SIXTH
AMENDED AND RESTATED
LOAN AGREEMENT
among
FIRST UNION NATIONAL BANK
as Agent,
CORESTATES BANK,
as Documentation Agent,
FLEET NATIONAL BANK,
MELLON BANK, N.A.,
COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK, B.A.,
"RABOBANK NEDERLAND," NEW YORK BRANCH,
and
CREDIT LYONNAIS NEW YORK BRANCH,
as Co-agents,
VARIOUS LENDERS
and
RENAL TREATMENT CENTERS, INC.,
as Borrower
$350,000,000 Revolving Credit/Term Facility
Arranged by
FIRST UNION CAPITAL MARKETS CORP.
September 26, 1997
TABLE OF CONTENTS
Page
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Recitals.......................................................................1
ARTICLE I
DEFINITIONS
1.1 Defined Terms............................................................2
1.2 Accounting Terms........................................................28
1.3 Singular/Plural.........................................................28
1.4 Other Terms.............................................................28
ARTICLE II
AMOUNT AND TERMS OF THE LOANS;
LETTERS OF CREDIT
2.1 The Loans...............................................................29
2.2 Borrowings..............................................................30
2.3 Revolving Credit/Term Notes.............................................32
2.4 Reduction of Commitments................................................32
2.5 Payments; Voluntary, Mandatory..........................................33
2.6 Interest................................................................34
2.7 Fees....................................................................36
2.8 Interest Periods........................................................37
2.9 Conversions and Continuations...........................................38
2.10 Method of Payments; Computations........................................39
2.11 Increased Costs, Change in Circumstances, etc...........................41
2.12 Taxes...................................................................44
2.13 Compensation............................................................46
2.14 Use of Proceeds.........................................................47
2.15 Recovery of Payments....................................................47
2.16 Pro Rata Borrowings.....................................................47
2.17 Letters of Credit.......................................................48
2.18 Sale and Assignment of Existing Loans...................................55
ARTICLE III
CLOSING; CONDITIONS OF CLOSING AND BORROWING
3.1 Closing.................................................................55
3.2 Conditions of Loans and Advances........................................55
3.2.1 Executed Loan Documents.....................................55
3.2.2 Closing Certificates; etc...................................56
3.2.3 Consents; No Adverse Change.................................58
3.2.4 Financial Matters...........................................58
3.2.5 Miscellaneous...............................................59
3.3 Conditions to All Loans and Advances....................................59
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3.4 Acquisition Loans.......................................................59
3.5 Waiver of Conditions Precedent..........................................60
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 Corporate Organization and Power........................................60
4.2 Litigation; Government Regulation.......................................61
4.3 Taxes...................................................................61
4.4 Enforceability of Loan Documents; Compliance With Other
Instruments...........................................................61
4.5 Governmental Authorization..............................................62
4.6 Event of Default........................................................62
4.7 Margin Securities.......................................................62
4.8 Full Disclosure.........................................................63
4.9 Principal Places of Business............................................63
4.10 ERISA; Employee Benefits................................................63
4.11 Subsidiaries............................................................64
4.12 Financial Statements....................................................65
4.13 Title to Assets.........................................................65
4.14 Solvency................................................................65
4.15 Use of Proceeds.........................................................65
4.16 Assets for Conduct of Business..........................................65
4.17 Compliance With Laws....................................................66
4.18 Environmental Matters...................................................66
4.19 Projections.............................................................66
4.20 First Priority..........................................................67
4.21 Contracts; Labor Disputes...............................................67
4.22 Insurance...............................................................67
4.23 Reimbursement from Third Party Payors...................................67
4.24 Fraud and Abuse.........................................................67
4.25 Single Business Enterprise..............................................68
ARTICLE V
AFFIRMATIVE COVENANTS
5.1 Repayment of Obligations................................................68
5.2 Performance Under Loan Documents........................................69
5.3 Financial and Business Information about the Borrower...................69
5.4 Notice of Certain Events................................................71
5.5 Corporate Existence and Maintenance of Properties.......................71
5.6 Payment of Debt.........................................................72
5.7 Maintenance of Insurance................................................72
5.8 Inspection..............................................................73
5.9 COBRA...................................................................73
5.10 Payment of Taxes........................................................74
5.11 Compliance with Laws....................................................74
5.12 Name Change.............................................................74
5.13 Creation or Acquisition of New Subsidiaries.............................74
5.14 Disbursement of Proceeds By the Borrower................................75
5.15 Certain Acquisitions....................................................76
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5.16 Year 2000...............................................................77
ARTICLE VI
NEGATIVE COVENANTS
6.1 Merger, Consolidation...................................................78
6.2 Debt....................................................................78
6.3 Contingent Obligations..................................................79
6.4 Liens and Encumbrances..................................................79
6.5 Disposition of Assets...................................................79
6.6 Transactions with Related Persons.......................................80
6.7 Restricted Investments..................................................80
6.8 Restricted Payments.....................................................81
6.9 Capital Expenditures....................................................81
6.10 Consolidated Net Worth..................................................81
6.11 Foreign Subsidiary EBITDA...............................................81
6.12 Cash Available to Fixed Charges.........................................81
6.13 Cash Available to Debt Service Ratio....................................82
6.14 Consolidated Senior Debt to Annualized Cash Flow........................82
6.15 Consolidated Debt to Annualized Cash Flow...............................82
6.16 Consolidated Debt to Consolidated Total Capital.........................82
6.17 Sale and Leaseback......................................................82
6.18 New Business............................................................82
6.19 Subsidiaries or Partnerships............................................82
6.20 Transactions Affecting the Collateral...................................82
6.21 Hazardous Wastes........................................................83
6.22 Fiscal Year.............................................................83
6.23 Amendments; Prepayments of Debt, etc....................................83
6.24 Fraud and Abuse.........................................................83
6.25 Limitation on Certain Restrictions......................................84
6.26 No Other Negative Pledges...............................................84
6.27 Accounting Changes......................................................84
ARTICLE VII
EVENTS OF DEFAULT
7.1 Events of Default.......................................................85
ARTICLE VIII
RIGHTS AND REMEDIES AFTER EVENT OF DEFAULT
8.1 Remedies: Termination of Commitments, Acceleration, etc................88
8.2 Right of Set-off........................................................88
8.3 Rights and Remedies Cumulative; Non-Waiver; etc.........................89
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ARTICLE IX
THE AGENT
9.1 Appointment.............................................................89
9.2 Nature of Duties........................................................90
9.3 Absence of Reliance on the Agent........................................90
9.4 Certain Rights of the Agent.............................................91
9.5 Notice of Default.......................................................91
9.6 Reliance by Agent.......................................................92
9.7 Indemnification.........................................................92
9.8 The Agent in its Individual Capacity....................................93
9.9 Holders.................................................................93
9.10 Successor Agent.........................................................93
9.11 Collateral Matters......................................................94
ARTICLE X
MISCELLANEOUS
10.1 Survival.................................................................94
10.2 Governing Law; Consent to Jurisdiction...................................95
10.3 Arbitration; Remedies....................................................95
10.4 Notice...................................................................97
10.5 Assignments, Participations..............................................98
10.6 Fees and Expenses.......................................................102
10.7 Indemnification.........................................................103
10.8 Amendments, Waivers, Etc................................................103
10.9 Rights and Remedies Cumulative, Nonwaiver, etc..........................104
10.10 Binding Effect, Assignment............................................105
10.11 Severability..........................................................105
10.12 Entire Agreement......................................................105
10.13 Interpretation........................................................106
10.14 Counterparts, Effectiveness...........................................106
10.15 Conflict of Terms.....................................................106
10.16 Injunctive Relief.....................................................106
10.17 Confidentiality.......................................................106
10.18 Post-Closing Matters..................................................107
10.19 Acknowledgement.......................................................107
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EXHIBITS
Exhibit A Form of Revolving Credit/Term Note
Exhibit B-1 Form of Notice of Borrowing
Exhibit B-2 Form of Notice of Conversion/Continuation
Exhibit B-3 Form of Letter of Credit Request
Exhibit C Form of Compliance Certificate
Exhibit D Form of Assignment and Acceptance
SCHEDULES
Schedule 1.1(a) Existing Liens
Schedule 4.1 Foreign Jurisdictions; Names
Schedule 4.2 Litigation; Government Regulation
Schedule 4.3 Taxes
Schedule 4.4 Compliance with Other Agreements
Schedule 4.9 Principal Place of Business
Schedule 4.10 ERISA Matters
Schedule 4.11 Subsidiaries
Schedule 4.13 Title to Assets
Schedule 4.22 Insurance
Schedule 6.8 Restricted Payments
Schedule 6.17 Sale and Leaseback
ANNEXES
Annex A Revolving Credit/Term Commitment
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SIXTH AMENDED AND RESTATED
LOAN AGREEMENT
THIS SIXTH AMENDED AND RESTATED LOAN AGREEMENT, dated as of the 26th day of
September, 1997 (the "Loan Agreement" or "Agreement"), is made among RENAL
TREATMENT CENTERS, INC., a Delaware corporation (the "Borrower") with its
principal offices in Berwyn, Pennsylvania, the banks and other financial
institutions from time to time parties hereto (each, a "Lender," and
collectively, the "Lenders"), FIRST UNION NATIONAL BANK, as Agent (formerly
known as "First Union National Bank of North Carolina"; the "Agent"), CORESTATES
BANK, N.A., as Documentation Agent, and FLEET NATIONAL BANK, MELLON BANK, N.A.,
COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK, B.A., "RABOBANK NEDERLAND," NEW
YORK BRANCH, and CREDIT LYONNAIS NEW YORK BRANCH, as Co-agents.
Recitals
A. The Borrower, the Agent and certain of the Lenders have entered into
a Fifth Amended and Restated Loan Agreement, dated as of May 2, 1997, as amended
by a First Amendment thereto dated as of June 24, 1997. Pursuant to the Fifth
Amended and Restated Loan Agreement, the Lenders have extended a $200,000,000
revolving credit/term loan facility to the Borrower.
B. The Borrower has requested that the Lenders increase the revolving
credit/term loan facility to a principal amount of up to $350,000,000 and make
certain other amendments, and the Borrower, the Agent and the Lenders wish to
evidence this increase and other amendments by an amendment and restatement of
the Fifth Amended and Restated Loan Agreement.
C. The parties acknowledge that this Sixth Amended and Restated Loan
Agreement and each of the other Loan Documents (as hereinafter defined) have
been negotiated, executed and delivered in Charlotte, North Carolina.
D. The Lenders are willing to amend and restate the Fifth Amended and
Restated Loan Agreement and to make the Loans and issue certain Letters of
Credit described herein based on the terms and conditions set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrower, the Lenders and the
Agent hereby agree that, as of the Amendment Effective Date, the Fifth Amended
and Restated Loan Agreement shall be amended and restated in its entirety as
follows:
ARTICLE I
DEFINITIONS
1.1 Defined Terms. For purposes of this Loan Agreement, in addition to
the terms defined elsewhere in this Loan Agreement, the following terms shall
have the meanings set forth below:
"Account Designation Letter" shall mean a letter from the Borrower to the
Agent, duly completed and signed by an authorized officer and in such form and
substance satisfactory to the Agent, listing any one or more accounts to which
the Borrower may at any time and from time to time request the Agent to forward
proceeds of any Loan made hereunder.
"Accounts" shall mean all "accounts," within the meaning of the Uniform
Commercial Code, of the Borrower and its Subsidiaries, including, without
limitation, any existing and future Medicare, Medicaid and other similar
accounts receivable.
"Acquisition" shall mean any bona fide transaction or series of related
transactions, consummated on or after the date hereof, by which the Borrower or
any Subsidiary (i) acquires all or a substantial part of the assets, or a going
business or division, of any Person, whether through purchase of assets or
securities, merger or otherwise, or (ii) directly or indirectly acquires control
of at least a majority in voting power of the securities or other ownership
interests of any Person. For the purpose of this definition, "control" means
the possession, directly or indirectly, of the power to direct or cause the
direction of management and policies, whether through the ownership of voting
securities, by contract or otherwise.
"Acquisition Amount" shall mean, with respect to any Permitted Acquisition,
the sum (without duplication) of (i) the aggregate original principal amount of
all Revolving Credit/Term Loans the proceeds of which are utilized to finance
such Acquisition, in part or in whole, (ii) the amount of cash paid by the
Borrower and its Subsidiaries in connection with such Acquisition, (iii) the
Fair Market Value of all capital stock or other ownership interests of the
Borrower or any Subsidiary issued or given in connection with such Acquisition,
(iv) the amount (determined by using the face amount or the amount payable at
maturity, whichever is greater) of all Debt incurred, assumed or acquired in
connection with such Acquisition, (v) all additional purchase price amounts in
the form of earnouts and other contingent obligations that should be recorded on
the financial statements of the Borrower and its Subsidiaries in accordance with
Generally Accepted Accounting Principles, (vi) all amounts paid in respect of
covenants not to compete, consulting agreements and other affiliated contracts
in connection with such Acquisition and (vii) the aggregate fair
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market value of all other consideration given by the Borrower and its
Subsidiaries in connection with such Acquisition.
"Adjusted Base Rate" shall mean, at any time with respect to any Loan, a
rate per annum equal to the Base Rate plus the Applicable Margin for Base Rate
Loans, each as in effect at such time.
"Adjusted LIBOR Rate" shall mean, at any time with respect to any Loan, a
rate per annum equal to the LIBOR Rate plus the Applicable Margin for LIBOR
Loans, each as in effect at such time.
"Affiliate" shall mean, as to any Person, each of the Persons that directly
or indirectly, through one or more intermediaries, owns or controls, or is
controlled by or under common control with, such Person. Notwithstanding the
foregoing, with respect to the Borrower or any Subsidiary, the term "Affiliate"
shall not include First Union or any Affiliate of First Union. For the purpose
of this definition, "control" means the possession, directly or indirectly, of
the power to direct or cause the direction of management and policies, whether
through the ownership of voting securities, by contract or otherwise.
"Agent" shall mean First Union, in its capacity as appointed in Article IX
hereof, and its permitted successors and assigns.
"Agreement" or "this Agreement" or "Loan Agreement" shall mean this Sixth
Amended and Restated Loan Agreement and any amendments, modifications and
supplements hereto, any replacements, renewals, extensions and restatements
hereof, and any substitutes herefor, in whole or in part and all schedules and
exhibits hereto, and shall refer to this Agreement as the same may be in effect
at the time such reference becomes operative.
"Amendment Effective Date" shall mean the date on which all conditions set
forth in Section 3.2 have been satisfied or waived in accordance with the terms
of this Agreement.
"Annualized Cash Flow" shall mean, with respect to the Borrower and its
Subsidiaries (other than Foreign Subsidiaries) on a consolidated basis as of the
last day of any fiscal quarter, twice the aggregate of (i) Consolidated Net
Income for the two (2) immediately preceding fiscal quarters then ended, plus
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(ii) the sum of Interest Expense, taxes, depreciation, amortization and other
non-cash expenses or charges reducing income for such period (to the extent
taken into account in the calculation of Consolidated Net Income for such
period), minus (iii) non-cash credits increasing Consolidated Net Income for
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such period (to the extent taken into account in the calculation of Consolidated
Net Income for such period). Annualized Cash Flow shall be deemed to include,
without duplication, historical Annualized Cash Flow of any business (other than
a Foreign Subsidiary) acquired and
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operated by the Borrower or any Subsidiary after the commencement of the
relevant measurement period, as if such business had been acquired by the
Borrower or such Subsidiary as of the first day of such measurement period,
subject to pro forma expense adjustments as set forth below; provided that such
Annualized Cash Flow is supported by financial statements, tax returns or other
financial data acceptable to the Agent in its sole discretion. Calculations of
Annualized Cash Flow shall exclude the results of operations of any entity
disposed of by the Borrower or any Subsidiary at any time after the first day of
the relevant measurement period. Annualized Cash Flow shall be adjusted for pro
forma expense adjustments in connection with newly acquired entities, if and
only to the extent approved in writing by the Required Lenders.
"Applicable Margin" shall mean, at any time with respect to any Loan, the
applicable percentage points as determined under the following matrix with
reference to the ratio of Consolidated Debt to Annualized Cash Flow, including
Foreign Subsidiaries, calculated as provided below:
Ratio of Consolidated Debt
to Annualized Cash Flow Applicable Margin Applicable Margin
(including Foreign Subsidiaries) (LIBOR Rate) (Base Rate)
-------------------------------- ----------------- -----------------
Greater than or equal to
3.5 to 1.0 1.50% 0.00%
Greater than or equal to
3.0 to 1.0
but less than 3.5 to 1.0 1.25% 0.00%
Greater than or equal to
2.5 to 1.0
but less than 3.0 to 1.0 1.00% 0.00%
Greater than or equal to
2.0 to 1.0
but less than 2.5 to 1.0 0.875% 0.00%
Greater than or equal to
1.5 to 1.0
but less than 2.0 to 1.0 0.75% 0.00%
Greater than or equal to
1.0 to 1.0
but less than 1.5 to 1.0 0.60% 0.00%
Less than 1.0 to 1.0 0.50% 0.00%
The Applicable Margins shall be reset from time to time in accordance with the
above matrix on the fifth (5th) Business Day after receipt by the Agent in
accordance with Section 5.3 of financial statements together with a Compliance
Certificate attaching an Interest Rate Calculation Worksheet (reflecting the
computation of the ratio of Consolidated Debt to Annualized Cash Flow, including
Foreign Subsidiaries, as of the last day of the
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preceding fiscal quarter or fiscal year, as appropriate) that provides for
different Applicable Margins than those then in effect; and provided however
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that, notwithstanding the foregoing, if at any time the Borrower shall have
failed to deliver the financial statements and a Compliance Certificate as
required by Section 5.3(a), Section 5.3(b), Section 5.3(c) and Section 5.3(d)
(as the case may be), then at all times from and including the date on which
such statements and Compliance Certificate are required to have been delivered
to the date on which the same shall have been delivered, each Applicable Margin
shall be determined as if the ratio of Consolidated Debt to Annualized Cash Flow
(including Foreign Subsidiaries) were greater than or equal to 3.5 : 1.0
(notwithstanding the actual ratio).
"Assignment Agreement" shall mean the Assignment Agreement, dated as of
July 27, 1992, as amended by a First Amendment to Assignment Agreement, dated as
of February 8, 1993, and as further amended, whereby the Borrower has assigned
to RTC Holdings as an equity contribution all of its right, title and interest
in and to the Intercompany Loan Documents referenced therein, and any further
amendments, modifications and supplements thereto, any replace ments, renewals,
extensions and restatements thereof, and any substitutes therefor, in whole or
in part.
"Assignment and Acceptance" shall mean an Assignment and Acceptance
Agreement entered into between a Lender and an Eligible Assignee, and accepted
by the Agent, in substantially the form of Exhibit D.
"Assigned Rights" shall have the meaning assigned in Section 2.18.
"Assignment Restrictions" shall mean, with respect to any contracts or
agreements assigned to the Agent, on behalf of the Lenders, as Collateral by the
Borrower or any Subsidiary, any restriction or prohibition on assignment that
has not been waived or consented to by the Person for whose benefit such
restriction or prohibition exists with respect to which the Agent has waived the
requirement of such waiver or consent and with respect to Medicare and Medicaid
accounts receivable, assignment restrictions as provided in the Medicare
Regulations and the Medicaid Regulations.
"Bankruptcy Code" shall mean 11 U.S.C. (S) 101 et seq., as amended, and any
successor statute or statute having substantially the same function.
