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EXHIBIT 10.21
EXECUTION COPY
$50,000,000
CREDIT AGREEMENT
dated as of June 28, 2000
among
NOVAMED EYECARE, INC.
as the Borrower,
CERTAIN COMMERCIAL LENDING INSTITUTIONS,
as the Lenders,
and
NATIONAL CITY BANK OF MICHIGAN/ILLINOIS,
as the Agent for the Lenders
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS.....................................1
SECTION 1.1 Defined Terms....................................................1
SECTION 1.2 Use of Defined Terms............................................20
SECTION 1.3 Cross-References................................................20
SECTION 1.4 Accounting Principles...........................................20
ARTICLE II REVOLVING COMMITMENTS, BORROWING PROCEDURES
AND NOTES.....................................................................20
SECTION 2.1 Revolving Commitments...........................................20
SECTION 2.1.1 Revolving Commitment of Each Lender.........................21
SECTION 2.1.2 Lenders Not Permitted or Required To Make Loans.............21
SECTION 2.2 Reduction of Revolving Commitment Amount........................21
SECTION 2.2.1 Optional....................................................21
SECTION 2.2.2 Mandatory Reductions and Prepayments........................21
SECTION 2.3 Borrowing Procedure.............................................22
SECTION 2.4 Continuation and Conversion Elections...........................22
SECTION 2.5 Funding.........................................................23
SECTION 2.6 Notes...........................................................23
SECTION 2.7 Letters of Credit...............................................23
SECTION 2.7.1 Issuance of Letters of Credit...............................23
SECTION 2.7.2 Participating Interests.....................................23
SECTION 2.7.3 Reimbursement Upon Drawing..................................24
SECTION 2.7.4 Request for Letter of Credit................................25
ARTICLE III REPAYMENTS, PREPAYMENTS, INTEREST AND FEES........................25
SECTION 3.1 Repayments and Prepayments......................................25
SECTION 3.1.1 Prior to the Revolving Commitment Termination Date..........25
SECTION 3.1.2 On the Maturity Date........................................26
SECTION 3.1.3 Extension of Maturity Date..................................26
SECTION 3.2 Interest Provisions.............................................26
SECTION 3.2.1 Rates.......................................................26
SECTION 3.2.2 Post-Maturity Rates.........................................28
SECTION 3.2.3 Payment Dates...............................................28
SECTION 3.3 Fees............................................................29
SECTION 3.3.1 Revolving Commitment Fee....................................29
SECTION 3.3.2 Letter of Credit Fees.......................................29
SECTION 3.3.3 Agency Fees.................................................30
ARTICLE IV LIBO RATE AND OTHER PROVISIONS.....................................30
SECTION 4.1 LIBO Rate Lending Unlawful......................................30
SECTION 4.2 Deposits Unavailable............................................30
SECTION 4.3 Increased LIBO Rate Loan Costs, etc.............................30
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SECTION 4.4 Funding Losses..................................................31
SECTION 4.5 Increased Capital Costs.........................................31
SECTION 4.6 Taxes...........................................................32
SECTION 4.7 Payments, Computations, etc.....................................33
SECTION 4.8 Sharing of Payments.............................................34
SECTION 4.10 Use of Proceeds................................................34
SECTION 4.11 Changes to Other Branches; Equal Treatment of Borrower.........34
SECTION 4.12 Replacement of Lenders.........................................35
ARTICLE V CONDITIONS TO BORROWING.............................................35
SECTION 5.1 Initial Borrowing...............................................35
SECTION 5.1.1 Resolutions, etc............................................36
SECTION 5.1.2 Delivery of Notes...........................................36
SECTION 5.1.3 Applicable Margin...........................................36
SECTION 5.1.4 Guaranty....................................................36
SECTION 5.1.5 Pledge Agreements...........................................36
SECTION 5.1.6 Security Agreements.........................................36
SECTION 5.1.7 Intellectual Property Assignment............................37
SECTION 5.1.8 Opinions of Counsel.........................................37
SECTION 5.1.9 Agreements..................................................37
SECTION 5.1.10 Closing Fees, Expenses, etc................................37
SECTION 5.2 All Borrowings and Letters of Credit............................37
SECTION 5.2.1 Compliance with Warranties, No Default, etc.................38
SECTION 5.2.2 Borrowing Request; LC Notice................................38
SECTION 5.2.3 Satisfactory Legal Form.....................................38
ARTICLE VI REPRESENTATIONS AND WARRANTIES.....................................38
SECTION 6.1 Organization, etc...............................................38
SECTION 6.2 Due Authorization, Non-Contravention, etc.......................39
SECTION 6.3 Government Approval, Regulation, etc............................39
SECTION 6.4 Validity, etc...................................................39
SECTION 6.5 Financial Information...........................................39
SECTION 6.6 No Material Adverse Change......................................40
SECTION 6.7 Litigation, Labor Controversies, etc............................40
SECTION 6.8 Subsidiaries....................................................40
SECTION 6.9 Ownership of Properties.........................................40
SECTION 6.10 Taxes..........................................................40
SECTION 6.11 Pension and Welfare Plans......................................40
SECTION 6.12 Environmental Warranties.......................................41
SECTION 6.13 Regulations T, U and X.........................................42
SECTION 6.14 Accuracy of Information........................................42
SECTION 6.15 Solvency.......................................................42
SECTION 6.16 Collateral Documents...........................................42
SECTION 6.17 Indebtedness...................................................43
SECTION 6.18 Service Agreements; Employment Agreements......................43
SECTION 6.19 Other Agreements/Program Eligibility...........................43
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SECTION 6.20 Reimbursement from Third Party Payors..........................44
SECTION 6.21 Legal Compliance...............................................44
SECTION 6.22 Licensing and Accreditation....................................44
SECTION 6.23 Subordination Provisions.......................................44
SECTION 6.24 RICO...........................................................45
SECTION 6.25 Year 2000 Problem..............................................45
ARTICLE VII COVENANTS.........................................................45
SECTION 7.1 Affirmative Covenants...........................................45
SECTION 7.1.1 Financial Information, Reports, Notices, etc................45
SECTION 7.1.2 Compliance with Laws, etc...................................47
SECTION 7.1.3 Maintenance of Properties...................................48
SECTION 7.1.4 Insurance...................................................48
SECTION 7.1.5 Books and Records...........................................49
SECTION 7.1.7 Changes to Certain Agreements...............................49
SECTION 7.1.8 Governmental Licenses.......................................49
SECTION 7.1.9 Covenants Extending to Other Persons........................50
SECTION 7.1.10 Solvency...................................................50
SECTION 7.1.11 Further Assurances.........................................50
SECTION 7.1.12 New Subsidiaries...........................................50
SECTION 7.2 Negative Covenants..............................................52
SECTION 7.2.1 Business Activities.........................................52
SECTION 7.2.2 Indebtedness................................................52
SECTION 7.2.3 Liens.......................................................54
SECTION 7.2.4 Financial Condition.........................................55
SECTION 7.2.5 Investments.................................................56
SECTION 7.2.6 Restricted Payments, etc....................................58
SECTION 7.2.8 Consolidation, Merger, etc..................................58
SECTION 7.2.9 Asset and Capital Stock Dispositions, etc...................59
SECTION 7.2.10 Modification of Certain Agreements.........................61
SECTION 7.2.11 Transactions with Affiliates...............................61
SECTION 7.2.12 Negative Pledges, Restrictive Agreements, etc..............61
ARTICLE VIII EVENTS OF DEFAULT................................................61
SECTION 8.1 Listing of Events of Default....................................61
SECTION 8.1.1 Non-Payment of Obligations..................................62
SECTION 8.1.2 Breach of Warranty..........................................62
SECTION 8.1.3 Non-Performance of Certain Covenants and Obligations........62
SECTION 8.1.4 Non-Performance of Other Covenants and Obligations..........62
SECTION 8.1.5 Default on Other Indebtedness...............................62
SECTION 8.1.6 Judgments...................................................62
SECTION 8.1.7 Pension Plans...............................................63
SECTION 8.1.8 Change of Control...........................................63
SECTION 8.1.9 Bankruptcy, Insolvency, etc.................................63
SECTION 8.1.10 Impairment of Security, etc................................64
SECTION 8.1.11 Fraud and Abuse Laws.......................................64
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SECTION 8.1.12 Certifications.............................................64
SECTION 8.1.13............................................................65
SECTION 8.2 Action if Bankruptcy............................................65
SECTION 8.3 Action if Other Event of Default................................65
SECTION 8.4 Letters of Credit...............................................65
ARTICLE IX THE AGENT..........................................................65
SECTION 9.1 Actions.........................................................66
SECTION 9.2 Funding Reliance, etc...........................................66
SECTION 9.3 Exculpation.....................................................66
SECTION 9.4 Successor.......................................................67
SECTION 9.5 Loans by National City..........................................67
SECTION 9.6 Credit Decisions................................................68
SECTION 9.7 Copies, etc.....................................................68
ARTICLE X MISCELLANEOUS PROVISIONS............................................68
SECTION 10.1 Waivers, Amendments, etc.......................................68
SECTION 10.2 Notices........................................................69
SECTION 10.3 Payment of Costs and Expenses..................................69
SECTION 10.4 Indemnification................................................70
SECTION 10.5 Survival.......................................................71
SECTION 10.6 Severability...................................................71
SECTION 10.7 Headings.......................................................71
SECTION 10.8 Execution in Counterparts, Effectiveness, etc..................71
SECTION 10.9 Governing Law; Entire Agreement................................71
SECTION 10.10 Successors and Assigns........................................72
SECTION 10.11 Sale and Transfer of Loans and Note; Participations in
Loans and Note............................................................72
SECTION 10.11.1 Assignments...............................................72
SECTION 10.11.2 Participations............................................73
SECTION 10.12 Confidentiality...............................................74
SECTION 10.13 Other Transactions............................................74
SECTION 10.14 Forum Selection and Consent to Jurisdiction...................75
SECTION 10.15 Waiver of Jury Trial..........................................75
SCHEDULE 1-- Closing Date Stockholders
SCHEDULE 2-- Agreed EBITDA Formula
SCHEDULE 6.3 -- Approvals
SCHEDULE 6.8 -- Subsidiaries
SCHEDULE 6.10 -- Tax Matters
SCHEDULE 6.17 -- Existing Indebtedness
SCHEDULE 6.18 -- Service Agreements; Employment Agreements
SCHEDULE 6.22 -- Required Certificates
SCHEDULE 7.1.4 -- Insurance
SCHEDULE 7.2.3 -- Existing Liens
SCHEDULE 7.2.5 -- Existing Investments
SCHEDULE 10.1 -- Commitment Percentages
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SCHEDULE 10.2 -- Notice Information
EXHIBIT A Form of Note
EXHIBIT B Form of Borrowing Request
EXHIBIT C Form of Continuation/Conversion Notice
EXHIBIT D Form of Lender Assignment Agreement
EXHIBIT E Form of Guaranty
EXHIBIT F-1 Form of Borrower Pledge Agreement
EXHIBIT F-2 Form of Guarantor Pledge Agreement
EXHIBIT G-1 Form of Borrower Security Agreement
EXHIBIT G-2 Form of Guarantor Security Agreement
EXHIBIT H Form of Opinion of Counsel to the Borrower
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of June 28, 2000 among NOVAMED EYECARE,
INC., a Delaware corporation (the "Borrower"), the various financial
institutions from time to time party hereto (collectively, the "Lenders"), and
NATIONAL CITY BANK OF MICHIGAN/ILLINOIS, as agent (the "Agent") for the Lenders;
W I T N E S S E T H:
WHEREAS, the Borrower desires to obtain Revolving Commitments from the
Lenders pursuant to which Loans, in a maximum aggregate principal amount at any
one time outstanding not to exceed $50,000,000, will be made to the Borrower
from time to time prior to the Revolving Commitment Termination Date; and
WHEREAS, the Lenders are willing, on the terms and subject to the
conditions hereinafter set forth (including Article V), to extend such Revolving
Commitments and make such Loans to the Borrower; and
WHEREAS, the proceeds of such Loans will be used for general corporate
purposes and working capital purposes of the Borrower and its Subsidiaries and
to finance Permitted Acquisitions by the Borrower;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1 Defined Terms. The following terms (whether or not underscored)
when used in this Agreement, including its preamble and recitals, shall, except
where the context otherwise requires, have the following meanings (such meanings
to be equally applicable to the singular and plural forms thereof):
"Affected Lender" is defined in Section 4.12.
"Affiliate" of any Person means any other Person which, directly or
indirectly, controls, is controlled by or is under common control with such
Person (excluding any trustee under, or any committee with responsibility for
administering, any Plan). A Person shall be deemed to be "controlled by" any
other Person if such other Person possesses, directly or indirectly, power
(a) to vote 10% or more of the securities (on a fully diluted basis)
having ordinary voting power for the election of directors or managing
general partners; or
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(b) to direct or cause the direction of the management and policies of
such Person whether by contract or otherwise.
"Agent" means National City Bank of Michigan/Illinois.
"Agreed EBITDA FORM" is defined in Schedule 2.
"Agreement" means, on any date, this Credit Agreement as originally in
effect on the Closing Date and as thereafter from time to time amended,
supplemented, amended and restated, or otherwise modified and in effect on such
date.
"ASC Subsidiary" means a Subsidiary of the Borrower primarily engaged in
the business as an ambulatory surgery center or a laser vision correction
center.
"ASP Business" means an application services provider business through
which the Borrower will provide information technology-based services and other
services designed to assist health care providers in the growth and development
of their business, which services, will include, without limitation:
installation, maintenance, hosting and support of information technology
systems; installation, maintenance and support of excimer lasers and other
equipment used to perform vision correction surgery; sales and marketing
products and services designed to assist health care professionals in the growth
of their businesses; financial and operations management services; patient
financing and credit card services; and other electronic services and related
electronic commerce capabilities.
"Asset Disposition" means any sale, transfer or other disposition of any
property of the Borrower or any Subsidiary in a single transaction or in a
series of related transactions (other than the sale of inventory and of
equipment that is obsolete, worn-out or no longer useable by the Borrower or any
of its Subsidiaries, in each case in the ordinary course of business and
Permitted Equity Ownership Sales).
"Assignee Lender" is defined in Section 10.11.1.
"Authorized Officer" means, relative to any Credit Party, those of its
officers whose signatures and incumbency shall have been certified to the Agent
and the Lenders pursuant to Section 5.1.1.
"Base Rate" means, on any date and with respect to all Base Rate Loans, a
fluctuating rate of interest per annum equal to the higher of (i) the rate of
interest most recently announced by the Agent as its prime rate of interest or
(ii) 0.50% per annum above the Federal Funds Effective Rate. The Base Rate is
not necessarily intended to be the lowest rate of interest determined by the
Agent in connection with extensions of credit. Changes in the rate of interest
on that portion of any Loans maintained as Base Rate Loans will take effect
simultaneously with each change in the Base Rate. The Agent will give notice
promptly to the Borrower and the Lenders of changes in the Base Rate.
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"Base Rate Loan" means a Loan bearing interest at a fluctuating rate
determined by reference to the Base Rate.
"Borrower" is defined in the preamble.
"Borrower Pledge Agreement" means the Pledge Agreement executed and
delivered by the Borrower pursuant to Section 5.1.5, substantially in the form
of Exhibit F-1 hereto, as amended, supplemented, restated or otherwise modified
from time to time.
"Borrower Security Agreement" means the Security Agreement executed and
delivered pursuant to Section 5.1.6, substantially in the form of Exhibit G-1
hereto, as amended, supplemented, restated or otherwise modified from time to
time.
"Borrowing" means the Loans of the same type and, in the case of LIBO Rate
Loans, having the same Interest Period made by all Lenders on the same Business
Day and pursuant to the same Borrowing Request in accordance with Section 2.1.
"Borrowing Request" means a loan request and certificate duly executed by
an Authorized Officer of the Borrower, substantially in the form of Exhibit B
hereto.
"Business Day" means
(a) any day which is neither a Saturday or Sunday nor a legal holiday
on which banks are authorized or required to be closed in Chicago,
Illinois; and
(b) relative to the making, continuing, prepaying or repaying of any
LIBO Rate Loans, any day on which dealings in Dollars are carried on in the
London interbank market.
"Capital Expenditures" means, for any period, the aggregate amount of all
expenditures of the Borrower and its Subsidiaries for fixed or capital assets
made during such period which, in accordance with GAAP, would be classified as
capital expenditures.
"Capitalized Lease Liabilities" means all monetary obligations of any
Credit Party under any leasing or similar arrangement which, in accordance with
GAAP, would be classified as capitalized leases, and, for purposes of this
Agreement and each other Loan Document, the amount of such obligations shall be
the capitalized amount thereof, determined in accordance with GAAP, and the
stated maturity thereof shall be the date of the last payment of rent or any
other amount due under such lease prior to the first date upon which such lease
may be terminated by the lessee without payment of a penalty.
"Cash Equivalent Investment" means, at any time:
(a) any evidence of Indebtedness, maturing not more than eighteen
months after such time, issued or guaranteed by the United States
Government;
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(b) commercial paper, maturing not more than nine months from the date
of issue, which is issued by:
(i) a corporation (other than an Affiliate of any Credit Party)
organized under the laws of any state of the United States or of the
District of Columbia and rated A-l by Standard & Poor's Corporation or
P-l by Moody's Investors Service, Inc., or
(ii) any Lender (or its holding company);
(c) any certificate of deposit or bankers acceptance, maturing not
more than one year after such time, which is issued by either:
(i) a commercial banking institution that is a member of the
Federal Reserve System and has a combined capital and surplus and
undivided profits of not less than $500,000,000, or
(ii) any Lender; or
(d) any repurchase agreement entered into with any Lender (or other
commercial banking institution of the stature referred to in clause (c)(i))
which:
(i) is secured by a fully perfected security interest in any
obligation of the type described in any of clauses (a) through (c);
and
(ii) has a market value at the time such repurchase agreement is
entered into of not less than 100% of the repurchase obligation of
such Lender (or other commercial banking institution) thereunder.
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended.
"CERCLIS" means the Comprehensive Environmental Response Compensation
Liability Information System List.
"Change of Control" means (a) any Person or any two or more Persons acting
in concert (in any such case, excluding the Closing Date Stockholders and their
Affiliates) acquiring beneficial ownership (within the meaning of Rule 13d-3 of
the Securities and Exchange Commission under the Exchange Act), directly or
indirectly, of capital stock (or other securities convertible into such capital
stock) of the Borrower representing 35% or more of the combined voting power of
all capital stock of the Borrower entitled to vote in the election of directors,
or (b) during any period of 12 consecutive calendar months, the ceasing of those
individuals (the "Continuing Directors") who (i) were directors of the Borrower,
on the first day of each such period or (ii) subsequently became directors of
the Borrower, and whose initial election or initial nomination for election
subsequent to that date was approved either by (A) a majority of the
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Continuing Directors then on the board of directors of the Borrower or (B) the
shareholders who, in accordance with the provisions of the Articles of
Incorporation of the Borrower, are entitled to elect such director, to
constitute a majority of the board of directors of the Borrower.
"Closing Date" means the date on which all conditions precedent set forth
in Section 5.1 are satisfied or waived by all Lenders.
"Closing Date Stockholders" means, collectively, the stockholders of record
of the Borrower as of the Closing Date listed on Schedule 1.
"Code" means the Internal Revenue Code of 1986, and regulations promulgated
thereunder.
"Collateral" means all property and interests in property and proceeds
thereof now owned or hereafter acquired by any Credit Party in or upon which a
Lien now or hereafter exists in favor of the Agent on behalf of the Lenders,
whether under this Agreement, Collateral Document or under any other documents
executed by any such Credit Party and delivered to the Agent.
"Collateral Documents" means, collectively, (a) the Borrower Security
Agreement, the Guarantor Security Agreement, the Guaranty, the Borrower Pledge
Agreement, the Guarantor Pledge Agreement, the Intellectual Property Assignments
and all other security agreements, pledge agreements, assignments, guarantees
and other similar agreements between a Credit Party and the Agent for the
benefit of the Lenders now or hereafter delivered to the Lenders or the Agent
pursuant to or in connection with the transactions contemplated hereby, and all
financing statements (or comparable documents now or hereafter filed in
accordance with the Uniform Commercial Code or comparable law) against a Credit
Party as debtor in favor of the Agent, for the benefit of the Lenders, as
secured party and (b) any amendments, supplements, modifications, renewals,
replacements, consolidations, substitutions and extensions of any of the
foregoing.
"Consideration" means with respect to any Permitted Acquisition, the
aggregate of (i) the cash paid by the Borrower or any of its Wholly-Owned
Subsidiaries, directly or indirectly, to the seller in connection therewith,
(ii) the Indebtedness incurred or assumed by the Borrower or any of its Wholly-
Owned Subsidiaries (including, without limitation, Indebtedness of a person
becoming a Credit Party in connection with a Permitted Acquisition, which
Indebtedness continues to exist following the consummation of such Permitted
Acquisition), whether in favor of the seller or otherwise and whether fixed or
contingent, in connection therewith, (iii) any guaranty given or incurred by the
Borrower or any of its Wholly-Owned Subsidiaries in connection therewith, (iv)
the fair market value of any equity issued by the Borrower, in connection
therewith, and (v) any other consideration given or obligation incurred by the
Borrower or any of its Wholly-Owned Subsidiaries in connection therewith;
provided, however, that the amount of any deferred earn-out payments to any
seller not required by GAAP to be reflected as a liability on the consolidated
balance sheet of the Borrower as of the date of consummation of such Permitted
Acquisition shall be excluded from the determination under clauses (i) through
(v) of this definition.
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"Consolidated Interest Expenses" means, for any period, the total interest
expense (including that attributable to capital leases) of the Borrower and its
Subsidiaries on a consolidated basis with respect to all outstanding
Indebtedness of the Borrower and its Subsidiaries, including, without
limitation, all commissions, discounts and other fees and charges owed with
respect to letters of credit and unused line fees but excluding any of the
foregoing to the extent it constitutes a non-cash item.
"Contingent Liability" means any agreement, undertaking or arrangement
which would be reflected in a footnote to a balance sheet as a contingent
liability in accordance with GAAP.
"Continuation/Conversion Notice" means a notice of continuation or
conversion and certificate duly executed by an Authorized Officer of the
Borrower, substantially in the form of Exhibit C hereto.
"Controlled Group" means all members of a controlled group of corporations
and all members of a controlled group of trades or businesses (whether or not
incorporated) under common control which, together with the Borrower, are
treated as a single employer under Section 414(b) or 414(c) of the Code or
Section 4001 of ERISA.
"Credit Party" means the Borrower and any Subsidiary of the Borrower party
to a Loan Document.
"Default" means any condition, occurrence or event which, after notice or
lapse of time or both, would constitute an Event of Default.
"Dollar" and the sign "$" mean lawful money of the United States.
"Domestic Office" means, relative to any Lender, the office of such Lender
designated as such below its signature hereto or designated in the Lender
Assignment Agreement or such other office of a Lender (or any successor or
assign of such Lender) within the United States as may be designated from time
to time by notice from such Lender, as the case may be, to each other Person
party hereto. A Lender may have separate Domestic Offices for purposes of
making, maintaining or continuing, as the case may be, Base Rate Loans.
