Exhibit
10.4
EXHIBIT A TO AMERIPATH
AMENDMENT AGREEMENT
DATED FEBRUARY 17, 2004
AMENDED AND RESTATED CREDIT AGREEMENT
dated as of February 17, 2004,
among
AMERIPATH, INC.,
AMERIPATH HOLDINGS, INC.,
THE LENDERS NAMED HEREIN,
and
CREDIT SUISSE FIRST BOSTON,
as Administrative Agent and Collateral Agent
CREDIT SUISSE FIRST BOSTON
and
DEUTSCHE BANK SECURITIES, INC.,
as Joint Bookrunners and Joint
Lead Arrangers
ii
iii
iv
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EXHIBIT E
|
Perfection Certificate
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|
|
EXHIBIT F-1
|
Form of Opinion of Ropes & Gray LLP
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|
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EXHIBIT F-2
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Form of Local Counsel Opinion
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EXHIBIT G
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Form of Subordination Provisions
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v
AMENDED AND RESTATED CREDIT AGREEMENT dated
as of February 17, 2004, (this “Agreement”) among AMERIPATH, INC., a
Delaware corporation (the “Borrower”), AMERIPATH HOLDINGS, INC., a
Delaware corporation (“Holdings”), the Lenders (as defined in
Article I), and CREDIT SUISSE FIRST BOSTON, a bank organized under the
laws of Switzerland, acting through its Cayman Islands branch, as
administrative agent (in such capacity, the “Administrative Agent”) and
as collateral agent (in such capacity, the “Collateral Agent”) for the Lenders.
The Borrower, Holdings, the Administrative Agent, the Collateral Agent
and certain lenders party thereto (the “Existing Lenders”) previously entered into
that certain Credit Agreement dated as of March 27, 2003 (as amended prior
to the date hereof, the “Existing Credit Agreement”), under which
(a) the Existing Lenders extended credit or agreed to extend credit to the
Borrower in the form of (i) term loans on the Closing Date (such term and
each other capitalized term used but not defined in this introductory statement
having the meaning given it in Article I), in an aggregate principal
amount of $225,000,000 (of which $213,312,500 aggregate principal amount (the “Existing
Term Loans”) is outstanding immediately prior to the Restatement
Date), and (ii) Revolving Loans at any time and from time to time prior to
the Revolving Credit Maturity Date, in an aggregate principal amount at any
time outstanding not in excess of $65,000,000, (b) the Swingline Lender
agreed to extend credit, at any time and from time to time prior to the
Revolving Credit Maturity Date, in the form of Swingline Loans, in an aggregate
principal amount at any time outstanding not in excess of $10,000,000, and
(c) the Issuing Bank agreed to issue Letters of Credit, in an aggregate
face amount at any time outstanding not in excess of $20,000,000, to support
payment obligations incurred in the ordinary course of business by the Borrower
and its Subsidiaries.
The Borrower has requested that the Term Lenders agree to make Term
Loans to the Borrower on the Restatement Date, in an aggregate principal amount
of $125,000,000, subject to the terms and conditions set forth herein, the
proceeds of which will be used by the Borrower and Holdings, together with cash
on hand and the net proceeds of the Additional Subordinated Notes, solely
(a) to prepay the Existing Term Loans, together with accrued and unpaid
interest thereon, and (b) to pay fees and expenses incurred in connection
with the Transactions in an aggregate amount not to exceed $5,000,000.
The Term Lenders are willing to make the Term Loans to the Borrower for
the purposes set forth above on the terms and subject to the conditions set
forth herein.
The Borrower, Holdings, the Requisite Lenders (as defined in the
Amendment Agreement) and the Term Lenders desire to amend and restate the
Existing Credit Agreement in the form hereof to, among other things, set forth
the terms and conditions under which the Term Lenders will make the Term Loans
to the Borrower, to permit the Transactions and to make certain other
amendments thereto.
The amendment and restatement of the Existing Credit Agreement
evidenced by this Agreement shall become effective as provided in the Amendment
Agreement.
SECTION 1.01. Defined Terms. As used in this Agreement, the following
terms shall have the meanings specified below:
“ABR”,
when used in reference to any Loan or Borrowing, refers to whether such Loan,
or the Loans comprising such Borrowing, are bearing interest at a rate
determined by reference to the Alternate Base Rate.
“Acquired Entity” shall
have the meaning assigned to such term in Section 6.04(g).
“Additional Seller Notes”
shall mean unsecured, subordinated contingent notes issued by the Borrower or
any Subsidiary Guarantor, and any earn-out obligations incurred by the Borrower
or any Subsidiary Guarantor (whether or not represented by actual notes), in
each case to the seller (or any of its Affiliates) in connection with any
Permitted Acquisition, the subordination provisions of which are no less
favorable in any material respect to the Lenders than those set forth in
Exhibit G. For purposes of this Agreement,
the aggregate outstanding amount of any Additional Seller Notes at any time
shall be the Midpoint Amount of such notes certified by the Borrower pursuant
to Section 6.04(g)(v).
“Additional Subordinated Debt”
shall mean unsecured, subordinated Indebtedness of Holdings, the Borrower or
any Subsidiary Guarantor (i) that requires no scheduled payment of principal
prior to a date that is one year after the Term Loan Maturity Date and (ii) the
subordination provisions and other non-pricing terms and conditions of which
are no less favorable to the Lenders than the analogous provisions of the
Subordinated Notes (or, if issued by Holdings, than the analogous provisions
(including the pay-in-kind provisions) of the Holdings Subordinated Notes).
“Additional
Subordinated Notes” shall mean $75,000,000 aggregate principal
amount of Subordinated Notes issued on the Restatement Date.
“Adjusted
LIBO Rate” shall mean, with respect to any Eurodollar Borrowing for
any Interest Period, an interest rate per annum equal to the product of (a) the
LIBO Rate in effect for such Interest Period and (b) Statutory Reserves.
“Administrative
Agent Fees” shall have the meaning assigned to such term in
Section 2.05(b).
2
“Administrative
Questionnaire” shall mean an Administrative Questionnaire in the
form of Exhibit A, or such other form as may be supplied from time to time by
the Administrative Agent.
“Affiliate”
shall mean, when used with respect to a specified person, another person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the person specified; provided,
however, that, for purposes of Section 6.07, the term “Affiliate” shall also include (i) any
person that directly or indirectly owns 5% or more of any class of Equity
Interests of the person specified or (ii) any person that is an executive
officer or director of the person specified.
“Affiliated Practice”
shall mean any physician-owned professional organization, association or
corporation that employs or contracts with physicians engaged in a pathology
practice and has entered into a Management Services Agreement with the Borrower
or any Subsidiary.
“Aggregate
Revolving Credit Exposure” shall mean the aggregate amount of the
Lenders’ Revolving Credit Exposures.
“Agreement”
shall have the meaning assigned to such term in the preamble.
“Alternate
Base Rate” shall mean, for any day, a rate per annum equal to the
greater of (a) the Prime Rate in effect on such day and (b) the Federal
Funds Effective Rate in effect on such day plus ½ of 1%. If the Administrative Agent shall have
determined (which determination shall be conclusive absent manifest error) that
it is unable to ascertain the Federal Funds Effective Rate for any reason,
including the inability or failure of the Administrative Agent to obtain
sufficient quotations in accordance with the terms of the definition thereof,
the Alternate Base Rate shall be determined without regard to clause (b) of the
preceding sentence until the circumstances giving rise to such inability no
longer exist. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective on the effective date of such change in the
Prime Rate or the Federal Funds Effective Rate, respectively.
“Amendment
Agreement” shall mean the Amendment Agreement dated as of
February 17, 2004, effecting, among other things, the amendment and
restatement of the Existing Credit Agreement.
“Applicable
Percentage” shall mean, for any day, with respect to any Eurodollar
Loan or ABR Loan, as the case may be, the applicable percentage set forth below
under the caption “Eurodollar Spread—Term Loans”, “ABR Spread—Term Loans”,
“Eurodollar Spread—Revolving Loans” or “ABR Spread—Revolving Loans”, as the
case may be, based upon the Leverage Ratio as of the relevant date of
determination:
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Leverage
Ratio
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Eurodollar
Spread —
Term
Loans
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|
ABR
Spread —
Term
Loans
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|
Eurodollar
Spread —
Revolving
Loans
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|
ABR
Spread —
Revolving
Loans
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|
|
Category 1
Greater than 5.35 to 1.00
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3.25
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%
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2.25
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%
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3.50
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%
|
2.50
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Category 2
Greater than 4.25 to 1.00, but less than or equal to
5.35 to 1.00
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3.00
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%
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2.00
|
%
|
3.50
|
%
|
2.50
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Category 3
Greater than 4.00 to 1.00, but less than or equal to
4.25 to 1.00
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2.75
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%
|
1.75
|
%
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3.50
|
%
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2.50
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Category 4
Greater than 3.50 to 1.00, but less than or equal to
4.00 to 1.00
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|
2.75
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%
|
1.75
|
%
|
3.25
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%
|
2.25
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Category 5
Greater than 3.00 to 1.00, but less than or equal to
3.50 to 1.00
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2.75
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%
|
1.75
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%
|
3.00
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%
|
2.00
|
%
|
|
|
|
|
|
|
|
|
|
|
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Category 6
Less than or equal to 3.00 to 1.00
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2.75
|
%
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1.75
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%
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2.75
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%
|
1.75
|
%
|
Each change in the Applicable Percentage resulting from a change in the
Leverage Ratio shall be effective with respect to all Loans and Letters of
Credit outstanding on and after the date
4
of delivery to the Administrative Agent of the financial statements and
certificates required by Section 5.04(a) or (b) and Section 5.04(d)
or (e), respectively, indicating such change until the date immediately
preceding the next date of delivery of such financial statements and
certificates indicating another such change.
Notwithstanding the foregoing, until the Borrower shall have delivered
the financial statements and certificates required by Section 5.04(b) and
Section 5.04(e), respectively, for the period ended June 30, 2004,
the Leverage Ratio shall be deemed to be not less than 4.26 to 1.00 for
purposes of determining the Applicable Percentage with respect to any Term
Loan. In addition, (a) at any time during which the Borrower has failed to
deliver the financial statements and certificates required by Section 5.04(a)
or (b) and Section 5.04(d) or (e), respectively, or (b) at any time after
the occurrence and during the continuance of an Event of Default, the Leverage
Ratio shall be deemed to be in Category 1 for purposes of determining the
Applicable Percentage.
“Asset
Sale” shall mean the sale, transfer or other disposition (by way of
merger, casualty, condemnation or otherwise) by Holdings, the Borrower or any
of the Subsidiaries to any person other than the Borrower or any Subsidiary
Guarantor of (a) any Equity Interests of any of the Subsidiaries (other than
directors’ qualifying shares) or (b) any other assets of Holdings, the Borrower
or any of the Subsidiaries (other than (i) inventory, damaged, obsolete or worn
out assets, scrap and Permitted Investments, in each case disposed of in the
ordinary course of business, (ii) non-exclusive licenses or sublicenses to use
the patents, trade secrets, know-how and other intellectual property of
Holdings, the Borrower or any Subsidiary to the extent such license does not
interfere with the business of Holdings, the Borrower or any Subsidiary or
(iii) dispositions between or among Foreign Subsidiaries).
“Assignment
and Acceptance” shall mean an assignment and acceptance entered into
by a Lender and an assignee, and accepted by the Administrative Agent, in the
form of Exhibit B or such other form as shall be approved by the Administrative
Agent.
“Board”
shall mean the Board of Governors of the Federal Reserve System of the United
States of America.
“Borrowing”
shall mean (a) Loans of the same Class and Type made, converted or continued on
the same date and, in the case of Eurodollar Loans, as to which a single
Interest Period is in effect, or (b) a Swingline Loan.
“Borrowing
Request” shall mean a request by the Borrower in accordance with the
terms of Section 2.03 and substantially in the form of Exhibit C, or such
other form as shall be approved by the Administrative Agent.
“Business
Day” shall mean any day other than a Saturday, Sunday or day on
which banks in New York City are authorized or required by law to close; provided,
however,
that when used in connection with a Eurodollar Loan, the term “Business Day”
shall also exclude any day on which banks are not open for dealings in dollar
deposits in the London interbank market.
“Capital
Expenditures” shall mean, for any period, without duplication, (a)
the additions to property, plant and equipment and other capital expenditures
of the Borrower and its
5
consolidated Subsidiaries that are (or should be) set forth in a
consolidated statement of cash flows of the Borrower for such period prepared
in accordance with GAAP and (b) Capital Lease Obligations or Synthetic Lease
Obligations incurred by the Borrower and its consolidated Subsidiaries during
such period, but excluding in each case (i) any such expenditure made to
restore, replace or rebuild property to the condition of such property
immediately prior to any damage, loss, destruction or condemnation of such property,
to the extent such expenditure is made with insurance proceeds, condemnation
awards or damage recovery proceeds relating to any such damage, loss,
destruction or condemnation and (ii) any such expenditures made with the cash
proceeds of any Asset Sale to the extent such proceeds are reinvested within
the period required by the definition of “Net Cash Proceeds”.
“Capital
Lease Obligations” of any person shall mean the obligations of such
person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination
thereof, which obligations are required to be classified and accounted for as
capital leases on a balance sheet of such person under GAAP, and the amount of
such obligations shall be the capitalized amount thereof determined in
accordance with GAAP.
“CHAMPUS” shall mean the
United States Department of Defense Civilian Health and Medical Program of the
Uniformed Services.
A “Change
in Control” shall mean any of the following events:
(a)
prior to the initial Public Equity Offering, the Permitted Investors
shall fail to own, directly or indirectly, beneficially and of record, and have
the right to vote Equity Interests in Holdings representing at least 51% of the
aggregate ordinary voting power represented by the issued and outstanding
Equity Interests of Holdings;
(b)
after the initial Public Equity Offering, (i) the Permitted Investors
shall fail to own, directly or indirectly, beneficially and of record, and have
the right to vote Equity Interests in Holdings representing more than 35% of
the aggregate ordinary voting power represented by the issued and outstanding
Equity Interests of Holdings or (ii) any “person” or “group” (within the
meaning of the Securities Exchange Act of 1934 and the rules of the Securities
and Exchange Commission thereunder as in effect on the date hereof) other than
the Permitted Investors becomes, directly or indirectly, the beneficial owner
of Equity Interests in Holdings representing more than 25% of the aggregate
ordinary voting power represented by the issued and outstanding Equity
Interests of Holdings;
(c)
after the initial Public Equity Offering, during any period of two
consecutive years, individuals who at the beginning of such period constituted
the board of directors of Holdings (together with any new directors whose
election was approved by a majority of the directors then in office who were
either directors at the beginning of such period or whose election was
previously so approved) cease for any reason to have a majority of the total
voting power of the board of directors of Holdings;
6
(d)
the occurrence of any change in control or similar event (however
denominated) with respect to Holdings or the Borrower under and as defined in
any indenture or agreement in respect of Material Indebtedness to which
Holdings, the Borrower or a Subsidiary is a party; or
(e)
Holdings shall cease to directly own, beneficially and of record, 100%
of the issued and outstanding Equity Interests of the Borrower.
“Change
in Law” shall mean (a) the adoption of any law, rule or
regulation after the Closing Date, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the Closing Date or (c) compliance by any Lender or the
Issuing Bank (or, for purposes of Section 2.14, by any lending office of
such Lender or by such Lender’s or Issuing Bank’s holding company, if any) with
any request, guideline or directive (whether or not having the force of law) of
any Governmental Authority made or issued after the Closing Date.
“Class”,
when used in reference to any Loan or Borrowing, refers to whether such Loan,
or the Loans comprising such Borrowing, are Revolving Loans, Term Loans or
Swingline Loans and, when used in reference to any Commitment, refers to
whether such Commitment is a Revolving Credit Commitment, Term Loan Commitment
or Swingline Commitment.
“Closing
Date” shall mean March 27, 2003.
“Code”
shall mean the Internal Revenue Code of 1986, as amended from time to time.
“Collateral”
shall mean all the “Collateral” as defined in any Security Document.
“Commitment”
shall mean, with respect to any Lender, such Lender’s Revolving Credit Commitment,
Term Loan Commitment and Swingline Commitment.
“Commitment
Fee” shall have the meaning assigned to such term in
Section 2.05(a).
“Consolidated
EBITDA” shall mean, for any period, Consolidated Net Income for such
period plus (a) without duplication and to the extent deducted in determining
such Consolidated Net Income, the sum of (i) Consolidated Interest Expense
for such period, (ii) consolidated income tax expense for such period,
(iii) all amounts attributable to depreciation and amortization for such
period, (iv) any non-recurring fees, cash charges and other cash expenses
(including severance costs) made or incurred in connection with the Original
Transactions that are paid or otherwise accounted for within 90 days of the
consummation of the Original Transactions, (v) any extraordinary losses and
(vi) any other non-cash charges for such period (provided that any charges made
or incurred in connection with captive self-insurance reserves shall not be
considered non-cash charges), and minus (b) without duplication
(i) all cash payments made during such period on account of reserves,
restructuring charges and other non-cash charges added to Consolidated Net
Income pursuant to clause (a)(vi) above in a previous period and (ii) to
the extent included in determining such Consolidated Net Income, any
extraordinary gains and all non-cash items of income for such period, all
determined on a consolidated basis in accordance with GAAP. Solely for purposes of determining the
amount of
7
Consolidated EBITDA to be used in the calculation of the Fixed Charge
Coverage Ratio, the Interest Coverage Ratio, the Net Leverage Ratio and the
Senior Leverage Ratio as of or for any period ended on or prior to
March 31, 2005, (A) there shall also be added to Consolidated Net Income
for such period (without duplication and to the extent deducted in determining
Consolidated Net Income for such period) severance expenses (not to exceed
$1,400,000 in the aggregate) in respect of the termination of employment of
James C. New and (B) there shall not be deducted from Consolidated EBITDA for
any period any cash payments made on account of reserves for such severance
expenses established in a previous period.
“Consolidated
Fixed Charges” shall mean, for any period, without duplication, the
sum of (a) Consolidated Interest Expense for such period and (b) the aggregate
amount of scheduled principal payments made during such period in respect of
long term Indebtedness of the Borrower and the Subsidiaries (other than (i)
payments made by the Borrower or any Subsidiary to the Borrower or any
Subsidiary and (ii) payments made in respect of Contingent Notes and Additional
Seller Notes), except to the extent refinanced with Indebtedness permitted by
Section 6.01. For purposes of
determining the Fixed Charge Coverage Ratio for the period of four consecutive
quarters ending on December 31, 2003, Consolidated Fixed Charges shall be
deemed to be the Consolidated Fixed Charges for the three consecutive fiscal
quarters ended December 31, 2003, multiplied by 4/3.
“Consolidated
Interest Expense” shall mean, for any period, the sum of (a) the
interest expense (including imputed interest expense in respect of Capital
Lease Obligations and Synthetic Lease Obligations, but excluding amortization
of capitalized financing costs incurred in connection with the Transactions) of
the Borrower and the Subsidiaries for such period, plus (b) any interest
accrued during such period in respect of Indebtedness of the Borrower or any
Subsidiary that is required to be capitalized rather than included in
consolidated interest expense, minus (c) interest income of the Borrower and
the Subsidiaries for such period, in each case determined on a consolidated
basis in accordance with GAAP. For purposes of the foregoing, interest expense
shall be determined after giving effect to any net payments made or received by
the Borrower or any Subsidiary with respect to interest rate Hedging
Agreements. For purposes of determining
the Interest Coverage Ratio for the period of four consecutive quarters ending
on December 31, 2003, Consolidated Interest Expense shall be deemed to be
the Consolidated Interest Expense for the three consecutive fiscal quarters
ended December 31, 2003, multiplied by 4/3.
“Consolidated
Net Income” shall mean, for any period, the net income or loss of
the Borrower and the Subsidiaries for such period determined on a consolidated
basis in accordance with GAAP (adjusted to reflect any charge, tax or expense incurred
or accrued by Holdings during such period (other than interest expense in
respect of the Holdings Subordinated Notes and Management Fees) as though such
charge, tax or expense had been incurred by the Borrower, to the extent that
the Borrower has made or would be entitled under the Loan Documents to make any
payment to or for the account of Holdings in respect thereof); provided
that there shall be excluded (a) the income of any Subsidiary to the extent
that the declaration or payment of dividends or similar distributions by the
Subsidiary of that income is not at the time permitted by operation of the
terms of its charter or any agreement, instrument, judgment,
8
decree, statute, rule or governmental regulation applicable to such
Subsidiary, except to the extent any such income is actually received by the
Borrower or the Subsidiary in the form of dividends, loans, fees or similar
distributions, (b) the income or loss of any person accrued prior to the date
it becomes a Subsidiary or is merged into or consolidated with the Borrower or
any Subsidiary or the date that such person’s assets are acquired by the
Borrower or any Subsidiary and (c) any gains attributable to sales of assets
out of the ordinary course of business.
“Consolidated Practice”
shall mean any Affiliated Practice, the accounts of which are consolidated with
the Borrower and its Subsidiaries in accordance with GAAP.
“Contingent Note Reserve”
shall mean the Accounts, the Accounts Collateral, and any proceeds thereof and
any funds and amounts deposited by Holdings with the Accounts in connection
therewith (as such terms are defined in the Custody and Control Agreement).
“Contingent Notes” shall
mean the unsecured contingent notes issued by the Borrower and certain of the
Subsidiaries in connection with acquisitions prior to the Closing Date and any
earn-out obligations incurred prior to the Closing Date which are similar in
nature thereto but which are not represented by actual notes, all of which are
set forth on Schedule 1.01(b).
“Contract Provider” shall
mean any person or any employee, agent or subcontractor of such person who
provides professional health care services under or pursuant to any contract
with Holdings, the Borrower or any of the Subsidiaries.
“Control”
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a person, whether through
the ownership of voting securities, by contract or otherwise, and the terms “Controlling”
and “Controlled”
shall have meanings correlative thereto.
“Credit
Event” shall have the meaning assigned to such term in
Section 4.01.
“Current
Assets” shall mean, at any time, the consolidated current assets
(excluding cash and Permitted Investments but including Restricted Cash held
for the sole purpose of providing captive self-insurance benefits to the
Borrower, the Subsidiaries and the Affiliated Practices) of the Borrower and
the Subsidiaries.
“Current
Liabilities” shall mean, at any time, the consolidated current
liabilities of the Borrower and the Subsidiaries at such time, but excluding,
without duplication, (a) the current portion of any long-term Indebtedness and
(b) outstanding Revolving Loans and Swingline Loans.
“Custody and Control Agreement”
shall mean the Custody and Control Agreement dated as of the Closing Date among
Holdings, the Collateral Agent and Wachovia Bank, N.A., as Financial
Intermediary.
“Default”
shall mean any event or condition which upon notice, lapse of time or both
would constitute an Event of Default.
9
“dollars”
or “$”
shall mean lawful money of the United States of America.
“Domestic
Subsidiaries” shall mean all Subsidiaries incorporated or organized
under the laws of the United States of America, any State thereof or the
District of Columbia.
“Environmental
Laws” shall mean all former, current and future Federal, state,
local and foreign laws (including common law), treaties, regulations, rules,
ordinances, codes, decrees, judgments, directives, orders (including consent
orders), and agreements issued, promulgated or entered into by or with any
Governmental Authority, in each case, relating to the environment, natural
resources, human health and safety or the presence, Release of, or exposure to,
Hazardous Materials, or the generation, manufacture, processing, distribution,
use, management, treatment, storage, transport, recycling or handling of, or
the arrangement for such activities with respect to, Hazardous Materials.
“Environmental
Liability” shall mean all liabilities, obligations, indemnities,
damages, losses, claims, actions, suits, judgments, orders, fines, penalties,
fees, expenses and costs (including costs of administrative proceedings or
oversight, natural resource damages and investigation or remediation costs),
whether contingent or otherwise, directly or indirectly arising out of or
relating to (a) compliance or non-compliance with any Environmental Law, (b)
the generation, use, handling, transportation, storage, treatment or disposal
of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the
actual or alleged presence of, threatened Release or the Release of any
Hazardous Materials or (e) any contract, agreement or other consensual
arrangement pursuant to which liability is assumed or imposed with respect to
any of the foregoing.
“Equity
Interests” shall mean shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity interests in any person.
“Equity
Issuance” shall mean any issuance or sale by Holdings, the Borrower
or any of their respective subsidiaries of any Equity Interests of Holdings,
the Borrower or any such subsidiary, as applicable, except in each case for
(a) any issuance or sale to Holdings, the Borrower or any Subsidiary,
(b) any issuance of directors’ qualifying shares, (c) sales or
issuances of common stock of Holdings to management, employees or consultants of
Holdings, the Borrower, any Subsidiary or any Managed Practice under any
employment or similar agreement, stock option or stock purchase plan or benefit
plan in existence from time to time, (d) any sale or issuance of Equity
Interests of Holdings to (i) any Permitted Investor or (ii) one or
more other financial sponsors reasonably acceptable to the Administrative Agent
and (e) any issuance of Equity Interests of Holdings, the proceeds of
which are contributed as common equity to the Borrower to fund a portion of the
purchase price of any Permitted Acquisition.
“ERISA”
shall mean the Employee Retirement Income Security Act of 1974, as the same may
be amended from time to time.
“ERISA
Affiliate” shall mean any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the
10
Code, or solely for purposes of Section 302 of ERISA and
Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
“ERISA
Event” shall mean (a) any “reportable event”, as defined in
Section 4043 of ERISA or the regulations issued thereunder, with respect
to a Plan (other than an event for which the 30-day notice period is waived);
(b) the existence with respect to any Plan of an “accumulated funding
deficiency” (as defined in Section 412 of the Code or Section 302 of
ERISA), whether or not waived; (c) the filing pursuant to Section 412(d)
of the Code or Section 303(d) of ERISA of an application for a waiver of
the minimum funding standard with respect to any Plan; (d) the incurrence by
the Borrower or any of its ERISA Affiliates of any liability under Title IV of
ERISA with respect to the termination of any Plan or the withdrawal or partial
withdrawal of the Borrower or any of its ERISA Affiliates from any Plan or
Multiemployer Plan; (e) the receipt by the Borrower or any of its ERISA
Affiliates from the PBGC or a plan administrator of any notice relating to the
intention to terminate any Plan or Plans or to appoint a trustee to administer
any Plan; (f) the adoption of any amendment to a Plan that would require the
provision of security pursuant to Section 401(a)(29) of the Code or
Section 307 of ERISA; (g) the receipt by the Borrower or any of its ERISA
Affiliates of any notice, or the receipt by any Multiemployer Plan from the
Borrower or any of its ERISA Affiliates of any notice, concerning the
imposition of Withdrawal Liability or a determination that a Multiemployer Plan
is, or is expected to be, insolvent or in reorganization, within the meaning of
Title IV of ERISA; (h) the occurrence of a “prohibited transaction” with
respect to which Holdings, the Borrower or any of the Subsidiaries is a
“disqualified person” (within the meaning of Section 4975 of the Code) or
with respect to which Holdings, the Borrower or any such Subsidiary could
otherwise be liable; or (i) any other event or condition with respect to a Plan
or Multiemployer Plan that could reasonably be expected to result in liability
of the Borrower or any Subsidiary.
“Eurodollar”,
when used in reference to any Loan or Borrowing, refers to whether such Loan,
or the Loans comprising such Borrowing, are bearing interest at a rate
determined by reference to the Adjusted LIBO Rate.
“Event
of Default” shall have the meaning assigned to such term in Article VII.
“Excess
Cash Flow” shall mean, for any fiscal year of the Borrower, the
excess of (a) the sum, without duplication, of (i) Consolidated EBITDA for such
fiscal year and (ii) reductions to non-cash working capital of the Borrower and
the Subsidiaries for such fiscal year (i.e., the decrease, if any, in Current
Assets minus Current Liabilities from the beginning to the end of such fiscal
year) over (b) the sum, without duplication, of (i) the amount of any Taxes
payable in cash by the Borrower and the Subsidiaries with respect to such
fiscal year, (ii) Consolidated Interest Expense for such fiscal year payable in
cash, (iii) Capital Expenditures made in cash in accordance with
Section 6.10 during such fiscal year, except to the extent financed with
the proceeds of Indebtedness (other than Revolving Loans), equity issuances or
other proceeds that would not be included in Consolidated EBITDA, (iv)
permanent repayments of Indebtedness (other than (x) mandatory prepayments
of Loans under Section 2.13 and (y) Voluntary Prepayments) made by
the Borrower and the Subsidiaries during such fiscal year, but only to the
extent that such prepayments by their terms cannot be reborrowed or redrawn and
do not occur in
11
connection with a refinancing of all or any portion of such
Indebtedness, (v) additions to non-cash working capital for such fiscal year (i.e.,
the increase, if any, in Current Assets minus Current Liabilities from the
beginning to the end of such fiscal year) and (vi) Restricted Payments pursuant
to clause (ii) or (iii) of Section 6.06(a).
“Excluded
Taxes” shall mean, with respect to the Administrative Agent, any
Lender, the Issuing Bank or any other recipient of any payment to be made by or
on account of any obligation of the Borrower hereunder, (a) income or franchise
taxes imposed on (or measured by) its net income by the United States of
America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax
imposed by any other jurisdiction described in clause (a) above and (c) in the
case of a Foreign Lender (other than an assignee pursuant to a request by the
Borrower under Section 2.21(a)), any withholding tax that is imposed on
amounts payable to such Foreign Lender at the time such Foreign Lender becomes
a party to this Agreement (or designates a new lending office) or is
attributable to such Foreign Lender’s failure to comply with
Section 2.20(e), except to the extent that such Foreign Lender (or its
assignor, if any) was entitled, at the time of designation of a new lending
office (or assignment), to receive additional amounts from the Borrower with
respect to such withholding tax pursuant to Section 2.20(a).
“Existing
Credit Agreement” shall have the meaning assigned to such term in
the preliminary statement.
“Existing
Subordinated Notes” shall mean the Subordinated Notes issued on the
Closing Date, in an initial aggregate outstanding principal amount of
$275,000,000.
“Existing
Term Loans” shall have the meaning assigned to such term in the
preliminary statement.
“Federal
Funds Effective Rate” shall mean, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for the day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
“Fee
Letter” shall mean the Fee Letter dated December 6, 2002, among
Holdings, the Administrative Agent, Deutsche Bank AG Cayman Islands Branch and
Deutsche Bank Securities Inc.
“Fees”
shall mean the Commitment Fees, the Administrative Agent Fees, the L/C
Participation Fees and the Issuing Bank Fees.
12
“Financial
Officer” of any person shall mean the chief financial officer,
principal accounting officer, Treasurer or Controller of such person.
“Fixed
Charge Coverage Ratio” shall mean, for any period, the ratio of (a)
the sum of (i) Consolidated EBITDA for such period, minus (ii) Capital
Expenditures made in cash during such period (except to the extent financed
with the proceeds of Indebtedness (other than Revolving Loans), equity issuances
or other proceeds that would not be included in Consolidated EBITDA), minus
(iii) Taxes paid in cash by the Borrower and the Subsidiaries during such
period (including Taxes payable by Holdings, the funds for which were
distributed by the Borrower pursuant to Sections 6.06(a)(iii) and (iv)) (“Cash Taxes”), minus (iv) payments made in
respect of Contingent Notes and Additional Seller Notes (other than payments in
respect of the Contingent Notes, to the extent made with funds on deposit in
the Contingent Note Reserve) to (b) Consolidated Fixed Charges for such
period. For purposes of determining the
Fixed Charge Coverage Ratio for the period of four consecutive quarters ending
December 31, 2003, Cash Taxes shall be deemed to be the Cash Taxes for the
three consecutive fiscal quarters ended December 31, 2003, multiplied by
4/3.
“Foreign
Lender” shall mean any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is located. For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
“Foreign
Subsidiary” shall mean any Subsidiary that is not a Domestic
Subsidiary.
“GAAP”
shall mean United States generally accepted accounting principles applied on a
consistent basis.
“Government Programs”
shall mean (i) the Medicare and Medicaid Programs, (ii) CHAMPUS and (iii) other
similar foreign or domestic federal, state or local reimbursement or
governmental health care programs.
“Governmental
Authority” shall mean any Federal, state, local or foreign court or
governmental agency, authority, instrumentality or regulatory body.
“Granting
Lender” shall have the meaning assigned to such term in
Section 9.04(i).