"Base Rate" shall mean the higher of (i) the per annum interest rate
publicly announced from time to time by First Union in Charlotte, North
Carolina, to be its prime or base rate (which may not necessarily be its best
lending rate), as adjusted to conform to changes as of the opening of business
on the date of any
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such change in such prime or base rate, or (ii) one-half percentage point (0.5%)
in excess of the Federal Funds Rate, as adjusted to conform to changes as of the
opening of business on the date of any such change in the Federal Funds Rate.
"Base Rate Loan" shall mean, at any time, any Loan that bears interest at
such time at the Adjusted Base Rate.
"Bloodborne Pathogens Standard" shall mean the Final Standard for
Occupational Exposure to Bloodborne Pathogens promulgated by OSHA at 56 Federal
Register 64004 et seq. (December 6, 1991) and codified at 29 C.F.R. (S)
1910.1030, or any similar regulation promulgated by any Governmental Authority.
"Borrower" shall mean Renal Treatment Centers, Inc., a Delaware
corporation, and its successors and assigns.
"Borrowing" shall mean the incurrence by the Borrower on a given date
(including as a result of conversions of outstanding Loans pursuant to Section
2.9) of one Type of Loan under a single Facility, provided that Base Rate Loans
incurred pursuant to Section 2.11(c) shall be considered part of the related
Borrowing of LIBOR Loans.
"Borrowing Date" shall have the meaning assigned to such term in Section
2.2(a).
"Business Day" shall mean (i) any day other than a Saturday or Sunday, a
legal holiday or a day on which commercial banks in Charlotte, North Carolina or
New York, New York are required by law to be closed and (ii) in respect of any
determination relevant to a LIBOR Loan, any such day that is also a day on which
tradings are conducted in the London interbank Eurodollar market.
"Capital Asset" shall mean any asset that would, in accordance with
Generally Accepted Accounting Principles, be required to be classified and
accounted for as a capital asset.
"Capital Expenditures" shall mean the aggregate amount of all expenditures
and liabilities (including, without limitation, Capital Lease Obligations) made
and incurred in respect of the acquisition by the Borrower or any Subsidiary of
Capital Assets.
"Capital Lease" shall mean any lease of any property that would, in
accordance with Generally Accepted Accounting Principles, be required to be
classified and accounted for as a capital lease on the balance sheet of the
lessee.
"Capital Lease Obligation" shall mean, with respect to any Capital Lease,
the amount of the obligation of the lessee thereunder that would, in accordance
with Generally Accepted
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Accounting Principles, appear on a balance sheet as a liability of such lessee
in respect of such Capital Lease, net of any government grant applicable to such
Capital Lease.
"Cash Available" shall mean, with respect to the Borrower and its
Subsidiaries (other than Foreign Subsidiaries) on a consolidated basis as of the
last day of any fiscal quarter, twice the aggregate of (i) Consolidated Net
Income for the two (2) immediately preceding fiscal quarters then ended, plus
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(ii) the sum of Interest Expense, Lease Expense, depreciation, amortization and
other non-cash expenses or charges reducing income for such period (to the
extent taken into account in the calculation of Consolidated Net Income for such
period), minus (iii) non-cash credits increasing income for such period (to the
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extent taken into account in the calculation of Consolidated Net Income for such
period).
"Cash Collateral Account" shall have the meaning assigned to such term in
Section 2.17(i).
"Cash Investments" shall mean (i) marketable direct obligations issued or
unconditionally guaranteed by the United States of America or issued by any
agency thereof and backed by the full faith and credit of the United States of
America, in each case maturing within one (1) year from the date of acquisition
thereof; (ii) marketable direct obligations issued by any state of the United
States of America or any political subdivision of any such state or any public
instrumentality thereof maturing within one (1) year from the date of
acquisition thereof and, at the time of acquisition, having the highest rating
obtainable from either Standard & Poor's Corporation or ▇▇▇▇▇'▇ Investors
Service, Inc.; (iii) marketable commercial paper maturing no more than one (1)
year from the date of creation thereof and, at the time of acquisition, having a
rating of at least A-1 or the equivalent thereof by Standard & Poor's
Corporation or at least P-1 or the equivalent thereof by ▇▇▇▇▇'▇ Investors
Service, Inc.; and (iv) demand deposits, time deposits and certificates of
deposit maturing within one (1) year from the date of issuance thereof and
issued by a bank or trust company organized under the laws of the United States
of America or any state thereof and having a long term debt rating by Standard &
Poor's Corporation of A or higher.
"Change of Control" shall mean (i) any Person or "group" (within the
meaning of Section 13(d)(3) of the Exchange Act), shall, directly or indirectly,
as a result of a tender or exchange offer, open market purchases, privately
negotiated purchases or otherwise have become, after the Amendment Effective
Date, the "beneficial owner" of securities of the Borrower representing 50% or
more of the combined voting power of the then outstanding securities of the
Borrower ordinarily (and apart from rights accruing under special circumstances)
having the right to vote in the election of directors, assuming the conversion,
exchange or
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exercise into or for voting stock of all outstanding shares so convertible, or
(ii) the members of the Board of Directors of the Borrower shall cease to
consist of a majority of the individuals (y) who constituted the Board of
Directors as of the date hereof or (z) who shall have become members thereof
subsequent to the date hereof after having been nominated, or otherwise approved
in writing, by at least a majority of individuals who constituted the Board of
Directors of the Borrower as of the date hereof. For purposes of this
definition, "voting power" shall be determined with reference to the then
outstanding securities of the Borrower ordinarily (and apart from rights
accruing under special circumstances) having the right to vote in the election
of directors, assuming the conversion, exchange or exercise into or for voting
stock of all outstanding securities of the Borrower other than voting stock.
"Collateral" shall mean and include all Stock or other equity interest and
Intercompany Loan Documents of each Subsidiary (other than RTC-Argentina S.A.,
RTC Buenos Aires, S.A. and RTC Cordoba S.A.), whether now owned or hereafter
acquired, from time to time pledged by the Borrower to the Agent, for the
benefit of the Lenders, pursuant to the Pledge Agreement or the Subsidiary
Pledge Agreement, in either case directly or indirectly securing the Obligations
or the obligations of any Guarantor under the Guaranty Agreement, and all other
property and interests in property that shall, from time to time, directly or
indirectly secure the Obligations or the obligations of any Guarantor under the
Guaranty Agreement.
"Commitment" shall mean, for any Lender, such Lender's Revolving
Credit/Term Commitment.
"Compliance Certificate" shall mean a fully completed certificate in the
form of Exhibit C.
"Consolidated Debt" shall mean, at any time, the aggregate (without
duplication) of all Debt of the Borrower and its Subsidiaries as of such date,
determined on a consolidated basis.
"Consolidated Net Assets" shall mean, as of the last day of any fiscal
year, the aggregate (without duplication) of all assets of the Borrower and its
Subsidiaries that are required to be included in determining, in accordance with
Generally Accepted Accounting Principles, total assets as shown on the asset
side of their consolidated balance sheet as of such date.
"Consolidated Net Income" shall mean, for any fiscal quarter, the net
income (or loss) of the Borrower and its Subsidiaries (other than Foreign
Subsidiaries), on a consolidated basis and excluding intercompany items, for
such quarter, determined in accordance with Generally Accepted Accounting
Principles, but excluding as income: (a) gains on the sale, conversion or other
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disposition of Capital Assets, (b) gains on the acquisition, retirement, sale or
other disposition of Stock of the Borrower or any Subsidiary, (c) gains on the
collection of life insurance proceeds, (d) any write-up of any asset, and (e)
any other gain or credit of an extraordinary nature. For purposes of
calculating the financial covenants contained in this Agreement, the Borrower
may exclude, without duplication, up to $6,000,000 of Excludable Acquisition
Expenses, including tax benefits related thereto, per fiscal year.
"Consolidated Net Revenue" shall mean, for the applicable period, net
revenue of the Borrower and its Subsidiaries (other than Foreign Subsidiaries),
on a consolidated basis, calculated in accordance with Generally Accepted
Accounting Principles.
"Consolidated Net Worth" shall mean, as of the last day of any fiscal
quarter, the net worth of the Borrower and its Subsidiaries (other than Foreign
Subsidiaries) as of such date, determined on a consolidated basis in accordance
with Generally Accepted Accounting Principles.
"Consolidated Senior Debt" shall mean, at any time, Consolidated Debt as of
such date less Consolidated Subordinated Debt as of such date.
----
"Consolidated Subordinated Debt" shall mean, at any time, the aggregate
(without duplication) of all Subordinated Debt of the Borrower and its
Subsidiaries as of such date, determined on a consolidated basis.
"Consolidated Total Capital" shall mean, with respect to the Borrower and
its Subsidiaries (other than Foreign Subsidiaries), the sum of Consolidated Net
Worth and Consolidated Debt.
"Contingent Obligation" shall mean, with respect to any Person, any direct
or indirect liability of such Person with respect to any Debt, lease, dividend,
guaranty, letter of credit or other obligation (the "primary obligation") of
another Person (the "primary obligor"), whether or not contingent, (a) to
purchase, repurchase or otherwise acquire such primary obligations or any
property constituting direct or indirect security therefor, (b) to advance or
provide funds (i) for the payment or discharge of any such primary obligation or
(ii) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency or any balance sheet item, level
of income or financial condition of the primary obligor, (c) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor in respect
thereof to make payment of such primary obligation or (d) otherwise to assure or
hold harmless the owner of any such primary obligation against loss or failure
or inability to perform in respect thereof. The amount of any
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Contingent Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof as determined by such Person
in good faith.
"Convertible Notes" shall mean the notes issued pursuant to the Indenture.
"Covenant Compliance Worksheet" shall mean a fully completed certificate in
the form of Attachment A to Exhibit C.
"Debt" shall mean, with respect to any Person, (i) all indebtedness of such
Person for money borrowed, (ii) all reimbursement obligations of such Person
with respect to surety bonds, letters of credit and bankers' acceptances (in
each case, whether or not matured), (iii) all obligations of such Person
evidenced by notes, bonds, debentures or similar instruments, (iv) all
obligations of such Person to pay the deferred purchase price of property or
services (including earnouts and other similar contingent obligations,
calculated in accordance with Generally Accepted Accounting Principles), other
than trade payables, (v) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property), (vi) all Capital Lease Obligations of such Person,
(vii) all obligations of such Person to purchase, redeem, retire, defease or
otherwise make any payment in respect of any capital stock or other equity
securities that, by their stated terms (or by the terms of any equity securities
issuable upon conversion thereof or in exchange therefor), or upon the
occurrence of any event, mature or are mandatorily redeemable, or are redeemable
at the option of the holder thereof, in whole or in part, (viii) all
indebtedness referred to in clauses (i) through (vii) above secured by any lien
on any property or asset owned or held by such Person regardless of whether the
indebtedness secured thereby shall have been assumed by such Person or is
nonrecourse to the credit of such Person, and (ix) any Contingent Obligation of
such Person.
"Debt Service" shall mean, with respect to the Borrower and its
Subsidiaries (other than Foreign Subsidiaries) on a consolidated basis as of the
last day of any fiscal quarter, the sum of Fixed Charges for such period plus
----
current maturities (due within twelve (12) months) of all Debt of the Borrower
and its Subsidiaries.
"Default" shall mean any event that, with the passage of time or giving of
notice, or both, would constitute an Event of Default.
-10-
"Dollars" or "$" shall mean dollars of the United States of America.
"Domestic Subsidiary" shall mean any subsidiary that is not a Foreign
Subsidiary.
"Eligible Assignee" shall mean (i) a commercial bank organized under the
laws of the United States or any state thereof and having total assets in excess
of $5,000,000,000, (ii) a commercial bank organized under the laws of any other
country that is a member of the OECD or a political subdivision of any such
country and having total assets in excess of $5,000,000,000, provided that such
bank is acting through a branch or agency located in the United States, in the
country under the laws of which it is organized or in another country that is
also a member of the OECD, (iii) the central bank of any country that is a
member of the OECD, (iv) a finance company, mutual funds, insurance company or
other financial institution that is engaged in making, purchasing or otherwise
investing in commercial loans in the ordinary course of its business and having
total assets in excess of $3,000,000,000, (v) any Affiliate of an existing
Lender or (vi) any other Person (other than an Affiliate of the Borrower)
approved by the Agent and the Borrower, which approval shall not be unreasonably
withheld.
"Employee Plan" shall mean any "employee benefit plan" within the meaning
of Section 3(3) of ERISA maintained by the Borrower or any Subsidiary.
"Environmental Claims" shall mean any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigations (other than internal reports prepared
by the Borrower or any Subsidiary solely in the ordinary course of its business
and not in response to any third party action or request of any kind) or
proceedings relating in any way to any Environmental Law or any permit issued,
or any approval given, under any such Environmental Law (hereinafter, "Claims"),
including, without limitation, (i) any and all Claims by Governmental
Authorities for enforcement, cleanup, removal, response, remedial or other
actions or damages pursuant to any applicable Environmental Law and (ii) any and
all Claims by any third party seeking damages, contribution, indemnification,
cost recovery, compensation or injunctive relief resulting from Hazardous
Substances or arising from alleged injury or threat of injury to health or the
environment.
"Environmental Laws" shall mean any and all laws, subsequent enactments,
amendments and modifications, including, without limitation, federal, state and
local laws, statutes, ordinances, rules, regulations, permits, licenses,
approvals, interpretations and orders of courts or Governmental Authorities,
relating to the
-11-
protection of human health or the environment, including, but not limited to,
requirements pertaining to the manufacture, processing, distribution, use,
treatment, storage, disposal, transportation, handling, reporting, licensing,
permitting, investigation or remediation of Hazardous Substances. Environmental
Laws include, without limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. (S)9601 et seq.) ("CERCLA"), the
Hazardous Material Transportation Act (49 U.S.C. (S)1801 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. (S)6901 et seq.) ("RCRA"), the Federal
Water Pollution Control Act (33 U.S.C. (S)1251 et seq.), the Clean Air Act (42
U.S.C. (S)7401 et seq.), the Toxic Substances Control Act (15 U.S.C. (S)2601 et
seq.), the Safe Drinking Water Act (42 U.S.C. (S)300, et seq.), the
Environmental Protection Agency's regulations relating to underground storage
tanks (40 C.F.R. Parts 280 and 281), and the Occupational Safety and Health Act
(29 U.S.C. (S)651 et seq.) ("OSHA"), as such laws have been amended or
supplemented and any analogous future federal, or present or future applicable
state or local, statutes and the rules and regulations promulgated thereunder.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and all rules and regulations from time to time
promulgated thereunder.
"ERISA Event" means (a) a Reportable Event with respect to a Qualified Plan
(as defined in Section 4.10); (b) a withdrawal by any Borrower Affiliate from a
Qualified Plan subject to Section 4063 of ERISA during a plan year in which it
was a substantial employer (as defined in Section 4001(a)(2) of ERISA); (c) a
complete or partial withdrawal by any Borrower Affiliate from a Multiemployer
Plan; (d) the filing of a notice of intent to terminate, the treatment of a plan
amendment as a termination under Section 4041 or 4041A of ERISA or the
commencement of proceedings by the Pension Benefit Guaranty Corporation to
terminate a Qualified Plan or Multiemployer Plan subject to Title IV of ERISA;
(e) a failure to make required contributions to a Qualified Plan or
Multiemployer Plan; (f) an event or condition which might reasonably be expected
to constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Qualified Plan or Multiemployer
Plan; (g) the imposition of any liability under Title IV of ERISA, other than
Pension Benefit Guaranty Corporation premiums due but not delinquent under
Section 4007 of ERISA, upon any Borrower Affiliate; (h) an application for a
funding waiver or an extension of any amortization period pursuant to Section
412 of the Internal Revenue Code with respect to any Qualified Plan; (i) any
Borrower Affiliate engages in or otherwise becomes liable for a non-exempt
prohibited transaction; or (j) a violation of the applicable requirements of
Section 404 or 405 of ERISA or the exclusive benefit rule under Section 401(a)
of the Internal Revenue Code by
-12-
any fiduciary with respect to any Qualified Plan for which any Borrower
Affiliate may be directly or indirectly liable.
"Event of Default" shall have the meaning specified in Article VII hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended
from time to time, and all rules and regulations from time to time promulgated
thereunder.
"Excludable Acquisition Expenses" shall mean fees, costs and expenses
actually incurred by the Borrower and its Subsidiaries in connection with
Acquisitions permitted hereunder that are accounted for under Generally Accepted
Accounting Principles Board Opinion #16 as poolings of interest.
"Existing Loans" shall have the meaning assigned to such term in Section
2.1(a).
"Facility" shall mean the Revolving Credit/Term Facility.
"Fair Market Value" shall mean, with respect to any capital stock or other
ownership interests issued or given by the Borrower or any Subsidiary in
connection with a Permitted Acquisition, (i) in the case of common stock of the
Borrower that is then designated as a national market system security by the
National Association of Securities Dealers, Inc. ("NASDAQ") or is listed on a
national securities exchange, the average of the last reported bid and ask
quotations or prices reported thereon for such common stock or (ii) in all other
cases, the determination of the fair market value thereof in good faith by a
majority of disinterested members of the board of directors of the Borrower or
such Subsidiary, in each case effective as of the close of business on the
Business Day immediately preceding the closing date of such Permitted
Acquisition.
"Federal Funds Rate" shall mean, for any day, the interest rate per annum
equal to the weighted average of the rates of overnight federal funds
transactions with members of the Federal Reserve System arranged by federal
funds brokers, as published for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal Reserve Bank of New York, or
if such rate is not so published on the relevant Business Day, the average of
the quotations for such day on such transactions received by the Agent from
three (3) federal funds brokers of recognized standing selected by the Agent.
"Fee Letter" shall mean the letter, dated September 2, 1997, as amended,
from First Union to the Borrower, relating to the agent's fee payable to the
Agent for its own account.
-13-
"Financials" or "Financial Statements" shall mean the audited consolidated
financial statements of the Borrower and its Subsidiaries for the fiscal years
ended December 31, 1996, December 31, 1995, December 31, 1994, December 31,
1993, December 31, 1992 and December 31, 1991; and all other financial
statements of the Borrower and its Subsidiaries that have previously been
delivered by the Borrower or any Subsidiary to the Agent or any Lender,
including, without limitation, interim financial statements.
"First Union" shall mean First Union National Bank (formerly known as
"First Union National Bank of North Carolina"), a national banking association,
and its successors and assigns.
"Fixed Charges" shall mean at any time, with respect to the Borrower and
its Subsidiaries (other than the Foreign Subsidiaries) on a consolidated basis
as of the last day of any fiscal quarter, twice the sum of Interest Expense and
Lease Expense for the two (2) immediately preceding fiscal quarters.
"Foreign Acquisition" shall mean (i) any Acquisition in which a substantial
part of the assets or business being acquired is located outside of the United
States of America or (ii) the Acquisition of any Foreign Subsidiary.
"Foreign Subsidiary" shall mean a Subsidiary that is organized under or
operates under the laws of, or is headquartered or maintains a significant
portion of its assets in, any jurisdiction located outside the United States of
America.