"EBITDA" means, for any applicable computation period, the Borrower's Net
Income on a consolidated basis from continuing operations, plus (a) income and
franchise taxes paid or accrued during such period, (b) interest expenses paid
or accrued during such period, and (c) amortization and depreciation deducted in
determining Net Income for such period. For the purpose of determining
compliance with Section 7.2.4(b) and (c), "EBITDA" shall be as adjusted pursuant
to the formula described in Schedule 2.
"Effective Maturity Date" is defined in Section 3.1.3.
"Employment Agreement" means any employment agreement entered into by any
Provider, who is a shareholder of a Practice, with such Practice.
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"Environmental Laws" means all applicable federal, state or local statutes,
laws, ordinances, codes, rules, regulations and guidelines (including consent
decrees and administrative orders) relating to public health and safety and
protection of the environment.
"Equity Provider" means any individual or group of individuals who had an
equity interest in (i) a Practice acquired in a Permitted Acquisition, on the
date of such Permitted Acquisition, or (ii) any other Practice with which the
Borrower has a Service Agreement, on the date of the execution of any such
Service Agreement."
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time. References
to sections of ERISA also refer to any successor sections.
"Event of Default" is defined in Section 8.1.
"Extension Effective Date" is defined in Section 3.1.3.
"Extension Response Date" is defined in Section 3.1.3.
"Extension Request" is defined in Section 3.1.3.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by Agent from three Federal
funds brokers of recognized standing selected by the Agent in its sole
discretion.
"Fiscal Quarter" means any quarter of a Fiscal Year.
"Fiscal Year" means any period of twelve consecutive calendar months ending
on December 31; references to a Fiscal Year with a number corresponding to any
calendar year (e.g. the "2000 Fiscal Year") refer to the Fiscal Year ending on
the December 31 occurring during such calendar year.
"Fixed Charges" means, with respect to the Borrower and its Subsidiaries on
a consolidated basis, as of any date of determination, (a) Consolidated Interest
Expenses for the period of four fiscal quarters ending on the date of
determination, and (b) scheduled principal payments on Indebtedness required to
be made in such period and (c) 10% of the outstanding principal amount of the
Loans and (d) rent expenses incurred by the Borrower and its Subsidiaries.
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"Fraud and Abuse Laws" means Section 1128B(b) of the Social Security Act,
42 U.S.C. Section 1320a-7b(b) and Section 1877 of the Social Security Act, 42
U.S.C. Section 1395nn, each as from time to time amended; any successor
statute(s) thereto; all rules and regulations promulgated thereunder; any other
federal or state law concerning the referral of patients by physicians; and any
law, rule, regulation or successor thereto concerning or related to false or
fraudulent billing for medical goods or services.
"F.R.S. Board" means the Board of Governors of the Federal Reserve System
or any successor thereto.
"GAAP" means generally accepted accounting principles set forth from time
to time in the opinions and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date of
determination; provided, however, that for purposes of all computations required
to be made with respect to compliance by the Borrower with Sections 7.2.4,
8.1.11 and 8.1.12 such term shall mean generally accepted accounting principles
as in effect on the date of this Agreement, applied in a manner consistent with
those used in preparing the financial statements referred to in Section 6.5.
"Guarantor" means each Person party to a Guaranty.
"Guarantor Pledge Agreement" means the Pledge Agreement executed and
delivered by each Credit Party to the Guaranty pursuant to Section 5.1.5,
substantially in the form of Exhibit F-2 hereto, as amended, supplemented,
restated or otherwise modified from time to time.
"Guarantor Security Agreement" means the Security Agreement executed and
delivered by each Credit Party to the Guaranty pursuant to Section 5.1.6,
substantially in the form of Exhibit G-2 hereto, as amended, supplemented,
restated or otherwise modified from time to time.
"Guaranty" means, collectively, the Guaranty executed and delivered by each
Subsidiary of the Borrower pursuant to Section 5.1.4, substantially in the form
of Exhibit E hereto, as amended, supplemented, restated or otherwise modified
from time to time.
"Hazardous Material" means
(a) any "hazardous substance", as defined by CERCLA;
(b) any "hazardous waste", as defined by the Resource Conservation and
Recovery Act, as amended;
(c) any petroleum product; or
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(d) any pollutant or contaminant or hazardous, dangerous or toxic
chemical, material or substance within the meaning of any other applicable
federal, state or local law, regulation, ordinance or requirement
(including consent decrees and administrative orders) relating to or
imposing liability or standards of conduct concerning any medical,
hazardous, toxic or dangerous waste, substance or material, all as amended
or hereafter amended.
"HCFA" shall mean the United States Health Care Financing Administration
and any successor thereto.
"Hedging Agreements" means any Interest Rate Agreement, foreign currency
exchange agreement, commodity price protection agreement or other interest or
currency exchange rate or commodity price hedging agreement, provided that such
agreement is not entered into for speculative purposes, is entered into with the
Agent or a Lender.
"herein", "hereof", "hereto", "hereunder" and similar terms contained in
this Agreement or any other Loan Document refer to this Agreement or such other
Loan Document, as the case may be, as a whole and not to any particular Section,
paragraph or provision of this Agreement or such other Loan Document.
"Impermissible Qualification" means, relative to the opinion or
certification of any independent public accountant as to any financial statement
of any Credit Party, any qualification or exception to such opinion or
certification:
(a) which is of a "going concern" or similar nature;
(b) which relates to the limited scope of examination of matters
relevant to such financial statement; or
(c) which relates to the treatment or classification of any item in
such financial statement and which, as a condition to its removal, would
require an adjustment to such item the effect of which would be to cause
such Credit Party to be in default of any of its obligations under Section
7.2.4.
"including" means including without limiting the generality of any
description preceding such term, and, for purposes of this Agreement and each
other Loan Document, the parties hereto agree that the rule of ejusdem generis
shall not be applicable to limit a general statement, which is followed by or
referable to an enumeration of specific matters, to matters similar to the
matters specifically mentioned.
"Indebtedness" of any Person means, without duplication:
(a) all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments;
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(b) all obligations, contingent or otherwise, relative to the face
amount of all letters of credit (including Letters of Credit), whether or
not drawn, and banker's acceptances issued for the account of such Person;
(c) all obligations of such Person as lessee under leases which have
been or should be, in accordance with GAAP, recorded as Capitalized Lease
Liabilities;
(d) all other liabilities for borrowed money in accordance with GAAP
included on the liability side of the balance sheet of such Person as of
the date at which Indebtedness is to be determined;
(e) net liabilities of such Person under all Hedging Agreements;
(f) whether or not so included as liabilities in accordance with GAAP,
all obligations of such Person to pay the deferred purchase price of
property or services, and indebtedness (excluding prepaid interest thereon)
secured by a Lien on property owned or being purchased by such Person
(including indebtedness arising under conditional sales or other title
retention agreements), whether or not such indebtedness shall have been
assumed by such Person or is limited in recourse; and
(g) all Contingent Liabilities of such Person in respect of any of the
foregoing.
For all purposes of this Agreement, the Indebtedness of any Person shall include
the Indebtedness of any partnership or joint venture in which such Person is a
general partner or a joint venturer, except to the extent payments have been
made or are required to be made with respect to such Indebtedness solely by a
general partner or a joint venture partner other than a Credit Party.
"Indemnified Liabilities" is defined in Section 10.4.
"Indemnified Parties" is defined in Section 10.4.
"Intercompany Loans" is defined in Section 7.2.2.
"Intercompany Notes" is defined in Section 7.2.2.
"Intellectual Property Assignment" means that certain Intellectual Property
Assignment in form and substance satisfactory to the Agent, duly executed and
delivered by a Credit Party in favor of the Agent, for the benefit of itself and
the Lenders, as the same may be amended, supplemented or otherwise modified from
time to time.
"Interest Period" means, relative to any LIBO Rate Loans, the period
beginning on (and including) the date on which such LIBO Rate Loan is made or
continued as, or converted into, a LIBO Rate Loan pursuant to Section 2.3 or 2.4
and shall end on (but exclude) either (i) the day one week subsequent to such
day, or (ii) the day which numerically corresponds to such date
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one, two, three or six months thereafter (or, if such month has no numerically
corresponding day, on the last Business Day of such month), as the Borrower may
select in its relevant notice pursuant to Section 2.3 or 2.4; provided, however,
that
(a) the Borrower shall not be permitted to select Interest Periods to
be in effect at any one time which have expiration dates occurring on more
than seven different dates;
(b) Interest Periods commencing on the same date for Loans comprising
part of the same Borrowing shall be of the same duration;
(c) if such Interest Period would otherwise end on a day which is not
a Business Day, such Interest Period shall end on the next following
Business Day (unless such next following Business Day is the first Business
Day of the immediately succeeding calendar month, in which case such
Interest Period shall end on the Business Day next preceding such
numerically corresponding day);
(d) no Interest Period with respect to Loans made prior to the
Revolving Commitment Termination Date may end later than the date set forth
in clause (a) of the definition of "Revolving Commitment Termination Date";
(e) no Interest Period for any Loan outstanding on and after the
Revolving Commitment Termination Date shall extend beyond the Maturity
Date; and
(f) no Interest Period applicable to a Loan outstanding on and after
the Revolving Commitment Termination Date, or portion thereof, shall extend
beyond any date upon which is due any scheduled principal payment in
respect of the Loans unless the aggregate principal amount of Loans
represented by LIBO Rate Loans having Interest Periods that will expire on
or before such date, equals or exceeds the amount of such principal
payment.
"Interest Rate Agreement" means any interest rate swap agreement, interest
rate cap agreement, interest rate collar agreement or other similar agreement or
arrangement designed to protect the Borrower or any of its Subsidiaries against
fluctuations in interest rates.
"Investment" means, relative to any Person,
(a) any loan or advance made by such Person to any other Person
(excluding commission, travel and similar advances to officers and
employees made in the ordinary course of business);
(b) any Contingent Liability of such Person; and
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(c) any ownership or similar interest held by such Person in any other
Person.
The amount of any Investment shall be the original principal or capital amount
thereof less all returns of principal or equity thereon (and without adjustment
by reason of the financial condition of such other Person) and shall, if made by
the transfer or exchange of property other than cash, be deemed to have been
made in an original principal or capital amount equal to the fair market value
of such property.
"LC Notice" has the meaning specified in Section 2.7.
"Lender Assignment Agreement" means a Lender Assignment Agreement
substantially in the form of Exhibit D hereto.
"Lenders" is defined in the preamble.
"Letter of Credit" shall mean a Letter of Credit that is issued pursuant to
Section 2.7.
"Letter of Credit Cash Collateral Account" has the meaning specified in
Section 8.4.
"Letter of Credit Expiry Date" shall mean the date which is five Business
Days prior to the Revolving Commitment Termination Date.
"Letter of Credit Issuer" shall mean National City.
"Letter of Credit Obligations" shall mean, as at the time of determination
thereof, the sum of (a) the aggregate amount of all unpaid and outstanding
reimbursement obligations and (b) without duplication, the aggregate stated
amount at such time of Letters of Credit then outstanding and undrawn (as such
aggregate stated amount shall be adjusted, from time to time, as a result of
drawings, the issuance of Letters of Credit, or otherwise).
"Letter of Credit Sublimit" shall mean an aggregate amount of $5,000,000.
"LIBO Rate" is defined in Section 3.2.1.
"LIBO Rate Loan" means a Loan bearing interest, at all times during an
Interest Period applicable to such Loan, at a fixed rate of interest determined
by reference to the LIBO Rate (Reserve Adjusted).
"LIBO Rate (Reserve Adjusted)" is defined in Section 3.2.1.
"LIBOR Office" means, relative to any Lender, the office of such Lender
designated as such below its signature hereto or designated in the Lender
Assignment Agreement or such other office of a Lender as designated from time to
time by notice from such Lender to the Borrower and the Agent, whether or not
outside the United States, which shall be making or maintaining LIBO Rate Loans
of such Lender hereunder.
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"LIBOR Reserve Percentage" is defined in Section 3.2.1.
"Lien" means any security interest, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge against or interest in property to secure payment of a debt or
performance of an obligation or other priority or preferential arrangement of
any kind or nature whatsoever.
"Loan" is defined in Section 2.1.1.
"Loan Document" means this Agreement, the Notes, each Collateral Document,
each Hedging Agreement and each other document delivered pursuant to Section
7.1.12.
"Majority Lenders" means Lenders holding at least 50.1% of the then
aggregate outstanding principal amount of all of the Notes then held by the
Lenders, or, if no such principal amount is then outstanding, Lenders having at
least 50.1% of the Revolving Commitments.
"Material Adverse Effect" means a material adverse effect on the financial
condition, operations, assets, business, properties or prospects of the Borrower
and its Subsidiaries taken as a whole or the Borrower and its Subsidiaries,
taken as a whole.
"Maturity Date" means the earliest of:
(a) June [___], 2003; or
(b) the date on which any Termination Event occurs.
"Medicaid Certification" means a certification by a state agency or other
entity responsible for certifying Medicaid providers and suppliers that a health
care provider or supplier is in compliance with all the conditions of
participation set forth in the Medicaid Regulations.
"Medicaid Provider Agreement" means an agreement entered into between HCFA
or a state agency or other such entity administering the Medicaid program and a
health care provider or supplier under which the health care provider or
supplier agrees to provide services for Medicaid patients in accordance with the
terms of the agreement and Medicaid Regulations.
"Medicaid Regulations" means, collectively, (i) all federal statutes
(whether set forth in Title XIX of the Social Security Act or elsewhere)
affecting the medical assistance program established by Title XIX of the Social
Security Act and any successor statute(s); (ii) all applicable provisions of all
federal rules, regulations, manuals and orders of all governmental authorities
promulgated pursuant to or in connection with the statutes described in clause
(i) above and all federal administrative, reimbursement and other guidelines of
all governmental authorities having the force of law promulgated pursuant to or
in connection with the statutes described in clause (i) above; (iii) all state
statutes and plans for medical assistance enacted in connection with the
statutes and provisions described in clauses (i) and (ii) above; and (iv) all
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applicable provisions of all rules, regulations, manuals and orders of all
governmental authorities promulgated pursuant to or in connection with the
statutes described in clause (iii) above and all state administrative,
reimbursement and other guidelines of all governmental authorities having the
force of law promulgated pursuant to or in connection with the statutes
described in clause (iii) above, in each case as may be amended, supplemented or
other wise modified from time to time.
"Medicare Certification" means certification by HCFA or a state agency or
entity under contract with HCFA that the health care operation is in compliance
with all the conditions of participation set forth in the Medicare Regulation.
"Medicare Provider Agreement" means an agreement entered into between HCFA
or a state agency or other such entity administering the Medicare program and a
health care provider or supplier under which the health care provider or
supplier agrees to provide services for Medicare patients in accordance with the
terms of the agreement and Medicare Regulations.
"Medicare Regulations" means, collectively, all federal statues (whether
set forth in Title XVIII of the Social Security Act or elsewhere) affecting the
health insurance program for the aged and disabled established by Title XVIII of
the Social Security Act and any successor statute(s); together with all
applicable provisions of all rules, regulations, manuals and orders and
administrative, reimbursement and other guidelines of all governmental
authorities (including without limitation, the United States Department of
Health and Human Services ("HHS"), HCFA, the Office of the Inspector General for
HHS, or any person succeeding to the functions of any of the foregoing)
promulgated pursuant to or in connection with any of the foregoing having the
force of law, as each may be amended, supplemented or otherwise modified from
time to time.
"National City" means National City Bank of Michigan/Illinois, acting in
its individual capacity.
"Net Available Proceeds" means (a) with respect to any Asset Disposition,
the sum of cash or readily marketable cash equivalents received (including by
way of a cash generating sale or discounting of a note or account receivable)
therefrom, whether at the time of such disposition or subsequent thereto, or (b)
with respect to any sale or issuance of any debt or equity securities of the
Borrower or any Subsidiary, cash or readily marketable cash equivalents received
therefrom, whether at the time of such disposition or subsequent thereto, net,
in either case, of all legal, title and recording tax expenses, commissions and
other fees and all costs and expenses incurred and all federal, state, local and
other taxes required to be accrued as a liability as a consequence of such
transactions and, in the case of an Asset Disposition, net of all payments made
by the Borrower or any of its Subsidiaries, including any prepayment premiums,
on any Indebtedness which is secured by such assets pursuant to a Permitted Lien
upon or with respect to such assets or which must, by the terms of such Lien, in
order to obtain a necessary consent to such Asset Disposition, or by applicable
law, be repaid out of the proceeds from such Asset Disposition.
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"Net Income" means, for any computation period, with respect to the
Borrower, on a consolidated basis, cumulative net income earned during such
period as determined in accordance with GAAP (other than net income from any
Subsidiary which is restricted from declaring or paying dividends, distributions
or otherwise advancing funds to its borrower whether by contract or otherwise,
except to the extent of any such net income actually received which is not in
violation of the applicable restriction). Net Income shall be determined without
giving effect to any non-cash, non-recurring loss.
"Net Worth" means, for any computation period, the consolidated
shareholders' equity of the Borrower determined in accordance with GAAP, which
consolidated shareholders' equity shall be deemed to include the preferred stock
of the Borrower.
"Note" means a promissory note of the Borrower payable to any Lender, in
the form of Exhibit A hereto (as such promissory note may be amended, endorsed
or otherwise modified from time to time), evidencing the aggregate Indebtedness
of the Borrower to such Lender resulting from outstanding Loans, and also means
all other promissory notes accepted from time to time in substitution therefor
or renewal thereof.
"Obligations" means all obligations (monetary or otherwise) of each Credit
Party arising under or in connection with this Agreement, the Notes, the Letters
of Credit and each other Loan Document.
"Organizational Document" means, relative to any Credit Party, its
certificate of incorporation, its by-laws, its limited liability company
agreement, partnership agreement and all shareholder agreements, voting trusts
and similar arrangements applicable to any of its authorized shares of capital
stock, partnership interests, or membership interests, as the case may be.
"Participant" is defined in Section 10.11.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Pension Plan" means a "pension plan", as such term is defined in section
3(2) of ERISA, which is subject to Title IV of ERISA (other than a multiemployer
plan as defined in section 4001(a)(3) of ERISA), and to which the Borrower or
any corporation, trade or business that is, along with the Borrower, a member of
a Controlled Group, may have liability, including any liability by reason of
having been a substantial employer within the meaning of section 4063 of ERISA
at any time during the preceding five years, or by reason of being deemed to be
a contributing sponsor under section 4069 of ERISA.
"Percentage" means, relative to any Lender, the percentage set forth
opposite its name on Schedule 10.1 hereto or set forth in the Lender Assignment
Agreement, as such percentage may be adjusted from time to time pursuant to
Lender Assignment Agreement(s) executed by such Lender and its Assignee
Lender(s) and delivered pursuant to Section 10.11.
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"Permitted Acquisition" means the purchase (by asset purchase, stock
purchase, merger or otherwise, subject to the other requirements of this
definition set forth below) by the Borrower or a Wholly-Owned Subsidiary of the
Borrower of the assets of a Practice (it being acknowledged that medical records
and certain other professional assets that are required by law to be owned by a
Provider are not acquired in these transactions), which purchase meets the
following criteria:
(a) no Default or Event of Default shall have occurred or be
continuing both before and after giving effect to such acquisition;
(b) in the event the Borrower's Total Leverage Ratio on a pro forma
basis (after giving effect to the Permitted Acquisition) is less than or
equal to 2.25:1.0, the Borrower must be able to comply on a pro forma basis
with all of the covenants in this Agreement;
(c) in the event the Borrower's Total Leverage Ratio on a pro forma
basis (after giving effect to the Permitted Acquisition) is greater than
2.25:1.0 the aggregate Consideration (including any Indebtedness pursuant
to Section 7.2.2(h), (i), (j) and (k) relating to such Permitted
Acquisitions) in connection with such Permitted Acquisition shall not
exceed $10,000,000 individually and $30,000,000 for all Permitted
Acquisitions (without giving effect to the transaction described on
Schedule 1.1.) consummated within the previous twelve (12) month period;
(d) the acquisition shall have been of the assets and/or working
capital of a Practice or, if for stock or other equity interest in a
Practice, shall be for not less than 51% of the equity interest therein,
shall either, to the extent permitted by applicable law, be merged with and
into the Borrower or a Wholly-Owned Subsidiary of the Borrower, or be a
Wholly-Owned Subsidiary of the Borrower;
(e) the acquired Practice, on a pro forma basis shall have positive
EBITDA for the period of four fiscal quarters ending on the date of any
such acquisition;
(f) the Borrower shall have delivered to the Agent, not later than 30
days after the closing of the acquisition (i) pro forma financial
statements or certificates demonstrating continued compliance with all
covenants in this Agreement following the inclusion of the target in the
Borrower's consolidated enterprise, (ii) a copy of the related acquisition
agreement and Service Agreement and each Employment Agreement (all to the
extent applicable) provided, however, in the event the approval of the
Lenders is required for any acquisition, the Borrower shall have delivered
to the Agent the documents contemplated by clauses (i) and (ii) of this
clause (f) not later than 15 days prior to the closing of such acquisition
(with the documents contemplated in (ii) being in draft form); and
(g) the Borrower shall have delivered to the Agent, not later than 30
days after the closing of the acquisition a fully executed Agreed EBITDA
Form.
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"Permitted Equity Ownership Sale" means the sale of the outstanding capital
stock or other equity interests in an ASC Subsidiary, so long as:
(i) after giving effect to such sale, a Credit Party shall own not
less than 65% of the equity interests (including securities convertible
into equity interests) of such ASC Subsidiary;
(ii) such ASC Subsidiary shall remain a party to the Guaranty,
Guarantor Pledge Agreement and Guarantor Security Agreement as such
agreements were in effect immediately prior to such sale; and
(iii) the chief financial officer of the Borrower shall have delivered
a certificate, dated the date of such sale, to the Agent certifying (a)
that no Default or Event of Default exists or would result from such sale
and (b) pro forma financial statements demonstrating compliance with
Section 7.2.4 for the twelve-month period following such sale.
"Permitted Liens" means those liens listed in Section 7.2.3.
"Person" means any natural person, corporation, partnership, limited
liability company, firm, association, trust, government, governmental agency or
any other entity, whether acting in an individual, fiduciary or other capacity.
"Plan" means any Pension Plan or Welfare Plan.
"Pledged Collateral" has the meaning specified in the Borrower Pledge
Agreement and the Guarantor Pledge Agreement.
"Practice" means any ASP Business and any medical or ophthalmology
practice, ambulatory surgery center or management service center, optometry
practice, optical dispensory or optical laboratory, vision correction centers
(including, without limitation, laser vision correction centers), companies that
own, operate and/or manage vision correction centers (including, without
limitation, laser vision correction centers), clinical research organizations or
entities engaged in the provision of clinical research and/or sight management
services to ophthalmic device and/or pharmaceutical companies, or reasonable
extensions thereof (including any company which leases or sells equipment or
provides services to any of the foregoing), at a single location or various
locations. Whenever in this Agreement "Practice" is used in describing an
acquisition by the Borrower or a Wholly-Owned Subsidiary of the Borrower of
equity interests, such reference is to the acquisition of the assets used in the
operation of the Practice that can lawfully be acquired by the Borrower or a
Wholly-Owned Subsidiary of the Borrower or to the acquisition of the equity
interests of a Person that owns, as of the time of purchase, only those assets
that can be lawfully acquired by the Borrower or a Wholly-Owned Subsidiary of
the Borrower.