“Guarantee”
of or by any person shall mean any obligation, contingent or otherwise, of such
person guaranteeing or having the economic effect of guaranteeing any
Indebtedness or other obligation of any other person (the “primary obligor”) in any
manner, whether directly or indirectly, and including any obligation of such
person, direct or indirect, (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Indebtedness or other obligation or to
purchase (or to advance or supply funds for the purchase of) any security for
the payment of such Indebtedness or other obligation, (b) to purchase or lease
property, securities or services for the purpose of assuring the owner of such
Indebtedness or other obligation of the payment of such Indebtedness or other
obligation or (c) to maintain working capital, equity capital or any other
financial statement condition or liquidity of the primary obligor so as to
13
enable the primary obligor to pay such Indebtedness or other
obligation; 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
of any guaranteeing person shall be deemed to be the lower of (a) an amount
equal to the stated or determinable amount of the primary obligation in respect
of which the Guarantee is made and (b) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of the instrument embodying
such Guarantee, unless such primary obligation or the maximum amount for which
such guaranteeing person may be liable is not stated or determinable (or is
limited to certain property or the value thereof), in which case the amount of
such Guarantee shall be such guaranteeing person’s maximum reasonably
anticipated liability in respect thereof or, with respect to any property, the
fair market value of such property or, if such fair market value is not readily
determinable, the maximum value of such property.
“Guarantee and Collateral Agreement”
shall mean the Guarantee and Collateral Agreement, dated as of the Closing
Date, among the Borrower, Holdings, the Subsidiaries party thereto and the
Collateral Agent, a copy of which is attached as Exhibit D.
“Guarantors”
shall mean Holdings and the Subsidiary Guarantors.
“Hazardous
Materials” shall mean any chemical, material, substance or waste
that is prohibited, limited or regulated by or pursuant to any Environmental
Law, including infectious or medical waste, petroleum products or byproducts
and all other hydrocarbons, coal ash, radon gas, asbestos, urea formaldehyde
foam insulation, polychlorinated biphenyls, chlorofluorocarbons and all other
ozone-depleting substances.
“Hedging
Agreement” shall mean any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging
arrangement.
“Holdings
Common Equity Documents” shall mean all instruments, agreements and
other documents evidencing or governing the common equity contribution made by
the Permitted Investors to Holdings and by Holdings to the Borrower on the
Closing Date or providing for any other right in respect thereof.
“Holdings Subordinated Note
Documents” shall mean all instruments, agreements and other
documents evidencing or governing the Holdings Subordinated Notes or providing
for any other right in respect thereof.
“Holdings Subordinated Notes”
shall mean (a) Holdings’ 10% Senior Subordinated Notes due 2014, in an initial
aggregate principal amount of $67,000,000 and (b) any Additional Subordinated
Debt issued by Holdings pursuant to Section 6.01(l).
“Incremental Revolving Credit
Assumption Agreement” shall mean an Incremental Revolving Credit
Assumption Agreement in form and substance reasonably satisfactory to the
Administrative Agent, among the Borrower, the Administrative Agent and one or
more Incremental Revolving Credit Lenders.
14
“Incremental Revolving Credit
Commitment” shall mean the commitment of any Lender, established
pursuant to Section 2.24, to make Revolving Loans to the Borrower.
“Incremental Revolving Credit
Commitment Amount” shall mean, at any time, the excess, if any, of
$10,000,000 over the aggregate amount of all Incremental Revolving Credit
Commitments established prior to such time pursuant to Section 2.24.
“Incremental Revolving Credit Lender”
shall mean a Lender with an Incremental Revolving Credit Commitment.
“Indebtedness”
of any person shall mean, without duplication, (a) all obligations of such
person for borrowed money or with respect to deposits or advances of any kind,
(b) all obligations of such person evidenced by bonds, debentures, notes or
similar instruments, (c) all obligations of such person upon which interest
charges are customarily paid, (d) all obligations of such person under
conditional sale or other title retention agreements relating to property or
assets purchased by such person, (e) all obligations of such person issued or
assumed as the deferred purchase price of property or services (excluding trade
accounts payable and accrued obligations incurred in the ordinary course of
business), (f) all Indebtedness of others secured by (or for which the holder
of such Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien on property owned or acquired by such person, whether or
not the obligations secured thereby have been assumed, but limited to the fair
market value of such property, (g) all Guarantees by such person of
Indebtedness of others, (h) all Capital Lease Obligations and Synthetic Lease
Obligations of such person, (i) all obligations of such person as an account
party in respect of letters of credit and (j) all obligations of such person in
respect of bankers’ acceptances. The
Indebtedness of any person shall include the Indebtedness of any partnership in
which such person is a general partner.
Notwithstanding the foregoing, in connection with the purchase by the
Borrower or any Subsidiary of any business, the term “Indebtedness” will
exclude post-closing payment adjustments to which the seller may become
entitled to the extent such payment is determined by a final closing balance
sheet.
“Indemnified
Taxes” shall mean Taxes other than Excluded Taxes.
“Interest
Coverage Ratio” shall mean, for any period, the ratio of (a)
Consolidated EBITDA for such period to (b) Consolidated Interest Expense for
such period.
“Interest
Payment Date” shall mean (a) with respect to any ABR Loan (including
any Swingline Loan), the last Business Day of each March, June,
September and December, and (b) with respect to any Eurodollar Loan, the
last day of the Interest Period applicable to the Borrowing of which such Loan
is a part and, in the case of a Eurodollar Borrowing with an Interest Period of
more than three months’ duration, each day that would have been an Interest
Payment Date had successive Interest Periods of three months’ duration been
applicable to such Borrowing, and, in addition, the date of any prepayment of a
Eurodollar Borrowing or conversion of a Eurodollar Borrowing to an ABR
Borrowing.
“Interest
Period” shall mean, with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day
15
(or, if there is no numerically corresponding day, on the last day) in
the calendar month that is 1, 2, 3 or 6 months thereafter (or 9 or 12 months thereafter
if, at the time of the relevant Borrowing, all Lenders participating therein
agree to make an interest period of such duration available), as the Borrower
may elect; provided,
however,
that if any Interest Period would end on a day other than a Business Day, such
Interest Period shall be extended to the next succeeding Business Day unless
such next succeeding Business Day would fall in the next calendar month, in
which case such Interest Period shall end on the next preceding Business Day. Interest shall accrue from and including the
first day of an Interest Period to but excluding the last day of such Interest
Period. For purposes hereof, the date of a Borrowing initially shall be the
date on which such Borrowing is made and thereafter shall be the effective date
of the most recent conversion or continuation of such Borrowing.
“Issuing
Bank” shall mean, as the context may require, (a) Credit Suisse
First Boston, in its capacity as the issuer of Letters of Credit hereunder, and
(b) any other Lender that may become an Issuing Bank pursuant to
Section 2.23(i) or 2.23(k), with respect to Letters of Credit issued by
such Lender. The Issuing Bank may, in
its discretion, arrange for one or more Letters of Credit to be issued by
Affiliates of the Issuing Bank, in which case the term “Issuing Bank” shall
include any such Affiliate with respect to Letters of Credit issued by such
Affiliate.
“Issuing
Bank Fees” shall have the meaning assigned to such term in
Section 2.05(c).
“L/C
Commitment” shall mean the commitment of the Issuing Bank to issue
Letters of Credit pursuant to Section 2.23.
“L/C
Disbursement” shall mean a payment or disbursement made by the
Issuing Bank pursuant to a Letter of Credit.
“L/C
Exposure” shall mean at any time the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time and (b) the
aggregate principal amount of all L/C Disbursements that have not yet been
reimbursed at such time. The L/C
Exposure of any Revolving Credit Lender at any time shall equal its Pro Rata
Percentage of the aggregate L/C Exposure at such time.
“L/C
Participation Fee” shall have the meaning assigned to such term in
Section 2.05(c).
“Lenders”
shall mean (a) the persons listed on Schedule 2.01 (other than any such
person that has ceased to be a party hereto pursuant to an Assignment and
Acceptance) and (b) any person that has become a party hereto pursuant to an
Assignment and Acceptance. Unless the
context clearly indicates otherwise, the term “Lenders” shall include the Swingline
Lender.
“Letter
of Credit” shall mean any letter of credit issued pursuant to
Section 2.23.
“Leverage
Ratio” shall mean, on any date, the ratio of (a) the sum, without
duplication, of (i) Total Debt on such date, and (ii) the aggregate principal
amount of Additional Subordinated Debt of Holdings outstanding on such date, to
(b) Consolidated EBITDA for the period of four consecutive fiscal quarters most
recently ended on or prior to such date.
16
“LIBO
Rate” shall mean, with respect to any Eurodollar Borrowing for any
Interest Period, the rate per annum determined by the Administrative Agent at
approximately 11:00 a.m. (London time), on the date that is two Business Days
prior to the commencement of such Interest Period by reference to the British
Bankers’ Association Interest Settlement Rates for deposits in dollars (as set
forth by any service selected by the Administrative Agent that has been
nominated by the British Bankers’ Association as an authorized information
vendor for the purpose of displaying such rates) for a period equal to such
Interest Period; provided that, to the extent that an interest rate is not
ascertainable pursuant to the foregoing provisions of this definition, the
“LIBO Rate” shall be the interest rate per annum determined by the
Administrative Agent to be the average of the rates per annum at which deposits
in dollars approximately equal in principal amount to such Eurodollar Borrowing
are offered for such relevant Interest Period to major banks in the London
interbank market in London, England by the Administrative Agent at
approximately 11:00 a.m. (London time) on the date that is two Business Days
prior to the beginning of such Interest Period.
“Lien”
shall mean, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, encumbrance, charge or security interest in or on such asset, (b) the
interest of a vendor or a lessor under any conditional sale agreement, capital
lease or title retention agreement (or any financing lease having substantially
the same economic effect as any of the foregoing) relating to such asset and
(c) in the case of securities, any purchase option, call or similar right of a
third party with respect to such securities.
“Loan
Documents” shall mean the Amendment Agreement, this Agreement, the
Letters of Credit and the Security Documents.
“Loan
Parties” shall mean the Borrower and the Guarantors.
“Loans”
shall mean the Revolving Loans, the Term Loans and the Swingline Loans.
“Managed Practice” shall
mean any Affiliated Practice, the accounts of which are not consolidated with
the Borrower and its Subsidiaries in accordance with GAAP.
“Management
Agreement” shall mean a written management agreement approved by the
board of directors of Holdings.
“Management Fee” shall
mean the fees payable by Holdings to the Sponsor or its Affiliates pursuant to
a Management Agreement.
“Management Services Agreement”
shall mean a long-term management agreement entered into by the Borrower or any
of its Subsidiaries with an Affiliated Practice.
“Margin
Stock” shall have the meaning assigned to such term in Regulation U.
“Material
Adverse Effect” shall mean (a) a materially adverse effect on the
business, assets, operations, condition (financial or otherwise) or prospects
of the Borrower and the Subsidiaries, taken as a whole, (b) material impairment
of the ability of the Borrower or any
17
other Loan Party to perform any of its material obligations under any
Loan Document to which it is or will be a party or (c) material impairment of
the rights of or benefits available to the Lenders under any Loan Document.
“Material
Indebtedness” shall mean Indebtedness (other than the Loans and
Letters of Credit), or obligations in respect of one or more Hedging
Agreements, of any one or more of Holdings, the Borrower and the Subsidiaries
in an aggregate principal amount exceeding $7,500,000. For purposes of determining Material
Indebtedness, the “principal amount” of the obligations of Holdings, the
Borrower or any Subsidiary in respect of any Hedging Agreement at any time
shall be the maximum aggregate amount (giving effect to any netting agreements)
that Holdings, the Borrower or such Subsidiary would be required to pay if such
Hedging Agreement were terminated at such time.
“Material Subsidiaries”
shall mean, with respect to a date of determination, all Subsidiaries that,
either individually or as a group in the aggregate, (x) constitute more than
2.5% of the consolidated assets of the Borrower and its Subsidiaries as of the
end of the immediately preceding fiscal quarter or (y) generate more than 2.5%
of the consolidated revenues of the Borrower and its Subsidiaries for the
period of four consecutive fiscal quarters ending as of the end of the
immediately preceding fiscal quarter.
“Medicare and Medicaid Programs”
shall mean the programs established under Titles XVIII and XIX of the Social
Security Act.
“Midpoint Amount” shall
mean, with respect to any Additional Seller Notes, the aggregate amount that
the Borrower projects that the issuer of such Additional Seller Notes will
ultimately actually have to pay in respect of such Additional Seller Notes, it
being understood that the Midpoint Amount shall be within a range of projected
contingent payments determined by the Borrower in accordance with its past
custom and practice.
“Multiemployer
Plan” shall mean a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
“Net
Cash Proceeds” shall mean (a) with respect to any Asset Sale, the
cash proceeds (including cash proceeds subsequently received (as and when
received) in respect of non-cash consideration initially received), net of (i)
selling expenses (including reasonable broker’s fees or commissions, legal fees,
transfer and similar taxes and the Borrower’s good faith estimate of income
taxes paid or payable in connection with such sale), (ii) amounts provided as a
reserve, in accordance with GAAP, against any liabilities under any
indemnification obligations or purchase price adjustment associated with such
Asset Sale or any other liabilities retained by the Borrower or any Subsidiary
associated with the assets sold in such Asset Sale (provided that, to the extent
and at the time any such amounts are released from such reserve, such amounts
shall constitute Net Cash Proceeds) and (iii) the principal amount, premium or
penalty, if any, interest and other amounts on any Indebtedness for borrowed
money which is secured by the asset sold in such Asset Sale and which is
required to be repaid with such proceeds (other than any such Indebtedness
assumed by the purchaser of such asset); provided, however, that, if (x) the
Borrower shall deliver (A) a certificate of a Financial Officer to the
Administrative Agent at the
18
time of receipt thereof if such proceeds are greater than $1,000,000 or
(B) the certificate required by Section 5.04(f) if such proceeds are less
than or equal to $1,000,000, setting forth the Borrower’s intent to reinvest
such proceeds in productive assets of a kind then used or usable in the
business of the Borrower and its Subsidiaries (including assets acquired in a
Permitted Acquisition) within 270 days of receipt of such proceeds and (y) no
Default or Event of Default shall have occurred and shall be continuing at the
time of such certificate or at the time such proceeds are contractually
committed to be used, such proceeds shall not constitute Net Cash Proceeds
except to the extent not so used or contractually committed to be used at the
end of such 270-day period, at which time such proceeds shall be deemed to be
Net Cash Proceeds; and (b) with respect to any issuance or disposition of
Indebtedness or any Equity Issuance, the cash proceeds thereof, net of all
taxes and customary fees, commissions, costs and other expenses incurred in
connection therewith.
“Net
Leverage Ratio” shall mean, on any date, the ratio of (a) the
sum, without duplication, of (i) Net Total Debt on such date, and
(ii) the aggregate principal amount of Additional Subordinated Debt of
Holdings outstanding on such date, to (b) Consolidated EBITDA for the
period of four consecutive fiscal quarters most recently ended on or prior to
such date.
“Net
Senior Debt” shall mean, at any time, the Total Debt at such time less,
the sum of (a) to the extent included therein, the amount of any such
Indebtedness that is subordinated to the Obligations pursuant to subordination
provisions no less favorable to the Lenders than those contained in the
Subordinated Note Documents and (b) the Unrestricted Cash at such time.
“Net
Total Debt” shall mean, at any time, Total Debt at such time less
the Unrestricted Cash at such time.
“Obligations”
shall mean all obligations defined as “Obligations” in the Guarantee and
Collateral Agreement and the other Security Documents.
“Original
Transactions” shall have the meaning assigned to the term
“Transactions” in the Existing Credit Agreement.
“Other
Taxes” shall mean any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made under any Loan Document or from the execution, delivery
or enforcement of, or otherwise with respect to, any Loan Document.
“PBGC”
shall mean the Pension Benefit Guaranty Corporation referred to and defined in
ERISA.
“Perfection
Certificate” shall mean the Perfection Certificate delivered by the
Borrower on the Restatement Date, a copy of which is attached as Exhibit E.
“Permitted
Acquisition” shall have the meaning assigned to such term in
Section 6.04(g).
19
“Permitted
Investments” shall mean:
(f)
direct obligations of, or obligations the principal of and interest on
which are unconditionally guaranteed by, the United States of America (or by
any agency thereof to the extent such obligations are backed by the full faith
and credit of the United States of America), in each case maturing within one
year from the date of acquisition thereof, or, in the case of such obligations
held in the Contingent Note Reserve, maturing within three years from the date
of acquisition thereof;
(g)
investments in commercial paper maturing within 270 days from the date
of acquisition thereof and having, at such date of acquisition, the highest
credit rating obtainable from Standard & Poor’s Ratings Service or from
Moody’s Investors Service, Inc.;
(h)
investments in certificates of deposit, banker’s acceptances and time
deposits maturing within one year from the date of acquisition thereof issued
or guaranteed by or placed with, and money market deposit accounts issued or
offered by, the Administrative Agent or any domestic office of any Lender or
any other commercial bank organized under the laws of the United States of
America or any State thereof that has a combined capital and surplus and
undivided profits of not less than $500,000,000;
(i)
fully collateralized repurchase agreements with a term of not more than
30 days for securities described in clause (a) above and entered into with a
financial institution satisfying the criteria of clause (c) above;
(j)
investments in “money market funds” within the meaning of Rule 2a-7 of
the Investment Company Act of 1940, as amended, substantially all of whose
assets are invested in investments of the type described in clauses (a) through
(d) above; and
(k)
other short-term investments utilized by Foreign Subsidiaries in
accordance with normal investment practices for cash management in investments
of a type analogous to the foregoing.
“Permitted Investors”
shall mean (i) the Sponsor and its Affiliates (including any investment
partnership under common Control with the Sponsor), (ii) any officer, director,
employee, partner, member or stockholder of the manager or general partner of
the foregoing persons, and (iii) any Related Parties with respect to any of the
foregoing persons. Except for a
Permitted Investor specifically identified by name, in determining whether
Equity Interests are owned by a Permitted Investor, only Equity Interests
acquired by a Permitted Investor in its described capacity will be treated as
“beneficially owned” by such Permitted Investor.
“person”
shall mean any natural person, corporation, business trust, joint venture,
association, company, limited liability company, partnership, Governmental
Authority or other entity.
“Plan”
shall mean any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the
Code or Section 307 of
20
ERISA, and in respect of which the Borrower or any ERISA Affiliate is
(or, if such plan were terminated, would under Section 4069 of ERISA be
deemed to be) an “employer” as defined in Section 3(5) of ERISA.
“Prime Rate” shall mean the fluctuating rate of
interest per annum determined from time to time by Credit Suisse First Boston
as its prime rate in effect at its principal office in New York City and
notified to the Borrower.
“Private Programs” shall
mean private non-governmental health care programs, including any private
health care insurance programs.
“Pro Forma Allowable Amount”
shall mean, with respect to any fiscal year, beginning with the fiscal year
ending December 31, 2004, the lesser of (a) $10,000,000 and
(b) the maximum amount (if any) that, if added to the amount of
Consolidated Fixed Charges during the preceding fiscal year, would not have
resulted in a breach of Section 6.12 as of the end of such preceding
fiscal year.
“Pro Forma
Basis” shall mean, with respect to compliance with any
test or covenant hereunder, compliance with such covenant or test after giving
effect to (a) any proposed Permitted Acquisition or (b) any Asset Sale of a
Subsidiary or operating entity for which historical financial statements
presented in accordance with GAAP for the relevant period are available
(including pro forma adjustments arising out of events which are directly
attributable to the proposed Permitted Acquisition or Asset Sale, are factually
supportable and are expected to have a continuing impact, in each case as
determined on a basis consistent with Article 11 of Regulation S-X of the
Securities Act of 1933, as amended, as interpreted by the Staff of the
Securities and Exchange Commission, and as certified by a Financial Officer of
the Borrower) using, for purposes of determining such compliance, the
historical financial statements of all entities or assets so acquired or sold
or to be acquired or sold (or, to the extent such financial statements for any
entity or assets so acquired or to be acquired are not available or are not
presented in accordance with GAAP, the due diligence report prepared with
respect to such entities or assets and satisfactory to the Administrative
Agent) and the consolidated financial statements of the Borrower and its
Subsidiaries which shall be reformulated as if such Permitted Acquisitions or
Asset Sale, and all other Permitted Acquisitions or Asset Sales that have been
consummated during the period, and any Indebtedness or other liabilities
incurred in connection with any such Permitted Acquisitions had been
consummated and incurred at the beginning of such period.
“Pro Forma
Compliance” shall mean, at any date of determination,
that the Borrower shall be in pro forma compliance with the covenants set forth
in Sections 6.11, 6.12 and 6.13 as of the date of such determination or the
last day of the most recent fiscal quarter-end, as the case may be (computed on
the basis of (a) balance sheet amounts as of such date, and (b) income
statement amounts for the most recently completed period of four consecutive
fiscal quarters for which financial statements shall have been delivered to the
Administrative Agent and calculated on a Pro Forma Basis in respect of the
event giving rise to such determination).
21
“Pro Rata
Percentage” of any Revolving Credit Lender at any time
shall mean the percentage of the Total Revolving Credit Commitment represented
by such Lender’s Revolving Credit Commitment.
In the event the Revolving Credit Commitments shall have expired or been
terminated, the Pro Rata Percentages shall be determined on the basis of the
Revolving Credit Commitments most recently in effect.
“Public Equity Offering”
shall mean an underwritten public offering of common stock of, and by, Holdings
pursuant to a registration statement filed with the Securities and Exchange
Commission in accordance with the Securities Act of 1933, as amended, which
yields not less than $50,000,000 in Net Cash Proceeds to Holdings.
“Register”
shall have the meaning assigned to such term in Section 9.04(d).
“Regulation
T” shall mean Regulation T of the Board as from
time to time in effect and all official rulings and interpretations thereunder
or thereof.
“Regulation
U” shall mean Regulation U of the Board as from
time to time in effect and all official rulings and interpretations thereunder
or thereof.
“Regulation X”
shall mean Regulation X of the Board as from time to time in effect and
all official rulings and interpretations thereunder or thereof.
“Related
Fund” shall mean, with respect to any Lender that is a
fund that invests in bank loans, any other fund that invests in bank loans and
is advised or managed by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
“Related
Parties” shall mean, with respect to any specified
person at any specified time:
(l)
if a natural person, (i) any spouse, parent or lineal descendant
(including by adoption) of such person or (ii) the estate of such person during
any period in which such estate holds Equity Interests of Holdings or of the
Borrower for the benefit of any person referred to in clause (a)(i), and
(m)
if a trust, corporation, partnership, limited liability company or other
entity, such person’s Affiliates and the respective directors, officers,
employees, agents and advisors of such person and such person’s Affiliates.
“Release”
shall mean any release, spill, emission, leaking, dumping, injection, pouring,
deposit, disposal, discharge, dispersal, leaching or migration into or through
the environment or within or upon any building, structure, facility or fixture.
“Repayment
Date” shall have the meaning given such term in
Section 2.11.
“Required
Lenders” shall mean, at any time, Lenders having Loans
(excluding Swingline Loans), L/C Exposure, Swingline Exposure and unused
Revolving Credit Commitments and Term Loan Commitments representing more than
50% of the sum of all Loans outstanding
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(excluding Swingline Loans), L/C Exposure, Swingline Exposure and
unused Revolving Credit Commitments and
Term Loan Commitments at such time.
“Responsible
Officer” of any person shall mean any executive
officer or Financial Officer of such person and any other officer or similar
official thereof responsible for the administration of the obligations of such
person in respect of this Agreement.
“Restatement
Date” shall mean February 17, 2004.
“Restricted Cash” shall
mean cash and Permitted Investments of the Borrower and the Subsidiaries that
(a) are subject to a Lien permitted under this Agreement or otherwise subject
to restrictions on withdrawal as permitted by this Agreement and (b) would be
shown as “restricted cash” (or with a similar designation) on a consolidated
balance sheet of the Borrower prepared in accordance with GAAP.
“Restricted
Indebtedness” shall mean Indebtedness of Holdings, the
Borrower or any Subsidiary, the payment, prepayment, repurchase or defeasance
of which is restricted under Section 6.09(b).
“Restricted
Payment” shall mean (a) any dividend or other
distribution (whether in cash, securities or other property) with respect to
any Equity Interests in Holdings, the Borrower or any Subsidiary, or any payment
(whether in cash, securities or other property), including any sinking fund or
similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancelation or termination of any Equity Interests in Holdings,
the Borrower or any Subsidiary or any option, warrant or other right to acquire
any such Equity Interests in Holdings, the Borrower or any Subsidiary and (b)
any payment in cash in respect of the principal of, premium (if any) or
interest on, or other amounts in respect of, the Holdings Subordinated Notes.
“Revolving
Credit Borrowing” shall mean a Borrowing comprised of
Revolving Loans.
“Revolving
Credit Commitment” shall mean, with respect to each
Lender, the commitment of such Lender to make Revolving Loans hereunder as set
forth on Schedule 2.01, or in the Assignment and Acceptance pursuant to
which such Lender assumed its Revolving Credit Commitment, as applicable, as
the same may be (a) reduced from time to time pursuant to
Section 2.09, (b) increased by the amount of such Lender’s Incremental
Revolving Credit Commitment and (c) reduced or increased from time to time
pursuant to assignments by or to such Lender pursuant to
Section 9.04. Unless the context
shall otherwise require, after the effectiveness of any Incremental Revolving
Credit Commitment, the term “Revolving Credit Commitment” shall include such
Incremental Revolving Credit Commitment.
“Revolving
Credit Exposure” shall mean, with respect to any
Lender at any time, the aggregate principal amount at such time of all outstanding
Revolving Loans of such Lender, plus
the aggregate amount at such time of such Lender’s L/C Exposure, plus the aggregate amount at such time of
such Lender’s Swingline Exposure.
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“Revolving
Credit Lender” shall mean a Lender with a Revolving
Credit Commitment or an outstanding Revolving Loan.
“Revolving
Credit Maturity Date” shall mean March 27, 2009.
“Revolving
Loans” shall mean the revolving loans made by the
Lenders to the Borrower pursuant to clause (b) of Section 2.01.
“Secured
Parties” shall have the meaning assigned to such term
in the Guarantee and Collateral Agreement.
“Security
Documents” shall mean the Guarantee and Collateral
Agreement, the Custody and Control Agreement and each of the security
agreements, mortgages and other instruments and documents executed and
delivered pursuant to any of the foregoing or pursuant to Section 5.09.
“Senior
Leverage Ratio” shall mean, on any date, the ratio of (a) Net
Senior Debt on such date to (b) Consolidated EBITDA for the period of four
consecutive fiscal quarters most recently ended on or prior to such date.
“SPC”
shall have the meaning assigned to such term in Section 9.04(i).
“Sponsor” shall mean
Welsh, Carson, Anderson & Stowe IX, L.P.
“Stark II” means
Section 1877 of the Social Security Act as set forth at
Section 1395nn of Title 42 of the United States Code, as amended, and the
rules and regulations issued thereunder.
“Statutory
Reserves” shall mean a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including
any marginal, special, emergency or supplemental reserves) expressed as a
decimal established by the Board and any other banking authority, domestic or
foreign, to which the Administrative Agent or any Lender (including any branch,
Affiliate, or other fronting office making or holding a Loan) is subject for
Eurocurrency Liabilities (as defined in Regulation D of the Board). Eurodollar Loans shall be deemed to
constitute Eurocurrency Liabilities (as defined in Regulation D of the
Board) and to be subject to such reserve requirements without benefit of or
credit for proration, exemptions or offsets that may be available from time to
time to any Lender under such Regulation D. Statutory Reserves shall be adjusted automatically on and as of
the effective date of any change in any reserve percentage.
“Subordinated
Notes” shall mean the Borrower’s 10½% Senior
Subordinated Notes due 2013.
“Subordinated
Note Documents” shall mean the indenture dated as of
March 27, 2003, among Holdings, the Borrower, the guarantors party thereto
and U.S. Bank National Association, as trustee, as amended, supplemented or modified
from time to time, under which the Subordinated Notes are issued and all other
instruments, agreements and other documents
24
evidencing or governing the Subordinated Notes or providing for any
Guarantee or other right in respect thereof.
“subsidiary”
shall mean, with respect to any person (herein referred to as the “parent”), any corporation, partnership, association or other business
entity of which securities or other ownership interests representing more than
50% of the equity or more than 50% of the ordinary voting power or more than
50% of the general partnership interests are, at the time any determination is
being made, owned, controlled or held (including, with respect to the Borrower,
any Consolidated Practice, but excluding any Managed Practice).
“Subsidiary”
shall mean any subsidiary of the Borrower.
“Subsidiary
Guarantor” shall mean each Subsidiary listed on
Schedule 1.01(a), and each other Subsidiary that is or becomes a party to
the Guarantee and Collateral Agreement.
“Swingline
Commitment” shall mean the commitment of the Swingline
Lender to make loans pursuant to Section 2.22, as the same may be reduced
from time to time pursuant to Section 2.09 or Section 2.22.
“Swingline
Exposure” shall mean at any time the aggregate
principal amount at such time of all outstanding Swingline Loans. The Swingline Exposure of any Revolving
Credit Lender at any time shall equal its Pro Rata Percentage of the aggregate
Swingline Exposure at such time.
“Swingline
Lender” shall mean Credit Suisse First Boston, in its
capacity as lender of Swingline Loans hereunder.
“Swingline
Loan” shall mean any loan made by the Swingline Lender
pursuant to Section 2.22.
“Synthetic Lease” shall
mean, as to any person, any lease (including leases that may be terminated by
the lessee at any time) of any property (whether real, personal or mixed) (a)
that is accounted for as an operating lease under GAAP and (b) in respect of
which the lessee retains or obtains ownership of the property so leased for
U.S. federal income tax purposes, other than any such lease under which such
person is the lessor.
“Synthetic Lease Obligations”
shall mean, as to any person, an amount equal to the capitalized amount of the
remaining lease payments under any Synthetic Lease that would appear on a
balance sheet of such person in accordance with GAAP if such obligations were
accounted for as Capital Lease Obligations.
“Synthetic
Purchase Agreement” shall mean any swap, derivative or
other agreement or combination of agreements pursuant to which Holdings, the
Borrower or any Subsidiary is or may become obligated to make (a) any payment
in connection with a purchase by any third party from a person other than
Holdings, the Borrower or any Subsidiary of any Equity Interest or Restricted
Indebtedness of Holdings, the Borrower or a Subsidiary or (b) any payment
(other than on account of a permitted purchase by it of any Equity Interest or
Restricted Indebtedness)
25
the amount of which is determined by reference to the price or value at
any time of any Equity Interest or Restricted Indebtedness of Holdings, the
Borrower or a Subsidiary; provided
that no phantom stock or similar plan providing for payments only to current or
former directors, officers or employees of Holdings, the Borrower or the
Subsidiaries (or to their heirs or estates) shall be deemed to be a Synthetic
Purchase Agreement.
“Taxes”
shall mean any and all present or future taxes, levies, imposts, duties,
deductions, charges, liabilities or withholdings imposed by any Governmental
Authority.
“Term
Borrowing” shall mean a Borrowing comprised of Term
Loans.
“Term
Lenders” shall mean those Lenders that have a Term Loan Commitment
or an outstanding Term Loan.
“Term Loan
Commitment” shall mean, with respect to each Lender,
the commitment of such Lender to make Term Loans hereunder as set forth on
Schedule 2.01, or in the Assignment and Acceptance pursuant to which such
Lender assumed its Term Loan Commitment, as applicable, as the same may be (a)
reduced from time to time pursuant to Section 2.09 and (b) reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 9.04.
“Term Loan
Maturity Date” shall mean March 27, 2010.
“Term
Loans” shall mean the term loans made by the Lenders
to the Borrower pursuant to Section 2.01.
“Total
Debt” shall mean, at any time, the total Indebtedness
of the Borrower and the Subsidiaries at such time; provided, however,
that Total Debt shall exclude (a) Indebtedness of the type described in
clause (i) of the definition of such term, except to the extent of any
drawings thereunder not reimbursed within one Business Day, and (b)
Indebtedness in respect of Contingent Notes outstanding at such time (i) to the
extent that such Indebtedness is not reflected as liabilities on the
consolidated balance sheet of the Borrower at such time or (ii) if so
reflected, to the extent of the value of all cash and Permitted Investments in
the Contingent Note Reserve at such time.
“Total
Revolving Credit Commitment” shall mean, at any time,
the aggregate amount of the Revolving Credit Commitments, as in effect at such
time. The initial Total Revolving Credit Commitment is $65,000,000.
