
Agreement, the VCA Security Agreement, the FPI Security Agreement and the MPI
Security Agreement, as each such term is defined in Section 4.1(b).
"Eligible Accounts Receivable" shall mean those Accounts (i) which do
not remain unpaid for more than 90 days from the original date of invoice,
unless the Account Debtor is a licensed insurance company, in which case such
Account shall not remain unpaid for more than 120 days from the original date of
invoice, and (ii) have been validly assigned to the Bank and, are subject to a
first priority Lien in favor of the Bank and comply with all of the terms,
conditions, warranties and representations made to the Bank under this Agreement
and the other Loan Documents. Eligible Accounts Receivable shall not include the
following: (a) Accounts with respect to which the Account Debtor is an officer,
director, employee, or agent of the Borrower or an Affiliate; (b) Accounts
arising from a sale of goods which are placed on consignment, or subject to
guaranteed sale, xxxx-and-hold, repurchase or return, or other terms by reason
of which the payment of the Account Debtor may be conditional; (c) Accounts
arising from invoices for deposits, and rebills of amounts previously credited
to the extent of credits issued more than fifteen (15) days prior to such
rebill; (d) Accounts with respect to which the Account Debtor is not domiciled
in the United States of America unless such Account is fully secured by an
irrevocable letter of credit acceptable to the Bank and in favor of or assigned
to the Bank; (e) Accounts with respect to which the sale is on an installment
sale, lease or other extended payment basis; (f) Accounts with respect to which
the Account Debtor is a federal, state, local or foreign governmental authority
unless such governmental authority is the United States of America or any
department, agency or instrumentality of the Untied States, and the Borrower
complies with the Assignment of Claims Act of 1940, as amended (31 U.S.C.
Section 203 et seq.); (g) Accounts with respect to which the Account Debtor is a
Subsidiary of, Affiliate of, or has common officers or directors with the
Borrower; (h) Accounts with respect to which the Bank does not for any reason
have a perfected first priority Lien; (i) Accounts with respect to which the
Borrower is or may become liable to the Account Debtor for goods sold or
services rendered by the Account Debtor to the Borrower, to the extent of the
Borrower's existing or potential liability to such Account Debtor; (j) Accounts
with respect to which the Account Debtor has disputed any liability, or the
Account is otherwise subject to any right of setoff, deduction, breach of
warranty or other defense, dispute or counterclaim by the Account Debtor but
such Account shall be ineligible only to the extent of the disputed or otherwise
disallowed amount; (k) that portion of any Accounts representing late fees,
service charges or interest, but only to the extent of such portion; (l)
Accounts with respect to which the Account Debtor is located in a state or
jurisdiction (e.g., New Jersey, Minnesota, and West Virginia) that requires, as
a condition to access to the courts of such jurisdiction, that a creditor
qualify to transact business, file a business activities report or other report
or form, or take one or more other actions, unless the Borrower has so
qualified, filed such reports or forms, or taken such actions (and, in each
case, paid any required fees or other charges), except to the extent that the
Borrower may qualify subsequently as a foreign entity authorized to transact
business in such state or jurisdiction and gain access to such courts, without
incurring any cost or penalty viewed by the Bank to be significant in amount,
and such later qualification cures any access to such courts to enforce payment
of such Account; (m) Accounts owed by any Account Debtor which is insolvent or
is the subject of an insolvency proceeding; (n) that portion or any Accounts
represented by an instrument or chattel paper; (o) Accounts owed by an Account
Debtor where 50% or more of the total amount of all Accounts owed by that
Account Debtor are otherwise deemed ineligible pursuant to this definition; (p)
Accounts with respect to an Account Debtor or a group of affiliated Account
Debtors whose total obligations owing to the Borrower exceeds 10% (such
percentage as applied to a particular Account Debtor or group of affiliated
Account Debtors (as the case may be) being subject to reduction by the Bank in
its sole discretion if the creditworthiness of such Account Debtor group of
affiliated Account Debtors (as the case may be) deteriorates) of all Eligible
Accounts Receivable, to the extent of the obligations owing by such Account
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Debtor or group of affiliated Account Debtors (as the case may be) in excess of
such percentage; provided, however, that, in each case, the amount of Eligible
Accounts Receivable that are excluded because they exceed the foregoing
percentage shall be determined by the Bank based on all of the otherwise
Eligible Accounts Receivable prior to giving effect to any eliminations based
upon the foregoing concentration limit; and (q) any and all Accounts of an
Account Debtor whose creditworthiness is not satisfactory to the Bank in its
reasonable credit judgment based on information available to the Bank.
References to percentages of all Accounts are based on dollar amount of
Accounts, and not number of Accounts.
"Embargoed Person" shall have the meaning set forth in Section 3.20.
"Environmental Laws" shall mean any federal, state or local statute or
regulation relating to hazardous or toxic wastes or substances or the removal
thereof.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time, the regulations promulgated thereunder and the
published interpretations thereof as in effect from time to time.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) under common control with the Borrower within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions relating to Section 412 of the Code).
"ERISA Event" shall mean (a) a Reportable Event with respect to a
Pension Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate from a
Pension Plan subject to Section 4063 of ERISA during a plan year in which it was
a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a
cessation of operations that is treated as such a withdrawal under Section
4062(e) of ERISA; (c) a complete or partial withdrawal by the Borrower or any
ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer
Plan is in reorganization; (d) the filing of a notice of intent to terminate,
the treatment of a Plan amendment as a termination under Section 4041 or 4041A
of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the
imposition of any liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower
or any ERISA Affiliate.
"Event of Default" shall have the meaning set forth in Section 8.1.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Existing LC" shall have the meaning set forth in the recitals hereto.
"Existing Management Agreements" shall have the meaning set forth in
Section 3.25.
"Existing IntegraMed PA Security Agreements" shall mean, collectively,
(a) the Continuing General Limited Security Agreement, dated as of July 31,
2003, by MPD Medical Associates (MA), P.C. in favor of the Bank; (b) the
Continuing General Limited Security Agreement, dated as of July 31, 2003, by MPD
Medical Associates (RI), P.C. in favor of the Bank; (c) the Continuing General
Limited Security Agreement, dated as of July 31, 2003, by Reproductive Science
Center of the Bay Area in favor of the Bank; (d) the Continuing General Limited
Security Agreement, dated as of July 30, 2003, by Fertility Centers of Illinois,
S.C. in favor of the Bank; (e) the Continuing General Limited Security
Agreement, dated as of July 31, 2003, by Shady Grove Fertility Reproductive
Science Center, P.C. in favor of the Bank; (f) the Continuing General Limited
Security Agreement, dated as of July 31, 2003, by Northwest Center for
Infertility and Reproductive Endocrinology in favor of the Bank; and (g) the
Continuing General Limited Security Agreement, dated as of January 1, 2005, by
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Reproductive Partners Medical Group, Inc. in favor of the Bank, as each of the
foregoing may be amended, amended and restated, supplemented or otherwise
modified from time to time.
"Fee Letter" shall mean the fee letter agreement, dated as of the date
hereof, from the Bank and addressed to and agreed to by the Borrower, as the
same may be amended, amended and restated, supplemented or otherwise modified
from time to time.
"Fertility Business" shall mean (a) the provision of services and
products to medical practices that specialize in the diagnosis and treatment of
infertility and to other providers in the fertility industry, including, without
limitation services in respect of finance, administration, information systems,
marketing and research and (b) the offering of the treatment and financing
programs for patients seeking fertility treatments.
"Fixed Charge Coverage Ratio" shall mean, at any date of determination,
with respect to the Borrower and its Subsidiaries on a consolidated basis, the
ratio of (a) an amount equal to the sum of (i) Consolidated EBITDA for the Test
Period in respect of such date minus (ii) the sum of (A) Unfunded Capital
Expenditures during the Test Period in respect of such date, (B) cash
Shareholder Distributions paid during the Test Period in respect of such date
and (C) cash income taxes paid during the Test Period in respect of such date to
(b) Consolidated Debt Service for the Test Period in respect of such date.
"Fluctuating Rate Borrowing" shall mean a Borrowing comprised of
Fluctuating Rate Loans.
"Fluctuating Rate Loan" shall mean a Loan that bears interest at a rate
of interest based on the Prime Rate.
"FPI" means Florida Phlebology, Inc., a Florida corporation.
"FRB" shall mean the Board of Governors of the Federal Reserve System
of the United States.
"GAAP" shall mean generally accepted accounting principles in the
United States set forth in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or
such other principles as may be approved by a significant segment of the
accounting profession in the United States, that are applicable to the
circumstances as of the date of determination, consistently applied.
"Governmental Authority" shall mean any nation or government, any state
or other political subdivision thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, and any corporation or other entity owned or controlled (through
stock or capital ownership or otherwise) by any of the foregoing.
"Guarantee" shall mean, as to any Person, any (a) any obligation,
contingent or otherwise, of such Person guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation payable or
performable by another Person (the "primary obligor") in any manner, whether
directly or indirectly, and including any obligation of such Person, direct or
indirect, (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or other obligation, (ii) to purchase or lease
property, securities or services for the purpose of assuring the obligee in
respect of such Indebtedness or other obligation of the payment or performance
of such Indebtedness or other obligation, (iii) to maintain working capital,
equity capital or any other financial statement condition or liquidity or level
of income or cash flow of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation, or (iv) entered into for
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the purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person (or any right, contingent or otherwise, of
any holder of such Indebtedness to obtain any such Lien). The amount of any
Guarantee shall be deemed to be an amount equal to the stated or determinable
amount of the related primary obligation, or portion thereof, in respect of
which such Guarantee is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof as determined by the
guaranteeing Person in good faith. The term "Guarantee" as a verb has a
corresponding meaning.
"Guarantors" shall mean each Subsidiary of the Borrower listed on
Schedule 1.1(A) attached hereto and each Subsidiary which may hereafter execute
a Guaranty Agreement pursuant to Section 5.10, together with their successors
and permitted assigns, and "Guarantor" shall mean any one of them.
"Guaranty Agreements" shall mean, collectively, (a) the Effective Date
Guaranty Agreements and (b) each other guarantee or guaranty agreement executed
and delivered pursuant to Section 5.10.
"Indebtedness" shall mean (without duplication), with respect to any
Person, (a) all obligations of such Person for borrowed money or with respect to
deposits or advances of any kind; (b) all obligations of such Person evidenced
by bonds, debentures, notes or other similar instruments; (c) all obligations of
such Person upon which interest charges are customarily paid or accrued; (d) all
obligations of such Person for the deferred purchase price of property or
services, except accrued expenses arising in the ordinary course of business,
current accounts payable and accrued obligations arising in the ordinary course
of business on normal trade terms and not overdue by more than 90 days, amounts
due to medical providers and patient deposits; (e) all obligations of such
Person under conditional sale or other title retention agreements relating to
property purchased by such Person; (f) all payment obligations of such Person
with respect to interest rate or currency protection agreements; (g) all
obligations of such Person for the reimbursement of any obligor in respect of
letters of credit, letters of guaranty, bankers' acceptances and similar credit
transactions; (h) all obligations or Indebtedness of others secured by property
or assets owned or acquired by such Person (regardless of whether or not such
Person is liable for repayment of such obligations, but limited to the fair
market value of such property); (i) all Capitalized Lease Obligations, Purchase
Money Obligations and Synthetic Lease Obligations of such Person; (j) the net
obligations of all Swap Contracts; (k) the redemption price of all redeemable
preferred stock of such Person (but not accrued dividends on any preferred
stock), but only to the extent that such stock is redeemable at the option of
the holder or requires sinking fund or similar payments at any time prior to the
Termination Date; and (l) all Guarantees of such Person in respect of
Indebtedness or obligations of others of the kinds referred to in clauses (a)
through (k) above. The Indebtedness of any Person shall include the Indebtedness
of any other entity (including any partnership in which such Person is a general
partner) to the extent such person is liable therefor as a result of such
person's ownership interest in or other relationship with such entity, except
(other than in the case of general partner liability) to the extent that terms
of such Indebtedness expressly provide that such person is not liable therefor
"Indemnitee" shall have the meaning set forth in Section 10.7(a).
"Initial Perfection Certificate" shall have the meaning set forth in
the definition of "Perfection Certificates".
"Installment Payment Date" shall mean any date on which all or any
portion of the principal amount of the New Term Loan is due and payable.
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"Interest Period" shall mean as to each LIBOR Loan, the period
commencing on the date such LIBOR Loan is disbursed or converted to or continued
as a LIBOR Loan and ending on the date one, two, three or six months thereafter,
as selected by the Borrower in its Notice of Borrowing, notice of borrowing for
the borrowing of the New Term Loan pursuant to Section 2.8 or the
Continuation/Conversion Notice (as the case may be); provided that:
(a) if any Interest Period would otherwise end on a day that is not
a Business Day, that Interest Period shall be extended to the next
succeeding Business Day unless such Business Day falls in another
calendar month, in which case such Interest Period shall end on the
next preceding Business Day;
(b) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month at the
end of such Interest Period; and
(c) no Interest Period shall extend beyond the stated Maturity Date
of such Loan; and
(d) no portion of the New Term Loan shall be continued as or
converted into a LIBOR Loan with an Interest Period which extends
beyond an Installment Payment Date if, after giving effect to the
continuation or conversion of such LIBOR Loan, the amount payable on
any Installment Payment Date would exceed the sum of (i) the aggregate
principal amount of the outstanding portion of the New Term Loan
constituting LIBOR Loans with Interest Periods ending prior to such
Installment Payment Date and (ii) the aggregate outstanding portion of
the New Term Loan constituting Fluctuating Rate Loans.
"Investment" shall mean, as to any Person, any direct or indirect
acquisition or investment by such Person, whether by means of (a) the purchase
or other acquisition of Capital Stock of another Person, (b) a loan, advance or
capital contribution to, Guarantee or assumption of debt of, or purchase or
other acquisition of any other debt or interest in, another Person, or (c) the
purchase or other acquisition (in one transaction or a series of transactions)
of assets of another Person that constitute a business unit or all or a
substantial part of the business of, such Person. For purposes of covenant
compliance, the amount of any Investment shall be the amount actually invested,
without adjustment for subsequent increases or decreases in the value of such
Investment.
"IP Security Documents" shall mean, collectively, the Borrower
Trademark Agreement, the VCA Trademark Agreement and the Borrower Copyright
Agreement (as each of the foregoing is defined in Section 4.1(b)).
"IRS" shall mean the United States Internal Revenue Service.
"LC Disbursement Amount" shall mean the amount of any payment made by
the Bank pursuant to a Letter of Credit.
"LC Documents" shall mean, with respect to any Letter of Credit, (a)
any application and agreement for the issuance or amendment of such Letter of
Credit and (b) any other document, agreement and instrument entered into by the
Bank and the Borrower or in favor of the Bank relating to such Letter of Credit.
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"LC Exposure" shall mean, at any time, the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time plus (b) the
aggregate principal amount of all LC Reimbursement Obligations outstanding at
such time. For purposes of computing the amount available to be drawn under any
Letter of Credit, the amount of such Letter of Credit shall be determined in
accordance with Section 1.4.
"LC Extension" shall mean, with respect to any Letter of Credit, the
issuance thereof or extension of the expiry date thereof, or the increase of the
amount thereof.
"LC Reimbursement Obligations" shall mean all obligations of the
Borrower to reimburse the Bank for outstanding LC Disbursement Amounts.
"LC Sublimit" shall mean an amount equal to $2.0 million. The LC
Sublimit is part of, and not in addition to, the Revolving Commitment.
"Lease" shall mean any lease, sublease, franchise agreement, license,
or occupancy agreement.
"Letter of Credit" shall mean any letter of credit which shall be
issued by the Bank for the account of the Borrower, which Letter of Credit shall
not expire later than the Termination Date, and shall include the Existing LC. A
Letter of Credit may be a commercial letter of credit or a standby letter of
credit.
"LIBOR Base Rate" has the meaning specified in the definition of LIBOR
Rate.
"LIBOR Borrowing" shall mean a Borrowing comprised of LIBOR Loans.
"LIBOR Loan" shall mean a Loan that bears interest at a rate of
interest based on the LIBOR Rate.
"LIBOR Rate" shall mean for any Interest Period with respect to a LIBOR
Loan, a rate per annum determined by the Bank pursuant to the following formula:
LIBOR Rate = LIBOR Base Rate
-------------------------------
1.00 - LIBOR Reserve Percentage
Where,
"LIBOR Base Rate" shall mean, for such Interest Period, the rate per
annum equal to the British Bankers Association LIBOR Rate ("BBA
LIBOR"), as published by Reuters (or other commercially available
source providing quotations of BBA LIBOR as designated by the Bank from
time to time) at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period, for Dollar
deposits (for delivery on the first day of such Interest Period) with a
term equivalent to such Interest Period. If such rate is not available
at such time for any reason, then the "LIBOR Base Rate" for such
Interest Period shall be the rate per annum determined by the Bank to
be the rate at which deposits in Dollars for delivery on the first day
of such Interest Period in same day funds in the approximate amount of
the LIBOR Loan being made, continued or converted by Bank of America,
N.A. and with a term equivalent to such Interest Period would be
offered by Bank of America, N.A.'s London Branch to major banks in the
London interbank eurodollar market at their request at approximately
11:00 a.m. (London time) two Business Days prior to the commencement of
such Interest Period.
-14-
"LIBOR Reserve Percentage" shall mean, for any day during any Interest
Period, the reserve percentage (expressed as a decimal, carried out to
five decimal places) in effect on such day, whether or not applicable
to the Bank, under regulations issued from time to time by the FRB for
determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) with respect to
Eurocurrency funding (currently referred to as "Eurocurrency
liabilities"). The LIBOR Rate for each outstanding LIBOR Loan shall be
adjusted automatically as of the effective date of any change in the
LIBOR Reserve Percentage.
"Lien" shall mean any mortgage, pledge, security interest,
hypothecation, assignment, deposit arrangement, encumbrance, or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever which has the practical effect of creating a security interest
(including, without limitation, any conditional sale or other title retention
agreement, any financing lease having substantially the same economic effect as
any of the foregoing, and the filing of any financing statement under the
Uniform Commercial Code or comparable law of any jurisdiction).
"Limited Grantor" shall mean each Practice Group that is a party to a
Management Agreement and has executed and delivered a Security Agreement in
favor of the Bank.
"Loan" shall mean, as the context may require, a Revolving Credit Loan
or the New Term Loan.
"Loan Documents" shall mean this Agreement, the Fee Letter, each Note,
each Security Document, each Guaranty Agreement, each Perfection Certificate,
each LC Document, and each other document, agreement and instrument executed in
connection herewith or pursuant hereto together with each document, agreement
and instrument made by the Borrower, any Guarantor or any Limited Grantor with
or in favor of the Bank.
"Loan Parties" shall mean, collectively, the Borrower, the Guarantors
and the Limited Grantors, collectively.
"Management Agreement" shall mean (a) a management agreement, service
agreement or other similar agreement, together with any security agreement,
entered into between the Borrower or a Guarantor and a Practice Group pursuant
to which the Borrower or such Guarantor provides management and administrative
services to such Practice Group and furnishes such Practice Group with
facilities, equipment, personnel and supplies, and (b) shall also include any
submanagement agreement, if any, entered into between the Borrower and a
Guarantor pursuant to which the Borrower and/or such Guarantor provides any or
all of such management and administrative services contemplated by the
underlying Management Agreement with the Practice Group(s) to which it relates,
and (c) shall also include the Existing Management Agreements, as each of the
may be amended in accordance with Section 7.17.
"Material Adverse Effect" shall mean (a) a material adverse change in,
or a material adverse effect upon, the business, operations, business, assets,
properties, liabilities (actual or contingent), results of operation, condition
(financial or otherwise) or prospects of the Borrower or of the Borrower and its
Subsidiaries taken as a whole or of the Guarantors taken as a whole; (b) a
material impairment of the rights and remedies of the Bank under any Loan
Document, or of the ability of any Loan Party to perform its obligations under
any Loan Document to which it is a party; or (c) a material adverse effect upon
the legality, validity, binding effect or enforceability against any Loan Party
of any Loan Document to which it is a party.
"Maturity Date" shall mean (a) with respect to Revolving Credit Loans,
the Termination Date, and (ii) with respect to the New Term Loan, the New Term
Loan Maturity Date.
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"Xxxxx'x" shall have the meaning set forth in the definition of "Cash
Equivalents".
"MPI" shall mean Missouri Phlebology, Inc., a Missouri corporation
"Multiemployer Plan" shall mean any employee benefit plan of the type
described in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA
Affiliate makes or is obligated to make contributions, or during the preceding
five plan years, has made or been obligated to make contributions.
"Network Site" shall mean each location with respect to which a
Practice Group has entered into a single Management Agreement with the Borrower
or any of its Subsidiaries.
"New Term Loan" shall mean the term loan made by the Bank to the
Borrower pursuant to Section 2.8(a).
"New Term Loan Maturity Date" shall mean the Termination Date.
"New Term Note" shall have the meaning set forth in Section 2.8(d).
"Notes" shall mean, collectively, the Revolving Credit Note and the New
Term Note.
"Notice of Borrowing" shall have the meaning set forth in Section 2.3.
"Obligations" shall mean all advances to, and debts, liabilities,
obligations, covenants and duties of, any Loan Party arising under any Loan
Document or otherwise with respect to any Loan or Letter of Credit, whether
direct or indirect (including those acquired by assumption), absolute or
contingent, due or to become due, now existing or hereafter arising and
including interest and fees that accrue after the commencement by or against any
Loan Party or any Affiliate thereof of any proceeding under any Debtor Relief
Laws naming such Person as the debtor in such proceeding, regardless of whether
such interest and fees are allowed claims in such proceeding. For the avoidance
of doubt and without limiting the generality of the foregoing, the Obligations
of the Borrower or any Guarantor under the Loan Documents (and which obligations
are covered by the Guaranty Agreements and secured by the Security Documents)
shall include, without limitation, all obligations and exposure of the Borrower
or any Guarantor arising out of, under, based upon or relating to (i) any Swap
Contract of the Borrower or any Guarantor to which the Bank or any of its
Affiliates is a party, and (ii) any cash management or treasury management
arrangements provided by the Bank or its Affiliates.
"OFAC" shall have the meaning set forth in Section 3.26.
"Organizational Documents" shall mean, with respect to any Person, (a)
in the case of any corporation, the certificate of incorporation and by-laws (or
similar documents) of such Person, (b) in the case of any limited liability
company, the certificate of formation and operating agreement (or similar
documents) of such Person, (c) in the case of any limited partnership, the
certificate of formation and limited partnership agreement (or similar
documents) of such Person, (d) in the case of any general partnership, the
partnership agreement (or similar document) of such Person and (e) in any other
case, the functional equivalent of the foregoing.
"Original Loan Agreement" shall have the meaning set forth in the
recitals hereto.
"Original Term Loan" shall have the meaning set forth in the recitals
hereto.