"Foreign Subsidiary EBITDA" shall mean, for any applicable period, the
aggregate of (i) the net income (or loss) of the Foreign Subsidiaries, on a
consolidated basis for such period, but excluding from income: (a) gains on the
sale, conversion or other disposition of Capital Assets of the Foreign
Subsidiaries, (b) gains on the acquisition, retirement, sale or other
disposition of Stock of the Foreign Subsidiaries, (c) gains on the collection of
life insurance proceeds, (d) any write-up of any assets, and (e) any other gain
or credit of an extraordinary nature, plus (ii) consolidated interest expense,
----
foreign, federal, state, local and other income taxes, depreciation,
amortization of intangible assets, and other non-cash expenses or charges
reducing income for such period of the Foreign Subsidiaries, all to the extent
taken into account in the calculation of consolidated net income of the Foreign
Subsidiaries for such period, minus (iii) non-cash credits increasing
-----
consolidated net income of the Foreign Subsidiaries for such period, to the
extent taken into account in the calculation of consolidated net income of the
Foreign Subsidiaries for such period, all calculated in accordance with
Generally Accepted Accounting Principles.
-14-
"Generally Accepted Accounting Principles" shall mean generally accepted
accounting principles, as recognized by the American Institute of Certified
Public Accountants, consistently applied and maintained on a consistent basis
for the Borrower and its Subsidiaries on a consolidated basis throughout the
period indicated and consistent with the financial practice of the Borrower and
its Subsidiaries after the date hereof.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof and any central bank thereof, any municipal,
local, city or county government, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"Guarantors" shall mean, as of the Amendment Effective Date, RTC Supply,
Renal-Lab, Renal-California, Renal-Hawaii, Renal-Illinois, Renal-Management
Acquisition, Renal-Mid-Atlantic, Renal-Northeast, Renal-Southeast, Renal-West,
RTC Texas, RTC Argentina, RTC Buenos Aires, RTC Cordoba, Southwest Dialysis and
any other Person that jointly and severally guarantees the Obligations of the
Borrower and the other Guarantors.
"Guaranty Agreement" shall mean the Fifth Amended and Restated Guaranty
Agreement, dated as of the date hereof, executed by each Guarantor in favor of
the Agent, whereby each Guarantor has guaranteed to the Lenders the payment and
performance of the Obligations and the obligations of each of the other
Guarantors under the Guaranty Agreement, and all other similar agreements
executed and delivered from time to time by any Guarantor in form and substance
satisfactory to the Lenders, together with any amendments, modifications,
consents and supplements thereto, any replacements, renewals, extensions,
acknowledgements and restatements thereof, and any substitutes therefor, in
whole or in part.
"Guaranty Documents" shall mean the Guaranty Agreement and the Subsidiary
Pledge Agreement and any other documents or agreements between the Agent and any
of the Guarantors, whereby certain Guarantors have pledged Collateral to the
Agent, together with any amendments, modifications and supplements thereto, any
replacements, renewals, extensions, acknowledgements, confirmations and
restatements thereof, and any substitutes therefor, in whole or in part.
"HCFA" shall mean the United States Health Care Financing Administration
and any successor agency.
"Hazardous Substances" means any substances or materials (i) that are or
become defined as hazardous wastes, hazardous substances, pollutants,
contaminants or toxic substances under any
-15-
Environmental Law; (ii) that are toxic, explosive, corrosive, flammable,
infectious, radioactive, mutagenic or otherwise hazardous and are or become
regulated by any Governmental Authority; (iii) the presence of which require
investigation or remediation under any Environmental Law or common law; (iv)
that are deemed to constitute a nuisance, a trespass or pose a health or safety
hazard to persons or neighboring properties; (v) materials consisting of
underground or aboveground storage tanks, whether empty, filled or partially
filled with any substance; or (vi) that contain, without limitation, asbestos,
polychlorinated biphenyls, urea formaldehyde foam insulation, petroleum
hydrocarbons, petroleum derived substances or waste, crude oil, nuclear fuel,
natural gas or synthetic gas.
"Hedge Agreement" shall mean any interest or foreign currency rate swap,
cap, collar, option, hedge, forward rate or other similar agreement or
arrangement designed to protect against fluctuations in interest rates or
currency exchange rates.
"IRS" shall mean the Internal Revenue Service and any successor thereto.
"Indemnified Costs" shall have the meaning assigned to such term in Section
10.7.
"Indemnified Person" shall have the meaning assigned to such term in
Section 10.7.
"Indenture" means the Indenture, dated June 12, 1996, between the Borrower
and PNC Bank, National Association, as Trustee, pursuant to which the Borrower
has issued certain convertible subordinated notes due 2006, as amended,
restated, modified or supplemented from time to time.
"Intercompany Loan Documents" shall mean the intercompany notes issued from
time to time by any Subsidiary to the Borrower and contributed by the Borrower
to RTC Holdings as an equity contribution pursuant to the Assignment Agreement,
together with any amendments, modifications and supplements thereto, any
replacements, renewals, extensions and restatements thereof, and any substitutes
therefor, in whole or in part.
"Interest Expense" shall mean, for any period, total interest expense of
the Borrower and its Subsidiaries on a consolidated basis for such period
(including, without limitation, interest expense attributable to Capital Lease
Obligations), determined in accordance with Generally Accepted Accounting
Principles.
"Interest Period" shall have the meaning assigned in Section 2.8.
-16-
"Interest Rate Calculation Worksheet" shall mean a fully completed
worksheet in the form of Attachment B to Exhibit C.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"Issuing Bank" shall mean First Union, in its capacity as issuer of the
Letters of Credit, and its successors and assigns in such capacity.
"L/C Participant" shall have the meaning assigned to such term in Section
2.17(c).
"LIBOR Loan" shall mean, at any time, any Loan that bears interest at such
time at the Adjusted LIBOR Rate.
"LIBOR Rate" shall mean, with respect to each LIBOR Loan comprising part of
the same Borrowing for any Interest Period, an interest rate per annum obtained
by dividing (i) (y) the rate of interest appearing on telerate page 3750 (or any
successor page or (z) if no such rate is available, the rate of interest
determined by the Agent to be the rate or the arithmetic mean of rates (rounded
upward, if necessary, to the nearest 1/16 of one percentage point) at which
Dollar deposits in immediately available funds are offered by first-tier banks
in the London interbank Eurodollar market to the Charlotte offices of First
Union, in each case under (y) and (z) above at approximately 10:00 a.m.,
Charlotte time, two (2) Business Days prior to the first day of such Interest
Period for a period equal to such Interest Period and in an amount substantially
equal to the amount of the Agent's LIBOR Loan in connection with such Borrowing,
by (ii) the amount equal to 1.00 minus the Reserve Requirement (expressed as a
decimal) for such Interest Period.
"Lease Expense" shall mean, for any period, all amounts paid, payable or
accrued during such period by the Borrower and its Subsidiaries on a
consolidated basis with respect to all leases of real and personal property,
excluding intercompany items.
"Lender" shall mean each financial institution signatory hereto and each
other financial institution that becomes a "Lender" hereto pursuant to Section
10.5, and their permitted successors and assigns.
"Lending Office" shall mean, with respect to any Lender, the branch or
branches (or Affiliates) from which any of such Lender's Loans are made or
maintained.
"Letter of Credit Outstandings" shall mean, at any time, the sum of (i) the
aggregate Stated Amount of all outstanding Letters of Credit at such time and
(ii) the aggregate amount of all Reimbursement Obligations at such time.
-17-
"Letter of Credit Request" shall have the meaning assigned to such term in
Section 2.17(b).
"Letters of Credit" shall have the meaning assigned to such term in Section
2.17(a).
"Loan Documents" shall mean and collectively refer to this Agreement, the
Revolving Credit/Term Notes, the Pledge Agreement, the Subsidiary Pledge
Agreement, the Guaranty Documents, the Intercompany Loan Documents, the
Assignment Agreement, the Letters of Credit, any Hedge Agreement to which the
Borrower and any Lender are parties and that is permitted hereunder, and any and
all agreements, instruments and documents, including, without limitation, notes,
guaranties, mortgages, deeds to secure debt, deeds of trust, chattel mortgages,
pledges, powers of attorney, consents, assignments, contracts, notices, security
agreements, trust account agreements and all other written matters whether
heretofore, now or hereafter executed by or on behalf of the Borrower or any
Subsidiary or delivered to the Agent or any Lender, with respect to this
Agreement or with respect to the transactions contemplated by this Agreement,
and in each case, together with any amendments, modifications and supplements
thereto, any replacements, renewals, extensions and restatements thereof, and
any substitutes therefor, in whole or in part.
"Loans" shall mean and collectively refer to the Revolving Credit/Term
Loans.
"Material Adverse Effect" or "Material Adverse Change" shall mean, in the
good faith opinion of the Required Lenders, a material adverse effect upon, or a
material adverse change in, any of (a) the financial condition, operations,
business, or properties of the Borrower and its Subsidiaries, taken as a whole;
(b) the ability of the Borrower or any Subsidiary to perform under any Loan
Document or any other material contract to which it is a party; (c) the
legality, validity or enforceability of any Loan Document; (d) the perfection or
priority of the liens of the Agent granted under the Loan Documents or the
rights and remedies of the Agent or the Lenders under the Loan Documents; or (e)
the condition or value of any material portion of the Collateral.
"Medicaid Certification" shall mean, with respect to any health care
facility, certification by HCFA or another Governmental Authority, or any Person
under contract with HCFA, that such health care facility is in compliance with
all conditions of participation set forth in the Medicaid Regulations, except
where the failure to so comply would not have a Material Adverse Effect.
"Medicaid Provider Agreement" shall mean an agreement entered into between
any Person administering the Medicaid program and a health care facility under
which the health care facility agrees to
-18-
provide services for Medicaid patients in accordance with the terms of the
agreement and Medicaid Regulations.
"Medicaid Regulations" shall mean, collectively, (i) all federal statutes
(whether set forth in Title XIX of the Social Security Act, 42 USC (S)(S) 1396
et seq., or elsewhere) affecting the medical assistance program established by
Title XIX of the Social Security Act, and any statutes succeeding thereto; (ii)
all applicable provisions of all federal rules, regulations, manuals and orders
of all Governmental Authorities promulgated pursuant to or in connection with
the statutes described in clause (i) above and all federal administrative,
reimbursement and other guidelines of all Governmental Authorities having the
force of law promulgated pursuant to or in connection with the statutes
described in clause (i) above; (iii) all state statutes and plans for medical
assistance enacted in connection with the statutes and provisions described in
clauses (i) and (ii) above; and (iv) all applicable provisions of all rules,
regulations, manuals and orders of all Governmental Authorities promulgated
pursuant to or in connection with the statutes described in clause (iii) above
and all state administrative, reimbursement and other guidelines of all
Governmental Authorities having the force of law promulgated pursuant to or in
connection with the statutes described in clause (iii) above, in each case as
may be amended, supplemented or otherwise modified from time to time.
"Medicare Certification" shall mean, with respect to any health care
facility, certification by HCFA or any other Governmental Authority, or any
Person under contract with HCFA, that such health care facility is in compliance
with all the conditions of participation set forth in the Medicare Regulations,
except where the failure to so comply would not have a Material Adverse Effect.
"Medicare Provider Agreement" shall mean an agreement entered into between
any Person administering the Medicare program and a health care facility under
which the health care facility agrees to provide services for Medicare patients
in accordance with the terms of the agreement and Medicare Regulations.
"Medicare Regulations" shall mean, collectively, all federal statutes
(whether set forth in Title XVIII of the Social Security Act, 42 USC (S)(S) 1396
et seq., or elsewhere) affecting the health insurance program for the aged and
disabled established by Title XVIII of the Social Security Act and any statutes
succeeding thereto; together with all applicable provisions of all rules,
regulations, manuals and orders and administrative, reimbursement and other
guidelines having the force of law of all Governmental Authorities (including,
without limitation, Health and Human Services ("HHS"), HCFA, the Office of the
Inspector General for HHS, or any Person succeeding to the functions of any of
the
-19-
foregoing) promulgated pursuant to or in connection with any of the foregoing
having the force of law, in each case as may be amended, supplemented or
otherwise modified from time to time.
"Mellon" shall mean Mellon Bank, N.A., a national banking association, and
its successors and assigns.
"Multiemployer Plan" shall mean any "multiemployer plan" within the meaning
of Section 4001(a)(3) of ERISA to which any Borrower or any Subsidiary is
required to make contributions.
"Notice of Borrowing" shall have the meaning assigned to such term in
Section 2.2(a).
"Notice of Conversion/Continuation" shall have the meaning assigned to such
term in Section 2.9(b).
"Notification and Consent Agreement" shall mean the Notification and
Consent Agreement, dated as of September 30, 1992, as amended, among RTC
Holdings, Mellon and the Agent, whereby Mellon has agreed to hold the
Intercompany Loan Documents on behalf and as bailee of the Agent, for the
benefit of the Lenders, in order to perfect the Lenders' security interest
therein, together with any amendments, modifications and supplements thereto,
any replacements, renewals, extensions and restatements thereof, and any
substitutes therefor, in whole or in part.
"OECD" shall mean the Organization for Economic Cooperation and Development
and any successor thereto.
"OSHA" shall mean the Occupational Safety and Health Act, as amended from
time to time, and all rules and regulations from time to time promulgated
thereunder.
"Obligations" shall mean and include (i) the Loans, any Reimbursement
Obligations and all other loans, advances, indebtedness, liabilities,
obligations, covenants and duties owing, arising, due or payable from the
Borrower to the Agent, the Issuing Bank or any Lender of any kind or nature,
present or future, howsoever evidenced, created, incurred, acquired or owing,
arising under this Agreement, the Revolving Credit/Term Notes or the other Loan
Documents or in any other way related to this Agreement, whether direct or
indirect (including those acquired by assignment), absolute or contingent,
primary or secondary, due or to become due, now existing or hereafter arising
and however acquired, and (ii) all interest (including, to the extent permitted
by law, all post-petition interest), charges, expenses, fees, attorneys' fees
and any other sums payable by the Borrower to the Agent, the Issuing Bank or any
Lender under this Agreement or any of the other Loan Documents.
-20-
"Participant" shall mean any Person, now or at any time hereafter,
participating with any Lender in the Loans pursuant to this Agreement, and its
permitted successors and assigns.
"Pension Plan" shall mean any "employee pension benefit plan" within the
meaning of Section 3(2) of ERISA maintained by the Borrower or any Subsidiary
(other than any Multiemployer Plan that is subject to the provisions of Title IV
of ERISA).
"Percentage" shall mean, with respect to any Lender at any time, such
Lender's Revolving Credit/Term Percentage at such time.
"Permitted Acquisition" shall mean an Acquisition with respect to which the
following conditions are satisfied:
(i) The Person, or division or business thereof, being acquired engages
chiefly in the business of providing kidney dialysis services and
ancillary services relating to the needs of patients with end stage
renal disease, including, without limitation, laboratories
predominately performing dialysis related functions;
(ii) To the extent that any Subsidiaries are created or acquired in
connection with the Acquisition, the Borrower and each such
Subsidiary shall have complied with the provisions of Section 5.13;
(iii) The Borrower and each Subsidiary shall have executed and
delivered such other Loan Documents as the Agent or the Required
Lenders shall have reasonably requested;
(iv) Any borrowing in connection with a Permitted Acquisition must be in
compliance with Section 2.2(a)(i)-(vi) hereof; and
(v) Immediately prior to and after giving effect to the Acquisition, no
Default or Event of Default shall have occurred and be continuing.
"Permitted Liens" shall mean any of the following liens, restrictions or
encumbrances securing any liability or indebtedness of the Borrower or any
Subsidiary on, or otherwise affecting, any of the Borrower's or such
Subsidiary's property, real or personal, whether now owned or hereafter
acquired; provided that, in addition to and notwithstanding the other
restrictions set forth in this definition, any lien or other restriction
described in this definition (other than liens described in clause (a) or (b))
shall be a Permitted Lien only if the sum of (i) the principal amount of Debt of
the Borrower and its Subsidiaries secured by such lien or restriction, (ii) the
aggregate principal amount of all Debt of the Borrower and its Subsidiaries
secured by all other liens or
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restrictions described in this definition (other than liens or restrictions
described in clause (a) or (b)), and (iii) the aggregate amount of all other
secured Debt of the Borrower and its Subsidiaries permitted hereunder only by
Section 6.2(vi), does not exceed $4,000,000.
(a) Liens granted to the Agent, for the benefit of the Lenders;
(b) Liens imposed by mandatory provisions of law of carriers,
warehousemen, mechanics, repairmen and materialmen and other like liens required
by provisions of law and incurred in the ordinary course of business for sums
not yet due and payable (or with respect to any obligation not greater than
$200,000, not more than sixty (60) days past the date of service) or that are
being contested in good faith and with due diligence by appropriate proceedings;
(c) Liens incurred in the ordinary course of business in connection with
worker's compensation, unemployment insurance or other forms of governmental
insurance or benefits, or liens arising from good faith deposits in connection
with letters of credit, bids, tenders, statutory obligations, leases and
contracts (other than for borrowed money) entered into in the ordinary course of
business, or to secure obligations on surety or appeal bonds provided that all
such liens in the aggregate have no Material Adverse Effect;
(d) Liens for current taxes, assessments or other governmental charges
that are not delinquent or remain payable without any penalty or that are being
contested in good faith and with due diligence by appropriate proceedings,
provided that all such liens in the aggregate have no Material Adverse Effect
and, if reasonably requested by the Agent, the Borrower or such Subsidiary has
established reserves reasonably satisfactory to the Agent with respect thereto;
(e) Liens upon property leased under a Capital Lease and placed upon such
property at the time of, or within ten (10) days after, the commencement of the
lease thereof to secure the lease payments under such Capital Lease, provided
that any such lien (i) shall not encumber any other property of the Borrower or
any Subsidiary, (ii) shall not exceed the total of such lease payments and (iii)
shall not be pursuant to a lease that is for a term of less than thirty-six (36)
months;
(f) Liens set forth on Schedule 1.1(a) attached hereto, provided that such
liens are not renewed, extended or increased;
(g) Purchase money liens incurred in the purchase of equipment permitted
under Section 6.9 hereof, provided that any such
-22-
lien (i) attaches to such asset concurrently with or within ten (10) days after
the acquisition thereof, (ii) shall not encumber any other property of the
Borrower or any Subsidiary and (iii) shall not exceed the purchase price of such
asset;
(h) Assignment Restrictions;
(i) Easements, rights of way, zoning restrictions and other similar
encumbrances on real estate that do not materially impair the value of the
property to which they relate; and
(j) Any other liens or encumbrances as the Required Lenders may approve in
writing from time to time.
"Person" shall mean a corporation, an association, a joint venture, a
partnership, an organization, a business, an individual, a trust or a government
or political subdivision thereof or any government agency or any other legal
entity.
"Pledge Agreement" shall mean the Fourth Amended and Restated Pledge
Agreement, dated as of the date hereof, between the Borrower and the Agent, as
amended, whereby the Borrower has pledged all of the Stock of its Subsidiaries
and the Intercompany Loan Documents to the Agent as Collateral for the
Obligations, together with any amendments, modifications and supplements
thereto, any replacements, renewals, extensions and restatements thereof, and
any substitutes therefor, in whole or in part.
"Prime Rate" shall mean the per annum interest rate publicly announced from
time to time by First Union from its principal office in Charlotte, North
Carolina, to be its Prime Rate, which may not necessarily be its best lending
rate, as adjusted to conform to changes as of the opening of business on the
date of any such change in the Prime Rate. In the event First Union shall
abolish or abandon the practice of announcing its Prime Rate or should the same
be unascertainable, the Agent shall designate a comparable reference rate that,
upon the Borrower's consent (which shall not be unreasonably withheld), shall be
deemed to be the Prime Rate under this Loan Agreement and the other Loan
Documents.