“Transactions”
shall mean, collectively, the transactions to occur on the Restatement Date,
including (a) the execution and delivery of the Amendment Agreement,
(b) the borrowing of the Term Loans hereunder, (c) the issuance of
the Additional Subordinated Notes, (d) the prepayment of the Existing Term
Loans, together with accrued interest thereon, and (e) the payment of all
related fees and expenses.
26
“Type”,
when used in respect of any Loan or Borrowing, shall refer to the Rate by
reference to which interest on such Loan or on the Loans comprising such
Borrowing is determined. For purposes
hereof, the term “Rate” shall include the Adjusted LIBO
Rate and the Alternate Base Rate.
“Unrestricted
Cash” shall mean all cash and Permitted Investments held by the
Borrower or a Subsidiary Guarantor that (a) is not Restricted Cash and (b)
is not subject to any Lien (other than a Lien in favor of the Secured Parties
created hereunder or under the Security Documents or customary setoff rights
and Liens in favor of a deposit account bank, custodian or securities
intermediary); provided, however, that for purposes of the
definitions of the terms “Net Senior Debt” and “Net Total Debt”, Unrestricted
Cash at any time shall be limited to the amount thereof, if any, in excess of
$10,000,000 and less than $30,000,000.
“Voluntary
Prepayment” shall mean a prepayment of principal of Term Loans
pursuant to Section 2.12 in any year to the extent that such prepayment
reduces the scheduled installments of principal due in respect of Term Loans as
set forth in Section 2.11(a) in any subsequent year.
“wholly
owned Subsidiary” of any person shall mean a
subsidiary of such person of which securities (except for directors’ qualifying
shares) or other ownership interests representing 100% of the Equity Interests
are, at the time any determination is being made, owned, controlled or held by
such person or one or more wholly owned Subsidiaries of such person or by such
person and one or more wholly owned Subsidiaries of such person.
“Withdrawal
Liability” shall mean liability to a Multiemployer
Plan as a result of a complete or partial withdrawal from such Multiemployer
Plan, as such terms are defined in Part I of Subtitle E of
Title IV of ERISA.
SECTION 1.02. Terms Generally. The definitions in Section 1.01 shall
apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any
pronoun shall include the corresponding masculine, feminine and neuter
forms. The words “include”, “includes”
and “including” shall be deemed to be followed by the phrase “without
limitation”. The word “will” shall be
construed to have the same meaning and effect as the word “shall”; and the
words “asset” and “property” shall be construed as having the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights. All references herein to Articles, Sections,
Exhibits and Schedules shall be deemed references to Articles and Sections of,
and Exhibits and Schedules to, this Agreement unless the context shall
otherwise require. Except as otherwise
expressly provided herein, (a) any reference in this Agreement to any Loan
Document shall mean such document as amended, restated, supplemented or
otherwise modified from time to time and (b) all terms of an accounting or
financial nature shall be construed in accordance with GAAP, as in effect from
time to time; provided, however, that if the Borrower notifies the
Administrative Agent that the Borrower wishes to amend any covenant in
Article VI or any related definition to eliminate the effect of any change
in GAAP occurring after the date of this Agreement on the operation of such covenant
(or if the Administrative Agent notifies the Borrower that the Required Lenders
wish to amend Article VI or any related definition for such purpose), then
the Borrower’s compliance with such covenant shall be determined on the basis
of GAAP in effect
27
immediately
before the relevant change in GAAP became effective, until either such notice
is withdrawn or such covenant is amended in a manner satisfactory to the
Borrower and the Required Lenders. All
references herein to the “knowledge” of Holdings or the Borrower shall be
deemed to refer to the actual knowledge of any executive officer or Financial
Officer of Holdings or the Borrower.
SECTION 1.03. Pro Forma Calculations. With respect to any period during which any
Permitted Acquisition or Asset Sale occurs as permitted pursuant to the terms
hereof, the Leverage Ratio, the Senior Leverage Ratio, the Net Leverage Ratio,
the Interest Coverage Ratio and the Fixed Charge Coverage Ratio shall be
calculated with respect to such period and such Permitted Acquisition or Asset
Sale on a Pro Forma Basis.
SECTION 1.04. Classification of Loans and Borrowings. For purposes of this Agreement, Loans may be classified and
referred to by Class (e.g., a
“Revolving Loan”) or by Type (e.g.,
a “Eurocurrency Loan”) or by Class and Type (e.g.,
a “Eurocurrency Revolving Loan”).
Borrowings also may be classified and referred to by Class (e.g., a “Revolving Borrowing”) or by Type
(e.g., a “Eurocurrency
Borrowing”) or by Class and Type (e.g.,
a “Eurocurrency Revolving Borrowing”).
SECTION 1.05. Bank Indebtedness. The Loans and other Obligations under the
Loan Documents collectively constitute “Bank Indebtedness”, and this Agreement
and the other Loan Documents collectively constitute the “Credit Agreement”,
for all purposes of the Subordinated Note Documents. The Loans and other Obligations under the Loan Documents
collectively shall constitute designated senior indebtedness in any indenture
or other definitive documentation for any Additional Subordinated Debt.
SECTION 2.01. Commitments. Subject to the terms and conditions and
relying upon the representations and warranties herein set forth, each Lender
agrees, severally and not jointly, (a) to make a Term Loan to the Borrower on
the Restatement Date in a principal amount not to exceed its Term Loan
Commitment, and (b) to make Revolving Loans to the Borrower, at any time and
from time to time on or after the date hereof, and until the earlier of the Revolving
Credit Maturity Date and the termination of the Revolving Credit Commitment of
such Lender in accordance with the terms hereof, in an aggregate principal
amount at any time outstanding that will not result in such Lender’s Revolving
Credit Exposure exceeding such Lender’s Revolving Credit Commitment. Within the limits set forth in clause (b) of
the preceding sentence and subject to the terms, conditions and limitations set
forth herein, the Borrower may borrow, pay or prepay and reborrow Revolving Loans.
Amounts paid or prepaid in respect of Term Loans may not be reborrowed. Holdings, the Borrower and the Lenders
acknowledge the making of Revolving Loans prior to the Restatement Date in
accordance with the terms of the Existing Credit Agreement and agree that such
Revolving Loans, if any, outstanding on the Restatement
28
Date shall
continue to be outstanding pursuant to the terms and conditions of this
Agreement and the other Loan Documents.
SECTION 2.02. Loans. (a) Each Loan (other than Swingline Loans)
shall be made as part of a Borrowing consisting of Loans made by the Lenders
ratably in accordance with their applicable Commitments; provided, however,
that the failure of any Lender to make any Loan shall not in itself relieve any
other Lender of its obligation to lend hereunder (it being understood, however,
that no Lender shall be responsible for the failure of any other Lender to make
any Loan required to be made by such other Lender). Except for Loans deemed made pursuant to Section 2.02(f),
the Loans comprising any Borrowing shall be in an aggregate principal amount
that is (i) with respect to Eurodollar Loans, an integral multiple of
$1,000,000 and not less than $3,000,000 or (ii) with respect to ABR Loans, (A)
an integral multiple of $1,000,000 and not less than $1,000,000 or (B) equal to
the remaining available balance of the applicable Commitments.
(b)
Subject to Sections 2.08 and 2.15, each Borrowing shall be comprised
entirely of ABR Loans or Eurodollar Loans as the Borrower may request pursuant
to Section 2.03. Each Lender may
at its option make any Eurodollar Loan by causing any domestic or foreign
branch or Affiliate of such Lender to make such Loan; provided that any exercise
of such option shall not affect the obligation of the Borrower to repay such
Loan in accordance with the terms of this Agreement. Borrowings of more than one Type may be outstanding at the same
time; provided,
however,
that the Borrower shall not be entitled to request any Borrowing that, if made,
would result in more than eight Eurodollar Borrowings outstanding hereunder at
any time. For purposes of the
foregoing, Borrowings having different Interest Periods, regardless of whether
they commence on the same date, shall be considered separate Borrowings.
(c)
Except with respect to Loans made pursuant to Section 2.02(f), each
Lender shall make each Loan to be made by it hereunder on the proposed date
thereof by wire transfer of immediately available funds to such account in New
York City as the Administrative Agent may designate not later than 1:00 p.m.,
New York City time, in the case of a Eurodollar Borrowing, or 1:00 p.m.,
New York City time, in the case of an ABR Borrowing, and the Administrative
Agent shall promptly transfer the amounts so received to an account designated
by the Borrower in the applicable Borrowing Request or, if a Borrowing shall
not occur on such date because any condition precedent herein specified shall
not have been met, return the amounts so received to the respective Lenders.
(d)
Unless the Administrative Agent shall have received notice from a Lender
prior to the date of any Borrowing that such Lender will not make available to
the Administrative Agent such Lender’s portion of such Borrowing, the
Administrative Agent may assume that such Lender has made such portion
available to the Administrative Agent on the date of such Borrowing in
accordance with paragraph (c) above and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If the
Administrative Agent shall have so made funds available then, to the extent
that such Lender shall not have made such portion available to the
Administrative Agent, such Lender and the Borrower severally agree to repay to
the Administrative Agent forthwith on demand such corresponding amount together
with interest thereon, for each day from the date
29
such amount is
made available to the Borrower until the date such amount is repaid to the
Administrative Agent at (i) in the case of the Borrower, the interest rate
applicable at the time to the Loans comprising such Borrowing and (ii) in the
case of such Lender, a rate determined by the Administrative Agent to represent
its cost of overnight or short-term funds (which determination shall be
conclusive absent manifest error). If
such Lender shall repay to the Administrative Agent such corresponding amount,
such amount shall constitute such Lender’s Loan as part of such Borrowing for
purposes of this Agreement.
(e)
Notwithstanding any other provision of this Agreement, the Borrower
shall not be entitled to request any Revolving Credit Borrowing if the Interest
Period requested with respect thereto would end after the Revolving Credit
Maturity Date.
(f)
If the Issuing Bank shall not have received from the Borrower the
payment required to be made by Section 2.23(e) within the time specified
in such Section, the Issuing Bank will promptly notify the Administrative Agent
of the L/C Disbursement and the Administrative Agent will promptly notify each
Revolving Credit Lender of such L/C Disbursement and its Pro Rata Percentage
thereof. Each Revolving Credit Lender
shall pay by wire transfer of immediately available funds to the Administrative
Agent not later than 2:00 p.m., New York City time, on such date (or, if such
Revolving Credit Lender shall have received such notice later than 12:00
(noon), New York City time, on any day, not later than 10:00 a.m., New York
City time, on the immediately following Business Day), an amount equal to such
Lender’s Pro Rata Percentage of such L/C Disbursement (it being understood that
such amount shall be deemed to constitute an ABR Revolving Loan of such Lender
and such payment shall be deemed to have reduced the L/C Exposure), and the
Administrative Agent will promptly pay to the Issuing Bank amounts so received
by it from the Revolving Credit Lenders.
The Administrative Agent will promptly pay to the Issuing Bank any
amounts received by it from the Borrower pursuant to Section 2.23(e) prior
to the time that any Revolving Credit Lender makes any payment pursuant to this
paragraph (f); any such amounts received by the Administrative Agent thereafter
will be promptly remitted by the Administrative Agent to the Revolving Credit
Lenders that shall have made such payments and to the Issuing Bank, as their
interests may appear. If any Revolving
Credit Lender shall not have made its Pro Rata Percentage of such L/C
Disbursement available to the Administrative Agent as provided above, such
Lender and the Borrower severally agree to pay interest on such amount, for
each day from and including the date such amount is required to be paid in
accordance with this paragraph to but excluding the date such amount is paid,
to the Administrative Agent for the account of the Issuing Bank at (i) in the
case of the Borrower, a rate per annum equal to the interest rate applicable to
Revolving Loans pursuant to Section 2.06(a), and (ii) in the case of such
Lender, for the first such day, the Federal Funds Effective Rate, and for each
day thereafter, the Alternate Base Rate.
SECTION 2.03. Borrowing Procedure. In order to request a Borrowing (other than
a Swingline Loan or a deemed Borrowing pursuant to Section 2.02(f), as to
which this Section 2.03 shall not apply), the Borrower shall hand deliver
or fax to the Administrative Agent a duly completed Borrowing Request (or shall
make such request by telephone promptly followed by the hand delivery or fax of
a duly completed Borrowing Request) (a) in the case of a Eurodollar Borrowing,
not later than 12:00 (noon), New York City time, three Business Days
30
before a
proposed Borrowing, and (b) in the case of an ABR Borrowing, not later than
12:00 (noon), New York City time, one Business Day before a proposed
Borrowing. Each Borrowing Request shall
be irrevocable, shall be signed by or on behalf of the Borrower and shall
specify the following information: (i) whether the Borrowing then being
requested is to be a Term Borrowing or a Revolving Credit Borrowing, and
whether such Borrowing is to be a Eurodollar Borrowing or an ABR Borrowing;
(ii) the date of such Borrowing (which shall be a Business Day);
(iii) the number and location of the account to which funds are to be
disbursed (which shall be an account that complies with the requirements of
Section 2.02(c)); (iv) the amount of such Borrowing; and (v) if
such Borrowing is to be a Eurodollar Borrowing, the Interest Period with
respect thereto; provided, however, that, notwithstanding any
contrary specification in any Borrowing Request, each requested Borrowing shall
comply with the requirements set forth in Section 2.02. If no election as to the Type of Borrowing
is specified in any such notice, then the requested Borrowing shall be an ABR
Borrowing. If no Interest Period with
respect to any Eurodollar Borrowing is specified in any such notice, then the
Borrower shall be deemed to have selected an Interest Period of one month’s
duration. The Administrative Agent
shall promptly advise the applicable Lenders of any notice given pursuant to
this Section 2.03 (and the contents thereof), and of each Lender’s portion
of the requested Borrowing.
SECTION 2.04. Evidence of Debt; Repayment of Loans. (a)
The Borrower hereby unconditionally promises to pay to the Administrative Agent
for the account of each Lender (i) the principal amount of each Term Loan of
such Lender as provided in Section 2.11 and (ii) the then unpaid principal
amount of each Revolving Loan of such Lender on the Revolving Credit Maturity
Date. The Borrower hereby promises to
pay to the Swingline Lender the then unpaid principal amount of each Swingline
Loan on the Revolving Credit Maturity Date.
(b)
Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to such Lender
resulting from each Loan made by such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time under this Agreement.
(c)
The Administrative Agent shall maintain accounts in which it will record
(i) the amount of each Loan made hereunder, the Type thereof and the Interest Period
applicable thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder
and (iii) the amount of any sum received by the Administrative Agent hereunder
from the Borrower or any Guarantor and each Lender’s share thereof.
(d)
The entries made in the accounts maintained pursuant to paragraphs (b)
and (c) above shall be prima facie evidence of the existence and
amounts of the obligations therein recorded; provided, however,
that the failure of any Lender or the Administrative Agent to maintain such
accounts or any error therein shall not in any manner affect the obligations of
the Borrower to repay the Loans in accordance with their terms.
(e)
Any Lender may request that Loans made by it hereunder be evidenced by a
promissory note. In such event, the
Borrower shall execute and deliver to such Lender a promissory note payable to
such Lender and its registered assigns and in a form and substance
31
reasonably
acceptable to the Administrative Agent and the Borrower. Notwithstanding any other provision of this
Agreement, in the event any Lender shall request and receive such a promissory
note, the interests represented by such note shall at all times (including
after any assignment of all or part of such interests pursuant to
Section 9.04) be represented by one or more promissory notes payable to
the payee named therein or its registered assigns.
SECTION 2.05. Fees. (a) The Borrower agrees to pay to each
Lender, through the Administrative Agent, on the last Business Day of March,
June, September and December in each year and on each date on which
any Revolving Credit Commitment of such Lender shall expire or be terminated as
provided herein, a commitment fee (a “Commitment
Fee”) equal to 0.50% per annum on the daily difference between the
Revolving Credit Commitment of such Lender and the Revolving Credit Exposure of
such Lender (other than the Swingline Exposure) during the preceding quarter
(or other period commencing with the Closing Date or ending with the Revolving
Credit Maturity Date or the date on which the Revolving Credit Commitments of
such Lender shall expire or be terminated).
All Commitment Fees shall be computed on the basis of the actual number
of days elapsed in a year of 360 days.
The Commitment Fee due to each Lender shall commence to accrue on the
Closing Date and shall cease to accrue on the date on which the Revolving
Credit Commitment of such Lender shall expire or be terminated as provided
herein. For purposes of calculating
Commitment Fees only, no portion of the Revolving Credit Commitments shall be
deemed utilized under Section 2.17 as a result of outstanding Swingline
Loans.
(b)
The Borrower agrees to pay to the Administrative Agent, for its own
account, the administration fees set forth in the Fee Letter at the times and
in the amounts specified therein (the “Administrative Agent Fees”).
(c)
The Borrower agrees to pay (i) to each Revolving Credit Lender, through
the Administrative Agent, on the last Business Day of March, June,
September and December of each year and on the date on which the
Revolving Credit Commitment of such Lender shall be terminated as provided
herein, a fee (an “L/C Participation Fee”) at a rate per
annum equal to the Applicable Percentage from time to time used to determine
the interest rate on Revolving Credit Borrowings comprised of Eurodollar Loans
pursuant to Section 2.06, calculated on such Lender’s Pro Rata Percentage
of the daily aggregate L/C Exposure (excluding the portion thereof attributable
to unreimbursed L/C Disbursements) during the preceding quarter (or other
period commencing with the date hereof or ending with the Revolving Credit
Maturity Date or the date on which the Revolving Credit Commitments of all
Lenders shall have been terminated); provided
that, if such Lender continues to have any L/C Exposure after its Revolving
Credit Commitment terminates, then the L/C Participation Fee shall continue to
accrue (and be payable on demand) on such Lender’s Pro Rata Percentage of the
daily aggregate L/C Exposure from and including the date on which its Revolving
Credit Commitment terminates to and including the date on which such Lender
ceases to have any L/C Exposure and (ii) to the Issuing Bank with respect to
each Letter of Credit issued by it, on the last Business Day of March, June,
September and December of each year and on the date on which all the
Letters of Credit issued by such Issuing Bank shall have been terminated or
expired, (x) a fronting fee equal to 0.125% per annum on the aggregate face
amount of such Letter of Credit outstanding during the preceding
32
quarter (or
other period commencing on the Closing Date or ending on the date that all such
Letters of Credit have been terminated or expired) and (y) the standard
issuance and drawing fees specified from time to time by the Issuing Bank (the
“Issuing
Bank Fees”). All L/C
Participation Fees and Issuing Bank Fees shall be computed on the basis of the
actual number of days elapsed in a year of 360 days.
(d)
All Fees shall be paid on the dates due, in immediately available funds,
to the Administrative Agent for distribution, if and as appropriate, among the
Lenders, except that the Issuing Bank Fees shall be paid directly to the
Issuing Bank. Once paid, none of the
Fees shall be refundable under any circumstances.
SECTION 2.06. Interest on Loans. (a) Subject to the provisions of
Section 2.07, the Loans comprising each ABR Borrowing, including each
Swingline Loan, shall bear interest (computed on the basis of the actual number
of days elapsed over a year of 365 or 366 days, as the case may be, when the
Alternate Base Rate is determined by reference to the Prime Rate and over a
year of 360 days at all other times and calculated from and including the date
of such Borrowing to but excluding the date of repayment thereof) at a rate per
annum equal to the Alternate Base Rate plus the Applicable Percentage in effect
from time to time.
(b)
Subject to the provisions of Section 2.07, the Loans comprising
each Eurodollar Borrowing shall bear interest (computed on the basis of the
actual number of days elapsed over a year of 360 days) at a rate per annum
equal to the Adjusted LIBO Rate for the Interest Period in effect for such
Borrowing plus the Applicable Percentage in effect from time to time.
(c)
Interest on each Loan shall be payable to the Administrative Agent on
the Interest Payment Dates applicable to such Loan except as otherwise provided
in this Agreement. The applicable
Alternate Base Rate or Adjusted LIBO Rate for each Interest Period or day
within an Interest Period, as the case may be, shall be determined by the Administrative
Agent, and such determination shall be conclusive absent manifest error.
SECTION 2.07. Default Interest. If the Borrower shall default in the
payment of any principal of or interest on any Loan or any other amount due
hereunder, by acceleration or otherwise, or under any other Loan Document,
then, until such defaulted amount shall have been paid in full, to the extent
permitted by law, all amounts outstanding under this Agreement and the other
Loan Documents shall bear interest (after as well as before judgment), payable
on demand, (a) in the case of principal, at the rate otherwise applicable to
such Loan pursuant to Section 2.06 plus 2.00% per annum and (b) in all
other cases, at a rate per annum (computed on the basis of the actual number of
days elapsed over a year of 365 or 366 days, as the case may be, when
determined by reference to the Prime Rate and over a year of 360 days at all
other times) equal to the rate that would be applicable to an ABR Revolving
Loan plus 2.00% per annum.
SECTION 2.08. Alternate Rate of Interest. In
the event, and on each occasion, that on the day two Business Days prior to the
commencement of any Interest Period for a Eurodollar Borrowing the
Administrative Agent shall have determined that dollar deposits in the
principal amounts of the Loans comprising such Borrowing are not generally
available in the London interbank market, or that the rates at which such
dollar deposits are being offered will not
33
adequately and
fairly reflect the cost to any Lender of making or maintaining its Eurodollar
Loan during such Interest Period, or that reasonable means do not exist for
ascertaining the Adjusted LIBO Rate, the Administrative Agent shall, as soon as
practicable thereafter, give written or fax notice of such determination to the
Borrower and the Lenders. In the event
of any such determination, until the Administrative Agent shall have advised
the Borrower and the Lenders that the circumstances giving rise to such notice
no longer exist, any request by the Borrower for a Eurodollar Borrowing
pursuant to Section 2.03 or 2.10 shall be deemed to be a request for an
ABR Borrowing. Each determination by
the Administrative Agent under this Section 2.08 shall be conclusive
absent manifest error.
SECTION 2.09. Termination and Reduction of Commitments. (a) The Term Loan Commitments shall automatically terminate at
5:00 p.m., New York City time, on the Restatement Date. The Revolving Credit
Commitments, the Swingline Commitment and the L/C Commitment shall automatically
terminate on the Revolving Credit Maturity Date.
(b)
Upon at least three Business Days’ prior irrevocable written or fax
notice to the Administrative Agent, the Borrower may at any time in whole
permanently terminate, or from time to time in part permanently reduce, the
Term Loan Commitments or the Revolving Credit Commitments; provided, however,
that (i) each partial reduction of the Term Loan Commitments or the Revolving
Credit Commitments shall be in an integral multiple of $1,000,000 and in a
minimum amount of $3,000,000 and (ii) the Total Revolving Credit Commitment
shall not be reduced to an amount that is less than the sum of the Aggregate
Revolving Credit Exposure at the time.
(c)
Each reduction in the Term Loan Commitments or the Revolving Credit
Commitments hereunder shall be made ratably among the Lenders in accordance
with their respective applicable Commitments.
The Borrower shall pay to the Administrative Agent for the account of
the applicable Lenders, on the date of each termination or reduction, the
Commitment Fees on the amount of the Commitments so terminated or reduced
accrued to but excluding the date of such termination or reduction.
SECTION 2.10. Conversion and Continuation of Borrowings. The Borrower shall have the right at any time upon prior
irrevocable notice to the Administrative Agent (a) not later than
12:00 (noon), New York City time, one Business Day prior to conversion, to
convert any Eurodollar Borrowing into an ABR Borrowing, (b) not later than
12:00 (noon), New York City time, three Business Days prior to conversion or
continuation, to convert any ABR Borrowing into a Eurodollar Borrowing or to
continue any Eurodollar Borrowing as a Eurodollar Borrowing for an additional
Interest Period, and (c) not later than 12:00 (noon), New York City time,
three Business Days prior to conversion, to convert the Interest Period with
respect to any Eurodollar Borrowing to another permissible Interest Period,
subject in each case to the following:
(i) each conversion or continuation shall be made pro rata among the
Lenders in accordance with the respective principal amounts of the Loans
comprising the converted or continued Borrowing;
34
(ii) if less than all the outstanding principal amount of any Borrowing
shall be converted or continued, then each resulting Borrowing shall satisfy
the limitations specified in Sections 2.02(a) and 2.02(b) regarding the
principal amount and maximum number of Borrowings of the relevant Type;
(iii) each conversion shall be effected by each Lender and the
Administrative Agent by recording for the account of such Lender the new Loan
of such Lender resulting from such conversion and reducing the Loan (or portion
thereof) of such Lender being converted by an equivalent principal amount;
accrued interest on any Eurodollar Loan (or portion thereof) being converted
shall be paid by the Borrower at the time of conversion;
(iv) if any Eurodollar Borrowing is converted at a time other than the
end of the Interest Period applicable thereto, the Borrower shall pay, upon
demand, any amounts due to the Lenders pursuant to Section 2.16;
(v) any portion of a Borrowing maturing or required to be repaid in
less than one month may not be converted into or continued as a Eurodollar
Borrowing;
(vi) any portion of a Eurodollar Borrowing that cannot be converted
into or continued as a Eurodollar Borrowing by reason of the immediately
preceding clause shall be automatically converted at the end of the Interest
Period in effect for such Borrowing into an ABR Borrowing;
(vii) no Interest Period may be selected for any Eurodollar Term
Borrowing that would end later than a Repayment Date occurring on or after the
first day of such Interest Period if, after giving effect to such selection,
the aggregate outstanding amount of (A) the Eurodollar Term Borrowings with
Interest Periods ending on or prior to such Repayment Date and (B) the ABR Term
Borrowings would not be at least equal to the principal amount of Term
Borrowings to be paid on such Repayment Date; and
(viii) upon notice to the Borrower from the Administrative Agent given
at the request of the Required Lenders, after the occurrence and during the
continuance of a Default or Event of Default, no outstanding Loan may be
converted into, or continued as, a Eurodollar Loan.
Each notice pursuant to this Section 2.10 shall be irrevocable and
shall refer to this Agreement and specify (i) the identity and amount of the
Borrowing that the Borrower requests be converted or continued, (ii) whether
such Borrowing is to be converted to or continued as a Eurodollar Borrowing or
an ABR Borrowing, (iii) if such notice requests a conversion, the date of such
conversion (which shall be a Business Day) and (iv) if such Borrowing is to be
converted to or continued as a Eurodollar Borrowing, the Interest Period with
respect thereto. If no Interest Period
is specified in any such notice with respect to any conversion to or
continuation as a Eurodollar Borrowing, the Borrower shall be deemed to have
selected an Interest Period of one month’s duration. The Administrative Agent shall advise the Lenders of any notice
given pursuant to this Section 2.10 and of each Lender’s portion of any
converted or continued Borrowing. If
the Borrower shall not have given notice in accordance with this
Section 2.10 to
35
continue any Eurodollar Borrowing into a subsequent Interest Period
(and shall not otherwise have given notice in accordance with this Section 2.10
to convert such Borrowing), such Borrowing shall, at the end of the Interest
Period applicable thereto (unless repaid pursuant to the terms hereof),
automatically be converted into an ABR Borrowing.
SECTION 2.11. Repayment of Term Borrowings.
(a) The Borrower shall pay to the Administrative Agent, for the account
of the Lenders, on the dates set forth below, or if any such date is not a
Business Day, on the next preceding Business Day (each such date being called a
“Repayment Date”), a principal amount of the Term Loans (as adjusted from time
to time pursuant to Sections 2.11(b), 2.12 and 2.13(g)) equal to the
amount set forth below for such date, together in each case with accrued and
unpaid interest on the principal amount to be paid to but excluding the date of
such payment:
|
Repayment
Date
|
|
Amount
|
|
|
|
|
|
|
|
|
June 30,
2004
|
|
$
|
312,500
|
|
|
September 30,
2004
|
|
$
|
312,500
|
|
|
December 31,
2004
|
|
$
|
312,500
|
|
|
March 31,
2005
|
|
$
|
312,500
|
|
|
June 30,
2005
|
|
$
|
312,500
|
|
|
September 30,
2005
|
|
$
|
312,500
|
|
|
December 31,
2005
|
|
$
|
312,500
|
|
|
March 31,
2006
|
|
$
|
312,500
|
|
|
June 30,
2006
|
|
$
|
312,500
|
|
|
September 30,
2006
|
|
$
|
312,500
|
|
|
December 31,
2006
|
|
$
|
312,500
|
|
|
March 31,
2007
|
|
$
|
312,500
|
|
|
June 30,
2007
|
|
$
|
312,500
|
|
|
September 30,
2007
|
|
$
|
312,500
|
|
|
December 31,
2007
|
|
$
|
312,500
|
|
|
March 31,
2008
|
|
$
|
312,500
|
|
|
June 30,
2008
|
|
$
|
312,500
|
|
|
September 30,
2008
|
|
$
|
312,500
|
|
|
December 31,
2008
|
|
$
|
312,500
|
|
|
March 31,
2009
|
|
$
|
312,500
|
|
|
June 30,
2009
|
|
$
|
29,687,500
|
|
|
September 30,
2009
|
|
$
|
29,687,500
|
|
|
December 31,
2009
|
|
$
|
29,687,500
|
|
|
Term Loan
Maturity Date
|
|
$
|
29,687,500
|
|
(b)
In the event and on each occasion that any Term Loan Commitments shall
be reduced or shall expire or terminate other than as a result of the making of
a Term Loan, the installments payable on each Repayment Date shall be reduced
pro rata by an aggregate amount equal to the amount of such reduction,
expiration or termination.
36
(c)
To the extent not previously paid, all Term Loans shall be due and
payable on the Term Loan Maturity Date, together with accrued and unpaid
interest on the principal amount to be paid to but excluding the date of
payment.
(d)
All repayments pursuant to this Section 2.11 shall be subject to
Section 2.16, but shall otherwise be without premium or penalty.
SECTION 2.12. Optional Prepayments. (a) The Borrower shall have the right at any
time and from time to time to prepay any Borrowing, in whole or in part, upon
at least three Business Days’ prior written or fax notice (or telephone notice
promptly confirmed by written or fax notice) in the case of Eurodollar Loans,
or written or fax notice (or telephone notice promptly confirmed by written or
fax notice) at least one Business Day prior to the date of prepayment in the
case of ABR Loans, to the Administrative Agent before 12:00 (noon), New York
City time; provided, however, that each partial prepayment
shall be in an amount that is (i) in the case of Eurodollar Loans, an integral
multiple of $1,000,000 and not less than $3,000,000, and (ii) in the case of
ABR Loans, an integral multiple of $1,000,000 and not less than $1,000,000.
(b)
Optional prepayments of Term Loans shall be applied in chronological
order to the remaining scheduled installments of principal due in respect of
the Term Loans as set forth in Section 2.11(a).
(c)
Each notice of prepayment shall specify the prepayment date and the
principal amount of each Borrowing (or portion thereof) to be prepaid, shall be
irrevocable and shall commit the Borrower to prepay such Borrowing by the
amount stated therein on the date stated therein. All prepayments under this Section 2.12 shall be subject to
Section 2.16 but otherwise without premium or penalty. All prepayments under this Section 2.12
shall be accompanied by accrued and unpaid interest on the principal amount to
be prepaid to but excluding the date of payment.
SECTION 2.13. Mandatory Prepayments. (a) In the event of any termination of all
the Revolving Credit Commitments, the Borrower shall, on the date of such
termination, repay or prepay all its outstanding Revolving Credit Borrowings
and all outstanding Swingline Loans and replace all outstanding Letters of
Credit and/or deposit an amount equal to the L/C Exposure in a cash collateral
account established with the Administrative Agent for the benefit of the
Secured Parties. If as a result of any partial reduction of the Revolving
Credit Commitments the Aggregate Revolving Credit Exposure would exceed the
Total Revolving Credit Commitment after giving effect thereto, then the
Borrower shall, on the date of such reduction, repay or prepay Revolving Credit
Borrowings or Swingline Loans (or a combination thereof) and/or replace or cash
collateralize outstanding Letters of Credit in an amount sufficient to
eliminate such excess.
(b)
Not later than the third Business Day following the receipt of Net Cash
Proceeds in respect of any Asset Sale, the Borrower shall apply 100% of the Net
Cash Proceeds received with respect thereto to prepay outstanding Term Loans in
accordance with Section 2.13(f); provided,
however that the Borrower shall
not be required to comply with this Section 2.13(b) with respect to the
first $500,000 of Net Cash Proceeds from Asset Sales received in each fiscal
year.
37
(c)
In the event and on each occasion that an Equity Issuance occurs, the
Borrower shall, substantially simultaneously with (and in any event not later
than the third Business Day next following) the occurrence of such Equity
Issuance, apply 50% of the Net Cash Proceeds therefrom to prepay outstanding
Term Loans in accordance with Section 2.13(f).