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"Provider" means any Person who performs professional medical services for
a Practice that is either managed by a Credit Party or the assets of which are
owned by a Credit Party.
"Quarterly EBITDA Certificate" is defined in Schedule 2.
"Quarterly Payment Date" means the last day of each March, June, September,
and December or, if any such day is not a Business Day, the next succeeding
Business Day.
"Release" means a "release", as such term is defined in CERCLA.
"Replacement Lender" is defined in Section 4.12.
"Reporting Person" shall mean, The Eye Center, Inc., NovaMed Eye Surgery
Center of North County, LLC, Illinois Eye Specialist, LTD, NovaMed Eye Surgery
Center of Maryville, L.L.C., Dominion Eye Associates, P.C., NovaMed of Richmond,
Inc., NovaMed Management of Kansas City, Inc., NovaMed Eye Surgery Center
(Plaza) L.L.C., NovaMed Surgery Center of Overland Park, L.L.C., NovaMed
Management of Hinsdale, Inc., SureVision Eye Centers, LLC, Surevision Eye
Centers Midwest LLC, Hunkler Eye Centers, P.C. and each Practice acquired by the
Borrower pursuant to a Permitted Acquisition.
"Required Lenders" means, (i) at any time less than three Lenders are a
party to this Agreement, all Lenders and (ii) at any other time, Lenders holding
at least 66-2/3% of the then aggregate outstanding principal amount of all of
the Notes then held by the Lenders, or, if no such principal amount is then
outstanding, Lenders having at least 66-2/3% of the Revolving Commitments.
"Resource Conservation and Recovery Act" means the Resource Conservation
and Recovery Act, 42 U.S.C. Section 6901, et seq., as in effect from time to
time.
"Revolving Commitment" means, relative to any Lender, such Lender's
obligation to make Loans pursuant to Section 2.1.1.
"Revolving Commitment Amount" means, on any date, $50,000,000. The
Revolving Commitment Amount then in effect may be reduced from time to time
pursuant to Section 2.2.
"Revolving Commitment Termination Date" means the earliest of
(a) June __, 2003;
(b) the date on which the Revolving Commitment Amount is terminated in
full or reduced to zero pursuant to Section 2.2; and
(c) the date on which any Termination Event occurs.
Upon the occurrence of any event described in clause (b) or (c), the Revolving
Commitments shall terminate automatically and without further action.
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"Service Agreement" means any of (i) the Service Agreements listed on
Schedule 6.18 and (ii) any similar agreement entered into by any Credit Party on
and after the Closing Date in each case as any of such agreements may from time
to time be amended, restated, supplemented or otherwise modified.
"Senior Debt" shall mean Indebtedness of the type described in clauses (a),
(c) and (d) of the definition "Indebtedness" (other than Subordinated Debt) of
the Borrower on a consolidated basis.
"Solvent" means, when used with respect to a Person, that (a) the fair
saleable value of the assets of such Person is in excess of the total amount of
the present value of its liabilities (including for purposes of this definition
all liabilities whether or not reflected on a balance sheet prepared in
accordance with GAAP and whether direct or indirect, fixed or contingent,
secured or unsecured, disputed or undisputed), (b) such Person is able to pay
its debts or obligations in the ordinary course as they mature and (c) such
Person does not have unreasonably small capital to carry out its business as
conducted and as proposed to be conducted. "Solvency" shall have a correlative
meaning.
"Subordinated Debt" means all Indebtedness the repayment of which is
subordinated, upon terms satisfactory to the Majority Lenders, in right of
payment to the payment in full in cash of all Obligations.
"Subsidiary" of a Person means any corporation , association, partnership,
limited liability company, joint venture or other business entity of which more
than 50% of the voting stock, membership interests or other equity interests (in
the case of Persons other than corporations), is owned or controlled directly or
indirectly by the Person, or one or more of the Subsidiaries of the Person, or a
combination thereof.
"Taxes" is defined in Section 4.6.
"Termination Event" means
(a) the occurrence of any Default described in clauses (a) through (e)
of Section 8.1.9; or
(b) the occurrence and continuance of any other Event of Default and
either
(i) the declaration of the Loans to be due and payable pursuant
to Section 8.3, or
(ii) in the absence of such declaration, the giving of notice by
the Agent, acting at the direction of the Required Lenders, to the
Borrower that the Revolving Commitments have been terminated.
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"Total Funded Debt" of any Person means all Indebtedness of such Person
except Indebtedness specified in clauses (b) and (g) of the definition of
Indebtedness.
"Total Leverage Ratio" has the meaning assigned to it in Section 3.2.1.
"Type" means, relative to any Loan, the portion thereof, if any, being
maintained as a Base Rate Loan or a LIBO Rate Loan.
"United States" or "U.S." means the United States of America, its fifty
States and the District of Columbia.
"Welfare Plan" means a "welfare plan", as such term is defined in Section
3(1) of ERISA.
"Wholly-Owned Subsidiary" means any Person in which (other than directors'
qualifying shares required by law) 100% of the equity interests of each class
having ordinary voting power, and 100% of the equity interests of every other
class, in each case, at the time as of which any determination is being made, is
owned, beneficially and of record, by the Borrower or by one or more of the
other Wholly-Owned Subsidiaries, or both.
SECTION 1.2 Use of Defined Terms. Unless otherwise defined or the context
otherwise requires, terms for which meanings are provided in this Agreement
shall have such meanings when used in the Schedules and in each Note, Borrowing
Request, Continuation/Conversion Notice, Loan Document, notice and other
communication delivered from time to time in connection with this Agreement or
any other Loan Document.
SECTION 1.3 Cross-References. Unless otherwise specified, references in
this Agreement and in each other Loan Document to any Article or Section are
references to such Article or Section of this Agreement or such other Loan
Document, as the case may be, and, unless otherwise specified, references in any
Article, Section or definition to any clause are references to such clause of
such Article, Section or definition.
SECTION 1.4 Accounting Principles. Unless the context otherwise clearly
requires, all accounting terms not expressly defined herein shall be construed,
and all financial computations required under this Agreement shall be made, in
accordance with GAAP, consistently applied.
ARTICLE II
REVOLVING COMMITMENTS, BORROWING PROCEDURES AND NOTES
SECTION 2.1 Revolving Commitments. On the terms and subject to the
conditions of this Agreement (including Article V), each Lender severally agrees
to make Loans pursuant to the Revolving Commitments described in this Section
2.1.
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SECTION 2.1.1 Revolving Commitment of Each Lender. From time to time on any
Business Day occurring prior to the Revolving Commitment Termination Date, each
Lender will make loans (relative to such Lender, and of any type, its "Loans")
to the Borrower, which, when added to the Letter of Credit Obligations at such
time, equal to such Lender's Percentage of the aggregate amount of the Borrowing
requested by the Borrower to be made on such day. The commitment of each Lender
described in this Section 2.1.1 is herein referred to as its "Revolving
Commitment". On the terms and subject to the conditions hereof, the Borrower may
from time to time borrow, prepay and reborrow Loans.
SECTION 2.1.2 Lenders Not Permitted or Required To Make Loans. No Lender
shall be permitted or required to make any Loan if, after giving effect thereto,
the aggregate outstanding principal amount of all Loans
(a) of all Lenders would exceed the Revolving Commitment Amount, or
(b) of such Lender would exceed such Lender's Percentage of the
Revolving Commitment Amount.
SECTION 2.2 Reduction of Revolving Commitment Amount. The Revolving
Commitment Amount is subject to reduction from time to time pursuant to this
Section 2.2.
SECTION 2.2.1 Optional. The Borrower may, from time to time on any Business
Day occurring after the time of the initial Borrowing hereunder, voluntarily
reduce the Revolving Commitment Amount; provided, however, that all such
reductions shall require at least three Business Days' prior notice to the Agent
and be permanent, and any partial reduction of the Revolving Commitment Amount
shall be in a minimum amount of $2,000,000 and in an integral multiple of
$1,000,000.
SECTION 2.2.2 Mandatory Reductions and Prepayments. The Revolving
Commitment Amount shall, without any further action, automatically and
permanently be reduced to zero on the Revolving Commitment Termination Date and:
(a) The Borrower shall prepay Loans in an amount equal to 100% of the
insurance proceeds received by the Borrower or any Subsidiary following a
casualty involving such Person's Property, to the extent not applied (or
intended to be applied) within 90 days after the consummation or receipt
thereof, as applicable, to the purchase of replacement assets or repair of
damaged assets;
(b) The Borrower shall prepay Loans in an amount equal to 100% of the sum
of the Net Available Proceeds realized upon all Asset Dispositions to the extent
not applied (or committed to be applied) within 180 days of such Asset
Disposition to the purchase of other assets that are not classified as current
assets under GAAP and are used or useful in the business of the Company and its
Subsidiaries;
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(c) The Borrower shall prepay Loans in an amount equal to 50% of the sum of
the Net Available Proceeds realized upon all equity issuances (other than in
connection with a Permitted Acquisition) by the Borrower and its Subsidiaries;
(d) The Borrower shall prepay Loans in an amount equal to 100% of the sum
of the Net Available Proceeds realized upon all debt issuances (other than in
connection with a Permitted Acquisition) by the Borrower and its Subsidiaries;
and
(f) The Borrower shall notify the Agent of the amount of any required
prepayment at least three (3) Business Days before it is made. The Borrower
shall pay any accrued interest on the Loans which are being prepaid pursuant to
this Section 2.2.2 and shall pay any break funding costs associated with such
required prepayment.
Any prepayments pursuant to Sections 2.2.1 or 2.2.2 hereof shall be without
penalty or premium of any kind other than break funding and other charges
expressly provided by this Agreement with respect to LIBOR breakage costs.
SECTION 2.3 Borrowing Procedure. By delivering a Borrowing Request to the
Agent on or before 10:00 a.m., Chicago time, on a Business Day, the Borrower may
from time to time irrevocably request, on notice on the date of the requested
Borrowing in the case of Base Rate Loans and on not less than three nor more
than five Business Days' notice in the case of LIBO Rate Loans, that a Borrowing
be made in a minimum amount of (i) $500,000 if such Loan is a LIBO Rate Loan or
(ii) the lesser of the unused amount of the Revolving Commitments or $100,000,
if such Loan is a Base Rate Loan and an integral multiple of $100,000, to the
extent such additional amount is permitted to be borrowed hereunder. On the
terms and subject to the conditions of this Agreement, each Borrowing shall be
comprised of the type of Loans, and shall be made on the Business Day, specified
in such Borrowing Request. On or before 1:00 p.m. (Chicago time) on such
Business Day, each Lender shall deposit with the Agent same day funds in an
amount equal to such Lender's Percentage of the requested Borrowing. Such
deposit will be made to an account which the Agent shall specify from time to
time by notice to the Lenders. To the extent funds are received from the
Lenders, the Agent shall make such funds available to the Borrower by wire
transfer to the accounts the Borrower shall have specified in its Borrowing
Request. No Lender's obligation to make any Loan shall be affected by any other
Lender's failure to make any Loan.
SECTION 2.4 Continuation and Conversion Elections. By delivering a
Continuation/Conversion Notice to the Agent on or before 10:00 a.m., Chicago
time, on a Business Day, the Borrower may from time to time irrevocably elect,
on not less than three nor more than five Business Days' notice that all, or any
portion in an aggregate minimum amount of $500,000 and an integral multiple of
$100,000, of any Loans be, in the case of Base Rate Loans, converted into LIBO
Rate Loans or, in the case of LIBO Rate Loans, be converted into a Base Rate
Loan or continued as a LIBO Rate Loan (in the absence of delivery of a
Continuation/ Conversion Notice with respect to any LIBO Rate Loan at least
three Business Days before the last day of the then current Interest Period with
respect thereto, such LIBO Rate
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Loan shall, on such last day, automatically convert to a Base Rate Loan);
provided, however, that (i) each such conversion or continuation shall be pro
rated among the applicable outstanding Loans of all Lenders, and (ii) no portion
of the outstanding principal amount of any Loans may be continued as, or be
converted into, LIBO Rate Loans when any Event of Default has occurred and is
continuing.
SECTION 2.5 Funding. Each Lender may, if it so elects, fulfill its
obligation to make, continue or convert LIBO Rate Loans hereunder by causing one
of its foreign branches or Affiliates (or an international banking facility
created by such Lender) to make or maintain such LIBO Rate Loan; provided,
however, that such LIBO Rate Loan shall nonetheless be deemed to have been made
and to be held by such Lender, and the obligation of the Borrower to repay such
LIBO Rate Loan shall nevertheless be to such Lender for the account of such
foreign branch, Affiliate or international banking facility. In addition, the
Borrower hereby consents and agrees that, for purposes of any determination to
be made for purposes of Sections 4.1, 4.2, 4.3 or 4.4, it shall be conclusively
assumed that each Lender elected to fund all LIBO Rate Loans by purchasing
Dollar deposits in its LIBOR Office's interbank eurodollar market.
SECTION 2.6 Notes. Each Lender's Loans under its Revolving Commitment shall
be evidenced by a Note payable to the order of such Lender in a maximum
principal amount equal to such Lender's Percentage of the original Revolving
Commitment Amount. The Borrower hereby irrevocably authorizes each Lender to
make (or cause to be made) appropriate notations on the grid attached to such
Lender's Note (or on any continuation of such grid), which notations, if made,
shall evidence, inter alia, the date of, the outstanding principal of, and the
interest rate and Interest Period applicable to the Loans evidenced thereby.
Such notations shall be conclusive and binding on the Borrower absent manifest
error; provided, however, that the failure of any Lender to make any such
notations shall not limit or otherwise affect any Obligations of the Borrower or
any other Credit Party.
SECTION 2.7 Letters of Credit.
SECTION 2.7.1 Issuance of Letters of Credit. From and after the date
hereof, the Letter of Credit Issuer agrees, upon the terms and conditions set
forth in this Agreement, and subject to the satisfaction of such policy
standards and conditions relating to the issuance of standby letters of credit
generally as may be established by the Letter of Credit Issuer from time to
time, to issue standby letters of credit, for the account of the Borrower, from
time to time from the Closing Date to the Letter of Credit Expiry Date; provided
that the Borrower shall not request and the Letter of Credit Issuer shall not
issue, any Letter of Credit which would cause the aggregate Letter of Credit
Obligations (after giving effect to the issuance of such Letter of Credit) to
exceed the amount of the lesser of (i) the Letter of Credit Sublimit and (ii)
the unused aggregate Revolving Commitment.
SECTION 2.7.2 Participating Interests. Immediately upon the issuance by the
Letter of Credit Issuer of a Letter of Credit, each Lender shall be deemed to
have irrevocably and unconditionally purchased and received from the Letter of
Credit Issuer, without recourse,
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representation or warranty, an undivided participation interest equal to its
Percentage of the face amount of such Letter of Credit and each draw paid by the
Letter of Credit Issuer thereunder. Each Lender's obligation to pay its
proportionate share of all draws under the Letters of Credit, absent gross
negligence or willful misconduct by the Letter of Credit Issuer in honoring any
such draw, shall be absolute, unconditional and irrevocable and in each case
shall be made without counterclaim or set-off by such Lender.
SECTION 2.7.3 Reimbursement Upon Drawing. (a) The Borrower agrees to
reimburse the Letter of Credit Issuer for the amount of each draft drawn on a
Letter of Credit within one Business Day after the date such draft is so drawn.
The Borrower agrees to reimburse the Letter of Credit Issuer immediately when
due, under all circumstances, including, without limitation, any of the
following circumstances: (w) any lack of validity or enforceability of this
Agreement or any instrument executed pursuant hereto; (x) the existence of any
claim, set-off, defense or other right which the Borrower may have at any time
against a beneficiary named in a Letter of Credit, any transferee of any Letter
of Credit (or any Person for whom any such transferee may be acting), any Lender
or any other Person, whether in connection with this Agreement, any Letter of
Credit, the transactions contemplated herein or any unrelated transactions
(including any underlying transaction between the Borrower and the beneficiary
named in any Letter of Credit); (y) the validity, sufficiency or genuineness of
any document which the Letter of Credit Issuer reasonably has determined in good
faith complies on its face with the terms of the applicable Letter of Credit,
even if such document should later prove, without the knowledge of the Letter of
Credit Issuer, to have been forged, fraudulent, invalid or insufficient in any
respect or any statement therein shall have been untrue or inaccurate in any
respect; or (z) the surrender or material impairment of any security for the
performance or observance of any of the terms hereof.
(b) If the Borrower does not pay any such reimbursement obligations
when due, the Borrower shall be deemed to have immediately requested that
the Lenders make a Base Rate Loan under this Agreement in a principal
amount equal to such unreimbursed reimbursement obligations. The Agent
shall promptly notify the Lenders of such deemed request and, without the
necessity of compliance with the requirements of Sections 2.1 and 5.2, each
Lender shall make available to the Agent its Loan. The proceeds of such
Loans shall be paid over by the Agent to the Letter of Credit Issuer for
the account of the Borrower in satisfaction of such unreimbursed
reimbursement obligations, which shall thereupon be deemed satisfied by the
proceeds of, and replaced by, such Loan.
(c) If the Letter of Credit Issuer makes a payment on account of any
Letter of Credit and is not concurrently reimbursed therefor by the
Borrower and if for any reason a Loan may not be made pursuant to Section
2.7.3(b), then as promptly as practical during normal banking hours on the
date of its receipt of such notice or, if not practicable on such date, not
later than 12:00 noon (Chicago time) on the Business Day immediately
succeeding such date of notification, each Lender shall deliver to the
Agent for the account of the Letter of Credit Issuer, in immediately
available funds, the purchase price for such Lender's interest in such
unreimbursed reimbursement obligations, which shall
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be an amount equal to such Lender's pro-rata share of such payment. Each
Lender shall, upon demand by the Letter of Credit Issuer, pay the Letter of
Credit Issuer interest on such Lender's pro-rata share of such draw from
the date of payment by the Letter of Credit Issuer on account of such
Letter of Credit until the date of delivery of such funds to the Letter of
Credit Issuer by such Lender at a rate per annum, computed for actual days
elapsed based on a 360-day year, equal to the Federal Funds Effective Rate
for such period; provided, that such payments shall be made by the Lenders
only in the event and to the extent that the Letter of Credit Issuer is not
reimbursed in full by the Borrower for interest on the amount of any draw
on the Letters of Credit.
SECTION 2.7.4 Request for Letter of Credit. Each Letter of Credit shall be
issued upon receipt by the Letter of Credit Issuer and the Agent from the
Borrower of an irrevocable request thereof (an "LC Notice") not later than 11:00
a.m. (Chicago time) three (3) Business Days prior the issuance date. Each LC
Notice for a Letter of Credit issued shall be in form and substance satisfactory
to the Letter of Credit Issuer.
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1 Repayments and Prepayments.
SECTION 3.1.1 Prior to the Revolving Commitment Termination Date. The
Borrower
(a) may, from time to time on any Business Day prior to the Revolving
Commitment Termination Date, make a voluntary prepayment, in whole or in
part, of the outstanding principal amount of any Loans; provided, however,
that:
(i) any such prepayment shall be made pro rata among Loans of the
same type and, if applicable, having the same Interest Period of all
Lenders;
(ii) unless the Borrower complies with Section 4.4, no such
prepayment of any LIBO Rate Loan may be made on any day other than the
last day of the Interest Period for such Loan; and
(b) shall, immediately upon any acceleration of the Maturity Date of
any Loans pursuant to Section 8.2 or Section 8.3, repay all Loans, unless,
pursuant to Section 8.3, only a portion of all Loans is so accelerated.
Each prepayment of any Loans made pursuant to this Section 3.1.1 shall be
without premium or penalty, except as may be required by Section 4.4. No
voluntary prepayment of principal of any Loans pursuant to this Section 3.1.1
shall cause a reduction in the Revolving Commitment Amount.
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SECTION 3.1.2 On the Maturity Date. On the Maturity Date, the Borrower
shall repay the principal of the Loans then outstanding.
SECTION 3.1.3 Extension of Maturity Date. The Borrower may, by written
request to the Agent and the Lenders given not later than one hundred eighty
(180) days prior to the Maturity Date then in effect (the "Effective Maturity
Date") request (an "Extension Request") that such Effective Maturity Date be
extended to a date which is twenty-four (24) months after such Effective
Maturity Date. No later than the date (the "Extension Response Date") which is
30 days after such Extension Request has been delivered to each of the Lenders,
each Lender will notify the Borrower in writing (with a copy to the Agent)
whether or not it consents to such Extension Request (which consent may be
granted or denied by each Lender in its sole discretion and may be conditioned
on receipt of such financial information or other documentation as may be
specified by such Lender); provided, that any Lender that fails to so advise the
Borrower on or prior to the Extension Response Date shall be deemed to have
denied such Extension Request. The extension of the Maturity Date contemplated
by an Extension Request shall become effective as of the applicable Effective
Maturity Date; provided, that (i) all of the Lenders shall have consented to
such Extension Request; and (ii) (x) each of the representations and warranties
made by the Borrower in or pursuant to the Loan Documents shall be true and
correct in all material respects on and as of each of the date of such Extension
Request and such Effective Maturity Date as if made on and as of such date,
except to the extent relating to an earlier date, (y) no Default or Event of
Default shall have occurred and be continuing on the date of such Extension
Request or on such Effective Maturity Date and (z) on each of the date of such
Extension Request and such Effective Maturity Date, the Agent shall have
received a certificate of the Borrower as to the matters set forth in clauses
(x) and (y) above.
SECTION 3.2 Interest Provisions. Interest on the outstanding principal
amount of Loans shall accrue and be payable in accordance with this Section 3.2.
SECTION 3.2.1 Rates. Pursuant to an appropriately delivered Borrowing
Request or Continuation/Conversion Notice, the Borrower may elect that Loans
comprising a Borrowing accrue interest at a rate per annum:
(a) on that portion maintained from time to time as a Base Rate Loan,
equal to the sum of the Base Rate from time to time in effect plus the
Applicable Margin for Base Rate Loans; or
(b) on that portion maintained as a LIBO Rate Loan, during each
Interest Period applicable thereto, equal to the sum of the LIBO Rate
(Reserve Adjusted) for such Interest Period plus the Applicable Margin for
LIBO Rate Loans.
The "LIBO Rate (Reserve Adjusted)" means, relative to any Loan to be made,
continued or maintained as, or converted into, a LIBO Rate Loan for any Interest
Period, a rate per annum
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(rounded upwards, if necessary, to the nearest 1/16 of 1%) determined pursuant
to the following formula:
LIBO Rate = LIBO Rate
-------------------------
(Reserve Adjusted) 1.00 - LIBOR Reserve Percentage
The LIBO Rate (Reserve Adjusted) for any Interest Period for LIBO Rate
Loans will be determined by the Agent on the basis of the LIBOR Reserve
Percentage in effect on, and the applicable rates furnished to and received by
the Agent from National City, two Business Days before the first day of such
Interest Period.