"Prohibited Transaction" shall mean any transaction described in (i)
Section 406 of ERISA that is not exempt by reason of Section 408 of ERISA or
(ii) Section 4975(c) of the Internal Revenue Code that is not exempt by reason
of Section 4975(c) or 4975(d).
"Projections" shall mean the financial projections delivered to the Agent
by the Borrower pursuant to Section 4.19 hereof.
"Pro Rata Share" of any amount shall mean, with respect to any Lender at
any time, the product of (i) such amount, multiplied by (ii) such Lender's
---------- --
Percentage at such time under the Facility or
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Facilities under which such amount is being paid or advanced or to which such
amount relates.
"Purchasing Lender" shall have the meaning assigned to such term in Section
2.18.
"RTC Argentina" shall mean RTC Argentina S.A., a company organized under
the laws of the Republic of Argentina, and its successors or assigns.
"RTC Buenos Aires" shall mean RTC Buenos Aires S.A., a company organized
under the laws of the Republic of Argentina, and its successors and assigns.
"RTC Cordoba" shall mean RTC Cordoba S.A., a company organized under the
laws of the Republic of Argentina, and its successors and assigns.
"RTC Holdings" shall mean RTC Holdings, Inc., a Delaware corporation, and
its successors and assigns.
"RTC Holdings International" shall mean RTC Holdings International, Inc., a
Delaware corporation, and its successors and assigns.
"RTC Supply" shall mean RTC Supply, Inc., a Delaware corporation, and its
successors and assigns.
"RTC TN" shall mean RTC TN, Inc., a Delaware corporation and its successors
and assigns.
"RTC Texas" shall mean RTC - Texas Acquisition, Inc., a Texas corporation
and its successors and assigns.
"Regulation G" shall mean Regulation G of the Board of Governors of the
Federal Reserve System, 12 C.F.R. Part 207, or any successor or other regulation
hereafter promulgated by said Board to replace the prior Regulation G and having
substantially the same function.
"Regulation U" shall mean Regulation U promulgated by the Board of
Governors of the Federal Reserve System, 12 C.F.R. Part 221, or any successor or
other regulation hereafter promulgated by said Board to replace the prior
Regulation U and having substantially the same function.
"Regulation X" shall mean Regulation X promulgated by the Board of
Governors of the Federal Reserve System, 12 C.F.R. Part 224, or any successor or
other regulation hereafter promulgated by said Board to replace the prior
Regulation X and having substantially the same function.
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"Reimbursement Obligation" shall have the meaning assigned to such term in
Section 2.17(d).
"Renal-California" shall mean Renal Treatment Centers -California, Inc., a
Delaware corporation, and its successors and assigns.
"Renal-Hawaii" shall mean Renal Treatment Centers - Hawaii, Inc., a
Delaware corporation, and its successors and assigns.
"Renal-Illinois" shall mean Renal Treatment Centers -Illinois, Inc., a
Delaware corporation, and its successors and assigns.
"Renal-Lab" shall mean Renal Diagnostic Laboratories, Inc., a Delaware
corporation, and its successors or assigns.
"Renal-Management Acquisition" shall mean Renal Treatment Centers -
Management Acquisition, Inc., a Delaware corporation, and its successors and
assigns.
"Renal-Mid-Atlantic" shall mean Renal Treatment Centers -Mid-Atlantic,
Inc., a Delaware corporation, and its successors and assigns.
"Renal-Northeast" shall mean Renal Treatment Centers -Northeast, Inc., a
Delaware corporation, and its successors and assigns.
"Renal-Southeast" shall mean Renal Treatment Centers -Southeast, Inc., a
Delaware corporation, and its successors and assigns.
"Renal-West" shall mean Renal Treatment Centers - West, Inc., a Delaware
corporation, and its successors and assigns.
"Reportable Event" shall mean a reportable event as defined in Section
4043(b) of ERISA (other than an event for which notice is waived under the ERISA
regulations).
"Required Lenders" shall mean, at any time, the Lenders owning or holding
66-2/3% or more of the sum of (i) the then aggregate principal amount of the
Loans then outstanding plus (ii) the aggregate Stated Amount of all Letters of
----
Credit then outstanding; or, if no Loans or Letters of Credit are then
outstanding, the Lenders with 66-2/3% or more of the aggregate of all
Commitments at such time. For purposes of this definition, the Stated Amount of
each outstanding Letter of Credit shall be considered to be owed to the Lenders
according to their respective Revolving Credit/Term Percentages.
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"Requirement of Law" means, as to any Person, the charter, articles or
certificate of incorporation and bylaws or other organizational or governing
documents of such Person, and any statute, law, treaty, rule, regulation, order,
decree, writ, injunction or determination of any arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is
subject.
"Reserve Requirement" shall mean, with respect to any Interest Period, the
reserve percentage (expressed as a decimal) applicable two (2) Business Days
before the first day of such Interest Period determined by the Agent to be in
effect on such day, as provided by the Board of Governors of the Federal Reserve
System (or any successor governmental body), applied for determining the maximum
reserve requirements (including, without limitation, basic, supplemental,
marginal and emergency reserves) applicable to the Lenders under Regulation D
with respect to "Eurocurrency liabilities" within the meaning of Regulation D,
or under any similar or successor regulation with respect to Eurocurrency
liabilities or Eurocurrency funding.
"Revolving Credit/Term Commitment" shall mean, with respect to any Lender
at any time, the amount set forth under such Lender's name on Annex A hereto
under the caption "Revolving Credit/Term Commitment" or, if such Lender has
entered into one or more Assignment and Acceptances, the amount set forth for
such Lender at such time in the Register maintained by the Agent pursuant to
Section 10.5(c) as such Lender's "Revolving Credit/Term Commitment," as such
amount may be reduced at or prior to such time pursuant to the terms hereof.
"Revolving Credit/Term Facility" shall mean the revolving line of credit
established by the Lenders under Section 2.1(a).
"Revolving Credit/Term Facility Conversion Date" shall mean March 31, 2000.
"Revolving Credit/Term Facility Maturity Date" shall mean March 31, 2004.
"Revolving Credit/Term Facility Termination Date" shall mean the Revolving
Credit/Term Facility Conversion Date, or such earlier date of termination of the
Total Revolving Credit/Term Commitment in accordance with Section 2.4(a) or
Section 8.1.
"Revolving Credit/Term Loans" shall have the meaning assigned to such term
in Section 2.1(a).
"Revolving Credit/Term Notes" shall mean the promissory notes of the
Borrower in substantially the form of Exhibit A, executed and delivered to the
Lenders with Revolving Credit/Term Commitments
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pursuant to Section 2.3(a) or, in connection with an Assignment and Acceptance,
pursuant to Section 10.5(d), together with any amendments, modifications and
supplements thereto and restatements thereof, in whole or in part.
"Revolving Credit/Term Percentage" shall mean, with respect to any Lender
at any time, a fraction (expressed as a percentage) the numerator of which is
the Revolving Credit/Term Commitment of such Lender at such time and the
denominator of which is the Total Revolving Credit/Term Commitment at such time;
provided that if the Revolving Credit/Term Percentage of any Lender is to be
determined after the Revolving Credit/Term Commitments have been terminated,
then such Revolving Credit/Term Percentage shall be determined immediately prior
(and without giving effect) to such termination.
"Satellite Acquisition" shall mean the proposed acquisition by one or more
Subsidiaries of the Borrower of substantially all of the assets of thirteen
dialysis centers which are currently providing care to approximately 1,500
patients and which will include 29 acute care agreements with hospitals that
provide approximately 9,200 acute treatments per year (65 equivalent hemo
patients) and 3,600 treatments to a stable transient patient population in
Nevada (26 equivalent hemo patients), the purchase price of which acquisition
shall not exceed $120,000,000 (plus working capital adjustments not to exceed
$5,000,000).
"Selling Lender" shall have the meaning assigned to such term in Section
2.18.
"Solvent" shall mean, as to any Person on any particular date, that such
Person (i) has capital sufficient to carry on its business and transactions and
all business and transactions in which it is about to engage, (ii) is able to
pay its debts as they mature, (iii) owns property having a fair saleable value
greater than the amount required to pay its probable liability on existing debts
as they mature (including known reasonable contingencies and contingencies that
should be included in notes of the Financial Statements pursuant to Generally
Accepted Accounting Principles), and (iv) does not intend to, and does not
believe that it will, incur debts or probable liabilities beyond its ability to
pay such debts or liabilities as they mature.
"Southwest Dialysis" shall mean Southwest Dialysis Center, Inc., a Texas
corporation, and its successors and assigns.
"Stated Amount" shall mean, with respect to any Letter of Credit at any
time, the maximum amount available to be drawn thereunder at such time
(regardless of whether any conditions for drawing could then be met).
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"Stock" shall mean all shares, options, interests or other equivalents
(howsoever designated) of or in a corporation or entity, whether voting or non-
voting, including, without limitation, common stock, warrants, preferred stock,
convertible debentures and all agreements, instruments and documents
convertible, in whole or in part, into any one or more or all of the foregoing.
For purposes of this Agreement, prior to conversion, the Convertible Notes shall
not constitute stock.
"Subordinated Debt" shall mean (i) the Convertible Notes and (ii) any Debt
of the Borrower or any Subsidiary to the extent such Debt is expressly
subordinated and made junior to the payment and performance of the Obligations
and evidenced as such by a written instrument the terms and conditions
(including, without limitation, subordination provisions) of which are
satisfactory in form and substance to the Required Lenders in their sole
discretion and are approved in writing by the Agent.
"Subsidiary" shall mean any corporation or other entity of which more than
fifty percent (50%) of the outstanding Stock having ordinary voting power to
elect a majority of the board of directors is at the time, directly or
indirectly, owned by any Person or one or more of its Subsidiaries (irrespective
of whether, at the time, Stock of any other class or classes of such corporation
shall have or might have voting power by reason of the happening of any
contingency). When used without reference to a parent corporation, the term
"Subsidiary" shall be deemed to refer to a Subsidiary of the Borrower.
"Subsidiary Pledge Agreement" shall mean the Third Amended and Restated
Subsidiary Pledge Agreement, dated as of the date hereof, between each Guarantor
and the Agent, which each Guarantor has pledged all of the Stock of its
Subsidiaries and its Intercompany Loan Documents, to the Agent as Collateral,
together with any amendment, modifications and supplements thereto, any
replacements, renewals, extensions and restatements thereof, and any substitutes
therefor, in whole or in part.
"Target" shall have the meaning assigned to such term in Section
5.15(c)(i).
"Taxes" shall have the meaning assigned to such term in Section 2.12(a).
"Total Commitment" shall mean, at any time, the sum of all Commitments at
such time.
"Total Revolving Credit/Term Commitment" shall mean, at any time, the sum
of the Revolving Credit/Term Commitment of each Lender at such time.
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"Total Unutilized Revolving Credit/Term Commitment" shall mean, at any
time, the sum of the Unutilized Revolving Credit/Term Commitments of each Lender
at such time.
"Type" shall have the meaning assigned to such term in Section 2.1(b).
"Uniform Commercial Code" shall mean the Uniform Commercial Code of the
State of North Carolina, as amended from time to time, unless in any particular
instance the Uniform Commercial Code of another state is applicable, in which
case it shall mean the Uniform Commercial Code of such state.
"Unutilized Revolving Credit/Term Commitment" shall mean, with respect to
any Lender at any time, such Lender's Revolving Credit/Term Commitment at such
time less the sum of (i) the aggregate principal amount of all Revolving
----
Credit/Term Loans made by such Lender that are outstanding at such time and (ii)
such Lender's Pro Rata Share of all Letter of Credit Outstandings at such time.
1.2 Accounting Terms. Any accounting terms used in this Agreement that
are not specifically defined shall have the meanings customarily given them in
accordance with Generally Accepted Accounting Principles; provided, however,
that, in the event that changes in Generally Accepted Accounting Principles
shall be mandated by the Financial Accounting Standards Board, or any similar
accounting body of comparable standing, or shall be recommended by the
Borrower's certified public accountants, to the extent that such changes would
modify or could modify such accounting terms or the interpretation or
computation thereof, such changes shall be followed in defining such accounting
terms only from and after the date this Agreement shall have been amended in
accordance with the terms of this Agreement to the extent necessary to reflect
any such changes in the financial covenants and other terms and conditions of
this Agreement.
1.3 Singular/Plural. Unless the context otherwise requires, words in the
singular include the plural and words in the plural include the singular.
1.4 Other Terms. All other terms contained in this Agreement shall, when
the context so indicates, have the meanings provided for by the Uniform
Commercial Code of the State of North Carolina to the extent the same are used
or defined therein.
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ARTICLE II
AMOUNT AND TERMS OF THE LOANS;
LETTERS OF CREDIT
2.1 The Loans.
(a) Each Lender having a Revolving Credit/Term Commitment severally
agrees, subject to and on the terms and conditions of this Agreement, to make
Loans (each, a "Revolving Credit/Term Loan" and collectively, the "Revolving
Credit/Term Loans") to the Borrower, from time to time on any Business Day
during the period from the date hereof to the Revolving Credit/Term Facility
Termination Date, provided that (i) the aggregate principal amount of Revolving
Credit/Term Loans at any time outstanding for any Lender shall not exceed the
difference between (A) such Lender's Revolving Credit/Term Commitment at such
time less (B) such Lender's Pro Rata Share (calculated based on its Revolving
----
Credit/Term Percentage) of the aggregate Letter of Credit Outstandings at such
time (exclusive of Reimbursement Obligations that are repaid with the proceeds
of, and simultaneously with the incurrence of, Revolving Credit/Term Loans) and
(ii) no Borrowing of Revolving Credit/Term Loans shall be permitted if,
immediately before or after giving effect thereto, a Default or Event of Default
exists. Subject to and on the terms and conditions of this Agreement, the
Borrower may borrow, repay and reborrow Revolving Credit/Term Loans. The
aggregate principal amount of all Loans (as defined in the Fifth Amended and
Restated Loan Agreement) made pursuant to the Fifth Amended and Restated Loan
Agreement and outstanding on the Amendment Effective Date (collectively, the
"Existing Loans") is $101,000,000. On the Amendment Effective Date, and after
giving effect to the concurrent assignment and purchase of a portion of the
Existing Loans among the Lenders in accordance with Section 2.18, the aggregate
outstanding principal amount of all Existing Loans shall automatically be
converted to an equivalent principal amount of Revolving Credit/Term Loans
hereunder, made by the Lenders ratably in accordance with their respective
commitments, and for all purposes of this Agreement shall be deemed to be Loans
hereunder and entitled to the benefits of (and subject to the terms of) this
Agreement and the other Loan Documents.
(b) The Loans shall, at the option of the Borrower and subject to the
terms and conditions of this Agreement, be either Base Rate Loans or LIBOR Loans
(each such type of Loan, a "Type"), provided that all Loans comprising the same
Borrowing shall, unless otherwise specifically provided herein, be of the same
Type.
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2.2 Borrowings.
(a) Whenever the Borrower desires to make a Borrowing (other than
continuations or conversions of outstanding Loans pursuant to Section 2.9) under
the Revolving Credit/Term Facility, the Borrower will give the Agent written
notice (by telecopier or otherwise), prior to 11:00 a.m., Charlotte time, at
least three (3) Business Days prior to each Borrowing to be comprised of LIBOR
Loans and at least one (1) Business Day prior to each Borrowing to be comprised
of Base Rate Loans. Each such notice (each, a "Notice of Borrowing") shall be
irrevocable, shall be given in the form of Exhibit B-1 and shall be
appropriately completed to specify (i) the aggregate principal amount and Type
of the Loans to be made pursuant to such Borrowing (and, in the case of a
Borrowing of LIBOR Loans, the initial Interest Period to be applicable thereto)
and (ii) the requested date of the Borrowing (the "Borrowing Date"), which shall
be a Business Day. Notwithstanding anything to the contrary contained herein:
(i) the aggregate principal amount of each Borrowing hereunder (y) in
the case of Borrowings comprised of Base Rate Loans, shall not be
less than $500,000 and, if greater, shall be in an integral multiple
of $100,000 in excess thereof, and (z) in the case of Borrowings
comprised of LIBOR Loans, shall not be less than $3,000,000 and, if
greater, shall be in an integral multiple of $1,000,000 in excess
thereof;
(ii) the aggregate principal amount of all Borrowings under the
Revolving Credit/Term Facility, the proceeds of which are utilized to
finance any single Permitted Acquisition, in part or in whole, shall
not be more than $20,000,000, without the prior written consent of
the Required Lenders, provided that the principal amount of all
Borrowings the proceeds of which are used to finance the Satellite
Acquisition may exceed $20,000,000 but shall not be more than
$125,000,000 (it being understood that the consummation of the
Satellite Acquisition shall be subject to compliance by the Borrower
with the provisions of Section 5.15 and the other applicable
provisions of this Agreement);
(iii) no Revolving Credit/Term Loans may be incurred to the extent that,
immediately after giving effect thereto, the aggregate original
principal amount of all Revolving Credit/Term Loans the proceeds of
which were utilized to finance Permitted Acquisitions during any
single fiscal year, in part or in whole, shall exceed $75,000,000,
without the prior written consent of the Required Lenders; provided,
however, that the purchase price of the Satellite Acquisition (not to
exceed the
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amount set forth in the definition thereof) shall be excluded from
such $75,000,000 Acquisition threshold for the 1997 fiscal year;
(iv) if the Borrower shall have failed to designate the Type of Loans
comprising a Borrowing, the Borrower shall be deemed to have
requested a Borrowing comprised of Base Rate Loans;
(v) if the Borrower shall have failed to select the duration of the
Interest Period to be applicable to any Borrowing of LIBOR Loans,
then the Borrower shall be deemed to have selected an Interest Period
with a duration of one (1) month; and
(vi) LIBOR Loans under the Revolving Credit/Term Facility may not be
outstanding under more than five (5) separate Interest Periods at any
one time.
(b) Upon the receipt of a Notice of Borrowing, the Agent will promptly
notify each Lender with a Revolving Credit/Term Commitment of the proposed
Borrowing, of such Lender's Pro Rata Share thereof and of the other matters
specified in the Notice of Borrowing. Each such Lender will make the amount of
its Pro Rata Share of such Borrowing available to the Agent at its office
referred to in Section 10.4, for the account of the Borrower, in Dollars and in
immediately available funds, prior to 12:00 noon, Charlotte time, on the
Borrowing Date. To the extent the relevant Lenders have made such amounts
available to the Agent as provided hereinabove, the Agent will make the
aggregate of such amounts available to the Borrower's account at the Agent's
office and in like funds as received by the Agent, prior to 3:30 p.m., Charlotte
time, on the Borrowing Date.
(c) Unless the Agent has received, prior to 12:00 noon, Charlotte time,
on any Borrowing Date, written notice from a Lender that such Lender will not
make available to the Agent its Pro Rata Share of the relevant Borrowing, the
Agent may assume that such Lender has made its Pro Rata Share of such Borrowing
available to the Agent on such Borrowing Date in accordance with subsection (b)
above, and the Agent may, in reliance upon such assumption, make a corresponding
amount available to the Borrower on such Borrowing Date. If and to the extent
that such Lender shall not have made such Pro Rata Share available to the Agent,
and the Agent shall have made such corresponding amount available to the
Borrower, such Lender, on the one hand, and the Borrower, on the other,
severally agree to pay to the Agent forthwith on demand such corresponding
amount, together with interest thereon for each day from the date such amount is
made available to the Borrower until the date such amount is repaid to the
Agent, (i) if recovered from such Lender, at the Federal Funds Rate, and (ii) if
recovered from the Borrower, at the rate of interest applicable to Loans
comprising such
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Borrowing, as determined under Section 2.6. If such Lender shall repay to the
Agent such corresponding amount, such amount so repaid shall constitute such
Lender's Loan as part of such Borrowing for purposes of this Agreement.