(d)
No later than the earlier of (i) 100 days after the end of each
fiscal year of the Borrower, commencing with the fiscal year ending on December 31,
2004, and (ii) the third Business Day following the date on which the
financial statements with respect to such fiscal year are delivered pursuant to
Section 5.04(a), the Borrower shall prepay outstanding Term Loans in
accordance with Section 2.13(f) in an aggregate principal amount equal to
50% of Excess Cash Flow for the fiscal year then ended, less the aggregate
amount of all Voluntary Prepayments made during such fiscal year.
(e)
In the event that any Loan Party or any subsidiary of a Loan Party shall
receive Net Cash Proceeds from the issuance or other disposition of
Indebtedness for money borrowed of any Loan Party or any subsidiary of a Loan
Party (other than Indebtedness for money borrowed permitted pursuant to
Section 6.01 (other than Section 6.01(m))), the Borrower shall,
substantially simultaneously with (and in any event not later than the third
Business Day next following) the receipt of such Net Cash Proceeds by such Loan
Party or such subsidiary, apply an amount equal to 100% of such Net Cash
Proceeds to prepay outstanding Term Loans in accordance with
Section 2.13(f); provided, however, that, if at the
time of such issuance and after giving effect thereto (and to the proposed use
of the proceeds thereof), the Net Leverage Ratio would be less than 5.25 to
1.00, then only 50% of such Net Cash Proceeds shall be required to be so
applied.
(f)
Mandatory prepayments of outstanding Term Loans under this Agreement
shall be applied in chronological order to the remaining scheduled installments
of principal due in respect of the Term Loans as set forth in
Section 2.11(a).
(g)
The Borrower shall deliver to the Administrative Agent, at the time of
each prepayment required under this Section 2.13, (i) a certificate signed
by a Financial Officer of the Borrower setting forth in reasonable detail the
calculation of the amount of such prepayment and (ii) to the extent
practicable, at least three days prior written notice of such prepayment. Each notice of prepayment shall specify the
prepayment date, the Type of each Loan being prepaid and the principal amount
of each Loan (or portion thereof) to be prepaid. All prepayments of Borrowings under this Section 2.13 shall
be subject to Section 2.16, but shall otherwise be without premium or
penalty.
SECTION 2.14. Reserve Requirements; Change in Circumstances. (a) Notwithstanding any other provision of
this Agreement, if any Change in Law shall impose, modify or deem applicable
any reserve, special deposit or similar requirement against assets of, deposits
with or for the account of or credit extended by any Lender or the Issuing Bank
(except any such reserve requirement which is reflected in the Adjusted LIBO
Rate) or shall impose on such Lender or the Issuing Bank or the London
interbank market any other condition affecting this Agreement or Eurodollar
Loans made by such Lender or any Letter of Credit or participation therein, and
the result of any of the foregoing shall be to increase the cost to such Lender
or the Issuing Bank of
38
making or
maintaining any Eurodollar Loan or increase the cost to any Lender of issuing
or maintaining any Letter of Credit or purchasing or maintaining a
participation therein or to reduce the amount of any sum received or receivable
by such Lender or the Issuing Bank hereunder (whether of principal, interest or
otherwise), in each case, by an amount deemed by such Lender or the Issuing
Bank to be material, then the Borrower will pay to such Lender or the Issuing
Bank, as the case may be, upon demand such additional amount or amounts as will
compensate such Lender or the Issuing Bank, as the case may be, for such
additional costs incurred or reduction suffered.
(b)
If any Lender or the Issuing Bank shall have determined that any Change
in Law regarding capital adequacy has or would have the effect of reducing the
rate of return on such Lender’s or the Issuing Bank’s capital or on the capital
of such Lender’s or the Issuing Bank’s holding company, if any, as a
consequence of this Agreement or the Loans made or participations in Letters of
Credit purchased by such Lender pursuant hereto or the Letters of Credit issued
by the Issuing Bank pursuant hereto to a level below that which such Lender or
the Issuing Bank or such Lender’s or the Issuing Bank’s holding company could
have achieved but for such Change in Law (taking into consideration such
Lender’s or the Issuing Bank’s policies and the policies of such Lender’s or
the Issuing Bank’s holding company with respect to capital adequacy) by an
amount deemed by such Lender or the Issuing Bank to be material, then from time
to time the Borrower shall pay to such Lender or the Issuing Bank, as the case
may be, such additional amount or amounts as will compensate such Lender or the
Issuing Bank or such Lender’s or the Issuing Bank’s holding company for any
such reduction suffered.
(c)
A certificate of a Lender or the Issuing Bank setting forth in
reasonable detail the amount or amounts necessary to compensate such Lender or
the Issuing Bank or its holding company, as applicable, as specified in
paragraph (a) or (b) above shall be delivered to the Borrower and shall be
conclusive absent manifest error. The
Borrower shall pay such Lender or the Issuing Bank the amount shown as due on
any such certificate delivered by it within 10 days after its receipt of the
same.
(d)
Failure or delay on the part of any Lender or the Issuing Bank to demand
compensation for any increased costs or reduction in amounts received or
receivable or reduction in return on capital shall not constitute a waiver of
such Lender’s or the Issuing Bank’s right to demand such compensation; provided
that the Borrower shall not be under any obligation to compensate any Lender or
the Issuing Bank under paragraph (a) or (b) above with respect to increased
costs or reductions with respect to any period prior to the date that is 120
days prior to such request if such Lender or the Issuing Bank knew or could
reasonably have been expected to know of the circumstances giving rise to such
increased costs or reductions and of the fact that such circumstances would
result in a claim for increased compensation by reason of such increased costs
or reductions; provided further that the foregoing limitation shall not
apply to any increased costs or reductions arising out of the retroactive
application of any Change in Law within such 120-day period. The protection of this Section shall be
available to each Lender and the Issuing Bank regardless of any possible
contention of the invalidity or inapplicability of the Change in Law that shall
have occurred or been imposed.
39
SECTION 2.15. Change in Legality. (a) Notwithstanding any other provision of
this Agreement, if any Change in Law shall make it unlawful for any Lender to
make or maintain any Eurodollar Loan or to give effect to its obligations as
contemplated hereby with respect to any Eurodollar Loan, then, by written
notice to the Borrower and to the Administrative Agent:
(i) such Lender may declare that Eurodollar Loans will not thereafter
(for the duration of such unlawfulness) be made by such Lender hereunder (or be
continued for additional Interest Periods and ABR Loans will not thereafter
(for such duration) be converted into Eurodollar Loans), whereupon any request
for a Eurodollar Borrowing (or to convert an ABR Borrowing to a Eurodollar
Borrowing or to continue a Eurodollar Borrowing for an additional Interest
Period) shall, as to such Lender only, be deemed a request for an ABR Loan (or
a request to continue an ABR Loan as such or to convert a Eurodollar Loan into
an ABR Loan, as the case may be), unless such declaration shall be subsequently
withdrawn; and
(ii) such Lender may require that all outstanding Eurodollar Loans made
by it be converted to ABR Loans, in which event all such Eurodollar Loans shall
be automatically converted to ABR Loans as of the effective date of such notice
as provided in paragraph (b) below.
In the event any Lender shall exercise its rights under (i) or (ii)
above, all payments and prepayments of principal that would otherwise have been
applied to repay the Eurodollar Loans that would have been made by such Lender
or the converted Eurodollar Loans of such Lender shall instead be applied to
repay the ABR Loans made by such Lender in lieu of, or resulting from the
conversion of, such Eurodollar Loans.
(b)
For purposes of this Section 2.15, a notice to the Borrower by any
Lender shall be effective as to each Eurodollar Loan made by such Lender, if
lawful, on the last day of the Interest Period then applicable to such
Eurodollar Loan; in all other cases such notice shall be effective on the date
of receipt by the Borrower.
SECTION 2.16. Indemnity. The Borrower shall indemnify each Lender
against any loss or expense that such Lender may sustain or incur as a
consequence of (a) any event, other than a default by such Lender in the
performance of its obligations hereunder, which results in (i) such Lender
receiving or being deemed to receive any amount on account of the principal of
any Eurodollar Loan prior to the end of the Interest Period in effect therefor,
(ii) the conversion of any Eurodollar Loan to an ABR Loan, or the conversion of
the Interest Period with respect to any Eurodollar Loan, in each case other
than on the last day of the Interest Period in effect therefor, or (iii) any
Eurodollar Loan to be made by such Lender (including any Eurodollar Loan to be
made pursuant to a conversion or continuation under Section 2.10) not
being made after notice of such Loan shall have been given by the Borrower
hereunder (any of the events referred to in this clause (a) being called a “Breakage Event”) or (b) any default in the
making of any payment or prepayment required to be made hereunder. In the case of any Breakage Event, such loss
shall include an amount equal to the excess, as reasonably determined by such
Lender, of (i) its cost of obtaining funds for the Eurodollar Loan that is the
subject of such Breakage Event for the period from the date of such Breakage
Event to the last day of the Interest Period in effect (or
40
that would
have been in effect) for such Loan over (ii) the amount of interest likely to
be realized by such Lender in redeploying the funds released or not utilized by
reason of such Breakage Event for such period.
A certificate of any Lender setting forth in reasonable detail any
amount or amounts which such Lender is entitled to receive pursuant to this
Section 2.16 shall be delivered to the Borrower and shall be conclusive
absent manifest error.
SECTION 2.17. Pro Rata Treatment. Except as provided below in this
Section 2.17 with respect to Swingline Loans and as required under
Section 2.15, each Borrowing, each payment or prepayment of principal of
any Borrowing, each payment of interest on the Loans, each payment of the
Commitment Fees or the L/C Participation Fees, each reduction of the Term Loan
Commitments or the Revolving Credit Commitments and each conversion of any
Borrowing to or continuation of any Borrowing as a Borrowing of any Type shall
be allocated pro rata among the Lenders in accordance with their respective
applicable Commitments (or, if such Commitments shall have expired or been
terminated, in accordance with the respective principal amounts of their
outstanding Loans or participations in L/C Disbursements, as applicable). For purposes of determining the available
Revolving Credit Commitments of the Lenders at any time, each outstanding
Swingline Loan shall be deemed to have utilized the Revolving Credit
Commitments of the Lenders (including those Lenders which shall not have made
Swingline Loans) pro rata in accordance with such respective Revolving Credit
Commitments. Each Lender agrees that in
computing such Lender’s portion of any Borrowing to be made hereunder, the
Administrative Agent may, in its discretion, round each Lender’s percentage of
such Borrowing to the next higher or lower whole dollar amount.
SECTION 2.18. Sharing of Setoffs. Each Lender agrees that if it shall,
through the exercise of a right of banker’s lien, setoff or counterclaim
against the Borrower or any other Loan Party, or pursuant to a secured claim
under Section 506 of Title 11 of the United States Code or other security
or interest arising from, or in lieu of, such secured claim, received by such
Lender under any applicable bankruptcy, insolvency or other similar law or
otherwise, or by any other means, obtain payment (voluntary or involuntary) in
respect of any Loan or L/C Disbursement as a result of which the unpaid portion
of its Loans and participations in L/C Disbursements shall be proportionately
less than the unpaid portion of the Loans and participations in L/C
Disbursements of any other Lender, it shall be deemed simultaneously to have
purchased from such other Lender at face value, and shall promptly pay to such
other Lender the purchase price for, a participation in the Loans and L/C
Exposure of such other Lender, so that the aggregate unpaid amount of the Loans
and L/C Exposure and participations in Loans and L/C Exposure held by each
Lender shall be in the same proportion to the aggregate unpaid amount of all
Loans and L/C Exposure then outstanding as the amount of its Loans and L/C
Exposure prior to such exercise of banker’s lien, setoff or counterclaim or
other event was to the amount of all Loans and L/C Exposure outstanding prior
to such exercise of banker’s lien, setoff or counterclaim or other event; provided, however,
that if any such purchase or purchases or adjustments shall be made pursuant to
this Section 2.18 and the payment giving rise thereto shall thereafter be
recovered, such purchase or purchases or adjustments shall be rescinded to the
extent of such recovery and the purchase price or prices or adjustment restored
without interest. The Borrower and
Holdings expressly consent to the foregoing arrangements and agree that any
Lender holding a participation in a Loan or L/C Disbursement deemed to have
been so purchased
41
may exercise
any and all rights of banker’s lien, setoff or counterclaim with respect to any
and all moneys owing by the Borrower and Holdings to such Lender by reason
thereof as fully as if such Lender had made a Loan directly to the Borrower in
the amount of such participation.
SECTION 2.19. Payments. (a) The Borrower shall make each payment
(including principal of or interest on any Borrowing or any L/C Disbursement or
any Fees or other amounts) hereunder and under any other Loan Document not later
than 12:00 (noon), New York City time, on the date when due in immediately
available dollars, without setoff, defense or counterclaim. Each such payment (other than (i) Issuing
Bank Fees, which shall be paid directly to the Issuing Bank, and (ii) principal
of and interest on Swingline Loans, which shall be paid directly to the
Swingline Lender except as otherwise provided in Section 2.21(e)) shall be
made to the Administrative Agent at its offices at Eleven Madison Avenue, New
York, NY 10010, which shall promptly distribute to each Lender its pro rata
share (or other applicable share, as provided herein) of such payment.
(b)
Except as otherwise expressly provided herein, whenever any payment
(including principal of or interest on any Borrowing or any Fees or other
amounts) hereunder or under any other Loan Document shall become due, or
otherwise would occur, on a day that is not a Business Day, such payment may be
made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of interest or Fees, if applicable.
SECTION 2.20. Taxes. (a) Any and all payments by or on account
of any obligation of the Borrower or any Loan Party hereunder or under any
other Loan Document shall be made free and clear of and without deduction for
any Indemnified Taxes or Other Taxes; provided
that if the Borrower or any Loan Party shall be required to deduct any
Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable
shall be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section)
the Administrative Agent or such Lender (as the case may be) receives an amount
equal to the sum it would have received had no such deductions been made, (ii)
the Borrower or such Loan Party shall make such deductions and (iii) the
Borrower or such Loan Party shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.
(b)
In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
(c)
The Borrower shall indemnify the Administrative Agent and each Lender,
within 10 days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes paid by the Administrative Agent or such
Lender, as the case may be, on or with respect to any payment by or on account
of any obligation of the Borrower or any Loan Party hereunder or under any
other Loan Document (including Indemnified Taxes or Other Taxes imposed or
asserted on or attributable to amounts payable under this Section) and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such
payment or liability delivered to
42
the Borrower
by a Lender, or by the Administrative Agent on its behalf or on behalf of a
Lender, shall be conclusive absent manifest error.
(d)
As soon as practicable after any payment of Indemnified Taxes or Other
Taxes by the Borrower or any other Loan Party to a Governmental Authority, the
Borrower shall deliver to the Administrative Agent the original or a certified
copy of a receipt issued by such Governmental Authority evidencing such
payment, a copy of the return reporting such payment or other evidence of such
payment reasonably satisfactory to the Administrative Agent.
(e)
Any Foreign Lender that is entitled to an exemption from or reduction of
withholding tax under the law of the jurisdiction in which the Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law, such
properly completed and executed documentation prescribed by applicable law or reasonably
requested by the Borrower as will permit such payments to be made without
withholding or at a reduced rate.
(f)
If the Administrative Agent or a Lender determines that it has received
a refund of any Taxes or Other Taxes as to which it has been indemnified by the
Borrower or with respect to which the Borrower has paid additional amounts
pursuant to this Section 2.20, it shall pay over such refund to the
Borrower (but only to the extent of indemnity payments made, or additional
amounts paid, by the Borrower under this Section 2.20 with respect to the
Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket
expenses of the Administrative Agent or such Lender and without interest (other
than any interest paid by the relevant Governmental Authority with respect to
such refund); provided that the
Borrower, upon the request of the Administrative Agent or such Lender, agrees
to repay the amount paid over to the Borrower (plus any penalties, interest or
other charges imposed by the relevant Governmental Authority) to the
Administrative Agent or such Lender in the event the Administrative Agent or
such Lender is required to repay such refund to such Governmental
Authority. This Section shall not
be construed to require the Administrative Agent or any Lender to make
available its tax returns (or any other information relating to its taxes which
it deems confidential) to the Borrower or any other person.
SECTION 2.21. Assignment of Commitments Under Certain Circumstances; Duty to Mitigate. (a)
In the event (i) any Lender or the Issuing Bank delivers a certificate
requesting compensation pursuant to Section 2.14, (ii) any Lender or the
Issuing Bank delivers a notice described in Section 2.15, (iii) the
Borrower is required to pay any additional amount to any Lender or the Issuing
Bank or any Governmental Authority on account of any Lender or the Issuing Bank
pursuant to Section 2.20 or (iv) any Lender refuses to consent to any
amendment, waiver or other modification of any Loan Document requested by the
Borrower that requires the consent of a greater percentage of the Lenders than
the Required Lenders and such amendment, waiver or other modification is
consented to by the Required Lenders, the Borrower may, at its sole expense and
effort (including with respect to the processing and recordation fee referred
to in Section 9.04(b)), upon notice to such Lender or the Issuing Bank and
the Administrative Agent, require such Lender or the Issuing Bank to transfer
and assign, without recourse (in accordance with and subject to the
restrictions contained in Section 9.04), all of its interests, rights and
obligations under this Agreement (or, in the case of clause (iv) above,
all of its
43
interests, rights
and obligation with respect to the Class of Loans or Commitments that is the
subject of the related consent, amendment, waiver or other modification) to an
assignee that shall assume such assigned obligations (which assignee may be
another Lender, if a Lender accepts such assignment); provided that (x) such assignment shall
not conflict with any law, rule or regulation or order of any court or other
Governmental Authority having jurisdiction, (y) the Borrower shall have
received the prior written consent of the Administrative Agent (and, if a
Revolving Credit Commitment is being assigned, of the Issuing Bank and the
Swingline Lender), which consent shall not unreasonably be withheld, and (z)
the Borrower or such assignee shall have paid to the affected Lender or the
Issuing Bank in immediately available funds an amount equal to the sum of the
principal of and interest accrued to the date of such payment on the
outstanding Loans or L/C Disbursements of such Lender or the Issuing Bank,
respectively, plus all Fees and other amounts accrued for the account of such
Lender or the Issuing Bank hereunder (including any amounts under
Section 2.14 and Section 2.16), in each case with respect to the
Loans or Commitments subject to such assignment; provided further
that, if prior to any such transfer and assignment the circumstances or event
that resulted in such Lender’s or the Issuing Bank’s claim for compensation
under Section 2.14 or notice under Section 2.15 or the amounts paid
pursuant to Section 2.20, as the case may be, cease to cause such Lender
or the Issuing Bank to suffer increased costs or reductions in amounts received
or receivable or reduction in return on capital, or cease to have the
consequences specified in Section 2.15, or cease to result in amounts
being payable under Section 2.20, as the case may be (including as a
result of any action taken by such Lender or the Issuing Bank pursuant to
paragraph (b) below), or if such Lender or the Issuing Bank shall waive its
right to claim further compensation under Section 2.14 in respect of such
circumstances or event or shall withdraw its notice under Section 2.15 or
shall waive its right to further payments under Section 2.20 in respect of
such circumstances or event or shall consent to the proposed amendment, waiver,
consent or other modification, as the case may be, then such Lender or the
Issuing Bank shall not thereafter be required to make any such transfer and
assignment hereunder.
(b)
If (i) any Lender or the Issuing Bank shall request compensation under
Section 2.14, (ii) any Lender or the Issuing Bank delivers a notice
described in Section 2.15 or (iii) the Borrower is required to pay any
additional amount to any Lender or the Issuing Bank or any Governmental
Authority on account of any Lender or the Issuing Bank, pursuant to
Section 2.20, then such Lender or the Issuing Bank shall use reasonable
efforts (which shall not require such Lender or the Issuing Bank to incur an
unreimbursed loss or unreimbursed cost or expense or otherwise take any action
inconsistent with its internal policies or legal or regulatory restrictions or
suffer any disadvantage or burden deemed by it to be significant) (x) to file
any certificate or document reasonably requested in writing by the Borrower or
(y) to assign its rights and delegate and transfer its obligations hereunder to
another of its offices, branches or affiliates, if such filing or assignment
would reduce its claims for compensation under Section 2.14 or enable it
to withdraw its notice pursuant to Section 2.15 or would reduce amounts
payable pursuant to Section 2.20, as the case may be, in the future. The Borrower hereby agrees to pay all
reasonable costs and expenses incurred by any Lender or the Issuing Bank in connection
with any such filing or assignment, delegation and transfer.
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SECTION 2.22. Swingline Loans. (a) Swingline
Commitment. Subject to the
terms and conditions and relying upon the representations and warranties herein
set forth, the Swingline Lender agrees to make loans to the Borrower at any
time and from time to time on and after the Closing Date and until the earlier
of the Revolving Credit Maturity Date and the termination of the Revolving
Credit Commitments in accordance with the terms hereof, in an aggregate
principal amount at any time outstanding that will not result in (i) the
aggregate principal amount of all Swingline Loans exceeding $10,000,000 in the
aggregate or (ii) the Aggregate Revolving Credit Exposure, after giving effect
to any Swingline Loan, exceeding the Total Revolving Credit Commitment. Each Swingline Loan shall be in a principal
amount that is an integral multiple of $100,000 and in a minimum amount of
$500,000. The Swingline Commitment may
be terminated or reduced from time to time as provided herein. Within the foregoing limits, the Borrower
may borrow, pay or prepay and reborrow Swingline Loans hereunder, subject to
the terms, conditions and limitations set forth herein.
(b)
Swingline
Loans. The Borrower shall notify the Swingline Lender by fax, or by
telephone (confirmed by fax), not later than 2:00 p.m., New York City time, on
the day of a proposed Swingline Loan.
Such notice shall be delivered on a Business Day, shall be irrevocable
and shall refer to this Agreement and shall specify the requested date (which
shall be a Business Day) and amount of such Swingline Loan and the wire
transfer instructions for the account of the Borrower to which the proceeds of
the Swingline Loan should be transferred. The Swingline Lender shall promptly
make each Swingline Loan by wire transfer to the account specified in such
request.
(c)
Prepayment. The Borrower shall have the right at any
time and from time to time to prepay any Swingline Loan, in whole or in part,
upon giving written or fax notice (or telephone notice promptly confirmed by
written, or fax notice) to the Swingline Lender and to the Administrative Agent
before 12:00 (noon), New York City time on the date of prepayment at the
Swingline Lender’s address for notices specified on Schedule 2.01.
(d)
Interest. Each Swingline Loan shall be an ABR Loan
and, subject to the provisions of Section 2.07, shall bear interest at the
rate provided for the ABR Revolving Loans as provided in Section 2.06(a).
(e)
Participations. The Swingline Lender may by written notice
given to the Administrative Agent not later than 11:00 a.m., New York City
time, on any Business Day require the Revolving Credit Lenders to acquire
participations on such Business Day in all or a portion of the Swingline Loans
outstanding. Such notice shall specify
the aggregate amount of Swingline Loans in which the Revolving Credit Lenders
will participate. The Administrative Agent
will, promptly upon receipt of such notice, give notice to each Revolving Credit
Lender, specifying in such notice such Lender’s Pro Rata Percentage of such
Swingline Loan or Loans. In furtherance
of the foregoing, each Revolving Credit Lender hereby absolutely and
unconditionally agrees, upon receipt of notice as provided above, to pay to the
Administrative Agent, for the account of the Swingline Lender, such Revolving
Credit Lender’s Pro Rata Percentage of such Swingline Loan or Loans. Each Revolving Credit Lender acknowledges
and agrees that its obligation to acquire participations in Swingline Loans
pursuant to this paragraph is absolute and unconditional and shall not be
affected by any circumstance whatsoever,
45
including the
occurrence and continuance of a Default or an Event of Default, and that each
such payment shall be made without any offset, abatement, withholding or
reduction whatsoever. Each Revolving
Credit Lender shall comply with its obligation under this paragraph by wire
transfer of immediately available funds, in the same manner as provided in
Section 2.02(c) with respect to Loans made by such Lender (and
Section 2.02(c) shall apply, mutatis mutandis, to the payment
obligations of the Lenders) and the Administrative Agent shall promptly pay to
the Swingline Lender the amounts so received by it from the Lenders. The Administrative Agent shall notify the
Borrower of any participations in any Swingline Loan acquired pursuant to this
paragraph and thereafter payments in respect of such Swingline Loan shall be
made to the Administrative Agent and not to the Swingline Lender. Any amounts received by the Swingline Lender
from the Borrower (or other party on behalf of the Borrower) in respect of a
Swingline Loan after receipt by the Swingline Lender of the proceeds of a sale
of participations therein shall be promptly remitted to the Administrative
Agent; any such amounts received by the Administrative Agent shall be promptly
remitted by the Administrative Agent to the Lenders that shall have made their
payments pursuant to this paragraph and to the Swingline Lender, as their
interests may appear. The purchase of participations in a Swingline Loan
pursuant to this paragraph shall not relieve the Borrower (or other party
liable for obligations of the Borrower) of any default in the payment thereof.
SECTION 2.23. Letters of Credit. (a) General. The Borrower may request the issuance of a
Letter of Credit for its own account or for the account of any of its
Subsidiaries or Affiliated Practices (in which case the Borrower and such
Subsidiary or Affiliated Practice shall be co-applicants with respect to such
Letter of Credit), in a form reasonably acceptable to the Administrative Agent
and the Issuing Bank, at any time and from time to time while the Revolving
Credit Commitments remain in effect, provided
that any Letters of Credit issued hereunder shall be denominated in U.S.
dollars and shall be payable on sight.
This Section shall not be construed to impose an obligation upon
the Issuing Bank to issue any Letter of Credit that is inconsistent with the
terms and conditions of this Agreement.
(b)
Notice
of Issuance, Amendment, Renewal, Extension; Certain Conditions.
(i) In order to request the issuance of a Letter of Credit (or to
amend, renew or extend an existing Letter of Credit), the Borrower shall hand
deliver or fax to the Issuing Bank and the Administrative Agent (reasonably in
advance of the requested date of issuance, amendment, renewal or extension) a
notice requesting the issuance of a Letter of Credit, or identifying the Letter
of Credit to be amended, renewed or extended, the date of issuance, amendment,
renewal or extension, the date on which such Letter of Credit is to expire
(which shall comply with paragraph (c) below), the amount of such Letter of
Credit, the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare such Letter of Credit. The Issuing
Bank shall promptly (i) notify the Administrative Agent in writing of the
amount and expiry date of each Letter of Credit issued by it and (ii) provide a
copy of each such Letter of Credit (and any amendments, renewals or extensions
thereof) to the Administrative Agent. A
Letter of Credit shall be issued, amended, renewed or extended only if, and
upon issuance, amendment, renewal or extension of each Letter of Credit the
Borrower shall be
46
deemed to represent and warrant that, after giving effect to such
issuance, amendment, renewal or extension (i) the L/C Exposure shall not exceed
$20,000,000 and (ii) the Aggregate Revolving Credit Exposure shall not exceed
the Total Revolving Credit Commitment.
(ii) The Issuing Bank shall provide Letter of Credit activity reports
to the Administrative Agent (A) monthly on the last Business Day of each month
and (B) weekly for the two weeks preceding the end of each fiscal quarter, with
the report for the last week of the fiscal quarter to be delivered the Business
Day prior to the Repayment Date for such fiscal quarter.
(c)
Expiration
Date. Each Letter of Credit
shall expire at the close of business on the earlier of the date one year after
the date of the issuance of such Letter of Credit and the date that is five
Business Days prior to the Revolving Credit Maturity Date, unless such Letter
of Credit expires by its terms on an earlier date; provided, that a Letter of
Credit may, upon the request of the Borrower, include a provision whereby such
Letter of Credit shall be renewed automatically for additional consecutive
periods of 12 months or less (but not beyond the date that is five Business
Days prior to the Revolving Credit Maturity Date) unless the Issuing Bank
notifies the beneficiary thereof at least 30 days prior to the then-applicable
expiration date that such Letter of Credit will not be renewed.
(d)
Participations. By the issuance of a Letter of Credit and
without any further action on the part of the Issuing Bank or the Lenders, the
Issuing Bank hereby grants to each Revolving Credit Lender, and each such
Lender hereby acquires from the Issuing Bank, a participation in such Letter of
Credit equal to such Lender’s Pro Rata Percentage of the aggregate amount
available to be drawn under such Letter of Credit, effective upon the issuance
of such Letter of Credit. In consideration
and in furtherance of the foregoing, each Revolving Credit Lender hereby
absolutely and unconditionally agrees to pay to the Administrative Agent, for
the account of the Issuing Bank, such Lender’s Pro Rata Percentage of each L/C
Disbursement made by the Issuing Bank and not reimbursed by the Borrower (or,
if applicable, another party pursuant to its obligations under any other Loan
Document) forthwith on the date due as provided in Section 2.02(f). Each Revolving Credit Lender acknowledges
and agrees that its obligation to acquire participations pursuant to this
paragraph in respect of Letters of Credit is absolute and unconditional and
shall not be affected by any circumstance whatsoever, including the occurrence
and continuance of a Default or an Event of Default, and that each such payment
shall be made without any offset, abatement, withholding or reduction
whatsoever.
(e)
Reimbursement. If the Issuing Bank shall make any L/C
Disbursement in respect of a Letter of Credit, the Borrower shall pay to the
Administrative Agent an amount equal to such L/C Disbursement not later than
two hours after the Borrower shall have received notice from the Issuing Bank
that payment of such draft will be made, or, if the Borrower shall have
received such notice later than 10:00 a.m., New York City time, on any Business
Day, not later than 10:00 a.m., New York City time, on the immediately
following Business Day.
(f)
Obligations
Absolute. The Borrower’s
obligations to reimburse L/C Disbursements as provided in paragraph (e) above
shall be absolute, unconditional and irrevocable, and shall be
47
performed
strictly in accordance with the terms of this Agreement, under any and all
circumstances whatsoever, and irrespective of:
(i) any lack of validity or enforceability of any Letter of Credit or
any Loan Document, or any term or provision therein;
(ii) any amendment or waiver of or any consent to departure from all or
any of the provisions of any Letter of Credit or any Loan Document;
(iii) the existence of any claim, setoff, defense or other right that
the Borrower, any other party guaranteeing, or otherwise obligated with, the
Borrower, any Subsidiary or other Affiliate thereof or any other person may at
any time have against the beneficiary under any Letter of Credit, the Issuing
Bank, the Administrative Agent or any Lender or any other person, whether in
connection with this Agreement, any other Loan Document or any other related or
unrelated agreement or transaction;
(iv) any draft or other document presented under a Letter of Credit
proving to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect;
(v) payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or other document that does not comply with the terms
of such Letter of Credit; and
(vi) any other act or omission to act or delay of any kind of the
Issuing Bank, the Lenders, the Administrative Agent or any other person or any
other event or circumstance whatsoever, whether or not similar to any of the
foregoing, that might, but for the provisions of this Section, constitute a
legal or equitable discharge of the Borrower’s obligations hereunder.
Without limiting the generality of the foregoing, it is expressly
understood and agreed that the absolute and unconditional obligation of the
Borrower hereunder to reimburse L/C Disbursements will not be excused by the
gross negligence or wilful misconduct of the Issuing Bank. However, the foregoing shall not be
construed to excuse the Issuing Bank from liability to the Borrower to the
extent of any direct damages (as opposed to consequential damages, claims in
respect of which are hereby waived by the Borrower to the extent permitted by
applicable law) suffered by the Borrower that are caused by the Issuing Bank’s
gross negligence or wilful misconduct in determining whether drafts and other
documents presented under a Letter of Credit comply with the terms thereof; it
is understood that the Issuing Bank may accept documents that appear on their
face to be in order, without responsibility for further investigation,
regardless of any notice or information to the contrary and, in making any
payment under any Letter of Credit (i) the Issuing Bank’s exclusive reliance on
the documents presented to it under such Letter of Credit as to any and all
matters set forth therein, including reliance on the amount of any draft
presented under such Letter of Credit, whether or not the amount due to the
beneficiary thereunder equals the amount of such draft and whether or not any
document presented pursuant to such Letter of Credit proves to be insufficient
in any respect, if such document on its face appears to be in order, and whether
or not any other statement or any other
48
document presented pursuant to such Letter of Credit proves to be
forged or invalid or any statement therein proves to be inaccurate or untrue in
any respect whatsoever and (ii) any noncompliance in any immaterial respect of
the documents presented under such Letter of Credit with the terms thereof
shall, in each case, be deemed not to constitute wilful misconduct or gross
negligence of the Issuing Bank.
