<PAGE> 1
FORM 10-K/A-1
(MARK ONE)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
FOR THE FISCAL YEAR ENDED JUNE 30, 1998 OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM ______ TO ______
COMMISSION FILE NUMBER 0-13849
RAMSAY HEALTH CARE, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 63-0857352
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
COLUMBUS CENTER
ONE ALHAMBRA PLAZA, SUITE 750
CORAL GABLES, FLORIDA 33134
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (305) 569-6993
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
------------------- -----------------------------------------
NONE NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
COMMON STOCK, $0.01 PAR VALUE
(TITLE OF CLASS)
Indicate by a check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months, and (2) has been subject to such
filing requirements for the past 90 days. Yes X No __.
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K/A-1 or any
amendment to this Form 10-K/A-1. / /
The number of shares of the registrant's Common Stock outstanding as of
October 2, 1998 was 10,877,982. The aggregate market value of Common Stock held
by non-affiliates on such date was $9,232,121.
DOCUMENTS INCORPORATED BY REFERENCE
Certain sections of the registrant's definitive Proxy Statement to be
filed for the 1998 Annual Meeting of Stockholders are incorporated by reference
into Part III.
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ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(A) DOCUMENTS FILED AS PART OF THE REPORT:
1. FINANCIAL STATEMENTS
Information with respect to this Item was
contained on Pages F-1 to F-27 of this Annual Report
on Form 10-K.
2. FINANCIAL STATEMENT SCHEDULES
All schedules have been omitted because they
are inapplicable or the information is provided in
the consolidated financial statements, including the
notes thereto.
3. EXHIBITS
Information with respect to this Item was
contained in the attached Index to Exhibits.
(B) REPORTS ON FORM 8-K:
On June 24, 1997, the Company filed with the
Commission a Current Report on Form 8-K related to
the merger with RMCI. In addition, on August 22,
1997, the Company filed a Current Report on Form
8-K/A to include the financial statements and pro
forma financial information related to the merger
with RMCI. Also, on June 17, 1998, the Company filed
with the Commission a Current Report on Form 8-K
related to the sale of all of the issued and
outstanding shares of common stock of FPMBH and the
sale of the Greenbrier facility. Also, on October 9,
1998, the Company filed with the Commission a Current
Report or Form 8-K related to the sale of its
behavioral health facilities.
(C) EXHIBITS REQUIRED BY ITEM 601 OF REGULATION S-K:
Exhibits required to be filed by the Company pursuant
to Item 601 of Regulation S-K are contained in
Exhibits listed in response to Item 14(a)3, and are
incorporated herein by reference. The agreements,
management contracts and compensatory plans and
arrangements required to be filed as an Exhibit to
this Form 10-K are listed in Exhibits 10.64, 10.66,
10.69, 10.71, 10.72, 10.76, 10.77, 10.79, 10.91,
10.97, 10.99, 10.101, 10.102, 10.104 and 10.105.
1
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POWER OF ATTORNEY
The Registrant, and each person whose signature appears below, hereby
appoints Bert G. Cibran and Thomas M. Haythe as attorneys-in-fact with full
power of substitution, severally, to execute in the name and on behalf of the
registrant and each such person, individually and in each capacity stated below,
one or more amendments to the annual report which amendments may make such
changes in the report as the attorney-in-fact acting deems appropriate and to
file any such amendment to the report with the Securities and Exchange
Commission.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto fully authorized.
RAMSAY HEALTH CARE, INC.
Dated: October 23, 1998 By /s/ Bert G. Cibran
---------------- ----------------------------------
Bert G. Cibran
President And Chief Operating Officer
Dated: October 23, 1998 By /s/ Marcio C. Cabrera
------------- ----------------------------------
Marcio C. Cabrera
Executive Vice President And
Chief Financial Officer
Pursuant to the requirements of the Securities and Exchange Act of
1934, this report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.
SIGNATURE/TITLE
---------------
Dated: October 23, 1998 By *
---------------- ----------------------------------
Paul J. Ramsay
Chairman of the Board of Directors
Dated: October 23, 1998 By *
---------------- ----------------------------------
Luis E. Lamela
Chief Executive Officer, Executive
Vice Chairman of The Board and
Director
2
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SIGNATURE/TITLE
---------------
Dated: By
---------------- ----------------------------------
Aaron Beam, Jr.
Director
Dated: October 23, 1998 By *
---------------- ----------------------------------
Peter J. Evans
Director
Dated: October 23, 1998 By *
---------------- ----------------------------------
Thomas M. Haythe
Director
Dated: By
---------------- ----------------------------------
Steven J. Shulman
Director
Dated: October 23, 1998 By *
---------------- ----------------------------------
Michael S. Siddle
Director
* By /s/ Bert G. Cibran
------------------------------
Bert G. Cibran
Attorney-in-Fact
3
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INDEX OF EXHIBITS
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2.1 Recapitalization Agreement dated as of June 30, 1993 by and among the Company,
Ramsay Holdings HSA Limited and Paul Ramsay Holdings Pty. Limited (incorporated
by reference to Exhibit 2.2 to the Company's Annual Report on Form 10-K for the
year ended June 30, 1994)......................................................... --
2.2 Agreement of sale and purchase dated April 12, 1995 by and between Mesa
Psychiatric Hospital, Inc. and Capstone Capital Corporation (incorporated by
reference to Exhibit 2.7 to the Company's Annual Report on Form 10-K for the year
ended June 30, 1995). Pursuant to Reg. S-K, Item 601(b)(2), the Company agrees
to furnish a copy of the Schedules and Exhibits to such Agreement to the
Commission upon request........................................................... --
2.3 Agreement of sale and purchase dated April 12, 1995 by and between RHCI San
Antonio, Inc. and Capstone Capital Corporation (incorporated by reference to
Exhibit 2.8 to the Company's Annual Report on Form 10-K for the year ended June
30, 1995). Pursuant to Reg. S-K, Item 601(b)(2), the Company agrees to furnish a
copy of the Schedules and Exhibits to such Agreement to the Commission upon
request........................................................................... --
2.4 Agreement and Plan of Merger dated as of October 1, 1996 among Ramsay Managed
Care, Inc., the Company and RHCI Acquisition Corp. (incorporated by reference to
Exhibit 2 to the Company's Current Report on Form 8-K dated October 2, 1996).
Pursuant to Reg. S-K, Item 601(b)(2), the Company agrees to furnish a copy of the
Disclosure Schedules to such Agreement to the Commission upon request............. --
2.5 Agreement and Plan of Merger dated as of July 1, 1997 among Summa Healthcare
Group, Inc., the Company and Ramsay Acquisition Corporation (incorporated by
reference to Exhibit 2.5 to the Company's Annual Report on Form 10-K for the year
ended June 30, 1997).............................................................. --
2.6 Agreement of Purchase and Sale dated as of March 18, 1998 by and between Ramsay
Louisiana, Inc. and Health-One Properties, LLC (incorporated by reference to
Exhibit 2.6 to the Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1998). Pursuant to Reg. S-K, Item 601(b)(2), the Company agrees to
furnish a copy of the Disclosure Schedules and attachments to such Agreement to
the Commission upon request ...................................................... --
2.7 Stock Purchase Agreement dated as of May 1, 1998 by and among the Company, Ramsay
Managed Care, Inc. and Horizon Health Corporation (incorporated by reference to
Exhibit 2.7 to the Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1998). Pursuant to Reg. S-K, Item 601(b)(2), the Company agrees to
furnish a copy of the Disclosure Schedules and attachments to such Agreement to
the Commission upon request....................................................... --
2.8 Asset Purchase Agreement dated as of May 15, 1998 by and among Greenbrier
Hospital, Inc., the Company and Provider Options Holdings, L.L.C (incorporated by
reference to Exhibit 2.8 to the Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1998). Pursuant to Reg. S- K, Item 601(b)(2), the
Company agrees to furnish a copy of the Disclosure Schedules and attachments to
such Agreement to the Commission upon request..................................... --
2.9 Purchase Agreement dated as of June 24, 1998 among Charter Behavioral Health
Systems, LLC, the Company, Carolina Treatment Center, Inc., Houma Psychiatric
Hospital, Inc., Mesa Psychiatric Hospital, Inc., RHCI San Antonio, Inc., The
Haven Hospital, Inc., Transitional Care Ventures (Arizona), Inc., Transitional
Care Ventures (North Texas), Inc. and Transitional Care Ventures (Texas), Inc.
(incorporated by reference to Exhibit 2.9 to the Company's Current Report on
Form 8-K dated October 9, 1998). Pursuant to Reg. S-K, Item 601(b)(2), the
Company agrees to furnish a copy of the Disclosure Schedules and attachments
to such Agreement to the Commission upon request.................................. --
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2.10 Purchase and Sale Contract dated as of June 25, 1998 among Charter
Behavioral Health Systems, LLC, Carolina Treatment Center, Inc. and
Mesa Psychiatric Hospital, Inc. (incorporated by reference to Exhibit
2.10 to the Company's Current Report on Form 8-K dated October 9,
1998). Pursuant to Reg. S-K, Item 601(b)(2), the Company agrees to
furnish a copy of the Disclosure Schedules and attachments to such
Agreement to the Commission upon request.......................................... --
2.11 Purchase and Sale Contract dated as of June 26, 1998 among Crescent
Real Estate Equities Limited Partnership and The Haven Hospital, Inc.
(incorporated by reference to Exhibit 2.11 to the Company's Current
Report on Form 8-K dated October 9, 1998). Pursuant to Reg. S-K, Item
601(b)(2), the Company agrees to furnish a copy of the Disclosure
Schedules and attachments to such Agreement to the Commission upon
request............................................................................ --
2.12 Asset Purchase Agreement dated as of July 2, 1998 among West Virginia University
Hospitals, Inc., Psychiatric Institute of West Virginia, Inc. and the Company
(incorporated by reference to Exhibit 2.12 to the Company's Current Report on
Form 8-K dated October 9, 1998). Pursuant to Reg. S-K, Item 601(b)(2), the Company
agrees to furnish a copy of the Disclosure Schedules and attachments to such
Agreement to the Commission upon request........................................... --
2.13 Amendment No. 1 dated as of September 28, 1998 Purchase Agreement dated as of
June 24, 1998 among Charter Behavioral Health Systems, LLC, the Company, Carolina
Treatment Center, Inc., Houma Psychiatric Hospital, Inc., Mesa Psychiatric
Hospital, Inc., RHCI San Antonio, Inc., The Haven Hospital, Inc., Transitional
Care Ventures (Arizona), Inc., Transitional Care Ventures (North Texas), Inc. and
Transitional Care Ventures (Texas), Inc. (incorporated by reference to Exhibit 2.13
to the Company's Current Report on Form 8-K dated October 9, 1998)................. --
2.14 Agreement of Sale and Purchase dated as of September 28, 1998 by and among
Havenwyck Hospital, Inc., Michigan Psychiatric Services, Inc. and Capstone
Capital Corporation (incorporated by reference to Exhibit 2.14 to the Company's
Current Report on Form 8-K dated October 9, 1998). Pursuant to Reg. S-K,
Item 601(b)(2), the Company agrees to furnish a copy of the Disclosure Schedules
and attachments to such Agreement to the Commission upon request.................. --
3.1 Restated Certificate of Incorporation of the Company, as amended (incorporated
by reference to Exhibit 3.1 to the Company's Annual Report on Form 10-K for the
year ended June 30, 1990)......................................................... --
3.2 Certificate of Amendment of Restated Certificate of Incorporation of the Company
filed on April 17, 1991 (incorporated by reference to Exhibit 3.2 to the
Company's Registration Statement on Form S-2, Registration No. 33-40762).......... --
3.3 Certificate of Correction to Certificate of Amendment of Restated Certificate of
Incorporation of the Company filed on April 18, 1991 (incorporated by reference
to Exhibit 3.3 to the Company's Registration Statement on Form S-2, Registration
No. 33-40762)..................................................................... --
3.4 By-Laws of the Company, as amended to date (incorporated by reference
to Exhibit 3.4 to the Company's Annual Report on Form 10-K for the
year ended June 30, 1994)......................................................... --
3.5 Certificate of Designation of Preferred Stock of the Company filed on June 27,
1991 (incorporated by reference to Exhibit 3.5 to the Company's Registration
Statement on Form S-2, Registration No. 33-40762)................................. --
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3.6 Certificate of Designation of Preferred Stock of the Company filed on July 9,
1991 (incorporated by reference to Exhibit 3.6 to the Company's Registration
Statement on Form S-2, Registration No. 33-40762)................................. --
3.7 Certificate of Designation of Preferred Stock of the Company filed on June 29,
1993 (incorporated by reference to Exhibit 3.7 to the Company's Annual Report on
Form 10-K for the year ended June 30, 1994)....................................... --
3.8 Certificate of Designation of Preferred Stock of the Company with respect to its
Class B Preferred Stock, Series 1996 filed on June 10, 1997 (incorporated by
reference to Exhibit 3.8 to the Company's Annual Report on Form 10-K for the year
ended June 30, 1997).............................................................. --
3.9 Certificate of Designation of Preferred Stock of the Company with respect to its
Class B Preferred Stock, Series 1997 filed on September 30, 1997 (incorporated by
reference to Exhibit 3.9 to the Company's Annual Report on Form 10-K for the year
ended June 30, 1997).............................................................. --
3.10 Certificate of Designation of Preferred Stock of the Company with respect to its
Class B Preferred Stock, Series 1997-A filed on September 30, 1997 (incorporated
by reference to Exhibit 3.10 to the Company's Annual Report on Form 10-K for the year
ended June 30, 1997).............................................................. --
3.11 Preferred Stock Purchase Agreement dated as of September 30, 1997 between the
Company and General Electric Capital Corporation (incorporated by
reference to Exhibit 3.11 to the Company's Annual Report on Form 10-K for the year
ended June 30, 1997).............................................................. --
3.12 Preferred Stock Purchase Agreement dated as of September 30, 1997 between the
Company and Paul Ramsay Holdings Pty. Limited (incorporated by
reference to Exhibit 3.12 to the Company's Annual Report on Form 10-K for the year
ended June 30, 1997).............................................................. --
3.13 Common Stock Purchase Agreement dated as of September 30, 1997 between the
Company and Paul Ramsay Holdings Pty. Limited (incorporated by
reference to Exhibit 3.13 to the Company's Annual Report on Form 10-K for the year
ended June 30, 1997).............................................................. --
3.14 Schedules to Preferred Stock Purchase Agreement described in exhibit 3.11 above
(incorporated by reference to Exhibit 3.14 to the Company's Quarterly Report on
Form 10-Q for the quarter ended September 30, 1997)............................... --
4.1 Trust Indenture dated as of March 31, 1990, between the Company, Bountiful
Psychiatric Hospital, Inc., Cumberland Mental Health, Inc., East Carolina
Psychiatric Services Corporation, Havenwyck Hospital, Inc., Mesa Psychiatric
Hospital, Inc., Psychiatric Institute of West Virginia, Inc., and The Citizens
and Southern National Bank and Susan L. Adams (incorporated by reference to
Exhibit 4.1 to the Company's Annual Report on Form 10-K for the year ended June
30, 1990)......................................................................... --
4.2 First Supplemental Trust Indenture dated as of June 15, 1991 between the Company,
Bountiful Psychiatric Hospital, Inc., Cumberland Mental Health, Inc., East
Carolina Psychiatric Services Corporation, Havenwyck Hospital, Inc., Mesa
Psychiatric Hospital, Inc. and Psychiatric Hospital of West Virginia, Inc. and
The Citizens and Southern National Bank, a national banking association, and an
individual trustee, as Trustees (incorporated by reference to Exhibit 4.4 to the
Company's Registration Statement on Form S-2, Registration No. 33-40762).......... --
4.3 Second Supplemental Trust Indenture dated as of May 15, 1993 between the Company,
Bountiful Psychiatric Hospital, Inc., Cumberland Mental Health, Inc., East
Carolina Psychiatric Services Corporation, Havenwyck Hospital, Inc., Mesa
Psychiatric Hospital, Inc. and Psychiatric Hospital of West Virginia, Inc., and
NationsBank of Georgia, National Association, and Susan L. Adams (incorporated by
reference to Exhibit 4.3 to the Company's Annual Report on Form 10-K for the year
ended June 30, 1994).............................................................. --
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4.4 Third Supplemental Trust Indenture dated as of April 12, 1995 between the
Company, Bountiful Psychiatric Hospital, Inc., Cumberland Mental Health, Inc.,
East Carolina Psychiatric Services Corporation, Havenwyck Hospital, Inc., Mesa
Psychiatric Hospital, Inc. and Psychiatric Hospital of West Virginia, Inc., and
NationsBank of Georgia, National Association, and Elizabeth Talley, as Trustee
(incorporated by reference to Exhibit 4.4 to the Company's Annual Report on Form
10-K for the year ended June 30, 1996)............................................ --
4.5 Fourth Supplemental Trust Indenture dated as of September 15, 1995 between the
Company, Bountiful Psychiatric Hospital, Inc., Cumberland Mental Health, Inc.,
East Carolina Psychiatric Services Corporation, Havenwyck Hospital, Inc., Mesa
Psychiatric Hospital, Inc. and Psychiatric Institute of West Virginia, Inc. and
NationsBank of Georgia, National Association, and Elizabeth Talley, as Trustee
(incorporated by reference to Exhibit 10.100 to the Company's Quarterly Report on
Form 10-Q for the quarter ended September 30, 1995)............................... --
4.6 Fifth Supplemental Trust Indenture dated as of June 1, 1997 between the Company,
Bountiful Psychiatric Hospital, Inc., Cumberland Mental Health, Inc., East
Carolina Psychiatric Services Corporation, Havenwyck Hospital, Inc. and
Psychiatric Institute of West Virginia, Inc. and The Bank of New York and Thomas
Zakrzewski, as Trustees (incorporated by reference to Exhibit 4.6 to the Company's
Annual Report on Form 10-K for the year ended June 30, 1997)...................... --
4.7 Subsidiary Borrower Note of Atlantic Treatment Center, Inc. dated May 21, 1993 in
the principal amount of $4,607,945 payable to the order of Societe Generale, New
York Branch (incorporated by reference to Exhibit 4.5 to the Company's Annual
Report on Form 10-K for the year ended June 30, 1994)............................. --
4.8 Subsidiary Borrower Note of Carolina Treatment Center, Inc. dated May 21, 1993 in
the principal amount of $5,030,000 payable to the order of Societe Generale, New
York Branch (substantially identical to Exhibit 4.7).............................. --
4.9 Subsidiary Borrower Note of Greenbrier Hospital, Inc. dated May 21, 1993 in the
principal amount of $5,973,125 payable to the order of Societe Generale, New York
Branch (substantially identical to Exhibit 4.7).................................... --
4.10 Subsidiary Borrower Note of Gulf Coast Treatment Center, Inc. dated May 21, 1993
in the principal amount of $4,392,500 payable to the order of Societe Generale,
New York Branch (substantially identical to Exhibit 4.7)........................... --
4.11 Subsidiary Borrower Note of Houma Psychiatric Hospital, Inc. dated May 21, 1993 in
the principal amount of $3,979,589 payable to the order of Societe Generale, New
York Branch (substantially identical to Exhibit 4.7)............................... --
4.12 Subsidiary Borrower Note of HSA of Oklahoma, Inc. dated May 21, 1993 in the
principal amount of $3,445,562 payable to the order of Societe Generale, New York
Branch (substantially identical to Exhibit 4.7).................................... --
10.1 Note Purchase Agreement dated as of March 31, 1990, among the Company, Bountiful
Psychiatric Hospital, Inc., Cumberland Mental Health, Inc., East Carolina
Psychiatric Services Corporation, Havenwyck Hospital, Inc., Mesa Psychiatric
Hospital, Inc., Psychiatric Institute of West Virginia, Inc., and Aetna Life
Insurance Company regarding the purchase by Aetna Life Insurance Company of
$26,000,000 principal amount of 11.6% Senior Secured Notes, $1,000,000 principal
amount of 15.6% Subordinated Secured Notes and Warrants to Purchase Common Stock
of the Company (incorporated by reference to Exhibit 10.2 to the Company's Annual
Report on Form 10-K for the year ended June 30, 1990).............................. --
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10.2 Note Purchase Agreement pursuant to which Monumental Life Insurance Company
purchased $15,500,000 principal amount of 11.6% Senior Secured Notes, $2,000,000
principal amount of 15.6% Subordinated Secured Notes and Warrants to Purchase
Common Stock of the Company (substantially identical to Exhibit 10.1)..............
--
10.3 Note Purchase Agreement pursuant to which Connecticut Mutual Life Insurance
Company purchased $15,000,000 principal amount of 11.6% Senior Secured Notes
(substantially identical to Exhibit 10.1).......................................... --
10.4 Pledge and Security Agreement between Bountiful Psychiatric Hospital, Inc. and The
Citizens and Southern National Bank (incorporated by reference to Exhibit 10.4 to
the Company's Annual Report on Form 10-K for the year ended June 30, 1996).........
--
10.5 Pledge and Security Agreement dated as of March 31, 1990 between the
Company and The Citizens and Southern National Bank (substantially
identical to Exhibit 10.4)......................................................... --
10.6 Pledge and Security Agreement between Michigan Psychiatric Services, Inc. and The
Citizens and Southern National Bank (substantially identical to Exhibit 10.4)...... --
10.7 Pledge and Security Agreement between Americare of Galax, Inc. and The Citizens
and Southern National Bank (substantially identical to Exhibit 10.4)............... --
10.8 Deed of Trust, Security Agreement, and Financing Statement dated as of March 31,
1990 from Bountiful Psychiatric Hospital, Inc. to Merrill Title Company for the
benefit of The Citizens and Southern National Bank and Susan L. Adams covering
certain property in Woods Cross, Utah (incorporated by reference to Exhibit 10.10
to the Company's Annual Report on Form 10-K for the year ended June 30, 1990)...... --
10.9 Deed of Trust and Security Agreement from Cumberland Mental Health, Inc. to First
American Title Insurance Company for the benefit of The Citizens and Southern
National Bank and Susan L. Adams covering certain property in Fayetteville, North
Carolina (substantially identical to Exhibit 10.8)................................. --
10.10 Deed of Trust and Security Agreement from East Carolina Psychiatric Services
Corporation to First American Title Insurance Company for the benefit of The
Citizens and Southern National Bank and Susan L. Adams covering certain property
in Jacksonville, North Carolina (substantially identical to Exhibit 10.8).......... --
10.11 Mortgage and Security Agreement dated as of March 31, 1990 from Havenwyck
Hospital, Inc. to The Citizens and Southern National Bank and Susan L. Adams
covering certain property in Auburn Hills, Michigan (incorporated by reference to
Exhibit 10.12 to the Company's Annual Report on Form 10-K for the year ended June
30, 1990).......................................................................... --
10.12 Leasehold Deed of Trust, Assignment of Rents and Security Agreement with Financing
Statement dated as of March 31, 1990 from Mesa Psychiatric Hospital, Inc. to
Transamerica Title Insurance Company for the benefit of The Citizens and Southern
National Bank and Susan L. Adams covering certain property in Mesa, Arizona
(incorporated by reference to Exhibit 10.13 to the Company's Annual Report on Form
10-K for the year ended June 30, 1990)............................................. --
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10.13 Leasehold Deed of Trust and Security Agreement from Psychiatric Institute of West
Virginia, Inc. to J. Nicholas Barth, Esq., for the benefit of The Citizens and
Southern National Bank and Susan L. Adams covering certain property in Morgantown,
West Virginia (substantially identical to Exhibit 10.12)........................... --
10.14 Obligor Subrogation and Contribution Agreement dated as of April 30, 1990 among
The Citizens and Southern National Bank, Susan L. Adams, the Company, Bountiful
Psychiatric Hospital, Inc., Cumberland Mental Health, Inc., East Carolina
Psychiatric Services Corporation, Havenwyck Hospital, Inc., Mesa Psychiatric
Hospital, Inc., and Psychiatric Institute of West Virginia, Inc. (incorporated by
reference to Exhibit 10.15 to the Company's Annual Report on Form 10-K for the
year ended June 30, 1990).......................................................... --
10.15 Credit Agreement dated as of May 15, 1993 among the Company and
certain of its subsidiaries named therein, Societe Generale, New York
Branch, First Union National Bank of North Carolina and Hibernia
National Bank, as lenders, and Societe Generale, as issuing bank and
agent (incorporated by reference to Exhibit 10.16 to the Company's
Annual Report on Form 10-K for the year ended June 30, 1994) ...................... --
10.16 Second Amendment to Credit Agreement dated as of September 15, 1995 among the
Company and certain of its subsidiaries named therein, Societe Generale, New York
Branch, First Union National Bank of North Carolina and Hibernia National Bank, as
lenders, and Societe Generale, as issuing bank and agent (incorporated by
reference to Exhibit 10.99 to the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1995................................................... --
10.17 Third Amendment to Credit Agreement dated as of August 15, 1996 among
the Company and certain subsidiaries named therein, Societe Generale,
New York Branch, First Union National Bank of North Carolina and
Hibernia National Bank, as lenders, and Societe Generale, as issuing
bank and agent (incorporated by reference to Exhibit 10.93 to the
Company's Annual Report on Form 10-K for the year ended June 30, 1996.............. --
10.18 Fourth Amendment to Credit Agreement, First Amendment to Waiver, Consent to Merger
and Extension Agreement dated as of May 15, 1997 among the Company and certain
subsidiaries named therein, Societe Generale, New York Branch, First Union
National Bank of North Carolina and Hibernia National Bank, as lenders, and
Societe Generale, as issuing bank and agent (incorporated by reference to
Exhibit 10.18 to the Company's Annual Report on Form 10-K for the year ended
June 30, 1997)..................................................................... --
10.19 Fifth Amendment to Credit Agreement, Amendment to Fourth Amendment and Amendment
to Waiver dated as of June 4, 1997 among the Company and certain subsidiaries
named therein, Societe Generale, New York Branch, First Union National Bank of
North Carolina, as lenders, and Societe Generale, as issuing bank and agent
(incorporated by reference to Exhibit 10.19 to the Company's Annual Report on
Form 10-K for the year ended June 30, 1997)........................................ --
10.20 Security Agreement dated as of May 15, 1993 by Atlantic Treatment Center, Inc. in
favor of Societe Generale, as agent for the lenders which are parties to that
certain Credit Agreement described in Exhibit 10.15 above, and covering certain
property in Daytona Beach, Florida (incorporated by reference to Exhibit 10.17 to
the Company's Annual Report on Form 10-K for the year ended June 30, 1994)......... --
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10.21 Security Agreement dated as of May 15, 1993 by Carolina Treatment Center, Inc. in
favor of Societe Generale, as agent for the lenders which are parties to that
certain Credit Agreement described in Exhibit 10.15 above (substantially identical
to Exhibit 10.20).................................................................. --
10.22 Security Agreement dated as of May 15, 1993 by Great Plains Hospital, Inc., in
favor of Societe Generale, as agent for the lenders which are parties to that
certain Credit Agreement described in Exhibit 10.15 above (substantially identical
to Exhibit 10.20).................................................................. --
10.23 Security Agreement dated as of May 15, 1993 by Greenbrier Hospital, Inc. in favor
of Societe Generale, as agent for the lenders which are parties to that certain
Credit Agreement described in Exhibit 10.15 above (substantially identical to
Exhibit 10.20)..................................................................... --
10.24 Security Agreement dated as of May 15, 1993 by Gulf Coast Treatment Center, Inc.
in favor of Societe Generale, as agent for the lenders which are parties to that
certain Credit Agreement described in Exhibit 10.15 above (substantially identical
to Exhibit 10.20).................................................................. --
10.25 Security Agreement dated as of May 15, 1993 by Houma Psychiatric Hospital, Inc. in
favor of Societe Generale, as agent for the lenders which are parties to that
certain Credit Agreement described in Exhibit 10.15 above (substantially identical
to Exhibit 10.20).................................................................. --
10.26 Security Agreement dated as of May 15, 1993 by HSA of Oklahoma, Inc. in favor of
Societe Generale, as agent for the lenders which are parties to that certain
Credit Agreement described in Exhibit 10.15 above (substantially identical to
Exhibit 10.20)..................................................................... --
10.27 Security Agreement dated as of May 15, 1993 by The Haven Hospital, Inc. in favor
of Societe Generale, as agent for the lenders which are parties to that certain
Credit Agreement described in Exhibit 10.15 above (substantially identical to
Exhibit 10.20)..................................................................... --
10.28 Security Agreement dated as of May 15, 1993 by the Company in favor of Societe
Generale, as agent for the lenders which are parties to that certain Credit
Agreement described in Exhibit 10.15 above (substantially identical to Exhibit
10.20)............................................................................. --
10.29 Accounts Receivable Security Agreement dated as of May 15, 1993 by Americare of
Galax, Inc. in favor of Societe Generale, as agent for the lenders which are
parties to that certain Credit Agreement described in Exhibit 10.15 above
(incorporated by reference to Exhibit 10.26 to the Company's Annual Report on Form
10-K for the year ended June 30, 1994)............................................. --
10.30 Accounts Receivable Security Agreement dated as of May 15, 1993 by Bountiful
Psychiatric Hospital, Inc. in favor of Societe Generale, as agent for the lenders
which are parties to that certain Credit Agreement described in Exhibit 10.15
above (substantially identical to Exhibit 10.29)................................... --
10.31 Accounts Receivable Security Agreement dated as of May 15, 1993 by Cumberland
Mental Health, Inc. in favor of Societe Generale, New York Branch, as agent for
the lenders which are parties to that certain Credit Agreement described in
Exhibit 10.15 above (substantially identical to Exhibit 10.29)..................... --
</TABLE>
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10.32 Accounts Receivable Security Agreement dated as of May 15, 1993 by East Carolina
Psychiatric Services Corporation in favor of Societe Generale, New York Branch, as
agent for the lenders which are parties to that certain Credit Agreement described
in Exhibit 10.15 above (substantially identical to Exhibit 10.29).................. --
10.33 Accounts Receivable Security Agreement dated as of May 15, 1993 by Havenwyck
Hospital, Inc. in favor of Societe Generale, New York Branch as agent for the
lenders which are parties to that certain Credit Agreement described in Exhibit
10.15 above (substantially identical to Exhibit 10.29)............................. --
10.34 Accounts Receivable Security Agreement dated as of May 15, 1993 by Mesa
Psychiatric Hospital, Inc. in favor of Societe Generale, New York Branch, as agent
for the lenders which are parties to that certain Credit Agreement described in
Exhibit 10.15 above (substantially identical to Exhibit 10.29)..................... --
10.35 Accounts Receivable Security Agreement dated as of May 15, 1993 by Michigan
Psychiatric Services, Inc. in favor of Societe Generale, New York Branch, as agent
for the lenders which are parties to that certain Credit Agreement described in
Exhibit 10.15 above (substantially identical to Exhibit 10.29)..................... --
10.36 Accounts Receivable Security Agreement dated as of May 15, 1993 by Psychiatric
Institute of West Virginia, Inc. in favor of Societe Generale, New York Branch, as
agent for the lenders which are parties to that certain Credit Agreement described
in Exhibit 10.15 above (substantially identical to Exhibit 10.29).................. --
10.37 Stock Pledge Agreement dated as of May 15, 1993, among the Company in favor of
Societe Generale, New York Branch, as agent for the lenders which are parties to
that certain Credit Agreement described in Exhibit 10.15 above (incorporated by
reference to Exhibit 10.34 to the Company's Annual Report on Form 10-K for the
year ended June 30, 1994).......................................................... --
10.38 Revolving Credit Guarantee dated as of May 15, 1993 by Americare of Galax, Inc. in
favor of Societe Generale, New York Branch, as agent for the lenders which are
parties to that certain Credit Agreement described in Exhibit 10.15 above
(incorporated by reference to Exhibit 10.35 to the Company's Annual Report on Form
10-K for the year ended June 30, 1994)............................................. --
10.39 Revolving Credit Guarantee dated as of May 15, 1993 by Bethany Psychiatric
Hospital, Inc. in favor of Societe Generale, New York Branch, as agent for the
lenders which are parties to that certain Credit Agreement described in Exhibit
10.15 above (substantially identical to Exhibit 10.38)............................. --
10.40 Revolving Credit Guarantee dated as of May 15, 1993 by Bountiful Psychiatric
Hospital, Inc. in favor of Societe Generale, New York Branch, as agent for the
lenders which are parties to that certain Credit Agreement described in Exhibit
10.15 above (substantially identical to Exhibit 10.38)............................. --
10.41 Revolving Credit Guarantee dated as of May 15, 1993 by Cumberland Mental Health,
Inc. in favor of Societe Generale, New York Branch, as agent for the lenders which
are parties to that certain Credit Agreement described in Exhibit 10.15 above
(substantially identical to Exhibit 10.38)......................................... --
10.42 Revolving Credit Guarantee dated as of May 15, 1993 by East Carolina Psychiatric
Services Corporation in favor of Societe Generale, New York Branch, as agent for
the lenders which are parties to that certain Credit Agreement described in
Exhibit 10.15 above (substantially identical to Exhibit 10.38)..................... --
</TABLE>
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10.43 Revolving Credit Guarantee dated as of May 15, 1993 by Havenwyck Hospital, Inc. in
favor of Societe Generale, New York Branch, as agent for the lenders which are
parties to that certain Credit Agreement described in Exhibit 10.15 above
(substantially identical to Exhibit 10.38) ....................................... --
10.44 Revolving Credit Guarantee dated as of May 15, 1993 by Mesa Psychiatric Hospital,
Inc. in favor of Societe Generale, New York Branch, as agent for the lenders
which are parties to that certain Credit Agreement described in Exhibit 10.15
above (substantially identical to Exhibit 10.38) .................................. --
10.45 Revolving Credit Guarantee dated as of May 15, 1993 by Michigan Psychiatric
Services, Inc. in favor of Societe Generale, New York Branch, as agent for the
lenders which are parties to that certain Credit Agreement described in Exhibit
10.15 above (substantially identical to Exhibit 10.38) ............................ --
10.46 Revolving Credit Guarantee dated as of May 15, 1993 by Psychiatric Institute of
West Virginia, Inc. in favor of Societe Generale, New York Branch, as agent for
the lenders which are parties to that certain Credit Agreement described in
Exhibit 10.15 above (substantially identical to Exhibit 10.38) .................... --
10.47 Management Fee Subordination Agreement dated May 15, 1993, among Paul J. Ramsay
and Ramsay Health Care Pty. Ltd. in favor of Societe Generale, New York Branch, as
agent for the lenders which are parties to that certain Credit Agreement described
in Exhibit 10.15 above (incorporated by reference to Exhibit 10.44 to the
Company's Annual Report on Form 10-K for the year ended June 30, 1994) ............ --
10.48 Mortgage and Fixture Filing and Assignment of Leases and Rents dated as of May 15,
1993 granted by Atlantic Treatment Center, Inc. to Societe Generale, individually
and as agent for the lenders which are parties to that certain Credit Agreement
described in Exhibit 10.15 above, with respect to certain real property located in
Volusia County, Florida (incorporated be reference to Exhibit 10.45 to the
Company's Annual Report on Form 10-K for the year ended June 30, 1994) ............ --
10.49 Mortgage and Fixture Filing and Assignment of Leases and Rents dated as of May 15,
1993 granted by Carolina Treatment Center, Inc. to Societe Generale, individually
and as agent for the lenders which are parties to that certain Credit Agreement
described in Exhibit 10.15 above, with respect to certain real property located in
Horry County, South Carolina (substantially identical to Exhibit 10.48)............ --
10.50 Deed of Trust and Fixture Filing and Assignment of Leases and Rents dated as of
May 15, 1993 granted by Great Plains Hospital, Inc. to Jacob W. Bayer, Jr. as
Trustee for the benefit of Societe Generale, individually and as agent for the
lenders which are parties to that certain Credit Agreement described in Exhibit
10.15 above, with respect to certain real property located in Vernon County,
Missouri (substantially identical to Exhibit 10.48)................................ --
10.51 Mortgage, Security and Assignment of Leases and Rents dated as of May 15, 1993 by
Greenbrier Hospital, Inc. to Societe Generale individually as agent for the
lenders which are parties to that certain Credit Agreement described in Exhibit
10.15 above, with respect to certain real property located in St. Tammany Parish,
Louisiana (substantially identical to Exhibit 10.48) .............................. --
10.52 Mortgage and Fixture Filing and Assignment of Leases and Rents dated as of May 15,
1993 granted by Gulf Coast Treatment Center, Inc. to Societe Generale,
individually and as an agent for the lenders which are parties to that certain
Credit Agreement described in Exhibit 10.15 above, with respect to certain real
property located in Okaloosa County, Florida (substantially identical to Exhibit
10.48) ........................................................................... --
</TABLE>
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10.53 Mortgage, Security Agreement and Assignment of Leases and Rents dated as of May
15, 1993 granted by Houma Psychiatric Hospital, Inc. to Societe Generale,
individually and as an agent for the lenders which are parties to that Certain
Credit Agreement described in Exhibit 10.15 above, with respect to certain real
property located in the City of Houma, Parish of Terrebonne, Louisiana
(substantially identical to Exhibit 10.48) ....................................... --
10.54 Mortgage with Power of Sale and Fixture Filing and Assignment of Leases and Rents
dated as of May 15, 1993 granted by HSA of Oklahoma, Inc. to Societe Generale,
individually and as agent for the lenders which are parties to that certain Credit
Agreement described in Exhibit 10.15 above, with respect to certain real property
located in Garfield County, Oklahoma (substantially identical to Exhibit 10.48) ... --
10.55 Deed of Trust and Fixture Filing and Assignment of Leases and Rents dated as of
May 15, 1993 granted by the Haven Hospital, Inc. to Societe Generate, individually
and as agent for the lenders which are parties to that certain Credit Agreement
described in Exhibit 10.15 above, with respect to certain real property located in
the City of DeSoto, Dallas County, Texas (substantially identical to Exhibit
10.48) ............................................................................ --
10.56 Loan Agreement between Okaloosa County, Florida and Gulf Coast Treatment Center,
Inc. dated October 1, 1984, relating to the issuance of bonds for Gulf Coast
Treatment Center, Inc. (incorporated by reference to Exhibit 10.16 to the
Company's Registration Statement on Form S-1, Registration No. 2-98921) ........... --
10.57 Loan Agreement between Louisiana Public Facilities Authority and Greenbrier
Hospital, Inc. dated November 1, 1984, relating to the issuance of bonds for
Greenbrier Hospital, Inc. (incorporated by reference to Exhibit 10.17 to the
Company's Registration Statement on Form S-1, Registration No. 2-98921) ........... --
10.58 Loan Agreement between Horry County, South Carolina and Carolina Treatment Center,
Inc. dated December 1, 1984, relating to the issuance of bonds for Carolina
Treatment Center, Inc. (incorporated by reference to Exhibit 10.18 to the
Company's Registration Statement on Form S-1, Registration No. 2-98921) ........... --
10.59 Loan Agreement between Louisiana Public Facilities Authority and Houma Psychiatric
Hospital, Inc. dated September 1, 1985, relating to the issuance of bonds for
Houma Psychiatric Hospital, Inc. (incorporated by reference to Exhibit 10.56 to
the Company's Annual Report on Form 10-K for the year ended June 30, 1994) ........ --
10.60 Ground Lease between Facilities Management Corporation, as landlord, and
Psychiatric Institute of West Virginia, Inc., as tenant, dated as of September 30,
1985 (incorporated by reference to Exhibit 10.57 to the Company's Annual Report on
Form 10-K for the year ended June 30, 1994)........................................ --
10.61 Lease Agreement between Houma Psychiatric Hospital, Inc. and Hospital Service
District No. 1 of the Parish of Terrebonne, State of Louisiana, effective February
1, 1985 (incorporated by reference to Exhibit 10.38 to the Company's Registration
Statement on Form S-1, Registration No. 2-98921) .................................. --
</TABLE>
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10.62 Lease among Bethany Psychiatric Hospital, Inc., Bethany General Hospital, the City
of Bethany, Oklahoma and the Bethany General Hospital Trust dated December 9, 1985
(ground lease) (incorporated by reference to Exhibit 10.58 to the Company's Annual
Report on Form 10-K for the year ended June 30, 1996) ............................. --
10.63 Loan Agreement between The Enid Development Authority and HSA of Oklahoma, Inc.
dated as of October 1, 1985, relating to The Enid Development Authority Variable
Rate Demand Revenue Bonds (Meadowlake Hospital Project) (incorporated by reference
to Exhibit 10.60 to the Company's Annual Report on Form 10-K for the year ended
June 30, 1994) .................................................................... --
10.64 Ramsay Health Care, Inc. 1990 Stock Option Plan, as amended to date (incorporated
by reference Exhibit 4.3 to the Company's Registration Statement on Form S-8 filed
on March 6, 1991) ................................................................. --
10.65 Lease Agreement dated August 30, 1988 between the Company and Ayshire Land Dome
Joint Venture relating to office space at One Poydras Plaza, New Orleans,
Louisiana (incorporated by reference to Exhibit 10.78 to the Company's
Registration Statement on Form S-2, Registration No. 33-40762) .................... --
10.66 Ramsay Health Care, Inc. Deferred Compensation and Retirement Plan (incorporated
by reference to Exhibit 10.79 to the Company's Registration Statement on Form S-2,
Registration No. 33-40762) ...................................................... --
10.67 Personnel and Facility Sharing Agreement dated as of June 27, 1991 between the
Company and Ramsay Holdings HSA Limited (incorporated by reference to Exhibit
10.83 to the Company's Registration Statement on Form S-2, Registration No.
33-40762) ......................................................................... --
10.68 Indemnity Agreement dated as of June 1991 between the Company and Ramsay Holdings
HSA Limited (incorporated by reference to Exhibit 10.84 to the Company's
Registration Statement on Form S-2, Registration No. 33-40762) .................... --
10.69 Management Agreement dated as of June 25, 1992 between the Company and Ramsay
Health Care Pty. Limited (incorporated by reference to Exhibit 10.90 to the
Company's Annual Report on Form 10-K for the year ended June 30, 1992) ............ --
10.70 Ramsay Health Care, Inc. 1991 Stock Option Plan (incorporated by reference to
Exhibit 10.91 to the Company's Annual Report on Form 10-K for the year ended June
30, 1992) ......................................................................... --
10.71 Employment Agreement dated January 23, 1992 between the Company and Wallace E.
Smith (incorporated by reference to Exhibit 10.94 to the Company's Annual Report
on Form 10-K for the year ended June 30, 1992) ................................... --
10.72 Employment Agreement dated January 23, 1992 between the Company and John A. Quinn
(incorporated by reference to Exhibit 10.95 to the Company's Annual Report on Form
10-K for the year ended June 30, 1992) ............................................ --
10.73 Lease dated April 4, 1992 between the Union Labor Life Insurance Company and the
Company (incorporated by reference to Exhibit 10.98 to the Company's Annual Report
on Form 10-K for the year ended June 30, 1992) .................................... --
</TABLE>
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10.74 Lease dated May 27, 1992 between Gail Buy and Bountiful Psychiatric Hospital
(incorporated by reference to Exhibit 10.99 to the Company's Annual Report on Form
10-K for the year ended June 30, 1992) ............................................ --
10.75 Lease Agreement dated as of February 12, 1993 by and between Gulf Coast Treatment
Center, Inc. and Vendell of Florida, Inc. (incorporated by reference to Exhibit
10.82 to the Company's Annual Report on Form 10-K for the year ended June 30,
1994) ............................................................................. --
10.76 Ramsay Health Care, Inc. 1993 Stock Option Plan (incorporated by reference to
Exhibit 10.83 to the Company's Quarterly Report on Form 10-Q for the quarter ended
December 31, 1993) ............................................................... --
10.77 Ramsay Health Care, Inc. 1993 Employee Stock Purchase Plan (incorporated by
reference to Exhibit 10.84 to the Company's Quarterly Report on Form 10-Q for the
quarter ended December 31, 1993) .................................................. --
10.78 Fourth Modification, Extension and Amendment of Lease Agreement dated November 15,
1993 between the Company and One Poydras Plaza Venture relating to the Company's
office space at One Poydras Plaza, New Orleans, Louisiana (incorporated by
reference to Exhibit 10.84 to the Company's Annual Report on Form 10-K for the
year ended June 30, 1994) ........................................................ --
10.79 Employment Agreement dated July 19, 1994 between the Company and Brent J. Bryson
(incorporated by reference to Exhibit 10.85 to the Company's Annual Report on Form
10-K for the year ended June 30, 1995) ............................................ --
10.80 Rights Agreement dated as of August 1, 1995 between the Company and First Union
National Bank of North Carolina, as Rights Agent, which includes the form of Right
Certificate as Exhibit A and the Summary Rights to Purchase Common Shares as
Exhibit B (incorporated by reference to Exhibit 4.1 to the Company's Current
Report on Form 8-K dated August 1, 1995) .......................................... --
10.81 Amendment to Rights Agreement, dated October 3, 1995 between the Company and First
Union National Bank of North Carolina, as Rights Agent (incorporated by reference
to Exhibit 10.102 to the Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1995).......................................................... --
10.82 Amendment No. 2 to Rights Agreement, dated as of November 1, 1996 between the
Company and First Union National Bank of North Carolina, as Rights Agent
(incorporated by reference to Exhibit 10.101 to the Company's Quarterly Report on
Form 10-Q for the quarter ended September 30, 1996)................................ --
10.83 Letter Agreement dated June 30, 1995 among the Company, Ramsay Holdings HSA
Limited and Paul Ramsay Holdings Pty. Limited (incorporated by reference to
Exhibit 4.2 to the Company's Current Report on Form 8-K dated August 1, 1995 ...... --
10.84 Lease Agreement dated April 12, 1995 between Capstone Capital Corporation and Mesa
Psychiatric Hospital, Inc. (incorporated by reference to Exhibit 10.88 to the
Company's Annual Report on Form 10-K for the year ended June 30, 1995) ............ --
10.85 Lease Agreement dated April 12, 1995 between Capstone Capital of San Antonio,
LTD, d/b/a Cahaba of San Antonio, LTD. and RHCI San Antonio, Inc. (incorporated by
reference to Exhibit 10.89 to the Company's Annual Report on Form 10-K for the
year ended June 30, 1995) ......................................................... --
</TABLE>
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10.86 Facility Lease Agreement dated June 26, 1995 by and between Charter Canyon
Behavioral Health Systems, Inc. and Bountiful Psychiatric Hospital, Inc.
(incorporated by reference to Exhibit 10.90 to the Company's Annual Report on Form
10-K for the year ended June 30, 1995 ............................................. --
10.87 Employment termination letter dated September 15, 1995 between the Company and
Gregory H. Browne (incorporated by reference to Exhibit 10.91 to the Company's
Annual Report on Form 10-K for the year ended June 30, 1995) ...................... --
10.88 Second Amended and Restated Distribution Agreement between the Company and Ramsay
Managed Care, Inc. ("RMCI") (incorporated by reference to Exhibit 10.1 to RMCI's
Registration Statement on Form S-1 (Registration No. 33-78034) filed with the
Commission on April 24, 1995) ..................................................... --
10.89 Employee Benefit Agreement dated as of February 1, 1995 between the Company and
RMCI (incorporated by reference to Exhibit 10.4 to RMCI's Registration Statement
on Form S-1 (Registration No. 33-78034) filed with the Commission on April 24,
1995) ............................................................................. --
10.90 Tax Sharing Agreement dated as of October 25, 1994 between the Company
and RMCI (incorporated by reference to Exhibit 10.5 to RMCI's
Registration Statement on Form S-1 (Registration No. 33-78034) filed
with the Commission on April 24, 1995) ............................................ --
10.91 Corporate Services Agreement dated as of January 2, 1995 between the Company and
RMCI (incorporated by reference to Exhibit 10.6 to RMCI's Registration Statement
on Form S-1 (Registration No. 33-78034) filed with the Commission on April 24,
1995) ............................................................................ --
10.92 Form of Withholding Tax Agreement between the Company, Ramsay
Holdings HSA Limited, Paul Ramsay Holdings Pty. Limited and Ramsay
Health Care Pty. Limited (incorporated by reference to Exhibit 10.7
to RMCI's Registration Statement on Form S-1 (Registration
No. 33-78034) filed with the Commission on April 24, 1995 ........................ --
10.93 $6,000,000 Subordinated Promissory Note of RMCI, as amended (incorporated by
reference to Exhibit 10.13 to RMCI's Registration Statement on Form S-1
(Registration No.33-78034) filed with the Commission on April 24, 1995) .......... --
10.94 Consent and Amendment dated April 12, 1996 among the Company and certain of its
subsidiaries named therein, Societe Generale, New York Branch, First Union
National Bank of North Carolina and Hibernia National Bank, as lenders, and
Societe Generale, as issuing bank and agent (incorporated by reference to Exhibit
10.88 to the Company's Annual Report on Form 10-K for the year ended June 30,
1996 )............................................................................ --
10.95 Amended and Restated Stock Purchase Agreement dated October 12, 1995 by and among
Paul Ramsay Holdings Pty. Limited, Ramsay Health Care, Inc. and, solely for the
purpose of Section I, III and VI of the agreement, Ramsay Health Care Pty.
Limited (incorporated by reference to Exhibit 10.101 to the Company's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1995 ..................... --
</TABLE>
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10.96 Amendment to Rights Agreement, date October 3, 1995 between Ramsay Health Care,
Inc. and First Union National Bank of North Carolina, as Rights Agent
incorporated by reference to Exhibit 10.102 to the Company's Quarterly Report on
Form 10-Q for the quarter ended September 30, 1995) ............................ --
10.97 Ramsay Health Care, Inc. 1995 Long Term Incentive Plan (incorporated by reference
to Exhibit 10.103 to the Company's Quarterly Report on Form 10-Q for the quarter
ended December 31, 1995) ......................................................... --
10.98 Stock Purchase Agreement dated as of August 13, 1996 by and among Paul Ramsay
Holdings Pty. Limited, the Company and, solely for purposes of Sections I, III
and IV thereof, Ramsay Health Care Pty. Limited (incorporated by reference to
Exhibit 10.94 to the Company's Annual Report on Form 10-K for the year ended June
30, 1996 ......................................................................... --
10.99 Amended and Restated Employment Agreement dated as of August 15, 1996 by
and between Reynold Jennings and the Company (incorporated by reference to
Exhibit 10.95 to the Company's Annual Report on Form 10-K for the year ended
June 30, (1996)................................................................... --
10.100 Exchange Agreement dated September 10, 1996, by and among the Company, Paul
Ramsay Hospitals Pty. Limited and Paul J. Ramsay, including a relates Warrant
Certificate dated September 10, 1996 issued to Ramsay Hospitals Pty. Limited
(incorporated by reference to Exhibit 10.96 to the Company's Annual Report on
Form 10-K for the year ended June 30, 1996)....................................... --
10.101 Consulting Agreement dated as of January 1, 1996 between the Company and Summa
Healthcare Group, Inc. (incorporated by reference to Exhibit 10.97 to the
Company's Annual Report on Form 10-K for the year ended June 30, 1996)............ --
10.102 Consulting Agreement dated as of February 1, 1997 between the Company and Summa
Healthcare Group, Inc............................................................. --
10.103 Letter Agreement dated as of September 10, 1996 by and among the Company, Ramsay
Health Care Pty. Limited Paul Ramsay Holdings Pty. Limited, including a related
Warrant Certificate dated September 10, 1996 issued to Paul Ramsay Holdings Pty.
Limited (incorporated by reference to Exhibit 10.98 to the Company's Annual
Report on Form 10-K for the year ended June 30, 1996) ............................ --
10.104 Employment Agreement dated August 12, 1996 by and between the Company and
Remberto Cibran (incorporated by reference to Exhibit 10.99 to the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30, 1996............ --
10.105 Services Agreement dated August 12, 1996 by and between the Company
and HealthLink Enterprises, Inc. (incorporated by reference to
Exhibit 10.100 to the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1996.................................................. --
10.106 Credit Agreement, including all Annexes thereto, dated September 30, 1997 among
the Company, The Lenders from Time to Time Party Thereto, General Electric
Capital Corporation, as Administrative Agent, and GECC Capital Markets Group, as
Syndication Agent................................................................. --
</TABLE>
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10.107 Subordinated Note Purchase Agreement dated as of September 30, 1997 among the
Company, as Issuer, and General Electric Capital Corporation and Paul Ramsay
Holdings Pty. Limited, as Purchasers.............................................. --
10.108 Registration Rights Agreement dated as of September 30, 1997 between the Company
and General Electric Capital Corporation.......................................... --
10.109 Release of Collateral, Termination and Cash Collateral Agreement dated as of
September 30, 1997 among the Company and certain subsidiaries named therein,
Societe Generale, New York Branch, First Union National Bank of North Carolina
and Hibernia National Bank, as lenders, and Societe Generale, as issuing bank and
agent............................................................................. --
10.110 Employment Agreement dated as of October 1, 1997 by and between the Company and
Luis E. Lamela (incorporated by reference to Exhibit 10.110 to the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30, 1997)........... --
10.111 Schedules to Credit Agreement described in Exhibit 10.106 above (incorporated by
reference to Exhibit 10.111 to the Company's Quarterly Report on Form 10-Q for
the quarter ended September 30, 1997)............................................. --
10.112 Schedules to Subordinated Note Purchase Agreement described in Exhibit 10.107
above (incorporated by reference to Exhibit 10.112 to the Company's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1997) .................... --
10.113 First Amendment to Credit Agreement dated as of March 27, 1998 by and among the
Company, certain subsidiaries of the Company on the signature pages thereto,
General Electric Capital Corporation, as Administrative Agent and Lender, and The
ING Capital Senior Secured High Income Fund, L.P., as Lender (incorporated by
reference to Exhibit 10.113 to the Company's Quarterly Report on Form 10-Q for
the quarter ended March 31, 1998) ................................................ --
10.114 First Amendment to Subordinated Note Purchase Agreement dated as of March 27,
1998 by and among the Company, General Electric Capital Corporation and Paul
Ramsay Holdings Pty. Limited (incorporated by reference to Exhibit 10.114 to the
Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1998)..... --
10.115 Junior Subordinated Note Purchase Agreement dated as of March 25, 1998 by and
between the Company and Paul Ramsay Holdings Pty. Limited (incorporated by
reference to Exhibit 10.115 to the Company's Quarterly Report on Form 10-Q for
the quarter ended March 31, 1998) ................................................ --
10.116 Lease Agreement dated as of September 28, 1998 between Capstone Capital
Corporation and Havenwyck Hospital, Inc. (incorporated by reference to
Exhibit 10.116 to the Company's Current Report on Form 8-K dated
October 9, 1998).................................................................. --
10.117 Guaranty of Obligations Pursuant to Lease Agreement described in Exhibit 10.116
above dated as of September 28, 1998 by the Company in favor of Capstone
Capital Corporation (incorporated by reference to Exhibit 10.117 to the Company's
Current Report on Form 8-K dated October 9, 1998)................................. --
*10.118 Second Amendment to Credit Agreement dated as of May 20, 1998 by and among the
Company, certain subsidiaries of the Company on the signature pages thereto,
General Electric Capital Corporation, as Administrative Agent and Lender, and
The ING Capital Senior Secured High Income Fund, L.P., as Lender..................
</TABLE>
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10.119 Second Amendment to Subordinated Note Purchase Agreement dated as of May
20, 1998 by and among the Company, General Electric Capital Corporation
and Paul Ramsay Holdings Pty. Limited............................................
10.120 Third Amendment to Credit Agreement dated as of June 29, 1998 by and among
the Company, certain subsidiaries of the Company on the signature pages thereto,
General Electric Capital Corporation, as Administrative Agent and Lender, and
The ING Capital Senior Secured High Income Fund, L.P., as Lender.................
10.121 Third Amendment to Subordinated Note Purchase Agreement dated as of June 29,
1998 by and among the Company, General Electric Capital Corporation and Paul
Ramsay Holdings Pty. Limited.....................................................
