1
EXHIBIT 10.9
Execution Copy
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AMERIPATH, INC.
CREDIT AGREEMENT
Originally Dated as of May 29, 1996
Amended and Restated as of June 27, 1997
BANKBOSTON, N.A.,
f/k/a The First National Bank of Boston, Agent
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TABLE OF CONTENTS
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1. Restatement; Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
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1.1. Restatement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
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1.2. Definitions; Certain Rules of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
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2. The Credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
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2.1. Revolving Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
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2.1.1. Revolving Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
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2.1.2. Maximum Amount of Revolving Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
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2.1.3. Borrowing Requests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
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2.1.4. Loan Account; Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
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2.2. Term Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
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2.3. Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
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2.3.1. Issuance of Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
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2.3.2. Requests for Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
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2.3.3. Form and Expiration of Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . 26
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2.3.4. Lenders' Participation in Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . 27
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2.3.5. Presentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
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2.3.6. Payment of Drafts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
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2.3.7. Uniform Customs and Practice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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2.3.8. Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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2.3.9. Modification, Consent, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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2.4. Application of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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2.4.1. Revolving Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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2.4.2. Term Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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2.4.3. Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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2.4.4. Specifically Prohibited Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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2.5. Nature of Obligations of Lenders to Make Extensions of Credit . . . . . . . . . . . . . . . . . . . 30
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3. Interest; Eurodollar Pricing Options; Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
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3.1. Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
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3.2. Eurodollar Pricing Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
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3.2.1. Election of Eurodollar Pricing Options . . . . . . . . . . . . . . . . . . . . . . . . . . 31
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3.2.2. Notice to Lenders and the Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
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3.2.3. Selection of Eurodollar Interest Periods . . . . . . . . . . . . . . . . . . . . . . . . . 31
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3.2.4. Additional Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
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3.2.5. Violation of Legal Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
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3.2.6. Funding Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
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3.3. Commitment Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
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3.4. Letter of Credit Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
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3.5. Reserve Requirements, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
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3
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3.6. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
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3.7. Capital Adequacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
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3.8. Regulatory Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
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3.9. Computations of Interest and Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
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4. Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
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4.1. Payment at Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
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4.2. Fixed Prepayments of Term Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
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4.3. Contingent Required Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
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4.3.1. Excess Credit Exposure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
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4.3.2. Letter of Credit Exposure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
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4.3.3. Net Equity Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
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4.4. Voluntary Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
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4.5. Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
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4.6. Reborrowing; Application of Payments, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
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4.6.1. Reborrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
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4.6.2. Order of Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
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4.6.3. Payment with Accrued Interest, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
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4.6.4. Payments for Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
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5. Conditions to Extending Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
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5.1. Conditions on Initial Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
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5.1.1. Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
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5.1.2. Perfection of Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
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5.1.3. Legal Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
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5.1.4. Payment of Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
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5.2. Conditions to Making Each Permitted Acquisition Advance . . . . . . . . . . . . . . . . . . . . . . 40
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5.2.1. Permitted Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
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5.2.2. Notes and Credit Documents; Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
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5.2.3. Legal Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
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5.3. Conditions to Each Extension of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
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5.3.1. Officer's Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
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5.3.2. Legality, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
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5.3.3. Proper Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
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5.3.4. General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
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6. General Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
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6.1. Taxes and Other Charges; Accounts Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
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6.1.1. Taxes and Other Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
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6.1.2. Accounts Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
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6.2. Conduct of Business, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
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6.2.1. Types of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
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6.2.2. Maintenance of Properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
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6.2.3. Statutory Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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6.2.4. No Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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6.2.5. Compliance with Material Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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6.3. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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6.3.1. Business Interruption Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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6.3.2. Property Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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6.3.3. Liability Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
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6.3.4. Key Executive Life . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
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6.3.5. Flood Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
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6.4. Financial Statements and Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
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6.4.1. Annual Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
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6.4.2. Quarterly Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
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6.4.3. Monthly Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
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6.4.4. Other Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
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6.4.5. Notice of Litigation, Defaults, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
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6.4.6. ERISA Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
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6.4.7. Other Information; Audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
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6.5. Certain Financial Tests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
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6.5.1. Minimum Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
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6.5.2. Consolidated Senior Debt Coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
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6.5.3. Consolidated Total Debt Coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
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6.5.4. Consolidated Interest Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
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6.6. Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
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6.7. Guarantees; Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
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6.8. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
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6.9. Investments and Permitted Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
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6.10. Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
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6.11. Asset Dispositions and Mergers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
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6.12. Lease Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
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6.13. Issuance of Stock by Subsidiaries; Subsidiary Distributions . . . . . . . . . . . . . . . . . . . . 56
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6.13.1. Issuance of Stock by Subsidiaries of the Company . . . . . . . . . . . . . . . . . . . . . 56
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6.13.2. No Restrictions on Subsidiary Distributions . . . . . . . . . . . . . . . . . . . . . . . 57
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6.14. Voluntary Prepayments of Other Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
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6.15. Derivative Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
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6.16. Negative Pledge Clauses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
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6.17. ERISA, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
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6.18. Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
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6.19. Interest Rate Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
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6.20. Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
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6.20.1. Compliance with Law and Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
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6.20.2. Notice of Claims, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
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6.21. Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
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7. Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
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7.1. Organization and Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
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7.1.1. The Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
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7.1.2. Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
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7.1.3. Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
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7.1.4. Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
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7.2. Financial Statements and Other Information; Material Agreements . . . . . . . . . . . . . . . . . . 60
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7.2.1. Financial Statements and Other Information . . . . . . . . . . . . . . . . . . . . . . . . 60
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7.2.2. Material Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
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7.3. Agreements Relating to Financing Debt, Investments, etc. . . . . . . . . . . . . . . . . . . . . . . 61
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7.4. Changes in Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
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7.5. Title to Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
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7.6. Operations in Conformity With Law, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
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7.7. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
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7.8. Authorization and Enforceability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
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7.9. No Legal Obstacle to Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
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7.10. Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
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7.11. Licenses, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
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7.12. Tax Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
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7.13. Certain Business Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
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7.13.1. Labor Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
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7.13.2. Antitrust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
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7.13.3. Consumer Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
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7.13.4. Burdensome Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
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7.13.5. Future Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
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7.14. Environmental Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
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7.14.1. Environmental Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
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7.14.2. Environmental Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
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7.14.3. Environmental Condition of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . 65
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7.15. Pension Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
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7.16. Acquisition Agreement, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
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7.17. Foreign Trade Regulations; Government Regulation; Margin Stock . . . . . . . . . . . . . . . . . . . 66
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7.17.1. Foreign Trade Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
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7.17.2. Government Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
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7.17.3. Margin Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
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7.18. Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
----------
8. Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
--------
8.1. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
-----------------
-iv-
6
Page
----
8.1.1. Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
-------
8.1.2. Specified Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
-------------------
8.1.3. Other Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
---------------
8.1.4. Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
------------------------------
8.1.5. Cross Default, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
------------------
8.1.6. Ownership; Liquidation; etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
---------------------------
8.1.7. Enforceability, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
-------------------
8.1.8. Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
---------
8.1.9. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
-----
8.1.10. Bankruptcy, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
----------------
8.2. Certain Actions Following an Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
---------------------------------------------
8.2.1. Terminate Obligation to Extend Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
-------------------------------------
8.2.2. Specific Performance; Exercise of Rights . . . . . . . . . . . . . . . . . . . . . . . . . 70
----------------------------------------
8.2.3. Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
------------
8.2.4. Enforcement of Payment; Credit Security; Setoff . . . . . . . . . . . . . . . . . . . . . . 71
-----------------------------------------------
8.2.5. Cumulative Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
-------------------
8.3. Annulment of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
---------------------
8.4. Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
-------
9. Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
----------
9.1. Guarantees of Credit Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
--------------------------------
9.2. Continuing Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
---------------------
9.3. Waivers with Respect to Credit Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
------------------------------------------
9.4. Lenders' Power to Waive, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
----------------------------
9.5. Information Regarding the Borrower, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
---------------------------------------
9.6. Certain Guarantor Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
---------------------------------
9.7. Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
-----------
9.8. Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
-------------
9.9. Future Subsidiaries; Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
---------------------------------------
10. Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
--------
10.1. Credit Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
---------------
10.1.1. Tangible Personal Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
--------------------------
10.1.2. Rights to Payment of Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
--------------------------
10.1.3. Intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
-----------
10.1.4. Pledged Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
-------------
10.1.5. Pledged Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
--------------
10.1.6. Pledged Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
--------------------
10.1.7. Chattel Paper, Instruments and Documents . . . . . . . . . . . . . . . . . . . . . . . . . 79
----------------------------------------
10.1.8. Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
------
10.1.9. Deposit Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
----------------
10.1.10. Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
----------
-v-
7
Page
----
10.1.11. Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
-----------------
10.1.12. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
---------
10.1.13. All Other Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
------------------
10.1.14. Proceeds and Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
---------------------
10.1.15. Excluded Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
-----------------
10.2. Additional Credit Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
--------------------------
10.2.1. Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
-------------
10.2.2. Motor Vehicles and Aircraft . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
---------------------------
10.3. Representations, Warranties and Covenants with Respect to Credit Security . . . . . . . . . . . . . 81
-------------------------------------------------------------------------
10.3.1. Pledged Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
-------------
10.3.2. Accounts and Pledged Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
---------------------------------
10.3.3. No Liens or Restrictions on Transfer or Change of Control . . . . . . . . . . . . . . . . 81
---------------------------------------------------------
10.3.4. Location of Credit Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
---------------------------
10.3.5. Trade Names . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
-----------
10.3.6. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
---------
10.3.7. Modifications to Credit Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
--------------------------------
10.3.8. Delivery of Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
---------------------
10.3.9. Perfection of Credit Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
-----------------------------
10.4. Administration of Credit Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
---------------------------------
10.4.1. Use of Credit Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
----------------------
10.4.2. Deposits; Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
------------------
10.4.3. Pledged Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
------------------
10.5. Right to Realize upon Credit Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
-------------------------------------
10.5.1. Assembly of Credit Security; Receiver . . . . . . . . . . . . . . . . . . . . . . . . . . 85
-------------------------------------
10.5.2. General Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
-----------------
10.5.3. Marshaling, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
----------------
10.5.4. Sales of Credit Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
------------------------
10.5.5. Sale without Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
-------------------------
10.5.6. Application of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
-----------------------
10.6. Custody of Credit Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
--------------------------
11. Expenses; Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
-------------------
11.1. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
--------
11.2. General Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
-----------------
11.3. Indemnity With Respect to Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
-------------------------------------------
12. Operations; Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
-----------------
12.1. Interests in Credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
--------------------
12.2. Agent's Authority to Act, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
------------------------------
12.3. Borrower to Pay Agent, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
---------------------------
12.4. Lender Operations for Advances, Letters of Credit, etc. . . . . . . . . . . . . . . . . . . . . . . 90
-------------------------------------------------------
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8
Page
----
12.4.1. Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
--------
12.4.2. Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
-----------------
12.4.3. Agent to Allocate Payments, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
--------------------------------
12.4.4. Delinquent Lenders; Nonperforming Lenders . . . . . . . . . . . . . . . . . . . . . . . . 92
-----------------------------------------
12.5. Sharing of Payments, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
-------------------------
12.6. Amendments, Consents, Waivers, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
-----------------------------------
12.7. Agent's Resignation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
-------------------
12.8. Concerning the Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
--------------------
12.8.1. Action in Good Faith, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
-------------------------
12.8.2. No Implied Duties, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
----------------------
12.8.3. Validity, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
-------------
12.8.4. Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
----------
12.8.5. Employment of Agents and Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
--------------------------------
12.8.6. Reliance on Documents and Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
---------------------------------
12.8.7. Agent's Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
---------------------
12.8.8. Conveying Reports to Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
----------------------------
12.9. Rights as a Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
------------------
12.10. Independent Credit Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
---------------------------
12.11. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
---------------
13. Successors and Assigns; Lender Assignments and Participations . . . . . . . . . . . . . . . . . . . . . . . 98
-------------------------------------------------------------
13.1. Assignments by Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
----------------------
13.1.1. Assignees and Assignment Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
-----------------------------------
13.1.2. Terms of Assignment and Acceptance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
----------------------------------
13.1.3. Register . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
--------
13.1.4. Acceptance of Assignment and Assumption . . . . . . . . . . . . . . . . . . . . . . . . . 100
---------------------------------------
13.1.5. Federal Reserve Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
--------------------
13.1.6. Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
------------------
13.2. Credit Participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
-------------------
13.3. Replacement of Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
---------------------
13.4. Foreign Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
---------------
14. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
---------------
15. Acknowledgments and Consents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
----------------------------
16. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
-------
17. Course of Dealing; Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
-----------------------------------------
18. Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
----------
19. Venue; Service of Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
-------------------------
20. WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
--------------------
21. No Strict Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
----------------------
22. General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
-------
-vii-
9
EXHIBITS
1 - Applicable Interest Rates
2.1.4 - Revolving Note
2.2.2 - Term Note
5.1.4 - Subordination Agreement
5.2.2 - Joinder Agreement
5.3.1 - Officer's Certificate
6.6 - Existing Indebtedness
6.8 - Existing Liens
6.11 - Asset Dispositions and Mergers
6.18 - Transactions with Affiliates
7.1 - Company and its Subsidiaries
7.1.4 - Stockholders of the Company
7.2.2 - Material Agreements
7.3 - Financing Debt, Certain Investments, etc.
7.4 - Changes in Condition
7.7 - Litigation
7.14 - Environmental
7.15 - Multi-employer and Defined Benefit Plans
8.1.6 - Certain Stockholders of the Company
10.4.2 - Depository Institutions
12.1 - Interests in Credits
13.1.1 - Assignment and Acceptance
-viii-
10
AMERIPATH, INC.
CREDIT AGREEMENT
This Agreement, originally dated as of May 29, 1996 and amended and
restated on June 27, 1997, is among AmeriPath, Inc., a Delaware corporation,
the Subsidiaries of AmeriPath, Inc. from time to time party hereto, the Lenders
from time to time party hereto and BankBoston, N.A., f/k/a The First National
Bank of Boston, both in its capacity as a Lender and in its capacity as agent
for itself and the other Lenders. The parties agree as follows:
1. Restatement; Definitions.
1.1. Restatement. Effective as of the Initial
Closing Date, this Agreement amends and restates in its entirety the Credit
Agreement dated as of May 29, 1996, as amended and in effect on the date
hereof, among the Company, its Subsidiaries and a group of lenders for which
BankBoston, N.A., f/k/a The First National Bank of Boston, is acting as agent.
Amounts in respect of interest, commitment fees, Letter of Credit fees and
other amounts payable hereunder shall be payable in accordance with the terms
of this Agreement as in effect prior to the amendment and restatement on the
Initial Closing Date for periods prior to the Initial Closing Date and in
accordance with this Agreement as amended and restated hereby for periods from
and after the Initial Closing Date.
1.2. Definitions; Certain Rules of Construction.
Certain capitalized terms are used in this Agreement and in the other Credit
Documents with the specific meanings defined below in this Section 1. Except
as otherwise explicitly specified to the contrary or unless the context clearly
requires otherwise, (a) the capitalized term "Section" refers to sections of
this Agreement, (b) the capitalized term "Exhibit" refers to exhibits to this
Agreement, (c) references to a particular Section include all subsections
thereof, (d) the word "including" shall be construed as "including without
limitation", (e) accounting terms not otherwise defined herein have the meaning
provided under GAAP, (f) terms defined in the UCC and not otherwise defined
herein have the meaning provided under the UCC, (g) references to a particular
statute or regulation include all rules and regulations thereunder and any
successor statute, regulation or rules, in each case as from time to time in
effect and (h) references to a particular Person include such Person's
successors and assigns to the extent not prohibited by this Agreement and the
other Credit Documents. References to "the date hereof" mean the date first
set forth above.
1.2.1. "Accounts" is defined in Section
10.1.2.
1.2.2. "Accumulated Benefit Obligations"
means the actuarial present value of the accumulated benefit
obligations under any Plan, calculated in accordance with
Statement No. 87 of the Financial Accounting Standards Board.
11
1.2.3. "Acquired Party" shall mean any
Person, 100% of the outstanding capital stock or
beneficial interests or substantially all of the
assets of which are acquired by the Borrower in
connection with a Permitted Acquisition.
1.2.4. "Acquired Party EBITDA
Adjustment" means (a) for any calculation made
with respect to Sections 6.5 or 6.9.5 of this
Agreement in which six or less full months of the
Net Income of an Acquired Party have been
included, and only to the extent not already
included in, Consolidated Net Income, an amount
equal to the product of (i) the number of months
in the applicable period in which none of the Net
Income of such Acquired Party was included in
Consolidated Net Income, multiplied by (ii)
one-twelfth of Pro Forma EBITDA of such Acquired
Party as of the date of the Acquisition of such
Acquired Party or (b) for any calculation made
with respect to Section 6.5 or 6.9.5 of this
Agreement in which more than six months but less
than one full year of the Net Income of an
Acquired Party have been included, and only to the
extent not already included in, Consolidated Net
Income, an amount equal to the product of (X) the
number of months in the applicable period in which
none of the Net Income of such Acquired Party was
included in Consolidated Net Income, multiplied by
(Y) the amount of actual EBITDA of such Acquired
Party for each full month following its
Acquisition by the Borrower, divided by (Z) the
number of full months for which EBITDA of the
Acquired Party was included in Consolidated Net
Income.
1.2.5. "Acquisition Agreement" means the
documentation pursuant to which the Borrower
commits itself to make a Permitted Acquisition.
1.2.6. "Affected Class" is defined in
Section 12.6.2.
1.2.7. "Affected Lender" is defined in
Section 13.3.
1.2.8. "Affiliate" means, with respect
to the Borrower (or any other specified Person),
any other Person directly or indirectly
controlling, controlled by or under direct or
indirect common control with the Borrower (or such
specified Person), and shall include (a) any
officer or director or general partner of the
Borrower (or such specified Person) and (b) any
Person of which the Borrower (or such specified
Person) or any Affiliate (as defined in clause (a)
above) of the Borrower (or such specified Person)
shall, directly or indirectly, beneficially own
either (i) at least 5% of the outstanding equity
securities having the general power to vote or
(ii) at least 5% of all equity interests.
1.2.9. "Agent" means BankBoston in its
capacity as agent for the Lenders hereunder, as
well as its successors and assigns in such
capacity pursuant to Section 12.7.
-2-
12
1.2.10. "Aggregate Percentage Interest"
means, with respect to the Loan, the ratio that
the respective Commitments of the Lenders bear to
the total Commitments of all Lenders as from time
to time in effect and reflected in the Register.
1.2.11. "Agreement" means this Agreement
as from time to time amended, modified and in
effect.
1.2.12. "Annualized Interest Expense"
means, for any period, the sum of (a) the product
of the Revolving Loan outstanding as of the last
day of such period multiplied by the then current
Applicable Rate plus (b) the product of the Term
Loan outstanding as of the last day of such period
multiplied by the then current Applicable Rate
plus (c) the product of outstanding amounts under
any instrument of Subordinated Indebtedness as of
the last day of such period multiplied by the then
current annual interest rate on such instrument of
Subordinated Indebtedness.
1.2.13. "Applicable Rate" means, at any
date, the sum of:
(a) the rate shown in Exhibit 1 that
corresponds to the current ratio of
Consolidated Total Debt to
Consolidated Adjusted EBITDA for the
most recently completed period of
four consecutive fiscal quarters (it
being understood that the such ratio
could change on any Closing Date due
to the occurrence of a Permitted
Acquisition and the resulting
inclusion of an Acquired Party's Pro
Forma EBITDA in Consolidated
Adjusted EBITDA and additional
Financing Debt in Consolidated Total
Debt);
plus (b) an additional 3.00% effective
on the day the Agent notifies the
Company that the interest rates
hereunder are increasing as a result
of the occurrence and continuance of
an Event of Default until the
earlier of such time as (i) such
Event of Default is no longer
continuing or (ii) such Event of
Default is deemed no longer to
exist, in each case pursuant to
Section 8.3.
1.2.14. "Assignee" is defined in Section
13.1.1.
1.2.15. "Assignment and Acceptance" is
defined in Section 13.1.1.
1.2.16. "BankBoston" means BankBoston,
N.A., f/k/a The First National Bank of Boston.
1.2.17. "Banking Day" means any day
other than Saturday, Sunday or a day on which
banks in Boston, Massachusetts are authorized or
required by law or other governmental action to
close and, if such term is used with reference to
a Eurodollar
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Pricing Option, any day on which dealings are
effected in the Eurodollars in question by
first-class banks in the inter-bank Eurodollar
markets in New York, New York.
1.2.18. "Bankruptcy Code" means Title
11 of the United States Code.
1.2.19. "Bankruptcy Default" means an
Event of Default referred to in Section 8.1.10.
1.2.20. "Base Rate" means, on any date,
the greater of (a) the rate of interest announced
by BankBoston at the Boston Office as its Base
Rate or (b) the sum of 1/2% plus the Federal Funds
Rate.
1.2.21. "Borrower" means the Company.
1.2.22. "Borrowing Base" means, on any
date, 80% of the aggregate amount carried as
accounts receivable (reduced appropriately for
doubtful accounts) on the most recent Consolidated
balance sheet of the Company and its Subsidiaries
delivered in accordance with Section 6.4.3, minus
the aggregate amount of any such accounts
receivable that are more than 120 days past due;
provided, however, that the Borrowing Base shall
be reduced to $1.00 at any time where the Borrower
has failed to furnish the computation of the
Borrowing Base required by Section 6.4.3(b) within
five days after such computation was originally
due.
1.2.23. "Boston Office" means the
principal banking office of BankBoston in Boston,
Massachusetts.
1.2.24. "By-laws" means all written
by-laws, rules, regulations and all other
documents relating to the management, governance
or internal regulation of any Person other than an
individual, or interpretive of the Charter of such
Person, all as from time to time in effect.
1.2.25. "Capital Expenditures" means,
for any period, amounts added or required to be
added to the property, plant and equipment or
other fixed assets account on the Consolidated
balance sheet of the Company and its Subsidiaries,
prepared in accordance with GAAP, in respect of
(a) the acquisition, construction, improvement or
replacement of land, buildings, machinery,
equipment, leaseholds and any other real or
personal property, (b) to the extent not included
in clause (a) above, materials, contract labor and
direct labor relating thereto (excluding amounts
properly expensed as repairs and maintenance in
accordance with GAAP) and (c) software development
costs to the extent not expensed.
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14
1.2.26. "Capitalized Lease" means any
lease which is required to be capitalized on the
balance sheet of the lessee in accordance with
GAAP, including Statement Nos. 13 and 98 of the
Financial Accounting Standards Board.
1.2.27. "Capitalized Lease Obligations"
means the amount of the liability reflecting the
aggregate discounted amount of future payments
under all Capitalized Leases calculated in
accordance with GAAP, including Statement Nos. 13
and 98 of the Financial Accounting Standards
Board.
1.2.28. "Cash Equivalents" means:
(a) negotiable certificates of
deposit, time deposits (including sweep
accounts), demand deposits and bankers'
acceptances having a maturity of nine months
or less and issued by any United States
financial institution having capital and
surplus and undivided profits aggregating at
least $100,000,000 and rated at least Prime-1
by Xxxxx'x Investors Service, Inc. or A-1 by
Standard & Poor's Ratings Group or issued by
any Lender;
(b) corporate obligations having a
maturity of nine months or less and rated at
least Prime-1 by Xxxxx'x Investors Service,
Inc. or A-1 by Standard & Poor's Ratings
Group or issued by any Lender;
(c) any direct obligation of the
United States of America or any agency or
instrumentality thereof, or of any state or
municipality thereof, (i) which has a
remaining maturity at the time of purchase of
not more than one year or which is subject to
a repurchase agreement with any Lender (or
any other financial institution referred to
in clause (a) above) exercisable within one
year from the time of purchase and (ii)
which, in the case of obligations of any
state or municipality, is rated at least Aa
by Xxxxx'x Investors Service, Inc. or AA by
Standard & Poor's Ratings Group; and
(d) any mutual fund or other
pooled investment vehicle rated at least Aa
by Xxxxx'x Investors Service, Inc. or AA by
Standard & Poor's Ratings Group which invests
principally in obligations described above.
1.2.29. "CERCLA" means the federal
Comprehensive Environmental Response, Compensation
and Liability Act of 1980.
1.2.30. "CERCLIS" means the federal
Comprehensive Environmental Response Compensation
Liability Information System List (or any
successor document) promulgated under CERCLA.
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1.2.31. "Charter" means the
articles of organization, certificate of
incorporation, statute, constitution, joint
venture agreement, partnership agreement, trust
indenture, limited liability company agreement or
other charter document of any Person other than an
individual, each as from time to time in effect.
1.2.32. "Class" means, applied to the
Lenders, each of the following classes of Lenders:
(i) Lenders having Commitments under the Revolving
Loan and (ii) Lenders having Commitments under the
Term Loan.
1.2.33. "Closing Date" means the Initial
Closing Date and each other date on which any
extension of credit is made pursuant to Sections
2.1, 2.2 or 2.3.
1.2.34. "Code" means the federal
Internal Revenue Code of 1986, as amended from
time to time.
1.2.35. "Commitment" means, with respect
to any Lender, such Lender's obligations to extend
the credits contemplated by the Credit Documents;
the original Commitments being set forth in
Section 12.1 and the current Commitments being
recorded from time to time in the Register.
1.2.36. "Company" means AmeriPath, Inc.,
a Delaware corporation.
1.2.37. "Computation Covenants" means
Sections 6.5, 6.6.7, 6.6.11, 6.9.5, 6.10, 6.11,
6.12, 6.17 and 6.21.
1.2.38. "Consolidated" and
"Consolidating", when used with reference to any
term, mean that term as applied to the accounts of
the Company (or other specified Person) and all of
its Subsidiaries (or other specified group of
Persons), or such of its Subsidiaries as may be
specified, consolidated (or combined) or
consolidating (or combining), as the case may be,
in accordance with GAAP and with appropriate
deductions for minority interests in Subsidiaries.
1.2.39. "Consolidated Adjusted EBITDA"
means, for any period, an amount equal to the sum
of (a) Consolidated Net Income of the Company and
its Subsidiaries for such period plus (b) all
amounts deducted in computing such Consolidated
Net Income in respect of (i) taxes based upon or
measured by income, (ii) Consolidated Interest
Expense and (iii) depreciation and amortization
plus (c) any Acquired Party EBITDA Adjustment.
1.2.40. "Consolidated EBITDA" means, for
any period, an amount equal to the sum of (a)
Consolidated Net Income of the Company and its
Subsidiaries for such period plus (b) all amounts
deducted in computing such Consolidated Net Income
in
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16
respect of (i) taxes based upon or measured by
income, (ii) Consolidated Interest Expense and
(iii) depreciation and amortization.
1.2.41. "Consolidated Interest Expense"
means, for any period, the Interest Expense paid
or accrued by the Company and its Subsidiaries on
a Consolidated basis.
1.2.42. "Consolidated Net Income" means,
for any period, the net income (or loss) of the
Company and its Subsidiaries, determined in
accordance with GAAP on a Consolidated basis;
provided, however, that Consolidated Net Income
shall not include the net amount after taxes of:
(a) the income (or loss) of any
other Person accrued prior to the date such
other Person becomes a Subsidiary or is
merged into or consolidated with such Person;
(b) the income (or loss) of any
other Person (other than a Subsidiary) in
which such Person has an ownership interest;
provided, however, that (i) Net Income shall
include amounts in respect of the income of
such other Person when actually received in
cash by such Person in the form of dividends
or similar Distributions and (ii) Net Income
shall be reduced by the aggregate amount of
all Investments, regardless of the form
thereof, made by such Person in such other
Person for the purpose of funding any deficit
or loss of such other Person;
(c) all amounts included in
computing such net income (or loss) in
respect of the write-up of any asset or the
retirement of any Indebtedness or equity at
less than face value after any acquisition;
(d) extraordinary and nonrecurring
gains;
(e) the income of any Subsidiary
to the extent the payment of such income in
the form of a Distribution or repayment of
Indebtedness to such Person is not permitted,
whether on account of any Charter or By-law
restriction, any agreement, instrument, deed
or lease or any law, statute, judgment,
decree or governmental order, rule or
regulation applicable to such Subsidiary;
(f) any after-tax gains or losses
attributable to returned surplus assets of
any Plan; and
(g) the amount, up to an aggregate
of $3,500,000, included in computing such net
income (or loss) in respect of the expenses
of the
-7-
17
Company incurred on or prior to May 31, 1997
in connection with its terminated initial
public offering.
1.2.43. "Consolidated Operating Cash
Flow" means, for any period, the total of (i)
Consolidated EBITDA minus (ii) taxes, based upon
or measured by net taxable income, paid in cash by
the Company and its Subsidiaries minus (iii)
Capital Expenditures.
1.2.44. "Consolidated Senior Debt" means
all Financing Debt of the Company and the
Subsidiaries on a Consolidated basis other than in
respect of Subordinated Indebtedness.
1.2.45. "Consolidated Senior Interest
Expense" means, for any period, the aggregate
amount of interest, including commitment fees and
payments in the nature of interest under
Capitalized Leases and Interest Rate Protection
Agreements, accrued by the Company and its
Subsidiaries on a Consolidated basis (whether such
interest is reflected as an item of expense or
capitalized) on Consolidated Senior Debt.
1.2.46. "Consolidated Total Debt" means,
at any date, all Financing Debt of the Company and
its Subsidiaries on a Consolidated basis.
1.2.47. "Consolidated Total Debt
Service" means, for any period, the sum of (i)
Consolidated Interest Expense plus (ii) the
aggregate amount of all mandatory scheduled
payments, prepayments and sinking fund payments
paid or accrued by the Company and its
Subsidiaries during such period with respect to
Financing Debt, including contingent obligations
under agreements relating to Permitted
Acquisitions (made before or after the date of
this Agreement) or with respect to principal paid
or accrued by the Company in respect of
Subordinated Indebtedness and Contingent Notes
(excluding prepayments permitted by the proviso in
Section 6.14 and voluntary prepayments of the
Loan).
1.2.48. "Consolidated Total Liabilities"
means, at any date, all Indebtedness of the
Company and its Subsidiaries on a Consolidated
basis.
1.2.49. "Contingent Notes" means the
contingent promissory notes constituting
Subordinated Indebtedness issued to the Sellers in
connection with a Permitted Acquisition made
hereunder or under this Agreement prior to its
amendment and restatement on the Initial Closing
Date.
1.2.50. "Credit Documents" means:
(a) this Agreement, the Notes,
each Letter of Credit, each draft presented
or accepted under a Letter of Credit, each
Interest Rate Protection
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18
Agreement provided by a Lender (or an
Affiliate of a Lender) to the Borrower or any
of its Subsidiaries and the Subordination
Agreement, each as from time to time in
effect;
(b) all financial statements,
reports, notices, mortgages, assignments, UCC
financing statements or certificates
delivered to the Agent or any of the Lenders
by the Company, any of its Subsidiaries or
any other Obligor in connection herewith or
therewith; and
(c) any other present or future
agreement or instrument from time to time
entered into among the Company, any of its
Subsidiaries or any other Obligor, on one
hand, and the Agent, any Letter of Credit
Issuer or all the Lenders, on the other hand,
relating to, amending or modifying this
Agreement or any other Credit Document
referred to above or which is stated to be a
Credit Document, each as from time to time in
effect.
1.2.51. "Credit Obligations" means all
present and future liabilities, obligations and
Indebtedness of the Company, any of its
Subsidiaries or any other Obligor owing to the
Agent or any Lender under or in connection with
this Agreement or any other Credit Document,
including obligations in respect of principal,
interest, reimbursement obligations under Letters
of Credit and Interest Rate Protection Agreements
provided by a Lender (or an affiliate of a
Lender), commitment fees, Letter of Credit fees,
amounts provided for in Sections 3.2.4, 3.5, 3.6,
3.7, 3.8 and 11 and other fees, charges,
indemnities and expenses from time to time owing
hereunder or under any other Credit Document
(whether accruing before or after a Bankruptcy
Default).
1.2.52. "Credit Participant" is defined
in Section 13.2.
1.2.53. "Credit Security" means all
assets now or from time to time hereafter
subjected to a security interest, mortgage or
charge (or intended or required so to be subjected
pursuant to this Agreement or any other Credit
Document) to secure the payment or performance of
any of the Credit Obligations, including the
assets described in Section 10.1.
1.2.54. "Default" means any Event of
Default and any event or condition which with the
passage of time or giving of notice, or both,
would become an Event of Default and the filing
against the Company, any of its Subsidiaries or
any other Obligor of a petition commencing an
involuntary case under the Bankruptcy Code.
1.2.55. "Delinquency Period" is defined
in Section 12.4.4.