"LIBO Rate" means, relative to any Interest Period for LIBO Rate Loans, the
rate of interest equal to the average (rounded upwards, if necessary, to the
nearest 1/16 of 1%) of the rates per annum at which Dollar deposits in
immediately available funds are offered to National City's LIBOR Office in the
London interbank market as at or about 10:00 a.m. London time two Business Days
prior to the beginning of such Interest Period for delivery on the first day of
such Interest Period, and in an amount approximately equal to the amount of
National City's LIBO Rate Loan and for a period approximately equal to such
Interest Period.
"LIBOR Reserve Percentage" means, relative to any Interest Period for LIBO
Rate Loans, the reserve percentage (expressed as a decimal) equal to the maximum
aggregate reserve requirements (including all basic, emergency, supplemental,
marginal and other reserves and taking into account any transitional adjustments
or other scheduled changes in reserve requirements) specified under regulations
issued from time to time by the F.R.S. Board and then applicable to assets or
liabilities consisting of and including "Eurocurrency Liabilities", as currently
defined in Regulation D of the F.R.S. Board, having a term approximately equal
or comparable to such Interest Period.
All LIBO Rate Loans shall bear interest from and including the first day of
the applicable Interest Period to (but not including) the last day of such
Interest Period at the interest rate determined as applicable to such LIBOR Rate
Loan.
"Applicable Margin" means on any date the applicable percentage set forth
below based upon the Level as shown in the certificate then most recently
delivered to the Lenders pursuant to Section 7.1.1(d):
Level Base Rate LIBOR Rate Commitment Fee
----- --------- ---------- --------------
I .75% 2.25% .500%
II .50% 2.00% .375%
III .25% 1.75% .375%
IV 0% 1.50% .375%
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; provided, however that if the Borrower shall have failed to deliver to the
Lenders by the date required hereunder any certificate pursuant to Section
7.1.1(d), then from the date such certificate was required to be delivered until
the date of such delivery the Applicable Margin shall be deemed to be Level I.
Each change in the Applicable Margin shall take effect with respect to all
outstanding Loans on the third Business Day immediately succeeding the day on
which such certificate is received by the Agent. Notwithstanding the foregoing,
no reduction in the Applicable Margin shall be effected if a Default or an Event
of Default shall have occurred and be continuing on the date when such change
would otherwise occur, it being understood that on the third Business Day
immediately succeeding the day on which such Default or Event of Default is
either waived or cured (assuming no other Default or Event of Default shall be
then pending), the Applicable Margin shall be reduced (on a prospective basis)
in accordance with the then most recently delivered certificate.
"Level" means, and includes, Level I, Level II, Level III or Level IV,
whichever is in effect at the relevant time.
"Level I" shall exist at any time the Total Leverage Ratio is equal to or
less than 3.00:1.0 but equal to or greater than 2.50:1.0.
"Level II" shall exist at any time the Total Leverage Ratio is less than
2.50:1.0 but equal to or greater than 2.00:1.0.
"Level III" shall exist at any time the Total Leverage Ratio is less than
2.00:1.0 but equal to or greater than 1.50:1.0.
"Level IV" shall exist at any time the Total Leverage Ratio is less than
1.50:1.0.
"Total Leverage Ratio" means, with respect to any period, the ratio of (i)
Total Funded Debt to (ii) EBITDA, as of the end of the relevant period.
SECTION 3.2.2 Post-Maturity Rates. After the date any principal amount of
any Loan is due and payable (whether on the Revolving Commitment Termination
Date, upon acceleration or otherwise), or after any other monetary Obligation of
the Borrower shall have become due and payable, the Borrower shall pay, but only
to the extent permitted by law, interest (after as well as before judgment) on
such amounts at a rate per annum equal to the Base Rate plus a margin of 2.00%.
SECTION 3.2.3 Payment Dates. Interest accrued on each Loan shall be
payable, without duplication:
(a) on the Revolving Commitment Termination Date;
(b) on the date of any payment or prepayment, in whole or in part, of
principal outstanding on such Loan;
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(c) with respect to Base Rate Loans, on each Quarterly Payment Date
occurring after the Closing Date;
(d) with respect to LIBO Rate Loans, the last day of each applicable
Interest Period and, in the case of an Interest period in excess of three
months, on the dates which are successively three months after the
commencement of such Interest Period;
(e) with respect to any Base Rate Loans converted into LIBO Rate Loans
on a day when interest would not otherwise have been payable pursuant to
clause (c), on the date of such conversion; and
(f) on that portion of any Loans the Maturity Date of which is
accelerated pursuant to Section 8.2 or Section 8.3, immediately upon such
acceleration.
Interest accrued on Loans or other monetary Obligations arising under this
Agreement or any other Loan Document after the date such amount is due and
payable (whether on the Maturity Date, upon acceleration or otherwise) shall be
payable upon demand.
SECTION 3.3 Fees. The Borrower agrees to pay the fees set forth in this
Section 3.3. All such fees shall be non-refundable.
SECTION 3.3.1 Revolving Commitment Fee. The Borrower agrees to pay to the
Agent for the account of each Lender, for the period (including any portion
thereof when its Revolving Commitment is suspended by reason of the Borrower's
inability to satisfy any condition of Article V) commencing on the Closing Date
and continuing through the Revolving Commitment Termination Date, a commitment
fee at the rate equal to the Applicable Margin for Commitment Fees per annum on
such Lender's Percentage of the sum of the average daily unused portion of the
Revolving Commitment Amount. Such commitment fees shall be payable by the
Borrower in arrears on each Quarterly Payment Date, commencing with the first
such day following the Closing Date and on the Revolving Commitment Termination
Date.
SECTION 3.3.2 Letter of Credit Fees. (a) The Borrower agrees to pay the
Agent, for the account of each Lender pro-rata on the basis of its Revolving
Commitment, a fee in respect of each Letter of Credit computed at the Applicable
Margin for LIBO Rate Loans on the average daily stated amount of such Letter of
Credit (computed on the basis of a 360-day year for the actual days elapsed),
such fee to be due and payable quarterly in arrears on each Quarterly Payment
Date and on the Revolving Commitment Termination Date.
(b) The Borrower shall pay to the Letter of Credit Issuer a letter of
credit fronting fee for each Letter of Credit issued by the Letter of
Credit Issuer equal to 1/4 of 1% of the face amount (or increased face
amount) of such Letter of Credit. Such Letter of Credit fronting fee shall
be due and payable on each date of issuance (or date of increase) of a
Letter of Credit.
(c) The Borrower agrees to pay directly to the Letter of Credit Issuer
upon each issuance of, drawing under, and/or amendment of, a Letter of
Credit issued by it in such amount
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as shall at the time of such issuance, drawing or amendment be the
administrative charge which the Letter of Credit Issuer is customarily
charging for issuances of, drawing under or amendments of, letters of
credit issued by it.
SECTION 3.3.3 Agency Fees. The Borrower shall pay to the Agent (x) on the
Closing Date for its own account and/or for distribution to the Lenders such
fees as heretofore agreed by the Borrower and the Agent and (y) for its own
account such other fees as may be agreed to from time to time between the
Borrower and the Agent, when and as due.
ARTICLE IV
LIBO RATE AND OTHER PROVISIONS
SECTION 4.1 LIBO Rate Lending Unlawful. If any Lender shall determine
(which determination shall, upon notice thereof to the Borrower and the Lenders,
be conclusive and binding on the Borrower) that the introduction of or any
change in or in the interpretation of any law makes it unlawful, or any central
bank or other governmental authority asserts that it is unlawful, for such
Lender to make, continue or maintain any Loan as, or to convert any Loan into, a
LIBO Rate Loan of a certain type, subject to the provisions of Section 4.11
hereof, the obligations of all Lenders to make, continue, maintain or convert
any such Loans shall, upon such determination, forthwith be suspended until such
Lender shall notify the Agent that the circumstances causing such suspension no
longer exist, and all LIBO Rate Loans of such type shall automatically convert
into Base Rate Loans at the end of the then current Interest Periods with
respect thereto or sooner, if required by such law or assertion.
SECTION 4.2 Deposits Unavailable. If the Agent shall have determined that
(a) Dollar certificates of deposit or Dollar deposits, as the case may
be, in the relevant amount and for the relevant Interest Period are not
available to a Lender in its relevant market; or
(b) by reason of circumstances affecting a Lender's relevant market,
adequate means do not exist for ascertaining the interest rate applicable
hereunder to LIBO Rate Loans of such type,
then, upon notice from the Agent to the Borrower and the Lenders, subject to the
provisions of Section 4.11 hereof, the obligations of all Lenders under Section
2.3 and Section 2.4 to make or continue any Loans as, or to convert any Loans
into, LIBO Rate Loans of such type shall forthwith be suspended until the Agent
shall notify the Borrower and the Lenders that the circumstances causing such
suspension no longer exist.
SECTION 4.3 Increased LIBO Rate Loan Costs, etc. The Borrower agrees to
reimburse each Lender for any increase in the cost to such Lender of, or any
reduction in the amount of any sum receivable by such Lender in respect of,
making, continuing or maintaining (or of its
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obligation to make, continue or maintain) any Loans as, or of converting (or of
its obligation to convert) any Loans into, LIBO Rate Loans, subject to the
provisions of Section 4.11 hereof. Such Lender shall promptly notify the Agent
and the Borrower in writing of the occurrence of any such event, such notice to
state, in reasonable detail, the reasons therefor and the additional amount
required fully to compensate such Lender for such increased cost or reduced
amount. Such additional amounts shall be payable by the Borrower directly to
such Lender within five days of its receipt of such notice, and such notice
shall, in the absence of manifest error, be conclusive and binding on the
Borrower; provided, however, in no event shall Borrower be obligated to pay
increased costs for a period greater than 180 days prior to the date of receipt
of such notice.
SECTION 4.4 Funding Losses. In the event any Lender shall incur any loss or
expense (including any loss or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to make,
continue or maintain any portion of the principal amount of any Loan as, or to
convert any portion of the principal amount of any Loan into, a LIBO Rate Loan)
as a result of;
(a) any conversion or repayment or prepayment of the principal amount
of any LIBO Rate Loans on a date other than the scheduled last day of the
Interest Period applicable thereto, whether pursuant to Section 3.1 or
otherwise;
(b) any Loans not being made as LIBO Rate Loans in accordance with the
Borrowing Request therefor; or
(c) any Loans not being continued as, or converted into, LIBO Rate
Loans in accordance with the Continuation/ Conversion Notice therefor;
then, subject to the provisions of Section 4.11 hereof, upon the written notice
of such Lender (which notice shall be delivered within thirty days of the
incurrence thereof by such Lender) to the Borrower (with a copy to the Agent),
the Borrower shall, within five days of its receipt thereof, pay directly to
such Lender such amount as will (in the reasonable determination of such Lender)
reimburse such Lender for such loss or expense. Such written notice (which shall
include calculations in reasonable detail) shall, in the absence of manifest
error, be conclusive and binding on the Borrower.
SECTION 4.5 Increased Capital Costs. If any change in, or the introduction,
adoption, effectiveness, interpretation, reinterpretation or phase-in of, any
law or regulation, directive, guideline, decision or request (whether or not
having the force of law) of any court, central bank, regulator or other
governmental authority affects or would affect the amount of capital required or
expected to be maintained by any Lender or any Person controlling such Lender,
and such Lender determines (in its sole and absolute discretion) that the rate
of return on its or such controlling Person's capital as a consequence of its
Revolving Commitment or the Loans made by such Lender is reduced to a level
below that which such Lender or such controlling Person could have achieved but
for the occurrence of any such circumstance, then, in any such
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case upon notice from time to time by such Lender to the Borrower, subject to
the provisions of Section 4.11 hereof, the Borrower shall immediately pay
directly to such Lender additional amounts sufficient to compensate such Lender
or such controlling Person for such reduction in rate of return. A statement of
such Lender as to any such additional amount or amounts (including calculations
thereof in reasonable detail) shall, in the absence of manifest error, be
conclusive and binding on the Borrower. In determining such amount, such Lender
may use any method of averaging and attribution that it (in its sole and
absolute discretion) shall deem applicable; provided, however, in no event shall
Borrower be obligated to pay increased costs for a period greater than 180 days
prior to the date of receipt of the notice required by this Section 4.5.
SECTION 4.6 Taxes. All payments by the Borrower of principal of, and
interest on, the Loans and all other amounts payable hereunder shall be made
free and clear of and without deduction for any present or future income,
excise, stamp or franchise taxes and other taxes, fees, duties, withholdings or
other charges of any nature whatsoever imposed by any taxing authority, but
excluding franchise taxes and taxes imposed on or measured by any Lender's net
income or receipts (such non-excluded items being called "Taxes"). In the event
that any withholding or deduction from any payment to be made by the Borrower
hereunder is required in respect of any Taxes pursuant to any applicable law,
rule or regulation, then the Borrower will:
(a) pay directly to the relevant authority the full amount required to
be so withheld or deducted;
(b) promptly forward to the Agent an official receipt or other
documentation satisfactory to the Agent evidencing such payment to such
authority; and
(c) pay to the Agent for the account of the Lenders such additional
amount or amounts as is necessary to ensure that the net amount actually
received by each Lender will equal the full amount such Lender would have
received had no such withholding or deduction been required.
Moreover, if any Taxes are directly asserted against the Agent or any Lender
with respect to any payment received by the Agent or such Lender hereunder, the
Agent or such Lender may pay such Taxes and the Borrower will promptly pay such
additional amounts (including any penalties, interest or expenses, other than
those penalties, interest or expenses which are due to any delay by Agent or any
Lender) as is necessary in order that the net amount received by such person
after the payment of such Taxes (including any Taxes on such additional amount)
shall equal the amount such person would have received had not such Taxes been
asserted.
If the Borrower fails to pay any Taxes when due to the appropriate taxing
authority or fails to remit to the Agent, for the account of the respective
Lenders, the required receipts or other required documentary evidence, the
Borrower shall indemnify the Lenders for any incremental Taxes, interest or
penalties that may become payable by any Lender as a result of
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any such failure. For purposes of this Section 4.6, a distribution hereunder by
the Agent or any Lender to or for the account of any Lender shall be deemed a
payment by the Borrower.
Upon the request of the Borrower or the Agent, each Lender that is
organized under the laws of a jurisdiction other than the United States shall,
prior to the due date of any payments under the Notes, execute and deliver to
the Borrower and the Agent, on or about the first scheduled payment date in each
Fiscal Year, one or more (as the Borrower or the Agent may reasonably request)
United States Internal Revenue Service Forms 4224 or Forms 1001 or such other
forms or documents (or successor forms or documents), appropriately completed,
as may be applicable to establish the extent, if any, to which a payment to such
Lender is exempt from withholding or deduction of Taxes.
SECTION 4.7 Payments, Computations, etc. Unless otherwise expressly
provided, all payments by the Borrower pursuant to this Agreement, the Notes or
any other Loan Document shall be made by the Borrower to the Agent for the pro
rata account of the Lenders entitled to receive such payment. All such payments
required to be made to the Agent shall be made, without setoff, deduction or
counterclaim, not later than 11:00 a.m., Chicago time, on the date due, in same
day or immediately available funds, to such account as the Agent shall specify
from time to time by notice to the Borrower. Funds received after that time
shall be deemed to have been received by the Agent on the next succeeding
Business Day. The Agent shall promptly remit in same day funds to each Lender
its share, if any, of such payments received by the Agent for the account of
such Lender. All interest and fees shall be computed on the basis of the actual
number of days (including the first day but excluding the last day) occurring
during the period for which such interest or fee is payable over a year
comprised of 360 days (or, in the case of interest on a Base Rate Loan, 365 days
or, if appropriate, 366 days). Whenever any payment to be made shall otherwise
be due on a day which is not a Business Day, such payment shall (except as
otherwise required by clause (c) of the definition of the term "Interest Period"
with respect to LIBO Rate Loans) be made on the next succeeding Business Day and
such extension of time shall be included in computing interest and fees, if any,
in connection with such payment.
SECTION 4.8 Sharing of Payments. If any Lender shall obtain any payment or
other recovery (whether voluntary, involuntary, by application of setoff or
otherwise) on account of any Loan (other than pursuant to the terms of Sections
4.3, 4.4 and 4.5) in excess of its pro rata share of payments then or therewith
obtained by all Lenders, such Lender shall purchase from the other Lenders such
participations in Loans made by them as shall be necessary to cause such
purchasing Lender to share the excess payment or other recovery ratably with
each of them; provided, however, that if all or any portion of the excess
payment or other recovery is thereafter recovered from such purchasing Lender,
the purchase shall be rescinded and each Lender which has sold a participation
to the purchasing Lender shall repay to the purchasing Lender the purchase price
to the ratable extent of such recovery together with an amount equal to such
selling Lender's ratable share (according to the proportion of:
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(a) the amount of such selling Lender's required repayment to the
purchasing Lender
to
(b) the total amount so recovered from the purchasing Lender);
of any interest or other amount paid or payable by the purchasing Lender in
respect of the total amount so recovered. The Borrower agrees that any Lender so
purchasing a participation from another Lender pursuant to this Section may, to
the fullest extent permitted by law, exercise all its rights of payment
(including pursuant to Section 4.9) with respect to such participation as fully
as if such Lender were the direct creditor of the Borrower in the amount of such
participation. If under any applicable bankruptcy, insolvency or other similar
law, any Lender receives a secured claim in lieu of a setoff to which this
Section applies, such Lender shall, to the extent practicable, exercise its
rights in respect of such secured claim in a manner consistent with the rights
of the Lenders entitled under this Section to share in the benefits of any
recovery on such secured claim.
SECTION 4.9 Setoff. Each Lender shall, upon the occurrence of any Default
described in clauses (a) through (d) of Section 8.1.9 or, with the consent of
the Required Lenders, upon the occurrence of any other Event of Default, have
the right to appropriate and apply to the payment of the Obligations owing to it
(whether or not then due), and (as security for such Obligations) the Borrower
hereby grants to each Lender a continuing security interest in, any and all
balances, credits, deposits, accounts or moneys of the Borrower then or
thereafter maintained with such Lender; provided, however, that any such
appropriation and application shall be subject to the provisions of Section 4.8.
Each Lender agrees promptly to notify the Borrower and the Agent after any such
setoff and application made by such Lender; provided, however, that the failure
to give such notice shall not affect the validity of such setoff and
application. The rights of each Lender under this Section are in addition to
other rights and remedies (including other rights of setoff under applicable law
or otherwise) which such Lender may have.
SECTION 4.10 Use of Proceeds. The Borrower shall apply the proceeds of each
Borrowing in accordance with the third recital; without limiting the foregoing,
no proceeds of any Loan will be used to acquire any equity security of a class
which is registered pursuant to Section 12 of the Securities Exchange Act of
1934 or any "margin stock", as defined in F.R.S. Board Regulation U.
SECTION 4.11 Changes to Other Branches; Equal Treatment of Borrower. If a
Lender claims any additional amounts payable or that its is unable to make LIBOR
Loans available, as described more fully in Sections 4.1 through 4.5 hereof,
such Lender shall (i) use its reasonable efforts (consistent with legal and
regulatory restrictions) to avoid the need for paying such additional amounts or
such unavailability, including changing the jurisdiction of its applicable
lending office or moving the applicable Loan(s) to an Affiliate or Subsidiary;
provided, that the
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taking of any such action would not, in the reasonable judgment of such Lender,
be disadvantageous to such Lender and (ii) treat the Borrower, with respect to
all such issues, in a manner consistent with the treatment of other similarly
situated borrowers with respect to such issues.
SECTION 4.12 Replacement of Lenders. Within fifteen (15) days after receipt
by Borrower of written notice and demand from any Lender for payment pursuant to
Section 4.5 or 4.6 (any such Lender demanding such payment being referred to
herein as an "Affected Lender"), Borrower may, at its option, notify Agent and
such Affected Lender of its intention to do one of the following:
(A) Borrower may obtain, at Borrower's expense, a replacement
Lender ("Replacement Lender") for such Affected Lender, which
Replacement Lender shall be reasonably satisfactory to Agent. In the
event Borrower obtains a Replacement Lender that will refinance all
outstanding Obligations owed to such Affected Lender and assume its
Commitments hereunder within ninety (90) days following notice of
Borrower's intention to do so, the Affected Lender shall sell and
assign all of its rights and delegate all of its obligations under
this Agreement to such Replacement Lender in accordance with the
provisions of Section 10.11.1, provided that Borrower has reimbursed
such Affected Lender for any administrative fee payable pursuant to
Section 10.11.1 and, in any case where such replacement occurs as the
result of a demand for payment pursuant to Section 4.5 or 5.6, paid
all amounts required to be paid to such Affected Lender pursuant to
subsection 4.5 or 4.6 through the date of such sale and assignment; or
(B) Borrower may, upon consent of the Majority Lenders (other
than the Affected Lender), prepay in full all outstanding Obligations
owed to such Affected Lender and terminate such Affected Lender's
Revolving Commitment, in which case the Revolving Commitment Amount
will be reduced by the amount of such Affected Lender's Revolving
Commitment. Borrower shall, within ninety (90) days following notice
of its intention to do so, prepay in full all outstanding Obligations
owed to such Affected Lender (including, in any case where such
replacement occurs as the result of a demand for payment for increased
costs, such Affected Lender's increased costs for which it is entitled
to reimbursement under this Agreement through the date of such
prepayment), and terminate such Affected Lender's obligations under
the Revolving Commitment Amount.
ARTICLE V
CONDITIONS TO BORROWING
SECTION 5.1 Initial Borrowing. The obligations of the Lenders to fund the
initial Borrowing and the Letter of Credit Issuer to issue, and the Lenders to
participate in, any letter of Credit, shall be subject to the prior or
concurrent satisfaction of each of the conditions precedent set forth in this
Section 5.1.
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SECTION 5.1.1 Resolutions, etc. The Agent shall have received from each
Credit Party a certificate, dated the date of the initial Borrowing, of its
Secretary or Assistant Secretary as to:
(a) resolutions of its Board of Directors then in full force and
effect authorizing the execution, delivery and performance of this
Agreement, the Notes and each other Loan Document to be executed by it; and
(b) the incumbency and signatures of those of its officers authorized
to act with respect to this Agreement, the Notes and each other Loan
Document executed by it;
upon which certificate each Lender may conclusively rely until it shall have
received a further certificate of the Secretary of such Credit Party canceling
or amending such prior certificate.
SECTION 5.1.2 Delivery of Notes. The Agent shall have received, for the
account of each Lender, its Notes duly executed and delivered by the Borrower.
SECTION 5.1.3 Applicable Margin. The Agent shall receive a certificate,
executed by an Authorized Officer of the Borrower, delineating the Applicable
Margin after giving pro forma effect to the Loans to be incurred on the Closing
Date.
SECTION 5.1.4 Guaranty. The Agent shall have received the Guaranty, dated
the date hereof, duly executed by each Subsidiary of the Borrower.