10.122 Fourth Amendment to Credit Agreement dated as of July 29, 1998 by and among
the Company, certain subsidiaries of the Company on the signature pages thereto,
General Electric Capital Corporation, as Administrative Agent and Lender, and
The ING Capital Senior Secured High Income Fund, L.P., as Lender.................
10.123 Fourth Amendment to Subordinated Note Purchase Agreement dated as of July 29,
1998 by and among the Company, General Electric Capital Corporation and Paul
Ramsay Holdings Pty. Limited.....................................................
10.124 Amended and Restated Credit Agreement dated as of
September 30, 1998 by and among the Company, the Lenders
from time to time party thereto and General Electric
Capital Corporation, as Administrative Agent.....................................
10.125 Amended and Restated Subordinated Note Purchase Agreement
dated as of September 30, 1998 by and between the Company
and Paul Ramsay Holding Pty. Limited.............................................
11 Computation of Net Income (Loss) Per Share.......................................
*21 Subsidiaries of the Company......................................................
*23 Consent of Ernst & Young LLP.....................................................
*27 Financial Data Schedule..........................................................
* Previously filed with the Commission.
</TABLE>
Copies of exhibits filed with this Annual Report on Form 10-K or incorporated
herein by reference do not accompany copies hereof for distribution to
stockholders of the Company. The Company will furnish a copy of such exhibits to
any stockholder requesting it.
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EXHIBIT 11
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES
COMPUTATION OF NET INCOME (LOSS) PER SHARE
<TABLE>
<CAPTION>
Year Ended June 30
-------------------------------------------------
1998 1997 1996
------------ ------------ ------------
<S> <C> <C> <C>
Numerator:
Net income (loss) before extraordinary
item, as reported $(54,261,000) $ 3,278,000 $(16,481,000)
Dividends, Class B convertible preferred
stock, Series C 362,000 362,000 362,000
Dividends, Class B convertible preferred
stock, Series 1996 150,000 -- --
Dividends, Class B convertible preferred
stock, Series 1997 182,000 -- --
Dividends, Class B convertible preferred
stock, Series 1997-A 271,000 -- --
------------ ------------ ------------
Numerator for basic earnings (loss) per share - income
(loss) attributable to common Stockholders, before
extraordinary item (55,226,000) 2,916,000 (16,843,000)
Effect of dilutive securities:
Class B convertible preferred stock,
Series C -- 362,000 --
------------ ------------ ------------
-- 362,000 --
------------ ------------ ------------
Numerator for diluted earnings (loss) per share - income
(loss) attributable to common stockholders after
assumed conversions $(55,226,000) $ 3,278,000 $(16,843,000)
============ ============ ============
Denominator:
Denominator for basic earnings (loss) per
share - weighted-average shares 10,784,495 8,403,570 7,927,644
Effect of dilutive securities:
Employee stock options and warrants -- 344,364 --
Convertible preferred stock -- 1,479,655 --
------------ ------------ ------------
Dilutive potential common shares -- 1,824,019 --
------------ ------------ ------------
Denominator for diluted earnings (loss)
per share - adjusted weighted-
average shares and assumed
conversions 10,784,495 10,227,588 7,927,644
============ ============ ============
Basic earnings (loss) per share, before
extraordinary item $ (5.12) $ 0.35 $ (2.12)
Extraordinary item (0.40) -- --
------------ ------------ ------------
Basic earnings (loss) per share $ (5.52) $ 0.35 $ (2.12)
============ ============ ============
Diluted earnings (loss) per share, before
extraordinary item $ (5.12) $ 0.32 $ (2.12)
Extraordinary item (0.40) -- --
------------ ------------ ------------
Diluted earnings (loss) per share $ (5.52) $ 0.32 $ (2.12)
============ ============ ============
</TABLE>
Options and warrants were not included in the computation for fiscal 1998 and
1996 because their effect would have been antidilutive for these periods.
<PAGE> 1
EXHIBIT 10.119
SECOND AMENDMENT TO
SUBORDINATED NOTE PURCHASE AGREEMENT
THIS SECOND AMENDMENT TO SUBORDINATED NOTE PURCHASE AGREEMENT
("AMENDMENT") is entered into as of May 20, 1998 by and among RAMSAY HEALTH
CARE, INC., a Delaware corporation (the "COMPANY"), GENERAL ELECTRIC CAPITAL
CORPORATION, a New York corporation ("GE CAPITAL"), and PAUL RAMSAY HOLDINGS
PTY. LIMITED ACN 008 446 151, an Australian corporation ("RAMSAY HOLDINGS;" GE
Capital and Ramsay Holdings are hereinafter each individually referred to as a
"PURCHASER", and collectively, as "PURCHASERS"), for the benefit of the parties
and each of the Holders.
RECITALS
A. The Company and Purchasers are parties to a certain Subordinated
Note Purchase Agreement dated as of September 30, 1997, as amended by the First
Amendment to Subordinated Note Purchase Agreement dated as of March 27, 1998 (as
so amended, the "PURCHASE AGREEMENT;" capitalized terms used herein and not
defined herein have the meanings assigned to them in the Purchase Agreement).
B. Purchasers are all of the Holders of the Bridge Notes.
C. The Company has requested that the Holders waive certain Defaults
that have occurred for the period ending March 31, 1998 and consent to the sale
by Ramsay Managed Care, Inc. of FPM Behavioral Health, Inc. and the sale of
substantially all of the assets of Greenbrier Hospital, Inc., and the Holders
have agreed to waive such Defaults and to consent to such sales, subject to the
terms and conditions hereof.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, and intending to be legally bound, the parties
hereto agree as follows:
A. WAIVER
Each Holder hereby waives all Defaults that arose under Section 7.10 of
the Purchase Agreement as of March 31, 1998.
B. AMENDMENTS
1. AMENDMENT TO ARTICLE 6 The Purchase Agreement is hereby amended by
adding to the end of Article 6 thereof the following new Section 6.14:
SECTION 6.14 COLLATERAL FOR SERIES A BRIDGE NOTES.
(a) No later than May 27, 1998, the Company agrees to execute
and deliver, and to cause all other Credit Parties to execute
and deliver, to GE Capital a Subsidiary Guaranty (in the case
of the other Credit Parties), a Security
<PAGE> 2
Agreement, Financing Statements (Form UCC-1) in proper form
for filing under the Uniform Commercial Code, or chattel
mortgages in proper form for filing under other applicable
law, of all jurisdictions as may be necessary or, in the
opinion of GE Capital, desirable to perfect the Liens created
by the Security Agreement, powers of attorney, a Stock Pledge
Agreement, and a bailee letter (with the acknowledgment of the
Senior Agent) regarding perfection of the Liens created by the
Stock Pledge Agreement, and all other instruments and
documents reasonably requested by GE Capital in connection
therewith and all evidence that all action necessary or, in
the judgment of GE Capital, desirable to perfect and protect
the Liens created by the foregoing Bridge Note Collateral
Documents has been taken. The Company shall also deliver to GE
Capital certificates of the Secretary or Assistant Secretary
of the Company and each other Credit Party certifying true and
correct copies of the articles or certificate of incorporation
and bylaws of the Company or such Credit Party, resolutions of
the Company or such Credit Party approving the transactions
described above and incumbency of the officers of the Company
or such Credit Party executing the documents described above
(b) No later than June 3, 1998, the Company agrees to
execute and deliver, and to cause all other Credit Parties to
execute and deliver, to GE Capital Mortgages and fixture
financing statements in respect to the Mortgaged Property,
together with all other instruments and documents reasonably
requested by GE Capital in connection therewith and all
evidence that all action necessary or, in the judgment of GE
Capital, desirable to perfect and protect the Liens created by
the foregoing Mortgages has been taken. The Company shall also
deliver to GE Capital certificates of the Secretary or
Assistant Secretary of the Company and each other Credit Party
certifying true and correct copies of the articles or
certificate of incorporation and bylaws of the Company or such
Credit Party, resolutions of the Company or such Credit Party
approving the transactions described above and incumbency of
the officers of the Company or such Credit Party executing the
documents described above. The Company shall also deliver to
GE Capital opinions of Haythe & Curley and special local
counsel to GE Capital in each jurisdiction in which the
foregoing Mortgaged Property is located, in each case in form
and substance satisfactory to GE Capital, addressing the
transactions contemplated in paragraph (a) above, this
paragraph (b), paragraph (f) below and the Second Amendment to
Credit Agreement.
(c) To the extent that the Company or any Credit
Party is required to execute and deliver to GE Capital a
mortgage, leasehold mortgage or other appropriate instrument
with respect to any Real Property pursuant to Section 5.14(a)
of the Senior Credit Agreement (a "SENIOR MORTGAGE"), the
Company or such Credit Party shall execute and deliver a
mortgage, leasehold mortgage
2
<PAGE> 3
or other appropriate instrument substantially identical to the
Senior Mortgage (but in favor of GE Capital and securing the
Series A Bridge Note Obligations) and shall provide all
relevant documentation with respect thereto and take such
other actions in favor of GE Capital as the Company or such
Credit Party is required to provide or take in favor of the
Senior Agent or the Senior Lenders pursuant to Section 5.14(a)
of the Senior Credit Agreement. The Company agrees that,
following the taking of the actions with respect to any Real
Property required by this paragraph (b), GE Capital shall have
a valid and enforceable second priority Lien on such Real
Property, free and clear of all defects and encumbrances
except for Permitted Encumbrances of the types described in
paragraphs (a) and (i) of the definition thereof and others
acceptable to GE Capital in its reasonable discretion. All
actions to be taken pursuant to this SECTION 6.14(c) shall be
at the expense of the Company or the applicable Credit Party,
shall be taken to the reasonable satisfaction of GE Capital,
and shall be taken within the same number of days given for
delivery of similar documentation and taking of action under
Section 5.14(a) of the Credit Agreement.
(d) To the extent that any other Person is required
to become a "Credit Party" under the Senior Credit Agreement,
the Company shall cause such Person (i) to become a party to
the Subsidiary Guaranty, the Security Agreement and the Stock
Pledge Agreement, (ii) to provide all relevant documentation
with respect thereto and take such other actions in favor of
GE Capital as the Company or such Credit Party is required to
provide or take in favor of the Senior Agent or the Senior
Lenders pursuant to Section 5.14(b) of the Senior Credit
Agreement; and (iii) if such Credit Party owns or leases any
Real Property having a book or fair market value in excess of
$1,500,000, to comply with paragraph (a) hereof with respect
to such Real Property. The Company agrees that, following the
taking of the actions required by this paragraph (c), GE
Capital shall have a valid and enforceable second priority
Lien on the respective Collateral covered thereby, free and
clear of all Liens other than Permitted Liens. All actions to
be taken pursuant to this SECTION 6.14(d) shall be at the
expense of Company or the applicable Credit Party, shall be
taken to the reasonable satisfaction of GE Capital, and shall
be taken within the same number of days given for delivery of
similar documentation and taking of action under Section
5.14(b) of the Credit Agreement.
(e) Upon the request of GE Capital, the Company
agrees to deliver (1) ALTA lender's title insurance policies
from a title insurer, in a form and in an amount reasonably
satisfactory to GE Capital, showing the Mortgages referred to
in paragraphs (b) and (c) above as the "insured mortgage" and
insuring the validity and priority of such Mortgages as second
priority Liens upon the Mortgaged Property, subject only to
the mortgages in
3
<PAGE> 4
favor of the Senior Agent and those title exceptions which are
permitted under this Agreement or such Mortgages and (2)
certified copies of Requests for Information (Form UCC-11), or
other evidence satisfactory to GE Capital, as of a recent
date, listing all effective financing statements or chattel
mortgages which name each Credit Party (under its present
name, any previous name or any trade or doing business name)
as debtor and which are filed in the jurisdictions referred to
in paragraph (a) and (d) above, together with copies of such
financing statements.
(f) The Company agrees to enter into a modification
of this Agreement no later than June 3, 1998 to make
conforming changes related to the foregoing transaction,
including, without limitation, any representations, covenants,
Defaults, rights and remedies relating to the Collateral that
GE Capital requests.
(g) So long as GE Capital is not the sole Senior
Lender under the Senior Credit Agreement, the Company shall
not be required to comply with the foregoing provisions unless
and until the Senior Lenders and GE Capital have executed and
delivered an intercreditor agreement in form and substance
reasonably acceptable to the Senior Lenders and GE Capital,
subordinating the Liens granted under the Bridge Note
Documents to the Liens securing the Senior Obligations.
2. AMENDMENT TO SECTION 7.01. The Purchase Agreement is hereby further
amended by replacing Section 7.01 with the following:
SECTION 7.01. ACQUISITIONS. The Company will not, and will not
permit any of its Subsidiaries to, make any Acquisition.
3. AMENDMENTS TO SECTION 7.04, 7.11 AND 7.12. The Purchase Agreement is
hereby further amended by replacing all references to "Rolling Four-Quarter
Period" in Section 7.04, Section 7.11 and Section 7.12 with references to
"Rolling Twelve-Month Period" and by replacing all references to "Fiscal
Quarter" in Section 7.04, Section 7.11 and Section 7.12 with references to
"Fiscal Month".
4. AMENDMENT TO SECTION 7.05. The Purchase Agreement is hereby further
amended by adding the following sentence to the end of Section 7.05:
Notwithstanding the foregoing or any other provision of this
Agreement, the Company shall not (nor permit any of its
Subsidiaries to) pay bonuses to the persons described on
Schedule A to the Second Amendment to Credit Agreement, dated
as of even date herewith, by and among the Company, the
4
<PAGE> 5
Senior Lenders and the Senior Agent, until all Senior
Obligations and the Bridge Note Obligations have been paid in
full.
5. AMENDMENT TO SECTION 7.06. The Purchase Agreement is hereby further
amended by deleting Section 7.06(e) in its entirety and substituting the
following in lieu thereof:
(e) Liens securing the Series A Bridge Note Obligations, and
all interest, fees and obligations owed to GE Capital arising
under the Bridge Note Purchase Agreement, and extensions and
renewals thereof; and (f) extensions and renewals of Liens
referred to in paragraphs (b), and (d) above, provided that
any such extension or renewal Lien is limited to the property
or assets covered by the Lien extended or renewed and does not
secure Indebtedness in an amount greater than the amount of
the outstanding Indebtedness secured thereby immediately prior
to such extension, renewal or replacement.
6. AMENDMENTS TO SECTION 8.01. The Purchase Agreement is hereby further
amended by (a) deleting Section 8.01(b) in its entirety and substituting the
following in lieu thereof:
(b) The Company shall fail or neglect to perform, keep or
observe any of the provisions of SECTIONS 1.03, 6.06, 6.09, 6.10, 6.11
or 6.14, of ARTICLE 7, or of any of the provisions set forth in ANNEX C
or ANNEX C-2, as the case may be.
(b) deleting Section 8.01(k) in its entirety and substituting the following in
lieu thereof:
(k) Any material provision of any Bridge Note Document shall
for any reason cease to be valid, binding and enforceable in accordance
with its terms (or any Credit Party shall challenge the enforceability
of any Bridge Note Document or shall assert in writing, or engage in
any action or inaction based on any such assertion, that any provision
of any of the Bridge Note Collateral Documents has ceased to be or
otherwise is not valid, binding and enforceable in accordance with its
terms), or any security interest created under any Bridge Note Document
shall cease to be a valid and perfected second priority security
interest or Lien (except as otherwise permitted herein or therein) in
any material amount of the Collateral purported to be covered thereby.
and (c) adding the following as a new Section 8.01(m) and Section 8.01(n),
respectively:
(m) except as the result of any disposition specifically
permitted or consented to hereunder, the Company or any other Credit
Party shall fail at any time to be the record and beneficial owner of
100% of the issued and outstanding capital Stock of any of its
Subsidiaries (other than Gulf Coast Treatment Center) that are Credit
Parties as of May 20, 1998 or that become Credit Parties subsequent
thereto, or shall fail at any time to be the record and beneficial
owner of not less than 96% of
5
<PAGE> 6
the issued and outstanding capital Stock of Gulf Coast Treatment
Center, in each case free and clear of any Lien other than inchoate tax
Liens, and Liens in favor of the Senior Agent for the benefit of the
Senior Lenders and Liens in favor of GE Capital securing the Series A
Bridge Note Obligations.
(n) The Company or any of its Subsidiaries make cash payments
in an aggregate amount exceeding $500,000 for which the offsetting
entry on the Company's Financial Statements is a debit to a reserve
reflected in the 1997 Audited Financial Statements or in a reserve
reflected in unaudited Financial Statements of the Company for the
Fiscal Quarter ending March 31, 1998, rather than an expense or
reduction of revenues on the Company's income statement.
7. AMENDMENTS TO SECTION 10.02. The Purchase Agreement is hereby
further amended by (a) deleting the definitions of "Bridge Note Documents" and
"Bridge Note Obligations" and substituting the following in lieu thereof:
"BRIDGE NOTE DOCUMENTS" shall mean, collectively,
this Agreement, the GE Capital Fee Letter, the Bridge Notes,
the Bridge Note Collateral Documents and each other document,
instrument and certificate executed and delivered by the
Company or any other Credit Party as of the date hereof or at
any time thereafter, in connection with the transactions
contemplated by this Agreement, in each case, as amended,
modified or supplemented from time to time.
"BRIDGE NOTE OBLIGATIONS" shall mean all obligations
of the Company and the other Credit Parties (monetary or
otherwise) arising under or in connection with this Agreement,
the GE Capital Fee Letter, the Bridge Notes and the other
Bridge Note Documents (including without limitation all
principal, interest and Prepayment Premiums and, in the case
of the Series A Bridge Notes, the Contingent Payment Amount
payable under this Agreement).
and (b) adding the following as new definitions in Section 10.02, in proper
alphabetical order:
"BRIDGE NOTE COLLATERAL DOCUMENTS" shall mean the
Security Agreement, the Mortgages, the Subsidiary Guaranty,
the Stock Pledge Agreement, and all other instruments and
agreements now or hereafter securing the whole or any part of
the Series A Bridge Note Obligations.
"COLLATERAL" shall mean the property covered by the
Bridge Note Collateral Documents and any other property, real
or personal, tangible or intangible, now existing or hereafter
acquired, that may at any time be or become subject to a Lien
in favor of GE Capital to secure the Series A Bridge Note
Obligations.
6
<PAGE> 7
"CREDIT PARTIES" shall mean the Company, each of the
Company's direct or indirect, existing and future wholly-owned
Subsidiaries (other than Inactive Subsidiaries) and Gulf Coast
Treatment Center.
"FPM BEHAVIORAL HEALTH DIVESTITURE" shall mean the
sale by Ramsay Managed Care, Inc. of one hundred percent of
the issued and outstanding shares of FPM Behavioral Health,
Inc. to Horizon Health Corporation pursuant to the FPM
Behavioral Sale Agreement.
"FPM BEHAVIORAL HEALTH SALE AGREEMENT" shall mean the
Stock Purchase Agreement, dated as of May 1, 1998, by and
among Ramsay Managed Care, Inc., Ramsay Health Care, Inc. and
Horizon Health Corporation.
"GREENBRIER HOSPITAL DIVESTITURE" shall mean the sale
by Greenbrier Hospital, Inc. of substantially all of its
assets to Provider Options Holdings, L.L.C., pursuant to the
Greenbrier Hospital Sale Agreement.
"GREENBRIER HOSPITAL SALE AGREEMENT" shall mean the
Asset Purchase Agreement, dated as of May 15, 1998, between
Provider Options Holdings, L.L.C., Greenbrier Hospital, Inc.
and the Company.
"MORTGAGED PROPERTY" shall mean all Real Property
subject to the Mortgages and serving as security for the
Series A Bridge Note Obligations, consisting of hospitals
owned by Bountiful Psychiatric Hospital, Inc., Havenwyck
Hospital, Inc., East Carolina Psychiatric Services Corp., HC
Partnership and Great Plains Hospital, Inc., together with all
additional Real Property becoming subject to a Mortgage
pursuant to SECTION 6.14(c), all as more particularly
described in Exhibit A to the Mortgages.
"MORTGAGES" shall mean the mortgages, deeds of trust
or deeds to secure debt with respect to the Mortgaged
Property, substantially in the form of Exhibit E to the Senior
Credit Agreement, modified to secure the Series A Bridge Note
Obligations and with such changes thereto as shall be
necessary or appropriate for use in the States of Alabama,
Arizona, Florida, Louisiana, Missouri, Michigan, North
Carolina, Oklahoma, South Carolina, Texas, Utah and West
Virginia or any other state in which a Credit Party hereafter
acquires Real Property that becomes subject to a Mortgage
pursuant to SECTION 6.14(c), and with such other changes as
the Holders of the Series A Bridge Notes shall require, in
each case executed by the appropriate Credit Party in favor of
the Holders of the Series A Bridge Notes or a trustee for the
benefit of the Holders of the Series A Bridge Notes, including
all amendments, modifications and supplements thereto, and
shall refer to the
7
<PAGE> 8
Mortgages as the same may be in effect at the time such
reference becomes operative.
"SECURITY AGREEMENT" shall mean the security
agreement, substantially in the form of Exhibit F to the
Senior Credit Agreement, modified to secure the Series A
Bridge Note Obligations, with such other modifications as the
Holders of the Series A Bridge Notes shall require, executed
by the Credit Parties in favor of the Holders of the Series A
Bridge Notes, including all amendments, modifications and
supplements thereto, and shall refer to the Security Agreement
as the same may be in effect at the time such reference
becomes operative.
"SERIES A BRIDGE NOTE OBLIGATIONS" shall mean,
without duplication, the Series A Bridge Notes and all Bridge
Note Obligations owed to GE Capital and its successors and
assigns.
"STOCK PLEDGE AGREEMENT" shall mean the Stock Pledge
Agreement, substantially in the form of Exhibit G to the
Senior Credit Agreement, modified to secure the Series A
Bridge Note Obligations, with such other modifications as the
Holders of the Series A Bridge Notes shall require, executed
by the Credit Parties holding Stock in other Credit Parties in
favor of the Holders of the Series A Bridge Notes, including
all amendments, modifications and supplements thereto, and
shall refer to the Stock Pledge Agreement as the same may be
in effect at the time such reference becomes operative.
"SUBSIDIARY GUARANTY" shall mean the Guaranty,
substantially in the form of Exhibit H to the Senior Credit
Agreement, modified to secure the Series A Bridge Note
Obligations, with such other modifications as the Holders of
the Series A Bridge Notes shall require, executed by each of
the Credit Parties (other than the Company) in favor of the
Holders of the Series A Bridge Notes, including all
amendments, modifications and supplements thereto, and shall
refer to the Subsidiary Guaranty as the same may be in effect
at the time such reference become operative.
8. AMENDMENTS TO SECTION 12.03. The Purchase Agreement is hereby
further amended by deleting Section 12.03 thereof in its entirety and
substituting the following in lieu thereof:
SECTION 12.03 FEES AND EXPENSES; CERTAIN TAXES.
(a) The Company shall reimburse GE Capital for all
reasonable out-of-pocket expenses incurred in connection with
the preparation, negotiation, execution, delivery and
syndication of the Bridge Note
8
<PAGE> 9
Documents (including the reasonable fees and expenses of GE
Capital's special counsel, advisors, consultants and auditors
retained in connection with the Bridge Note Documents and
advice in connection therewith). The Company shall reimburse
GE Capital (and, with respect to clauses (iii), (iv) and (v)
below, all Holders) for all reasonable fees, costs and
expenses, including the reasonable fees, costs and expenses of
counsel or other advisors to the Holders (including
environmental and management consultants and appraisers) for
advice, assistance, or other representation in connection
with:
(i) wire transfer fees and other costs of the
forwarding to the Company or any other Person on behalf of the
Company by the Administrative Agent of the proceeds of the
Bridge Notes;
(ii) any amendment, modification or waiver of, or
consent with respect to, any of the Bridge Note Documents or
advice in connection with the administration of the
transactions contemplated by the Bridge Note Documents or the
rights of the Holders thereunder;
(iii) any litigation, contest, dispute, suit,
proceeding or action (whether instituted by any Holder, the
Company, any other Credit Party or any other Person) in any
way relating to the Collateral, any of the Bridge Note
Documents or any other agreement to be executed or delivered
in connection therewith or herewith, whether as party,
witness, or otherwise, including any litigation, contest,
dispute, suit, case, proceeding or action, and any appeal or
review thereof, in connection with a case commenced by or
against Company, any other Credit Party or any other Person
that may be obligated to the Holders by virtue of the Bridge
Note Documents, including any such litigation, contest,
dispute, suit, proceeding or action arising in connection with
any work-out or restructuring of the Bridge Notes during the
pendency of one or more Events of Default; PROVIDED, that
Company shall not be liable to reimburse any Holder for any
such fees, costs or expenses incurred by it in the defense of
any Claim as to which such Holder would not be entitled to
indemnification by virtue of the proviso to SECTION 12.17;
(iv) any attempt to enforce any remedies of any
Holder against any or all of the Credit Parties or any other
Person that may be obligated to the any Holder by virtue of
any of the Bridge Note Documents;
(v) any work-out or restructuring of the Bridge Note
Documents during the pendency of one or more Events of
Default; or
9
<PAGE> 10
(vi) any efforts to verify, protect, evaluate,
assess, appraise, collect, sell, liquidate or otherwise
dispose of any of the Collateral after the occurrence and
during the continuance of an Event of Default;
including all reasonable attorneys' and other professional and
service providers' fees arising from such services, including
those in connection with any appellate proceedings; and all
reasonable out-of-pocket expenses, costs, charges and other
fees incurred by such counsel and others in any way or respect
arising in connection with or relating to any of the events or
actions described in this SECTION 12.03 shall be payable, on
demand, by the Company to the respective Holders, as
applicable. Without limiting the generality of the foregoing,
such expenses, costs, charges and fees may include: reasonable
fees, costs and expenses of accountants, environmental
advisors, appraisers, investment bankers, management and other
consultants and paralegals; court costs and expenses;
photocopying and duplication expenses; court reporter fees,
costs and expenses; long distance telephone charges; air
express charges; telegram or telecopy charges; secretarial
overtime charges; and expenses for travel, lodging and food
paid or incurred in connection with the performance of such
legal or other advisory services.
(b) In addition, the Company agrees to pay any
present or future intangible personal property, stamp or
documentary taxes or any other excise or property taxes,
charges or similar levies that arise from the sale or delivery
of the Bridge Notes by the Company to Purchasers pursuant to
this Agreement, the issuance of Common Stock to Holders of
Series A Bridge Notes pursuant to Section 3.04 hereof, any
payment made hereunder or under the Bridge Notes or the
execution, delivery, recording or registration of, or
otherwise with respect to, this Agreement, any of the
Mortgages or any of the other Collateral Documents or Bridge
Note Documents or any other matter contemplated by this
Agreement, within ten (10) Business Days after demand by any
Holder therefor (including penalties, interest and expenses
arising therefrom or with respect thereto), whether or not
such taxes were correctly or legally asserted.
9. AMENDMENT TO ANNEX B. The Purchase Agreement is hereby further
amended by (a) deleting Section 1 and Section 2 of Annex B of the Purchase
Agreement and substituting the following in lieu thereof:
1. Within thirty-five (35) days after the close of
each Fiscal Month, (i) an unaudited consolidated and
consolidating income statement for the Company for such Fiscal
Month and that portion of the current Fiscal Year ending as of
the close of such Fiscal Month, together with comparisons to
the corresponding income statement for the prior year's
equivalent period,
10
<PAGE> 11
both on a monthly and year-to-date basis, and to budget, (ii)
the Company's consolidated balance sheet as at the end of such
Fiscal Month, and (iii) a Compliance Certificate of a
Responsible Financial Officer of the Company for such Fiscal
Month, substantially in the form of Exhibit A to this ANNEX B.
2. Within five (5) days after delivery to the SEC,
but in any event within fifty (50) days after the close of
each Fiscal Quarter, the Company's Form 10-Q for such Fiscal
Quarter,
(b) replacing all references in Exhibit A to Annex B to the "Rolling
Four-Quarter Period" with references to "Rolling Twelve-Month Period", (c)
replacing all references in Exhibit A to Annex B to "Fiscal Quarter" with
references to "Fiscal Month" and (d) replacing the reference to "[FOR QUARTERLY
CERTIFICATE:]" in Section 1 of Exhibit A to Annex B with a reference to "[FOR
MONTHLY CERTIFICATE:]".
10. AMENDMENTS TO ANNEX C. The Purchase Agreement is hereby further
amended by (a) replacing all references in Annex C to the "Rolling Four-Quarter
Period" with references to "Rolling Twelve-Month Period", (b) replacing the
reference to "Fiscal Quarter" in Section 1(e) with a reference to "Fiscal
Month", (c) deleting Section 1(f) in its entirety and substituting the following
in lieu thereof:
(f) The Company shall not make Capital Expenditures
in excess of $3,500,000 in the aggregate during its Fiscal
Year ending June 30, 1999 or any Fiscal Year thereafter.
(d) deleting Section 2(a) in its entirety and substituting the following in lieu
thereof:
(a) TRANSITIONAL RULES. Notwithstanding anything to
the contrary set forth herein, in calculating the Company's
compliance with the financial covenants set forth in
paragraphs 1(c) and (d) above for the Rolling Twelve-Month
Period ending April 30, 1998, May 31, 1998 and June 30, 1998,
the "Rolling Twelve-Month Period" ending April 30, 1998 shall
mean the ten Fiscal Months then ended; the "Rolling
Twelve-Month Period" ending May 31, 1998 shall mean the eleven
Fiscal Months then ended; and the "Rolling Twelve-Month
Period" ending June 30, 1998 shall mean the twelve Fiscal
Months then ended.
and (e) deleting the definitions of "Fixed Charges" and "Rolling Four-Quarter
Period" in Section 3 of Annex C and adding the following definitions of "Fixed
Charges" and "Rolling Twelve-Month Period" in proper alphabetical order:
11
<PAGE> 12
"FIXED CHARGES" shall mean, with respect to any
fiscal period of the Company, the sum of (i) Interest Expense
for such period, PLUS (ii) regularly scheduled payments of
principal paid on Funded Debt during such period.
"ROLLING TWELVE-MONTH PERIOD" shall mean, as of the
end of any Fiscal Month of the Company, the immediately
preceding twelve Fiscal Months (except as set forth in
paragraph 2(a) above), including the Fiscal Month then ending.
In addition, the Company agrees that at any time that the Senior Obligations
have been paid in full, Annex C and Annex C-2 to the Purchase Agreement shall be
deemed amended in their entirety by deleting such Annex C and Annex C-2 and
incorporating by reference all terms and conditions of Annex G and Annex G-2,
respectively, to the Senior Credit Agreement as Annex C and Annex C-2,
respectively to the Purchase Agreement, and all defined terms used therein.
11. NEW ANNEX C-2. The Purchase Agreement is hereby further amended by
adding ANNEX C-2 attached hereto as a new Annex C-2 to the Purchase Agreement.
C. CONSENTS
The Holders consent to the FPM Behavioral Health Divestiture and the
Greenbrier Hospital Divestiture and waive any Defaults that would arise
therefrom under Section 7.07 of the Purchase Agreement, PROVIDED that (i) the
FPM Behavioral Health Divestiture is consummated no later than June 15, 1998 in
accordance with the terms of the FPM Behavioral Health Sale Agreement (without
giving effect to any amendment, waiver or modification), (ii) the Greenbrier
Hospital Divestiture is consummated no later than June 15, 1998 in accordance
with the terms of the Greenbrier Hospital Sale Agreement (without giving effect
to any amendment, waiver or modification), (iii) Ramsay Managed Care shall
execute and deliver to the Holders, with the written consent of Horizon Health
Corporation and the Escrow Agent (as defined in the FPM Behavioral Health Sale
Agreement), a second-priority assignment (in form and substance satisfactory to
the Holders) of all of its rights in and to the Indemnity Escrow Deposit (as
defined in the FPM Behavioral Health Sale Agreement) and a second-priority
collateral assignment (in form and substance satisfactory to the Holders) of all
of its rights to purchase price adjustments and post-closing payments payable to
Ramsay Managed Care, Inc. or the Company under the FPM Behavioral Health Sale
Agreement, and (iv) Greenbrier Hospital, Inc. shall execute and deliver to the
Holders, with the written consent of Provider Options Holdings, L.L.C. and the
Escrow Agent (as defined in the Greenbrier Hospital Sale Agreement), a
second-priority assignment (in form and substance satisfactory to the Holders)
of all of the Company's rights in and to the Escrow Deposit (as defined in the
Greenbrier Hospital Sale Agreement) and a second-priority collateral assignment
(in form and substance satisfactory to the Holders) of all of the Company's
rights to purchase price adjustments and post-closing payments payable to
Greenbrier Hospital, Inc. or the Company under the Greenbrier Hospital Sale
Agreement.
12
<PAGE> 13
2. Ramsay Holdings consents to the amendments to Section 6.14 of the
Purchase Agreement effected by Section B hereof, and acknowledge that the Series
B Bridge Notes will not be entitled to the security and other benefits afforded
to the Holders of the Series A Bridge Notes by such Amendments.
D. CONDITIONS PRECEDENT
Notwithstanding any other provision of this Amendment and without
affecting in any manner the rights of GE Capital hereunder, it is understood and
agreed that this Amendment shall not become effective, and the Purchase
Agreement shall remain in full force and effect in its unamended form, the
Company shall have no rights under this Amendment and the Holders shall not be
obligated to take, fulfill or perform any action hereunder, until GE Capital
shall have received the following, each dated as of the date of this Amendment,
in form and substance reasonably satisfactory to and its counsel:
1. This Amendment, duly executed by all parties hereto;
2. Opinion of Haythe & Curley, special counsel to the
Credit Parties, in form and substance satisfactory to
GE Capital; and
3. An acknowledgment from each employee listed on
SCHEDULE A acknowledging and accepting the
restriction added to Section 7.05 of the Purchase
Agreement in this Amendment.
E. REPRESENTATIONS
The Company hereby represents and warrants to Purchasers that:
1. The execution, delivery and performance by the Company of this
Amendment (i) are within the Company's corporate power; (ii) have been duly
authorized by all necessary corporate and shareholder action; (iii) are not in
contravention of any provision of the Company's certificate of incorporation or
bylaws or other organizational documents; (iv) do not violate any law or
regulation, or any order or decree of any Governmental Authority; (v) do not
conflict with or result in the breach or termination of, constitute a default
under or accelerate any performance required by, any indenture, mortgage, deed
of trust, lease, agreement or other instrument to which the Company or any of
its Subsidiaries is a party or by which the Company or any such Subsidiary or
any of their respective property is bound; (vi) do not result in the creation or
imposition of any Lien upon any of the property of the Company or any of its
Subsidiaries; and (vii) do not require the consent or approval of any
Governmental Authority or any other person other than the consent of the Senior
Lenders set forth below;
2. This Amendment has been duly executed and delivered for the benefit
of or on behalf of the Company and constitutes a legal, valid and binding
obligation of the Company, enforceable
13
<PAGE> 14
against the Company in accordance with its terms except as the enforceability
hereof may be limited by bankruptcy, insolvency, reorganization, moratorium and
other laws affecting creditors' rights and remedies in general; and
3. After giving effect to this Amendment, no Default or Event of
Default has occurred and is continuing as of the date hereof.
F. MISCELLANEOUS
1. The Company hereby restates, ratifies and reaffirms each and every
term and condition set forth in the Purchase Agreement, as modified by this
Amendment, effective as of the date hereof.
2. The Company agrees that as a condition precedent to the
effectiveness of this Amendment, it must deliver to the Holders the
acknowledgment of each employee listed on Schedule A to the Second Amendment to
Credit Agreement to the restriction added to Section 7.05 of the Purchase
Agreement in this Amendment.
3. The Company agrees to pay on demand all costs and expenses of GE
Capital in connection with the preparation, execution, delivery and enforcement
of this Amendment, including the reasonable fees and out-of-pocket expenses of
counsel to GE Capital. Without limiting the generality of the foregoing, the
Company agrees to pay the sum of $98,002.17 presently due and payable to King &
Spalding on or before the close of business on May 20, 1998.
4. This Amendment shall be governed by, and construed in accordance
with, the internal laws (and not the laws of conflicts), of the State of New
York and all applicable laws of the United States of America.
5. This Amendment may be executed in any number of separate
counterparts, each of which shall, collectively and separately, constitute one
agreement.
14
<PAGE> 15
IN WITNESS WHEREOF, this Amendment has been duly executed as of the
date first written above.
RAMSAY HEALTH CARE, INC.
By: _____________________________
Remberto G. Cibran
President
15
<PAGE> 16
GENERAL ELECTRIC CAPITAL
CORPORATION
By: _____________________________
Cheryl P. Boyd
Authorized Signatory
PAUL RAMSAY HOLDINGS PTY.
LIMITED
By: _____________________________
Peter Evans
Director
16
<PAGE> 17
The undersigned, being the Senior Agent and all of the Senior Lenders
under the Senior Credit Agreement, hereby consent to the foregoing Second
Amendment as of the date first written above.
GENERAL ELECTRIC CAPITAL
CORPORATION
By: _____________________________
Cheryl P. Boyd
Authorized Signatory
THE ING CAPITAL SENIOR SECURED
HIGH INCOME FUND, L.P.
By: _____________________________
Name:
Title:
17
<PAGE> 18
ANNEX C-2
Annex C-2 to
PURCHASE AGREEMENT
FINANCIAL COVENANTS FOR APRIL 1, 1998 - SEPTEMBER 30, 1998
1. FINANCIAL COVENANTS. The Company shall not breach or fail to comply
with any of the following financial covenants:
(a) The Company shall maintain, as of the end of each Rolling
Twelve-Month Period, commencing with the Rolling Twelve-Month Period ending
April 30, 1998, EBITDA for such Rolling Twelve-Month Period of not less than an
amount equal to the sum of (i) $840,000 for each Fiscal Month during such
Rolling Twelve-Month Period ending on or prior to the date of consummation of
the FPM Behavioral Health Divestiture and (ii) $625,000 for each Fiscal Month
during such Rolling Twelve-Month Period ending after the date of consummation of
the FPM Behavioral Health Divestiture.
(b) The Company shall maintain, as of the end of each Rolling
Twelve-Month Period set forth below, a Leverage Ratio of not more than
5.00:1.00.
(c) The Company shall maintain, as of the end of each Rolling
Twelve-Month Period, commencing with the Rolling Twelve-Month Period ending
April 30, 1998, a Fixed Charge Coverage Ratio of not less than 1.10:1.00.
(d) The Company shall maintain, as of the end of each Rolling
Twelve-Month Period set forth below, an Interest Coverage Ratio of not less than
1.50:1.00.
(e) The Company shall maintain, as of the last day of each Fiscal
Month, commencing April 30, 1998, a Tangible Net Worth of not less than an
amount equal to the sum of (i) (A) ($1,183,000) for each Fiscal Month ending
prior to the consummation of the FPM Behavioral Health Divestiture and (B)
$12,950,000 for each Fiscal Month ending after the consummation of the FPM
Behavioral Health Divestiture, PLUS (ii) fifty percent (50%) of the Company's
cumulative positive Net Income for each Fiscal Month ended subsequent to April
30, 1998 through and including the Fiscal Month then ended (but without
reduction for negative Net Income).
(f) The Company shall not make Capital Expenditures in excess of the
amount set forth below for the periods corresponding thereto:
PERIOD ENDING AMOUNT
One-month period ending 4/30/98 $315,000
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<PAGE> 19
Two-month period ending 5/31/98 $555,000
Three-month period ending 6/30/98 $800,000
Four-month period ending 7/31/98 $1,040,000
Five-month period ending 8/31/98 $1,285,000
Six-month period ending 9/30/98 $1,533,000
2. TRANSITIONAL RULES. Notwithstanding anything to the contrary set
forth herein in calculating Company's compliance with the financial covenants
set forth in paragraphs 1(a), (b), (c) and (d) above for the Rolling
Twelve-Month Periods ending April 30, 1998, May 31, 1998, June 30, 1998, July
31, 1998, August 31, 1998 and September 30, 1998, the "Rolling Twelve-Month
Period" ending April 30, 1998 shall mean the Fiscal Month then ended; the
"Rolling Twelve-Month Period" ending May 31, 1998 shall mean the two Fiscal
Months then ended; the "Rolling Twelve-Month Period" ending June 30, 1998 shall
mean the three Fiscal Months then ended; the "Rolling Twelve-Month Period"
ending July 31, 1998 shall mean the four Fiscal Months then ended; the "Rolling
Twelve-Month Period" ending August 31, 1998 shall mean the five Fiscal Months
then ended; and the "Rolling Twelve-Month Period" ending September 30, 1998
shall mean the six Fiscal Months then ended.
3. DEFINITIONS AND RULES OF CONSTRUCTION.
(a) DEFINED TERMS. Capitalized terms used in this ANNEX C-2
and not defined in ARTICLE 10 of this Agreement shall have the following
respective meanings:
"CAPITAL EXPENDITURES" shall mean, with respect to any fiscal
period of the Company, all of the Company's consolidated expenditures during
such period for any fixed assets or improvements, or for replacements,
substitutions or additions thereto, that have a useful life of more than one
year and that are required to be capitalized under GAAP, and, in any event,
shall include Capital Lease Obligations and all asset purchases secured by
purchase money security interests.
"CAPITAL LEASE" shall mean any lease of any property (whether
real, personal or mixed) by any Person as lessee that, in accordance with GAAP,
either would be required to be classified and accounted for as a capital lease
on a consolidated balance sheet of such Person or otherwise be disclosed as such
in a note to such balance sheet.
"CAPITAL LEASE OBLIGATION" shall mean, as of any date, the
amount of the obligation of the lessee under a Capital Lease that, in accordance
with GAAP, would appear on a consolidated balance sheet of such lessee in
respect of such Capital Lease or otherwise be disclosed as such in a note to
such balance sheet.
"EBITDA" shall mean, with respect to any fiscal period of the
Company, (i) Net Income for such period, PLUS (ii) Interest Expense for such
period, PLUS (iii) Tax Expense for such period, PLUS (iv) to the extent deducted
in determining Net Income, Company's depreciation, amortization and other
similar non-cash charges for such period, MINUS (v) to the extent included in
19
<PAGE> 20
determining Net Income, Company's extraordinary gains for such period, PLUS,
(vi) to the extent included in determining Net Income, the non-cash portion of
any of the Company's extraordinary losses for such period, PLUS (vii) any losses
from asset sales for such period, MINUS (viii) any gains from asset sales for
such period, all determined in accordance with GAAP on a consolidated basis,
MINUS (ix) any cash payments made with respect to extraordinary losses related
to a prior period, MINUS (x) to the extent included in determining Net Income,
any consolidated net income derived from the reversal of a reserve reflected in
the 1997 Audited Financial Statements or a reserve reflected in unaudited
Financial Statements of the Company for the Fiscal Quarter ending March 31, 1998
for which there was not a corresponding cash payment.
"FIXED CHARGE COVERAGE RATIO" shall mean, with respect to any
fiscal period of the Company, the ratio of (a) the sum of (i) EBITDA for such
period, MINUS (ii) Capital Expenditures during such period, MINUS (iii) that
portion of Tax Expense paid in cash during such period, MINUS (iv) any payment
made in cash for which the offsetting entry on the Company's Financial
Statements is a debit to a reserve reflected in the 1997 Audited Financial
Statements or in a reserve reflected in unaudited Financial Statements of the
Company for the Fiscal Quarter ending March 31, 1998, rather than an expense or
reduction of revenues on the Company's income statement, to (b) Fixed Charges
for such period.
"FIXED CHARGES" shall mean, with respect to any fiscal period
of the Company, the sum of (i) Interest Expense for such period, PLUS (ii)
regularly scheduled payments of principal paid on Funded Debt during such
period, MINUS (iii) one-half of the scheduled payments of principal paid on the
Term Loans.
"FUNDED DEBT" shall mean all of the Company's consolidated
Indebtedness which by the terms of the agreement governing or instrument
evidencing such Indebtedness matures more than one year from or is directly or
indirectly renewable or extendible at its option under a revolving credit or
similar agreement obligating the lender or lenders to extend credit over a
period of more than one year from the date of creation thereof, including in
each instance current maturities of long-term debt (and the current portion of
long-term debt in the last year of its term), revolving credit and short-term
debt extendible beyond one year at the option of the debtor, and shall also
include, without limitation, (i) Indebtedness arising under or in connection
with any interest rate swap agreement or arrangements, (ii) the Obligations,
and (iii) Subordinated Indebtedness.
"GAAP" shall mean generally accepted accounting principles in
the United States as in effect from time to time, consistently applied.
"INTEREST COVERAGE RATIO" shall mean, with respect to any
fiscal period of the Company, the ratio of (a) the sum of (i) EBITDA for such
period, PLUS (ii) up to $150,000 of the losses incurred by Greenbrier Hospital,
Inc. during the Fiscal Month ending May 31, 1998 to the extent such losses
reduced Net Income, MINUS (iii) Capital Expenditures during such period
(excluding up to $150,000 of Capital Expenditures made by Greenbrier Hospital,
Inc. during the Fiscal Month ending April 30, 1998), to (b) Interest Expense for
such period.
20
<PAGE> 21
"INTEREST EXPENSE" shall mean, with respect to any fiscal
period of the Company, the Company's consolidated interest expense determined in
accordance with GAAP, including without limitation, the interest component of
any Capital Lease Obligation.
"LEVERAGE RATIO" shall mean, with respect to any period, the
ratio of (a) Funded Debt excluding the Ramsay Subordinated Note, as of the last
day of such period, to (b) EBITDA for such period divided by the number of
Fiscal Months in such period and multiplied by twelve.
"NET INCOME" shall mean, with respect to any fiscal period of
the Company, the Company's consolidated net income (or loss) from continuing
operations for such period.
"ROLLING TWELVE-MONTH PERIOD" shall mean, as of the end of any
Fiscal Month of the Company, the immediately preceding twelve Fiscal Months
(except as set forth in paragraph 2(a) above), including the Fiscal Month then
ending.
"TANGIBLE NET WORTH" shall mean, as of any date, (a) the
Company's consolidated shareholders' equity, MINUS (b) the Company's
consolidated intangible assets, including, without limitation, the following:
(a) any surplus resulting from the write-up of assets
subsequent to the Audit Date;
(b) goodwill, including any amounts (however designated on the
balance sheet) representing the cost of acquisitions of Subsidiaries in excess
of underlying tangible assets;
(c) patents, trademarks, copyrights, etc.; and
(d) deferred charges (including, but not limited to,
unamortized debt discount and expense, organization expenses and experimental
and development expenses, but excluding prepaid expenses), but excluding, to the
extent included therein, transaction costs in an amount not to exceed $3,400,000
incurred by the Company in connection with the consummation of the Senior Credit
Agreement, the Bridge Note Purchase Agreement and the Preferred Stock Purchase
Agreement.
"TAX EXPENSE" shall mean, with respect to any fiscal period of
the Company, the Company's consolidated provision for income taxes for such
period.
4. RULES OF CONSTRUCTION. Any accounting term used in this ANNEX C-2 or
elsewhere in this Agreement shall have, unless otherwise specifically provided,
the meaning customarily given such term in accordance with GAAP, and all
financial computations shall be computed, unless otherwise specifically
provided, on a consolidated basis in accordance with GAAP consistently applied.
That certain items or computations are explicitly modified by the phrase "in
accordance with GAAP" shall in no way be construed to limit the foregoing. In
the event that any "Accounting Changes" (as defined below) occur and such
changes result in a change in the calculation of the financial covenants,
standards or terms used in this ANNEX C-2 or elsewhere in this Agreement, then
21
<PAGE> 22
Company and the Holders agree to enter into negotiations in order to amend such
provisions of this Agreement, subject to the approval of the Required Holders,
so as equitably to reflect such Accounting Changes with the desired result that
the criteria for evaluating Company's financial condition shall be the same
after giving effect to such Accounting Changes as if such Accounting Changes had
not been made. "ACCOUNTING CHANGES" means (i) changes in accounting principles
required by the promulgation of any rule, regulation, pronouncement or opinion
by the Financial Accounting Standards Board of the American Institute of
Certified Public Accountants (or successor thereto or any agency with similar
functions), (c) purchase accounting adjustments under A.P.B. 16 and/or 17 and
EITF 88-16, and the application of the accounting principles set forth in FASB
109, including the establishment of reserves pursuant thereto and any subsequent
reversal (in whole or in part) of such reserves; and (d) the reversal of any
reserves established as a result of purchase accounting adjustments. All such
adjustments resulting from expenditures made subsequent to the Closing Date
(including capitalization of costs and expenses or payment of pre-Closing Date
liabilities) shall be treated as expenses in the period the expenditures are
made and deducted as part of the calculation of EBITDA in such period. and (ii)
changes in accounting principles concurred in by Company's independent public
accountants. In the event that Company and the Required Holders shall have
agreed upon any such required amendment, then, after such amendment has been
evidenced in writing and the underlying Accounting Change with respect thereto
has been implemented, any reference to GAAP contained in this ANNEX C-2 or
elsewhere in this Agreement shall, only to the extent of such Accounting Change,
refer to GAAP, consistently applied after giving effect to the implementation of
such Accounting Change. If Company, the Holders and the Required Holders cannot
agree upon any required amendment within thirty (30) days following the date of
implementation of any Accounting Change, then all financial statements delivered
in accordance with ANNEX B to this Agreement and all calculations of financial
covenants and other standards and terms in accordance with this ANNEX C-2 shall
be prepared, delivered and made without regard to the underlying Accounting
Change.
22
<PAGE> 1
EXHIBIT 10.120
THIRD AMENDMENT TO CREDIT AGREEMENT
THIS THIRD AMENDMENT TO CREDIT AGREEMENT ("AMENDMENT") is entered into
as of June 29, 1998, by and among RAMSAY HEALTH CARE, INC., a Delaware
corporation ("BORROWER"), certain subsidiaries of Borrower listed on the
signature pages hereto (the "GUARANTORS"), GENERAL ELECTRIC CAPITAL CORPORATION,
a New York corporation ("GE CAPITAL"), and THE ING CAPITAL SENIOR SECURED HIGH
INCOME FUND, L.P., a Delaware limited partnership ("ING;" GE Capital and ING are
hereinafter each individually referred to as a "LENDER", and collectively, as
"LENDERS"), and GENERAL ELECTRIC CAPITAL CORPORATION, as administrative agent
(in such capacity, the "ADMINISTRATIVE AGENT").
RECITALS
A. Borrower, Guarantors, Lenders, Administrative Agent and Syndication
Agent are parties to a certain Credit Agreement dated as of September 30, 1997,
as amended by the First Amendment to Credit Agreement dated as of March 27, 1998
and the Second Amendment to Credit Agreement dated as of May 20, 1998 (as so
amended, the "CREDIT AGREEMENT;" capitalized terms used herein and not defined
herein have the meanings assigned to them in the Credit Agreement).
B. Borrower has requested that Lenders and Administrative Agent waive
certain Defaults that have occurred for the period ending April 30, 1998, and
Lenders and Administrative Agent have agreed to waive such Defaults, subject to
the terms and conditions hereof.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, and intending to be legally bound, the parties
hereto agree as follows:
A. WAIVER
Each Lender hereby waives all Defaults that arose under Section 6.11 of
the Credit Agreement as of April 30, 1998 (but not thereafter); PROVIDED,
HOWEVER, that the waiver granted therein shall remain in force and effect only
so long as Paul Ramsay Holdings Pty. Ltd. continues to make loans to Borrower
pursuant to the Ramsay Subordinated Note Purchase Agreement (up to the aggregate
amount of $5,000,000 provided for therein) to fund working capital deficits and
operating losses at the facilities acquired in the Dothan Alabama Acquisition
and the Palm Bay Acquisition.
B. REPRESENTATIONS
Each Credit Party hereby represents and warrants to the Lenders and the
Administrative Agent that:
1. The execution, delivery and performance by such Credit Party of this
Amendment (a) are within such Credit Party's corporate power; (b) have been duly
authorized by all necessary corporate and shareholder action; (c) are not in
contravention of any provision of such Credit Party's
<PAGE> 2
certificate of incorporation or bylaws or other organizational documents; (d) do
not violate any law or regulation, or any order or decree of any Governmental
Authority; (e) do not conflict with or result in the breach or termination of,
constitute a default under or accelerate any performance required by, any
indenture, mortgage, deed of trust, lease, agreement or other instrument to
which such Credit Party or any of its Subsidiaries is a party or by which such
Credit Party or any such Subsidiary or any of their respective property is
bound; (f) do not result in the creation or imposition of any Lien upon any of
the property of such Credit Party or any of its Subsidiaries; and (g) do not
require the consent or approval of any Governmental Authority or any other
person;
2. This Amendment has been duly executed and delivered for the benefit
of or on behalf of each Credit Party and constitutes a legal, valid and binding
obligation of each Credit Party, enforceable against such Credit Party in
accordance with its terms except as the enforceability hereof may be limited by
bankruptcy, insolvency, reorganization, moratorium and other laws affecting
creditors' rights and remedies in general; and
3. After giving effect to this Amendment, no Default or Event of
Default has occurred and is continuing as of the date hereof.
C. OTHER AGREEMENTS
1. Each Credit Party hereby restates, ratifies and reaffirms each and
every term and condition set forth in the Credit Agreement, as modified by this
Amendment, effective as of the date hereof.
2. Each Guarantor hereby reaffirms and ratifies its unconditional and
irrevocable, joint and several guarantee to Administrative Agent, Syndication
Agent, Lenders and their respective successors, endorsees, transferees and
assigns, of the prompt payment (whether at stated maturity, by acceleration or
otherwise) and performance when due of the Obligations of Borrower arising under
the Credit Agreement, as amended and affirmed hereby, and reaffirms and ratifies
all of its other obligations under the Subsidiary Guaranty. Each Guarantor
hereby consents to the execution and delivery of this Amendment by the Borrower,
and each Guarantor acknowledges that it has received and reviewed a copy of the
Amendment.
3. Each Credit Party acknowledges and reaffirms that (i) all Liens
granted to the Administrative Agent for the benefit of the Lenders under the
Collateral Documents remain in full force and effect and shall continue to
secure the Obligations and (ii) the validity, perfection or priority of the
Liens will not be impaired by the execution and delivery of this Amendment.
4. Borrower agrees to pay on demand all costs and expenses of GE
Capital in connection with the preparation, execution, delivery and enforcement
of this Amendment, including the reasonable fees and out-of-pocket expenses of
counsel to GE Capital.
2
<PAGE> 3
5. This Amendment shall be governed by, and construed in accordance
with, the internal laws (and not the laws of conflicts), of the State of New
York and all applicable laws of the United States of America.
6. This Amendment may be executed in any number of separate
counterparts, each of which shall, collectively and separately, constitute one
agreement.
IN WITNESS WHEREOF, this Amendment has been duly executed as of the
date first written above.
RAMSAY HEALTH CARE, INC.
By: _____________________________
Remberto G. Cibran
President
GENERAL ELECTRIC CAPITAL
CORPORATION, as Administrative Agent
and as a Lender
By: _____________________________
Cheryl P. Boyd
Authorized Signatory
THE ING CAPITAL SENIOR SECURED
HIGH INCOME FUND, L.P., as a Lender
By: _____________________________
Name:
Title:
3
<PAGE> 4
AMERICARE OF GALAX, INC.
BETHANY PSYCHIATRIC HOSPITAL, INC.
BOUNTIFUL PSYCHIATRIC HOSPITAL, INC.
CAROLINA TREATMENT CENTER, INC.
EAST CAROLINA PSYCHIATRIC SERVICES
CORPORATION
GREAT PLAINS HOSPITAL, INC.
GREENBRIER HOSPITAL, INC.
GULF COAST TREATMENT CENTER, INC.