-16-
"Outstanding Amount" shall mean (a) with respect to the New Term Loan
and Revolving Credit Loans on any date, the aggregate outstanding principal
amount thereof after giving effect to any borrowings and prepayments or
repayments of the New Term Loan and Revolving Credit Loans, as the case may be,
occurring on such date; and (b) with respect to any LC Exposure on any date, the
amount of such LC Exposure on such date after giving effect to any LC Extension
occurring on such date and any other changes in the aggregate amount of the LC
Exposure as of such date, including as a result of any reimbursements by the
Borrower of any LC Disbursement Amounts.
"Patriot Act" shall have the meaning set forth in Section 10.21.
"Pension Plan" shall mean any "employee pension benefit plan" (as such
term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that
is subject to Title IV of ERISA and is sponsored or maintained by the Borrower
or any ERISA Affiliate or to which the Borrower or any ERISA Affiliate
contributes or has an obligation to contribute, or in the case of a multiple
employer or other plan described in Section 4064(a) of ERISA, has made
contributions at any time during the immediately preceding five plan years.
"Perfection Certificates" shall mean, collectively, (a) the Perfection
Certificate (General Grantors), dated as of the Effective Date, executed and
delivered by the Borrower, RPI, Acquisition Sub, VCA, FPI and MPI (the "Initial
Perfection Certificate") and (b) each other perfection certificate (which shall
be substantially in form and substance reasonably acceptable to the Bank)
executed and delivered by the applicable Guarantor from time to time pursuant to
Section 5.10.
"Permitted Acquisition" shall mean any Acquisition that satisfies each
of the following conditions:
(i) the entire business or assets acquired or business of the
entity whose Capital Stock is acquired shall be substantially similar to the
Borrower's Fertility Business as conducted on the Effective Date (before giving
effect to the VCA Acquisition);
(ii) (A) the Acquisition Cost with respect to such Acquisition
shall not exceed the Acquisition Cost Individual Threshold Amount and (B) the
aggregate amount of the Acquisition Costs with respect to all Acquisitions
consummated in any period (as set forth in the definition of Acquisition Cost
Aggregate Threshold Amount) shall not exceed the Acquisition Cost Aggregate
Threshold Amount for such period;
(iii) neither the Borrower nor such acquiree has incurred any
additional Indebtedness to finance, or otherwise in connection with, such
Acquisition, whether in the form of seller notes, third party Indebtedness or
otherwise to the extent same would cause the Acquisition Cost to exceed the
limitations set forth in "(ii)" of this definition;
(iv) if the Acquisition is of the Capital Stock of another Person,
said Acquisition shall be of all of such Capital Stock;
(v) at the time of such Acquisition, no Default or Event of Default
exists and no Default or Event of Default would occur after giving effect to
such Acquisition;
-17-
(vi) the Borrower shall have delivered to the Bank, not less than
10 days prior to the consummation of such Acquisition the following:
(A) a certificate of a financial officer of the Borrower, in
all respects reasonably satisfactory to the Bank and dated the date
of such consummation, attaching a compliance certificate (in a
format satisfactory to the Bank) evidencing compliance with the
financial covenants set forth in Section 6.1 on a Pro Forma Basis
after giving effect to such Acquisition and based on the most
recent financial statements delivered to the Bank pursuant to this
Agreement;
(B) copies of the purchase or merger agreement or any other
material documents executed in connection with the Acquisition;
(C) if the Acquisition is an Acquisition of the Capital Stock
of a Person, (1) copies of the resolutions of the board of
directors (or similar governing body) of such new Subsidiary
authorizing the execution, delivery and performance of its
respective Guaranty Agreement, Security Agreement and other Loan
Documents to which it is a party, certified respectively by an
authorized officer of such new Subsidiary, (2) a certificate of an
authorized officer of such new Subsidiary certifying the names and
true signatures of the officers of new Subsidiary to sign any and
all documents to be delivered by new Subsidiary or as required or
contemplated hereunder, (3) the Organizational Documents of such
new Subsidiary, all of which shall be in form and substance
satisfactory to the Bank and certified as true and correct by an
authorized officer of such new Subsidiary, (4) a good standing
certificate as of the dates not more than twenty (20) days prior to
the date of delivery thereof to the Bank from the Secretary of
State of the respective state of organization of such new
Subsidiary and each state in which it is qualified to do business
and (5) an opinion of counsel to such new Subsidiary, in form and
substance reasonably satisfactory to the Bank;
(D) if the Acquisition is of the right to manage and/or
service certain aspects of the business of a Practice Group, each
such applicable Practice Group shall have executed and delivered to
the Bank a security agreement, substantially in the form of Exhibit
D and reasonably satisfactory --------- to the Bank, and the Bank
shall have received an opinion of counsel to the Borrower and such
Practice Group with respect to such Practice Group's security
agreement and such Practice Group, and such resolutions,
certificates and other instruments, in each case as the Bank shall
reasonably request, all of the foregoing in form and substance
reasonably satisfactory to the Bank; and
(E) satisfactory Uniform Commercial Code and other searches
with respect to the acquiree and/or applicable Practice Group;
(vii) the Acquisition shall have the approval of the target
company's board of directors (or similar governing body);
(viii) the Bank shall have filed all applicable Uniform Commercial
Code financing statements and shall have received such other information or
documents as it shall have reasonably requested in connection with such
Acquisition;
(ix) the Acquisition shall have been consummated in accordance with
the definitive acquisition agreement, without any waiver or amendment of any
material term or condition therein not consented to by the Bank and in
compliance with all applicable laws and all necessary approvals, except where
the failure to
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so comply could not reasonably be expected to have a material
adverse effect on the acquiree or on the Borrower;
(x) the Borrower, the parties to such Acquisition and the
Acquisition in each case shall have complied with any applicable state takeover
law and any applicable supermajority charter provisions; and
(xi) all governmental and third-party consents and approvals
necessary in connection with each aspect of the Acquisition shall have been
obtained (without the imposition of any unreasonable conditions) and shall
remain in effect, except where the failure to obtain same could not reasonably
be expected to have a material adverse effect on the acquiree or on the
Borrower; all applicable waiting periods shall have expired or been terminated
or waived without any material adverse action being taken by any authority
having jurisdiction, and no law or regulation shall be applicable that
restrains, prevents or imposes material adverse conditions upon any aspect of
the Acquisition.
Notwithstanding the foregoing in this definition of "Permitted
Acquisition" to the contrary, (a) the VCA Acquisition shall constitute a
"Permitted Acquisition" for purposes of this Agreement, and (b) the Contemplated
Acquisition shall be deemed a "Permitted Acquisition", provided, that such
Contemplated Acquisition is in compliance with the requirements set forth in
clause (i) and clauses (iii) through and including (ix) above in this definition
and the aggregate Acquisition Cost paid by the Borrower in respect of the
Contemplated Acquisition does not exceed $3,150,000.
"Permitted Liens" shall have the meaning set forth in Section 7.4.
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Plan" shall mean any "employee benefit plan" (as such term is defined
in Section 3(3) of ERISA) established by the Borrower or, with respect to any
such plan that is subject to Section 412 of the Code or Title IV of ERISA, any
ERISA Affiliate.
"Pledge Agreements" shall mean, collectively, (a) the Effective Date
Pledge Agreements (b) and each and every other pledge agreement hereafter
executed and delivered by the Borrower or any Guarantor in favor of the Bank
pursuant to Section 5.10, as each of the foregoing may be amended, amended and
restated, supplemented or otherwise modified from time to time
"Post-Default Rate" shall mean at any time a rate of interest equal to
4% per annum in excess of the rate that would then be applicable to Fluctuating
Rate Loans based upon the Pricing Level therefor.
"Practice Group" shall mean one or more physicians or a professional
corporation or professional association owned by physicians or a hospital or
medical center.
"Pricing Level" shall mean Pricing Level I, Pricing Level II, Pricing
Level III or Pricing Level IV, as applicable.
"Pricing Level I" shall mean the applicable Pricing Level at any time
when the Consolidated Leverage Ratio is greater than or equal to 2.25:1.00.
"Pricing Level II" shall mean the applicable Pricing Level at any time
when the Consolidated Leverage Ratio is greater than or equal to 1.75:1.00 but
less than 2.25:1.00.
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"Pricing Level III" shall mean the applicable Pricing Level at any time
when the Consolidated Leverage Ratio is greater than or equal to 1.25:1.00 but
less than 1.75:1.00.
"Pricing Level IV" shall mean the applicable Pricing Level at any time
when the Consolidated Leverage Ratio is less than 1.25:1.00.
"Prime Rate" shall mean the variable per annum rate of interest so
designated from time to time by the Bank as its prime rate. The Prime Rate is a
reference rate and does not necessarily represent the lowest or best rate being
charged to any customer. Interest based on the Prime Rate shall be payable
monthly in arrears. Changes in the rate of interest resulting from changes in
the Prime Rate shall take effect immediately without notice or demand of any
kind.
"Pro Forma Basis" shall mean on a basis in accordance with GAAP and
Regulation S-X and otherwise reasonably satisfactory to the Bank.
"Projections" shall have the meaning set forth in Section 4.1(h)(iii).
"Property" shall mean all types of real, personal, tangible, intangible
or mixed property.
"Purchase Money Obligation" shall mean, for any Person, the obligations
of such Person in respect of Indebtedness (including Capitalized Lease
Obligations) incurred for the purpose of financing all or any part of the
purchase price of any property (including Capital Stock of any Person) or the
cost of installation, construction or improvement of any property and any
refinancing thereof; provided, however, that (i) such Indebtedness is incurred
within one year after such acquisition, installation, construction or
improvement of such property by such Person and (ii) the amount of such
Indebtedness does not exceed 100% of the cost of such acquisition, installation,
construction or improvement, as the case may be.
"Real Property" shall mean any real property owned or leased by the any
Specified Person.
"Related Parties" shall mean, with respect to any Person, such Person's
Affiliates and the partners, directors, officers, employees, agents and advisors
of such person and of such person's Affiliates.
"Regulation S-X" shall mean Regulation S-X promulgated under the
Securities Act.
"Reportable Event" shall mean any of the events set forth in Section
4043(c) of ERISA, other than events for which the 30 day notice period has been
waived.
"Requirements of Law" shall mean as to any Person, the Organizational
Documents of such Person, and any law, statute, treaty, rule or regulation, or
determination of an arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"Responsible Officer" shall mean, with respect to any Loan Party, the
chief executive officer, the president (if not the chief executive officer), any
senior or executive vice president, the chief financial officer or treasurer or,
with respect to financial matters, the chief financial officer, senior financial
officer or treasurer, or any secretary, in each case of such Loan Party.
"Restricted Payment" means any dividend or other distribution (whether
in cash, securities or other property) with respect to any Capital Stock or
other equity interest of the Borrower or any of its Subsidiaries, or any payment
(whether in cash, securities or other property), including any sinking fund or
similar deposit, on account of the purchase, redemption, retirement, defeasance,
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acquisition, cancellation or termination of any such Capital Stock or other
equity interest, or on account of any return of capital to any of such Person's
stockholders, partners or members (or the equivalent of any thereof), or any
option, warrant or other right to acquire any such Capital Stock or other equity
interests.
"Revolving Commitment" shall mean the obligation of the Bank to make
Revolving Credit Loans and to issue Letters of Credit for the account of the
Borrower during the Revolving Commitment Period in an aggregate principal amount
at any one time outstanding not to exceed $10.0 million, as such amount may be
adjusted from time to time in accordance with this Agreement.
"Revolving Commitment Period" shall mean the period from and including
the Effective Date to and including the Termination Date or such earlier date as
the Revolving Commitment shall terminate as provided herein.
"Revolving Credit Exposure" shall mean, at any time, the sum of (a) the
Outstanding Amount of all Revolving Credit Loans at such time plus (b) the
Outstanding Amount of the LC Exposure at such time.
"Revolving Credit Loan" shall mean any Revolving Credit Loan made
pursuant to Section 2.1.
"Revolving Credit Note" shall have the meaning set forth in Section
2.2.
"RPI" means Reproductive Partners, Inc., a Delaware corporation.
"S&P" shall have the meaning set forth in the definition of "Cash
Equivalents".
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Security Agreements" shall mean, collectively, (a) the Effective Date
Security Agreements, (b) the Existing IntegraMed PA Security Agreements, (c)
each and every other security agreement hereafter executed and delivered by the
Borrower or any Guarantor in favor of the Bank, as the same may be amended,
amended and restated, supplement or otherwise modified from time to time, (d)
each and every security agreement hereafter delivered by any VCA Initial
Practice Group in favor of the Bank, and (e) each and every security agreement
hereafter delivered by any Practice Group in favor of the Bank, as each of the
foregoing may be amended, amended and restated, supplement or otherwise modified
from time to time.
"Security Documents" shall mean this Agreement, the Security
Agreements, the Pledge Agreements, the IP Security Documents, any Perfection
Certificate, and each other security agreement or pledge agreement delivered in
accordance with applicable local or foreign law to grant a valid, perfected
security interest in any property as collateral for the Obligations, and all
UCC-1 financing statements, control agreements and other instruments of
perfection required by this Agreement, the Security Agreements, the Pledge
Agreement, the IP Security Documents or any other such security agreement or
pledge agreement to be filed with respect to the security interests in property
created pursuant to any of the Security Agreements, Pledge Agreements, the IP
Security Documents and any other document or instrument utilized to pledge or
grant or purport to pledge or grant a security interest or lien on any property
as collateral for the Obligations.
"Shareholder Distributions" shall mean all payments, dividends or
distributions made by the Borrower or any Subsidiary to any holder (other than
to the Borrower or any Guarantor) of the Capital Stock of the Borrower or such
Subsidiary.
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"Solvent", with respect to any Person on any date of determination,
that on such date (a) the fair value of the property of such Person is greater
than the total amount of liabilities, including contingent liabilities, of such
Person, (b) the present fair salable value of the assets of such Person is not
less than the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured, (c) such Person does
not intend to, and does not believe that it will, incur debts or liabilities
beyond such Person's ability to pay such debts and liabilities as they mature,
(d) such Person is not engaged in business or a transaction, and is not about to
engage in business or a transaction, for which such Person's property would
constitute an unreasonably small capital, and (e) such Person is able to pay its
debts and liabilities, contingent obligations and other commitments as they
mature in the ordinary course of business. The amount of contingent liabilities
at any time shall be computed as the amount that, in the light of all the facts
and circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
"Specified Person" shall mean either the Borrower or any of its
Subsidiaries or any Guarantor or any of its Subsidiaries.
"Subordinated Debt" shall mean Indebtedness of Borrower or any
Guarantor that is by its terms subordinated in right of payment to the
Obligations of the Borrower and such Guarantor, as applicable,
"Subsidiary" shall mean, with respect to any Person (the "parent") at
any date, (a) any corporation, partnership, limited liability company,
association or other business entity of which securities or other ownership
interests representing more than 50% of the voting power of all Capital Stock
entitled (without regard to the occurrence of any contingency) to vote in the
election of the Board of Directors thereof are, as of such date, owned,
controlled or held by the parent and/or one or more Subsidiaries of the parent,
(b) any partnership (i) the sole general partner or the managing general partner
of which is the parent and/or one or more Subsidiaries of the parent or (ii) the
only general partners of which are the parent and/or one or more Subsidiaries of
the parent, or (c) any partnership, limited liability company, association,
joint venture or other entity in which the parent and/or one or more
Subsidiaries of the parent has more than a 50% equity interest at the time.
Unless otherwise specified, all references herein to a "Subsidiary" or to
"Subsidiaries" shall refer to a Subsidiary or Subsidiaries of the Borrower.
"Swap Contract" shall mean (a) any and all rate swap transactions,
basis swaps, credit derivative transactions, forward rate transactions,
commodity swaps, commodity options, forward commodity contracts, equity or
equity index swaps or options, bond or bond price or bond index swaps or options
or forward bond or forward bond price or forward bond index transactions,
interest rate options, forward foreign exchange transactions, cap transactions,
floor transactions, collar transactions, currency swap transactions,
cross-currency rate swap transactions, currency options, spot contracts, or any
other similar transactions or any combination of any of the foregoing (including
any options to enter into any of the foregoing), whether or not any such
transaction is governed by or subject to any master agreement, and (b) any and
all transactions of any kind, and the related confirmations, which are subject
to the terms and conditions of, or governed by, any form of master agreement
published by the International Swaps and Derivatives Association, Inc., any
International Foreign Exchange Master Agreement, or any other master agreement
(any such master agreement, together with any related schedules, a "Master
Agreement"), including any such obligations or liabilities under any Master
Agreement.
"Swap Termination Value" shall mean, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the
xxxx-to-market value(s) for such Swap Contracts, as determined based upon one or
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more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include the Bank or any Affiliate of
the Bank).
"Synthetic Lease Obligation" shall mean the monetary obligation of a
Person under (a) a so-called synthetic, off-balance sheet or tax retention
lease, or (b) an agreement for the use or possession of property (including sale
and leaseback transactions), in each case, creating obligations that do not
appear on the balance sheet of such Person but which, upon the application of
any Debtor Relief Laws to such Person, would be characterized as the
indebtedness of such Person (without regard to accounting treatment).
"Term Commitment" shall mean the commitment, if any, of the Bank to
make the New Term Loan on the Effective Date in the amount of up to $25.0
million, as such amount may be adjusted from time to time in accordance with
this Agreement.
"Termination Date" shall mean August 8, 2012 or, if such date is not a
Business Day, the Business Day next succeeding such date.
"Test Period" shall mean, at any date of determination, the four most
recently ended consecutive fiscal quarters of Borrower (in each case taken as
one accounting period) for which financial statements have been or are required
to be delivered pursuant to Section 5.2(a)(i) or 5.2(a)(ii).
"Threshold Amount" shall mean $250,000.
"Transactions" shall mean, collectively, the financings and
transactions to occur on the Effective Date including (a) the consummation of
the VCA Acquisition, (b) the entering into by the Loan Parties of the Loan
Documents, (c) the borrowings hereunder, (d) the consummation of the
Refinancing, (e) the repayment in full the Original Term Loan, and (f) the
payment of all fees and expenses in connection with the foregoing.
"Type" refers to whether a Loan is a Fluctuating Rate Loan or a LIBOR
Loan.
"UCC" shall mean the Uniform Commercial Code as in effect from time to
time (except as otherwise specified) in any applicable state or jurisdiction.
"Unencumbered Liquid Assets" shall mean Cash Equivalents (excluding
assets of any retirement plan) which (a) are not the subject of any Lien with
any creditor (other than the Bank) and (b) may be converted to cash within seven
days.
"Unfunded Capital Expenditures" shall mean, for any period, Capital
Expenditures made during such period to the extent such Capital Expenditures
were not financed from the proceeds of long term debt (borrowings of Revolving
Loans hereunder not included) and if they were made with cash, so long as the
Borrower and its Subsidiaries maintain Unencumbered Liquid Assets of not less
than the amount required pursuant to Section 6(a) at all times.
"Unfunded Pension Liability" shall mean the excess of a Pension Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over the current value
of that Pension Plan's assets, determined in accordance with the assumptions
used for funding the Pension Plan pursuant to Section 412 of the Code for the
applicable plan year.
"United States" shall mean United States of America.
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"VCA" shall have the meaning set forth in the recitals hereto.
"VCA Acquisition" shall have the meaning set forth in the recitals
hereto.
"VCA Acquisition Agreement" shall mean the Stock Purchase Agreement,
dated as of August 8, 2007, by and among the Borrower, Acquisition Sub, D. Xxxxx
XxXxxxxx, M.D. Trust Dated May 1, 2004 ("XxXxxxxx Seller"), Kush X. Xxxxxxx
Living Trust ("Agarwal Seller"), Kush X. Xxxxxxx (the "Sellers'
Representative"), D. Xxxxx XxXxxxxx, in his personal capacity, as guarantor of
the obligations of XxXxxxxx Seller ("XxXxxxxx Guarantor"), Kush X. Xxxxxxx, in
his personal capacity, as guarantor of the obligations of Agarwal Seller
("Agarwal Guarantor"), and VCA, together with all exhibits, appendices,
schedules and annexes thereto, and as amended in accordance with Section 7.16.
"VCA Initial Practice Groups" shall mean, collectively, (a) Georgia
Phlebology, P.C., a Georgia professional corporation, (b) Illinois Phlebology
Associates, S.C., an Illinois service corporation, (c) Indiana Phlebology, P.C.,
an Indiana professional corporation, (d) Kansas City Phlebology Medical Group,
P.A., a Kansas professional association, (e) D. Xxxxx XxXxxxxx, M.D., P.C., a
Maryland professional corporation, (f) North Carolina Phlebology, P.C., a North
Carolina professional corporation, (g) Tennessee Phlebology, P.C., a Tennessee
professional corporation, and (h) Wisconsin Phlebology Medical Group, P.C., a
Wisconsin professional corporation
"VCA Lease Default" shall mean, with respect to each lease entered into
by VCA on behalf any VCA Initial Practice Group as a lessee, a default arising
thereunder resulting from the change of control of VCA as a result of
consummation of the VCA Acquisition.
"Vein Clinics" shall mean those places of business of the Borrower or
VCA and its Subsidiaries designated for operation of as vein clinics.
1.2 Accounting Terms. As used herein and in any certificate or other
document made or delivered pursuant hereto, accounting terms not specifically
defined herein shall have the respective meanings given to them under GAAP.
1.3 Other Interpretive Provisions. With reference to this Agreement and
each other Loan Document, unless otherwise specified herein or in such other
Loan Document:
(a) The definitions of terms herein shall apply equally to the
singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words "include," "includes" and "including" shall be deemed to
be followed by the phrase "without limitation." The word "will" shall be
construed to have the same meaning and effect as the word "shall." Unless the
context requires otherwise, (i) any definition of or reference to any agreement,
instrument or other document (including any Organizational Document) shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein
or in any other Loan Document), (ii) any reference herein to any Person shall be
construed to include such Person's successors and assigns, (iii) the words
"herein," "hereof" and "hereunder," and words of similar import when used in any
Loan Document, shall be construed to refer to such Loan Document in its entirety
and not to any particular provision thereof, (iv) all references in a Loan
Document to Articles, Sections, Exhibits and Schedules shall be construed to
refer to Articles and Sections of, and Exhibits and Schedules to, the Loan
Document in which such references appear, (v) any reference to any law shall
include all
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statutory and regulatory provisions consolidating, amending, replacing or
interpreting such law and any reference to any law or regulation shall, unless
otherwise specified, refer to such law or regulation as amended, modified or
supplemented from time to time, and (vi) the words "asset" and "property" shall
be construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.
(b) In the computation of periods of time from a specified date to
a later specified date, the word "from" means "from and including;" the words
"to" and "until" each mean "to but excluding;" and the word "through" means "to
and including."