1.2.56. "Delinquent Lender" is defined
in Section 12.4.4.
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19
1.2.57. "Delinquent Payment" is defined
in Section 12.4.4.
1.2.58. "Distribution" means, with
respect to the Company (or other specified Person):
(a) the declaration or payment of
any dividend or distribution, including
dividends payable in shares of capital stock
of or other equity interests in the Company
(or such specified Person), on or in respect
of any shares of any class of capital stock
of or other equity interests in the Company
(or such specified Person);
(b) the purchase or redemption of
any shares of any class of capital stock of
or other equity interest in the Company (or
such specified Person) or of options,
warrants or other rights for the purchase of
such shares, directly, indirectly through a
Subsidiary or otherwise;
(c) any other distribution on or
in respect of any shares of any class of
capital stock of or equity or other
beneficial interest in the Company (or such
specified Person);
(d) any payment of principal or
interest with respect to, or any purchase,
redemption or defeasance of, any Indebtedness
of the Company (or such specified Person)
which by its terms or the terms of any
agreement is subordinated to the payment of
the Credit Obligations; and
(e) any payment, loan or advance
by the Company (or such specified Person) to,
or any other Investment by the Company (or
such specified Person) in, the holder of any
shares of any class of capital stock of or
equity interest in the Company (or such
specified Person), or any Affiliate of such
holder;
provided, however, that the term "Distribution"
shall not include (i) dividends payable in
perpetual common stock of or other similar equity
interests in the Company (or such specified
Person) or (ii) payments in the ordinary course of
business in respect of (A) reasonable compensation
paid to employees, officers and directors, (B)
advances to employees for travel expenses, drawing
accounts and similar expenditures, or (C) rent
paid to, or accounts payable for services rendered
or goods sold by, non-Affiliates that own capital
stock of or other equity interests in the Company
(or such specified Person).
1.2.59. "EBITDA" means, for any period,
an amount equal to the sum of (a) the Net Income
(or loss) of any Person for such period plus (b)
all amounts deducted in
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20
computing such Net Income in respect of (i) taxes
based upon or measured by income, (ii) Interest
Expense and (iii) depreciation and amortization.
1.2.60. "Environmental Laws" means all
applicable federal, state or local statutes, laws,
ordinances, codes, rules, regulations and
guidelines (including consent decrees and
administrative orders) relating to public health
and safety and protection of the environment,
including OSHA.
1.2.61. "Equity Transaction" means any
issuance or sale by the Company or any of its
Subsidiaries of any shares of capital stock, other
equity interests or options, warrants or other
purchase rights to acquire such capital stock or
other equity interests, of the Company or any of
its Subsidiaries, to any Person; provided,
however, that the term "Equity Transaction" shall
not include such issuances or sales (i) to any of
the Obligors or their officers, employees and
directors, (ii) to any Person pursuant to the
Company's Amended and Restated 1996 Stock Option
Plan or 1996 Director Stock Option Plan or (iii)
that comprise a portion of the Purchase Price in
any Permitted Acquisition.
1.2.62. "ERISA" means the federal
Employee Retirement Income Security Act of 1974.
1.2.63. "ERISA Group Person" means the
Company, any Subsidiary of the Company and any
Person which is a member of the controlled group
or under common control with the Company or any
Subsidiary within the meaning of section 414 of
the Code or section 4001(a)(14) of ERISA.
1.2.64. "Eurodollars" means, with
respect to any Lender, deposits of United States
Funds in a non-United States office or an
international banking facility of such Lender.
1.2.65. "Eurodollar Basic Rate" means,
for any Eurodollar Interest Period, the rate of
interest at which Eurodollar deposits in an amount
comparable to the portion of the Loan as to which
a Eurodollar Pricing Option has been elected and
which have a term corresponding to such Eurodollar
Interest Period are offered to the Agent by first
class banks in the inter-bank Eurodollar market
for delivery in immediately available funds at a
Eurodollar Office on the first day of such
Eurodollar Interest Period as determined by the
Agent at approximately 10:00 a.m. (Boston time)
two Banking Days prior to the date upon which such
Eurodollar Interest Period is to commence (which
determination by the Agent shall, in the absence
of manifest error, be conclusive).
1.2.66. "Eurodollar Interest Period"
means any period, selected as provided in Section
3.2.1, of one, two, three or six months,
commencing on any Banking Day and ending on the
corresponding date in the subsequent calendar
month so indicated
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(or, if such subsequent calendar month has no
corresponding date, on the last day of such
subsequent calendar month); provided, however,
that subject to Section 3.2.3, if any Eurodollar
Interest Period so selected would otherwise begin
or end on a date which is not a Banking Day, such
Eurodollar Interest Period shall instead begin or
end, as the case may be, on the immediately
preceding or succeeding Banking Day as determined
by the Agent in accordance with the then current
banking practice in the inter-bank Eurodollar
market with respect to Eurodollar deposits at the
applicable Eurodollar Office, which determination
by the Agent shall, in the absence of manifest
error, be conclusive.
1.2.67. "Eurodollar Office" means such
non-United States office or international banking
facility of the Agent as the Agent may from time
to time select.
1.2.68. "Eurodollar Pricing Options"
means the options granted pursuant to Section
3.2.1 to have the interest on any portion of the
Loan computed on the basis of a Eurodollar Rate.
1.2.69. "Eurodollar Rate" for any
Eurodollar Interest Period means the rate, rounded
upward to the nearest 1/100%, obtained by dividing
(a) the Eurodollar Basic Rate for such Eurodollar
Interest Period by (b) an amount equal to 1 minus
the Eurodollar Reserve Rate; provided, however,
that if at any time during such Eurodollar
Interest Period the Eurodollar Reserve Rate
applicable to any outstanding Eurodollar Pricing
Option changes, the Eurodollar Rate for such
Eurodollar Interest Period shall automatically be
adjusted to reflect such change, effective as of
the date of such change.
1.2.70. "Eurodollar Reserve Rate" means
the stated maximum rate (expressed as a decimal)
of all reserves (including any basic,
supplemental, marginal or emergency reserve or any
reserve asset), if any, as from time to time in
effect, required by any Legal Requirement to be
maintained by any Lender against (a) "Eurocurrency
liabilities" as specified in Regulation D of the
Board of Governors of the Federal Reserve System
applicable to Eurodollar Pricing Options, (b) any
other category of liabilities that includes
Eurodollar deposits by reference to which the
interest rate on portions of the Loan subject to
Eurodollar Pricing Options is determined, (c) the
principal amount of or interest on any portion of
the Loan subject to a Eurodollar Pricing Option or
(d) any other category of extensions of credit, or
other assets, that includes loans subject to a
Eurodollar Pricing Option by a non-United States
office of any of the Lenders to United States
residents, in each case without the benefits of
credits for prorations, exceptions or offsets that
may be available to a Lender.
1.2.71. "Event of Default" is defined in
Section 8.1.
1.2.72. "Exchange Act" means the federal
Securities Exchange Act of 1934.
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1.2.73. "FACA" means the Federal
Assignment of Claims Act as set forth in 31 U.S.C.
Section 3727 and 41 U.S.C. Section 15.
1.2.74. "Federal Funds Rate" means, for
any day, the rate equal to the weighted average
(rounded upward to the nearest 1/8%) of the rates
on overnight federal funds transactions with
members of the Federal Reserve System arranged by
federal funds brokers, (a) as such weighted
average is published for such day (or, if such day
is not a Banking Day, for the immediately
preceding Banking Day) by the Federal Reserve Bank
of New York or (b) if such rate is not so
published for such Banking Day, as determined by
the Agent using any reasonable means of
determination. Each determination by the Agent of
the Federal Funds Rate shall, in the absence of
manifest error, be conclusive.
1.2.75. "Final Maturity Date" means (a)
June 30, 2002 for the Revolving Loan and (b) June
30, 2004 for the Term Loan.
1.2.76. "Financial Officer" of the
Company (or other specified Person) means its
chief executive officer, chief financial officer,
chief operating officer, chairman, president,
treasurer or any of its vice presidents whose
primary responsibility is for its financial
affairs, all of whose incumbency and signatures
have been certified to the Agent by the secretary
or other appropriate attesting officer of the
Company (or such specified Person).
1.2.77. "Financing Debt" means each of
the items described in clauses (a) through (e) of
the definition of the term "Indebtedness."
1.2.78. "Foreign Trade Regulations"
means (a) any act that prohibits or restricts, or
empowers the President or any executive agency of
the United States of America to prohibit or
restrict, exports to or financial transactions
with any foreign country or foreign national, (b)
the regulations with respect to certain prohibited
foreign trade transactions set forth at 22 C.F.R.
Parts 120-130 and 31 C.F.R. Parts 500-590 and (c)
any order, regulation, ruling, interpretation,
direction, instruction or notice relating to any
of the foregoing.
1.2.79. "Funding Liability" means (a)
any Eurodollar deposit which was used (or deemed
by Section 3.2.6 to have been used) to fund any
portion of the Loan subject to a Eurodollar
Pricing Option, and (b) any portion of the Loan
subject to a Eurodollar Pricing Option funded (or
deemed by Section 3.2.6 to have been funded) with
the proceeds of any such Eurodollar deposit.
1.2.80. "GAAP" means generally accepted
accounting principles as from time to time in
effect, including the statements and
interpretations of the United States Financial
Accounting Standards Board.
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23
1.2.81. "Government Receivables" means
any Accounts as to which the United States of
America or any agency or department thereof is the
obligor.
1.2.82. "Guarantee" means, with respect
to the Company (or other specified Person):
(a) any guarantee by the Company
(or such specified Person) of the payment or
performance of, or any contingent obligation
by the Company (or such specified Person) in
respect of, any Indebtedness or other
obligation of any primary obligor;
(b) any other arrangement whereby
credit is extended to a primary obligor on
the basis of any promise or undertaking of
the Company (or such specified Person),
including any binding "comfort letter" or
"keep well agreement" written by the Company
(or such specified Person), to a creditor or
prospective creditor of such primary obligor,
to (i) pay the Indebtedness of such primary
obligor, (ii) purchase an obligation owed by
such primary obligor, (iii) pay for the
purchase or lease of assets or services
regardless of the actual delivery thereof or
(iv) maintain the capital, working capital,
solvency or general financial condition of
such primary obligor;
(c) any liability of the Company
(or such specified Person), as a general
partner of a partnership in respect of
Indebtedness or other obligations of such
partnership;
(d) any liability of the Company
(or such specified Person) as a joint
venturer of a joint venture in respect of
Indebtedness or other obligations of such
joint venture;
(e) any liability of the Company
(or such specified Person) with respect to
the tax liability of others as a member of a
group that is consolidated for tax purposes;
and
(f) reimbursement obligations,
whether contingent or matured, of the Company
(or such specified Person) with respect to
letters of credit, bankers acceptances,
surety bonds, other financial guarantees and
Interest Rate Protection Agreements,
whether or not any of the foregoing are reflected
on the balance sheet of the Company (or such
specified Person) or in a footnote thereto;
provided, however, that the term "Guarantee" shall
not include endorsements for collection or deposit
in the ordinary course of business. The amount of
any Guarantee and the amount of Indebtedness
-14-
24
resulting from such Guarantee shall be the
maximum amount that the guarantor may become
obligated to pay in respect of the obligations
(whether or not such obligations are outstanding
at the time of computation).
1.2.83. "Guarantor" means each
Subsidiary of the Borrower listed on the signature
page hereto or which subsequently becomes party to
this Agreement as a Guarantor.
1.2.84. "Hazardous Material" means any
pollutant, toxic or hazardous material or waste,
including any "hazardous substance" or "pollutant"
or "contaminant" as defined in section 101(14) of
CERCLA or any other Environmental Law or regulated
as toxic or hazardous under RCRA or any other
Environmental Law.
1.2.85. "Impermissible Reference" means,
relative to the opinion or certification of any
independent public accountant as to any financial
statement of any Obligor, any qualification or
exception to such opinion or certification
(a) which expresses concern about
whether or not such Obligor will be able to
meet its obligations as such become due, or
otherwise will be able to operate or conduct
its business in the future;
(b) which relates to the limited
scope of examination of matters relevant to
such financial statement;
(c) which relates to the treatment
or classification of any item in such
financial statement and which, as a condition
to its removal, would require an adjustment
to such item the effect of which would be to
cause there to be a Default under Sections
6.5 through 6.21; or
(d) which, in the reasonable
judgment of the Required Lenders, is not
acceptable.
1.2.86. "Indebtedness" means all
obligations, contingent or otherwise, which in
accordance with GAAP are required to be classified
upon the balance sheet of the Company (or other
specified Person) as liabilities, but in any event
including (without duplication):
(a) borrowed money;
(b) indebtedness evidenced by
notes, debentures or similar instruments;
(c) Capitalized Lease Obligations;
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(d) reimbursement obligations,
whether contingent or matured, with respect
to letters of credit, bankers acceptances,
surety bonds, other financial guarantees and
Interest Rate Protection Agreements (without
duplication of other Indebtedness supported
or guaranteed thereby);
(e) unfunded pension liabilities;
(f) mandatory redemption or
dividend rights on capital stock (or other
equity);
(g) obligations that are
immediately and directly due and payable out
of the proceeds of or production from
property;
(h) liabilities secured by any
Lien existing on property owned or acquired
by the Company (or such specified Person),
whether or not the liability secured thereby
shall have been assumed; and
(i) all Guarantees in respect of
Indebtedness of others.
1.2.87. "Indemnified Party" is defined
in Section 11.2.
1.2.88. "Initial Closing Date" means the
first date on or prior to June 27, 1997 on which
all the conditions set forth in Section 5.1 have
been satisfied.
1.2.89. "Interest Expense" means, for
any period, the aggregate amount of interest,
including commitment fees and payments in the
nature of interest under Capitalized Leases and
Interest Rate Protection Agreements (whether such
interest is reflected as an item of expense or
capitalized), paid or accrued by any Person in
accordance with GAAP.
1.2.90. "Interest Rate Protection
Agreement" means any interest rate swap, interest
rate cap, interest rate hedge or other contractual
arrangement that converts variable interest rates
into fixed interest rates, fixed interest rates
into variable interest rates or other similar
arrangements.
1.2.91. "Investment" means, with respect
to the Borrower (or other specified Person):
(a) any share of capital
stock, partnership or other equity interest,
evidence of Indebtedness or other security
issued by any other Person;
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(b) any loan, advance or extension
of credit to, or contribution to the capital
of, any other Person;
(c) any Guarantee of the
Indebtedness of any other Person;
(d) any acquisition of all or any
part of the business of any other Person or
the assets comprising such business or part
thereof; and
(e) any other similar investment.
The investments described in the foregoing
clauses (a) through (e) shall be included in the
term "Investment" whether they are made or
acquired by purchase, exchange, issuance of stock
or other securities, merger, reorganization or any
other method; provided, however, that the term
"Investment" shall not include (i) trade and
customer accounts receivable for property leased,
goods furnished or services rendered in the
ordinary course of business and payable in
accordance with customary trade terms, (ii)
advances and prepayments to suppliers for property
leased, goods furnished and services rendered in
the ordinary course of business, (iii) advances to
employees for travel expenses, drawing accounts
and similar expenditures, (iv) stock or other
securities acquired in connection with the
satisfaction or enforcement of Indebtedness or
claims due to the Company (or such specified
Person) or as security for any such Indebtedness
or claim or (v) demand deposits in banks or
similar financial institutions.
In determining the amount of outstanding
Investments:
(A) the amount of any Investment shall
be the cost thereof minus any returns of
capital in cash on such Investment
(determined in accordance with GAAP without
regard to amounts realized as income on such
Investment);
(B) the amount of any Investment in
respect of a purchase described in clause
(d) above shall include the amount of any
Financing Debt assumed in connection with
such purchase or secured by any asset
acquired in such purchase (whether or not any
Financing Debt is assumed) or for which any
Person that becomes a Subsidiary is liable on
the date on which the securities of such
Person are acquired; and
(C) no Investment shall be increased
as the result of an increase in the
undistributed retained earnings of the Person
in which the Investment was made or decreased
as a result of an equity interest in the
losses of such Person.
1.2.92. "Legal Requirement" means any
present or future requirement imposed upon any of
the Lenders or the Company and its Subsidiaries by
any law,
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statute, rule, regulation, directive, order,
decree, guideline (or any interpretation thereof
by courts or of administrative bodies) of the
United States of America, or any jurisdiction in
which any Eurodollar Office is located or any
state or political subdivision of any of the
foregoing, or by any board, governmental or
administrative agency, central bank or monetary
authority of the United States of America, any
jurisdiction in which any Eurodollar Office is
located, or any political subdivision of any of
the foregoing. Any such requirement imposed on
any of the Lenders which such Lender reasonably
believes has the force of law shall be deemed to
be a Legal Requirement.
1.2.93. "Lender" means each of the
Persons listed as lenders on the signature page
hereto, including BankBoston in its capacity as a
Lender and such other Persons who may from time to
time own an Aggregate Percentage Interest in the
Loan, but the term "Lender" shall not include any
Credit Participant.
1.2.94. "Lending Officer" means such
individuals whom the Agent may designate by notice
to the Company from time to time as an officer who
may receive telephone requests for borrowings
under Section 2.1.3.
1.2.95. "Letter of Credit" is defined in
Section 2.3.1.
1.2.96. "Letter of Credit Exposure"
means, at any date, the sum of (a) the aggregate
face amount of all drafts that may then or
thereafter be presented by beneficiaries under all
Letters of Credit then outstanding, plus (b) the
aggregate face amount of all drafts that the
Letter of Credit Issuer has previously accepted
under Letters of Credit but has not paid.
1.2.97. "Letter of Credit Issuer" means,
for any Letter of Credit, BankBoston or, in the
event BankBoston does not for any reason issue a
requested Letter of Credit, another Lender with a
Percentage Interest in the Revolving Loan willing
to issue such Letter of Credit in accordance with
Section 2.3 and who is reasonably acceptable to
the Agent.
1.2.98. "Lien" means, with respect to
the Company (or any other specified Person):
(a) any lien, encumbrance,
mortgage, pledge, charge or security interest
of any kind upon any property or assets of
the Company (or such specified Person),
whether now owned or hereafter acquired, or
upon the income or profits therefrom;
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(b) the acquisition of, or the
agreement to acquire, any property or asset
upon conditional sale or subject to any other
title retention agreement, device or
arrangement (including a Capitalized Lease);
(c) the sale, assignment, pledge
or transfer for security of any accounts,
general intangibles or chattel paper of the
Company (or such specified Person), with or
without recourse;
(d) the transfer of any tangible
property or assets for the purpose of
subjecting such items to the payment of
previously outstanding Indebtedness in
priority to payment of the general creditors
of the Company (or such specified Person);
and
(e) the existence for a period of
more than 120 consecutive days of any
Indebtedness against the Company (or such
specified Person) which if unpaid would by
law or upon a Bankruptcy Default be given any
priority over general creditors.
1.2.99. "Loan" means the Revolving Loan
and the Term Loan, collectively.
1.2.100. "Loan Account" is defined in
Section 2.1.4.
1.2.101. "Management Agreements" shall
mean the agreements entered into by the Company or
any of its Subsidiaries, on the one hand, and a
professional association or corporation which
employs physicians engaged in a pathology
practice, on the other hand, for the long-term
management of such physician practice, including
(i) the Management Agreement by and between
AmeriPath Cincinnati, Inc. and AmeriPath Ohio,
Inc. dated September 30, 1996, as amended, (ii)
the Management Agreement by and between Xxxx
Xxxxxx, M.D., Inc. and AmeriPath, Inc. dated
October 15, 1996, (iii) the Management Agreement
by and between Xxxx X. Xxxxxxxxx, M.D., P.A. and
AmeriPath Texas, Inc. dated September 30, 1996, as
amended on January 17, 1997 and (iv) any other
similar management agreement entered into by the
Company or one of its Subsidiaries after the date
hereof.
1.2.102. "Margin Stock" means "margin
stock" within the meaning of Regulations G, T, U
or X of the Board of Governors of the Federal
Reserve System.
1.2.103. "Material Adverse Change"
means, since any specified date or from the
circumstances existing immediately prior to the
happening of any specified event, a material
adverse change in (a) the business, assets,
financial condition, income or prospects of the
Company (on an individual basis) or the Company
and its Subsidiaries (on a Consolidated basis),
whether as a result of (i) general economic
conditions affecting the industry in which the
Company and its Subsidiaries are engaged, (ii)
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difficulties in obtaining supplies and raw
materials, (iii) fire, flood or other natural
calamities, (iv) environmental pollution, (v)
regulatory changes, judicial decisions, war or
other governmental action or (vi) any other event
or development, whether or not related to those
enumerated above or (b) the ability of the
Obligors to perform their obligations under the
Credit Documents or (c) the rights and remedies of
the Agent and the Lenders under the Credit
Documents.
1.2.104. "Material Agreements" is
defined in Section 7.2.2.
1.2.105. "Material Plan" means any Plan
or Plans, collectively, as to which (a) the excess
of (i) the aggregate Accumulated Benefit
Obligations under such Plan or Plans over (ii) the
aggregate fair market value of the assets of such
Plan or Plans allocable to such benefits, all
determined as of the then most recent valuation
date or dates for such Plan or Plans, is greater
than (b) $500,000.
1.2.106. "Maximum Amount of Revolving
Credit" is defined in Section 2.1.2.
1.2.107. "Multiemployer Plan" means any
Plan that is a "multiemployer plan" as defined in
section 4001(a)(3) of ERISA.
1.2.108. "Net Equity Proceeds" means the
cash proceeds received by the Company or any of
its Subsidiaries in connection with any Equity
Transaction (net of related actual out-of-pocket
fees and expenses incurred by the Company in the
exercise of the reasonable business judgment of
its officers).
1.2.109. "Net Income" means, for any
period, the net income (or loss) of any Person,
determined in accordance with GAAP; provided,
however, that Net Income shall not include:
(a) all amounts included in
computing such net income (or loss) in
respect of the write-up of any asset or the
retirement of any Indebtedness or equity at
less than face value after any acquisition;
(b) extraordinary and nonrecurring
gains;
(c) any after-tax gains or losses
attributable to returned surplus assets of
any Plan.
1.2.110. "Nonperforming Lender" is
defined in Section 12.4.4.
1.2.111. "Notes" means each of the
Revolving Notes and the Term Notes.
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1.2.112. "Obligor" means the Company and
each Guarantor.
1.2.113. "OSHA" means the federal
Occupational Health and Safety Act.
1.2.114. "Overdue Reimbursement Rate"
means, at any date, the highest Applicable Rate
then in effect.
1.2.115. "Payment Date" means the first
Banking Day of each month, commencing with the
first such date after the Initial Closing Date.
1.2.116. "PBGC" means the Pension
Benefit Guaranty Corporation or any successor
entity.
1.2.117. "Percentage Interest" means,
with respect to the Revolving Loan, the Term Loan
or Letter of Credit Exposure, the ratio that the
respective Commitments of the Lenders with respect
to such portion of the Loan (or Letter of Credit
Exposure) bear to the total Commitments in respect
of such portion of the Loan (or Letter of Credit
Exposure) of all Lenders as from time to time in
effect and reflected in the Register.
1.2.118. "Performing Lender" is defined
in Section 12.4.4.
1.2.119. "Permitted Acquisition" means
an Investment by the Borrower permitted under
Section 6.9.5.
1.2.120. "Person" means any present or
future natural person or any corporation,
association, partnership, joint venture, limited
liability, joint stock or other company, business
trust, trust, organization, business or government
or any governmental agency or political
subdivision thereof.
1.2.121. "Plan" means, at any date, any
pension benefit plan subject to Title IV of ERISA
maintained, or to which contributions have been
made or are required to be made, by any ERISA
Group Person within six years prior to such date.
1.2.122. "Pledged Indebtedness" is
defined in Section 10.1.6.
1.2.123. "Pledged Rights" is defined in
Section 10.1.5.
1.2.124. "Pledged Securities" means the
Pledged Stock, the Pledged Rights and the Pledged
Indebtedness, collectively.
1.2.125. "Pledged Stock" is defined in
Section 10.1.4.
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1.2.126. "Pro Forma EBITDA" shall mean,
for any period, an amount calculated on a pro
forma basis taking into account the Permitted
Acquisition equal to (a) the historical EBITDA of
the Acquired Party and (b) any non-GAAP adjustment
to Net Income to the extent that such adjustment
is approved by the Required Lenders.
1.2.127. "Purchase Price" means the
amount of the consideration, including, but not
limited to, cash or Cash Equivalents, capital
stock, assets, debt, including contingent or other
promissory notes, and any other form of payment,
for any Permitted Acquisition; provided, however,
that the amount of any Contingent Note included in
this definition of Purchase Price shall be the
lesser of (a) the maximum principal amount of such
Contingent Note or (b) the principal amount of
such Contingent Note that becomes payable by the
Borrower at the time that the Borrower attains the
level of Pro Forma EBITDA previously determined by
the Required Lenders.
1.2.128. "RCRA" means the federal
Resource Conservation and Recovery Act, 42 U.S.C.
Section 690, et seq.
1.2.129. "Register" is defined in
Section 13.1.3.
1.2.130. "Replacement Lender" is defined
in Section 13.3.
1.2.131. "Required Class Lenders" means,
with respect to any approval, consent,
modification, waiver or other action to be taken
by the Agent or the Lenders under the Credit
Documents which requires action by the Required
Class Lenders for either Class, such Lenders as
own at least a majority of the Percentage
Interests in the Revolving Loan or the Term Loan,
as the case may be.
1.2.132. "Required Lenders" means, with
respect to any approval, consent, modification,
waiver or other action to be taken by the Agent or
the Lenders under the Credit Documents which
require action by the Required Lenders, such
Lenders as own at least a majority of the
Aggregate Percentage Interests in the Loan;
provided, however, that with respect to any
matters referred to in the proviso to Section
12.6.1, Required Lenders means such Lenders as own
at least the respective portions of the Aggregate
Percentage Interests in the Loan required by such
proviso.
1.2.133. "Revolving Loan" is defined in
Section 2.1.4.
1.2.134. "Revolving Notes" is defined in
Section 2.1.4.
1.2.135. "Securities Act" means the
federal Securities Act of 1933.
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1.2.136. "Sellers" means the Person or
Persons selling or otherwise transferring the
capital stock, partnership or other equity
interest or assets of the Acquired Party to the
Borrower pursuant to a Permitted Acquisition.
1.2.137. "Subordinated Indebtedness"
means Indebtedness of the Borrower which is
subordinated to the Credit Obligations pursuant to
a Subordination Agreement or on terms approved by
the Required Lenders in writing.
1.2.138. "Subordination Agreement" shall
be an agreement in form and substance
substantially similar to Exhibit 5.1.4.
1.2.139. "Subsidiary" means any Person
of which the Company (or other specified Person)
shall at the time, directly or indirectly through
one or more of its Subsidiaries, or through a
trust or similar entity controlled by the Company
(or other specified Person) or a Subsidiary, (a)
own at least 50% of the outstanding capital stock
(or other shares of beneficial interest) entitled
to vote generally, (b) hold at least 50% of the
partnership, joint venture or similar interests or
(c) be a general partner or joint venturer.
1.2.140. "Summit Partners" means
collectively, Summit Ventures III, L.P., Summit
Investors II, L.P. and Summit Subordinated Debt
Fund, L.P.
1.2.141. "Tax" means any present or
future tax, levy, duty, impost, deduction,
withholding or other charges of whatever nature at
any time required by any Legal Requirement (a) to
be paid by any Lender or (b) to be withheld or
deducted from any payment otherwise required
hereby to be made to any Lender, in each case on
or with respect to its obligations hereunder, the
Loan, any payment in respect of the Credit
Obligations or any Funding Liability not included
in the foregoing; provided, however, that the term
"Tax" shall not include taxes imposed upon or
measured by the net income of such Lender (other
than withholding taxes) or franchise taxes.
1.2.142. "Term Loan" is defined in
Section 2.2.1.
1.2.143. "Term Note" is defined in
Section 2.2.2.
1.2.144. "UCC" means the Uniform
Commercial Code as in effect in Massachusetts on
the date hereof; provided, however, that with
respect to the perfection of the Agent's Lien in
the Credit Security and the effect of
nonperfection thereof, the term "UCC" means the
Uniform Commercial Code as in effect in any
jurisdiction the laws of which are made applicable
by Section 9-103 of the Uniform Commercial Code as
in effect in Massachusetts.
1.2.145. "Uniform Customs and Practice"
is defined in Section 2.3.7.
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1.2.146. "United States Funds" means
such coin or currency of the United States of
America as at the time shall be legal tender
therein for the payment of public and private
debts.
1.2.147. "Wholly Owned Subsidiary" means
any Subsidiary of which all of the outstanding
capital stock (or other shares of beneficial
interest) entitled to vote generally (other than
directors' qualifying shares) is owned by the
Company (or other specified Person) directly, or
indirectly through one or more Wholly Owned
Subsidiaries.
1.2.148. "8% Senior Subordinated Notes"
is defined in Section 6.10.5.
1.2.149. "10% Junior Subordinated Notes"
is defined in Section 6.10.5.
2. The Credits.
2.1. Revolving Credit.
2.1.1. Revolving Loan. Subject to all
the terms and conditions of this Agreement and so
long as no Default then exists, from time to time
on and after the Initial Closing Date and prior to
the Final Maturity Date the Lenders will,
severally in accordance with their respective
Percentage Interests in the Revolving Loan, make
loans to the Borrower in such amounts as may be
requested by the Borrower in accordance with
Section 2.1.3. The sum of the aggregate principal
amount of loans made under this Section 2.1.1 at
any one time outstanding plus the Letter of Credit
Exposure shall in no event exceed the Maximum
Amount of Revolving Credit and the sum of the
aggregate principal amount of loans made to and
the face amount of Letters of Credit issued on
behalf of the Borrower for the purposes of working
capital shall in no event exceed the Borrowing
Base. In no event will the principal amount of
loans at any one time outstanding made by any
Lender pursuant to this Section 2.1 exceed such
Lender's Commitment.
2.1.2. Maximum Amount of Revolving
Credit. The term "Maximum Amount of Revolving
Credit" means, on any date, the lesser of (a)
$85,000,000 or (b) the amount (in an integral
multiple of $1,000,000) to which the then
applicable amount shall have been irrevocably
reduced from time to time by notice from the
Company to the Agent.
2.1.3. Borrowing Requests. The Borrower
may from time to time request a loan under Section
2.1.1 by providing to the Agent a notice (which
may be given by a telephone call received by a
Lending Officer if promptly confirmed in writing).
Such notice must be not later than noon (Boston
time) on the first Banking Day (third
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Banking Day if any portion of such loan will be
subject to a Eurodollar Pricing Option on the
requested Closing Date) prior to the requested
Closing Date for such loan. If such notice
requested that a loan, or any portion thereof, be
made subject to a Eurodollar Pricing Option, and
the Agent shall have notified the Borrower
pursuant to Section 3.2.2 that such election did
not become effective, the notice shall be deemed
to have been made for a loan at the Base Rate.
The notice must specify (a) the amount of the
requested loan (which shall be not less than
$100,000 and an integral multiple of $50,000), (b)
the requested Closing Date therefor (which shall
be a Banking Day) and (c) the portion of the
requested loan that is to be used for working
capital. Upon receipt of such notice, the Agent
will promptly inform each other Lender with
Percentage Interests in the Revolving Loan (by
telephone or otherwise). Each such loan will be
made at the Boston Office by depositing the amount
thereof to the general account of the Borrower
with the Agent. In connection with each such
loan, the Borrower shall furnish to the Agent a
certificate in substantially the form of Exhibit
5.3.1.
2.1.4. Loan Account; Notes. The Agent
will establish on its books a loan account for the
Borrower (the "Loan Account") which the Agent
shall administer as follows: (a) the Agent shall
add to the Loan Account, and the Loan Account
shall evidence, the principal amount of all loans
from time to time made by the Lenders to the
Borrower pursuant to Section 2.1.1 and (b) the
Agent shall reduce the Loan Account by the amount
of all payments made on account of the
Indebtedness evidenced by the Loan Account. The
aggregate principal amount of the Indebtedness
evidenced by the Loan Account is referred to as
the "Revolving Loan". The Revolving Loan shall be
deemed owed to each Lender severally in accordance
with such Lender's Percentage Interest in the
Revolving Loan, and all payments credited to the
Loan Account shall be for the account of each
Lender in accordance with its Percentage Interest
in the Revolving Loan. The Borrower's obligations
to pay each Lender's Percentage Interest in the
Revolving Loan shall be evidenced by a separate
note of such Borrower in substantially the form of
Exhibit 2.1.4 (the "Revolving Notes"), payable to
each Lender in maximum principal amount equal to
such Lender's Percentage Interest in the Revolving
Loan.