HAVENWYCK HOSPITAL, INC.
H. C. CORPORATION
HOUMA PSYCHIATRIC HOSPITAL, INC.
HSA HILL CREST CORPORATION
HSA OF OKLAHOMA, INC.
INTEGRATED BEHAVORIAL SERVICES, INC.
MESA PSYCHIATRIC HOSPITAL, INC.
MICHIGAN PSYCHIATRIC SERVICES, INC.
PSYCHIATRIC INSTITUTE OF WEST
VIRGINIA
RAMSAY ACQUISITION CORP.
RAMSAY CORRECTIONAL SERVICES, INC.
RAMSAY LOUISIANA, INC.
RAMSAY MANAGEMENT SERVICES OF
WEST VIRGINIA, INC.
RAMSAY NEW ORLEANS, INC.
RAMSAY YOUTH SERVICES, INC.
RHCI SAN ANTONIO, INC.
THE HAVEN HOSPITAL, INC.
By: _____________________________
Carol C. Lang
Vice President of each of
the foregoing Guarantors
Attest: _____________________________
Daniel A. Sims
Secretary of each of the foregoing
Guarantors
4
<PAGE> 5
H. C. PARTNERSHIP
By: HSA HILL CREST CORPORATION,
its General Partner
By:_______________________
Carol C. Lang
Vice President
RAMSAY MANAGED CARE, INC.
ARIZONA PSYCHIATRIC AFFILIATES, INC.
UTAH PSYCHIATRIC AFFILIATES, INC.
RAMSAY CONTRACT SERVICES, INC.
RAMSAY MANAGEMENT SERVICES OF
TEXAS, INC.
RAMSAY YOUTH SERVICES OF ALABAMA,
INC.
RAMSAY YOUTH SERVICES OF FLORIDA,
INC.
By:_____________________________
Carol C. Lang
Vice President of each of
the foregoing Guarantors
5
<PAGE> 1
EXHIBIT 10.121
THIRD AMENDMENT TO
SUBORDINATED NOTE PURCHASE AGREEMENT
THIS THIRD AMENDMENT TO SUBORDINATED NOTE PURCHASE AGREEMENT
("AMENDMENT") is entered into as of June 29, 1998 by and among RAMSAY HEALTH
CARE, INC., a Delaware corporation (the "COMPANY"), certain subsidiaries of the
Company listed on the signature pages hereto (the "GUARANTORS"), GENERAL
ELECTRIC CAPITAL CORPORATION, a New York corporation ("GE CAPITAL"), and PAUL
RAMSAY HOLDINGS PTY. LIMITED ACN 008 446 151, an Australian corporation
("RAMSAY HOLDINGS;" GE Capital and Ramsay Holdings are hereinafter each
individually referred to as a "PURCHASER", and collectively, as "PURCHASERS"),
for the benefit of the parties and each of the Holders.
RECITALS
A. The Company and Purchasers are parties to a certain Subordinated
Note Purchase Agreement dated as of September 30, 1997, as amended by the First
Amendment to Subordinated Note Purchase Agreement dated as of March 27, 1998
and the Second Amendment to Subordinated Note Purchase Agreement dated as of
May 20, 1998 (as so amended, the "PURCHASE AGREEMENT;" capitalized terms used
herein and not defined herein have the meanings assigned to them in the
Purchase Agreement).
B. Pursuant to a Subsidiary Guaranty dated as of May 27, 1998, the
Guarantors guaranteed the Series A Bridge Note Obligations.
C. Purchasers are all of the Holders of the Bridge Notes.
D. The Company has requested that the Holders waive certain Defaults
that have occurred for the period ending April 30, 1998, and the Holders have
agreed to waive such Defaults, subject to the terms and conditions hereof.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, and intending to be legally bound, the parties
hereto agree as follows:
A. WAIVER
Each Holder hereby waives all Defaults that arose under Section 7.10
of the Purchase Agreement as of April 30, 1998.
B. AMENDMENTS
1. AMENDMENT TO ARTICLE 6 The Purchase Agreement is hereby amended by
adding to the end of Article 6 thereof the following new Section 6.15:
<PAGE> 2
SECTION 6.15 ADDITIONAL COVENANTS. Effective upon such date,
if any, as there are no Senior Lenders under the Senior Credit
Agreement other than GE Capital, the Company agrees that it will
perform in favor of the Holders all of the covenants set forth in
Articles 6 and 7 of the Senior Credit Agreement, as such covenants are
modified or amended from time to time, and irrespective of the
termination of the Senior Credit Agreement for any reason, all of
which covenants (as so modified or amended) are incorporated herein by
reference.
C. REPRESENTATIONS
Each Credit Party hereby represents and warrants to Purchasers that:
1. The execution, delivery and performance by such Credit Party of
this Amendment (i) are within such Credit Party's corporate power; (ii) have
been duly authorized by all necessary corporate and shareholder action; (iii)
are not in contravention of any provision of such Credit Party's certificate of
incorporation or bylaws or other organizational documents; (iv) do not violate
any law or regulation, or any order or decree of any Governmental Authority;
(v) do not conflict with or result in the breach or termination of, constitute
a default under or accelerate any performance required by, any indenture,
mortgage, deed of trust, lease, agreement or other instrument to which such
Credit Party or any of its Subsidiaries is a party or by which such Credit
Party or any of its Subsidiaries or any of their respective property is bound;
(vi) do not result in the creation or imposition of any Lien upon any of the
property of such Credit Party or any of its Subsidiaries; and (vii) do not
require the consent or approval of any Governmental Authority or any other
person other than the consent of the Senior Lenders set forth below;
2. This Amendment has been duly executed and delivered for the benefit
of or on behalf of each Credit Party and constitutes a legal, valid and binding
obligation of each Credit Party, enforceable against such Credit Party in
accordance with its terms except as the enforceability hereof may be limited by
bankruptcy, insolvency, reorganization, moratorium and other laws affecting
creditors' rights and remedies in general; and
3. After giving effect to this Amendment, no Default or Event of
Default has occurred and is continuing as of the date hereof.
D. MISCELLANEOUS
1. Each Credit Party hereby restates, ratifies and reaffirms each and
every term and condition set forth in the Purchase Agreement, as modified by
this Amendment, effective as of the date hereof.
2. Each Guarantor hereby reaffirms and ratifies its unconditional and
irrevocable, joint and several guarantee to GE Capital and its successors,
endorsees, transferees and assigns, of the prompt payment (whether at stated
maturity, by acceleration or otherwise) and performance when
2
<PAGE> 3
due of the Series A Bridge Note Obligations, as amended and affirmed hereby,
and reaffirms and ratifies all of its other obligations under the Subsidiary
Guaranty. Each Guarantor hereby consents to the execution and delivery of this
Amendment by the Company, and each Guarantor acknowledges that it has received
and reviewed a copy of the Amendment.
3. Each Credit Party acknowledges and reaffirms that (i) all Liens
granted to GE Capital under the Bridge Note Collateral Documents remain in full
force and effect and shall continue to secure the Series A Bridge Note
Obligations and (ii) the validity, perfection or priority of the Liens will not
be impaired by the execution and delivery of this Amendment.
4. The Company agrees to pay on demand all costs and expenses of GE
Capital in connection with the preparation, execution, delivery and enforcement
of this Amendment, including the reasonable fees and out-of-pocket expenses of
counsel to GE Capital.
5. This Amendment shall be governed by, and construed in accordance
with, the internal laws (and not the laws of conflicts), of the State of New
York and all applicable laws of the United States of America.
6. This Amendment may be executed in any number of separate
counterparts, each of which shall, collectively and separately, constitute one
agreement.
IN WITNESS WHEREOF, this Amendment has been duly executed as of the
date first written above.
RAMSAY HEALTH CARE, INC.
By:
------------------------------------
Remberto G. Cibran
President
GENERAL ELECTRIC CAPITAL
CORPORATION
By:
------------------------------------
Cheryl P. Boyd
Authorized Signatory
3
<PAGE> 4
PAUL RAMSAY HOLDINGS PTY.
LIMITED
By:
------------------------------------
Peter Evans
Director
4
<PAGE> 5
AMERICARE OF GALAX, INC.
BETHANY PSYCHIATRIC HOSPITAL, INC.
BOUNTIFUL PSYCHIATRIC HOSPITAL, INC.
CAROLINA TREATMENT CENTER, INC.
EAST CAROLINA PSYCHIATRIC SERVICES
CORPORATION
GREAT PLAINS HOSPITAL, INC.
GREENBRIER HOSPITAL, INC.
GULF COAST TREATMENT CENTER, INC.
HAVENWYCK HOSPITAL, INC.
H. C. CORPORATION
HOUMA PSYCHIATRIC HOSPITAL, INC.
HSA HILL CREST CORPORATION
HSA OF OKLAHOMA, INC.
INTEGRATED BEHAVORIAL SERVICES, INC.
MESA PSYCHIATRIC HOSPITAL, INC.
MICHIGAN PSYCHIATRIC SERVICES, INC.
PSYCHIATRIC INSTITUTE OF WEST
VIRGINIA
RAMSAY ACQUISITION CORP.
RAMSAY CORRECTIONAL SERVICES, INC.
RAMSAY LOUISIANA, INC.
RAMSAY MANAGEMENT SERVICES OF
WEST VIRGINIA, INC.
RAMSAY NEW ORLEANS, INC.
RAMSAY YOUTH SERVICES, INC.
RHCI SAN ANTONIO, INC.
THE HAVEN HOSPITAL, INC.
By:
------------------------------------
Carol C. Lang
Vice President of each of the
foregoing Guarantors
Attest:
---------------------------------
Daniel A. Sims
Secretary of each of the foregoing
Guarantors
5
<PAGE> 6
H. C. PARTNERSHIP
By: HSA HILL CREST CORPORATION,
its General Partner
By:
------------------------------------
Carol C. Lang
Vice President
RAMSAY MANAGED CARE, INC.
UTAH PSYCHIATRIC AFFILIATES, INC.
RAMSAY CONTRACT SERVICES, INC.
RAMSAY MANAGEMENT SERVICES OF
TEXAS, INC.
RAMSAY YOUTH SERVICES OF ALABAMA,
INC.
RAMSAY YOUTH SERVICES OF FLORIDA,
INC.
By:
------------------------------------
Carol C. Lang
Vice President of each of
the foregoing Guarantors
6
<PAGE> 7
The undersigned, being the Senior Agent and all of the Senior Lenders
under the Senior Credit Agreement, hereby consent to the foregoing Second
Amendment as of the date first written above.
GENERAL ELECTRIC CAPITAL
CORPORATION
By:
------------------------------------
Cheryl P. Boyd
Authorized Signatory
THE ING CAPITAL SENIOR SECURED
HIGH INCOME FUND, L.P.
By:
------------------------------------
Name:
Title:
7
<PAGE> 1
EXHIBIT 10.122
FOURTH AMENDMENT TO CREDIT AGREEMENT
THIS FOURTH AMENDMENT TO CREDIT AGREEMENT ("AMENDMENT") is entered into
as of July 29, 1998, by and among RAMSAY HEALTH CARE, INC., a Delaware
corporation ("BORROWER"), certain subsidiaries of Borrower listed on the
signature pages hereto (the "GUARANTORS"), GENERAL ELECTRIC CAPITAL CORPORATION,
a New York corporation ("GE CAPITAL"), and THE ING CAPITAL SENIOR SECURED HIGH
INCOME FUND, L.P., a Delaware limited partnership ("ING;" GE Capital and ING are
hereinafter each individually referred to as a "LENDER", and collectively, as
"LENDERS"), and GENERAL ELECTRIC CAPITAL CORPORATION, as administrative agent
(in such capacity, the "ADMINISTRATIVE AGENT").
RECITALS
A. Borrower, Guarantors, Lenders, Administrative Agent and Syndication
Agent are parties to a certain Credit Agreement dated as of September 30, 1997,
as amended by the First Amendment to Credit Agreement dated as of March 27,
1998, the Second Amendment to Credit Agreement dated as of May 20, 1998 and the
Third Amendment to Credit Agreement dated as of June 29, 1998 (as so amended,
the "CREDIT AGREEMENT;" capitalized terms used herein and not defined herein
have the meanings assigned to them in the Credit Agreement).
B. Borrower has requested that Lenders and Administrative Agent waive
certain Defaults that have occurred for the period ending May 31, 1998, and
Lenders and Administrative Agent have agreed to waive such Defaults, subject to
the terms and conditions hereof.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, and intending to be legally bound, the parties
hereto agree as follows:
A. WAIVER
Each Lender hereby waives all Defaults that arose under Section 6.11 of
the Credit Agreement as of May 31, 1998 (but not thereafter); PROVIDED, HOWEVER,
that the waiver granted therein shall remain in force and effect only so long as
Paul Ramsay Holdings Pty. Ltd. continues to make loans to Borrower pursuant to
the Ramsay Subordinated Note Purchase Agreement (up to the aggregate amount of
$5,000,000 provided for therein) to fund working capital deficits and operating
losses at the facilities acquired in the Dothan Alabama Acquisition and the Palm
Bay Acquisition.
B. REPRESENTATIONS
Each Credit Party hereby represents and warrants to the Lenders and the
Administrative Agent that:
1. The execution, delivery and performance by such Credit Party of this
Amendment (a) are within such Credit Party's corporate power; (b) have been duly
authorized by all necessary
<PAGE> 2
corporate and shareholder action; (c) are not in contravention of any provision
of such Credit Party's certificate of incorporation or bylaws or other
organizational documents; (d) do not violate any law or regulation, or any order
or decree of any Governmental Authority; (e) do not conflict with or result in
the breach or termination of, constitute a default under or accelerate any
performance required by, any indenture, mortgage, deed of trust, lease,
agreement or other instrument to which such Credit Party or any of its
Subsidiaries is a party or by which such Credit Party or any such Subsidiary or
any of their respective property is bound; (f) do not result in the creation or
imposition of any Lien upon any of the property of such Credit Party or any of
its Subsidiaries; and (g) do not require the consent or approval of any
Governmental Authority or any other person;
2. This Amendment has been duly executed and delivered for the benefit
of or on behalf of each Credit Party and constitutes a legal, valid and binding
obligation of each Credit Party, enforceable against such Credit Party in
accordance with its terms except as the enforceability hereof may be limited by
bankruptcy, insolvency, reorganization, moratorium and other laws affecting
creditors' rights and remedies in general; and
3. After giving effect to this Amendment, no Default or Event of
Default has occurred and is continuing as of the date hereof.
C. OTHER AGREEMENTS
1. Each Credit Party hereby restates, ratifies and reaffirms each and
every term and condition set forth in the Credit Agreement, as modified by this
Amendment, effective as of the date hereof.
2. Each Guarantor hereby reaffirms and ratifies its unconditional and
irrevocable, joint and several guarantee to Administrative Agent, Syndication
Agent, Lenders and their respective successors, endorsees, transferees and
assigns, of the prompt payment (whether at stated maturity, by acceleration or
otherwise) and performance when due of the Obligations of Borrower arising under
the Credit Agreement, as amended and affirmed hereby, and reaffirms and ratifies
all of its other obligations under the Subsidiary Guaranty. Each Guarantor
hereby consents to the execution and delivery of this Amendment by the Borrower,
and each Guarantor acknowledges that it has received and reviewed a copy of the
Amendment.
3. Each Credit Party acknowledges and reaffirms that (i) all Liens
granted to the Administrative Agent for the benefit of the Lenders under the
Collateral Documents remain in full force and effect and shall continue to
secure the Obligations and (ii) the validity, perfection or priority of the
Liens will not be impaired by the execution and delivery of this Amendment.
4. Borrower agrees to pay on demand all costs and expenses of GE
Capital in connection with the preparation, execution, delivery and enforcement
of this Amendment, including the reasonable fees and out-of-pocket expenses of
counsel to GE Capital.
2
<PAGE> 3
5. This Amendment shall be governed by, and construed in accordance
with, the internal laws (and not the laws of conflicts), of the State of New
York and all applicable laws of the United States of America.
6. This Amendment may be executed in any number of separate
counterparts, each of which shall, collectively and separately, constitute one
agreement.
IN WITNESS WHEREOF, this Amendment has been duly executed as of the
date first written above.
RAMSAY HEALTH CARE, INC.
By: _____________________________
Remberto G. Cibran
President
GENERAL ELECTRIC CAPITAL
CORPORATION, as Administrative Agent
and as a Lender
By: _____________________________
Cheryl P. Boyd
Authorized Signatory
THE ING CAPITAL SENIOR SECURED
HIGH INCOME FUND, L.P., as a Lender
By: _____________________________
Name:
Title:
3
<PAGE> 4
AMERICARE OF GALAX, INC.
BETHANY PSYCHIATRIC HOSPITAL, INC.
BOUNTIFUL PSYCHIATRIC HOSPITAL, INC.
CAROLINA TREATMENT CENTER, INC.
EAST CAROLINA PSYCHIATRIC SERVICES
CORPORATION
GREAT PLAINS HOSPITAL, INC.
GREENBRIER HOSPITAL, INC.
GULF COAST TREATMENT CENTER, INC.
HAVENWYCK HOSPITAL, INC.
H. C. CORPORATION
HOUMA PSYCHIATRIC HOSPITAL, INC.
HSA HILL CREST CORPORATION
HSA OF OKLAHOMA, INC.
INTEGRATED BEHAVORIAL SERVICES, INC.
MESA PSYCHIATRIC HOSPITAL, INC.
MICHIGAN PSYCHIATRIC SERVICES, INC.
PSYCHIATRIC INSTITUTE OF WEST
VIRGINIA
RAMSAY ACQUISITION CORP.
RAMSAY CORRECTIONAL SERVICES, INC.
RAMSAY LOUISIANA, INC.
RAMSAY MANAGEMENT SERVICES OF
WEST VIRGINIA, INC.
RAMSAY NEW ORLEANS, INC.
RAMSAY YOUTH SERVICES, INC.
RHCI SAN ANTONIO, INC.
THE HAVEN HOSPITAL, INC.
By: _____________________________
Carol C. Lang
Vice President of each of
the foregoing Guarantors
Attest: _____________________________
Daniel A. Sims
Secretary of each of the foregoing
Guarantors
4
<PAGE> 5
H. C. PARTNERSHIP
By: HSA HILL CREST CORPORATION,
its General Partner
By:_______________________
Carol C. Lang
Vice President
RAMSAY MANAGED CARE, INC.
UTAH PSYCHIATRIC AFFILIATES, INC.
RAMSAY CONTRACT SERVICES, INC.
RAMSAY MANAGEMENT SERVICES OF
TEXAS, INC.
RAMSAY YOUTH SERVICES OF ALABAMA,
INC.
RAMSAY YOUTH SERVICES OF FLORIDA,
INC.
By:_____________________________
Carol C. Lang
Vice President of each of
the foregoing Guarantors
5
<PAGE> 1
EXHIBIT 10.123
FOURTH AMENDMENT TO
SUBORDINATED NOTE PURCHASE AGREEMENT
THIS FOURTH AMENDMENT TO SUBORDINATED NOTE PURCHASE AGREEMENT
("AMENDMENT") is entered into as of July 29, 1998 by and among RAMSAY HEALTH
CARE, INC., a Delaware corporation (the "COMPANY"), certain subsidiaries of the
Company listed on the signature pages hereto (the "GUARANTORS"), GENERAL
ELECTRIC CAPITAL CORPORATION, a New York corporation ("GE CAPITAL"), and PAUL
RAMSAY HOLDINGS PTY. LIMITED ACN 008 446 151, an Australian corporation ("RAMSAY
HOLDINGS;" GE Capital and Ramsay Holdings are hereinafter each individually
referred to as a "PURCHASER", and collectively, as "PURCHASERS"), for the
benefit of the parties and each of the Holders.
RECITALS
A. The Company and Purchasers are parties to a certain Subordinated
Note Purchase Agreement dated as of September 30, 1997, as amended by the First
Amendment to Subordinated Note Purchase Agreement dated as of March 27, 1998,
the Second Amendment to Subordinated Note Purchase Agreement dated as of May 20,
1998 and the Third Amendment to Subordinated Note Purchase Agreement dated as of
June 29, 1998 (as so amended, the "PURCHASE AGREEMENT;" capitalized terms used
herein and not defined herein have the meanings assigned to them in the Purchase
Agreement).
B. Pursuant to a Subsidiary Guaranty dated as of May 27, 1998, the
Guarantors guaranteed the Series A Bridge Note Obligations.
C. Purchasers are all of the Holders of the Bridge Notes.
D. The Company has requested that the Holders waive certain Defaults
that have occurred for the period ending May 31, 1998, and the Holders have
agreed to waive such Defaults, subject to the terms and conditions hereof.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, and intending to be legally bound, the parties
hereto agree as follows:
A. WAIVER
Each Holder hereby waives all Defaults that arose under Section 7.10 of
the Purchase Agreement as of May 31, 1998.
<PAGE> 2
B. REPRESENTATIONS
Each Credit Party hereby represents and warrants to Purchasers that:
1. The execution, delivery and performance by such Credit Party of this
Amendment (i) are within such Credit Party's corporate power; (ii) have been
duly authorized by all necessary corporate and shareholder action; (iii) are not
in contravention of any provision of such Credit Party's certificate of
incorporation or bylaws or other organizational documents; (iv) do not violate
any law or regulation, or any order or decree of any Governmental Authority; (v)
do not conflict with or result in the breach or termination of, constitute a
default under or accelerate any performance required by, any indenture,
mortgage, deed of trust, lease, agreement or other instrument to which such
Credit Party or any of its Subsidiaries is a party or by which such Credit Party
or any of its Subsidiaries or any of their respective property is bound; (vi) do
not result in the creation or imposition of any Lien upon any of the property of
such Credit Party or any of its Subsidiaries; and (vii) do not require the
consent or approval of any Governmental Authority or any other person other than
the consent of the Senior Lenders set forth below;
2. This Amendment has been duly executed and delivered for the benefit
of or on behalf of each Credit Party and constitutes a legal, valid and binding
obligation of each Credit Party, enforceable against such Credit Party in
accordance with its terms except as the enforceability hereof may be limited by
bankruptcy, insolvency, reorganization, moratorium and other laws affecting
creditors' rights and remedies in general; and
3. After giving effect to this Amendment, no Default or Event of
Default has occurred and is continuing as of the date hereof.
C. MISCELLANEOUS
1. Each Credit Party hereby restates, ratifies and reaffirms each and
every term and condition set forth in the Purchase Agreement, as modified by
this Amendment, effective as of the date hereof.
2. Each Guarantor hereby reaffirms and ratifies its unconditional and
irrevocable, joint and several guarantee to GE Capital and its successors,
endorsees, transferees and assigns, of the prompt payment (whether at stated
maturity, by acceleration or otherwise) and performance when due of the Series A
Bridge Note Obligations, as amended and affirmed hereby, and reaffirms and
ratifies all of its other obligations under the Subsidiary Guaranty. Each
Guarantor hereby consents to the execution and delivery of this Amendment by the
Company, and each Guarantor acknowledges that it has received and reviewed a
copy of the Amendment.
3. Each Credit Party acknowledges and reaffirms that (i) all Liens
granted to GE Capital under the Bridge Note Collateral Documents remain in full
force and effect and shall continue to
2
<PAGE> 3
secure the Series A Bridge Note Obligations and (ii) the validity, perfection or
priority of the Liens will not be impaired by the execution and delivery of this
Amendment.
4. The Company agrees to pay on demand all costs and expenses of GE
Capital in connection with the preparation, execution, delivery and enforcement
of this Amendment, including the reasonable fees and out-of-pocket expenses of
counsel to GE Capital.
5. This Amendment shall be governed by, and construed in accordance
with, the internal laws (and not the laws of conflicts), of the State of New
York and all applicable laws of the United States of America.
6. This Amendment may be executed in any number of separate
counterparts, each of which shall, collectively and separately, constitute one
agreement.
IN WITNESS WHEREOF, this Amendment has been duly executed as of the
date first written above.
RAMSAY HEALTH CARE, INC.
By:_______________________________
Remberto G. Cibran
President
GENERAL ELECTRIC CAPITAL
CORPORATION
By:_______________________________
Cheryl P. Boyd
Authorized Signatory
3
<PAGE> 4
PAUL RAMSAY HOLDINGS PTY.
LIMITED
By:______________________________
Peter Evans
Director
4
<PAGE> 5
AMERICARE OF GALAX, INC.
BETHANY PSYCHIATRIC HOSPITAL, INC.
BOUNTIFUL PSYCHIATRIC HOSPITAL, INC.
CAROLINA TREATMENT CENTER, INC.
EAST CAROLINA PSYCHIATRIC SERVICES
CORPORATION
GREAT PLAINS HOSPITAL, INC.
GREENBRIER HOSPITAL, INC.
GULF COAST TREATMENT CENTER, INC.
HAVENWYCK HOSPITAL, INC.
H. C. CORPORATION
HOUMA PSYCHIATRIC HOSPITAL, INC.
HSA HILL CREST CORPORATION
HSA OF OKLAHOMA, INC.
INTEGRATED BEHAVORIAL SERVICES, INC.
MESA PSYCHIATRIC HOSPITAL, INC.
MICHIGAN PSYCHIATRIC SERVICES, INC.
PSYCHIATRIC INSTITUTE OF WEST
VIRGINIA
RAMSAY ACQUISITION CORP.
RAMSAY CORRECTIONAL SERVICES, INC.
RAMSAY LOUISIANA, INC.
RAMSAY MANAGEMENT SERVICES OF
WEST VIRGINIA, INC.
RAMSAY NEW ORLEANS, INC.
RAMSAY YOUTH SERVICES, INC.
RHCI SAN ANTONIO, INC.
THE HAVEN HOSPITAL, INC.
By:____________________________________
Carol C. Lang
Vice President of each of the
foregoing Guarantors
Attest:__________________________________
Daniel A. Sims
Secretary of each of the foregoing
Guarantors
5
<PAGE> 6
H. C. PARTNERSHIP
By: HSA HILL CREST CORPORATION,
its General Partner
By:____________________________________
Carol C. Lang
Vice President
RAMSAY MANAGED CARE, INC.
UTAH PSYCHIATRIC AFFILIATES, INC.
RAMSAY CONTRACT SERVICES, INC.
RAMSAY MANAGEMENT SERVICES OF
TEXAS, INC.
RAMSAY YOUTH SERVICES OF ALABAMA,
INC.
RAMSAY YOUTH SERVICES OF FLORIDA,
INC.
By:____________________________________
Carol C. Lang
Vice President of each of
the foregoing Guarantors
6
<PAGE> 7
The undersigned, being the Senior Agent and all of the Senior Lenders
under the Senior Credit Agreement, hereby consent to the foregoing Second
Amendment as of the date first written above.
GENERAL ELECTRIC CAPITAL
CORPORATION
By:_________________________________
Cheryl P. Boyd
Authorized Signatory
THE ING CAPITAL SENIOR SECURED
HIGH INCOME FUND, L.P.
By:_________________________________
Name:
Title:
7
<PAGE> 1
Exhibit 10.124
- -------------------------------------------------------------------------------
Up to U.S. $9,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of September 30, 1998
among
RAMSAY HEALTH CARE, INC.,
as Borrower
THE LENDERS FROM TIME TO TIME PARTY HERETO,
as Lenders
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as Administrative Agent
- -------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
ARTICLE 1
AMOUNT AND TERMS OF CREDIT
<S> <C> <C>
SECTION 1.01. REVOLVING CREDIT ADVANCES...........................................2
SECTION 1.02. PAYMENTS AND PREPAYMENTS; TERMINATION OF
REVOLVING CREDIT COMMITMENT.........................................3
SECTION 1.03. USE OF PROCEEDS.....................................................5
SECTION 1.04. LETTERS OF CREDIT...................................................5
SECTION 1.05. INTEREST............................................................5
SECTION 1.06. BORROWING BASE......................................................5
SECTION 1.07. FEES................................................................6
SECTION 1.08. RECEIPT OF PAYMENTS.................................................6
SECTION 1.09. FUNDING, PAYMENTS; NON-FUNDING LENDERS..............................7
SECTION 1.10. APPLICATION AND ALLOCATION OF PAYMENTS..............................8
SECTION 1.11. LOAN ACCOUNT AND ACCOUNTING.........................................9
SECTION 1.12. INDEMNITY...........................................................9
SECTION 1.13. ACCESS.............................................................10
SECTION 1.14. TAXES..............................................................11
SECTION 1.15. CAPITAL ADEQUACY; INCREASED COSTS; ILLEGALITY......................11
SECTION 1.16. SINGLE OBLIGATION..................................................13
ARTICLE 2
CONDITIONS TO EFFECTIVENESS OF THIS AGREEMENT;
EFFECT OF AMENDMENT AND RESTATEMENT;
EXTENSIONS OF CREDIT ON AND AFTER EFFECTIVE DATE
SECTION 2.01. CONDITIONS TO EFFECTIVENESS OF THIS AGREEMENT......................13
SECTION 2.02. CONFIRMATION OF EFFECTIVENESS......................................14
SECTION 2.03. EFFECT OF AMENDMENT AND RESTATEMENT................................15
SECTION 2.04. FURTHER CONDITIONS TO EACH REVOLVING CREDIT
ADVANCE AND LETTER OF CREDIT OBLIGATION ON AND
AFTER THE EFFECTIVE DATE...........................................15
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. CORPORATE EXISTENCE; COMPLIANCE WITH LAW...........................16
SECTION 3.02. EXECUTIVE OFFICES; COLLATERAL LOCATIONS;
CORPORATE OR OTHER NAMES...........................................17
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
<S> <C> <C>
SECTION 3.03. CORPORATE POWER; AUTHORIZATION;
ENFORCEABLE OBLIGATIONS............................................17
SECTION 3.04. FINANCIAL STATEMENTS AND PROJECTIONS...............................17
SECTION 3.05. MATERIAL ADVERSE EVENTS............................................17
SECTION 3.06. OWNERSHIP OF PROPERTY; LIENS.......................................18
SECTION 3.07. RESTRICTIONS; NO DEFAULT; MATERIAL CONTRACTS.......................18
SECTION 3.08. LABOR MATTERS......................................................18
SECTION 3.09. VENTURES, SUBSIDIARIES AND AFFILIATES;
OUTSTANDING STOCK AND INDEBTEDNESS.................................19
SECTION 3.10. GOVERNMENT REGULATION..............................................19
SECTION 3.11. MARGIN REGULATIONS.................................................19
SECTION 3.12. TAXES..............................................................20
SECTION 3.13. ERISA..............................................................20
SECTION 3.14. NO LITIGATION......................................................21
SECTION 3.15. BROKERS............................................................22
SECTION 3.16. PATENTS, TRADEMARKS, COPYRIGHTS AND LICENSES.......................22
SECTION 3.17. FULL DISCLOSURE....................................................22
SECTION 3.18. ENVIRONMENTAL MATTERS..............................................23
SECTION 3.19. INSURANCE POLICIES.................................................24
SECTION 3.20. DEPOSIT AND DISBURSEMENT ACCOUNTS..................................24
SECTION 3.21. SOLVENCY...........................................................24
SECTION 3.22. SUBORDINATION OF SUBORDINATED INDEBTEDNESS.........................24
SECTION 3.23. LICENSES AND PERMITS...............................................25
SECTION 3.24. COMPLIANCE WITH LAW................................................25
SECTION 3.25. HEALTH CARE PROFESSIONALS..........................................25
SECTION 3.26. MANAGEMENT AGREEMENTS..............................................26
SECTION 3.27. PATIENT REFERRALS, ETC.............................................26
SECTION 3.28. PENDING REVOCATIONS, ETC...........................................26
SECTION 3.29. INVESTIGATIONS AND AUDITS..........................................27
SECTION 3.30. PAYMENT ADJUSTMENTS................................................27
SECTION 3.31. CERTAIN AGREEMENTS.................................................27
SECTION 3.32. RELATED TRANSACTIONS...............................................27
ARTICLE 4
FINANCIAL STATEMENTS AND INFORMATION
SECTION 4.01. REPORTS AND NOTICES................................................28
SECTION 4.02. COMMUNICATION WITH ACCOUNTANTS.....................................28
ARTICLE 5
AFFIRMATIVE COVENANTS
SECTION 5.01. MAINTENANCE OF EXISTENCE AND CONDUCT OF BUSINESS...................28
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
<S> <C> <C>
SECTION 5.02. PAYMENT OF CHARGES AND CLAIMS......................................28
SECTION 5.03. BOOKS AND RECORDS..................................................29
SECTION 5.04. LITIGATION.........................................................29
SECTION 5.05. INSURANCE..........................................................29
SECTION 5.06. COMPLIANCE WITH LAWS...............................................30
SECTION 5.07. AGREEMENTS.........................................................30
SECTION 5.08. ENVIRONMENTAL MATTERS..............................................30
SECTION 5.09. CERTAIN OBLIGATIONS RESPECTING SUBSIDIARIES........................31
SECTION 5.10. APPLICATION OF PROCEEDS............................................31
SECTION 5.11. FISCAL YEAR........................................................32
SECTION 5.12. CASUALTY AND CONDEMNATION..........................................32
SECTION 5.13. APPLICATION OF CERTAIN PROCEEDS....................................33
SECTION 5.14. ADDITIONAL MORTGAGED PROPERTIES;
ADDITIONAL CREDIT PARTIES..........................................34
SECTION 5.15. PERMITS, ETC.......................................................35
SECTION 5.16. FURTHER ASSURANCES.................................................35
SECTION 5.17. RAMSAY COMMON STOCK SUBSCRIPTION AGREEMENT.........................36
ARTICLE 6
NEGATIVE COVENANTS
SECTION 6.01. ACQUISITIONS.......................................................36
SECTION 6.02. MERGERS, SUBSIDIARIES, INTERCOMPANY TRANSFERS, ETC.................36
SECTION 6.03. INVESTMENTS........................................................36
SECTION 6.04. INDEBTEDNESS.......................................................37
SECTION 6.05. AFFILIATE AND EMPLOYEE LOANS AND TRANSACTIONS......................37
SECTION 6.06. GUARANTEED INDEBTEDNESS............................................38
SECTION 6.07. LIENS..............................................................38
SECTION 6.08. SALE OF STOCK AND ASSETS...........................................38
SECTION 6.09. MATERIAL CONTRACTS.................................................39
SECTION 6.10. ERISA..............................................................39
SECTION 6.11. FINANCIAL COVENANTS................................................39
SECTION 6.12. HAZARDOUS MATERIALS................................................39
SECTION 6.13. SALE-LEASEBACKS....................................................40
SECTION 6.14. CANCELLATION OF INDEBTEDNESS.......................................40
SECTION 6.15. RESTRICTED PAYMENTS................................................40
SECTION 6.16. NO SPECULATIVE TRANSACTIONS........................................40
SECTION 6.17. MARGIN REGULATIONS.................................................41
SECTION 6.18. LIMITATION ON NEGATIVE PLEDGE CLAUSES, ETC.........................41
SECTION 6.19. ACCOUNTING CHANGES.................................................41
SECTION 6.20. CHANGES RELATING TO SUBORDINATED DEBT..............................41
SECTION 6.21. LEASES.............................................................41
SECTION 6.22. TAX SHARING AGREEMENTS.............................................42
</TABLE>
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<TABLE>
<CAPTION>
ARTICLE 7
TERM
<S> <C> <C>
SECTION 7.01. DURATION...........................................................42
SECTION 7.02. SURVIVAL OF OBLIGATIONS............................................42
ARTICLE 8
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
SECTION 8.01. EVENTS OF DEFAULT..................................................42
SECTION 8.02. REMEDIES...........................................................45
SECTION 8.03. WAIVERS BY CREDIT PARTIES..........................................46
ARTICLE 9
THE ADMINISTRATIVE AGENT
SECTION 9.01. APPOINTMENT OF THE ADMINISTRATIVE AGENT............................46
SECTION 9.02. THE ADMINISTRATIVE AGENT'S RELIANCE, ETC...........................47
SECTION 9.03. GE CAPITAL AND AFFILIATES..........................................48
SECTION 9.04. LENDER CREDIT DECISION.............................................48
SECTION 9.05. INDEMNIFICATION....................................................48
SECTION 9.06. SUCCESSOR ADMINISTRATIVE AGENT.....................................49
SECTION 9.07. DISSEMINATION OF INFORMATION.......................................50
SECTION 9.08. RELEASE OF COLLATERAL..............................................50
ARTICLE 10
SUCCESSORS AND ASSIGNS
SECTION 10.01. SUCCESSORS AND ASSIGNS.............................................50
SECTION 10.02. ASSIGNMENTS AND PARTICIPATIONS.....................................51
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. COMPLETE AGREEMENT.................................................52
SECTION 11.02. AMENDMENTS AND WAIVERS.............................................53
SECTION 11.03. FEES AND EXPENSES; CERTAIN TAXES...................................54
SECTION 11.04. NO WAIVER..........................................................55
SECTION 11.05. REMEDIES...........................................................56
SECTION 11.06. SEVERABILITY.......................................................56
SECTION 11.07. CONFLICT OF TERMS..................................................56
</TABLE>
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<TABLE>
<CAPTION>
<S> <C> <C>
SECTION 11.08. SETOFF AND SHARING OF PAYMENTS.....................................56
SECTION 11.09. AUTHORIZED SIGNATURE...............................................57
SECTION 11.10. NOTICES............................................................57
SECTION 11.11. SECTION TITLES.....................................................59
SECTION 11.12. COUNTERPARTS.......................................................59
SECTION 11.13. TIME OF THE ESSENCE................................................59
SECTION 11.14. PUBLICITY..........................................................59
SECTION 11.15. CONFIDENTIALITY....................................................59
SECTION 11.16. GOVERNING LAW......................................................60
SECTION 11.17. WAIVER OF JURY TRIAL...............................................61
SECTION 11.18. ESTOPPEL...........................................................61
</TABLE>
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<PAGE> 7
INDEX OF ANNEXES, SCHEDULES AND EXHIBITS
<TABLE>
<CAPTION>
<S> <C> <C>
Annex A - Definitions; Rules of Construction
Annex B - Letters of Credit
Annex C - Interest Rates, Etc.
Annex D - Schedule of Closing Documents
Annex E - Insurance Requirements
Annex F - Financial Statements, Projections and Notices
Annex G - Financial Covenants
Schedule 1.01 - Mortgaged Property
Schedule 3.02 - Executive Offices; Other Places of Business
and Collateral Locations; Trade Names
Schedule 3.04 - Financial Statements and Projections
Schedule 3.05 - Contingent Liabilities; Restricted Payments
Schedule 3.06 - Real Property and Leases
Schedule 3.07 - Material Contracts
Schedule 3.09 - Subsidiaries, Joint Ventures and Affiliates; Outstanding
Stock; Indebtedness Held by Credit Parties; Inactive
Subsidiaries; Material Subsidiaries
Schedule 3.12 - Tax Matters
Schedule 3.13 - ERISA Plans
Schedule 3.14 - Litigation
Schedule 3.18 - Certain Environmental Matters
Schedule 3.31 - Certain Agreements
Schedule 6.03 - Investments
Schedule 6.05 - Transactions with Affiliates and Employees
Schedule 6.07 - Liens
Schedule 11.09 - Authorized Signatures
Exhibit A - Form of Notice of Revolving Credit Advance
Exhibit B - Form of Revolving Credit Note
Exhibit C - Form of Assignment Agreement
Exhibit D - Form of Opinion of Borrower's Counsel
</TABLE>
vi
<PAGE> 8
AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT ("AGREEMENT") is entered
into as of September 30, 1998, by and among RAMSAY HEALTH CARE, INC., a Delaware
corporation ("BORROWER"), the lenders from time to time party hereto (the
"LENDERS"), and GENERAL ELECTRIC CAPITAL CORPORATION, a corporation organized
under the banking laws of the State of New York, as administrative agent (in
such capacity, the "ADMINISTRATIVE AGENT").
RECITALS
A. Borrower, Lenders and the Administrative Agent are parties to a
certain Credit Agreement, dated as of September 30, 1997 (as amended by a First
Amendment to Credit Agreement dated as of March 27, 1998, a Second Amendment to
Credit Agreement dated as of May 20, 1998, a Third Amendment to Credit Agreement
dated as of June 29, 1998 and a Fourth Amendment to Credit Agreement dated as of
July 29, 1998, the "ORIGINAL CREDIT AGREEMENT"), pursuant to which Lenders
funded the Term Loans to Borrower and made the Revolving Credit Commitment (as
in effect under the Original Credit Agreement) available to Borrower.
B. On the date hereof, with the consent of the Required Lenders,
Borrower has sold certain of its assets and has utilized the Net Cash Proceeds
thereof (i) to redeem all of the issued and outstanding shares of Series 1997
Preferred Stock, as required by the provisions of Section (e)(iii) of the
Preferred Stock Designation; (ii) to repay in full the Series A Bridge Notes, as
required by Section 2.04(b) of the Original Bridge Note Purchase Agreement, and
all other amounts due to GE Capital under the Original Bridge Note Purchase
Agreement; (iii) to repay in full the Term Loans and to repay a portion of the
Revolving Credit Loan then outstanding under the Original Credit Agreement; and
(iv) to pay to GE Capital certain fees payable to GE Capital in connection with
the transactions taking place on such date.
C. Borrower, Lenders and the Administrative Agent desire to amend the
Original Credit Agreement to reflect the repayment in full of the Term Loans, to
decrease the amount of the Revolving Credit Commitment available under the
Original Credit Agreement, to change the maturity of the Revolving Credit
Commitment to September 30, 1999 and to amend the Original Credit Agreement in
certain other respects, and to restate the Original Credit Agreement, as so
amended, in its entirety, in order to remove references to the Term Loans and to
other transactions that have been completed, to set forth in a single agreement
all of the amendments to the Original Credit Agreement (including those effected
hereby), and for convenience of reference.
D. Unless otherwise defined herein, capitalized terms used herein shall
have the respective meanings ascribed to them in ANNEX A and, for the purposes
of this Agreement and the other Loan Documents, the rules of construction set
forth in ANNEX A shall govern. All Annexes, Schedules and Exhibits to this
Agreement are incorporated into this Agreement and are a part hereof.
These Recitals shall be construed as part of this Agreement.
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AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, and intending to be legally bound, the parties
hereto amend the Original Credit Agreement and restate the Original Credit
Agreement, as so amended, as follows:
ARTICLE 1
AMOUNT AND TERMS OF CREDIT
SECTION 1.01. REVOLVING CREDIT ADVANCES.
(a) Upon and subject to the terms and conditions hereof, each
Lender severally agrees to make available to Borrower, from time to time until
the Revolving Credit Commitment Termination Date, its Pro Rata Share of
revolving credit advances (each, a "REVOLVING CREDIT ADVANCE") in an aggregate
principal amount at any time outstanding up to but not exceeding the Borrowing
Availability. The Pro Rata Share of the Revolving Credit Loan of any Lender, as
set forth opposite such Lender's name on the signature pages hereto, shall not
at any time exceed its Pro Rata Share of the Revolving Credit Commitments. No
Lender shall be responsible for the failure of any other Lender to fund its Pro
Rata Share of any Revolving Credit Advance to be made on any funding date. Each
Revolving Credit Advance shall be in an aggregate amount of $100,000 or an
integral multiple of $50,000 in excess thereof. Until the Revolving Credit
Commitment Termination Date, Borrower may from time to time borrow, repay and
reborrow Revolving Credit Advances under this SECTION 1.01.
(b) Each notice of a borrowing of a Revolving Credit Advance
shall be given in writing (by telecopy, hand delivery, or U.S. mail) by a
Responsible Financial Officer of Borrower to the Administrative Agent in the
manner provided in a written notice requesting such Revolving Credit Advance (a
"NOTICE OF REVOLVING CREDIT ADVANCE") given no later than 2:00 P.M. (New York
time) on the date which is one Business Day prior to the proposed Revolving
Credit Advance. Each such Notice of Revolving Credit Advance shall be
substantially in the form of EXHIBIT A hereto, specifying therein the requested
(i) date of such Revolving Credit Advance, (ii) amount of such Revolving Credit
Advance, (iii) Disbursement Account into which such Revolving Credit Advance
shall be made, and (iv) such other information as may reasonably be requested by
the Administrative Agent. The Administrative Agent and each Lender shall be
entitled to rely upon and shall be fully protected under this Agreement in
relying upon any Notice of Revolving Credit Advance believed by the
Administrative Agent to be genuine and to assume that the persons executing and
delivering the same were duly authorized unless the responsible individual
acting thereon for the Administrative Agent shall have actual knowledge to the
contrary.
(c) The Administrative Agent shall, promptly upon receipt of
any Notice of Revolving Credit Advance, forward a copy of such request to each
of the Lenders. Each Lender
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<PAGE> 10
shall make available to the Administrative Agent the amount of such Lender's Pro
Rata Share of each Revolving Credit Advance by wire transfer to the Payment
Account, in same day funds, not later than 11:00 A.M. (New York time) on the
requested funding date. After receipt of such wire transfers (or, in the
Administrative Agent's sole discretion, before receipt of such wire transfers),
subject to the terms hereof, the Administrative Agent shall make the requested
Revolving Credit Advance to Borrower. All payments by each Lender shall be made
without setoff, counterclaim or deduction of any kind.
(d) Each Notice of Revolving Credit Advance shall be
irrevocable and binding on Borrower.
(e) The Pro Rata Share of the Revolving Credit Advances made
by each Lender shall be evidenced by a promissory note of Borrower substantially
in the form of EXHIBIT B hereto, dated the date hereof, payable to such Lender
in a principal amount equal to the amount of the Revolving Credit Commitment of
such Lender and otherwise duly completed. The date and amount of the Pro Rata
Share of each Revolving Credit Advance made by each Lender and each payment of
principal with respect thereto shall be recorded on the books and records of the
Administrative Agent, which books and records shall constitute PRIMA FACIE
evidence of the accuracy of the information therein recorded.
(f) Borrower shall furnish to the Administrative Agent a
Borrowing Base Certificate substantially in the form of Exhibit A to ANNEX F
hereto, as and when required by ANNEX F hereto, completed and signed by a
Responsible Financial Officer of Borrower, which sets forth a calculation of the
Borrowing Base as of the date set forth therein. Promptly after receipt thereof,
the Administrative Agent shall furnish a copy to each Lender. Borrower agrees
that in making any Revolving Credit Advance hereunder, each Lender shall be
entitled to rely upon the most recent Borrowing Base Certificate delivered to it
by the Administrative Agent. Borrower further agrees that if Borrower shall have
failed to deliver a Borrowing Base Certificate to the Administrative Agent
within the specified period, the Lenders shall be under no obligation to make
any further Re volving Credit Advances (or incur any additional Letter of Credit
Obligations) until such time as such Borrowing Base Certificate is delivered to
the Administrative Agent.
SECTION 1.02. PAYMENTS AND PREPAYMENTS; TERMINATION OF REVOLVING CREDIT
COMMITMENT.
(a) Borrower hereby promises to pay to the Administrative
Agent in immediately available funds, for the ratable benefit of each Lender,
the entire outstanding principal amount of the Revolving Credit Loan, and the
Revolving Credit Loan shall mature, on the Revolving Credit Commitment
Termination Date.
(b) In the event that the outstanding balance of the Revolving
Credit Loan shall at any time exceed the Borrowing Availability, Borrower shall
immediately repay the Revolving Credit Loan in the amount of such excess. If any
such excess remains after repayment in full of the
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<PAGE> 11
Revolving Credit Loan, Borrower shall provide cash collateral for the Letter of
Credit Obligations in the manner specified in ANNEX B to the extent required to
eliminate such excess.
(c) Borrower shall have the right, at any time, upon thirty
(30) days' prior written notice to the Administrative Agent, to terminate or
ratably reduce the Revolving Credit Commitments, in whole or in part, without
premium or penalty; PROVIDED, HOWEVER, that (i) each such reduction of the
Revolving Credit Commitments shall be in integral multiples of $1,000,000, and
(ii) the Revolving Credit Commitments may not be reduced to less than $1,000,000
unless terminated in full. Upon any such termination of the Revolving Credit
Commitments, Borrower's right to receive Revolving Credit Advances and the
benefit of Letter of Credit Obligations shall simultaneously terminate and
Borrower's obligation to pay the Non-Use Fee shall terminate, and
notwithstanding anything to the contrary contained herein or in the Revolving
Credit Notes the entire outstanding balance of the Revolving Credit Loan shall
be immediately due and payable. On the date of any such termination, Borrower
shall pay to the Administrative Agent, for the ratable benefit of each Lender,
in immediately available funds, all of the Obligations, together with any
accrued and unpaid interest, and make arrangements in accordance with the terms
and conditions of ANNEX B with respect to any outstanding Letter of Credit
Obligations.
(d) If the unpaid principal balance of the Revolving Credit
Loan should at any time exceed the Borrowing Availability, the excess balance
shall nevertheless constitute Obligations that are secured by the Collateral and
entitled to all of the benefits hereof and of the Loan Documents and shall be
evidenced by the Revolving Credit Note.
(e) Borrower shall make the following prepayments of the
outstanding principal amount of the Revolving Credit Loan as follows:
(i) Promptly upon receipt by any Credit Party of any
cash proceeds of insurance or condemnation pursuant to SECTION 5.12
hereof, or of any asset disposition permitted by SECTION 6.08 hereof,
and in each case to the extent and within the time periods provided by
SECTION 5.13 hereof, Borrower shall prepay the Revolving Credit Loan in
an amount equal to the Net Cash Proceeds thereof;
(ii) If Borrower issues any Stock for cash after the
Effective Date (other than Stock issued (x) upon the exercise of
warrants issued and outstanding on the Original Closing Date, (y) upon
the exercise of stock options issued under any employee stock option
plan of Borrower or (z) under Borrower's 1993 Employee Stock Purchase
Plan), Borrower may retain the first $2,000,000 in Net Cash Proceeds of
such issuance and, no later than the Business Day following the date of
receipt of the proceeds thereof, Borrower shall prepay the Revolving
Credit Loan in an amount equal to 100% of any such Net Cash Proceeds in
excess of the first $2,000,000 thereof; and
(iii) If Borrower issues any debt securities for cash
or otherwise incurs any Indebtedness (other than Indebtedness
specifically permitted by SECTION 6.04 hereof), no later
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<PAGE> 12
than the Business Day following the date of receipt of the proceeds
thereof, Borrower shall prepay the Revolving Credit Loan in an amount
equal to 100% of the Net Cash Proceeds of the issuance of any such debt
securities or incurrence of Indebtedness.
(f) All prepayments made pursuant to paragraph (e) of this
SECTION 1.02 shall be applied FIRST against the outstanding principal amount, if
any, of the Revolving Credit Loan, until paid in full; and SECOND, to the Cash
Collateral Account in accordance with the provisions of ANNEX B until all Letter
of Credit Obligations then outstanding are fully collateralized on the basis set
forth therein. Concurrently with any such prepayment, the Revolving Credit
Commitments shall automatically reduce by an amount equal to the amount of such
prepayment until the Revolving Credit Commitments are reduced to zero.
SECTION 1.03. USE OF PROCEEDS. Borrower shall use the proceeds of the
Revolving Credit Loan (i) for the payment of costs and expenses of the
transactions contemplated by this Agreement that are payable by Borrower, and
(ii) for Borrower's working capital and other corporate purposes not prohibited
by the terms of this Agreement and the other Loan Documents.
SECTION 1.04. LETTERS OF CREDIT. Subject to the terms and conditions of
this Agreement, Borrower shall have the right to request the issuance of Letters
of Credit, and the Lenders agree to incur Letter of Credit Obligations, in
accordance with the terms and conditions set forth in ANNEX B.
SECTION 1.05. INTEREST. Borrower shall pay interest on the Revolving
Credit Loan to the Administrative Agent for the ratable benefit of each Lender:
(i) in arrears for the preceding Fiscal Month, on each Interest Payment Date;
(ii) on the Revolving Credit Commitment Termination Date; and (iii) if any
interest accrues or remains payable after the Revolving Credit Commitment
Termination Date, upon demand. If any interest or other payment under this
Agreement becomes due and payable on a day other than a Business Day, the
maturity thereof shall be extended to the next succeeding Business Day and, with
respect to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension. Interest shall accrue and be payable on
the Revolving Credit Loan at the rate or rates, and upon the terms and
conditions, set forth in ANNEX C. Each determination by the Administrative Agent
of an interest rate hereunder shall be conclusive and binding for all purposes,
absent manifest error or bad faith.
SECTION 1.06. BORROWING BASE. Based on the most recent Borrowing Base
Certificate delivered by Borrower to the Administrative Agent and on other
information available to the Administrative Agent, the Administrative Agent
shall in its reasonable credit judgment determine the amount of Reserves, if
any, in addition to those set forth in the Borrowing Base Certificate, for
purposes of determining the amounts, if any, to be advanced to Borrower under
the Revolving Credit Loan.
5
<PAGE> 13
SECTION 1.07. FEES.
(a) Borrower shall pay to GE Capital, individually or in its
capacity as Administrative Agent, the Fees specified in the GE Capital Fee
Letter, at the times specified for payment therein.
(b) Additionally, as compensation for the Lenders' making the
Revolving Credit Loan and the Letters of Credit available to Borrower, Borrower
agrees to pay to the Administrative Agent, for the ratable benefit of the
Lenders, in arrears, on each Interest Payment Date, the following fees:
(i) An unused facility fee (the "NON-USE FEE"), equal
to one-half of one percent (1/2 of 1%) per annum on the average unused
daily balance of the Revolving Credit Commitments; and
(ii) A letter of credit fee (the "LETTER OF CREDIT
FEE") at a rate per annum equal to two percent (2%) on the average
outstanding Letter of Credit Obligations; PROVIDED, HOWEVER, that, if
an Event of Default shall have occurred and be continuing, the
Administrative Agent may (or, upon the written request of the Required
Lenders, shall), by written notice to Borrower, increase such rate per
annum to the Default Rate, effective as of the initial date of such
Event of Default and continuing until the date on which such Event of
Default is waived or cured; PROVIDED, FURTHER, HOWEVER, that, upon the
occurrence of an Event of Default specified in SECTIONS 8.01(G), (H) or
(I), such rate per annum shall automatically increase to the Default
Rate.
(c) All Fees payable pursuant to paragraph (b) above shall be
payable in arrears for the preceding Fiscal Month, on each Interest Payment
Date. All computations of Fees calculated on a per annum basis shall be made by
the Administrative Agent on the basis of a three hundred and sixty (360) day
year, in each case for the actual number of days occurring in the period for
which such Fees are payable.
SECTION 1.08. RECEIPT OF PAYMENTS. Borrower shall make each payment
under this Agreement not later than 12:00 Noon (New York time) on the day when
due in Dollars in immediately available funds to the Payment Account. For
purposes of determining Borrowing Availability and computing interest and Fees
hereunder, all payments shall be deemed received by the Administrative Agent on
the day of receipt of immediately available funds therefor in the Payment
Account prior to 12:00 Noon (New York time). Payments received after 12:00 Noon
(New York time) on any Business Day shall be deemed to have been received on the
following Business Day.
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<PAGE> 14
SECTION 1.09. FUNDING, PAYMENTS; NON-FUNDING LENDERS.
(a) AVAILABILITY OF EACH LENDER'S PRO RATA SHARE. The
Administrative Agent may assume that each Lender will make its Pro Rata Share of
each Revolving Credit Advance available to the Administrative Agent on each
funding date. If such Pro Rata Share is not, in fact, paid to the Administrative
Agent by such Lender when due, the Administrative Agent will be entitled to
recover such amount on demand from such Lender without set-off, counterclaim or
deduction of any kind. If such Lender fails to pay the amount of its Pro Rata
Share forthwith upon the Administrative Agent's demand, the Administrative Agent
shall promptly notify Borrower and Borrower shall immediately repay such amount
to the Administrative Agent. Nothing in this SECTION 1.09(A) or elsewhere in
this Agreement or the other Loan Documents shall be deemed to require the
Administrative Agent to advance funds on behalf of any Lender or to relieve any
Lender from its obligation to fulfill its Revolving Credit Commitment hereunder
or to prejudice any rights that Borrower may have against any Lender as a result
of any default by such Lender hereunder. To the extent that the Administrative
Agent advances funds to Borrower on behalf of any Lender and is not reimbursed
therefor on the same Business Day as such Revolving Credit Advance is made, the
Administrative Agent shall be entitled to retain for its account all interest
accrued on that Lender's portion of such Revolving Credit Advance until
reimbursed by the applicable Lender.