1.4 Letter of Credit Amounts(a) . Unless otherwise specified herein,
the amount of a Letter of Credit at any time shall be deemed to be the stated
amount of such Letter of Credit in effect at such time; provided, however, that
with respect to any Letter of Credit that, by its terms or the terms of any LC
Document related thereto, provides for one or more automatic increases in the
stated amount thereof, the amount of such Letter of Credit shall be deemed to be
the maximum stated amount of such Letter of Credit after giving effect to all
such increases, whether or not such maximum stated amount is in effect at such
time.
ARTICLE 2. AMOUNT AND TERMS OF COMMITMENTS AND LOANS.
2.1 Revolving Commitment.
(a) Subject to the terms and conditions hereof, the Bank agrees to
make revolving credit loans to the Borrower (the "Revolving Credit Loans") and
issue Letters of Credit for the account of the Borrower from time to time during
the Revolving Commitment Period; provided, that, after giving immediate effect
to such Revolving Credit Loan(s) and/or Letter(s) of Credit, (i) the Revolving
Credit Exposure shall not exceed the lesser of (x) the Revolving Commitment or
(y) the Borrowing Base and (ii) the LC Exposure shall not exceed the LC
Sublimit, as such amounts may be reduced as provided in this Agreement. During
the Revolving Commitment Period the Borrower may use the Revolving Commitment
(i) for obtaining Revolving Credit Loans by borrowing, prepaying in whole or in
part and reborrowing on a revolving basis, all in accordance with the terms and
conditions hereof and (ii) for the issuance of Letters of Credit by the
issuance, repayment and/or termination in whole or in part and reissuance on a
revolving basis, all in accordance with the terms and conditions hereof. Within
the limits as set forth above in this Section 2.1(a), and subject to the other
terms and conditions hereof, the Borrower may borrow under this Section 2. 1(a),
prepay under Section 2.10(a), and reborrow under this Section 2.1(a). Revolving
Credit Loans may be Fluctuating Rate Loans or LIBOR Loans, as further provided
herein.
(b) The Borrower shall repay to the Bank on the Maturity Date the
aggregate principal amount of all Revolving Credit Loans outstanding on such
date
2.2 Revolving Credit Note. The Revolving Credit Loans made by the Bank
to the Borrower pursuant to Section 2.1(a) shall be evidenced by a promissory
note of the Borrower substantially in the form of Exhibit A hereto with
appropriate insertions (the "Revolving Credit Note").
2.3 Procedure for Borrowings of Revolving Credit Loans. The Borrower
may borrow under the Revolving Commitment during the Revolving Commitment Period
on any Business Day by giving the Bank irrevocable notice (each a "Notice of
Borrowing") of a request for a Revolving Credit Loan hereunder in accordance
with the following sentence. Each such notice must (i) be received by the Bank
(x) in the case of Revolving Credit Loans that are LIBOR Loans, not later than
3:00 p.m. (New York City time) three (or, in the case of a Borrowing of
Revolving Credit Loans on the Effective Date, two) Business Days prior to the
requested date of any borrowing thereof and (y) in the case of all Revolving
Credit Loans that are Fluctuating Rate Loans, not later than 3:00 p.m. (New York
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City time) on the requested date of any borrowing thereof and (ii) set forth (A)
the amount of the Revolving Credit Loans requested, which shall not be less than
$100,000, (B) the requested borrowing date, (C) whether the Revolving Credit
Loan shall be a LIBOR Loan, Fluctuating Rate Loan or a combination thereof, and
(D) if entirely or partially a LIBOR Loan, the length of the Interest Period
therefor, which shall be one, two, three or six months, as the Borrower shall
elect. Such notice shall be written (including, without limitation, via
facsimile transmission). If any such request is sent by facsimile it shall be
confirmed in writing sent by the Borrower to the Bank within two Business Days
thereafter. Unless notification is otherwise furnished by the Borrower to the
Bank (in a manner consistent with the requirements of this Section), Revolving
Credit Loans will be made by credits to the Borrower's demand deposit account
maintained with the Bank. If the Borrower furnishes such notice but no election
is made as to the Type of Loan or the Interest Period to be applicable thereto,
the Loan will automatically then be made as a Fluctuating Rate Loan until such
required information is furnished pursuant to the terms hereof.
2.4 Letters of Credit.
(a) Request for Letter of Credit. Subject to the limitations set
forth in Section 2.1 and the other terms and conditions herein, the Borrower may
from time to time during the Revolving Commitment Period, upon one (1) day's
prior written notice, request that the Bank issue Letters of Credit for the
account of the Borrower.
(b) Obligations to make LC Extensions. The Bank shall not have any
obligation to and shall not:
(i) issue any Letter of Credit if, after giving effect
thereto, the LC Exposure would exceed the LC Sublimit;
(ii) issue any Letter of Credit if, after giving effect
thereto, the Revolving Credit Exposure would exceed the Revolving
Commitment;
(iii) issue any Letter of Credit which has an expiry date (A)
later than 12 months after the issuance date thereof or (B) after
the Maturity Date, unless the Bank approves of such expiry date;
(iv) issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental
Authority or arbitrator shall by its terms purport to enjoin
or restrain the Bank from issuing such Letter of Credit, or
any Requirement of Law applicable to the Bank or any request
or directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over the Bank shall
prohibit, or request that the Bank refrain from, the issuance
of letters of credit generally or such Letter of Credit in
particular or shall impose upon the Bank with respect to such
Letter of Credit any restriction, reserve or capital
requirement (for which the Bank is not otherwise compensated
hereunder) not in effect on the Effective Date, or shall
impose upon the Bank any unreimbursed loss, cost or expense
which was not applicable on the Effective Date and which the
Bank in good xxxxx xxxxx material to it;
(B) the issuance of such Letter of Credit would violate
one or more policies of the Bank applicable to letters of
credit generally;
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(C) except as otherwise agreed by the Bank, such Letter
of Credit is in an initial stated amount less than $100,000,
in the case of a commercial Letter of Credit, or $100,000, in
the case of a standby Letter of Credit;
(D) such Letter of Credit is to be denominated in a
currency other than Dollars;
(v) amend any Letter of Credit if the Bank would not be
permitted at such time to issue such Letter of Credit in its
amended form under the terms hereof; or
(vi) amend any Letter of Credit if the beneficiary of such
Letter of Credit does not accept the proposed amendment to such
Letter of Credit.
(c) Reimbursement. In the event the Bank makes payment to the
beneficiary of any Letter of Credit in accordance with the terms thereof, the
Borrower agrees to reimburse the Bank therefor on the same day such payment is
made, all as more fully set forth in, and subject to the terms and conditions
of, any applicable LC Documents, each of which LC Documents is fully
incorporated herein by reference thereto.
(d) Borrower's Agreements. In connection with any Letter of Credit, the
Borrower agrees as follows:
(i) Any LC Extension is subject to the Bank's written approval
and must be in form and content satisfactory to the Bank and in
favor of a beneficiary acceptable to the Bank;
(ii) to executed and deliver to the Bank any LC Documents as
reasonably requested by the Bank;
(iii) to pay any issuance and/or other fees that the Bank
notifies the Borrower will be charged for issuing and processing
Letters of Credit for the Borrower; and
(iv) to allow the Bank to automatically charge any of its
deposit accounts at the Bank (if any) for applicable fees,
discounts and other charges.
(e) Letter of Credit Fees. The Borrower agrees to pay for the issuance
of each Letters of Credit: (i) a per annum fee equal to the product of the face
amount of such Letter of Credit and the Applicable Margin then existing for
Revolving Credit Loans that are LIBOR Loans, such fee to be due and payable on
the date of issuance of such Letter of Credit; and (ii) any other standard fees
and commissions routinely charged in connection therewith.
2.5 Commitment Fee and Other Fees.
(a) Commitment Fee. As compensation for the Revolving Commitment on the
revolving basis provided for herein, the Borrower agrees to pay the Bank a
commitment fee equal to 0.25% per annum times the average daily amount by which
the Revolving Commitment exceeds the sum of (i) the Outstanding Amount of
Revolving Credit Loan and (ii) the Outstanding Amount of the LC Exposure. Such
commitment fee shall accrue at all times during the Revolving Commitment Period,
and shall be due and payable quarterly in arrears, on the last Business Day of
each March, June, September and December, commencing on the first such date to
occur after the Effective Date, and on last day of the Revolving Commitment
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Period. If the Borrower fails to pay any such amount to the Bank when due the
amount of such defaulted payment shall bear interest from the date when due
until (but excluding) the date when paid at the Post-Default Rate. The
obligation so to pay interest shall not be construed so as to waive the
requirement to pay the commitment fees as hereinabove set forth.
(b) Other Fees. The Borrower shall pay to the Bank such fees as shall
have been separately agreed upon in writing in the amounts and at the times so
specified. Such fees shall be fully earned when paid and shall not be refundable
for any reason whatsoever.
2.6 Regulatory Changes in Capital Requirements. If as a result of a
change in any existing, or the imposition of any future, law, regulation or
guideline or the interpretation thereof by any court or administrative or
governmental authority charged with the administration thereof, or compliance by
the Bank with any request or directive (whether or not having the force of law)
of any such authority, imposes, modifies, deems applicable or results in the
application of, any capital maintenance, capital ratio or similar requirement
against loan commitments made by the Bank (or participations therein) or the
Bank in anticipation of the effectiveness of any capital maintenance, capital
ratio or similar requirement takes reasonable action to enable itself to comply
therewith, and the result thereof is to impose upon the Bank or increase any
capital requirement applicable as a result of the making or maintenance of the
Commitments or any Loans or participations therein (which imposition of or
increase in capital requirements may be determined by the Bank's reasonable
allocation of the aggregate of such capital impositions or increases) then, upon
demand by the Bank, the Borrower shall immediately pay to the Bank from time to
time as specified by the Bank such additional amount as shall be sufficient to
compensate the Bank for such impositions of or increases in capital
requirements. Any such amount not paid within one Business Day after demand
being made by the Bank shall be paid together with interest at the Post-Default
Rate from the date demanded until payment in full thereof. A certificate setting
forth in reasonable detail the amounts necessary to compensate the Bank as a
result of an imposition of or increase in capital requirements submitted by the
Bank to the Borrower shall be conclusive, absent manifest error or bad faith, as
to the amount thereof. For purposes of this Section, all references to the
"Bank" shall be deemed to include any corporation controlling the Bank. The Bank
will promptly notify the Borrower of any event of which it has knowledge
occurring after the Effective Date which will entitle it to compensation
pursuant to this Section and will designate a different lending office if such
designation will avoid the need for, or reduce the amount of, any such
additional amounts which may thereafter accrue and would not, in the judgment of
the Bank, be otherwise disadvantageous to the Bank.
2.7 Termination or Reduction of Commitments.
(a) The Term Commitment shall be automatically and permanently reduced
to zero on the Effective Date (after giving effect to the making of the New Term
Loan on such date). The Revolving Commitment shall automatically terminate on
the Termination Date. Notwithstanding the foregoing, all the Commitments shall
automatically terminate at 6:00 p.m., New York City time, on August 8, 2007, if
the initial Credit Extension shall not have occurred by such time.
(b) The Borrower shall have the right, upon not less than three
Business Days' irrevocable written notice, to terminate any Commitment or, from
time to time, to reduce the amount of such Commitment; provided, however, that
(i) any such reduction (A) shall be in the minimum amount of $500,000 or an
integral multiple of $100,000 in excess thereof, (B) shall reduce permanently
the amount of such Commitment then in effect, and (C) shall be accompanied by
prepayment of the applicable Revolving Credit Loans outstanding to the extent,
if any, that the Loans then outstanding exceed the amount of such Commitment as
then reduced, together with accrued interest on the amount so prepaid to and
including the dates of each such prepayment and any amounts payable pursuant to
Section 2.14 in connection therewith and the payment of any unpaid commitment
fee applicable to such commitment then accrued hereunder, and (ii) any such
termination of such Commitment shall be accompanied by prepayment in full of the
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applicable Revolving Credit Loans and all obligations in respect of Letters of
Credit together with accrued interest thereon to and including the date of
prepayment and any amounts payable pursuant to Section 2.14 in connection
therewith and the payment of any unpaid commitment fee applicable to such
commitment then accrued hereunder.
2.8 New Term Loan.
(a) Subject to the terms and conditions set forth herein, the Bank
agrees to make the New Term Loan to the Borrower on the Effective Date in an
amount equal to the Term Commitment. The amounts borrowed under this Section
2.8(a) and repaid or prepaid may not be reborrowed.
(b) The New Term Loan shall be made upon the Borrower's irrevocable
notice to the Bank, which may be given by telephone. Such notice must be
received by the Bank not later than 3:00 p.m. (New York City time) two Business
Days prior to the requested date of the borrowing of such New Term Loan, and
must set forth (i) the requested borrowing date commencement date, as the case
may be, (ii) whether the Loan shall be a LIBOR Loan or a Fluctuating Rate Loan,
and (iii) if entirely a LIBOR Loan, the length of the Interest Period therefor,
which shall be one, two, three or six months, as the Borrower shall elect. Such
telephonic notice by the Borrower pursuant to this Section 2.8(b) must be
confirmed promptly by delivery to the Bank of a written borrowing notice (in
form and substance reasonably satisfactory to the Bank), appropriately completed
and signed by a chief financial officer of the Borrower. Thereafter, if no Event
of Default is (at the time in question) continuing, the Borrower may split the
initial Borrowing of the New Term Loan into multiple tranches of Borrowings, and
may elect to convert any tranche of a Borrowing of the New Term Loan to create a
tranche of a Borrowing of the New Term Loan of a different Type (or Interest
Period, where applicable) or to continue such tranche and, in the case of a
tranche of LIBOR Borrowing of the New Term Loan, may elect Interest Periods
therefor, all in accordance with, and as provided in, Section 2.9.
(c) The Borrower shall repay to the Bank the aggregate principal amount
of the New Term Loan on the following dates in the respective amounts set forth
opposite such dates (which amounts shall be reduced as a result of the
application of prepayments in accordance with the order of priority set forth in
Section 2.10)):
---------------------------- -----------------------------------------
Date Amount
---------------------------- -----------------------------------------
November 8, 2007 $0
---------------------------- -----------------------------------------
February 8, 2008 $892,857.14
---------------------------- -----------------------------------------
May 8, 2008 $892,857.14
---------------------------- -----------------------------------------
August 8, 2008 $892,857.14
---------------------------- -----------------------------------------
November 8, 2008 $892,857.14
---------------------------- -----------------------------------------
February 8, 2009 $892,857.14
---------------------------- -----------------------------------------
May 8, 2009 $892,857.14
---------------------------- -----------------------------------------
August 8, 2009 $892,857.14
---------------------------- -----------------------------------------
November 8, 2009 $892,857.14
---------------------------- -----------------------------------------
February 8, 2010 $892,857.14
---------------------------- -----------------------------------------
May 8, 2010 $892,857.14
---------------------------- -----------------------------------------
August 8, 2010 $892,857.14
---------------------------- -----------------------------------------
November 8, 2010 $892,857.14
---------------------------- -----------------------------------------
February 8, 2011 $892,857.14
---------------------------- -----------------------------------------
May 8, 2011 $892,857.14
---------------------------- -----------------------------------------
August 8, 2011 $892,857.14
---------------------------- -----------------------------------------
November 8, 2011 $892,857.14
---------------------------- -----------------------------------------
February 8, 2012 $892,857.14
---------------------------- -----------------------------------------
May 8, 2012 $892,857.14
---------------------------- -----------------------------------------
August 8, 2012 $8,928,571.48
---------------------------- -----------------------------------------
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provided, however, that the final principal repayment installment of the New
Term Loan shall be repaid on the New Term Loan Maturity Date and in any event
shall be in an amount equal to the aggregate principal amount of the New Term
Loan on such date.
(d) The New Term Loan shall be evidenced by, among other things, a term
note substantially in the form of Exhibit B hereto and dated the Effective Date
(the "New Term Note").
2.9 Continuation and Conversion of Loans; Number of Interest Periods.
(a) The Borrower shall have the right at any time on prior irrevocable
written or telex notice to the Bank as specified in this Agreement (i) to
continue any LIBOR Loan as a LIBOR Loan for the same or a different Interest
Period (specifying the Interest Period to be applicable thereto), (ii) to
convert any LIBOR Loan into a Fluctuating Rate Loan and (iii) to convert any
Fluctuating Rate Loan into a LIBOR Loan (specifying the Interest Period to be
applicable thereto) (each such notice, a "Continuation/Conversion Notice"),
subject to the following:
(i) in the case of a conversion of less than all of the outstanding
Loans, the aggregate principal amount of Loans converted shall not be
less than (A) in the case of the New Term Loan, $500,000 and shall be
in an integral multiple of $100,000 in excess thereof and (B) in the
case of Revolving Credit Loans, $100,000 and shall be in an integral
multiple of $100,000 in excess thereof;
(ii) no LIBOR Loan shall be converted at any time other than at the
end of an Interest Period applicable thereto; and
(iii) any portion of a Loan maturing or required to be prepaid in
less than one month may not be converted into or continued as a LIBOR
Loan.
(b) In the event that the Borrower shall not give notice to continue
any LIBOR Loan into a subsequent Interest Period or convert any such Loan into a
Loan of another Type, on the last day of the Interest Period thereof, such Loan
(unless prepaid) shall automatically be converted into a Fluctuating Rate Loan.
The Interest Period applicable to any LIBOR Loan resulting from a conversion or
continuation shall be specified by the Borrower in the Continuation/Conversion
Notice delivered by the Borrower pursuant to this Agreement; provided, however,
that, if such notice does not specify either the Type of Loan or the Interest
Period to be applicable thereto, the Loan shall automatically be converted into,
or continued as, as the case may be, a Fluctuating Rate Loan until such required
information is furnished pursuant to the terms hereof. Notwithstanding anything
to the contrary contained above, if an Event of Default shall have occurred and
is continuing, no LIBOR Loan may be continued into a subsequent Interest Period
and no Fluctuating Rate Loan may be converted into a LIBOR Loan.
(c) Each Continuation/Conversion Notice must be received by the Bank
not later than 3:00 p.m. (New York City time) three Business Days prior to the
requested date of a conversion to or continuation of LIBOR Loans and of any
conversion of LIBOR Loans to Fluctuating Rate Loans. Each
Continuation/Conversion Notice must specify (A) whether the Borrower is
requesting a conversion of the New Term Loan or Revolving Credit Loans from one
Type to the other, or a continuation of LIBOR Loans, (B) the requested date of
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the conversion or continuation, as the case may be (which shall be a Business
Day), (C) the principal amount of Loans to be converted or continued, (D) the
Type of Loans to which existing New Term Loan or Revolving Credit Loans are to
be converted, and (E) if applicable, the length of the Interest Period therefor,
which shall be one, two, three or six months, as the Borrower shall elect. Such
Continuation/Conversion Notice shall be written (including, without limitation,
via facsimile transmission). If any such request is sent by facsimile it shall
be confirmed in writing sent by the Borrower to the Bank within two Business
Days thereafter.
(d) After giving effect to (i) all Borrowings (including all tranches
of Borrowings) of the New Term Loan, (ii) all conversions of all tranches of the
New Term Loan from one Type to the other, (iii) all continuations of tranches of
the New Term Loan as the same Type, (iv) all Borrowings of Revolving Credit
Loans, (v) all conversions of Revolving Credit Loans from one Type to the other,
and (vi) all continuations of Revolving Credit Loans as the same Type, there
shall not be more than eight Interest Periods in effect in respect of the Loans.
2.10 Prepayment.
(a) Voluntary. The Borrower may, upon notice to the Bank, prepay any
Fluctuating Rate Loan in whole or in part without premium or penalty; provided,
however, that (i) such notice must be received by the Bank not later than 3:00
p.m. on the date of prepayment of any Fluctuation Rate Loan and (ii) each
partial prepayment on account of any Fluctuating Rate Loan shall be (A) in the
case of the New Term Loan, in an amount not less than $500,000 or an integral
multiple of $100,000 in excess thereof and (B) in the case of Revolving Credit
Loans, in an amount not less than $100,000 or an integral multiple of $100,000
in excess thereof. Except as provided otherwise in this Agreement, the Borrower
may prepay a LIBOR Loan only upon at least three (3) Business Days prior written
notice to the Bank (which notice shall be irrevocable) and any such prepayment
shall occur only on the last day of the Interest Period for such LIBOR Loan. Any
prepayment of a LIBOR Loan, to the extent permitted, shall be accompanied by any
additional amounts required pursuant to Section 2.14. Any partial prepayment of
the New Term Loan pursuant to this Section 2.10(a) shall be applied to the
principal repayment installments thereof in inverse order of maturity.
(b) Mandatory. If, at any time, the sum of (i) the Outstanding Amount
of the Revolving Credit Loans plus (ii) the Outstanding Amount of the LC
Exposure exceeds the Borrowing Base in effect as such time, then, within five
days of the first day there exists such excess, the Borrower shall make payment
to the Bank in an amount equal to such excess together with any amounts payable
pursuant to Section 2.14 in connection therewith. Such payment shall be applied
to reduce the aggregate unpaid principal balance of the Revolving Credit Loans
then outstanding by first applying such payment to reduce Fluctuating Rate Loans
and then to reduce LIBOR Loans. Notwithstanding the foregoing, the Borrower may
direct by written notice to the Bank that any prepayment or repayment be applied
first, to the principal amount of LIBOR Loans if such prepayment or repayment is
made on the last day of the Interest Period applicable thereto.
(c) Each prepayment made pursuant to Section 2.10(a) or 2.10(b) shall
be made together with payment of accrued interest on the amount prepaid to and
including the date of prepayment any additional amounts required pursuant to
Section 2.14.
2.11 Interest Rates; Interest Payments; Manner of Payments; Rate After
Default; Schedule to Notes; Computation.
(a) Subject to the provisions of Section 2.11(h), (i) the Loans
comprising each Fluctuating Rate Borrowing shall bear interest at a rate per
annum equal to the Prime Rate plus or minus (as the case may be) the Applicable
Margin in effect from time to time, and (ii) the Loans comprising each LIBOR
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Borrowing shall bear interest at a rate per annum equal to the LIBOR Rate for
the Interest Period in effect for such Borrowing plus the Applicable Margin in
effect from time to time.
(b) Interest accrued on each Loan shall be payable, without
duplication, on:
(i) the Maturity Date of such Loan (excluding any Installment
Payment Date unless interest would otherwise be payable on such
Installment Payment Date pursuant to clauses (ii) - (v) below);
(ii) with respect to any portion of any Loan repaid or prepaid
pursuant to this Agreement, the date of such repayment or
prepayment, as the case may be;
(iii) with respect to that portion of the outstanding
principal amount of any Loan maintained as a Fluctuating Rate Loan,
the last Business Day of each March, June, September and December,
commencing with the first such date following the date of the
making of such Loan;
(iv) with respect to that portion of the outstanding principal
amount of any Loan maintained as a LIBOR Loan, the last day of each
applicable Interest Period (and, if such Interest Period shall
exceed three months, on the last day of each three-month period
occurring during such Interest Period), but in no event more
frequently than monthly; and
(v) with respect to that portion of the outstanding principal
amount of a Loan converted into a Fluctuating Rate Loan or a LIBOR
Loan on a day when interest would not otherwise have been payable
pursuant to Section 2.11(b)(iii) or 2.11(b)(iv), the date of such
conversion.