2.2 Term Credit.
2.2.1. Term Loan. Subject to all the
terms and conditions hereof and so long as no
Default exists, on the Initial Closing Date the
Lenders will, severally in accordance with their
respective Percentage Interests in the Term Loan,
lend to the Company as a term loan $65,000,000.
The aggregate principal amount of the loans made
pursuant to this Section 2.2.1 at any one time
outstanding are referred to collectively as the
"Term Loan".
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2.2.2. Term Notes. The portion of Term
Loan advanced under Section 2.2.1 shall be made at
the Boston Office by crediting the amount of such
loan to the general account of the Borrower with
BankBoston against delivery to the Agent of the
separate term notes of the Company (the "Term
Notes") payable to the respective Lenders. The
Term Notes issued to each Lender shall be in an
aggregate principal amount equal to such Lender's
Percentage Interest in the Term Loan advanced
under Section 2.2.1 and shall be in substantially
the form of Exhibit 2.2.2.
2.3. Letters of Credit.
2.3.1. Issuance of Letters of Credit.
Subject to all the terms and conditions of this
Agreement and so long as no Default then exists,
from time to time on and after the Initial Closing
Date and prior to the Final Maturity Date, the
Letter of Credit Issuer will issue for the account
of the Borrower one or more irrevocable
documentary or standby letters of credit (the
"Letters of Credit"). Letter of Credit Exposure
plus the Revolving Loan shall in no event exceed
the Maximum Amount of Revolving Credit. Letter of
Credit Exposure shall in no event exceed
$2,000,000.
2.3.2. Requests for Letters of Credit.
The Borrower may from time to time request a
Letter of Credit to be issued by providing to the
Letter of Credit Issuer (and the Agent if the
Letter of Credit Issuer is not the Agent) a notice
which is actually received not less than five
Banking Days prior to the requested Closing Date
for such Letter of Credit specifying (a) the
amount of the requested Letter of Credit, (b) the
beneficiary thereof, (c) the requested Closing
Date and (d) the principal terms of the text for
such Letter of Credit. Each Letter of Credit will
be issued by forwarding it to the Borrower or to
such other Person as directed in writing by the
Borrower. In connection with the issuance of any
Letter of Credit, the Borrower shall furnish to
the Letter of Credit Issuer (and the Agent if the
Letter of Credit Issuer is not the Agent) a
certificate in substantially the form of Exhibit
5.3.1 and any customary application forms required
by the Letter of Credit Issuer.
2.3.3. Form and Expiration of Letters of
Credit. Each Letter of Credit issued under this
Section 2.3 and each draft accepted or paid under
such a Letter of Credit shall be issued, accepted
or paid, as the case may be, by the Letter of
Credit Issuer at its principal office. No Letter
of Credit shall provide for the payment of drafts
drawn thereunder, and no draft shall be payable,
at a date which is later than the earlier of (a)
the date 12 months after the date of issuance of
such Letter of Credit or (b) the Final Maturity
Date. Each Letter of Credit and each draft
accepted under a Letter of Credit shall be in such
form and minimum amount, and shall contain such
terms, as the Letter of Credit Issuer and the
Borrower may agree upon at the time such Letter of
Credit is issued, including a requirement of not
less than three Banking Days after presentation of
a draft before payment must be made thereunder.
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2.3.4. Lenders' Participation in Letters
of Credit. Upon the issuance of any Letter of
Credit, a participation therein, in an amount
equal to each Lender's Percentage Interest in the
Revolving Loan, shall automatically be deemed
granted by the Letter of Credit Issuer to each
Lender with a Percentage Interest in the Revolving
Loan on the date of such issuance and the Lenders
shall automatically be obligated, as set forth in
Section 12.4, to reimburse the Letter of Credit
Issuer to the extent of their respective
Percentage Interests in the Revolving Loan for all
obligations incurred by the Letter of Credit
Issuer to third parties in respect of such Letter
of Credit not reimbursed by the Company. The
Letter of Credit Issuer will send to each Lender
with a Percentage Interest in the Revolving Loan
(and the Agent if the Letter of Credit Issuer is
not the Agent) a confirmation regarding the
participations in Letters of Credit outstanding
during such month.
2.3.5. Presentation. The Letter of
Credit Issuer may accept or pay any draft
presented to it, regardless of when drawn and
whether or not negotiated, if such draft, the
other required documents and any transmittal
advice are presented to the Letter of Credit
Issuer and dated on or before the expiration date
of the Letter of Credit under which such draft is
drawn. Except insofar as instructions actually
received may be given by the Borrower in writing
expressly to the contrary with regard to, and
prior to, the Letter of Credit Issuer's issuance
of any Letter of Credit for the account of the
Borrower and such contrary instructions are
reflected in such Letter of Credit, the Letter of
Credit Issuer may honor as complying with the
terms of the Letter of Credit and with this
Agreement any drafts or other documents otherwise
in order signed or issued by an administrator,
executor, conservator, trustee in bankruptcy,
debtor in possession, assignee for benefit of
creditors, liquidator, receiver or other legal
representative of the party authorized under such
Letter of Credit to draw or issue such drafts or
other documents.
2.3.6. Payment of Drafts. At such time
as a Letter of Credit Issuer makes any payment on
a draft presented or accepted under a Letter of
Credit, the Borrower will on demand pay to such
Letter of Credit Issuer in immediately available
funds the amount of such payment. Unless the
Borrower shall otherwise pay to the Letter of
Credit Issuer the amount required by the foregoing
sentence, such amount shall be considered a loan
under Section 2.1.1 to the Borrower and part of
the Revolving Loan.
2.3.7. Uniform Customs and Practice.
The Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of
Commerce Publication No. 500, and any subsequent
revisions thereof approved by a Congress of the
International Chamber of Commerce and adhered to
by the Letter of Credit Issuer (the "Uniform
Customs and Practice"), shall be binding on the
Company and the Letter of Credit Issuer except to
the extent otherwise provided herein, in any
Letter of Credit or in any other Credit Document.
Anything in the Uniform Customs and Practice to
the contrary notwithstanding:
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(a) Neither the Borrower nor any
beneficiary of any Letter of Credit shall be
deemed an agent of any Letter of Credit Issuer.
(b) With respect to each Letter of
Credit, neither the Letter of Credit Issuer nor
its correspondents shall be responsible for or
shall have any duty to ascertain:
(i) the genuineness of any
signature;
(ii) the validity, form,
sufficiency, accuracy, genuineness or legal
effect of any endorsements;
(iii) delay in giving, or failure
to give, notice of arrival, notice of
refusal of documents or of discrepancies in
respect of which any Letter of Credit Issuer
refuses the documents or any other notice,
demand or protest;
(iv) the performance by any
beneficiary under any Letter of Credit of
such beneficiary's obligations to the
Borrower;
(v) inaccuracy in any notice
received by the Letter of Credit Issuer; or
(vi) the validity, form,
sufficiency, accuracy, genuineness or
legal effect of any instrument, draft,
certificate or other document required by
such Letter of Credit to be presented before
payment of a draft, or the office held by or
the authority of any Person signing any of
the same.
(c) The occurrence of any of the events
referred to in the Uniform Customs and Practice or
in the preceding clauses of this Section 2.3.7
shall not affect or prevent the vesting of any of
the Letter of Credit Issuer's rights or powers
hereunder or the Borrower's obligation to make
reimbursement of amounts paid under any Letter of
Credit or any draft accepted thereunder.
(d) The Borrower will promptly examine (i)
each Letter of Credit (and any amendments
thereof) sent to it by the Letter of Credit Issuer
and (ii) all instruments and documents delivered
to it from time to time by the Letter of Credit
Issuer. The Borrower will notify the Letter of
Credit Issuer of any claim of noncompliance by
notice actually received within three Banking Days
after receipt of any of the foregoing documents,
the Borrower being conclusively deemed to have
waived any such claim against such Letter of
Credit Issuer and its correspondents unless such
notice is given. The Letter of Credit Issuer
shall have no obligation or responsibility to send
any such Letter of Credit or any such instrument
or document to the Borrower.
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(e) In the event of any conflict between
the provisions of this Agreement and the Uniform
Customs and Practice, the provisions of this
Agreement shall govern.
2.3.8. Subrogation. Upon any payment by
a Letter of Credit Issuer under any Letter of
Credit and until the reimbursement of such Letter
of Credit Issuer by the Borrower with respect to
such payment, the Letter of Credit Issuer shall be
entitled to be subrogated to, and to acquire and
retain, the rights which the Person to whom such
payment is made may have against the Borrower, all
for the benefit of the Lenders.
2.3.9. Modification, Consent, etc. If
the Borrower requests or consents in writing to
any modification or extension of any Letter of
Credit, or waives any failure of any draft,
certificate or other document to comply with the
terms of such Letter of Credit, and if the Letter
of Credit Issuer consents thereto, the Letter of
Credit Issuer shall be entitled to rely on such
request, consent or waiver. This Agreement shall
be binding upon the Borrower with respect to such
Letter of Credit as so modified or extended, and
with respect to any action taken or omitted by
such Letter of Credit Issuer pursuant to any such
request, consent or waiver.
2.4. Application of Proceeds.
2.4.1. Revolving Loan. Subject to
Section 2.4.4, the Borrower will apply the
proceeds of the Revolving Loan (a) to fund
Permitted Acquisitions, and (b) for working
capital to the extent of the Borrowing Base.
2.4.2. Term Loan. Subject to Section
2.4.4, the Borrower will apply the proceeds of the
Term Loan to the prepayment of the Revolving Loan.
2.4.3. Letters of Credit. Letters of
Credit shall be issued only for such lawful
corporate purposes as the Borrower has requested
in writing and to which the Letter of Credit
Issuer agrees.
2.4.4. Specifically Prohibited
Applications. The Borrower will not, directly or
indirectly, apply any part of the proceeds of any
extension of credit made pursuant to the Credit
Documents to purchase or to carry Margin Stock or
to any transaction prohibited by the Foreign Trade
Regulations, by other Legal Requirements
applicable to the Lenders or by the Credit
Documents.
2.5. Nature of Obligations of Lenders to Make
Extensions of Credit. The Lenders' obligations
to extend credit under this Agreement are several and
are not joint or joint and several. If on any Closing
Date any Lender shall fail to perform its obligations
under this Agreement, the aggregate amount of
Commitments to make the extensions of credit under this
Agreement shall be reduced by the amount of unborrowed
Commitment of the Lender so failing to perform and the
Percentage Interests in the portion of the Loan to
which such
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Commitment relates shall be appropriately
adjusted. Lenders in the Class to which such
Commitment relates that have not failed to perform
their obligations to make the extensions of credit
contemplated by Section 2 may, if any such Lender so
desires, assume, in such proportions as the Required
Class Lenders of such Class may agree, the obligations
of any Lender who has so failed and the Percentage
Interests in the portion of the Loan to which such
obligations relate shall be appropriately adjusted.
The provisions of this Section 2.5 shall not affect the
rights of the Borrower against any Lender failing to
perform its obligations hereunder.
3. Interest; Eurodollar Pricing Options; Fees.
3.1. Interest. The Loan shall accrue and
bear interest at a rate per annum which shall
at all times equal the Applicable Rate. Prior to any
stated or accelerated maturity of any portion of the
Loan, the Borrower will, on each Payment Date, pay the
accrued and unpaid interest on the portions of the Loan
which were not subject to a Eurodollar Pricing Option.
On the last day of each Eurodollar Interest Period or
on any earlier termination of any Eurodollar Pricing
Option, the Borrower will pay the accrued and unpaid
interest on the portions of the Loan which were subject
to the Eurodollar Pricing Option which expired or
terminated on such date. In the case of any Eurodollar
Interest Period longer than three months, the Borrower
will also pay the accrued and unpaid interest on the
portion of the Loan subject to the Eurodollar Pricing
Option having such Eurodollar Interest Period at
three-month intervals, the first such payment to be
made on the last Banking Day of the three-month period
which begins on the first day of such Eurodollar
Interest Period. On the stated or any accelerated
maturity of the Loan, the Borrower will pay all
accrued and unpaid interest on the portion of the Loan
evidenced by its Loan Account, including any accrued
and unpaid interest on any portion of such Loan which
is subject to a Eurodollar Pricing Option. Upon the
occurrence and during the continuance of an Event of
Default, the Lenders may require accrued interest to be
payable on demand or at regular intervals more frequent
than each Payment Date. All payments of interest
hereunder for each portion of the Loan shall be made to
the Agent for the account of each Lender in accordance
with such Lender's Percentage Interest in such portion
of the Loan.
3.2. Eurodollar Pricing Options.
3.2.1. Election of Eurodollar
Pricing Options. Subject to all of the terms and
conditions hereof and so long as no Default
exists, the Borrower may from time to time, by
irrevocable notice to the Agent actually received
not less than three Banking Days prior to the
commencement of the Eurodollar Interest Period
selected in such notice, elect to have such
portion of the Loan as the Borrower may specify in
such notice accrue and bear interest during the
Eurodollar Interest Period so selected at the
Applicable Rate computed on the basis of the
Eurodollar Rate. No such election shall become
effective:
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(a) if, prior to the commencement of any
such Eurodollar Interest Period, the Agent
determines that (i) the electing or granting of
the Eurodollar Pricing Option in question would
violate a Legal Requirement, (ii) Eurodollar
deposits in an amount comparable to the principal
amount of the Loan as to which such Eurodollar
Pricing Option has been elected and which have a
term corresponding to the proposed Eurodollar
Interest Period are not readily available in the
inter-bank Eurodollar market, or (iii) by reason
of circumstances affecting the inter-bank
Eurodollar market, adequate and reasonable methods
do not exist for ascertaining the interest rate
applicable to such deposits for the proposed
Eurodollar Interest Period; or
(b) if any Lender shall have advised the
Agent by telephone or otherwise at or prior to
noon (Boston time) on the second Banking Day prior
to the commencement of such proposed Eurodollar
Interest Period (and shall have subsequently
confirmed in writing) that, after reasonable
efforts to determine the availability of such
Eurodollar deposits, such Lender reasonably
anticipates that Eurodollar deposits in an amount
equal to the Percentage Interest of such Lender in
the portion of the Loan as to which such
Eurodollar Pricing Option has been elected and
which have a term corresponding to the Eurodollar
Interest Period in question will not be offered in
the Eurodollar market to such Lender at a rate of
interest that does not exceed the anticipated
Eurodollar Basic Rate.
3.2.2. Notice to Lenders and the
Borrower. The Agent will promptly inform each
Lender (by telephone or otherwise) of each notice
received by it from the Borrower pursuant to
Section 3.2.1 and of the Eurodollar Interest
Period specified in such notice. Upon
determination by the Agent of the Eurodollar Rate
for such Eurodollar Interest Period or in the
event such election shall not become effective,
the Agent will promptly notify the Borrower and
each Lender (by telephone or otherwise) of the
Eurodollar Rate so determined or why such election
did not become effective, as the case may be.
3.2.3. Selection of Eurodollar Interest
Periods. Eurodollar Interest Periods shall be
selected so that:
(a) the minimum portion of the Loan
subject to any Eurodollar Pricing Option shall be
$500,000 and an integral multiple of $100,000;
(b) no more than 6 Eurodollar Pricing
Options shall be outstanding at any one time;
(c) a portion of the Term Loan at least
equal to the amount of the next mandatory fixed
prepayment required by Section 4.2 shall not be
subject to a Eurodollar Pricing Option on the date
such mandatory prepayment is required to be made;
and
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(d) no Eurodollar Interest Period with
respect to any part of the Loan subject to a
Eurodollar Pricing Option shall expire later than
the Final Maturity Date.
3.2.4. Additional Interest. If any
portion of the Loan subject to a Eurodollar
Pricing Option is repaid, or any Eurodollar
Pricing Option is terminated for any reason
(including acceleration of maturity), on a date
which is prior to the last Banking Day of the
Eurodollar Interest Period applicable to such
Eurodollar Pricing Option, the Borrower will pay
to the Agent for the account of each Lender in
accordance with such Lender's Percentage Interest
in such portion of the Loan, in addition to any
amounts of interest otherwise payable hereunder,
an amount equal to the present value (calculated
in accordance with this Section 3.2.4) of interest
for the unexpired portion of such Eurodollar
Interest Period on the portion of the Loan so
repaid, or as to which a Eurodollar Pricing Option
was so terminated, at a per annum rate equal to
the excess, if any, of (a) the rate applicable to
such Eurodollar Pricing Option minus (b) the
lowest rate of interest obtainable by the Agent
upon the purchase of debt securities customarily
issued by the Treasury of the United States of
America which have a maturity date approximating
the last Banking Day of such Eurodollar Interest
Period. The present value of such additional
interest shall be calculated by discounting the
amount of such interest for each day in the
unexpired portion of such Eurodollar Interest
Period from such day to the date of such repayment
or termination at a per annum interest rate equal
to the interest rate determined pursuant to clause
(b) of the preceding sentence, and by adding all
such amounts for all such days during such period.
The determination by the Agent of such amount of
interest shall, in the absence of manifest error,
be conclusive. For purposes of this Section
3.2.4, if any portion of the Loan which was to
have been subject to a Eurodollar Pricing Option
is not outstanding on the first day of the
Eurodollar Interest Period applicable to such
Eurodollar Pricing Option other than for reasons
described in Section 3.2.1, the Borrower shall be
deemed to have terminated such Eurodollar Pricing
Option.
3.2.5. Violation of Legal Requirements.
If any Legal Requirement shall prevent any Lender
from funding or maintaining through the purchase
of deposits in the interbank Eurodollar market any
portion of the Loan subject to a Eurodollar
Pricing Option or otherwise from giving effect to
such Lender's obligations as contemplated by
Section 3.2, (a) the Agent may by notice to the
Borrower terminate all of the affected Eurodollar
Pricing Options, (b) the portion of the Loan
subject to such terminated Eurodollar Pricing
Options shall immediately bear interest thereafter
at the Applicable Rate computed on the basis of
the Base Rate and (c) the Borrower shall make any
payment required by Section 3.2.4.
3.2.6. Funding Procedure. The Lenders
may fund any portion of the Loan subject to a
Eurodollar Pricing Option out of any funds
available to the Lenders. Regardless of the
source of the funds actually used by any of the
Lenders to fund any
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portion of the Loan subject to a Eurodollar
Pricing Option, however, all amounts payable
hereunder, including the interest rate applicable
to any such portion of the Loan and the amounts
payable under Sections 3.2.4, 3.5, 3.6, 3.7 and
3.8, shall be computed as if each Lender had
actually funded such Lender's Percentage Interest
in such portion of the Loan through the purchase
of deposits in such amount of the type by which
the Eurodollar Basic Rate was determined with a
maturity the same as the applicable Eurodollar
Interest Period relating thereto and through the
transfer of such deposits from an office of the
Lender having the same location as the applicable
Eurodollar Office to one of such Lender's offices
in the United States of America.
3.3. Commitment Fees. In consideration of the
Lenders' commitments to make the extensions of credit provided for in Section
2.1, while such commitments are outstanding, the Borrower will pay to the Agent
for the account of the Lenders in accordance with the Lenders' respective
Percentage Interests in the Revolving Loan, on the first Banking Day of each
fiscal quarter, an amount equal to interest computed at the rate per annum
shown in Exhibit 1 that corresponds to the current ratio of Consolidated Total
Debt to Consolidated Adjusted EBITDA for the most recently completed period of
four consecutive fiscal quarters on the amount by which (a) the average daily
Maximum Amount of Revolving Credit during the three-month period or portion
thereof ending on such Payment Date exceeded (b) the sum of (i) the average
daily Revolving Loan during such period or portion thereof plus (ii) the
average daily Letter of Credit Exposure during such period or portion thereof;
provided, however, that the first such payment shall be for the period
beginning on the Initial Closing Date and ending on the first Payment Date.
3.4. Letter of Credit Fees. The Borrower will pay
to the Agent for the account of each of the Lenders, in accordance with the
Lenders' respective Percentage Interests in the Revolving Loan, on the date any
Letter of Credit is issued by the Letter of Credit Issuer, a Letter of Credit
fee equal to interest at the rate of 1.50% per annum on the face amount of such
Letter of Credit for the term of such Letter of Credit. The Company will pay
to the Letter of Credit Issuer customary service charges and expenses for its
services in connection with the Letters of Credit at the times and in the
amounts from time to time in effect in accordance with its general rate
structure, including fees and expenses relating to issuance, amendment,
negotiation, cancellation and similar operations.
3.5. Reserve Requirements, etc. If any Legal
Requirement shall (a) impose, modify, increase or deem applicable any insurance
assessment, reserve, special deposit or similar requirement against any Funding
Liability or the Letters of Credit, (b) impose, modify, increase or deem
applicable any other requirement or condition with respect to any Funding
Liability or the Letters of Credit, or (c) change the basis of taxation of
Funding Liabilities or payments in respect of any Letter of Credit (other than
changes in the rate of taxes measured by the overall net income of such Lender)
and the effect of any of the foregoing shall be to increase the cost to any
Lender of issuing, making, funding or maintaining its respective Percentage
Interest in any portion of the Loan subject to a Eurodollar Pricing Option or
any
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Letter of Credit, to reduce the amounts received or receivable by such Lender
under this Agreement or to require such Lender to make any payment or forego
any amounts otherwise payable to such Lender under this Agreement, then, the
Lender shall, promptly after it has made such determination, give notice
thereof to the Company. Promptly after the receipt by the Company of any such
notice, the Company and the Lender shall attempt to negotiate in good faith an
adjustment to the amount payable by the Borrower to the Lender under this
Section 3.5, which amount shall be sufficient to compensate the Lender for such
increased cost or reduced return. If the Company and the Lender are unable to
agree to such adjustment within thirty days of the date upon which the Company
receives such notice, then the Borrower will, on demand by the Lender, pay to
the Lender such additional amount as shall be sufficient, in the Lender's
reasonable determination, to compensate the Lender for such increased cost or
such reduced return, together with interest at the Overdue Reimbursement Rate
from the 30th day after receipt of such certificate until payment in full
thereof; provided, however, that the foregoing provisions shall not apply to
any Tax or to any reserves which are included in computing the Eurodollar
Reserve Rate. The determination by such Lender of the amount of such costs
shall, in the absence of manifest error, be conclusive. The Borrower shall be
entitled to replace any such Lender in accordance with Section 13.3.
3.6. Taxes. All payments of the Credit
Obligations shall be made without set-off or counterclaim and free and clear of
any deductions, including deductions for Taxes, unless the Borrower is required
by law to make such deductions. If (a) any Lender shall be subject to any Tax
with respect to any payment of the Credit Obligations or its obligations
hereunder or (b) the Borrower shall be required to withhold or deduct any Tax
on any payment on the Credit Obligations, then, the Lender shall, promptly give
notice of its claim for compensation under this Section 3.6 to the Company.
Promptly after the receipt by the Company of any such notice, the Company and
the Lender shall attempt to negotiate in good faith an adjustment to the amount
payable by the Borrower to the Lender under this Section 3.6, which amount
shall be sufficient to compensate the Lender for the amount of the Tax so
imposed or the full amount of all payments which would have been received on
the Credit Obligations in the absence of such Tax. If the Company and the
Lender are unable to agree to such adjustment within thirty days of the date
upon which the Company receives such notice, then the Borrower will, on demand
by the Lender, pay to the Lender such additional amount as shall be sufficient,
in the Lender's reasonable determination, to enable such Lender to receive the
amount of Tax so imposed on the Lender's obligations hereunder or the full
amount of all payments which it would have received on the Credit Obligations
(including amounts required to be paid under Sections 3.5, 3.7, 3.8 and this
Section 3.6) in the absence of such Tax, as the case may be, together with
interest at the Overdue Reimbursement Rate on such amount from the 30th day
after receipt of such certificate until payment in full thereof. Whenever
Taxes must be withheld by the Borrower with respect to any payments of the
Credit Obligations, the Borrower shall promptly furnish to the Agent for the
account of the applicable Lender official receipts (to the extent that the
relevant governmental authority delivers such receipts) evidencing payment of
any such Taxes so withheld. If the Borrower fails to pay any such Taxes when
due or fails to remit to the Agent for the account of the applicable Lender the
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required receipts evidencing payment of any such Taxes so withheld or deducted,
the Borrower shall indemnify the affected Lender for any incremental Taxes and
interest or penalties that may become payable by such Lender as a result of any
such failure. The determination by such Lender of the amount of such Tax and
the basis therefor shall, in the absence of manifest error, be conclusive. The
Borrower shall be entitled to replace any such Lender in accordance with
Section 13.3.
3.7. Capital Adequacy. If any Lender shall
determine that compliance by such Lender with any Legal Requirement regarding
capital adequacy of banks or bank holding companies has or would have the
effect of reducing the rate of return on the capital of such Lender and its
Affiliates as a consequence of such Lender's commitment to make the extensions
of credit contemplated hereby, or such Lender's maintenance of the extensions
of credit contemplated hereby, to a level below that which such Lender could
have achieved but for such compliance (taking into consideration the policies
of such Lender and its Affiliates with respect to capital adequacy immediately
before such compliance and assuming that the capital of such Lender and its
Affiliates was fully utilized prior to such compliance) by an amount deemed by
such Lender to be material, then, the Lender shall, promptly after it has made
such determination, give notice thereof to the Company. Promptly after the
receipt by the Company of any such notice, the Company and the Lender shall
attempt to negotiate in good faith an adjustment to the amount payable by the
Borrower to the Lender under this Section 3.7, which amount shall be sufficient
to compensate the Lender for such reduced return. If the Company and the
Lender are unable to agree to such adjustment within thirty days of the date
upon which the Company receives such notice, then the Borrower will, on demand
by the Lender, pay to the Lender such additional amount as shall be sufficient,
in the Lender's reasonable determination, to compensate the Lender for such
reduced return, together with interest at the Overdue Reimbursement Rate from
the 30th day until payment in full thereof. The determination by such Lender
of the amount to be paid to it and the basis for computation thereof shall, in
the absence of manifest error, be conclusive. In determining such amount, such
Lender may use any reasonable averaging, allocation and attribution methods.
The Borrower shall be entitled to replace any such Lender in accordance with
Section 13.3.
3.8. Regulatory Changes. If any Lender shall
determine that (a) any change in any Legal Requirement (including any new Legal
Requirement) after the date hereof shall directly or indirectly (i) reduce the
amount of any sum received or receivable by such Lender with respect to the
Loan or the Letters of Credit or the return to be earned by such Lender on the
Loan or the Letters of Credit, (ii) impose a cost on such Lender or any
Affiliate of such Lender that is attributable to the making or maintaining of,
or such Lender's commitment to make, its portion of the Loan or the Letters of
Credit, or (iii) require such Lender or any Affiliate of such Lender to make
any payment on, or calculated by reference to, the gross amount of any amount
received by such Lender under any Credit Document, and (b) such reduction,
increased cost or payment shall not be fully compensated for by an adjustment
in the Applicable Rate or the Letter of Credit fees, then, the Lender shall,
promptly after it has made such determination, give notice thereof to the
Company. Promptly after the receipt by the
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Company of any such notice, the Company and the Lender shall attempt to
negotiate in good faith an adjustment to the amount payable by the Borrower to
the Lender under this Section 3.8, which amount, together with any adjustment
in the Applicable Rate, shall be sufficient to fully compensate the Lender for
such reduction, increased cost or payment taking into account any compensation
for such reduction, increased cost or payment received by the Lender pursuant
to the provisions of Section 3.5, 3.6 or 3.7 hereof. If the Company and the
Lender are unable to agree to such adjustment within thirty days of the date
upon which the Company receives such notice, then the Borrower will, on demand
by the Lender, pay to the Lender such additional amount, together with any
adjustment in the Applicable Rate, as shall be sufficient to fully compensate
the Lender for such reduction, increased cost or payment, together with
interest on such amount from the 30th day after receipt of such certificate
until payment in full thereof at the Overdue Reimbursement Rate. The
determination by such Lender of the amount to be paid to it and the basis for
computation thereof hereunder shall, in the absence of manifest error, be
conclusive. In determining such amount, such Lender may use any reasonable
averaging and attribution methods. The Borrower shall be entitled to replace
any such Lender in accordance with Section 13.3.
3.9. Computations of Interest and Fees. For
purposes of this Agreement, interest, commitment fees and Letter of Credit fees
(and any other amount expressed as interest or such fees) shall be computed on
the basis of a 360-day year for actual days elapsed. If any payment required
by this Agreement becomes due on any day that is not a Banking Day, such
payment shall, except as otherwise provided in the Eurodollar Interest Period,
be made on the next succeeding Banking Day. If the due date for any payment of
principal is extended as a result of the immediately preceding sentence,
interest shall be payable for the time during which payment is extended at the
Applicable Rate.
4. Payment.
4.1. Payment at Maturity. On the Final Maturity
Date or any accelerated maturity of the Loan, the Borrower will pay to the
Agent for the account of the Lenders an amount equal to the portion of the Loan
then due, together with all accrued and unpaid interest thereon and all other
Credit Obligations then outstanding.
4.2. Fixed Prepayments of Term Loan. On the first
Banking Day of each July, the Borrower will pay to the Agent, for the account
of the Lenders, $650,000 of the principal amount of the Term Loan, together
with accrued interest on such amount prepaid; provided, however, that the
Borrower shall not be required to make such a prepayment in July 1997.
4.3. Contingent Required Prepayments.
4.3.1. Excess Credit Exposure. If at
any time the Revolving Loan exceeds the limits set
forth in Section 2.1, the Borrower shall within
three Banking Days pay the amount of such excess
to the Agent for the account of the Lenders.
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4.3.2. Letter of Credit Exposure. If at
any time the Letter of Credit Exposure exceeds the
limits set forth in Section 2.3, the Borrower
shall within three Banking Days pay the amount of
such excess to the Agent for the account of the
Lenders to be applied as provided in Section 4.6.
4.3.3. Net Equity Proceeds. Within
three Banking Days after the receipt of Net Equity
Proceeds, the Borrower shall pay to the Agent as a
prepayment of the Loan, to be applied as provided
in Section 4.6.2, the lesser of
(a) the sum of (i) the amount of such
Net Equity Proceeds minus (ii) the amount of all
Distributions permitted by Section 6.10.5 and made
from such Net Equity Proceeds minus (iii) the
amount of all accrued and unpaid dividends on the
3,088,113 shares of convertible preferred stock of
the Company issued on or prior to the date hereof
(on the terms of such stock on the date hereof),
or
(b) the amount of the Loan.
The Company shall give the Agent at least five
Banking Days' prior notice of its intention to
prepay the Loans, or any portion thereof, under
this Section 4.3.3.
4.4. Voluntary Prepayments. In addition to the
prepayments required by Sections 4.2 and 4.3, the Borrower may from time to
time prepay all or any portion of the Loan (in a minimum amount of $100,000 and
an integral multiple of $100,000), without premium or penalty of any type
(except as provided in Section 3.2.4 with respect to the early termination of
Eurodollar Pricing Options). The Borrower shall give the Agent at least one
Banking Day prior notice of its intention to prepay, specifying the date of
payment, the total amount of the Loan to be paid on such date, whether the
Revolving Loan or the Term Loan will be paid, and the amount of interest to be
paid with such prepayment.
4.5. Letters of Credit. If on the stated or any
accelerated maturity of the Credit Obligations the Lenders shall be obligated
in respect of a Letter of Credit or a draft accepted under a Letter of Credit,
the Borrower will either:
(a) prepay such obligation by depositing
with the Agent an amount of cash, or
(b) deliver to the Agent a standby
letter of credit (designating the Agent as
beneficiary and issued by a bank and on terms
reasonably acceptable to the Agent),
in each case in an amount equal to the portion of the then Letter of Credit
Exposure issued for the account of the Borrower. Any such cash so deposited
and the cash proceeds of any draw under any standby letter of credit so
furnished, including any interest thereon, shall be returned
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by the Agent to the Borrower only when, and to the extent that, the amount of
such cash held by the Agent exceeds the Letter of Credit Exposure at a time
when no Default exists; provided, however, that if an Event of Default occurs
and the Credit Obligations become or are declared immediately due and payable,
the Agent may apply such cash, including any interest thereon, to the payment
of any of the Credit Obligations as provided in Section 10.5.6.