(b) PAYMENTS. Upon the receipt of any payment from Borrower
with respect to any Obligation, the Administrative Agent will advise each Lender
by telephone or telecopy of the amount of such Lender's Pro Rata Share of
principal, interest and Fees paid for the benefit of Lenders with respect to
each applicable Loan. Provided that such Lender has made all payments required
to be made by it under this Agreement and the other Loan Documents as of such
date, the Administrative Agent will pay to each Lender such Lender's Pro Rata
Share of principal, interest and Fees paid by Borrower for the benefit of that
Lender on the portion of the Revolving Credit Loan held by it. Such payments
shall be made by wire transfer to such Lender's account (as specified by such
Lender to the Administrative Agent) promptly following receipt thereof by the
Administrative Agent.
(c) RETURN OF PAYMENTS. If the Administrative Agent pays an
amount to a Lender under this Agreement in the belief or expectation that a
related payment has been or will be received by the Administrative Agent from
Borrower and such related payment is not received by the Administrative Agent,
then the Administrative Agent will be entitled to recover such amount from such
Lender on demand, without set-off, counterclaim or deduction of any kind. If the
Administrative Agent determines at any time that any amount received by the
Administrative Agent under this Agreement must be returned to Borrower or paid
to any other Person pursuant to any insolvency law or otherwise, then,
notwithstanding any other term or condition of this Agreement or any other Loan
Document, the Administrative Agent will not be required to distribute any
portion thereof to any Lender. In addition, each Lender will repay to the
Administrative Agent on demand any portion of such amount that the
Administrative Agent has distributed to such Lender, together with interest at
such rate, if any, as the Administrative Agent is required to pay to Borrower or
such other Person, without set-off, counterclaim or deduction of any kind.
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<PAGE> 15
(d) NON-FUNDING LENDERS. The failure of any Lender (such
Lender, a "NON- FUNDING LENDER") to make its Pro Rata Share of any Revolving
Credit Advance on the date specified therefor shall not relieve any other Lender
(each such other Lender, an "OTHER LENDER") of its obligation to make its Pro
Rata Share of such Revolving Credit Advance, but neither any Other Lender nor
the Administrative Agent shall be responsible for the failure of any Non-Funding
Lender to make its Pro Rata Share of any Revolving Credit Advance to be made on
any funding date, and no Non-Funding Lender shall have any obligation to the
Administrative Agent or any Other Lender for the failure by such Non-Funding
Lender. Notwithstanding anything set forth herein to the contrary, a Non-Funding
Lender shall not have any voting or consent rights under or with respect to any
Loan Document or constitute a "Lender" (or be included in the calculation of
"Required Lenders" hereunder) for any voting or consent rights under or with
respect to any Loan Document.
SECTION 1.10. APPLICATION AND ALLOCATION OF PAYMENTS.
(a) So long as no Default or Event of Default shall have
occurred and be continuing, (i) payments matching specific scheduled payments
then due shall be applied to those scheduled payments; (ii) voluntary
prepayments shall be applied as determined by Borrower, subject to the
provisions of SECTION 1.02(F); and (iii) mandatory prepayments shall be applied
as set forth in SECTION 1.02(F). As to each other payment, and as to all
payments made when a Default or Event or Default shall have occurred and be
continuing or following the Revolving Credit Commitment Termination Date,
Borrower hereby irrevocably waives the right to direct the application of any
and all payments received from or on behalf of Borrower (including any proceeds
of Collateral), and Borrower and each Lender hereby irrevocably agree that the
Administrative Agent shall have the continuing exclusive right to apply any and
all such payments against the Obligations in the follow ing order: FIRST, to the
payment of any "Administrative Agent's Fee" or other fees then due and pay able
to the Administrative Agent, in its capacity as such, under the GE Capital Fee
Letter; SECOND, to the payment of all expenses incurred by the Administrative
Agent in connection with the exercise, protection and enforcement (whether
through negotiations, legal proceedings or otherwise) of this Agreement, the
Revolving Credit Notes, the Subsidiary Guaranty, or any of the other Loan
Documents; THIRD, to the payment of interest and Fees owed to each Lender,
ratably among all of the Lenders in accordance with the aggregate amount of
interest and Fees then owed to each of them; FOURTH, to the payment of the
principal amount of the Revolving Credit Notes and the Letter of Credit
Obligations then due and payable and for deposit to the Cash Collateral Account
in accordance with ANNEX B with respect to Letter of Credit Obligations not then
due and payable, ratably among all of the Lenders in accordance with the
aggregate amount of the Revolving Credit Loan and Letter of Credit Obligations
then outstanding; FIFTH, to the payment of all expenses then due and payable to
the Lenders under SECTION 11.03 hereof (other than expenses payable under item
SECOND above), ratably among each of them in accordance with the aggregate
amount of such amounts then owed to each of them; and SIXTH, to the payment of
all other Obligations of Borrower or any other Credit Party hereunder, including
any such Obligations of Borrower to any Indemnified Party entitled to
indemnification under SECTION 1.12 hereof, ratably among all of the Indemnified
Parties in accordance with the aggregate amount then owed to each of them.
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(b) The Administrative Agent is authorized to, and at its
option may, charge to the Revolving Credit Loan balance on behalf of Borrower
and cause to be paid all Fees, expenses, Charges, costs (including insurance
premiums in accordance with SECTION 5.05), principal, interest, or other
Obligations then due and payable by Borrower under this Agreement or any of the
Loan Documents, if and to the extent that Borrower fails promptly to pay any
such amounts as and when due, even if the making of such Revolving Credit
Advance causes the outstanding balance of the Revolving Credit Loan to exceed
the Borrowing Availability, in which case the terms of SECTIONS 1.02(B) and (D)
shall apply.
SECTION 1.11. LOAN ACCOUNT AND ACCOUNTING. The Administrative Agent
shall maintain a loan account (the "LOAN ACCOUNT") on its books to record: (a)
all Revolving Credit Advances and Letter of Credit Obligations, (b) all payments
made by Borrower, and (c) all other debits and credits as provided in this
Agreement with respect to the Revolving Credit Loan or any other Obligations.
All entries in the Loan Account shall be made in accordance with the
Administrative Agent's customary accounting practices as in effect from time to
time. The balance in the Loan Account, as recorded on the Administrative Agent's
most recent printout or other written statement, shall be presumptive evidence
of the amounts due and owing to the Administrative Agent and Lenders by
Borrower; PROVIDED that any failure to so record or any error in so recording
shall not limit or otherwise affect Borrower's duty to pay the Obligations. The
Administrative Agent will provide a monthly accounting of transactions under the
Revolving Credit Loan to Borrower and each Lender. Each and every such
accounting shall (absent manifest error) be deemed final, binding and conclusive
upon Borrower in all respects as to all matters reflected therein, unless
Borrower, within thirty (30) days after the date any such accounting is
rendered, shall notify the Administrative Agent in writing of any objection
which Borrower may have to any such accounting, describing the basis for such
objection with reasonable specificity. In that event, only those items (the
"DISPUTED ITEMS") expressly objected to in such notice shall be deemed to be
disputed by Borrower. The Administrative Agent's determination, based upon the
facts available, of any disputed item shall (absent manifest error) be final,
binding and conclusive on Borrower.
SECTION 1.12. INDEMNITY.
(a) Irrespective of whether any Revolving Credit Advance is
ever made hereunder or any Letter of Credit ever issued hereunder, Borrower and
each other Credit Party shall indemnify and hold the Administrative Agent, the
Syndication Agent, each Lender, each Letter of Credit Issuer, their respective
Affiliates, and their respective officers, directors, employees, attorneys and
agents (each, an "INDEMNIFIED PERSON"), harmless from and against any and all
suits, actions, costs, fines, deficiencies, penalties, proceedings, claims,
damages, losses, liabilities and expenses (including reasonable attorneys' fees
and disbursements and other costs of investigations or defense, including those
incurred upon any appeal) (each, a "CLAIM") which may be instituted or asserted
against or incurred by such Indemnified Person as the result of credit having
been extended under this Agreement or any other Loan Document or otherwise
arising in connection with the transactions contemplated hereunder and
thereunder, including any and all Environmental Liabilities and
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regardless of whether the Indemnified Person is a party to such Claim; PROVIDED,
that Borrower shall not be liable for any indemnification to such Indemnified
Person with respect to any portion of any such Claim which results solely from
such Indemnified Person's gross negligence, willful misconduct or breach of this
Agreement as determined by a final judgment of a court of competent
jurisdiction. NEITHER THE ADMINISTRATIVE AGENT, THE SYNDICATION AGENT, ANY
LENDER NOR ANY OTHER INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY
OTHER PARTY HERETO, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OF SUCH
PERSON OR ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR
INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A
RESULT OF CREDIT HAVING BEEN EXTENDED UNDER THE LOAN DOCUMENTS OR OTHERWISE IN
CONNECTION WITH THE TRANSACTIONS CONTEMPLATED THEREBY.
(b) In addition, Borrower and each other Credit Party shall
indemnify each Lender in the manner specified in ANNEXES B and C.
SECTION 1.13. ACCESS. Borrower and each of the other Credit Parties
shall, at the expense of the Administrative Agent (unless an Event of Default
shall have occurred and be continuing and as otherwise provided in the GE
Capital Fee Letter), provide access during normal business hours to the
Administrative Agent and any of its officers, employees and agents, as
frequently as the Administrative Agent determines to be reasonably appropriate,
upon at least three Business Days' advance notice (unless a Default or Event of
Default shall have occurred and be continuing, in which event no notice shall be
required and the Administrative Agent shall have access at any and all times,
without notice), to the properties and facilities of Borrower and each of the
other Credit Parties and, while the Administrative Agent has access to such
properties and facilities, (a) permit the Administrative Agent and any of its
officers, employees and agents to inspect and make extracts from all of
Borrower's and the other Credit Parties' records, files and books of account;
and (b) permit the Administrative Agent to inspect, review, evaluate and make
test verifications of the Collateral, and Borrower and each of the other Credit
Parties shall render to the Administrative Agent, at Borrower's or such Credit
Party's reasonable cost and expense, such clerical and other assistance as may
be reasonably requested with regard thereto. Borrower and each of the other
Credit Parties shall make available to the Administrative Agent and its counsel,
as quickly as practicable under the circumstances, originals or copies of all
books, records, board minutes, contracts, insurance policies, environmental
audits, business plans, files, financial statements (actual and PRO FORMA),
filings with federal, state and local regulatory agencies, and other instruments
and documents which the Administrative Agent may request, but excluding (i) any
confidential patient medical records and (ii) confidential information relating
to a proposed Acquisition and subject to a confidentiality agreement in favor of
the seller. Borrower and each of the other Credit Parties shall deliver any
document or instrument reasonably necessary for the Administrative Agent, as it
may from time to time request, to obtain records from any service bureau or
other Person which maintains records for Borrower or the other Credit Parties.
Borrower shall instruct its independent certified public accountants and its
banking and other financial institutions to make available to the Administrative
Agent such information and records as the Administrative Agent may reasonably
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request. Representatives of other Lenders may accompany the Administrative
Agent's representatives, but Borrower shall not be charged for the costs or
expenses of the representatives of such other Lenders.
SECTION 1.14. TAXES.
(a) Any and all payments by or on behalf of Borrower hereunder
or under the Revolving Credit Notes or any other Loan Document, shall be made,
in accordance with this SECTION 1.14, free and clear of and without deduction
for any and all present or future Taxes. If Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder or under the
Revolving Credit Notes or any other Loan Document to the Administrative Agent
for distribution to any Lender or Letter of Credit Issuer, (i) the sum payable
shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this SECTION 1.14) each such Lender or Letter of Credit Issuer receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) Borrower shall make such deductions, and (iii) Borrower shall pay the full
amount deducted to the relevant taxing or other authority in accordance with
applicable law.
(b) Each Credit Party shall indemnify and, within ten (10)
days after demand therefor, shall pay to the Administrative Agent, for the
benefit of such Lender or Letter of Credit Issuer, the full amount of Taxes
(including any Taxes imposed by any jurisdiction on amounts payable under this
SECTION 1.14) paid by any Lender or Letter of Credit Issuer and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto, whether or not such Taxes were correctly or legally asserted.
(c) Within thirty (30) days after the date of any such payment
of Taxes, Borrower shall furnish to the Administrative Agent, at its address
referred to in SECTION 11.10, the original or a certified copy of a receipt
evidencing payment thereof.
(d) For the purposes of this SECTION 1.14, "TAXES" shall mean
taxes, levies, imposts, deductions, charges or withholdings, and all liabilities
with respect thereto, excluding taxes imposed on or measured by the net income
of Lenders, the Letter of Credit Issuers or any of their respective assigns
pursuant to SECTION 10.02, by the United States, the jurisdiction under the laws
of which any Lender, any Letter of Credit Issuer or any of such assigns is
organized or, in each case, any political subdivision thereof.
SECTION 1.15. CAPITAL ADEQUACY; INCREASED COSTS; ILLEGALITY.
(a) If the Administrative Agent, any Lender, or any Letter of
Credit Issuer party to this Agreement shall have determined that the adoption
after the date hereof of any law, treaty, governmental (or quasi-governmental)
rule, regulation, guideline or order regarding capital adequacy, reserve
requirements or similar requirements or compliance by any Lender or any such
Letter of Credit Issuer with any request or directive regarding capital
adequacy, reserve requirements
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or similar requirements (whether or not having the force of law) from any
central bank or other Governmental Authority increases or would have the effect
of increasing the amount of capital, reserves or other funds required to be
maintained by such Lender or Letter of Credit Issuer and thereby reducing the
rate of return on such Lender's or Letter of Credit Issuer's capital as a
consequence of its obligations hereunder, then Borrower shall from time to time
upon demand by such Lender or Letter of Credit Issuer (with a copy of such
demand to the Administrative Agent) pay to the Administrative Agent, for the
account of such Lender or Letter of Credit Issuer, additional amounts sufficient
to compensate such Lender or Letter of Credit Issuer for such reduction. A
certificate as to the amount of that reduction and showing the basis therefor
and the computation thereof submitted by such Lender or Letter of Credit Issuer
to Borrower and to the Administrative Agent shall, absent manifest error, be
final, conclusive and binding for all purposes.
(b) If, due to either (i) the introduction of or any change in
any law or regulation (or any change in the interpretation thereof) after the
date hereof or (ii) the compliance with any guideline or request from any
central bank or other Governmental Authority (whether or not having the force of
law) after the date hereof, there shall be any increase in the cost to any
Lender or to any Letter of Credit Issuer party hereto of agreeing to make or
making, funding or maintaining any Revolving Credit Loan or of agreeing to issue
or purchase a participation interest in or in issuing or purchasing a
participation interest in any Letter of Credit or Letter of Credit Obligation,
then Borrower shall from time to time, upon demand by such Lender or Letter of
Credit Issuer (with a copy of such demand to the Administrative Agent), pay to
the Administrative Agent for the account of such Lender or Letter of Credit
Issuer additional amounts sufficient to compensate such Lender or Letter of
Credit Issuer for such increased cost. A certificate as to the amount of such
increased cost, the basis therefor and the computation thereof, submitted to
Borrower and to the Administrative Agent by such Lender or Letter of Credit
Issuer, shall be conclusive and binding on Borrower for all purposes, absent
manifest error. Each Lender and Letter of Credit Issuer party hereto agrees
that, as promptly as practicable after it becomes aware of any circumstances
referred to above which would result in any such increased cost, the affected
Lender or Letter of Credit Issuer shall, to the extent not inconsistent with
such Lender's or Letter of Credit Issuer's internal policies of general
application, use reasonable commercial efforts to minimize costs and expenses
incurred by it and payable to it by Borrower pursuant to this SECTION 1.15(B).
(c) If any Lender requests compensation from Borrower under
SECTION 1.15(B), Borrower may at its option, within fifteen (15) days after
receipt by Borrower of written demand from such Lender (an "AFFECTED LENDER")
for payment of such increased costs, notify the Administrative Agent and such
Affected Lender of its intention to replace the Affected Lender. So long as no
Default or Event of Default shall have occurred and be continuing, Borrower,
with the consent of the Administrative Agent, may obtain, at Borrower's expense,
a replacement Lender ("REPLACEMENT LENDER") for the Affected Lender, which
Replacement Lender must be satisfactory to the Administrative Agent. If Borrower
obtains a Replacement Lender within ninety (90) days following notice of its
intention to do so, the Affected Lender must sell and assign its portion of the
Revolving Credit Loan and any Revolving Credit Commitment to such Replacement
Lender for an amount equal to the principal balance of the portion of the
Revolving Credit Loan held by the
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Affected Lender and all accrued interest and Fees with respect thereto through
the date of such sale, PROVIDED that Borrower shall have reimbursed such
Affected Lender for the increased costs that it is entitled to receive under
SECTION 1.15(B) through the date of such sale and assignment. Notwithstanding
the foregoing, Borrower shall not have the right to obtain a Replacement Lender
if the Affected Lender rescinds its demand for increased costs within fifteen
(15) days following its receipt of Borrower's notice of intention to replace
such Affected Lender. Furthermore, if Borrower gives a notice of intention to
replace and does not so replace such Affected Lender within ninety (90) days
thereafter, Borrower's rights under this SECTION 1.15(C) shall terminate and
Borrower shall promptly pay all increased costs demanded by such Affected Lender
pursuant to SECTION 1.15(B).
(d) Each Lender or Letter of Credit Issuer that desires
compensation under this SECTION 1.15 shall notify Borrower of any event
occurring after the date hereof entitling such Lender or Letter of Credit Issuer
to compensation under paragraph (a) or (b) of this SECTION 1.15 as promptly as
practicable, but in any event within 90 days after such Person obtains knowledge
thereof; PROVIDED that if any such Lender or Letter of Credit Issuer fails to
give such notice within 90 days after it obtains knowledge of such an event,
such Person shall, with respect to compensation payable pursuant to this SECTION
1.15 in respect of any costs resulting from such event, only be entitled to
payment under this SECTION 1.15 for costs incurred from and after the date 90
days prior to the date that such Lender or Letter of Credit Issuer does give
notice.
SECTION 1.16. SINGLE OBLIGATION. All Revolving Credit Advances to
Borrower and all of the other Obligations of Borrower and any other Credit Party
arising under this Agreement and the other Loan Documents shall constitute one
general obligation of Borrower and the other Credit Parties secured, until the
Termination Date, by all of the Collateral.
ARTICLE 2
CONDITIONS TO EFFECTIVENESS OF THIS AGREEMENT;
EFFECT OF AMENDMENT AND RESTATEMENT;
EXTENSIONS OF CREDIT ON AND AFTER EFFECTIVE DATE
SECTION 2.01. CONDITIONS TO EFFECTIVENESS OF THIS AGREEMENT. This
Agreement shall not become effective, the Original Credit Agreement shall remain
in full force and effect, Borrower shall have no rights under this Agreement and
neither Lenders nor the Administrative Agent shall be obligated to take, fulfill
or perform any action hereunder, until the following conditions have been
fulfilled to the satisfaction of the Administrative Agent:
(a) CREDIT AGREEMENT; LOAN DOCUMENTS. This Agreement or
counterparts hereof shall have been duly executed by, and delivered to,
Borrower, each other Credit Party, the Administrative Agent and Lenders; and the
Administrative Agent shall have received such documents, instruments, agreements
and legal opinions as the Administrative Agent shall reasonably request in
connection with the transactions contemplated by this Agreement and the other
Loan
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Documents, including all those listed in the Schedule of Closing Documents
attached hereto as ANNEX D, each in form and substance satisfactory to the
Administrative Agent.
(b) APPROVALS. The Administrative Agent shall have received
(i) satisfactory evidence that the Credit Parties have obtained all required
consents and approvals of all Persons including all requisite Governmental
Authorities, to the execution, delivery and performance of this Agreement and
the other Loan Documents and the consummation of the Related Transactions or
(ii) an officer's certificate in form and substance reasonably satisfactory to
the Administrative Agent affirming that no such consents or approvals are
required.
(c) PAYMENT OF FEES. Borrower shall have paid the Fees
required to be paid on the Effective Date in the respective amounts specified in
SECTION 1.07 (including the Fees specified in the GE Capital Fee Letter), and
shall have reimbursed the Administrative Agent for all reasonable legal fees and
all other out-of-pocket costs and expenses of closing presented as of the actual
date of execution of this Agreement.
(d) CONSUMMATION OF RELATED TRANSACTIONS. Each of the Related
Transaction Conditions shall have been satisfied, each of the Related
Transactions shall have been consummated, Borrower shall have received not less
than $27,200,000 in Net Cash Proceeds in respect of the Related Transactions and
Borrower shall have applied such Net Cash Proceeds (i) to the extent of
$2,739,028.25, to the redemption in full of the Series 1997 Preferred Stock as
required by Section (e)(iii) of the Preferred Stock Designation; (ii) to the
extent of $16,151,041.57 to prepay in full the Series A Bridge Notes, together
with all accrued and unpaid interest thereon as required by Section 2.04(b) of
the Original Bridge Note Purchase Agreement, and the Contingent Payment Amount
due GE Capital under Article 3 thereof; (iii) to the extent of $3,703,528.92, to
prepay in full the Term Loans, together with all accrued but unpaid interest
thereon; (iv) to the extent of the amounts then due and payable under the GE
Capital Fee Letter, to pay to GE Capital such amounts; and (v) to the extent of
the balance, to prepay a like principal amount of the Revolving Credit Loan.
(e) SERIES B BRIDGE NOTES. The holder or holders of the Series
B Bridge Notes shall have waived in writing the applicability of Section 2.04(b)
of the Original Bridge Note Purchase Agreement to the Series B Bridge Notes.
(f) BRIDGE NOTE PURCHASE AGREEMENT. The parties to the
Original Bridge Note Purchase Agreement shall have entered into the Bridge Note
Purchase Agreement, amending and restating the Original Bridge Note Purchase
Agreement to reflect the payment in full of the Series A Bridge Notes and the
Contingent Payment Amount due GE Capital under Article 3 thereof, to amend the
provisions of Article 3 thereof on a basis satisfactory to the parties thereto
and the Administrative Agent and to amend the terms and conditions thereof in
certain other respects satisfactory to the parties thereto and the
Administrative Agent.
SECTION 2.02. CONFIRMATION OF EFFECTIVENESS. Upon the fulfillment of
each of the con ditions to the effectiveness of this Agreement set forth in
SECTION 2.01, the Administrative Agent
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shall deliver to Borrower a letter confirming that the foregoing conditions have
been fulfilled (or, if any such condition precedent has been waived, stating the
terms and conditions of such waiver) and stating that this Agreement has become
effective. Upon the effectiveness of this Agreement, this Agreement shall be
effective from and after the Effective Date.
SECTION 2.03. EFFECT OF AMENDMENT AND RESTATEMENT. Upon the
effectiveness of this Agreement pursuant to SECTION 2.01, from and after the
Effective Date: (a) except as expressly set forth herein, all terms and
conditions of the Original Credit Agreement and the other Loan Documents shall
be and remain in full force and effect and shall constitute the legal, valid,
binding and enforceable obligations of Borrower to the Lenders and the
Administrative Agent; (b) the terms and conditions of the Original Credit
Agreement shall be amended as set forth herein and, as so amended, shall be
restated in their entirety, but only with respect to the rights, duties and
obligations among Borrower, the Lenders and the Administrative Agent accruing
from and after the Effective Date; (c) this Agreement shall not in any way
release or impair the rights, duties, Obligations or Liens created pursuant to
the Original Credit Agreement or any other Loan Document or affect the relative
priorities thereof, in each case to the extent in force and effect thereunder as
of the Effective Date and except as modified hereby or by documents, instruments
and agreements executed and delivered in connection herewith, and all of such
rights, duties, Obligations and Liens are assumed, ratified and affirmed by
Borrower; (d) all indemnification obligations of Borrower under the Original
Credit Agreement and any other Loan Documents shall survive the execution and
delivery of this Agreement and shall continue in full force and effect for the
benefit of the Lenders, the Administrative Agent, the Syndication Agent and any
other Person indemnified under the Original Credit Agreement or any other Loan
Document at any time prior to the Effective Date (including, without limitation,
to the extent set forth in Sections 1.14 and 9.05 of the Original Credit
Agreement as in effect immediately prior to the Effective Date); (e) the
Obligations incurred under the Original Credit Agreement shall, to the extent
outstanding on the Effective Date, continue outstanding under this Agreement and
shall not be deemed to be paid, released, discharged or otherwise satisfied by
the execution of this Agreement, and this Agreement shall not constitute a
refinancing, substitution or novation of such Obligations or any of the other
rights, duties and obligations of the parties hereunder; (f) the execution,
delivery and effectiveness of this Agreement shall not operate as a waiver of
any right, power or remedy of the Lenders or the Administrative Agent under the
Original Credit Agreement, nor constitute a waiver of any covenant, agreement or
obligation under the Original Credit Agreement, except to the extent that any
such covenant, agreement or obligation is no longer set forth herein or is
modified hereby; and (g) any and all references in the Loan Documents to the
Original Credit Agreement shall, without further action of the parties, be
deemed a reference to the Original Credit Agreement, as amended and restated by
this Agreement, and as this Agreement shall be further amended or amended and
restated from time to time hereafter.
SECTION 2.04. FURTHER CONDITIONS TO EACH REVOLVING CREDIT ADVANCE AND
LETTER OF CREDIT OBLIGATION ON AND AFTER THE EFFECTIVE DATE. Except as otherwise
expressly provided herein, no Lender shall be obligated to fund any Revolving
Credit Advance or incur any Letter of Credit Obligation on or after the
Effective Date, if, as of the date thereof:
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(a) Any representation or warranty by any Credit Party
contained herein or in any of the other Loan Documents shall be untrue or
incorrect as of such date, except to the extent that such representation or
warranty expressly relates to an earlier date and except for changes therein
expressly permitted or expressly contemplated by this Agreement; or
(b) Any Material Adverse Event shall have occurred and be
continuing since the Audit Date; or
(c) (i) Any Event of Default shall have occurred and be
continuing or would result after giving effect to any Revolving Credit Advance
(or the incurrence of any Letter of Credit Obligations), or (ii) a Default shall
have occurred and be continuing or would result after giving effect to any
Revolving Credit Advance, and the Administrative Agent or the Required Lenders
shall have determined not to make any Revolving Credit Advance or incur any
Letter of Credit Obligation so long as that Default is continuing; or
(d) After giving effect to any Revolving Credit Advance (or
the incurrence of any Letter of Credit Obligations), the outstanding principal
amount of the Revolving Credit Loan would exceed the Borrowing Availability.
The request and acceptance by Borrower of the proceeds of any Revolving Credit
Advance or the incurrence of any Letter of Credit Obligations, shall be deemed
to constitute, as of the date thereof, (i) a representation and warranty by
Borrower that the conditions in this SECTION 2.02 have been satisfied and (ii) a
reaffirmation by Borrower of the granting and continuance of the Administrative
Agent's Liens, on behalf of itself and Lenders, pursuant to the Collateral
Documents.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
To induce Lenders and the Administrative Agent to enter into this
Agreement, Borrower and each Credit Party represents and warrants to each Lender
and the Administrative Agent that:
SECTION 3.01. CORPORATE EXISTENCE; COMPLIANCE WITH LAW. Borrower and
each of its Subsidiaries: (a) is a corporation duly organized or, in the case of
certain of its Subsidiaries, a partnership or a limited liability company duly
formed; (b) is validly existing and in good standing under the laws of the
jurisdiction of its incorporation or formation; (c) is duly qualified to do
business and is in good standing in each other jurisdiction where its ownership
or lease of property or the conduct of its business requires such qualification
except where a failure to be so qualified and in good standing is not a Material
Adverse Event; (d) has the requisite corporate, partnership or limited liability
company power and authority, as the case may be, and the legal right to own,
pledge, mortgage or otherwise encumber and operate its properties, to lease the
property it operates under lease, and to conduct its business as now, heretofore
and proposed to be conducted; and (e) is in
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compliance with its articles or certificate of incorporation and bylaws, its
partnership agreement or limited liability company operating agreement, as the
case may be.
SECTION 3.02. EXECUTIVE OFFICES; COLLATERAL LOCATIONS; CORPORATE OR
OTHER NAMES. The locations of Borrower's and each of the other Credit Parties'
respective executive offices, principal places of business, corporate offices,
all premises within which any Collateral is located, and the locations of all of
Borrower's and each of the other Credit Parties' records concerning the
Collateral, in each case as of the Effective Date, are set forth in SCHEDULE
3.02. During the prior five years, except as set forth in SCHEDULE 3.02, neither
Borrower nor any of the other Credit Parties has been known as or used any
corporate, fictitious or trade name.
SECTION 3.03. CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.
The execution, delivery and performance by Borrower and each of the other Credit
Parties of this Agreement and the other Loan Documents to which it is a party
and the creation of all Liens provided for herein and therein: (a) are within
Borrower's and each such Credit Party's corporate power; (b) have been duly
authorized by all necessary corporate and shareholder action; (c) are not in
contravention of any provision of Borrower's or any such Credit Party's articles
or certificate of incorporation or bylaws or other organizational documents; (d)
do not violate any law or regulation, or any order or decree of any Governmental
Authority; (e) do not conflict with or result in the breach or termination of,
constitute a default under or accelerate any performance required by, any
indenture, mortgage, deed of trust, lease, agreement or other instrument to
which Borrower or any such Credit Party is a party or by which Borrower or any
such Credit Party or any of their respective property is bound, including,
without limitation, any agreement, document or instrument relating to
Subordinated Indebtedness; (f) do not result in the creation or imposition of
any Lien upon any of the Property of Borrower or any such Credit Party other
than those in favor of the Administrative Agent for the ratable benefit of the
Lenders, all pursuant to the Collateral Documents; and (g) do not require the
consent or approval of any Governmental Authority or any other Person, except
those consents and approvals referred to in SECTION 2.01(C), all of which will
have been duly obtained, made or complied with prior to the Effective Date and
which are in full force and effect. At or prior to the Effective Date, each of
the Loan Documents shall have been duly executed and delivered for the benefit
of or on behalf of Borrower and each of the other Credit Parties party thereto
and each shall then constitute a legal, valid and binding obligation of Borrower
and each such Credit Party, enforceable against Borrower and each such Credit
Party a party thereto in accordance with its terms except as the enforceability
of such Loan Document may be limited by bankruptcy, insolvency, reorganization,
moratorium and other laws affecting creditor's rights and remedies in general.
SECTION 3.04. FINANCIAL STATEMENTS AND PROJECTIONS. Borrower has
delivered to the Administrative Agent the Financial Statements and Projections
identified in SCHEDULE 3.04, and each of such Financial Statements and
Projections complies with the description thereof contained in SCHEDULE 3.04 as
of the Effective Date.
SECTION 3.05. MATERIAL ADVERSE EVENTS. As of the Effective Date, except
as set forth in SCHEDULE 3.05, Borrower and its Subsidiaries have no material
obligations, known material
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contingent liabilities, or material liabilities for Charges, long-term leases or
unusual forward or long-term commitments which are not reflected in the
Financial Statements identified in SCHEDULE 3.04. As of the Effective Date,
there has been no material deviation in Borrower's or any of the other Credit
Parties' financial position and results of operations from those reflected in
the Projections. As of the Effective Date, except as otherwise permitted
hereunder or as set forth in SCHEDULE 3.05, no Restricted Payment has been made
since the Audit Date, and no shares of Stock of Borrower have been, or are now
required to be, redeemed, retired, purchased or otherwise acquired for value by
Borrower or any of its Subsidiaries. Since the Audit Date, no Material Adverse
Event has occurred and is continuing.
SECTION 3.06. OWNERSHIP OF PROPERTY; LIENS. The real property listed in
SCHEDULE 3.06 constitutes all of the Real Property owned, leased, or used in
Borrower's or any of the other Credit Parties' respective businesses as of the
Effective Date. Borrower and each of the other Credit Parties holds (a) good and
insurable fee simple title to all Real Property owned by it and described in
SCHEDULE 3.06, subject only to Permitted Encumbrances of the types described in
paragraphs (a), (e) and (i) of the definition thereof, (b) valid and insurable
leasehold interests in all Leases to which it is a party and which are described
in SCHEDULE 3.06, subject only to Permitted Encumbrances of the types described
in paragraphs (a), (e) and (i) of the definition thereof, and (c) good and valid
title to, or valid leasehold interests in, all of its other properties and
assets, subject only to Permitted Liens. As of the Effective Date, none of the
properties and assets of Borrower or any of the other Credit Parties are subject
to any Liens, except Permitted Encumbrances, Liens set forth in SCHEDULE 6.07
and the Lien in favor of the Administrative Agent pursuant to the Collateral
Documents.
SECTION 3.07. RESTRICTIONS; NO DEFAULT; MATERIAL CONTRACTS. No
contract, lease, agreement or other instrument to which Borrower or any of its
Subsidiaries is a party or by which any of them or any of their respective
properties or assets is bound or affected and no provision of any charter,
corporate restriction, applicable law or governmental regulation would cause a
Material Adverse Event. Neither Borrower nor any of its Subsidiaries is in
default and, to Borrower's knowledge, no third party is in default, under or
with respect to any Material Contract, except in each case to the extent that
such default is not a Material Adverse Event. No Default or Event of Default has
occurred and is continuing. As of the Effective Date, SCHEDULES 3.07 and 3.31
set forth a complete and accurate list of all Material Contracts.
SECTION 3.08. LABOR MATTERS. Except as set forth in SCHEDULE 3.08 to
the Original Credit Agreement, as updated pursuant to ANNEX F, there are no
strikes or other labor disputes against Borrower or any of its Subsidiaries that
are pending or, to Borrower's knowledge, threatened that would be a Material
Adverse Event. Hours worked by and payment made to employees of Borrower or its
Subsidiaries have not been in violation of the Fair Labor Standards Act or any
other applicable law dealing with such matters, except where such violations are
not Material Adverse Events. All payments due from Borrower or any of its
Subsidiaries on account of employee health and welfare insurance have been paid
or accrued as a liability on the books of Borrower or such Subsidiary, except in
each case to the extent that a failure to pay or accrue such payment is not a
Material Adverse Event. Except as set forth in such SCHEDULE 3.08, as of the
Effective Date neither Borrower
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nor any of its Subsidiaries has any obligation under any collective bargaining
agreement or any agreement providing for management services to be provided to
Borrower, and a correct and complete copy of each agreement listed on such
SCHEDULE 3.08 has been provided to the Administrative Agent. Except as set forth
on such SCHEDULE 3.08, as of the Effective Date there is no organizing activity
involving Borrower or any of its Subsidiaries pending or, to Borrower's
knowledge, threatened by any labor union or group of employees. Except as set
forth in such SCHEDULE 3.08, as of the Effective Date there are no
representation proceedings pending or, to Borrower's knowledge, threatened with
the National Labor Relations Board with respect to Borrower or any of its
Subsidiaries, and no labor organization or group of employees of Borrower or any
of its Subsidiaries has made a pending demand for recognition. Except as set
forth on such SCHEDULE 3.08, there are no complaints or charges against Borrower
or any of its Subsidiaries pending or, to the knowledge of Borrower, threatened
to be filed with any federal, state, local or foreign court, governmental agency
or arbitrator based on, arising out of, in connection with, or otherwise
relating to the employment or termination of employment of any individual by
Borrower or any of its Subsidiaries, which if adversely determined would be a
Material Adverse Event.
SECTION 3.09. VENTURES, SUBSIDIARIES AND AFFILIATES; OUTSTANDING STOCK
AND INDEBTEDNESS. Except as set forth in SCHEDULE 3.09 as of the Effective Date
(a) Borrower has no Subsidiaries and is not engaged in any joint venture or
partnership with any other Person, and is not an Affiliate of any other Person;
(b) the Stock of each Subsidiary of Borrower (other than an Inactive Subsidiary)
owned by Borrower or a Subsidiary of Borrower and described in such SCHEDULE
3.09 constitutes all of the issued and outstanding Stock of each such
Subsidiary; and (c) there are no outstanding rights to purchase, options,
warrants or similar rights or agreements pursuant to which Borrower or any of
the other Credit Parties may be required to issue, sell or purchase any Stock or
other equity security of a Credit Party (other than Borrower). Such SCHEDULE
3.09 lists all outstanding Stock of each of the Credit Parties (other than
Borrower) as of the Effective Date and all Indebtedness held by any of the
Credit Parties as of the Effective Date. As of the Effective Date, all of the
Subsidiaries of Borrower that are Inactive Subsidiaries or Material Subsidiaries
are identified as such on such SCHEDULE 3.09.
SECTION 3.10. GOVERNMENT REGULATION. Neither Borrower nor any of the
other Credit Parties is: (a) an "investment company" or an "affiliated person"
of, or "promoter" or "principal underwriter" for, an "investment company," as
such terms are defined in the Investment Company Act of 1940 as amended; or (b)
subject to regulation under the Public Utility Holding Company Act of 1935, the
Federal Power Act, the Interstate Commerce Act or any other federal or state
regulatory statute that requires the approval of any Governmental Authority in
order for Borrower or any such Credit Party to incur Indebtedness, pledge its
assets, or to perform its obligations hereunder, or under any other Loan
Document.
SECTION 3.11. MARGIN REGULATIONS. Borrower is not engaged in the
business of extending credit for the purpose of purchasing or carrying Margin
Stock and no proceeds of any Revolving Credit Advance will be used to purchase
or carry any Margin Stock or to extend credit to others for the purpose of
purchasing or carrying any Margin Stock. Borrower will not take any action, or
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permit to be taken any action under its control, which might cause any Loan
Document or any document or instrument delivered pursuant hereto or thereto to
violate any regulation of the Federal Reserve Board.
SECTION 3.12. TAXES. As of the Effective Date, Borrower's and each of
the other Credit Parties' federal tax identification numbers are set forth on
SCHEDULE 3.12. All federal, and all material state, local and foreign, tax
returns, reports and statements, including information returns, required to be
filed by Borrower and its Subsidiaries, have been filed with the appropriate
Govern mental Authority and all material Charges and other impositions shown
thereon to be due and payable have been paid prior to the date on which any
fine, penalty, interest or late charge may be added thereto for nonpayment
thereof, or any such fine, penalty, interest, late charge or loss has been paid.
Proper and accurate amounts have been withheld by Borrower and each of its
Subsidiaries from its employees for all periods in compliance in all material
respects with the tax, social security and unemployment withholding provisions
of applicable federal, state, local and foreign law and such withholdings have
been timely paid to the respective Governmental Authorities. As of the Effective
Date, (i) SCHEDULE 3.12 sets forth those taxable years for which any of the tax
returns of Borrower or any of its Subsidiaries are currently being audited by
the IRS or any other applicable Governmental Authority, and any assessments or
threatened assessments in connection with such audit or otherwise currently
outstanding; (ii) except as described in SCHEDULE 3.12, neither Borrower nor any
of its Subsidiaries has executed or filed with the IRS or any other Governmental
Authority any agreement or other document extending, or having the effect of
extending, the period for assessment or collection of any Charges; (iii) neither
Borrower nor any of its Subsidiaries has agreed or been requested to make any
adjustment under IRC Section 481(a) by reason of a change in accounting method
or otherwise; and (iv) except as described in SCHEDULE 3.12, Borrower has no
obligation under any written tax sharing agreement.
SECTION 3.13. ERISA.
(a) As of the Effective Date, SCHEDULE 3.13 lists all Plans
maintained or con tributed to by Borrower and each of its Subsidiaries and all
Qualified Plans maintained or con tributed to by any ERISA Affiliate, and
separately identifies the Title IV Plans, Multi-employer Plans, any multiple
employer plans subject to Section 4064 of ERISA, unfunded Pension Plans, Welfare
Plans and Retiree Welfare Plans. IRS determination letters regarding the
qualified status under IRC Section 401 of each such Qualified Plan have been
received as of the dates listed in such SCHEDULE 3.13. Each of the favorable
determination letters considers the requirements of the Tax Reform Act of 1986,
the Omnibus Budget Reconciliation Act of 1986 and the Omnibus Budget
Reconciliation Act of 1987. To the knowledge of Borrower, the Qualified Plans as
amended continue to qualify under Section 401 of the IRC, the trusts created
thereunder continue to be exempt from tax under the provisions of IRC Section
501(a), and nothing has occurred which would cause the loss of such
qualification or tax-exempt status. Each Qualified Plan so amended has been
submitted to the IRS for a determination letter as to the ongoing qualified
status of the Plan under the IRC within the applicable IRC Section 401(b)
remedial amendment period for the Tax Reform Act of 1986; and each such Plan
shall be amended, including retroactive amendments, as required
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during such determination letter process to maintain the qualified status of
such Plans. To the knowledge of Borrower, each Plan is in compliance in all
material respects with the applicable provisions of ERISA and the IRC, including
the filing of all reports required under the IRC or ERISA which are true and
correct as of the date filed, and all required contributions and benefits have
been paid in accordance with the provisions of each such Plan. Neither Borrower,
nor any of its Subsidiaries nor any ERISA Affiliate, with respect to any
Qualified Plan, has failed to make any contribution or pay any amount due as
required by IRC Section 412 or Section 302 of ERISA. With respect to all Retiree
Welfare Plans, the present value of future anticipated expenses pursuant to
Borrower's most recent actuarial projections of liabilities does not exceed
$500,000, and copies of such projections have been provided to Lender. Borrower
has no Pension Plans, other than Qualified Plans and the unfunded Pension Plans
listed in such SCHEDULE 3.13, and Borrower has not engaged in a prohibited
transaction, as defined in IRC Section 4975 or Section 406 of ERISA, in
connection with any Plan which would subject Borrower (after giving effect to
any exemption) to a material tax on prohibited transactions imposed by IRC
Section 4975 or any other material liability.
(b) Except as set forth in such SCHEDULE 3.13: (i) no Title IV
Plan has any Unfunded Pension Liability; (ii) no ERISA Event or event described
in Section 4062(e) of ERISA with respect to any Title IV Plan has occurred or is
reasonably expected to occur; (iii) there are no pending, or to the knowledge of
Borrower, threatened claims, actions or lawsuits (other than claims for benefits
in the normal course), asserted or instituted against (x) any Plan or its
assets, (y) to Borrower's knowledge, any fiduciary with respect to any Plan or
(z) Borrower, any of its Subsidiaries or any ERISA Affiliate with respect to any
Plan; (iv) neither Borrower, nor any of its Subsidiaries nor any ERISA Affiliate
has incurred or reasonably expects to incur any Withdrawal Liability (and no
event has occurred which, with the giving of notice under Section 4219 of ERISA,
would result in such liability) under Section 4201 of ERISA as a result of a
complete or partial withdrawal from a Multi-employer Plan; (v) within the last
five (5) years neither Borrower, nor any of its Subsidiaries nor any ERISA
Affiliate has engaged in a transaction which resulted in a Title IV Plan with
Unfunded Pension Liabilities being transferred outside of the "controlled group"
(within the meaning of Section 4001(a)(14) of ERISA) of any such entity; (vi) no
Plan which is a Retiree Welfare Plan provides for continuing benefits or
coverage for any participant or any beneficiary of a participant after such
participant's termination of employment (except as may be required by IRC
Section 4980B or Part 6 of Title I of ERISA and at the sole expense of the
participant or the beneficiary of the participant); (vii) Borrower, each of its
Subsidiaries and each ERISA Affiliate have complied in all material respects
with the notice and continuation coverage requirements of IRC Section 4980B and
the proposed or final regulations thereunder; and (viii) no liability under any
Plan has been funded, nor has such obligation been satisfied with, the purchase
of a contract from an insurance company that is not rated AAA by Standard &
Poor's Rating Group and the equivalent by each other nationally recognized
rating agency.
SECTION 3.14. NO LITIGATION. Except as set forth in SCHEDULE 3.14, no
action, claim or proceeding is now pending or, to the knowledge of Borrower,
threatened against Borrower or any of its Subsidiaries, at law, in equity or
otherwise, before any court, board, commission, agency or instrumentality of any
federal, state, or local government or of any agency or subdivision thereof,
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or before any arbitrator or panel of arbitrators (a) which challenges Borrower's
or any Credit Party's right, power, or competence to enter into or perform any
of its obligations under the Loan Documents, or the validity or enforceability
of any Loan Document or any action taken thereunder, or (b) which has a
reasonable risk of being determined adversely to Borrower or any of its
Subsidiaries and which, if so determined, would be a Material Adverse Event. To
the knowledge of Borrower, as of the Effective Date there does not exist a state
of facts which is reasonably likely to give rise to such proceedings. Except as
set forth in SCHEDULE 3.14, as of the Effective Date there is no litigation
pending or, to the knowledge of Borrower, threatened against Borrower or any of
its Subsidiaries which seeks damages in excess of $500,000 or injunctive relief
or alleges criminal misconduct on the part of Borrower or any of its
Subsidiaries, and neither Borrower nor any of its Subsidiaries is a party to any
consent decree.
SECTION 3.15. BROKERS. No broker or finder acting on behalf of Borrower
or any other Credit Party brought about the obtaining, making or closing of the
credit extended pursuant to this Agreement or of the Related Transactions and
neither Borrower nor any other Credit Party has any obligation to any Person in
respect of any finder's or brokerage fees in connection therewith.
SECTION 3.16. PATENTS, TRADEMARKS, COPYRIGHTS AND LICENSES. As of the
Effective Date, Borrower and each of the other Credit Parties own or have valid
licenses for all patents, patent applications, copyrights, service marks,
trademarks, trademark applications and trade names which are necessary to
conduct its business, each of which is listed, together with United States
Patent and Trademark Office or United States Copyright Office application or
registration numbers, where applicable, in SCHEDULE 3.16 to the Original Credit
Agreement, as updated pursuant to ANNEX F. Borrower and each of its Subsidiaries
conduct business without infringement or claim of in fringement of any such
license, patent, copyright, service mark, trademark, trade name, trade secret or
other intellectual property right of others, except in each case to the extent
that such infringement or claim of infringement is not a Material Adverse Event.
Except as set forth in such SCHEDULE 3.16, to Borrower's knowledge, as of the
Effective Date, there is no infringement or claim of infringement by others of
any material license, patent, copyright, service mark, trademark, trade name,
trade secret or other intellectual property right of Borrower or any of its
Subsidiaries.
SECTION 3.17. FULL DISCLOSURE. No information contained in this
Agreement, the other Loan Documents, the Financial Statements or any written
statement, notice, report or certificate furnished by or on behalf of Borrower
or any Affiliate thereof pursuant to the terms of this Agree ment or any other
Loan Document, which has previously been delivered to the Administrative Agent
or any Lender, contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements contained herein or
therein not misleading in light of the circum stances under which they were
made. With respect to all business plans and other forecasts and projections
(including the Projections) furnished by or on behalf of Borrower and made
available to the Administrative Agent or any Lender relating to the financial
condition, operations, business, properties or prospects of Borrower and its
Subsidiaries, (i) to the knowledge of Borrower, as of the Effective Date no
facts exist concerning Borrower or any of its Subsidiaries which would result in
any material change of any of such business plans, forecasts and projections,
(ii) such business plans,
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forecasts and projections are based upon estimates and assumptions deemed
reasonable by Borrower at the time of preparation thereof, which as a whole are
fair in light of current conditions known to Borrower, have been prepared on the
basis of the assumptions stated therein, and reflect a reasonable estimate by
Borrower of the results of operations and other information projected therein.
SECTION 3.18. ENVIRONMENTAL MATTERS.
(a) Except as set forth in SCHEDULE 3.18, as of the Effective
Date: (i) the Real Property is free of contamination from any Hazardous Material
except for such contamination that would not materially adversely impact the
value or marketability of such Real Property; (ii) no Credit Party has caused or
suffered to occur any Release of Hazardous Materials on, at, in, under, above,
to, from or about any of its Real Property that would give rise to any material
liability for corrective or remedial action under any Environmental Laws except
in each case to the extent that the failure to do so would not be a Material
Adverse Event; (iii) Borrower and each of its Subsidiaries are and have been in
compliance with all Environmental Laws, except in each case to the extent that
the failure to do so would not be a Material Adverse Event; (iv) the Credit
Parties have obtained, and are in compliance with, all Environmental Permits
required by Environmental Laws for the operations of their respective
businesses, except in each case to the extent that the failure to do so would
not be a Material Adverse Event, and all such Environmental Permits are valid,
uncontested and in good standing; (v) no Credit Party is involved in operations
or knows of any facts, circumstances or conditions, including, without
limitation, any generation, use, treatment, storage, disposal, handling, other
management or Release of Hazardous Materials, that are reasonably likely to
result in any material Environmental Liabilities of such Credit Party, and, to
the knowledge of the Credit Parties, no Credit Party has permitted any current
or former tenant or occupant of the Real Property to engage in any such
operations; (vi) as of the Effective Date, there is no litigation against any
Credit Party arising under or related to any Environmental Laws, Environmental
Permits or Hazardous Material; (vii) no written notice has been received by any
Credit Party identifying it as a "potentially responsible party" or requesting
information under CERCLA or analogous state statutes in respect of any actual or
potential Environmental Liabilities and, to the knowledge of the Credit Parties,
there are no facts, circumstances or conditions that may result in any Credit
Party being identified as a "potentially responsible party" under CERCLA or
analogous state statutes; (viii) as of the Effective Date, the Credit Parties
have provided to the Administrative Agent copies of all existing environmental
reports, reviews and audits and all written information pertaining to actual or
potential Environmental Liabilities, in each case relating to any Credit Party;
and (ix) to the knowledge of the Credit Parties, the Real Property owned or
leased as of the Effective Date does not contain any underground storage tanks
that have ever leaked; are not registered with appropriate government officials
(to the extent such registration is required) or fail to meet any applicable
legal requirement, including, without limitation to, tightness-testing
requirements.
(b) Borrower has furnished to the Administrative Agent a
correct and complete copy of the Phase I Environmental Assessments for Seven
Hospital Facilities prepared by Robert Bates & Associates, dated March, 1993 and
designated RBA Project No. 93455 (the "PHASE I
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ASSESSMENT") and, except with respect to Atlantic Shores Hospital, which have
previously been sold, and except as set forth on SCHEDULE 3.18, (i) Borrower is
not aware of any change since March, 1993 in respect of any of the existing and
potential environmental issues noted in the Phase I Assessment that is
reasonably likely to result in any material Environmental Liability, (ii) since
March, 1993 there has been no material construction to or demolition of any of
the hospitals the subject of the Phase I Assessment and, in any event, no
construction or demolition involving asbestos-containing materials that is
reasonably likely to result in material Environmental Liabilities, and (iii)
since March, 1993, there has been no material change in the processes or
physical operations conducted by any of the hospitals that were the subject of
the Phase I Assessment (including, without limitation, any processes or physical
operations involving the generation, use, storage, treatment, management or
other handling of Hazardous Materials) that is reasonably likely to result in
any material Environmental Liability.
SECTION 3.19. INSURANCE POLICIES. The certificate of insurance
furnished by Borrower to the Administrative Agent pursuant to paragraph 3(a) of
ANNEX D lists all insurance of any nature maintained for current occurrences by
Borrower and each of its Subsidiaries as of the Effective Date, as well as a
summary of the terms of such insurance. Such insurance complies with the
standards set forth in ANNEX E.
SECTION 3.20. DEPOSIT AND DISBURSEMENT ACCOUNTS. SCHEDULE 3.20 to the
Original Credit Agreement, as updated pursuant to ANNEX F, lists all banks and
other financial institutions at which, as of the Effective Date, any Credit
Party maintains deposit and/or other accounts and/or post office lock boxes,
including the Disbursement Accounts, and such Schedule correctly identifies the
name, address and telephone number of each depository, the name in which the
account is held, a description of the purpose of the account and the complete
account number.
SECTION 3.21. SOLVENCY. Both before and after giving effect to (a) the
entering into by the Credit Parties of this Agreement; (b) any Revolving Credit
Advances and Letter of Credit Obligations to be made or incurred on the
Effective Date or such other date as any Revolving Credit Advances and Letter of
Credit Obligations requested hereunder are made or incurred; (c) the
disbursement of the proceeds of such Revolving Credit Advances pursuant to the
instructions of Borrower; (d) the consummation of the Related Transactions; and
(e) the payment and accrual of all transaction costs in connection with the
foregoing, each Credit Party is Solvent.
SECTION 3.22. SUBORDINATION OF SUBORDINATED INDEBTEDNESS. This
Agreement, and all amendments, modifications, extensions, renewals, refinancings
and refundings hereof, constitute the "Senior Credit Agreement" within the
meaning of the Bridge Note Purchase Agreement and the Ramsay Subordinated Note
Purchase Agreement; this Agreement, together with each of the other Loan
Documents and all amendments, modifications, extensions, renewals, refinancings
and refundings hereof and thereof, constitute "Senior Credit Documents" within
the meaning of the Bridge Note Purchase Agreement and the Ramsay Subordinated
Note Purchase Agreement; and the Revolving Credit Loan, the Letter of Credit
Obligations and all other Obligations of Borrower to the Lenders and the Agents
under this Agreement, the Revolving Credit Notes and any of the other Loan
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Documents, and all amendments, modifications, extensions, renewals, refundings
or refinancings of any of the foregoing constitute "Senior Indebtedness" of
Borrower within the meaning of the Bridge Note Purchase Agreement and the Ramsay
Subordinated Note Purchase Agreement, and the holders thereof from time to time
shall be entitled to all of the rights of a holder of "Senior Indebtedness"
pursuant to Article 9 of the Bridge Note Purchase Agreement and pursuant to
Section 4 of the Ramsay Subordinated Note Purchase Agreement, respectively.
SECTION 3.23. LICENSES AND PERMITS. Borrower and each of its
Subsidiaries have all licenses, permits, consents or approvals from or by, and
have made all filings with, and has given all notices to, all Governmental
Authorities having jurisdiction, to the extent required for the ownership of its
property and the operation and conduct of its business, including, but not
limited to: (i) licenses, certifications, approvals, and accreditations as a
provider of health care services including those necessary for it to be eligible
to receive payment and compensation and to participate under Medicare, Medicaid,
and any other federal, state, local or commercial health benefit programs
pursuant to which Borrower and each of its Material Subsidiaries currently
receives reimbursement for health care items and services provided; and (ii)
licenses, certifications, approvals, and accreditations necessary to engage in
activities deemed to be the "business of insurance" and to engage in utilization
review activities under applicable State law; except in each case to the extent
that a failure to have such licenses, permits, consents, approvals, certificates
or accreditation from, to have made such filings with, or to have given such
notices to, any such Governmental Authority would not be a Material Adverse
Event with respect to Borrower or any Material Subsidiary.
SECTION 3.24. COMPLIANCE WITH LAW. Borrower and each of its
Subsidiaries is in compliance with all applicable laws relating to its business,
including, but not limited to: (i) all applicable requirements for participation
in and for the receipt of reimbursement under Medicare, Medicaid, and any other
federal, state, local or commercial health benefit program pursuant to which
Borrower and each of its Subsidiaries currently receives reimbursement for
health care items and services; (ii) all State laws relating to the "business of
insurance" and utilization review activities in any State in which Borrower and
each of its Subsidiaries engages in such business and/or activities; (iii) all
State laws relating to the provision of inpatient psychiatric services and
residential behavioral treatment programs, including, but not limited to, laws
relating to the marketing of psychiatric services, patient referral services,
involuntary admissions, patient rights, and the confidentiality of patient
medical records; except in each case to the extent that a failure to be in
compliance would not be a Material Adverse Event with respect to Borrower or any
Material Subsidiary.