SECTION 5.1.5 Pledge Agreements. The Agent shall have received executed
counterparts of the Borrower Pledge Agreement and the Guarantor Pledge
Agreement, each dated as of the date hereof, duly executed by each Credit Party
party thereto, together with stock certificates, accompanied by undated stock
powers duly executed in blank, and promissory notes, duly endorsed in blank,
required to be delivered to the Agent pursuant to the Borrower Pledge Agreement
and the Guarantor Pledge Agreement.
SECTION 5.1.6 Security Agreements. The Agent shall have received executed
counterparts of the Borrower Security Agreement and the Guarantor Security
Agreement, each dated as of the date hereof, duly executed by each Credit Party
thereto, together with:
(a) acknowledgment copies of properly filed Uniform Commercial Code
financing statements (Form UCC-1) naming the relevant Credit Party as the
debtor and the Agent as the secured party, or other similar instruments or
documents, filed under the Uniform Commercial Code of all jurisdictions as
may be necessary or, in the opinion of the Agent, desirable to perfect the
security interest of the Agent pursuant to such Security Agreement;
(b) executed copies of proper Uniform Commercial Code Form UCC-3
termination statements, if any, necessary to release all Liens and other
rights of any Person:
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(i) in any collateral described in such Security Agreement
previously granted by any Person, and
(ii) securing any of the Indebtedness identified in Part A of
Schedule 6.17, together with such other Uniform Commercial Code Form
UCC-3 termination statements as the Agent may reasonably request from
such Credit Party; and
(c) copies of Uniform Commercial Code Requests for Information or
Copies (Form UCC-11), or a similar search report certified by a party
acceptable to the Agent, dated a date reasonably near to the date of the
initial Borrowing, listing all effective financing statements which name
each Credit Party (under its present name and any previous names) as the
debtor and which are filed in the jurisdictions in which filings were made
pursuant to clause (a) above, together with copies of such financing
statements (none of which (other than those described in clause (a), if
such Form UCC-11 or search report, as the case may be, is current enough to
list such financing statements described in clause (a)) shall cover any
collateral described in such Security Agreement).
SECTION 5.1.7 Intellectual Property Assignment. The Agent shall have
received executed counterparts of an Intellectual Property Assignment, dated the
date hereof, duly executed by each Credit Party.
SECTION 5.1.8 Opinions of Counsel. The Agent shall have received opinions,
dated the date of the initial Borrowing and addressed to the Agent and all
Lenders, from Katten Muchin & Zavis, counsel to the Borrower and its
Subsidiaries, substantially in the form of Exhibit H hereto.
SECTION 5.1.9 Agreements. The Agent shall have received true and correct
copies, certified as such by an Authorized Officer of the Borrower, of each
agreement governing Indebtedness listed on Schedule 6.17 and each Service
Agreement and Employment Agreement listed on Schedule 6.18.
SECTION 5.1.10 Closing Fees, Expenses, etc. The Agent shall have received
for its own account, or for the account of each Lender, as the case may be, all
fees, costs and expenses due and payable on the Closing Date pursuant to Section
3.3 and, to the extent invoiced on such date, Section 10.3.
SECTION 5.2 All Borrowings and Letters of Credit. The obligation of each
Lender to fund any Loan on the occasion of any Borrowing (including the initial
Borrowing) and the obligation of the Letter of Credit Issuer to issue any Letter
of Credit shall be subject to the satisfaction of each of the conditions
precedent set forth in this Section 5.2.
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SECTION 5.2.1 Compliance with Warranties, No Default, etc. Both before and
after giving effect to any Borrowing (but, if any Default of the nature referred
to in Section 8.1.5 shall have occurred with respect to any other Indebtedness,
without giving effect to the application, directly or indirectly, of the
proceeds thereof) the following statements shall be true and correct:
(a) the representations and warranties set forth in Article VI shall
be true and correct with the same effect as if then made (unless stated to
relate solely to an early date, in which case such representations and
warranties shall be true and correct as of such earlier date); and
(b) no Default or Event of Default shall have then occurred and be
continuing.
SECTION 5.2.2 Borrowing Request; LC Notice. The Agent shall have received a
Borrowing Request for such Borrowing or LC Notice for the issuance of a Letter
of Credit. Each of the delivery of a Borrowing Request or LC Notice, as the case
may be, and the acceptance by the Borrower of the proceeds of such Borrowing or
the issuance of such Letter of Credit, as the case may be, shall constitute a
representation and warranty by the Borrower that on the date of such Borrowing
or the issuance of such Letter of Credit, as the case may be (both immediately
before and after giving effect to such Borrowing and the application of the
proceeds thereof or the issuance of such Letter of Credit, as the case may be,)
the statements made in Section 5.2.1 are true and correct.
SECTION 5.2.3 Satisfactory Legal Form. All documents executed or submitted
pursuant hereto by or on behalf of each Credit Party shall be reasonably
satisfactory in form and substance to the Agent and its counsel; the Agent and
its counsel shall have received all information, approvals, opinions, documents
or instruments as the Agent or its counsel may reasonably request.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders and the Agent to enter into this Agreement
and to make Loans hereunder, the Borrower represents and warrants unto the Agent
and each Lender as set forth in this Article VI.
SECTION 6.1 Organization, etc. The Borrower and each of its Subsidiaries,
including, without limitation, the Borrower, is validly organized and existing
and in good standing under the laws of the State of its organization, is duly
qualified to do business and is in good standing as a foreign corporation in
each jurisdiction where the nature of its business requires such qualification,
and has full power and authority and holds all requisite governmental licenses,
permits and other approvals to enter into and perform its Obligations under this
Agreement, the
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Notes and each other Loan Document to which it is a party and to own and hold
under lease its property and to conduct its business substantially as currently
conducted by it.
SECTION 6.2 Due Authorization, Non-Contravention, etc. The execution,
delivery and performance by the Borrower and each of its Subsidiaries, including
without limitation, the Borrower, of this Agreement, the Notes and each other
Loan Document executed or to be executed by it, are within each such Credit
Party's powers, have been duly authorized by all necessary corporate action, and
do not:
(a) contravene such Credit Party's Organizational Documents;
(b) contravene any contractual restriction, law or governmental
regulation or court decree or order binding on or affecting such Credit
Party, which contravention reasonably would be expected to have a Material
Adverse Effect; or
(c) result in, or require the creation or imposition of, any Lien on
any of such Credit Party's properties other than a Permitted Lien.
SECTION 6.3 Government Approval, Regulation, etc. No authorization or
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body or other Person is required for the due execution,
delivery or performance by any Credit Party, including, without limitation, the
Borrower, of this Agreement, the Notes or any other Loan Document to which it is
a party, other than as described in Schedule 6.3 which have been obtained or
delivered on or prior to the Closing Date. Neither the Borrower nor any of its
Subsidiaries, is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, or a "holding company", or a "subsidiary
company" of a "holding company", or an "affiliate" of a "holding company" or of
a "subsidiary company" of a "holding company", within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
SECTION 6.4 Validity, etc. This Agreement constitutes, and the Notes and
each other Loan Document executed by each Credit Party thereto will, on the due
execution and delivery thereof, constitute, the legal, valid and binding
obligations of such Credit Party enforceable in accordance with their respective
terms, except that the validity or enforceability of any such Loan Document may
be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforceability of creditors' rights generally or by
equitable principles, whether enforcement thereof is sought in a court of law or
equity.
SECTION 6.5 Financial Information. The audited financial statements of the
Borrower and its Subsidiaries on a consolidated basis as of December 31, 1999,
and the unaudited financial statements of the Borrower and its Subsidiaries on a
consolidated basis as at March 31, 2000, copies of which have been furnished to
the Agent and each Lender, have been prepared in accordance with GAAP
consistently applied (subject to ordinary, good faith year end audit
adjustments), and present fairly the consolidated financial position of the
Persons
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covered thereby as at the dates thereof and the results of their operations for
the periods then ended.
SECTION 6.6 No Material Adverse Change. Since December 31, 1999, there has
been no material adverse change in the financial condition, operations, assets,
business, properties or prospects of the Borrower and its Subsidiaries taken as
a whole.
SECTION 6.7 Litigation, Labor Controversies, etc. There is no pending or,
to the knowledge of the Borrower, threatened litigation, action, proceeding, or
labor controversy affecting any Credit Party, or any of their respective
properties, businesses, assets or revenues, or any Person who provided health
care services under contract with any Credit Party, which reasonably would be
expected to have a Material Adverse Effect or which purports to affect the
legality, validity or enforceability of this Agreement, the Notes or any other
Loan Document.
SECTION 6.8 Subsidiaries. (a) The Borrower has no Subsidiaries, except
those Subsidiaries:
(i) which are identified in Schedule 6.8; or
(ii) which are permitted to have been acquired by the Borrower in
accordance with Section 7.2.5 or 7.2.8.
SECTION 6.9 Ownership of Properties. The Borrower and each of its
Subsidiaries owns good and marketable title (or valid leasehold title, with
respect to leasehold estates) to all of its properties and assets, real and
personal, tangible and intangible, of any nature whatsoever (including patents,
trademarks, trade names, service marks and copyrights), free and clear of all
Liens, charges or claims (including infringement claims with respect to patents,
trademarks, copyrights and the like) except as permitted pursuant to Section
7.2.3.
SECTION 6.10 Taxes. Except as described on Schedule 6.10, the Borrower and
each of its Subsidiaries has filed all tax returns and reports required by law
to have been filed by it and has paid all taxes and governmental charges thereby
shown to be owing, except any such taxes or charges which are being diligently
contested in good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP shall have been set aside on its books.
SECTION 6.11 Pension and Welfare Plans. During the twelve-consecutive-month
period prior to the Closing Date and prior to the date of any Borrowing
hereunder, no steps have been taken to terminate any Pension Plan, and no
contribution failure has occurred with respect to any Pension Plan sufficient to
give rise to a Lien under Section 302(f) of ERISA. No condition exists or event
or transaction has occurred with respect to any Pension Plan which reasonably
would be expected to result in the incurrence by the Borrower or any member of
the Controlled Group of any material liability, fine or penalty. Neither the
Borrower nor any member of the Controlled Group has any contingent liability
with respect to any post-retirement
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benefit under a Welfare Plan, other than liability for continuation coverage
described in Part 6 of Title I of ERISA.
SECTION 6.12 Environmental Warranties. (a) All facilities and property
(including underlying groundwater) owned or leased by the Borrower or any of its
Subsidiaries have been, and continue to be, owned or leased by the Borrower and
its Subsidiaries in material compliance with all applicable Environmental Laws.
(b) There have been no past (which have not been remedied or
resolved), and there are no pending or, to the best knowledge of the
Borrower, threatened:
(i) claims, complaints, notices or requests for information
received by the Borrower or any of its Subsidiaries with respect to
any alleged material violation of any Environmental Law, or
(ii) complaints, notices or inquiries to the Borrower or any of
its Subsidiaries regarding potential material liability under any
Environmental Law.
(c) There have been no Releases of Hazardous Materials at, on or under
any property now or previously owned or leased by the Borrower or any of
its Subsidiaries that, singly or in the aggregate, have, or would
reasonably be expected to have, a Material Adverse Effect.
(d) The Borrower and its Subsidiaries have been issued and are in
material compliance with all material permits, certificates, approvals,
licenses and other material authorizations relating to environmental
matters and necessary or desirable for their businesses.
(e) No property now or previously owned or leased by the Borrower or
any of its Subsidiaries is listed or proposed for listing (with respect to
owned property only) on the National Priorities List pursuant to CERCLA, on
the CERCLIS or on any similar state list of sites requiring investigation
or clean- up.
(f) There are no underground storage tanks, active or abandoned,
including petroleum storage tanks, on or under any property now or
previously owned or leased by the Borrower or any of its Subsidiaries.
(g) Neither the Borrower nor any of its Subsidiaries has directly
transported or directly arranged for the transportation of any Hazardous
Material to any location which is listed or proposed for listing on the
National Priorities List pursuant to CERCLA, on the CERCLIS or on any
similar state list or which is the subject of federal, state or local
enforcement actions or other investigations which reasonably would be
expected to lead to material claims against the Borrower or such Subsidiary
thereof for any remedial work, damage to natural resources or personal
injury, including claims under CERCLA.
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(h) To the best of the Borrower's knowledge after due inquiry, there
are no polychlorinated biphenyls or friable asbestos present at any
property now or previously owned or leased by the Borrower or any of its
Subsidiaries.
(i) No conditions exist at, on or under any property now or previously
owned or leased by the Borrower or any of its Subsidiaries which, with the
passage of time, or the giving of notice or both, reasonably would be
expected to give rise to any material liability under any Environmental
Law.
SECTION 6.13 Regulations T, U and X. Neither the Borrower nor any of its
Subsidiaries is engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock, and no proceeds of any Loans or any Letter
of Credit will be used for a purpose which violates, or would be inconsistent
with, F.R.S. Board Regulation U or X. Terms for which meanings are provided in
F.R.S. Board Regulation T, U or X or any regulations substituted therefor, as
from time to time in effect, are used in this Section with such meanings.
SECTION 6.14 Accuracy of Information. All factual information heretofore or
contemporaneously furnished by or on behalf of any Credit Party in writing to
the Agent or any Lender for purposes of or in connection with this Agreement or
any transaction contemplated hereby is, and all other such factual information
hereafter furnished by or on behalf of any Credit Party to the Agent or any
Lender will be, true and accurate in every material respect on the date as of
which such information is dated or certified and as of the date of execution and
delivery of this Agreement by the Agent and such Lender, and such information is
not, or shall not be, as the case may be, incomplete by omitting to state any
material fact necessary to make such information not misleading.
SECTION 6.15 Solvency. As of the Closing Date, after giving effect to the
consummation of the transaction contemplated by the Loan Documents and the
payment of all fees, costs and expenses payable by the Borrower with respect to
the transactions contemplated by the Loan Documents, the Borrower and its
Subsidiaries are Solvent on a consolidated basis.
SECTION 6.16 Collateral Documents. (a) Subject to the provisions of clause
(b) below with respect to the requirement of the Agent to maintain possession as
the Pledged Collateral, the provisions of each of the Collateral Documents are
effective to create in favor of the Agent for the benefit of the Lenders and the
Agent, a legal, valid and enforceable first priority security interest in all
right, title and interest of each Credit Party in the Collateral described
therein; and financing statements have been filed in the offices in all of the
jurisdictions listed in the schedule to the Borrower Security Agreement and the
Guarantor Security Agreement, and each Intellectual Property Assignment has been
filed in the U.S. Patent and Trademark Office and the U.S. Copyright Office.
(b) The provisions of the Borrower Pledge Agreement and the Guarantor
Pledge Agreement are effective to create, in favor of the Agent for the
benefit of the Lenders and the Agent, a legal, valid and enforceable first
priority security interest in all of the Collateral
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described therein; and the Pledged Collateral was delivered to the Agent or
its nominee in accordance with the terms thereof. The Lien of the Borrower
Pledge Agreement and the Guarantor Pledge Agreement constitutes a
perfected, first priority security interest in all right, title and
interest of the Credit Party thereto in the Pledged Collateral described
therein, prior and superior to all other Liens and interests, provided the
Agent maintains possession of the Pledged Collateral for the term of each
such Borrower Pledge Agreement or Guarantor Pledge Agreement, as
applicable.
(c) All representations and warranties of each Credit Party contained
in the Collateral Documents are true and correct as of the date on which
made, except to the extent such representations pertain to a prior date, in
which case such representations and warranties are true and correct as of
such prior date.
SECTION 6.17 Indebtedness. Attached hereto as Schedule 6.17 is a complete
and correct list of all Indebtedness of the Borrower and its Subsidiaries
outstanding on the Closing Date, showing the aggregate principal amount which
was outstanding on such date. The Borrower has delivered or caused to be
delivered to the Agent a true and complete copy of each instrument evidencing
any Indebtedness listed on Schedule 6.17 and of each document pursuant to which
any of such Indebtedness was issued.
SECTION 6.18 Service Agreements; Employment Agreements. As of the Closing
Date, the Borrower has delivered to the Agent a true and complete copy of each
Service Agreement and Employment Agreement, and of each amendment of
modification thereof, listed on Schedule 6.18. Each such Service Agreement and
Employment Agreement is a valid and subsisting agreement and is in full force
and effect in accordance with the terms thereof, and no material default by the
Borrower or any of its Subsidiaries exists under any such Service Agreement or
such Employment Agreement and, to the best of the Borrower's knowledge, no party
to any Service Agreement or Employment Agreement has any accrued right to
terminate any such Service Agreement or Employment Agreement on account of a
default by the Borrower or any of its Subsidiaries which right of default
reasonably would be expected to have a Material Adverse Effect.
SECTION 6.19 Other Agreements/Program Eligibility. Neither the Borrower nor
any of its Subsidiaries, and to the knowledge of the Borrower's officers, no
Practice or Provider, is in default in the performance, observance or
fulfillment of any obligation, covenant or condition contained in or applicable
with respect to any Medicaid Provider Agreement, Medicare Provider Agreement,
other agreement or instrument to which the Borrower, a Subsidiary, Practice or
Provider is a party with a third party payor, or participation in medicare,
medicaid or a third party payor program in which the Borrower, a Subsidiary,
Practice or Provider participates, which default, if not remedied within any
applicable grace period, reasonably would be expected to (i) result in the
revocation, termination, cancellation, suspension or non-renewal of Medicaid
Certification, Medicare Certification, any similar certification of a material
third party payor, if any, a Medicare Provider Agreement, Medicaid Provider
Agreement or agreement with a third party payor, or eligibility to participate,
directly or indirectly, in
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medicare, medicaid or material third party payor programs, or (ii) have a
Material Adverse Effect.
SECTION 6.20 Reimbursement from Third Party Payors. The accounts receivable
of the Borrower, each of its Subsidiaries and, to the knowledge of the
Borrower's officers, each Practice, have been and will continue to be adjusted
reasonably to reflect reimbursement experiences with and policies of third party
payors such as Medicare, Medicaid, Blue Cross/Blue Shield, private insurance
companies, health maintenance organizations, preferred provider organizations,
alternative delivery systems, managed care systems, government contracting
agencies and other third party payors. In particular, accounts receivable
relating to such third party payors do not and shall not exceed amounts any
obligee is entitled to receive under any capitation arrangement, fee schedule,
discount formula, cost-based reimbursement or other adjustment or limitation to
its usual charges.
SECTION 6.21 Legal Compliance. The Borrower and each of its Subsidiaries,
and to the knowledge of any of the Borrower's or any of its Subsidiaries'
officers, each Practice and each Provider, have duly complied and are in
compliance with all requirements, restrictions and prohibitions of law,
including, without limitation, any statute, law, treaty, rule, regulation,
manual, guidelines, rules of professional conduct, or order, decree, writ,
injunction or other determination of an arbitrator, court or other governmental
authority, in each case applicable to or binding upon such Person or any of its
property or to which such person or its property is subject and having the force
of law, other than those noncompliance with which would not reasonably be
expected to have a Material Adverse Effect.
SECTION 6.22 Licensing and Accreditation. Each of the Borrower and each of
its Subsidiaries, and, to the extent applicable, to the knowledge of the
Borrower's officers, each Practice and Provider has, to the extent applicable,
(i) obtained (or been duly assigned) all required certificates of need (other
than as described on Schedule 6.22) or determinations of need, as required by
the relevant state governmental authority, for the acquisition, construction,
expansion of, investment in or operation of its businesses or facilities as
currently operated; (ii) obtained and maintains in good standing all required
licenses; (iii) to the extent customary in the industry in which it is engaged,
obtained and maintains accreditation from all generally recognized accrediting
agencies; (iv) obtained and maintains Medicaid Certification, Medicare
Certification and any similar third party payor certification, if any; and (v)
entered into and maintains in good standing, if applicable, its Medicare
Provider Agreement, its Medicaid Provider Agreement and its agreements with
third party payors. To the knowledge of the Borrower's officers, each Provider
is duly licensed (where licensing is required) by each federal or state agency
or commission, or any other governmental authority having jurisdiction over the
provision of such services rendered by such Provider, and all such required
licenses are in full force and effect on the date hereof and have not been
revoked or suspended or otherwise limited.
SECTION 6.23 Subordination Provisions. The subordination provisions
contained in all notes, debentures and other instruments entered into or issued
in respect of Subordinated Debt
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are enforceable against the issuer of the respective security and the holders
thereof in accordance with their respective terms, and the Loans and all other
Obligations are within the definitions of "Senior Indebtedness", or other
comparable definition, included in such provisions.
SECTION 6.24 RICO. None of the Borrower nor any of its Subsidiaries is
engaged in or has engaged in any course of conduct that reasonably would be
expected to subject any of their respective properties to any Lien, seizure or
other forfeiture under any criminal law, racketeer influenced and corrupt
organizations law, civil or criminal, or other similar laws.
SECTION 6.25 Year 2000 Problem. The Borrower and each of its Subsidiaries
have reviewed the areas within its business and operations, as such business and
operations exist as of the Closing Date, which reasonably would be expected to
be adversely affected by, and have developed or is developing a program to
address on a timely basis the risk that certain computer applications used and
controlled by such Person may be unable to recognize and perform properly date-
sensitive functions involving dates prior to and after December 31, 1999 (the
"Year 2000 Problem"). The Year 2000 Problem will not result, and is not
reasonably expected to result, in any Material Adverse Effect, or the ability of
any Credit Party to duly and punctually pay or perform its obligations under
this Agreement or under the other Loan Documents. With respect to any Permitted
Acquisition, the Borrower will use its best efforts to ensure that any Year 2000
Problem which exists as a result of such Permitted Acquisition will not result,
and will not reasonably be expected to result, in any Material Adverse Effect.
ARTICLE VII
COVENANTS
SECTION 7.1 Affirmative Covenants. The Borrower agrees with the Agent and
each Lender that, until all Revolving Commitments have terminated and all
Obligations have been paid and performed in full, each Credit Party will perform
the obligations set forth in this Section 7.1 applicable to such Credit Party.