(d) The failure of any Lender to make any Loan required to be made by it
as part of any Borrowing shall not relieve any other Lender of its obligation
hereunder to make its Loan on the respective Borrowing Date or relieve any
Lender (including the Lender that failed to make such amount available) of its
obligation, if any, hereunder to make its Pro Rata Share of any subsequent
Borrowing available, but no Lender shall be responsible for the failure of any
other Lender to make the Loan to be made by such other Lender as part of any
Borrowing.
2.3 Revolving Credit/Term Notes.
(a) The Revolving Credit/Term Loans made by each Lender shall be
evidenced by a Revolving Credit/Term Note appropriately completed in
substantially the form of Exhibit A.
(b) The Revolving Credit/Term Note issued to each Lender with a Revolving
Credit/Term Commitment shall (i) be executed by the Borrower, (ii) be payable to
the order of such Lender, (iii) be dated as of the Closing Date (or, in the case
of Revolving Credit/Term Notes issued pursuant to an Assignment and Acceptance,
as of the date thereof), (iv) be in a stated principal amount equal to such
Lender's Revolving Credit/Term Commitment, (v) bear interest in accordance with
the provisions of Section 2.6, as the same may be applicable to the Revolving
Credit/Term Loans made by such Lender from time to time, and (vi) be entitled to
all of the benefits of this Agreement and the other Loan Documents and subject
to the provisions hereof and thereof. The Revolving Credit/Term Notes are an
amendment, restatement and renewal, and not a novation, discharge or
satisfaction, of a series of Fourth Amended and Restated Renewal Revolving
Credit/Term Promissory Notes, dated May 2, 1997, in the original aggregate
principal amount of up to $200,000,000, each executed and delivered by the
Borrower to the Lenders to evidence the loans made under the Revolving
Credit/Term Facility, pursuant to the Fifth Amended and Restated Loan Agreement.
Upon execution and delivery of the Revolving Credit/Term Notes, the notes
amended, restated and renewed thereby will be marked: "Renewed and reevidenced
by a series of promissory notes dated September 26, 1997, which are substituted
herefor in entirety."
(c) Each Lender will record on its internal records the amount of each
Loan made by it and each payment received by it in respect thereof and will, in
the event of any transfer of any of its Revolving Credit/Term Notes, either
endorse on the reverse side thereof the outstanding principal amount of the
Loans evidenced
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thereby as of the date of transfer or provide such information on Annex I to the
Assignment and Acceptance relating to such transfer; provided, however, that the
failure of any Lender to make any such recordation or provide any such
information, or any error in such recordation or information, shall not affect
the Borrower's obligations in respect of such Loans.
2.4 Reduction of Commitments.
(a) At any time and from time to time, upon at least five (5) Business
Days' prior written notice to the Agent, the Borrower may terminate in whole or
reduce in part the Total Unutilized Revolving Credit/Term Commitment, provided
that any such partial reduction shall be in an aggregate amount of not less than
$1,000,000 or integral multiples thereof. The amount of any termination or
reduction made under this subsection (a) may not thereafter be reinstated.
(b) Each reduction of the Revolving Credit/Term Commitment under this
Section shall be applied ratably to the Revolving Credit/Term Commitments of the
Lenders according to their respective Percentages under the Revolving
Credit/Term Facility. After any such reduction, the fee provided for in
Sections 2.7(a) shall be calculated with respect to the reduced Commitments.
2.5 Payments; Voluntary, Mandatory.
(a) The Borrower shall have the right from time to time to prepay the
Loans, in whole or in part, upon written notice to the Agent prior to 11:00
a.m., Charlotte time, at least three (3) Business Days' prior to each intended
prepayment of LIBOR Loans and at least one (1) Business Day prior to each
intended prepayment of Base Rate Loans, provided that (i) each partial
prepayment shall be in an aggregate principal amount of no less than $500,000 or
an integral multiple thereof, (ii) no partial prepayment of LIBOR Loans made
pursuant to any single Borrowing shall reduce the outstanding principal amount
of the remaining LIBOR Loans under such Borrowing to less than $3,000,000 and,
if greater, in an integral multiple of $1,000,000 in excess thereof and (iii)
unless made together with all amounts required under Section 2.13 to be paid as
a consequence of such prepayment, a prepayment of a LIBOR Loan may be made only
on the last day of the Interest Period applicable thereto. Each such notice
shall specify (x) the proposed date of such prepayment and (y) the aggregate
principal amount and the Types of the Loans to be prepaid (and, in the case of
LIBOR Loans, the specific Borrowing or Borrowings pursuant to which made) and
shall be irrevocable and shall bind the Borrower to make such prepayment on the
terms specified therein. Amounts prepaid under the Revolving Credit/Term
Facility pursuant to this subsection (a) may be reborrowed, subject to the terms
and conditions of this Agreement.
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(b) In the event that the sum of (i) the aggregate principal amount of
the Revolving Credit/Term Loans outstanding on any date plus (ii) the aggregate
----
Letter of Credit Outstandings as of such date exceeds the Total Revolving
Credit/Term Commitment as of such date (after giving effect to any termination
or reduction thereof as of such date), the Borrower will repay the principal
amount of the Revolving Credit/Term Loans on such date in the amount of such
excess; provided that, (A) such payment shall be accompanied by all amounts
required under Section 2.13 if applied to a LIBOR Loan and such payment is not
made on the last day of the Interest Period applicable thereto, and (B) to the
extent such excess amount required to be repaid is greater than the aggregate
principal amount of the Revolving Credit/Term Loans outstanding immediately
prior to the application of such repayment, the amount so repaid shall be
retained by the Agent and held in the Cash Collateral Account as security for
the Borrower's Reimbursement Obligations, as more particularly described in
Section 2.17(i).
(c) The Borrower shall repay the Revolving Credit/Term Notes in full on
the Revolving Credit/Term Facility Termination Date; provided, however, that if
no Default or Event of Default shall have occurred and be continuing and the
Revolving Credit/Term Facility Termination Date occurs on, and solely because
of, the occurrence of the Revolving Credit/Term Facility Conversion Date, the
aggregate outstanding principal balance of the Revolving Credit/Term Loans on
the Revolving Credit/Term Facility Conversion Date will be converted to a term
loan and shall be due and payable and repaid by the Borrower in sixteen (16)
equal quarterly installments, on March 31, June 30, September 30 and December 31
in each year, commencing on June 30, 2000 through and including the Revolving
Credit/Term Facility Maturity Date. Prepayments of such term loan shall be
applied to installments of the Loans in inverse order of maturity.
2.6 Interest.
(a) The Borrower will pay interest in respect of the unpaid principal
amount of each Loan, from the date of Borrowing thereof until such principal
amount shall be paid in full, (i) at the Adjusted Base Rate, as in effect from
time to time during such periods as such Loan is a Base Rate Loan, and (ii) at
the Adjusted LIBOR Rate, as in effect from time to time during such periods as
such Loan is a LIBOR Loan.
(b) Any principal amounts of the Loans not paid when due and, to the
greatest extent permitted by law, all interest accrued on the Loans and all
other fees and amounts hereunder not paid when due (whether at maturity,
pursuant to acceleration or otherwise), shall bear interest at a rate per annum
equal to the interest rate then applicable to such Loans (whether the Adjusted
Base Rate or the Adjusted LIBOR Rate) plus two percentage points (2.0%), and
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such default interest shall be payable on demand. Further, but without
duplication of the foregoing, during the existence of any Event of Default in
response to which the Lenders do not elect to declare the outstanding principal
amounts of the Revolving Credit/Term Loans immediately due and payable, if
required by the Required Lenders, the Borrower will pay interest on the dates
provided pursuant to subsection (c) below, in respect of the unpaid principal
amount of each Revolving Credit/Term Loan, from the date the Event of Default
first exists until it is cured, at a rate per annum equal to the Adjusted Base
Rate plus two percentage points (2.0%). To the greatest extent permitted by
law, interest shall continue to accrue after the filing by or against the
Borrower of any petition seeking any relief in bankruptcy or under any act or
law pertaining to insolvency or debtor relief, whether state, federal or
foreign.
(c) Accrued (and theretofore unpaid) interest shall be payable (i) in
respect of each Base Rate Loan, in arrears on the last Business Day of each
fiscal quarter, beginning with the last Business Day of the fiscal quarter
ending September 30, 1997 and (ii) in respect of each LIBOR Loan, in arrears on
the last Business Day of the Interest Period applicable thereto (subject to the
provisions of clause (iv) in Section 2.8) and for any Interest Period longer
than three (3) months, interest shall also be payable on the first Business Day
occurring three (3) months after the first day of such Interest Period and (iii)
in respect of any Loan, on the date of any repayment or prepayment in full, at
maturity (whether pursuant to acceleration or otherwise) and, after maturity, on
demand.
(d) Nothing contained in this Agreement or in any other Loan Document
shall be deemed to establish or require the payment of interest to any Lender at
a rate in excess of the maximum rate permitted by applicable law. If the amount
of interest payable for the account of any Lender on any interest payment date
would exceed the maximum amount permitted by applicable law to be charged by
such Lender, the amount of interest payable for its account on such interest
payment date shall be automatically reduced to such maximum permissible amount.
In the event of any such reduction affecting any Lender, if from time to time
thereafter the amount of interest payable for the account of such Lender on any
interest payment date would be less than the maximum amount permitted by
applicable law to be charged by such Lender, then the amount of interest payable
for its account on such subsequent interest payment date shall be automatically
increased to such maximum permissible amount, provided that at no time shall the
aggregate amount by which interest paid for the account of any Lender has been
increased pursuant to this sentence exceed the aggregate amount by which
interest paid for its account has theretofore been reduced pursuant to the
previous sentence.
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(e) The Agent shall promptly notify the Borrower and the Lenders upon
determining the interest rate for each Borrowing after its receipt of the
relevant Notice of Borrowing or Notice of Conversion/Continuation; provided,
however, that the failure of the Agent to provide the Borrower or the Lenders
with any such notice shall neither affect any obligations of the Borrower or the
Lenders hereunder nor result in any liability on the part of the Agent to the
Borrower or any Lender. Each such determination (including each determination
of the Reserve Requirement in connection with a Borrowing of LIBOR Loans) shall,
absent manifest error, be final and conclusive and binding on all parties
hereto.
2.7 Fees. The Borrower agrees to pay:
(a) To the Agent, for the account of each Lender with a Revolving
Credit/Term Commitment, a commitment fee per annum for the period from the
Amendment Effective Date to the Revolving Credit/Term Facility Termination Date,
at the applicable percentage per annum determined under the following matrix and
applied to the average daily Unutilized Revolving Credit/Term Commitment of such
Lender, payable in arrears (i) on the last Business Day of each fiscal quarter,
beginning with the last Business Day of the fiscal quarter ending September 30,
1997, and (ii) on the Revolving Credit/Term Facility Termination Date:
Ratio of Consolidated Debt
to Annualized Cash Flow Commitment Fee
(including Foreign Subsidiaries) Percentage
--------------------------------- ---------------
Greater than or equal to
3.0 to 1.0 0.25%
Greater than or equal to
2.0 to 1.0
but less than 3.0 to 1.0 0.225%
Less than 2.0 to 1.0 0.20%
(b) To the Agent, for the account of each Lender with a Revolving
Credit/Term Commitment, a letter of credit fee in respect of each Letter of
Credit for the period from the date of its issuance to the date of its
termination, at a rate per annum equal to the Applicable Margin for LIBOR Loans
in effect from time to time during such period on the daily average Stated
Amount thereof, payable in arrears (i) on the last Business Day of each fiscal
quarter, beginning with the last Business Day of the fiscal quarter ending
September 30, 1997, and (ii) on the later of the Revolving Credit/Term Facility
Termination Date or the date of termination of the last outstanding Letter of
Credit;
(c) To the Issuing Bank, for its own account, a facing fee in respect of
each Letter of Credit for the period from the date of its issuance to the date
of its termination, at the rate of 0.125%
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per annum on the daily average Stated Amount thereof, payable in arrears (i) on
the last Business Day of each fiscal quarter, beginning with the last Business
Day of the fiscal quarter ending September 30, 1997, and (ii) on the later of
the Revolving Credit/Term Facility Termination Date and the date of termination
of the last outstanding Letter of Credit;
(d) To the Issuing Bank, for its own account, such commissions, issuance
fees, transfer fees and other fees and charges incurred in connection with the
issuance and administration of each Letter of Credit as are customarily charged
from time to time by the Issuing Bank for the performance of such services in
connection with similar letters of credit, or as may be otherwise agreed to by
the Issuing Bank, but without duplication of amounts payable under subsection
(c) above; and
(e) To the Agent, for its own account, the annual agency fee in the
amount and at the times provided in the Fee Letter, such fee to accrue from the
Amendment Effective Date to the date upon which all of the Obligations have been
indefeasibly paid in full and the Commitments have been terminated.
2.8 Interest Periods. Concurrently with the giving of any Notice of
Borrowing or Notice of Conversion/Continuation in respect of any Borrowing
comprised of LIBOR Loans, the Borrower shall have the right to elect, pursuant
to such notice, the interest period (each, an "Interest Period") to be
applicable to such LIBOR Loans, which Interest Period shall, at the option of
the Borrower, be a one, two, three or six-month period (subject to
availability); provided, however, that:
(i) all LIBOR Loans comprising a single Borrowing shall at all times
have the same Interest Period;
(ii) the initial Interest Period for any LIBOR Loan shall commence on
the date of the Borrowing of such Loan (including the date of any
continuation of, or conversion into, such LIBOR Loan), and each
successive Interest Period applicable to such LIBOR Loan shall
commence on the day on which the next preceding Interest Period
applicable thereto expires;
(iii) the Borrower may not select any Interest Period that expires
after the Revolving Credit/Term Facility Maturity Date, with respect
to Revolving Credit/Term Loans that are to be maintained as LIBOR
Loans;
(iv) if any Interest Period otherwise would expire on a day that is not
a Business Day, such Interest Period shall expire on the next
succeeding Business Day unless such next succeeding Business Day
falls in another calendar
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month, in which case such Interest Period shall expire on the next
preceding Business Day;
(v) if any Interest Period begins on a day for which there is no
numerically corresponding day in the calendar month during which such
Interest Period would otherwise expire, such Interest Period shall
expire on the last Business Day of such calendar month; and
(vi) if, upon the expiration of any Interest Period applicable to a
Borrowing of LIBOR Loans, the Borrower shall have failed to elect a
new Interest Period to be applicable to such LIBOR Loans, then the
Borrower shall be deemed to have elected to convert such LIBOR Loans
into Base Rate Loans as of the expiration of the then current
Interest Period applicable thereto.
2.9 Conversions and Continuations.
(a) The Borrower shall have the right, on any Business Day, to elect (y)
to convert all (or a portion in an amount not less than (A) in the case of Base
Rate Loans, $500,000 or, if greater, an integral multiple of $100,000 in excess
thereof and (B) in the case of LIBOR Loans, $3,000,000 or, if greater, an
integral multiple of $1,000,000 in excess thereof) of the outstanding principal
amount of any Loans of one Type made pursuant to one or more Borrowings under
any Facility (and, in the case of LIBOR Loans, having the same Interest Period)
into a Borrowing or Borrowings of Loans (under the same Facility) of the other
Type, or (z) to continue all (or a portion, subject to the restrictions as to
amount set forth in clause (B) of the parenthetical in clause (y) above) of the
outstanding principal amount of any LIBOR Loans made pursuant to one or more
Borrowings under any Facility (and having the same Interest Period) for an
additional Interest Period, provided that (i) except as otherwise provided for
in Section 2.11(d), LIBOR Loans may be converted into Base Rate Loans or
continued as new LIBOR Loans only on the last day of the Interest Period
applicable thereto (and, in any event, if a LIBOR Loan is converted into a Base
Rate Loan on any day other than the last day of the Interest Period applicable
thereto, the Borrower will pay, upon such conversion, all amounts required under
Section 2.13 to be paid as a consequence thereof), (ii) if any partial
conversion of LIBOR Loans into Base Rate Loans shall have reduced the
outstanding principal amount of the remaining LIBOR Loans made pursuant to a
single Borrowing (and thereby continued) to less than $3,000,000 and, if
greater, an integral multiple of $1,000,000 in excess thereof, such remaining
LIBOR Loans shall be converted immediately into Base Rate Loans and may not
thereafter be converted into or continued as LIBOR Loans unless the requirements
of clause (y) above are satisfied, (iii) no conversion of Base Rate Loans into
LIBOR Loans or continuation of LIBOR Loans
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shall be permitted during the existence of a Default or Event of Default and
(iv) no conversion or continuation under this Section shall result in a greater
number of separate Interest Periods in respect of LIBOR Loans under either
Facility than is permitted under Section 2.2(a)(vi).
(b) The Borrower shall make each such election by delivering written
notice to the Agent prior to 11:00 a.m., Charlotte time, at least three (3)
Business Days prior to the effective date of any conversion of Base Rate Loans
into, or continuation of, LIBOR Loans and at least one (1) Business Day prior to
the effective date of any conversion of LIBOR Loans into Base Rate Loans. Each
such notice (each, a "Notice of Conversion/Continuation") shall be irrevocable,
shall be given in the form of Exhibit B-2 and shall be appropriately completed
to specify (x) the date of such conversion or continuation, (y) in the case of a
conversion into, or a continuation of, LIBOR Loans, the Interest Period to be
applicable thereto and (z) the aggregate amount and Type of the Loans being
converted or continued. Upon the receipt of a Notice of Conversion/Continuation,
the Agent will promptly notify each Lender having a Commitment under the
Facility pursuant to which such conversion or continuation is elected of the
proposed conversion or continuation, of such Lender's Pro Rata Share thereof and
of the other matters specified in the Notice of Conversion/Continuation. In the
event that the Borrower shall fail to deliver a Notice of
Conversion/Continuation as provided hereinabove with respect to any Borrowing of
LIBOR Loans, such LIBOR Loans shall automatically be converted to Base Rate
Loans upon the expiration of the then current Interest Period applicable
thereto.
2.10 Method of Payments; Computations.
(a) All payments by the Borrower hereunder and under the Revolving
Credit/Term Notes shall be made without set-off, counterclaim or other defense,
in Dollars and in immediately available funds to the Agent, for the account of
the Lenders (except as otherwise provided in Sections 2.7(c), 2.7(d), 2.7(e),
2.11, 2.12, 2.13, 2.17, 10.6 and 10.7 as to payments required to be made
directly to the Issuing Bank and the Lenders) to First Union, ABA Routing
#▇▇▇▇▇▇▇▇▇, to the Credit of First Union National Bank of North Carolina,
Charlotte, North Carolina, Attention: Syndication Agency Services, ▇/▇ #▇▇▇▇▇▇,
▇▇ # ▇▇▇▇, RE: Renal Treatment Centers, prior to 12:00 noon, Charlotte time, on
the date payment is due. Any payment made as required hereinabove, but after
12:00 noon, Charlotte time, shall be deemed to have been made on the next
succeeding Business Day. If any payment falls due on a day that is not a
Business Day, then such due date shall be extended to the next succeeding
Business Day (except that in the case of LIBOR Loans to which the provisions of
clause (iv) in Section 2.8 are applicable, such due date shall be the next
preceding Business Day), and such extension of time shall then be
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included in the computation of payment of interest, fees or other applicable
amounts.