SECTION 3.25. HEALTH CARE PROFESSIONALS. To the knowledge of Borrower,
all health care professionals who are employees or independent contractors of
Borrower or any of its Subsidiaries have obtained all licenses, permits,
certifications, accreditations or approvals necessary to practice the
professions in which such employees or independent contractors are engaged, and
are otherwise in compliance with all State licensing laws relating to the
practice of such professions, and, as applicable, are in compliance with all
requirements for participation in and for the receipt of reimbursement under
Medicare, Medicaid and any federal, state, local or commercial health benefit
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program pursuant to which Borrower and each of its Subsidiaries currently
receives reimbursement for health care items and services, except in each case
to the extent that a failure to obtain such licenses, permits, certifications,
accreditations or approvals, or to be in compliance with such laws and
requirements would not be a Material Adverse Event with respect to Borrower or
any Material Subsidiary.
SECTION 3.26. MANAGEMENT AGREEMENTS. None of the Management Agreements
to which Borrower or any Material Subsidiary is a party, nor any of the
transactions contemplated thereunder, violates any applicable statute, rule or
regulation (i) relating to the eligibility of a Managed Facility to receive
payment and to participate as an accredited and certified provider of health
care services under Medicare, Medicaid or any other federal, state, local or
commercial health benefit program pursuant to which such Managed Facility
currently receives reimbursement for health care items and services, or
applicable to such Managed Facility as a result of its participation in such
programs; (ii) relating to the licenses and permits required in connection
therewith; or (iii) relating to the practice of any health care profession or
the sharing of fees generated in connection therewith; except in each case to
the extent that such violation would not be a Material Adverse Event for
Borrower or such Material Subsidiary.
SECTION 3.27. PATIENT REFERRALS, ETC. Borrower and each of its
Subsidiaries, and any business arrangement with physicians, other health care
professionals, and institutional health care providers involving Borrower and
any of its Subsidiaries, are in compliance with all federal and state laws that
prohibit direct or indirect payments for patient referrals, that prohibit
referrals to an entity with which the referring provider has a financial
relationship, and that regulate procedures and practices with respect to
reimbursement, cost reports, claims for reimbursement, and billing for items and
services under Medicare, Medicaid and other federal, state, and local health
benefit programs, as well as with regard to commercial payors, including, but
not limited to, the Ethics in Patient Referrals Act of 1989, 42 U.S.C. ss.
1395nn, as amended, the Medicare and Medicaid Patient and Program Protection Act
of 1987, 42 U.S.C. ss. 1320-7b(b), as amended, and the relevant provisions of
the Health Insurance Portability and Accountability Act of 1996, except in each
case to the extent that a failure to be in compliance with such laws would not
be a Material Adverse Event with respect to Borrower or any Material Subsidiary.
SECTION 3.28. PENDING REVOCATIONS, ETC. Neither Borrower nor any of its
Subsidiaries has received notification from any Governmental Authority that any
such Governmental Authority has taken or intends to take action to revoke,
terminate, restrict or cancel any license, certificate, certification or permit
of Borrower or any of its Subsidiaries to engage in the practice of any health
care profession, to provide any health care service, to operate a health care
facility, program or service or to participate under Medicare, Medicaid or any
other federal, state, or local health benefit program, except in each case to
the extent that any such revocation, termination, restriction or cancellation,
singly or in the aggregate, would not be a Material Adverse Event with respect
to Borrower or any Material Subsidiary.
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SECTION 3.29. INVESTIGATIONS AND AUDITS. Neither Borrower nor any of
its Subsidiaries has received notice of any pending investigation by JCAHO, HCFA
or any other Governmental Authority (which investigation is not otherwise
conducted in the ordinary course of business) or of any pending criminal, civil
or administrative action, audit or investigation by a fiscal intermediary or by
or on behalf of HCFA or any other Governmental Authority (which action, audit or
investigation is of a criminal nature or is otherwise not conducted in the
ordinary course of business) and, to the knowledge of each of the Credit
Parties, no such action, audit or investigation is threatened with respect to
Borrower or any of its Subsidiaries, except in each case to the extent that any
such action, audit or investigation (i) could not reasonably be expected
materially and adversely to affect Borrower's or any Material Subsidiary's right
to receive reimbursement under, or right to participate in, Medicare, Medicaid
or any other federal, state, or local health benefit program to which such
Person would otherwise be entitled, and (ii) would not otherwise be a Material
Adverse Event with respect to Borrower or any Material Subsidiary.
SECTION 3.30. PAYMENT ADJUSTMENTS. With respect to any audit by
Medicare, Medicaid, or any other federal, state, local or commercial third party
payor pending with respect to Borrower or any of its Subsidiaries as of the
Effective Date, neither Borrower nor any of its Subsidiaries has received notice
of any requests or assertions of adjustments or claims for repayment by it of
costs and/or payments previously made to it by any third party payor and, to the
knowledge of each of the Credit Parties, as of the Effective Date none of such
audits provides for any such adjustments or claims; except in each case to the
extent that any such adjustments or claims, individually or in the aggregate,
would not be a Material Adverse Event with respect to Borrower or any Material
Subsidiary.
SECTION 3.31. CERTAIN AGREEMENTS. As of the Effective Date, Borrower
has provided to the Administrative Agent or its counsel, on behalf of the
Lenders, accurate and complete copies (or summaries) of all of the following
agreements or documents to which it is subject and each of which is listed on
SCHEDULE 3.31: (a) licenses and permits held by Borrower or any Material
Subsidiary, except in each case to the extent that the failure to hold such
license or permit would not be a Material Adverse Event with respect to Borrower
or such Material Subsidiary (including agreements, accreditations or
certifications as a provider of health care services eligible to receive payment
and compensation and to participate under Medicare, Medicaid or any other
federal, state, local or commercial health benefit program); and (b) all
Management Agreements to which it or any Material Subsidiary is or is to become
a party.
SECTION 3.32. RELATED TRANSACTIONS. As of the Effective Date, Borrower
has delivered to the Administrative Agent a complete and correct copy of each of
the material documents executed and delivered by Borrower or any of the other
Credit Parties in connection with the Related Transactions, and no Credit Party
and, to the knowledge of Borrower, no other Person party thereto is in default
in the performance or compliance with any provisions thereof. Each of the
Related Transactions has been consummated in accordance with all applicable
laws.
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ARTICLE 4
FINANCIAL STATEMENTS AND INFORMATION
SECTION 4.01. REPORTS AND NOTICES. Borrower covenants and agrees that,
from and after the Effective Date and until the Termination Date, it shall
deliver to the Administrative Agent the Financial Statements, projections,
certificates and notices at the times and in the manner set forth in ANNEX F.
Promptly after receipt thereof, the Administrative Agent shall furnish a copy of
each to each Lender.
SECTION 4.02. COMMUNICATION WITH ACCOUNTANTS. Borrower (for itself and
on behalf of each of the other Credit Parties) authorizes the Administrative
Agent, after notice to Borrower, to communicate with its and the other Credit
Parties' independent certified public accountants including Ernst & Young LLP
(which communication shall, at the option of Borrower, be conducted in the
presence of a Responsible Financial Officer), and authorizes those accountants
to disclose to the Administrative Agent any and all financial statements and
other supporting financial documents and schedules, including copies of any
management letter, with respect to the business, financial condition and other
affairs of Borrower and the other Credit Parties.
ARTICLE 5
AFFIRMATIVE COVENANTS
Borrower covenants and agrees (for itself and its Subsidiaries) that,
unless the Required Lenders and the Administrative Agent shall otherwise consent
in writing, from and after the Effective Date and until the Termination Date:
SECTION 5.01. MAINTENANCE OF EXISTENCE AND CONDUCT OF BUSINESS.
Borrower shall (and shall cause each of its Subsidiaries, other than Inactive
Subsidiaries, to): (a) except in the case of a Subsidiary that is permitted to
merge out of existence pursuant to SECTION 6.02, do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence and its rights and franchises; (b) continue to conduct its business
substantially as now conducted or as otherwise permitted hereunder; (c) at all
times maintain, preserve and protect all of its Intellectual Property material
to the conduct of its business, and preserve all the remainder of its Property
material to the conduct of its business, and keep the same in good repair,
working order and condition (taking into consideration ordinary wear and tear),
and (d) transact business only under the names set forth in SCHEDULE 3.02 hereto
or such other names as Borrower shall notify Administrative Agent in accordance
with the terms of Section 6(a) of the Security Agreement.
SECTION 5.02. PAYMENT OF CHARGES AND CLAIMS. Borrower shall (and shall
cause each of its Subsidiaries to) pay and discharge, or cause to be paid and
discharged in accordance with the terms thereof, (a) all Charges imposed upon it
or any such Subsidiary or its or their income and profits, or any of its
Property (real, personal or mixed), and (b) all lawful claims for labor,
materials, supplies and services or otherwise, which if unpaid by law become a
Lien on its Property; PROVIDED,
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that Borrower or any such Subsidiary shall not be required to pay any such
Charge or claim which is being contested in good faith by proper legal actions
or proceedings, so long as at the time of commencement of any such action or
proceeding and during the pendency thereof (i) no Default or Event of Default
shall have occurred and be continuing, (ii) adequate reserves with respect
thereto are established and are maintained in accordance with GAAP, (iii) such
contest operates to suspend collection of the contested Charges or claims and is
maintained and prosecuted continuously with diligence, (iv) none of the
Collateral having a value in excess of $100,000 would be subject to forfeiture
or loss by reason of the institution or prosecution of such contest, and (v)
Borrower shall promptly pay or discharge such contested Charges and all
additional charges, interest penalties and expenses, if any, and shall deliver
to Administrative Agent evidence reasonably acceptable to Administrative Agent
of such compliance, payment or discharge, if such contest is terminated or
discontinued adversely to Borrower.
SECTION 5.03. BOOKS AND RECORDS. Borrower shall (and shall cause each
of its Subsidiaries to) keep adequate records and books of account with respect
to its business activities, in which proper entries, reflecting all of its
consolidated and consolidating financial transactions, are made in accordance
with GAAP and on a basis consistent with the 1997 Audited Financial Statements.
SECTION 5.04. LITIGATION. Borrower shall notify the Administrative
Agent in writing, promptly upon learning thereof, of any litigation, suit,
administrative proceeding or other action commenced or threatened in writing
against Borrower or any Subsidiary of Borrower, which (a) in volves an amount in
excess of $1,000,000, or (b) would be a Material Adverse Event if adversely
determined.
SECTION 5.05. INSURANCE.
(a) Borrower shall, at its sole cost and expense, maintain or
cause to be maintained for itself and each of its Subsidiaries policies of
insurance in such amounts and as otherwise described in ANNEX E. In the event
Borrower at any time or times hereafter shall fail to obtain or maintain (or
fail to cause to be obtained or maintained) any of the policies of insurance
required above or to pay any premium in whole or in part relating thereto, the
Administrative Agent, without waiving or releasing any Obligations or any
Default or Event of Default hereunder, may at any time or times thereafter (but
shall not be obligated to) obtain and maintain such policies of insurance and
pay such premium and take any other action with respect thereto which the
Administrative Agent deems advisable. All sums so disbursed, including
reasonable attorneys' fees, court costs and other charges related thereto, shall
be payable, on demand, by Borrower to the Administrative Agent and shall be
additional Obligations hereunder secured by the Collateral, PROVIDED, that, if
and to the extent Borrower fails promptly to pay any of such sums upon the
Administrative Agent's demand therefor, the Administrative Agent is authorized
to, and at its option may, make or cause to be made Revolving Credit Advances on
behalf of Borrower for payment thereof.
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(b) The Administrative Agent and the Required Lenders reserve
the right at any time, upon review of Borrower's risk profile, to require
additional forms and limits of insurance adequate, in the Administrative Agent's
or the Required Lenders' reasonable opinion, to protect the interests of
Lenders, provided that the same is available on commercially reasonable terms.
Borrower shall, if so requested by the Administrative Agent or the Required
Lenders, deliver to the Administrative Agent and the Lenders, as often as the
Administrative Agent and the Required Lenders may reasonably request, a report
of a reputable insurance broker reasonably satisfactory to the Administrative
Agent or the Required Lenders with respect to the existence and scope of
coverage of its insurance policies.
(c) Borrower shall deliver to the Administrative Agent
certificates of insurance evidencing its compliance with this SECTION 5.05,
together with endorsements to all of its and its Subsidiaries' (i) "All Risk"
insurance covering the Collateral and business interruption insurance naming the
Administrative Agent as loss payee as its interest appears, for the ratable
benefit of the Lenders, and (ii) general liability and other liability policies
naming the Agents and the Lenders as additional insured.
SECTION 5.06. COMPLIANCE WITH LAWS. Borrower shall (and shall cause
each of its Subsidiaries to) comply with all federal, state and local laws,
permits and regulations applicable to it, including those relating to health
care; health care licensing, permits and accreditation; ERISA and labor matters;
and the filing of tax returns and payment of taxes (including, without
limitation, the withholding, collection, payment and deposit of employees'
income, unemployment and Social Security taxes), except in each case to the
extent that a failure to so comply with any laws, permits and regulations
relating to health care and to health care licensing, permits and accreditation
would not be a Material Adverse Event with respect to Borrower or any Material
Subsidiary, and to the extent that a failure to so comply with any other laws,
permits and regulations would not be a Material Adverse Event.
SECTION 5.07. AGREEMENTS. Borrower shall (and shall cause each of its
Subsidiaries to) perform, within all required time periods (after giving effect
to any applicable grace periods), all of its obligations and enforce all of its
rights under each agreement, contract, instrument or other document to which it
is a party, except in each case to the extent that any such failure to so
perform or enforce would not be a Material Adverse Event. Borrower shall not
(and shall not permit any of its Subsidiaries to) terminate or modify any
provision of any agreement, contract, instrument or other document to which it
is a party, except in each case to the extent that any such termination or
modification would not be a Material Adverse Event. Borrower shall (and shall
cause each of the other Credit Parties to) perform and comply with all
obligations in respect of Accounts, except in each case to the extent that any
failure so to perform or comply could materially adversely affect the
collectibility of any material portion thereof.
SECTION 5.08. ENVIRONMENTAL MATTERS. Borrower and each other Credit
Party shall, and shall cause each other Person leasing, occupying or operating
any of the Real Property (to the extent that any such other Person is within its
control) to: (a) conduct its operations and keep and maintain
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its Real Property in compliance with all Environmental Laws and Environmental
Permits, except in each case to the extent that any such noncompliance would not
be a Material Adverse Event; (b) implement any and all investigation,
remediation, removal and response actions which are reasonably appropriate or
necessary to maintain the value and marketability of the Real Property or to
comply with Environmental Laws and Environmental Permits pertaining to the
presence, generation, treatment, storage, use, disposal, transportation or
Release of any Hazardous Material on, at, in, under, above, to, from or about
any of its Real Property; (c) notify the Administrative Agent promptly after
Borrower or such Credit Party becomes aware of any violation of Environmental
Laws or Environmental Permits or any Release on, at, in, under, above, to, from
or about any Real Property which is reasonably likely to result in Environmental
Liabilities in excess of $1,000,000; and (d) promptly forward to the
Administrative Agent a copy of any order, notice, request for information or any
communication or report received by Borrower or such Credit Party in connection
with any such violation or Release or any other matter relating to any
Environmental Laws or Environmental Permits that could reasonably be expected to
result in Environmental Liabilities in excess of $1,000,000, in each case
whether or not the Environmental Protection Agency or any Governmental Authority
has taken or threatened any action in connection with any such violation,
Release or other matter. If the Administrative Agent at any time has a
reasonable basis to believe that there may be a violation of any Environmental
Laws or Environmental Permits by any Credit Party or any Environmental Liability
arising thereunder, or a Release of Hazardous Materials on, at, in, under,
above, to, from or about any of its Real Property, which, in each case, would be
a Material Adverse Event, then each Credit Party shall, upon the Administrative
Agent's written request (i) cause the performance of such environmental audits
including subsurface sampling of soil and groundwater, and preparation of such
environmental reports, at Borrower's expense, as the Administrative Agent may
from time to time request, which shall be conducted by reputable environmental
consulting firms acceptable to the Administrative Agent and shall be in form and
substance acceptable to the Administrative Agent, and (ii) permit the
Administrative Agent or its representatives to have access to all Real Property
for the purpose of conducting such environmental audits and testing as the
Administrative Agent deems appropriate, including subsurface sampling of soil
and groundwater. Borrower shall reimburse the Administrative Agent for the
reasonable costs of such audits and tests and the same will constitute a part of
the Obligations secured hereunder.
SECTION 5.09. CERTAIN OBLIGATIONS RESPECTING SUBSIDIARIES. Except with
respect to Subsidiaries that are not the surviving corporation in any merger
permitted under SECTION 6.02, Borrower shall (and shall cause each of its
Subsidiaries to) take such action from time to time as shall be necessary to
ensure that each of the other Credit Parties (excluding Gulf Coast Treatment
Center) is a direct or indirect wholly-owned Subsidiary of Borrower and that at
least ninety-six percent (96%) of the Stock of Gulf Coast Treatment Center
remains owned by Borrower or another Credit Party.
SECTION 5.10. APPLICATION OF PROCEEDS. Borrower shall use the proceeds
of Revolving Credit Advances as provided in SECTION 1.03.
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SECTION 5.11. FISCAL YEAR. Borrower shall (and shall cause each of its
Subsidiaries to) maintain as its fiscal year the twelve month accounting period
ending on June 30 of each year; PROVIDED, HOWEVER, that at any time after the
delivery to the Administrative Agent of all Financial Statements and reports to
be delivered pursuant to SECTION 4.01 and ANNEX F with respect to the Fiscal
Year ending June 30, 1998, Borrower may change its fiscal year to the twelve
month accounting period ending on December 31 of each year, and thereafter shall
maintain such fiscal year.
SECTION 5.12. CASUALTY AND CONDEMNATION.
(a) Borrower shall (and shall cause each of the other Credit
Parties to) promptly notify the Administrative Agent of any material loss,
damage or destruction to any material Collateral, whether or not covered by
insurance. Effective after the occurrence and at all times during the
continuation of an Event of Default, (i) Borrower hereby directs all present and
future insurers under its and each of its Subsidiaries' policies of insurance
covering the Collateral to pay all proceeds payable thereunder directly to the
Administrative Agent as its interest appears, for the ratable benefit of the
Lenders; and (ii) Borrower and each of the other Credit Parties irrevocably
makes, constitutes and appoints the Administrative Agent (and all officers,
employees or agents designated by the Administrative Agent) as its true and
lawful agent and attorney-in-fact for the purpose of making, settling and
adjusting claims under the policies of insurance covering the Collateral,
endorsing the name of Borrower or any of the other Credit Parties on any check,
draft, instrument or other item of payment for the proceeds of such policies of
insurance covering the Collateral, and for making all determinations and
decisions with respect to such policies of insurance covering the Collateral.
The Administrative Agent shall have no duty to exercise any rights or powers
granted to it pursuant to the foregoing power-of-attorney. If, notwithstanding
the provisions hereof which require that the Administrative Agent be the sole
loss payee, a check or other instrument from an insurer is made payable to
Borrower or any other Credit Party or to Borrower or any other Credit Party and
the Administrative Agent jointly, the Administrative Agent may endorse
Borrower's or such other Credit Party's name thereon and take such other action
as the Administrative Agent may elect to obtain the proceeds thereof.
(b) Borrower shall (and shall cause each of the other Credit
Parties to), promptly upon learning of the institution of any proceeding for the
condemnation or other taking of any material portion of its or such Credit
Party's Property, notify the Administrative Agent of the pendency of such
proceeding, and Borrower agrees that the Administrative Agent may participate in
any such proceeding and charge the expense thereof to Borrower in accordance
with SECTION 11.03, and that Borrower from time to time will deliver to the
Administrative Agent all instruments reasonably requested by the Administrative
Agent to permit such participation. After the occurrence and during the
continuation of an Event of Default, the Administrative Agent is hereby
authorized to prosecute, compromise or settle any such proceeding and to collect
any and all awards, payments or other proceeds of any such condemnation or
taking.
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(c) After deducting the expenses, if any, reasonably incurred
by the Administrative Agent in the collection or handling of any insurance or
condemnation proceeds pursuant to paragraphs (a) or (b) above, the
Administrative Agent may, at its option, either (i) apply such proceeds to the
prepayment of the Revolving Credit Loan in accordance with SECTION 1.02(E)(I)
and (F) above, or (ii) permit or require the applicable Credit Party to use such
money, or any part thereof, to replace, repair, restore or rebuild the
Collateral in a diligent and expeditious manner with materials and workmanship
of substantially the same quality as existed before the loss, damage,
destruction or condemnation. All insurance or condemnation proceeds, if any, in
excess of the amount permitted to be retained by such Credit Party and which are
otherwise to be made available to a Credit Party to replace, repair, restore or
rebuild the Collateral shall be applied by the Administrative Agent to reduce
the outstanding principal balance of the Revolving Credit Loan (which
application shall not result in a permanent reduction of the Revolving Credit
Commitments) and, upon such application, the Administrative Agent shall
establish a Reserve against the Borrowing Base in an amount equal to the amount
of such proceeds so applied. Thereafter, such funds shall be made available to
the applicable Credit Party, after the expenditure in full for such purpose of
all funds permitted to be retained by such Credit Party, to provide funds to
replace, repair, restore or rebuild the Collateral as follows: (i) Borrower
shall request a Revolving Credit Advance in the amount requested to be released;
(ii) so long as the conditions set forth in SECTION 2.02 have been met, the
Lenders shall make such Revolving Credit Advance; and (iii) the Reserve
established with respect to such proceeds shall be reduced by the amount of such
Revolving Credit Advance. To the extent not used to replace, repair, restore or
rebuild the Collateral, such proceeds shall be applied by the Administrative
Agent to the prepayment of the Revolving Credit Loan in accordance with SECTION
1.02(E)(I) and (F) above.
SECTION 5.13. APPLICATION OF CERTAIN PROCEEDS. Borrower shall apply all
Net Cash Proceeds of insurance or condemnation received by it pursuant to
SECTION 5.12 (to the extent not permitted to be retained by Borrower or another
Credit Party for the uses permitted by SECTION 5.12(C)), and all Net Cash
Proceeds of any sale or other disposition of assets permitted pursuant to
SECTION 6.08, as follows (it being understood that, to the extent that the
Administrative Agent receives any such Net Cash Proceeds that Borrower or
another Credit Party is permitted to retain pursuant to any provision of this
Agreement, it will make such Net Cash Proceeds available to Borrower or such
other Credit Party for the purposes permitted thereby):
(a) Provided that no Default or Event of Default has occurred
and is continuing, Borrower may retain the first $25,000 in the aggregate of any
Net Cash Proceeds received during any Fiscal Year under SECTION 5.12(C),
pro-rated in the case of any Fiscal Year of less than twelve full months, and
such amounts shall not be subject to the requirements of SECTION 1.02(E).
Additionally, provided that no Default or Event of Default has occurred and is
continuing, if any amount otherwise required to be remitted to the
Administrative Agent at any time under paragraphs (b), (c), (d), (e) and (g) of
this SECTION 5.13 is less than $25,000, then Borrower shall not be required to
remit such funds to the Administrative Agent for application to the prepayment
of the Revolving Credit Loan until such time as the cumulative amounts required
to be remitted thereunder equal or exceed $25,000, in which case Borrower shall
remit such cumulative amounts to the Administrative
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Agent for application to the Revolving Credit Loan, in integral multiples of
$25,000, and shall be entitled to retain any excess until the cumulative amounts
required to be remitted hereunder and not yet remitted once again equal or
exceed $25,000.
(b) Subject to the provisions of paragraph (a) above, Borrower
shall remit to the Administrative Agent or the date of receipt thereof all of
the Net Cash Proceeds of insurance or condemnation described in SECTION 5.12(C)
above that are received by Borrower or any Credit Party, but that Borrower or
such Credit Party is not entitled to retain for the purposes set forth therein,
and the Administrative Agent shall apply all of such proceeds to the prepayment
of the Revolving Credit Loan in accordance with SECTION 5.12(C) hereof.
(c) Subject to the provisions of paragraph (a) above, Borrower
shall remit to the Administrative Agent on the date of receipt thereof the Net
Cash Proceeds received upon any sale of Stock or assets permitted by SECTION
6.08(A), and the Administrative Agent shall apply all Net Cash Proceeds required
to be remitted to it pursuant to this paragraph (c) to the prepayment of the
Revolving Credit Loan in accordance with SECTION 1.02(E) and (F) hereof.
(d) Notwithstanding anything to the contrary set forth in this
Agreement, at any time while a Default or Event of Default shall have occurred
and be continuing or following the Revolving Credit Commitment Termination Date,
Borrower shall have no right to retain any proceeds of Collateral and the
Administrative Agent may apply all such proceeds in accordance with SECTION 1.10
hereof.
SECTION 5.14. ADDITIONAL MORTGAGED PROPERTIES; ADDITIONAL CREDIT
PARTIES.
(a) In the event that, subsequent to the Effective Date,
Borrower or any other Credit Party intends to acquire or lease any Real Property
that, when acquired or leased, would have a book or fair market value in excess
of $500,000, Borrower shall, or shall cause such other Credit Party to, notify
the Administrative Agent of such intent as soon as is reasonably practicable
prior to the acquisition or lease of such Real Property. At the request of the
Administrative Agent or the Required Lenders, Borrower shall, or shall cause
such other Credit Party to, execute and deliver a mortgage, leasehold mortgage
or other appropriate instrument with respect to such Real Property,
substantially identical to the Mortgages, and provide all relevant documentation
with respect thereto and take such other actions as would have been provided and
taken pursuant to paragraph 2(h) of ANNEX D to the Original Credit Agreement if
such Real Property had constituted Mortgaged Property on the Original Closing
Date. Borrower agrees that, following the taking of the actions with respect to
any Real Property required by this paragraph (a), the Administrative Agent shall
have a valid and enforceable first priority Lien on such Real Property, free and
clear of all defects and encumbrances except for Permitted Encumbrances of the
types described in paragraphs (a) and (i) of the definition thereof and others
acceptable to the Administrative Agent in its reasonable discretion. All actions
to be taken pursuant to this SECTION 5.14(A) shall be at the expense of Borrower
or the applicable Credit Party, shall be taken to the reasonable satisfaction of
the Administrative Agent, and shall be taken within thirty (30) days after the
date of closing of an Acquisition, if such Real Property is
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acquired in connection with an Acquisition consented to by the Required Lenders
and the Administrative Agent, and otherwise shall be taken within sixty (60)
days following receipt of a request from the Administrative Agent or the
Required Lenders.
(b) In the event that, subsequent to the Effective Date, any
Person becomes a Credit Party, whether pursuant to an Acquisition consented to
by the Required Lenders and the Administrative Agent or otherwise, Borrower
shall cause such Person (i) to become a party to this Agreement, the Subsidiary
Guaranty, the Security Agreement and the Stock Pledge Agreement, (ii) to provide
all relevant documentation with respect thereto and to take such other actions
as such Credit Party would have provided and taken pursuant to ANNEX D if such
Credit Party had been a Credit Party on the Original Closing Date; and (iii) if
such Credit Party owns or leases any Real Property having a book or fair market
value in excess of $500,000, to comply with paragraph (a) hereof with respect to
such Real Property. Borrower agrees that, following the delivery of any
Collateral Documents required to be executed and delivered by this SECTION
5.14(B), the Administrative Agent shall have a valid and enforceable first
priority Lien on the respective Collateral covered thereby, free and clear of
all Liens other than Permitted Liens. All actions to be taken pursuant to this
SECTION 5.14(B) shall be at the expense of Borrower or the applicable Credit
Party, shall be taken to the reasonable satisfaction of the Administrative
Agent, and shall be taken within thirty (30) days following the date such Person
becomes a Credit Party, whether pursuant to an Acquisition or otherwise.
SECTION 5.15. PERMITS, ETC. Borrower shall (and shall cause each of its
Subsidiaries, other than Inactive Subsidiaries, to) (i) obtain and maintain all
permits, licenses, certifications, accreditations, and other approvals as may be
necessary for the operation of the business of Borrower and each of its Material
Subsidiaries under applicable law, except in each case to the extent that a
failure to obtain or maintain any of such permits, licenses, certifications,
accreditations or other approvals would not be a Material Adverse Event with
respect to Borrower or any Material Subsidiary; and (ii) obtain and maintain its
qualification for participation in and the receipt of reimbursement under
Medicare, Medicaid and any other federal, state or local governmental health
benefit program or commercial health benefit program providing for payment or
reimbursement for services rendered by such Person, as applicable, except in
each case to the extent that the loss or relinquishment of such qualification
does not constitute a Material Adverse Event with respect to Borrower or any
Material Subsidiary. Borrower will promptly furnish or cause to be furnished to
the Administrative Agent copies of all reports and correspondence it or any of
its Material Subsidiaries sends or receives relating to any loss or revocation
(or threatened loss or revocation) of any permit, license, certification,
accreditation, approval or qualification required to be maintained pursuant to
this SECTION 5.15.
SECTION 5.16. FURTHER ASSURANCES. Borrower and each other Credit Party
agrees, at such Credit Party's expense and upon the reasonable request of the
Administrative Agent, to duly execute and deliver, or cause to be duly executed
and delivered, to the Administrative Agent such further instruments and do and
cause to be done such further acts as may be necessary or desirable in the
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reasonable opinion of the Administrative Agent to carry out more effectually the
provisions and purposes of this Agreement or any other Loan Document.
SECTION 5.17. RAMSAY COMMON STOCK SUBSCRIPTION AGREEMENT. Borrower
shall perform all of its obligations under the Ramsay Common Stock Subscription
Agreement and shall enforce all of the obligations of Ramsay Holdings under the
Ramsay Common Stock Subscription Agreement in accordance with their terms.
ARTICLE 6
NEGATIVE COVENANTS
Borrower covenants and agrees (for itself and its Subsidiaries) that,
unless the Required Lenders and the Administrative Agent shall otherwise consent
in writing, from and after the date hereof and until the Termination Date:
SECTION 6.01. ACQUISITIONS. Borrower will not, and will not permit any
of its Subsidiaries to, make any Acquisition.
SECTION 6.02. MERGERS, SUBSIDIARIES, INTERCOMPANY TRANSFERS, ETC.
Borrower shall not (nor permit any of its Subsidiaries to), directly or
indirectly, by operation of law or otherwise: (a) merge with, consolidate with,
or otherwise combine with, any Person, other than (i) a merger effecting an
Acquisition consented to by the Required Lenders and the Administrative Agent,
(ii) a merger or consolidation between or among any of Borrower's Subsidiaries
in which a Credit Party is the surviving entity or between or among Inactive
Subsidiaries, or (iii) a merger or consolidation between Borrower and any of its
Subsidiaries in which Borrower is the surviving entity; (b) permit any of its
Inactive Subsidiaries to acquire any material assets or conduct any material
business unless such Inactive Subsidiary concurrently becomes a Credit Party and
complies with the requirements of SECTION 5.14 hereof; (c) transfer any
Mortgaged Real Estate to any of Borrower's Subsidiaries; or (d) transfer any
assets to any of Borrower's Subsidiaries, other than (i) transfers of Stock or
assets to a Credit Party not prohibited by clause (c); or (ii) Investments
permitted by SECTION 6.03(C).
SECTION 6.03. INVESTMENTS. Borrower shall not (nor permit any of its
Subsidiaries to), directly or indirectly, make or maintain any Investment
except: (a) Cash Equivalents; (b) time deposits maturing no more than 30 days
from the date of creation thereof with a Lender or A-rated banks; (c)
Investments in Credit Parties; (d) Investments in Subsidiaries that are not
Credit Parties to the extent outstanding on the Original Closing Date and, in
the case of TCV, to the extent outstanding on the Effective Date; (e) Practice
Guarantees (evidenced by written agreements), to the extent outstanding on the
Effective Date, (f) extensions of credit to patients, evidenced by Eligible
Accounts for services rendered, made in the ordinary course of business and
consistent with past practice; and (g) other Investments outstanding on the date
hereof and listed in SCHEDULES 3.09 and 6.03.
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SECTION 6.04. INDEBTEDNESS. Borrower shall not (nor permit any of its
Subsidiaries to) create, incur, assume or permit to exist any Indebtedness,
except: (a) the Obligations; (b) Deferred Taxes; (c) Capital Lease Obligations,
Indebtedness secured by purchase money Liens permitted under SECTION 6.07(D),
and other Indebtedness incurred during any Fiscal Year, provided that the
aggregate outstanding principal amount of such Capital Lease Obligations and
other Indebtedness permitted under this clause (c) shall not exceed $250,000;
(d) unfunded pension fund and other employee benefit plan obligations and
liabilities to the extent they are permitted to remain unfunded under applicable
law; (e) Indebtedness consisting of intercompany loans and advances made by (i)
any Credit Party to any other Credit Party, or (ii) by any Subsidiary that is
not a Credit Party, to any Credit Party; (f) Guaranteed Indebtedness permitted
by SECTION 6.06; (g) the Series B Bridge Notes; and (h) the Ramsay Subordinated
Note.
SECTION 6.05. AFFILIATE AND EMPLOYEE LOANS AND TRANSACTIONS. Borrower
shall not (nor permit any of its Subsidiaries to) enter into any lending,
borrowing or other commercial transaction with or make any payments or transfers
of funds or assets (including payment of any management, consulting, advisory or
similar fee) to, or issue any shares of Borrower's Stock, or any warrant, option
or other right to acquire Shares of Borrower's Stock, or any securities
convertible into Borrower's Stock to, any of its Affiliates; PROVIDED, that (a)
Borrower may issue shares of Borrower's Stock, or any warrant, option or other
right to acquire shares of Borrower's Stock, or any security convertible into
Borrower's Stock, to any Affiliate (including, without limitation, to Ramsay
Affiliates in exchange for Series 1997-A Preferred Stock, Series B Bridge Notes
and/or the Ramsay Subordinated Note) on terms that are no less favorable to
Borrower than might be obtained in an arm's-length transaction from a Person
that is not an Affiliate of Borrower; (b) Borrower's Subsidiaries may make
Restricted Payments to the extent permitted under SECTION 6.15; (c) the Credit
Parties may pay salary and wages and provide stock options and other executive
compensation to its executive officers, to the extent approved by Borrower's
Board of Directors or the compensation committee thereof; (d) Borrower may pay
reasonable and customary directors' fees to its directors; (e) the Credit
Parties may pay reasonable legal fees and reasonable out-of-pocket expenses to
Haythe & Curley for services rendered; (f) the Credit Parties may engage in
other transactions between or among Credit Parties that are specifically
permitted by SECTION 6.02; and (g) RMCI may pay the balance of the sums due to
Peter J. Evans and the sums due to Luis E. Lamella referenced in paragraph 12 of
Schedule 6.05 of the Original Credit Agreement after such time as (i) the
$2,500,000 figure included in clause (b) of the definition of Borrowing Base
shall have reduced to zero upon the application of Net Cash Proceeds of one or
more issuances of Stock by Borrower pursuant to SECTIONS 1.02(E)(II) and (F);
the $9,000,000 figure included in the definition of Revolving Credit Commitments
shall have reduced to $5,500,000 upon the application of such Net Cash Proceeds;
and (iii) no Default or Event of Default shall have occurred and be continuing.
Set forth in SCHEDULE 6.05 is a list of all such lending, borrowing or other
commercial transactions existing or outstanding as of the Effective Date.
Notwithstanding the foregoing or any other provision of this Agreement, the
Credit Parties shall not pay bonuses to Luis Lamela, Remberto Cibran or Carol C.
Lang until all Obligations have been paid in full.
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SECTION 6.06. GUARANTEED INDEBTEDNESS. Borrower shall not (nor permit
any of its Subsidiaries to) incur any Guaranteed Indebtedness except: (a) by
endorsement of instruments or items of payment for deposit to the general
account of Borrower or such Subsidiary; (b) Guaranteed Indebtedness incurred for
the benefit of Borrower or another Credit Party if Borrower or another Credit
Party is permitted by this Agreement to incur the primary obligation (and such
Guaranteed Indebtedness shall be treated as a primary obligation for all
purposes hereof); and (c) performance bonds or indemnities entered into in the
ordinary course of business consistent with past practices.
SECTION 6.07. LIENS. Borrower shall not (nor permit any of its
Subsidiaries to) create or permit to exist any Lien on any of its properties or
assets except for: (a) presently existing or hereafter created Liens in favor of
the Administrative Agent to secure the Obligations; (b) Liens set forth in
SCHEDULE 6.07 existing on the Effective Date; (c) Permitted Encumbrances; (d)
purchase money liens or purchase money security interests upon or in Equipment
acquired by Borrower or such Subsidiary (other than Inactive Subsidiaries) in
the ordinary course of business to secure the purchase price of such Equipment
or otherwise to secure Indebtedness or Capital Lease Obligations permitted under
SECTION 6.04(C) incurred solely for the purpose of financing the acquisition of
such Equipment, so long as such Equipment is not a component, part or accessory
installed on, or an accession, addition or attachment to, any other Equipment of
Borrower or such Subsidiary (except other Equipment on which a security interest
is permitted to exist under this clause (d)); and (e) extensions and renewals of
Liens referred to in paragraphs (b) and (d) above, provided that any such
extension or renewal Lien is limited to the property or assets covered by the
Lien extended or renewed and does not secure Indebtedness in an amount greater
than the amount of the outstanding Indebtedness secured thereby immediately
prior to such extension, renewal or replacement.
SECTION 6.08. SALE OF STOCK AND ASSETS. Borrower shall not (nor permit
any of its Subsidiaries to) sell, transfer, convey, assign or otherwise dispose
of any of its properties or other assets, including the capital Stock of any of
their respective Subsidiaries (whether in a public or a private offering or
otherwise) or any of their Accounts, other than the following:
(a) the sale of properties or assets (including Investments
but excluding the capital Stock of any of their respective Subsidiaries) having
a fair market value of not more than $250,000 in the aggregate during any Fiscal
Year, pro-rated in the case of any Fiscal Year of less than twelve full months,
PROVIDED that, as to any such sale, the fair market value of the total
consideration received by Borrower or any of its Subsidiaries in respect of each
such sale is not less than the fair market value of the asset disposed of, and
the consideration payable to Borrower or its Subsidiary in respect of each such
sale is paid in cash; and
(b) transfers of assets specifically permitted by SECTION
6.02(D) and Restricted Payments specifically permitted by SECTION 6.15;
PROVIDED, in each case, that the proceeds of any such sale or other disposition
are applied in the manner set forth in SECTION 5.13.
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All determinations of fair market value shall be made in good faith by a
Responsible Financial Officer for the purposes of paragraph (a) above. With
respect to any disposition of assets or other properties permitted pursuant to
this SECTION 6.08, the Administrative Agent shall, with reasonable promptness,
on reasonable prior written notice and upon receipt of any proceeds thereof
required by SECTION 5.13 hereof to be remitted to the Administrative Agent for
application to the Obligations, release its Lien on such assets or other
properties in order to permit the applicable Credit Party to effect such
disposition and shall execute and deliver to Borrower, at Borrower's expense,
appropriate UCC-3 termination statements and other releases as reasonably
requested by Borrower.
SECTION 6.09. MATERIAL CONTRACTS. Borrower shall not (nor permit any of
its Subsidiaries to) enter into, cancel or terminate any Material Contract or
amend or otherwise modify any Material Contract, or waive any default or breach
under any Material Contract except that Borrower and its Subsidiaries may (a)
enter into Material Contracts in the ordinary course of business, and (b) enter
into, cancel, terminate, amend or otherwise modify any Material Contract, or
waive any default or breach thereunder, (i) as specifically provided in SECTION
6.20 with respect to certain Subordinated Indebtedness, or (ii) that would not
be a Material Adverse Event.
SECTION 6.10. ERISA. Neither Borrower nor any of its Subsidiaries nor
any ERISA Affiliate shall acquire any new ERISA Affiliate that maintains or has
an obligation to contribute to a Pension Plan that has either an "accumulated
funding deficiency," as defined in Section 302 of ERISA, or any "unfunded vested
benefits," as defined in Section 4006(a)(3)(E)(iii) of ERISA in the case of any
Pension Plan other than a Multi-employer Plan and in Section 4211 of ERISA in
the case of a Multi-employer Plan if such acquisition would be a Material
Adverse Event. Additionally, neither Borrower nor any of its Subsidiaries nor
any ERISA Affiliate shall, to the extent that any of the following actions would
be a Material Adverse Event: (a) permit or suffer any condition set forth in
SCHEDULE 3.13 to cease to be met and satisfied at any time; (b) terminate any
Pension Plan that is subject to Title IV of ERISA where such termination could
reasonably be anticipated to result in liability to Borrower or such Subsidiary;
(c) permit any accumulated funding deficiency, as defined in Section 302(a)(2)
of ERISA, to be incurred with respect to any Pension Plan; fail to make any
contributions or fail to pay any amounts due and owing as required by the terms
of any Plan before such contributions or amounts become delinquent; (d) make a
complete or partial withdrawal (within the meaning of Section 4201 of ERISA)
from any Multi-employer Plan; (e) at any time fail to provide the Administrative
Agent with copies of any Plan documents or governmental reports or filings, if
requested by the Administrative Agent.
SECTION 6.11. FINANCIAL COVENANTS. Borrower shall not breach or fail to
comply with any of the financial covenants set forth in ANNEX G, each of which
shall be calculated in accordance with ANNEX G (and based upon the Financial
Statements delivered hereunder).
SECTION 6.12. HAZARDOUS MATERIALS. Borrower shall not (nor permit any
of its Subsidiaries or any other Person within the control of Borrower to): (a)
cause or permit a Release of any Hazardous Materials on, under in or about any
Real Property; (b) use, store, generate, treat or dispose of Hazardous
Materials; or (c) transport any Hazardous Materials to or from any Real
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Property; except in each case to the extent that such Release, use, storage,
generation, treatment or disposal would not (i) be a Material Adverse Event, or
(ii) materially adversely impact the value or marketability of any of the
Mortgaged Property.
SECTION 6.13. SALE-LEASEBACKS. Borrower shall not (nor permit any of
its Subsidiaries to) enter into any sale-leaseback or similar transaction
involving any of its property or assets.
SECTION 6.14. CANCELLATION OF INDEBTEDNESS. Borrower shall not (nor
permit any of its Subsidiaries to) cancel any material claim or material
Indebtedness owing to it, except for reasonable consideration and in the
ordinary course of its business.
SECTION 6.15. RESTRICTED PAYMENTS. Borrower shall not (nor permit any
of its Subsidiaries to) make any Restricted Payment to any Person, except that
(a) any Subsidiary of Borrower may pay cash dividends (or, in the case of a
Subsidiary that is a partnership or limited liability company, cash
distributions) (i) to Borrower or to another Credit Party and (ii) to any other
Person holding such Subsidiary's Stock, provided that any such dividends or
distributions are paid on a basis which is PRO RATA as to all Persons holding
such Stock (including Borrower or another Credit Party, as applicable); (b)
Borrower may effect transactions permitted by paragraph (a) of the proviso to
SECTION 6.05; (c) Borrower may make payments of interest, fees and expenses
under the Series B Bridge Notes in accordance with their terms (including,
without limitation, their subordination provisions); and (d) Borrower may make
payments of interest under the Ramsay Subordinated Note in kind for the first
twelve months after the issuance of the Ramsay Subordinated Note and thereafter
in cash in accordance with the terms of the Ramsay Subordinated Note (including,
without limitation, the subordination provisions set forth in Section 4 of the
Ramsay Subordinated Note Purchase Agreement), PROVIDED that such cash interest
payments may only be made if (i) Borrower's Fixed Charge Coverage Ratio would
not be less than 1.35:1.00 for the period beginning October 1, 1998 and ending
on the last day of each Fiscal Month thereafter, determined on a PRO FORMA basis
for the most recent period for which Borrower is required to deliver a
Compliance Certificate to the Administrative Agent pursuant to ANNEX F hereof,
based on Borrower's actual Fixed Charge Coverage Ratio as set forth therein, but
calculated as if such interest was included in Fixed Charges for such period for
the purpose of such computation, (ii) Borrower would be in compliance with the
financial covenant set forth in Section 1(b) (Interest Coverage Ratio) of ANNEX
G, determined on a PRO FORMA basis for the most recent period for which Borrower
is required to deliver a Compliance Certificate to the Administrative Agent
pursuant to ANNEX F hereof, based on Borrower's actual Interest Coverage Ratio
as set forth therein, but calculated as if interest on the Ramsay Subordinated
Note was included in Interest Expense for such period for the purpose of such
computation; (iii) the Series B Bridge Notes and all amounts owed by Borrower to
the holders of the Series B Bridge Notes under the Bridge Note Purchase
Agreement have been paid in full, and (iv) no Default or Event of Default exists
or would be caused by such payment.
SECTION 6.16. NO SPECULATIVE TRANSACTIONS. Borrower shall not (nor
permit any of its Subsidiaries to) engage in any transaction involving commodity
options or futures contracts or other,
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similar, speculative matters (other than in the ordinary course of business
consistent with past practice and interest rate swap, cap or collar agreements
relating to the Revolving Credit Loan).
SECTION 6.17. MARGIN REGULATIONS. Borrower shall not use the proceeds
of or any Revolving Credit Advance to purchase or carry any Margin Stock or any
equity security of a class which is registered pursuant to Section 12 of the
Securities Exchange Act of 1934.
SECTION 6.18. LIMITATION ON NEGATIVE PLEDGE CLAUSES, ETC. Borrower
shall not (nor permit any of its Subsidiaries to), directly or indirectly, enter
into any agreement with any Person which directly or indirectly (a) prohibits or
limits the ability of Borrower or any other Credit Party to create, incur,
assume or suffer to exist any Lien upon any of its Property, assets or revenues
in favor of the Administrative Agent for the benefit of Lenders, whether now
owned or hereafter acquired; or (b) restricts, prohibits or requires the consent
of any Person with respect to the payment of dividends or distributions or the
making or repayment of intercompany loans by a Subsidiary of Borrower to
Borrower.
SECTION 6.19. ACCOUNTING CHANGES. Borrower shall not make any
significant change in accounting treatment and reporting practices except for
changes concurred in by Borrower's independent public accountants.
SECTION 6.20. CHANGES RELATING TO SUBORDINATED DEBT. Neither Borrower
nor any other Credit Party shall change or amend the terms of the Series B
Bridge Notes, the Ramsay Subordinated Note, the Bridge Note Purchase Agreement,
the Ramsay Subordinated Note Purchase Agreement or any other Subordinated
Indebtedness (or any indenture or agreement in connection therewith) if the
effect of such amendment is to: (a) increase the interest rate on such
Subordinated Indebtedness; (b) change the dates upon which payments of principal
or interest are due on such Subordinated Indebtedness other than to extend such
dates; (c) change any default or event of default other than to delete or make
less restrictive any default provision therein; (d) change or add any covenant
with respect to such Subordinated Indebtedness other than to make less
restrictive any such covenant; (d) change the redemption or prepayment
provisions of such Subordinated Indebtedness other than to extend the dates
therefor or to reduce the premiums payable in connection therewith; (e) grant
any security or collateral to secure payment of such Subordinated Indebtedness;
or (f) change or amend any other term if such change or amendment would
materially increase the obligations of the obligor or confer additional material
rights to the holder of such Subordinated Indebtedness in a manner adverse to
any Credit Party, the Administrative Agent or any Lender.
SECTION 6.21. LEASES. Neither Borrower nor any other Credit Party shall
lease any of the Mortgaged Property to any third party, other than (a) leases in
existence on the Original Closing Date and reflected in the title insurance
policy in respect thereof furnished to the Administrative Agent pursuant to
ANNEX D to the Original Credit Agreement, and (b) other leases entered into
after the Original Closing Date, provided that the space leased under all such
leases with respect to any Mortgaged Property does not exceed 10% of the total
square footage of the building to which such lease applies.
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SECTION 6.22. TAX SHARING AGREEMENTS. Neither Borrower nor any other
Credit Party shall enter into any tax sharing agreement with any Person not
included in Borrower's Financial Statements.
ARTICLE 7
TERM
SECTION 7.01. DURATION. The financing arrangements contemplated hereby
shall be in effect until the Revolving Credit Commitment Termination Date. On
the Revolving Credit Commitment Termination Date, the Revolving Credit
Commitments shall terminate and the Revolving Credit Loan and all other
Obligations shall immediately become due and payable in full, in cash.
SECTION 7.02. SURVIVAL OF OBLIGATIONS. Except as otherwise expressly
provided for in the Loan Documents, no termination or cancellation (regardless
of cause or procedure) of any financing arrangement under this Agreement shall
in any way affect or impair the Obligations, duties, indemnities and liabilities
of Borrower or any other Credit Party, or the rights of the Agents or Lenders
relating to any Obligations, due or not due, liquidated, contingent or
unliquidated or any transaction or event occurring prior to such termination, or
any transaction or event, the performance of which is not required until after
the Revolving Credit Commitment Termination Date. Except as otherwise expressly
provided herein or in any other Loan Document, all undertakings, agreements,
covenants, warranties and representations of or binding upon Borrower or any
other Credit Party, and all rights of the Agents and Lenders, all as contained
in the Loan Documents, shall not terminate or expire, but rather shall survive
such termination or cancellation and shall continue in full force and effect
until such time as all of the Obligations have been indefeasibly paid in full in
accordance with the terms of the agreements creating such Obligations.
ARTICLE 8
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
SECTION 8.01. EVENTS OF DEFAULT. The occurrence of any one or more of
the following events (regardless of the reason therefor) shall constitute an
"EVENT OF DEFAULT" hereunder:
(a) Borrower (i) fails to make any payment or prepayment of
principal of the Revolving Credit Loan or any of the other Obligations when due
and payable, (ii) fails to make any payment of interest on, or Fees owing in
respect of, the Revolving Credit Loan or any of the other Obligations when due
and payable and such failure shall remain unremedied for more than three (3)
Business Days, or (iii) fails to pay or reimburse the Administrative Agent or
Lenders for any expense reimbursable hereunder or under any other Loan Document
within ten (10) Business Days following the Administrative Agent's demand for
such reimbursement or payment of expenses.
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(b) Any Credit Party shall fail or neglect to perform, keep or
observe any of the provisions of SECTIONS 1.03, 1.13, 5.05, 5.10, 5.11, 5.13 or
5.14, of ARTICLE 6, or of any of the provisions set forth in ANNEX G.
(c) Borrower shall fail or neglect to perform, keep or observe
any of the provisions of ARTICLE 4 or any provisions set forth in ANNEX F and
the same shall remain unremedied for one (1) Business Day or more after receipt
of written notice thereof from the Administrative Agent or any Lender.
(d) Any Credit Party shall fail or neglect to perform, keep or
observe any other provision of this Agreement or of any of the other Loan
Documents (other than any provision embodied in or covered by any other clause
of this SECTION 8.01) and the same shall remain unremedied for thirty (30) days
or more after the earlier of (i) receipt of written notice thereof from the
Administrative Agent or any Lender and (ii) the date any Credit Party knows of
such failure or neglect.
(e) A default or breach shall occur under any other agreement,
document or instrument to which any Credit Party is a party which is not cured
within any applicable grace period, and such default or breach (i) involves the
failure to make any payment when due in respect of any Indebtedness (other than
the Obligations) of any Credit Party in excess of $100,000 in the aggregate, or
(ii) causes, or permits any holder of such Indebtedness or a trustee to cause,
Indebtedness or a portion thereof in excess of $100,000 in the aggregate to
become due prior to its stated maturity or prior to its regularly scheduled
dates of payment, regardless of whether such default is waived, or such right is
exercised, by such holder or trustee.
(f) Any information contained in any Borrowing Base
Certificate is untrue or incorrect in any material respect as of the date made,
or any representation or warranty herein or in any Loan Document or in any
written statement, report, financial statement or certificate (other than a
Borrowing Base Certificate) made or delivered to the Administrative Agent or any
Lender by any Credit Party is untrue or incorrect in any material respect as of
the date when made or deemed made.
(g) Assets of any Credit Party with a fair market value of
$100,000 or more shall be attached, seized, levied upon or subjected to a writ
or distress warrant, or come within the possession of any receiver, trustee,
custodian or assignee for the benefit of creditors of any Credit Party and such
condition continues for thirty (30) days or more.
(h) A case or proceeding shall have been commenced against any
Credit Party seeking a decree or order in respect of any Credit Party (i) under
Title 11 of the United States Code, as now constituted or hereafter amended or
any other applicable federal, state or foreign bankruptcy or other similar law,
(ii) appointing a custodian, receiver, liquidator, assignee, trustee or
sequestrator (or similar official) for any Credit Party or of any substantial
part of any such
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Credit Party's assets, or (iii) ordering the winding-up or liquidation of the
affairs of any Credit Party, and such case or proceeding shall remain
undismissed or unstayed for sixty (60) days or more or such court shall enter a
decree or order granting the relief sought in such case or proceeding.
(i) Any Credit Party (i) shall file a petition seeking relief
under Title 11 of the United States Code, as now constituted or hereafter
amended, or any other applicable federal, state or foreign bankruptcy or other
similar law, (ii) shall fail to contest in a timely and appropriate manner or
shall consent to the institution of proceedings thereunder or to the filing of
any such petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee or sequestrator (or similar official) of
any Credit Party or of any substantial part of any such Credit Party's assets,
(iii) shall make an assignment for the benefit of creditors, or (iv) shall take
any corporate action in furtherance of any of the foregoing, or (v) shall admit
in writing its inability to, or shall be generally unable to, pay its debts as
such debts become due.
(j) A final judgment or judgments for the payment of money in
excess of $300,000 in the aggregate at any time outstanding shall be rendered
against any Credit Party unless such judgment or judgments shall, within thirty
(30) days after the entry thereof, have been discharged or execution thereof
stayed or bonded pending appeal, or shall have been discharged prior to the
expiration of any such stay.
(k) Any material provision of any Loan Document shall for any
reason cease to be valid, binding and enforceable in accordance with its terms
(or any Credit Party shall challenge the enforceability of any Loan Document or
shall assert in writing, or engage in any action or inaction based on any such
assertion, that any provision of any of the Loan Documents has ceased to be or
otherwise is not valid, binding and enforceable in accordance with its terms),
or any security interest created under any Loan Document shall cease to be a
valid and perfected first priority security interest or Lien (except as
otherwise permitted herein or therein) in any material amount of the Collateral
purported to be covered thereby.
(l) Any Change of Control shall occur; or, except as the
result of any disposition specifically permitted or consented to hereunder,
Borrower or any other Credit Party shall fail at any time to be the record and
beneficial owner of 100% of the issued and outstanding capital Stock of any of
its Subsidiaries (other than Gulf Coast Treatment Center) that are Credit
Parties as of the Effective Date or that become Credit Parties subsequent to the
Effective Date, or shall fail at any time to be the record and beneficial owner
of not less than 96% of the issued and outstanding capital Stock of Gulf Coast
Treatment Center, in each case free and clear of any Lien other than inchoate
tax Liens and Liens in favor of the Administrative Agent for the benefit of the
Lenders.
(m) Any Material Adverse Event occurs and is continuing.
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(n) Borrower or any of the Ramsay Affiliates shall fail to
perform their respective obligations under the Ramsay Common Stock Subscription
Agreement, as and when such performance is due.