SECTION 7.1.1 Financial Information, Reports, Notices, etc. The Borrower
will furnish, or will cause to be furnished, to each Lender and the Agent copies
of the following financial statements, reports, notices and information:
(a) as soon as available and in any event within 45 days after the end
of each of the first three Fiscal Quarters (commencing with the Fiscal
Quarter ending June 30, 2000) of each Fiscal Year of the Borrower, to the
extent prepared to comply with SEC requirements, a copy of the SEC Form 10-
Qs filed by the Borrower with the SEC for each such quarterly period, or if
no such Form 10-Q was so filed by the Borrower with respect to any such
quarterly period, consolidated and consolidating balance sheets of the
Borrower and its Subsidiaries as of the end of such Fiscal Quarter and
consolidated and consolidating statements of earnings and cash flow of the
Borrower and its Subsidiaries
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for such Fiscal Quarter and for the period commencing at the end of the
previous Fiscal Year and ending with the end of such Fiscal Quarter,
certified by the Authorized Officer of the Borrower;
(b) as soon as available and in any event within 90 days after the end
of each Fiscal Year of the Borrower, to the extent prepared to comply with
SEC requirements, a copy of the SEC Form 10-Ks filed by the Borrower with
the SEC for such fiscal year, or, if no such Form 10-K was so filed by the
Borrower for such fiscal year, a copy of the annual audit report for such
Fiscal Year for the Borrower and its Subsidiaries including therein
consolidated and consolidating balance sheets of the Borrower and its
Subsidiaries (which consolidating balance sheets shall be prepared and
delivered under separate cover by the Borrower) as of the end of such
Fiscal Year and consolidated and consolidating statements of earnings and
cash flow of the Borrower and its Subsidiaries (which consolidating
statements shall be prepared and delivered under separate cover by the
Borrower) for such Fiscal Year, in the case of the consolidated financial
statements, certified (without any Impermissible Qualification) by Arthur
Andersen LLP or other independent public accountants reasonably acceptable
to the Agent, together with a certificate from such accountants containing
a computation of, and showing compliance with, each of the financial ratios
and restrictions contained in Section 7.2.4 and to the effect that, in
making the examination necessary for the signing of such annual report by
such accountants, they have not become aware of any Default or Event of
Default that has occurred and is continuing, or, if they have become aware
of such Default or Event of Default, describing such Default or Event of
Default and the steps, if any, which they have been advised are being taken
to cure it;
(c) as soon as available and in any event within 45 days after the end
of each Fiscal Quarter, a certificate, executed by the chief financial
officer and/or principal accounting officer of the Borrower, showing (in
reasonable detail and with appropriate calculations and computations in all
respects satisfactory to the Agent, including, without limitation, the
delivery of a Quarterly EBITDA Certificate for each Reporting Person)
compliance with the financial covenants set forth in Section 7.2.4.;
(d) as soon as possible and in any event within three Business Days
after the occurrence of each Default, a statement of the chief financial
officer and/or principal accounting officer of the Borrower setting forth
details of such Default and the action which the Borrower has taken and
proposes to take with respect thereto;
(e) as soon as possible and in any event within three Business Days
after (x) the occurrence of any adverse development with respect to any
litigation, action, proceeding, or labor controversy described in Section
6.7 or (y) the commencement of any labor controversy, litigation, action,
proceeding of the type described in Section 6.7, any of which reasonably
would be expected to have a Material Adverse Effect, notice thereof and
copies of all documentation relating thereto;
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(f) promptly, but not later than five days after the date of filing
with the SEC, copies of all financial statements and reports that Borrower
sends to its shareholders, and copies of all financial statements and
regular, periodical or special reports (including Forms 10-K, 10-Q and 8-K)
that Borrower or any of its Subsidiaries may make to, or file with, the SEC
(including, without limitation, pursuant to Section 7.2.9(b) or any
national securities exchange;
(g) immediately upon becoming aware of the institution of any steps by
the Borrower or any other Person to terminate any Pension Plan, or the
failure to make a required contribution to any Pension Plan if such failure
is sufficient to give rise to a Lien under Section 302(f) of ERISA, or the
taking of any action with respect to a Pension Plan which reasonably would
be expected to result in the requirement that the Borrower furnish a bond
or other security to the PBGC or such Pension Plan, or the occurrence of
any event with respect to any Pension Plan which reasonably would be
expected to result in the incurrence by the Borrower of any material
liability, fine or penalty, or any material increase in the contingent
liability of the Borrower with respect to any post-retirement Welfare Plan
benefit, notice thereof and copies of all documentation relating thereto;
(h) immediately upon becoming aware of any litigation or other
proceedings being instituted against any Credit Party or any Practice or
Provider to suspend, revoke or terminate any Medicaid Provider Agreement,
Medicaid Certification, Medicare Provider Agreement, Medicare
Certification, eligibility to participate in Medicare or Medicaid, or
agreement with or certification by, if any, or eligibility to participate
in a program of a third party payor, which suspension, revocation or
termination reasonably would be expected to have a Material Adverse Effect,
promptly deliver to the Agent written notice thereof stating the nature and
status of such litigation, dispute, proceeding, levy, execution or other
process; and
(i) such other information respecting the condition or operations,
financial or otherwise, of the Borrower or any of its Subsidiaries or any
Practice as any Lender through the Agent may from time to time reasonably
request.
SECTION 7.1.2 Compliance with Laws, etc. (a) The Borrower will, and will
cause each of its Subsidiaries to, comply in all material respects with all
applicable laws, rules, regulations and orders (including, without limitation,
Fraud and Abuse Laws, Medicare Regulations, Medicaid Regulations and the rules
and regulations established by any third party payor), such compliance to
include (without limitation):
(i) the maintenance and preservation of its corporate existence
and qualification as a foreign corporation, except to the extent no
longer necessary within the reasonable business judgement of the
Borrower or such Subsidiary, as applicable, or if otherwise terminated
pursuant to a transaction consummated in accordance with the
provisions of Section 7.2.8; and
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(ii) the payment, before the same become delinquent, of all
taxes, assessments and governmental charges imposed upon it or upon
its property except to the extent being diligently contested in good
faith by appropriate proceedings and for which adequate reserves in
accordance with GAAP shall have been set aside on its books.
(b) the Borrower will further use its reasonable best efforts, subject
to applicable laws, to assure the compliance by all Practices and Providers
with all applicable laws, including, but not limited to, medical licensure
and Fraud and Abuse Laws, relating to their providing of healthcare
services in all material respects.
SECTION 7.1.3 Maintenance of Properties. The Borrower will, and will cause
each of its Subsidiaries to, maintain, preserve, protect and keep its properties
in good repair, working order and condition, and make necessary and proper
repairs, renewals and replacements so that its business carried on in connection
therewith may be properly conducted at all times unless the Borrower determines
in good faith that the continued maintenance of any of its properties is no
longer economically desirable.
SECTION 7.1.4 Insurance. (a) Schedule 7.1.4 sets forth as of the date of
this Agreement a true and complete listing of all insurance maintained by the
Borrower and each of its Subsidiaries and by each physician and non-physician
Provider. The Borrower will, and will cause each of its Subsidiaries to,
maintain or cause to be maintained with responsible insurance companies
insurance with respect to its properties and business (including business
interruption insurance) against at least such casualties and contingencies and
of at least such types and in at least such amounts as are described in Schedule
7.1.4 which insurance shall name the Agent as loss payee and an additional
insured, and will, upon request of the Agent, furnish to each Lender at
reasonable intervals (provided that, so long as no Event of Default shall have
occurred and be continuing, no such certification shall be required to be
delivered more than once in any Fiscal Year) a certificate of an Authorized
Officer of the Borrower setting forth the nature and extent of all insurance
maintained by the Borrower and its Subsidiaries in accordance with this Section.
(b) The Borrower will, and with cause each of its Subsidiaries to,
maintain insurance for claims, however characterized, against them in
connection with the provision of medical services by Providers and/or
ancillary services provided by them for Practices covered by Service
Agreements, in at least such amounts per occurrence as are described in
Schedule 7.1.4, which insurance shall name the Agent as an additional
insured. The Borrower will further cause each Practice to maintain medical
malpractice insurance in at least such amounts per occurrence as are
described in Schedule 7.1.4.
SECTION 7.1.5 Books and Records. The Borrower will, and will cause each of
its Subsidiaries to, keep books and records which accurately reflect all of its
business affairs and transactions and permit the Agent and each Lender or any of
their respective representatives, at reasonable times and intervals, upon, so
long as no Event of Default shall exist and be continuing, reasonable prior
notice delivered during regular business hours, to visit all of its
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offices, to discuss its financial matters with its officers and independent
public accountant (and the Borrower hereby authorizes such independent public
accountant to discuss the Borrower's financial matters with each Lender or its
representatives, provided, so long as no Event of Default shall exist or be
continuing, a representative of the Borrower is present) and to examine (and, at
the expense of the Borrower, photocopy extracts from) any of its books or other
corporate records. The Borrower shall pay any fees of such independent public
accountant incurred in connection with the Agent's or any Lender's exercise of
its rights pursuant to this Section provided, however, that so long as no Event
of Default shall exist and be continuing, the Borrower shall not be liable for
the fees and expenses of such independent public accountant related to more than
one visit during any Fiscal Year. All visits conducted pursuant to this Section
7.1.5 shall be conducted in such a manner so as not to disrupt the business
operations of the applicable office. All information obtained during any such
visit shall be subject to the provisions of Section 10.12.
SECTION 7.1.6 Environmental Covenant. The Borrower will, and will cause
each of its Subsidiaries to:
(a) use and operate all of its facilities and properties in material
compliance with all Environmental Laws, keep all necessary material
permits, approvals, certificates, licenses and other authorizations
relating to environmental matters in effect and remain in material
compliance therewith, and handle all Hazardous Materials in material
compliance with all applicable Environmental Laws;
(b) immediately notify the Agent and provide copies upon receipt of
all written material claims, complaints, notices or inquiries relating to,
the condition of its facilities and properties or compliance with
Environmental Laws, and shall promptly cure and have dismissed with
prejudice to the reasonable satisfaction of the Agent any actions and
proceedings relating to compliance with Environmental Laws; and
(c) provide such information and certifications which the Agent may
reasonably request from time to time to evidence compliance with this
Section 7.1.6.
SECTION 7.1.7 Changes to Certain Agreements. Without Required Lender's
prior written consent, no Credit Party shall make any amendment, supplement or
modification to any agreements evidencing Subordinated Debt; provided, however,
that any such amendment which conforms with applicable law in all material
respects and is not materially adverse to the interests of the Lenders as
Lenders under the Loan Documents shall be permitted without any consent. Copies
of such amended agreements shall be delivered promptly to the Agent by the
Borrower.
SECTION 7.1.8 Governmental Licenses. The Borrower will, and will cause each
of its Subsidiaries to, obtain and maintain all material licenses, permits,
agreements, certifications and approvals of all applicable governmental
authorities as are required for the conduct of its
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business as currently conducted and herein contemplated, Medicaid Certifications
and Medicare Certifications and certifications of third party payors, if any.
SECTION 7.1.9 Covenants Extending to Other Persons. The Borrower will, and
will cause each of its Subsidiaries to, use its reasonable best efforts, in
accordance with applicable law (which shall include, without limitation, the
exercise of contractual rights and remedies available to the Borrower and its
Subsidiaries) to cause each Practice or Provider, as appropriate to do with
respect to itself, its business and its assets, each of the things required of a
Credit Party in Sections 7.1.2 through 7.1.8 inclusive, subject, however, in the
case of Section 7.1.5 to any laws, rules or regulations concerning the
confidentiality of medical records.
SECTION 7.1.10 Solvency. The Borrower and its Subsidiaries on a
consolidated basis shall at all times be Solvent.
SECTION 7.1.11 Further Assurances. (a) The Borrower shall ensure that all
written information, exhibits and reports furnished to the Agent or the Lenders
do not and will not contain any untrue statement of a material fact and do not
and will not omit to state any material fact or any fact necessary to make the
statements contained therein not misleading in light of the circumstances in
which made, and will promptly disclose to the Agent and the Lenders and correct
any defect or error that may be discovered therein or in any Loan Document or in
the execution, acknowledgment or recordation thereof.
(b) Promptly upon request of the Agent or the Required Lenders, the
Borrower shall (and shall cause any of its Subsidiaries to) execute,
acknowledge, deliver, record, re-record, file, re-file, register and re-
register, any and all such further acts, deeds, conveyances, security
agreements, mortgages, assignments, estoppel certificates, financing
statements and continuations thereof, termination statements, notices of
assignment, transfers, certificates, assurances and other instruments the
Agent or such Lenders, as the case may be, may reasonably require from time
to time in order (i) to carry out more effectively the purposes of this
Agreement or any other Loan Document, (ii) to subject any of the
properties, rights or interests covered by any of the Collateral Documents
to the Liens intended to be created by any of the Collateral Documents,
(iii) to perfect and maintain the validity, effectiveness and priority of
any of the Collateral Documents and the Liens intended to be created
thereby, and (iv) to better assure, convey, grant, assign, transfer,
preserve, protect and confirm to the Agent and the Lenders the rights
granted or now or hereafter intended to be granted to the Agent and the
Lenders under any Loan Document or under any other document executed in
connection therewith.
SECTION 7.1.12 New Subsidiaries. Within 30 Business Days after the date of
the acquisition or creation of any Subsidiary by the Borrower or Wholly-Owned
Subsidiary, such Person will cause to be delivered to the Agent for the benefit
of the Lenders each of the following:
(i) a joinder to the Guaranty, the Guarantor Pledge Agreement and the
Guarantor Security Agreement;
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(ii) if such Subsidiary is a corporation, a limited liability company
or a partnership that has issued certificates evidencing ownership of
interests therein, the capital stock or, if applicable, certificates of
ownership of such limited liability company or partnership, as the case may
be, of such Person pertaining thereto, together with duly executed stock
powers or powers of assignment in blank affixed thereto;
(iii) if such Subsidiary is a limited liability company or a
partnership not described in clause (ii) immediately above, an
acknowledgment of security interest of such limited liability company or
partnership, as the case may be, with respect to the registration of the
Lien on membership or partnership interests in such Subsidiary, as the case
may be, of such Person which acknowledgment shall be in form and substance
satisfactory to the Agent;
(iv) a supplement to the appropriate schedules attached to the
Collateral Documents to reflect the acquisition by the Borrower or, a
Wholly-Owned Subsidiary of the Borrower, of such Subsidiary, certified as
true, correct and complete by the Authorized Officer of the relevant Credit
Party (provided that the failure to deliver such supplement shall not
impair the rights conferred under the Collateral Documents in after
acquired Collateral and Pledged Collateral);
(v) to the extent requested by Agent in its reasonable discretion, an
opinion or opinions of counsel to the Borrower and such Subsidiary, dated
as of the date of delivery of the Guaranty, provided in the foregoing
clause (i) and addressed to the Agent and the Lenders, in form and
substance reasonably acceptable to the Agent (which opinion may include
assumptions and qualifications of similar effect to those contained in the
opinions of counsel delivered pursuant to Section 5.1.8), to the effect
that:
(A) such Subsidiary is duly organized, validly existing and in
good standing in the jurisdiction of its organization, has the
requisite power and authority to own its properties and conduct its
business as then owned and then proposed to be conducted and is duly
qualified to transact business and is in good standing in each
jurisdiction listed on the schedule attached to such opinion;
(B) the execution, delivery and performance of the Guaranty, the
Guarantor Pledge Agreement and the Guarantor Security Agreement
described in clause (i) of this Section 7.1.12, have been duly
authorized by all requisite action (including any required
shareholder, member or partner approval), such agreement has been duly
executed and delivered and constitutes the valid and binding
obligation of such Subsidiary, enforceable against such Subsidiary in
accordance with its terms, except to the extent such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to creditors' rights and remedies
generally, or to general principles of equity, whether enforcement
thereof is considered in a court of law or equity; and
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(C) all financing statements, instruments and documents are in a
form which is sufficient to create a security interest in favor of the
Agent in the Pledged Collateral and the Collateral, as the case may
be;
(vi) current copies of the charter documents, including, limited
liability agreements and certificates of formation, partnership agreements
and certificates of limited partnership, if applicable, and bylaws of such
Subsidiary, minutes of duly called and conducted meetings (or duly effected
consent actions) of the Board of Directors, members, partners, or
appropriate committees thereof (and, if required by such charter documents,
bylaws or by applicable laws, of the shareholders, members or partners) of
such Subsidiary authorizing the actions and the execution and delivery of
documents described in this Section 7.1.2 and evidence satisfactory to the
Agent (confirmation of the receipt of which will be provided by the Agent
to the Lenders) that such Subsidiary is Solvent as of such date and after
giving effect to the Guaranty.
SECTION 7.2 Negative Covenants. The Borrower agrees with the Agent and each
Lender that, until all Revolving Commitments have terminated and all Obligations
have been paid and performed in full, each Credit Party will perform the
obligations set forth in this Section 7.2.
SECTION 7.2.1 Business Activities. The Borrower will not, and will not
permit any of its Subsidiaries, including, without limitation, any New
Subsidiary, to, engage in any business activity, except in the fields of
enterprise relating to eye care as it is presently conducting and such
activities as may be incidental or related thereto and reasonable extensions
thereof, including, without limitation, the ASP Business.
SECTION 7.2.2 Indebtedness. The Borrower will not, and will not permit any
of its Subsidiaries to, create, incur, assume or suffer to exist or otherwise
become or be liable in respect of any Indebtedness, other than, without
duplication, the following:
(a) Indebtedness in respect of the Loans and other Obligations;
(b) until the date of the initial Borrowing, Indebtedness identified
in Part A of Schedule 6.17;
(c) Indebtedness, including Subordinated Debt, existing as of the
Closing Date which is identified in Part B of Schedule 6.17, but without
giving effect to any extensions, renewals or refinancing thereof;
(d) Indebtedness in respect of Liens to the extent permitted in
Section 7.2.3(c);
(e) unsecured Indebtedness incurred in the ordinary course of business
(including open accounts extended by suppliers on normal trade terms in
connection with
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purchases of goods and services, but excluding Indebtedness incurred
through the borrowing of money or Contingent Liabilities);
(f) Indebtedness, in respect of Capitalized Lease Liabilities, at any
one time not to exceed in the aggregate $6,000,000 less the amount of any
Indebtedness which is outstanding and permitted solely under subsection
7.2.3.(c);
(g) Indebtedness consisting of intercompany loans and advances made by
the Borrower to any Credit Party or by such Credit Party to the Borrower or
another Credit Party ("Intercompany Loans"), provided that (i) if requested
by the Agent, the payor Credit Party shall have executed and delivered to
the payee Credit Party a demand note (the "Intercompany Note") to evidence
any such Intercompany Loan, which Intercompany Note shall be in form and
substance satisfactory to Agent pledged to the Agent pursuant to the
relevant Collateral Documents as additional collateral security for the
Obligations, (ii) the payee Credit Party shall record all Intercompany
Loans on its books and records in a manner satisfactory to Agent, (iii) at
the time any such Intercompany Loan is made by a payee Credit Party and
after giving effect thereto, each of the payee Credit Party and the payor
Credit Party shall be Solvent and (iv) the aggregate outstanding principal
amount of Intercompany Loans to Credit Parties that are non-Wholly-Owned
Subsidiaries of the Borrower shall not at any one time exceed in the
aggregate $500,000, provided, however, that the dollar limitation contained
in this clause (iv) shall not apply to any non-Wholly-Owned Subsidiary that
has executed and delivered to the Agent a guaranty, pledge agreement and
security agreement in form and substance similar to the forms of such
documents executed by Wholly-Owned Subsidiaries of the Borrower;
(h) Subordinated Debt of the Borrower issued to a Provider in
connection with a Permitted Acquisition, such Indebtedness to be on terms
and conditions reasonably satisfactory to the Agent (the Agent hereby
acknowledges and agrees that the subordination provisions contained in the
Subordinated Debt existing as of the date hereof are satisfactory);
(i) Subordinated Debt of the Borrower, such Subordinated Debt to
mature no earlier than one year after the Maturity Date and shall otherwise
be on terms and conditions reasonably satisfactory to the Agent (the Agent
hereby acknowledges and agrees that the subordination provisions contained
in the Subordinated Debt existing as of the date hereof are satisfactory);
(j) Indebtedness of the Borrower constituting unpaid minority
interests to a Provider in connection with a Permitted Acquisition, such
Indebtedness to be on terms and conditions reasonably satisfactory to the
Agent;
(k) Indebtedness of a Practice which exists at the time such Practice
is the subject of a Permitted Acquisition, which Indebtedness is assumed by
the Credit Party
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which is a party to such Permitted Acquisition and is otherwise permitted
pursuant to this Section 7.2.2; and
(l) Indebtedness represented by the Investments described in Section
7.2.5(h);
provided, however, that no Indebtedness otherwise permitted by clauses (d), (e),
(f), (g), (h), (i), (j), (k) or (l) shall be permitted if, after giving effect
to the incurrence thereof, any Default shall have occurred and be continuing.
SECTION 7.2.3 Liens. The Borrower will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon any of
its property, revenues or assets, whether now owned or hereafter acquired,
except:
(a) Liens securing payment of the Obligations, granted pursuant to any
Loan Document;
(b) until the date of the initial Borrowing; Liens securing payment of
Indebtedness of the type permitted and described in clause (b) of Section
7.2.2;
(c) purchase money security interests, in addition to, and not in
limitation of, the Capitalized Lease Liabilities described in clause (j)
hereof, on any property acquired or held by any Credit Party in the
ordinary course of business, securing Indebtedness incurred or assumed for
the purpose of financing all or any part of the cost of acquiring such
property; provided that (i) any such Lien attaches to such property
concurrently with or within 20 days after the acquisition thereof, (ii)
such Lien attaches solely to the property so acquired in such transaction,
(iii) the principal amount of the Indebtedness secured thereby does not
exceed 75% of the cost of such property and (iv) the principal amount of
the Indebtedness which is outstanding and which is secured by any and all
such purchase money security interests shall not at any time exceed
$6,000,000 less the amount of Indebtedness outstanding and permitted solely
under subsection 7.2.2(f);
(d) Liens for taxes, assessments or other governmental charges or
levies not at the time delinquent or thereafter payable without penalty or
being diligently contested in good faith by appropriate proceedings and for
which adequate reserves in accordance with GAAP shall have been set aside
on its books;
(e) Liens of carriers, warehousemen, mechanics, materialmen and
landlords incurred in the ordinary course of business for sums not overdue
or being diligently contested in good faith by appropriate proceedings and
for which adequate reserves in accordance with GAAP shall have been set
aside on its books;
(f) Liens (other than any Lien imposed by ERISA) incurred in the
ordinary course of business in connection with workmen's compensation,
unemployment insurance or other forms of governmental insurance or
benefits, or to secure performance of tenders, statutory obligations,
leases and contracts (other than for borrowed money)
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entered into in the ordinary course of business or to secure obligations on
surety or appeal bonds;
(g) judgment Liens in existence less than 30 days after the entry
thereof or with respect to which execution has been stayed or the payment
of which is bonded or covered in full (subject to a customary deductible)
by insurance maintained with responsible insurance companies;
(h) Liens in existence on the Closing Date and listed on Schedule
7.2.3, but without giving effect to any extensions or renewals thereof; and
(i) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, do not materially detract from the value of the property subject
thereto or interfere with the ordinary conduct of the business of the
property of the Person which is subject thereto;
(j) Liens in connection with Capitalized Lease Liabilities in the
amount and to the extent permitted by subsection 7.2.2(f);
(k) Liens on property leased by the Borrower or any Subsidiary or
other interest or title of the lessor under operating leases securing
obligations of the Borrower or such Subsidiary to the lessor under such
leases; and
(l) Liens on property of a Practice which exist at the time such
Practice becomes the subject of a Permitted Acquisition to the extent such
Liens are otherwise permitted pursuant to this Section 7.2.3.
SECTION 7.2.4 Financial Condition. The Borrower will not permit:
(a) Its Net Worth as of the end of each Fiscal Quarter to be less than
85% of the amount of its Net Worth existing on the Closing Date, plus 50%
of Net Income (without giving effect to any losses) for each Fiscal Quarter
occurring since the Closing Date, plus 50% of the net proceeds from any
equity issuance by the Borrower or any of its Subsidiaries occurring since
the Closing Date, plus 50% of any incremental additive equity associated
with any Permitted Acquisition.