(b) The Agent will distribute to the Lenders like amounts relating to
payments made to the Agent for the account of such Lenders as follows: (i) if
the payment is received by 12:00 noon, Charlotte time, in immediately available
funds, the Agent will make available to each such Lender on the same date, by
wire transfer of immediately available funds, such Lender's Pro Rata Share of
such payment, and (ii) if such payment is received after 12:00 noon, Charlotte
time, or in other than immediately available funds, the Agent will make
available to each such Lender its Pro Rata Share of such payment by wire
transfer of immediately available funds on the next succeeding Business Day (or
in the case of uncollected funds, as soon as practicable after collected). If
the Agent shall not have made a required distribution to the appropriate Lenders
as required hereinabove after receiving a payment for the account of such
Lenders, the Agent will pay to each such Lender, on demand, its Pro Rata Share
of such payment with interest thereon at the Federal Funds Rate for each day
from the date such amount was required to be disbursed by the Agent until the
date repaid to such Lender. The Agent will distribute to the Issuing Bank like
amounts relating to payments made to the Agent for the account of the Issuing
Bank in the same manner, and subject to the same terms and conditions, as set
forth hereinabove with respect to distributions of amounts to the Lenders.
(c) Unless the Agent shall have received notice from the Borrower prior to
the date on which any payment is due to any Lender hereunder that such payment
will not be made in full, the Agent may assume that the Borrower has made such
payment in full to the Agent on such date, and the Agent may, in reliance on
such assumption, cause to be distributed to each Lender on such due date an
amount equal to the amount then due to each such Lender. If and to the extent
the Borrower shall not have so made such payment in full to the Agent, each such
Lender shall repay to the Agent forthwith on demand such amount so distributed
to such Lender, together with interest thereon for each day from the date such
amount is so distributed to such Lender until the date repaid to the Agent, at
the Federal Funds Rate.
(d) The Borrower hereby authorizes each Lender, if and to the extent that
any payment owed to such Lender is not made when due hereunder or under any
Revolving Credit/Term Note held by such Lender, to charge from time to time
against any or all of the accounts of the Borrower with such Lender any amount
so due.
(e) With respect to each payment on the Loans hereunder, except as
specifically provided otherwise herein or in any of the other Loan Documents,
the Borrower may designate by written notice to the Agent prior to or
concurrently with such payment the Types of Loans that are to be repaid or
prepaid and, in the case of LIBOR
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Loans, the specific Borrowing or Borrowings pursuant to which made, provided
that (i) unless made together with all amounts required under Section 2.13 to be
paid as a consequence thereof, a prepayment of a LIBOR Loan may be made only on
the last day of the Interest Period applicable thereto, (ii) if any partial
prepayment of LIBOR Loans made pursuant to any single Borrowing shall reduce the
outstanding principal amount of the remaining LIBOR Loans under such Borrowing
to less than $3,000,000, and, if greater, in integral multiples of $1,000,000 in
excess thereof, such remaining LIBOR Loans shall be converted immediately into
Base Rate Loans and (iii) each prepayment of Loans comprising a single Borrowing
shall be applied pro rata among such Loans. In the absence of any such
designation by the Borrower, the Agent shall, subject to the foregoing, make
such designation in its sole discretion.
(f) All computations of interest and fees hereunder (including
computations of the Reserve Requirement) shall be made on the basis of a year
consisting of 360 days and the actual number of days (including the first day,
but excluding the last day) elapsed; provided, that interest on Base Rate Loans
shall be computed on the basis of 365/366-day year and the actual days elapsed.
2.11 Increased Costs, Change in Circumstances, etc.
(a) If, at any time after the Amendment Effective Date and from time to
time, the adoption or modification of any applicable law, rule or regulation, or
any interpretation or administration thereof by any Governmental Authority or
central bank (whether or not having the force of law) charged with the
interpretation, administration or compliance of the Lenders with any of such
requirements, shall:
(i) subject any Lender to, or increase the net amount of, any tax,
impost, duty, charge or withholding with respect to any amount
received or to be received hereunder in connection with LIBOR Loans
(other than taxes imposed on net income or profits of, or any branch
or franchise tax applicable to, such Lender or a Lending Office of
such Lender);
(ii) change the basis of taxation of payments to any Lender in connection
with LIBOR Loans (other than changes in taxes on the net income or
profits of, or any branch or franchise tax applicable to, such Lender
or a Lending Office of such Lender);
(iii) impose, increase or render applicable any reserve (other than the
Reserve Requirement), capital adequacy, special deposit or similar
requirement against assets of, deposits with or for the account of,
or loans,
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credit or commitments extended by, any Lender or a Lending Office of
such Lender; or
(iv) impose on any Lender or in the London interbank Eurodollar market any
other condition or requirement affecting this Agreement or LIBOR
Loans;
and the result of any of the foregoing is to increase the costs to any Lender of
agreeing to make, making, funding or maintaining any LIBOR Loans or to reduce
the yield or rate of return of or any sum received or receivable by such Lender
on any LIBOR Loans to a level below that which such Lender could have achieved
or received pursuant to this Agreement but for the adoption or modification of
any such requirements, the Borrower will, within fifteen (15) days after
delivery to the Borrower by such Lender of written demand therefor (with a copy
thereof to the Agent), pay to such Lender such additional amounts as shall
compensate such Lender for such increase in costs or reduction in return.
(b) If, at any time after the Amendment Effective Date and from time to
time, any Lender shall have determined that the adoption or modification of any
applicable federal, state or local law, rule or regulation regarding such
Lender's (or a corporation controlling such Lender) required level of capital
(including any allocation of capital requirements or conditions, but excluding
federal, state or local income tax liability), or the implementation of any such
requirements previously adopted but not implemented prior to the Amendment
Effective Date, or any interpretation or administration thereof by any
Governmental Authority (whether or not having the force of law) charged with the
interpretation, administration or compliance of such Lender (or a corporation
controlling such Lender) with any of such requirements, has or would have the
effect of reducing the rate of return on such Lender's capital (or the capital
of any corporation controlling such Lender) as a consequence of its Commitments,
Loans or participations in Letters of Credit hereunder to a level below that
which such Lender (or a corporation controlling such Lender) could have achieved
but for such adoption, modification, implementation or interpretation (taking
into account such Lender's policies with respect to capital adequacy), the
Borrower will, within fifteen (15) days after delivery to the Borrower by such
Lender of written demand therefor (with a copy thereof to the Agent), pay to
such Lender such additional amounts as will compensate such Lender for such
reduction in return.
(c) If, on or prior to the first day of any Interest Period, (i) the
Agent shall have received written notice from any Lender of such Lender's
determination that Dollar deposits in the amount of such Lender's required LIBOR
Loan pursuant to such Borrowing are not generally available in the London
interbank Eurodollar market or that the rate at which such Dollar deposits are
being offered will not adequately and fairly reflect the cost to such Lender of
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making or maintaining its LIBOR Loan during such Interest Period or (ii) the
Agent shall have determined that adequate and reasonable means do not exist for
ascertaining the applicable LIBOR Rate for such Interest Period, the Agent will
forthwith so notify the Borrower and the Lenders, whereupon the obligation of
(y) in the case of clause (i) above, each such affected Lender, and (z) in the
case of clause (ii) above, all Lenders, in each case to make, to convert Base
Rate Loans into, or to continue, LIBOR Loans shall be suspended (including
pursuant to the Borrowing to which such Interest Period applies), and any Notice
of Borrowing or Notice of Conversion/Continuation given at any time thereafter
with respect to LIBOR Loans shall be deemed to be a request for Base Rate Loans
(but in the case of clause (i) above, only to the extent of such affected
Lender's Pro Rata Share thereof) until the Agent or the affected Lender, as the
case may be, shall have determined that the circumstances giving rise to such
suspension no longer exist (and the affected Lender, if making such
determination, shall have so notified the Agent), and the Agent shall have so
notified the Borrower and the Lenders.
(d) Notwithstanding any other provision in this Agreement, if, at any time
after the Amendment Effective Date and from time to time, any Lender shall have
determined that the adoption or modification of any applicable law, rule or
regulation, or any interpretation or administration thereof by any Governmental
Authority or central bank (whether or not having the force of law) charged with
the interpretation, administration or compliance of such Lender with any of such
requirements, has or would have the effect of making it unlawful for such Lender
to honor its obligation to make LIBOR Loans or to continue to make or maintain
LIBOR Loans, such Lender will forthwith so notify the Agent and the Borrower,
whereupon (i) each of such Lender's outstanding LIBOR Loans shall automatically,
on the expiration date of the respective Interest Period applicable thereto or,
to the extent any such LIBOR Loan may not lawfully be maintained as a LIBOR Loan
until such expiration date, upon such notice, be converted into a Base Rate Loan
and (ii) the obligation of such Lender to make, to convert Base Rate Loans into,
or to continue, LIBOR Loans shall be suspended, and any Notice of Borrowing or
Notice of Conversion/Continuation given at any time thereafter with respect to
LIBOR Loans shall, as to such Lender, be deemed to be a request for Base Rate
Loans, until such Lender shall have determined that the circumstances giving
rise to such suspension no longer exist and shall have so notified the Agent,
and the Agent shall have so notified the Borrower.
(e) Determinations by the Agent or any Lender for purposes of this Section
of any increased costs, reduction in return, market contingencies, illegality or
any other matter shall, absent manifest error, be conclusive, provided that such
determinations are made in good faith. Each Lender agrees that, upon the
occurrence
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of any event giving rise to the operation of this Section with respect to such
Lender, it will, if requested by the Borrower and to the extent permitted by
law, endeavor in good faith to designate another Lending Office for its LIBOR
Loans, but only if such designation would make it lawful for such Lender to
continue to make or maintain LIBOR Loans hereunder; provided that such
designation is made on such terms that such Lender, in its good faith
determination, suffers no increased cost or economic, legal or regulatory
disadvantage, with the object of avoiding the consequence of the event giving
rise to the operation of this Section.
(f) Each demand for payment under this Section shall be preceded by a
notice to the Borrower of such anticipated demand, which notice shall specify in
reasonable detail the basis for such demand, but the failure to provide such
advance notice shall not relieve the Borrower of any of its obligations
hereunder. No failure by the Agent or any Lender to demand payment of any
amounts payable under this Section shall constitute a waiver of its right to
demand payment of any additional amounts arising at any subsequent time.
Nothing in this Section shall be construed or so operate as to require the
Borrower to pay any interest, fees, costs or charges in excess of that permitted
by applicable law.
2.12 Taxes.
(a) Any and all payments by the Borrower hereunder or under any Revolving
Credit/Term Note shall be made, in accordance with the terms hereof and thereof,
free and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto (other than net income and franchise taxes imposed on the Agent,
the Issuing Bank or any Lender) (y) by the jurisdiction under the laws of which
the Agent, the Issuing Bank or such Lender, as the case may be, is organized or
any political subdivision thereof and (z) in the case of each Lender, by the
jurisdiction in which any Lending Office of such Lender is located or any
political subdivision thereof (all such nonexcluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes"). If the Borrower shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder or under any Revolving Credit/Term
Note to the Agent, the Issuing Bank or any Lender, (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),
the Agent, the Issuing Bank or such Lender, as the case may be, receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) the Borrower will make such deductions and (iii) the Borrower will pay the
full amount deducted to the relevant taxation authority or other authority in
accordance with applicable law.
-45-
(b) The Borrower will indemnify the Agent, the Issuing Bank and each Lender
for the full amount of Taxes (including, without limitation, any Taxes imposed
by any jurisdiction on amounts payable under this Section) paid by the Agent,
the Issuing Bank or such Lender, as the case may be, and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto, whether or not such Taxes were correctly or legally asserted. This
indemnification shall be made within 30 days from the date the Agent, the
Issuing Bank or any Lender, as the case may be, makes written demand therefor.
Within thirty (30) days after the date of any payment of Taxes pursuant to this
Section, the Borrower will furnish to the Agent, the Issuing Bank or the
relevant Lender, as the case may be, the original or a certified copy of a
receipt evidencing payment thereof.
(c) If any Lender is a "foreign corporation, partnership or trust" within
the meaning of the Code, and such Lender claims exemption from United States
withholding tax under Section 1441 or 1442 of the Code, such Lender will deliver
to the Agent and the Borrower:
(i) if such Lender claims an exemption from, or a reduction of, withholding
tax under a United States tax treaty, properly completed IRS Forms 1001
and W-8 before the payment of any interest in the first calendar year,
and before the payment of any interest in each third succeeding
calendar year, during which interest may be paid to such Lender under
this Agreement;
(ii) if such Lender claims that interest paid under this Agreement is exempt
from United States withholding tax because it is effectively connected
with a United States trade or business of such Lender, two (2) properly
completed and executed copies of IRS Form 4224 before the payment of
any interest is due in the first taxable year of such Lender, and in
each succeeding taxable year of such Lender, during which interest may
be paid to such Lender under this Agreement, and IRS Form W-9; and
(iii) such other form or forms as may be required under the Code or other
laws of the United States as a condition to exemption from, or
reduction of, United States withholding tax.
Each such Lender will promptly notify the Agent and the Borrower of any
changes in circumstances that would modify or render invalid any claimed
exemption or reduction.
(d) If any Lender is entitled to a reduction in the applicable withholding
tax, the Agent may withhold from any interest payment to such Lender an amount
equivalent to the
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applicable withholding tax after taking into account such reduction. If the
forms or other documentation required under subsection (c) above are not
delivered to the Agent, then the Agent may withhold from any interest payment to
such Lender not providing such forms or other documentation an amount equivalent
to the applicable withholding tax. For purposes of this Section, a distribution
hereunder by the Agent to or for the account of any Lender shall be deemed a
payment by the Borrower.
(e) If the IRS or any other Governmental Authority, domestic or foreign,
asserts a claim that the Agent did not properly withhold tax from amounts paid
to or for the account of any Lender (whether because the appropriate form was
not delivered or was not properly executed, because such Lender failed to notify
the Agent of a change in circumstances that rendered the exemption from, or
reduction of, withholding tax ineffective, or for any other reason), such Lender
shall indemnify the Agent fully for all amounts paid, directly or indirectly, by
the Agent as tax or otherwise, including penalties and interest, and including
any taxes imposed by any jurisdiction on the amounts payable to the Agent under
this subsection (e), together with all costs, expenses and reasonable attorneys'
fees incurred or paid in connection therewith.
(f) If at any time the Borrower requests any Lender to deliver any forms
or other documentation pursuant to subsection (c) above, then the Borrower
shall, upon demand of such Lender, reimburse such Lender for any reasonable
costs or expenses incurred by such Lender in the preparation or delivery of such
forms or other documentation.
(g) Each Lender agrees that, if the Borrower is required to pay
additional amounts to any Lender pursuant to subsection (a) above, then such
Lender will, if requested by the Borrower and to the extent permitted by law,
endeavor in good faith to designate another Lending Office for its LIBOR Loans,
but only if such designation would make it lawful for such Lender to continue to
make or maintain LIBOR Loans hereunder; provided that such designation is made
on such terms that such Lender, in its good faith determination, suffers no
increased cost or economic, legal or regulatory disadvantage, with the object of
avoiding the consequence of the event giving rise to the operation of this
Section.
2.13 Compensation. The Borrower will compensate each Lender, upon its
written request (which request shall set forth the basis for requesting such
compensation and shall be copied to the Agent), for all losses, expenses and
liabilities (including, without limitation, any loss, expense or liability
incurred by reason of the liquidation or reemployment of deposits or other funds
required by such Lender to fund its LIBOR Loans) that such Lender may
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sustain (i) if for any reason (other than a default by such Lender or the Agent)
a Borrowing or continuation of, or conversion of or into, LIBOR Loans does not
occur on a date specified therefor in a Notice of Borrowing or Notice of
Conversion/Continuation, (ii) if any repayment, prepayment or conversion of any
of its LIBOR Loans occurs on a date other than the last day of an Interest
Period applicable thereto, (iii) if any prepayment of any of its LIBOR Loans is
not made on any date specified in a notice of prepayment given by the Borrower
or (iv) as a consequence of any other failure by the Borrower to make any
payments with respect to LIBOR Loans when due hereunder, including as a
consequence of acceleration of the maturity of such Loans pursuant to Section
8.1. In addition, the Borrower will pay to the Agent, for its own account, an
administrative fee of $500 concurrently with any payments made in respect of any
single occurrence pursuant to this Section. Calculation of all amounts payable
to a Lender under this Section shall be made as though such Lender had actually
funded its relevant LIBOR Loan through the purchase of a Eurodollar deposit
bearing interest at the LIBOR Rate in an amount equal to the amount of such
LIBOR Loan, having a maturity comparable to the relevant Interest Period and
through the transfer of such Eurodollar deposit from an offshore Lending Office
of such Lender to a Lending Office of such Lender in the United States;
provided, however, that each Lender may fund each of its LIBOR Loans in any
manner it sees fit and the foregoing assumption shall be utilized only for the
calculation of amounts payable under this Section. Determinations by any Lender
for purposes of this Section 2.13 of any such losses, expenses or liabilities
shall, absent manifest error, be conclusive, provided that such determinations
--------
are made in good faith.
2.14 Use of Proceeds. The proceeds of the Revolving Credit/Term Loans
shall be used by the Borrower solely (i) to refinance existing Debt, (ii) to
provide working capital and for general corporate purposes for the Borrower and
its Subsidiaries and (iii) to finance Permitted Acquisitions pursuant to this
Agreement.
2.15 Recovery of Payments.
(a) The Borrower agrees that to the extent the Borrower makes a payment
or payments to or for the account of the Agent, the Lenders or the Issuing Bank,
which payment or payments or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid to
a trustee, receiver or any other party under any bankruptcy, insolvency or
similar state or federal law, common law or equitable cause, then, to the extent
of such payment or repayment, the Obligation intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been
received.
(b) If any amounts distributed by the Agent to a Lender are subsequently
returned or repaid by the Agent to the Borrower or its
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representative or successor in interest, whether by court order or by settlement
approved by the Lender in question, such Lender will, promptly upon receipt of
notice thereof from the Agent, pay the Agent such amount. If any such amounts
are recovered by the Agent from the Borrower or its representative or successor
in interest, the Agent shall redistribute such amounts to the Lenders on the
same basis as such amounts were originally distributed.
2.16 Pro Rata Borrowings.
(a) All Borrowings, continuations and conversions of Loans shall be made
by the Lenders pro rata on the basis of their respective Percentages, as
appropriate from time to time, rounded to the nearest ▇▇▇▇▇.
(b) Each Lender agrees that if it shall receive any amount hereunder
(whether by voluntary payment, realization upon security, exercise of the right
of set-off or banker's lien, counterclaim or cross action, enforcement of any
right under the Loan Documents, or otherwise) applicable to the payment of any
of the Obligations that exceeds its Pro Rata Share of payments on account of
such Obligations then or therewith obtained by all the Lenders to which such
payments are required to have been made, such Lender shall forthwith purchase
from the other Lenders such participations in such Obligations as shall be
necessary to cause such purchasing Lender to share the excess payment or other
recovery ratably with each of them; provided, however, that if all or any
portion of such excess payment is thereafter recovered from such purchasing
Lender, such purchase from each such other Lender shall be rescinded and each
such other Lender shall repay to the purchasing Lender the purchase price to the
extent of such recovery together with an amount equal to such other Lender's
ratable share (according to the proportion of (i) the amount of such other
Lender's required repayment to (ii) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. The Borrower
agrees that any Lender so purchasing a participation from another Lender
pursuant to the provisions of this Section may, to the fullest extent permitted
by law, exercise any and all rights of payment (including, without limitation,
set-off, banker's lien or counterclaim) with respect to such participation as
fully as if such participant were a direct creditor of the Borrower in the
amount of such participation.