(o) Borrower or any of its Subsidiaries make cash payments in
an aggregate amount exceeding $750,000 for which the offsetting entry on
Borrower's Financial Statements is a debit to a litigation or malpractice claim
reserve reflected in the 1997 Audited Financial Statements or in a litigation or
malpractice claim reserve reflected in unaudited Financial Statements of the
Borrower for the Fiscal Quarter ending March 31, 1998, rather than an expense or
reduction of revenues on Borrower's income statement; PROVIDED, HOWEVER, that
the $750,000 figure above shall increase to $1,000,000 after such time as (i)
the $2,500,000 figure included in clause (b) of the definition of Borrowing Base
shall have reduced to zero upon the application of Net Cash Proceeds of one or
more issuances of Stock by Borrower pursuant to SECTIONS 1.02(E)(II) and (F);
the $9,000,000 figure included in the definition of Revolving Credit Commitments
shall have reduced to $5,500,000 upon the application of such Net Cash Proceeds;
and (iii) no Default or Event of Default shall have occurred and be continuing.
SECTION 8.02. REMEDIES.
(a) If any Event of Default shall have occurred and be
continuing, the provisions of SECTION 1.07 (B)(II) and paragraph 1(c) of ANNEX C
with respect to the Default Rate shall apply.
(b) If any Event of Default shall have occurred and be
continuing, or if a Default shall have occurred and be continuing and the
Administrative Agent or the Required Lenders shall have determined not to make
any Revolving Credit Advances or incur any Letter of Credit Obligations so long
as that specific Default is continuing, the Administrative Agent may, or at the
written direction of the Required Lenders shall, without notice, suspend the
Revolving Credit Commitments with respect to further Revolving Credit Advances
and/or the incurrence of further Letter of Credit Obligations whereupon any
further Revolving Credit Advances or Letter of Credit Obligations shall be made
or incurred in the Administrative Agent's sole discretion (or in the sole
discretion of the Required Lenders, if such suspension occurred at their
direction) so long as such Event of Default is continuing.
(c) If any Event of Default shall have occurred and be
continuing, the Administrative Agent may (and at the direction of the Required
Lenders shall), without notice, take any one or more of the following actions:
(i) terminate the Revolving Credit Commitments, whereupon the Lenders'
obligation to make further Revolving Credit Advances or to incur further Letter
of Credit Obligations shall terminate; (ii) declare all or any portion of the
Obligations to be forthwith due and payable, including the Revolving Credit Loan
and any contingent liabilities with respect to Letter of Credit Obligations,
whereupon such Obligations shall become and be due and payable; (iii) require
that all Letter of Credit Obligations be fully cash collateralized in accordance
with the terms of ANNEX B; or (iv) exercise any rights and remedies provided to
the Administrative Agent or any Lender under the Loan Documents and/or at law or
equity, including all remedies
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provided under the Code; PROVIDED, HOWEVER, that upon the occurrence of an Event
of Default specified in SECTION 8.01(G), (H) or (I), the Revolving Credit
Commitments shall immediately terminate and the Obligations shall become
immediately due and payable, in each case, without declaration, notice or demand
by or to any Person.
(d) Anything in this Agreement to the contrary
notwithstanding, each Lender hereby agrees with each other Lender that no Lender
shall take any action to protect or enforce its rights arising out of this
Agreement, the Revolving Credit Notes or the other Loan Documents (including
exercising any rights of set-off) without first obtaining the prior written
consent of the Administrative Agent and the Required Lenders, it being the
intent of Lenders that any such action to protect or enforce rights under this
Agreement and the Revolving Credit Notes shall be taken in concert and at the
direction or with the consent of the Administrative Agent and the Required
Lenders.
SECTION 8.03. WAIVERS BY CREDIT PARTIES. Except as otherwise provided
for in this Agreement and the other Loan Documents, to the full extent permitted
by applicable law, Borrower and each other Credit Party waives (a) presentment,
demand and protest and notice of presentment, dishonor, notice of intent to
accelerate, notice of acceleration, protest, default, nonpayment, maturity,
release, compromise, settlement, extension or renewal of any or all Loan
Documents, notes, commercial paper, accounts, contract rights, documents,
instruments, chattel paper and guaranties at any time held by the Administrative
Agent on which Borrower or any other Credit Party may in any way be liable, and
Borrower and each other Credit Party hereby ratifies and confirms whatever the
Administrative Agent may do in this regard, (b) all rights to notice and a
hearing prior to the Administrative Agent's taking possession or control of, or
to the Administrative Agent's replevy, attachment or levy upon, the Collateral
or any bond or security which might be required by any court prior to allowing
the Administrative Agent to exercise any of their remedies, and (c) the benefit
of any right of redemption and all valuation, appraisal and exemption laws.
Borrower and each other Credit Party acknowledges that it has been advised by
counsel of its choice with respect to this Agreement, the other Loan Documents
and the transactions contemplated by this Agreement and the other Loan
Documents.
ARTICLE 9
THE ADMINISTRATIVE AGENT
SECTION 9.01. APPOINTMENT OF THE ADMINISTRATIVE AGENT.
(a) GE Capital is hereby appointed to act on behalf of all
Lenders as the Administrative Agent under this Agreement and the other Loan
Documents. The provisions of this ARTICLE 9 are solely for the benefit of the
Administrative Agent and Lenders, and neither Borrower, the Credit Parties nor
any other Person shall have any rights directly or as a third party beneficiary
of any of the provisions hereof, except (i) Borrower's right to approve any
successor Administrative Agent in accordance with SECTION 9.06 and (ii)
Borrower's right to have Collateral released in
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accordance with SECTION 9.08. In performing its functions and duties under this
Agreement and the other Loan Documents, the Administrative Agent shall act
solely as an agent of Lenders and does not assume and shall not be deemed to
have assumed any obligation toward or relationship of agency or trust with or
for Borrower, any other Credit Party or any other Person. The Administrative
Agent shall have no duties or responsibilities except for those expressly set
forth in this Agreement and the other Loan Documents. The duties of the
Administrative Agent shall be mechanical and administrative in nature and the
Administrative Agent shall not have, or be deemed to have, by reason of this
Agreement, any other Loan Document or otherwise, a fiduciary relationship in
respect of any Lender. Neither the Administrative Agent nor any of its
Affiliates nor any of their respective officers, directors, employees, agents or
representatives shall be liable to any Lender for any action taken or omitted to
be taken by it hereunder or under any other Loan Document, or in connection
herewith or therewith, except for damages solely caused by its or their own
gross negligence or willful misconduct as finally determined by a court of
competent jurisdiction.
(b) If the Administrative Agent shall request instructions
from the Required Lenders or all affected Lenders with respect to any act or
action (including failure to act) in connection with this Agreement or any other
Loan Document, then the Administrative Agent shall be entitled to refrain from
such act or taking such action unless and until the Administrative Agent shall
have received instructions from the Required Lenders or all affected Lenders, as
the case may be, and the Administrative Agent shall not incur liability to any
Person by reason of so refraining. The Administrative Agent shall be fully
justified in failing or refusing to take any action hereunder or under any other
Loan Document (i) if such action would, in the opinion of the Administrative
Agent, be contrary to law or the terms of this Agreement or any other Loan
Document, (ii) if such action would, in the opinion of the Administrative Agent,
expose the Administrative Agent to Environmental Liabilities or (iii) if the
Administrative Agent shall not first be indemnified to its satisfaction against
any and all liability and expense which may be incurred by it by reason of
taking or continuing to take any such action. Without limiting the foregoing, no
Lender shall have any right of action whatsoever against the Administrative
Agent as a result of the Administrative Agent's acting or refraining from acting
hereunder or under any other Loan Documents in accordance with the instructions
of the Required Lenders or all affected Lenders, as applicable.
SECTION 9.02. THE ADMINISTRATIVE AGENT'S RELIANCE, ETC. Neither the
Administrative Agent nor any of its Affiliates nor any of their respective
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them under or in connection with this Agreement or
the other Loan Documents, except for damages solely caused by its or their own
gross negligence or willful misconduct as finally determined by a court of
competent jurisdiction. Without limitation of the generality of the foregoing,
the Administrative Agent: (a) may treat the payee of any Revolving Credit Note
as the holder thereof until the Administrative Agent receives written notice of
the assignment or transfer thereof signed by such payee and in form satisfactory
to the Administrative Agent; (b) may consult with legal counsel, independent
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken in good faith by it in accordance with
the advice of such counsel, accountants or experts; (c) makes no warranty or
representation to any Lender and shall not be responsible to any Lender for any
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statements, warranties or representations made in or in connection with this
Agreement or the other Loan Documents; (d) shall not have any duty to ascertain
or to inquire as to the performance or observance of any of the terms, covenants
or conditions of this Agreement or the other Loan Documents on the part of any
Credit Party or to inspect the Collateral (including the books and records) of
any Credit Party; (e) shall not be responsible to any Lender for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of this Agreement or the other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto; and (f) shall incur no liability
under or in respect of this Agreement or the other Loan Documents by acting upon
any notice, consent, certificate or other instrument or writing (which may be by
telecopy, telegram, cable or telex) believed by it to be genuine and signed or
sent by the proper party or parties.
SECTION 9.03. GE CAPITAL AND AFFILIATES. With respect to its Revolving
Credit Commitment and portion of the Revolving Credit Loan hereunder, GE Capital
shall have the same rights and powers under this Agreement and the other Loan
Documents as any other Lender and may exercise the same as though it were not
the Administrative Agent; and the term "Lender" or "Lenders" shall, unless
otherwise expressly indicated, include GE Capital in its individual capacity. GE
Capital and its Affiliates may lend money to, invest in, and generally engage in
any kind of business with, any Credit Party, any of their Affiliates and any
Person who may do business with or own securities of any Credit Party or any
such Affiliate, all as if GE Capital were not the Administrative Agent and
without any duty to account therefor to Lenders. GE Capital and its Affiliates
may accept fees and other consideration from any Credit Party for services in
connection with this Agreement or otherwise without having to account for the
same to Lenders. Each Lender acknowledges the potential conflict of interest
between GE Capital as a Lender holding disproportionate interests in the
Revolving Credit Loan and GE Capital as the Administrative Agent.
SECTION 9.04. LENDER CREDIT DECISION. Each Lender acknowledges that it
has, independently and without reliance upon the Administrative Agent or any
other Lender and based on the Financial Statements and such other documents and
information as it has deemed appropriate, made its own credit and financial
analysis of the Credit Parties and its own decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement. Each Lender acknowledges the potential conflict of interest of each
other Lender as a result of Lenders holding disproportionate interests in the
Revolving Credit Loan, and expressly consents to, and waives any claim based
upon, such conflict of interest.
SECTION 9.05. INDEMNIFICATION. Lenders agree to indemnify the
Administrative Agent (to the extent not reimbursed by Borrower and without
limiting the obligations of Borrower hereunder), ratably according to their
respective Pro Rata Shares, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against the Administrative Agent in any way
relating to or arising out of this Agreement or any other
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Loan Document or any action taken or omitted by the Administrative Agent in
connection therewith; PROVIDED, HOWEVER, that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting solely from the
Administrative Agent's gross negligence or willful misconduct as finally
determined by a court of competent jurisdiction. Without limiting the foregoing,
each Lender agrees to reimburse the Administrative Agent promptly upon demand
for its Pro Rata Share of any out-of-pocket expenses (including counsel fees)
incurred by the Administrative Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement and each
other Loan Document, to the extent that the Administrative Agent is not
reimbursed for such expenses by Borrower or any other Credit Party.
SECTION 9.06. SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent
may resign at any time by giving not less than thirty (30) days' prior written
notice thereof to Lenders and Borrower. Upon any such resignation, the Required
Lenders shall have the right to appoint a successor Administrative Agent. If no
successor Administrative Agent shall have been so appointed by the Required
Lenders and shall have accepted such appointment within 30 days after the
resigning Administrative Agent's giving notice of resignation, then the
resigning Administrative Agent may, on behalf of Lenders, appoint a successor
Administrative Agent, which shall be a Lender, if a Lender is willing to accept
such appointment, or otherwise shall be a commercial bank or financial
institution or a subsidiary of a commercial bank or financial institution if
such commercial bank or financial institution is organized under the laws of the
United States of America or of any State thereof and has a combined capital and
surplus of at least $300,000,000. If no successor Administrative Agent has been
appointed pursuant to the foregoing, by the 30th day after the date such notice
of resignation was given by the resigning Administrative Agent, such resignation
shall become effective and the Required Lenders shall thereafter perform all the
duties of the Administrative Agent hereunder until such time, if any, as the
Required Lenders appoint a successor Administrative Agent as provided above. Any
successor Administrative Agent appointed by the Required Lenders hereunder shall
be subject to the approval of Borrower, such approval not to be unreasonably
withheld or delayed; PROVIDED that such approval shall not be required if a
Default or an Event of Default shall have occurred and be continuing. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall succeed to and
become vested with all the rights, powers, privileges and duties of the
resigning Administrative Agent. Upon the earlier of the acceptance of any
appointment as the Administrative Agent hereunder by a successor Administrative
Agent or the effective date of the resigning Administrative Agent's resignation,
the resigning Administrative Agent shall be discharged from its duties and
obligations under this Agreement and the other Loan Documents, except that any
indemnity rights or other rights in favor of such resigning Administrative Agent
shall continue. After any resigning Administrative Agent's resignation
hereunder, the provisions of this ARTICLE 9 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was the Administrative Agent
under this Agreement and the other Loan Documents. The Administrative Agent may
be removed at the written direction of the Required
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Lenders; provided that in so doing, such Required Lenders shall be deemed to
have waived and released any and all claims they may have against the
Administrative Agent.
SECTION 9.07. DISSEMINATION OF INFORMATION. The Administrative Agent
will use reasonable efforts to provide Lenders with any notice of Default or
Event of Default received by the Administrative Agent from, or delivered by the
Administrative Agent to, Borrower or any other Credit Party, with notice of any
Event of Default of which the Administrative Agent has actually become aware and
with notice of any action taken by the Administrative Agent following any Event
of Default; PROVIDED, HOWEVER, that the Administrative Agent shall not be liable
to any Lender for any failure to do so, except to the extent that such failure
is attributable solely to the Administrative Agent's gross negligence or willful
misconduct as finally determined by a court of competent jurisdiction. Lenders
acknowledge that Borrower is required to provide financial statements to Lenders
in accordance with SECTION 4.01 hereof and agree that the Administrative Agent
shall have no duty to provide the same to Lenders.
SECTION 9.08. RELEASE OF COLLATERAL. Upon indefeasible payment in full
in cash and performance of all of the outstanding Obligations (other than
indemnification Obligations under SECTION 1.12), termination of the Revolving
Credit Commitments of all Lenders and a release of all claims against the
Administrative Agent and Lenders, and so long as no suits, actions, proceedings,
or claims are pending or threatened against any Indemnified Person asserting any
damages, losses or liabilities that are indemnified Claims, the Administrative
Agent shall deliver to Borrower termination statements, mortgage releases and
other documents necessary or appropriate to evidence the termination of the
Liens securing payment of the Obligations.
ARTICLE 10
SUCCESSORS AND ASSIGNS
SECTION 10.01. SUCCESSORS AND ASSIGNS. This Agreement and the other
Loan Documents shall be binding on and shall inure to the benefit of Borrower,
Lenders, the Agents and their respective successors and assigns (including, in
the case of Borrower or any other Credit Party, a debtor-in-possession on behalf
of Borrower or such Credit Party), except as otherwise provided herein or
therein. Borrower may not assign, delegate, transfer, hypothecate or otherwise
convey its rights, benefits, obligations or duties hereunder or under any of the
Loan Documents without the prior express written consent of the Administrative
Agent and the Required Lenders. Any such purported assignment, transfer,
hypothecation or other conveyance by Borrower without such prior express written
consent shall be void. The terms and provisions of this Agreement and the other
Loan Documents are for the purpose of defining the relative rights and
obligations of Borrower, Lenders and Agents with respect to the transactions
contemplated hereby and there shall be no third party beneficiaries of any of
the terms and provisions of this Agreement or any of the other Loan Documents.
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SECTION 10.02. ASSIGNMENTS AND PARTICIPATIONS.
(a) Subject to the terms and conditions of this SECTION 10.02,
each Lender shall have the right to assign or sell participations in, at any
time or times, the Loan Documents, Revolving Credit Loan, Letter of Credit
Obligations and any Revolving Credit Commitment or of any portion thereof or
interest therein, including any Lender's rights, title, interests, remedies,
powers or duties thereunder, whether evidenced by a writing or not. Each such
assignment by a Lender shall (i) require the consent of Borrower (which shall
not be unreasonably withheld or delayed) unless a Default or Event of Default
shall have occurred and be continuing, (ii) require the consent of the
Administrative Agent (which shall not be unreasonably withheld or delayed),
(iii) require the execution of an assignment and assumption agreement (an
"ASSIGNMENT AGREEMENT") substantially in the form attached hereto as EXHIBIT D
and otherwise in form and substance satisfactory to, and acknowledged by, the
Administrative Agent; (iv) be a PRO RATA assignment of its Revolving Credit
Commitment and its ratable portion of the Revolving Credit Loan, (v) be
conditioned on such assignee Lender's representing to the assigning Lender and
the Administrative Agent that it is purchasing the portion of the Revolving
Credit Loan to be assigned to it for its own account, for investment purposes
and not with a view to the distribution thereto; (vi) if a partial assignment,
be in an amount at least equal to $5,000,000 or, if less, the assigning Lender's
entire remaining interest and, after giving effect to any such partial
assignment, other than an assignment of its entire remaining interest, the
assigning Lender shall have retained Revolving Credit Loan and/or a Revolving
Credit Commitment in an amount at least equal to $5,000,000; and (vii) include a
payment to the Administrative Agent of an assignment fee of $3,500. In the case
of an assignment by a Lender under this SECTION 10.02, the assignee shall have,
to the extent of such assignment, the same rights, benefits and obligations as
it would if it were a Lender hereunder. Each assigning Lender shall be relieved
of its obligations hereunder with respect to its Revolving Credit Commitment or
assigned portion thereof from and after the date of such assignment. Borrower
hereby acknowledges and agrees that any assignment will give rise to a direct
obligation of Borrower to the assignee and that the assignee shall be considered
to be a "Lender". In all instances, each Lender's liability to make Revolving
Credit Advances hereunder shall be several and not joint and shall be limited to
such Lender's Pro Rata Share of the applicable Revolving Credit Advance. In the
event any Lender assigns or otherwise transfers all or any part of a Revolving
Credit Note, Borrower shall, upon the request of the Administrative Agent or
such Lender, execute new Revolving Credit Notes in exchange for the Revolving
Credit Notes being assigned. Notwithstanding the foregoing provisions of this
SECTION 10.02(A), any Lender may at any time pledge or assign all or any portion
of such Lender's rights under this Agreement and the other Loan Documents to a
Federal Reserve Bank; PROVIDED, HOWEVER, that no such pledge or assignment shall
release such Lender from such Lender's obligations hereunder or under any other
Loan Document.
(b) Any participation by a Lender of all or any part of its
Revolving Credit Loan and/or Revolving Credit Commitment shall be in an amount
at least equal to $1,000,000, and with the understanding that all amounts
payable by Borrower hereunder shall be determined as if that Lender had not sold
such participation, and that the holder of any such participation shall not be
entitled to require such Lender to take or omit to take any action hereunder
except actions directly
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affecting (i) any reduction in the principal amount of , or interest rate or
Fees payable with respect to, any Loan in which such holder participates, (ii)
any extension of the scheduled amortization of the principal amount of any Loan
in which such holder participates or the final maturity date thereof, and (iii)
any release of all or substantially all of the Collateral (other than in
accordance with the terms of this Agreement, the Collateral Documents or the
other Loan Documents). Solely for purposes of SECTIONS 1.14, 1.15 and 11.08,
Borrower acknowledges and agrees that a participation shall give rise to a
direct obligation of Borrower to the participant and the participant shall be
considered to be a "Lender." Except as set forth in the preceding sentence
neither Borrower nor any other Credit Party shall have any obligation or duty to
any participant. Neither the Administrative Agent nor any Lender (other than the
Lender selling a participation) shall have any duty to any participant and may
continue to deal solely with the Lender selling a participation as if no such
sale had occurred.
(c) Except as expressly provided in this SECTION 10.02, no
Lender shall, as between Borrower and that Lender, or the Administrative Agent
and that Lender, be relieved of any of its obligations hereunder as a result of
any sale, assignment, transfer or negotiation of, or granting of participation
in, all or any part of the Revolving Credit Loan, the Revolving Credit Notes or
other Obligations owed to such Lender.
(d) Borrower and each of its Subsidiaries shall assist any
Lender permitted to sell assignments or participations under this SECTION 10.02
as reasonably required to enable the assigning or selling Lender to effect any
such assignment or participation, including the execution and delivery of any
and all agreements, notes and other documents and instruments as shall
reasonably be requested and the preparation of informational materials for, and
the participation of management in meetings with, potential assignees or
participants. Borrower and each of the other Credit Parties shall certify the
correctness, completeness and accuracy of all descriptions of such Credit Party
and their affairs contained in any selling materials provided by it and all
other information provided by it and included in such materials, except that any
Projections delivered by Borrower shall only be certified by Borrower as having
been prepared by Borrower in compliance with the representations contained in
SCHEDULE 3.04.
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. COMPLETE AGREEMENT. This Agreement and the other Loan
Documents constitute the complete agreement among the parties with respect to
the subject matter hereof and thereof and supersede all prior agreements,
commitments, understandings or inducements (oral or written, expressed or
implied) relating to a financing of substantially similar form, purpose or
effect. This Agreement is a continuation of, an amendment to, and a restatement
of, the Original Credit Agreement. This Agreement shall not in any event be
deemed a novation of the Original Credit Agreement, and all rights and remedies
of Lender, and all debts, liabilities and obligations of
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Borrower, under the Original Credit Agreement, as amended and restated hereby,
shall continue to exist from and after the execution of this Agreement.
SECTION 11.02. AMENDMENTS AND WAIVERS.
(a) Except for actions expressly permitted to be taken by the
Administrative Agent, no amendment, modification, termination or waiver of any
provision of this Agreement or any of the Revolving Credit Notes, or any consent
to any departure by any Credit Party therefrom, shall in any event be effective
unless the same shall be in writing and signed by the Administrative Agent and
Borrower, and by the Required Lenders or all affected Lenders, as applicable.
Except as set forth in paragraphs (b) and (c) below, all such amendments,
modifications, terminations or waivers requiring the consent of any Lenders
shall require the written consent of the Required Lenders.
(b) No amendment, modification, termination or waiver of or
consent with respect to any provision of this Agreement which increases the
percentage advance rate set forth in the definition of "Borrowing Base" shall be
effective unless the same shall be in writing and signed by the Administrative
Agent, the Required Lenders and Borrower. No amendment, modification,
termination or waiver of or consent with respect to any provision of this
Agreement which waives compliance with the conditions precedent set forth in
SECTION 2.02 to the making of any Revolving Credit Advance or the incurrence of
any Letter of Credit Obligations shall be effective unless the same shall be in
writing and signed by the Administrative Agent, the Required Lenders and
Borrower. Notwithstanding anything contained in this Agreement to the contrary,
no waiver or consent with respect to any Default (if in connection therewith the
Administrative Agent or the Required Lenders, as the case may be, have exercised
its or their right to suspend the making or incurrence of further Revolving
Credit Advances or Letter of Credit Obligations pursuant to SECTION 8.02(A)) or
any Event of Default shall be effective for purposes of the conditions precedent
to the making of Revolving Credit Advances or the incurrence of Letter of Credit
Obligations set forth in SECTION 2.02 unless the same shall be in writing and
signed by the Administrative Agent, the Required Lenders and Borrower.
(c) No amendment, modification, termination or waiver shall,
unless in writing and signed by the Administrative Agent and each Lender, do any
of the following: (i) increase the principal amount of any Revolving Credit
Commitment; (ii) except as otherwise permitted under SECTION 6.08, release any
Credit Party from liability under the Subsidiary Guaranty or release all or
substantially all of the Collateral; (iii) amend or waive this SECTION 11.02,
any provision of this Agreement requiring consent or action on the part of the
Required Lenders or the definition of the term "Required Lenders;" (iv) extend
any scheduled payment date or final maturity date of the principal amount of the
Revolving Credit Loan; (v) reduce the principal of, rate of interest on or Fees
payable with respect to any Revolving Credit Commitment, Loan or Letter of
Credit Obligations, or (vi) waive, forgive, defer, extend or postpone any
payment of interest or Fees.
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(d) No amendment, modification, termination or waiver
affecting the rights or duties of the Administrative Agent under this Agreement
or any other Loan Document shall be effective unless in writing and signed by
the Administrative Agent, in addition to the Lenders required hereinabove to
take such action.
(e) Each amendment, modification, termination or waiver shall
be effective only in the specific instance and for the specific purpose for
which it was given. No amendment, modification, termination or waiver shall be
required for the Administrative Agent to take additional Collateral pursuant to
any Loan Document. No amendment, modification, termination or waiver of any
provision of any Revolving Credit Note shall be effective without the written
concurrence of the holder of that Revolving Credit Note. No notice to or demand
on any Credit Party in any case shall entitle such Credit Party or any other
Credit Party to any other or further notice or demand in similar or other
circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this SECTION 11.02 shall be binding upon each holder
of the Revolving Credit Notes at the time outstanding and each future holder of
the Revolving Credit Notes.
SECTION 11.03. FEES AND EXPENSES; CERTAIN TAXES.
(a) Borrower shall reimburse the Agents for all reasonable
out-of-pocket expenses incurred in connection with the preparation, negotiation,
execution, delivery and syndication of this Agreement and the other Loan
Documents (including the reasonable fees and expenses of the Agents' special
counsel, advisors, consultants and auditors retained in connection with this
Agreement and the other Loan Documents and advice in connection therewith).
Borrower shall reimburse the Administrative Agent (and, with respect to clauses
(iii), (iv) and (v) below, all Lenders) for all reasonable fees, costs and
expenses, including the reasonable fees, costs and expenses of counsel or other
advisors (including environmental and management consultants and appraisers) for
advice, assistance, or other representation in connection with:
(i) wire transfer fees and other costs of the
forwarding to Borrower or any other Person on behalf of Borrower by the
Administrative Agent of the proceeds of the Revolving Credit Loan;
(ii) any amendment, modification or waiver of, or
consent with respect to, any of the Loan Documents or advice in
connection with the administration of the Revolving Credit Loan made
pursuant hereto or its rights hereunder or thereunder;
(iii) any litigation, contest, dispute, suit,
proceeding or action (whether instituted by the Administrative Agent,
the Syndication Agent, any Lender, Borrower, any other Credit Party or
any other Person) in any way relating to the Collateral, any of the
Loan Documents or any other agreement to be executed or delivered in
connection therewith or herewith, whether as party, witness, or
otherwise, including any litigation, contest, dispute, suit, case,
proceeding or action, and any appeal or review thereof, in connection
with a case commenced by or against Borrower, any other Credit Party or
any other Person that may be
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obligated to Lenders or the Agents by virtue of the Loan Documents,
including any such litigation, contest, dispute, suit, proceeding or
action arising in connection with any work-out or restructuring of the
Revolving Credit Loan during the pendency of one or more Events of
Default; PROVIDED, that Borrower shall not be liable to reimburse the
Administrative Agent, the Syndication Agent or any Lender for any such
fees, costs or expenses incurred by it in the defense of any Claim as
to which such Person would not be entitled to indemnification by virtue
of the proviso to SECTION 1.12(A).
(iv) any attempt to enforce any remedies of the
Administrative Agent or any Lender against any or all of the Credit
Parties or any other Person that may be obligated to the Administrative
Agent or any Lender by virtue of any of the Loan Documents;
(v) any work-out or restructuring of the Revolving
Credit Loan during the pendency of one or more Events of Default; or
(vi) any efforts to verify, protect, evaluate,
assess, appraise, collect, sell, liquidate or otherwise dispose of any
of the Collateral after the occurrence and during the continuance of an
Event of Default;
including all reasonable attorneys' and other professional and service
providers' fees arising from such services, including those in connection with
any appellate proceedings; and all reasonable out-of-pocket expenses, costs,
charges and other fees incurred by such counsel and others in any way or respect
arising in connection with or relating to any of the events or actions described
in this SECTION 11.03 shall be payable, on demand, by Borrower to the Agents or
Lenders, as applicable. Without limiting the generality of the foregoing, such
expenses, costs, charges and fees may include: reasonable fees, costs and
expenses of accountants, environmental advisors, appraisers, investment bankers,
management and other consultants and paralegals; court costs and expenses;
photocopying and duplication expenses; court reporter fees, costs and expenses;
long distance telephone charges; air express charges; telegram or telecopy
charges; secretarial overtime charges; and expenses for travel, lodging and food
paid or incurred in connection with the performance of such legal or other
advisory services.
(b) In addition, Borrower agrees to pay any present or future
intangible personal property, stamp or documentary taxes or any other excise or
property taxes, charges or similar levies that arise from any payment made
hereunder or under the Revolving Credit Notes or from the execution, delivery,
recording or registration of, or otherwise with respect to, this Agreement, any
of the Mortgages or any of the other Collateral Documents or Loan Documents or
any other matter contemplated by this Agreement, within ten (10) Business Days
after demand by the Administrative Agent or any Lender therefor (including
penalties, interest and expenses arising therefrom or with respect thereto),
whether or not such taxes were correctly or legally asserted.
SECTION 11.04. NO WAIVER. No failure on the part of the Administrative
Agent or any Lender, at any time or times, to require strict performance by
Borrower or any other Credit Party
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with any provision of this Agreement and any of the other Loan Documents shall
waive, affect or diminish any right of the Administrative Agent or Lenders
thereafter to demand strict compliance and performance therewith. Any suspension
or waiver of a Default or Event of Default shall not suspend, waive or affect
any other Default or Event of Default whether the same is prior or subsequent
thereto and whether of the same or of a different type. None of the
undertakings, agreements, warranties, covenants and representations of Borrower
or any other Credit Party contained in this Agreement or any of the other Loan
Documents and no Default or Event of Default by Borrower shall be deemed to have
been suspended or waived by the Administrative Agent or Lenders, unless such
waiver or suspension is by an instrument in writing signed by an officer of or
other authorized employee of the Administrative Agent or the Required Lenders
and directed to Borrower specifying such suspension or waiver.
SECTION 11.05. REMEDIES. The rights and remedies of Lenders and the
Agents under this Agreement and the other Loan Documents shall be cumulative and
nonexclusive of any other rights and remedies which Lenders and the Agents may
have under any other agreement, including the Loan Documents, by operation of
law or otherwise. Recourse to the Collateral shall not be required.
SECTION 11.06. SEVERABILITY. Wherever possible, each provision of this
Agreement and each of the other Loan Documents shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Agreement or any of the other Loan Documents shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement or any of the other Loan
Documents.
SECTION 11.07. CONFLICT OF TERMS. Except as otherwise provided in this
Agreement or any of the other Loan Documents by specific reference to the
applicable provisions of this Agreement, if any provision contained in this
Agreement is in conflict with, or inconsistent with, any provision contained in
any of the other Loan Documents, the provisions contained in this Agreement
shall govern and control.
SECTION 11.08. SETOFF AND SHARING OF PAYMENTS.
(a) In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence and during the continuance of any Event of Default, each Lender and
each holder of any Revolving Credit Note is hereby authorized to the extent
permitted by applicable law at any time or from time to time, without notice to
Borrower or any of the other Credit Parties or to any other Person, any such
notice being hereby expressly waived, to set off and to appropriate and to apply
any and all balances held by it at any of its offices for the account of
Borrower or any other Credit Party (regardless of whether such balances are then
due to Borrower or such Credit Party) and any other properties or assets any
time held or owing by that Lender or that holder to or for the credit or for the
account of Borrower or any other Credit Party against and on account of any of
the Obligations which are not paid when due.
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<PAGE> 64
(b) Any Lender or holder of any Revolving Credit Note
exercising a right to set off or otherwise receiving any payment on account of
the Obligations in excess of its Pro Rata Share thereof shall purchase for cash
(and the other Lenders or holders shall sell) such participations in each such
other Lender's or holder's Pro Rata Share of the Obligations as would be
necessary to cause such Lender to share the amount so set off or otherwise
received with each other Lender or holder in accordance with their respective
Pro Rata Shares. Borrower and each of the other Credit Parties agree, to the
fullest extent permitted by law, that (a) any Lender or holder may exercise its
right to set off with respect to amounts in excess of its Pro Rata Share of the
Obligations and may sell participations in such amount so set off to other
Lenders and holders and (b) any Lender or holders so purchasing a participation
in the Revolving Credit Loan made or other Obligations held by other Lenders or
holders may exercise all rights of set-off, bankers' lien, counterclaim or
similar rights with respect to such participation as fully as if such Lender or
holder were a direct holder of the Revolving Credit Loan and the other
Obligations in the amount of such participation. Notwithstanding the foregoing,
if all or any portion of the set-off amount or payment otherwise received is
thereafter recovered from the Lender that has exercised the right of set-off,
the purchase of participations by that Lender shall be rescinded and the
purchase price restored without interest.
SECTION 11.09. AUTHORIZED SIGNATURE. Until the Administrative Agent
shall be notified by Borrower to the contrary, the signature upon any document
or instrument delivered pursuant hereto and believed by the Administrative Agent
or any of the Administrative Agent's officers, agents, or employees to be that
of an officer or duly authorized representative of Borrower or any other Credit
Party listed in SCHEDULE 11.09 shall bind Borrower and all other Credit Parties
and be deemed to be the act of Borrower or such other Credit Party affixed
pursuant to and in accordance with resolutions duly adopted by Borrower's or
such other Credit Party's Board of Directors, and the Administrative Agent shall
be entitled to assume the authority of each signature and authority of the
Person whose signature it is or appears to be unless the Person acting in
reliance on such signature shall have actual knowledge of the fact that such
signature is false or the Person whose signature or purported signature is
presented is without authority.
SECTION 11.10. NOTICES. Except as otherwise provided herein, whenever
it is provided herein that any notice, demand, request, consent, approval,
declaration or other communication shall or may be given to or served upon any
of the parties by another party, or whenever any of the parties desires to give
or serve upon another party any communication with respect to this Agreement or
any of the other Loan Documents, each such notice, demand, request, consent,
approval, declaration or other communication shall be in writing and shall be
deemed to have been validly served, given or delivered (a) upon the earlier of
actual receipt and three (3) Business Days after deposit in the United States
Mail, registered or certified mail, return receipt requested, with proper
postage prepaid, (b) upon transmission, when sent by telecopy or other similar
facsimile transmission (with such telecopy or facsimile promptly confirmed by
delivery of a copy by personal delivery or United States Mail as otherwise
provided in this SECTION 11.10), (c) one Business Day after deposit with a
reputable overnight courier with all charges prepaid, or (d) when delivered, if
hand-delivered by messenger, all of which shall be addressed to the party to be
notified and sent to the address or
57
<PAGE> 65
facsimile number indicated below or to such other address (or facsimile number)
as may be substituted by notice given as herein provided. The giving of any
notice required hereunder may be waived in writing by the party entitled to
receive such notice. Failure or delay in delivering copies of any notice,
demand, request, consent, approval, declaration or other communication to any
Person (other than the Administrative Agent, Borrower or a Lender) designated
below to receive copies shall in no way adversely affect the effectiveness of
such notice, demand, request, consent, approval, declaration or other
communication.
(a) If to the Administrative Agent, at:
General Electric Capital Corporation
3379 Peachtree Road, N.E.
Suite 560
Atlanta, Georgia 30326
Attention: Ms. Cheryl P. Boyd
Telecopy No.: (404) 266-3438
with copies to:
General Electric Capital Corporation
201 High Ridge Road
Stamford, Connecticut 06927-5100
Attention: Region Counsel - Commercial Finance
Telecopy No.: (203) 316-7889
and
King & Spalding
191 Peachtree Street
Atlanta, Georgia 30303-1763
Attention: John Hays Mershon, Esq.
Telecopy No.: (404) 572-5100
(b) if to Borrower, at:
Ramsay Health Care, Inc.
Columbus Center
One Alhambra Plaza
Suite 750
Coral Gables, Florida 33134
Attention: Chief Financial Officer
Telecopy No.: (305) 569-4647
58
<PAGE> 66
with a copy to:
Haythe & Curley
237 Park Avenue
New York, New York 10017
Attention: Bradley P. Cost, Esq.
Telecopy No.: (212) 682-0200
(c) if to any Lender, at its address for notices set forth
below its signature hereto.
SECTION 11.11. SECTION TITLES. The Section titles and Table of Contents
contained in this Agreement are and shall be without substantive meaning or
content of any kind whatsoever and are not a part of this Agreement.
SECTION 11.12. COUNTERPARTS. This Agreement may be executed in any
number of separate counterparts, each of which shall, collectively and
separately, constitute one agreement.
SECTION 11.13. TIME OF THE ESSENCE. Time is of the essence of this
Agreement and each of the other Loan Documents.
SECTION 11.14. PUBLICITY. Except to the extent otherwise required by
law, Borrower shall not use the name of or refer to GE Capital, or any of its
Affiliates, in any press release or other public disclosure made in connection
with the transactions contemplated by this Agreement or the Related Transactions
without the prior written consent of GE Capital, and shall provide to GE Capital
the proposed text of any such press release or other public disclosure for
review not later than two Business Days prior to the proposed date of release or
disclosure thereof.
SECTION 11.15. CONFIDENTIALITY. Borrower has furnished and will furnish
to Lenders certain information concerning Borrower, its Subsidiaries, Affiliates
and their respective businesses which Borrower has advised is non-public,
proprietary or confidential in nature ("CONFIDENTIAL INFORMATION"). Each of the
Administrative Agent and the Lenders confirms to Borrower, for itself, that it
is the Administrative Agent's or such Lender's policy and practice to maintain
in confidence all Confidential Information which is provided to it under
agreements providing for the extension of credit and which is identified to it
as such, and that it will protect the confidentiality of Confi dential
Information submitted to it with respect to Borrower under this Agreement,
commensurate with its efforts to maintain the confidentiality of its own
Confidential Information, PROVIDED, HOW EVER, that (a) nothing contained herein
shall prevent the Administrative Agent or any Lender from disclosing
Confidential Information (i) to its Affiliates and their respective directors,
officers and employees and to any legal counsel, auditors, appraisers,
consultants or other persons retained by it or its Affiliates as professional
advisors, on the condition that such information not be further disclosed except
in compliance with this SECTION 11.15; (ii) under color of legal authority,
including, without limitation, to any regulatory authority having jurisdiction
over it or its operations or to or under the authority of any court deemed by it
to be of competent jurisdiction; (iii) to any actual or
59
<PAGE> 67
potential assignee of or participant in such Lender's rights and obligations
under this Agreement pursuant to SECTION 10.02 hereof, to the extent such actual
or potential assignee or lender has agreed to maintain such information in
confidence on the basis set forth in this SECTION 11.15; and (iv) as necessary
in connection with the exercise of its remedies under this Agreement or any of
the other Loan Documents; (b) the terms of this SECTION 11.15 shall be
inapplicable to any information furnished to it which is in its possession prior
to the delivery to it of such information by Borrower, or otherwise has been
obtained by it on a non-confidential basis, or which was or becomes available to
the public or otherwise part of the public domain (other than as a result of the
Administrative Agent's or such Lender's failure to abide hereby), or which was
not non-public, proprietary or confidential when Borrower delivered it to the
Administrative Agent or such Lender; and (c) the determination by the
Administrative Agent or such Lender as to the application of any of the
circumstances described in the foregoing clauses (a) and (b) will be conclusive
if made reasonably and in good faith.
SECTION 11.16. GOVERNING LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN
ANY OF THE LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS
ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND
PERFORMED IN SUCH STATE, AND ANY APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA. BORROWER AND EACH OTHER CREDIT PARTY HEREBY CONSENTS AND AGREES THAT
THE STATE OR FEDERAL COURTS LOCATED IN NEW YORK COUNTY, NEW YORK SHALL HAVE
EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES PERTAINING
TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY MATTER ARISING
OUT OF OR RELATED TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS;
PROVIDED, THAT THE PARTIES ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY
HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK COUNTY, NEW YORK; AND
FURTHER PROVIDED, THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO
PRECLUDE LENDERS OR THE ADMINISTRATIVE AGENT FROM BRINGING SUIT OR TAKING OTHER
LEGAL ACTION IN ANY COURT OF COMPETENT JURISDICTION IN ANY OTHER JURISDICTION TO
COLLECT THE OBLIGATIONS, TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR
THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF
LENDERS OR THE ADMINISTRATIVE AGENT. BORROWER AND EACH OTHER CREDIT PARTY
EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR
SUIT COMMENCED IN ANY SUCH COURT, AND BORROWER AND EACH OTHER CREDIT PARTY
HEREBY WAIVES ANY OBJECTION WHICH BORROWER OR SUCH CREDIT PARTY MAY HAVE BASED
UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND
HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
APPROPRIATE BY ANY SUCH COURT. TO THE EXTENT PERMITTED BY APPLICABLE LAW,
BORROWER
60
<PAGE> 68
HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS
ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS,
COMPLAINTS AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL
ADDRESSED TO BORROWER OR SUCH CREDIT PARTY AT THE ADDRESS FOR BORROWER SET FORTH
IN SECTION 11.10 OF THIS AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED
COMPLETED UPON THE EARLIER OF BORROWER'S ACTUAL RECEIPT THEREOF OR THREE (3)
BUSINESS DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID.
SECTION 11.17. WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN
CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY
RESOLVED BY AN EXPERIENCED AND EXPERT PERSONA ND THE PARTIES WISH APPLICABLE
STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES
DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS.
THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL
SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY
IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER IN
CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
SECTION 11.18. ESTOPPEL. Each Credit Party represents and warrants that
there are no claims, causes of action, defenses, rights of offset, suits, debts,
liens, obligations, liabilities, demands, losses, costs and expenses (including
attorneys' fees) of any kind, character or nature whatsoever, known or unknown,
fixed or contingent, which Borrower may have or claim to have against any
Lender, the Administrative Agent or the Syndication Agent which arise out of or
in connection with any act or omission of such Lender, the Administrative Agent
or the Syndication Agent existing or occurring on or prior to each of the date
of this Agreement and the Effective Date, including, without limitation, any
claims, liabilities or obligations arising with respect to the Original Credit
Agreement or any of the Loan Documents.
61
<PAGE> 69
IN WITNESS WHEREOF, this Agreement has been duly executed as of the
date first written above.
"BORROWER"
RAMSAY HEALTH CARE, INC.
By: Carol C. Lang
--------------------------------------
Name:
Title:
"ADMINISTRATIVE AGENT"
GENERAL ELECTRIC CAPITAL CORPORATION,
as Administrative Agent
By: Cheryl P. Boyd
--------------------------------------
Cheryl P. Boyd
Authorized Signatory
"LENDER"
Pro Rata Share of GENERAL ELECTRIC CAPITAL CORPORATION
Revolving Credit
Commitments: 100%
By: Cheryl P. Boyd
---------------------------------------
Cheryl P. Boyd
Authorized Signatory
ADDRESS FOR NOTICES:
3379 Peachtree Road, N.E.
Suite 560
Atlanta, Georgia 30326
Attention: Ms. Cheryl P. Boyd
Telecopy No.: (404) 266-3438
62
<PAGE> 70
JOINDER OF CREDIT PARTIES
Each of the undersigned, being all of the Subsidiaries of Borrower that
are Credit Parties, joins in the execution and delivery of this Agreement as a
party hereto and, by its execution below:
1. confirms and joins in each of the representations, warranties,
covenants and agreements set forth in this Agreement with respect to such Credit
Party;
2. restates, ratifies and reaffirms each and every term and condition
set forth in the Original Credit Agreement, as modified by this Agreement,
effective as of the Effective Date;
3. reaffirms and ratifies its unconditional and irrevocable, joint and
several guarantee to GE Capital and its successors and assigns, of the prompt
payment (whether at stated maturity, by acceleration or otherwise) and
performance when due of the Obligations and reaffirms and ratifies all of its
other obligations under the Subsidiary Guaranty;
4. consents to the execution and delivery of this Agreement by the
Company, and acknowledges that it has received and reviewed a copy of this
Agreement; and
5. acknowledges and reaffirms that (i) all Liens granted to GE Capital
under the Collateral Documents remain in full force and effect and shall
continue to secure the Obligations and (ii) the validity, perfection or priority
of the Liens will not be impaired by the execution and delivery of this
Agreement.
IN WITNESS WHEREOF, each of such Credit Parties has executed this
Joinder of Credit Parties as of the 30th day of September, 1998.
AMERICARE OF GALAX, INC., a Virginia corporation
BETHANY PSYCHIATRIC HOSPITAL, INC., an Oklahoma corporation
BOUNTIFUL PSYCHIATRIC HOSPITAL, INC., a Utah corporation
CAROLINA TREATMENT CENTER, INC., a South Carolina corporation
EAST CAROLINA PSYCHIATRIC SERVICES CORPORATION, a North Carolina
corporation
GREAT PLAINS HOSPITAL, INC., a Missouri corporation
GREENBRIER HOSPITAL, INC., a Louisiana corporation
GULF COAST TREATMENT CENTER, INC., a Florida corporation
HAVENWYCK HOSPITAL, INC., a Michigan corporation
H.C. CORPORATION, an Alabama corporation
HOUMA PSYCHIATRIC HOSPITAL, INC., a Louisiana corporation
HSA HILL CREST CORPORATION, an Alabama corporation
HSA OF OKLAHOMA, INC., an Oklahoma corporation
63
<PAGE> 71
MESA PSYCHIATRIC HOSPITAL, INC., an Arizona corporation
MICHIGAN PSYCHIATRIC SERVICES, INC., a Michigan corporation
PSYCHIATRIC INSTITUTE OF WEST VIRGINIA, INC., a Virginia corporation
RAMSAY ACQUISITION CORP., a Delaware corporation
RAMSAY CORRECTIONAL SERVICES, INC., a Delaware corporation
RAMSAY LOUISIANA, INC., a Delaware corporation
RAMSAY MANAGED CARE, INC., a Delaware corporation
RAMSAY MANAGEMENT SERVICES OF WEST VIRGINIA, INC., a West Virginia
corporation
RAMSAY NEW ORLEANS, INC., a Delaware corporation
RAMSAY YOUTH SERVICES, INC., a Delaware corporation
RAMSAY YOUTH SERVICES OF ALABAMA, INC., a Delaware corporation
RAMSAY YOUTH SERVICES OF FLORIDA, INC., a Delaware corporation
RHCI SAN ANTONIO, INC., a Delaware corporation
THE HAVEN HOSPITAL, INC., a Delaware corporation
UTAH PSYCHIATRIC AFFILIATES, INC., a Delaware corporation
By: Carol C. Lang
----------------------------------------
Carol C. Lang, Vice President of
each of the foregoing Credit Parties
Attest: Jorge Rico
-------------------------------------
Jorge Rico, Assistant Secretary of
each of the foregoing Credit Parties
H. C. PARTNERSHIP, an Alabama general partnership
By: HSA HILL CREST CORPORATION, its General Partner
By: Carol C. Lang
-------------------------------
Carol C. Lang
Vice President
64
<PAGE> 1
Exhibit 10.125
===============================================================================
AMENDED AND RESTATED
SUBORDINATED NOTE PURCHASE AGREEMENT
Dated as of September 30, 1998
between
RAMSAY HEALTH CARE, INC.,
as Issuer
and
PAUL RAMSAY HOLDINGS PTY. LIMITED,
as Purchaser
===============================================================================
<PAGE> 2
TABLE OF CONTENTS
ARTICLE 1
AUTHORIZATION OF NOTES;
SALE AND PURCHASE OF NOTES
SECTION 1.01 AUTHORIZATION OF BRIDGE NOTES...............................2
SECTION 1.02 INVESTMENT REPRESENTATIONS..................................2
ARTICLE 2
TERMS OF THE BRIDGE NOTES
SECTION 2.01 INTEREST....................................................3
SECTION 2.02 PRINCIPAL AND INTEREST PAYMENTS.............................3
SECTION 2.03 OPTIONAL PREPAYMENTS........................................3
SECTION 2.04 MANDATORY PREPAYMENTS.......................................4
SECTION 2.05 PAYMENTS, INTEREST RATE COMPUTATIONS,
OTHER COMPUTATIONS, ETC.....................................4
SECTION 2.06 PRORATION OF PAYMENTS.......................................4
SECTION 2.07 SAVINGS CLAUSE..............................................5
ARTICLE 3
[INTENTIONALLY DELETED]
ARTICLE 4
CONDITIONS TO CLOSING
SECTION 4.01 CONDITIONS TO EFFECTIVENESS OF THIS AGREEMENT...............6
SECTION 4.02 EFFECT OF AMENDMENT AND RESTATEMENT.........................7
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
SECTION 5.01 CORPORATE EXISTENCE; COMPLIANCE WITH LAW....................7
SECTION 5.02 CORPORATE POWER; AUTHORIZATION;
ENFORCEABLE OBLIGATIONS.....................................8
SECTION 5.03 FINANCIAL STATEMENTS........................................8
SECTION 5.04 MATERIAL ADVERSE EVENTS.....................................8
SECTION 5.05 OWNERSHIP OF PROPERTY; LIENS................................9
i
<PAGE> 3
SECTION 5.06 SUBORDINATION OF SUBORDINATED INDEBTEDNESS..................9
ARTICLE 6
AFFIRMATIVE COVENANTS
SECTION 6.01 REPORTS AND NOTICES.........................................9
SECTION 6.02 MAINTENANCE OF EXISTENCE AND CONDUCT OF BUSINESS............9
SECTION 6.03 PAYMENT OF CHARGES AND CLAIMS..............................10
SECTION 6.04 BOOKS AND RECORDS..........................................10
SECTION 6.05 LITIGATION.................................................10
SECTION 6.06 INSURANCE..................................................10
SECTION 6.07 COMPLIANCE WITH LAWS.......................................10
SECTION 6.08 ENVIRONMENTAL MATTERS......................................11
SECTION 6.09 FISCAL YEAR................................................11
SECTION 6.10 PERMITS, ETC...............................................11
SECTION 6.11 FURTHER ASSURANCES.........................................12
ARTICLE 7
NEGATIVE COVENANTS
SECTION 7.01 ACQUISITIONS...............................................12
SECTION 7.02 MERGERS, ETC...............................................12
SECTION 7.03 INVESTMENTS................................................12
SECTION 7.04 INDEBTEDNESS...............................................13
SECTION 7.05 AFFILIATE AND EMPLOYEE LOANS AND TRANSACTIONS..............13
SECTION 7.06 LIENS......................................................14
SECTION 7.07 SALE OF STOCK AND ASSETS...................................14
SECTION 7.08 MATERIAL CONTRACTS.........................................15
SECTION 7.09 ERISA......................................................15
SECTION 7.10 FINANCIAL COVENANTS........................................15
SECTION 7.11 SALE LEASE-BACKS...........................................15
SECTION 7.12 RESTRICTED PAYMENTS........................................16
SECTION 7.13 MARGIN REGULATIONS.........................................16
SECTION 7.14 LIMITATION ON DIVIDEND RESTRICTIONS, ETC...................16
SECTION 7.15 ACCOUNTING CHANGES.........................................16
SECTION 7.16 CHANGES RELATING TO SENIOR INDEBTEDNESS....................16
SECTION 7.17 CHANGES RELATING TO SUBORDINATED DEBT......................17
ii
<PAGE> 4
ARTICLE 8
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
SECTION 8.01 EVENTS OF DEFAULT .........................................17
SECTION 8.02 REMEDIES ..................................................19
SECTION 8.03 WAIVERS BY THE COMPANY ....................................20
ARTICLE 9
SUBORDINATION PROVISIONS
SECTION 9.01 SUBORDINATION .............................................20
SECTION 9.02 SUBORDINATION UPON DEFAULT IN SENIOR INDEBTEDNESS .........20
SECTION 9.03 SUBORDINATION UPON BANKRUPTCY, ETC ........................22
SECTION 9.04 NO SUSPENSION OF REMEDIES .................................23
SECTION 9.05 PAYMENTS AND DISTRIBUTIONS RECEIVED .......................23
SECTION 9.06 SUBROGATION ...............................................23
SECTION 9.07 RELATIVE RIGHTS ...........................................24
SECTION 9.08 SUBORDINATION MAY NOT BE IMPAIRED BY THE COMPANY ..........24
SECTION 9.09 SECTION NOT TO PREVENT EVENTS OF DEFAULT ..................24
SECTION 9.10 HOLDERS OF BRIDGE NOTE OBLIGATIONS ENTITLED TO ASSUME
PAYMENTS NOT PROHIBITED IN ABSENCE OF NOTICE...............24
SECTION 9.11 AMENDMENTS TO DOCUMENTS ...................................25
SECTION 9.12 WAIVERS ...................................................25
SECTION 9.13 AGREEMENT NOT TO CONTEST LIENS ............................26
SECTION 9.14 REINSTATEMENT .............................................26
ARTICLE 10
DEFINITIONS; RULES OF CONSTRUCTION
SECTION 10.01 TERMS DEFINED IN THE SENIOR CREDIT AGREEMENT...............26
SECTION 10.02 OTHER DEFINED TERMS........................................26
SECTION 10.03 CERTAIN MATTERS OF CONSTRUCTION............................32
ARTICLE 11
REGISTRATION; EXCHANGE; SUBSTITUTION OF BRIDGE NOTES
SECTION 11.01 REGISTRATION OF BRIDGE NOTES...............................33
SECTION 11.02 TRANSFERS..................................................33
SECTION 11.03 TRANSFER AND EXCHANGE OF BRIDGE NOTES......................34
SECTION 11.04 REPLACEMENT OF BRIDGE NOTES................................34
iii
<PAGE> 5
ARTICLE 12
MISCELLANEOUS
SECTION 12.01 COMPLETE AGREEMENT.........................................34
SECTION 12.02 AMENDMENTS AND WAIVERS.....................................35
SECTION 12.03 FEES AND EXPENSES; CERTAIN TAXES...........................35
SECTION 12.04 NO WAIVER..................................................37
SECTION 12.05 REMEDIES...................................................37
SECTION 12.06 SEVERABILITY...............................................37
SECTION 12.07 CONFLICT OF TERMS..........................................37
SECTION 12.08 SETOFF AND SHARING OF PAYMENTS.............................37
SECTION 12.09 NOTICES....................................................38
SECTION 12.10 SECTION TITLES.............................................39
SECTION 12.11 COUNTERPARTS...............................................39
SECTION 12.12 TIME OF THE ESSENCE........................................39
SECTION 12.13 CONFIDENTIALITY............................................39
SECTION 12.14 GOVERNING LAW..............................................40
SECTION 12.15 WAIVER OF JURY TRIAL.......................................41
SECTION 12.16 INDEMNIFICATION............................................41
SECTION 12.17 SUCCESSORS AND ASSIGNS.....................................42
SECTION 12.18 SURVIVAL...................................................42
SECTION 12.19 ESTOPPEL...................................................42
SECTION 12.20 WAIVER.....................................................42
iv
<PAGE> 6
INDEX OF ANNEXES, SCHEDULES AND EXHIBITS
Annex A - Schedule of Closing Documents
Annex B - Financial Statements, Projections and Notices
Annex C - Financial Covenants
Schedule 5.03 - Financial Statements and Projections
Schedule 5.04 - Contingent Liabilities; Restricted Payments
Schedule 5.07 - Labor Matters
Schedule 5.08 - Subsidiaries, Joint Ventures and Affiliates
Schedule 5.11 - Tax Matters
Schedule 5.12 - ERISA Plans
Schedule 5.13 - Litigation
Schedule 5.17 - Certain Environmental Matters
Schedule 5.30 - Certain Options, Etc.