(b) the Total Leverage Ratio as of the end of each Fiscal Quarter for
the twelve-month period preceding such date to be greater than 3.00:1.00.
(c) as of the last day of any Fiscal Quarter the ratio of (a) EBITDA
plus rent expenses incurred by the Borrower and its Subsidiaries, minus
Capital Expenditures incurred by the Borrower and its Subsidiaries, minus
cash taxes paid by the Borrower and its Subsidiaries, in each case for the
period of four fiscal quarters then ending, to (b) Fixed Charges for such
four fiscal quarter period to be less than the ratio set forth below for
such period:
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Fiscal Quarter Ended Ratio
-------------------- -----
Closing through June 30, 2000 1.15:1.0
July 1, 2000 through September 30, 2000 1.20:1.0
October 1, 2000 and each
Fiscal Quarter thereafter 1.25:1.0
SECTION 7.2.5 Investments. The Borrower will not, and will not permit any
of its Subsidiaries to, make, incur, assume or suffer to exist any Investment in
any other Person, except:
(a) Investments existing on the Closing Date and identified in
Schedule 7.2.5;
(b) Cash Equivalent Investments and cash, provided, however, that the
balance maintained in any deposit account not subject to a Lien of the
Agent shall not exceed $100,000 for a period of seven consecutive days;
(c) without duplication, Investments permitted as Indebtedness
pursuant to Section 7.2.2;
(d) without duplication, Investments permitted as Capital
Expenditures;
(e) in the ordinary course of business, Investments by the Borrower in
any of its Subsidiaries, or in any new Subsidiary created after the Closing
Date in connection with a Permitted Acquisition, or by any Subsidiary in
any of its Subsidiaries, by way of contributions to capital;
(f) Permitted Acquisitions by the Borrower or a Wholly-Owned
Subsidiary of the Borrower;
(g) the acquisition by the Borrower or a Wholly-Owned Subsidiary of
the Borrower of 100% of the minority interests held by a Provider in a non-
Wholly-Owned Subsidiary, provided that any such acquisition is made solely
in connection with the merger of such non-Wholly-Owned Subsidiary into the
Borrower or a Wholly-Owned Subsidiary of the Borrower as permitted by
Section 7.2.8;
(h) Investments by the Borrower or any Subsidiary consisting of loans
to Providers in an amount not to exceed $300,000 individually or $2,000,000
in the aggregate outstanding at any one time;
(i) Investments constituting Hedging Agreements of the Borrower; and
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(j) Investments by a Practice which exist at the time such Practice is
the subject of a Permitted Acquisition to the extent such Investments are
otherwise permitted pursuant to this Section 7.2.5.
provided, however, that
(k) any Investment which when made complies with the requirements of
the definition of the term "Cash Equivalent Investment" may continue to be
held notwithstanding that such Investment if made thereafter would not
comply with such requirements; and
(l) no Investment otherwise permitted by clause (e), (f), (g), (h),
(i), (j), (k) or (l) shall be permitted to be made if, immediately before
or after giving effect thereto, any Default shall exist and be continuing.
SECTION 7.2.6 Restricted Payments, etc. On and at all times after the
Closing Date:
(a) The Borrower will not, and will not permit any of its Subsidiaries
to, declare, pay or make any dividend or distribution (in cash, property or
obligations) on any shares of any class of capital stock (now or hereafter
outstanding) of the Borrower or such Subsidiary or on any warrants, options
or other rights with respect to any shares of any class of capital stock
(now or hereafter outstanding) of the Borrower or such Subsidiary (other
than in the case of (I) the Borrower (x) dividends or distributions payable
in its common stock or warrants to purchase its common stock or splitups or
reclassifications of its stock into additional or other shares of its
common stock, (y) scheduled dividend payments on its preferred stock so
long as no Default or Event of Default has occurred and is continuing both
before and after giving effect to the payment of such dividend and (z)
distributions to any Subsidiary which is a limited liability company of the
Borrower solely to permit the members thereof to make payment of its
federal and state income tax liability attributable to such limited
liability company's taxable income, whether or not a Default or an Event of
Default then or (II) any Subsidiary which is a limited liability company,
distributions to members of any such Subsidiary solely to permit such
members to make payment of their federal and state income tax liability
attributably to such member's taxable income of such Subsidiary whether or
not a Default or an Event of Default than exists) or apply, or permit any
of its Subsidiaries to apply, any of its funds, property or assets to the
purchase, redemption, sinking fund or other retirement of, or agree or
permit any of its Subsidiaries to purchase or redeem, any shares of any
class of capital stock (now or hereafter outstanding) of the Borrower, or
warrants, options or other rights with respect to any shares of any class
of capital stock (now or hereafter outstanding) of the Borrower, except
that, (A), in addition to distributions permitted pursuant to clause
(a)(II) above, any Subsidiary of the Borrower may declare and pay cash
dividends and distributions to its equity holders and (B) so long as no
Default or Event of Default then exists or would result therefrom, the
Borrower may redeem or purchase shares of its stock held by former
employees of the
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Borrower or any of its Subsidiaries following their death, disability or
the termination of their employment;
(b) Borrower will not, and will not permit any of its Subsidiaries to:
(i) make any payment or prepayment of principal of, or make any
payment of interest on, any Subordinated Debt or on any put option
granted to a holder of Subordinated Debt on any day other than the
stated, scheduled date for such payment or prepayment set forth in the
documents and instruments memorializing such Subordinated Debt or such
put option, or which would violate the subordination provisions of
such Subordinated Debt or such put option, or while any Default or
Event of Default exists and is continuing both before and after giving
effect to such payment; or
(ii) redeem, purchase or defease any Subordinated Debt other than
Subordinated Debt held by a Provider or a Practice, so long as no
Default or Event of Default exists or is continuing both before and
after giving effect to such redemption, purchase or defeasance; and
(c) Borrower will not, and will not permit any Subsidiary to, make any
sinking fund payment or deposit for any of the foregoing purposes.
SECTION 7.2.7 Intentionally Omitted.
SECTION 7.2.8 Consolidation, Merger, etc. The Borrower will not, and will
not permit any of its Subsidiaries to, liquidate or dissolve, consolidate with,
or merge into or with, any other corporation, or purchase or otherwise acquire
all or substantially all of the assets of any Person (or of any division
thereof) except:
(a) any such Subsidiary may liquidate or dissolve voluntarily into,
and may merge with and into, the Borrower or any Wholly-Owned Subsidiary of
the Borrower or any Guarantor, and the assets or stock of any Subsidiary
may be purchased or otherwise acquired by the Borrower or any Wholly-Owned
Subsidiary of the Borrower or any Guarantor;
(b) so long as no Default or Event of Default exists and is continuing
or would occur after giving effect thereto, the Borrower or any Wholly-
Owned Subsidiary of the Borrower may consummate a Permitted Acquisition;
and
(c) any Subsidiary may liquidate or dissolve into or merge with or
into any other Person, provided that, after giving effect thereto (i) no
Default or Event of Default shall exist or be continuing; (ii) the Net
Worth of the surviving Person shall be at least equal to the Net Worth of
the applicable Subsidiary immediately prior to the consummation of any such
liquidation, dissolution or merger and (iii) the surviving
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Person shall assume all Obligations of the applicable Subsidiary under the
Loan Documents.
SECTION 7.2.9 Asset and Capital Stock Dispositions, etc.(a) The Borrower
will not, and will not permit any of its Subsidiaries to, sell, transfer, lease,
contribute or otherwise convey, or grant options, warrants or other rights with
respect to, all or any substantial part of its assets (including accounts
receivable and capital stock of Subsidiaries) to any Person, unless:
(a) such sale, transfer, lease, contribution or conveyance is in
the ordinary course of its business or is permitted by Section
7.2.9(b); or
(b) the net book value of such assets, together with the net book
value of all other assets sold, transferred, leased, contributed or
conveyed otherwise than in the ordinary course of business by the
Borrower or any of its Subsidiaries pursuant to this clause since the
Closing Date, does not exceed [$100,000] (exclusive of the value of
any transaction described in the preceding clause (i)).
(b) the Borrower will not, and will not permit any of its Subsidiaries
to, issue, sell, assign, pledge or otherwise encumber or dispose of any
shares of capital stock or other equity securities in the Borrower or any
such Subsidiary (other than pursuant to this Agreement or any other Loan
Document), including warrants, rights or options to acquire shares or other
equity securities of the Borrower or any of its Subsidiaries; provided
that, notwithstanding the foregoing, and so long as no Default or Event of
Default will result therefrom, :
(i) (x) the Borrower may issue capital stock (or warrants, rights
or options to purchase capital stock) of the Borrower in connection
with a Permitted Acquisition and (y) a Subsidiary of the Borrower may
issue its capital stock in connection with a Permitted Equity
Ownership Sale;
(ii) the Borrower may issue common stock of the Borrower to a
Provider upon the conversion of Subordinated Debt held by such
Provider into common stock of the Borrower pursuant to the terms and
conditions contained in the documentation governing such Subordinated
Debt;
(iii) the Borrower may issue common stock of the Borrower in
connection with a registered offering, provided, however, that the
Borrower shall have delivered a certified copy of each agreement,
document or other instrument (including, without limitation, any
registration statement and underwriting agreement) entered into by the
Borrower in connection with such registered offering;
(iv) the Borrower may issue capital stock, and related options,
of the Borrower to any permitted participant under Borrower's stock
incentive plan or to
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any permitted participant under any future stock incentive plans
established by the Borrower and reasonably acceptable to the Agent;
and
(v) the Borrower may issue capital stock (or warrants, rights or
options to purchase capital stock) of the Borrower so long as in
connection with a private placement of its capital stock the
consideration received by the Borrower in connection with such sale is
(x) for fair market value (as determined by the Board of Directors of
the Borrower) and (y) paid in immediately available funds.
To the extent the Required Lenders waive the provisions of this Section
7.2.9 with respect to the sale of any Collateral, or any Collateral is sold as
permitted by this Section 7.2.9, such Collateral shall be sold free and clear of
the Liens created by the Collateral Documents and, if requested by the Borrower,
the Guarantor owner of such Collateral shall be released from the Guaranty, and
the portion of the Collateral owned by such Guarantor shall be released from the
Guarantor Security Agreement and the Agent shall be authorized to take any
actions deemed appropriate in order to effect the foregoing.
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SECTION 7.2.10 Modification of Certain Agreements. Except as otherwise
permitted pursuant to Section 7.1.7 hereof, the Borrower will not, and will not
permit any of its Subsidiaries to, consent to any amendment, supplement or other
modification of any of the terms or provisions contained in, or applicable to,
its Organizational Documents, any Service Agreement or Employment Agreement
listed on Schedule 6.18, any document, once entered into, relating to a
Permitted Acquisition, other than any amendment, supplement or other
modification that conforms with applicable laws in all material respects and is
not material or does not have an adverse effect on the Lenders as Lenders under
the Loan Documents, or any document or instrument evidencing or applicable to
any Subordinated Debt or any put option granted to the holders of Subordinated
Debt, other than any amendment, supplement or other modification which extends
the date or reduces the amount of any required repayment or redemption.
SECTION 7.2.11 Transactions with Affiliates. The Borrower will not, and
will not permit any of its Subsidiaries to, enter into, or cause, suffer or
permit to exist any arrangement or contract with any of its other Affiliates
(other than a Subsidiary Guarantor) unless such arrangement or contract is fair
and equitable to the Borrower or such Subsidiary and is an arrangement or
contract of the kind which would be entered into by a prudent Person in the
position of the Borrower or such Subsidiary with a Person which is not one of
its Affiliates.
SECTION 7.2.12 Negative Pledges, Restrictive Agreements, etc. The Borrower
will not, and will not permit any of its Subsidiaries to, enter into any
agreement (excluding this Agreement, any other Loan Document and any agreement
governing any Indebtedness permitted either by clause (b) of Section 7.2.2 as in
effect on the Closing Date or by clause (d) of Section 7.2.2 as to the assets
financed with the proceeds of such Indebtedness) prohibiting:
(a) the creation or assumption of any Lien upon its properties,
revenues or assets, whether now owned or hereafter acquired, or the ability
of any Credit Party to amend or otherwise modify this Agreement or any
other Loan Document; or
(b) the ability of any Subsidiary to make any payments, directly or
indirectly, to the Borrower by way of dividends, distributions, advances,
repayments of loans or advances, reimbursements of management and other
intercompany charges, expenses and accruals or other returns on
investments, or any other agreement or arrangement which restricts the
ability of any such Subsidiary to make any payment, directly or indirectly,
to the Borrower.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1 Listing of Events of Default. Each of the following events or
occurrences described in this Section 8.1 shall constitute an "Event of
Default".
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SECTION 8.1.1 Non-Payment of Obligations. The Borrower shall default in the
payment or prepayment when due of any principal of or interest on any Loan or
any reimbursement obligation when due, or the Borrower shall default (and such
default shall continue unremedied for a period of five days) in the payment when
due of any commitment fee or other fee or of any other Obligation.
SECTION 8.1.2 Breach of Warranty. Any representation or warranty of any
Credit Party made or deemed to be made hereunder or in any other Loan Document
executed by it, any Letter of Credit or any other writing or certificate
furnished by or on behalf of any Credit Party to the Agent or any Lender for the
purposes of or in connection with this Agreement or any such other Loan Document
or Letter of Credit (including any certificates delivered pursuant to Article V)
is or shall be incorrect when made in any material respect.
SECTION 8.1.3 Non-Performance of Certain Covenants and Obligations. Any
Credit Party shall default in the due performance and observance of any of its
obligations under Sections 7.1.1, 7.1.7, 7.1.8, 7.1.11, 7.1.12 or Section 7.2.
SECTION 8.1.4 Non-Performance of Other Covenants and Obligations. Any
Credit Party shall default in the due performance and observance of any other
agreement contained herein or in any other Loan Document executed by it, and
such default shall continue unremedied for a period of 30 days after notice
thereof shall have been given to the Borrower by the Agent or any Lender.
SECTION 8.1.5 Default on Other Indebtedness. A default shall occur in the
payment when due (subject to any applicable grace period), whether by
acceleration or otherwise, of any Indebtedness (other than Indebtedness
described in Section 8.1.1) of any Credit Party having a principal amount,
individually or in the aggregate, in excess of $1,000,000, or a default shall
occur in the performance or observance of any obligation or condition with
respect to such Indebtedness if the effect of such default is to accelerate the
maturity of any such Indebtedness or such default shall continue unremedied for
any applicable period of time sufficient to permit the holder or holders of such
Indebtedness, or any trustee or agent for such holders, to cause such
Indebtedness to become due and payable prior to its expressed maturity.
SECTION 8.1.6 Judgments. Any judgment or order for the payment of money in
excess of $1,000,000 shall be rendered against any Credit Party (which judgement
is not covered by insurance and with respect to such judgment an insurance
carrier has not accepted responsibility for coverage) and either:
(a) enforcement proceedings shall have been commenced by any creditor
upon such judgment or order; or
(b) there shall be any period of 10 consecutive days during which a
stay of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect.
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SECTION 8.1.7 Pension Plans. Any of the following events shall occur with
respect to any Pension Plan:
(a) the institution of any steps by the Borrower, any member of its
Controlled Group or any other Person to terminate a Pension Plan if, as a
result of such termination, the Borrower or any such member reasonably
would be expected to be required to make a contribution to such Pension
Plan, or would reasonably expect to incur a liability or obligation to such
Pension Plan, in excess of $1,000,000; or
(b) a contribution failure occurs with respect to any Pension Plan
sufficient to give rise to a Lien under Section 302(f) of ERISA.
SECTION 8.1.8 Change of Control. Any Change of Control shall occur.
SECTION 8.1.9 Bankruptcy, Insolvency, etc. Any Credit Party shall:
(a) become insolvent or generally fail to pay, or admit in writing its
inability or unwillingness to pay, its debts as they become due;
(b) apply for, consent to, or acquiesce in, the appointment of a
trustee, receiver, sequestrator or other custodian for such Credit Party or
any property of such Credit Party, or make a general assignment for the
benefit of creditors;
(c) in the absence of such application, consent or acquiescence,
permit or suffer to exist the appointment of a trustee, receiver,
sequestrator or other custodian for such Credit Party or for a substantial
part of the property of such Credit Party, and such trustee, receiver,
sequestrator or other custodian shall not be discharged within 60 days,
provided that the Borrower hereby expressly authorizes the Agent and each
Lender to appear in any court conducting any relevant proceeding during
such 60-day period to preserve, protect and defend their rights under the
Loan Documents;
(d) permit or suffer to exist the commencement of any bankruptcy,
reorganization, debt arrangement or other case or proceeding under any
bankruptcy or insolvency law, or any dissolution, winding up or liquidation
proceeding, in respect of such Credit Party, and, if any such case or
proceeding is not commenced by such Credit Party, such case or proceeding
shall be consented to or acquiesced in by such Credit Party or shall result
in the entry of an order for relief or shall remain for 60 days
undismissed, provided that the Borrower hereby expressly authorizes the
Agent and each Lender to appear in any court conducting any such case or
proceeding during such 60-day period to preserve, protect and defend their
rights under the Loan Documents; or
(e) take any action authorizing, or in furtherance of, any of the
foregoing.
SECTION 8.1.10 Impairment of Security, etc. Any Loan Document, or any Lien
granted thereunder, shall (except in accordance with its terms or pursuant to
Section 7.2.9), in
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whole or in part, terminate, cease to be effective or cease to be the legally
valid, binding and enforceable obligation of any Credit Party thereto; any
Credit Party or any other party shall, directly or indirectly, contest in any
manner the effectiveness, validity, binding nature or enforceability of any Loan
Document or Lien granted thereunder; or any Lien securing any Obligation shall,
in whole or in part, cease to be a perfected first priority Lien, subject only
to those exceptions expressly permitted by such Loan Document.
SECTION 8.1.11 Fraud and Abuse Laws. Receipt by any Credit Party, Practice
or Provider of a notice from a governmental authority or third party payor that
it intends to disallow requested reimbursements, or intends to demand or demands
adjustment or repayment of past reimbursements in excess of two percent (2%) of
the gross revenues of the Borrower for the previous fiscal quarter respecting
amounts submitted for reimbursement or collected by such Credit Party, Practice
or Provider from participation in the Medicare, Medicaid or third party payor
programs if the gross revenues (determined in accordance with GAAP) to such
Credit Party arising from the affected Credit Party, Practice or Provider exceed
one-half percent ( 1/2%) of the gross revenues (determined in accordance with
GAAP) of the Borrower for the previous Fiscal Quarter.
SECTION 8.1.12 Certifications. (i) Revocation, suspension or involuntary
cancellation or termination of any Medicare Certification, Medicare Provider
Agreement, Medicaid Certification, Medicaid Provider Agreement or third party
payor certification, if any, or agreement of or affecting any Credit Party,
Practice or Provider, or (ii) the loss of any other permits, licenses,
authorizations, certifications or approval from any federal, state or local
governmental authority or termination of any contract with any such authority by
a Credit Party, Practice or Provider, in either case which cancellation,
revocation, suspension or termination, (x) continues for a period greater than
60 days and (y) results in the suspension or termination of operations of any
Credit Party or Practice or in the failure of any Credit Party, Practice or
Provider to be eligible to participate in Medicare, Medicaid or third party
payor programs or to accept assignments of rights to reimbursement under
Medicaid Regulations, Medicare Regulations or guidelines established by a third
party payor, provided that any such events described in this Section 8.1.12
shall result either singly or in the aggregate in the termination, cancellation,
revocation, suspension or material impairment of operations or rights to
reimbursement which produce two percent (2%) or more of the Borrower's gross
revenues (determined in accordance with GAAP).
SECTION 8.1.13 Service Agreements. (a) The termination of any Service
Agreement by a Credit Party or Practice which, either individually, or when
aggregated with other Service Agreements that have been terminated during the
preceding twelve-month period constitutes more than 10% of annual EBITDA of the
Borrower; or (b) any Equity Provider or group of Equity Providers within a given
Practice cease to be employed or otherwise retained by such Practice and such
Equity Provider or group of Equity Providers accounted for 10% or more of the
consolidated net revenues (either individually, or when aggregated with the net
revenues of other Equity Providers who have ceased to be employed or otherwise
retained by Reporting
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Persons within the preceding twelve-month period) of the Borrower and its
Subsidiaries, in each case for the twelve-month period immediately preceding the
date of such termination.
SECTION 8.2 Action if Bankruptcy. If any Event of Default described in
clauses (a) through (e) of Section 8.1.9 shall occur, the Revolving Commitments
(if not theretofore terminated) and the obligation of the Letter of Credit
Issuer to issue Letters of Credit shall automatically terminate and the
outstanding principal amount of all outstanding Loans and all other Obligations
shall automatically be and become immediately due and payable, without notice or
demand.
SECTION 8.3 Action if Other Event of Default. If any Event of Default
(other than any Event of Default described in clauses (a) through (e) of Section
8.1.9) shall occur for any reason, whether voluntary or involuntary, and be
continuing, the Agent, upon the direction of the Required Lenders, shall by
notice to the Borrower declare all or any portion of the outstanding principal
amount of the Loans and other Obligations to be due and payable and/or the
Revolving Commitments (if not theretofore terminated) and/or the obligation of
the Letter of Credit Issuer to issue Letters of Credit to be terminated,
whereupon the full unpaid amount of such Loans and other Obligations which shall
be so declared due and payable shall be and become immediately due and payable,
without further notice, demand or presentment, and/or, as the case may be, the
Revolving Commitments shall terminate.
SECTION 8.4 Letters of Credit. In addition to the foregoing, following the
occurrence and during the continuance of an Event of Default, so long as any
Letter of Credit has not been fully drawn and has not been canceled or expired
by its terms, upon demand by the Lenders, the Borrower shall deposit in an
account (the "Letter of Credit Cash Collateral Account") maintained with
National City in the name of the Agent, for the benefit of itself and the
Lenders, cash in an amount equal to the aggregate undrawn face amount of all
outstanding Letters of Credit and all fees and other amounts due or which may
become due with respect thereto. The Borrower shall have no control over funds
in the Letter of Credit Cash Collateral Account, which funds shall be invested
by the Agent from time to time in its discretion in certificates of deposit of
National City having a maturity not exceeding thirty days. Such funds shall be
promptly applied by the Agent to reimburse the Letter of Credit Issuer for
drafts drawn from time to time under the Letters of Credit. Such funds, if any,
remaining in the Letter of Credit Cash Collateral Account following the payment
of all Obligations in full or the earlier termination of all Events of Default
shall, unless the Agent is otherwise directed by a court of competent
jurisdiction, be promptly paid over to the Borrower.