4.6. Reborrowing; Application of Payments, etc.
4.6.1. Reborrowing. The amounts of the
Revolving Loan prepaid pursuant to Section 4.4 may
be reborrowed from time to time prior to the Final
Maturity Date in accordance with Section 2.1,
subject to the limits set forth therein. No
portion of the Term Loan prepaid hereunder may be
reborrowed.
4.6.2. Order of Application.
Prepayments of the Loan made pursuant to Section
4.3.3 shall be applied to the Revolving Loan and
the Term Loan, pro rata according to the total of
Commitments in respect thereof at the time of such
prepayment. Any Lender who does not wish to
receive a prepayment under Section 4.3.3 in
respect of such Lender's Percentage Interest in
the Term Loan must notify the Agent and the
Company within two banking Days after receipt of
notice of such proposed prepayment. If any Lender
elects not to receive such prepayment of the Term
Loan, the portion of such prepayment that would
have been applied to the portion of the Term Loan
held by such Lender shall instead be applied (i)
first to the repayment of the Revolving Loan,
until there is no outstanding principal amount of
the Revolving Loan, and (ii) then any amount
remaining shall be applied to the prepayment of
the Term Loan, pro rata in accordance with the
respective Percentage Interests in the Term Loan
of all the Lenders. Prepayments of the Term Loan
made pursuant to Sections 4.3.3 and 4.4 shall be
applied first to the payment of the amount of
principal of the Term Loan owing at the Final
Maturity Date, and then to the prepayments of the
Term Loan required by Section 4.2 in the inverse
order of the maturity thereof. Any prepayment of
a portion of the Loan shall be applied first to
the portion of the Loan not then subject to
Eurodollar Pricing Options, then the balance of
any such prepayment shall be applied to the
portion of the Loan then subject to Eurodollar
Pricing Options, in the chronological order of the
respective maturities thereof, together with any
payments required by Section 3.2.4.
4.6.3. Payment with Accrued Interest,
etc. Upon all prepayments of the Term Loan, the
Borrower shall pay to the Agent the principal
amount to be prepaid together with unpaid interest
in respect thereof accrued to the date of
prepayment. Notice of prepayment having been
given in accordance with Section 4.4, the amount
specified to be prepaid shall become due and
payable on the date specified for prepayment.
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4.6.4. Payments for Lenders. All
payments of principal of a portion of the Loan
shall be made to the Agent for the account of the
Lenders in accordance with the Lenders' respective
Percentage Interests in such portion of the Loan.
5. Conditions to Extending Credit.
5.1. Conditions on Initial Closing Date. The
obligations of the Lenders to make any extension of credit pursuant to Section
2 shall be subject to the satisfaction, on or before the Initial Closing Date,
of the conditions set forth in this Section 5.1 as well as the further
conditions in Section 5.3. If the conditions set forth in this Section 5.1 and
5.3 are not met on or prior to the Initial Closing Date, the Lenders shall have
no obligation to make any extensions of credit hereunder.
5.1.1. Notes. The Borrower shall have
duly executed and delivered to the Agent a
Revolving Note and a Term Note for each Lender.
5.1.2. Perfection of Security. Each
Obligor shall have duly authorized, executed,
acknowledged, delivered, filed, registered and
recorded such security agreements, notices,
financing statements and other instruments as the
Agent may have requested in order to perfect the
Liens contemplated pursuant to the Credit
Documents to be created in the Credit Security.
Each Obligor shall have duly authorized, executed,
acknowledged and delivered to the Agent a mortgage
on each real property owned by such Obligor and a
leasehold mortgage on each real property leased by
such Obligor, in each case in form and substance
satisfactory to the Agent, together with, for each
such real property: (a) mortgage title insurance
with such insurer, in such amount, in such form
and with such exceptions as are reasonably
satisfactory to the Agent and (b) an environmental
site assessment report in such form, with such
conclusions and from such environmental
engineering firm as are reasonably satisfactory to
the Agent.
5.1.3. Legal Opinions. On the Initial
Closing Date, the Lenders shall have received from
the following counsel their respective opinions
with respect to the transactions contemplated by
the Credit Documents, which opinions shall be in
form and substance satisfactory to the Required
Lenders:
(a) Xxxxxxxxx Xxxxxxx Xxxxxxx Xxxxxx
Xxxxx & Quentel, P.A., special counsel for the
Obligors.
(b) Ropes & Xxxx, special counsel for
the Agent.
The Obligors authorize and direct its counsel to furnish the
foregoing opinions.
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5.1.4. Payment of Fee. The Borrower
shall have paid to the Agent (a) for the Lenders'
accounts a facility fee in accordance with the
separate letter agreements with the Lenders and
(b) the reasonable fees and disbursements of the
Agent's special counsel for which statements have
been rendered on or prior to the Initial Closing
Date.
5.2. Conditions to Making Each Permitted
Acquisition Advance. The Lenders' several obligations to make any loan
contemplated by Section 2.1 or 2.2, the proceeds of which will be applied to a
Permitted Acquisition, shall be subject to the satisfaction, on or before the
date of consummation of the proposed Permitted Acquisition, of the following
conditions, as well as the further conditions set forth in Section 5.3:
5.2.1. Permitted Acquisition. Other
than as consented to by the Required Lenders in
writing:
(a) The Acquisition Agreement relating
to such Permitted Acquisition shall have been
delivered to the Agent.
(b) The provisions of the Acquisition
Agreement relating to such Permitted Acquisition
shall not have been amended, modified, waived or
terminated in any material respect from the form
of such Agreement delivered to the Agent pursuant
to clause (a) and any amendment, modification or
waiver shall have been delivered to the Agent.
(c) All of the representations and
warranties of the Sellers set forth in such
Acquisition Agreement shall be complete and
correct in all material respects on and as of the
Closing Date with the same force and effect as
though made on and as of such date.
(d) All of the other conditions to the
obligations of the Borrower set forth in such
Acquisition Agreement shall have been satisfied or
waived by each of the other parties to such
Acquisition Agreement.
(e) Any material consent, authorization,
order or approval of any Person required in
connection with the transactions contemplated by
such Acquisition Agreement shall have been
obtained and shall be in full force and effect.
(f) All of the items required to be
delivered under such Acquisition Agreement shall
have been so delivered.
(g) The Borrower shall furnish to the
Agent computations demonstrating compliance with
Section 6.9.5, certified by a Financial Officer of
the Borrower.
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(h) Contemporaneously with or
immediately after the making by the Lenders of the
extension of credit hereunder, the Agent shall
have received a certificate of a Financial Officer
of the Borrower to the effect that (A) the initial
closing has occurred under such Acquisition
Agreement and (B) each of the conditions set forth
in this Section 5.2.1 has been satisfied.
5.2.2. Notes and Credit Documents;
Merger. Contemporaneously with or immediately
after such Permitted Acquisition, such Acquired
Party shall either (a) execute and deliver to the
Agent a Joinder Agreement to the Credit Agreement
in the form of Exhibit 5.2.2 or (b) be merged with
and into the Borrower or one of its Subsidiaries,
in which case the Agent shall have received a
certificate of a Financial Officer of the Company
to the effect that the merger of such Acquired
Party with and into such entity has been
consummated.
5.2.3. Legal Opinions. On the date of
any Permitted Acquisition the Lenders shall have
received from counsel reasonably satisfactory to
the Agent in a form and substance reasonably
satisfactory to the Agent (a) an opinion with
respect to the transactions contemplated by the
Acquisition Agreement, and (b) if the Purchase
Price for such Permitted Acquisition exceeds
$10,000,000, an opinion with respect to the
addition of the Acquired Party as a Guarantor
under this Agreement and the other Credit
Documents.
5.3. Conditions to Each Extension of Credit. The
obligations of the Lenders to make any extension of credit pursuant to Section
2 shall be subject to the satisfaction, on or before the Closing Date for such
extension of credit, of the following conditions:
5.3.1. Officer's Certificate. The
representations and warranties contained in
Sections 7 and 10.3 shall be true and correct on
and as of such Closing Date with the same force
and effect as though made on and as of such date
(except as to any representation or warranty which
refers to a specific earlier date); no Default
shall exist on such Closing Date prior to or
immediately after giving effect to the requested
extension of credit; no Material Adverse Change
shall have occurred since December 31, 1996; and
the Borrower shall have furnished to the Agent in
connection with the requested extension of credit
a certificate to these effects, in substantially
the form of Exhibit 5.3.1, signed by a Financial
Officer.
5.3.2. Legality, etc. The making of the
requested extension of credit shall not (a)
subject any Lender to any penalty or special tax
(other than a Tax for which the Borrower is
required to reimburse the Lenders under Section
3.6), (b) be prohibited by any Legal Requirement
or (c) violate any credit restraint program of the
executive branch of the government of the United
States of America, the Board of Governors of the
Federal Reserve System or any other governmental
or administrative agency so long as any Lender
reasonably believes that compliance is required by
law.
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5.3.3. Proper Proceedings. This
Agreement, each other Credit Document and the
transactions contemplated hereby and thereby shall
have been authorized by all necessary corporate or
other proceedings of the Obligors. All necessary
consents, approvals and authorizations of any
governmental or administrative agency or any other
Person of any of the transactions contemplated
hereby or by any other Credit Document shall have
been obtained and shall be in full force and
effect.
5.3.4. General. All legal and corporate
proceedings in connection with the transactions
contemplated by this Agreement shall be
satisfactory in form and substance to the Agent
and the Agent shall have received copies of all
documents, including certified copies of the
Charter and By-Laws of the Borrower and the other
Obligors, records of corporate proceedings,
certificates as to signatures and incumbency of
officers and opinions of counsel, which the Agent
may have reasonably requested in connection
therewith, such documents where appropriate to be
certified by proper corporate or governmental
authorities.
6. General Covenants. Each of the Borrower and its
Subsidiaries covenants that, until all of the Credit Obligations shall have
been paid in full and until the Lenders' commitments to extend credit under
this Agreement and any other Credit Document shall have been irrevocably
terminated, it will comply, and will cause its Subsidiaries to comply, with the
following provisions:
6.1. Taxes and Other Charges; Accounts Payable.
6.1.1. Taxes and Other Charges. Each of
the Borrower and its Subsidiaries shall duly pay
and discharge, or cause to be paid and discharged,
before the same become in arrears, all taxes,
assessments and other governmental charges imposed
upon such Person and its properties, sales or
activities, or upon the income or profits
therefrom, as well as all claims for labor,
materials or supplies which if unpaid might by law
become a Lien upon any of its property; provided,
however, that any such tax, assessment, charge or
claim need not be paid if the validity or amount
thereof shall at the time be contested in good
faith by appropriate proceedings and if such
Person shall, in accordance with GAAP, have set
aside on its books adequate reserves with respect
thereto; and provided, further, that each of the
Borrower and its Subsidiaries shall pay or bond,
or cause to be paid or bonded, all such taxes,
assessments, charges or other governmental claims
immediately upon the commencement of proceedings
to foreclose any Lien which may have attached as
security therefor (except to the extent such
proceedings have been dismissed or stayed).
6.1.2. Accounts Payable. Each of the
Borrower and its Subsidiaries Obligors shall
promptly pay when due, or in conformity with
customary trade terms, all other Indebtedness,
including accounts payable, incident to the
operations of such
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Person not referred to in Section 6.1.1; provided,
however, that any such Indebtedness need not be
paid if the validity or amount thereof shall at
the time be contested in good faith and if such
Person shall, in accordance with GAAP, have set
aside on its books adequate reserves with respect
thereto.
6.2. Conduct of Business, etc.
6.2.1. Types of Business. The Borrower
and its Subsidiaries shall engage only in the
business of (a) providing pathology services,
laboratory services (including full service
clinical and anatomical pathology laboratory
services) and (b) other activities and services
related thereto.
6.2.2. Maintenance of Properties. Each
of the Borrower and its Subsidiaries:
(a) shall keep its properties in such
repair, working order and condition, and shall
from time to time make such repairs, replacements,
additions and improvements thereto as are
necessary for the efficient operation of its
businesses and shall comply at all times in all
material respects with all franchises, licenses,
leases and other material agreements to which it
is party so as to prevent any loss or forfeiture
thereof or thereunder, except where (i) compliance
is at the time being contested in good faith by
appropriate proceedings or (ii) failure to comply
with the provisions being contested has not
resulted, or does not create a material risk of
resulting, in the aggregate in any Material
Adverse Change; provided, however, that this
Section 6.2.2(a) shall not apply to assets or
entities disposed of in transactions permitted by
Section 6.11; and
(b) shall do all things necessary to
preserve, renew and keep in full force and effect
and in good standing its legal existence and
authority necessary to continue its business;
provided, however, that this Section 6.2.2(b)
shall not prevent the merger, consolidation or
liquidation of Subsidiaries permitted by Section
6.11.
6.2.3. Statutory Compliance. Each of
the Borrower and its Subsidiaries shall comply in
all material respects with all valid and
applicable statutes, laws, ordinances, zoning and
building codes and other rules and regulations of
the United States of America, of the states and
territories thereof and their counties,
municipalities and other subdivisions and of any
foreign country or other jurisdictions applicable
to such Person, except where (a) compliance
therewith shall at the time be contested in good
faith by appropriate proceedings or (b) failure so
to comply with the provisions being contested has
not resulted, or does not create a material risk
of resulting, in the aggregate in any Material
Adverse Change.
6.2.4. No Subsidiaries. The Borrower
shall not form or suffer to exist any Subsidiary,
except for such Subsidiaries as shall have
executed and delivered to the
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Agent either (a) this Agreement and each other
applicable Credit Document as of the Initial
Closing Date or (b) a Joinder Agreement in the
form of Exhibit 5.2.2 pursuant to which such
Subsidiary shall have become a Guarantor
hereunder.
6.2.5. Compliance with Material
Agreements. Each of the Borrower and its
Subsidiaries shall comply in all material respects
with the Material Agreements (to the extent not in
violation of the other provisions of this
Agreement or any other Credit Document). Except
with respect to Acquisition Agreements, without
the prior written consent of the Required Lenders,
which consent shall not be unreasonably withheld,
no Material Agreement shall be amended, modified,
waived or terminated in any manner that would have
in any material respect an adverse effect on the
interests of the Lenders.
6.3. Insurance.
6.3.1. Business Interruption Insurance.
Each of the Borrower and its Subsidiaries shall
maintain with financially sound and reputable
insurers insurance related to interruption of
business, either for loss of revenues or for extra
expense, in the manner customary for businesses of
similar size engaged in similar activities in
similar localities.
6.3.2. Property Insurance. Each of the
Borrower and its Subsidiaries shall keep its
assets which are of an insurable character insured
by financially sound and reputable insurers
against theft and fraud and against loss or damage
by fire, explosion and hazards and such other
extended coverage risks insured against by
extended coverage to the extent, in amounts and
with deductibles at least as favorable as those
generally maintained by businesses of similar size
engaged in similar activities in similar
localities.
6.3.3. Liability Insurance. Each of the
Borrower and its Subsidiaries shall maintain with
financially sound and reputable insurers insurance
against liability for hazards, risks and liability
to persons (for both death and bodily injury) and
property, including product liability insurance
and medical malpractice insurance, to the extent,
in amounts and with deductibles at least as
favorable as those generally maintained by
businesses of similar size engaged in similar
activities in similar localities; provided,
however, that it may effect workers' compensation
insurance or similar coverage with respect to
operations in any particular state or other
jurisdiction through an insurance fund operated by
such state or jurisdiction or by meeting the
self-insurance requirements of such state or
jurisdiction.
6.3.4. Key Executive Life Insurance.
The Borrower and its Subsidiaries shall maintain
with financially sound and reputable insurers life
insurance policies on each of E.G. Xxxxxx, X.X.
Xxxxxxx and X.X. Xxxxxxxxx in an amount of at
least
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$2,000,000 each in form satisfactory to the Agent,
and, on each doctor employed by the Borrower or
any of its Subsidiaries in an amount not less than
and in the form of any life insurance policy
maintained by the Borrower and its Subsidiaries on
such individual as of or immediately prior to the
Initial Closing Date.
6.3.5. Flood Insurance. Each of the
Borrower and its Subsidiaries shall at all times
keep each parcel of real property owned or leased
by it which is (a) included in the Credit
Security, (b) in an area determined by the
Director of the Federal Emergency Management
Agency to be subject to special flood hazard and
(c) in a community participating in the National
Flood Insurance Program, insured against such
special flood hazards in an amount equal to the
maximum limit of coverage available for the
particular type of property under the federal
National Flood Insurance Act of 1968.
6.4. Financial Statements and Reports. Each of
the Borrower and its Subsidiaries shall maintain a system of accounting in
which correct entries shall be made of all transactions in relation to their
business and affairs in accordance with generally accepted accounting practice.
The fiscal year of the Borrower and its Subsidiaries shall end on December 31
in each year and the fiscal quarters of the Obligors shall end on March 31,
June 30, September 30 and December 31 in each year.
6.4.1. Annual Reports. The Borrower
shall furnish to the Agent as soon as available,
and in any event within 120 days after the end of
each fiscal year, the Consolidated and
Consolidating balance sheets of the Borrower and
its Subsidiaries as at the end of such fiscal
year, the Consolidated and Consolidating
statements of income and Consolidated statements
of changes in shareholders' equity and of cash
flows of the Borrower and its Subsidiaries for
such fiscal year (all in reasonable detail) and
together, in the case of Consolidated financial
statements, with comparative figures for the
immediately preceding fiscal year, all accompanied
by:
(a) Unqualified reports of independent
certified public accountants of recognized
national standing reasonably satisfactory to the
Agent, containing no material uncertainty and
without any Impermissible Reference, to the effect
that they have audited the foregoing Consolidated
financial statements in accordance with generally
accepted auditing standards and that such
Consolidated financial statements present fairly,
in all material respects, the financial position
of the Borrower and its Subsidiaries covered
thereby at the dates thereof and the results of
their operations for the periods covered thereby
in conformity with GAAP.
(b) The statement of such accountants
that they have caused this Agreement to be
reviewed and that in the course of their audit of
the Borrower and its Subsidiaries no facts have
come to their attention that cause them to believe
that any Default exists and in particular that
they have no knowledge of any Default under
Sections 6.5
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through 6.21 or, if such is not the case,
specifying such Default and the nature thereof.
This statement is furnished by such accountants
with the understanding that the examination of
such accountants cannot be relied upon to give
such accountants knowledge of any such Default
except as it relates to accounting or auditing
matters within the scope of their audit.
(c) A certificate of the Borrower signed
by a Financial Officer to the effect that such
officer has caused this Agreement to be reviewed
and has no knowledge of any Default, or if such
officer has such knowledge, specifying such
Default and the nature thereof, and what action
the Borrower has taken, is taking or proposes to
take with respect thereto.
(d) Computations by the Borrower
comparing the financial statements referred to
above with the most recent budget for such fiscal
year furnished to the Agent in accordance with
Section 6.4.4.
(e) Computations by the Borrower
demonstrating, as of the end of such fiscal year,
compliance with the Computation Covenants,
certified by a Financial Officer.
(f) Calculations, as at the end of such
fiscal year, of (i) the Accumulated Benefit
Obligations for each Plan covered by Title IV of
ERISA (other than Multiemployer Plans) and (ii)
the fair market value of the assets of such Plan
allocable to such benefits.
(g) Supplements to Exhibits 7.1, 7.3 and
10.4.2 showing any changes in the information set
forth in such Exhibits not previously furnished to
the Agent in writing, as well as any changes in
the Charter, Bylaws or incumbency of officers of
the Borrower or its Subsidiaries from those
previously certified to the Agent.
(h) In the event of a change in GAAP
after the Initial Closing Date, computations by
the Borrower, certified by a Financial Officer,
reconciling the financial statements referred to
above with financial statements prepared in
accordance with GAAP as applied to the other
covenants in Section 6 and related definitions.
6.4.2. Quarterly Reports. The Borrower
shall furnish to the Agent as soon as available
and, in any event, within 45 days after the end of
each of the first three fiscal quarters of the
Borrower, the internally prepared Consolidated and
Consolidating balance sheets of the Borrower and
its Subsidiaries as of the end of such fiscal
quarter, the Consolidated and Consolidating
statements of income and Consolidated statements
of changes in shareholders' equity and of cash
flows of the Borrower and its Subsidiaries for
such fiscal quarter and for the portion of the
fiscal year then ended (all
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in reasonable detail) and together, in the case of
Consolidated statements, with comparative figures
for the same period in the preceding fiscal year,
all accompanied by:
(a) A certificate of the Borrower signed
by a Financial Officer to the effect that such
financial statements have been prepared in
accordance with GAAP and present fairly, in all
material respects, the financial position of the
Borrower and its Subsidiaries covered thereby at
the dates thereof and the results of their
operations for the periods covered thereby,
subject only to normal year-end audit adjustments
and the addition of footnotes.
(b) A certificate of the Borrower signed
by a Financial Officer to the effect that such
officer has caused this Agreement to be reviewed
and has no knowledge of any Default, or if such
officer has such knowledge, specifying such
Default and the nature thereof and what action the
Borrower has taken, is taking or proposes to take
with respect thereto.
(c) Computations by the Borrower
comparing the financial statements referred to
above with the most recent budget for the period
covered thereby furnished to the Agent in
accordance with Section 6.4.4.
(d) Computations by the Borrower
demonstrating, as of the end of such quarter,
compliance with the Computation Covenants,
certified by a Financial Officer.
(e) Supplements to Exhibits 7.1, 7.3 and
10.4.2 showing any changes in the information set
forth in such Exhibits not previously furnished to
the Agent in writing, as well as any changes in
the Charter, Bylaws or incumbency of officers of
the Borrower or its Subsidiaries from those
previously certified to the Agent.
(f) In the event of a change in GAAP
after the Initial Closing Date, computations by
the Borrower, certified by a Financial Officer,
reconciling the financial statements referred to
above with financial statements prepared in
accordance with GAAP as applied to the other
covenants in Section 6 and related definitions.
6.4.3. Monthly Reports. The Borrower
shall furnish to the Agent as soon as available
and, in any event, within 30 days after the end of
each month, a certificate of a Financial Officer
of the Borrower supplying computations of the
Borrowing Base at the beginning of such month and
certifying that such computations were based on
the monthly reports prepared in accordance with
GAAP.
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6.4.4. Other Reports. The Borrower
shall promptly furnish to the Agent:
(a) As soon as prepared and in any event
prior to the beginning of each fiscal year, an
annual budget and operating projections for such
fiscal year of the Borrower and its Subsidiaries,
prepared in a manner consistent with the manner in
which the financial projections described in
Section 7.2.1 were prepared.
(b) Any material updates of such budget
and projections.
(c) Any management letters furnished to
the Borrower or any of its Subsidiaries by the
Company's auditors.
(d) All budgets, projections, statements
of operations and other reports furnished
generally to the shareholders of the Borrower.
(e) As soon as practicable but, in any
event, within 20 Banking Days after the filing
thereof, such registration statements, proxy
statements and reports, including, to the extent
applicable, Forms X-0, X-0, X-0, X-0, 10-K, 10-Q
and 8-K, as may be filed by the Borrower or any of
its Subsidiaries with the Securities and Exchange
Commission.
(f) Any 90-day letter or 30-day letter
from the federal Internal Revenue Service (or the
equivalent notice received from state or other
taxing authorities) asserting tax deficiencies
against the Borrower or any of its Subsidiaries.
(g) Any material information relating to
a material audit or investigation of the Borrower
or any of its Subsidiaries in its capacity as a
Medicare or Medicaid provider by a governmental or
administrative agency.
(h) The financial and operational
projections for the Borrower and its Subsidiaries
on a Consolidated and Consolidating basis.
6.4.5. Notice of Litigation, Defaults,
etc. Each of the Borrower and its Subsidiaries
shall promptly furnish to the Agent notice of any
litigation or any administrative or arbitration
proceeding (a) which creates a material risk of
resulting, after giving effect to any applicable
insurance, in the payment by the Borrower or any
of its Subsidiaries of more than $100,000 or (b)
which results, or creates a material risk of
resulting, in a Material Adverse Change. Within
five Banking Days after acquiring knowledge
thereof, the Borrower shall notify the Lenders of
the existence of any Default or Material Adverse
Change, specifying the nature thereof and what
action the Borrower or such Subsidiary has taken,
is taking or proposes to take with respect
thereto.
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6.4.6. ERISA Reports. Each of the
Borrower and its Subsidiaries shall furnish to the
Agent promptly after the same shall become
available the following items with respect to any
Plan:
(a) any request for a waiver of the
funding standards or an extension of the
amortization period,
(b) any reportable event (as defined in
section 4043 of ERISA), unless the notice
requirement with respect thereto has been waived
by regulation,
(c) any notice received by any ERISA
Group Person that the PBGC has instituted or
intends to institute proceedings to terminate any
Plan, or that any Multiemployer Plan is insolvent
or in reorganization,
(d) notice of the possibility of the
termination of any Plan by its administrator
pursuant to section 4041 of ERISA, and
(e) notice of the intention of any ERISA
Group Person to withdraw, in whole or in part,
from any Multiemployer Plan.
6.4.7. Other Information; Audit. From
time to time at reasonable intervals upon request
of any authorized officer of the Agent, each of
the Borrower and its Subsidiaries shall furnish to
the Agent such other information regarding the
business, assets, financial condition, income or
prospects of the Borrower and its Subsidiaries as
such officer may reasonably request, including
copies of all tax returns, licenses, agreements,
leases and instruments to which any of the
Borrower and its Subsidiaries is party. The
Agent's authorized officers and representatives
shall have the right during normal business hours
upon reasonable notice and at reasonable intervals
to examine the books and records of the Borrower
and its Subsidiaries, to make copies and notes
therefrom for the purpose of ascertaining
compliance with or obtaining enforcement of this
Agreement or any other Credit Document. The
Agent, upon reasonable advance notice, may
undertake to have the Borrower and its
Subsidiaries reviewed by the Agent's commercial
financial examiners and fixed asset appraisers.
The Borrower shall bear the reasonable expenses
related to one such review annually unless an
Event of Default has occurred and is continuing in
which event the Borrower shall bear all reasonable
expenses of any reasonable number of reviews.
6.5. Certain Financial Tests.
6.5.1. Minimum Net Income. On the last
day of each fiscal quarter of the Borrower,
Consolidated Net Income for the fiscal quarter
then ending shall be at least $1.00.
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6.5.2. Consolidated Senior Debt
Coverage. At all times set forth in the table
below, Consolidated Senior Debt shall not exceed
the percentage of Consolidated Adjusted EBITDA
indicated in the table below for the period of
four consecutive fiscal quarters most recently
ended:
Period Percentage
------ ----------
Initial Closing Date through March 31, 1998 400%
April 1, 1998 through March 31, 1999 350%
April 1, 1999 and thereafter 300%
6.5.3. Consolidated Total Debt Coverage.
At all times set forth in the table below, the amount
of (a) Consolidated Total Debt minus (b) that portion
of the outstanding principal amount of any Contingent
Notes to the extent that such portion is not required
to be reflected on the financial statements of the
Borrower in accordance with GAAP, shall not exceed
the percentage of Consolidated Adjusted EBITDA
indicated in the table below for the period of four
consecutive fiscal quarters most recently ended:
Period Percentage
------ ----------
Initial Closing Date through March 31, 1999 450%
April 1, 1999 and thereafter 400%
6.5.4. Consolidated Interest Expense.
On the last day of each fiscal quarter of the
Borrower (a) ending on or prior to March 31, 1998,
Consolidated Adjusted EBITDA for the period of four
consecutive fiscal quarters then ending shall be at
least 275% of the Annualized Interest Expense for
such period and (b) ending after March 31, 1998,
Consolidated Adjusted EBITDA for the period of four
consecutive fiscal quarters then ending shall be at
least 300% of the Annualized Interest Expense for
such period.
6.5.5. Consolidated Operating Cash Flow.
On the last day of each fiscal quarter of the
Borrower, Consolidated Operating Cash Flow for the
period of four consecutive fiscal quarters then
ending shall be at least 125% of Consolidated Total
Debt Service for such period.
6.6. Indebtedness. Neither the Borrower nor any
of its Subsidiaries shall create, incur, assume or otherwise become or remain
liable with respect to any Indebtedness except the following:
6.6.1. Indebtedness in respect of the
Credit Obligations.
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6.6.2. Guarantees permitted by Section
6.7.
6.6.3. Current liabilities, other than
Financing Debt, incurred in the ordinary course of
business.
6.6.4. To the extent that payment
thereof shall not at the time be required by Section
6.1, Indebtedness in respect of taxes, assessments,
governmental charges and claims for labor, materials
and supplies.
6.6.5. Indebtedness secured by Liens of
carriers, warehouses, mechanics and landlords
permitted by Sections 6.8.5 and 6.8.6.
6.6.6. Indebtedness in respect of
judgments or awards (a) which have been in force for
less than the applicable appeal period or (b) in
respect of which the Borrower or any of its
Subsidiaries shall at the time in good faith be
prosecuting an appeal or proceedings for review and,
in the case of each of clauses (a) and (b), the
Borrower or such Subsidiary shall have taken
appropriate reserves therefor in accordance with GAAP
and execution of such judgment or award shall not be
levied.
6.6.7. To the extent permitted by
Section 6.8.9, Indebtedness in respect of Capitalized
Lease Obligations or secured by purchase money
security interests; provided, however, that the
aggregate principal amount of all Indebtedness
permitted by this Section 6.6.7 at any one time
outstanding shall not exceed $1,000,000.
6.6.8. Indebtedness with respect to
deferred compensation in the ordinary course of
business and Indebtedness with respect to employee
benefit programs (including liabilities in respect of
deferred compensation, pension or severance benefits,
early termination benefits, disability benefits,
vacation benefits and tuition benefits) incurred in
the ordinary course of business so long as the
Borrower and its Subsidiaries is in compliance with
Section 6.17.
6.6.9. Indebtedness in respect of
customer advances and deposits, deferred income,
deferred taxes and other deferred credits arising in
the ordinary course of business.
6.6.10. Indebtedness relating to
deferred gains and deferred taxes arising in
connection with sale of assets permitted under
Section 6.11.
6.6.11. Indebtedness in respect of
inter-company loans and advances among the Borrower
and its Subsidiaries which are not prohibited by
Section 6.9.
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6.6.12. Indebtedness that is not payable before
the Final Maturity Date with respect to mandatory redemption
or dividend rights relating to the Company's Series A
Preferred Stock.
6.6.13. Contingent Notes.
6.6.14. Indebtedness to the extent set forth on
Exhibit 6.6.
6.7. Guarantees; Letters of Credit. Neither the Borrower
nor any of its Subsidiaries shall become or remain liable with respect to any
Guarantee, including reimbursement obligations, whether contingent or matured,
under letters of credit or other financial guarantees by third parties, except
the following:
6.7.1. Letters of Credit and Guarantees of the
Credit Obligations.
6.7.2. Guarantees by the Borrower of
Indebtedness incurred by its Subsidiaries and permitted by
Section 6.6.
6.7.3. Guarantees by the Borrower of the
obligations of its Subsidiaries under employment agreements
between such Subsidiary and its employees.
6.8. Liens. Neither the Borrower nor any of its
Subsidiaries shall create, incur or enter into, or suffer to be created or
incurred or to exist, any Lien, except the following:
6.8.1. Liens on the Credit Security that secure
the Credit Obligations.
6.8.2. Liens to secure taxes, assessments and
other governmental charges, to the extent that payment thereof
shall not at the time be required by Section 6.1.
6.8.3. Deposits or pledges made (a) in
connection with, or to secure payment of, workers'
compensation, unemployment insurance, old age pensions or
other social security, (b) in connection with casualty
insurance maintained in accordance with Section 6.3, (c) to
secure the performance of bids, tenders, contracts (other than
contracts relating to Financing Debt) or leases, (d) to secure
statutory obligations or surety or appeal bonds, (e) to secure
indemnity, performance or other similar bonds in the ordinary
course of business or (f) in connection with contested amounts
to the extent that payment thereof shall not at that time be
required by Section 6.1.
6.8.4. Liens in respect of judgments or awards,
to the extent that such judgments or awards are permitted by
Section 6.6.6.