(c) All payments (including prepayments) to be made by the Borrower on
account of principal or interest with respect to any Loan or on account of fees
or any other obligations of the Borrower to the Bank hereunder shall be made to
the Bank at the office of the Bank set forth in Section 10.1 or at such other
place as the Bank may from time to time designate in writing in lawful money of
the United States of America in immediately available funds, without
counterclaim or setoff and free and clear of, and without any deduction or
withholding for, any taxes or other payments.
(d) If the entire amount of any required principal and/or interest is
not paid in full within ten (10) days after the same is due, the Borrower shall
pay to the Bank a late fee equal to five percent (5%) of the required payment.
(e) The Borrower hereby authorizes and directs the Bank to charge any
account of the Borrower maintained at any office of the Bank for any such
payments.
(f) Subject to the provisions of subparagraph (a) in the definition of
Interest Period set forth in Section 1.1, if any payment to be so made hereunder
or under any Loan Document becomes due and payable on a day other than a
Business Day, such payment shall be extended to the next succeeding Business Day
and, to the extent permitted by applicable law, interest thereon shall be
payable at the then applicable rate during such extension.
(g) All payments shall be applied first to the payment of all fees,
expenses and other amounts due to the Bank (excluding principal and interest),
then to accrued interest, then on account of the Outstanding Amount of the Loans
and the balance, if any, applied as cash collateral for any contingent
-32-
obligations that the Borrower may have owing to the Bank; provided, however,
that after the occurrence of an Event of Default, payments will be applied to
the Obligations as the Bank determines in its sole discretion.
(h) Upon and following an Event of Default, all Loans and any and all
accrued and unpaid interest, fees or amounts due hereunder, to the extent
permitted by applicable law, shall bear interest (payable on demand) (A) in all
cases other than LIBOR Loans at the Post-Default Rate until paid and (ii) in the
case of LIBOR Loans at a rate which shall be the greater of the Post-Default
Rate or 4% per annum in excess of the rate applicable to such LIBOR Loan (based
upon the Pricing Level therefor) until the expiration of the Interest Period
applicable to such Loan, at which time the Loan will automatically be converted
into a Fluctuating Rate Loan and until paid shall bear interest at the
Post-Default Rate.
(i) In no event, however, shall interest payable hereunder be in excess
of the maximum rate of interest permitted under applicable law.
(j) The obligation so to pay interest upon any obligation of the
Borrower to the Bank shall not be construed so as to waive the requirement for
payment on the date that payment is due to the Bank as set forth in this
Agreement.
(k) The Borrower hereby expressly authorizes the Bank to record on the
schedule attached to each applicable Note the amount and date of each Loan, the
rate of interest thereon, the date and amount of each payment of principal and
the unpaid principal balance; provided, however, that the failure of the Bank to
make any such notation shall not in any manner affect the obligation of the
Borrower to repay any Loan in accordance with the terms hereof. All such
notations shall be presumed to be correct.
(l) All computations of interest for Fluctuating Rate Loans shall be
made on the basis of a year of 365 or 366 days, as the case may be, and actual
days elapsed. All other computations of fees and interest shall be made on the
basis of a 360-day year and actual days elapsed (which results in more fees or
interest, as applicable, being paid than if computed on the basis of a 365-day
year) and in each case shall be payable for the actual number of days elapsed.
Interest shall accrue on each Loan for the day on which the Loan is made, and
shall not accrue on a Loan, or any portion thereof, for the day on which the
Loan or such portion is paid, provided that any Loan that is repaid on the same
day on which it is made shall, subject to Section 2.11(f), bear interest for one
day. Each determination by the Bank of an interest rate or fee hereunder shall
be conclusive and binding for all purposes, absent manifest error.
2.12 Use of Proceeds.
(a) The Borrower will use the proceeds of any Revolving Credit Loans
for working capital and general corporate purposes of the Borrower and its
Subsidiaries; provided, however, that the Borrower may use up to $3.0 million of
proceeds of the Revolving Credit Loans on the Effective Date to finance in part
the Transactions.
(b) The Borrower will use the proceeds of the New Term Loan to finance
the Transactions.
2.13 Increased Costs. If the Bank determines that the effect of any
applicable law or government regulation, guideline or order or the
interpretation thereof by any Governmental Authority charged with the
administration thereof (such as, for example, a change in official reserve
requirements which the Bank is required to maintain in respect of loans or
deposits or other funds procured for funding such loans) is to increase the cost
to the Bank of making or continuing LIBOR Loans hereunder or to reduce the
-33-
amount of any payment of principal or interest receivable by the Bank thereon,
then the Borrower will pay to the Bank on demand such additional amounts as the
Bank may determine to be required to compensate the Bank for such additional
costs or reduction. Any additional payment under this Section will be computed
from the effective date at which such additional costs have to be borne by the
Bank. A certificate as to any additional amounts payable pursuant to this
Section setting forth the basis and method of determining such amounts shall be
conclusive, absent manifest error, as to the determination by the Bank set forth
therein if made reasonably and in good faith. The Borrower shall pay any amounts
so certified to it by the Bank within 10 days of receipt of any such
certificate. The Bank will promptly notify the Borrower of any event of which it
has knowledge occurring after the date hereof which will entitle it to
compensation pursuant to this Section and will designate a different lending
office if such designation will avoid the need for, or reduce the amount of, any
such additional amounts which may thereafter accrue and would not, in the
judgment of the Bank, be otherwise disadvantageous to the Bank. For purposes of
this Section, all references to the "Bank" shall be deemed to include any
participant in any Commitments and/or Loans.
2.14 Yield Maintenance. The Borrower shall pay to the Bank, upon
request of the Bank, such amount or amounts as shall be sufficient (in the
reasonable opinion of the Bank) to compensate it for any loss, cost, or expense
incurred as a result of: (i) any payment of a LIBOR Loan on a date other than
the last day of the Interest Period for such Loan; (ii) any failure by Borrower
to borrow a LIBOR Loan on the date specified by Borrower's written notice; (iii)
any failure of Borrower to pay a LIBOR Loan on the date for payment specified in
Borrower's written notice. Without limiting the foregoing, Borrower shall pay to
Bank a "yield maintenance fee" in an amount computed as follows: The current
rate for United States Treasury securities (bills on a discounted basis shall be
converted to a bond equivalent) with a maturity date closest to the term chosen
pursuant to the Fixed Rate Election as to which the prepayment is made, shall be
subtracted from LIBOR in effect at the time of prepayment. If the result is zero
or a negative number, there shall be no yield maintenance fee. If the result is
a positive number, then the resulting percentage shall be multiplied by the
amount of the principal balance being prepaid. The resulting amount shall be
divided by 360 and multiplied by the number of days remaining in the term chosen
pursuant to the Fixed Rate Election as to which the prepayment is made. Said
amount shall be reduced to present value calculated by using the above
referenced United States Treasury securities rate and the number of days
remaining in the term chosen pursuant to the Fixed Rate Election as to which
prepayment is made. The resulting amount shall be the yield maintenance fee due
to Bank upon the payment of a LIBOR Loan. Each reference in this paragraph to
"Fixed Rate Election" shall mean the election by Borrower of Loan to bear
interest based on LIBOR. If by reason of an Event of Default, the Bank elects to
declare the Loans and/or any Note to be immediately due and payable, then any
yield maintenance fee with respect to a LIBOR Loan shall become due and payable
in the same manner as though the Borrower has exercised such right of
prepayment.
A certificate as to any additional amounts payable pursuant to this Section
setting forth the basis and method of determining such amounts shall be
conclusive, absent manifest error, as to the determination by the Bank set forth
therein if made reasonably and in good faith. The Borrower shall pay any amounts
so certified to it by the Bank within 10 days of receipt of any such
certificate. For purposes of this Section, all references to the "Bank" shall be
deemed to include any participant in any Commitments and/or Loans.
2.15 Alternate Rate of Interest. In the event, and on each occasion,
that on the day two Business Days prior to the commencement of any Interest
Period for a LIBOR Loan, the Bank shall have determined (i) that dollar deposits
in the amount of the requested principal amount of such LIBOR Loan are not
generally available in the London Interbank Market, (ii) that the rate at which
such dollar deposits are being offered will not adequately and fairly reflect
the cost to the Bank of making or maintaining such LIBOR Loan during such
Interest Period, or (iii) that reasonable means do not exist for ascertaining
the LIBOR, the Bank shall, as soon as practicable thereafter, give written or
-34-
telex notice of such determination to the Borrower. In the event of any such
determination, until the circumstances giving rise to such notice no longer
exist, (i) no LIBOR Loans will be made hereunder (ii) each outstanding LIBOR
Loan shall be converted into a Fluctuating Rate Loan on the last day of the then
current Interest Period applicable thereto and (iii) unless the Borrower
notifies the Bank at least two Business Days prior to the date of any proposed
borrowing of a LIBOR Loan for which a Notice of Borrowing has previously been
given that it elects not to borrow on such date, such Loan shall instead be made
as a Fluctuating Rate Loan.
Promptly upon becoming aware that the circumstances giving rise to such
notice no longer exist, the Bank shall use its best efforts to notify the
Borrower that its obligation to make LIBOR Loans and convert Loans into LIBOR
Loans has been reinstated, but its failure to do so shall impose no liability on
the Bank. Each determination by the Bank hereunder shall be conclusive absent
manifest error.
2.16 Change in Legality.
(a) Notwithstanding anything to the contrary herein contained, if any
change in any law or regulation or in the interpretation thereof by any
Governmental Authority charged with the administration or interpretation thereof
shall make it unlawful for the Bank to make or maintain any LIBOR Loan, then, by
written notice to the Borrower, the Bank may:
(i) declare that LIBOR Loans will not thereafter be made by
the Bank hereunder, whereupon the Borrower shall be prohibited from
requesting LIBOR Loans from the Bank hereunder unless such
declaration is subsequently withdrawn; and
(ii) require that all outstanding LIBOR Loans made by it be
converted to Fluctuating Rate Loans, in which event (x) all such
LIBOR Loans shall be automatically converted to Fluctuating Rate
Loans as of the effective date of such notice as provided in
paragraph (b) below and (y) all payments and prepayments of
principal which would otherwise have been applied to repay the
converted LIBOR Loans shall instead be applied to repay the
Fluctuating Rate Loans resulting from the conversion of such LIBOR
Loans.
(b) For purposes of this Section, a notice to the Borrower by the Bank
pursuant to paragraph (a) above shall be effective with respect to each LIBOR
Loan, if lawful, on the last day of the then current Interest Period for such
LIBOR Loan; in all other cases, such notice shall be effective on the day of
receipt by the Borrower and (ii) all references to the "Bank" shall be deemed to
include any participant in any Commitments and/or the Loans.
Promptly upon becoming aware that the circumstances giving rise to such notice
no longer exist, the Bank shall use its best efforts to notify the borrower that
its obligation to make LIBOR Loans and convert Loans into LIBOR Loans has been
reinstated, but its failure to do so shall impose no liability on the Bank.
2.17 Reserves. Anything to the contrary in Section 2.1 notwithstanding,
the Bank shall have the right to establish reserves in such amounts, and with
respect to such matters, as the Bank in its reasonable discretion shall deem
necessary or appropriate, against the Borrowing Base, including reserves with
respect to (i) sums that the Borrower is required to pay (such as taxes,
assessments, insurance premiums, or, in the case of leased assets, rents or
other amounts payable under such leases) and have failed to pay under any
Section of this Agreement or any other Loan Document, and (ii) amounts owing by
the Borrower or any of its Subsidiaries to any Person to the extent secured by a
Lien on, or trust over, any of the Collateral, which Lien or trust, in the sole
discretion of the Bank likely would have a priority superior to the Bank's Liens
-35-
(such as Liens or trusts in favor of landlords, warehousemen, carriers,
mechanics, materialmen, laborers, or suppliers, or Liens or trusts for ad
valorem, excise, sales, or other taxes where given priority under applicable
law) in and to such item of the Collateral.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES.
In order to induce the Bank to enter into this Agreement and to make
the financial accommodations herein provided for, the Borrower hereby covenants,
represents and warrants to the Bank that:
3.1 Financial Condition.
(a) The consolidated balance sheet of the Borrower and its Subsidiaries
as of December 31, 2006, and the related consolidated statements of operations
and retained earnings and cash flows for the fiscal year ended on such date,
certified by Amper, Politziner & Xxxxxx, P.C. , copies of which certified
statements have heretofore been furnished to the Bank, are complete and correct
and present fairly the financial condition of the Borrower and each of its
Subsidiaries as at such date, and the results of its operations and changes in
financial position for the fiscal year then ended. Such certified financial
statements, including schedules and notes thereto, have been prepared in
accordance with GAAP.
(b) The unaudited consolidated balance sheet of the Borrower and its
Subsidiaries as of March 31, 2007, and the related consolidated statements of
operations and retained earnings and cash flows for the fiscal quarter ended on
each such date, copies of which certified statements have heretofore been
furnished to the Bank, are complete and correct and present fairly the financial
condition of the Borrower and its Subsidiaries as at such date, and the results
of its operations and changes in financial position for such fiscal quarter then
ended. Such certified financial statements, including schedules and notes
thereto, have been prepared in accordance with GAAP.
(c) Schedule 3.1 sets forth a true and complete list of all
Indebtedness (including liabilities for taxes) of the Borrower and its
Subsidiaries as of the Effective Date (after giving effect to the Transactions),
in each case (other than the Obligations (other than Indebtedness under Swap
Contracts)) showing the aggregate principal amount thereof and the name of each
respective borrower and any other entity that guaranteed such Indebtedness.
(d) Since May 31, 2007, there has been no event or circumstance, either
individually or in the aggregate, that has had or could reasonably be expected
to have a Material Adverse Effect.
3.2 Corporate Existence; Compliance with Law. The Borrower, each
Guarantor and each of their Subsidiaries (a) is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation or
organization, (b) has the requisite power and authority and the legal right to
own and operate its property and to conduct the business in which it is
currently engaged, (c) is duly qualified as a foreign corporation and in good
standing under the laws of each jurisdiction where its ownership or operation of
property or the conduct of its business require such qualification, and (d) is
in compliance with all Requirements of Law; except to the extent that the
failure to so qualify as a foreign corporation as required by clause (c) of this
Section or to comply with all Requirements of Law as required by clause (d) of
this Section could not, in the aggregate, have a Material Adverse Effect.
3.3 Corporate Power; Authorization; Enforceable Obligations. The
Borrower has the corporate power and authority and the legal right to make,
execute, deliver and perform its obligations under the Loan Documents to which
it is a party and to borrow hereunder and has taken all necessary corporate
action to authorize the borrowings on the terms and conditions of the Loan
Documents to which it is a party and to authorize the execution, delivery and
performance of the Loan Documents to which it is a party. No consent or
-36-
authorization of, filing with, or other act by or in respect of any other Person
(including stockholders and creditors of the Borrower) or any Governmental
Authority, is required in connection with the borrowings hereunder or with the
execution, delivery, performance, validity or enforceability of any of the Loan
Documents to which the Borrower is a party or the consummation of any of the
Transactions. The Loan Documents to which the Borrower is a party will be duly
executed and delivered on behalf of the Borrower and such Loan Documents, when
executed and delivered, will each constitute a legal, valid and binding
obligation of the Borrower enforceable against the Borrower in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and equitable principles of general
applicability, regardless of whether enforcement is sought in an action at law
or a proceeding in equity.
3.4 Power, Authorization, Enforceable Obligations of Guarantors. Each
Guarantor has the requisite power and authority and the legal right to make,
deliver and perform its obligations under the Loan Documents to which it is a
party and the transactions contemplated thereby and has taken all necessary
action to authorize the execution, delivery and performance of the Loan
Documents to which it is a party. No consent or authorization of, filing with,
or other act by or in respect of any other Person (including stockholders and
creditors of the Guarantors) or any Governmental Authority is required in
connection with the execution, delivery, performance, validity or enforceability
of any of the Loan Documents or the consummation of the Transactions. Each of
the Loan Documents to which a Guarantor is party have been duly executed and
delivered by the respective parties thereto, and each such Loan Document
constitutes a legal, valid and binding obligation of the respective Guarantor
enforceable against such Guarantor in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditor's rights generally and equitable principles of general applicability,
regardless of whether enforcement is sought in an action at law or a proceeding
in equity.
3.5 No Legal Bar. The execution, delivery and performance of the Loan
Documents to which the Borrower is a party and the borrowings hereunder and the
use of the proceeds thereof by the Borrower, the execution, delivery and
performance by each Guarantor of the Loan Documents to which it is a party, and
the consummation of the Transactions, in each case do not and will not (a)
violate any Requirement of Law; (b) conflict with or result in any breach or
contravention of, or require any payment to be made under (i) any Contractual
Obligation to which such Person is a party or affecting such Person or the
properties or revenues of such Person or any of its Subsidiaries or (ii) any
order, injunction, writ or decree of any Governmental Authority or any arbitral
award to which such Person or its property is subject; (c) will not result in,
or require, the creation or imposition of any Lien on any of its properties or
revenues pursuant to any Requirement of Law, Contractual Obligation, or any
order, injunction, writ or decree of any Governmental Authority or any arbitral
award to which such Person or its property is subject, except those Liens in
favor of the Bank permitted hereunder; or (d) the terms of any of such Person's
Organizational Documents.
3.6 No Material Litigation. No litigation, investigation or proceeding
of or before any arbitrator or Governmental Authority is pending by or against
any Specified Person or against any of their properties or revenues (a) with
respect to any of the Loan Documents or any of the Transactions, or (b) which if
adversely determined, would have a Material Adverse Effect.
3.7 No Default. No Specified Person is in default under or with respect
to any Contractual Obligation in any respect which could be materially adverse
to the business, operations, property or financial or other condition of the
Borrower or any of its Subsidiaries or of the Guarantors, other than the VCA
Lease Defaults, or which could materially and adversely affect the ability of
(i) the Borrower to perform its obligations under any Loan Document to which it
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is a party, or (ii) the Guarantors to perform their respective obligations under
any Loan Document to which it is a party. No Default or Event of Default has
occurred and is continuing.
3.8 No Burdensome Restrictions. No Contractual Obligation of any
Specified Person and no Requirement of Law materially adversely affects, or
insofar as the Borrower may reasonably foresee may so affect, the business,
operations, property or financial or other condition of any such Specified
Person.
3.9 [Intentionally Omitted].
3.10 Federal Regulations. The Borrower is not engaged nor will it
engage, principally or as one of its important activities, in the business of
extending credit for the purpose of "purchasing" or "carrying" any "margin
stock" within the respective meanings of each of the quoted terms under
Regulation U of the Board of Governors of the Federal Reserve System as now and
from time to time hereafter in effect. No part of the proceeds of any Loans
hereunder will be used for "purchasing" or "carrying" "margin stock" as so
defined or for any purpose which violates, or which would be inconsistent with,
the provisions of the Regulations of such Board of Governors.
3.11 Environmental Matters.
(a) None of the Real Property contains, or to the best knowledge of the
Borrower has previously contained, (i) any hazardous or toxic waste or
substances in amounts or concentrations which (A) constitute or constituted a
violation of or (B) could reasonably be expected to give rise to liability under
any applicable environmental law, except in either case insofar as such
violation or liability could not reasonably be expected to have a material
adverse effect on the business, operations or financial condition of the
Borrower and its Subsidiaries or (ii) any underground storage tanks, except such
as have been removed or remediated in accordance with all applicable
environmental laws.
(b) The Real Property is in compliance in all material respects with
all applicable federal, state and local environmental standards and requirements
affecting such Real Property, and there are no environmental conditions of which
Borrower has knowledge which could interfere in any material respects with the
continued use of the Real Property.
(c) Neither the Borrower nor any of its Subsidiaries nor any Guarantor
has received any notices of violations or advisory action by regulatory agencies
regarding environmental control matters or environmental permit compliance.
(d) Hazardous waste has not been transferred from any of the Real
Property to any other locations except in compliance in all material respects
with all applicable environmental laws, regulations or permit requirements.
(e) With respect to the Real Property, there are no proceedings,
governmental administrative actions or judicial proceedings pending or, to the
best knowledge of the Borrower, contemplated under any federal, state or local
law regulating the discharge of hazardous or toxic materials or substances into
the environment, to which the Borrower or any of its Subsidiaries is named as a
party.
3.12 Solvency. As of each date of a borrowing of a Loan hereunder,
immediately prior to (in the case of the initial borrowing hereunder) and
immediately following the consummation of the Transactions and/or the extensions
of credit to occur on such borrowing date, the Borrower (on a consolidated basis
with its Subsidiaries) is and will be Solvent.
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3.13 Labor Matters. There are no collective bargaining agreements or
Multiemployer Plans covering the employees of the Borrower or any of its
Subsidiaries as of the Effective Date and neither the Borrower nor any
Subsidiary of the Borrower has suffered any strikes, walkouts, work stoppages or
other material labor difficulty within the last five years.
3.14 Taxes. The Borrower and its Subsidiaries have filed all Federal,
state and other material tax returns and reports required to be filed, and have
paid all Federal, state and other material taxes, assessments, fees and other
governmental charges levied or imposed upon them or their properties, income or
assets otherwise due and payable, except those which are being contested in good
faith by appropriate proceedings diligently conducted and for which adequate
reserves have been provided in accordance with GAAP. There is no proposed tax
assessment against the Borrower or any Subsidiary that would, if made, have a
Material Adverse Effect. Neither any Loan Party nor any Subsidiary thereof is
party to any tax sharing agreement.
3.15 Investment Company Act. None of the Borrower, any Person
Controlling the Borrower, or any Subsidiary of the Borrower is or is required to
be registered as an "investment company" under the Investment Company Act of
1940, as amended.
3.16 VCA Acquisition. Upon the funding of the Transactions with the
proceeds of the initial Credit Extension, the VCA Acquisition shall have been
consummated in accordance with the VCA Acquisition Agreement and with applicable
Requirements of Law.
3.17 Ownership of Property; Liens.
(a) The Borrower and each of its Subsidiaries has good record and
marketable title in fee simple to, or valid leasehold interests in, all real
property necessary or used in the ordinary conduct of its business, except for
such defects in title as could not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
(b) Schedule 3.17 sets forth a complete and accurate list of all Liens
on the property or assets of the Borrower and each of its Subsidiaries, showing
as of the date hereof the lienholder thereof, the principal amount of the
obligations secured thereby and the property or assets of the Borrower or such
Subsidiary subject thereto. The property of the Borrower and each of its
Subsidiaries is subject to no Liens, other than Permitted Liens.