Schedule 7.03 - Investments
Schedule 7.05 - Transactions with Affiliates and Employees
Schedule 7.06 - Liens
Exhibit A - Form of Opinion of the Company's Counsel
v
<PAGE> 7
AMENDED AND RESTATED
SUBORDINATED NOTE PURCHASE AGREEMENT
THIS AMENDED AND RESTATED SUBORDINATED NOTE PURCHASE AGREEMENT
("AGREEMENT") is entered into as of September 30, 1998, by and between RAMSAY
HEALTH CARE, INC., a Delaware corporation (the "COMPANY"), and PAUL RAMSAY
HOLDINGS PTY. LIMITED ACN 008 446 151, an Australian corporation ("RAMSAY
HOLDINGS" or "PURCHASER"), for the benefit of the parties and each other Person
that may hereafter become a registered holder of a Bridge Note (as hereinafter
defined) in accordance with ARTICLE 11 below (Purchaser and any such holder,
individually a "HOLDER", and collectively, the "HOLDERS").
RECITALS
A. The Company, General Electric Capital Corporation ("GE CAPITAL")
and Ramsay Holdings are parties to a certain Subordinated Note Purchase
Agreement, dated as of September 30, 1997 (as amended by a First Amendment to
Subordinated Note Purchase Agreement dated as of March 27, 1998, a Second
Amendment to Subordinated Note Purchase Agreement dated as of May 20, 1998, a
Third Amendment to Subordinated Note Purchase Agreement dated as of June 29,
1998 and a Fourth Amendment to Subordinated Note Purchase Agreement dated as of
July 29, 1998, the "ORIGINAL NOTE PURCHASE AGREEMENT"), pursuant to which GE
Capital purchased the Series A Bridge Notes and Ramsay Holdings purchased the
Series B Bridge Notes.
B. On the date hereof, the Company has sold certain of its assets with
the consent of Purchaser and GE Capital. Such sale constitutes a "Sale of the
Company" (as defined in the Original Note Purchase Agreement), thus requiring a
mandatory prepayment of the Bridge Notes. With the consent of the Senior Agent,
the Senior Lenders and the Holders of all of the Series B Bridge Notes, the
Company has utilized certain of the proceeds of such asset sales to repay in
full the Series A Bridge Notes (but not the Series B Bridge Notes) and all
other obligations owing to GE Capital under the Original Note Purchase
Agreement.
C. The Company and Ramsay Holdings desire to amend the Original Note
Purchase Agreement to reflect the repayment in full of the Series A Bridge
Notes and the termination of all other interests of GE Capital under the
Original Note Purchase Agreement, and to restate the Original Note Purchase
Agreement, as so amended, in its entirety, in order to set forth in a single
agreement all of the amendments to the Original Note Purchase Agreement
(including those effected hereby), and for convenience of reference.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, and intending to be legally bound, the parties
hereto amend the Original Note Purchase Agreement and restate the Original Note
Purchase Agreement, as so amended, as follows:
<PAGE> 8
ARTICLE 1
AUTHORIZATION OF NOTES;
SALE AND PURCHASE OF NOTES
SECTION 1.01 AUTHORIZATION OF BRIDGE NOTES.
(a) The Company has duly authorized the issuance and sale, on
the terms and subject to the conditions set forth herein, of its Increasing
Rate Senior Subordinated Bridge Notes, Series B, due September 30, 2005 (the
"BRIDGE NOTES") in the aggregate principal amount of Two Million Five Hundred
Thousand Dollars ($2,500,000), to be dated the date of issuance thereof, to
mature on September 30, 2005, and to bear interest on the unpaid balance
thereof from the date thereof until the principal shall have been paid in full
at the rates of interest set forth herein.
(b) The Bridge Notes shall rank PARI PASSU with all other
Indebtedness of the Company other than Senior Indebtedness. The term "Bridge
Notes" as used herein shall mean and include each Bridge Note delivered
pursuant to any provisions of this Agreement, and each Bridge Note delivered in
substitution, amendment, modification, extension or exchange for any such
Bridge Note pursuant to any such provision of this Agreement.
SECTION 1.02 INVESTMENT REPRESENTATIONS. Each Purchaser and, by its
purchase of any Bridge Note hereafter, each other Holder represents and
warrants that:
(a) it is an "accredited investor," as that term is defined
in Regulation D under the Securities Act, and has such knowledge, skill,
sophistication and experience in business and financial matters, based on
actual participation, that it is capable of evaluating the merits and risks of
the purchase of Bridge Notes from the Company and the suitability thereof for
such Purchaser;
(b) it is acquiring its Bridge Note for its own account, for
investment purposes and not with a view to the distribution thereof; PROVIDED,
HOWEVER, that the foregoing representation and warranty shall not be construed
as imposing any limitation on any Purchaser's or any other Holder's right to
transfer any Bridge Note that is not otherwise expressly set forth in this
Agreement or required under applicable law; and
(c) it will not, directly or indirectly, offer, transfer,
sell, assign, pledge, hypothecate or otherwise dispose of any of the Bridge
Notes (or solicit any offers to buy, purchase or otherwise acquire or take a
pledge of any of the Bridge Notes), except in compliance with the Securities
Act.
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ARTICLE 2
TERMS OF THE BRIDGE NOTES
SECTION 2.01 INTEREST.
(a) Interest on the outstanding principal amount of the
Bridge Notes shall accrue and be payable at a rate per annum equal to (i)
eleven percent (11%) from the Original Closing Date to and including December
31, 1997, (ii) eleven and one-half percent (11-1/2%) from January 1, 1998 to
and including March 31, 1998, (iii) twelve percent (12%) from April 1, 1998 to
and including June 30, 1998, (iv) twelve and one-half percent (12-1/2%) from
July 1, 1998 to and including September 30, 1998, and (v) thirteen percent
(13%) per annum at all times from and after October 1, 1998.
(b) If an Event of Default shall have occurred and be
continuing, the Required Holders may, by written notice to the Company,
increase each of the interest rates specified in paragraph (a) to the Default
Rate, effective as of the initial date of such Event of Default and continuing
until the date on which such Event of Default is waived or cured; PROVIDED,
HOWEVER, that, upon the occurrence of an Event of Default specified in SECTIONS
8.01(G), (H) or (I), the interest rates specified in paragraph (a) shall
automatically increase to the Default Rate.
SECTION 2.02 PRINCIPAL AND INTEREST PAYMENTS.
(a) If not sooner paid, the entire principal amount of the
Bridge Notes shall be due and payable in full on the Stated Maturity Date.
(b) Accrued interest on the Bridge Notes shall be payable,
without duplication, (i) in arrears for the preceding three-month period, on
the first Business Day of each March, June, September and December hereafter,
commencing December 1, 1997, (ii) on the Maturity Date, (iii) with respect to
any portion of the Bridge Notes prepaid or repaid pursuant to SECTION 2.04, on
the date such prepayment or repayment is due and, in the case of a voluntary
prepayment, on the date set forth in any notice required for such prepayment;
(iv) on the date of acceleration of the Bridge Notes pursuant to SECTION 8.02;
and (v) in the case of interest accruing at the Default Rate, upon demand.
SECTION 2.03 OPTIONAL PREPAYMENTS. Prior to the Stated Maturity Date,
the Company may, from time to time on any Business Day, make a voluntary
prepayment, in whole or in part, of the outstanding principal amount of the
Bridge Notes; PROVIDED, HOWEVER, that (i) all such voluntary prepayments shall
require at least three (3) Business Days' prior written notice to the Holders,
(ii) all such voluntary prepayments shall be in a minimum amount of $1,000,000
(subject to the Company's right to prepay in full the entire unpaid principal
amount of the Bridge Notes), (iii) all such prepayments shall be applied in
accordance with the provisions of SECTION 2.05, and (iv) concurrently with such
prepayment the Company shall pay to the Holders (x) all accrued but unpaid
interest on the amount prepaid, and (y) if paid on or after September 30, 1998
but before September
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30, 2004, but not otherwise, a Prepayment Premium in the amount specified in
the definition thereof.
SECTION 2.04 MANDATORY PREPAYMENTS. Prior to the Stated Maturity Date,
the Company shall, subject to any restrictions imposed by the Senior Credit
Documents, at the option of the Required Holders, prepay the entire outstanding
principal amount of the Bridge Notes upon the occurrence of a Change of Control
or a Sale of the Company;
in each case together with (x) accrued but unpaid interest on the amount
prepaid, and (y) if paid on or after September 30, 1998 but before September
30, 2004, but not otherwise, a Prepayment Premium in the amount specified
herein.
SECTION 2.05 PAYMENTS, INTEREST RATE COMPUTATIONS, OTHER COMPUTATIONS,
ETC. All payments by the Company of the principal amount of the Bridge Notes
pursuant to SECTION 2.02 and all regularly scheduled payments of interest on
the Bridge Notes pursuant to SECTION 2.01 shall be made by the Company to the
Holders PRO RATA according to the unpaid principal amounts of their respective
Bridge Notes. All such payments required to be made to each Holder shall be
made, without setoff, deduction or counterclaim, not later than 12:00 Noon (New
York time) on the date due, in immediately available funds, to such account as
each Holder shall specify from time to time by notice to the Company. Funds
received after that time shall be deemed to have been received by the Holders
on the following Business Day. All interest shall be computed on the basis of a
360-day year consisting of twelve 30-day months. Whenever any payment to be
made hereunder shall otherwise be due on a day which is not a Business Day,
such payment shall be made on the next succeeding Business Day and, with
respect to payments of principal, such extension of time shall be included in
the computation of accrued interest.
SECTION 2.06 PRORATION OF PAYMENTS.
(a) Except as otherwise provided in SECTION 2.05, the Company
shall not prepay or otherwise retire in whole or in part, or purchase or
otherwise acquire, directly or indirectly, any Bridge Notes held by any Holder
unless the Company shall have offered to prepay or otherwise retire, purchase
or acquire, as the case may be, the same proportion of the aggregate principal
amount of the Bridge Notes held by each other Holder at the time outstanding
upon the same terms and conditions. Any Bridge Notes prepaid or otherwise
retired, purchased or acquired by the Company or any of its Subsidiaries shall
not be deemed to be outstanding for any purpose under this Agreement.
(b) Except as otherwise provided in SECTION 2.05, if any
Holder shall obtain any payment or other recovery (whether voluntary,
involuntary, by application of setoff or otherwise) on account of principal of
or interest on the Bridge Notes or other Bridge Note Obligations in excess of
such Holder's PRO RATA share of payments then or therewith obtained thereon by
all Holders, such Holder which has received in excess of its PRO RATA share
shall purchase from the other Holders such participations in the Bridge Notes
or other Bridge Note Obligations held by them as shall be necessary to cause
such purchaser to share the excess payment or other recovery ratably with each
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of them; PROVIDED, HOWEVER, that if all or any portion of the excess payment or
other recovery is thereafter recovered from such purchasing Holder, the
purchase shall be rescinded and the purchase price restored to the extent of
such recovery, but without interest. The Company agrees that any Holder so
purchasing a participation from another Holder pursuant to this SECTION 2.06
(B) may, to the fullest extent permitted by law, exercise all its rights of
payment with respect to such participation as fully as if such Holder were the
direct creditor of the Company in the amount of such participation. If under
any applicable bankruptcy, insolvency or other similar law, any Holder receives
a secured claim in lieu of a setoff to which this SECTION 2.06(B) applies, such
Holder shall, to the extent practicable, exercise its rights in respect of such
secured claim in a manner consistent with the rights of the Holders under this
SECTION 2.06(B) to share in the benefits of any recovery on such secured claim.
SECTION 2.07 SAVINGS CLAUSE. Notwithstanding anything to the contrary
set forth in this Agreement, if, at any time until payment in full of all of
the Bridge Note Obligations, any rate of interest payable hereunder (including,
without limitation, any amounts payable to the Series A Holders pursuant to
ARTICLE 3 hereof that are treated as interest under applicable law) exceeds the
highest rate of interest permissible under any law which a court of competent
jurisdiction shall, in a final determination, deem applicable hereto (the
"MAXIMUM LAWFUL RATE"), then in such event and so long as the Maximum Lawful
Rate would be so exceeded, such rate of interest shall be equal to the Maximum
Lawful Rate; PROVIDED, that if at any time thereafter any rate of interest
payable hereunder is less than the Maximum Lawful Rate, the Company shall
continue to pay interest to the Holders hereunder at the Maximum Lawful Rate
until such time as the total interest received by the Holders hereunder is
equal to the total interest which the Holders would have received had the
interest rate or rates payable hereunder been (but for the operation of this
SECTION 2.07) the interest rate or rates payable since the date of incurrence
of the Bridge Note Obligations as otherwise provided in this Agreement.
Thereafter, the interest rate or rates payable hereunder shall be the rate or
rates of interest provided in SECTION 2.01 unless and until any rate of
interest again exceeds the Maximum Lawful Rate, in which event this SECTION
2.07 shall again apply. In no event shall the total interest received by the
Holders pursuant to the terms hereof exceed the amount which the Holders could
lawfully have received had the interest due hereunder been calculated for the
full term hereof at the Maximum Lawful Rate. In the event the Maximum Lawful
Rate is calculated pursuant to this SECTION 2.07, (x) if required by applicable
law, such interest shall be calculated at a daily rate equal to the Maximum
Lawful Rate divided by the number of days in the year in which such calculation
is made, and (y) if permitted by applicable law, the Company shall (i)
characterize any nonprincipal payment as an expense, fee or premium rather than
as interest, (ii) exclude voluntary prepayments and the effect thereof, and
(iii) amortize, pro rate, allocate and spread in equal or unequal parts the
total amount of interest throughout the entire contemplated term of the Bridge
Note Obligations so that interest for the entire term of this Agreement does
not exceed the Maximum Lawful Rate. In the event that a court of competent
jurisdiction, notwithstanding the provisions of this SECTION 2.07, shall make a
final determination that the Company has received interest hereunder in excess
of the Maximum Lawful Rate, the Company shall, to the extent permitted by
applicable law, promptly apply such excess first to any lawful interest due and
not yet paid hereunder, then to the outstanding principal of the Bridge Note
Obligations, then to any other unpaid Bridge Note
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Obligations, and thereafter shall refund any excess to the Company or as a
court of competent jurisdiction may otherwise order.
ARTICLE 3
[INTENTIONALLY DELETED]
ARTICLE 4
CONDITIONS TO CLOSING
SECTION 4.01 CONDITIONS TO EFFECTIVENESS OF THIS AGREEMENT.
Notwithstanding any other provision of this Agreement, it is understood and
agreed that this Agreement shall not become effective, and the Original Note
Purchase Agreement shall remain in full force and effect, until the following
conditions have been fulfilled to the satisfaction of Purchaser:
(a) THIS AGREEMENT; BRIDGE NOTE DOCUMENTS. This Agreement or
counterparts hereof shall have been duly executed by, and delivered to, the
Company and Purchaser; and Purchaser shall have received such documents,
instruments, agreements and legal opinions as Purchaser shall reasonably
request in connection with the transactions contemplated by this Agreement and
the other Bridge Note Documents, including all those listed in the Schedule of
Closing Documents attached hereto as ANNEX A, each in form and substance
satisfactory to Purchaser.
(b) APPROVALS. Purchaser shall have received (i) satisfactory
evidence that the Company has obtained all required consents and approvals of
all Persons, including all requisite Governmental Authorities, to the
execution, delivery and performance of this Agreement and the other Bridge Note
Documents or (ii) an officer's certificate in form and substance reasonably
satisfactory to Purchaser affirming that no such consents or approvals are
required.
(c) REDEMPTION AND PREPAYMENT. The Company shall have prepaid
in full the Series A Bridge Notes, together with all accrued but unpaid
interest thereon and all other obligations owing to GE Capital under the
Original Note Purchase Agreement.
(d) SENIOR CREDIT AGREEMENT. The Company and GE Capital shall
have entered into the Senior Credit Agreement and the Senior Credit Agreement
shall have become effective (such effectiveness to be evidenced by the delivery
by GE Capital of the letter contemplated by Section 2.02 of the Senior Credit
Agreement).
Upon the effectiveness of this Agreement pursuant to this Section 4.01, this
Agreement shall be effective from and after the Effective Date.
SECTION 4.02 EFFECT OF AMENDMENT AND RESTATEMENT. Upon the
effectiveness of this
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Agreement pursuant to SECTION 4.01, from and after the Effective Date: (a)
except as expressly set forth herein, all terms and conditions of the Original
Note Purchase Agreement and the other Bridge Note Documents shall be and remain
in full force and effect and shall constitute the legal, valid, binding and
enforceable obligations of the Company to the Purchaser; (b) the terms and
conditions of the Original Note Purchase Agreement shall be amended as set
forth herein and, as so amended, shall be restated in their entirety, but only
with respect to the rights, duties and obligations among the Company and the
Purchaser accruing from and after the Effective Date; (c) this Agreement shall
not in any way release or impair the rights, duties, Bridge Note Obligations or
any other Bridge Note Document or affect the relative priorities thereof, in
each case to the extent in force and effect thereunder as of the Effective Date
and except as modified hereby or by documents, instruments and agreements
executed and delivered in connection herewith, and all of such rights, duties,
Bridge Note Obligations are assumed, ratified and affirmed by the Company; (d)
all indemnification obliga tions of the Company under the Original Note
Purchase Agreement and any other Bridge Note Documents shall survive the
execution and delivery of this Agreement and shall continue in full force and
effect for the benefit of the Purchaser, GE Capital and any other Person
indemnified under the Original Note Purchase Agreement or any other Bridge Note
Document at any time prior to the Effective Date (including, without
limitation, to the extent set forth in Section 12.17 of the Original Note
Purchase Agreement as in effect immediately prior to the Effective Date); (e)
the Bridge Note Obligations incurred under the Original Note Purchase Agreement
shall, to the extent outstanding on the Effective Date, continue outstanding
under this Agreement and shall not be deemed to be paid, released, discharged
or otherwise satisfied by the execution of this Agreement, and this Agree ment
shall not constitute a refinancing, substitution or novation of such Bridge
Note Obligations or any of the other rights, duties and obligations of the
parties hereunder; (f) the execution, delivery and effectiveness of this
Agreement shall not operate as a waiver of any right, power or remedy of the
Purchaser or GE Capital under the Original Note Purchase Agreement, nor
constitute a waiver of any covenant, agreement or obligation under the Original
Note Purchase Agreement, except to the extent that any such covenant, agreement
or obligation is no longer set forth herein or is modified hereby; and (g) any
and all references in the Bridge Note Documents to the Original Note Purchase
Agreement shall, without further action of the parties, be deemed a reference
to the Original Note Purchase Agreement, as amended and restated by this
Agreement, and as this Agreement shall be further amended or amended and
restated from time to time hereafter.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
To induce Purchaser to enter into this Agreement, the Company
represents and warrants to Purchaser and each other Holder of any Bridge Note
that, as of the Effective Date:
SECTION 5.01 CORPORATE EXISTENCE; COMPLIANCE WITH LAW. The Company and
each of its Subsidiaries: (a) is a corporation duly organized or, in the case
of certain of its Subsidiaries, a partnership or a limited liability company
duly formed; (b) is validly existing and in good standing under the laws of the
jurisdiction of its incorporation or formation; (c) is duly qualified to do
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business and is in good standing in each other jurisdiction where its ownership
or lease of property or the conduct of its business requires such qualification
except where a failure to be so qualified and in good standing is not a
Material Adverse Event; (d) has the requisite corporate, partnership or limited
liability company power and authority, as the case may be, and the legal right
to own, pledge, mortgage or otherwise encumber and operate its properties, to
lease the property it operates under lease, and to conduct its business as now,
heretofore and proposed to be conducted; and (d) is in compliance with its
articles or certificate of incorporation and bylaws, its partnership agreement
or limited liability company operating agreement, as the case may be.
SECTION 5.02 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.
The execution, delivery and performance by the Company of this Agreement and
the other Bridge Note Documents: (a) are within the Company's corporate power;
(b) have been duly authorized by all necessary corporate and shareholder
action; (c) are not in contravention of any provision of the Company's
certificate of incorporation or bylaws or other organizational documents; (d)
do not violate any law or regulation, or any order or decree of any
Governmental Authority; (e) do not conflict with or result in the breach or
termination of, constitute a default under or accelerate any performance
required by, any indenture, mortgage, deed of trust, lease, agreement or other
instrument to which the Company or any of its Subsidiaries is a party or by
which the Company or any such Subsidiary or any of their respective property is
bound, or any other agreement, document or instrument relating to Senior
Indebtedness; (f) do not result in the creation or imposition of any Lien upon
any of the Property of the Company or any of its Subsidiaries; and (g) do not
require the consent or approval of any Governmental Authority or any other
Person, except those consents and approvals referred to in SECTION 4.02, all of
which have been duly obtained, made or complied with and are in full force and
effect. Each of the Bridge Note Documents has been duly executed and delivered
for the benefit of or on behalf of the Company and constitutes a legal, valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms except as the enforceability of such Bridge Note
Document may be limited by bankruptcy, insolvency, reorganization, moratorium
and other laws affecting creditor's rights and remedies in general.
SECTION 5.03 FINANCIAL STATEMENTS. The Company has delivered to
Purchaser the Financial Statements identified in SCHEDULE 5.03, and each of
such Financial Statements complies with the description thereof contained in
SCHEDULE 5.03.
SECTION 5.04 MATERIAL ADVERSE EVENTS. Except as set forth in SCHEDULE
5.04, the Company and its Subsidiaries have no material obligations, material
contingent liabilities, or material liabilities for Charges, long-term leases
or unusual forward or long-term commitments which are not reflected in the
Financial Statements identified in SCHEDULE 5.03. Except as otherwise permitted
hereunder or as set forth in SCHEDULE 5.04, no Restricted Payment has been made
since the Audit Date, and no shares of Stock of the Company have been, or are
now required to be, redeemed, retired, purchased or otherwise acquired for
value by the Company or any of its Subsidiaries. Since the Audit Date, no
Material Adverse Event has occurred and is continuing.
SECTION 5.05 OWNERSHIP OF PROPERTY; LIENS. The Company and each of its
Subsidiaries
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holds (a) good and insurable fee simple title to all Real Property owned by it,
subject only to Permitted Encumbrances of the types described in paragraphs (a)
and (i) of the definition thereof, (b) valid and insurable leasehold interests
in all Leases to which it is a party, subject only to Permitted Encumbrances of
the types described in paragraphs (a) and (i) of the definition thereof, and
(c) good and valid title to, or valid leasehold interests in, all of its other
properties and assets, subject only to Permitted Liens. None of the properties
and assets of the Company or any of the other Credit Parties are subject to any
Liens, except Permitted Encumbrances, Liens set forth in SCHEDULE 7.06 and the
Lien in favor of the Senior Agent pursuant to the Senior Documents.
SECTION 5.06 SUBORDINATION OF SUBORDINATED INDEBTEDNESS. This
Agreement, and all amendments, modifications, extensions, renewals,
refinancings and refundings hereof, constitute the "Bridge Note Purchase
Agreement" within the meaning of the Ramsay Subordinated Note Purchase
Agreement; this Agreement, together with each of the other Bridge Note
Documents and all amendments, modifications, extensions, renewals, refinancings
and refundings hereof and thereof, constitute "Senior Credit Documents" within
the meaning of the Ramsay Subordinated Note Purchase Agreement; and all of the
Bridge Note Obligations, and all amendments, modifications, extensions,
renewals, refundings or refinancings thereof constitute "Senior Indebtedness"
of the Company within the meaning of the Ramsay Subordinated Note Purchase
Agreement, and the Holders of the Bridge Notes from time to time constitute
"Senior Lenders" entitled to all of the rights of a holder of "Senior
Obligations" pursuant to Article 4 of the Ramsay Subordinated Note Purchase
Agreement.
ARTICLE 6
AFFIRMATIVE COVENANTS
The Company covenants and agrees (for itself and its Subsidiaries)
that, unless the Required Holders shall otherwise consent in writing, from and
after the date hereof and until the Maturity Date:
SECTION 6.01 REPORTS AND NOTICES. The Company shall deliver to the
Holders the Financial Statements, projections, certificates and notices at the
times and in the manner set forth in ANNEX B.
SECTION 6.02 MAINTENANCE OF EXISTENCE AND CONDUCT OF BUSINESS. The
Company shall (and shall cause each of its Subsidiaries, other than Inactive
Subsidiaries, to): (a) except in the case of a Subsidiary that is permitted to
merge out of existence pursuant to SECTION 7.02, do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence and its rights and franchises; (b) continue to conduct its business
substantially as now conducted or as otherwise permitted hereunder; and (c) at
all times maintain, preserve and protect all of its Intellectual Property
material to the conduct of its business, and preserve all the remainder of its
Property material to the conduct of its business, and keep the same in good
repair, working order and condition (taking into consideration ordinary wear
and tear).
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SECTION 6.03 PAYMENT OF CHARGES AND CLAIMS. The Company shall (and
shall cause each of its Subsidiaries to) pay and discharge, or cause to be paid
and discharged in accordance with the terms thereof, (a) all Charges imposed
upon it or any such Subsidiary or its or their income and profits, or any of
its Property (real, personal or mixed), and (b) all lawful claims for labor,
materials, supplies and services or otherwise, which if unpaid by law become a
Lien on its Property; PROVIDED, that the Company or any such Subsidiary shall
not be required to pay any such Charge or claim which is being contested in
good faith by proper legal actions or proceedings, so long as at the time of
commencement of any such action or proceeding and during the pendency thereof
(i) no Default or Event of Default shall have occurred and be continuing, (ii)
adequate reserves with respect thereto are established and are maintained in
accordance with GAAP, (iii) such contest operates to suspend collection of the
contested Charges or claims and is maintained and prosecuted continuously with
diligence, and (iv) the Company shall promptly pay or discharge such contested
Charges and all additional charges, interest penalties and expenses, if any, if
such contest is terminated or discontinued adversely to the Company.
SECTION 6.04 BOOKS AND RECORDS. The Company shall (and shall cause
each of its Subsidiaries to) keep adequate records and books of account with
respect to its business activities, in which proper entries, reflecting all of
its consolidated and consolidating financial transactions, are made in
accordance with GAAP and on a basis consistent with the 1997 Audited Financial
Statements.
SECTION 6.05 LITIGATION. The Company shall notify the Holders in
writing, promptly upon learning thereof, of any litigation, suit,
administrative proceeding or other action commenced or threatened in writing
against the Company or any Subsidiary of the Company, which (a) involves an
amount in excess of $1,000,000, or (b) would be a Material Adverse Event if
adversely determined.
SECTION 6.06 INSURANCE. The Company shall, at its sole cost and
expense, maintain or cause to be maintained for itself and each of its
Subsidiaries with financially sound and reputable insurers, insurance with
respect to its properties and business against loss or damage of the kinds
customarily insured against by corporations of established reputation engaged
in the same or similar businesses and similarly situated, and of such types and
in such amounts as are customarily carried under similar circumstances by such
other corporations (it being understood that the maintenance of all insurance
required by the Senior Credit Documents shall be deemed to satisfy the
foregoing requirement). The Company will, and will cause each of the
Subsidiaries to, furnish to the Holder, upon the request of the Required
Holders, information as to the insurance carried.
SECTION 6.07 COMPLIANCE WITH LAWS. The Company shall (and shall cause
each of its Subsidiaries to) comply with all federal, state and local laws,
permits and regulations applicable to it, including those relating to health
care; health care licensing, permits and accreditation; ERISA and labor
matters; and the filing of tax returns and payment of taxes (including, without
limitation, the withholding, collection, payment and deposit of employees'
income, unemployment and Social
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Security taxes), except in each case to the extent that a failure to so comply
with any laws, permits and regulations relating to health care and to health
care licensing, permits and accreditation would not be a Material Adverse Event
with respect to the Company or any Material Subsidiary, and to the extent that
a failure to so comply with any other laws, permits and regulations would not
be a Material Adverse Event.
SECTION 6.08 ENVIRONMENTAL MATTERS. The Company shall, and shall cause
each of its Subsidiaries and each other Person leasing, occupying or operating
any of the Real Property (to the extent that any such other Person is within
its control) to: (a) conduct its operations and keep and maintain its Real
Property in compliance with all Environmental Laws and Environmental Permits
except in each case to the extent that any such noncompliance would not be a
Material Adverse Event; (b) implement any and all investigation, remediation,
removal and response actions which are reasonably necessary to comply with
Environmental Laws and Environmental Permits pertaining to the presence,
generation, treatment, storage, use, disposal, transportation or Release of any
Hazardous Material on, at, in, under, above, to, from or about any of its Real
Property and (c) notify the Designated Holder promptly after the Company
becomes aware of any violation of Environmental Laws or Environmental Permits
or any Release on, at, in, under, above, to, from or about any Real Property
which is reasonably likely to result in Environmental Liabilities in excess of
$1,000,000.
SECTION 6.09 FISCAL YEAR. The Company shall (and shall cause each of
its Subsidiaries to) maintain as its fiscal year the twelve month accounting
period ending on June 30 of each year; PROVIDED, HOWEVER, that at any time
after delivery to the Senior Agent of all Financial Statements (as defined in
the Senior Credit Agreement) and reports delivered pursuant to Section 4.01 and
Annex F of the Senior Credit Agreement with respect to the fiscal year ended
June 30, 1998, the Company may change its fiscal year to the twelve month
accounting period ending on December 31 of each year, and thereafter shall
maintain such fiscal year.
SECTION 6.10 PERMITS, ETC. The Company shall (and shall cause each of
its Subsidiaries, other than Inactive Subsidiaries, to) (i) obtain and maintain
all permits, licenses, certifications, accreditations, and other approvals as
may be necessary for the operation of the business of the Company and each of
its Material Subsidiaries under applicable law, except in each case to the
extent that a failure to obtain or maintain any of such permits, licenses,
certifications, accreditations or other approvals would not be a Material
Adverse Event, and (ii) obtain and maintain its qualification for participation
in and the receipt of reimbursement under Medicare, Medicaid and any other
federal, state or local governmental health benefit program or commercial
health benefit program providing for payment or reimbursement for services
rendered by such Person, as applicable, except to the extent that the loss or
relinquishment of such qualification does not constitute a Material Adverse
Event with respect to the Company or any Material Subsidiary. The Company will
promptly furnish or cause to be furnished to the Holders copies of all reports
and correspondence it or any of its Material Subsidiaries sends or receives
relating to any loss or revocation (or threatened loss or revocation) of any
material permit, license, certification, accreditation, approval or
qualification required to be maintained pursuant to this SECTION 6.10.
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SECTION 6.11 FURTHER ASSURANCES. The Company agrees, at its expense
and upon the reasonable request of the Required Holders, to duly execute and
deliver, or cause to be duly executed and delivered, to the Holders such
further instruments and do and cause to be done such further acts as may be
necessary or desirable in the reasonable opinion of the Required Holders to
carry out more effectually the provisions and purposes of this Agreement or any
other Bridge Note Document.
ARTICLE 7
NEGATIVE COVENANTS
The Company covenants and agrees (for itself and its Subsidiaries)
that, unless the Required Holders shall otherwise consent in writing, from and
after the date hereof and until the Maturity Date:
SECTION 7.01 ACQUISITIONS. The Company will not, and will not permit
any of its Subsidiaries to, make any Acquisition.
SECTION 7.02 MERGERS, ETC. The Company shall not (nor permit any of
its Subsidiaries to), directly or indirectly, by operation of law or otherwise
merge with, consolidate with, or otherwise combine with, any Person, other than
(i) a merger effecting an Acquisition consented to by the Required Holders,
(ii) a merger effecting a disposition of Stock permitted by SECTION 7.07, (iii)
a merger or consolidation between or among any of the Company's Subsidiaries,
or (iv) a merger or consolidation between the Company and any of its
Subsidiaries in which the Company is the surviving entity.
SECTION 7.03 INVESTMENTS. The Company shall not (nor permit any of its
Subsidiaries to), directly or indirectly, make or maintain any Investment
except: (a) Cash Equivalents; (b) time deposits maturing no more than 30 days
from the date of creation thereof with a Senior Lender or A-rated banks; (c)
Investments in Gulf Coast Treatment Center and wholly-owned Subsidiaries of the
Company; (d) Investments in other Subsidiaries of the Company to the extent
outstanding on the Original Closing Date and, in the case of TCV, other
Investments to the extent set forth in SECTION 7.05(D); (e) Investments in
Permitted Joint Ventures (other than TCV) not to exceed $1,000,000 in the
aggregate at any time outstanding; (f) Practice Guarantees (evidenced by
written agreements), provided that the aggregate outstanding amount of Practice
Guarantees and commitments to give Practice Guarantees shall not at any time
exceed $1,000,000; (g) extensions of credit to patients, evidenced by accounts
receivable for services rendered, made in the ordinary course of business and
consistent with past practice; (h) other Investments outstanding on the date
hereof and listed in SCHEDULE 7.03; (i) the purchase by the Company or any
Subsidiary of the Company of Stock of any Subsidiary of the Company that is not
directly or indirectly wholly-owned by the Company on the Original Closing
Date, PROVIDED that the aggregate amount paid by the Company and its
Subsidiaries for such Stock shall not exceed $2,000,000 in the aggregate; and
(j) other Investments not exceeding $1,000,000 in the aggregate made during any
Fiscal Year.
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SECTION 7.04 INDEBTEDNESS. The Company shall not (nor permit any of
its Subsidiaries to) create, incur or assume any Indebtedness (including
Guaranteed Indebtedness) unless the creation, incurrence or assumption of such
Indebtedness would not cause the Leverage Ratio to exceed 4.00:1.00, determined
on a PRO FORMA basis for the Rolling Twelve-Month Period ending on the last day
of the most recent Fiscal Month for which a Compliance Certificate is required
to be furnished to the Holders pursuant to ANNEX B hereof, calculated as if
such Indebtedness had been created, incurred or assumed on the first day of
such period.
SECTION 7.05 AFFILIATE AND EMPLOYEE LOANS AND TRANSACTIONS. The
Company shall not (nor permit any of its Subsidiaries to) enter into any
lending, borrowing or other commercial transaction with, or make any payments
or transfers of funds or assets (including payment of any management,
consulting, advisory or similar fee) to, or issue any shares of the Company's
Stock, or any warrant, option or other right to acquire shares of the Company's
Stock, or any securities convertible into the Company's Stock, to, any of its
Affiliates; PROVIDED, that (a) the Company may borrow money from Ramsay
Affiliates, provided that the Indebtedness owed to any such Ramsay Affiliate is
Subordinated Indebtedness meeting the requirements of the Senior Credit
Agreement, and repay such Subordinated Indebtedness in accordance with the
terms thereof (including the subordination provisions); (b) the Company and its
Subsidiaries may engage in commercial transactions (including transfers of
assets and lending or borrowing transactions) between or among the Company and
its Subsidiaries (other than Permitted Joint Ventures); (c) the Company and its
Subsidiaries may engage in lending or borrowing transactions with TCV to the
extent that such transactions do not cause the intercompany account due to the
Company from TCV to exceed $10,100,000 at any time; (d) the Company and its
Subsidiaries may make Investments in Permitted Joint Ventures to the extent
permitted by SECTION 7.03(E) and, additionally, may provide legal, accounting,
insurance and other shared services to the Permitted Joint Ventures of the
types provided on the Original Closing Date and may lease Real Property to the
Permitted Joint Ventures, all on terms that are no less favorable to the
Company and its Subsidiaries than might be obtained in an arm's-length
transaction from a Person that is not an Affiliate of the Company or such
Subsidiary; (e) the Permitted Joint Ventures may engage in commercial
transactions with their Subsidiaries on terms that are no less favorable to the
Permitted Joint Ventures than might be obtained in an arm's- length transaction
from a Person that is not an Affiliate of such Permitted Joint Venture; (f) the
Company and its Subsidiaries may extend loans to their respective officers,
directors and employees in a maximum aggregate principal amount outstanding at
any time for all officers, directors and employees of $1,000,000, other than
loans to officers or directors to whom any other amount is due by the Company
or any of its Subsidiaries that is not permitted to be paid to such officer or
director by virtue of this SECTION 7.05, unless such loan is for a business
purpose of the Company or such Subsidiary that is unrelated to the
circumstances of the other amount due to such officer or director; (g) the
Company may issue shares of the Company's Stock, or any warrant, option or
other right to acquire shares of the Company's Stock, or any security
convertible into the Company's Stock, to any Affiliate (including, without
limitation, to Ramsay Affiliates (as defined in the Senior Credit Agreement) in
exchange for Series 1997-A Preferred Stock (as defined in the Senior Credit
Agreement), Series B Bridge Notes and/or the Ramsay Subordinated Note) on terms
that are no less
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favorable to the Company than might be obtained in an arm's-length transaction
from a Person that is not an Affiliate of the Company; (h) the Company and its
Subsidiaries may make Restricted Payments to the extent permitted under SECTION
7.12; (i) the Company and its Subsidiaries may pay salary and wages and provide
stock options and other executive compensation to its executive officers, to
the extent approved by the Company's Board of Directors or the compensation
committee thereof; (j) the Company may pay reasonable and customary directors'
fees to its directors; (k) the Company and its Subsidiaries may pay reasonable
legal fees and reasonable out-of-pocket expenses to Haythe & Curley for
services rendered; and (l) RMCI (as defined the Senior Credit Agreement) may
pay the balance of the sums due to Peter J. Evans and the sums due to Luis E.
Lamela referred to in paragraph 12 of Schedule 6.05 of the Original Credit
Agreement (as defined in the Senior Credit Agreement) after such time as (i)
the $2,500,000 figure included in clause (b) of the definition of Borrowing
Base (as defined in the Senior Credit Agreement) shall have reduced to zero
upon the application of Net Cash Proceeds (as defined in the Senior Credit
Agreement) of one or more issuances of Stock by the Company pursuant to
Sections 1.02(e)(ii) and (f) of the Senior Credit Agreement; (ii) the
$9,000,000 figure included in the definition of Revolving Credit Commitments
(as defined int he Senior Credit Agreement) shall have reduced to $5,500,000
upon the application of such Net Cash Proceeds; and (iii) no Default or Event
of Default shall have occurred and be continuing.. Set forth in SCHEDULE 7.05
is a list of all such lending, borrowing or other transactions with Affiliates
as of the Effective Date. Notwithstanding the foregoing or any other provision
of this Agreement, the Company shall not (nor permit any of its Subsidiaries
to) pay bonuses to Luis Lamela, Remberto Cibran or Carol C. Lang, until all
Senior Obligations and the Bridge Note Obligations have been paid in full.
SECTION 7.06 LIENS. The Company shall not (nor permit any of its
Subsidiaries to) create or permit to exist any Lien on any of its properties or
assets except for: (a) presently existing or hereafter created Liens in favor
of the Senior Agent or the Senior Lenders to secure the Senior Obligations; (b)
Liens set forth in SCHEDULE 7.06 existing on the Effective Date; (c) Permitted
Encumbrances; (d) other Liens securing Indebtedness not to exceed $5,000,000 in
the aggregate at any time outstanding; and (e) extensions and renewals of Liens
referred to in paragraphs (b), and (d) above, provided that any such extension
or renewal Lien is limited to the property or assets covered by the Lien
extended or renewed and does not secure Indebtedness in an amount greater than
the amount of the outstanding Indebtedness secured thereby immediately prior to
such extension, renewal or replacement.
SECTION 7.07 SALE OF STOCK AND ASSETS. The Company shall not (nor
permit any of its Subsidiaries to) sell, transfer, convey, assign or otherwise
dispose of any of its properties or other assets, including the capital Stock
of any of their respective Subsidiaries (whether in a public or a private
offering or otherwise) or any of their Accounts, other than the following:
(a) the sale of properties or assets (including the capital
Stock of any of their respective Subsidiaries) having a book value of not more
than ten percent (10%) of the book value of the Company's consolidated assets
as to each such sale or other disposition, determined as of the time of such
disposition, or in excess of twenty percent (20%) of the book value of the
Company's
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consolidated assets, in the aggregate as to all such sales or other
dispositions, determined as of the date of the last such disposition;
(b) the sale or other disposition of Investments; and
(c) transfers of assets among the Company and its
Subsidiaries, lending and borrowing transactions specifically permitted by
SECTION 7.05(B), (C) and (D) and Restricted Payments specifically permitted by
SECTION 7.12.
SECTION 7.08 MATERIAL CONTRACTS. The Company shall not (nor permit any
of its Subsidiaries to) enter into, cancel or terminate any Material Contract
or amend or otherwise modify any Material Contract if any of the foregoing
actions would be a Material Adverse Event.
SECTION 7.09 ERISA. Neither the Company nor any of its Subsidiaries
nor any ERISA Affiliate shall acquire any new ERISA Affiliate that maintains or
has an obligation to contribute to a Pension Plan that has either an
"accumulated funding deficiency," as defined in Section 302 of ERISA, or any
"unfunded vested benefits," as defined in Section 4006(a)(3)(E)(iii) of ERISA
in the case of any Pension Plan other than a Multi-employer Plan and in Section
4211 of ERISA in the case of a Multi-employer Plan if such acquisition would be
a Material Adverse Event. Additionally, neither the Company nor any of its
Subsidiaries nor any ERISA Affiliate shall, to the extent that any of the
following actions would be a Material Adverse Event: (a) permit or suffer any
condition set forth in SCHEDULE 5.12 to cease to be met and satisfied at any
time; (b) terminate any Pension Plan that is subject to Title IV of ERISA where
such termination could reasonably be anticipated to result in liability to the
Company or such Subsidiary; (c) permit any accumulated funding deficiency, as
defined in Section 302(a)(2) of ERISA, to be incurred with respect to any
Pension Plan; fail to make any contributions or fail to pay any amounts due and
owing as required by the terms of any Plan before such contributions or amounts
become delinquent; or (d) make a complete or partial withdrawal (within the
meaning of Section 4201 of ERISA) from any Multi-employer Plan.
SECTION 7.10 FINANCIAL COVENANTS. The Company shall not breach or fail
to comply with any of the financial covenants set forth in ANNEX C, each of
which shall be calculated in accordance with ANNEX C (and based upon the
Financial Statements delivered hereunder). In addition, the Company agrees that
at any time that the Senior Obligations have been paid in full, Annex C to the
Purchase Agreement shall be deemed amended in their entirety by deleting such
Annex C and incorporating by reference all terms and conditions of Annex G to
the Senior Credit Agreement as Annex C to the Purchase Agreement, and all
defined terms used therein.
SECTION 7.11 SALE LEASE-BACKS. The Company shall not (nor permit any
of its Subsidiaries to) enter into any sale-leaseback or similar transaction
involving any of its property or assets if such transaction would cause the
Company to be in violation of any of the financial covenants set forth in ANNEX
C, for the Rolling Twelve-Month Period ending on the last day of the most
recent Fiscal Month for which a Compliance Certificate is required to be
furnished to the Holders pursuant to ANNEX B hereof, calculated as if such
transaction had occurred on the first day
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of such period.
SECTION 7.12 RESTRICTED PAYMENTS. The Company shall not (nor permit
any of its Subsidiaries to) make any Restricted Payment to any Person, except
that (a) the Company may pay dividends on any class of its preferred stock
provided that (i) the Company's Fixed Charge Coverage Ratio would not be less
than 1.00:1.00, determined on a PRO FORMA basis for the most recent period for
which the Company is required to deliver a Compliance Certificate to the
Holders pursuant to ANNEX B hereof, based on the Company's actual Fixed Charge
Coverage Ratio as set forth therein, but calculated as if such dividends were
included in Fixed Charges for the purpose of such computation, (ii) no Default
or Event of Default exists or would be caused by such payment, and (iii) such
payment is otherwise permitted by law; (b) the Company may redeem its Series
1997-A Preferred Stock at any time provided that (i) no Default or Event of
Default exists or would be caused by such redemption, and (ii) such redemption
is otherwise permitted by law; (c) any Subsidiary of the Company may pay cash
dividends (or, in the case of a Subsidiary that is a partnership or limited
liability company, cash distributions) (i) to the Company or to another
Subsidiary of the Company and (ii) to any other Person holding such
Subsidiary's Stock, provided that any such dividends or distributions are paid
on a basis which is PRO RATA to all Persons holding such Stock (including the
Company or a Subsidiary, as applicable); (d) the Company may repurchase Stock
of the Company from former employees of the Company or its Subsidiaries for
amounts not to exceed $500,000 in the aggregate during the term of this
Agreement; (e) Borrower may make payments of interest under the Ramsay
Subordinated Note in kind; (f) with the consent of the Required Holders,
Borrower may prepay the Ramsay Subordinated Notes in full; and (g) the Company
may affect transactions permitted by paragraph (g) of SECTION 7.05 hereto.
SECTION 7.13 MARGIN REGULATIONS. The Company shall not use the
proceeds of the Bridge Notes to purchase or carry any Margin Stock or any
equity security of a class which is registered pursuant to Section 12 of the
Securities Exchange Act of 1934.
SECTION 7.14 LIMITATION ON DIVIDEND RESTRICTIONS, ETC. The Company
shall not (nor permit any of its Subsidiaries to), directly or indirectly,
enter into any agreement with any Person which directly or indirectly
restricts, prohibits or requires the consent of any Person with respect to the
payment of dividends or distributions or the making or repayment of
intercompany loans by a Subsidiary of the Company to the Company.
SECTION 7.15 ACCOUNTING CHANGES. The Company shall not make any
significant change in accounting treatment and reporting practices except for
changes concurred in by the Company's independent public accountants.
SECTION 7.16 CHANGES RELATING TO SENIOR INDEBTEDNESS. The Company
shall not change or amend the terms of the Senior Credit Agreement, the Senior
Credit Documents or the Senior Indebtedness if the effect thereof would be to
cause the principal amount of Senior Indebtedness outstanding or committed at
any time to exceed $55,000,000.
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SECTION 7.17 CHANGES RELATING TO SUBORDINATED DEBT. The Company shall
not change or amend the terms of the Ramsay Subordinated Note, the Ramsay
Subordinated Note Purchase Agreement or any other Subordinated Indebtedness (or
any indenture or agreement in connection therewith) if the effect of such
amendment is to: (a) increase the interest rate on such Subordinated
Indebtedness; (b) change the dates upon which payments of principal or interest
are due on such Subordinated Indebtedness other than to extend such dates; (c)
change any default or event of default other than to delete or make less
restrictive any default provision therein; (d) change or add any covenant with
respect to such Subordinated Indebtedness other than to make less restrictive
any such covenant; (d) change the redemption or prepayment provisions of such
Subordinated Indebtedness other than to extend the dates therefor or to reduce
the premiums payable in connection therewith; (e) grant any security or
collateral to secure payment of such Subordinated Indebtedness; or (f) change
or amend any other term if such change or amendment would materially increase
the obligations of the obligor or confer additional material rights to the
holder of such Subordinated Indebtedness in a manner adverse to any Holder.
ARTICLE 8
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
SECTION 8.01 EVENTS OF DEFAULT. The occurrence of any one or more of
the following events (regardless of the reason therefor) shall constitute an
"EVENT OF DEFAULT" hereunder:
(a) the Company (i) fails to make any payment or prepayment
of principal of the Bridge Notes when due and payable, (ii) fails to make any
payment of interest on the Bridge Notes or any of the other Bridge Note
Obligations when due and payable and such failure shall remain unremedied for
more than five (5) Business Days, or (iii) fails to pay or reimburse any Holder
for any expense reimbursable hereunder or under any other Bridge Note Document
within fifteen (15) Business Days following such Holder's demand for such
reimbursement or payment of expenses.
(b) The Company shall fail or neglect to perform, keep or
observe any of the provisions of SECTIONS 1.03, 6.06, 6.09, or 6.12, of ARTICLE
7, or of any of the provisions set forth in ANNEX C.
(c) the Company shall fail or neglect to perform, keep or
observe any of the provisions of SECTION 6.01 or any provisions set forth in
ANNEX B and the same shall remain unremedied for three (3) Business Days or
more after receipt of written notice thereof from any Holder.
(d) The Company shall fail or neglect to perform, keep or
observe any other provision of this Agreement or of any of the other Bridge
Note Documents (other than any provision embodied in or covered by any other
clause of this SECTION 8.01) and the same shall remain unremedied for thirty
(30) days or more after the earlier of (i) receipt of written notice thereof
from any Holder and (ii) the Company knows such failure or neglect.
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(e) An Event of Default occurs under the Senior Credit
Agreement; or a default or breach shall occur under any other agreement,
document or instrument to which the Company or any of its Subsidiaries is a
party which is not cured within any applicable grace period, and such default
or breach (i) involves the failure to make any payment when due in respect of
any Indebtedness (other than the Bridge Note Obligations) of the Company or any
of its Subsidiaries in excess of $5,000,000 in the aggregate, or (ii) causes,
or permits any holder of such Indebtedness or a trustee to cause, Indebtedness
or a portion thereof in excess of $5,000,000 in the aggregate to become due
prior to its stated maturity or prior to its regularly scheduled dates of
payment, regardless of whether such default is waived, or such right is
exercised, by such holder or trustee.
(f) Any representation or warranty herein or in any Bridge
Note Document or in any written statement, report, financial statement or
certificate made or delivered to any Holder by the Company is untrue or
incorrect in any material respect as of the date when made or deemed made.
(g) Assets of the Company or any of its Subsidiaries with a
fair market value of $5,000,000 or more shall be attached, seized, levied upon
or subjected to a writ or distress warrant, or come within the possession of
any receiver, trustee, custodian or assignee for the benefit of creditors of
the Company or any of its Subsidiaries and such condition continues for thirty
(30) days or more.
(h) A case or proceeding shall have been commenced against
the Company or any of its Subsidiaries seeking a decree or order in respect of
the Company or such Subsidiary (i) under Title 11 of the United States Code, as
now constituted or hereafter amended or any other applicable federal, state or
foreign bankruptcy or other similar law, (ii) appointing a custodian, receiver,
liquidator, assignee, trustee or sequestrator (or similar official) for the
Company or any of its Subsidiaries or of any substantial part of any of the
Company's or such Subsidiary's assets, or (iii) ordering the winding-up or
liquidation of the affairs of the Company or such Subsidiary, and such case or
proceeding shall remain undismissed or unstayed for sixty (60) days or more or
such court shall enter a decree or order granting the relief sought in such
case or proceeding.
(i) The Company or any of its Subsidiaries (i) shall file a
petition seeking relief under Title 11 of the United States Code, as now
constituted or hereafter amended, or any other applicable federal, state or
foreign bankruptcy or other similar law, (ii) shall fail to contest in a timely
and appropriate manner or shall consent to the institution of proceedings
thereunder or to the filing of any such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee, trustee or
sequestrator (or similar official) of the Company or any of its Subsidiaries or
of any substantial part of the Company's or such Subsidiary's assets, (iii)
shall make an assignment for the benefit of creditors, or (iv) shall take any
corporate action in furtherance of any of the foregoing, or (v) shall admit in
writing its inability to, or shall be generally unable to, pay its debts as
such debts become due.
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(j) A final judgment or judgments for the payment of money in
excess of $5,000,000 in the aggregate at any time outstanding shall be rendered
against the Company or any of its Subsidiaries unless such judgment or
judgments shall, within thirty (30) days after the entry thereof, have been
discharged or execution thereof stayed or bonded pending appeal, or shall have
been discharged prior to the expiration of any such stay.
(k) Any material provision of any Bridge Note Document shall
for any reason cease to be valid, binding and enforceable in accordance with
its terms (or the Company shall challenge the enforceability of any Bridge Note
Document).
(l) Any Material Adverse Event occurs and is continuing.
(m) except as the result of any disposition specifically
permitted or consented to hereunder, the Company shall fail at any time to be
the record and beneficial owner of 100% of the issued and outstanding capital
Stock of any of its Subsidiaries (other than Gulf Coast Treatment Center) that
are Subsidiaries as of the Effective Date or that become Subsidiaries
subsequent thereto, or shall fail at any time to be the record and beneficial
owner of not less than 96% of the issued and outstanding capital Stock of Gulf
Coast Treatment Center, in each case free and clear of any Lien other than
inchoate tax Liens, and Liens in favor of the Senior Agent for the benefit of
the Senior Lenders.
(n) The Company or any of its Subsidiaries make cash payments
in an aggregate amount exceeding $750,000 for which the offsetting entry on the
Company's Financial Statements is a debit to a litigation or malpractice claim
reserve reflected in the 1997 Audited Financial Statements or in a litigation
or malpractice claim reserve reflected in unaudited Financial Statements of the
Company for the Fiscal Quarter ending March 31, 1998, rather than an expense or
reduction of revenues on the Company's income statement; PROVIDED, HOWEVER,
that the $750,000 figure above shall increase to $1,000,000 after such time as
(i) the $2,500,000 figure included in clause (b) of the definition of Borrowing
Base shall have reduced to zero upon the application of Net Cash Proceeds of
one or more issuances of Stock by the Company pursuant to Sections 1.02(e)(ii)
and (f) of the Senior Credit Agreement; (ii) the $9,000,000 figure included in
the definition of Revolving Credit Commitments shall have reduced to $5,500,000
upon the application of such Net Cash Proceeds; and (iii) no Default or Event
of Default shall have occurred and be continuing.
SECTION 8.02 REMEDIES.
(a) Subject to the terms and conditions of ARTICLE 9 below,
if any Event of Default shall have occurred and be continuing, the Required
Holders may (i) by written notice to the Company, declare all or any portion of
the Bridge Note Obligations to be forthwith due and payable, including the
outstanding principal amount of the Bridge Notes, any interest thereon and any
Contingent Payment Amount then due and payable, whereupon such Bridge Note
Obligations shall become and be due and payable; and (ii) without notice, at
any time or times, exercise any rights and remedies provided to the Holders
under the Bridge Notes and the Bridge Note Documents and/or
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at law or equity; PROVIDED, HOWEVER, that upon the occurrence of an Event of
Default specified in SECTION 8.01(G), (H) or (I), the Bridge Notes and Bridge
Note Obligations shall become immediately due and payable, in each case without
declaration, notice or demand by or to any Person.
(b) Anything in this Agreement to the contrary
notwithstanding, each Holder hereby agrees with each other Holder that no
Holder shall take any action to protect or enforce its rights arising out of
this Agreement, the Bridge Notes or the other Bridge Note Documents (including
exercising any rights of set-off) without first obtaining the prior written
consent of the Required Holders, it being the intent of Holders that any such
action to protect or enforce rights under this Agreement and the Bridge Notes
shall be taken in concert and at the direction or with the consent of the
Required Holders.
SECTION 8.03 WAIVERS BY THE COMPANY. Except as otherwise provided for
in this Agreement and the other Bridge Note Documents, to the fullest extent
permitted by applicable law, the Company waives (a) presentment, demand and
protest and notice of presentment, dishonor, notice of intent to accelerate,
notice of acceleration, protest, default, nonpayment and maturity of any or all
Bridge Note Documents, and (b) any bond or security which might be required by
any court prior to allowing the Holders to exercise any of their remedies. The
Company acknowledges that it has been advised by counsel of its choice with
respect to this Agreement, the other Bridge Note Documents and the transactions
contemplated by this Agreement and the other Bridge Note Documents.
ARTICLE 9
SUBORDINATION PROVISIONS
SECTION 9.01 SUBORDINATION. Notwithstanding any other provision of
this Agreement or the Bridge Notes to the contrary, each Purchaser covenants
and agrees, and each subsequent Holder, by the acceptance of any Bridge Note,
shall be deemed to have covenanted and agreed, that the payment of the Bridge
Note Obligations shall be subordinate and subject in right of payment, to the
extent and in the manner hereinafter set forth, to the prior payment in full in
cash of all Senior Indebtedness. The provisions of this ARTICLE 9 shall
constitute a continuing offer to all Persons who, in reliance upon such
provisions, become holders of, or continue to hold, Senior Indebtedness, and
each holder of Senior Indebtedness shall be deemed to have acquired Senior
Indebtedness in reliance upon the provisions of this ARTICLE 9.
SECTION 9.02 SUBORDINATION UPON DEFAULT IN SENIOR INDEBTEDNESS.