6.8.5. Liens of carriers, warehouses, mechanics
and similar Liens, in each case (a) in existence less than 120
days from the date of creation thereof or (b) being
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contested in good faith by the Borrower or any Subsidiary in
appropriate proceedings (so long as the Borrower or such
Subsidiary shall, in accordance with GAAP, have set aside on
its books adequate reserves with respect thereto).
6.8.6. Encumbrances in the nature of (a) zoning
restrictions, (b) easements, (c) restrictions of record on the
use of real property, (d) landlords' and lessors' Liens on
rented premises and (e) restrictions on transfers or
assignment of leases, which in each case do not materially
detract from the value of the encumbered property or impair
the use thereof in the business of the Borrower or any
Subsidiary.
6.8.7. Restrictions under federal and state
securities laws on the transfer of securities.
6.8.8. Restrictions under Foreign Trade
Regulations on the transfer or licensing of certain assets of
the Borrower and its Subsidiaries.
6.8.9. Liens constituting (a) purchase money
security interests (including mortgages, conditional sales,
Capitalized Leases and any other title retention or deferred
purchase devices) in real property, interests in leases or
tangible personal property (other than inventory) existing or
created on the date on which such property is acquired, and
(b) the renewal, extension or refunding of any security
interest referred to in the foregoing clause (a) in an amount
not to exceed the amount thereof remaining unpaid immediately
prior to such renewal, extension or refunding; provided,
however, that (i) each such security interest shall attach
solely to the particular item of property so acquired, and the
principal amount of Indebtedness (including Indebtedness in
respect of Capitalized Lease Obligations) secured thereby
shall not exceed the cost (including all such Indebtedness
secured thereby, whether or not assumed) of such item of
property; and (ii) the aggregate principal amount of all
Indebtedness secured by Liens permitted by this Section 6.8.9
shall not exceed the amount permitted by Section 6.6.7.
6.8.10. Other Liens and Capitalized Lease
Obligations on the property secured by such Liens or the
subject of such Capitalized Lease as set forth on Exhibit 6.8
and any renewals thereof, but not any increase in the amount
thereof.
6.9. Investments and Permitted Acquisitions. Neither the
Borrower nor any of its Subsidiaries shall have outstanding, acquire, commit
itself to acquire or hold any Investment (including any Investment consisting
of the Permitted Acquisition of any business) except for the following:
6.9.1. Cash Investments of the Borrower in its
Subsidiaries.
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6.9.2. Intercompany loans and advances from the
Borrower and its Subsidiaries to any Subsidiary but in each
case only to the extent reasonably necessary for Consolidated
tax planning and working capital management.
6.9.3. Investments in Cash Equivalents.
6.9.4. Guarantees permitted by Section 6.7.
6.9.5. Investments constituting the acquisition
of all of the capital stock, equity, partnership or other
beneficial interests in, or substantially all the assets of,
any Person that derives substantially all of its revenues from
a business that the Borrower would be permitted to engage in
under Section 6.2.1; provided, however, that:
(a) not less than 10 days prior to the
consummation of such acquisition, the Agent shall have
received any report, analysis and other documentation with
respect to such acquisition, produced by such independent due
diligence firm as approved by the Agent.
(b) immediately before and after giving effect
to such acquisition, no Default shall exist;
(c) the Purchase Price for such acquisition does
not exceed $10,000,000, unless the terms and the documentation
relating to such acquisition is satisfactory to the Required
Lenders, as specified in writing to the Borrower; and
(d) before such acquisition, the Agent shall
have received computations, certified by a Financial Officer
of the Borrower, showing
(i) pro forma compliance as of the date
of such acquisition with the financial tests set
forth in Section 6.5 (other than Section 6.5.5) ,
after giving effect to any increases in Financing
Debt incurred in connection with such acquisition and
adding to the financial statements most recently
delivered to the Agent the Pro Forma EBITDA of the
Acquired Party for the most recently completed period
of four consecutive fiscal quarters,
(ii) that the Financing Debt component
of the consideration for such acquisition does not
exceed the sum of 450% of the Pro Forma EBITDA of the
Acquired Party for the most recently completed period
of four consecutive fiscal quarters plus the cash and
Cash Equivalents of the Acquired Party.
Each Lender shall be deemed to have approved any non-GAAP
adjustments used in such certified calculation of the Pro
Forma EBITDA unless, within five Banking Days after the
Company (via the Agent) gives notice to such Lender of the
proposed Pro
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Forma EBITDA calculations showing such non-GAAP adjustments,
such Lender has given notice to the Company and the Agent of
its objection to such non-GAAP adjustments.
6.9.6. Investments representing Indebtedness of
any Person owing as a result of the sale by the Borrower in
the ordinary course of business to such Person of products,
services or tangible property no longer required in the
Borrower's business.
6.10. Distributions. Neither the Borrower nor any of its
Subsidiaries shall make any Distribution except for the following:
6.10.1. Subsidiaries of the Borrower may make
Distributions to the Borrower or any other Subsidiary of the
Borrower.
6.10.2. Distributions consisting of Investments
permitted by Sections 6.9.1 and 6.9.2.
6.10.3. Distributions in respect of the
redemption of capital stock of the Company from employees of
the Borrower or any of its Subsidiaries; provided, however,
that the amount of all such Distributions shall not exceed
$50,000 in the aggregate in any fiscal year.
6.10.4. Distributions on Subordinated
Indebtedness to the extent permitted by a Subordination
Agreement or such other documentation relating to Subordinated
Indebtedness that has been approved by the Agent.
6.10.5. Distributions consisting of the
principal of, premium, if any, and interest on the 8%
Non-Negotiable Senior Subordinated Notes due December 31, 1998
issued pursuant to the Asset Purchase Agreement dated January
1, 1994 (the "8% Senior Subordinated Notes") and the 10%
Junior Subordinated Notes due December 31, 2001 issued
pursuant to the Series A Preferred Stock, Common Stock and
Junior Subordinated Note Purchase Agreement dated January 1,
1994 (the "10% Junior Subordinated Notes"), so long as
immediately before and after giving effect to such
Distribution, no Default shall exist.
6.11. Asset Dispositions and Mergers. Except as otherwise
set forth in Exhibit 6.11, neither the Borrower nor any of its Subsidiaries
shall merge or enter into a consolidation or sell, lease, sell and lease back,
sublease or otherwise dispose of any of its assets, except the following:
6.11.1. So long as immediately prior to and after
giving effect thereto there shall exist no Default, the
Borrower and any of its Subsidiaries may sell or otherwise
dispose of: (a) inventory in the ordinary course of business;
(b) tangible assets to be
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replaced in the ordinary course of business within 12 months
by other assets of equal or greater value; (c) tangible assets
no longer used or useful in the business of the Borrower or
such Subsidiary; provided, however, that the aggregate fair
market value (or book value, if greater) of the assets sold or
disposed of pursuant to this clause (c) shall not exceed
$500,000 in any fiscal year; and (d) the portion of the assets
acquired from Gulf Coast Pathology Associates, Inc. that
comprise the operations of two clinical laboratories.
6.11.2. Any Subsidiary may merge or be
liquidated into the Borrower or any other Subsidiary of the
Borrower so long as after giving effect to any such merger to
which the Borrower is a party the Borrower shall be the
surviving or resulting Person.
6.12. Lease Obligations. Neither the Borrower nor any of
its Subsidiaries shall be or become obligated as lessee under any lease except:
6.12.1. Capitalized Leases permitted by Sections
6.6.7 and 6.8.9.
6.12.2. Leases other than Capitalized Leases;
provided, however, that the aggregate fixed rental obligations
for any year (excluding payments required to be made by the
lessee in respect of taxes and insurance whether or not
denominated as rent) shall not exceed $2,000,000.
6.13. Issuance of Stock by Subsidiaries; Subsidiary
Distributions.
6.13.1. Issuance of Stock by Subsidiaries of the
Company. No Subsidiary shall issue or sell any shares of its
capital stock or other evidence of beneficial ownership to any
Person other than the Borrower or any other Wholly-Owned
Subsidiary of the Borrower, which shares shall have been
pledged to the Agent as part of the Credit Security; provided,
however, that (i) in the event that applicable state law or
regulation prohibits the Company from directly holding the
capital stock of a medical practice that is a Subsidiary of
the Company, such shares may be issued or sold to a trust or
similar entity controlled solely by the Borrower or a
Wholly-Owned Subsidiary of the Borrower and (ii) Xxxxx X.
Xxxxxxxxxx, M.D. may hold one share of AmeriPath Kentucky,
Inc., so long as the Shareholders' Agreement among Xx.
Xxxxxxxxxx, the Company and AmeriPath Kentucky, Inc. remains
in full force and effect.
6.13.2. No Restrictions on Subsidiary
Distributions. Except for this Agreement and the Credit
Documents, neither the Borrower nor any of its Subsidiaries
shall enter into or be bound by any agreement (including
covenants requiring the maintenance of specified amounts of
net worth or working capital) restricting the right of any
Subsidiary to make Distributions or extensions of credit to
the Borrower (directly or indirectly through another
Subsidiary).
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6.14. Voluntary Prepayments of Other Indebtedness. Neither
the Borrower nor any of its Subsidiaries shall make any voluntary prepayment of
principal of or interest on any Financing Debt (other than the Credit
Obligations) or make any voluntary redemptions or repurchases of Financing Debt
(other than the Credit Obligations) without the prior written consent of the
Required Lenders; provided, however that the Borrower may make a voluntary
prepayment of the principal of, premium, if any, and interest on the 8% Senior
Subordinated Notes and the 10% Junior Subordinated Notes, so long as
immediately before and after giving effect to such payment, no Default shall
exist.
6.15. Derivative Contracts. Neither the Borrower nor any
of its Subsidiaries shall enter into any Interest Rate Protection Agreement,
foreign currency exchange contract or other financial or commodity derivative
contracts except to provide hedge protection for an underlying economic
transaction in the ordinary course of business.
6.16. Negative Pledge Clauses. Neither the Borrower nor any
of its Subsidiaries shall enter into any agreement, instrument, deed or lease
which prohibits or limits the ability of such Obligor to create, incur, assume
or suffer to exist any Lien upon any of their respective properties, assets or
revenues, whether now owned or hereafter acquired, or which requires the grant
of any collateral for such obligation if collateral is granted for another
obligation, except the following:
6.16.1. This Agreement and the other Credit
Documents.
6.16.2. Covenants in documents creating Liens
permitted by Section 6.8 prohibiting further Liens on the
assets encumbered thereby.
6.17. ERISA, etc. Each of the Borrower and its
Subsidiaries shall comply, and shall cause all ERISA Group Persons to comply,
in all material respects, with the provisions of ERISA and the Code applicable
to each Plan. Each of the Borrower and its Subsidiaries shall meet, and shall
cause all ERISA Group Persons to meet, all minimum funding requirements
applicable to them with respect to any Plan pursuant to section 302 of ERISA or
section 412 of the Code, without giving effect to any waivers of such
requirements or extensions of the related amortization periods which may be
granted. At no time shall the Accumulated Benefit Obligations under any Plan
that is not a Multiemployer Plan exceed the fair market value of the assets of
such Plan allocable to such benefits by more than $250,000. The Borrower and
its Subsidiaries shall not withdraw, and shall cause all other ERISA Group
Persons not to withdraw, in whole or in part, from any Multiemployer Plan so as
to give rise to withdrawal liability exceeding $250,000 in the aggregate. At
no time shall the actuarial present value of unfunded liabilities for
post-employment health care benefits, whether or not provided under a Plan,
calculated in a manner consistent with Statement No. 106 of the Financial
Accounting Standards Board, exceed $500,000.
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6.18. Transactions with Affiliates. Except with respect to
transactions set forth on Exhibit 6.18, neither the Borrower nor any of its
Subsidiaries shall effect any transaction with any of their respective
Affiliates (except for the Borrower and its Subsidiaries) on a basis less
favorable to the Borrower and its Subsidiaries than would be the case if such
transaction had been effected with a non-Affiliate.
6.19. Interest Rate Protection. Within 90 days after the
Initial Closing Date, the Borrower shall obtain and keep in effect one or more
Interest Rate Protection Agreements, each in form and substance reasonably
satisfactory to the Agent, covering at least $30,000,000, in each case for an
aggregate period of not less than two years.
6.20. Environmental Laws.
6.20.1. Compliance with Law and Permits. Each
of the Borrower and its Subsidiaries shall use and operate all
of their respective facilities and properties in material
compliance with all Environmental Laws, keep all necessary
permits, approvals, certificates, licenses and other
authorizations relating to environmental matters in effect and
remain in material compliance therewith, and handle all
Hazardous Materials in material compliance with all applicable
Environmental Laws.
6.20.2. Notice of Claims, etc. Each of the
Borrower and its Subsidiaries shall immediately notify the
Agent, and provide copies upon receipt, of all written claims,
complaints, notices or inquiries from governmental authorities
relating to the condition of its facilities and properties or
compliance with Environmental Laws, and shall promptly cure
and have dismissed with prejudice to the satisfaction of the
Agent any actions and proceedings relating to compliance with
Environmental Laws.
6.21. Capital Expenditures. The Borrower and its
Subsidiaries will not make Capital Expenditures in any fiscal year which in the
aggregate exceed 4% of the net revenues of the Borrower and its Subsidiaries on
a Consolidated basis as determined in accordance with GAAP, for such fiscal
year, other than with respect to the purchase of assets in connection with a
Permitted Acquisition.
7. Representations and Warranties. In order to induce the
Lenders to extend credit to the Borrower hereunder, each of the Borrower and
its Subsidiaries as are party hereto from time to time jointly and severally
represents and warrants as follows:
7.1. Organization and Business.
7.1.1. The Borrower. The Borrower is a duly
organized and validly existing corporation, in good standing
under the laws of Delaware with all power and authority,
corporate or otherwise, necessary to (a) enter into and
perform this Agreement and each other Credit Document to which
it is party, (b) grant the Agent for the benefit of the
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Lenders the security interests in the Credit Security owned by
it to secure the Credit Obligations and (c) own its properties
and carry on the business now conducted or proposed to be
conducted by it. Certified copies of the Charter and By-laws
of the Borrower have been previously delivered to the Agent
and are correct and complete. Exhibit 7.1, as from time to
time hereafter supplemented in accordance with Sections 6.4.1
and 6.4.2, sets forth, as of the later of the date hereof or
as of the end of the most recent fiscal quarter for which
financial statements are required to be furnished in
accordance with such Sections, (i) the jurisdiction of
incorporation of the Borrower, (ii) the address of the
Borrower's principal executive office and chief place of
business, (iii) each name, including any trade name, under
which the Borrower conducts its business and (iv) the
jurisdictions in which the Borrower keeps tangible personal
property.
7.1.2. Subsidiaries. Each Subsidiary of the
Borrower is duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it is
organized, with all power and authority, corporate or
otherwise, necessary to (a) enter into and perform this
Agreement and each other Credit Document to which it is party,
(b) guarantee the Credit Obligations, (c) grant the Lenders
the security interest in the Credit Security owned by such
Subsidiary to secure the Credit Obligations and (d) own its
properties and carry on the business now conducted or proposed
to be conducted by it. Certified copies of the Charter and
By-laws of each Subsidiary of the Borrower have been
previously delivered to the Agent and are correct and
complete. Exhibit 7.1, as from time to time hereafter
supplemented in accordance with Sections 6.4.1 and 6.4.2, sets
forth, as of the later of the date hereof or as of the end of
the most recent fiscal quarter for which financial statements
are required to be furnished in accordance with such Sections,
(i) the name and jurisdiction of organization of each
Subsidiary of the Borrower, (ii) the address of the chief
executive office and principal place of business of each such
Subsidiary, (iii) each name under which each such Subsidiary
conducts its business; (iv) each jurisdiction in which each
such Subsidiary keeps tangible personal property, and (v) the
number of authorized and issues shares and ownership of each
such Subsidiary.
7.1.3. Qualification. Each of the Borrower and
its Subsidiaries is duly and legally qualified to do business
as a foreign corporation or other entity and is in good
standing in each state or jurisdiction in which such
qualification is required and is duly authorized, qualified
and licensed under all laws, regulations, ordinances or orders
of public authorities, or otherwise, to carry on its business
in the places and in the manner in which it is conducted,
except for failures to be so qualified, authorized or licensed
which would not in the aggregate result, or create a material
risk of resulting, in any Material Adverse Change.
7.1.4. Capitalization. No options, warrants,
conversion rights, preemptive rights or other statutory or
contractual rights to purchase shares of capital stock or
other
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securities of any Subsidiary, now exist, nor has any
Subsidiary authorized any such right, nor is any Subsidiary
obligated in any other manner to issue shares of its capital
stock or other securities. Attached as Exhibit 7.1.4. is a
list of the holders of all the outstanding capital stock of
the Borrower together with the number of shares so held.
7.2. Financial Statements and Other Information; Material
Agreements.
7.2.1. Financial Statements and Other
Information. The Borrower has previously furnished to the
Lenders copies of the following:
(a) The audited Consolidated balance sheets of
the Borrower and its Subsidiaries as of December 31, 1996 and
the audited statements of income, of changes in shareholders'
equity and of cash flows of the Borrower and its Subsidiaries
for the fiscal year of the Borrower then ended.
(b) The unaudited balance sheets of the Borrower
and its Subsidiaries on a Consolidated basis as of March 31,
1997 and the unaudited statements of income, of changes in
shareholders' equity and of cash flows of the Company and its
Subsidiaries on a Consolidated basis for the portion of the
fiscal year then ended.
(c) Calculations demonstrating pro forma
compliance with the Computation Covenants as of the end of the
most recent quarter, as applicable, preceding the date hereof.
The audited financial statements (including the notes
thereto) referred to in clause (a) above were prepared in
accordance with GAAP and fairly present the financial position
of the Borrower and its Subsidiaries on a Consolidated basis
at the date thereof and the results of their operations for
the periods covered thereby. The unaudited financial
statements referred to in clause (b) above were prepared in
accordance with GAAP and fairly present the financial position
of the Borrower and its Subsidiaries on a Consolidated basis
at the respective dates thereof and the results of their
operations for the periods covered thereby, subject to normal
year-end audit adjustment and the addition of footnotes in the
case of interim financial statements. Neither the Borrower
nor any of its Subsidiaries has any known contingent liability
material to the Borrower and its Subsidiaries on a
Consolidated basis which is not reflected in the balance
sheets referred to in clauses (a) or (b) above (or delivered
pursuant to Sections 6.4.1 or 6.4.2) or in the notes thereto.
In the Borrower's judgment, the financial and
operational projections referred to in clause (c) above
constitute a reasonable basis as of the Initial Closing Date
for the assessment of the future performance of the Borrower
and its Subsidiaries during the periods indicated therein, it
being understood that any projected financial information
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represents an estimate, based on various assumptions, of
future results of operations which may or may not in fact
occur.
7.2.2. Material Agreements. The Borrower has
previously furnished to the Lenders correct and complete
copies, including all exhibits, schedules and amendments
thereto, of the agreements, each as in effect on the date
hereof, listed in Exhibit 7.2.2 (the "Material Agreements").
7.3. Agreements Relating to Financing Debt, Investments,
etc. Exhibit 7.3, as from time to time hereafter supplemented in accordance
with Sections 6.4.1 and 6.4.2, sets forth (a) the amounts (as of the dates
indicated in Exhibit 7.3, as so supplemented) of all Financing Debt of the
Borrower and its Subsidiaries and all agreements which relate to such Financing
Debt, (b) all Liens and Guarantees with respect to such Financing Debt and (c)
all agreements which directly or indirectly require the Borrower or any
Subsidiary to make any Investment. The Borrower has furnished the Lenders with
correct and complete copies of any agreements described in clauses (a), (b) and
(c) above requested by the Required Lenders.
7.4. Changes in Condition. Since December 31, 1996 no
Material Adverse Change has occurred and between December 31, 1996 and the date
hereof, except as set forth in Exhibit 7.4, neither the Borrower nor any of its
Subsidiaries has entered into any material transaction outside the ordinary
course of business except for the transactions contemplated by or otherwise
permitted or authorized pursuant to this Agreement and the Material Agreements.
7.5. Title to Assets. The Borrower and its Subsidiaries
have good and marketable title to, or rights to use under lease all assets
necessary for or used in the operations of their business as now conducted by
them and reflected in the most recent balance sheet referred to in Section
7.2.1 (or the balance sheet most recently furnished to the Lenders pursuant to
Sections 6.4.1 or 6.4.2), and to all assets acquired subsequent to the date of
such balance sheet, subject to no Liens except for Liens permitted by Section
6.8 and except for assets disposed of as permitted by Section 6.11.
7.6. Operations in Conformity With Law, etc. The
operations of the Borrower and its Subsidiaries as now conducted or proposed to
be conducted are not in violation of, nor is the Borrower or any of its
Subsidiaries in default under, any Legal Requirement presently in effect,
except for such violations and defaults as do not and will not, in the
aggregate, result, or create a material risk of resulting, in any Material
Adverse Change. Neither the Borrower nor any of its Subsidiaries has received
notice of any such violation or default or has knowledge of any basis on which
the operations of the Borrower or its Subsidiaries, as now conducted and as
currently proposed to be conducted after the date hereof, would be held so as
to violate or to give rise to any such violation or default.
7.7. Litigation. Except as otherwise set forth in Exhibit
7.7, no litigation, at law or in equity, or any proceeding before any court,
board or other governmental or administrative
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agency or any arbitrator is pending or, to the knowledge of the Borrower or any
of its Subsidiaries, threatened which may involve any material risk of any
final judgment, order or liability which, after giving effect to any applicable
insurance, has resulted, or creates a material risk of resulting, in any
Material Adverse Change or which seeks to enjoin the consummation, or which
questions the validity, of any of the transactions contemplated by this
Agreement or any other Credit Document. No judgment, decree or order of any
court, board or other governmental or administrative agency or any arbitrator
has been issued against or binds the Borrower or any of Subsidiaries which has
resulted, or creates a material risk of resulting, in any Material Adverse
Change.
7.8. Authorization and Enforceability. Each of the
Obligors has taken all corporate action required to execute, deliver and
perform this Agreement and each other Credit Document to which it is party. No
consent of stockholders of any Obligor is necessary in order to authorize the
execution, delivery or performance of this Agreement or any other Credit
Document to which such Obligor is party. Each of this Agreement and each other
Credit Document constitutes the legal, valid and binding obligation of each
Obligor party thereto and is enforceable against such Obligor in accordance
with its terms.
7.9. No Legal Obstacle to Agreements. Neither the
execution and delivery of this Agreement or any other Credit Document, nor the
making of any borrowings hereunder, nor the guaranteeing of the Credit
Obligations, nor the securing of the Credit Obligations with the Credit
Security, nor the consummation of any transaction referred to in or
contemplated by this Agreement or any other Credit Document, nor the
fulfillment of the terms hereof or thereof or of any other agreement,
instrument, deed or lease contemplated by this Agreement or any other Credit
Document, has constituted or resulted in or will constitute or result in:
(a) any breach or termination of the provisions
of any agreement, instrument, deed or lease to which the
Borrower, any of its Subsidiaries or any other Obligor is a
party or by which it is bound, or of the Charter or By-laws of
the Borrower, any of its Subsidiaries or any other Obligor;
(b) the violation of any law, statute, judgment,
decree or governmental order, rule or regulation applicable to
the Borrower, any of its Subsidiaries or any other Obligor;
(c) the creation under any agreement,
instrument, deed or lease of any Lien (other than Liens on the
Credit Security which secure the Credit Obligations) upon any
of the assets of the Borrower, any of its Subsidiaries or any
other Obligor; or
(d) any redemption, retirement or other
repurchase obligation of the Borrower, any of its Subsidiaries
or any other Obligor under any Charter, By-law, agreement,
instrument, deed or lease.
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No approval, authorization or other action by, or declaration to or filing
with, any governmental or administrative authority or any other Person is
required to be obtained or made by the Borrower, any of its Subsidiaries or any
other Obligor in connection with the execution, delivery and performance of
this Agreement, the Notes or any other Credit Document, the transactions
contemplated hereby or thereby, the making of any borrowing hereunder, the
guaranteeing of the Credit Obligations or the securing of the Credit
Obligations with the Credit Security.
7.10. Defaults. Neither the Borrower nor any of its
Subsidiaries is in default under any provision of its Charter or By-laws or of
this Agreement or any other Credit Document. Neither the Borrower nor any of
its Subsidiaries is in default under any provision of any agreement,
instrument, deed or lease to which it is party or by which it or its property
is bound. Neither the Borrower nor any of its Subsidiaries has violated any
law, judgment, decree or governmental order, rule or regulation, in each case
so as to result, or create a material risk of resulting, in any Material
Adverse Change.
7.11. Licenses, etc. The Borrower and its Subsidiaries
have all patents, patent applications, patent licenses, patent rights,
trademarks, trademark rights, trade names, trade name rights, copyrights,
licenses, franchises, permits, authorizations and other rights as are necessary
for the conduct of the business of the Borrower and its Subsidiaries as now
conducted by them. All of the foregoing are in full force and effect in all
material respects, and each of the Borrower and its Subsidiaries is in
substantial compliance with the foregoing without any known conflict with the
valid rights of others which has resulted, or creates a material risk of
resulting, in any Material Adverse Change. No event has occurred which
permits, or after notice or lapse of time or both would permit, the revocation
or termination of any such license, franchise or other right or which affects
the rights of any of the Borrower and its Subsidiaries thereunder so as to
result, or to create a material risk of resulting, in any Material Adverse
Change. No litigation or other proceeding or dispute exists with respect to
the validity or, where applicable, the extension or renewal, of any of the
foregoing which has resulted, or creates a material risk of resulting, in any
Material Adverse Change.
7.12. Tax Returns. Each of the Borrower and its
Subsidiaries has filed all material tax and information returns which are
required to be filed by it and has paid, or made adequate provision for the
payment of, all taxes which have or may become due pursuant to such returns or
to any assessment received by it. Neither the Borrower nor any of its
Subsidiaries knows of any material additional assessments or any basis
therefor. Neither the Borrower nor any of its Subsidiaries reasonably believes
that the charges, accruals and reserves on the books of the Borrower and its
Subsidiaries in respect of taxes or other governmental charges are adequate.
7.13. Certain Business Representations.
7.13.1. Labor Relations. No dispute or
controversy between the Borrower or any of its Subsidiaries
and any of their respective employees has resulted, or is
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reasonably likely to result, in any Material Adverse Change,
and neither the Borrower nor any of its Subsidiaries
anticipates that its relationships with its unions or
employees will result, or are reasonably likely to result, in
any Material Adverse Change. Each of the Borrower and its
Subsidiaries is in compliance in all material respects with
all federal and state laws with respect to (a)
non-discrimination in employment with which the failure to
comply, in the aggregate, has resulted, or creates a material
risk of resulting, in a Material Adverse Change and (b) the
payment of wages.
7.13.2. Antitrust. Each of the Borrower and
its Subsidiaries is in compliance in all material respects
with all federal and state antitrust laws relating to its
business and the geographic concentration of its business.
7.13.3. Consumer Protection. Neither the
Borrower nor any of its Subsidiaries is in violation of any
rule, regulation, order, or interpretation of any rule,
regulation or order of the Federal Trade Commission (including
truth-in-lending), with which the failure to comply, in the
aggregate, has resulted, or creates a material risk of
resulting, in a Material Adverse Change.
7.13.4. Burdensome Obligations. Neither the
Borrower nor any of its Subsidiaries is party to or bound by
any agreement, instrument, deed or lease or is subject to any
Charter, By-law or other restriction, commitment or
requirement which, in the opinion of the management of such
Person, is so unusual or burdensome as in the foreseeable
future to result, or create a material risk of resulting, in a
Material Adverse Change.
7.13.5. Future Expenditures. Neither the
Borrower nor any of its Subsidiaries anticipate that the
future expenditures, if any, by the Borrower and its
Subsidiaries needed to meet the provisions of any federal,
state or foreign governmental statutes, orders, rules or
regulations will be so burdensome as to result, or create a
material risk of resulting, in any Material Adverse Change.
7.14. Environmental Regulations.
7.14.1. Environmental Compliance. Each of the
Borrower and its Subsidiaries is in compliance in all material
respects with the Clean Air Act, the Federal Water Pollution
Control Act, the Marine Protection Research and Sanctuaries
Act, RCRA, CERCLA and any other Environmental Law in effect in
any jurisdiction in which any properties of the Borrower and
its Subsidiaries are located or where any of them conducts its
business, and with all applicable published rules and
regulations (and applicable standards and requirements) of the
federal Environmental Protection Agency and of any similar
agencies in states or foreign countries in which the Borrower
and its Subsidiaries conduct their businesses other than those
which in the aggregate have not resulted, and do not create a
material risk of resulting, in a Material Adverse Change.
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7.14.2. Environmental Litigation. No suit,
claim, action or proceeding of which any Obligor has been
given notice or otherwise has knowledge is now pending before
any court, governmental agency or board or other forum, or to
any Obligor's knowledge, threatened by any Person (nor to any
Obligor's knowledge, does any factual basis exist therefor)
for, and none of the Obligors have received written
correspondence from any federal, state or local governmental
authority with respect to:
(a) noncompliance by any Obligor with any
Environmental Law;
(b) personal injury, wrongful death or other
tortious conduct relating to materials, commodities or
products used, generated, sold, transferred or manufactured by
any Obligor (including products made of, containing or
incorporating asbestos, lead or other hazardous materials,
commodities or toxic substances); or
(c) the release into the environment by any
Obligor of any Hazardous Material generated by any Obligor
whether or not occurring at or on a site owned, leased or
operated by any Obligor.
7.14.3. Environmental Condition of Properties.
None of the properties owned or leased by any Obligor has been
used as a treatment, storage or disposal site, other than as
disclosed in Exhibit 7.14. No Hazardous Material is present
in any real property currently or formerly owned or operated
by any Obligor except that which has not resulted, and does
not create a material risk of resulting, in a Material Adverse
Change.
7.15. Pension Plans. Each Plan (other than a Multiemployer
Plan) and, to the knowledge of each of the Borrower and its Subsidiaries, each
Multiemployer Plan is in material compliance with the applicable provisions of
ERISA and the Code. Each Multiemployer Plan and each Plan that constitutes a
"defined benefit plan" (as defined in ERISA) are set forth in Exhibit 7.15.
Each ERISA Group Person has met all of the funding standards applicable to all
Plans that are not Multiemployer Plans, and no condition exists which would
permit the institution of proceedings to terminate any Plan that is not a
Multiemployer Plan under section 4042 of ERISA. To the best knowledge of the
Borrower and each of its Subsidiaries, no Plan that is a Multiemployer Plan is
currently insolvent or in reorganization or has been terminated within the
meaning of ERISA.
7.16. Acquisition Agreement, etc. Each Acquisition
Agreement is a valid and binding contract as to the Borrower and each
Subsidiary party thereto and, to the best of the Borrower's knowledge, as to
the Sellers party thereto. The Borrower is not in default in any material
respect of its obligations under any Acquisition Agreement and, to the best of
the Borrower's knowledge, the Sellers party thereto are not in default in any
material respect of any of their obligations thereunder. The representations
and warranties of the Borrower set
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forth in each Acquisition Agreement are true and correct in all material
respect as of the date hereof with the same force and effect as though made on
and as of the date hereof. To the best of the Borrower's knowledge all of the
representations and warranties of the Sellers set forth in each Acquisition
Agreement are true and correct in all material respects as of the date hereof
with the same force and effect as though made on and as of the date hereof.
7.17. Foreign Trade Regulations; Government Regulation;
Margin Stock.
7.17.1. Foreign Trade Regulations. Neither the
execution and delivery of this Agreement or any other Credit
Document, nor the making by the Borrower of any borrowings
hereunder, nor the guaranteeing of the Credit Obligations by
any Guarantor, nor the securing of the Credit Obligations with
the Credit Security, has constituted or resulted in or will
constitute or result in the violation of any Foreign Trade
Regulation.
7.17.2. Government Regulation. Neither the
Borrower nor any Subsidiary, nor any Person controlling the
Borrower or any of its Subsidiaries or under common control
with the Borrower or any of its Subsidiaries, is subject to
regulation under the Public Utility Holding Company Act of
1935, the Federal Power Act, the Investment Company Act, the
Interstate Commerce Act or any statute or regulation which
regulates the incurring by the Borrower or any of its
Subsidiaries of Financing Debt as contemplated by this
Agreement and the other Credit Documents.
7.17.3. Margin Stock. Neither the Borrower nor
any of its Subsidiaries owns any Margin Stock.