3.18 Insurance. The properties of the Borrower and its Subsidiaries are insured
with financially sound and reputable insurance companies not Affiliates of the
Borrower, in such amounts (after giving effect to any self-insurance compatible
with the following standards), with such deductibles and covering such risks as
are customarily carried by companies engaged in similar businesses and owning
similar properties in localities where the Borrower or the applicable Subsidiary
operates.
3.19 Disclosure. The Borrower has disclosed to the Bank all agreements,
instruments and corporate or other restrictions to which it or any of its
Subsidiaries or any other Loan Party is subject, and all other matters known to
it, that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect. No report, financial statement, certificate
or other information furnished (whether in writing or orally) by or on behalf of
any Loan Party to the Bank in connection with the transactions contemplated
hereby and the negotiation of this Agreement or delivered hereunder or under any
other Loan Document (in each case as modified or supplemented by other
information so furnished) contains any material misstatement of fact or omits to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided that,
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with respect to projected financial information, the Borrower represents only
that such information was prepared in good faith based upon assumptions believed
to be reasonable at the time.
3.20 Embargoed Persons Act. After giving effect to any of the
transactions contemplated herein, (i) none of the funds or other assets of any
Loan Party, any Affiliate of any Loan Party or the holder of any Capital Stock
in any Loan Party or in any such Affiliate constitute property of, or are
beneficially owned, directly or indirectly, by any Person (an "Embargoed
Person") subject to trade restrictions under United States law, including the
International Emergency Economic Powers Act, 50 U.S.C. xx.xx. 1701 et seq., The
Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., and any Executive Orders
or regulations promulgated thereunder, with the result that any investment in
any Loan Party, in any Affiliate of any Loan Party or in any holder of any
Equity Interest in any Loan Party or in any such Affiliate (whether made or held
directly or indirectly) is prohibited by law, or that any portion of the Loan is
or would be in violation of law; (ii) no Embargoed Person has any interest of
any nature whatsoever (whether direct or indirect) in any Loan Party, in any
Affiliate of any Loan Party or in any holder of any Capital Stock in any Loan
Party or in any such Affiliate, with the result that any investment in any Loan
Party, in any Affiliate of any Loan Party or in any holder of any Capital Stock
in any Loan Party or in any such Affiliate (whether made or held directly or
indirectly) is prohibited by law, or that any portion of the Loan is or would be
in violation of law; and (iii) none of the assets of any Loan Party, of any
Affiliate of any Loan Party or of any holder of any Capital Stock in any Loan
Party or in any such Affiliate has been derived from any unlawful activity, with
the result that an investment in any of them (whether made or held directly or
indirectly) is prohibited by law, or that any portion of the Loans is or would
be in violation of law.
3.21 Accuracy of Borrowing Base. At the time any Borrowing Base
Certificate is delivered pursuant to this Agreement, each Account included in
the calculation of the Borrowing Base is an Eligible Accounts Receivable.
3.22 Schedules; Perfection Certificate. All of the information which is
required to be scheduled to this Agreement is correct and accurate in all
respects. All of the information set forth in each Perfection Certificate is
correct and accurate in all respects.
3.23 Subsidiaries. Schedule 3.23 sets forth a list of (a) all the
Subsidiaries
of the Borrower and their respective jurisdictions of organization as of the
Effective Date, (b) the number of each class of its Capital Stock authorized,
and the number outstanding, on the Effective Date, and (c) the holder or holders
of such Capital Stock. All Capital Stock of each Subsidiary of the Borrower are
duly and validly issued and are fully paid and non-assessable.
3.24 ERISA Compliance.
(a) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other Federal or state laws,
statutes, rules and regulations. Each Plan that is intended to qualify under
Section 401(a) of the Code has received a favorable determination letter from
the IRS or an application for such a letter is currently being processed by the
IRS with respect thereto and, to the best knowledge of the Borrower, nothing has
occurred which would prevent, or cause the loss of, such qualification. The
Borrower and each ERISA Affiliate have made all required contributions to each
Plan subject to Section 412 of the Code, and no application for a funding waiver
or an extension of any amortization period pursuant to Section 412 of the Code
has been made with respect to any Plan.
(b) There are no pending or, to the best knowledge of the Borrower,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan that could reasonably be expected to have a Material
Adverse Effect. There has been no prohibited transaction or violation of the
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fiduciary responsibility rules with respect to any Plan that has resulted or
could reasonably be expected to result in a Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected to occur;
(ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither the
Borrower nor any ERISA Affiliate has incurred, or reasonably expects to incur,
any liability under Title IV of ERISA with respect to any Pension Plan (other
than premiums due and not delinquent under Section 4007 of ERISA); (iv) neither
the Borrower nor any ERISA Affiliate has incurred, or reasonably expects to
incur, any liability (and no event has occurred which, with the giving of notice
under Section 4219 of ERISA, would result in such liability) under Section 4201
or 4243 of ERISA with respect to a Multiemployer Plan; and (v) neither the
Borrower nor any ERISA Affiliate has engaged in a transaction that could be
subject to Section 4069 or 4212(c) of ERISA.
3.25 Existing Management Agreements. Schedule 3.25 sets forth a true
and accurate list of all Management Agreements to which the Borrower or any of
its Subsidiaries is a party as of the Effective Date (as each may be amended,
amended and restated, supplemented or otherwise modified from time to time
hereafter, the "Existing Management Agreement"). As of the Effective Date, each
Existing Management Agreement is in full force and effect and none of the
parties thereto is in breach of or in default under such Existing Management
Agreement.
3.26 Patriot Act. Each of the Loan Parties, each Affiliate or any of
them and each holder of an Equity Interest in any Company or any such Affiliate,
is: (i) not a "blocked" person listed in the Annex to Executive Order Nos.
12947, 13099 and 13224 and all modifications thereto or thereof (the "Blocked
Person Annex"); (ii) in full compliance with the requirements of the USA Patriot
Xxx 0000, 107 Public Law 56 (October 26, 2001) and in other statutes and all
orders, rules and regulations of the United States government and its various
executive departments, agencies and offices, related to the subject matter of
the Patriot Act, and all other requirements contained in the rules and
regulations of the Office of Foreign Assets Control, Department of the Treasury
("OFAC"); (iii) operated under policies, procedures and practices, if any, that
are in compliance with the Patriot Act and available to the Bank for the Bank's
review and inspection during normal business hours and upon reasonable prior
notice; (iv) not in receipt of any notice from the Secretary of State or the
Attorney General of the United States or any other department, agency or office
of the United States claiming a violation or possible violation or possible
violation of the Patriot Act; (v) not listed as a Specially Designated Terrorist
(as defined in the Patriot Act) or as a "blocked" person on any lists maintained
by the OFAC pursuant to the Patriot Act or any other list of terrorists or
terrorist organizations maintained pursuant to any of the rules and regulations
of the OFAC issued pursuant to the Patriot Act or on any other list of
terrorists or terrorist organizations maintained pursuant to the Patriot Act;
(vi) not a Person who has been determined by competent authority to be subject
to any of the prohibitions contained in the Patriot Act; and (vii) not owned or
controlled by or now acting and or will in the future act for or on behalf of
any Person named in the Blocked Person Annex or any other list promulgated under
the Patriot Act or any other Person who has been determined to be subject to the
prohibitions contained in the Patriot Act.
ARTICLE 4. CONDITIONS PRECEDENT.
4.1 Conditions to Effectiveness of Second Amended and Restated Loan
Agreement. The obligation of the Bank to make the initial Credit Extension to
the Borrower hereunder is subject to the satisfaction of the following
conditions precedent:
(a) Agreement and Notes. The Bank shall have received this Agreement,
the Revolving Credit Note and the New Term Note duly executed and delivered by
the Borrower.
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(b) Other Loan Documents. The Bank shall have received the following:
(i) the Amended and Restated Borrower Pledge Agreement, dated
as of the Effective Date, by the Borrower in favor of the Bank,
substantially in the form of Exhibit E attached hereto (as amended,
amended and restated, supplemented or otherwise modified from time
to time, the "Borrower Pledge Agreement").
(ii) the Acquisition Sub Pledge Agreement, dated as of the
Effective Date, by Acquisition Sub in favor of the Bank,
substantially in the form of Exhibit F attached hereto (as amended,
amended and restated, supplemented or otherwise modified from time
to time, the "Acquisition Sub Pledge Agreement").
(iii) the VCA Pledge Agreement, dated as of the Effective
Date, by VCA in favor of the Bank, substantially in the form of
Exhibit G attached hereto (as amended, amended and restated,
supplemented or otherwise modified from time to time, the "VCA
Pledge Agreement").
(iv) the Amended and Restated Continuing General Security
Agreement, dated as of the Effective Date, by the Borrower in favor
of the Bank, substantially in the form of Exhibit H attached hereto
(as amended, amended and restated, supplemented or otherwise
modified from time to time, the "Borrower Security Agreement").
(v) the Amended and Restated Continuing General Security
Agreement, dated as of the Effective Date, by RPI in favor of the
Bank, substantially in the form of Exhibit I attached hereto (as
amended, amended and restated, supplemented or otherwise modified
from time to time, the "RPI Security Agreement").
(vi) the Continuing General Security Agreement, dated as of
the Effective Date, by Acquisition Sub in favor of the Bank,
substantially in the form of Exhibit J attached hereto (as amended,
amended and restated, supplemented or otherwise modified from time
to time, the "Acquisition Sub Security Agreement").
(vii) the Continuing General Security Agreement, dated as of
the Effective Date, by VCA in favor of the Bank, substantially in
the form of Exhibit K attached hereto (as amended, amended and
restated, supplemented or otherwise modified from time to time, the
"VCA Security Agreement").
(viii) the Continuing General Security Agreement, dated as of
the Effective Date, by FPI in favor of the Bank, substantially in
the form of Exhibit L attached hereto (as amended, amended and
restated, supplemented or otherwise modified from time to time, the
"FPI Security Agreement").
(ix) the Continuing General Security Agreement, dated as of
the Effective Date, by MPI in favor of the Bank, substantially in
the form of Exhibit M attached hereto (as amended, amended and
restated, supplemented or otherwise modified from time to time, the
"MPI Security Agreement").
(x) the Amended and Restated Guarantee, dated as of the
Effective Date by RPI in favor of the Bank, substantially in the
form of Exhibit N attached hereto (as amended, amended and
restated, supplemented or otherwise modified from time to time, the
"RPI Guaranty Agreement").
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(xi) the Guarantee, dated as of the Effective Date, by
Acquisition Sub in favor of the Bank, substantially in the form of
Exhibit O attached hereto (as amended, amended and restated,
supplemented or otherwise modified from time to time, the
"Acquisition Sub Guaranty Agreement").
(xii) the Guarantee, dated as of the Effective Date, by VCA in
favor of the Bank, substantially in the form of Exhibit P attached
hereto (as amended, amended and restated, supplemented or otherwise
modified from time to time, the "VCA Guaranty Agreement").
(xiii) the Guarantee, dated as of the Effective Date, by FPI
in favor of the Bank, substantially in the form of Exhibit Q
attached hereto (as amended, amended and restated, supplemented or
otherwise modified from time to time, the "FPI Guaranty
Agreement").
(xiv) the Guarantee, dated as of the Effective Date, by MPI in
favor of the Bank, substantially in the form of Exhibit R attached
hereto (as amended, amended and restated, supplemented or otherwise
modified from time to time, the "MPI Guaranty Agreement").
(xv) the Trademark Security Agreement, dated as of the
Effective Date, by the Borrower in favor of the Bank, substantially
in the form of Exhibit S attached hereto (as amended, amended and
restated, supplemented or otherwise modified from time to time, the
"Borrower Trademark Agreement").
(xvi) the Trademark Security Agreement, dated as of the
Effective Date, by VCA in favor of the Bank, substantially in the
form of Exhibit T attached hereto (as amended, amended and
restated, supplemented or otherwise modified from time to time, the
"VCA Trademark Agreement").
(xvii) the Copyright Security Agreement, dated as of the
Effective Date, by the Borrower in favor of the Bank, substantially
in the form of Exhibit U attached hereto (as amended, amended and
restated, supplemented or otherwise modified from time to time, the
"Borrower Copyright Agreement").
(xviii) the Initial Perfection Certificate, duly executed and
delivered by the parties thereto.
(c) Notice of Borrowing. The Bank shall have received a notice of
borrowing for the borrowing of the New Term Loan and any Revolving Credit Loans,
in accordance with Section 2.8 and Section 2.3, respectively.
(d) Borrowing Base Certificate. The Bank shall have received and
satisfactorily reviewed a Borrowing Base Certificate as set forth in Section
5.2(c) if any Revolving Credit Loans are to be borrowed on the Effective Date.
(e) Opinions. The following opinions, each of which shall be reasonably
satisfactory to the Bank in form and substance and dated the date of the initial
extension of credit hereunder:
(i) an opinion of Xxxxxx Xxxxxxx, special counsel to the
Borrower and the Guarantors; and
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(ii) an opinion of Xxxxxx X. Xxxxx, Vice President and General
Counsel, as in-house counsel to the Borrower and the Guarantors.
(f) Certificates and Resolutions. The Bank shall received the
following:
(i) a certificate of a Responsible Officer of each Loan Party
dated the Effective Date, certifying as to the following: (A) that
attached thereto is a true and complete copy of each Organizational
Document of such Loan Party certified (to the extent applicable) as
of a recent date by the Secretary of State of the state of its
organization, incorporation or formation, as the case may be; (B)
that attached thereto is a true and complete copy of resolutions
duly adopted by the board of directors (or similar governing body)
of such Loan Party authorizing the execution, delivery and
performance of the Loan Documents to which such Person is a party
and, in the case of Borrower, the borrowings hereunder, and that
such resolutions have not been modified, rescinded or amended and
are in full force and effect; and (C) as to the incumbency and
specimen signature of each officer executing any Loan Document or
any other document delivered in connection herewith on behalf of
such Loan Party (together with a certificate of another officer as
to the incumbency and specimen signature of the secretary or
assistant secretary executing the certificate in this clause (i));
and
(ii) a certificate as to the good standing of each Loan Party
as of
a recent date, from such Secretary of State (or other
applicable Governmental Authority).
(g) Personal Property Requirements. The Bank shall have received:
(A) all certificates, agreements or instruments
representing or evidencing the Collateral constituting Capital
Stock accompanied by instruments of transfer and stock powers
undated and endorsed in blank;
(B) all other certificates, agreements, including control
agreements, or instruments necessary to perfect the Bank's
security interest in all Accounts, chattel paper, all
instruments, all deposit accounts and all investment property
of each Loan Party (to the extent required by the applicable
Security Agreements);
(C) UCC financing statements in appropriate form for
filing under the UCC, filings with patent, trademark and
copyright offices and such other documents under applicable
law in each jurisdiction as may be necessary or appropriate
or, in the opinion of the Bank, desirable to perfect the Liens
created, or purported to be created, by the Security
Agreements; and
(D) certified copies of Uniform Commercial Code, patent,
trademark and copyright offices, tax and judgment lien
searches, bankruptcy and pending lawsuit searches or
equivalent reports or searches, each of a recent date listing
all effective financing statements, lien notices or comparable
documents that name any Loan Party as debtor and that are
filed in those state and county jurisdictions in which any
property of any Loan Party is located and the state and county
jurisdictions in which any Loan Party is organized and such
other searches that the Bank deems necessary or appropriate,
none of which encumbers the Collateral covered or intended to
be covered by the Security Agreements (other than Permitted
Liens).
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(h) Financial Statements and Projections. The Bank shall have received
the following, together with a certificate of a Responsible Officer of the
Borrower (and the Bank shall be satisfied with the form and substance thereof
(in its sole discretion)):
(i) the financial statements identified in Section 3.1;
(ii) the audited consolidated balance sheet of VCA and its
Subsidiaries (before giving effect to the VCA Acquisition) for the
fiscal year ended December 31, 2006, and the related consolidated
statements of income or operations, shareholders' equity and cash
flows for such fiscal year of VCA and its Subsidiaries (before
giving effect to the VCA Acquisition), including the notes thereto;
and
(iii) projected consolidated financial statements of Borrower
and its Subsidiaries (after giving effect to the VCA Acquisition)
certified by the chief financial officer or the chief operating
officer of Borrower for the fiscal years 2007 through 2009 (the
"Projections"), which Projections shall reflect the forecasted
consolidated financial conditions and income and expenses of
Borrower and its Subsidiaries both before and after giving effect
to the Transactions and the related financing thereof and the other
transactions contemplated hereby.
(i) Closing Certificate. The Bank shall have received a certificate of
a Responsible Officer of the Borrower dated the Effective Date, certifying as to
the following:
(i) to the effect set forth in Sections 4.2(a) and 4.2(b);
(ii) to the effect that all conditions precedent to the making
of any Credit Extension to be effected on the Effective Date have
been satisfied;
(iii) Consolidated EBITDA as of December 31, 2006 (determined
on a Pro Forma Basis for the four fiscal quarters ending on such
date) is not less than $12.4 million (including in such certificate
a computation of such Consolidated EBITDA, including supporting
detail of such computation);
(iv) the Consolidated Leverage Ratio as of the Effective Date
(calculated on a Pro Forma Basis to give effect to the
Transactions) is equal to or less than 2.26 to 1.0 (including in
such certificate a computation of such Consolidated Leverage Ratio,
including supporting detail of such computation);
(v) all Existing Management Agreements, together with all
amendments thereto and such agreements are in full force and
effect; and
(vi) that attached to such certificate are true and correct
copies of the VCA Acquisition Agreement, together with all
amendments thereto and such agreement is in full force and effect
on the Effective Date.
(j) Consents. All governmental and third-party consents and approvals
necessary in connection with each aspect of the Transactions and the other
transactions contemplated by the Loan Documents shall have been obtained
(without the imposition of any conditions that are not acceptable to the Bank)
and shall remain in effect; all applicable waiting periods shall have expired or
been terminated or waived without any adverse action being taken by any
authority having jurisdiction; and no law or regulation shall be applicable in
the judgment of the Bank that restrains, prevents or imposes
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material adverse conditions on the Borrower or any of its Subsidiaries
(after giving effect to the VCA Acquisition) or upon any aspect of the
Transactions or any other transactions contemplated by the Loan Documents. If
requested by the Bank, the Bank shall have received such consents and approvals
referred to in the immediately preceding sentence.
(k) Compliance. The intended use of the proceeds of the Loans shall be
in full compliance with all applicable laws, including, without limitation,
Regulation U of the FRB.
(l) Litigation. There shall be no litigation, public or private, or
administrative proceedings, governmental investigation or other legal or
regulatory developments, actual or threatened, that, singly or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect, or the
ability of the parties to consummate the financings contemplated hereby or the
other Transactions.
(m) No Material Adverse Change or Effect.
(i) There shall not have occurred a material adverse change
since May 31, 2007 in the business, assets, liabilities (actual or
contingent), operations, condition (financial or otherwise) or
prospects of the Borrower or any of its Subsidiaries (before giving
effect to the VCA Acquisition) taken as a whole or in the facts and
information regarding such Persons as represented to the date
hereof.
(ii) There shall not have occurred a material adverse change
since May 31, 2007 in the business, assets, liabilities (actual or
contingent), operations, condition (financial or otherwise) or
prospects of VCA or any of its Subsidiaries (before giving effect
to the VCA Acquisition) taken as a whole or in the facts and
information regarding such Persons as represented to the date
hereof.
(iii) There has been no change, occurrence or development
since May 31, 2007 that could reasonably be expected to have a
Material Adverse Effect.
(n) Consummation of Transactions.
(i) The Transactions and the consummation thereof shall be in
compliance in all material respects with all Requirements of Law
and all applicable regulatory approvals. After giving effect to the
Transactions, there shall be no conflict with, or default under,
any material contractual obligation of Borrower and its
Subsidiaries (including any such material Contractual Obligations
(A) acquired pursuant to the VCA Acquisition and (B) entered into
pursuant to the Transactions) (except as the Bank shall otherwise
agree).
(ii) The VCA Acquisition shall have been (or shall be
contemporaneously with or immediately following the making of the
initial Loans hereunder) consummated in a manner consistent with
the VCA Acquisition Agreement, unless otherwise consented to by
Bank (such consent not to be unreasonably withheld or delayed). Any
documentation executed and delivered in connection with the VCA
Acquisition Agreement not delivered to Bank on or prior to the date
hereof shall be reasonably satisfactory in form and substance to
the Bank. All conditions precedent to the consummation of the VCA
Acquisition, as set forth in the VCA Acquisition Agreement, shall
have been satisfied in all material respects, and not otherwise
waived in any material respect except, in each case, with the
consent of the Bank (such consent not to be unreasonably withheld
or delayed), to the satisfaction of the Bank.
-46-
(o) Due Diligence.
(i) The Bank shall be satisfied with (A) the corporate and
legal structure and capitalization of the Borrower and its
Subsidiaries (after giving effect to the VCA Acquisition),
including, without limitation, the Organizational Documents of the
Loan Parties and each agreement or instrument relating thereto, and
(B) all Indebtedness of the Borrower and its Subsidiaries (after
giving effect to the VCA Acquisition), including without all
intercompany interestedness, that are to remain outstanding
following the Effective Date.
(ii) The Bank shall have completed a due diligence
investigation of the Borrower and its Subsidiaries (after giving
effect to the VCA Acquisitions) in scope, and with results,
satisfactory to the Bank. All of the information made available to
the Bank prior to the date of the Commitment Letter shall be
complete and correct in all material respects; and no changes or
developments shall have occurred, and no new or additional
information shall have been received or discovered by the Bank
regarding the Borrower and its Subsidiaries (after giving effect to
the VCA Acquisitions) or the Transactions after the date of the
Commitment Letter that (A) either individually or in the aggregate
could reasonably be expected to have a Material Adverse Effect or
(B) purports to adversely affect the credit facilities established
hereunder or any other respect of the Transaction.
(p) Solvency. The Bank shall have received a certificate in a form
reasonably satisfactory to the Bank from the chief financial officer of the
Borrower with respect to the Solvency of the Borrower and its Subsidiaries,
taken as a whole, immediately after giving effect to the consummation of the
Transactions.
(q) Refinancing. The Borrower shall have effected (or will, on the
Effective Date, effect) the repayment in full of all obligations and
indebtedness of VCA and its Subsidiaries in respect of the CapitalSource Credit
Facility, including, without limitation, the termination of all outstanding
commitments in effect under the CapitalSource Credit Facility, on terms and
conditions and pursuant to documentation reasonably satisfactory to the Bank.
All Liens and Guarantees in respect of such obligations shall have been
terminated and released (or will, on the Effective Date, be terminated and
released) and the Bank shall have received (or will, on the Effective Date,
receive) evidence thereof reasonably satisfactory to the Bank and a "pay-off"
letter or letters reasonably satisfactory to the Bank with respect to such
obligations and indebtedness and such Uniform Commercial Code termination
statements, releases and other instruments, in each case in proper form for
recording or filing, as the Bank shall have reasonably requested to release and
terminate of record the Liens securing such obligations and indebtedness (or
arrangements for such release and termination reasonably satisfactory to the
Bank shall have been made). All of the foregoing in this clause shall be
referred to as the "Refinancings".