(g)
Disbursement
Procedures. The Issuing Bank
shall, promptly following its receipt thereof, examine all documents purporting
to represent a demand for payment under a Letter of Credit. The Issuing Bank shall as promptly as
possible give telephonic notification, confirmed by fax, to the Administrative
Agent and the Borrower of such demand for payment and whether the Issuing Bank
has made or will make an L/C Disbursement thereunder; provided that any failure to
give or delay in giving such notice shall not relieve the Borrower of its
obligation to reimburse the Issuing Bank and the Revolving Credit Lenders with
respect to any such L/C Disbursement.
The Administrative Agent shall promptly give each Revolving Credit Lender
notice thereof.
(h)
Interim
Interest. If the Issuing
Bank shall make any L/C Disbursement in respect of a Letter of Credit, then,
unless the Borrower shall reimburse such L/C Disbursement in full on such date,
the unpaid amount thereof shall bear interest for the account of the Issuing
Bank, for each day from and including the date of such L/C Disbursement, to but
excluding the earlier of the date of payment by the Borrower or the date on
which interest shall commence to accrue thereon as provided in
Section 2.02(f), at the rate per annum that would apply to such amount if
such amount were an ABR Revolving Loan.
(i)
Resignation
or Removal of the Issuing Bank.
The Issuing Bank may resign at any time by giving 30 days’ prior written
notice to the Administrative Agent, the Lenders and the Borrower, and may be
removed at any time by the Borrower by notice to the Issuing Bank, the
Administrative Agent and the Lenders.
Subject to the next succeeding paragraph, upon the acceptance of any
appointment as the Issuing Bank hereunder by a Lender that shall agree to serve
as successor Issuing Bank, such successor shall succeed to and become vested
with all the interests, rights and obligations of the retiring Issuing Bank and
the retiring Issuing Bank shall be discharged from its obligations to issue additional
Letters of Credit hereunder. At the
time such removal or resignation shall become effective, the Borrower shall pay
all accrued and unpaid fees pursuant to Section 2.05(c)(ii). The acceptance of any appointment as the
Issuing Bank hereunder by a successor Lender shall be evidenced by an agreement
entered into by such successor, in a form satisfactory to the Borrower and the
Administrative Agent, and, from and after the effective date of such agreement,
(i) such successor Lender shall have all the rights and obligations of the
previous Issuing Bank under this Agreement and the other Loan Documents and
(ii) references herein and in the other Loan Documents to the term “Issuing
Bank” shall be deemed to refer to such successor or to any previous Issuing
Bank, or to such successor and all previous Issuing Banks, as the context shall
require. After the resignation or
removal of the Issuing Bank hereunder, the retiring Issuing Bank shall remain a
party hereto and shall continue to have all the rights and obligations of an
Issuing Bank under this Agreement and the other Loan Documents with respect to
Letters of Credit issued by it prior to such resignation or removal, but shall
not be required to issue additional Letters of Credit.
49
(j)
Cash
Collateralization. If any
Event of Default shall occur and be continuing, the Borrower shall, on the
Business Day it receives notice from the Administrative Agent or the Required
Lenders (or, if the maturity of the Loans has been accelerated, Revolving
Credit Lenders holding participations in outstanding Letters of Credit
representing greater than 50% of the aggregate undrawn amount of all
outstanding Letters of Credit) thereof and of the amount to be deposited, deposit
in an account with the Collateral Agent, for the benefit of the Revolving
Credit Lenders, an amount in cash equal to the L/C Exposure as of such date; provided, however,
that the obligation to deposit such cash shall become effective immediately,
and such deposit shall become immediately due and payable, without demand or
other notice of any kind, upon the occurrence of any Event of Default with
respect to the Borrower described in clause (g) or (h) or
Article VII. Such deposit shall be
held by the Collateral Agent as collateral for the payment and performance of
the Obligations. The Collateral Agent
shall have exclusive dominion and control, including the exclusive right of
withdrawal, over such account. Other
than any interest earned on the investment of such deposits in Permitted
Investments, which investments shall be made at the option and sole discretion
of the Collateral Agent, such deposits shall not bear interest. Interest or profits, if any, on such investments
shall accumulate in such account.
Moneys in such account shall (i) automatically be applied by the
Administrative Agent to reimburse the Issuing Bank for L/C Disbursements for
which it has not been reimbursed, (ii) be held for the satisfaction of the
reimbursement obligations of the Borrower for the L/C Exposure at such time and
(iii) if the maturity of the Loans has been accelerated (but subject to the
consent of Revolving Credit Lenders holding participations in outstanding
Letters of Credit representing greater than 50% of the aggregate undrawn amount
of all outstanding Letters of Credit), be applied to satisfy the
Obligations. If the Borrower is
required to provide an amount of cash collateral hereunder as a result of the
occurrence of an Event of Default, such amount (to the extent not applied as
aforesaid) shall be returned to the Borrower within three Business Days after
all Events of Default have been cured or waived.
(k)
Additional
Issuing Banks. The Borrower
may, at any time and from time to time with the consent of the Administrative
Agent (which consent shall not be unreasonably withheld) and such Lender,
designate one or more additional Lenders to act as an issuing bank under the
terms of the Agreement. Any Lender
designated as an issuing bank pursuant to this paragraph (k) shall be deemed to
be an “Issuing Bank” (in addition to being a Lender) in respect of Letters of
Credit issued or to be issued by such Lender, and, with respect to such Letters
of Credit, such term shall thereafter apply to the other Issuing Bank and such
Lender.
SECTION 2.24. Increase in Revolving Credit Commitments. (a) The Borrower may, by written notice to the Administrative
Agent from time to time after the Restatement Date, request Incremental
Revolving Credit Commitments in an amount not to exceed the Incremental
Revolving Credit Commitment Amount from one or more Incremental Revolving
Credit Lenders, which may include any existing Lender; provided that each Incremental Revolving
Credit Lender shall be subject to the approval of the Administrative Agent, the
Issuing Bank and the Swingline Lender (which approvals shall not be
unreasonably withheld). Each such
notice shall set forth (i) the amount of the Incremental Revolving Credit
Commitments being requested (which shall be in minimum increments of $1,000,000
and in a minimum amount of $1,000,000 or equal to the remaining Incremental
Revolving Credit Commitment Amount) and (ii) the date
50
on which such
Incremental Revolving Credit Commitments are requested to become effective
(which shall not be (x) less than 10 days nor more than 60 days after the date
of such notice or (y) later than the third anniversary of the Closing Date).
(b)
The Borrower and each Incremental Revolving Credit Lender shall execute
and deliver to the Administrative Agent an Incremental Revolving Credit
Assumption Agreement and such other documentation as the Administrative Agent
shall reasonably specify to evidence the Incremental Revolving Credit
Commitment of such Incremental Revolving Credit Lender. The Administrative Agent shall promptly
notify each Lender as to the effectiveness of each Incremental Revolving Credit
Assumption Agreement. Each of the
parties hereto hereby agrees that, upon the effectiveness of any Incremental
Revolving Credit Assumption Agreement, this Agreement shall be deemed amended
to the extent (but only to the extent) necessary to reflect the existence of
the Incremental Revolving Credit Commitment evidenced thereby.
(c)
Each of the parties hereto hereby agrees that the Administrative Agent
may take any and all actions as may be reasonably necessary to ensure that,
after giving effect to any Incremental Revolving Credit Commitment pursuant to
this Section 2.24, the outstanding Revolving Loans (if any) are held by
the Revolving Credit Lenders in accordance with their new Pro Rata
Percentages. This may be accomplished
at the discretion of the Administrative Agent (i) by requiring the outstanding
Revolving Loans to be prepaid with the proceeds of a new Revolving Credit
Borrowing or (ii) by causing the existing Revolving Credit Lenders to assign
portions of their outstanding Revolving Loans to Incremental Revolving Credit
Lenders. Any prepayment or assignment
described in this paragraph (c) shall be subject to indemnification by the
Borrower pursuant to Section 2.16, but otherwise without premium or
penalty.
(d)
Notwithstanding the foregoing, no Incremental Revolving Credit
Commitment shall become effective under this Section 2.24 unless on the
date of such effectiveness, the conditions set forth in paragraphs (b) and (c)
of Section 4.01 shall be satisfied and the Administrative Agent shall have
received a certificate to that effect dated such date and executed by a
Financial Officer of the Borrower.
Each of Holdings and the Borrower represents and warrants to the
Administrative Agent, the Collateral Agent, the Issuing Bank and each of the
Lenders that:
SECTION 3.01. Organization; Powers. Holdings, the Borrower and each of the
Subsidiaries (a) is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, except for the failure
of the Subsidiaries set forth on Schedule 3.01(a) to be in good standing on
the Restatement Date, provided that such failures to be in good
standing, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect, (b) has all requisite power and
authority to own its property and assets
51
and to carry
on its business as now conducted and as proposed to be conducted, (c) is
qualified to do business in, and is in good standing in, every jurisdiction
where such qualification is required, except where the failure so to qualify
could not reasonably be expected to result in a Material Adverse Effect, and
(d) has the power and authority to execute, deliver and perform its
obligations under each of the Loan Documents and each other agreement or instrument
contemplated hereby or thereby to which it is or will be a party and, in the
case of the Borrower, to borrow hereunder.
SECTION 3.02. Authorization. The Transactions (a) have been duly
authorized by all requisite corporate and, if required, stockholder action and
(b) will not (i) violate (A) any provision of law, statute, rule
or regulation, or of the certificate or articles of incorporation or other
constitutive documents or by-laws of Holdings, the Borrower or any Subsidiary,
(B) any order of any Governmental Authority or (C) any provision of
any indenture, agreement or other instrument to which Holdings, the Borrower or
any Subsidiary is a party or by which any of them or any of their property is
or may be bound, (ii) be in conflict with, result in a breach of or
constitute (alone or with notice or lapse of time or both) a default under, or
give rise to any right to accelerate or to require the prepayment, repurchase
or redemption of any obligation under any such indenture, agreement or other
instrument or (iii) result in the creation or imposition of any Lien upon
or with respect to any property or assets now owned or hereafter acquired by
Holdings, the Borrower or any Subsidiary (other than any Lien created hereunder
or under the Security Documents), other than any such conflicts, violations,
breaches, defaults or rights referred to in clauses (b)(i) and (b)(ii) above
that are set forth on Schedule 3.02.
SECTION 3.03. Enforceability. This Agreement has been duly executed and
delivered by Holdings and the Borrower and constitutes, and each other Loan
Document when executed and delivered by each Loan Party party thereto will
constitute, a legal, valid and binding obligation of such Loan Party
enforceable against such Loan Party in accordance with its terms.
SECTION 3.04. Governmental Approvals. No action, consent or approval of,
registration or filing with or any other action by any Governmental Authority
is or will be required in connection with the Transactions, except as have been
made or obtained and are in full force and effect.
SECTION 3.05. Financial Statements. (a) The Borrower has heretofore furnished to
the Lenders (i) its consolidated balance sheet and related statements of
income, stockholders’ equity and cash flows as of and for each of the fiscal
years ended December 31, 2000 and 2001, audited by and accompanied by the
opinion of Deloitte & Touche LLP, independent public accountants, and as of
and for the fiscal year ended December 31, 2002, audited by and
accompanied by the opinion of Ernst & Young, LLP, independent public
accountants (which opinion has not been qualified in any material respect), and
(ii) the unaudited consolidated balance sheet and related statements of
income, stockholders’ equity and cash flows as of and for each fiscal quarter
subsequent to December 31, 2002 ended at least 45 days before
the Restatement Date. Such financial
statements present fairly in all material respects the financial condition and
results of operations and cash flows of the Borrower and its consolidated
Subsidiaries as of such dates and for such periods. Such balance sheet and the notes thereto disclose all material
liabilities, direct
52
or contingent,
of the Borrower and its consolidated Subsidiaries as of the dates thereof. Such financial statements were prepared in
accordance with GAAP applied on a consistent basis.
(b)
The Borrower has heretofore delivered to the Lenders its unaudited pro
forma consolidated balance sheet and statements of income, stockholder’s equity
and cash flows as of and for the period of nine consecutive months ended
September 30, 2003, prepared giving effect to the Transactions as if they
had occurred, with respect to such balance sheet, on such date and, with respect
to such other financial statements, on the first day of the 9-month period
ending on such date. Such pro forma
financial statements have been prepared in good faith by the Borrower, based on
certain assumptions (which assumptions are believed by the Borrower to be
reasonable), are based on the best information available to the Borrower as of
the date of delivery thereof, accurately reflect all adjustments required to be
made to give effect to the Transactions and present fairly on a pro forma basis
the estimated consolidated financial position of the Borrower and its
consolidated Subsidiaries as of such date and for such period, assuming that
the Transactions had actually occurred at such date or at the beginning of such
period, as the case may be.
SECTION 3.06. No Material Adverse Change. No event, change or condition
has occurred that has had, or could reasonably be expected to have, a material
adverse effect on the business, assets, operations, condition (financial or
otherwise) or prospects of Holdings, the Borrower and the Subsidiaries, taken
as a whole, since December 31, 2002; provided
that the adoption of reductions in Medicare reimbursement levels
proposed by the Centers for Medicare and Medicaid Services in July 2002
shall not constitute a material adverse change in the financial condition or
operations of Holdings, the Borrower and the Subsidiaries, taken as a whole.
SECTION 3.07. Title to Properties; Possession Under Leases. (a) Each of Holdings, the Borrower and each
of the Subsidiaries has good and marketable title to, or valid leasehold
interests in, all its material properties and assets, except for minor defects
in title that do not interfere with its ability to conduct its business as
currently conducted or to utilize such properties and assets for their intended
purposes. All such material properties
and assets are free and clear of Liens, other than Liens expressly permitted by
Section 6.02.
(b)
Each of Holdings, the Borrower and each of the Subsidiaries has complied
with all obligations under all material leases to which it is a party and all
such leases are in full force and effect, except where any such noncompliance,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect. Each of
Holdings, the Borrower and each of the Subsidiaries enjoys peaceful and
undisturbed possession under all such material leases.
SECTION 3.08. Subsidiaries. Schedule 3.08 sets forth as
of the Restatement Date a list of all Subsidiaries and the percentage ownership
interest of Holdings or the Borrower therein.
As of the Restatement Date, the shares of Equity Interests so indicated
on Schedule 3.08 are fully paid and non-assessable and are owned by
Holdings or the Borrower, directly or indirectly, free and clear of all Liens
(other than Liens created under the Security Documents).
53
SECTION 3.09. Litigation; Compliance with Laws. (a) Except as set forth on
Schedule 3.09(a), there are not any actions, suits or proceedings at law
or in equity or by or before any Governmental Authority now pending or, to the
knowledge of Holdings or the Borrower, threatened against or affecting
Holdings, the Borrower or any Subsidiary, or, to the knowledge of Holdings or the
Borrower, any Managed Practice or Contract Provider, or any business, property
or rights of any such person (i) that involve any Loan Document or the
Transactions, (ii) as to which there is a reasonable possibility of an
adverse determination and that, if adversely determined, could reasonably be
expected, individually or in the aggregate, to result in a Material Adverse
Effect or (iii) to revoke, withdraw or suspend any license, right or
authorization, or to terminate the participation of Holdings, the Borrower or
any Subsidiary or, to the knowledge of Holdings and the Borrower, any Managed
Practice or Contract Provider, in any Government Program or Private Program and
that, if adversely determined, could reasonably be expected, individually or in
the aggregate, to result in a Material Adverse Effect.
(b)
None of Holdings, the Borrower or any of the Subsidiaries, or, to the
knowledge of Holdings or the Borrower, any Managed Practice or Contract
Provider, or any of their respective material properties or assets is in
violation of, nor will the continued operation of their material properties and
assets as currently conducted violate, any applicable law, rule or regulation
(including any applicable zoning, building, Environmental Law, ordinance, code
or approval or any building permits), or is in default with respect to any
judgment, writ, injunction, decree or order of any Governmental Authority,
where such violation or default could reasonably be expected to result in a
Material Adverse Effect.
(c)
Except as set forth in Schedule 3.09(c), each of Holdings, the
Borrower and the Subsidiaries, and, to the knowledge of Holdings and the
Borrower, the Managed Practices and the Contract Providers, (i) is the holder
of all valid licenses and other rights and authorizations required by law, rule
or regulation and necessary for the Borrower, the Subsidiaries, the Managed
Practices and the Contract Providers to operate their respective businesses and
to provide pathology services; and (ii) where required, is certified for
participation and reimbursement in the Government Programs and has current
provider agreements for the Government Programs in which it participates and
the Private Programs in which it participates, except for any failures to
comply with any of the foregoing requirements that have not and could not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
(d)
Each facility operated by the Borrower, the Subsidiaries and, to the
knowledge of Holdings and the Borrower, the Managed Practices, charges rates
and bills for services in accordance with the applicable rules and regulations
of the Government Programs, except for any failures to comply that have not and
could not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
(e)
Except as set forth in Schedule 3.09(e) and except for referrals
which comply with (or are exempt from) the requirements of Stark II, (i) no
physician who has a “financial relationship”, as that term is defined in Stark
II, whether an investment or ownership interest or compensation arrangement (a
“Financial Relationship”) with
Holdings, the Borrower or any Subsidiary practices any medical specialty other
than pathology and also refers patients to the Borrower or any Subsidiary or,
to the knowledge of Holdings and the Borrower, any Managed
54
Practice, (ii)
to the knowledge of the Holdings and Borrower, no physician who has a Financial
Relationship with any Managed Practice practices any medical specialty other
than pathology and also refers patients to the Borrower, any Subsidiary or any
Managed Practice, (iii) no physician having a Financial Relationship with
Holdings, the Borrower or any Subsidiary whose immediate family member has such
a Financial Relationship with Holdings, the Borrower or any Subsidiary directly
or indirectly refers patients or services to the Borrower or any Subsidiary or,
to the knowledge of Holdings and the Borrower, any Managed Practice, and (iv)
to the knowledge of Holdings and the Borrower, no physician having a Financial
Relationship with any Managed Practice whose immediate family member has such a
Financial Relationship with Holdings, the Borrower, any Subsidiary or any
Managed Practice, directly or indirectly refers patients or services to the
Borrower, any Subsidiary or any Managed Practice, except in each case for any
failures to comply that have not and could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
(f)
The Borrower and the Subsidiaries, and, to the knowledge of Holdings and
the Borrower, the Managed Practices, have timely filed all reports and billings
required to be filed with respect to the Government Programs and the Private
Programs in which they participate, all fiscal intermediaries and other third
party payors and all such reports are complete and accurate in all material
respects and have been prepared in accordance with all applicable laws, rules
and regulations, except for any failures to comply with any of the foregoing
requirements that have not and would not be expected to have, individually or
in the aggregate, a Material Adverse Effect.
SECTION 3.10. Agreements. (a) None of Holdings, the Borrower or any
of the Subsidiaries is a party to any agreement or instrument or subject to any
corporate restriction that has resulted or could reasonably be expected to
result in a Material Adverse Effect.
(b)
None of Holdings, the Borrower or any of the Subsidiaries is in default
in any manner under any provision of any indenture or other agreement or
instrument evidencing Indebtedness, or any other material agreement or
instrument to which it is a party or by which it or any of its properties or
assets are or may be bound, where such default could reasonably be expected to
result in a Material Adverse Effect.
SECTION 3.11. Federal Reserve Regulations.
(a) None of Holdings, the Borrower or any of the Subsidiaries is engaged
principally, or as one of its important activities, in the business of
extending credit for the purpose of buying or carrying Margin Stock.
(b)
No part of the proceeds of any Loan or any Letter of Credit will be
used, whether directly or indirectly, and whether immediately, incidentally or
ultimately, for any purpose that entails a violation of, or that is
inconsistent with, the provisions of the Regulations of the Board, including
Regulation T, U or X.
SECTION 3.12. Investment Company Act; Public Utility Holding Company Act. None of Holdings, the Borrower
or any Subsidiary is (a) an “investment company” as defined in, or subject
to regulation under, the Investment Company Act of 1940 or (b) a “holding
company” as defined in, or subject to regulation under, the Public Utility
Holding Company Act of 1935.
55
SECTION 3.13. Use of Proceeds. The Borrower (a) will use the
proceeds of the Term Loans and will request the issuance of Letters of Credit
only for the purposes specified in the preamble and (b) will use the proceeds
of the Revolving Loans and the Swingline Loans only for general corporate
purposes.
SECTION 3.14. Tax Returns. Each of the Holdings, the
Borrower and each of the Subsidiaries has filed or caused to be filed all
Federal, state, local and foreign tax returns or materials required to have
been filed by it and has paid or caused to be paid all taxes due and payable by
it and all assessments received by it, except taxes that are being contested in
good faith by appropriate proceedings and for which Holdings, the Borrower or
such Subsidiary, as applicable, shall have set aside on its books adequate
reserves in accordance with GAAP.
SECTION 3.15. No Material Misstatements. No information, report,
financial statement, exhibit or schedule furnished by or on behalf of
Holdings or the Borrower to the Administrative Agent or any Lender in
connection with the negotiation of any Loan Document or included therein or
delivered pursuant thereto contained, contains or will contain any material misstatement
of fact or omitted, omits or will omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were, are or will be made, not misleading; provided
that to the extent any such information, report, financial statement, exhibit
or schedule was based upon or constitutes a forecast or projection, each
of Holdings and the Borrower represents only that it acted in good faith and
utilized assumptions believed by Holdings and the Borrower to be reasonable and
due care in the preparation of such information, report, financial statement,
exhibit or schedule.
SECTION 3.16. Employee Benefit Plans. Each of the Borrower and each of
its ERISA Affiliates is in compliance in all material respects with the
applicable provisions of ERISA and the Code and the regulations and published
interpretations thereunder. No ERISA
Event has occurred or is reasonably expected to occur that, when taken together
with all other such ERISA Events, could reasonably be expected to result in
material liability of the Borrower or any of its ERISA Affiliates. The present value of all benefit liabilities
under each Plan (based on the assumptions used for purposes of Statement of Financial
Accounting Standards No. 87) did not, as of the last annual valuation date
applicable thereto, exceed the fair market value of the assets of such Plan.
SECTION 3.17. Environmental Matters. Except as set forth in Schedule 3.17
and except with respect to any other matters that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect, none of Holdings, the Borrower or any of the Subsidiaries (i) has
failed to comply with any Environmental Law or to obtain, maintain or comply
with any permit, license or other approval required under any Environmental
Law, (ii) has become subject to any Environmental Liability,
(iii) has received any request for information pursuant to any
Environmental Law or notice of any claim with respect to any Environmental
Liability or (iv) knows of any basis for any Environmental Liability.
SECTION 3.18. Insurance. Schedule 3.18 sets forth a
true, complete and correct description of all insurance maintained by the
Borrower or by the Borrower for its Subsidiaries as of the Restatement
Date. As of such date, such insurance
is in full force and effect and all
56
premiums have
been duly paid. The Borrower and its
Subsidiaries have insurance in such amounts and covering such risks and
liabilities as are in accordance with normal industry practice.
SECTION 3.19. Security Documents. (a) The Guarantee and Collateral Agreement
is effective to create in favor of the Collateral Agent, for the ratable
benefit of the Secured Parties, a legal, valid and enforceable security
interest in the Collateral (as defined in the Guarantee and Collateral
Agreement) and the proceeds thereof and (i) with respect to all Pledged
Collateral (as defined in the Guarantee and Collateral Agreement) previously
delivered to and in the possession of the Collateral Agent, the Guarantee and
Collateral Agreement constitutes, or in the case of Pledged Collateral to be
delivered to the Collateral Agent in the future, the Guarantee and Collateral
Agreement will constitute, a fully perfected first priority Lien on, and
security interest in, all right, title and interest of the Loan Parties in such
Pledged Collateral, in each case prior and superior in right to any other
person, and (ii) together with the financing statements previously filed in the
offices specified on Schedule 3.19, the Lien created under the Guarantee
and Collateral Agreement constitutes a fully perfected Lien on, and security
interest in, all right, title and interest of the Loan Parties in such
Collateral (other than Intellectual Property, as defined in the Guarantee and
Collateral Agreement) that may be perfected by filing, recording or registering
a financing statement, in each case prior and superior in right to any other
person, other than with respect to Liens expressly permitted by
Section 6.02.
(b)
The Guarantee and Collateral Agreement currently on file with the United
States Patent and Trademark Office and the United States Copyright Office,
together with the financing statements previously filed in the offices
specified on Schedule 3.19(b), constitutes a fully perfected Lien on, and
security interest in, all right, title and interest of the Loan Parties in the
Intellectual Property (as defined in the Guarantee and Collateral Agreement) in
which a security interest may be perfected by filing in the United States and
its territories and possessions, in each case prior and superior in right to
any other person (it being understood that subsequent recordings in the United
States Patent and Trademark Office and the United States Copyright Office may
be necessary to perfect a Lien on registered trademarks, trademark applications
and copyrights acquired by the Loan Parties after the Closing Date).
SECTION 3.20. Location of Real Property and Leased Premises. (a) On the Restatement Date, none of
Holdings, the Borrower or any Subsidiary owns any real property.
(b)
Schedule 3.20 lists completely and correctly as of the Restatement
Date all real property leased by the Borrower and the Subsidiaries and the
addresses thereof. The Borrower and the
Subsidiaries, as the case may be, have valid leasehold interests in all the
real property set forth on Schedule 3.20.
SECTION 3.21. Labor Matters. As of the Restatement Date,
there are no strikes, lockouts or slowdowns against Holdings, the Borrower or
any Subsidiary pending or, to the knowledge of Holdings or the Borrower,
threatened, or, to the knowledge of Holdings or the Borrower, against any
Managed Practice or Contract Provider.
The hours worked by and payments made to employees of Holdings, the
Borrower and the Subsidiaries, and, to the knowledge of Holdings or the
Borrower, the Managed Practices and the Contract Providers, have
57
not been in
violation of the Fair Labor Standards Act or any other applicable federal,
state, local or foreign law dealing with such matters. All payments due from Holdings, the Borrower
or any Subsidiary, or for which any claim may be made against Holdings, the Borrower
or any Subsidiary, on account of wages and employee health and welfare
insurance and other benefits, have been paid or accrued as a liability on the
books of Holdings, the Borrower or such Subsidiary. The consummation of the Transactions will not give rise to any
right of termination or right of renegotiation on the part of any union under
any collective bargaining agreement to which Holdings, the Borrower or any
Subsidiary, or, to the knowledge of Holdings or the Borrower, any Managed
Practice or Contract Provider, is bound.
SECTION 3.22. Solvency. Immediately after the
consummation of the Transactions to occur on the Restatement Date and
immediately following the making of each Loan and after giving effect to the
application of the proceeds of each Loan, (a) the fair value of the assets of
Holdings, the Borrower and the Subsidiaries, taken as a whole, at a fair
valuation, will exceed their debts and liabilities, subordinated, contingent or
otherwise; (b) the present fair saleable value of the property of Holdings, the
Borrower and the Subsidiaries, taken as a whole, will be greater than the
amount that will be required to pay the probable liability of their debts and
other liabilities, subordinated, contingent or otherwise, as such debts and other
liabilities become absolute and matured; (c) Holdings, the Borrower and the
Subsidiaries, taken as a whole, will be able to pay their debts and
liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (d) Holdings, the Borrower and the
Subsidiaries, taken as a whole, will not have unreasonably small capital with
which to conduct the business in which they are engaged as such business is now
conducted and is proposed to be conducted following the Restatement Date.
SECTION 3.23. Bank Indebtedness. The Loans and other Obligations
under the Loan Documents collectively constitute “Bank Indebtedness” under and
as defined in the Subordinated Note Documents and “Senior Indebtedness” under
and as defined in the Holdings Subordinated Note Documents, and will constitute
designated senior indebtedness under, and be entitled to the benefit of the
subordination provisions of, the documentation relating to any Additional
Subordinated Debt or any Additional Seller Notes.
SECTION 3.24. Fraud and Abuse.
Except as would not reasonably be expected to result in a Material
Adverse Effect or as set forth on Schedule 3.24, to the knowledge of
Holdings and the Borrower, none of Holdings, the Borrower, any of the Subsidiaries
or any of the Managed Practices or any of their respective officers, directors
or Contract Providers has engaged in any activities that are prohibited under
the Government Programs in which they participate or that are prohibited by
binding rules of professional conduct, including, (i) knowingly and wilfully
making or causing to be made a false statement or a misrepresentation of any
material fact in any application for any benefit or payment; (ii) knowingly and
wilfully making or causing to be made any false statement or a
misrepresentation of any material fact for use in determining rights to any
benefit or payment; (iii) failing to disclose knowledge by a claimant of the
occurrence of any event affecting the initial or continued right to any benefit
or payment on its own behalf or on behalf of another, with intent to secure
such benefit or payment fraudulently; (iv) knowingly and wilfully soliciting or
receiving any renumeration (including any kickback, bribe or rebate),
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directly or
indirectly, overtly or covertly, in cash or in kind or offering to pay such
renumeration (A) in return for referring an individual to a person for the
furnishing or arranging for the furnishing of any item or service for which
payment may be made in whole or in part by any Government Program in which they
participate or other applicable third-party payors, or (B) in return for
purchasing, leasing or ordering or arranging for or recommending the
purchasing, leasing or ordering of any good, facility, service or item for
which payment may be made in whole or in part by any Government Program in
which they participate or other applicable third-party payors.
The obligations of the Lenders to make Loans and of the Issuing Bank to
issue Letters of Credit hereunder are subject to the satisfaction or waiver of
the following conditions:
SECTION 4.01. All Credit Events. On the date of each Borrowing,
including each Borrowing of a Swingline Loan and on the date of each issuance,
amendment, extension or renewal of a Letter of Credit (each such event being
called a “Credit Event”):
(a)
The Administrative Agent shall have received a notice of such Borrowing
as required by Section 2.03 (or such notice shall have been deemed given
in accordance with Section 2.03) or, in the case of the issuance,
amendment, extension or renewal of a Letter of Credit, the Issuing Bank and the
Administrative Agent shall have received a notice requesting the issuance, amendment,
extension or renewal of such Letter of Credit as required by
Section 2.23(b) or, in the case of the Borrowing of a Swingline Loan, the
Swingline Lender and the Administrative Agent shall have received a notice
requesting such Swingline Loan as required by Section 2.22(b).
(b)
Except in the case of a Borrowing that does not increase the aggregate
principal amount of Loans outstanding of any Lender, the representations and
warranties set forth in Article III hereof and in each other Loan Document
shall be true and correct in all material respects on and as of the date of
such Credit Event with the same effect as though made on and as of such date,
except to the extent such representations and warranties expressly relate to an
earlier date.
(c)
No Event of Default or Default shall have occurred and be continuing.
(d)
In the case of a Borrowing of a Revolving Loan or a Swingline Loan,
immediately after giving effect to such Borrowing and the use of proceeds
thereof, the aggregate amount of cash and Permitted Investments on hand at
Holdings, the Borrower and the Subsidiaries shall not exceed $10,000,000,
excluding for purposes hereof (i) cash and Permitted Investments held in the
Contingent Note Reserve, (ii) funds on deposit in any bank account and used for
current payroll purposes and (iii) Restricted Cash.
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Each Credit Event shall be deemed to constitute a representation and
warranty by the Borrower and Holdings on the date of such Credit Event as to
the matters specified in paragraphs (b), (c) and (d) of this Section 4.01;
provided, however, that the conversion or
continuation of a Borrowing pursuant to Section 2.10 shall not constitute
a “Credit Event” for purposes of this Section.
(a)
The Administrative Agent shall have received, on behalf of itself, the
Lenders and the Issuing Bank, a written opinion of (i) Ropes & Gray LLP,
counsel for Holdings and the Borrower, in substantially the form attached as
Exhibit F-1, and (ii) each local counsel listed on Schedule 4.02(a),
in substantially the form attached as Exhibit F-2, in each case, (A) dated the
Restatement Date, (B) addressed to the Issuing Bank, the Administrative Agent
and the Lenders, and (C) covering such other matters relating to the Loan
Documents and the Transactions as the Administrative Agent shall reasonably
request, and Holdings and the Borrower hereby request such counsel to deliver
such opinions.
(b)
All legal matters incident to this Agreement, the Borrowings and
extensions of credit hereunder and the other Loan Documents shall be reasonably
satisfactory to the Lenders, to the Issuing Bank and to the Administrative
Agent.