7.18. Disclosure. Neither this Agreement nor any other
Credit Document to be furnished to the Lenders by or on behalf of the Borrower
or any of its Subsidiaries in connection with the transactions contemplated
hereby or by such Credit Document contains any untrue statement of material
fact or omits to state a material fact necessary in order to make the
statements contained herein or therein not misleading in light of the
circumstances under which they were made. No fact is actually known to
Borrower or any of its Subsidiaries which has resulted, or in the future (so
far as the Borrower or any of its Subsidiaries can reasonably foresee) will
result, or creates a material risk of resulting, in any Material Adverse
Change, except to the extent that present or future general economic conditions
may result in a Material Adverse Change.
8. Defaults.
8.1. Events of Default. The following events are referred
to as "Events of Default":
8.1.1. Payment. The Borrower shall fail to make
any payment in respect of: (a) interest or any fee on or in
respect of any of the Credit Obligations owed by it as the
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same shall become due and payable, and such failure shall
continue for a period of three Banking Days, or (b) any Credit
Obligation with respect to payments made by any Letter of
Credit Issuer under any Letter of Credit or any draft drawn
thereunder within three Banking Days after demand therefor by
such Letter of Credit Issuer or (c) principal of any of the
Credit Obligations owed by it as the same shall become due,
whether at maturity or by acceleration or otherwise.
8.1.2. Specified Covenants. The Borrower or any
of its Subsidiaries shall fail to perform or observe any of
the provisions of Section 6.4.5 or Sections 6.5 through 6.21.
8.1.3. Other Covenants. The Borrower, any of
its Subsidiaries or any other Obligor shall fail to perform or
observe any other covenant, agreement or provision to be
performed or observed by it under this Agreement or any other
Credit Document, and such failure shall not be rectified or
cured to the written satisfaction of the Required Lenders
within 30 days after the earlier of (a) notice thereof by the
Agent to the Borrower or (b) a Financial Officer shall have
actual knowledge thereof.
8.1.4. Representations and Warranties. Any
representation or warranty of or with respect to the Borrower
or any of its Subsidiaries or any other Obligor made to the
Lenders or the Agent in, pursuant to or in connection with
this Agreement or any other Credit Document shall be
materially false on the date as of which it was made.
8.1.5. Cross Default, etc.
(a) The Borrower or any of Subsidiaries shall
fail to make any payment when due (after giving effect to any
applicable grace periods) in respect of any Capitalized Lease
or in respect of any Financing Debt (other than the Credit
Obligations) outstanding in an aggregate amount of principal
(whether or not due) and accrued interest exceeding $250,000;
(b) the Borrower or any of its Subsidiaries
shall fail to perform or observe the terms of any agreement or
instrument relating to any Capitalized Lease or any Financing
Debt (other than the Credit Obligations) outstanding in an
aggregate amount of principal (whether or not due) and accrued
interest exceeding $250,000, and such failure shall continue,
without having been duly cured, waived or consented to, beyond
the period of grace, if any, specified in such agreement or
instrument, and such failure shall permit the acceleration of
such Financing Debt or Capitalized Lease;
(c) all or any part of any Financing Debt (other
than the Credit Obligations) outstanding in an aggregate
amount of principal (whether or not due) and accrued interest
exceeding $250,000 of the Borrower or any of its Subsidiaries
shall be
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accelerated or shall become due or payable prior to its stated
maturity (except with respect to voluntary prepayments
thereof) for any reason whatsoever;
(d) any Lien on any property of the Borrower or
any of its Subsidiaries securing any Financing Debt (other
than the Credit Obligations) outstanding in an aggregate
amount of principal (whether or not due) and accrued interest
exceeding $250,000 shall be enforced by foreclosure or similar
action; or
(e) any holder of any Financing Debt (other than
the Credit Obligations) outstanding in an aggregate amount of
principal (whether or not due) and accrued interest exceeding
$250,000 shall exercise any right of rescission or put right
with respect thereto.
8.1.6. Ownership; Liquidation; etc. Except as
permitted by either Section 6.11 or Section 6.13:
(a) the Borrower shall cease to own, directly or
indirectly, all the capital stock of each of its Subsidiaries;
(b) any transaction or series of transactions
shall occur as a result of which the Persons listed on Exhibit
8.1.6 shall collectively cease to beneficially own, in the
aggregate, (A) at any time prior to consummation of the
initial public offering of the common stock of the Company,
(i) preferred stock and/or (ii) common stock representing or
convertible into at least 51% of the fully diluted equity of
the Company or (B) at any time after the consummation of the
initial public offering of the Company's common stock, a
greater amount of the Company's capital stock entitled to vote
than the aggregate amount of the Company's capital stock
entitled to vote held by any other beneficial owner (as such
term is defined in Rule 13d-3 or any other successor rule or
regulation promulgated under the Exchange Act).
(c) the Borrower, any of its Subsidiaries or any
other Obligor shall initiate any action to dissolve, liquidate
or otherwise terminate its existence.
8.1.7. Enforceability, etc. Any Credit Document
shall cease for any reason (other than the scheduled
termination thereof in accordance with its terms) to be
enforceable in accordance with its terms or in full force and
effect; or the Borrower, any of its Subsidiaries or any other
Obligor in respect of any Credit Document shall so assert in a
judicial or similar proceeding; or the security interests
created by this Agreement or any other Credit Documents shall
cease to be enforceable and of the same effect and priority
purported to be created hereby.
8.1.8. Judgments. A final judgment (a) which,
with other outstanding final judgments against the Borrower or
any of its Subsidiaries, exceeds an aggregate of
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$100,000 in excess of applicable insurance coverage shall be
rendered against the Borrower or any of its Subsidiaries, or
(b) which grants injunctive relief that results, or creates a
material risk of resulting, in a Material Adverse Change and
in either case if, (i) within 60 days after entry thereof,
such judgment shall not have been discharged or execution
thereof stayed pending appeal or (ii) within 60 days after the
expiration of any such stay, such judgment shall not have been
discharged.
8.1.9. ERISA. Any "reportable event" (as
defined in section 4043 of ERISA) shall have occurred that
reasonably could be expected to result in termination of a
Material Plan or the appointment by the appropriate United
States District Court of a trustee to administer any Material
Plan or the imposition of a Lien in favor of a Material Plan;
or any ERISA Group Person shall fail to pay when due amounts
aggregating in excess of $100,000 which it shall have become
liable to pay to the PBGC or to a Material Plan under Title IV
of ERISA; or notice of intent to terminate a Material Plan
shall be filed under Title IV of ERISA by any ERISA Group
Person or administrator; or the PBGC shall institute
proceedings under Title IV of ERISA to terminate or to cause a
trustee to be appointed to administer any Material Plan or a
proceeding shall be instituted by a fiduciary of any Material
Plan against any ERISA Group Person to enforce section 515 or
4219(c)(5) of ERISA and such proceeding shall not have been
dismissed within 30 days thereafter; or a condition shall
exist by reason of which the PBGC would be entitled to obtain
a decree adjudicating that any Material Plan must be
terminated.
8.1.10. Bankruptcy, etc. The Borrower, any of
its Subsidiaries or any other Obligor shall:
(a) commence a voluntary case under the
Bankruptcy Code or authorize, by appropriate proceedings of
its board of directors or other governing body, the
commencement of such a voluntary case;
(b) (i) have filed against it a petition
commencing an involuntary case under the Bankruptcy Code that
shall not have been dismissed within 60 days after the date on
which such petition is filed, or (ii) file an answer or other
pleading within such 60-day period admitting or failing to
deny the material allegations of such a petition or seeking,
consenting to or acquiescing in the relief therein provided,
or (iii) have entered against it an order for relief in any
involuntary case commenced under the Bankruptcy Code;
(c) seek relief as a debtor under any applicable
law, other than the Bankruptcy Code, of any jurisdiction
relating to the liquidation or reorganization of debtors or to
the modification or alteration of the rights of creditors, or
consent to or acquiesce in such relief;
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(d) have entered against it an order by a court
of competent jurisdiction (i) finding it to be bankrupt or
insolvent, (ii) ordering or approving its liquidation or
reorganization as a debtor or any modification or alteration
of the rights of its creditors or (iii) assuming custody of,
or appointing a receiver or other custodian for, all or a
substantial portion of its property; or
(e) make an assignment for the benefit of, or
enter into a composition with, its creditors, or appoint, or
consent to the appointment of, or suffer to exist a receiver
or other custodian for, all or a substantial portion of its
property.
8.2. Certain Actions Following an Event of Default. If
any one or more Events of Default shall occur and be continuing, then in each
and every such case:
8.2.1. Terminate Obligation to Extend Credit.
The Agent on behalf of the Lenders may (and upon written
request of the Lenders holding at least one-third of the
Aggregate Percentage Interests in the Loan the Agent shall)
terminate the obligations of the Lenders to make any further
extensions of credit under the Credit Documents by furnishing
notice of such termination to the Borrower.
8.2.2. Specific Performance; Exercise of Rights.
The Agent on behalf of the Lenders may (and upon written
request of the Lenders holding at least one-third of the
Aggregate Percentage Interests in the Loan the Agent shall)
proceed to protect and enforce the Lenders' rights by suit in
equity, action at law and/or other appropriate proceeding,
either for specific performance of any covenant or condition
contained in this Agreement or any other Credit Document or in
any instrument or assignment delivered to the Lenders pursuant
to this Agreement or any other Credit Document, or in aid of
the exercise of any power granted in this Agreement or any
other Credit Document or any such instrument or assignment.
8.2.3. Acceleration. The Agent on behalf of the
Lenders may (and upon written request of the Lenders holding
at least one-third of the Aggregate Percentage Interests in
the Loan the Agent shall) by notice in writing to the Borrower
(a) declare all or any part of the unpaid balance of the
Credit Obligations then outstanding to be immediately due and
payable, and (b) require the Borrower immediately to deposit
with the Agent in cash an amount equal to the then Letter of
Credit Exposure (which cash shall be held and applied as
provided in Section 4.5), and thereupon such unpaid balance or
part thereof and such amount equal to the Letter of Credit
Exposure shall become so due and payable without presentation,
protest or further demand or notice of any kind, all of which
are hereby expressly waived; provided, however, that if a
Bankruptcy Default shall have occurred, the unpaid balance of
the Credit Obligations shall automatically become immediately
due and payable.
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8.2.4. Enforcement of Payment; Credit Security;
Setoff. The Agent on behalf of the Lenders may (and upon
written request of the Lenders holding at least one-third of
the Aggregate Percentage Interests in the Loan the Agent
shall) proceed to enforce payment of the Credit Obligations in
such manner as it may elect, to cancel, or instruct other
Letter of Credit Issuers to cancel, any outstanding Letters of
Credit which permit the cancellation thereof and to realize
upon any and all rights in the Credit Security. The Lenders
may offset and apply toward the payment of the Credit
Obligations (and/or toward the curing of any Event of Default)
any Indebtedness from the Lenders to the respective Obligors,
including any Indebtedness represented by deposits in any
account maintained with the Lenders, regardless of the
adequacy of any security for the Credit Obligations. The
Lenders shall have no duty to determine the adequacy of any
such security in connection with any such offset.
8.2.5. Cumulative Remedies. To the extent not
prohibited by applicable law which cannot be waived, all of
the Lenders' rights hereunder and under each other Credit
Document shall be cumulative.
8.2.6. Exercise of Call Right. The Company
shall, upon the reasonable request of the Agent, exercise its
rights to purchase the share of stock of AmeriPath Kentucky,
Inc. owned by Xxxxx X. Xxxxxxxxxx, M.D. pursuant to Section 3
of the Shareholders' Agreement among AmeriPath Kentucky, Inc.,
Xxxxx X. Xxxxxxxxxx, M.D. and the Company.
8.3. Annulment of Defaults. Any Default or Event of
Default shall be deemed not to exist or to have occurred for any purpose of the
Credit Documents if the Required Lenders or the Agent (with the consent of the
Required Lenders) shall have waived such Default or Event of Default in
writing, stated in writing that the same has been cured to such Lenders'
reasonable satisfaction or entered into an amendment to this Agreement which by
its express terms cures such Event of Default, at which time such Event of
Default shall no longer be deemed to exist or to have continued. No such
action by the Lenders or the Agent shall extend to or affect any subsequent
Event of Default or impair any rights of the Lenders upon the occurrence
thereof. The making of any extension of credit during the existence of any
Default or Event of Default shall not constitute a waiver thereof.
8.4. Waivers. To the extent that such waiver is not
prohibited by the provisions of applicable law that cannot be waived, each of
the Borrower and the other Obligors waives:
(a) all presentments, demands for performance,
notices of nonperformance (except to the extent required by
this Agreement or any other Credit Document), protests,
notices of protest and notices of dishonor;
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(b) any requirement of diligence or promptness
on the part of any Lender in the enforcement of its rights
under this Agreement, the Notes or any other Credit Document;
(c) any and all notices of every kind and
description which may be required to be given by any statute
or rule of law; and
(d) any defense (other than indefeasible payment
in full) which it may now or hereafter have with respect to
its liability under this Agreement, the Notes or any other
Credit Document or with respect to the Credit Obligations.
9. Guarantees.
9.1. Guarantees of Credit Obligations. Each Guarantor
unconditionally jointly and severally guarantees that the Credit Obligations
will be performed and will be paid in full in immediately available funds when
due and payable, whether at the stated or accelerated maturity thereof or
otherwise, this guarantee being a guarantee of payment and not of
collectability and being absolute and in no way conditional or contingent. In
the event any part of the Credit Obligations shall not have been so paid in
full when due and payable, each Guarantor will, immediately upon notice by the
Agent or, without notice, immediately upon the occurrence of a Bankruptcy
Default, pay or cause to be paid to the Agent for the account of each Lender in
accordance with the Lenders' respective Aggregate Percentage Interests in the
Loan the amount of such Credit Obligations which are then due and payable and
unpaid. The obligations of each Guarantor hereunder shall not be affected by
the invalidity, unenforceability or irrecoverability of any of the Credit
Obligations as against any other Obligor, any other guarantor thereof or any
other Person. For purposes hereof, the Credit Obligations shall be due and
payable when and as the same shall be due and payable under the terms of this
Agreement or any other Credit Document notwithstanding the fact that the
collection or enforcement thereof may be stayed or enjoined under the
Bankruptcy Code or other applicable law.
9.2. Continuing Obligation. Each Guarantor acknowledges
that the Lenders and the Agent have entered into this Agreement (and, to the
extent that the Lenders or the Agent may enter into any future Credit Document,
will have entered into such agreement) in reliance on this Section 9 being a
continuing irrevocable agreement, and such Guarantor agrees that its guarantee
may not be revoked in whole or in part. The obligations of the Guarantors
hereunder shall terminate when the commitment of the Lenders to extend credit
under this Agreement shall have terminated and all of the Credit Obligations
have been indefeasibly paid in full in immediately available funds and
discharged; provided, however, that:
(a) if a claim is made upon the Lenders at any
time for repayment or recovery of any amounts or any property
received by the Lenders from any source on account of any of
the Credit Obligations and the Lenders repay or return any
amounts or property
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so received (including interest thereon to the extent required
to be paid by the Lenders) or
(b) if the Lenders become liable for any part of
such claim by reason of (i) any judgment or order of any court
or administrative authority having competent jurisdiction, or
(ii) any settlement or compromise of any such claim,
then the Guarantors shall remain liable under this Agreement for the amounts so
repaid or property so returned or the amounts for which the Lenders become
liable (such amounts being deemed part of the Credit Obligations) to the same
extent as if such amounts or property had never been received by the Lenders,
notwithstanding any termination hereof or the cancellation of any instrument or
agreement evidencing any of the Credit Obligations. Not later than five days
after receipt of notice from the Agent, the Guarantors shall jointly and
severally pay to the Agent an amount equal to the amount of such repayment or
return for which the Lenders have so become liable. Payments hereunder by a
Guarantor may be required by the Agent on any number of occasions.
9.3. Waivers with Respect to Credit Obligations. Except
to the extent expressly required by this Agreement or any other Credit
Document, each Guarantor waives, to the fullest extent permitted by the
provisions of applicable law, all of the following (including all defenses,
counterclaims and other rights of any nature based upon any of the following):
(a) presentment, demand for payment and protest
of nonpayment of any of the Credit Obligations, and notice of
protest, dishonor or nonperformance;
(b) notice of acceptance of this guarantee and
notice that credit has been extended in reliance on the
Guarantor's guarantee of the Credit Obligations;
(c) notice of any Default or of any inability to
enforce performance of the obligations of the Company or any
other Person with respect to any Credit Document, or notice of
any acceleration of maturity of any Credit Obligations;
(d) demand for performance or observance of, and
any enforcement of any provision of, the Credit Obligations,
this Agreement or any other Credit Document or any pursuit or
exhaustion of rights or remedies with respect to any Credit
Security or against the Company or any other Person in respect
of the Credit Obligations or any requirement of diligence or
promptness on the part of the Agent or the Lenders in
connection with any of the foregoing;
(e) any act or omission on the part of the Agent
or the Lenders which may impair or prejudice the rights of the
Guarantor, including rights to obtain subrogation,
exoneration, contribution, indemnification or any other
reimbursement from the Company or any other Person, or
otherwise operate as a deemed release or discharge;
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(f) failure or delay to perfect or continue the
perfection of any security interest in any Credit Security or
any other action which xxxxx or impairs the value of, or any
failure to preserve or protect the value of, any Credit
Security;
(g) any statute of limitations or any statute or
rule of law which provides that the obligation of a surety
must be neither larger in amount nor in other respects more
burdensome than the obligation of the principal;
(h) any "single action" or "anti-deficiency" law
which would otherwise prevent the Lenders from bringing any
action, including any claim for a deficiency, against the
Guarantor before or after the Agent's or the Lenders'
commencement or completion of any foreclosure action, whether
judicially, by exercise of power of sale or otherwise, or any
other law which would otherwise require any election of
remedies by the Agent or the Lenders;
(i) all demands and notices of every kind with
respect to the foregoing; and
(j) to the extent not referred to above, all
defenses (other than payment) which the Company may now or
hereafter have to the payment of the Credit Obligations,
together with all suretyship defenses, which could otherwise
be asserted by such Guarantor.
Each Guarantor represents that it has obtained the advice of counsel as to the
extent to which suretyship and other defenses may be available to it with
respect to its obligations hereunder in the absence of the waivers contained in
this Section 9.3.
No delay or omission on the part of the Agent or the Lenders in
exercising any right under this Agreement or any other Credit Document or under
any guarantee of the Credit Obligations or with respect to the Credit Security
shall operate as a waiver or relinquishment of such right. No action which the
Agent or the Lenders or the Company may take or refrain from taking with
respect to the Credit Obligations, including any amendments thereto or
modifications thereof or waivers with respect thereto, shall affect the
provisions of this Agreement or the obligations of the Guarantor hereunder.
None of the Lenders' or the Agent's rights shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of any Obligor,
or by any noncompliance by the Company with the terms, provisions and covenants
of this Agreement, regardless of any knowledge thereof which the Agent or the
Lenders may have or otherwise be charged with.
9.4. Lenders' Power to Waive, etc. Each Guarantor grants
to the Lenders full power in their discretion, without notice to or consent of
such Guarantor, such notice and consent being expressly waived to the fullest
extent permitted by applicable law, and without in any way affecting the
liability of the Guarantor under its guarantee hereunder:
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(a) To waive compliance with, and any Default
under, and to consent to any amendment to or modification or
termination of any terms or provisions of, or to give any
waiver in respect of, this Agreement, any other Credit
Document, the Credit Security, the Credit Obligations or any
guarantee thereof (each as from time to time in effect);
(b) To grant any extensions of the Credit
Obligations (for any duration), and any other indulgence with
respect thereto, and to effect any total or partial release
(by operation of law or otherwise), discharge, compromise or
settlement with respect to the obligations of the Obligors or
any other Person in respect of the Credit Obligations, whether
or not rights against the Guarantor under this Agreement are
reserved in connection therewith;
(c) To take security in any form for the Credit
Obligations, and to consent to the addition to or the
substitution, exchange, release or other disposition of, or to
deal in any other manner with, any part of any property
contained in the Credit Security whether or not the property,
if any, received upon the exercise of such power shall be of a
character or value the same as or different from the character
or value of any property disposed of, and to obtain, modify or
release any present or future guarantees of the Credit
Obligations and to proceed against any of the Credit Security
or such guarantees in any order;
(d) To collect or liquidate or realize upon any
of the Credit Obligations or the Credit Security in any manner
or to refrain from collecting or liquidating or realizing upon
any of the Credit Obligations or the Credit Security; and
(e) To extend credit under this Agreement, any
other Credit Document or otherwise in such amount as the
Lenders may determine, including increasing the amount of
credit and the interest rate and fees with respect thereto,
even though the condition of the Obligors (financial or
otherwise on an individual or Consolidated basis) may have
deteriorated since the date hereof.
9.5. Information Regarding the Borrower, etc.
Each Guarantor has made such investigation as it deems desirable of the risks
undertaken by it in entering into this Agreement and is fully satisfied that it
understands all such risks. Each Guarantor waives any obligation which may now
or hereafter exist on the part of the Agent or the Lenders to inform it of the
risks being undertaken by entering into this Agreement or of any changes in
such risks and, from and after the date hereof, each Guarantor undertakes to
keep itself informed of such risks and any changes therein. Each Guarantor
expressly waives any duty which may now or hereafter exist on the part of the
Agent or the Lenders to disclose to the Guarantor any matter related to the
business, operations, character, collateral, credit, condition (financial or
otherwise), income or prospects of the Borrower or its Affiliates or their
properties or
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management, whether now or hereafter known by the Agent or the Lenders. Each
Guarantor represents, warrants and agrees that it assumes sole responsibility
for obtaining from the Borrower all information concerning this Agreement and
all other Credit Documents and all other information as to the Borrower and its
Affiliates or their properties or management as such Guarantor deems necessary
or desirable.
9.6. Certain Guarantor Representations. Each Guarantor
represents that:
(a) it is in its best interest and in pursuit of
the purposes for which it was organized as an integral part of
the business conducted and proposed to be conducted by the
Borrower and its Subsidiaries, and reasonably necessary and
convenient in connection with the conduct of the business
conducted and proposed to be conducted by them, to induce the
Lenders to enter into this Agreement and to extend credit to
the Borrower by making the Guarantees contemplated by this
Section 9,
(b) the credit available hereunder will directly
or indirectly inure to its benefit,
(c) by virtue of the foregoing it is receiving
at least reasonably equivalent value from the Lenders for its
Guarantee,
(d) it will not be rendered insolvent as a
result of entering into this Agreement,
(e) after giving effect to the transactions
contemplated by this Agreement, it will have assets having a
fair saleable value in excess of the amount required to pay
its probable liability on its existing debts as they become
absolute and matured,
(f) it has, and will have, access to adequate
capital for the conduct of its business,
(g) it has the ability to pay its debts from
time to time incurred in connection with its business as such
debts mature, and
(h) it has been advised by the Agent that the
Lenders are unwilling to enter into this Agreement unless the
Guarantees contemplated by this Section 9 are given by it.
9.7. Subrogation. Each Guarantor agrees that, until the
Credit Obligations are paid in full, it will not exercise any right of
reimbursement, subrogation, contribution, offset or other claims against the
other Obligors arising by contract or operation of law in connection with any
payment made or required to be made by such Guarantor under this Agreement.
After the payment in full of the Credit Obligations, each Guarantor shall be
entitled to exercise against the Borrower and the other Obligors all such
rights of reimbursement, subrogation, contribution and offset, and all such
other claims, to the fullest extent permitted by law.
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9.8. Subordination. Each Guarantor covenants and agrees
that, after the occurrence of an Event of Default, all Indebtedness, claims and
liabilities then or thereafter owing by the Borrower or any other Obligor to
such Guarantor whether arising hereunder or otherwise are subordinated to the
prior payment in full of the Credit Obligations and are so subordinated as a
claim against such Obligor or any of its assets, whether such claim be in the
ordinary course of business or in the event of voluntary or involuntary
liquidation, dissolution, insolvency or bankruptcy, so that no payment with
respect to any such Indebtedness, claim or liability will be made or received
while any Event of Default exists.
9.9. Future Subsidiaries; Further Assurances. The
Borrower will from time to time cause (a) any present Wholly Owned Subsidiary
that is not a Guarantor within 30 days after notice from the Agent or (b) any
future Wholly Owned Subsidiary within 30 days after any such Person becomes a
Wholly Owned Subsidiary, to join this Agreement as a Guarantor pursuant to a
joinder agreement in the form attached hereto as Exhibit 5.2.2. Each Guarantor
will, promptly upon the request of the Agent from time to time, execute,
acknowledge and deliver, and file and record, all such instruments, and take
all such action, as the Agent deems necessary or advisable to carry out the
intent and purposes of this Section 9.
10. Security.
10.1. Credit Security. As security for the payment and
performance of the Credit Obligations, each Obligor mortgages, pledges and
collaterally grants and assigns to the Agent for the benefit of the Lenders and
the holders from time to time of any Credit Obligation, and creates a security
interest in favor of the Agent for the benefit of the Lenders and such holders
in, all of such Obligor's right, title and interest in and to (but none of its
obligations or liabilities with respect to) the items and types of present and
future property described in Sections 10.1.1 through 10.1.14 (subject, however,
to Section 10.1.15), whether now owned or hereafter acquired, all of which
shall be included in the term "Credit Security":
10.1.1. Tangible Personal Property. All goods,
machinery, equipment, inventory and all other tangible
personal property of any nature whatsoever, wherever located,
including raw materials, work in process, finished parts and
products, supplies, spare parts, replacement parts,
merchandise for resale, computers, tapes, disks and computer
equipment.
10.1.2. Rights to Payment of Money. All rights
to receive the payment of money, including accounts (as
defined in the UCC) and receivables, rights to receive the
payment of money under contracts, franchises, licenses,
permits, subscriptions or other agreements (whether or not
earned by performance), and rights to receive payments from
any other source (all such rights, other than Financing Debt,
being referred to herein as "Accounts").
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10.1.3. Intangibles. All of the following (to
the extent not included in Section 10.1.2): (a) contracts
(including the Management Agreements), franchises, licenses,
permits, subscriptions and other agreements and all rights
thereunder; (b) rights granted by others which permit the
Obligor to sell or market items of personal property; (c)
United States and foreign common law and statutory copyrights
and rights in literary property and rights and licenses
thereunder; (d) trade names, United States and foreign
trademarks, service marks, any registrations thereof and any
related good will; (e) United States and foreign patents and
patent applications; (f) computer software, designs, models,
know-how, trade secrets, rights in proprietary information,
formulae, customer lists, backlog, orders, subscriptions,
royalties, catalogues, sales material, documents, good will,
inventions and processes; (g) judgments, causes in action and
claims, whether or not inchoate, and (h) all other general
intangibles (as defined in the UCC) and intangible property
and all rights thereunder.
10.1.4. Pledged Stock. (a) All shares of
capital stock or other evidence of beneficial interest in any
corporation, business trust or limited liability company, (b)
all limited partnership interests in any limited partnership,
(c) all general partnership interests in any general
partnership, (d) all joint venture interests in any joint
venture and (e) all options, warrants and similar rights to
acquire such capital stock or such interests. All such
capital stock, interests, options, warrants and other rights
are collectively referred to as the "Pledged Stock".
10.1.5. Pledged Rights. All rights to receive
profits or surplus of, or other Distributions (including
income, return of capital and liquidating distributions) from,
any partnership or joint venture, including any distributions
by any such Person to partners or joint venturers. All such
rights are collectively referred to as the "Pledged Rights".
10.1.6. Pledged Indebtedness. All Financing
Debt from time to time owing to such Obligor from any Person
(all such Financing Debt being referred to as the "Pledged
Indebtedness").
10.1.7. Chattel Paper, Instruments and
Documents. All chattel paper (as defined in the UCC),
non-negotiable instruments, negotiable instruments (as defined
in the UCC) and documents (as defined in the UCC).
10.1.8. Leases. All leases of personal
property, whether the Obligor is the lessor or the lessee
thereunder.
10.1.9. Deposit Accounts. All general or
special deposit accounts, including any demand, time, savings,
passbook or similar account maintained by the Obligor with any
bank, trust company, savings and loan association, credit
union or similar
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organization, and all money, cash and cash equivalents of the
Obligor, whether or not deposited in any such deposit account.
10.1.10. Collateral. All collateral granted by
third party obligors to, or held by, the Obligor with respect
to the Accounts, Pledged Securities, chattel paper,
instruments, leases and other items of Credit Security.
10.1.11. Books and Records. All books and
records, including books of account and ledgers of every kind
and nature, all electronically recorded data (including all
computer programs, disks, tapes, electronic data processing
media and software used in connection with maintaining the
Obligor's books and records), all files and correspondence and
all receptacles and containers for the foregoing.
10.1.12. Insurance. All insurance policies
which insure against any loss or damage to any other Credit
Security and each of the key executive life insurance policies
set forth in Section 6.3.4.
10.1.13. All Other Property. All other
property, assets and items of value of every kind and nature,
tangible, or intangible, absolute or contingent, legal or
equitable, including the rights of any Obligors under the
Material Agreements set forth in Exhibit 7.2.2.
10.1.14. Proceeds and Products. All proceeds,
including insurance proceeds, and products of the items of
Credit Security described or referred to in Sections 10.1.1
through 10.1.13 and, to the extent not included in the
foregoing, all Distributions with respect to the Pledged
Securities.
10.1.15. Excluded Property. Notwithstanding
Sections 10.1.1 through 10.1.14, the payment and performance
of the Credit Obligations shall not be secured by:
(a) any rights arising under, and any property,
tangible or intangible, acquired under, any agreement which
validly prohibits the creation by such Obligor of a security
interest in such rights or property;
(b) any rights or property to the extent that
any valid and enforceable law or regulation applicable to such
rights or property prohibits the creation of a security
interest therein;
(c) more than 66% of the outstanding stock or
other equity in any foreign Subsidiary; or
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(d) the items described in Section 10.2 (but
only in the event and to the extent the Agent has not
specified that such items be included in the Credit Security
pursuant thereto).
In addition, in the event an Obligor disposes of assets to
third parties in a transaction permitted by Section 6.11, such assets, but not
the proceeds or products thereof, shall automatically be released from the Lien
of the Credit Security.
10.2. Additional Credit Security. As additional Credit
Security, each Obligor covenants that it will mortgage, pledge and collaterally
grant and assign to the Agent for the benefit of the Lenders and the holders
from time to time of any Credit Obligation, and will create a security interest
in favor of the Agent for the benefit of the Lenders and such holders in, all
of its right, title and interest in and to (but none of its obligations with
respect to) such of the following present or future items as the Agent may from
time to time specify by notice to the Borrower, whether now owned or hereafter
acquired, and the proceeds and products thereof, except to the extent
consisting of rights or property of the types referred to in Section 10.1.15(a)
through (d), subject only to Liens permitted by Section 10.3.4, all of which
shall thereupon be included in the term "Credit Security":
10.2.1. Real Property. All real property and
immovable property and fixtures, leasehold interests and
easements wherever located, together with any and all estates
and interests of the Obligor therein, including lands,
buildings, stores, manufacturing facilities and other
structures erected on such property, fixed plant, fixed
equipment and all permits, rights, licenses, benefits and
other interests of any kind or nature whatsoever in respect of
such real and immovable property.
10.2.2. Motor Vehicles and Aircraft. All motor
vehicles and aircraft.
10.3. Representations, Warranties and Covenants with
Respect to Credit Security. Each Obligor represents, warrants and covenants
that:
10.3.1. Pledged Stock. All shares of capital
stock, limited partnership interests and similar securities
included in the Pledged Stock are and shall be at all times
duly authorized, validly issued, fully paid and (in the case
of capital stock and limited partnership interests)
nonassessable. Each Obligor will deliver to the Agent
certificates representing the Pledged Stock, registered, if
the Agent so requests, in the name of the Agent or its
nominee, as pledgee, or accompanied by a stock transfer power
executed in blank and, if the Agent so requests, with the
signature guaranteed, all in form and manner satisfactory to
the Agent. Pledged Stock that is not evidenced by a
certificate will be registered in the Agent's name as pledgee
on the issuer's records, all in form and substance
satisfactory to the Agent. The Agent may at any time
following and during the continuation of the occurrence of an
Event of Default transfer into its name or the name of its
nominee, as pledgee, any Pledged Securities.