(r) Fees and Expenses. The Borrower shall have paid to the Bank (a) all
of the Bank's out of pocket costs and expenses, including without limitation
examination fees, search fees, filing fees and legal fees and expenses, and (b)
all fees required to be paid to the Bank on or before the Effective Date shall
have been paid.
(s) Examinations.
-47-
(i) The Bank shall have conducted a field exam of the
Borrower, the Borrower's Subsidiaries, VCA and VCA's Subsidiaries,
and the findings of such field exam shall be satisfactory to the
Bank.
(ii) The Bank shall have conducted an examination of the books
and records of the Network Sites (subject to applicable laws and
regulations relating to patient confidentiality), at the Borrower's
sole expense, by an examiner satisfactory to the Bank and such
examination shall be in form and substance satisfactory to the
Bank.
(iii) The Bank shall have received, in form and substance
reasonably satisfactory to it, all asset appraisals, field audit,
third party MIS reports, reports and audits prepared by the
Borrower or any advisor engaged by the Borrower with respect to the
Borrower and its Subsidiaries (after giving effect to the VCA
Acquisition) and such other reports, audits or certifications as
the Bank may reasonably request.
(t) USA Patriot Act. The Bank shall have received, sufficiently in
advance of the Effective Date, all documentation and other information required
by bank regulatory authorities under applicable "know your customer" and
anti-money laundering rules and regulations, including without limitation, the
Patriot Act, including, without limitation, the information described in Section
10.21.
(u) Additional Matters. All other documents and legal matters in
connection with the Transactions and the other contemplated by the Loan
Documents shall be reasonably satisfactory in form and substance to the Bank and
its counsel.
4.2 Conditions to All Extensions of Credit. The obligation of the Bank
to make any Credit Extension (including the initial Loans) (other than notice
requesting only a conversion of Loans to the other Type, or a continuation of
LIBOR Loans) to be made by it hereunder is subject to the satisfaction of the
following conditions precedent:
(a) Representations and Warranties. Each of the representations and
warranties made by the Borrower herein, made by each Loan Party in each of the
other Loan Documents to which it is a party and made by any Loan Party in any
document or financial or other written statement furnished at any time hereunder
or in connection herewith, shall be correct on and as of the date of such Credit
Extension as if made on and as of such date (except to the extent any such
representation or warranty expressly speaks as of a specific date, in which case
such representation or warranty shall be true and correct as of such date of
such earlier date).
(b) No Default or Event of Default. No Default or Event of Default
shall have occurred and be continuing on the date such Credit Extension is to be
made or after giving effect to such Credit Extension to be made on such date.
(c) Compliance with Borrowing Base. As to Revolving Credit Loans and
Letters of Credit only, after taking into account the Revolving Credit Loan
and/or Letter of Credit to be made, all the Revolving Credit Exposure (giving
immediate effect to the requested Revolving Credit Loan and/or LC Extension as
the case may be), shall not exceed the Borrowing Base.
Each request for a Credit Extension by the Borrower shall constitute a
representation and warranty by the Borrower as of the date of each such Credit
Extension that the conditions in clauses (a), (b), and, in the case of a Credit
Extension for Revolving Credit Loans, (c) of this Section have been satisfied.
-48-
ARTICLE 5. AFFIRMATIVE COVENANTS.
The Borrower hereby agrees that, so long as any Commitment remains in
effect, any Loan, any Note or any Letter of Credit remains outstanding and
unpaid, or any other Obligation shall remain unpaid or unsatisfied, the Borrower
will and will cause each of its Subsidiaries as applicable to:
5.1 Corporate Existence and Qualification.
(a) Preserve and maintain and keep in full force and effect its
existence as a corporation, partnership or limited liability company, as the
case may be, and good standing in the jurisdiction of its incorporation,
organization or formation, as the case may be.
(b) Take the necessary steps to preserve its right to conduct business
in all states in which the nature of its business requires qualification to do
business, except where the failure so to qualify could not reasonably by
expected to have a Material Adverse Effect.
5.2 Financial Information and Compliance Certificates.
(a) Furnish to the Bank:
(i) within 90 days after the end of each fiscal year of the
Borrower, beginning with the fiscal year ending December 31, 2007,
the consolidated and consolidating balance sheets of the Borrower
and its Subsidiaries as at such last day of the fiscal year and
consolidated and consolidating statements of income and retained
earnings and cash flows for such fiscal year all in reasonable
detail and setting forth in comparative form the figures for the
previous fiscal year, and prepared in accordance with GAAP
consistently applied and certified without qualification by a firm
of independent certified public accountants reasonably satisfactory
to the Bank;
(ii) within 45 days after the end of each fiscal quarter of
the Borrower, beginning with the fiscal quarter ending September
30, 2007, the consolidated and consolidating balance sheets of the
Borrower and its Subsidiaries as at such last day of such fiscal
quarter and the consolidated and consolidating statements of income
and retained earnings and cash flows for such fiscal quarter, all
in reasonable detail and setting forth in comparative form the
figures for the comparable quarter for the previous fiscal year,
certified by a Responsible Officer of the Borrower, internally
prepared by the Borrower and satisfactory to the Bank, all prepared
in accordance with GAAP; and
(iii) within 30 days after the close of each fiscal month
consolidated balance sheets, statements of income and retained
earnings and cash flows of the Borrower and its Subsidiaries as of
the last day of and for such month and for the period of the fiscal
year ended as of the close of the particular month, all such
monthly statements to be in reasonable detail, and certified by a
Responsible Officer of the Borrower as having been prepared in
accordance with GAAP (exclusive of footnotes and subject to
year-end adjustments).
(b) Within 45 days after the close of each fiscal quarter, deliver a
certificate of a Responsible Officer of the Borrower evidencing a computation of
compliance with the provisions of and financial covenants contained in Article 6
(each including supporting detail of each applicable calculation) and stating
that in each case except as disclosed in such certificate, the person making
such certificate has no knowledge of any Default or Event of Default.
-49-
(c) Within 30 days after the last day of each month, deliver to the
Bank an accounts receivable agings report accompanied by a Borrowing Base
Certificate indicating a computation of the Borrowing Base and executed by a
Responsible Officer of the Borrower, covering the period ending the last day of
the immediately preceding month.
(d) Within 90 days following the Effective Date, deliver to the Bank an
appraisal performed by an independent third party and any supporting
documentation for the calculation of goodwill associated with the VCA
Acquisition.
(e) Promptly after the same are sent, copies of all financial
statements and reports which the Borrower sends to its stockholders, and
promptly after the same are filed, copies of all financial statements and
reports which the Borrower may make to, or file with, any Governmental
Authority, agency, commission, board or bureau.
(f) Keep its books of account in accordance with good accounting
practices.
(g) The Borrower will at all times and from time to time permit the
Bank by or through any of its officers, agents, employees, attorneys or
accountants to inspect and make extracts from such Borrower's books and records
at each Network Site (subject to applicable laws and regulations relating to
patient confidentiality).
(h) Promptly upon the Bank's request, furnish to the Bank such other
data, books, records, statements, list of property and accounts, budgets,
information, forecasts or reports as to the Borrower and as to each Subsidiary
or any of its properties as the Bank may request from time to time.
5.3 Insurance. Maintain insurance with responsible and reputable
insurance companies or associations in such amounts and covering such risks as
are usually carried by companies engaged in similar businesses and owning
similar properties in the same general areas in which the Borrower or any of its
Subsidiaries operates and naming the Bank as an additional insured or loss payee
(as appropriate) thereon as its interest may appear.
5.4 Preservation of Properties; Compliance with Law. Maintain and
preserve all of its properties which are used or which are useful in the conduct
of its business in good working order and condition, ordinary wear and tear
excepted and comply in all material respects with all Requirements of Law .
5.5 Taxes. Duly pay and discharge all taxes or other claims which might
become a lien upon any of its property except to the extent that any thereof are
being in good faith appropriately contested with adequate reserves provided
therefor.
5.6 Maintain Operating Accounts. Maintain all of its primary operating accounts
with the Bank, unless the Borrower shall have provided evidence reasonably
satisfactory to the Bank that for geographical purposes or in order to comply
with applicable Requirements of Law such accounts are required to be maintained
elsewhere. It is understood and agreed that, with respect to the operating
accounts of VCA and its Subsidiaries, to the extent that any of such accounts
are not maintained with the Bank on or prior to the Effective Date, the Borrower
shall promptly after the Effective Date close such accounts and establish and
maintain primary operating accounts for VCA and (if necessary) its Subsidiaries
with the Bank.
5.7 Notices. Promptly notify the Bank in writing:
-50-
(a) of any matter that has resulted or could reasonably be expected to
result in a Material Adverse Effect;
(b) within five days of any officer of the Borrower obtaining knowledge
of any
Default, if such Default is then continuing, Borrower shall furnish to the Bank
a certificate of the chief financial or accounting officer of the Borrower
setting forth the details thereof and the action which the Borrower is taking or
proposes to take with respect thereto
(c) of any breach or non-performance of, or any default under, a
material Contractual Obligation of any Specified Person;
(d) of any dispute, litigation, investigation, proceeding or suspension
between any Specified Person and any Governmental Authority;
(e) of the commencement of, or any material development in, any
litigation or proceeding affecting any Loan Party or any other Specified Person,
including
pursuant to any applicable Environmental Laws;
(f) of the occurrence of any ERISA Event; and
(g) in the event any Specified Person receives any notice that any such
Specified Person, or any Affiliate of any such Specified Person or any of them),
or any officer or director or holder of any Capital Stock therein, becomes
listed on the Blocked Person Annex or any other list promulgated under the
Patriot Act or is indicted, arraigned, or custodially detained on charges
involving money laundering or predicate crimes to money laundering.
5.8 Indemnity (Environmental Matters). Indemnify the Bank against any
liability, loss, cost, damage, or expense (including, without limitation,
reasonable attorneys' fees) arising from (i) the imposition or recording of a
lien by any local, state, or federal government or governmental agency or
authority pursuant to any Cleanup Laws; (ii) claims of any private parties
regarding violations of Cleanup Laws; and (iii) costs and expenses (including,
without limitation, reasonable attorneys' fees and fees incidental to the
securing of repayment of such costs and expenses) incurred by any Specified
Person or the Bank in connection with compliance by any Specified Person or the
Bank with any Environmental Laws or any statute, regulation or order issued
pursuant to any Cleanup Laws by any local, state or federal government or
governmental agency or authority.
5.9 Visitation and Examination of Books and Records. Permit the Bank or
its representatives and independent contractors to visit and inspect to any of
the Borrower's or its Subsidiaries' or Network Site its properties, to examine
its corporate, financial and operating records, and make copies thereof or
abstracts therefrom, and to discuss its affairs, finances and accounts with its
directors, officers, and independent public accountants (subject to applicable
laws and regulations relating to patient confidentiality), all at the expense of
the Borrower and at such reasonable times during normal business hours and as
often as may be reasonably desired, upon reasonable advance notice to the
Borrower; provided, however, that when an Event of Default exists the Bank (or
any of its respective representatives or independent contractors) may do any of
the foregoing at the expense of the Borrower at any time during normal business
hours and without advance notice
5.10 Material Subsidiaries. Cause each direct and indirect Subsidiary
of the
Borrower to become a Guarantor (unless the Bank has provided written notice to
the Borrower that such Subsidiary is not, in the Bank's sole discretion, a
"material" Subsidiary of the Borrower) and take any action as shall be necessary
to Guarantee the Obligations pursuant to a Guaranty Agreement in form and
-51-
substance reasonably and grant to the Bank a first priority perfected security
interest in all the issued and outstanding Capital Stock and all the personal
property and fixtures of each such Subsidiary, subject to Permitted Liens, and
to execute and deliver such pledge agreement, security agreement, documents,
instrument and other agreements as the Bank shall reasonably request.
5.11 Management Agreements. Cause each Practice Group that enters into
a Management Agreement with the Borrower or a Guarantor to execute and deliver
to the Bank a security agreement, substantially in the form of Exhibit D and
reasonably satisfactory to the Bank, and the Bank shall have received an opinion
of counsel to the Borrower and such Practice Group with respect to such Practice
Group's security agreement ,and such resolutions, certificates and other
instruments, in each case as the Bank shall reasonably request, all of the
foregoing in form and substance reasonably satisfactory to the Bank.
5.12 Use of Proceeds. Use the proceeds of the Credit Extensions in
accordance with Section 2.12 and not in contravention of any law, rule or
statute or of any Loan Document.
5.13 Contractual Obligations. Perform and observe all the terms and
provisions of each material Contractual Obligation to be performed or observed
by it, maintain each such material Contractual Obligation in full force and
effect, enforce each such material Contractual Obligation in accordance with its
terms.
5.14 Further Assurances. Promptly upon request by the Bank, (a) correct
any material defect or error that may be discovered in any Loan Document or in
the execution, acknowledgment, filing or recordation thereof, and (b) do,
execute, acknowledge, deliver, record, re-record, file, re-file, register and
re-register any and all such further acts, deeds, certificates, assurances and
other instruments as the Bank may reasonably require from time to time in order
to (i) carry out more effectively the purposes of the Loan Documents, (ii) to
the fullest extent permitted by applicable law, subject any Loan Party's or any
of its Subsidiaries' properties, assets, rights or interests to the Liens now or
hereafter intended to be covered by any of the Loan Documents, (iii) perfect and
maintain the validity, effectiveness and priority of any of the Loan Documents
and any of the Liens intended to be created thereunder and (iv) assure, convey,
grant, assign, transfer, preserve, protect and confirm more effectively unto the
Bank the rights granted or now or hereafter intended to be granted to the Bank
under any Loan Document or under any other instrument executed in connection
with any Loan Document to which any Loan Party or any of its Subsidiaries is or
is to be a party, and cause each of its Subsidiaries to do so.
5.15 Interest Rate Protection. No later than the 30th day after the
Effective Date, Borrower shall enter into, and for a minimum of three years
thereafter maintain, interest rate Swap Contract with terms and conditions
reasonable acceptable to the Bank that result in at least 50% of the aggregate
principal amount of all funded Indebtedness of the Borrower and its Subsidiaries
(other than Revolving Credit Loans) being effectively subject to a fixed or
maximum interest rate reasonable acceptable to the Bank.
5.16 Post-Closing Requirement. Notwithstanding anything set forth in
Section 4.1 to the contrary, the Borrower shall complete the tasks set forth
below, in each case within the time limits specified below:
(a) Within 90 days following the Effective Date, with respect to each
Existing IntegraMed PA Security Agreement, (i) deliver to the Bank an amendment
and restatement of such Existing IntegraMed PA Security Agreement, in such form
and substance reasonably satisfactory to the Bank, duly executed and delivered
by the Limited Grantor party thereto and (ii) deliver such opinions,
certificates, financing statements and other instruments with respect to such
amendment and restatement and such Limited Grantor that otherwise would have
-52-
been required to be delivered pursuant to Sections 4.1(e), 4.1(f) and 4.1(g) to
be delivered on the Effective Date, and all in form and substance reasonably
satisfactory to the Bank.
(b) Within 90 days following the Effective Date, with respect to each
of Seattle Reproductive Medicine, Inc. and Reproductive Endocrine Associates of
Charlotte, P.C., (i) deliver to the Bank a security agreement substantially in
the form of Exhibit D and reasonably satisfactory to the Bank, and duly executed
and delivered by such Person and (ii) deliver such opinions, certificates,
financing statements and other instruments with respect to such security
agreement and such Person that otherwise would have been required to be
delivered pursuant to Sections 4.1(e), 4.1(f) and 4.1(g) to be delivered on the
Effective Date, and all in form and substance reasonably satisfactory to the
Bank.
(c) Within 60 days following the Effective Date, with respect to each
VCA Initial Practice Group, (i) deliver to the Bank a security agreement
substantially in the form of Exhibit D and reasonably satisfactory to the Bank,
and duly executed and delivered by such VCA Initial Practice Group and (ii)
deliver such opinions, certificates, financing statements and other instruments
with respect to such security agreement and such VCA Initial Practice Group that
otherwise would have been required to be delivered pursuant to Sections 4.1(e),
4.1(f) and 4.1(g) to be delivered on the Effective Date, and all in form and
substance reasonably satisfactory to the Bank.
(d) By no later than October 15, 2007, deliver to the Bank the
financial statements of VCA and its Subsidiaries for fiscal years 2004 and 2005.
(e) Within 90 days following the Effective Date, deliver to the Bank
the appraisals and supporting documentation for the goodwill calculation
associated with the VCA Acquisition, all of which shall be in form and substance
reasonably satisfactory to the Bank.
(f) With 45 days following the Effective Date, deliver evidence
reasonably satisfactory to the Bank that the Lien granted to CapitalSource
Funding LLC as agent under the CapitalSource Credit Facility pursuant to a
Collateral Assignment of Life Insurance Policy, dated as of October 4, 2006 (as
amended) in the key-man life insurance policy obtained by VCA covering the life
of Kush A. Agarwal, has been terminated and released.
ARTICLE 6. FINANCIAL COVENANTS.
The Borrower hereby agrees that, so long as any Commitment remains in
effect, any Loan, any Note or any Letter of Credit remains outstanding and
unpaid, or any other Obligation shall remain unpaid or unsatisfied, the Borrower
will:
(a) Minimum Liquidity: At all times, maintain Unencumbered Liquid
Assets in an aggregate amount of not less than $10.0 million.
(b) Maximum Consolidated Senior Leverage Ratio: Not permit the
Consolidated Senior Leverage Ratio as of the last day of a fiscal quarter of the
Borrower set forth in the table below to exceed the ratio set forth opposite
such fiscal quarter in the table below:
----------------------------------------------------------------------------- -----------------
Fiscal Quarter Ending: Ratio
----------------------------------------------------------------------------- -----------------
September 30, 2007 2.75 to 1.00
----------------------------------------------------------------------------- -----------------
December 31, 2007 2.50 to 1.00
----------------------------------------------------------------------------- -----------------
March 31, 2008 2.50 to 1.00
----------------------------------------------------------------------------- -----------------
June 30, 2008 2.50 to 1.00
----------------------------------------------------------------------------- -----------------
September 30, 2008 2.50 to 1.00
----------------------------------------------------------------------------- -----------------
December 31, 2008 2.25 to 1.00
----------------------------------------------------------------------------- -----------------
March 31, 2009 2.25 to 1.00
----------------------------------------------------------------------------- -----------------
June 30, 2009 2.25 to 1.00
----------------------------------------------------------------------------- -----------------
September 30, 2009 2.25 to 1.00
----------------------------------------------------------------------------- -----------------
December 31, 2009 and each fiscal quarter of the Borrower thereafter 2.00 to 1.00
----------------------------------------------------------------------------- -----------------
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(c) Fixed Charge Coverage Ratio: Not permit the Fixed Charge Coverage
Ratio as of the last day of a fiscal quarter of the Borrower to be less than
1.20 to 1.00.
(d) Minimum Consolidated EBITDA: Maintain a minimum Consolidated EBITDA
as of the last day of a fiscal quarter of the Borrower set forth in the table
below of at least the amount set forth opposite such fiscal quarter in the table
below:
----------------------------------------------------------------------------- ------------------
Fiscal Quarter Ending: Amount
----------------------------------------------------------------------------- ------------------
----------------------------------------------------------------------------- ------------------
December 31, 2007 $9,361,600.00
----------------------------------------------------------------------------- ------------------
----------------------------------------------------------------------------- ------------------
March 31, 2008 $10,097,200.00
----------------------------------------------------------------------------- ------------------
----------------------------------------------------------------------------- ------------------
June 30, 2008 $10,832,800.00
----------------------------------------------------------------------------- ------------------
----------------------------------------------------------------------------- ------------------
September 30, 2008 $11,568,400.00
----------------------------------------------------------------------------- ------------------
----------------------------------------------------------------------------- ------------------
December 31, 2008 $12,304,000.00
----------------------------------------------------------------------------- ------------------
----------------------------------------------------------------------------- ------------------
March 31, 2009 $13,193,000.00
----------------------------------------------------------------------------- ------------------
----------------------------------------------------------------------------- ------------------
June 30, 2009 $14,082,000.00
----------------------------------------------------------------------------- ------------------
----------------------------------------------------------------------------- ------------------
September 30, 2009 $14,971,000.00
----------------------------------------------------------------------------- ------------------
----------------------------------------------------------------------------- ------------------
December 31, 2009 and each fiscal quarter of the Borrower thereafter $15,860,000.00
----------------------------------------------------------------------------- ------------------
(e) Calculation. Solely for purposes of determining or calculating
Unencumbered Liquid Assets, the Consolidated Senior Leverage Ratio, the
Consolidated Leverage Ratio, the Fixed Charge Coverage Ratio and Consolidated
EBITDA, a Limited Grantor that is not a Subsidiary of the Borrower shall be
included in such calculation or determination if and only the extent that the
Borrower and/or VCA consolidates the results of such Limited Grantor in its
financial statements in accordance with GAAP.
ARTICLE 7. NEGATIVE COVENANTS.
The Borrower hereby agrees that, so long as any Commitment remains in
effect, any Loan, any Note or any Letter of Credit remains outstanding and
unpaid, or any other Obligation shall remain unpaid or unsatisfied, the Borrower
not, nor will it permit any of its Subsidiaries to:
7.1 Indebtedness. Incur, create, assume or suffer to exist or otherwise
become liable in respect of any Indebtedness, except that the following shall be
permitted:
(a) Indebtedness under the Loan Documents and under any other
Indebtedness owing to the Bank in its discretion;
-54-
(b) Indebtedness outstanding on the date hereof and listed on Schedule
7.1, which Indebtedness shall not be renewed, extended, refinanced or optionally
prepaid;
(c) Indebtedness in respect of Capitalized Lease Obligations and
Purchase Money Obligations for fixed or capital assets in the ordinary course of
business within the limitations set forth in Section 7.4(i), and extensions,
renewals and replacements of any such Indebtedness that do not increase the
outstanding principal amount thereof; provided, however, that the aggregate
amount of all such Indebtedness permitted pursuant to this Section 7.1(c) shall
not exceed $2.0 million at any one time outstanding;
(d) Indebtedness constituting Guarantees permitted pursuant to Section
7.5;
(e) (A) Indebtedness under interest rate Swap Contracts entered into in
compliance with Section 5.15; and (B) Indebtedness under any other interest rate
Swap Contracts, provided that (1) such interest rate Swap Contract relate to
payment obligations on any Loans made hereunder and the counterparty is with a
party reasonably acceptable to the Bank and the terms shall be reasonably
acceptable to the Bank, and (2) the notional principal amount of such interest
rate Swap Contracts at the time incurred does not exceed the principal amount of
the Indebtedness to which such interest rate Swap Contract relate; and
(f) the Borrower may make the "Earn-Out Payment" (as defined in the VCA
Acquisition Agreement as in effect on the date hereof), if any, pursuant to and
in accordance with the VCA Acquisition Agreement.