(a) In the event that:
(i) there shall occur and be continuing a Senior
Payment Default, or
(ii) there shall occur and be continuing any Senior
Covenant Default,
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then no payment in cash or other property, other than a payment consisting
solely of the proceeds of any other Subordinated Indebtedness then permitted to
be incurred by the Company pursuant to the Senior Credit Documents and other
than a payment solely in Junior Securities, shall be made by the Company on
account of the Bridge Note Obligations:
(x) in case of a Senior Payment Default,
unless and until all Senior Indebtedness shall have been paid
in full in cash, such Senior Payment Default shall have been
cured or waived, or the benefits of this paragraph (a) shall
have been waived in writing by or on behalf of the Senior
Lenders (or the Senior Agent on their behalf) required to
effect such a waiver, or
(y) in case of a Senior Covenant Default,
for a period (the "BLOCKAGE PERIOD") commencing on the
earlier of (A) the date the Company and the Designated Holder
of the Bridge Note Obligations receives written notice of
such Senior Covenant Default from the Senior Lenders holding
at least a majority in outstanding principal amount of the
Senior Indebtedness (or the Senior Agent on their behalf),
specifying that such notice is a "Blockage Notice" given
pursuant to this SECTION 9.02 (a "BLOCKAGE NOTICE") and (B)
if such Senior Covenant Default results from the acceleration
of the Bridge Note Obligations, the date of such
acceleration, and, in any case, ending on the earlier of (i)
179 days after such date and (ii) the date, if any, on which
all Senior Indebtedness shall have been paid in full in cash,
such Senior Covenant Default shall have been cured or waived,
or the benefits of this paragraph (a) shall have been waived
in writing by or on behalf of the Senior Lenders (or the
Senior Agent on their behalf) required to effect such a
waiver;
PROVIDED that (A) no Senior Covenant Default which existed or was continuing on
the date of the commencement of any Blockage Period shall be, or be made, the
basis for a subsequent Blockage Notice and (B) during any 360-day period the
total number of days subject to any Blockage Period or Blockage Periods shall
not exceed 179.
(b) Immediately upon expiration of any period under this
SECTION 9.02 during which no payment may be made on account of the Bridge Note
Obligations, the Company may, subject to the provisions of paragraph (a),
resume making any payments on account of the Bridge Note Obligations (including
any payments in respect thereof missed during such period).
(c) Except as provided in SECTION 9.03 hereof and this
SECTION 9.02, nothing contained in this Agreement shall prevent the Company
from making at any time payments on account of the Bridge Note Obligations
required to be made under this Agreement, the Bridge Notes, or any other
document or instrument evidencing any of the Bridge Note Obligations.
(d) The provisions of this SECTION 9.02 shall not modify or
limit in any way the application of SECTION 9.03.
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SECTION 9.03 SUBORDINATION UPON BANKRUPTCY, ETC.
(a) In the event of (x) any insolvency or bankruptcy case or
proceeding, or any receivership, liquidation, reorganization or other similar
case or proceeding in connection therewith, relative to the Company or to its
creditors, as such, or to its assets, (y) any liquidation, dissolution or other
winding up of the Company, whether voluntary or involuntary and whether or not
involving insolvency or bankruptcy or (z) any assignment for the benefit of
creditors or any other marshaling of assets and liabilities of the Company
(each, an "INSOLVENCY PROCEEDING"), then and in any such event:
(i) Upon any payment or distribution of assets of
the Company to creditors of the Company, the Senior Lenders shall be
entitled to receive payment in full in cash of all obligations with
respect to the Senior Indebtedness before any Holder shall be entitled
to receive any payment in respect of the Bridge Note Obligations.
(ii) Until all Senior Indebtedness is paid in full
in cash, any distribution to which any Holder would be entitled but
for this ARTICLE 9 shall be made to the Senior Lenders, as their
interests may appear; PROVIDED, HOWEVER, that notwithstanding any
provision of this ARTICLE 9 to the contrary, each Holder may receive
and retain Junior Securities.
(iii) For purposes of this ARTICLE 9, a distribution
may consist of cash, securities or other property, by set-off or
otherwise.
(iv) Upon any distribution of assets of the Company,
the Holders shall be entitled to rely upon any order or decree made by
any court of competent jurisdiction in which such Insolvency
Proceeding is pending, or a certificate of the liquidating trustee,
the Senior Agent or other Person making any distribution to such
Holders, for the purpose of ascertaining the Persons entitled to
participate in such distribution (subject in all events in the case of
the Holders to the provisions of this SECTION 9.03), the holders of
the Senior Indebtedness, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this ARTICLE 9.
(b) If any holder of Bridge Note Obligations does not file a
proper claim or proof of debt as shall be necessary in order to have the claims
of such holder allowed in any Insolvency Proceeding commenced by or against the
Company or involving the Company's assets, in the form required in such
Insolvency Proceeding, at least 10 days prior to the expiration of the time to
file such claim or proof of debt, the Senior Lenders (or the Senior Agent on
their behalf) are hereby irrevocably authorized and shall have the right (but
not the obligation) to file an appropriate claim or proof of debt in such
Insolvency Proceeding for and on behalf of such holder of Bridge Note
Obligations. The holders of Bridge Note Obligations shall retain all rights to
vote and otherwise act in any Insolvency Proceeding in their capacity as such
holders (including the right to vote to accept
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or reject any Plan) to the extent provided by applicable law, except that such
holders shall not be empowered to vote in any such Insolvency Proceeding with
respect to any Plan that contains provisions that are inconsistent with the
priority of the Senior Indebtedness over the Bridge Note Obligations.
SECTION 9.04 NO SUSPENSION OF REMEDIES. A Senior Payment Default or a
Senior Covenant Default with respect to the Senior Indebtedness does not
suspend the rights of the Holders to accelerate the maturity of the Bridge
Notes pursuant to SECTION 8.02, or, subject to the rights of the Senior Lender
under SECTION 9.05 hereof, to pursue any other rights or remedies hereunder or
under applicable law; PROVIDED, HOWEVER, so long as the Senior Indebtedness is
outstanding or any commitment therefor is in effect, the Holders hereby agree,
for the benefit of the Senior Lenders not to accelerate the Bridge Notes and
all other Bridge Note Obligations pursuant to SECTION 8.02 until the earlier of
(i) 120 days after the delivery by the Designated Holder to the Senior Agent
(or another designated representative of the Senior Lenders) of written notice
of the intent of the Holders to so accelerate the Bridge Notes and all other
Bridge Note Obligations or (ii) acceleration of the Senior Indebtedness, and
thereupon, the Holders may proceed to protect and enforce their rights by
appropriate judicial proceedings. In the event that the Senior Indebtedness has
been accelerated and such acceleration is subsequently rescinded, then, to the
extent that any of the Holders has accelerated the maturity of the Bridge Notes
or any of the other Bridge Note Obligations solely by virtue of the
acceleration of the Senior Indebtedness (and not by virtue of any other Event
of Default that has occurred and is continuing hereunder), such acceleration
shall automatically be rescinded as well.
SECTION 9.05 PAYMENTS AND DISTRIBUTIONS RECEIVED. If any Holder shall
have received any payment from or distribution of assets of the Company in
respect of the Bridge Note Obligations in contravention of the terms of this
ARTICLE 9 before all Senior Indebtedness is paid in full, then and in such
event such payment or distribution shall be received and held in trust for and
shall be paid over or delivered to the holders of the Senior Indebtedness (PRO
RATA on the basis of the respective amounts of such Senior Indebtedness held by
them) remaining unpaid, to the extent necessary to pay all such Senior
Indebtedness in full in cash after giving effect to any concurrent payment or
distribution to the holders of the Senior Indebtedness, for application to the
payment in full of such Senior Indebtedness.
SECTION 9.06 SUBROGATION. Upon the indefeasible payment and discharge
in full of the Senior Indebtedness and the termination of all commitments by
the Senior Lenders to make additional Senior Indebtedness available to the
Company, the Holders shall be subrogated to the rights of the Senior Lenders to
receive payments or distributions of cash, property or securities of the
Company applicable to Senior Indebtedness until the principal of, and interest
on, the Bridge Note Obligations shall be paid in full, and no payments or
distributions (direct or indirect) to the Senior Lenders of cash, property or
securities to which the Holders would be entitled except for the provisions
herein shall, as among the Company, its creditors (other than the Senior
Lenders) and the Holders, be deemed to be a payment or distribution by the
Company to or on account of the Senior Indebtedness. In no event, however,
shall any Holders have any rights or claims against the Senior
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Lenders for any impairment of any Holder's subrogation rights that might result
from any Senior Lender's or the Senior Agent's release of any Lien upon any
collateral securing the Senior Obligations, forgiveness, compromise, extension
or discharge of any Senior Obligations, release of any the Company or any
guarantor, or vote to accept or reject any Plan.
SECTION 9.07 RELATIVE RIGHTS. This ARTICLE 9 defines the relative
rights of the Holders and the Senior Lenders. Nothing in this ARTICLE 9 shall:
(i) impair, as among the Company and the Holders, the obligation of the
Company, which is absolute and unconditional, to pay principal of and interest
(including any interest payable at the Default Rate) on the Bridge Notes and
other items constituting Bridge Note Obligations in accordance with their
terms; (ii) affect the relative rights of the Holders and creditors of the
Company other than Senior Lenders; or (iii) prevent any Holder from exercising
its available remedies upon a Default or Event of Default, subject to the
rights, if any, under this ARTICLE 9 of Senior Lenders. The Holders acknowledge
that the holders of the Senior Indebtedness and the Holders are entitled to
exercise certain rights and powers with respect to the Company from time to
time, whether before or after the occurrence of a default, and the exercise of
a similar power or right by one creditor may preclude the exercise of a similar
power or right by one or more other creditors.
SECTION 9.08 SUBORDINATION MAY NOT BE IMPAIRED BY THE COMPANY. No
right of any holder of any Senior Indebtedness to enforce the subordination of
the Bridge Note Obligations shall be impaired by any failure to act by the
Company or such holder of Senior Indebtedness or by the failure of the Company
or such holder to comply herewith.
SECTION 9.09 SECTION NOT TO PREVENT EVENTS OF DEFAULT. The failure to
make a payment on account of principal of or interest on or other amounts
constituting Bridge Note Obligations by reason of any provision of this ARTICLE
9 shall not be construed as preventing the occurrence of a Default or an Event
of Default hereunder or a default or event of default under or in respect of
the Bridge Notes or any other document or instrument evidencing any of the
Bridge Note Obligations.
SECTION 9.10 HOLDERS OF BRIDGE NOTE OBLIGATIONS ENTITLED TO ASSUME
PAYMENTS NOT PROHIBITED IN ABSENCE OF NOTICE.
(a) No Holder shall at any time be charged with knowledge of
the existence of any facts which would prohibit the making of any payment to
it, unless and until such Holder shall have received written notice thereof at
its principal office from the Company or from any Senior Lender (or the Senior
Agent on its behalf); and prior to the receipt of any such written notice each
such Holder shall be entitled to assume conclusively that no such facts exist.
(b) Each Holder shall be entitled to rely on the delivery to
it of a written notice by a Person representing himself to be a Senior Lender
(or an agent on such Senior Lender's behalf) to establish that such notice has
been given. In the event that such Holder determines in good faith that further
evidence is required with respect to the right of any holder of Senior
Indebtedness to participate in any payment or distribution pursuant to this
ARTICLE 9, such Holder may request such
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Person to furnish evidence to the reasonable satisfaction of such Holder as to
the amount of Senior Indebtedness held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this ARTICLE 9, and if such
evidence is not furnished such Holder may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
SECTION 9.11 AMENDMENTS TO DOCUMENTS.
(a) The Senior Lenders, the Senior Agent and the Company
shall be authorized to amend any of the Senior Credit Documents to which they
are a party in accordance with the terms thereof, and without prior notice to
or the consent of any of the holders of the Bridge Note Obligations, to the
extent not prohibited by SECTION 7.16 hereof.
(b) Without the prior written consent of the required Senior
Lenders (or the Senior Agent on their behalf), no provision of the Bridge Note
Documents shall be amended, modified or supplemented if the effect thereof
would be to (i) increase the interest rate on the Bridge Notes; (ii) change the
dates upon which payments of principal or interest are due on the Bridge Notes
other than to extend such dates; (iii) change any default or event of default
other than to delete or make less restrictive any default provision therein;
(iv) change or add any covenant with respect thereto other than to make less
restrictive any such covenant; (v) change the redemption or prepayment
provisions thereof other than to extend the dates therefor or to reduce the
premiums payable in connection therewith; (vi) grant any security or collateral
to secure payment thereof; or (vii) change or amend any other term if such
change or amendment would materially increase the obligations of the Company or
confer additional material rights to the Holders in a manner adverse to the
Company, any of its Subsidiaries, the Senior Agent or any Senior Lender;
PROVIDED, HOWEVER, that nothing contained in this ARTICLE 9 or elsewhere in
this Agreement shall be construed to require the consent of the Senior Lenders
to any waiver by the Holders of any Default or Event of Default, or of any of
the rights and remedies of the Holders hereunder.
SECTION 9.12 WAIVERS. The Company and the Holders each hereby waives
any defense based on the adequacy of a remedy at law which might be asserted as
a bar to the remedy of specific performance of this Agreement in any action
brought therefor by the Senior Lenders (or the Senior Agent on their behalf).
To the fullest extent permitted by applicable law, the Company and the Holders
each hereby further waives: presentment, demand, protest, notice of protest,
notice of default or dishonor, notice of payment or nonpayment and any and all
other notices and demands of any kind in connection with all negotiable
instruments evidencing all or any portion of the Senior Indebtedness; the right
to require the Senior Lenders to marshall any securities, or to enforce any
Lien that the Senior Lenders may now or hereafter have in any collateral
securing the Senior Obligations or to pursue any claim it may have against any
guarantor of the Senior Obligations, as a condition to the Senior Lenders'
entitlement to receive any payment on account of the Senior Obligations; notice
of the acceptance of this Agreement by the Senior Lenders; and notice of any
loans, letters of credit, guaranties, or other credit made available to the
Company, extensions of time granted, amendments to the Senior Credit Agreement
or the other Senior Credit Documents, or other
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action taken in reliance hereon. Without limiting the provisions of SECTION
9.11(A) hereof, each Holder hereby consents and agrees that the Senior Lenders
may, without in any manner impairing, releasing or otherwise affecting the
subordination provided for in this Agreement or any of the Senior Lenders'
rights hereunder and without prior notice to or the consent of any Holder;
release, renew, extend, compromise or postpone the time of payment of any of
the Senior Indebtedness; substitute, exchange or release any or all of the
collateral securing the Senior Obligations or decline or neglect to perfect the
Senior Lenders' Lien upon any of such collateral; add or release any Person
primarily or secondarily liable from any of the Senior Indebtedness; amend or
modify any of the Senior Credit Documents or waive any default or event of
default under the Senior Credit Documents; and increase or decrease the amount
of the Senior Indebtedness, the rates of interest, or the amount of any other
charges payable in connection therewith, provided that the principal amount of
the Senior Indebtedness may be increased to the extent not prohibited by
SECTION 7.16 hereof.
SECTION 9.13 AGREEMENT NOT TO CONTEST LIENS. In no event shall any
Holder institute, or join as a party in the institution of, or assist in the
prosecution of, any action, suit or proceeding seeking a determination that any
of the Liens granted to the Senior Agent for the benefit of the Senior Lenders
under any of the Senior Credit Documents is invalid, unperfected or avoidable,
or is or should be subordinated to the interests of any other Person.
SECTION 9.14 REINSTATEMENT. The provisions of this ARTICLE 9 shall
continue to be effective or reinstated, as the case may be, if at any time any
payment of the Senior Indebtedness is rescinded or returned by the Senior
Lenders or the Senior Agent upon the insolvency, bankruptcy or reorganization
of the Company or otherwise, all as though such payment had not been made.
ARTICLE 10
DEFINITIONS; RULES OF CONSTRUCTION
SECTION 10.01 TERMS DEFINED IN THE SENIOR CREDIT AGREEMENT. Except as
otherwise set forth in SECTION 10.02, capitalized terms used herein and defined
in Annex A of the Senior Credit Agreement shall have the meanings set forth
therein.
SECTION 10.02 OTHER DEFINED TERMS. In addition to the terms defined in
the Senior Credit Agreement, the terms set forth below shall have the following
respective meanings:
"AGREEMENT" shall mean this Amended and Restated Subordinated Note
Purchase Agreement, including all Annexes, Schedules, and Exhibits attached or
otherwise identified hereto, all restatements, modifications and supplements
hereof or hereto, and any appendices, attachments, exhibits or schedules to any
of the foregoing, and shall refer to this Agreement as the same may be in effect
at the time such reference becomes operative; PROVIDED, that any reference to
the Schedules to this Agreement shall be deemed a reference to the Schedules as
in effect as of the Effective Date, unless otherwise provided in a written
amendment thereto.
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"BLOCKAGE NOTICE" shall have the meaning assigned to it in SECTION
9.02(A).
"BLOCKAGE PERIOD" shall have the meaning assigned to it in SECTION
9.02(A).
"BRIDGE NOTE DOCUMENTS" shall mean, collectively, this Agreement, the
Bridge Notes, and each other document, instrument and certificate executed and
delivered by the Company as of the date hereof or at any time thereafter, in
connection with the transactions contemplated by this Agreement, in each case,
as amended, modified or supplemented from time to time.
"BRIDGE NOTE OBLIGATIONS" shall mean all obligations of the Company and
the other Credit Parties (monetary or otherwise) arising under or in connection
with this Agreement, the Bridge Notes and the other Bridge Note Documents
(including without limitation all principal, interest and Prepayment Premiums
payable under this Agreement).
"BRIDGE NOTES" shall have the meaning assigned to it in SECTION 1.01.
"CHANGE OF CONTROL" shall mean any of the following: (a) any person or
group of persons (within the meaning of the Exchange Act), other than Ramsay
Affiliates, shall have acquired beneficial ownership (within the meaning of Rule
13d-3 promulgated by the SEC under the Exchange Act) of the issued and
outstanding shares of capital stock of the Company having the right to cast 30%
or more of the votes for the election of directors of the Company under ordinary
circumstances; (b) Ramsay Affiliates shall fail to hold beneficial ownership
(within the meaning of Rule 13d-3 promulgated by the SEC under the Exchange Act)
of that number of the issued and outstanding shares of capital stock of the
Company having the right to cast at least 4,000,000 votes for the election of
directors of the Company under ordinary circumstances (such number to be
appropriately adjusted for stock splits, reverse stock splits and similar events
involving such capital stock); or (c) during any period of twelve consecutive
calendar months, individuals who at the beginning of such period constituted the
board of directors of the Company (together with any new directors whose
election by the board of directors of the Company or whose nomination for
election by the stockholders of the Company was approved by a vote of at least
two-thirds of the directors then still in office who either were directors at
the beginning of such period or whose elections or nomination for election was
previously so approved) cease for any reason other than death or disability to
constitute a majority of the directors then in office.
"CLAIM" shall have the meaning assigned to it in SECTION 12.17.
"COMPANY" shall have the meaning assigned to it in the preamble to
this Agreement.
"DEFAULT" shall mean any Event of Default or any condition or event
which, after notice or lapse of time or both, would constitute an Event of
Default.
"DEFAULT RATE" shall mean the rate of interest otherwise in effect
pursuant to SECTION 2.01(A) hereof, PLUS two percent (2%) per annum.
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"DESIGNATED HOLDER" shall mean such Person as the Required Holders
shall elect as their representative for purposes of ARTICLE 9, effective upon
receipt by the Senior Agent in accordance with SECTION 11.10 of the Senior
Credit Agreement of notice of the election of such Designated Holder.
"EFFECTIVE DATE" shall mean September 30, 1998, provided that all of
the conditions set forth in SECTION 4.01 shall have been satisfied and this
Agreement shall have become effective.
"EVENT OF DEFAULT" shall have the meaning assigned to it in SECTION
8.01.
"HOLDER" shall have the meaning assigned to it in the preamble to this
Agreement.
"INDEMNIFIED PERSON" shall have the meaning assigned to it in SECTION
12.17.
"INSOLVENCY PROCEEDING" shall have the meaning assigned to it in
SECTION 9.03(A).
"JUNIOR SECURITIES" shall mean (i) the securities of the Company
(including senior securities) provided for by a Plan that has been proposed in
a case under the Bankruptcy Code and confirmed by final order of the bankruptcy
court having jurisdiction over such case, and (ii) shares of common stock or
other equity securities, and debt securities, the payment of which is
subordinated, at least to the extent provided in this Agreement with respect to
the Bridge Note Obligations, to the payment of all Senior Indebtedness at the
time outstanding and to the payment of all debt securities issued in exchange
therefor to the Senior Lenders, which shares or other equity or debt securities
have been provided for by a Plan which has been adopted or agreed to other than
pursuant to a proceeding referred to in clause (i) of this definition and which
has been approved or agreed to by the Senior Lenders.
"MATERIAL CONTRACTS" shall mean (a) each Management Agreement, and (b)
each contract to which the Company or any of its Subsidiaries is now or
hereafter a party, either (i) involving aggregate consideration payable to or
by the Company or such Subsidiary, contingent or otherwise, in excess of
$5,000,000; or (ii) the breach or termination by any party of which would be a
Material Adverse Event.
"MATURITY DATE" shall mean the earlier of the Stated Maturity Date or
such other date when the Bridge Notes or portion thereof shall be or become due
and payable in accordance with the terms of this Agreement, whether by required
repayment, prepayment, declaration or otherwise.
"MAXIMUM LAWFUL RATE" shall have the meaning assigned to it in SECTION
2.07.
"NASD" shall mean the National Association of Securities Dealers,
Inc., or any successor corporation thereto.
"ORIGINAL NOTE PURCHASE AGREEMENT" shall have the meaning set forth in
the Recitals
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to this Agreement.
"ORIGINAL CLOSING DATE" shall mean September 30, 1997, the date of the
purchase and sale of the Bridge Notes pursuant to the Original Note Purchase
Agreement.
"PLAN" shall mean a plan proposed in an Insolvency Proceeding for the
reorganization or rehabilitation of the Company, a composition or extension of
the Company's debts and liabilities or a liquidation in whole or in part of the
Company's assets.
"PURCHASER" shall have the meaning assigned to it in the preamble to
this Agreement.
"PREPAYMENT PREMIUM" shall mean, with respect to the principal amount
of any Bridge Note being prepaid on or after September 30, 1998 but before
September 30, 2004, an amount equal to such principal amount multiplied by the
percentage designated below based on the date when such prepayment occurs:
DATE PERCENTAGE
On or after September 30, 1998 but
before September 30, 1999 5%
On or after September 30, 1999 but
before September 30, 2000 4.167%
On or after September 30, 2000 but
before September 30, 2001 3.333%
On or after September 30, 2001 but
before September 30, 2002 2.500%
On or after September 30, 2002 but
before September 30, 2003 1.667%
On or after September 30, 2003 but
before September 30, 2004 0.833%
"RAMSAY HOLDINGS" shall have the meaning assigned to it in the
preamble to this Agreement.
"RAMSAY SUBORDINATED NOTE PURCHASE AGREEMENT" shall mean the
Subordinated Note Purchase Agreement, dated as of March 25, 1998, among the
Company, as issuer, and Ramsay Holdings, as purchaser, as the same may be
amended, modified or supplemented with the consent of the Holders.
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"RAMSAY SUBORDINATED NOTE" shall mean the Company's Junior
Subordinated Note due September 30, 2006, issued pursuant to the Ramsay
Subordinated Note Purchase Agreement in the principal amount of $5,000,000 plus
Capitalized Interest (as defined therein).
"REQUIRED HOLDERS" shall mean Holders holding, in the aggregate, more
than 50% of the outstanding principal amount of the Bridge Notes at any time.
"SALE OF THE COMPANY" shall mean (i) the sale by the shareholders of
the Company in one or more related transactions of shares of Stock then issued
and outstanding (including, without limitation, pursuant to a tender offer for
such shares) representing a majority of the total number of votes eligible to
be cast by all holders of the Company's Stock for the election of directors of
the Company under ordinary circumstances; (ii) the merger or consolidation of
the Company with or into any other Person (other than a merger in which the
Company is the corporation surviving the merger and which is permitted pursuant
to SECTION 7.02 hereof); (iii) the sale by the Company or any of its
Subsidiaries of the capital stock of one or more of its Subsidiaries, the
merger of one or more of the Company's Subsidiaries with and into any Person
other than a direct or indirect wholly-owned Subsidiary of the Company or the
sale by the Company or any of its Subsidiaries of other assets of the Company
or any of its Subsidiaries, in one or more transactions, whether or not
related, involving Stock or assets representing or aggregating 50% or more of
the consolidated book value of the Company's assets as of the Effective Date;
or (iv) any recapitalization of the Company shall occur pursuant to which
Ramsay Affiliates shall have acquired beneficial ownership of issued and
outstanding shares of capital stock of the Company having the right to cast
more than 66-2/3% of the total number of votes in an election of directors of
the Company under ordinary circumstances.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended, or
any successor federal statute, and the rules and regulations of the SEC
promulgated thereunder, all as the same shall be in effect from time to time.
"SENIOR AGENT" shall mean General Electric Capital Corporation, in its
capacity as Administrative Agent for the Senior Lenders under the Senior Credit
Agreement, and its successors in such capacity under the Senior Credit
Agreement.
"SENIOR COVENANT DEFAULT" shall mean any default under any Senior
Indebtedness (other than a Senior Payment Default) that permits the Senior
Lenders or the Senior Agent to accelerate the maturity of the Senior
Indebtedness or that has been the basis for the acceleration of the maturity of
the Senior Indebtedness.
"SENIOR CREDIT AGREEMENT" shall mean that certain Amended and Restated
Credit Agreement, dated as of the date hereof, by and among the Company, the
Senior Lenders and the Senior Agent as amended, restated, refinanced,
supplemented or otherwise modified from time to time.
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"SENIOR CREDIT DOCUMENTS" shall mean and include (i) the Senior Credit
Agreement, the other "Loan Documents" (as defined in the Senior Credit
Agreement), and all other instruments or agreements now or hereafter evidencing
or securing the payment of the whole or any part of the Senior Indebtedness and
(ii) all renewals, extensions, substitutions, refundings, refinancings,
restructurings or replacements thereof (including all successive renewals,
extensions, substitutions, refundings, refinancings, restructurings or
replacements of any Senior Credit Documents, whether or not with the same
lenders or holders, and whether or not with the same entity as the Company so
long as such borrower is a successor or assign of the Company).
"SENIOR INDEBTEDNESS" shall mean (i) all Senior Obligations now or
hereafter existing under or with respect to any of the Senior Credit Documents,
whether such Senior Obligations are now or hereafter existing and however and
whenever made or incurred, and whether direct or indirect, absolute or
contingent, due or to become due, or secured or unsecured, including all
principal, interest and premium on, and all other amounts payable in respect
of, any of such Senior Obligations, and all commitment or other fees, indemnity
amounts, reimbursement obligations and other amounts owed by the Company or any
of its Subsidiaries to the Senior Lenders thereunder, (ii) any and all loans
now or hereafter made or other credit extended by the Senior Lenders to the
Company, including, without limitation, during the pendency of any Insolvency
Proceeding of the Company, (iii) all interest at any time accrued with respect
to the foregoing (including any interest that accrues during the pendency of
any bankruptcy case of the Company, whether or not the Senior Lenders are
authorized by Section 506 of the Bankruptcy Code to collect such interest from
the Company), and (iv) all reasonable costs and expenses incurred by the Senior
Agent or the Senior Lenders in connection with its or their enforcement of any
rights or remedies under the Senior Credit Documents, the collection of any of
the Senior Indebtedness or the protection of, or realization upon, any
collateral securing the Senior Obligations after the occurrence and during the
continuance of an "Event of Default" (as defined in the Senior Credit
Agreement), including, without limitation, attorneys' fees, court costs,
appraisal and consulting fees, auctioneer's fees, rent, storage, insurance
premiums and like items and whether or not such amounts are allowed as a claim
against the Company under the Bankruptcy Code, in each case to the extent that
the Company is now or hereafter becomes liable to pay any such amounts to the
Senior Lenders or the Senior Agent in connection with any of the foregoing
items (i)-(iii) under any agreement or by applicable law.
"SENIOR LENDERS" shall mean all of the "Lenders" that are parties to
the Senior Credit Agreement from time to time.
"SENIOR OBLIGATIONS" shall mean all "Obligations" (as defined in the
Senior Credit Agreement) now or hereafter existing under or with respect to any
of the Senior Credit Documents.
"SENIOR PAYMENT DEFAULT" shall mean any default in the payment of any
Senior Indebtedness that permits the Senior Lender to accelerate the maturity
of the Senior Indebtedness or that has been the basis for the acceleration of
the maturity of the Senior Indebtedness.
"SERIES A BRIDGE NOTES" shall have the meaning assigned to it in the
Original Note
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Purchase Agreement.
"SERIES B BRIDGE NOTES" shall have the meaning assigned to it in the
Original Note Purchase Agreement.
"STATED MATURITY DATE" shall mean September 30, 2005.
"SUBORDINATED INDEBTEDNESS" shall mean the Indebtedness evidenced by
or in respect of the Ramsay Subordinated Note.
SECTION 10.03 CERTAIN MATTERS OF CONSTRUCTION.
(a) Except as otherwise set forth in ANNEX C, any accounting
term used in this Agreement or the other Bridge Note Documents shall have,
unless otherwise specifically provided therein, the meaning customarily given
such term in accordance with GAAP.
(b) All other undefined terms contained in this Agreement or
the other Bridge Note Documents shall, unless the context indicates otherwise,
have the meanings provided for by the Code as in effect in the State of New
York to the extent the same are used or defined therein.
(c) The words "herein," "hereof" and "hereunder" or other
words of similar import refer to this Agreement as a whole, including the
annexes, exhibits and schedules hereto, as the same may from time to time be
amended, modified or supplemented, and not to any particular section,
subsection or clause contained in this Agreement.
(d) For purposes of this Agreement and the other Bridge Note
Documents, the following additional rules of construction shall apply: (i)
wherever from the context it appears appropriate, each term stated in either
the singular or plural shall include the singular and the plural, and pronouns
stated in the masculine, feminine or neuter gender shall include the masculine,
the feminine and the neuter; (ii) the term "including" shall not be limiting or
exclusive, unless specifically indicated to the contrary; (iii) all references
to statutes and related regulations shall include any amendments of same and
any successor statutes and regulations; and (iv) all references to any
instruments or agreements, including references to any of the Bridge Note
Documents, shall include any and all modifications or amendments thereto and
any and all extensions or renewals thereof.
(e) Unless otherwise indicated, all references in this
Agreement to articles, sections, subsections, schedules, annexes, exhibits and
attachments shall refer to the corresponding articles, sections, subsections,
schedules, annexes, exhibits and attachments of or to this Agreement. All
schedules, annexes, exhibits and attachments hereto, or expressly identified to
this Agreement, are incorporated herein by reference and, taken together, shall
constitute but a single agreement. Unless otherwise expressly set forth herein,
or in a written amendment referring to such schedules and annexes, all
schedules and annexes referred to herein shall mean the schedules and annexes
as
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in effect as of the Effective Date.
ARTICLE 11
REGISTRATION; EXCHANGE; SUBSTITUTION OF BRIDGE NOTES
SECTION 11.01 REGISTRATION OF BRIDGE NOTES. The Company shall keep at
its principal executive office a register for the registration of transfers of
Bridge Notes. The name and address of each Holder, each transfer thereof and
the name and address of each transferee of one or more Bridge Notes shall be
registered in such register. Prior to due presentment for registration of
transfer, the Person in whose name any Bridge Note shall be registered shall be
deemed and treated as the owner and holder thereof for all purposes hereof, and
the Company shall not be affected by any notice or knowledge to the contrary.
The Company shall give to any Holder, promptly upon request therefor, a
complete and correct copy of the names and addresses of all Holders.
SECTION 11.02 TRANSFERS.
(a) Subject to compliance with applicable securities laws,
the Holders may transfer all or any portion of the Bridge Notes held by them at
any time to any Person, PROVIDED, HOWEVER, that (i) Ramsay Holdings may not
transfer any Bridge Notes of which it is the Holder, other than transfers to
Ramsay Affiliates pursuant to which such Ramsay Affiliates agree to be bound by
this clause (i), and (ii) no Holder may transfer Bridge Notes to any Person
other than a bank, savings and loan association or other financial institution,
a commercial lender or an insurance company, investment fund or other
institutional investor, or to an Affiliate of the Holder, without the prior
written consent of the Company, such consent not unreasonably to be withheld.
(b) The Company shall assist any Holder permitted to transfer
Bridge Notes under this SECTION 11.02 as reasonably required to enable the
transferring Holder to effect any such transfer, including the execution and
delivery of any and all agreements, notes and other documents and instruments
as shall be reasonably requested and the preparation of informational materials
for, and the participation of management in meetings with, potential
transferees. The Company shall certify the correctness, completeness and
accuracy of all descriptions of the Company, its Subsidiaries and their affairs
contained in any selling materials provided by it and all other information
provided by it and included in such materials, except that any Projections
delivered by the Company shall only be certified by the Company as having been
prepared by the Company in compliance with the representations contained in
SCHEDULE 3.04 of the Senior Credit Agreement.
SECTION 11.03 TRANSFER AND EXCHANGE OF BRIDGE NOTES. Upon surrender of
any Bridge Note at the principal executive office of the Company for
registration of transfer or exchange (and in the case of a surrender for
registration of transfer, duly endorsed or accompanied by a written instrument
of transfer duly executed by the registered Holder or his attorney duly
authorized in writing and accompanied by (i) the address for notices of each
transferee of such Bridge Note or part thereof, (ii) evidence of the payment of
any applicable transfer taxes, and (iii) an executed agreement
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from the transferee in favor of the Company, making the representations and
warranties set forth in SECTION 1.04 and agreeing to be bound by the terms and
conditions of this Agreement), the Company shall execute and deliver, at its
expense, one or more new Bridge Notes (as requested by the registered Holder
thereof) in exchange therefor, in an aggregate principal amount of the
surrendered Bridge Note. Each such new Bridge Note shall be payable to such
Person as such Holder shall request and shall be substantially in the form of
EXHIBIT B to the Original Note Purchase Agreement. Each such new Bridge Note
shall be dated and bear interest from the date to which interest shall have
been paid on the surrendered Bridge Note or dated the date of the surrendered
Bridge Note if no interest shall have been paid thereon. Bridge Notes shall not
be transferred in denominations of less than $1,000,000; PROVIDED that if
necessary to enable the registration of transfer by a Holder of all of its
Bridge Notes, one Bridge Note may be in a denomination of less than $1,000,000.
Transfers hereunder shall be made by the Company to the extent permitted by
applicable law.
SECTION 11.04 REPLACEMENT OF BRIDGE NOTES. Upon receipt by the Company
of written notice from any Holder of the loss, theft, destruction or mutilation
of any Bridge Note held by such Holder and (a) in the case of loss, theft or
destruction, of security reasonably satisfactory to the Company (or, in the
case of any Holder that is an institutional investor, an unsecured agreement of
indemnity from such Holder), or (b) in the case of mutilation, upon surrender
and cancellation thereof, the Company, at its own expense, shall execute and
deliver, in lieu thereof, a new Bridge Note, dated and bearing interest from
the date to which interest shall have been paid on such lost, stolen, destroyed
or mutilated Bridge Note or dated the date of such lost, stolen, destroyed or
mutilated Bridge Note if no interest shall have been paid thereon.
ARTICLE 12
MISCELLANEOUS
SECTION 12.01 COMPLETE AGREEMENT. This Agreement, the other Bridge
Note Documents, the Senior Credit Agreement, the other Senior Credit Documents
and the Preferred Stock Purchase Agreement constitute the complete agreement
among the parties with respect to the subject matter hereof and thereof and
supersede all prior agreements, commitments, understandings or inducements
(oral or written, expressed or implied) relating to a financing of
substantially similar form, purpose or effect. This Agreement is a continuation
of, an amendment to, and a restatement of, the Original Note Purchase
Agreement. This Agreement shall not in any event be deemed a novation of the
Original Note Purchase Agreement, and all rights and remedies of Purchaser, and
all debts, liabilities and obligations of the Company, under the Original Note
Purchase Agreement, as amended and re stated hereby, shall continue to exist
from and after the execution of this Agreement.
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SECTION 12.02 AMENDMENTS AND WAIVERS.
(a) No amendment, modification, termination or waiver of any
provision of this Agreement, or any consent to any departure by the Company
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Company and by the Required Holders or all affected Holders,
as applicable. Except as set forth in SECTION 12.02(B) below, all such
amendments, modifications, terminations or waivers requiring the consent of any
Holders shall require the written consent of the Required Holders.
(b) No amendment, modification, termination or waiver shall,
unless in writing and signed by each Holder holding a Bridge Note directly
affected thereby, do any of the following: (i) reduce the principal of, rate of
interest on, or any fees payable with respect to any Bridge Note of any
affected Holder; (ii) extend any scheduled payment date or final maturity date
of the principal amount of any Bridge Note of any affected Holder; (iii) waive,
forgive, defer, extend or postpone any payment of interest or fees as to any
affected Holder; (iv) change the percentage of the aggregate unpaid principal
amount of the Bridge Notes which shall be required for Holders or any of them
to take any action hereunder; or (v) amend or waive this SECTION 12.02 or the
definition of the term "Required Holders" insofar as such definition affects
the substance of this SECTION 12.02.
(c) No amendment, modification, termination or waiver
affecting the rights or duties of the Designated Holder under this Agreement or
any other Bridge Note Document shall be effective unless in writing and signed
by the Designated Holder, in addition to the Holders required hereinabove to
take such action.
(d) Each amendment, modification, termination or waiver shall
be effective only in the specific instance and for the specific purpose for
which it was given. No amendment, modification, termination or waiver of any
provision of any Bridge Note shall be effective without the written concurrence
of the holder of that Bridge Note. No notice to or demand on the Company in any
case shall entitle the Company to any other or further notice or demand in
similar or other circumstances. Any amendment, modification, termination,
waiver or consent effected in accordance with this SECTION 12.02 shall be
binding upon each holder of the Bridge Notes at the time outstanding and each
future holder of the Bridge Notes.
SECTION 12.03 FEES AND EXPENSES; CERTAIN TAXES.
(a) The Company shall reimburse Holders for all reasonable
fees, costs and expenses, including the reasonable fees, costs and expenses of
counsel or other advisors to the Holders (including environmental and
management consultants and appraisers) for advice, assistance, or other
representation in connection with:
(i) any litigation, contest, dispute, suit,
proceeding or action (whether instituted by any Holder, the Company or
any other Person) in any way relating to any of the Bridge Note
Documents or any other agreement to be executed or delivered in
connection
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therewith or herewith, whether as party, witness, or otherwise,
including any litigation, contest, dispute, suit, case, proceeding or
action, and any appeal or review thereof, in connection with a case
commenced by or against Company or any other Person that may be
obligated to the Holders by virtue of the Bridge Note Documents,
including any such litigation, contest, dispute, suit, proceeding or
action arising in connection with any work-out or restructuring of the
Bridge Notes during the pendency of one or more Events of Default;
PROVIDED, that Company shall not be liable to reimburse any Holder for
any such fees, costs or expenses incurred by it in the defense of any
Claim as to which such Holder would not be entitled to indemnification
by virtue of the proviso to SECTION 12.17;
(ii) any attempt to enforce any remedies of any
Holder against the Company or any other Person that may be obligated
to the any Holder by virtue of any of the Bridge Note Documents; or
(iii) any work-out or restructuring of the Bridge
Note Documents during the pendency of one or more Events of Default;
including all reasonable attorneys' and other professional and service
providers' fees arising from such services, including those in connection with
any appellate proceedings; and all reasonable out-of-pocket expenses, costs,
charges and other fees incurred by such counsel and others in any way or
respect arising in connection with or relating to any of the events or actions
described in this SECTION 12.03 shall be payable, on demand, by the Company to
the respective Holders, as applicable. Without limiting the generality of the
foregoing, such expenses, costs, charges and fees may include: reasonable fees,
costs and expenses of accountants, environmental advisors, appraisers,
investment bankers, management and other consultants and paralegals; court
costs and expenses; photocopying and duplication expenses; court reporter fees,
costs and expenses; long distance telephone charges; air express charges;
telegram or telecopy charges; secretarial overtime charges; and expenses for
travel, lodging and food paid or incurred in connection with the performance of
such legal or other advisory services.
(b) In addition, the Company agrees to pay any present or
future intangible personal property, stamp or documentary taxes or any other
excise or property taxes, charges or similar levies that arise from the sale or
delivery of the Bridge Notes by the Company to Purchaser pursuant to this
Agreement, any payment made hereunder or under the Bridge Notes or the
execution, delivery, recording or registration of, or otherwise with respect
to, this Agreement, any of the other Bridge Note Documents or any other matter
contemplated by this Agreement, within ten (10) Business Days after demand by
any Holder therefor (including penalties, interest and expenses arising
therefrom or with respect thereto), whether or not such taxes were correctly or
legally asserted.
SECTION 12.04 NO WAIVER. No failure on the part of any Holder, at any
time or times, to require strict performance by the Company of any provision of
this Agreement and any of the other Bridge Note Documents shall waive, affect
or diminish any right of the Holders thereafter to
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demand strict compliance and performance therewith. Any suspension or waiver of
a Default or Event of Default shall not suspend, waive or affect any other
Default or Event of Default whether the same is prior or subsequent thereto and
whether of the same or of a different type. None of the undertakings,
agreements, warranties, covenants and representations of the Company contained
in this Agreement or any of the other Bridge Note Documents and no Default or
Event of Default by the Company shall be deemed to have been suspended or
waived by the Holders, unless such waiver or suspension is by an instrument in
writing signed by an officer of or other authorized employee of each of the
Required Holders or all Holders, as required by SECTION 12.02 above, and
directed to the Company specifying such suspension or waiver.
SECTION 12.05 REMEDIES. The rights and remedies of the Holders under
this Agreement and the other Bridge Note Documents shall be cumulative and
nonexclusive of any other rights and remedies which the Holders may have under
any other agreement, including the Bridge Note Documents, by operation of law
or otherwise.
SECTION 12.06 SEVERABILITY. Wherever possible, each provision of this
Agreement and each of the other Bridge Note Documents shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Agreement or any of the other Bridge Note Documents shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Agreement or any of the other Bridge Note Documents.
SECTION 12.07 CONFLICT OF TERMS. Except as otherwise provided in this
Agreement or any of the other Bridge Note Documents by specific reference to
the applicable provisions of this Agreement, if any provision contained in this
Agreement is in conflict with, or inconsistent with, any provision contained in
any of the other Bridge Note Documents, the provisions contained in this
Agreement shall govern and control.
SECTION 12.08 SETOFF AND SHARING OF PAYMENTS.
(a) Subject to the terms of ARTICLE 9 hereof, in addition to
any rights now or hereafter granted under applicable law and not by way of
limitation of any such rights, upon the occurrence and during the continuance
of any Event of Default, each Holder is hereby authorized to the extent
permitted by applicable law at any time or from time to time, without notice to
the Company or to any other Person, any such notice being hereby expressly
waived, to set off and to appropriate and to apply any and all balances held by
it at any of its offices for the account of the Company or any of its
Subsidiaries (regardless of whether such balances are then due to the Company
or such Subsidiary) and any other properties or assets any time held or owing
by that Holder to or for the credit or for the account of the Company or such
Subsidiary against and on account of any of the Bridge Note Obligations which
are not paid when due.
(b) Any Holder exercising a right to set off or otherwise
receiving any payment on account of the Bridge Note Obligations in excess of
its ratable share thereof shall purchase for
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cash (and the other Holders shall sell) such participations in each such other
Holder's ratable share of the Bridge Note Obligations as would be necessary to
cause such Holder to share the amount so set off or otherwise received with
each other Holder in accordance with their respective ratable shares. The
Company agrees, to the fullest extent permitted by law, that (a) any Holder may
exercise its right to set off with respect to amounts in excess of its ratable
share of the Bridge Note Obligations and may sell participations in such amount
so set off to other Holders and (b) any Holders so purchasing a participation
in the Bridge Notes or other Bridge Note Obligations held by other Holders may
exercise all rights of set-off, bankers' lien, counterclaim or similar rights
with respect to such participation as fully as if such Holder were a direct
holder of the Bridge Notes and the other Bridge Note Obligations in the amount
of such participation. Notwithstanding the foregoing, if all or any portion of
the set-off amount or payment otherwise received is thereafter recovered from
the Holder that has exercised the right of set-off, the purchase of
participations by that Holder shall be rescinded and the purchase price
restored without interest.
SECTION 12.09 NOTICES. Except as otherwise provided herein, whenever
it is provided herein that any notice, demand, request, consent, approval,
declaration or other communication shall or may be given to or served upon any
of the parties by another party, or whenever any of the parties desires to give
or serve upon another party any communication with respect to this Agreement or
any of the other Bridge Note Documents, each such notice, demand, request,
consent, approval, declaration or other communication shall be in writing and
shall be deemed to have been validly served, given or delivered (a) upon the
earlier of actual receipt and three (3) Business Days after deposit in the
United States Mail, registered or certified mail, return receipt requested,
with proper postage prepaid, (b) upon transmission, when sent by telecopy or
other similar facsimile transmission (with such telecopy or facsimile promptly
confirmed by delivery of a copy by personal delivery or United States Mail as
otherwise provided in this SECTION 12.09), (c) one Business Day after deposit
with a reputable overnight courier with all charges prepaid, or (d) when
delivered, if hand-delivered by messenger, all of which shall be addressed to
the party to be notified and sent to the address or facsimile number indicated
below or to such other address (or facsimile number) as may be substituted by
notice given as herein provided. The giving of any notice required hereunder
may be waived in writing by the party entitled to receive such notice. Failure
or delay in delivering copies of any notice, demand, request, consent,
approval, declaration or other communication to any Person (other than the
Company or a Holder) designated below to receive copies shall in no way
adversely affect the effectiveness of such notice, demand, request, consent,
approval, declaration or other communication.
If to Ramsay Holdings at: Paul Ramsay Holdings Pty. Limited
154 Pacific Highway
St. Leonards NSW 2065
Australia
Attention: Director
Telecopy No.: 011-612-943-3460
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with a copy to: Haythe & Curley
237 Park Avenue
New York, New York 10017
Attention: Bradley P. Cost, Esq.
Telecopy No.: (212) 682-0200
If to any other Holder: At its last known address appearing
on the books of the Company maintained
for such purpose in accordance with SECTION 11.01
If to the Company, at: Ramsay Health Care, Inc.
Columbus Center
One Alhambra Plaza
Suite 750
Coral Gables, Florida 33134
Attention: Chief Financial Officer
Telecopy No.: (305) 569-4647
with a copy to: Haythe & Curley
237 Park Avenue
New York, New York 10017
Attention: Bradley P. Cost, Esq.
Telecopy No.: (212) 682-0200
SECTION 12.10 SECTION TITLES. The Section titles and Table of Contents
contained in this Agreement are and shall be without substantive meaning or
content of any kind whatsoever and are not a part of this Agreement.
SECTION 12.11 COUNTERPARTS. This Agreement may be executed in any
number of separate counterparts, each of which shall, collectively and
separately, constitute one agreement.
SECTION 12.12 TIME OF THE ESSENCE. Time is of the essence of this
Agreement and each of the other Bridge Note Documents.
SECTION 12.13 CONFIDENTIALITY. The Company has furnished and will
furnish to Purchaser certain information concerning the Company which the
Company has advised is non-public, proprietary or confidential in nature
("CONFIDENTIAL INFORMATION"). Each Purchaser confirms to the Company, for
itself, that it is such Purchaser's policy and practice to maintain in
confidence all Confidential Information which is provided to it under
agreements providing for the extension of credit and which is identified to it
as such, and that it will protect the confidentiality of Confidential
Information submitted to it with respect to the Company under this Agreement,
commensurate with its efforts to maintain the confidentiality of its own
Confidential Information, PROVIDED, HOWEVER, that (a) nothing contained herein
shall prevent either Purchaser from disclosing
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Confidential Information (i) to its Affiliates and their respective directors,
officers and employees and to any legal counsel, auditors, appraisers,
consultants or other persons retained by it or its Affiliates as professional
advisors, on the condition that such information not be further disclosed
except in compliance with this SECTION 12.13; (ii) under color of legal
authority, including, without limitation, to any regulatory authority having
jurisdiction over it or its operations or to or under the authority of any
court deemed by it to be of competent jurisdiction; (iii) to any actual or
potential transferee of such Purchaser's Bridge Notes pursuant to SECTION 11.02
or any actual or potential assignee of such Purchaser's rights and obligations
under this Agreement pursuant to SECTION 12.17 hereof, to the extent such
actual or potential assignee has agreed to maintain such information in
confidence on the basis set forth in this SECTION 12.13; and (iv) as necessary
in connection with the exercise of its remedies under this Agreement or any of
the other Bridge Note Documents; (b) the terms of this SECTION 12.13 shall be
inapplicable to any information furnished to it which is in its possession
prior to the delivery to it of such information by the Company, or otherwise
has been obtained by it on a non-confidential basis, or which was or becomes
available to the public or otherwise part of the public domain (other than as a
result of such Purchaser's failure to abide hereby), or which was not
non-public, proprietary or confidential when the Company delivered it to such
Purchaser; and (c) the determination by such Purchaser as to the application of
any of the circumstances described in the foregoing clauses (a) and (b) will be
conclusive if made reasonably and in good faith.
SECTION 12.14 GOVERNING LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN
ANY OF THE BRIDGE NOTE DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT AND THE BRIDGE NOTE
OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS
MADE AND PERFORMED IN SUCH STATE, AND ANY APPLICABLE LAWS OF THE UNITED STATES
OF AMERICA. THE COMPANY HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL
COURTS LOCATED IN NEW YORK COUNTY, NEW YORK SHALL HAVE EXCLUSIVE JURISDICTION
TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES PERTAINING TO THIS AGREEMENT OR
ANY OF THE OTHER BRIDGE NOTE DOCUMENTS OR TO ANY MATTER ARISING OUT OF OR
RELATED TO THIS AGREEMENT OR ANY OF THE OTHER BRIDGE NOTE DOCUMENTS; PROVIDED,
THAT THE PARTIES ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE
HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK COUNTY, NEW YORK; AND FURTHER
PROVIDED, THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE
ANY HOLDER FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY COURT OF
COMPETENT JURISDICTION IN ANY OTHER JURISDICTION TO COLLECT THE BRIDGE NOTE
OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE
HOLDERS. THE COMPANY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH
JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND THE COMPANY
HEREBY WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED UPON
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LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND
HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
APPROPRIATE BY ANY SUCH COURT. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE
COMPANY HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER
PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH
SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED
MAIL ADDRESSED TO THE COMPANY AT THE ADDRESS SET FORTH IN SECTION 12.09 OF THIS
AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER
OF THE COMPANY'S ACTUAL RECEIPT THEREOF OR THREE (3) BUSINESS DAYS AFTER
DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID.
SECTION 12.15 WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN
CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND
ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH
APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE
PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH
APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF
THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY
DISPUTE, WHETHER IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO, THIS AGREEMENT OR ANY OF THE OTHER BRIDGE
NOTE DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
SECTION 12.16 INDEMNIFICATION. The Company shall indemnify and hold
each Holder, their respective Affiliates, and their respective officers,
directors, employees, attorneys and agents (each, an "INDEMNIFIED PERSON"),
harmless from and against any and all suits, actions, costs, fines,
deficiencies, penalties, proceedings, claims, damages, losses, liabilities and
expenses (including reasonable attorneys' fees and disbursements and other
costs of investigations or defense, including those incurred upon any appeal)
(each, a "CLAIM") which may be instituted or asserted against or incurred by
such Indemnified Person as the result of credit having been extended under this
Agreement or any other Bridge Note Document or otherwise arising in connection
with the transactions contemplated hereunder and thereunder, including any and
all Environmental Liabilities and regardless of whether the Indemnified Person
is a party to such Claim; PROVIDED, that the Company shall not be liable for
any indemnification to such Indemnified Person with respect to any portion of
any such Claim which results solely from such Indemnified Person's gross
negligence, willful misconduct or breach of this Agreement as determined by a
final judgment of a court of competent jurisdiction. NO HOLDER OR ANY OTHER
INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY OTHER PARTY HERETO,
ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OF SUCH PERSON OR ANY OTHER
PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT,
PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED
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AS A RESULT OF CREDIT HAVING BEEN EXTENDED UNDER THE BRIDGE NOTE DOCUMENTS OR
OTHERWISE IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED THEREBY.
SECTION 12.17 SUCCESSORS AND ASSIGNS. This Agreement, the Bridge Notes
and the other Bridge Note Documents shall be binding on and shall inure to the
benefit of the Company, the Holders and their respective successors and
permitted assigns (including, in the case of the Company, a
debtor-in-possession on behalf of the Company), except as otherwise provided
herein or therein. The Company may not assign, delegate, transfer, hypothecate
or otherwise convey its rights, benefits, obligations or duties hereunder or
under any of the Bridge Note Documents without the prior express written
consent of the Required Holders. Any such purported assignment, transfer,
hypothecation or other conveyance by the Company without such prior express
written consent shall be void. The terms and provisions of this Agreement and
the other Bridge Note Documents are for the purpose of defining the relative
rights and obligations of the Company and the Holders with respect to the
transactions contemplated hereby and there shall be no third party
beneficiaries of any of the terms and provisions of this Agreement or any of
the other Bridge Note Documents.
SECTION 12.18 SURVIVAL. The obligations of the company under SECTIONS
12.03, 12.14, 12.15 and 12.16 shall in each case survive the payment or
permitted transfer of any Bridge Note, the enforcement, amendment or waiver of
any provision of this Agreement or the Bridge Notes and the termination of this
Agreement. The representations and warranties made by the Company in this
Agreement, the Bridge Notes and in each other Bridge Note Document shall
survive the execution and delivery of this Agreement, the Bridge Notes and each
such other Bridge Note Document, the purchase or transfer of any Bridge Note or
portion thereof or interest therein, any may be relied upon by any subsequent
Holder, regardless of any investigation made at any time by or on behalf of any
Holder.
SECTION 12.19 ESTOPPEL. The Company represents and warrants that there
are no claims, causes of action, defenses, rights of offset, suits, debts,
liens, obligations, liabilities, demands, losses, costs and expenses (including
attorneys' fees) of any kind, character or nature whatsoever, known or unknown,
fixed or contingent, which the Company may have or claim to have against any
Purchaser which arise out of or in connection with any act or omission of such
Purchaser existing or occurring on or prior to each of the date of this
Agreement and the Effective Date, including, without limitation, any claims,
liabilities or obligations arising with respect to the Original Note Purchase
Agreement or any of the Bridge Note Documents.
SECTION 12.20 WAIVER. Purchaser hereby waives the applicability of
Section 2.04(b) of the Original Note Purchase Agreement to the Series B Bridge
Notes; PROVIDED, HOWEVER, that Purchaser's waiver contained in this SECTION
12.20 shall not be deemed a waiver of a similar or dissimilar provision or
condition at the same or any prior or subsequent time, nor shall the failure of
or delay by Purchaser in exercising any right, power or privilege hereunder
operate as a waiver thereof to preclude any other or further exercise thereof
or the exercise of any other such right, power or privilege.
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IN WITNESS WHEREOF, this Agreement has been duly executed as of the
date first written above.
RAMSAY HEALTHCARE, INC.
By: /s/ Carol C. Lang
-----------------------------
Name: Carol C. Lang
Title:
PAUL RAMSAY HOLDINGS PTY. LIMITED
By: /s/ Peter Evans
-----------------------------
Name: Peter Evans
Title: Director
43