(c)
The Administrative Agent shall have received (i) a certificate, dated
the Restatement Date and signed by the Secretary or Assistant Secretary of
Holdings and the Borrower, certifying that (A) except as set forth on any
schedule attached thereto, the certificate or articles of incorporation of
Holdings, the Borrower and each other Loan Party previously delivered on the
Closing Date (or such later date on which such person became a Loan Party) have
not been amended since the date of such delivery, (B) except as set forth on
any schedule attached thereto, the by-laws of Holdings, the Borrower and
each other Loan Party as in effect and delivered on the Closing Date (or such
later date on which such person became a Loan Party) have not been amended
since the date of such delivery, (C) attached thereto is a true and complete
copy of resolutions duly adopted by the Board of Directors or other equivalent
governing body of Holdings, the Borrower and each other Loan Party authorizing
the execution, delivery and performance of the Amendment Agreement (including
Exhibit A thereto in the form of this Agreement) and the other Loan Documents
to which such person is a party, as applicable, and, in the case of the
Borrower, the borrowings hereunder, and that such resolutions have not been
modified, rescinded or amended and are in full force and effect, and (D) as to
the incumbency and specimen signature of each officer executing the Amendment
Agreement or any other Loan Document or any other document delivered in
connection therewith on behalf of such Loan Party; (ii) a certificate of
another officer as to the incumbency and specimen signature of the Secretary or
Assistant Secretary executing the certificate pursuant to clause (i) above; and
(iii) such other documents as the Lenders, the Issuing Bank or the
Administrative Agent may reasonably request.
(d)
The Administrative Agent shall have received a certificate, dated the
Restatement Date and signed by a Financial Officer of the Borrower, confirming
compliance with the conditions precedent set forth in paragraphs (b) and (c) of
Section 4.01.
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(e)
The Administrative Agent shall have received all Fees and other amounts
due and payable on or prior to the Restatement Date, including, to the extent
invoiced, reimbursement or payment of all out-of-pocket expenses required to be
reimbursed or paid by the Borrower hereunder or under any other Loan Document.
(f)
The Security Documents shall be in full force and effect on the
Restatement Date, and each document (including each Uniform Commercial Code
financing statement) required by law or reasonably requested by the Collateral
Agent to be filed, registered or recorded in order to create or continue in
favor of the Collateral Agent for the benefit of the Secured Parties a valid,
legal and perfected first-priority Lien on, and security interest in, the
Collateral (subject to any Liens expressly permitted by Section 6.02)
shall have been delivered to the Collateral Agent. The Pledged Collateral (as defined in the Guarantee and Collateral
Agreement) shall be duly and validly pledged under the Guarantee and Collateral
Agreement to the Collateral Agent for the benefit of the Secured Parties, and
certificates representing such Pledged Collateral, accompanied by instruments
of transfer and stock powers endorsed in blank, shall have been delivered to
the Collateral Agent.
(g)
The Amendment Agreement shall have become effective in accordance with
its terms.
(h)
The Borrower shall have received gross cash proceeds of not less than
$75,000,000 from the issuance of the Additional Subordinated Notes. The terms and conditions of the Additional
Subordinated Notes (other than the pricing terms thereof) shall be identical in
all material respects to the Existing Subordinated Notes. The Administrative Agent shall have received
copies of the Subordinated Note Documents executed in connection with the
issuance of the Additional Subordinated Notes, certified by a Financial Officer
of the Borrower as being complete and correct.
(i)
Immediately after giving effect to the Transactions and the other
transactions contemplated hereby, the Borrower and the Subsidiaries shall have
outstanding no Indebtedness or preferred stock other than (a) Indebtedness
outstanding under this Agreement, (b) the Subordinated Notes, (c) the
Contingent Notes and (d) other Indebtedness permitted under
Section 6.01. Immediately after
giving effect to the Transactions and the other transactions contemplated
hereby, Holdings shall have no outstanding Indebtedness or preferred stock other
than (a) its Guarantee of the Indebtedness outstanding under this Agreement and
(b) the Holdings Subordinated Notes.
(j)
The Lenders shall have received the financial statements and opinion
referred to in Section 3.05, none of which shall demonstrate a material
adverse change in the financial condition of the Borrower from the forecasts
previously provided to the Lenders.
(k)
All requisite Governmental Authorities shall have approved or consented
to the Transactions and the other transactions contemplated hereby to the
extent required, all applicable appeal periods shall have expired and there
shall be no litigation, governmental, administrative or judicial action that
could reasonably be expected to restrain, prevent or impose burdensome
conditions on the Transactions or the other transactions contemplated
hereby. All requisite third-party
consents necessary for the consummation of the Acquisition shall have been
obtained
61
except for
those third-party consents where the failure to so obtain such consents would
not have a Material Adverse Effect.
(l)
The Existing Term Loans, together with accrued interest thereon, shall
have been repaid, or shall be repaid simultaneously with the initial Borrowing
of the Term Loans hereunder.
(m)
The Collateral Agent shall have received a certificate, dated the
Restatement Date and signed by a Responsible Officer of the Borrower,
certifying that, except as set forth on any schedule attached thereto, the
information set forth on the Perfection Certificate is complete, correct and
accurate as of the Restatement Date.
(n)
The Lenders shall have received, to the extent requested, all
documentation and other information required by bank regulatory authorities
under applicable “know your customer” and anti-money laundering rules and
regulations, including the U.S.A. Patriot Act.
Each of Holdings and the Borrower covenants and agrees with each Lender
that so long as this Agreement shall remain in effect and until the Commitments
have been terminated and the principal of and interest on each Loan, all Fees
and all other expenses or amounts payable under any Loan Document shall have
been paid in full (other than contingent indemnification obligations to the
extent no claim giving rise thereto has been asserted) and all Letters of
Credit have been canceled or have expired and all amounts drawn thereunder have
been reimbursed in full, unless the Required Lenders shall otherwise consent in
writing, each of Holdings and the Borrower will, and will cause each of the
Subsidiaries to:
SECTION 5.01. Existence; Businesses and Properties. (a) Do or cause to be done all things necessary to preserve,
renew and keep in full force and effect its legal existence, except as
otherwise expressly permitted under Section 6.05.
(b)
Do or cause to be done all things necessary to obtain, preserve, renew,
extend and keep in full force and effect the rights, licenses, permits,
franchises, authorizations, patents, copyrights, trademarks and trade names
material to the conduct of its business; maintain and operate such business in
substantially the manner in which it is presently conducted and operated;
comply in all material respects with all applicable laws, rules, regulations
and decrees and orders of any Governmental Authority (including all applicable
Government Programs and all state and federal anti-kickback, fraud and abuse
and Stark II requirements), whether now in effect or hereafter enacted; and at
all times maintain and preserve all property material to the conduct of such
business and keep such property in good repair, working order and condition and
from time to time make, or cause to be made, all needful and proper repairs,
renewals, additions, improvements and replacements thereto necessary in order
that the business carried on in
62
connection
therewith may be properly conducted at all times; provided, however,
that nothing in this Section 5.01 shall prevent the Borrower from
discontinuing the operation or maintenance of any of its assets or properties
if such discontinuance is, in the judgment of its board of directors, desirable
in the conduct of its business.
SECTION 5.02. Insurance. (a) Keep its insurable properties
adequately insured at all times by financially sound and reputable insurers;
maintain such other insurance (which may include self-insurance pursuant to
Section 6.04(h)), to such extent and against such risks, including fire
and other risks insured against by extended coverage, as is customary with
companies in the same or similar businesses operating in the same or similar
locations, including medical malpractice insurance, workers’ compensation
insurance, business interruption insurance, public liability insurance against
claims for personal injury or death or property damage occurring upon, in,
about or in connection with the use of any properties owned, occupied or
controlled by it; and maintain such other insurance as may be required by law.
(b)
Cause all such policies covering any Collateral to be endorsed or
otherwise amended to include a customary lender’s loss payable endorsement, in
form and substance reasonably satisfactory to the Administrative Agent and the
Collateral Agent, which endorsement shall provide that, from and after the
Closing Date, if the insurance carrier shall have received written notice from
the Administrative Agent or the Collateral Agent of the occurrence of an Event
of Default, the insurance carrier shall pay all proceeds otherwise payable to
the Borrower or the Loan Parties under such policies directly to the Collateral
Agent; cause all such policies to provide that neither the Borrower, the
Administrative Agent, the Collateral Agent nor any other party shall be a
coinsurer thereunder and to contain a “Replacement Cost Endorsement”, without
any deduction for depreciation, and such other provisions as the Administrative
Agent or the Collateral Agent may reasonably require from time to time to
protect their interests; deliver original or certified copies of all such
policies to the Collateral Agent; cause each such policy to provide that it
shall not be canceled, modified or not renewed (i) by reason of nonpayment of
premium upon not less than 10 days’ prior written notice thereof by the insurer
to the Administrative Agent and the Collateral Agent (giving the Administrative
Agent and the Collateral Agent the right to cure defaults in the payment of
premiums) or (ii) for any other reason upon not less than 30 days’ prior
written notice thereof by the insurer to the Administrative Agent and the
Collateral Agent; deliver to the Administrative Agent and the Collateral Agent,
prior to the cancellation, modification or nonrenewal of any such policy of
insurance, a copy of a renewal or replacement policy (or other evidence of
renewal of a policy previously delivered to the Administrative Agent and the
Collateral Agent) together with evidence satisfactory to the Administrative
Agent and the Collateral Agent of payment of the premium therefor.
(c)
Notify the Administrative Agent and the Collateral Agent promptly
whenever any separate insurance concurrent in form or contributing in the event
of loss with that required to be maintained under this Section 5.02 is
taken out by the Borrower; and promptly deliver to the Administrative Agent and
the Collateral Agent a duplicate original copy of such policy or policies.
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SECTION 5.03. Taxes. Pay and discharge promptly when
due all taxes, assessments and governmental charges or levies imposed upon it
or upon its income or profits or in respect of its property, before the same
shall become delinquent or in default, as well as all lawful claims for labor,
materials and supplies or otherwise that, if unpaid, might give rise to a Lien
upon such properties or any part thereof; provided,
however, that such payment and
discharge shall not be required with respect to any such tax, assessment,
charge, levy or claim so long as the validity or amount thereof shall be
contested in good faith by appropriate proceedings and the Borrower shall have
set aside on its books adequate reserves with respect thereto in accordance
with GAAP and such contest operates to suspend collection of the contested obligation,
tax, assessment or charge and enforcement of a Lien.
SECTION 5.04. Financial Statements, Reports, etc.
In the case of the Borrower, furnish to the Administrative
Agent, which shall furnish to each Lender:
(a)
within 90 days after the end of each fiscal year, its consolidated
balance sheet and related statements of income, stockholders’ equity and cash
flows showing the financial condition of the Borrower and its consolidated
Subsidiaries as of the close of such fiscal year and the results of its
operations and the operations of such Subsidiaries during such year, together
with comparative figures for the immediately preceding fiscal year and for the
consolidated budget for such fiscal year, which financial statements shall be
audited by Ernst & Young, LLP or other independent public accountants of
recognized national standing and accompanied by an opinion of such accountants
(which shall not be qualified in any material respect) to the effect that such
consolidated financial statements fairly present the financial condition and
results of operations of the Borrower and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied;
(b)
within 45 days after the end of each of the first three fiscal quarters
of each fiscal year, its consolidated balance sheet and related statements of
income, stockholders’ equity and cash flows showing the financial condition of
the Borrower and its consolidated Subsidiaries as of the close of such fiscal
quarter and the results of its operations and the operations of such
Subsidiaries during such fiscal quarter and the then elapsed portion of the
fiscal year, and comparative figures for the same periods in the immediately
preceding fiscal year, for the consolidated budget for such fiscal quarter and
for the consolidated budget for the then elapsed portion of the fiscal year,
all certified by one of its Financial Officers as fairly presenting the
financial condition and results of operations of the Borrower and its
consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments;
(c)
within 30 days after the end of the first two fiscal months of each
fiscal quarter, its consolidated balance sheet and related statements of income
and cash flows showing the financial condition of the Borrower and its
consolidated Subsidiaries during such fiscal month and the then elapsed portion
of the fiscal year, all certified by one of its Financial Officers as fairly presenting
the financial condition and results of operations of the Borrower and its
consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments;
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(d)
concurrently with any delivery of financial statements under paragraph
(a) above, (i) a certificate of the accounting firm opining on such statements
(which certificate may be limited to accounting matters and disclaim
responsibility for legal interpretations) (x) setting forth computations in
reasonable detail satisfactory to the Administrative Agent demonstrating
compliance with the covenants contained in Sections 6.06, 6.10, 6.11, 6.12 and
6.13 and (y) stating whether they obtained knowledge during the course of their
examination of such financial statements of any Event of Default or Default and
specifying the extent and nature thereof, insofar as the same related to any
financial accounting matters covered by their audit, and (ii) a certificate of
a Financial Officer of the Borrower (x) certifying that no Event of Default or
Default has occurred or, if such an Event of Default or Default has occurred,
specifying the nature and extent thereof and any corrective action taken or proposed
to be taken with respect thereto, (y) setting forth the calculations of
Excess Cash Flow and the Pro Forma Allowable Amount and (z) certifying that
there has been no change in the business activities, assets or liabilities of
the Borrower or Holdings, or if there has been any such change, describing such
change in reasonable detail and certifying that each of the Borrower and
Holdings is in compliance with Section 6.08;
(e)
concurrently with any delivery of financial statements under
paragraph (b) or (c) above, a certificate of a Financial Officer of the
Borrower (i) setting forth computations in reasonable detail satisfactory
to the Administrative Agent demonstrating compliance with the covenants
contained in Sections 6.06, 6.10, 6.11, 6.12 and 6.13 and
(ii) certifying that no Event of Default or Default has occurred or, if
such an Event of Default or Default has occurred, specifying the nature and
extent thereof and any corrective action taken or proposed to be taken with
respect thereto;
(f)
concurrently with any delivery of financial statements under
paragraph (a) or (b) above, a certificate of a Financial Officer of the
Borrower setting forth the amount of Net Cash Proceeds from Asset Sales during
the immediately preceding fiscal quarter and the amount thereof that the
Borrower intends to reinvest in assets of a kind then used or usable in the
business of the Borrower and its Subsidiaries within 270 days of receipt of
such proceeds in accordance with the definition of “Net Cash Proceeds”;
(g)
within five Business Days of approval by the board of directors of the
Borrower, and in no event later than 30 days after the end of each fiscal year
of the Borrower, a detailed consolidated quarterly budget for such fiscal year
(including a projected consolidated balance sheet and related statements of
projected operations and cash flows as of the end of and for each fiscal
quarter of such fiscal year and setting forth the assumptions used for purposes
of preparing such budget) and, promptly when available, any significant
revisions of such budget;
(h)
promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements, press releases and other
materials filed by Holdings, the Borrower or any Subsidiary with the Securities
and Exchange Commission, or any Governmental Authority succeeding to any or all
of the functions of said Commission, or with any national securities exchange,
or distributed to its shareholders, as the case may be;
65
(i)
promptly after the receipt thereof by Holdings or the Borrower or any
Subsidiary, a copy of any “management letter” received by any such person from
its certified public accountants and the management’s response thereto; and
(j)
promptly, from time to time, such other information regarding the
operations, business affairs and financial condition of Holdings, the Borrower
or any Subsidiary, or compliance with the terms of any Loan Document, as the
Administrative Agent or any Lender may reasonably request.
SECTION 5.05. Litigation and Other Notices.
Furnish to the Administrative Agent, the Issuing Bank and each Lender
written notice of the following promptly after Holdings or the Borrower obtains
knowledge thereof:
(a)
any Event of Default or Default, specifying the nature and extent
thereof and the corrective action (if any) taken or proposed to be taken with
respect thereto;
(b)
the filing or commencement of, or any threat or notice of intention of
any person to file or commence, any action, suit or proceeding, whether at law
or in equity or by or before any Governmental Authority, (i) against the
Borrower or any Affiliate thereof that could reasonably be expected to result
in a Material Adverse Effect or (ii) against Holdings, the Borrower, any of the
Subsidiaries, any Managed Practice or any Contract Provider to suspend, revoke
or terminate (or that may result in the termination of) its participation in
the Government Programs or the Private Programs; and
(c)
the occurrence of any ERISA Event that, alone or together with any other
ERISA Events that have occurred, could reasonably be expected to result in
liability of the Borrower and the Subsidiaries in an aggregate amount exceeding
$1,000,000; and
(d)
any development specific to the Borrower, any Subsidiary, any Managed
Practice or any Contract Provider that is not a matter of general public
knowledge and that has resulted in, or could reasonably be expected to result
in, a Material Adverse Effect.
SECTION 5.06. Information Regarding Collateral.
(a) Furnish to the Administrative Agent prompt written notice of any
change (i) in any Loan Party’s corporate name, (ii) in the jurisdiction of
organization or formation of any Loan Party, (iii) in any Loan Party’s identity
or corporate structure or (iv) in any Loan Party’s Federal Taxpayer
Identification Number. Holdings and the
Borrower agree not to effect or permit any change referred to in the preceding
sentence unless all filings have been made under the Uniform Commercial Code or
otherwise that are required in order for the Collateral Agent to continue at
all times following such change to have a valid, legal and perfected security
interest in all the Collateral.
Holdings and the Borrower also agree promptly to notify the Administrative
Agent if any material portion of the Collateral is damaged or destroyed.
(b)
In the case of the Borrower, each year, at the time of delivery of the
annual financial statements with respect to the preceding fiscal year pursuant
to Section 5.04(a), deliver to the Administrative Agent a certificate of a
Financial Officer setting forth the information required
66
pursuant to
Section 2 of the Perfection Certificate or confirming that there has been
no change in such information since the date of the Perfection Certificate
delivered on the Closing Date or the date of the most recent certificate
delivered pursuant to this Section 5.06.
SECTION 5.07. Maintaining Records; Access to Properties and Inspections. Keep proper books of record and account in
which full, true and correct entries in conformity with GAAP and all
requirements of law are made of all dealings and transactions in relation to
its business and activities. Each Loan
Party will, and will cause each of its subsidiaries to, permit any
representatives designated by the Administrative Agent, the Collateral Agent or
any Lender to visit and inspect the financial records and the properties of
Holdings, the Borrower or any Subsidiary at reasonable times and with
reasonable notice and as often as reasonably requested and to make extracts
from and copies of such financial records, and permit any representatives
designated by the Administrative Agent, the Collateral Agent or any Lender to
discuss the affairs, finances and condition of Holdings, the Borrower or any
Subsidiary with the officers thereof and independent accountants therefor, provided, that the Borrower shall have the
option to participate in and arrange or otherwise coordinate any such discussion
held by the Administrative Agent, the Collateral Agent or any Lender with its
independent auditors pursuant to this Section 5.06.
SECTION 5.08. Use of Proceeds. Use the proceeds of the Loans
and request the issuance of Letters of Credit only for the purposes set forth
or referred to in Section 3.13.
SECTION 5.09. Further Assurances. Execute any and all further
documents, financing statements, agreements and instruments, and take all
further action (including filing Uniform Commercial Code and other financing
statements, mortgages and deeds of trust) that may be required under applicable
law, or that the Required Lenders, the Administrative Agent or the Collateral
Agent may reasonably request, in order to effectuate the transactions
contemplated by the Loan Documents and in order to grant, preserve, protect and
perfect the validity and first priority of the security interests created or
intended to be created by the Security Documents. The Borrower will cause any subsequently acquired or organized
Domestic Subsidiary (other than any Consolidated Practice) to become a Loan
Party by executing the Guarantee and Collateral Agreement and each other
applicable Security Document in favor of the Collateral Agent. In addition, from time to time, the Borrower
will, at its cost and expense, promptly secure the Obligations by pledging or
creating, or causing to be pledged or created, perfected security interests
with respect to such of its assets and properties as the Administrative Agent,
the Collateral Agent or the Required Lenders shall designate (it being
understood that it is the intent of the parties that the Obligations shall be
secured by substantially all the assets of the Borrower and its Domestic
Subsidiaries (other than any Consolidated Practice)) including real and other
properties acquired subsequent to the Closing Date. Notwithstanding the foregoing, in no event shall the Borrower or
any Domestic Subsidiary be required to pledge greater than 65% of the total
outstanding voting Equity Interests of any Foreign Subsidiary. Such security interests and Liens will be
created under the Security Documents and other security agreements, mortgages,
deeds of trust and other instruments and documents in form and substance
satisfactory to the Administrative Agent and the Collateral Agent, and the
Borrower shall deliver or cause to be delivered to the Lenders all such
instruments and documents (including legal opinions, title
67
insurance
policies and lien searches) as the Collateral Agent shall reasonably request to
evidence compliance with this Section 5.09. The Borrower agrees to provide such evidence as the Collateral
Agent shall reasonably request as to the perfection and priority status of each
such security interest and Lien. In
furtherance of the foregoing, the Borrower will give prompt notice to the
Administrative Agent of the acquisition by it or any of the Subsidiaries (other
than any Consolidated Practice) of any real property (or any interest in real
property) having a value in excess of $250,000.
Each of Holdings and the Borrower covenants and agrees with each Lender
that, so long as this Agreement shall remain in effect and until the
Commitments have been terminated and the principal of and interest on each
Loan, all Fees and all other expenses or amounts payable under any Loan
Document have been paid in full (other than contingent indemnification
obligations to the extent no claim giving rise thereto has been asserted) and
all Letters of Credit have been cancelled or have expired and all amounts drawn
thereunder have been reimbursed in full, unless the Required Lenders shall
otherwise consent in writing, neither Holdings nor the Borrower will, nor will
they cause or permit any of the Subsidiaries to:
SECTION 6.01. Indebtedness.
Incur, create, assume or permit to exist any Indebtedness,
except:
(a) Indebtedness existing on the
Restatement Date and set forth in Schedule 6.01(a), and any extensions,
renewals or replacements of such Indebtedness to the extent the principal
amount of such Indebtedness is not increased, neither the final maturity nor
the weighted average life to maturity of such Indebtedness is decreased, such
Indebtedness, if subordinated to the Obligations, remains so subordinated on
terms no less favorable to the Lenders, and the original obligors in respect of
such Indebtedness remain the only obligors thereon;
(b) Indebtedness created hereunder
and under the other Loan Documents;
(c) intercompany Indebtedness of
Holdings, the Borrower and the Subsidiaries to the extent permitted by
Section 6.04(c) or 6.04(h);
(d) Indebtedness of the Borrower
or any Subsidiary incurred to finance the acquisition, construction or
improvement of any fixed or capital assets, and extensions, renewals and
replacements of any such Indebtedness that do not increase the outstanding
principal amount thereof; provided that (i) such Indebtedness is
incurred prior to or within 90 days after such acquisition or the completion of
such construction or improvement and (ii) the aggregate principal amount of
Indebtedness permitted by this Section 6.01(d), when combined with the
aggregate principal amount of all Capital Lease
68
Obligations and Synthetic Lease Obligations incurred pursuant to
Section 6.01(e) shall not exceed $10,000,000 at any time outstanding;
(e) Capital Lease Obligations and
Synthetic Lease Obligations in an aggregate principal amount, when combined
with the aggregate principal amount of all Indebtedness incurred pursuant to
Section 6.01(d), not in excess of $10,000,000 at any time outstanding;
(f) Indebtedness owed to
(including obligations in respect of letters of credit for the benefit of) any
person providing worker’s compensation, health, disability or other employee
benefits or property, casualty or liability insurance, pursuant to
reimbursement or indemnification obligations to such person, in each case
incurred in the ordinary course of business;
(g) Indebtedness in respect of
performance bonds, bid bonds, appeal bonds, surety bonds and similar
obligations, in each case provided in the ordinary course of business including
those incurred to secure health, safety and environmental obligations in the
ordinary course of business;
(h) obligations under Hedging
Agreements to the extent they constitute Indebtedness;
(i) Indebtedness in respect of the
Subordinated Notes in an aggregate principal amount not to exceed $350,000,000;
(j) Indebtedness of Holdings in
respect of the Holdings Subordinated Notes issued on the Closing Date in an
aggregate principal amount of $67,000,000, together with any additional notes
issued pursuant to the terms and conditions of the Holdings Subordinated Notes
as pay-in-kind interest on such Holdings Subordinated Notes;
(k) Indebtedness in respect of the
Contingent Notes;
(l) (i) Additional Subordinated
Debt and Additional Seller Notes incurred to finance any Permitted Acquisition
(including the refinancing of Indebtedness of the Acquired Entity and the
payment of related fees and expenses) and (ii) Indebtedness acquired or assumed
by the Borrower or any Subsidiary in connection with any Permitted Acquisition that existed at the time of such
Permitted Acquisition and was not created in connection therewith or in
contemplation thereof, provided
that the aggregate outstanding amount of all Indebtedness incurred pursuant to
this Section 6.01(l) shall not at any time exceed $75,000,000;
(m) Additional Subordinated Debt,
the Net Cash Proceeds of which is used to prepay, in whole or in part,
outstanding Term Loans to the extent required by and in accordance with
Section 2.13(e), in an aggregate outstanding amount not at any time in
excess of $225,000,000;
69
(n) Guarantees by the Borrower and
its Subsidiaries with respect to any Indebtedness of the Borrower or any of its
Subsidiaries permitted hereunder;
(o) Indebtedness existing on the
date hereof and set forth in Schedule 6.01(o), but not any extensions,
renewals or replacements of such Indebtedness; and
(p) other unsecured Indebtedness
of the Borrower or the Subsidiaries in an aggregate principal amount not
exceeding $10,000,000 at any time outstanding.
SECTION 6.02. Liens. Create, incur, assume or permit
to exist any Lien on any property or assets (including Equity Interests or
other securities of any person, including any Subsidiary) now owned or
hereafter acquired by it or on any income or revenues or rights in respect of
any thereof, except:
(a) Liens on property or assets of
the Borrower and its Subsidiaries existing on the Restatement Date and set
forth in Schedule 6.02; provided that such Liens shall secure only
those obligations which they secure on the Restatement Date and any extensions,
renewals and replacements thereof permitted hereunder;
(b) any Lien created under the
Loan Documents;
(c) any Lien existing on any
property or asset prior to the acquisition thereof by the Borrower or any
Subsidiary; provided
that (i) such Lien is not created in contemplation of or in connection with
such acquisition and (ii) such Lien does not apply to any other property or
assets of the Borrower or any Subsidiary, provided
that neither (x) the aggregate fair market value of the property subject to all
such Liens nor (y) the aggregate outstanding liabilities secured by all such
Liens shall exceed $5,000,000 at any time;
(d) Liens for taxes not yet due or
which are being contested in compliance with Section 5.03;
(e) carriers’, warehousemen’s,
mechanics’, materialmen’s, repairmen’s or other like Liens arising in the
ordinary course of business and securing obligations that are not due and
payable or which are being contested in compliance with Section 5.03;
(f) pledges and deposits made in the ordinary course of business in compliance
with workmen’s compensation, unemployment insurance and other social
security laws or regulations;
(g) deposits to secure the
performance of bids, trade contracts (other than for Indebtedness), leases
(other than Capital Lease Obligations), statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature incurred
in the ordinary course of business;
(h) zoning restrictions,
easements, rights-of-way, restrictions on use of real property and other
similar encumbrances incurred in the ordinary course of business
70
which, in the aggregate, are not substantial
in amount and do not materially detract from the value of the property subject
thereto or interfere with the ordinary conduct of the business of the Borrower
or any of its Subsidiaries;
(i) purchase money security
interests in real property, improvements thereto or equipment hereafter
acquired (or, in the case of improvements, constructed) by the Borrower or any
Subsidiary; provided
that (i) such security interests secure Indebtedness permitted by
Section 6.01, (ii) such security interests are incurred, and the
Indebtedness secured thereby is created, within 90 days after such acquisition
(or construction), (iii) the Indebtedness secured thereby does not exceed the
lesser of the cost or the fair market value of such real property, improvements
or equipment at the time of such acquisition (or construction) and (iv) such
security interests do not apply to any other property or assets of the Borrower
or any Subsidiary;
(j) Liens arising out of judgments
or awards in respect of which Holdings, the Borrower or any of the Subsidiaries
shall in good faith be prosecuting an appeal or proceedings for review in
respect of which there shall be secured a subsisting stay of execution pending
such appeal or proceedings; provided that the aggregate amount of all
such judgments or awards (and any cash and the fair market value of any
property subject to such Liens) does not exceed $7,500,000 at any time
outstanding;
(k) Liens created or deemed to
exist by the establishment of trusts or other similar arrangements in
connection with self-insurance programs permitted by Section 6.04(h);
(l) licenses, sublicenses, leases
or subleases granted to others not interfering in any material respect with the
business of the Borrower or any Subsidiary;
(m) any interest or title of a
lessor or any Lien encumbering such lessor’s interest with respect to any lease
to the Borrower or any Subsidiary; and
(n) Liens not otherwise permitted
hereunder (other than Liens securing Indebtedness for money borrowed), provided that neither (x) the fair market
value of the property subject to such Liens nor (y) the outstanding liabilities
secured by such Liens shall exceed $2,500,000 in the aggregate at any time.
SECTION 6.03. Sale and Lease-Back Transactions.
Enter into any arrangement, directly or indirectly, with any
person whereby it shall sell or transfer any property, real or personal, used
or useful in its business, whether now owned or hereafter acquired, and
thereafter rent or lease such property or other property which it intends to
use for substantially the same purpose or purposes as the property being sold
or transferred unless (a) the sale of such property is permitted by
Section 6.05 and (b) any Capital Lease Obligations, Synthetic Lease
Obligations or Liens arising in connection therewith are permitted by Sections
6.01 and 6.02, as the case may be.
71
SECTION 6.04. Investments, Loans and Advances.