2.17 Letters of Credit.
(a) Subject to and upon the terms and conditions herein set forth, so
long as no Default or Event of Default has occurred and is continuing, the
Issuing Bank will, at any time and from time to time on and after the Amendment
Effective Date and prior to the Revolving Credit/Term Facility Termination Date,
and upon request
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by the Borrower in accordance with the provisions of Section 2.17(b), issue for
the account of the Borrower one or more irrevocable standby letters of credit
denominated in Dollars and in a form customarily used or otherwise approved by
the Issuing Bank (together with all amendments, modifications and supplements
thereto, substitutions therefor and renewals and restatements thereof,
collectively, the "Letters of Credit"). The Stated Amount of each Letter of
Credit shall not be less than such amount as may be acceptable to the Issuing
Bank. Notwithstanding the foregoing:
(i) No Letter of Credit shall be issued with a Stated Amount upon
issuance which (i) when added to all other Letter of Credit
Outstandings at such time, would exceed $10,000,000 or (ii) when
added to all other Letter of Credit Outstandings at such time and
the aggregate principal amount of all Revolving Credit/Term Loans
then outstanding, would exceed the Total Revolving Credit/Term
Commitment at such time;
(ii) No Letter of Credit shall be issued that by its terms expires more
than one (1) year after its date of issuance or later than the
seventh day prior to the Revolving Credit/Term Facility Conversion
Date; provided, however, that a Letter of Credit may, if requested
by the Borrower, provide by its terms, and on terms acceptable to
the Issuing Bank, for renewal for successive periods of one year or
less (but not beyond the seventh day prior to the Revolving
Credit/Term Facility Conversion Date), unless and until the Issuing
Bank shall have delivered a notice of nonrenewal to the beneficiary
of such Letter of Credit; and
(iii) The Issuing Bank shall be under no obligation to issue any Letter of
Credit if, at the time of such proposed issuance, (A) any order,
judgment or decree of any Governmental Authority or arbitrator shall
purport by its terms to enjoin or restrain the Issuing Bank from
issuing such Letter of Credit, or any Requirement of Law applicable
to the Issuing Bank or any request or directive (whether or not
having the force of law) from any Governmental Authority with
jurisdiction over the Issuing Bank shall prohibit, or request that
the Issuing Bank refrain from, the issuance of letters of credit
generally or such Letter of Credit in particular or shall impose
upon the Issuing Bank with respect to such Letter of Credit any
restriction or reserve or capital requirement (for which the Issuing
Bank is not otherwise compensated) not in effect on the Amendment
Effective Date, or any unreimbursed loss, cost or expense that was
not applicable, in effect or known to the Issuing Bank as of the
Amendment Effective Date and
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that the Issuing Bank in good ▇▇▇▇▇ ▇▇▇▇▇ material to it, or (B) the
Issuing Bank shall have actual knowledge, or shall have received
notice from any Lender, prior to the issuance of such Letter of
Credit that one or more of the conditions specified in Section 3.2
(if applicable) or 3.3 are not then satisfied or that the issuance of
such Letter of Credit would violate the provisions of subsection (i)
above.
(b) Whenever the Borrower desires the issuance of a Letter of Credit, the
Borrower will notify the Issuing Bank (with copies to the Agent) in writing, by
11:00 a.m., Charlotte time, at least three (3) Business Days' (or such shorter
period as is acceptable to the Issuing Bank in any given case) prior to the
requested date of issuance thereof. Each such request (each, a "Letter of
Credit Request") shall be irrevocable, shall be given in the form of Exhibit B-3
and shall be appropriately completed to specify (i) the proposed date of
issuance (which shall be a Business Day), (ii) the proposed Stated Amount and
expiry date of the Letter of Credit, and (iii) the name and address of the
proposed beneficiary or beneficiaries of the Letter of Credit. The Borrower
will also complete any application procedures and documents required by the
Issuing Bank in connection with the issuance of any Letter of Credit. The Agent
will, promptly upon its receipt thereof, notify each Lender of the Letter of
Credit Request. Upon its issuance of any Letter of Credit, the Issuing Bank
will promptly notify each Lender of such issuance and will notify each Lender
with a Revolving Credit/Term Commitment of the amount of its participation
therein under Section 2.17(c).
(c) Immediately upon the issuance of any Letter of Credit, the Issuing
Bank shall be deemed to have sold and transferred to each Lender with a
Revolving Credit/Term Commitment, and each such Lender (each, in such capacity,
an "L/C Participant") shall be deemed irrevocably and unconditionally to have
purchased and received from the Issuing Bank, without recourse or warranty, an
undivided interest and participation, pro rata to the extent of its Revolving
Credit/Term Percentage at such time, in such Letter of Credit, each drawing made
thereunder and the obligations of the Borrower under this Agreement with respect
thereto and any security therefor (including the Collateral) or guaranty
pertaining thereto; provided, however, that the fees and other charges relating
to Letters of Credit described in Sections 2.7(c) and (d) shall be payable
directly to the Issuing Bank as provided therein, and the L/C Participants shall
have no right to receive any portion thereof. Upon any change in the Revolving
Credit/Term Commitments of any of the Lenders pursuant to Section 10.5, with
respect to all outstanding Letters of Credit and Reimbursement Obligations there
shall be an automatic adjustment to the participations pursuant to this Section
to reflect the new Revolving Credit/Term Percentages of the assigning Lender and
the Eligible Assignee.
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(d) The Borrower hereby agrees to reimburse the Issuing Bank by making
payment to the Agent, for the account of the Issuing Bank, in immediately
available funds, for any payment made by the Issuing Bank under any Letter of
Credit (each such amount so paid until reimbursed, together with interest
thereon payable as provided hereinbelow, a "Reimbursement Obligation")
immediately after, and in any event on the date of, such payment, together with
interest on the amount so paid by the Issuing Bank, to the extent not reimbursed
prior to 2:00 p.m., Charlotte time, on the date of such payment or disbursement,
(i) for the period from the date of the respective payment to the date of
receipt by the Borrower from the Issuing Bank of notice of such payment, the
Adjusted Base Rate as in effect from time to time during such period, and (ii)
for the period from the date of receipt by the Borrower from the Issuing Bank of
notice of such payment to the date the Reimbursement Obligation created thereby
is satisfied, the Base Rate as in effect from time to time during such period
plus two percentage points (2.0%), such interest also to be payable on demand.
The Issuing Bank will provide the Agent and the Borrower with prompt notice of
any payment or disbursement made under any Letter of Credit, although the
failure to give, or any delay in giving, any such notice shall not release,
diminish or otherwise affect the Borrower's obligations under this Section or
any other provision of this Agreement.
(e) In the event that the Issuing Bank makes any payment under any Letter
of Credit and the Borrower shall not have timely satisfied in full its
Reimbursement Obligation to the Issuing Bank pursuant to Section 2.17(d), and to
the extent that any amounts then held in the Cash Collateral Account established
pursuant to Section 2.17(i) shall be insufficient to satisfy such Reimbursement
Obligation in full, the Issuing Bank will promptly notify the Agent, and the
Agent will promptly notify each L/C Participant, of such failure. If the Agent
gives such notice prior to 11:00 a.m., Charlotte time, on any Business Day to
any L/C Participant, such L/C Participant will make available to the Agent, for
the account of the Issuing Bank, its Pro Rata Share (calculated with respect to
its Revolving Credit/Term Percentage) of the amount of such payment on such
Business Day in immediately available funds. If the Agent gives such notice
after 11:00 a.m., Charlotte time, on any Business Day to any such L/C
Participant, such L/C Participant shall make its Pro Rata Share of such amount
available to the Agent on the next succeeding Business Day. If and to the
extent such L/C Participant shall not have so made its Pro Rata Share of the
amount of such payment available to the Agent, such L/C Participant agrees to
pay to the Agent, for the account of the Issuing Bank, forthwith on demand such
amount, together with interest thereon, for each day from such date until the
date such amount is paid to the Agent at the Federal Funds Rate. The failure of
any L/C Participant to make available to the Agent its Pro Rata Share of any
payment under any Letter of Credit shall not relieve any other L/C Participant
of its obligation hereunder to make available to the Agent its Pro Rata
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Share of any payment under any Letter of Credit on the date required, as
specified above, but no L/C Participant shall be responsible for the failure of
any other L/C Participant to make available to the Agent such other L/C
Participant's Pro Rata Share of any such payment. Each such payment by an L/C
Participant under this Section 2.17(e) of its Pro Rata Share of an amount paid
by the Issuing Bank shall constitute a Revolving Credit/Term Loan by such Lender
(the Borrower being deemed to have given a timely Notice of Borrowing therefor)
and shall be treated as such for all purposes of this Agreement; provided that
for purposes of determining the available unused portion of the Total Revolving
Credit/Term Commitment immediately prior to giving effect to the application of
the proceeds of such Revolving Credit/Term Loans, the Reimbursement Obligation
being satisfied thereby shall be deemed not to be outstanding at such time.
(f) Whenever the Issuing Bank receives a payment in respect of a
Reimbursement Obligation as to which the Agent has received, for the account of
the Issuing Bank, any payments from the L/C Participants pursuant to Section
2.17(e), the Issuing Bank will promptly pay to the Agent, and the Agent will
promptly pay to each L/C Participant that has paid its Pro Rata Share thereof,
in immediately available funds, an amount equal to such L/C Participant's
ratable share (based on the proportionate amount funded by such L/C Participant
to the aggregate amount funded by all L/C Participants) of such Reimbursement
Obligation.
(g) The Reimbursement Obligations of the Borrower, and the obligations of
the L/C Participants to make payments to the Agent, for the account of the
Issuing Bank, with respect to Letters of Credit, shall be irrevocable, shall
remain in effect until the Issuing Bank shall have no further obligations to
make any payments or disbursements under any circumstances with respect to any
Letter of Credit, and, except to the extent resulting from any gross negligence
or willful misconduct on the part of the Issuing Bank as finally determined by a
court of competent jurisdiction and not subject to any appeal (or pursuant to
arbitration as set forth herein), shall not be subject to counterclaim, set-off
or other defense or any other qualification or exception whatsoever and shall be
made in accordance with the terms and conditions of this Agreement under all
circumstances, including, without limitation, any of the following
circumstances:
(i) Any lack of validity or enforceability of this Agreement, any of the
other Loan Documents or any documents or instruments relating to any
Letter of Credit;
(ii) Any change in the time, manner or place of payment of, or in any other
term of, all or any of the Obligations in respect of any Letter of
Credit or any other
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amendment, modification or waiver of or any consent to departure from
any Letter of Credit or any documents or instruments relating
thereto, in each case whether or not the Borrower has notice or
knowledge thereof;
(iii) The existence of any claim, set-off, defense or other right that the
Borrower may have at any time against a beneficiary named in a Letter
of Credit, any transferee of any Letter of Credit (or any Person for
whom any such transferee may be acting), the Agent, the Issuing Bank,
any Lender or other Person, whether in connection with this
Agreement, any Letter of Credit, the transactions contemplated hereby
or any unrelated transactions (including any underlying transaction
between the Borrower and the beneficiary named in any such Letter of
Credit);
(iv) Any draft, certificate or any other document presented under the
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect, any errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail,
telecopier or otherwise, or any errors in translation or in
interpretation of technical terms;
(v) Any defense based upon the failure of any drawing under a Letter of
Credit to conform to the terms of the Letter of Credit (the Issuing
Bank's sole obligation, in determining whether to pay under any
Letter of Credit, being in good faith to confirm that any documents
required to be delivered under such Letter of Credit have been
delivered and that they appear on their face to comply with the
requirements of such Letter of Credit), any nonapplication or
misapplication by the beneficiary or any transferee of the proceeds
of such drawing or any other act or omission of such beneficiary or
transferee in connection with such Letter of Credit;
(vi) The exchange, release, surrender or impairment of any Collateral or
other security for the Obligations;
(vii) The occurrence of any Default or Event of Default; or
(viii) Any other circumstance or event whatsoever, including, without
limitation, any other circumstance that might otherwise constitute a
defense available to, or a discharge of, the Borrower or a guarantor.
None of the foregoing shall impair, prevent or otherwise affect any of the
rights and powers granted to the Issuing Bank hereunder.
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Any action taken or omitted to be taken by the Issuing Bank under or in
connection with any Letter of Credit, if taken or omitted in the absence of
gross negligence or willful misconduct, shall be binding upon the Borrower and
each L/C Participant and shall not create or result in any liability of the
Issuing Bank to the Borrower or any L/C Participant.
(h) If at any time after the Amendment Effective Date the Issuing Bank or
any L/C Participant determines that the introduction of or any change in any
applicable law, rule, regulation, order, guideline or request or in the
interpretation or administration thereof by any Governmental Authority charged
with the interpretation or administration thereof, or compliance by the Issuing
Bank or any L/C Participant with any request or directive by any such authority
(whether or not having the force of law) shall either (i) impose, modify or make
applicable any reserve, deposit, capital adequacy or similar requirement against
Letters of Credit issued by the Issuing Bank or participated in by any L/C
Participant or (ii) impose on the Issuing Bank or any L/C Participant any other
conditions relating, directly or indirectly, to this Agreement or any Letter of
Credit, and the result of any of the foregoing is to increase the cost to the
Issuing Bank or L/C Participant of issuing, maintaining or participating in any
Letter of Credit, or to reduce the amount of any sum received or receivable by
the Issuing Bank or such L/C Participant hereunder or reduce the rate of return
on its capital with respect to Letters of Credit, then the Borrower will, within
fifteen (15) days after delivery to the Borrower by the Issuing Bank or such L/C
Participant of written demand therefor (with a copy thereof to the Agent), pay
to the Issuing Bank or such L/C Participant such additional amounts as shall
compensate the Issuing Bank or such L/C Participant for such increase in costs
or reduction in return. A certificate submitted to the Borrower by the Issuing
Bank or such L/C Participant, as the case may be (a copy of which certificate
shall be sent by the Issuing Bank or such L/C Participant to the Agent), setting
forth the basis for the determination of such additional amount or amounts
necessary to compensate the Issuing Bank or such L/C Participant as aforesaid,
shall be conclusive and binding on the Borrower absent manifest error.
(i) At any time and from time to time (i) during the continuance of an
Event of Default, the Agent may, and at the direction of the Required Lenders
shall, require the Borrower to deliver to the Agent such additional amount of
cash as is equal to the aggregate Stated Amount of all Letters of Credit at any
time outstanding (whether or not any beneficiary under any Letter of Credit
shall have drawn or be entitled at such time to draw thereunder) or (ii) in the
event of a repayment under Section 2.5(b), the Agent will retain such amount as
may then be required to be retained under the proviso in Section 2.5(b), such
amount in each case under clauses (i) and (ii) above to be held by the Agent in
a non-interest bearing cash collateral account (the
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"Cash Collateral Account") as security for, and for application to, the
Borrower's Reimbursement Obligations. In the event of a drawing, and subsequent
payment by the Issuing Bank, under any Letter of Credit at any time during which
any amounts are held in the Cash Collateral Account, the Agent will deliver to
the Issuing Bank an amount equal to the Reimbursement Obligation created as a
result of such payment (or, if the amounts so held are less than such
Reimbursement Obligation, all of such amounts) to reimburse the Issuing Bank
therefor. Any amounts remaining in the Cash Collateral Account after the
expiration of all Letters of Credit and reimbursement in full of the Issuing
Bank for all of its obligations thereunder shall be held by the Agent, for the
benefit of the Borrower, to be applied against the Obligations in such order as
the Agent may direct.
(j) Notwithstanding any termination of the Commitments or repayment of
the Loans, or both, the obligations of the Borrower under this Section 2.17
shall remain in full force and effect until the Issuing Bank and the L/C
Participants shall have no further obligations to make any payments or
disbursements under any circumstances with respect to any Letter of Credit.
2.18 Sale and Assignment of Existing Loans.
Each of the original Lenders party hereto that is selling Loans in
existence immediately prior to the date hereof ("Existing Loans") pursuant to
this Section 2.18 (each, a "Selling Lender," and collectively, the "Selling
Lenders") hereby represents and warrants to (i) each of the Lenders party hereto
that is not an original Lender, and (ii) each other original Lender party hereto
that is purchasing Existing Loans pursuant to this Section 2.18 (the Lenders
described under (i) and (ii), each, a "Purchasing Lender," and collectively, the
"Purchasing Lenders"), that it is the legal and beneficial owner of the interest
in the Existing Loans being assigned by it hereunder and that such interest is
free and clear of any adverse claim. In order to give effect to the assignment
to the Purchasing Lenders of their respective pro rata shares of the Existing
Loans to be concurrently converted to Loans hereunder as of the Amendment
Effective Date, all as contemplated hereunder, each Selling Lender shall and
does hereby sell and assign to each Purchasing Lender, without recourse,
representation or warranty (except as set forth in the first sentence of this
subsection (a)), and each Purchasing Lender shall and does hereby purchase and
assume from each Selling Lender, a portion of all of the rights and obligations
of each Selling Lender with respect to such Existing Loans converted to Loans
hereunder as of the Amendment Effective Date and each of the Loan Documents, in
each case in the amounts set forth in Annex A hereto (the "Assigned Rights"),
-------
such that after giving effect to such sale and assignment, the Lenders shall own
the Existing Loans converted to Loans hereunder in proportion to their
respective Commitments.
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ARTICLE III
CLOSING; CONDITIONS OF CLOSING AND BORROWING
3.1 Closing. The closing of the transactions contemplated by this Loan
Agreement shall take place at the offices of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.A.,
1900 Independence Center, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ at 10:00 a.m. on September 26, 1997, or at such other place or time as the
parties hereto shall mutually agree.
3.2 Conditions of Loans and Advances. The obligations of the Lenders to
enter into this financing and to make the Loans under this Agreement on the
Amendment Effective Date and the obligation of the Issuing Bank to issue any
Letter of Credit on the Amendment Effective Date are subject to the satisfaction
of the following conditions:
3.2.1 Executed Loan Documents.
(a) Revolving Credit/Term Notes. The Revolving Credit/Term Notes
required under Sections 2.3 shall have been duly authorized, executed and
delivered to the appropriate Lenders by the Borrower, in form and substance
satisfactory to the Lenders, shall be in full force and effect and no Default
shall exist thereunder, each Lender shall have received its original Revolving
Credit/Term Note and a copy of each other Revolving Credit/Term Note, and the
Agent shall have received a copy of each Revolving Credit/Term Note.
(b) Pledge Agreements. The Pledge Agreement and the Subsidiary Pledge
Agreement shall have been duly authorized, executed and delivered to the Agent
and each Lender by the Borrower and Guarantors, respectively, in form and
substance satisfactory to the Lenders, together with all certificates for the
Stock being pledged thereunder and duly executed undated stock powers for each
such certificate, shall be in full force and effect and no Default shall exist
thereunder, and the Agent and each Lender shall have received a fully executed
original thereof.
(c) Guaranty Agreement. Each Guarantor shall have duly authorized,
executed and delivered to the Agent and each Lender the Guaranty Agreement, or a
confirmation thereof, in form and substance satisfactory to the Lenders, each
such document shall be in full force and effect and no Default shall exist
thereunder, and the Agent and each Lender shall have received a fully executed
original thereof.