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In the event the Pledged Stock includes any Margin Stock, the
Obligors will furnish to the Lenders Federal Reserve Form U-1
and take such other action as the Agent may request to ensure
compliance with applicable laws.
10.3.2. Accounts and Pledged Indebtedness. All
Accounts and Pledged Indebtedness owed by any Affiliate of the
Obligors shall be on open account and shall not be evidenced
by any note or other instrument; provided, however, that all
Pledged Indebtedness owed by any Affiliate of any Obligor
shall, if the Agent requests, be evidenced by a promissory
note, which note shall be delivered to the Agent after having
been endorsed in blank. Each Obligor will, immediately upon
the receipt thereof, deliver to the Agent any promissory note
or similar instrument representing any Pledged Indebtedness,
after having endorsed such promissory note or instrument in
blank.
10.3.3. No Liens or Restrictions on Transfer or
Change of Control. All Credit Security shall be free and
clear of any Liens and restrictions on the transfer thereof,
including contractual provisions which prohibit the assignment
of rights under contracts, except for Liens permitted by
Section 6.8 and except for restrictions on transfer under the
Securities Act and under applicable state securities laws.
Without limiting the generality of the foregoing, each Obligor
will exclude from contracts to which it becomes a party after
the date hereof provisions that would prevent such Obligor
from creating a security interest in such contract or any
property acquired thereunder as contemplated hereby. None of
the Pledged Stock is subject to any option to purchase or
similar rights of any Person. Except with the written consent
of the Agent, no Obligor is, and none of them will be, party
to or bound by any agreement, instrument, deed or lease that
restricts the change of control or ownership, or the creation
of a security interest in the ownership, of the Company or any
of its Subsidiaries.
10.3.4. Location of Credit Security. Each
Obligor shall at all times keep its records concerning the
Accounts at its chief executive office and principal place of
business, which office and place of business shall be set
forth in Exhibit 7.1, or, so long as such Obligor shall have
taken all steps reasonably necessary to perfect the Lenders'
security interest in the Credit Security with respect to such
new address, at such other address as such Obligor may specify
by notice actually received by the Agent not less than 10
Banking Days prior to such change of address. No Obligor
shall at any time keep tangible personal property of the type
referred to in Section 10.1.1 in any jurisdiction other than
the jurisdictions specified in Exhibit 7.1, or, so long as
such Obligor shall have taken all steps reasonably necessary
to perfect the Lenders' security interest in the Credit
Security with respect to such other jurisdiction, other
jurisdictions as such Obligor may specify by notice actually
received by the Agent not less than 10 days prior to moving
such tangible personal property into such other jurisdiction.
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10.3.5. Trade Names. No Obligor will adopt or
do business under any name other than its name or names
designated in Exhibit 7.1 or any other name specified by
notice actually received by the Agent not less than 10 days
prior to the conduct of business under such additional name.
Since its incorporation, no Obligor has changed its corporate
name or adopted or conducted business under any trade name
other than a name specified on Exhibit 7.1.
10.3.6. Insurance. Each insurance policy
included in, or insuring against loss or damage to, the Credit
Security shall name the Agent as additional insured party or
as loss payee. No such insurance policy shall be cancelable
or subject to termination or reduction in amount or scope of
coverage until after at least 30 days' prior written notice
from the insurer to the Agent. At least 10 days prior to the
expiration of any such insurance policy for any reason, each
Obligor shall furnish the Agent with a renewal or replacement
policy and evidence of payment of the premiums therefor when
due. Each Obligor grants to the Agent full power and
authority as its attorney-in-fact, effective upon notice to
such Obligor after the occurrence of an Event of Default to
obtain, cancel, transfer, adjust and settle any such insurance
policy and to endorse any drafts thereon. Any amounts that
the Agent receives under any such policy (including return of
unearned premiums) insuring against loss or damage to the
Credit Security prior to the occurrence of an Event of Default
shall be delivered to the Obligors for the replacement,
restoration and maintenance of the Credit Security. Any such
amounts that the Agent receives after the occurrence of an
Event of Default shall, at the Agent's option, be applied to
payment of the Credit Obligations or to the replacement,
restoration and maintenance of the Credit Security. If any
Obligor fails to provide insurance as required by this
Agreement, the Agent may, at its option, purchase such
insurance, and such Obligor will on demand pay to the Agent
the amount of any payments made by the Agent or the Lenders
for such purpose, together with interest on the amounts so
disbursed from five Banking Days after the date demanded until
payment in full thereof at the Overdue Reimbursement Rate.
10.3.7. Modifications to Credit Security.
Except with the prior written consent of the Required Lenders,
no Obligor shall amend or modify, or waive any of its rights
under or with respect to, any material Accounts, general
intangibles, Pledged Securities or leases if the effect of
such amendment, modification or waiver would be to reduce the
amount of any such items or to extend the time of payment
thereof, to waive any default by any other party thereto, or
to waive or impair any remedies of the Obligors or the Lenders
under or with respect to any such Accounts, general
intangibles, Pledged Securities or leases, in each case other
than consistent with past practice in the ordinary course of
business and on an arm's-length basis. Each Obligor will
promptly give the Agent written notice of any request by any
Person for any material credit or adjustment with respect to
any Account, general intangible, Pledged Securities or leases.
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10.3.8. Delivery of Documents. At the Agent's
request, each Obligor shall deliver to the Agent, promptly
upon such Obligor's receipt thereof, copies of any agreements,
instruments, documents or invoices comprising or relating to
the Credit Security. Pending such request, such Obligor shall
keep such items at its chief executive office and principal
place of business (as specified pursuant to Section 10.3.5).
10.3.9. Perfection of Credit Security. Upon the
Agent's request from time to time, the Obligors will execute
and deliver, and file and record in the proper filing and
recording places, all such instruments, including financing
statements, collateral assignments of copyrights, trademarks
and patents, mortgages or deeds of trust, and notations on
certificates of title and will take all such other action, as
the Agent deems advisable for confirming to it the Credit
Security or to carry out any other purposes of this Agreement
or any other Credit Document.
10.4. Administration of Credit Security. The Credit
Security shall be administered as follows, and if an Event of Default shall
have occurred, Section 10.5 shall also apply.
10.4.1. Use of Credit Security. Until the Agent
provides written notice to the contrary, each Obligor may use,
commingle and dispose of any part of the Credit Security in
the ordinary course of its business, all subject to Section
6.11.
10.4.2. Deposits; Accounts.
(a) Unless the Agent shall otherwise
consent in writing, which consent shall not be
unreasonably withheld, each Obligor shall keep all
its bank and deposit accounts only with the Agent,
other Lenders, financial institutions designated on
Exhibit 10.4.2 or any financial institution approved
by the Agent.
(b) To the extent specified by prior
written notice from the Agent, whether prior to or
after the occurrence of an Event of Default, all sums
collected or received and all property recovered or
possessed by any Obligor in connection with any
Credit Security shall be received and held by such
Obligor in trust for and on the Lenders' behalf,
shall be segregated from the assets and funds of such
Obligor, and shall be delivered to the Agent for the
benefit of the Lenders.
(c) In addition, the Obligors shall
direct that all Accounts payable by Medicare or
Medicaid and all Accounts payable in an amount
greater than $50 be paid directly into a locked box
account maintained with any financial institution
designated on Exhibit 10.4.2 or such other financial
institution as approved by the Agent (which, in the
event such financial institution is not a
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Lender, must be party to an Assignment Agreement in
form and substance satisfactory to the Agent).
10.4.3. Pledged Securities.
(a) Distributions. (i) Until an Event of Default
shall occur, and thereafter once such Event of
Default has ceased to exist, the respective Obligors
shall be entitled, to the extent permitted by the
Credit Documents, to receive all Distributions on or
with respect to the Pledged Securities (other than
Distributions constituting additional Pledged
Securities). All Distributions constituting
additional Pledged Securities will be retained by the
Agent (or if received by any Obligor shall be held by
such Person in trust and shall be immediately
delivered by such Person to the Agent in the original
form received, endorsed in blank) and held by the
Agent as part of the Credit Security.
(ii) If an Event of Default shall have
occurred and be continuing, all Distributions on or
with respect to the Pledged Securities shall be
retained by the Agent (or if received by any Obligor
shall be held by such Person in trust and shall be
immediately delivered by it to the Agent in the
original form received, endorsed in blank) and held
by the Agent as part of the Credit Security or
applied by the Agent to the payment of the Credit
Obligations in accordance with Section 10.5.6.
(b) Voting. (i) Until an Event of Default shall
occur, the respective Obligors shall be entitled to
vote or consent with respect to the Pledged
Securities in any manner not inconsistent with the
terms of any Credit Document, and the Agent will, if
so requested, execute appropriate revocable proxies
therefor.
(ii) If an Event of Default shall have
occurred, if and to the extent that the Agent shall
so notify in writing the Obligor pledging the Pledged
Securities in question, only the Agent shall be
entitled to vote or consent or take any other action
with respect to the Pledged Securities (and any
Obligor will, if so requested, execute or cause to be
executed appropriate proxies therefor).
10.5. Right to Realize upon Credit Security. Except to the
extent prohibited by applicable law that cannot be waived, this Section 10.5
shall govern the Lenders' right to realize upon the Credit Security if any
Event of Default shall have occurred and be continuing. The provisions of this
Section 10.5 are in addition to any rights and remedies available at law or in
equity and in addition to the provisions of any other Credit Document. In the
case of a conflict between this Section 10.5 and any other Credit Document,
this Section 10.5 shall govern. If any Event of Default shall have occurred
and be continuing:
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10.5.1. Assembly of Credit Security; Receiver.
Each of the Obligors shall, upon the Agent's request, assemble
the Credit Security and otherwise make it available to the
Agent. The Agent may have a receiver appointed for all or any
portion of the Obligor's assets or business which constitutes
the Credit Security in order to manage, protect, preserve,
sell and otherwise dispose of all or any portion of the Credit
Security in accordance with the terms of the Credit Documents,
to continue the operations of the Obligors and to collect all
revenues and profits therefrom to be applied to the payment of
the Credit Obligations, including the compensation and
expenses of such receiver.
10.5.2. General Authority. To the extent
specified in written notice from the Agent to the Obligor in
question, each Obligor grants the Agent full and exclusive
power and authority, subject to the other terms hereof and
applicable law, to take any of the following actions (for the
sole benefit of the Agent on behalf of the Lenders and the
holders from time to time of any Credit Obligations, but at
the Obligor's expense):
(a) To ask for, demand, take, collect, xxx for
and receive all payments in respect of any Accounts, general
intangibles, Pledged Securities or leases which the Obligor
could otherwise ask for, demand, take, collect, xxx for and
receive for its own use.
(b) To extend the time of payment of any
Accounts, general intangibles, Pledged Securities or leases
and to make any allowance or other adjustment with respect
thereto.
(c) To settle, compromise, prosecute or defend
any action or proceeding with respect to any Accounts, general
intangibles, Pledged Securities or leases and to enforce all
rights and remedies thereunder which the Obligor could
otherwise enforce.
(d) To enforce the payment of any Accounts,
general intangibles, Pledged Securities or leases, either in
the name of the Obligor or in its own name, and to endorse the
name of the Obligor on all checks, drafts, money orders and
other instruments tendered to or received in payment of any
Credit Security.
(e) To notify the third party payor with respect
to any Accounts, general intangibles, Pledged Securities or
leases of the existence of the security interest created
hereby and to cause all payments in respect thereof thereafter
to be made directly to the Agent; provided, however, that
whether or not the Agent shall have so notified such payor,
the Obligors will at their expense render all reasonable
assistance to the Agent in collecting such items and in
enforcing claims thereon.
(f) To sell, transfer, assign or otherwise deal
in or with any Credit Security or the proceeds thereof, as
fully as any Obligor otherwise could do.
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10.5.3. Marshaling, etc. Neither the Agent nor
the Lenders shall be required to make any demand upon, or
pursue or exhaust any of their rights or remedies against, any
Obligor or any other guarantor, pledgor or any other Person
with respect to the payment of the Credit Obligations or to
pursue or exhaust any of their rights or remedies with respect
to any collateral therefor or any direct or indirect guarantee
thereof. Neither the Agent nor the Lenders shall be required
to marshal the Credit Security or any guarantee of the Credit
Obligations or to resort to the Credit Security or any such
guarantee in any particular order, and all of its and their
rights hereunder or under any other Credit Document shall be
cumulative. To the extent it may lawfully do so, each of the
Obligors absolutely and irrevocably waives and relinquishes
the benefit and advantage of, and covenants not to assert
against the Agent or the Lenders, any valuation, stay,
appraisement, extension, redemption or similar laws now or
hereafter existing which, but for this provision, might be
applicable to the sale of any Credit Security made under the
judgment, order or decree of any court, or privately under the
power of sale conferred by this Agreement, or otherwise.
Without limiting the generality of the foregoing, each of the
Obligors (a) agrees that it will not invoke or utilize any law
which might prevent, cause a delay in or otherwise impede the
enforcement of the rights of the Agent or any Lender in the
Credit Security, (b) waives all such laws, and (c) agrees that
it will not invoke or raise as a defense to any enforcement by
the Agent or any Lender of any rights and remedies relating to
the Credit Security or the Credit Obligations any legal or
contractual requirement with which the Agent or any Lender may
have in good faith failed to comply. In addition, each of the
Obligors waives any right to prior notice (except to the
extent expressly required by this Agreement) or judicial
hearing in connection with foreclosure on or disposition of
any Credit Security, including any such right which such
Obligor would otherwise have under the Constitution of the
United States of America, any state or territory thereof or
any other jurisdiction.
10.5.4. Sales of Credit Security. All or any
part of the Credit Security may be sold for cash or other
value in any number of lots at public or private sale, without
demand, advertisement or notice; provided, however, that
unless the Credit Security to be sold threatens to decline
speedily in value or is of a type customarily sold on a
recognized market, the Agent shall give the Obligor granting
the security interest in such Credit Security 10 days' prior
written notice of the time and place of any public sale, or
the time after which a private sale may be made, which notice
each of the Obligors and the Lenders hereby agrees to be
reasonable. At any sale or sales of Credit Security, any
Lender or any of its respective officers acting on its behalf,
or such Lender's assigns, may bid for and purchase all or any
part of the property and rights so sold, may use all or any
portion of the Credit Obligations owed to such Lender as
payment for the property or rights so purchased, and upon
compliance with the terms of such sale may hold and dispose of
such property and rights without further accountability to the
respective Obligor, except for the proceeds of such sale or
sales pursuant to Section 10.5.6. The Obligors acknowledge
that any such sale will be made
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by the Agent on an "as is" basis with disclaimers of all
warranties, whether express or implied. The respective
Obligors will execute and deliver or cause to be executed and
delivered such instruments, documents, assignments, waivers,
certificates and affidavits, will supply or cause to be
supplied such further information and will take such further
action as the Agent shall request in connection with any such
sale.
10.5.5. Sale without Registration. If, at any
time when the Agent shall determine to exercise its rights
hereunder to sell all or part of the securities included in
the Credit Security, the securities in question shall not be
effectively registered under the Securities Act (or other
applicable law), the Agent may, in its sole discretion, sell
such securities by private or other sale not requiring such
registration in such manner and in such circumstances as the
Agent may deem necessary or advisable in order that such sale
may be effected in accordance with applicable securities laws
without such registration and the related delays, uncertainty
and expense. Without limiting the generality of the
foregoing, in any event the Agent may, in its sole discretion,
(a) approach and negotiate with a single purchaser or one or
more possible purchasers to effect such sale, (b) restrict
such sale to one or more purchasers each of whom will
represent and agree that such purchaser is purchasing for its
own account, for investment and not with a view to the
distribution or sale of such securities and (c) cause to be
placed on certificates representing the securities in question
a legend to the effect that such securities have not been
registered under the Securities Act (or other applicable law)
and may not be disposed of in violation of the provisions
thereof. Each of the Obligors agrees that such manner of
disposition is commercially reasonable, that it will upon the
Agent's request give any such purchaser access to such
information regarding the issuer of the securities in question
as the Agent may reasonably request and that the Agent and the
Lenders shall not incur any responsibility for selling all or
part of the securities included in the Credit Security at any
private or other sale not requiring such registration,
notwithstanding the possibility that a substantially higher
price might be realized if the sale were deferred until after
registration under the Securities Act (or other applicable
law) or until made in compliance with certain other rules or
exemptions from the registration provisions under the
Securities Act (or other applicable law). Each of the
Obligors acknowledges that no adequate remedy at law exists
for breach by it of this Section 10.5.5 and that such breach
would not be adequately compensable in damages and therefore
agrees that this Section 10.5.5 may be specifically enforced.
10.5.6. Application of Proceeds. The proceeds
of all sales and collections in respect of any Credit Security
or other assets of any Obligor, all funds collected from the
Obligors and any cash contained in the Credit Security, the
application of which is not otherwise specifically provided
for herein, shall be applied as follows:
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First, to the payment of the costs and expenses of
such sales and collections, the reasonable expenses of the
Agent and the reasonable fees and expenses of its special
counsel;
Second, any surplus then remaining to the payment of
the Credit Obligations in such order and manner as the Agent
may in its sole discretion determine; provided, however, that
any such payment of Credit Obligations owed to all Lenders
shall be pro rata in accordance with the respective Aggregate
Percentage Interests of the Lenders in the Loan;
Third, any surplus then remaining shall be paid to
the Obligors, subject, however, to the rights of the holder of
any then existing Lien of which the Agent has actual notice.
10.6. Custody of Credit Security. Except as provided by
applicable law that cannot be waived, the Agent will have no duty as to the
custody and protection of the Credit Security, the collection of any part
thereof or of any income thereon or the preservation or exercise of any rights
pertaining thereto, including rights against prior parties, except for the use
of reasonable care in the custody and physical preservation of any Credit
Security in its possession. The Lenders will not be liable or responsible for
any loss or damage to any Credit Security, or for any diminution in the value
thereof, by reason of the act or omission of any agent selected by the Agent
acting in good faith.
11. Expenses; Indemnity.
11.1. Expenses. Whether or not the transactions
contemplated hereby shall be consummated, the Company will pay:
(a) all reasonable expenses of the Agent
(including the out-of-pocket expenses related to forming the
group of Lenders and reasonable fees and disbursements of the
counsel to the Agent) in connection with the preparation and
duplication of this Agreement, each other Credit Document,
examinations by, and reports of, the Agent's commercial
financial examiners, the transactions contemplated hereby and
thereby and amendments, waivers, consents and other operations
hereunder and thereunder;
(b) all recording and filing fees and transfer
and documentary stamp and similar taxes at any time payable in
respect of this Agreement, any other Credit Document, any
Credit Security or the incurrence of the Credit Obligations;
and
(c) to the extent not prohibited by applicable
law that cannot be waived, after the occurrence and during the
continuance of any Default or Event of Default, all other
reasonable expenses incurred by the Lenders or the holder of
any Credit Obligation in connection with the enforcement of
any rights hereunder or under any other Credit
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Document, including costs of collection and reasonable
attorneys' fees (including a reasonable allowance for the
hourly cost of attorneys employed by the Lenders on a salaried
basis) and expenses.
11.2. General Indemnity. The Borrower shall indemnify the
Lenders and the Agent and hold them harmless from any liability, loss or damage
resulting from the violation by the Company of Section 2.3. In addition, the
Borrower shall indemnify each Lender, the Agent, each of the Lenders' or the
Agent's directors, officers and employees, and each Person, if any, who
controls any Lender or the Agent (each Lender, the Agent and each of such
directors, officers, employees and control Persons is referred to as an
"Indemnified Party") and hold each of them harmless from and against any and
all claims, damages, liabilities and reasonable expenses (including reasonable
fees and disbursements of counsel with whom any Indemnified Party may consult
in connection therewith and all reasonable expenses of litigation or
preparation therefor) which any Indemnified Party may incur or which may be
asserted against any Indemnified Party in connection with (a) the Indemnified
Party's compliance with or contest of any subpoena or other process issued
against it in any proceeding involving any of the Obligors or their Affiliates,
(b) any litigation or investigation involving the Obligors or their Affiliates,
or any officer, director or employee thereof, (c) the existence or exercise of
any security rights with respect to the Credit Security in accordance with the
Credit Documents, or (d) this Agreement, any other Credit Document or any
transaction contemplated hereby or thereby; provided, however, that the
foregoing indemnity shall not apply to litigation commenced by the Borrower or
any Obligor against the Lenders or the Agent which seeks enforcement of any of
the rights of the Borrower or such Obligor hereunder or under any other Credit
Document and is determined adversely to the Lenders or the Agent in a final
nonappealable judgment or to the extent such claims, damages, liabilities and
expenses result from a Lender's or the Agent's gross negligence or willful
misconduct.
11.3. Indemnity With Respect to Letters of Credit. The
Borrower shall indemnify each Letter of Credit Issuer and its correspondents
and hold each of them harmless from and against any and all claims, losses,
liabilities, damages and reasonable expenses (including reasonable attorneys'
fees) arising from or in connection with any Letter of Credit, including any
such claim, loss, liability, damage or expense arising out of any transfer,
sale, delivery, surrender or endorsement of any invoice, xxxx of lading,
warehouse receipt or other document at any time held by the Agent, any other
Letter of Credit Issuer or held for their respective accounts by any of their
correspondents, in connection with any Letter of Credit, except to the extent
such claims, losses, liabilities, damages and expenses result from gross
negligence or willful misconduct on the part of the Agent or any other Letter
of Credit Issuer.
12. Operations; Agent.
12.1. Interests in Credits. The Percentage Interest of
each Lender in each portion of the Loan, and the Aggregate Percentage Interest
of each Lender in the Loan, and the related Commitments, shall be computed
based on the maximum principal amount for each Lender as
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set forth on Exhibit 12.1. Upon the consummation of any assignment pursuant to
Section 13.1 or 13.3, the Agent shall modify Exhibit 12.1 to reflect such
assignment.
12.2. Agent's Authority to Act, etc. Each of the Lenders
appoints and authorizes BankBoston to act for the Lenders as the Lenders' Agent
in connection with the transactions contemplated by this Agreement and the
other Credit Documents on the terms set forth herein. In acting hereunder, the
Agent is acting for the account of BankBoston to the extent of its Aggregate
Percentage Interest in the Loan and for the account of each other Lender to the
extent of the Lenders' respective Aggregate Percentage Interests in the Loan,
and all action in connection with the enforcement of, or the exercise of any
remedies (other than the Lenders' rights of set-off as provided in Section
8.2.4 or in any Credit Document) in respect of the Credit Obligations and
Credit Documents shall be taken by the Agent.
12.3. Borrower to Pay Agent, etc. The Borrower and each
Guarantor shall be fully protected in making all payments in respect of the
Credit Obligations to the Agent, in relying upon consents, modifications and
amendments executed by the Agent purportedly on the Lenders' behalf, and in
dealing with the Agent as herein provided. The Agent may charge the account of
the Borrower, on the dates when the amounts thereof become due and payable,
with the amounts of the principal of and interest on the Loan, any amounts paid
by the Letter of Credit Issuers to third parties under Letters of Credit or
drafts presented thereunder, commitment fees, Letter of Credit fees and all
other fees and amounts owing under any Credit Document.
12.4. Lender Operations for Advances, Letters of Credit,
etc.
12.4.1. Advances. On each Closing Date, each
Lender shall advance to the Agent in immediately available
funds such Lender's Percentage Interest in the portion of the
Loan advanced on such Closing Date prior to 12:00 noon (Boston
time). If such funds are not received at such time, but all
applicable conditions set forth in Section 5 have been
satisfied, each Lender authorizes and requests the Agent to
advance for the Lender's account, pursuant to the terms
hereof, the Lender's respective Percentage Interest in such
portion of the Loan and agrees to reimburse the Agent in
immediately available funds for the amount thereof prior to
3:00 p.m. (Boston time) on the day any portion of the Loan is
advanced hereunder; provided, however, that the Agent is not
authorized to make any such advance for the account of any
Lender who has previously notified the Agent in writing that
such Lender will not be performing its obligations to make
further advances hereunder; and provided, further, that the
Agent shall be under no obligation to make any such advance.
12.4.2. Letters of Credit. Each of the Lenders
authorizes and requests each Letter of Credit Issuer to issue
the Letters of Credit provided for in Section 2.2 and to grant
each Lender a participation in each of such Letters of Credit
in an amount equal to its Percentage Interest in the amount of
each such Letter of Credit. Promptly upon
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the request of the Letter of Credit Issuer, each Lender shall
reimburse the Letter of Credit Issuer in immediately available
funds for such Lender's Percentage Interest in the amount of
all obligations to third parties incurred by the Letter of
Credit Issuer in respect of each Letter of Credit and each
draft accepted under a Letter of Credit to the extent not
reimbursed by the Borrower. The Letter of Credit Issuer will
notify each Lender of the issuance of any Letter of Credit,
the amount and date of payment of any draft drawn or accepted
under a Letter of Credit and whether in connection with the
payment of any such draft the amount thereof was added to the
Revolving Loan or was reimbursed by the Borrower.
12.4.3. Agent to Allocate Payments, etc. All
payments of principal and interest in respect of the
extensions of credit made pursuant to this Agreement,
reimbursement of amounts paid by any Letter of Credit Issuer
to third parties under Letters of Credit or drafts presented
thereunder, commitment fees, Letter of Credit fees and other
fees under this Agreement shall, as a matter of convenience,
be made by the Borrower and the Guarantors to the Agent in
immediately available funds. The share of each Lender shall
be credited to such Lender by the Agent in immediately
available funds in such manner that the principal amount of
the Credit Obligations to be paid shall be paid
proportionately in accordance with the Lenders' respective
Percentage Interests in such Credit Obligations or portion of
the Loan to which such Credit Obligation relates, except as
otherwise provided in this Agreement. Under no circumstances
shall any Lender be required to produce or present its Notes
as evidence of its interests in the Credit Obligations in any
action or proceeding relating to the Credit Obligations.
12.4.4. Delinquent Lenders; Nonperforming
Lenders. In the event that any Lender fails to reimburse the
Agent pursuant to Section 12.4.1 for the Percentage Interest
of such lender (a "Delinquent Lender") in any credit advanced
by the Agent pursuant hereto, overdue amounts (the "Delinquent
Payment") due from the Delinquent Lender to the Agent shall
bear interest, payable by the Delinquent Lender on demand, at
a per annum rate equal to (a) the Federal Funds Rate for the
first three days overdue and (b) the sum of 2% plus the
Federal Funds Rate for any longer period. Such interest shall
be payable to the Agent for its own account for the period
commencing on the date of the Delinquent Payment and ending on
the date the Delinquent Lender reimburses the Agent on account
of the Delinquent Payment (to the extent not paid by the
Company as provided below) and the accrued interest thereon
(the "Delinquency Period"), whether pursuant to the
assignments referred to below or otherwise. Upon notice by
the Agent, the Borrower will pay to the Agent the principal
(but not the interest) portion of the Delinquent Payment.
During the Delinquency Period, in order to make reimbursements
for the Delinquent Payment and accrued interest thereon, the
Delinquent Lender shall be deemed to have assigned to the
Agent all interest, commitment fees and other payments made by
the Borrower under Section 3 that would have thereafter
otherwise been payable under the Credit Documents to the
Delinquent
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Lender. During any other period in which any Lender is not
performing its obligations to extend credit under Section 2 (a
"Nonperforming Lender"), the Nonperforming Lender shall be
deemed to have assigned to each Lender that is not a
Nonperforming Lender (a "Performing Lender") all principal and
other payments made by the Borrower under Section 4 that would
have thereafter otherwise been payable under the Credit
Documents to the Nonperforming Lender. The Agent shall credit
a portion of such payments to each Performing Lender in an
amount equal to the Percentage Interest of such Performing
Lender in the portion of the Loan with respect to which there
is such nonperformance, in an amount equal to such Percentage
Interest of such Performing Lender divided by one minus the
Percentage Interest of the Nonperforming Lender in the portion
of the Loan with respect to which there is such
nonperformance, until the respective portions of such portion
of the Loan owed to all the Lenders are the same as the
Percentage Interests of the Lenders in such portion of the
Loan immediately prior to the failure of the Nonperforming
Lender to perform its obligations under Section 2. The
foregoing provisions shall be in addition to any other
remedies the Agent, the Performing Lenders or the Borrower may
have under law or equity against the Delinquent Lender as a
result of the Delinquent Payment or against the Nonperforming
Lender as a result of its failure to perform its obligations
under Section 2.
12.5. Sharing of Payments, etc. Each Lender agrees that
(a) if by exercising any right of set-off or counterclaim or otherwise, it
shall receive payment of (i) a proportion of the aggregate amount due with
respect to its Percentage Interest in a portion of the Loan and Letter of
Credit Exposure which is greater than (ii) the proportion received by any other
Lender in respect of the aggregate amount due with respect to such other
Lender's Percentage Interest in such portion of the Loan and Letter of Credit
Exposure and (b) if such inequality shall continue for more than 10 days, the
Lender receiving such proportionately greater payment shall purchase
participations in the Percentage Interests in the portions of the Loan and
Letter of Credit Exposure held by the other Lenders, and such other adjustments
shall be made from time to time (including rescission of such purchases of
participations in the event the unequal payment originally received is
recovered from such Lender through bankruptcy proceedings or otherwise), as may
be required so that all such payments of principal and interest with respect to
the portion of the Loan and Letter of Credit Exposure held by the Lenders shall
be shared by the Lenders pro rata in accordance with their respective
Percentage Interests in the relevant portion of the Loan; provided, however,
that this Section 12.5 shall not impair the right of any Lender to exercise any
right of set-off or counterclaim it may have and to apply the amount subject to
such exercise to the payment of Indebtedness of any Obligor other than such
Obligor's Indebtedness with respect to the Loan and Letter of Credit Exposure.
Each Lender that grants a participation in the Credit Obligations to a Credit
Participant shall require as a condition to the granting of such participation
that such Credit Participant agree to share payments received in respect of the
Credit Obligations as provided in this Section 12.5. The provisions of this
Section 12.5 are for the sole and exclusive benefit of the Lenders and no
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failure of any Lender to comply with the terms hereof shall be available to any
Obligor as a defense to the payment of the Credit Obligations.
12.6. Amendments, Consents, Waivers, etc.
12.6.1. Actions by Agent; Voting by All Lenders.
Except as otherwise set forth in this Section 12.6.1 or
Section 12.6.2, the Agent may (and upon the written request of
the Required Lenders the Agent shall) take or refrain from
taking any action under this Agreement or any other Credit
Document, including giving its written consent to any
modification of or amendment to and waiving in writing
compliance with any covenant or condition in this Agreement or
any other Credit Document or any Default or Event of Default,
all of which actions shall be binding upon all of the Lenders;
provided, however, that:
(a) Without the written consent of the
Required Lenders (other than Delinquent Lenders
during the existence of a Delinquency Period so long
as such Delinquent Lender is treated the same as the
other Lenders with respect to any actions enumerated
below), no written modification of, amendment to,
consent with respect to, waiver of compliance with or
waiver of a Default under any of the Credit Documents
(other than Interest Rate Protection Agreements)
shall be made.
(b) Without the written consent of such
Lenders as own 100% of the Aggregate Percentage
Interests in the Loan (other than Delinquent Lenders
during the existence of a Delinquency Period so long
as such Delinquent Lender is treated the same as the
other Lenders with respect to any actions enumerated
below):
(i) No reduction shall be made in
(A) the amount of principal of the Loan or
reimbursement obligations for payments made
under Letters of Credit, (B) the interest
rate on the Loan or (C) the Letter of Credit
fees or commitment fees.
(ii) No change shall be made in
the stated time of payment of all or any
portion of the Loan or interest thereon or
reimbursement of payments made under Letters
of Credit or fees relating to any of the
foregoing payable to all of the Lenders and
no waiver shall be made of any Default under
Section 8.1.1.
(iii) No increase shall be made in
the amount, or extension of the term, of the
Commitments beyond that provided for under
Section 2.
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(iv) No alteration shall be made
of the Lenders' rights of set-off contained
in Section 8.2.4.
(v) No release of any Credit
Security or of any Guarantor shall be made
(except that the Agent may release particular
items of Credit Security or particular
Guarantors in dispositions permitted by
Section 6.11 and may release all Credit
Security pursuant to Section 18 upon payment
in full of the Credit Obligations and
termination of the Commitments without the
written consent of the Lenders).
(vi) No amendment to or
modification of this Section 12.6.1(b) or of
the definition of Required Lenders shall be
made.