Purchase, hold or acquire any Equity Interests, evidences of
indebtedness or other securities of, make or permit to exist any loans or
advances to, or make or permit to exist any investment or any other interest
in, any other person, except:
(a)
(i) investments by Holdings, the Borrower and the Subsidiaries existing
on the Restatement Date in the Equity Interests of the Borrower and the
Subsidiaries and (ii) additional investments by Holdings, the Borrower and the
Subsidiaries in the Equity Interests of the Borrower and the Subsidiary
Guarantors; provided
that any such Equity Interests held by a Loan Party shall be pledged pursuant
to the Guarantee and Collateral Agreement (subject to the limitations
applicable to voting stock of a Foreign Subsidiary referred to therein);
(b)
Permitted Investments;
(c)
loans or advances made
by the Borrower to any Subsidiary Guarantor and made by any Subsidiary to
Holdings, the Borrower or any Subsidiary Guarantor; provided that all related
promissory notes (if any) shall be pledged to the Collateral Agent for the
ratable benefit of the Secured Parties pursuant to the Guarantee and Collateral
Agreement;
(d)
investments arising from transactions by the Borrower or its
Subsidiaries with customers or suppliers in the ordinary course of business,
including endorsements of negotiable instruments, debt obligations and other
investments received in connection with the bankruptcy or reorganization of
customers and suppliers and in settlement of delinquent obligations of, and
other disputes with, customers or suppliers, arising in the ordinary course of
business and in the exercise of the reasonable business judgment of such
Borrower or such Subsidiary;
(e)
the Borrower and the Subsidiaries may make loans and advances in the
ordinary course of business to their respective employees so long as the
aggregate principal amount thereof at any time outstanding (determined without
regard to any write-downs or write-offs of such loans and advances) shall not
exceed $2,500,000;
(f)
the Borrower may enter into Hedging Agreements in the ordinary course of
business that are not speculative in nature;
(g)
the Borrower or any Subsidiary may acquire all or substantially all the
assets of a person or line of business of such person, or not less than 100% of
the Equity Interests of a person (any such person referred to herein as the “Acquired
Entity”); provided that
(i) such acquisition was not preceded by an unsolicited tender offer
for such Equity Interests by, or proxy contest initiated by, Holdings, the
Borrower or any Subsidiary;
72
(ii) the Acquired Entity shall be a going concern and shall be in a
similar line of business as that of the Borrower and the Subsidiaries as
conducted during the current and most recent calendar year;
(iii) the Acquired Entity is located in the United States of America;
(iv) any Management Services Agreement executed and delivered in
connection with such acquisition shall provide that 100% of the net income of
the Acquired Entity (determined in accordance GAAP or in a manner
otherwise reasonably acceptable to the
Administrative Agent) be payable to the Borrower or a Subsidiary Guarantor;
(v) at the time of the execution and delivery of the definitive
acquisition agreement relating to such acquisition, the Borrower shall have
delivered to the Administrative Agent a compliance certificate signed by a
Financial Officer of the Borrower (A) demonstrating Pro Forma Compliance
(including, for purposes of this clause only, the Midpoint Amount of any
Additional Seller Notes to be incurred in connection with such acquisition, in
the calculation of Total Debt), (B) attaching a true and complete copy of any
due diligence report provided to the board of directors of the Borrower with
respect to such acquisition, (C) attaching a true and complete copy of the
acquisition agreement (including all schedules, exhibits and attachments) for
such acquisition, (D) certifying the Midpoint Amount of any Additional Seller
Notes to be issued in connection with such acquisition, (E) affirming that the
representations and warranties set forth in Article IV would be true and
correct in all material respects as of such date and after giving effect to
such acquisition (except to the extent such representations and warranties
expressly relate to an earlier date) and (F) certifying that, at the date of
such certificate and after giving effect to such acquisition, no Default or
Event of Default shall have occurred and be continuing;
(vi) on the date of such acquisition, the Borrower shall deliver to the
Administrative Agent a compliance certificate signed by a Financial Officer of
the Borrower (A) attaching a true and complete copy of any amendments or other
modifications to the acquisition agreement (including all schedules, exhibits
and attachments) for such acquisition, (B) certifying that such acquisition has
been consummated, in all material respects, on the terms and conditions set
forth in such documentation and (C) certifying that such acquisition
constitutes a Permitted Acquisition;
(vii) if the acquisition involves an interest in a partnership and a
requirement that the Borrower or a Subsidiary be a general partner, the general
partner shall be a special purpose Subsidiary of the Borrower;
(viii) after giving effect to such acquisition, there must be at least
$20,000,000 of unused and available Revolving Credit Commitments;
73
(ix) any Indebtedness issued in connection with such acquisition shall
be Additional Subordinated Debt or Additional Seller Notes;
(x) any Indebtedness issued or assumed in connection with such
acquisition and all other acquisitions pursuant to this Section 6.04(g)
shall not in the aggregate exceed 50% of the aggregate of the consideration
paid in connection with such acquisition and all other acquisitions pursuant to
this Section 6.04(g) (including all Indebtedness of the Acquired Entity
that is assumed by the Borrower or any Subsidiary following such acquisition);
and
(xi) the Borrower shall comply, and shall cause the Acquired Entity to
comply, with the applicable provisions of Section 5.09 and the Security
Documents (any acquisition of an Acquired Entity meeting all the criteria of
this Section 6.04(g) being referred to herein as a “Permitted Acquisition”);
(h)
the Borrower may make investments in and loans and advances to a wholly
owned Subsidiary established for the sole purpose of providing self-insurance
benefits to the Borrower, the Subsidiaries and the Affiliated Practices in
amounts equal to the actuarial self insurance requirements of the Borrower, the
Subsidiaries and the Affiliated Practices and the general corporate overhead
expenses of such captive insurance Subsidiary;
(i)
the Borrower may make payments, loans, advances to, and investments in,
Consolidated Practices in the ordinary course of business and consistent with
past practice in satisfaction of its obligations under any Management Services
Agreements; provided that any
promissory notes evidencing any such loans or advances shall be pledged to the
Collateral Agent for the ratable benefit of the Secured Parties pursuant to the
Guarantee and Collateral Agreement;
(j)
investments, loans and advances existing on the Restatement Date and set
forth on Schedule 6.04;
(k)
investments consisting of non-cash consideration received in connection
with a sale of assets permitted by Section 6.05; and
(l)
in addition to investments permitted by paragraphs (a) through (k)
above, additional investments, loans and advances by the Borrower and the
Subsidiaries (determined without regard to any write-downs or write-offs of
such investments, loans and advances) not to exceed $15,000,000 at any time
outstanding.
SECTION 6.05. Mergers, Consolidations, Sales of Assets and Acquisitions. (a) Merge into or consolidate with any
other person, or permit any other person to merge into or consolidate with it,
or sell, transfer, lease or otherwise dispose of (in one transaction or in a
series of transactions) all or substantially all of the assets (whether now
owned or hereafter acquired) of the Borrower or less than all the Equity
Interests of any Subsidiary, or purchase, lease or otherwise acquire (in one
transaction or a series of transactions) all or any substantial part of the
74
assets of any
other person, except that if at the time thereof and immediately after giving
effect thereto no Event of Default or Default shall have occurred and be
continuing (i) any wholly owned Subsidiary may merge into the Borrower in a
transaction in which the Borrower is the surviving corporation, (ii) any
wholly owned Subsidiary may merge into or consolidate with any other wholly
owned Subsidiary in a transaction in which the surviving entity is a wholly
owned Subsidiary and no person other than the Borrower or a wholly owned
Subsidiary receives any consideration (provided that if any party to any such
transaction is a Loan Party, the surviving entity of such transaction shall be
a Loan Party), (iii) any Consolidated Practice may merge into a wholly owned
Subsidiary or another Consolidated Practice in a transaction in which no person
other than the Borrower or a wholly owned Subsidiary receives any consideration
(provided that if any party to such transaction is a Loan Party, the surviving
entity of such transaction shall be a Loan Party), (iv) any Subsidiary may merge
into any third party in any Asset Sale permitted by Section 6.05(b) and
(v) the Borrower and the Subsidiaries may make Permitted Acquisitions.
(b)
Engage in any Asset Sale otherwise permitted under paragraph (a) above
unless (i) such Asset Sale is for consideration at least 75% of which is
cash, (ii) such consideration is at least equal to the fair market value of the
assets being sold, transferred, leased or disposed of and (iii) the fair market
value of all assets sold, transferred, leased or disposed of pursuant to this
paragraph (b) shall not exceed $5,000,000 in any fiscal year or $25,000,000 in
the aggregate.
SECTION 6.06. Restricted Payments; Restrictive Agreements. (a) Declare or make, or agree to declare or
make, directly or indirectly, any Restricted Payment (including pursuant to any
Synthetic Purchase Agreement), or incur any obligation (contingent or
otherwise) to do so; provided, however, that
(i) any Subsidiary may declare and pay dividends or make other
distributions ratably to its equity holders;
(ii) so long as no Event of Default or Default shall have occurred and
be continuing or would result therefrom, (A) Holdings, the Borrower and any of
its Subsidiaries may repurchase or otherwise acquire Equity Interests of
Holdings, the Borrower or any of its Subsidiaries (or make dividends to
Holdings to consummate any such repurchase or other acquisition of Equity
Interests) from current or former employees, consultants, directors or former
directors of Holdings, the Borrower or any of its Subsidiaries (or permitted
transferees of such persons), pursuant to the terms of the agreements
(including employment agreements) or plans (or amendments thereto) approved by
Holding’s board of directors under which such individuals purchase or sell or
are granted the option to purchase or sell such Equity Interests; provided, however,
that the aggregate amount of such repurchases and other acquisitions shall not
exceed in any calendar year the lesser of (x) the sum of $500,000 and the
aggregate amount of Restricted Payments permitted (but not made) in prior years
pursuant to this clause (ii) and (y) $2,500,000;
(iii) the Borrower may make Restricted Payments to Holdings to be used
by Holdings solely to pay its franchise taxes and other fees required to maintain
its corporate existence and to pay for general corporate and overhead expenses
(including salaries and
75
other compensation of employees) incurred by Holdings in the ordinary
course of its business, provided,
however, that such Restricted
Payments shall not exceed $250,000 in any calendar year;
(iv) the Borrower may make Restricted Payments to Holdings in an amount
necessary to pay the Tax liabilities of Holdings directly attributable to (or
arising as a result of) the operations of the Borrower and the Subsidiaries; provided, however,
that (A) the amount of such dividends shall not exceed the amount that the
Borrower and the Subsidiaries would be required to pay in respect of Federal,
State and local taxes were the Borrower and the Subsidiaries to pay such taxes
as stand-alone taxpayers and (B) all Restricted Payments made to Holdings
pursuant to this clause (iv) are used by Holdings for the purposes specified
herein within 20 days of the receipt thereof;
(v) the Borrower may make distributions in any fiscal year, beginning
with the fiscal year ended December 31, 2004, in an amount not to exceed
the Pro Forma Allowable Amount to Holdings so that Holdings may pay (A)
regularly scheduled interest on the Holdings Subordinated Notes, when and as
due, in an amount not to exceed 10% of the accreted value of the Holdings
Subordinated Notes, (B) principal of any Holdings Subordinated Notes issued in
lieu of cash interest on Holdings Subordinated Notes that was previously due
but not paid and (C) Management Fees, in an amount not to exceed $1,000,000 in
any fiscal year; provided, however, that (1) no Default or Event of
Default shall have occurred and be continuing at the time of any such payment
or result therefrom, and (2) the Borrower shall not make any payment pursuant
to this clause (v) prior to the delivery of the financial statements and
certificates required by Sections 5.04(a) and 5.04(d) for the preceding fiscal
year; and
(vi) Holdings may repay the outstanding principal and accrued interest
on the Holdings Subordinated Notes pursuant to Section 9.17.
(b)
Enter into, incur or permit to exist any agreement or other arrangement
that prohibits, restricts or imposes any condition upon (i) the ability of Holdings,
the Borrower or any Subsidiary to create, incur or permit to exist any Lien
upon any of its property or assets to secure the Obligations, or (ii) the
ability of any Subsidiary to pay dividends or other distributions with respect
to any of its Equity Interests or to make or repay loans or advances to the
Borrower or any other Subsidiary or to Guarantee Indebtedness of the Borrower
or any other Subsidiary; provided
that (A) the foregoing shall not apply to restrictions and conditions imposed
by law or by any Loan Document, (B) the foregoing shall not apply to customary
restrictions and conditions contained in agreements relating to the sale of a
Subsidiary pending such sale, provided such restrictions and conditions apply
only to the Subsidiary that is to be sold and such sale is permitted hereunder,
(C) clause (i) of the foregoing shall not apply to restrictions or conditions
imposed by any agreement relating to secured Indebtedness permitted by this
Agreement if such restrictions or conditions apply only to the property or
assets securing such Indebtedness, (D) clause (i) of the foregoing shall
not apply to customary provisions in leases and other contracts restricting the
assignment thereof, (E) the foregoing shall not apply to restrictions and conditions
contained in agreements in effect on the Restatement Date and set forth on
Schedule 6.06, (F) the foregoing shall not apply to restrictions pursuant
to Indebtedness
76
of any person
that becomes a Subsidiary after the date hereof, provided that such Indebtedness exists at the time such
person becomes a Subsidiary and is not created in contemplation of or in
connection with such person becoming a Subsidiary, and (G) the foregoing shall
not apply to any restrictions or conditions imposed on any Consolidated
Practice by (and for the benefit of) the Borrower or any Subsidiary Guarantor.
SECTION 6.07. Transactions with Affiliates.
Except for transactions by or among Loan Parties or
identified on Schedule 6.07, sell or transfer any property or assets to,
or purchase or acquire any property or assets from, or otherwise engage in any
other transactions with, any of its Affiliates, except that (a) the Borrower or
any Subsidiary may engage in any of the foregoing transactions in the ordinary
course of business at prices and on terms and conditions not less favorable to
the Borrower or such Subsidiary than could be obtained on an arm’s-length basis
from unrelated third parties, (b) dividends may be paid to the extent provided
in Section 6.06, (c) loans, investments and advances may be made to the
extent permitted by Sections 6.01 and 6.04, (d) the payment of reasonable fees
to directors of the Borrower or any Subsidiary who are not employees of the
Borrower or any Subsidiary, and compensation and employee benefit arrangements
paid to, and indemnity provided for the benefit of, directors, officers or
employees of the Borrower or its Subsidiaries in the ordinary course of
business, (e) any issuances of securities or other payments, awards or grants
in cash, securities or otherwise pursuant to, or the funding of, employment
agreements, stock options and stock ownership plans approved by the Borrower’s
board of directors and (f) the Borrower or any Subsidiary may provide services
to, and perform its other obligations under, any Management Services Agreement
with any Affiliated Practice.
SECTION 6.08. Business of Holdings, Borrower and Subsidiaries. (a) With respect to Holdings, engage in any
business activities or have any assets or liabilities other than its ownership
of the Equity Interests of the Borrower and the Contingent Note Reserve and
other assets and liabilities contemplated hereunder and incidental thereto,
including its liabilities under the Loan Documents, the Subordinated Note
Documents, the Holdings Subordinated Note Documents, the Holdings Common Equity
Documents and the Management Agreement.
(b)
With respect to the Borrower and its Subsidiaries, engage at any time in
any business or business activity other than the business currently conducted
by them and business activities reasonably incidental thereto.
SECTION 6.09. Other Indebtedness and Agreements.
(a) Permit any waiver, supplement, modification, amendment, termination
or release of any indenture, instrument or agreement in respect of any
Contingent Notes or pursuant to which any Material Indebtedness of Holdings,
the Borrower or any of the Subsidiaries is outstanding if the effect of such
waiver, supplement, modification, amendment, termination or release would
materially increase the obligations of the obligor or confer additional
material rights on the holder of such Indebtedness in a manner adverse to
Holdings, the Borrower, any of the Subsidiaries or the Lenders.
(b)
(i) Make any distribution,
whether in cash, property, securities or a combination thereof, other than
regular scheduled payments of principal and interest as and when due (to the
extent not prohibited by applicable subordination provisions), in respect of,
or pay, or offer or
77
commit to pay,
or directly or indirectly (including pursuant to any Synthetic Purchase
Agreement) redeem, repurchase, retire or otherwise acquire for consideration,
or set apart any sum for the aforesaid purposes, any subordinated Indebtedness,
other than any prepayment of the Contingent Notes permitted by
Section 9.17 or any prepayment of the Holdings Subordinated Notes
permitted by Section 6.06(a)(v)(B) or Section 9.17, (ii) pay in cash
any amount in respect of any Indebtedness or preferred Equity Interests that
may at the obligor’s option be paid in kind or in other securities, or (iii) so
long as cash or Permitted Investments are held in the Contingent Note Reserve,
use any other funds to pay any amount in respect of any Contingent Notes.
SECTION 6.10. Capital Expenditures. Permit the aggregate amount of
Capital Expenditures (excluding expenditures relating to the acquisition of
fixed or capital assets acquired in Permitted Acquisitions) made by the Borrower
and the Subsidiaries in any period set forth below to exceed the amount set
forth below for such period:
|
Period
|
|
Amount
|
|
|
January 1,
2004 through December 31, 2004
|
|
$
|
20,000,000
|
|
|
January 1,
2005 through December 31, 2005
|
|
$
|
20,000,000
|
|
|
January 1,
2006 through December 31, 2006
|
|
$
|
20,000,000
|
|
|
January 1,
2007 through December 31, 2007
|
|
$
|
20,000,000
|
|
|
January 1,
2008 through December 31, 2008
|
|
$
|
21,000,000
|
|
|
January 1,
2009 through December 31, 2009
|
|
$
|
23,000,000
|
|
|
Each fiscal
year thereafter
|
|
$
|
25,000,000
|
|
The amount of permitted Capital Expenditures set forth above in respect
of any fiscal year commencing with the fiscal year ending on December 31,
2005, shall be increased (but not decreased) by (a) an amount equal to 50% of
the unused permitted Capital Expenditures for the immediately preceding fiscal
year less (b) an amount equal to unused Capital Expenditures carried forward to
such preceding fiscal year.
SECTION 6.11. Interest Coverage Ratio. Permit the Interest Coverage
Ratio for any period of four consecutive fiscal quarters, in each case taken as
one accounting period, ending during any period set forth below to be less than
the ratio set forth opposite such date or period below:
|
Date or Period
|
|
Ratio
|
|
|
|
|
|
|
|
December 31,
2003 through December 31, 2004
|
|
1.80 to 1.00
|
|
|
January 1,
2005 through December 31, 2005
|
|
1.90 to 1.00
|
|
|
January 1,
2006 through December 31, 2006
|
|
2.00 to 1.00
|
|
|
January 1,
2007 through December 31, 2007
|
|
2.25 to 1.00
|
|
|
Thereafter
|
|
2.50 to 1.00
|
|
SECTION 6.12. Fixed Charge Coverage Ratio.
Permit the Fixed Charge Coverage Ratio for any period of four
consecutive fiscal quarters, in each case taken as one accounting period,
78
ending during
any period set forth below to be the less than the ratio set forth opposite
such date or period below:
|
Date or
Period
|
|
Ratio
|
|
|
|
|
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December 31,
2003 through December 31, 2004
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1.15 to 1.00
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January 1,
2005 through December 31, 2005
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1.20 to 1.00
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Thereafter
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1.30 to 1.00
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SECTION 6.13. Maximum Senior Leverage Ratio.
Permit the Senior Leverage Ratio as of the last day of any
fiscal quarter ending during any period set forth below to be greater than the
ratio set forth opposite such period below:
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Date or
Period
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Ratio
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Restatement
Date through September 30, 2005
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1.75 to 1.00
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October 1,
2005 through September 30, 2006
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1.60 to 1.00
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Thereafter
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1.50 to 1.00
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SECTION 6.14. Fiscal Year.
With respect to Holdings and the Borrower, change their fiscal
year-end to a date other than December 31.
In case of the happening of any of the following events (“Events of
Default”):
(a)
any representation or warranty made or deemed made in or in connection
with any Loan Document or the borrowings or issuances of Letters of Credit
hereunder, or any representation, warranty, statement or information contained
in any report, certificate, financial statement or other instrument furnished
in connection with or pursuant to any Loan Document, shall prove to have been
false or misleading in any material respect when so made, deemed made or
furnished;
(b)
default shall be made in the payment of any principal of any Loan or the
reimbursement with respect to any L/C Disbursement when and as the same shall
become due and payable, whether at the due date thereof or at a date fixed for
prepayment thereof or by acceleration thereof or otherwise;
(c)
default shall be made in the payment of any interest on any Loan or any
Fee or L/C Disbursement or any other amount (other than an amount referred to
in (b) above) due under any
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Loan Document,
when and as the same shall become due and payable, and such default shall
continue unremedied for a period of three Business Days;
(d)
default shall be made in the due observance or performance by Holdings,
the Borrower or any Subsidiary of any covenant, condition or agreement
contained in Section 5.01(a) (with respect to Holdings or the Borrower),
5.05 or 5.08 or in Article VI;
(e)
default shall be made in the due observance or performance by Holdings,
the Borrower or any Subsidiary of any covenant, condition or agreement
contained in any Loan Document (other than those specified in (b), (c) or (d)
above) and such default shall continue unremedied for a period of 20 days after
notice thereof from the Administrative Agent or any Lender to the Borrower;
(f)
(i) Holdings, the Borrower or
any Subsidiary shall (i) fail to pay any principal or interest, regardless of
amount, due in respect of any Material Indebtedness, when and as the same shall
become due and payable, after any applicable grace period, or (ii) any other
event or condition occurs that results in any Material Indebtedness becoming
due prior to its scheduled maturity or that enables or permits (after the
giving of notice, if required, or the expiration of any applicable grace
period) the holder or holders of any Material Indebtedness or any trustee or
agent on its or their behalf to cause any Material Indebtedness to become due,
or to require the prepayment, repurchase, redemption or defeasance thereof,
prior to its scheduled maturity; provided
that this clause (ii) shall not apply to secured Indebtedness that becomes due
as a result of the voluntary sale or transfer of the property or assets
securing such Indebtedness;
(g)
an involuntary proceeding shall be commenced or an involuntary petition
shall be filed in a court of competent jurisdiction seeking (i) relief in
respect of Holdings, the Borrower or any Material Subsidiary, or of a
substantial part of the property or assets of Holdings, the Borrower or a
Material Subsidiary, under Title 11 of the United States Code, as now
constituted or hereafter amended, or any other Federal, state or foreign bankruptcy,
insolvency, receivership or similar law, (ii) the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for Holdings,
the Borrower or any Material Subsidiary or for a substantial part of the
property or assets of Holdings, the Borrower or a Material Subsidiary or (iii)
the winding-up or liquidation of Holdings, the Borrower or any Material
Subsidiary; and such proceeding or petition shall continue undismissed for 60
days or an order or decree approving or ordering any of the foregoing shall be
entered;
(h)
Holdings, the Borrower or any Material Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking relief under Title 11 of
the United States Code, as now constituted or hereafter amended, or any other
Federal, state or foreign bankruptcy, insolvency, receivership or similar law,
(ii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or the filing of any petition described in
(g) above, (iii) apply for or consent to the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for Holdings,
the Borrower or any Material Subsidiary or for a substantial part of the
property or assets of Holdings, the Borrower or any Material Subsidiary, (iv)
file an answer admitting the material allegations of a petition filed against
it in any such proceeding, (v) make a general assignment for the benefit of
creditors, (vi) become unable, admit
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in writing its
inability or fail generally to pay its debts as they become due or (vii) take
any action for the purpose of effecting any of the foregoing;
(i)
one or more judgments for the payment of money in an aggregate amount
(in each case to the extent not paid or covered by insurance provided by a
carrier who has acknowledged coverage in writing and has the ability to
perform) in excess of $7,500,000 shall be rendered against Holdings, the
Borrower, any Subsidiary or any combination thereof and the same shall remain
undischarged for a period of 30 consecutive days during which execution shall
not be effectively stayed, or any action shall be legally taken by a judgment
creditor to levy upon assets or properties of Holdings, the Borrower or any
Subsidiary to enforce any such judgment;
(j)
an ERISA Event shall have occurred that, in the opinion of the Required
Lenders, when taken together with all other such ERISA Events, could reasonably
be expected to result in liability of the Borrower and its ERISA Affiliates in
an aggregate amount exceeding $7,500,000;
(k)
any Guarantee under the Guarantee and Collateral Agreement for any
reason shall cease to be in full force and effect (other than in accordance
with its terms), or any Guarantor shall deny in writing that it has any further
liability under the Guarantee and Collateral Agreement (other than as a result
of the discharge of such Guarantor in accordance with the terms of the Loan
Documents, including in connection with such Guarantor ceasing to be a
Subsidiary of the Borrower pursuant to a transaction permitted by
Section 6.05);
(l)
any security interest purported to be created by any Security Document
shall cease to be, or shall be asserted by the Borrower or any other Loan Party
not to be, a valid, perfected, first priority (except as otherwise expressly
provided in this Agreement or such Security Document) security interest in the
securities, assets or properties covered thereby, except to the extent that any
such loss of perfection or priority results from the failure of the Collateral
Agent to maintain possession of certificates representing securities pledged
under the Pledge Agreement and except to the extent that such loss is covered
by a lender’s title insurance policy and the related insurer promptly after
such loss shall have acknowledged in writing that such loss is covered by such
title insurance policy;
(m)
the Indebtedness under the Subordinated Notes, the Holdings Subordinated
Notes or the Additional Subordinated Debt or any Guarantees thereof shall
cease, for any reason, to be validly subordinated to the Obligations, as
provided in the Subordinated Note Documents, the Holdings Subordinated Note
Documents or the documents governing any Additional Subordinated Debt or any
Loan Party or any Affiliate of any Loan Party shall so assert; or
(n)
there shall have occurred a Change in Control;
then, and in every such event (other than an event with respect to
Holdings or the Borrower described in paragraph (g) or (h) above), and at any
time thereafter during the continuance of such event, the Administrative Agent
may, and at the request of the Required Lenders shall, by notice to the
Borrower, take either or both of the following actions, at the same or
different times: (i) terminate
forthwith the Commitments and (ii) declare the Loans then outstanding to be
forthwith due and payable in whole or in part, whereupon the principal of the
Loans so declared
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to be due and payable, together with accrued interest thereon and any
unpaid accrued Fees and all other liabilities of the Borrower accrued hereunder
and under any other Loan Document, shall become forthwith due and payable,
without presentment, demand, protest or any other notice of any kind, all of
which are hereby expressly waived by the Borrower, anything contained herein or
in any other Loan Document to the contrary notwithstanding; and in any event
with respect to Holdings or the Borrower described in paragraph (g) or (h)
above, the Commitments shall automatically terminate and the principal of the
Loans then outstanding, together with accrued interest thereon and any unpaid
accrued Fees and all other liabilities of the Borrower accrued hereunder and
under any other Loan Document, shall automatically become due and payable,
without presentment, demand, protest or any other notice of any kind, all of
which are hereby expressly waived by the Borrower, anything contained herein or
in any other Loan Document to the contrary notwithstanding.
Each of the Lenders and the Issuing Bank hereby irrevocably appoints
the Administrative Agent and the Collateral Agent (for purposes of this
Article VIII, the Administrative Agent and the Collateral Agent are
referred to collectively as the “Agents”) its agent and authorizes the Agents
to take such actions on its behalf and to exercise such powers as are delegated
to such Agent by the terms of the Loan Documents, together with such actions
and powers as are reasonably incidental thereto. Without limiting the generality of the foregoing, the Agents are
hereby expressly authorized to execute any and all documents (including
releases) with respect to the Collateral and the rights of the Secured Parties
with respect thereto, as contemplated by and in accordance with the provisions
of this Agreement and the Security Documents.
The bank serving as the Administrative Agent and/or the Collateral
Agent hereunder shall have the same rights and powers in its capacity as a
Lender as any other Lender and may exercise the same as though it were not an
Agent, and such bank and its Affiliates may accept deposits from, lend money to
and generally engage in any kind of business with Holdings, the Borrower or any
Subsidiary or other Affiliate thereof as if it were not an Agent hereunder.
Neither Agent shall have any duties or obligations except those
expressly set forth in the Loan Documents.
Without limiting the generality of the foregoing, (a) neither Agent
shall be subject to any fiduciary or other implied duties, regardless of
whether a Default has occurred and is continuing, (b) neither Agent shall have
any duty to take any discretionary action or exercise any discretionary powers,
except discretionary rights and powers expressly contemplated hereby that such
Agent is required to exercise in writing by the Required Lenders (or such other
number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 9.08), and (c) except as expressly
set forth in the Loan Documents, neither Agent shall have any duty to disclose,
nor shall it be liable for the failure to disclose, any information relating to
Holdings, the Borrower or any of the Subsidiaries that is communicated to or
obtained by the bank serving as Administrative Agent and/or Collateral Agent or
any of its Affiliates in
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any capacity. Neither Agent
shall be liable for any action taken or not taken by it with the consent or at
the request of the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances as provided in
Section 9.08) or in the absence of its own gross negligence or wilful
misconduct. Neither Agent shall be
deemed to have knowledge of any Default unless and until written notice thereof
is given to such Agent by Holdings, the Borrower or a Lender, and neither Agent
shall be responsible for or have any duty to ascertain or inquire into (i) any
statement, warranty or representation made in or in connection with any Loan
Document, (ii) the contents of any certificate, report or other document
delivered thereunder or in connection therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth in any Loan Document, (iv) the validity, enforceability, effectiveness or
genuineness of any Loan Document or any other agreement, instrument or
document, or (v) the satisfaction of any condition set forth in Article IV
or elsewhere in any Loan Document, other than to confirm receipt of items
expressly required to be delivered to such Agent.
Each Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper person. Each Agent may also rely upon any statement made to it orally or
by telephone and believed by it to have been made by the proper person, and
shall not incur any liability for relying thereon. Each Agent may consult with legal counsel (who may be counsel for
the Borrower), independent accountants and other experts selected by it, and
shall not be liable for any action taken or not taken by it in accordance with
the advice of any such counsel, accountants or experts.
Each Agent may perform any and all its duties and exercise its rights
and powers by or through any one or more sub-agents appointed by it. Each Agent and any such sub-agent may
perform any and all its duties and exercise its rights and powers by or through
their respective Related Parties. The
exculpatory provisions of the preceding paragraphs shall apply to any such
sub-agent and to the Related Parties of each Agent and any such sub-agent, and
shall apply to their respective activities in connection with the syndication
of the credit facilities provided for herein as well as activities as Agent.
Subject to the appointment and acceptance of a successor Agent as
provided below, either Agent may resign at any time by notifying the Lenders,
the Issuing Bank and the Borrower. Upon
any such resignation, the Required Lenders shall have the right, with the
consent of the Borrower (except during the continuance of an Event of Default),
not to be unreasonably withheld, to appoint a successor. If no successor shall have been so appointed
by the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Agent gives notice of its resignation, then the retiring
Agent may, on behalf of the Lenders and the Issuing Bank, appoint a successor
Agent which shall be a bank with an office in New York, New York, or an
Affiliate of any such bank. Upon the
acceptance of its appointment as Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Agent, and the retiring Agent shall be discharged from
its duties and obligations hereunder. The fees payable by the Borrower to a
successor Agent shall be the same as those payable to its predecessor unless
otherwise agreed between the Borrower and
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such successor. After an
Agent’s resignation hereunder, the provisions of this Article and
Section 9.05 shall continue in effect for the benefit of such retiring
Agent, its sub-agents and their respective Related Parties in respect of any
actions taken or omitted to be taken by any of them while acting as Agent.
Each Lender acknowledges that it has, independently and without
reliance upon the Agents or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement.
Each Lender also acknowledges that it will, independently and without
reliance upon the Agents or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make
its own decisions in taking or not taking action under or based upon this
Agreement or any other Loan Document, any related agreement or any document
furnished hereunder or thereunder.
SECTION 9.01. Notices. Notices and other communications
provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent by
fax, as follows:
(a) if to the Borrower or
Holdings, to it at 7289 Garden Road, Suite 200, Riviera Beach, Florida 33404,
Attention of Gregory A. Marsh (Fax No.
(561) 841-8527);
(b) if to the Administrative
Agent, to Credit Suisse First Boston, Eleven Madison Avenue, New York, NY
10010, Attention of Agency Group (Fax No. (212) 325-8304); and
(c) if to a Lender, to it at its
address (or fax number) set forth on Schedule 2.01 or in the Assignment
and Acceptance pursuant to which such Lender shall have become a party hereto.
All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt if delivered by hand or overnight courier service
or sent by fax or on the date five Business Days after dispatch by certified or
registered mail if mailed, in each case delivered, sent or mailed (properly
addressed) to such party as provided in this Section 9.01 or in accordance
with the latest unrevoked direction from such party given in accordance with
this Section 9.01.
SECTION 9.02. Survival of Agreement. All covenants, agreements,
representations and warranties made by the Borrower or Holdings herein and in
the certificates or other instruments prepared or delivered in connection with
or pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Lenders and the Issuing Bank and
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shall survive
the making by the Lenders of the Loans and the issuance of Letters of Credit by
the Issuing Bank, regardless of any investigation made by the Lenders or the
Issuing Bank or on their behalf, and shall continue in full force and effect as
long as the principal of or any accrued interest on any Loan or any Fee or any
other amount payable under this Agreement or any other Loan Document is
outstanding and unpaid or any Letter of Credit is outstanding and so long as
the Commitments have not been terminated.
The provisions of Sections 2.14, 2.16, 2.20 and 9.05 shall remain
operative and in full force and effect regardless of the expiration of the term
of this Agreement, the consummation of the transactions contemplated hereby,
the repayment of any of the Loans, the expiration of the Commitments, the
expiration of any Letter of Credit, the invalidity or unenforceability of any term
or provision of this Agreement or any other Loan Document, or any investigation
made by or on behalf of the Administrative Agent, the Collateral Agent, any
Lender or the Issuing Bank.
SECTION 9.03. Binding Effect. This Agreement shall become
effective as set forth in the Amendment Agreement.
SECTION 9.04. Successors and Assigns. (a) Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
permitted successors and assigns of such party; and all covenants, promises and
agreements by or on behalf of the Borrower, Holdings, the Administrative Agent,
the Collateral Agent, the Issuing Bank or the Lenders that are contained in
this Agreement shall bind and inure to the benefit of their respective
successors and assigns.
(b)
Each Lender may assign to one or more assignees all or a portion of its
interests, rights and obligations under this Agreement (including all or a
portion of its Commitments and the Loans at the time owing to it); provided, however, that (i) except in the
case of an assignment (other than an assignment of a Revolving Credit
Commitment) to a Lender or an Affiliate or Related Fund of a Lender, (x) the
Borrower and the Administrative Agent (and, in the case of any assignment of a Revolving
Credit Commitment, the Issuing Bank and the Swingline Lender) must give their
prior written consent to such assignment (which consent shall not be
unreasonably withheld or delayed); provided,
however, that the consent of the Borrower shall not be required to
any such assignment during the continuance of any Event of Default, and (y) the
amount of the Loan Commitment of the assigning Lender subject to each such
assignment (determined as of the date the Assignment and Acceptance with
respect to such assignment is delivered to the Administrative Agent) shall not
be less than $1,000,000 (or, if less, the entire remaining amount of such
Lender’s Loan Commitment), (ii) the parties to each such assignment shall (A)
electronically execute and deliver to the Administrative Agent an Assignment
and Acceptance via an electronic settlement system acceptable to the
Administrative Agent (which initially shall be ClearPar, LLC) or (B) if no such
system shall be acceptable to the Administrative Agent, manually execute and
deliver to the Administrative Agent an Assignment and Acceptance, together with
a processing and recordation fee of $3,500 and (iii) the assignee, if it
shall not be a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire and applicable tax forms. Upon acceptance and recording pursuant to
paragraph (e) of this Section 9.04, from and after the effective date
specified in each Assignment and Acceptance, (A) the assignee thereunder
shall be a party hereto and, to the extent of the interest
85
assigned by
such Assignment and Acceptance, have the rights and obligations of a Lender
under this Agreement and (B) the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Acceptance, 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
2.14, 2.16, 2.20 and 9.05, as well as to any Fees accrued for its account and
not yet paid).