ARTICLE IX
THE AGENT
SECTION 9.1 Actions. Each Lender hereby appoints National City as its Agent
under and for purposes of this Agreement, the Notes and each other Loan
Document. Each Lender authorizes the Agent to act on behalf of such Lender under
this Agreement, the Notes and each
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other Loan Document and, in the absence of other written instructions from the
Required Lenders received from time to time by the Agent (with respect to which
the Agent agrees that it will comply, except as otherwise provided in this
Section or as otherwise advised by counsel), to exercise such powers hereunder
and thereunder as are specifically delegated to or required of the Agent by the
terms hereof and thereof, together with such powers as may be reasonably
incidental thereto. Each Lender hereby indemnifies (which indemnity shall
survive any termination of this Agreement) the Agent, pro rata according to such
Lender's Percentage, from and against any and all liabilities, obligations,
losses, damages, claims, costs or expenses of any kind or nature whatsoever
which may at any time be imposed on, incurred by, or asserted against, the Agent
in any way relating to or arising out of this Agreement, the Notes and any other
Loan Document, including reasonable attorneys' fees, and as to which the Agent
is not reimbursed by the Borrower; provided, however, that no Lender shall be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, claims, costs or expenses which are determined by a court of competent
jurisdiction in a final proceeding to have resulted solely from the Agent's
gross negligence or willful misconduct. The Agent shall not be required to take
any action hereunder, under the Notes or under any other Loan Document, or to
prosecute or defend any suit in respect of this Agreement, the Notes or any
other Loan Document, unless it is indemnified hereunder to its satisfaction. If
any indemnity in favor of the Agent shall be or become, in the Agent's
determination, inadequate, the Agent may call for additional indemnification
from the Lenders and cease to do the acts indemnified against hereunder until
such additional indemnity is given.
SECTION 9.2 Funding Reliance, etc. Unless the Agent shall have been
notified by telephone, confirmed in writing, by any Lender by 5:00 p.m., Chicago
time, on the day prior to a Borrowing that such Lender will not make available
the amount which would constitute its Percentage of such Borrowing on the date
specified therefor, the Agent may assume that such Lender has made such amount
available to the Agent and, in reliance upon such assumption, make available to
the Borrower a corresponding amount. If and to the extent that such Lender shall
not have made such amount available to the Agent, such Lender and the Borrower
severally, without duplication, agree to repay the Agent forthwith on demand
such corresponding amount together with interest thereon, for each day from the
date the Agent made such amount available to the Borrower to the date such
amount is repaid to the Agent, at the interest rate applicable at the time to
Loans comprising such Borrowing.
SECTION 9.3 Exculpation. Neither the Agent nor any of its directors,
officers, employees or agents shall be liable to any Lender for any action taken
or omitted to be taken by it under this Agreement or any other Loan Document, or
in connection herewith or therewith, except for its own willful misconduct or
gross negligence, nor responsible for any recitals or warranties herein or
therein, nor for the effectiveness, enforceability, validity or due execution of
this Agreement or any other Loan Document, nor for the creation, perfection or
priority of any Liens purported to be created by any of the Loan Documents, or
the validity, genuineness, enforceability, existence, value or sufficiency of
any collateral security, nor to make any inquiry respecting the performance by
the Borrower of its obligations hereunder or under any other Loan Document. Any
such inquiry which may be made by the Agent shall not obligate it to
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make any further inquiry or to take any action. The Agent shall be entitled to
rely upon advice of counsel concerning legal matters and upon any notice,
consent, certificate, statement or writing which the Agent believes to be
genuine and to have been presented by a proper Person.
SECTION 9.4 Successor. The Agent may resign as such at any time upon at
least 30 days' prior notice to the Borrower and all Lenders. If the Agent at any
time shall resign, the Required Lenders, with, so long as no Default or Event of
Default exists and is continuing, the consent of the Borrower, may appoint
another Lender as a successor Agent which shall thereupon become the Agent
hereunder. If no successor Agent shall have been so appointed by the Required
Lenders, and shall have accepted such appointment, within 30 days after the
retiring Agent's giving notice of resignation, then the retiring Agent may, on
behalf of the Lenders, appoint a successor Agent, which shall be one of the
Lenders or a commercial banking institution organized under the laws of the U.S.
(or any State thereof) or a U.S. branch or agency of a commercial banking
institution, and having a combined capital and surplus of at least $500,000,000.
Upon the acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall be entitled to receive from the retiring Agent such
documents of transfer and assignment as such successor Agent may reasonably
request, and shall thereupon succeed to and become vested with all rights,
powers, privileges and duties of the retiring Agent, and the retiring Agent
shall be discharged from its duties and obligations under this Agreement. After
any retiring Agent's resignation hereunder as the Agent, the provisions of
(i) this Article IX shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was the Agent under this Agreement;
and
(ii) Section 10.3 and Section 10.4 shall continue to inure to its
benefit.
SECTION 9.5 Loans by National City. National City shall have the same
rights and powers with respect to (x) the Loans made by it or any of its
Affiliates, and (y) the Notes held by it or any of its Affiliates as any other
Lender and may exercise the same as if it were not the Agent. National City and
its Affiliates may accept deposits from, lend money to, and generally engage in
any kind of business with the Borrower or any Subsidiary or Affiliate of
Borrower as if National City were not the Agent hereunder.
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SECTION 9.6 Credit Decisions. Each Lender acknowledges that it has,
independently of the Agent and each other Lender, and based on such Lender's
review of the financial information of each Credit Party, this Agreement, the
other Loan Documents (the terms and provisions of which being satisfactory to
such Lender) and such other documents, information and investigations as such
Lender has deemed appropriate, made its own credit decision to extend its
Revolving Commitment. Each Lender also acknowledges that it will, independently
of the Agent and each other Lender, and based on such other documents,
information and investigations as it shall deem appropriate at any time,
continue to make its own credit decisions as to exercising or not exercising
from time to time any rights and privileges available to it under this Agreement
or any other Loan Document.
SECTION 9.7 Copies, etc. The Agent shall give prompt notice to each Lender
of each notice or request required or permitted to be given to the Agent by any
Credit Party pursuant to the terms of this Agreement (unless concurrently
delivered to the Lenders by such Credit Party). The Agent will distribute to
each Lender each document or instrument received for its account and copies of
all other communications received by the Agent from any Credit Party for
distribution to the Lenders by the Agent in accordance with the terms of this
Agreement.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1 Waivers, Amendments, etc. The provisions of this Agreement and
of each other Loan Document may from time to time be amended, modified or
waived, if such amendment, modification or waiver is in writing and consented to
by the Borrower and the Required Lenders; provided, however, that no such
amendment, modification or waiver which would:
(a) modify any requirement hereunder that any particular action be
taken by all the Lenders or by the Required Lenders shall be effective
unless consented to by each Lender;
(b) modify this Section 10.1, change the definition of "Required
Lenders", increase the Revolving Commitment Amount or the Percentage of any
Lender, reduce any fees described in Article III, change the schedule of
repayments of Loans provided for in Section 3.1.2, release any Guarantor
from its obligations pursuant to any Guaranty, release all or substantially
all of the collateral security, except as otherwise specifically provided
in any Loan Document or extend the Revolving Commitment Termination Date or
Maturity Date shall be made without the consent of each Lender and each
holder of a Note;
(c) extend the due date for, or reduce the amount of, any scheduled
repayment or prepayment of principal of or interest on any Loan or any fee
payable to a Lender (or reduce the principal amount of or rate of interest
on any Loan) shall be made without the consent of the holder of that Note
evidencing such Loan or Lender entitled to such fee;
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(d) affect adversely the interests, rights or obligations of the Agent
qua the Agent shall be made without consent of the Agent; or
(e) modify Section 2.7 or 8.4 shall be made without the consent of the
Letter of Credit Issuer.
No failure or delay on the part of the Agent, any Lender or the holder of any
Note in exercising any power or right under this Agreement or any other Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power or right preclude any other or further exercise
thereof or the exercise of any other power or right. No notice to or demand on
any Credit Party in any case shall entitle it to any notice or demand in similar
or other circumstances. No waiver or approval by the Agent, any Lender or the
holder of any Note under this Agreement or any other Loan Document shall, except
as may be otherwise stated in such waiver or approval, be applicable to
subsequent transactions. No waiver or approval hereunder shall require any
similar or dissimilar waiver or approval thereafter to be granted hereunder.
SECTION 10.2 Notices. All notices and other communications provided to any
party hereto under this Agreement or any other Loan Document shall be in writing
or by facsimile transmission and addressed, delivered or transmitted to such
party at its address, facsimile number transmission set forth below in Schedule
10.2 hereto or set forth in the Lender Assignment Agreement or at such other
address, or facsimile transmission number as may be designated by such party in
a notice to the other parties. Any notice, if mailed and properly addressed with
postage prepaid or if properly addressed and sent by pre-paid courier service,
shall be deemed given when received; any notice, if transmitted by facsimile
transmission, shall be deemed given when transmitted, provided such notice is
delivered or facsimile transmitted during regular business hours on a Business
Day.
SECTION 10.3 Payment of Costs and Expenses. The Borrower agrees to pay on
demand all reasonable expenses of the Agent (including the reasonable fees and
out-of-pocket expenses of counsel to the Agent and of local counsel, if any, who
may be retained by counsel to the Agent) in connection with:
(i) the negotiation, preparation, execution and delivery of this
Agreement and of each other Loan Document, including schedules and
exhibits, and any amendments, waivers, consents, supplements or other
modifications to this Agreement or any other Loan Document as may from time
to time hereafter be required, whether or not the transactions contemplated
hereby are consummated, and
(ii) the filing, recording, refiling or rerecording of any Security
Document and/or any Uniform Commercial Code financing statements relating
thereto and all amendments, supplements and modifications to any thereof
and any and all other documents or instruments of further assurance
required to be filed or recorded or refiled or rerecorded by the terms
hereof or of such Security Document, and
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(iii) the preparation and review of the form of any document or
instrument required by this Agreement or any other Loan Document.
The Borrower further agrees to pay, and to save the Agent and the Lenders
harmless from all liability for, any stamp or other taxes which may be payable
in connection with the execution or delivery of this Agreement, the borrowings
hereunder, or the issuance of the Notes or any other Loan Documents. The
Borrower also agrees to reimburse the Agent and each Lender upon demand for all
reasonable out-of-pocket expenses (including reasonable attorneys' fees and
legal expenses) incurred by the Agent or such Lender in connection with (x) the
negotiation of any restructuring or "work-out", whether or not consummated, of
any Obligations and (y) the enforcement of any Obligations. Notwithstanding
anything contained herein to the contrary, the Borrower shall not be responsible
for any costs or expenses incurred by the Agent or any Lender in connection with
the transactions contemplated by either of Section 10.11(a) or 10.11(b) hereof.
SECTION 10.4 Indemnification. In consideration of the execution and
delivery of this Agreement by each Lender and the extension of the Revolving
Commitments and the making of the Loans, the Borrower hereby indemnifies,
exonerates and holds the Agent and each Lender and each of their respective
officers, directors, employees and agents (collectively, the "Indemnified
Parties") free and harmless from and against any and all actions, causes of
action, suits, losses, costs, liabilities and damages, and expenses incurred in
connection therewith (irrespective of whether any such Indemnified Party is a
party to the action for which indemnification hereunder is sought), including
reasonable attorneys' fees and disbursements (collectively, the "Indemnified
Liabilities"), incurred by the Indemnified Parties or any of them as a result
of, or arising out of, or relating to:
(i) any transaction financed or to be financed in whole or in part,
directly or indirectly, with the proceeds of any Loan;
(ii) the entering into and performance of this Agreement and any other
Loan Document by any of the Indemnified Parties (including any action
brought by or on behalf of the Borrower as the result of any determination
by the Required Lenders pursuant to Article V not to fund any Borrowing);
(iii) any investigation, litigation or proceeding related to any
acquisition or proposed acquisition by the Borrower of all or any portion
of the stock or assets of any Person, whether or not the Agent or such
Lender is party thereto;
(iv) any investigation, litigation or proceeding related to any
environmental cleanup, audit, compliance or other matter relating to the
protection of the environment or the Release by Borrower or any of its
Subsidiaries of any Hazardous Material; or
(v) the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission, discharging or releases from, any real
property owned or operated by the Borrower or any Subsidiary thereof of any
Hazardous Material (including any
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losses, liabilities, damages, injuries, costs, expenses or claims asserted
or arising under any Environmental Law), regardless of whether caused by,
or within the control of, the Borrower or such Subsidiary,
except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the relevant Indemnified Party's gross
negligence or wilful misconduct. If and to the extent that the foregoing
undertaking may be unenforceable for any reason, the Borrower hereby agrees to
make the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under applicable law.
SECTION 10.5 Survival. The obligations of the Borrower under Sections 4.3,
4.4, 4.5, 4.6 and 10.3 and 10.4, and the obligations of the Lenders under
Section 9.1, shall in each case survive any termination of this Agreement, the
payment in full of all Obligations and the termination of all Revolving
Commitments. The representations and warranties made by the Borrower in this
Agreement and in each other Loan Document shall survive the execution and
delivery of this Agreement and each such other Loan Document.
SECTION 10.6 Severability. Any provision of this Agreement or any other
Loan Document which is prohibited or unenforceable in any jurisdiction shall, as
to such provision and such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions of
this Agreement or such Loan Document or affecting the validity or enforceability
of such provision in any other jurisdiction.
SECTION 10.7 Headings. The various headings of this Agreement and of each
other Loan Document are inserted for convenience only and shall not affect the
meaning or interpretation of this Agreement or such other Loan Document or any
provisions hereof or thereof.
SECTION 10.8 Execution in Counterparts, Effectiveness, etc. This Agreement
may be executed by the parties hereto in several counterparts, each of which
shall be executed by the Borrower and the Agent and be deemed to be an original
and all of which shall constitute together but one and the same agreement. This
Agreement shall become effective when counterparts hereof executed on behalf of
the Borrower and each Lender (or notice thereof satisfactory to the Agent) shall
have been received by the Agent and notice thereof shall have been given by the
Agent to the Borrower and each Lender.
SECTION 10.9 Governing Law; Entire Agreement. THIS AGREEMENT, THE NOTES AND
EACH OTHER LOAN DOCUMENT SHALL EACH BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS. This Agreement, the
Notes and the other Loan Documents constitute the entire understanding among the
parties hereto with respect to the subject matter hereof and supersede any prior
agreements, written or oral, with respect thereto.
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SECTION 10.10 Successors and Assigns. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that:
(i) the Borrower may not assign or transfer its rights or obligations
hereunder without the prior written consent of the Agent and all Lenders;
and
(ii) the rights of sale, assignment and transfer of the Lenders are
subject to Section 10.11.
SECTION 10.11 Sale and Transfer of Loans and Note; Participations in Loans
and Note. Each Lender may assign, or sell participations in, its Loans and
Revolving Commitment to one or more other Persons in accordance with this
Section 10.11.
SECTION 10.11.1 Assignments. Any Lender:
(i) with the written consent of the Agent and, provided no Event of
Default then shall exist or be continuing, the Borrower (which consent
shall not be unreasonably delayed or withheld) may at any time assign and
delegate to one or more commercial banks or other financial institutions,
and
(ii) with notice to the Borrower and the Agent, but without the
consent of the Borrower or the Agent, may assign and delegate to any of its
Affiliates or to any other Lender,
(each Person described in either of the foregoing clauses as being the Person to
whom such assignment and delegation is to be made, being hereinafter referred to
as an "Assignee Lender"), all or any fraction of such Lender's total Loans and
Revolving Commitment (which assignment and delegation shall be of a constant,
and not a varying, percentage of all the assigning Lender's Loans and Revolving
Commitment) in a minimum aggregate amount of $5,000,000 (or such lesser amount
to the extent that after giving effect to such assignment such Lender's total
Loans and Revolving Commitment is reduced to zero); provided, however, that any
such Assignee Lender will comply, if applicable, with the provisions contained
in the penultimate sentence of Section 4.6, and provided further, however, that,
the Borrower and the Agent shall be entitled to continue to deal solely and
directly with such Lender in connection with the interests so assigned and
delegated to an Assignee Lender until:
(iii) written notice of such assignment and delegation, together with
payment instructions, addresses and related information with respect to
such Assignee Lender, shall have been given to the Borrower and the Agent
by such Lender and such Assignee Lender,
(iv) such Assignee Lender shall have executed and delivered to the
Borrower and the Agent a Lender Assignment Agreement, accepted by the
Agent, and
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(v) the processing fees described below shall have been paid.
From and after the date that the Agent accepts such Lender Assignment Agreement,
(x) the Assignee Lender thereunder shall be deemed automatically to have become
a party hereto and to the extent that rights and obligations hereunder have been
assigned and delegated to such Assignee Lender in connection with such Lender
Assignment Agreement, shall have the rights and obligations of a Lender
hereunder and under the other Loan Documents, and (y) the assignor Lender, to
the extent that rights and obligations hereunder have been assigned and
delegated by it in connection with such Lender Assignment Agreement, shall be
released from its obligations hereunder and under the other Loan Documents.
Within five Business Days after its receipt of notice that the Agent has
received an executed Lender Assignment Agreement, the Borrower shall execute and
deliver to the Agent (for delivery to the relevant Assignee Lender) a new Note
evidencing such Assignee Lender's assigned Loans and Revolving Commitment and,
if the assignor Lender has retained Loans and a Revolving Commitment hereunder,
a replacement Note in the principal amount of the Loans and Revolving Commitment
retained by the assignor Lender hereunder (such Note to be in exchange for, but
not in payment of, that Note then held by such assignor Lender). Each such Note
shall be dated the date of the predecessor Note. The assignor Lender shall mark
the predecessor Note "exchanged" and deliver it to the Borrower. Accrued
interest on that part of the predecessor Note evidenced by the new Note, and
accrued fees, shall be paid as provided in the Lender Assignment Agreement.
Accrued interest on that part of the predecessor Note evidenced by the
replacement Note shall be paid to the assignor Lender. Accrued interest and
accrued fees shall be paid at the same time or times provided in the predecessor
Note and in this Agreement. Such assignor Lender or such Assignee Lender must
also pay a processing fee to the Agent upon delivery of any Lender Assignment
Agreement in the amount of $3,500. Any attempted assignment and delegation not
made in accordance with this Section 10.11.1 shall be null and void.
SECTION 10.11.2 Participations. Any Lender may at any time sell to one or
more commercial banks or other Persons (each of such commercial banks and other
Persons being herein called a "Participant") participating interests in any of
the Loans, its Revolving Commitment, or other interests of such Lender
hereunder; provided, however, that:
(i) no participation contemplated in this Section 10.11 shall relieve
such Lender from its Revolving Commitment or its other obligations
hereunder or under any other Loan Document,
(ii) such Lender shall remain solely responsible for the performance
of its Revolving Commitment and such other obligations,
(iii) the Borrower and the Agent shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and each of the other Loan Documents,
(iv) no Participant, unless such Participant is an Affiliate of such
Lender, or is itself a Lender, shall be entitled to require such Lender to
take or refrain from taking any
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action hereunder or under any other Loan Document, except that such Lender
may agree with any Participant that such Lender will not, without such
Participant's consent, take any actions of the type described in clause (b)
or (c) of Section 10.1, and
(v) the Borrower shall not be required to pay any amount under Section
4.6 that is greater than the amount which it would have been required to
pay had no participating interest been sold.
The Borrower acknowledges and agrees that each Participant, for purposes of
Sections 4.3, 4.4, 4.5, 4.6, 4.8, 4.9, 10.3 and 10.4, shall be considered a
Lender.
SECTION 10.12 Confidentiality. The Lenders shall hold all non-public
information (which has been identified as such by Borrower) obtained pursuant to
the requirements of this Agreement in accordance with their customary procedures
for handling confidential information of this nature and in accordance with safe
and sound banking practices and in any event may make disclosure to any of their
examiners, Affiliates, outside auditors, counsel and other professional advisors
in connection with this Agreement or as reasonably required by any bona fide
transferee, participant or assignee or as required or requested by any
governmental agency or representative thereof or pursuant to legal process;
provided, however, that:
(i) unless specifically prohibited by applicable law or court order,
each Lender shall notify the Borrower of any request by any governmental
agency or representative thereof (other than any such request in connection
with an examination of the financial condition of such Lender by such
governmental agency) for disclosure of any such non-public information
prior to disclosure of such information;
(ii) prior to any such disclosure pursuant to this Section 10.12, each
Lender shall require any such bona fide transferee, participant and
assignee receiving a disclosure of non-public information to agree in
writing:
(1) to be bound by this Section 10.12; and
(2) to require such Person to require any other Person to whom
such Person discloses such non-public information to be similarly
bound by this Section 10.12; and
(iii) except as may be required by an order of a court of competent
jurisdiction and to the extent set forth therein, no Lender shall be
obligated or required to return any materials furnished by any Credit
Party.
SECTION 10.13 Other Transactions. Nothing contained herein shall preclude
the Agent or any other Lender from engaging in any transaction, in addition to
those contemplated by this Agreement or any other Loan Document, with the
Borrower or any of its Affiliates in which Borrower or such Affiliate is not
restricted hereby from engaging with any other Person.
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SECTION 10.14 Forum Selection and Consent to Jurisdiction. ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE AGENT, THE LENDERS OR ANY CREDIT
PARTY SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF
ILLINOIS OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF
ILLINOIS; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY
COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE AGENT'S OPTION, IN THE
COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND.
THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE
COURTS OF THE STATE OF ILLINOIS AND OF THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF ILLINOIS FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET
FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY
IN CONNECTION WITH SUCH LITIGATION. BORROWER FURTHER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE
WITHIN OR WITHOUT THE STATE OF ILLINOIS. THE BORROWER HEREBY EXPRESSLY AND
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION
BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH
LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT THE
BORROWER HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY
COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT
PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO
ITSELF OR ITS PROPERTY, EACH SUCH CREDIT PARTY HEREBY IRREVOCABLY WAIVES SUCH
IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
SECTION 10.15 Waiver of Jury Trial. THE AGENT, THE LENDERS AND THE BORROWER
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF THE AGENT, THE LENDERS OR THE BORROWER. THE BORROWER ACKNOWLEDGES AND
AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION
(AND EACH OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY)
AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENT AND THE
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LENDERS ENTERING INTO THIS AGREEMENT AND EACH SUCH OTHER LOAN DOCUMENT.
* * *
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
NOVAMED EYECARE, INC.
By
----------------------------------
Title:
NATIONAL CITY BANK OF
MICHIGAN/ILLINOIS,
Individually as a Lender, as Letter of Credit
Issuer and as Agent
By
----------------------------------
Title:
LASALLE BANK NATIONAL ASSOCIATION
Individually as a Lender
By
----------------------------------
Title:
THE NORTHERN TRUST COMPANY
Individually as a Lender
By
----------------------------------
Title:
BANK OF AMERICA, N.A.
Individually as a Lender
By
----------------------------------
Title:
<PAGE>
Schedule 10.1
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COMMITMENT PERCENTAGES
--------------------------------------------------------------------------------
Name of Bank Amount of Commitment Percentage of aggregate
Revolving Commitment Amount
--------------------------------------------------------------------------------
National City Bank of $17,500,000 35%
Michigan/Illinois
--------------------------------------------------------------------------------
Lasalle Bank National $15,000,000 30%
Association
--------------------------------------------------------------------------------
The Northern Trust Company $12,500,000 25%
--------------------------------------------------------------------------------
Bank of America, N.A. $ 5,000,000 10%
--------------------------------------------------------------------------------
Totals $50,000,000 100%
--------------------------------------------------------------------------------