7.2 Mergers, Acquisitions and Sales of Assets. Enter into any merger or
consolidation or liquidate, windup or dissolve itself or Dispose of all or any
substantial part of its assets or properties or make any Acquisition or enter
into any Management Agreement, except that the following shall be permitted:
(a) the Borrower may make any Permitted Acquisition;
(b) (A) any Subsidiary of the Borrower may merge or consolidate with or
into any other Subsidiary of the Borrower, provided, that, if any Subsidiary
party to such transaction is a wholly-owned Subsidiary of the Borrower, the
surviving or continuing Person of such transaction is a wholly-owned Subsidiary
of the Borrower; provided, further, that, if any Subsidiary party to such
transaction is a Guarantor, the surviving or continuing Person of such
transaction is a Guarantor; and (B) any wholly-owned Subsidiary of the Borrower
may merge or consolidate with or into the Borrower, provided that the Borrower
is the surviving or continuing Person of such transaction;
(c) the Existing Management Agreements and any other Management
Agreement entered into in connection with a Permitted Acquisition; and
(d) Acquisition Sub may merge with and into VCA in connection with the
VCA Acquisition so long as VCA is the surviving or continuing Person and a
Guarantor.
7.3 Investments. Make or hold any Investments, except that the
following shall be permitted: -----------
(a) Investments held by the Borrower and its Subsidiaries in the form
of Cash Equivalents;
-55-
(b) Investments outstanding on the Effective Date and identified on
Schedule 7.3;
(c) (A) Investments by the Borrower and its Subsidiaries in their
respective Subsidiaries outstanding on the date hereof and identified on
Schedule 7.3, (B) additional Investments by the Borrower and any -------------
Guarantor in any other Guarantor and (C) additional Investments by any
Subsidiary of the Borrower that is not a Guarantor in any other Subsidiary of
the Borrower that is not a Guarantor; provided, however, -------- ------- that,
in the case of clauses (A), (B) and (C) immediately above, any intercompany
loans shall (x) be evidenced by intercompany promissory notes, (y) be pledged by
the Borrower or Subsidiary that is the payee thereunder to the Bank pursuant to
the applicable Security Agreement and (z) be on terms (including subordination
terms) acceptable to the Bank;
(d) acquire and hold accounts receivables owing to any of them arising
out of sales of inventory or the rendering of services if created or acquired in
the ordinary course of business and payable or dischargeable in accordance with
customary terms;
(e) loans or advances to any Limited Grantor; provided, however, that
the aggregate principal amount of all such loans and advances permitted pursuant
to this Section 7.3(c) shall not exceed $1.0 million at any one time
outstanding;
(f) advances made by the Borrower to a Limited Grantor in any calendar
month pursuant to the Management Agreement to which such Limited Grantor is a
party, provided, that (A) the proceeds of such advances are applied to pay
operating expenses incurred by such Limited Grantor in the ordinary course of
business during the immediately preceding month and (B) such advances are repaid
to the Borrower in accordance with the terms of such Management Agreement;
(g) purchases of accounts receivable pursuant to Management Agreements
to which the Borrower or any Guarantor is party; provided that such Management
Agreement exists as of the Effective Date or is entered into in connection with
a Permitted Acquisition permitted pursuant to Section 7.2;
(h) loans or advances to officers, directors and employees in an
aggregate amount at any one time outstanding not to exceed $100,000 for travel,
entertainment, relocation and analogous ordinary business purposes;
(i) Permitted Acquisitions permitted pursuant to Section 7.2;
(j) Guarantees permitted pursuant to Section 7.5;
(k) Investments by the Borrower in Swap Contracts permitted by Section
7.1(e); and
(l) Payroll advances to employees; provided, that (A) such advances are
to be repaid through payroll deduction and (B) the aggregate amount of all such
advances permitted pursuant to this Section 7.3(k) shall not exceed $100,000 at
any one time outstanding.
7.4 Liens. Incur, create, assume or suffer to exist any Lien on any
properties or assets now or hereafter owned by it, except the following shall be
permitted (collectively, the "Permitted Liens"):
(a) Liens in favor of the Bank;
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(b) Liens existing on the date hereof and listed on Schedule 7.4 and
any renewals or extensions thereof, provided that (A) the property covered
thereby is not changed, (B) the amount secured or benefited thereby is not
increased except as contemplated by Section 7.1(b), (C) the direct or any
contingent obligor with respect thereto is not changed, and (D) any renewal or
extension of the obligations secured or benefited thereby is permitted by
Section 7.1(b);
(c) Liens for taxes not yet due or which are being contested in good
faith and by appropriate proceedings diligently conducted, if adequate reserves
with respect thereto are maintained on the books of the applicable Person in
accordance with GAAP;
(d) carriers', warehousemen's, mechanics', materialmen's, repairmen's
or other like Liens arising in the ordinary course of business which are not
overdue for a period of more than 30 days or which are being contested in good
faith and by appropriate proceedings diligently conducted, if adequate reserves
with respect thereto are maintained on the books of the applicable Person;
(e) pledges or deposits in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other social
security legislation, other than any Lien imposed by ERISA;
(f) deposits to secure the performance of bids, trade contracts and
leases (other than Indebtedness), statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature incurred in the
ordinary course of business;
(g) easements, rights-of-way, restrictions and other similar
encumbrances affecting real property which, in the aggregate, are not
substantial in amount, and which do not in any case materially detract from the
value of the property subject thereto or materially interfere with the ordinary
conduct of the business of the applicable Person;
(h) Liens securing judgments for the payment of money not constituting
an Event of Default under Section 8.1(h);
(i) Liens securing Indebtedness permitted under Section 7.1(c);
provided that (A) such Liens do not at any time encumber any property other than
the property financed by such Indebtedness and (B) the Indebtedness secured
thereby does not exceed the cost or fair market value, whichever is lower, of
the property being acquired on the date of acquisition; and
(j) Leases of the properties of any Specified Person, in each case
entered into in the ordinary course of such Specified Person's business so long
as such Leases do not, individually or in the aggregate, (A) interfere in any
material respect with the ordinary conduct of the business of any Specified
Person, or (B) materially impair the use (for its intended purposes) or the
value of the property subject thereto.
7.5 Contingent Liabilities. Assume, endorse, be or become liable for or
Guarantee the obligations of any Person, except that the following shall be
permitted:
(a) the endorsement of negotiable instruments for deposit or collection
in the ordinary course of business; and
(b) the Guaranty Agreements.
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7.6 Restricted Payments. Declare or make, directly or indirectly, any
Restricted Payment, or incur any obligation (contingent or otherwise) to do so,
except that:
(a) the Borrower and each Subsidiary may declare and make dividend
payments or other distributions payable solely in the common stock of such
Person; and
(b) the Borrower may repurchase its common stock so long as (A) no
Default or Event of Default shall have occurred and be continuing at the time of
any such repurchase or would result therefrom, (B) the total consideration paid
by the Borrower for all such purchases in the aggregate does not exceed $1.0
million, (C) the Borrower shall be in compliance, on a Pro Forma Basis after
giving effect to such repurchase, with the covenants set forth in Sections 6(b),
6(c) and 6(d) as of the most recently ended Test Period, as if such repurchase
had occurred on the first day of such relevant Test Period and (D) Borrower has
delivered to the Bank an certificate of a Responsible Officer of the Borrower to
the effect set forth in clauses (A) and (D) above the Borrower is at the time of
such repurchase.
7.7 Sales of Receivables; Sale - Leasebacks. (i) Sell, discount or
otherwise dispose of notes, accounts receivable or other obligations owing to
the Borrower or any of its Subsidiaries, with or without recourse, except for
the purpose of collection in the ordinary course of business; or (B) sell or
transfer any asset or property of any Specified Person pursuant to an
arrangement to, and thereafter rent or lease such asset or property from, the
purchaser thereof.
7.8 Dispositions. Make any Disposition or enter into any agreement to
make any Disposition, except:
(a) Dispositions of obsolete or worn out property, whether now owned or
hereafter acquired, in the ordinary course of business;
(b) Dispositions of inventory in the ordinary course of business;
(c) Dispositions of equipment or real property to the extent that (A)
such property is exchanged for credit against the purchase price of similar
replacement property or (B) the proceeds of such Disposition are reasonably
promptly applied to the purchase price of such replacement property;
(d) Dispositions of property by any Subsidiary to the Borrower or to a
wholly-owned Subsidiary of the Borrower; provided that if the transferor of such
property is a Guarantor, the transferee thereof must either be the Borrower or a
Guarantor;
(e) Dispositions permitted by Section 7.2; (f) Dispositions permitted
by Section 7.7;
(g) Dispositions permitted by Section 7.11;
(h) the Borrower or any of its Subsidiaries may grant to any Limited
Grantor a revocable, non-exclusive and non-assignable license to use service
names, trademark names and/or logos of the Borrower or any of its Subsidiaries
in accordance with the applicable Management Agreements; and
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(i) the Borrower or any of its Subsidiaries may sell to a Limited Grantor
any of the fixed assets utilized directly by a Limited Grantor in the
operation of such Limited Grantor's medical practice or business;
provided, such sale is required pursuant to, and the purchase price of
such assets is determined in accordance with, the applicable Management
Agreement .
7.9 Burdensome Agreements. Enter into or permit to exist any
Contractual Obligation (other than this Agreement or any other Loan Document)
that (a) limits the ability (i) of any Subsidiary to make Restricted Payments to
the Borrower or any Guarantor or to otherwise transfer property to or invest in
the Borrower or any Guarantor, except for any agreement in effect (A) on the
date hereof and set forth on Schedule 7.9 or (B) at the time any Subsidiary
becomes a Subsidiary of the Borrower, so long as such agreement was not entered
into solely in contemplation of such Person becoming a Subsidiary of the
Borrower, (ii) of any Subsidiary to Guarantee the Indebtedness of the Borrower
or (iii) of the Borrower or any Subsidiary to create, incur, assume or suffer to
exist Liens on property of such Person; provided, however, that this clause
(iii) shall not prohibit any negative pledge incurred or provided in favor of
any holder of Indebtedness permitted under Section 7.1(c) solely to the extent
any such negative pledge relates to the property financed by or the subject of
such Indebtedness; or (b) requires the grant of a Lien to secure an obligation
of such Person if a Lien is granted to secure another obligation of such Person.
7.10 Nature of Business. Materially alter the nature of its business
from those business conducted on the date of this Agreement (after giving effect
to the VCA Acquisition).
7.11 Stock of Subsidiaries. Sell or otherwise dispose of any Subsidiary
(except in connection with a merger or consolidation of a Subsidiary into the
Borrower or another Subsidiary to the extent permitted pursuant to Section
7.2(b)) or permit any Subsidiary to issue any additional shares of its Capital
Stock.
7.12 ERISA. (a) Terminate any Plan so as to result in any material
liability to the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA (the "PBGC"), (b) engage in or permit any person
under its control to engage in any "prohibited transaction" (as defined in
Section 406 of ERISA or Section 4975 of the Internal Revenue Code of 1954, as
amended) involving any Plan which would subject a Borrower to any material tax,
penalty or other liability, (c) incur or suffer to exist any material
"accumulated funding deficiency" (as defined in Section 302 of ERISA), whether
or not waived, involving any Plan, or (d) allow or suffer to exist any event or
condition, which presents a material risk of incurring a material liability to
the PBGC by reason of termination of any Plan.
7.13 Accounting Changes; Fiscal Year. Make, or permit any Subsidiary to
make any change in (i) its accounting policies or financial reporting practices
except as required or permitted by GAAP in effect from time to time or (ii) its
fiscal year.
7.14 Transactions with Affiliates. Except for the Management Agreements
and as otherwise specifically set forth in this Agreement, directly or
indirectly purchase, acquire or lease any property from, or sell, transfer or
lease any property to, or enter into any other transaction, with any Affiliate
of the Borrower except in the ordinary course of business and at prices and on
terms not less favorable to it than those which would have been obtained in an
arm's-length transaction with a non-affiliated third party.
7.15 Use of Proceeds. Use the proceeds of any Loan, whether directly or
indirectly, and whether immediately, incidentally or ultimately, to purchase or
carry margin stock (within the meaning of Regulation U of the FRB) or to extend
credit to others for the purpose of purchasing or carrying margin stock or to
refund indebtedness originally incurred for such purpose.
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7.16 Limitation of Amendments to VCA Acquisition Agreement. Neither the
Borrower nor any of its Subsidiaries shall amend or modify, or permit the
amendment or modification of, the VCA Acquisition Agreement, in each case except
for amendments or modifications which are not in any way adverse in any material
respect to the interests of the Bank.
7.17 Limitation on Amendments to Management Agreements. Neither the
Borrower nor any Subsidiary shall amend, modify or waive any term or provision
of any Management Agreement or any document or instrument delivered in
connection therewith in any respect or consent to any release of a party
therefrom, or agree to amend, modify or waive any term or provision of any
Management Agreement or any document or instrument delivered in connection
therewith or waive any rights thereunder in any respect or agree to consent to
any release of a party therefrom, except, in each case, for amendments,
releases, waivers and/or modifications (i) made solely to correct ministerial
errors, (ii) that do not materially and adversely affect the Bank or (iii) made
to the extent any such amendment, release, waiver or modification is required by
any applicable Governmental Authorities.
7.18 Limitation on Amendments to Organizational Documents. Terminate,
amend or modify any of its Organizational Documents or any agreement to which it
is a party with respect to its Capital Stock (including any stockholders'
agreement, partnership agreement and operating agreement) other than any such
amendments or modifications or such new agreements which are not adverse in any
material respect to the interests of the Bank.
7.19 Prepayments, Etc. of Indebtedness. Prepay, redeem, purchase,
defease or otherwise satisfy prior to the scheduled maturity thereof in any
manner, or make any payment in violation of any subordination terms of, any
Indebtedness, except (a) the prepayment of the Obligations in accordance with
the terms of this Agreement and the other Loan Documents and (b) regularly
scheduled or required repayments or redemptions of Indebtedness set forth in
Section 7.1 and refinancings and refundings of such Indebtedness in compliance
with Section 7.1.
7.20 Limitation on Creation of Subsidiaries. After the Effective Date,
create or acquire any Subsidiaries; provided, however, that the Borrower may
create or acquire one or more Subsidiaries, so long as the Borrower and the
applicable Subsidiary shall have complied with Section 5.10 and such acquisition
or creation is permitted by Section 7.3.
ARTICLE 8. EVENTS OF DEFAULT.
8.1 Events of Default. Upon the occurrence and during the continuance
of any of the following events (each an "Event of Default"):
(a) Borrower shall fail to pay principal of any of the Loans when due
or shall fail to pay amounts necessary to reimburse the Bank for a draw under a
Letter of Credit, or shall fail to pay any interest, or other amount payable
hereunder within two Business Days after the same becomes due; or
(b) any representation or warranty made or deemed made by or on behalf
of any Loan Party in or in connection with any Loan Document or the borrowings
or issuances of Letters of Credit hereunder, or any representation, warranty,
statement or information contained in any report, certificate, document,
instrument or financial or other written statement furnished in connection with
or pursuant to any Loan Document, shall prove to have been false or misleading
in any material respect on or as of the date made or deemed made; or
(c) the Borrower shall fail to perform or observe any covenant or
agreement (not specified in Section 8.1(a)) contained in Section 5.1(a), 5.7(b),
5.7(d), 5.7(e), 5.9 or 5.11 or Article 6 or Article 7; or
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(d) the Borrower or any Loan Party shall default in the observance or
performance of any covenant, condition or agreement contained in this Agreement
or any other Loan Document (other than those specified in paragraphs (a) or (c)
immediately above) on its part to be performed or observed (the "Other
Provisions") and such default shall continue unremedied (i) in the case of any
Other Provisions to be performed by the Borrower under this Agreement, for a
period of 10 days after written notice thereof is given to the Borrower by the
Bank and (ii) the case of any Other Provisions to be performed by the Borrower
or any other Loan Party under any Loan Document (other than this Agreement),
after the expiration of any applicable grace or cure periods; or
(e) Any Specified Person (A) fails to make any payment when due
(whether by scheduled maturity, required prepayment, acceleration, demand, or
otherwise) in respect of any Indebtedness or Guarantee (other than Indebtedness
hereunder and Indebtedness under Swap Contracts) having an aggregate principal
amount (including undrawn committed or available amounts and including amounts
owing to all creditors under any combined or syndicated credit arrangement) of
more than the Threshold Amount, or (B) fails to observe or perform any other
agreement or condition relating to any Indebtedness or Guarantee (other than
Indebtedness hereunder and Indebtedness under Swap Contracts) or contained in
any instrument or agreement evidencing, securing or relating thereto, or any
other event occurs, the effect of which default or other event is to cause, or
to permit the holder or holders of such Indebtedness or the beneficiary or
beneficiaries of such Guarantee (or a trustee or agent on behalf of such holder
or holders or beneficiary or beneficiaries) to cause, with the giving of notice
if required, such Indebtedness to be demanded or to become due or to be
repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an
offer to repurchase, prepay, defease or redeem such Indebtedness to be made,
prior to its stated maturity, or such Guarantee to become payable or cash
collateral in respect thereof to be demanded; or
(f) (i) Any Specified Person shall commence any case, proceeding or
other action (A) under any existing or future law of any jurisdiction, domestic
or foreign, relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with respect to it, or
seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition or
other relief with respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian or other similar official for it or for all or any
substantial part of its assets, or any Specified Person shall make a general
assignment for the benefit of its creditors; or (ii) there shall be commenced
against any Specified Person any case, proceeding or other action of a nature
referred to in clause (i) above which (A) results in the entry of an order for
relief or any such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 60 days; or (iii) there shall be
commenced against any Specified Person any case, proceeding or other action
seeking issuance of a warrant of attachment, execution, distraint or similar
process against all or any substantial part of its assets which results in the
entry of an order for any such relief which shall have not been vacated,
discharged, or stayed or bonded pending appeal within 30 days from the entry
thereof; or (iv) any Specified Person shall take any action in furtherance of,
or indicating its consent to, approval of, or acquiescence in, any of the acts
set forth in clause (i), (ii) or (iii) of this Section 8.1(f); or (v) any
Specified Person shall generally not, or shall be unable to, or shall admit in
writing its inability to, pay its debts as they become due; or
(g) (i) any Specified Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (ii) any "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, shall exist with respect to any
Plan, (iii) a Reportable Event shall occur with respect to, or proceedings shall
commence to have a trustee appointed, or a trustee shall be appointed, to
administer or to terminate, any Plan, which Reportable Event or institution of
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proceedings is, in the reasonable opinion of the Bank, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, and, in the case of
a Reportable Event, the continuance of such Reportable Event unremedied for ten
days after notice of such Reportable Event pursuant to Section 4043(a), (c) or
(d) of ERISA is given or the continuance of such proceedings for ten days after
commencement thereof, as the case may be, (iv) any Plan shall terminate for
purposes of Title IV of ERISA, and in each case in clauses (i) through (iv)
above, such event or condition could subject the Borrower to any tax, penalty or
other liabilities in the aggregate material in relation to the business,
operations or property of the Borrower; or
(h) there is entered against any Specified Person (A) one or more final
judgments or orders for the payment of money in an aggregate amount (as to all
such judgments and orders) exceeding the Threshold Amount (to the extent not
covered by independent third-party insurance as to which the insurer is rated at
least "A" by A.M. Best Company, has been notified of the potential claim and
does not dispute coverage), or (B) any one or more non-monetary final judgments
that have, or could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect and, in either case, (A) enforcement
proceedings are commenced by any creditor upon such judgment or order, including
any action taken to levy or attach on properties of any Specified Person to
enforce such judgment, or (B) there is a period of 30 consecutive days during
which a stay of enforcement of such judgment, by reason of a pending appeal or
otherwise, is not in effect; or
(i) any Loan Document, at any time after its execution and delivery and
for any reason other than as expressly permitted hereunder or thereunder or the
satisfaction in full of all the Obligations, shall cease to be in full force and
effect (other than by reason of a transaction permitted by Section 7.2(b)); or
any Loan Party (or any Person by, through or on behalf of such Loan Party),
shall contest in any manner the validity or enforceability of any provision of
any Loan Document; or any Loan Party shall deny that it has any or further
liability or obligation under any provision of any Loan Document, or purport to
revoke, terminate or rescind any provision of any Loan Document; or
(j) any of the Liens created and granted pursuant to the Security
Documents shall fail to be valid, first, perfected Liens subject to no prior or
equal Lien, except as expressly permitted by this Agreement; or
(k) a Change of Control shall occur; or
(l) the Bank shall have determined in its reasonable discretion that
there has occurred a material adverse change in the business, properties or
financial condition of the Borrower; or
(m) there occurs under any Swap Contract an Early Termination Date (as
defined in such Swap Contract) resulting from (A) any event of default under
such Swap Contract as to which any Specified Person is the Defaulting Party (as
defined in such Swap Contract) or (B) any Termination Event (as so defined)
under such Swap Contract as to which any Specified Person is an Affected Party
(as so defined) and, in either event, the Swap Termination Value owed by such
Specified Person as a result thereof is greater than the Threshold Amount; or
(n) the VCA Acquisition shall fail to occur within five Business Days
following the Effective Date;then, in any such event, any or all of the
following actions may be taken: (i) the Bank may, at its option, declare the
Commitments to be terminated forthwith, whereupon such Commitments and all
obligations of the Bank to make Revolving Credit Loans, to make (to the extent
not made) the New Term Loan and to make any LC Extensions in each case shall
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immediately terminate; (ii) the Bank may, at its option, declare the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents and all reimbursement obligations with
respect to Letters of Credit to be due and payable and the same, and all
interest accrued thereon, shall forthwith become due and payable without
presentment, demand, protest or notice of any kind, all of which are hereby
waived, anything contained herein or in any instrument evidencing the Loans
and/or Letters of Credit to the contrary notwithstanding,; provided, however,
upon the occurrence of an Event of Default referred to in Section 8.1(f), the
Commitments and any obligation of the Bank to make Revolving Credit Loans, to
make (to the extent not made) the New Term Loan and to make LC Extensions shall
automatically terminate, the unpaid principal amount of all outstanding Loans
and reimbursement obligations with respect to Letters of Credit and all interest
and other amounts as aforesaid shall automatically become due and payable,
without presentment, demand, protest or notice of any kind, all of which are
hereby waived, anything contained herein or in any instrument evidencing the
Loans and/or Letters of Credit to the contrary notwithstanding, and the
obligation of the Borrower to cash collateralize the LC Exposure as provided in
the next sentence shall automatically become effective, in each case without
further act of the Bank. With respect to all Letters of Credit which shall not
have matured or with respect to which presentment for honor shall not have
occurred, the Borrower shall deposit in a cash collateral account maintained
with the Bank an amount equal to the aggregate undrawn amount of all Letters of
Credit, and the unused portion thereof, if any, shall be returned to the
Borrower after the respective expiry dates of the Letters of Credit and after
all Obligations have been paid in full and all Commitments have terminated and
the obligation of the Bank to make LC Extensions has terminated. In order to
entitle the Bank to exercise any remedy reserved to it in this Article 8, it
shall not be necessary to give any notice, other than such notice as may be
herein expressly required in this Agreement or in any Loan Document.