(c)
By executing and delivering an Assignment and Acceptance, the assigning
Lender thereunder and the assignee thereunder shall be deemed to confirm to and
agree with each other and the other parties hereto as follows: (i) such assigning Lender warrants that it
is the legal and beneficial owner of the interest being assigned thereby free
and clear of any adverse claim and that its Term Loan Commitment and Revolving
Credit Commitment, and the outstanding balances of its Term Loans and Revolving
Loans, in each case without giving effect to assignments thereof which have not
become effective, are as set forth in such Assignment and Acceptance, (ii)
except as set forth in (i) above, 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 Loan Document or any other instrument or
document furnished pursuant hereto, or the financial condition of the Borrower
or any Subsidiary or the performance or observance by the Borrower or any
Subsidiary of any of its obligations under this Agreement, any other Loan
Document or any other instrument or document furnished pursuant hereto; (iii)
such assignee represents and warrants that it is legally authorized to enter
into such Assignment and Acceptance; (iv) such assignee confirms that it has
received a copy of this Agreement, together with copies of the most recent
financial statements referred to in Section 3.05(a) or delivered pursuant
to Section 5.04 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; (v) such assignee will independently and without
reliance upon the Administrative Agent, the Collateral 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; (vi) such assignee
appoints and authorizes the Administrative Agent and the Collateral Agent to
take such action as agent on its behalf and to exercise such powers under this
Agreement as are delegated to the Administrative Agent and the Collateral
Agent, respectively, by the terms hereof, together with such powers as are
reasonably incidental thereto; and (vii) such assignee agrees that it will
perform in accordance with their terms all the obligations which by the terms
of this Agreement are required to be performed by it as a Lender.
(d)
The Administrative Agent, acting for this purpose as an agent of the
Borrower, shall maintain at one of its offices in The City of New York a copy
of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the “Register”). The entries in the Register shall be
conclusive and the Borrower, the Administrative Agent, the Issuing Bank, the
Collateral Agent and the Lenders may treat each person whose name is recorded
in the Register pursuant to
86
the terms
hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary.
The Register shall be available for inspection by the Borrower, the
Issuing Bank, the Collateral Agent and any Lender, at any reasonable time and
from time to time upon reasonable prior notice.
(e)
Upon its receipt of a duly completed Assignment and Acceptance executed
by an assigning Lender and an assignee, an Administrative Questionnaire
completed in respect of the assignee (unless the assignee shall already be a
Lender hereunder), if required, the processing and recordation fee referred to
in paragraph (b) above (if applicable), the applicable tax forms completed in
respect of the assignee (unless the assignee shall already be a Lender
hereunder) and, if required, the written consent of the Borrower, the Swingline
Lender, the Issuing Bank and the Administrative Agent to such assignment, the
Administrative Agent shall (i) accept such Assignment and Acceptance, (ii) record
the information contained therein in the Register and (iii) give prompt notice
thereof to the Lenders, the Issuing Bank and the Swingline Lender. No assignment shall be effective unless it
has been recorded in the Register as provided in this paragraph (e).
(f)
Each Lender may without the consent of the Borrower, the Swingline
Lender, the Issuing Bank or the Administrative Agent sell participations to one
or more banks or other entities in all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Loans owing to it); provided,
however, that (i) such Lender’s obligations under this Agreement
shall remain unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations, (iii) the
participating banks or other entities shall be entitled to the benefit of the
cost protection provisions contained in Sections 2.14, 2.16 and 2.20 to the
same extent as if they were Lenders (but, with respect to any particular
participant, to no greater extent than the Lender that sold the participation
to such participant) and (iv) the Borrower, the Administrative Agent, the
Issuing Bank and the 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 to enforce the
obligations of the Borrower relating to the Loans or L/C Disbursements and to
approve any amendment, modification or waiver of any provision of this
Agreement (other than amendments, modifications or waivers decreasing any fees
payable hereunder or the amount of principal of or the rate at which interest
is payable on the Loans, extending any scheduled principal payment date or date
fixed for the payment of interest on the Loans, increasing or extending the
Commitments or releasing any Guarantor or all or substantially all of the
Collateral).
(g)
Any Lender or participant may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this
Section 9.04, disclose to the assignee or participant or proposed assignee
or participant any information relating to the Borrower furnished to such
Lender by or on behalf of the Borrower; provided
that, prior to any such disclosure of information designated by the Borrower as
confidential, each such assignee or participant or proposed assignee or
participant shall execute an agreement whereby such assignee or participant
shall agree (subject to customary exceptions) to preserve the confidentiality
of
87
such
confidential information on terms no less restrictive than those applicable to
the Lenders pursuant to Section 9.16.
(h)
Any Lender may (without the consent of the Borrower or the
Administrative Agent) at any time assign all or any portion of its rights under
this Agreement to secure extensions of credit to such Lender or in support of
obligations owed by such Lender (including, if such Lender is a fund that
invests in bank loans, to a trustee for holders of obligations owed, or
securities issued, by such fund); provided
that no such assignment shall release a Lender from any of its obligations
hereunder or substitute any such assignee for such Lender as a party hereto and
any foreclosure or exercise of remedies by such assignee or trustee shall be
subject to the provisions of this Section 9.04 regarding assignments in
all respects.
(i)
Notwithstanding anything to the contrary contained herein, any Lender (a
“Granting Lender”) may grant to a
special purpose funding vehicle (an “SPC”),
identified as such in writing from time to time by the Granting Lender to the
Administrative Agent and the Borrower, the option to provide to the Borrower
all or any part of any Loan that such Granting Lender would otherwise be
obligated to make to the Borrower pursuant to this Agreement; provided that (i) nothing herein
shall constitute a commitment by any SPC to make any Loan and (ii) if an
SPC elects not to exercise such option or otherwise fails to provide all or any
part of such Loan, the Granting Lender shall be obligated to make such Loan
pursuant to the terms hereof. The
making of a Loan by an SPC hereunder shall utilize the Commitment of the
Granting Lender to the same extent, and as if, such Loan were made by such
Granting Lender. Each party hereto
hereby agrees that no SPC shall be liable for any indemnity or similar payment
obligation under this Agreement (all liability for which shall remain with the
Granting Lender). In furtherance of the
foregoing, each party hereto hereby agrees (which agreement shall survive the
termination of this Agreement) that, prior to the date that is one year and one
day after the payment in full of all outstanding commercial paper or other
senior indebtedness of any SPC, it will not institute against, or join any
other person in instituting against, such SPC any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under the laws of the United
States or any State thereof. In
addition, notwithstanding anything to the contrary contained in this
Section 9.04, any SPC may (i) with notice to, but without the prior
written consent of, the Borrower and the Administrative Agent and without
paying any processing fee therefor, assign all or a portion of its interests in
any Loans to the Granting Lender or to any financial institutions (consented to
by the Borrower and Administrative Agent) providing liquidity and/or credit
support to or for the account of such SPC to support the funding or maintenance
of Loans and (ii) disclose on a confidential basis any non-public information
relating to its Loans to any rating agency, commercial paper dealer or provider
of any surety, guarantee or credit or liquidity enhancement to such SPC.
(j)
Neither Holdings nor the Borrower shall assign or delegate any of its
rights or duties hereunder without the prior written consent of the
Administrative Agent, the Issuing Bank and each Lender, and any attempted
assignment without such consent shall be null and void.
(k)
In the event that Standard & Poor’s Ratings Service, Moody’s
Investors Service, Inc., and Thompson’s BankWatch (or InsuranceWatch Ratings
Service, in the case of Lenders that are insurance companies (or Best’s Insurance
Reports, if such insurance company is not rated by
88
Insurance
Watch Ratings Service)) shall, after the date that any Lender becomes a
Revolving Credit Lender, downgrade the long-term certificate deposit ratings of
such Lender, and the resulting ratings shall be below BBB-, Baa3 and C (or BB,
in the case of a Lender that is an insurance company (or B, in the case of an
insurance company not rated by InsuranceWatch Ratings Service)), then the Issuing
Bank shall have the right, but not the obligation, at its own expense, upon
notice to such Lender and the Administrative Agent, to replace (or to request
the Borrower to use its reasonable efforts to replace) such Lender with an
assignee (in accordance with and subject to the restrictions contained in
paragraph (b) above), and such Lender hereby agrees to transfer and assign
without recourse (in accordance with and subject to the restrictions contained
in paragraph (b) above) all its interests, rights and obligations in respect of
its Revolving Credit Commitment to such assignee; provided, however, that (i) no such assignment shall
conflict with any law, rule and regulation or order of any Governmental
Authority and (ii) the Issuing Bank or such assignee, as the case may be, shall
pay to such Lender in immediately available funds on the date of such
assignment the principal of and interest accrued to the date of payment on the
Loans made by such Lender hereunder and all other amounts accrued for such
Lender’s account or owed to it hereunder.
SECTION 9.05. Expenses; Indemnity. (a) The Borrower and Holdings agree,
jointly and severally, to pay all reasonable out-of-pocket expenses incurred by
the Administrative Agent, the Collateral Agent, the Issuing Bank and the
Swingline Lender in connection with the syndication of the credit facilities
provided for herein and the preparation and administration of this Agreement
and the other Loan Documents or in connection with any amendments,
modifications or waivers of the provisions hereof or thereof (whether or not
the transactions hereby or thereby contemplated shall be consummated) or
incurred by the Administrative Agent, the Collateral Agent or any Lender in
connection with the enforcement or protection of its rights in connection with
this Agreement and the other Loan Documents or in connection with the Loans
made or Letters of Credit issued hereunder, including the fees, charges and
disbursements of Cravath, Swaine & Moore LLP, counsel for the
Administrative Agent and the Collateral Agent, and, in connection with any such
enforcement or protection, the fees, charges and disbursements of any other
counsel for the Administrative Agent, the Collateral Agent or any Lender.
(b)
The Borrower and Holdings agree, jointly and severally, to indemnify the
Administrative Agent, the Collateral Agent, each Lender, the Issuing Bank and
each Related Party of any of the foregoing persons (each such person being
called an “Indemnitee”) against,
and to hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including reasonable counsel fees, charges
and disbursements, incurred by or asserted against any Indemnitee arising out
of, in any way connected with, or as a result of (i) the execution or delivery
of the Existing Credit Agreement, this Agreement or any other Loan Document or
any agreement or instrument contemplated thereby, the performance by the
parties thereto of their respective obligations thereunder or the consummation
of the Transactions and the other transactions contemplated thereby, (ii) the
use of the proceeds of the Loans or issuance of Letters of Credit, (iii) any
claim, litigation, investigation or proceeding relating to any of the
foregoing, whether or not any Indemnitee is a party thereto, or (iv) any actual
or alleged presence or Release of Hazardous Materials on any property currently
or formerly owned or operated by the Borrower or any of the Subsidiaries, or
any Environmental Liability related in any way to the
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Borrower or
the Subsidiaries; provided that
such indemnity shall not, as to any Indemnitee, be available to the extent that
such losses, claims, damages, liabilities or related expenses are determined by
a court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or wilful misconduct of such Indemnitee.
(c)
To the extent that Holdings and the Borrower fail to pay any amount
required to be paid by them to the Administrative Agent, the Collateral Agent,
the Issuing Bank or the Swingline Lender under paragraph (a) or (b) of this
Section, each Lender severally agrees to pay to the Administrative Agent, the
Collateral Agent, the Issuing Bank or the Swingline Lender, as the case may be,
such Lender’s pro rata share (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or
indemnified loss, claim, damage, liability or related expense, as the case may
be, was incurred by or asserted against the Administrative Agent, the
Collateral Agent, the Issuing Bank or the Swingline Lender in its capacity as
such. For purposes hereof, a Lender’s
“pro rata share” shall be determined based upon its share of the sum of the
Aggregate Revolving Credit Exposure, outstanding Term Loans and unused
Commitments at the time.
(d)
To the extent permitted by applicable law, neither Holdings nor the
Borrower shall assert, and each hereby waives, any claim against any
Indemnitee, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement or any agreement or
instrument contemplated hereby, the Transactions, any Loan or Letter of Credit
or the use of the proceeds thereof.
(e)
Promptly after receipt by an Indemnitee under this Section 9.05 of
notice of any claim or the commencement of any action, the Indemnitee shall
notify Holdings and the Borrower in writing of the claim or the commencement of
that action; provided, however, that the failure to notify
Holdings and the Borrower shall not relieve it from any liability which it may
have under this Section 9.05 except to the extent that it has been
materially prejudiced (through the forfeiture of substantive rights or defenses
or liability for fees and expenses) by such failure; and, provided, further,
that the failure to notify Holdings and the Borrower shall not relieve it from
any liability which it may have to an Indemnitee otherwise than under this
Section 9.05. If any such claim or
action shall be brought against an Indemnitee, and it shall notify Holdings and
the Borrower thereof, Holdings and the Borrower shall be entitled to
participate therein. It is understood
that Holdings and the Borrower shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable
fees, disbursements and other charges of more than one separate firm of
attorneys (in addition to any local counsel) at any one time for all such
Indemnitees, unless a bona fide conflict of interest requires separate counsel
for particular Indemnitees. Each
Indemnitee, as a condition of the indemnity agreements contained in this
Section 9.05, shall use all reasonable efforts to cooperate with Holdings
and the Borrower in the defense of any such action or claim. Holdings and the Borrower shall not be
liable for any settlement of any such action effected without its written
consent (which consent shall not be unreasonably withheld), but if settled with
its written consent or if there be a final judgment for the plaintiff in any
such action, Holdings and the Borrower agree to indemnify and hold harmless any
Indemnitee from and against any loss or liability by reason of such settlement
or judgment.
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Holdings and
the Borrower shall not, without the prior written consent of the Indemnitee
(which consent shall not be unreasonably withheld), effect any settlement of
any pending or threatened proceeding in respect of which any Indemnitee is or
could have been a party and indemnity could have been sought hereunder by such
Indemnitee unless such settlement includes an unconditional release of such
Indemnitee from all liability on claims that are the subject matter of such
proceeding.
(f)
If any Indemnitee makes a claim pursuant to this Section 9.05 for
payment of fees or expenses, such fees or expenses shall be paid even if
Holdings or the Borrower reserves the right to dispute or does dispute whether
Section 9.05 requires the payment of such expenses; however, such Indemnitee
shall promptly refund such amount to the extent that there is a final judicial
or arbitral determination that such Indemnitee was not entitled to
indemnification or contribution rights with respect to such payment pursuant to
the express terms of this Section 9.05.
(g)
The provisions of this Section 9.05 shall remain operative and in
full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the expiration of the Commitments, the
expiration of any Letter of Credit, the invalidity or unenforceability of any
term or provision of this Agreement or any other Loan Document, or any
investigation made by or on behalf of the Administrative Agent, the Collateral
Agent, any Lender or the Issuing Bank.
All amounts due under this Section 9.05 shall be payable on written
demand therefor.
SECTION 9.06. Right of Setoff. If an Event of Default shall
have occurred and be continuing, each Lender is hereby authorized at any time
and from time to time, except to the extent prohibited by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Lender
to or for the credit or the account of the Borrower or Holdings against any of
and all the obligations of the Borrower or Holdings now or hereafter existing
under this Agreement and other Loan Documents held by such Lender. The rights of each Lender under this
Section 9.06 are in addition to other rights and remedies (including other
rights of setoff) which such Lender may have.
SECTION 9.07. Applicable Law. THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS (OTHER THAN LETTERS OF CREDIT AND AS EXPRESSLY SET FORTH IN
OTHER LOAN DOCUMENTS) SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK. EACH
LETTER OF CREDIT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED IN ACCORDANCE
WITH, THE LAWS OR RULES DESIGNATED IN SUCH LETTER OF CREDIT, OR IF NO SUCH LAWS
OR RULES ARE DESIGNATED, THE UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY
CREDITS MOST RECENTLY PUBLISHED AND IN EFFECT, ON THE DATE SUCH LETTER OF
CREDIT WAS ISSUED, BY THE INTERNATIONAL CHAMBER OF COMMERCE (THE “UNIFORM
CUSTOMS”) AND, AS TO MATTERS NOT GOVERNED BY THE UNIFORM CUSTOMS, THE LAWS OF
THE STATE OF NEW YORK.
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SECTION 9.08. Waivers; Amendment. (a) No failure or delay of the
Administrative Agent, the Collateral Agent, any Lender or the Issuing Bank in
exercising any power or right hereunder or under any other Loan Document shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of steps to enforce
such a right or power, preclude any other or further exercise thereof or the
exercise of any other right or power.
The rights and remedies of the Administrative Agent, the Collateral
Agent, the Issuing Bank and the Lenders hereunder and under the other Loan
Documents are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No waiver of
any provision of this Agreement or any other Loan Document or consent to any
departure by the Borrower or any other Loan Party therefrom shall in any event
be effective unless the same shall be permitted by paragraph (b) below, and
then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. No
notice or demand on the Borrower or Holdings in any case shall entitle the
Borrower or Holdings to any other or further notice or demand in similar or
other circumstances.
(b)
Neither this Agreement nor any provision hereof may be waived, amended
or modified except pursuant to an agreement or agreements in writing entered
into by the Borrower, Holdings and the Required Lenders; provided, however, that no such agreement
shall (i) decrease the principal amount of, or extend the maturity of or any
scheduled principal payment date or date for the payment of any interest on any
Loan or any date for reimbursement of an L/C Disbursement, or waive or excuse
any such payment or any part thereof, or decrease the rate of interest on any
Loan or L/C Disbursement, without the prior written consent of each Lender
affected thereby, (ii) increase or extend the Commitment or decrease or extend
the date for payment of any Fees of any Lender without the prior written
consent of such Lender, (iii) amend or modify the pro rata requirements of
Section 2.17, the provisions of Section 9.04(j), the provisions of
this Section or release any Guarantor (except that no consent is required
to permit the termination of any Guarantee of any Guarantor that ceases to be a
Subsidiary pursuant to a transaction permitted pursuant to Section 6.05)
or all or substantially all of the Collateral, without the prior written
consent of each Lender, (iv) change the provisions of any Loan Document in a
manner that by its terms adversely affects the rights in respect of payments
due to Lenders holding Loans of one Class differently from the rights of Lenders
holding Loans of any other Class without the prior written consent of Lenders
holding a majority in interest of the outstanding Loans and unused Commitments
of each adversely affected Class, (v) modify the protections afforded to an SPC
pursuant to the provisions of Section 9.04(i) without the written consent
of such SPC, (vi) amend, modify or waive compliance by Holdings or the Borrower
with the provisions of Section 6.11, 6.12 or 6.13 (or with the provisions
of Section 4.01, as it relates to an Event of Default following a breach
of the provisions of Section 6.11, 6.12 or 6.13) without the prior written
consent of Revolving Lenders holding a majority in interest of the Revolving
Credit Commitments or (vii) reduce the percentage contained in the definition
of the term “Required Lenders” (it being understood that with the consent of
the Required Lenders, additional extensions of credit pursuant to this
Agreement may be included in the determination of the Required Lenders on
substantially the same basis as the Term Loan Commitments and Revolving Credit
Commitments on the date hereof); provided
further that no such agreement shall amend, modify or otherwise affect the
rights or duties of the Administrative Agent, the Collateral Agent, the Issuing
Bank or the Swingline Lender hereunder or under any other Loan
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Document
without the prior written consent of the Administrative Agent, the Collateral
Agent, the Issuing Bank or the Swingline Lender.
SECTION 9.09. Interest Rate Limitation. Notwithstanding anything herein
to the contrary, if at any time the interest rate applicable to any Loan or
participation in any L/C Disbursement, together with all fees, charges and
other amounts which are treated as interest on such Loan or participation in
such L/C Disbursement under applicable law (collectively the “Charges”), shall exceed the maximum lawful
rate (the “Maximum Rate”) which
may be contracted for, charged, taken, received or reserved by the Lender
holding such Loan or participation in accordance with applicable law, the rate
of interest payable in respect of such Loan or participation hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would
have been payable in respect of such Loan or participation but were not payable
as a result of the operation of this Section 9.09 shall be cumulated and
the interest and Charges payable to such Lender in respect of other Loans or
participations or periods shall be increased (but not above the Maximum Rate
therefor) until such cumulated amount, together with interest thereon at the
Federal Funds Effective Rate to the date of repayment, shall have been received
by such Lender.
SECTION 9.10. Entire Agreement. This Agreement, the Fee Letter and the other
Loan Documents constitute the entire contract between the parties relative to
the subject matter hereof. Any other
previous agreement among the parties with respect to the subject matter hereof
is superseded by this Agreement and the other Loan Documents. Nothing in this Agreement or in the other
Loan Documents, expressed or implied, is intended to confer upon any person
(other than the parties hereto and thereto, their respective successors and
assigns permitted hereunder (including any Affiliate of the Issuing Bank that
issues any Letter of Credit) and, to the extent expressly contemplated hereby,
the Related Parties of each of the Administrative Agent, the Collateral Agent,
the Issuing Bank and the Lenders) any rights, remedies, obligations or
liabilities under or by reason of this Agreement or the other Loan Documents.
SECTION 9.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS. EACH PARTY HERETO (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS,
THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.11.
SECTION 9.12. Severability. In the event any one or more of
the provisions contained in this Agreement or in any other Loan Document should
be held invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein and
therein shall not in any way be affected or impaired thereby (it being
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understood
that the invalidity of a particular provision in a particular jurisdiction
shall not in and of itself affect the validity of such provision in any other
jurisdiction). The parties shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 9.14. Headings. Article and
Section headings and the Table of Contents used herein are for convenience
of reference only, are not part of this Agreement and are not to affect the
construction of, or to be taken into consideration in interpreting, this
Agreement.
SECTION 9.15. Jurisdiction; Consent to Service of Process. (a) Each party to this Agreement hereby
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of any New York State court or Federal court of the
United States of America sitting in New York City, and any appellate court from
any thereof, in any action or proceeding arising out of or relating to this
Agreement or the other Loan Documents, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State or, to the extent permitted by law, in
such Federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law.
Nothing in this Agreement shall affect any right that the Administrative
Agent, the Collateral Agent, the Issuing Bank or any Lender may otherwise have
to bring any action or proceeding relating to this Agreement or the other Loan
Documents against the Borrower, Holdings or their respective properties in the
courts of any jurisdiction.
(b)
Each party to this Agreement hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any
suit, action or proceeding arising out of or relating to this Agreement or the
other Loan Documents in any New York State or Federal court. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
(c)
Each party to this Agreement irrevocably consents to service of process
in the manner provided for notices in Section 9.01. Nothing in this Agreement will affect the
right of any party to this Agreement to serve process in any other manner
permitted by law.
SECTION 9.16. Confidentiality. (a) Each of the Administrative
Agent, the Collateral Agent, the Issuing Bank and the Lenders agrees to
maintain the confidentiality of the Information (as defined below), except that
Information may be disclosed (a) to its and its Affiliates’ officers,
directors, employees and agents, including accountants, legal counsel and other
advisors (it being understood that the persons to whom such disclosure is made
will be informed of the confidential nature of such Information and instructed
to keep such Information confidential), (b) to the extent requested by any
regulatory authority or quasi-regulatory authority (such as the National
Association of Insurance Commissioners), (c) to the extent required by
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applicable
laws or regulations or by any subpoena or similar legal process, (in which case
the Borrower shall be notified promptly thereof if permitted by applicable
law), (d) in connection with the exercise of any remedies hereunder or under
the other Loan Documents or any suit, action or proceeding relating to the
enforcement of its rights hereunder or thereunder, (e) subject to an agreement
containing provisions substantially the same as those of this
Section 9.16, to (i) any actual or prospective assignee of or participant
in any of its rights or obligations under this Agreement and the other Loan
Documents or (ii) any actual or prospective counterparty (or its advisors) to
any swap or derivative transaction relating to the Borrower or any Subsidiary
or any of their respective obligations, (f) with the consent of the Borrower or
(g) to the extent such Information becomes publicly available other than as a
result of a breach of this Section 9.16.
For the purposes of this Section, “Information”
shall mean all information received from or on behalf of the Borrower or
Holdings and related to the Borrower or Holdings or their business, other than
any such information that was available to the Administrative Agent, the
Collateral Agent, the Issuing Bank or any Lender on a nonconfidential basis
prior to its disclosure by or on behalf of the Borrower or Holdings. Any person required to maintain the
confidentiality of Information as provided in this Section 9.16 shall be
considered to have complied with its obligation to do so if such person has
exercised the same degree of care to maintain the confidentiality of such
Information as such person would accord its own confidential information, but
in no event less than a reasonable degree of care.
(b)
Notwithstanding anything herein to the contrary, any party to this
Agreement (and any employee, representative or other agent of such party) may
disclose to any and all persons, without limitation of any kind, the tax
treatment and tax structure of the transactions contemplated by this Agreement
and all materials of any kind (including opinions or other tax analyses) that
are provided to it relating to such tax treatment and tax structure, provided, however, that no party shall
disclose any information relating to such tax treatment or tax structure to the
extent nondisclosure is necessary in order to comply with applicable securities
laws.
SECTION 9.17. Release of Contingent Note Reserve.
(a) Notwithstanding any other provision of this Agreement, cash on
deposit in the Contingent Note Reserve shall be released to Holdings and shall
be promptly contributed to the Borrower in the form of common equity to enable
the Borrower to pay regularly scheduled principal of and interest on the
Contingent Notes, when and as due, on a Business Day specified by the Borrower
(a “Contingent Note Payment Date”)
in an amount specified by the Borrower (a “Contingent
Note Payment Amount”) upon satisfaction of the following conditions
precedent: (i) the Borrower shall have
given written notice to the Administrative Agent and the Collateral Agent at
least five Business Days prior to the Contingent Note Payment Date, specifying
the proposed Contingent Note Payment Date and the Contingent Note Payment
Amount; (ii) no Default or Event of Default shall have occurred and be
continuing as of the Contingent Note Payment Date; and (iii) the Borrower shall
have provided to the Administrative Agent and the Collateral Agent a
certificate, dated the Contingent Note Payment Date and executed on behalf of
the Borrower by a Financial Officer of the Borrower, (A) confirming (x) any
cash on deposit in the Contingent Note Reserve released pursuant to this
Section 9.17(a) shall be used to make a regularly scheduled payment of
principal of and/or interest on the Contingent Notes in the Contingent Note
Payment Amount within five
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Business Days
of the Contingent Note Payment Date and (y) the satisfaction of the condition
precedent set forth in clause (ii) above and (B) specifying the number and
location of the account to which the Contingent Note Payment Amount is to be
disbursed.
(b)
Notwithstanding any other provision of this Agreement, any cash interest
earned on the cash and Permitted Investments held in Contingent Note Reserve in
accordance with the provisions of the Custody and Control Agreement shall be
released to Holdings to pay regularly scheduled interest on the Holdings
Subordinated Notes, when and as due, on a Business Day specified by the
Borrower (a “Holdings Interest Payment Date”)
in an amount specified by the Borrower (a “Holdings
Interest Payment Amount”) upon satisfaction of the following
conditions precedent: (i) the Borrower
shall have given written notice to the Administrative Agent and the Collateral
Agent at least five Business Days prior to the Holdings Interest Payment Date,
specifying the proposed Holdings Interest Payment Date and the Holdings
Interest Payment Amount; (ii) no Default or Event of Default shall have
occurred and be continuing as of the Holdings Interest Payment Date; and (iii)
the Borrower shall have provided to the Administrative Agent and the Collateral
Agent a certificate, dated the Holdings Interest Payment Date and executed on
behalf of the Borrower by a Financial Officer of the Borrower, (A) confirming
(x) any interest earnings on the Contingent Note Reserve released pursuant to
this Section 9.17(b) shall be used to make a regularly scheduled payment
of interest on the Holdings Subordinated Notes in the Holdings Interest Payment
Amount within five Business Days of the Holdings Interest Payment Date and (y) the
satisfaction of the condition precedent set forth in clause (ii) above and (B)
specifying the number and location of the account to which the Holdings
Interest Payment Amount is to be disbursed.
(c)
Notwithstanding any other provision of this Agreement or the Guarantee
and Collateral Agreement, following the payment in full of all principal of and
interest on the Contingent Notes, the Lien on the Contingent Note Reserve
created pursuant to the Guarantee and Collateral Agreement shall be released,
without representation, warranty or recourse of any nature, on a Business Day
specified by the Borrower (the “Release Date”) upon satisfaction of the
following conditions precedent:
(i) the Borrower shall have
given written notice to the Administrative Agent and the Collateral Agent at
least five Business Days prior to the Release Date, specifying the proposed
Release Date, (ii) no Default or Event of Default shall have occurred and be
continuing as of the Release Date; and (iii) the Borrower shall have provided
to the Administrative Agent and the Collateral Agent a certificate, dated the
Release Date and executed on behalf of the Borrower by a Financial Officer of
the Borrower, confirming (x) that the Contingent Notes shall have been paid in
full or otherwise expired and of no further force and effect and (y) the
satisfaction of the condition precedent set forth in clause (ii) above. If the Net Leverage Ratio as of the Release
Date shall be greater than 4.00 to 1.00, any funds remaining in the Contingent
Note Reserve shall be released to Holdings and shall be contributed to the
Borrower in the form of common equity, and if the Net Leverage Ratio as of the
Release Date shall be less than or equal to 4.00 to 1.00, any funds remaining
in the Contingent Note Reserve shall be released to Holdings and may be used by
Holdings to repay or prepay the outstanding principal of and accrued interest
on the Holdings Subordinated Notes.
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(d)
Notwithstanding any other provision of this Agreement or the Guarantee
and Collateral Agreement, if the Required Lenders consent to the prepayment of
any Contingent Note at a discount to the principal amount thereof, an amount of
cash on deposit in the Contingent Note Reserve shall be released to Holdings
(without representation, warranty or recourse of any nature, but free and clear
of the Lien created pursuant to the Guarantee and Collateral Agreement) and
Holdings shall promptly contribute such funds to the Borrower in the form of
common equity to enable the Borrower to make such prepayment.
(e)
Without limiting the provisions of Section 9.05, the Borrower shall
reimburse the Administrative Agent, the Collateral Agent and the Lenders upon
demand for all reasonable costs and expenses, including the reasonable fees,
charges and disbursements of counsel, incurred by any of them in connection
with any action contemplated by this Section 9.17.
SECTION 9.18. Effect of Restatement. This Agreement shall, except as otherwise
expressly set forth herein, supersede the Existing Credit Agreement from and
after the Restatement Date with respect to the transactions hereunder and with
respect to the Loans and Letters of Credit outstanding under the Existing
Credit Agreement as of the Restatement Date.
The parties hereto acknowledge and agree, however, that except to the
extent contemplated hereby with respect to the borrowing of the Term Loans and
prepayment of the Existing Term Loans, (i) this Agreement and all other Loan
Documents executed and delivered herewith do not constitute a novation, payment
and reborrowing or termination of the Obligations under the Existing Credit
Agreement and the other Loan Documents as in effect prior to the Restatement
Date, (ii) such Obligations are in all respects continuing with only the terms
being modified as provided in this Agreement and the other Loan Documents,
(iii) the liens and security interests in favor of the Collateral Agent for the
benefit of the Secured Parties securing payment of such Obligations are in all respects
continuing and in full force and effect with respect to all Obligations and
(iv) all references in the other Loan Documents to the Credit Agreement shall
be deemed to refer without further amendment to this Agreement.
SECTION 9.19. U.S.A. Patriot Act Notice. Each Lender and the Administrative Agent
(for itself and not on behalf of any Lender) hereby notifies the Borrower that
pursuant to the requirements of the U.S.A. Patriot Act (Title III of Pub. L.
107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify
and record information that identifies the Borrower, which information includes
the name and address of the Borrower and other information that will allow such
Lender or the Administrative Agent, as applicable, to identify the Borrower in
accordance with the Act.
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