12.6.2. Voting by Class. In addition to any
written consent of Lenders required under Section 12.6.1:
(i) No amendment to, or modification,
termination or waiver of the provisions of Sections
2.1, 2.2 or 4 that has the effect of changing any
interim scheduled payments, voluntary or mandatory
prepayments or Commitment reductions applicable to
either Class (such Class being the "Affected Class")
in a manner that disproportionately disadvantages
such Class relative to the other Class shall be made
without the written consent of the Required Class
Lenders of the Affected Class (other than Delinquent
Lenders during the existence of a Delinquency Period
so long as such Delinquent Lender is treated the same
as the other Lenders with respect to any such action
to be taken).
(ii) No amendment to or modification of
this Section 12.6.2, or of the definition of Required
Class Lenders, shall be made without the written
consent of the Required Class Lenders for each of the
Revolving Loan and the Term Loan (other than
Delinquent Lenders during the existence of a
Delinquency Period so long as such Delinquent Lender
is treated the same as the other Lenders with respect
to any such action to be taken).
12.7. Agent's Resignation. The Agent may resign at any
time by giving at least 60 days' prior written notice of its intention to do so
to each other of the Lenders and the Borrower and upon the appointment by the
Required Lenders of a successor Agent satisfactory to the Borrower. If no
successor Agent shall have been so appointed and shall have accepted such
appointment within 45 days after the retiring Agent's giving of such notice of
resignation, then the retiring Agent may with the consent of the Borrower,
which shall not be unreasonably withheld, appoint a successor Agent which shall
be a bank or a trust company organized under the laws of the United States of
America or any state thereof and having a combined capital,
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surplus and undivided profit of at least $100,000,000; provided, however, that
any successor Agent appointed under this sentence may be removed upon the
written request of the Required Lenders, which request shall also appoint a
successor Agent satisfactory to the Borrower. Upon the appointment of a new
Agent hereunder, the term "Agent" shall for all purposes of this Agreement
thereafter mean such successor. After any retiring Agent's resignation
hereunder as Agent, or the removal hereunder of any successor Agent, the
provisions of this Agreement shall continue to inure to the benefit of such
Agent as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement.
12.8. Concerning the Agent.
12.8.1. Action in Good Faith, etc. The Agent
and its officers, directors, employees and agents shall be
under no liability to any of the Lenders or to any future
holder of any interest in the Credit Obligations for any
action or failure to act taken or suffered in good faith, and
any action or failure to act in accordance with an opinion of
its counsel shall conclusively be deemed to be in good faith.
The Agent shall in all cases be entitled to rely, and shall be
fully protected in relying, on instructions given to the Agent
by the required holders of Credit Obligations as provided in
this Agreement.
12.8.2. No Implied Duties, etc. The Agent shall
have and may exercise such powers as are specifically
delegated to the Agent under this Agreement or any other
Credit Document together with all other powers incidental
thereto. The Agent shall have no implied duties to any Person
or any obligation to take any action under this Agreement or
any other Credit Document except for action specifically
provided for in this Agreement or any other Credit Document to
be taken by the Agent. Before taking any action under this
Agreement or any other Credit Document, the Agent may request
an appropriate specific indemnity satisfactory to it from each
Lender in addition to the general indemnity provided for in
Section 12.11. Until the Agent has received such specific
indemnity, the Agent shall not be obligated to take (although
it may in its sole discretion take) any such action under this
Agreement or any other Credit Document. Each Lender confirms
that the Agent does not have a fiduciary relationship to it
under the Credit Documents. Each of the Obligors party hereto
confirms that neither the Agent nor any other Lender has a
fiduciary relationship to it under the Credit Documents.
12.8.3. Validity, etc. The Agent shall not be
responsible to any Lender or any future holder of any interest
in the Credit Obligations (a) for the legality, validity,
enforceability or effectiveness of this Agreement or any other
Credit Document, (b) for any recitals, reports,
representations, warranties or statements contained in or made
in connection with this Agreement or any other Credit
Document, (c) for the existence or value of any assets
included in any security for the Credit Obligations, (d) for
the effectiveness of any Lien purported to be included in the
Credit Security, (e) for the specification or failure to
specify any particular assets to be included in the Credit
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Security, or (f) unless the Agent shall have failed to comply
with Section 12.8.1, for either the perfection of the security
interests in the Credit Security or for failure of the Agent
to its obligations under Section 12.8.8.
12.8.4. Compliance. The Agent shall not be
obligated to ascertain or inquire as to the performance or
observance of any of the terms of this Agreement or any other
Credit Document; and in connection with any extension of
credit under this Agreement or any other Credit Document, the
Agent shall be fully protected in relying on a certificate of
the Borrower as to the fulfillment by the Borrower of any
conditions to such extension of credit.
12.8.5. Employment of Agents and Counsel. The
Agent may execute any of its duties as Agent under this
Agreement or any other Credit Document by or through
employees, agents and attorneys-in-fact and shall not be
responsible to any of the Lenders, the Borrower or any other
Obligor for the default or misconduct of any such agents or
attorneys-in-fact selected by the Agent acting in good faith.
The Agent shall be entitled to advice of counsel concerning
all matters pertaining to the agency hereby created and its
duties hereunder or under any other Credit Document.
12.8.6. Reliance on Documents and Counsel. The
Agent shall be entitled to rely, and shall be fully protected
in relying, upon any affidavit, certificate, cablegram,
consent, instrument, letter, notice, order, document,
statement, telecopy, telegram, telex or teletype message or
writing reasonably believed in good faith by the Agent to be
genuine and correct and to have been signed, sent or made by
the Person in question, including any telephonic or oral
statement made by such Person, and, with respect to legal
matters, upon an opinion or the advice of counsel selected by
the Agent.
12.8.7. Agent's Reimbursement. Each of the
Lenders severally agrees to reimburse the Agent, in the amount
of such Lender's Aggregate Percentage Interest in the Loan,
for any reasonable expenses not reimbursed by the Borrower or
the Guarantors (without limiting the obligation of the
Borrower or the Guarantors to make such reimbursement): (a)
for which the Agent is entitled to reimbursement by the
Borrower or the Guarantors under this Agreement or any other
Credit Document, and (b) after the occurrence of a Default,
for any other reasonable expenses incurred by the Agent on the
Lenders' behalf in connection with the enforcement of the
Lenders' rights under this Agreement or any other Credit
Document.
12.8.8. Conveying Reports to Lenders. The Agent
shall provide to each of the Lenders, in any reasonable form
and reasonably promptly, a copy of those communications
received from the Company pursuant to Sections 4.3.3, 5.2, 6.4
and 6.9.5.
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12.9. Rights as a Lender. With respect to any credit
extended by it hereunder, BankBoston shall have the same rights, obligations
and powers hereunder as any other Lender and may exercise such rights and
powers as though it were not the Agent, and unless the context otherwise
specifies, BankBoston shall be treated in its individual capacity as though it
were not the Agent hereunder. Without limiting the generality of the
foregoing, the Percentage Interest in any portion of the Loan, and the
Aggregate Percentage Interest in the Loan, of BankBoston shall be included in
any computations of Percentage Interests and Aggregate Percentage Interests in
the Loan, respectively. BankBoston and its Affiliates may accept deposits
from, lend money to, act as trustee for and generally engage in any kind of
banking or trust business with the Borrower, any of its Subsidiaries or any
Affiliate of any of them and any Person who may do business with or own an
equity interest in the Borrower, any of its Subsidiaries or any Affiliate of
any of them, all as if BankBoston were not the Agent and without any duty to
account therefor to the other Lenders.
12.10. Independent Credit Decision. Each of the Lenders
acknowledges that it has independently and without reliance upon the Agent,
based on the financial statements and other documents referred to in Section
7.2, on the other representations and warranties contained herein and on such
other information with respect to the Obligors as such Lender deemed
appropriate, made such Lender's own credit analysis and decision to enter into
this Agreement and to make the extensions of credit provided for hereunder.
Each Lender represents to the Agent that such Lender will continue to make its
own independent credit and other decisions in taking or not taking action under
this Agreement or any other Credit Document. Each Lender expressly
acknowledges that neither the Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates has made any representations
or warranties to such Lender, and no act by the Agent taken under this
Agreement or any other Credit Document, including any review of the affairs of
the Obligors, shall be deemed to constitute any representation or warranty by
the Agent. Except for notices, reports and other documents expressly required
to be furnished to each Lender by the Agent under this Agreement or any other
Credit Document, the Agent shall not have any duty or responsibility to provide
any Lender with any credit or other information concerning the business,
operations, property, condition, financial or otherwise, or creditworthiness of
any Obligor which may come into the possession of the Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates.
12.11. Indemnification. The holders of the Credit
Obligations shall indemnify the Agent and its officers, directors, employees
and agents (to the extent not reimbursed by the Obligors and without limiting
the obligation of any of the Obligors to do so), pro rata in accordance with
their respective Aggregate Percentage Interests in the Loan, from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind whatsoever which
may at any time be imposed on, incurred by or asserted against the Agent or
such Persons relating to or arising out of this Agreement, any other Credit
Document, the transactions contemplated hereby or thereby, or any action taken
or omitted by the Agent in connection with any of the foregoing; provided,
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however, that the foregoing shall not extend to actions or omissions which are
taken by the Agent with gross negligence or willful misconduct.
13. Successors and Assigns; Lender Assignments and Participations.
Any reference in this Agreement to any of the parties hereto shall be deemed to
include the successors and assigns of such party, and all covenants and
agreements by or on behalf of the Obligors, the Guarantors, the Agent or the
Lenders that are contained in this Agreement or any other Credit Documents
shall bind and inure to the benefit of their respective successors and assigns;
provided, however, that (a) the Obligors may not assign their rights or
obligations under this Agreement except for mergers or liquidations permitted
by Section 6.11, and (b) the Lenders shall be not entitled to assign their
respective Percentage Interests in portions of the Loan hereunder except as set
forth below in this Section 13.
13.1. Assignments by Lenders.
13.1.1. Assignees and Assignment Procedures.
Each Lender may (a) without the consent of the Agent or the
Borrower if the proposed assignee is already a Lender
hereunder or a Wholly Owned Subsidiary of the same corporate
parent of which the assigning Lender is a Subsidiary, or (b)
otherwise with the consents of the Agent and (so long as no
Event of Default has occurred and is continuing) the Borrower
(which consents will not be unreasonably withheld), in
compliance with applicable laws in connection with such
assignment, assign to one or more commercial banks or other
financial institutions (each, an "Assignee") all or a portion
of its interests, rights and obligations under this Agreement
and the other Credit Documents, including all or a portion,
which need not be pro rata between the Loan and the Letter of
Credit Exposure, of its Commitment, the portion of the Loan
and Letter of Credit Exposure at the time owing to it and the
Notes held by it, but excluding its rights and obligations as
a Letter of Credit Issuer; provided, however, that:
(i) the aggregate amount of the
Commitment of the assigning Lender subject to each
such assignment to any Assignee other than another
Lender (determined as of the date the Assignment and
Acceptance with respect to such assignment is
delivered to the Agent) shall be not less than
$2,500,000 and in increments of $1,000,000; and
(ii) the parties to each such assignment
shall execute and deliver to the Agent an Assignment
and Acceptance (the "Assignment and Acceptance")
substantially in the form of Exhibit 13.1.1, together
with the Note subject to such assignment and a
processing and recordation fee of $2,500 payable to
the Agent by the assigning Lender or the Assignee.
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Upon acceptance and recording pursuant to Section 13.1.4, from
and after the effective date specified in each Assignment and
Acceptance (which effective date shall be at least five
Banking Days after the execution thereof unless waived by the
Agent):
(A) the Assignee shall be a party hereto and, to
the extent provided in such Assignment and
Acceptance, have the rights and obligations
of a Lender under this Agreement and
(B) the assigning Lender shall, to the extent
provided in such assignment, be released from
its obligations under this Agreement (and, in
the case of an Assignment and Acceptance
covering all or the remaining portion of an
assigning Lender's rights and obligations
under this Agreement, such Lender shall cease
to be a party hereto but shall continue to be
entitled to the benefits of Sections 3.2.4,
3.5, 3.6, 3.7, 3.8 and 11, as well as to any
fees accrued for its account hereunder and
not yet paid).
13.1.2. Terms of Assignment and Acceptance. By
executing and delivering an Assignment and Acceptance, the
assigning Lender and Assignee shall be deemed to confirm to
and agree with each other and the other parties hereto as
follows:
(a) other than the representation and warranty
that it is the legal and beneficial owner of the interest
being assigned thereby free and clear of any adverse claim,
such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with
this Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this
Agreement, any other Credit Document or any other instrument
or document furnished pursuant hereto;
(b) such assigning Lender makes no
representation or warranty and assumes no responsibility with
respect to the financial condition of the Obligors or the
performance or observance by any Obligor of any of its
obligations under this Agreement, any other Credit Document or
any other instrument or document furnished pursuant hereto;
(c) such Assignee confirms that it has received
a copy of this Agreement, together with copies of the most
recent financial statements delivered pursuant to Section 7.2
or Section 6.4 and such other documents and information as it
has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance;
(d) such Assignee will independently and without
reliance upon the Agent, such assigning Lender or any other
Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this
Agreement;
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(e) such Assignee appoints and authorizes the
Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement as are delegated to
the Agent by the terms hereof, together with such powers as
are reasonably incidental thereto; and
(f) such Assignee agrees that it will perform in
accordance with the terms of this Agreement all the
obligations which are required to be performed by it as a
Lender.
13.1.3. Register. The Agent shall maintain at
the Boston Office a register (the "Register") for the
recordation of (a) the names and addresses of the Lenders and
the Assignees which assume rights and obligations pursuant to
an assignment under Section 13.1.1, (b) the Percentage
Interests of each such Lender in the Revolving Loan and the
Term Loan, and the Aggregate Percentage Interest of each such
Lender in the Loan, all as set forth in Section 12.1 and (c)
the amount of the Loan and Letter of Credit Exposure owing to
each Lender from time to time. The entries in the Register
shall be conclusive, in the absence of manifest error, and the
Borrower, the Agent and the Lenders may treat each Person
whose name is registered therein for all purposes as a party
to this Agreement. The Register shall be available for
inspection by the Borrower or any Lender at any reasonable
time and from time to time upon reasonable prior notice.
13.1.4. Acceptance of Assignment and Assumption.
Upon its receipt of a completed Assignment and Acceptance
executed by an assigning Lender and an Assignee together with
the Note or Notes subject to such assignment, and the
processing and recordation fee referred to in Section 13.1.1,
the Agent shall (a) accept such Assignment and Acceptance, (b)
record the information contained therein in the Register and
(c) give prompt notice thereof to the Borrower. Within five
Banking Days after receipt of notice, the Borrower, at their
own expense, shall execute and deliver to the Agent, in
exchange for the surrendered Note or Notes, a new Note or
Notes to the order of such Assignee in a principal amount
equal to the applicable Commitment and Loan assumed by it
pursuant to such Assignment and Acceptance and, if the
assigning Lender has retained a Commitment and Loan, a new
Note or Notes to the order of such assigning Lender in a
principal amount equal to the applicable Commitment and Loan
retained by it. Such new Note or Notes shall be in an
aggregate principal amount equal to the aggregate principal
amount of such surrendered Note or Notes, respectively, and
shall be dated the date of the surrendered Notes which they
replace.
13.1.5. Federal Reserve Bank. Notwithstanding
the foregoing provisions of this Section 13, any Lender may at
any time pledge or assign all or any portion of such Lender's
rights under this Agreement and the other Credit Documents to
a Federal Reserve Bank; provided, however, that no such pledge
or assignment shall release such Lender from such Lender's
obligations hereunder or under any other Credit Document.
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13.1.6. Further Assurances. The Obligors shall
sign such documents and take such other actions from time to
time reasonably requested by an Assignee to enable it to share
in the benefits of the rights created by the Credit Documents.
13.2. Credit Participants. Each Lender may, without the
consent of the Borrower or the Agent, in compliance with applicable laws in
connection with such participation, sell to one or more commercial banks or
other financial institutions (each a "Credit Participant") participations in
all or a portion of its interests, rights and obligations under this Agreement
and the other Credit Documents (including all or a portion of its Commitment,
the Loan and Letter of Credit Exposure owing to it and the Notes held by it);
provided, however, that:
(a) such Lender's obligations under this
Agreement shall remain unchanged;
(b) such Lender shall remain solely responsible
to the other parties hereto for the performance of such
obligations;
(c) the Credit Participant shall be entitled to
the benefit of the cost protection provisions contained in
Sections 3.2.4, 3.5, 3.6, 3.7, 3.8 and 11, but shall not be
entitled to receive any greater payment thereunder than the
selling Lender would have been entitled to receive with
respect to the interest so sold if such interest had not been
sold; and
(d) the Borrower, the Agent and the other
Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations
under this Agreement, and such Lender shall retain the sole
right as one of the Lenders to vote with respect to the
enforcement of the obligations of the Borrower relating to the
Loan and Letter of Credit Exposure and the approval of any
amendment, modification or waiver of any provision of this
Agreement (other than amendments, modifications, consents or
waivers described in clause (c) of the proviso to Section
12.6).
Each Obligor agrees, to the fullest extent permitted by applicable law, that
any Credit Participant and any Lender purchasing a participation from another
Lender pursuant to Section 12.5 may exercise all rights of payment (including
the right of set-off), with respect to its participation as fully as if such
Credit Participant or such Lender were the direct creditor of the Obligors and
a Lender hereunder in the amount of such participation.
13.3. Replacement of Lender. In the event that any Lender
or, to the extent applicable, any Credit Participant (the "Affected Lender"):
(a) fails to perform its obligations to fund any
portion of the Loan or to issue any Letter of Credit on any
Closing Date when required to do so by the terms of the
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Credit Documents, or fails to provide its portion of any
Eurodollar Pricing Option pursuant to Section 3.2.1 or on
account of a Legal Requirement as contemplated by Section
3.2.5;
(b) demands payment under the Reserve provisions
of Section 3.5, the Tax provisions of Section 3.6, the capital
adequacy provisions of Section 3.7 or the regulatory change
provisions in Section 3.8 in an amount the Company deems
materially in excess of the amounts with respect thereto
demanded by the other Lenders; or
(c) refuses to consent to a proposed amendment,
modification, waiver or other action requiring consent of the
holders of 100% of the Aggregate Percentage Interests in the
Loan under Section 12.6.1(c) that is consented to by the other
Lenders;
then, so long as no Event of Default exists and is continuing, the Borrower
shall have the right to seek a replacement lender which is reasonably
satisfactory to the Agent (the "Replacement Lender"). The Replacement Lender
shall purchase the interests of the Affected Lender in the Loan, Letters of
Credit and its Commitment and shall assume the obligations of the Affected
Lender hereunder and under the other Credit Documents upon execution by the
Replacement Lender of an Assignment and Acceptance and the tender by it to the
Affected Lender of a purchase price agreed between it and the Affected Lender
(or, if they are unable to agree, a purchase price in the aggregate amount of
the Affected Lender's Percentage Interests in each portion of the Loan and
Letter of Credit Exposure, or appropriate credit support for contingent amounts
included therein, and all other outstanding Credit Obligations then owed to the
Affected Lender). Such assignment by the Affected Lender shall be deemed an
early termination of any Eurodollar Pricing Option to the extent of the
Affected Lender's portion thereof, and the Borrower will pay to the Affected
Lender any resulting amounts due under Section 3.2.4. Upon consummation of
such assignment, the Replacement Lender shall become party to this Agreement as
a signatory hereto and shall have all the rights and obligations of the
Affected Lender under this Agreement and the other Credit Documents with a
Percentage Interest in each portion of the Loan equal to the Percentage
Interest in such portion of the Loan of the Affected Lender, the Affected
Lender shall be released from its obligations hereunder and under the other
Credit Documents, and no further consent or action by any party shall be
required. Upon the consummation of such assignment, the Borrower, the Agent
and the Affected Lender shall make appropriate arrangements so that a new Note
is issued to the Replacement Lender if it has acquired a portion of the Loan.
The Borrower and the Guarantors shall sign such documents and take such other
actions reasonably requested by the Replacement Lender to enable it to share in
the benefits of the rights created by the Credit Documents. Until the
consummation of an assignment in accordance with the foregoing provisions of
this Section 13.3, the Borrower shall continue to pay to the Affected Lender
any Credit Obligations as they become due and payable.
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13.4. Foreign Lenders. If any Lender is not incorporated
or organized under the laws of the United States of America or a state thereof,
such Lender shall deliver to the Borrower and the Agent the following:
(a) Two duly completed copies of United States
Internal Revenue Service Form 1001 or 4224 or successor form,
as the case may be, certifying in each case that such Person
is entitled to receive payments under this Agreement, the
Notes and reimbursement obligations under Letters of Credit
payable to it, without deduction or withholding of any United
States federal income taxes; and
(b) A duly completed Internal Revenue Service
Form W-8 or W-9 or successor form, as the case may be, to
establish an exemption from United States backup withholding
tax.
Each such Lender that delivers to the Borrower and the Agent a
Form 1001 or 4224 and Form W-8 or W-9 pursuant to this Section 13 further
undertakes to deliver to the Borrower and the Agent two further copies of Form
1001 or 4224 and Form W-8 or W-9, or successor applicable form, or other manner
of certification, as the case may be, on or before the date that any such form
expires or becomes obsolete or after the occurrence of any event requiring a
change in the most recent form previously delivered by it to the Borrower and
the Agent. Such Forms 1001 or 4224 shall certify that such Lender is entitled
to receive payments under this Agreement without deduction or withholding of
any United States federal income taxes. The foregoing documents need not be
delivered in the event any change in treaty, law or regulation or official
interpretation thereof has occurred which renders all such forms inapplicable
or which would prevent such Lender from delivering any such form with respect
to it, or such Lender advises the Borrower that it is not capable of receiving
payments without any deduction or withholding of United States federal income
tax and, in the case of a Form W-8 or W-9, establishing an exemption from
United States backup withholding tax. Until such time as the Borrower and the
Agent have received such forms indicating that payments hereunder are not
subject to United States withholding tax or are subject to such tax at a rate
reduced by an applicable tax treaty, the Borrower shall withhold taxes from
such payments at the applicable statutory rate without regard to Section 3.6.
14. Confidentiality. Each Lender will make no disclosure of
confidential information furnished to it by any Obligor unless such information
shall have become public, except:
(a) in connection with operations under or the
enforcement of this Agreement or any other Credit Document;
(b) pursuant to any statutory or regulatory
requirement or any mandatory court order, subpoena or other
legal process;
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(c) to any parent or corporate Affiliate of such
Lender or to any Credit Participant, proposed Credit
Participant or proposed Assignee; provided, however, that any
such Person shall agree to comply with the restrictions set
forth in this Section 14 with respect to such information;
(d) to its independent counsel, auditors and
other professional advisors with an instruction to such Person
to keep such information confidential; and
(e) with the prior written consent of the
Borrower, to any other Person.
15. Acknowledgments and Consents. The Borrower and each of its
Subsidiaries, in their capacities as Borrower, as guarantors of the Credit
Obligations, grantors of security interests to secure the Credit Obligations
and/or holders of Subordinated Indebtedness, as the case may be, pursuant to
the Credit Agreement dated as of May 29, 1996, as amended and in effect on the
date hereof, hereby acknowledge and agree that, as of the Initial Closing Date,
(i) the Uniform Commercial Code Financing Statements and other instruments
previously filed in connection with the perfection of the Liens created in the
Credit Security pursuant to such Credit Agreement shall be deemed to refer to
the Credit Agreement as amended and restated hereby and that the term "Credit
Obligations" as used in such financing statements and other instruments, shall
be deemed to refer to the Credit Obligations under the Credit Agreement as
amended and restated hereby; and (ii) such financing statements and other
instruments are confirmed and ratified as being in full force and effect.
16. Notices. Except as otherwise specified in this Agreement, any
notice required to be given pursuant to this Agreement shall be given in
writing. Any notice, consent, approval, demand or other communication in
connection with this Agreement shall be deemed to be given if given in writing
(including telex, telecopy or similar teletransmission) addressed as provided
below (or to the addressee at such other address as the addressee shall have
specified by notice actually received by the addressor), and if either (a)
actually delivered in fully legible form to such address (evidenced in the case
of a telex by receipt of the correct answerback) or (b) in the case of a
letter, unless actual receipt of the notice is required by any Credit Document
five days shall have elapsed after the same shall have been deposited in the
United States mails, with first-class postage prepaid and registered or
certified.
If to the Borrower or its Subsidiaries, to it at its address
set forth in Exhibit 7.1 (as supplemented pursuant to Sections 6.4.1 and
6.4.2), to the attention of the chief financial officer, with a copy to:
Summit Partners, L.P.
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx
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If to any Lender or the Agent, to it at its address set forth on the
signature pages of this Agreement or in the Register, with a copy to the Agent.
17. Course of Dealing; Amendments and Waivers. No course of
dealing between any Lender or the Agent, on one hand, and the Borrower or any
other Obligor, on the other hand, shall operate as a waiver of any of the
Lenders' or the Agent's rights under this Agreement or any other Credit
Document or with respect to the Credit Obligations. Each of the Borrower and
the Guarantors acknowledges that if the Lenders or the Agent, without being
required to do so by this Agreement or any other Credit Document, give any
notice or information to, or obtain any consent from, the Borrower or any other
Obligor, the Lenders and the Agent shall not by implication have amended,
waived or modified any provision of this Agreement or any other Credit
Document, or created any duty to give any such notice or information or to
obtain any such consent on any future occasion. No delay or omission on the
part of any Lender of the Agent in exercising any right under this Agreement or
any other Credit Document or with respect to the Credit Obligations shall
operate as a waiver of such right or any other right hereunder or thereunder.
A waiver on any one occasion shall not be construed as a bar to or waiver of
any right or remedy on any future occasion. No waiver, consent or amendment
with respect to this Agreement or any other Credit Document shall be binding
unless it is in writing and signed by the Agent, the Required Lenders and the
Required Class Lenders.
18. Defeasance. When all Credit Obligations have been paid,
performed and reasonably determined by the Lenders to have been indefeasibly
discharged in full, and if at the time no Lender continues to be committed to
extend any credit to the Borrower hereunder or under any other Credit Document,
this Agreement shall terminate and, at the Borrower's written request,
accompanied by such certificates and other items as the Agent shall reasonably
deem necessary, the Credit Security shall revert to the Obligors and the right,
title and interest of the Lenders therein shall terminate. Thereupon, on the
Obligor's demand and at their cost and expense, the Agent shall execute proper
instruments, acknowledging satisfaction of and discharging this Agreement, and
shall redeliver to the Obligors any Credit Security then in its possession;
provided, however, that Sections 3.2.4, 3.5, 3.6, 3.7, 3.8, 11, 12.8.7, 12.11,
14, 19 and 20 shall survive the termination of this Agreement.
19. Venue; Service of Process. Each of the Borrower and the other
Obligors:
(a) Irrevocably submits to the nonexclusive
jurisdiction of the state courts of The Commonwealth of
Massachusetts and to the nonexclusive jurisdiction of the
United States District Court for the District of Massachusetts
for the purpose of any suit, action or other proceeding
arising out of or based upon this Agreement or any other
Credit Document or the subject matter hereof or thereof.
(b) Waives to the extent not prohibited by
applicable law that cannot be waived, and agrees not to
assert, by way of motion, as a defense or otherwise, in any
such proceeding brought in any of the above-named courts, any
claim that it is not
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subject personally to the jurisdiction of such court, that its
property is exempt or immune from attachment or execution,
that such proceeding is brought in an inconvenient forum, that
the venue of such proceeding is improper, or that this
Agreement or any other Credit Document, or the subject matter
hereof or thereof, may not be enforced in or by such court.
Each of the Borrower and the other Obligors consents to service of process in
any such proceeding in any manner at the time permitted by Chapter 223A of the
General Laws of The Commonwealth of Massachusetts and agrees that service of
process by registered or certified mail, return receipt requested, at its
address specified in or pursuant to Section 16 is reasonably calculated to give
actual notice.
20. WAIVER OF JURY TRIAL. TO THE EXTENT NOT PROHIBITED BY
APPLICABLE LAW THAT CANNOT BE WAIVED, EACH OF THE BORROWER, THE OTHER OBLIGORS,
THE AGENT AND THE LENDERS WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT
(WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN
ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM OR PROCEEDING ARISING OUT OF THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT OR THE SUBJECT MATTER HEREOF OR THEREOF
OR ANY CREDIT OBLIGATION OR IN ANY WAY CONNECTED WITH THE DEALINGS OF THE
LENDERS, THE AGENT, THE BORROWER OR ANY OTHER OBLIGOR IN CONNECTION WITH ANY OF
THE ABOVE, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER
IN CONTRACT, TORT OR OTHERWISE. Each of the Borrower and the other Obligors
acknowledges that it has been informed by the Agent that the provisions of this
Section 20 constitute a material inducement upon which each of the Lenders has
relied and will rely in entering into this Agreement and any other Credit
Document, and that it has reviewed the provisions of this Section 20 with its
counsel. Any Lender, the Agent, the Borrower or any other Obligor may file an
original counterpart or a copy of this Section 20 with any court as written
evidence of the consent of the Borrower, the other Obligors, the Agent and the
Lenders to the waiver of their rights to trial by jury.
21. No Strict Construction. The parties have participated jointly
in the negotiation and drafting of this Agreement and the other Credit
Documents with counsel sophisticated in financing transactions. In the event
an ambiguity or question of intent or interpretation arises, this Agreement and
the other Credit Documents shall be construed as if drafted jointly by the
parties and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provisions of this
Agreement and the other Credit Documents.
22. General. All covenants, agreements, representations and
warranties made in this Agreement or any other Credit Document or in
certificates delivered pursuant hereto or thereto shall be deemed to have been
relied on by each Lender, notwithstanding any investigation made by any Lender
on its behalf, and shall survive the execution and delivery to the Lenders
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hereof and thereof. The invalidity or unenforceability of any provision hereof
shall not affect the validity or enforceability of any other provision hereof.
The headings in this Agreement are for convenience of reference only and shall
not limit or otherwise affect the meaning hereof. This Agreement and the other
Credit Documents (including any related fee agreements with the Agent or the
Lenders) constitute the entire understanding of the parties with respect to the
subject matter hereof and thereof and supersede all prior and contemporaneous
understandings and agreements, whether written or oral. This Agreement may be
executed in any number of counterparts which together shall constitute one
instrument. This Agreement shall be governed by and construed in accordance
with the laws (other than the conflict of laws rules) of The Commonwealth of
Massachusetts, except as may be required by the UCC with respect to matters
involving the perfection of the Agent's Lien on the Credit Security.
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Each of the undersigned has caused this Agreement to be executed and
delivered by its duly authorized officer as an agreement under seal as of the
date first above written.
AMERIPATH, INC.
By /s/ Xxxxxx X. Xxxx
-------------------------------
Title: Executive Vice President-
Chief Financial Officer
AMERICAN LABORATORY ASSOCIATES, INC.
AMERIPATH FLORIDA, INC.
AMERIPATH ALABAMA, INC.
AMERIPATH KENTUCKY, INC.
AMERIPATH TEXAS, INC.
AMERIPATH OHIO, INC.
AMERIPATH CINCINNATI, INC.
AMERIPATH CLEVELAND, INC.
By /s/ Xxxxxx X. Xxxx
-------------------------------
Executive Vice President-
Chief Financial Officer
BANKBOSTON, N.A.
By /s/ Xxxxx X. Xxxxxxx
-------------------------------
Title: Vice President
NATIONSBANK, N.A. (South)
By /s/ Xxxxxxxxx X. Xxxx
-------------------------------
Title: Vice President
118
CREDITANSTALT-BANKVEREIN
By /s/ W. Xxxxx Xxxxx
--------------------------------
Title: Senior Associate
By /s/ Xxxxxx X. Xxxxxxxx
--------------------------------
Title: Executive Vice President
IMPERIAL BANK
By /s/ Xxxxx Xxxxxxxxx
--------------------------------
Title: Senior Vice President
SILICON VALLEY BANK
By /s/ Xxxx Xxxxxxx
--------------------------------
Title: Senior Vice President
PARIBAS CAPITAL FUNDING
By /s/ Xxxxxxxx Xxxxxx
--------------------------------
Title: Director
ANTARES LEVERAGED CAPITAL CORP.
By /s/ Xxxxx Xxxxx
--------------------------------
Title: Director