ARTICLE 9. COLLATERAL SECURITY.
9.1 General Loan and Collateral Agreement. As collateral security for
the payment of the Obligations of the Borrower, now of hereafter owned or held
by the Bank, the Borrower hereby grants to the Bank a continuing lien, security
interest and right of setoff as security for all Obligations of the Borrower,
whether now existing or hereafter arising, upon and against all deposits,
credits, collateral and property, now or hereafter in the possession, custody,
safekeeping or control of the Bank or any of its Affiliates, or in transit to
any of them. At any time, without demand or notice (any such notice being
expressly waived by the Borrower), the Bank may setoff same, or any part thereof
and apply the same to any of the Obligations of the Borrower even though
unmatured and regardless of the adequacy of any other collateral securing the
Obligations. ANY AND ALL RIGHTS TO REQUIRE THE BANK TO EXERCISE ITS RIGHTS OR
REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS,
PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS
OR OTHER PROPERTY OF THE BORROWER OR THE GUARANTORS ARE HEREBY KNOWINGLY,
VOLUNTARILY AND IRREVOCABLY WAIVED. The Bank at any time, before or after an
Event or Default, may but shall not be obligated to, transfer into or out of its
own name or that of its nominee all or any of the collateral security, including
stocks, bonds, and other securities, and the Bank or its nominee may demand, xxx
for, collect, receive and hold as like collateral security any or all interest,
dividends and income thereon and if the securities are held in the name of the
Bank or its nominee, the Bank may, after an Event of Default, exercise all
voting and other rights pertaining thereto as if the Bank were the absolute
owner thereof; but the Bank shall not be obligated to demand payment of,
protest, or take any steps necessary to preserve any rights in the collateral
against prior parties, or to take any action whatsoever in regard to the
collateral security or any part thereof, all of which the Borrower assumes and
agrees to do. Without limiting the generality of the foregoing, the Bank shall
not be obligated to take any action in connection with any conversion, call,
redemption, retirement or any other event relating to any of the collateral
security, unless the Borrower gives written notice to the Bank that such action
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shall be taken not more than thirty (30) days prior to the time such action may
first be taken and not less than ten (10) days prior to the expiration of the
time during which such action may be taken.
9.2 Additional Collateral Security. In addition to the collateral
described in Section 9.1, payment of the Obligations is also secured by a first
priority (subject to Liens permitted by this Agreement) security interest in all
the Collateral.
ARTICLE 10. MISCELLANEOUS.
10.1 Notices; Etc. Except in the case of notices and other
communications expressly permitted to be given by telephone, any notice,
request, approval, consent or other communication hereunder shall be in writing
and shall be hand delivered or sent by reputable courier service, or by postage
pre-paid registered or certified mail, return receipt requested, or by
telecopier, or by via electronic mail as follows, and shall be deemed given as
follows: (i) if hand delivered or sent by reputable courier service, when
received; (ii) if sent by registered or certified mail, return receipt
requested, three Business Days after being postmarked; (iii) if sent by
telecopy, when sent (except that, if not given during normal business hours for
the recipient, shall be deemed to have been given at the opening of business on
the next Business Day for the recipient); or (iv) if sent by electronic email,
upon the sender's receipt of an acknowledgement from the intended recipient
(such as by the "return receipt requested" function, as available, return e-mail
or other written acknowledgement), provided that if such notice or other
communication is not sent during the normal business hours of the recipient,
such notice or communication shall be deemed to have been sent at the opening of
business on the next Business Day for the recipient. Notwithstanding the
foregoing to the contrary, all such notices and communications to the Bank shall
not be effective until received.
If to the Borrower: IntegraMed America, Inc.
Two Xxxxxxxxxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000-0000
Attention: Xxxx X. Xxxxxx, Xx.,
Executive Vice President and
Chief Financial Officer
Telecopy No.: 000-000-0000
Telephone No.: 000-000-0000
Email Address: xxxx.xxxxxx@xxxxxxxxxx.xxx
with a copy to: Xxxxxx & Whitney LLP
000 Xxxx Xxx.
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxx, Esq.
Telecopy No.: 212-953-7201
Telephone No.: (000) 000-0000
Email Address: xxxxxxx.xxxxxx@xxxxxx.xxx
If to the Bank: Bank of America, N.A.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxx, Senior Vice President
Telecopy No.: 000-000-0000
Telephone No.: (000) 000-0000
Email Address: xxxxxxx.x.xxxxx@xxxxxxxxxxxxx.xxx
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with a copy to: Xxxxxxx, Xxxxxxxxx LLP
0 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telecopy No.: 000-000-0000
Telephone No.: 000-000-0000
Email Address: xxxxxxx@xxxxxxx.xxx
Each of the Borrower and the Bank may change its address, telecopier, email
address for notices and other communications hereunder by notice to the other
parties hereto.
10.2 No Waiver; Cumulative Remedies. No failure by the Bank to
exercise, and no delay by such Person in exercising, any right, remedy, power or
privilege hereunder or under any other Loan Document shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided, and provided under each other Loan
Document, are cumulative and not exclusive of any rights, remedies, powers and
privileges provided by law.
10.3 Survival of Representations and Warranties. All representations
and warranties made hereunder and in any document, certificate or statement
delivered pursuant hereto or in connection herewith shall survive the execution
and delivery of this Agreement and the other Loan Documents
10.4 Payment of Expenses.
(a) The Borrower agrees to pay or reimburse the Bank for all its costs
and expenses (including, without limitation, the reasonable fees and expenses of
attorneys for the Bank) incurred in connection with the preparation,
administration, default, collection, waiver or amendment of any of the Loan
Documents, or in connection with Bank's exercise, preservation or enforcement of
any of its rights, remedies or options hereunder, including, without limitation
in connection with (i) the enforcement or preservation of any rights under this
Agreement or the Notes or any other Loan Document or any other instrument or
agreement entered into in connection herewith or therewith including, without
limitation, the reasonable fees and disbursements of attorneys for the Bank;
(ii) any claim or action threatened, made or brought against the Bank arising
out of or relating to any extent to this Agreement or any other Loan Document or
any instrument or agreement entered into in connection with the transactions
contemplated hereby or thereby; (iii) the perfection of any security interest in
the Collateral or in the maintenance of the Collateral; (iv) any amendment or
modification of any Loan Document; (v) the payment of any tax, assessment,
recording fee or similar charge; (vi) any waiver of any right of the Bank under
any Loan Document and (vii) the reasonable fees and disbursements of any outside
counsel to the Bank and/or the allocated costs of in-house legal counsel
incurred from time to time in connection with the transactions contemplated by
this Agreement, accounting, consulting, brokerage or other similar professional
fees or expenses, and any fees or expenses associated with travel or other costs
relating to any appraisals or examinations conducted in connection with the
Obligations or any Collateral therefor. All such fees and expenses shall be
Obligations secured by the Collateral and, commencing ten days after demand
therefore, shall, until paid, bear interest at the Post-Default Rate.
(b) The obligations set forth in this Section 10.4 shall be in addition
to any other obligations or liabilities of the Borrower to the Bank hereunder or
at common law or otherwise. The provisions of this Section 10.4 shall survive
the payment of the Obligations and the termination of this Agreement.
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10.5 WAIVER OF JURY TRIAL, SET-OFF AND COUNTERCLAIM
THE BORROWER AND THE BANK MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY, AND THE BORROWER WAIVES THE
RIGHT TO INTERPOSE ANY SET-OFF OR COUNTERCLAIM, IN EACH CASE IN RESPECT OF ANY
CLAIM BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT,
ANY NOTE AND/OR ANY OTHER LOAN DOCUMENTS CONTEMPLATED TO BE EXECUTED IN
CONNECTION HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY, INCLUDING, WITHOUT
LIMITATION, ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS OR ACTIONS OF
THE BANK RELATING TO THE ADMINISTRATION OF THE LOANS OR ENFORCEMENT OF THE LOAN
DOCUMENTS AND AGREE THAT NEITHER PARTY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION
WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED.
EXCEPT AS PROHIBITED BY LAW, THE BORROWER HEREBY WAIVES ANY RIGHT IT MAY HAVE TO
CLAIM OR RECOVER IN ANY LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL
DAMAGES. THE BORROWER CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE
BANK HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE BANK WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER. THIS WAIVER
CONSTITUTES A MATERIAL INDUCEMENT FOR THE BANK TO ENTER INTO THIS AGREEMENT,
ACCEPT THE NOTES AND MAKE THE LOANS.
10.6 [Intentionally Omitted].
10.7 Indemnification.
(a) Indemnification by the Borrower. The Borrower shall indemnify the
Bank and each of its Related Parties (each such Person being called an
"Indemnitee") against, and hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities, costs and related expenses (including the
fees, charges and disbursements of any counsel for any Indemnitee), and shall
indemnify and hold harmless each Indemnitee from all fees and time charges and
disbursements for attorneys who may be employees of any Indemnitee, incurred by
any Indemnitee or asserted against any Indemnitee by any third party or by the
Borrower or any other Loan Party arising out of, in connection with, or as a
result of (i) the execution or delivery of this Agreement, any other Loan
Document or any agreement or instrument contemplated hereby or thereby, the
performance by the parties hereto of their respective obligations hereunder or
thereunder or the consummation of the transactions contemplated hereby or
thereby, (ii) any Loan or Letter of Credit or the use or proposed use of the
proceeds therefrom (including any refusal by the Bank to honor a demand for
payment under an Letter of Credit if the documents presented in connection with
such demand do not strictly comply with the terms of such Letter of Credit), or
(iii) any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other
theory, whether brought by a third party or by the Borrower or any other Loan
Party or any of the Borrower's or such Loan Party's directors, shareholders or
creditors, and regardless of whether any Indemnitee is a party thereto, in all
cases, whether or not caused by or arising, in whole or in part, out of the
comparative, contributory or sole negligence of the Indemnitee; provided that
such indemnity shall not, as to any Indemnitee, be available to the extent that
such losses, claims, damages, costs, liabilities or related expenses are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee.
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(b) LIMITATION OF LIABILITY. EXCEPT AS PROHIBITED BY LAW, THE BORROWER
HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION ANY
SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN,
OR IN ADDITION TO, ACTUAL DAMAGES. THE BORROWER CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF THE BANK HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT THE BANK WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE
THE FOREGOING WAIVER. THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR THE BANK
TO ACCEPT THIS AGREEMENT, ANY NOTE, THE OTHER LOAN DOCUMENTS AND TO EXTEND
CREDIT TO THE BORROWER.
(c) Payments. All amounts due under this Section shall be payable not
later than ten Business Days after demand therefor.
(d) Survival. The agreements in this Section shall survive the
resignation of the Bank, the termination of the Commitments and the repayment,
satisfaction or discharge of all the Obligations.
10.8 Modifications, Amendments and Waivers
No modification of, amendment to, change to or waiver of any provision
of this Agreement or any other Loan Document to which the Borrower is a party
shall be effective unless and until it shall be in writing and signed by the
Bank and the Borrower, and then such modification, amendment, change or waiver
shall be effective only in the specific instance and for the purpose for which
given. No notice to or demand on the Borrower in any case shall, of itself,
entitle it to any other or further notice or demand in similar or other
circumstances.
10.9 Successors and Assigns; Participations
(a) This Agreement shall be binding upon and inure to the benefit of
the Borrower, the Bank, all future holders of a Note and their respective
successors and assigns, except that the Borrower may not assign or transfer any
of its rights under this Agreement without the prior written consent of the
Bank. The term "Bank" as used herein shall be deemed to include the Bank and its
successors, endorsees and assigns.
(b) The Bank shall have the unrestricted right at any time or from time
to time, and without Borrower's or any Loan Party's consent, to assign any
portion of its rights and obligations hereunder (including all or a portion of
its Commitment(s) and the Loans) to one or more banks or other financial
institutions (each, an "Assignee"), and the Borrower agrees that it shall
execute, or cause to be executed, such documents, including without limitation,
amendments to this Agreement and to any other documents, instruments and
agreements executed in connection herewith as the Bank shall deem necessary to
effect the foregoing. In addition, at the request of the Bank and any such
Assignee, the Borrower shall issue one or more new promissory notes, as
applicable, to any such Assignee and, if the Bank has retained any of its rights
and obligations hereunder following such assignment, to the Bank, which new
promissory notes shall be issued in replacement of, but not in discharge of, the
liability evidenced by the promissory note held by the Bank prior to such
assignment and shall reflect the amount of the respective commitments and loans
held by such Assignee and the Bank after giving effect to such assignment. Upon
the execution and delivery of appropriate assignment documentation, amendments
and any other documentation required by the Bank in connection with such
assignment, and the payment by Assignee of the purchase price agreed to by the
Bank, and such Assignee, such Assignee shall be a party to this Agreement and
shall have all of the rights and obligations of the Bank hereunder (and under
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any and all other guaranties, documents, instruments and agreements executed in
connection herewith) to the extent that such rights and obligations have been
assigned by the Bank pursuant to the assignment documentation between the Bank
and such Assignee, and the Bank shall be released from its obligations hereunder
and thereunder to a corresponding extent. Notwithstanding the foregoing, no
Assignee or other transferee of any rights of the Bank shall be entitled to
receive any greater payment under Section 2.6 or 2.13 than the Bank would have
been entitled to receive with respect to the rights transferred, unless such
transfer was made at a time when the circumstance giving rise to such greater
payment did not exist.
(c) The Bank shall have the unrestricted right at any time and from
time to time, and without the consent of or notice to the Borrower or any
Guarantor, to grant to one or more banks or other financial institutions (each,
a "Participant") participating interests in the Bank's obligation to lend
hereunder and/or any or all of the Loans held by the Bank hereunder. In the
event of any such grant by the Bank of a participating interest to a
Participant, whether or not upon notice to the Borrower, the Bank shall remain
responsible for the performance of its obligations hereunder and the Borrower
shall continue to deal solely and directly with the Bank in connection with the
Bank's rights and obligations hereunder. The Bank may furnish any information
concerning the Borrower in its possession from time to time to prospective
Assignees and Participants, provided that the Bank shall require any such
prospective Assignee or Participant to agree in writing to maintain the
confidentiality of such information. Notwithstanding the foregoing, the Bank and
any Participants shall not be entitled to receive any greater payment under
Section 2.6 or 2.13 than the Bank would have been entitled to receive had no
participating interests been granted.
10.10 Governing Law; Consent to Jurisdiction; Venue; Service of
Process.
(a) THIS AGREEMENT AND ANY OTHER LOAN DOCUMENTS AND THE RIGHTS AND
DUTIES OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK,
WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS EXCEPT AS SET FORTH IN SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK.
(b) THE BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR
ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE
STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT
COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY
THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY
JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES
THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A
FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL
AFFECT ANY RIGHT THAT THE BANK MAY OTHERWISE HAVE TO BRING ANY ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE
BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION..
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(c) THE BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED
TO IN PARAGRAPH (b) OF THIS SECTION. THE BORROWER IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM
TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.
(d) THE BORROWER HEREBY IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN
THE MANNER PROVIDED FOR NOTICES IN SECTION 10.1. NOTHING IN THIS AGREEMENT WILL
AFFECT THE RIGHT OF THE BANK TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
APPLICABLE LAW.
10.11 Entire Agreement
This Agreement and the other Loan Documents are intended by the parties
as the final, complete and exclusive statement of the transactions evidenced
thereby. All prior or contemporaneous promises, agreements and understandings,
whether oral or written, are deemed to be superceded by this Agreement and such
other Loan Documents, and no party is relying on any promise, agreement or
understanding not set forth in this Agreement or such other Loan Documents.
Neither this Agreement nor any of such other Loan Documents may be amended or
modified except by a written instrument describing such amendment or
modification executed by the Borrower and the Bank.
10.12 Interest Adjustment.
All agreements between the Borrower (and each Guarantor and each other
party obligated for payment on a Note) and the Bank are hereby expressly limited
so that in no contingency or event whatsoever, whether by reason of acceleration
of maturity of the indebtedness evidenced by a Note or otherwise, shall the
amount paid or agreed to be paid to the Bank for the use or the forbearance of
the indebtedness evidenced hereby exceed the maximum permissible under
applicable law. As used herein, the term "applicable law" shall mean the law in
effect as of the date hereof; provided, however, that in the event there is a
change in the law which results in a higher permissible rate of interest, then
this Agreement, the Notes and the other Loan Documents shall be governed by such
new law as of its effective date. In this regard, it is expressly agreed that it
is the intent of the Borrower and the Bank in the execution, delivery and
acceptance of this Agreement, the Notes and the other Loan Documents to contract
in strict compliance with the laws of the State of New York from time to time in
effect. If, under or from any circumstances whatsoever, fulfillment of any
provision hereof or of any of the other Loan Documents at the time of
performance of such provision shall be due, shall involve transcending the limit
of such validity prescribed by applicable law, then the obligation to be
fulfilled shall automatically be reduced to the limits of such validity, and if
under or from circumstances whatsoever the Bank should ever receive as interest
an amount which would exceed the highest lawful rate, such amount which would be
excessive interest shall be applied to the reduction of the principal balance
evidenced by the Note(s) and not to the payment of interest. This provision
shall control every other provision of all agreements between the Borrower, each
Guarantor, each other party obligated on a Note and the Bank.
10.13 Pledge to Federal Reserve
The Bank may at any time, without the consent of or notice to the
Borrower or any Guarantor, pledge or assign all or any portion of its rights
under the Loan Documents (including under its Note, if any) to any of the twelve
(12) Federal Reserve Banks organized under Section 4 of the Federal Reserve Act,
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12 U.S.C. Section 341. No such pledge or assignment or enforcement thereof shall
release Bank from its obligations under any of the Loan Documents.
10.14 Lost Notes
Upon receipt of an affidavit of an officer of the Bank as to the loss,
theft, destruction or mutilation of any Note or any other security document
which is not of public record, and, in the case of any such loss, theft,
destruction or mutilation, upon surrender and cancellation of such Note or other
security document, the Borrower will issue, in lieu thereof, a replacement Note
or other security document in the same principal amount thereof and otherwise of
like tenor.
10.15 Effective Date
This Agreement shall be effective on the date (the "Effective Date") as
of which (a) this Agreement shall be executed by all the parties hereto and
delivered to the Bank and (b) all the conditions precedent required to have been
satisfied on or before the first extension of credit hereunder pursuant to
Section 4.1 shall have been satisfied or waived (whether temporarily or
otherwise) in writing by the Bank..
10.16 No Waiver Action
Any waiver or consent respecting any representation, warranty, covenant
or other term or provision of this Agreement or any other Loan Document shall be
effective only in the specific instance and for the specific purpose for which
given and shall not be deemed, regardless of frequency given, to be a further or
continuing waiver or consent. The failure or delay of a party at any time or
times to require performance or, or to exercise its rights with respect to, any
representation, warranty, covenant or other term or provision of this Agreement
or other Loan Document in no manner (except as otherwise expressly provided
herein) shall affect its right at a later time to enforce any such provision. No
notice to or demand on a party in any case shall entitle such party to any other
or further notice or demand in the same, similar or other circumstances. The
acceptance by the Bank of (a) any partial or late payment shall not constitute a
satisfaction or waiver of the full amount then due or the resulting Event of
Default or (b) any payment during the continuance of an Event of Default shall
not constitute a waiver or cure thereof; and the Bank may accept or reject any
such payment without affecting any of its rights, powers, privileges, remedies
and other interests under this Agreement, the other Loan Documents and
applicable law. All rights, powers, privileges, remedies and other interests of
the parties hereunder are cumulative and not alternatives, and they are in
addition to and shall not limit (except as otherwise expressly provided in this
Agreement) any other right, power, privilege, remedy or other interest of the
parties under this Agreement, any other Loan Document or applicable law.
10.17 Severability
Every provision of the Loan Documents is intended to be severable, and
if any term or provision thereof shall be invalid, illegal or unenforceable for
any reason, the validity, legality and enforceability of the remaining
provisions thereof shall not be affected or impaired thereby, and any
invalidity, illegality or unenforceability in any jurisdiction shall not affect
the validity, legality or enforceability of any such term or provision in any
other jurisdiction.
10.18 Amendment and Restatement
Upon satisfaction of the conditions precedent to the effectiveness of
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this agreement set forth in Section 4.1, this Agreement shall be binding on the
Borrower and the Bank and the provisions of the Original Loan Agreement shall be
amended and restated and replaced by the provisions of this Agreement; provided,
that (a) any obligations and indebtedness of the Borrower under the Original
Loan Agreement that remains unpaid and outstanding as of the Effective Date
after giving effect to the Amendment Effective Date shall continue to exist
under and be evidenced by this Agreement and the other Loan Documents, (b) the
Existing LC under the Original Loan Agreement shall continue as a Letter of
Credit under this Agreement and (c) the Loan Documents and the Collateral shall
continue to secure, guarantee, support and otherwise benefit the Obligations of
the Borrower and the other Loan Parties under this Agreement and the other Loan
Documents. Upon the effectiveness of this Agreement in accordance with Section
4.1, each other Loan Document that was in effect immediately prior to the
Effective Date shall continue to be effective and, unless the context otherwise
requires, any reference to the Original Loan Agreement contained therein shall
be deemed to refer to this Agreement.
10.19 Counterparts. This Agreement may be signed in any number of
counterparts with the same effect as if the signatures thereto and hereto were
upon the same instrument.
10.20 Headings. Article, Section and subsection headings used herein
are for convenience of reference only, are not part of this Agreement and shall
not affect the construction of, or be taken into consideration in interpreting,
this Agreement.
10.21 USA PATRIOT Act Notice. The Bank that is subject to the Act (as
hereinafter defined) hereby notifies the Borrower that pursuant to the
requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)) (the "Patriot Act"), it is required to obtain, verify and
record information that identifies each Loan Party, which information includes
the name and address of each Loan Party and other information that will allow
the Bank to identify each Loan Party in accordance with the Act.
[REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
BORROWER:
INTEGRAMED AMERICA, INC.
By:/s/Xxxx X. Xxxxxx, Xx.
----------------------------------
Name: Xxxx X. Xxxxxx, Xx.
Title:Executive Vice President and Chief
Financial Officer
BANK:
BANK OF AMERICA, N.A.
By:/s/Xxxxxxx x. Xxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
[Signature Page to the Second Amended and Restated Loan Agreement]
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