(d) Intercompany Loan Documents. A promissory note in respect of
intercompany indebtedness shall have been duly authorized,
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executed and delivered by each Guarantor and assigned by the Borrower to the
Agent, in form and substance satisfactory to the Agent, such assignment shall be
evidenced and perfected in a manner satisfactory to the Agent, each such
document shall be in full force and effect and no Default shall exist
thereunder.
3.2.2 Closing Certificates; etc.
(a) Certificate of the Borrower. The Agent and each Lender shall have
received a certificate dated as of the Amendment Effective Date from the
President or Vice President and Secretary of the Borrower, in form and substance
satisfactory to the Lenders, to the effect that, to the best of their knowledge
after diligent inquiry, all representations and warranties of the Borrower
contained in this Agreement and the other Loan Documents are true, correct and
complete as of the Amendment Effective Date; that the Borrower is not in
violation of any of the covenants contained in this Agreement and the other Loan
Documents; that, after giving effect to the transactions contemplated by this
Agreement, no Default or Event of Default has occurred and is continuing; and
that the Borrower has satisfied each of the conditions set forth in this
Section.
(b) Secretaries' Certificates. The Agent and each Lender shall have
received a certificate dated as of the Amendment Effective Date from the
Secretary or an Assistant Secretary of the Borrower and each Guarantor, in form
and substance satisfactory to the Lenders, certifying: (i) that attached
thereto is a true and complete copy of the bylaws of such corporation as in
effect on the date of such certification; (ii) that attached thereto is a true
and complete copy of resolutions adopted by the Board of Directors and
stockholders (if necessary) of such corporation, authorizing the execution,
delivery and performance of this Agreement and the other Loan Documents, as
applicable; and (iii) as to the incumbency and genuineness of the signature of
each officer of such corporation executing this Agreement or any of the other
Loan Documents, as applicable.
(c) Articles of Incorporation. The Agent and each Lender shall have
received copies of the articles or certificate of incorporation of the Borrower
and each Guarantor and all amendments thereto, each certified as of a recent
date by the Secretary of State (or other equivalent officer) of its state of
incorporation, together with a certification by the Secretary or an Assistant
Secretary of the Borrower and each Guarantor that such articles of incorporation
have not been amended since such date.
(d) Certificates of Good Standing. The Agent and each Lender shall have
received (i) long-form certificates as of a recent date of the good standing of
the Borrower and each Guarantor under the laws of its state of incorporation and
each state where the Borrower and
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each Guarantor is qualified to transact business, and (ii) where reasonably
available, certificates as of a recent date from the department of revenue or
other appropriate Governmental Authority of each such state indicating that the
Borrower or such Guarantor, as appropriate, has filed all required tax returns
and owes no delinquent taxes.
(e) Opinion of Counsel to the Borrower and the Guarantors. The Agent and
each Lender shall have received the favorable opinion of Duane, Morris &
Heckscher, counsel to the Borrower and the Guarantors, addressed to the Agent,
for the benefit of the Lenders, the Issuing Bank and each Lender, in form and
substance satisfactory to the Agent and each Lender.
(f) UCC Search. The Agent and each Lender shall have received the
results of a search of all filings made against the Borrower and each Guarantor
under the Uniform Commercial Code as in effect in any state in which any assets
of the Borrower or any Guarantor are located, indicating that the Collateral is
free and clear of any liens or encumbrances except for Permitted Liens.
(g) Insurance. The Agent shall have received certificates, and copies of
policies, of insurance, in form and substance satisfactory to the Agent, upon
the Collateral and the business of the Borrower and each Guarantor, with the
mortgagee and loss payable clauses and endorsements required by Section 5.7.
3.2.3 Consents; No Adverse Change.
(a) Consents and Approvals. All necessary approvals, authorizations and
consents, if any be required, of any Person and all Governmental Authorities
having jurisdiction with respect to the Collateral and the transactions
contemplated by this Agreement shall have been obtained.
(b) No Injunction, Etc. No action, proceeding, investigation, claim,
regulation or legislation shall have been instituted, threatened or proposed
before any court or other Governmental Authority to enjoin, restrain or
prohibit, or to obtain substantial damages in respect of, or that is related to
or arises out of this Agreement or the consummation of the transactions
contemplated hereby or that, in the Required Lenders' discretion, would make
inadvisable the consummation of the transactions contemplated by this Agreement.
(c) No Material Adverse Change. Since December 31, 1996, there shall not
have occurred any Material Adverse Change or any event, condition or state of
facts that could reasonably be expected to have a Material Adverse Effect, other
than as specifically contemplated by this Agreement and the other Loan
Documents.
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(d) Event of Default. No Default or Event of Default shall have occurred
and be continuing.
3.2.4 Financial Matters.
(a) Financial Statements. The Lenders shall have received the Financial
Statements from the Borrower, in form and substance satisfactory to the Lenders.
(b) Projections. The Lenders shall have received the Projections from
the Borrower, together with a certificate of the chief financial officer of the
Borrower as to the assumptions used in preparing the Projections, all in form
and substance satisfactory to the Lenders.
(c) Financial Condition Certificate. The Lenders shall have received a
certificate of the Borrower, in form and substance satisfactory to the Lenders,
executed by the chief financial officer of the Borrower, to the effect that on a
consolidated basis the Borrower and each of its Subsidiaries is Solvent as of
the Amendment Effective Date, taking into account any rights of contribution
that may exist between the Subsidiaries or between any Subsidiary and the
Borrower.
(d) Taxes. All taxes, fees and other charges in connection with the
execution, delivery, recording, filing and registration of any of the Loan
Documents shall have been paid by the Borrower.
3.2.5 Miscellaneous.
(a) Account Designation Letter. The Agent shall have received an Account
Designation Letter, together with written instructions from an authorized
officer, including wire transfer information, directing payment of the proceeds
of the initial Loan or Loans to be made hereunder.
(b) Disbursement Instructions. The Agent shall have received written
instructions from the Borrower to the Agent directing the payment of any
proceeds of Loans made hereunder that are to be paid on the Amendment Effective
Date.
(c) Proceedings and Documents. The Agent and the Lenders shall have
received copies of all other documents, certificates, opinions, instruments and
other evidence as each may reasonably request, in form and substance
satisfactory to the Agent and the Lenders, with respect to the transactions
contemplated by this Agreement and the taking of all actions in connection
therewith.
3.3 Conditions to All Loans and Advances. The obligation of the Lenders
to make any Loan hereunder (including any Loans made on the
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Amendment Effective Date) and the obligation of the Issuing Bank to issue any
Letters of Credit are subject to the continued validity of all Loan Documents
and the satisfaction of the following conditions precedent on the relevant
Borrowing Date:
(a) Each of the representations and warranties made by the Borrower
contained in Article IV shall be true and correct on and as of such Borrowing
Date with the same effect as if made on and as of the Borrowing Date, except to
the extent the facts upon which such representation and warranty are based may
be changed as a result of transactions permitted or contemplated hereby and such
representation or warranty relates solely to a prior date; and
(b) No Default or Event of Default shall have occurred and be continuing
on the Borrowing Date with respect to such Loan or Letter of Credit or after
giving effect to the Loans to be made or Letters of Credit to be issued on such
Borrowing Date.
(c) The security interest in certain Collateral previously pledged to the
Agent, for the benefit of the Lenders, pursuant to the Loan Documents shall
remain in full force and effect.
3.4 Acquisition Loans. The obligation of the Lenders to make any
Revolving Credit/Term Loan the proceeds of which are requested to be used, in
whole or in part, to pay all or a portion of the purchase price in connection
with a Permitted Acquisition, shall be subject to the following conditions, in
addition to the other conditions precedent set forth in this Article III:
(a) All acquisition agreements and other material agreements and
documents relating to the Permitted Acquisition shall have been fully executed
and, to the extent necessary, recorded or filed with the appropriate
Governmental Authorities ;
(b) All conditions to the Borrower's and any Subsidiary's obligations
with respect to the Permitted Acquisition shall have been satisfied or waived,
and the Permitted Acquisition shall have been consummated (before or concurrent
with such Loan); and
(c) The Permitted Acquisition complies with the provisions of Section
5.15.
3.5 Waiver of Conditions Precedent. If any Lender makes any Loan
hereunder, or if the Issuing Bank issues any Letter of Credit, prior to the
fulfillment of any of the conditions precedent set forth in this Article III,
the making of such Loan or the issuance of such Letter of Credit shall
constitute only an extension of time for the fulfillment of such condition and
not a waiver thereof, and unless the Required Lenders indicate otherwise in
writing, the Borrower shall thereafter use its best efforts to fulfill each such
condition promptly. No failure by the Borrower to fulfill any such
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condition precedent shall constitute a Default or an Event of Default hereunder,
except to the extent any such failure is continuing after the expiration of any
period within which such condition is specifically required to be fulfilled.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Loan Agreement, to make
the Loans and to continue to make the Loans, and to induce the Issuing Bank to
issue, and the Lenders to participate in, the Letters of Credit, the Borrower
makes the following warranties and representations to the Agent, the Issuing
Bank and each Lender:
4.1 Corporate Organization and Power. The Borrower and each Subsidiary
(a) is a corporation duly organized, validly existing and in good standing under
the laws of the jurisdiction set forth opposite its name on Schedule 4.1; (b) is
qualified to do business and is in good standing in every other jurisdiction
where the nature of its business or the ownership of its properties requires it
to be so qualified and where the failure to be so qualified would have a
Material Adverse Effect, which jurisdictions are set forth on Schedule 4.1; (c)
except as set forth on Schedule 4.1, has no Subsidiaries or Affiliates (other
than its officers, directors and shareholders) and is not a partner or joint
venturer in any partnerships or joint ventures; (d) has the corporate power to
own and give a lien on and security interest in its respective Collateral and to
engage in the transactions contemplated hereby; and (e) has the full corporate
power, authority and legal right to execute and deliver this Agreement and the
other Loan Documents to which it is a party and to perform and observe the terms
and provisions thereof. Neither the Borrower nor any of its Subsidiaries has,
during the preceding five (5) years, been known as or used any other corporate,
fictitious or trade names in the United States other than as set forth on
Schedule 4.1.
4.2 Litigation; Government Regulation. Except as set forth in Schedule
4.2, (a) there are no material actions, suits, investigations or proceedings
pending (pursuant to which the Borrower or any Subsidiary has been served) or,
to the knowledge of the Borrower, threatened against or affecting the Borrower
or any Subsidiary or its business, or that question the validity of this
Agreement or any of the Loan Documents, at law or in equity before any court,
arbitrator or Governmental Authority, and (b) neither the Borrower nor any
Subsidiary is in violation of or in default under any Requirement of Law where
such violation could have a Material Adverse Effect.
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4.3 Taxes. Except as set forth in Schedule 4.3, neither the Borrower nor
any Subsidiary is delinquent in the payment of any taxes that have been levied
or assessed by any Governmental Authority against it or its assets. Except as
set forth in Schedule 4.3, the Borrower and each Subsidiary (a) has timely filed
all tax returns that are required by law to be filed prior to the date hereof,
and has paid all taxes shown on said returns and all other assessments or fees
levied upon it or upon its properties to the extent that such taxes, assessments
or fees have become due, and if not due, such taxes have been adequately
provided for and sufficient reserves therefor established on its books of
account, and (b) is current with respect to payment of all federal and state
withholding taxes, social security taxes and other payroll taxes.
4.4 Enforceability of Loan Documents; Compliance With Other Instruments.
Each of the Loan Documents to which the Borrower or any Guarantor is a party, as
the case may be, has been duly authorized by all necessary corporate action on
the part of the Borrower or such Guarantor, has been validly executed and
delivered by the Borrower or such Guarantor and is the legal, valid and binding
obligation of the Borrower or such Guarantor, enforceable against the Borrower
or such Guarantor in accordance with its terms. Except as set forth in Schedule
4.4, neither the Borrower nor any Subsidiary is in default in any material
respect with respect to any indenture, loan agreement, mortgage, lease, deed or
similar agreement related to the borrowing of monies to which it is a party or
by which it, or any of its property, is bound. Neither the execution, delivery
or performance of the Loan Documents by the Borrower and the Guarantors, nor
compliance by the Borrower and the Guarantors therewith: (a) conflicts or will
conflict with or results or will result in any breach of, or constitutes or will
constitute with the passage of time or the giving of notice or both, a default
under, (i) any Requirement of Law or (ii) any agreement or instrument to which
the Borrower or any Guarantor is a party or by which it, or any of its property,
is bound or (b) results or will result in the creation or imposition of any
lien, charge or encumbrance upon the properties of the Borrower or any
Subsidiary pursuant to any such agreement or instrument, except for Permitted
Liens.
4.5 Governmental Authorization.
(a) No authorization, consent or approval of, notice to, or declaration or
filing with, any Governmental Authority is required for the valid execution,
delivery and performance by the Borrower or any Guarantor of the Loan Documents
to which it is a party or the consummation by the Borrower or any Guarantor of
the transactions contemplated thereby. The Borrower and each Subsidiary has,
and is in good standing with respect to, all material licenses, approvals,
permits, certificates, inspections, consents and franchises of Governmental
Authorities and other Persons necessary to continue to conduct its business as
heretofore
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conducted and to own or lease and operate its respective properties as now owned
or leased by it. None of such licenses, approvals, permits, certificates,
consents, or franchises contains any term, provision, condition or limitation
more burdensome than such as are generally applicable to Persons engaged in the
same or similar business as the Borrower or such Subsidiary. Without limitation
of the foregoing, the Borrower and each Subsidiary has, to the extent
applicable, (i) obtained (or been duly assigned) all required certificates of
need or determinations of need, as required by the relevant state Governmental
Authority, for the acquisition, construction, expansion of, investment in or
operation of its businesses as currently operated; (ii) obtained and maintains
Medicare Certification; and (iii) entered into and maintains in good standing
its Medicaid Provider Agreement.
4.6 Event of Default. No Default or Event of Default has occurred and is
continuing.
4.7 Margin Securities. None of the proceeds of the Loans will be used,
directly or indirectly, for the purpose of purchasing or carrying any "margin
stock," as such term is defined in Regulation U, or for the purposes of
maintaining, reducing or retiring any Debt originally incurred to purchase or
carry margin stock or for any other purpose that might constitute the
transactions contemplated herein a "purpose credit" within the meaning of
Regulation U, Regulation X or Regulation G or any other regulations of the Board
of Governors of the Federal Reserve System, as in effect from time to time.
4.8 Full Disclosure. None of (i) the Loan Documents, (ii) any document,
report or other correspondence filed with the Securities and Exchange Commission
or distributed to the Borrower's stockholders pursuant to the requirements of
the Exchange Act, or (iii) any statements furnished to the Agent or any Lender
by or on behalf of the Borrower or any Subsidiary in connection with the Loan
Documents, contains any untrue statement of a material fact or, to the
Borrower's knowledge, omits to state a material fact necessary to make the
statements contained therein or herein, in light of the circumstances under
which they were made, not misleading. To the Borrower's knowledge, there is no
fact that the Borrower or any other Person has not disclosed to the Agent or the
Lenders that may result in a Material Adverse Effect.
4.9 Principal Places of Business. Schedule 4.9 lists the chief executive
office and principal place of business, as provided in the Uniform Commercial
Code, of the Borrower and each Subsidiary as of the Amendment Effective Date.
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4.10 ERISA; Employee Benefits.
(a) Schedule 4.10 (i) lists, as of the Amendment Effective Date, all
Employee Plans and Pension Plans ("Plans") maintained or sponsored by the
Borrower and its Subsidiaries or to which the Borrower or any Subsidiary is
obligated to contribute and (ii) separately identifies all Qualified Plans (as
defined below) and all Multiemployer Plans.
(b) Each such Plan is in compliance in all material respects (or may be
brought into compliance without a Material Adverse Effect) with the applicable
provisions of ERISA, the Internal Revenue Code and other federal or state law,
including all requirements under the Internal Revenue Code or ERISA for filing
reports (which are true and correct in all material respects as of the date
filed), and benefits have been paid in accordance with the provisions of each
such Plan.
(c) The form of each Plan intended to be qualified under Section 401 of
the Internal Revenue Code ("Qualified Plan") in the opinion of Borrower
qualifies under Section 401 of the Internal Revenue Code, and the trusts created
thereunder are, in the opinion of the Borrower, exempt from tax under the
provisions of Section 501 of the Internal Revenue Code, and to the knowledge of
the Borrower nothing has occurred that would cause the loss of such
qualification or tax-exempt status.
(d) There is no outstanding liability under Title IV of ERISA with
respect to any Plan maintained or sponsored by the Borrower and its Subsidiaries
(as to which the Borrower or any Subsidiary is or may be liable), nor with
respect to any Plan to which the Borrower or any Subsidiary (wherein the
Borrower or any Subsidiary is or may be liable) contributes or is obligated to
contribute.
(e) None of the Qualified Plans subject to Title IV of ERISA has any
unfunded benefit liability (as to which the Borrower or any Subsidiary is or may
be liable).
(f) No Plan maintained or sponsored by the Borrower or any Subsidiary
provides medical or other welfare benefits or extends coverage relating to such
benefits beyond the date of a participant's termination of employment with the
Borrower or such Subsidiary, except to the extent required by Section 4980B of
the Internal Revenue Code and at the sole expense of the participant or the
beneficiary of the participant to the fullest extent permissible under such
Section of the Internal Revenue Code. The Borrower and its Subsidiaries have
complied in all material respects with the notice and continuation coverage
requirements of Section 4980B of the Internal Revenue Code.
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(g) No ERISA Event has occurred or is reasonably expected to occur with
respect to any Plan maintained or sponsored by the Borrower and its Subsidiaries
or to which the Borrower or any Subsidiaries is obligated to contribute.
(h) As of the Amendment Effective Date, there are no pending or, to the
knowledge of the Borrower, threatened claims, actions or lawsuits, other than
routine claims for benefits in the usual and ordinary course, asserted or
instituted against (i) any Plan maintained or sponsored by the Borrower and its
Subsidiaries or their assets, or (ii) any fiduciary with respect to any Plan for
which the Borrower or any Subsidiary may be directly or indirectly liable,
through indemnification obligations or otherwise.
(i) Neither the Borrower nor any Subsidiary has incurred or, to the
knowledge of the Borrower, reasonably expects to incur (i) any liability (and no
event has occurred that, with the giving of notice under Section 4219 of ERISA,
would result in such liability) under Section 4201 or 4243 of ERISA with respect
to a Multiemployer Plan or (ii) any liability under Title IV of ERISA (other
than premiums due and not delinquent under Section 4007 of ERISA) with respect
to a Plan.
(j) Neither the Borrower nor any Subsidiary has engaged, directly or
indirectly, in a non-exempt prohibited transaction (as defined in Section 4975
of the Internal Revenue Code or Section 406 of ERISA) in connection with any
Plan that has a Material Adverse Effect.
4.11 Subsidiaries. Schedule 4.11 contains a complete and accurate list of
the Subsidiaries of the Borrower as of the Amendment Effective Date, showing, as
to each Subsidiary, the number of shares of each class of capital stock
authorized and outstanding. Except as set forth on Schedule 4.11, all of such
issued and outstanding shares of capital stock of all of the Borrower's
Subsidiaries have been duly authorized and validly issued, are fully paid and
nonassessable and are owned by the Borrower, free and clear of any liens,
charges, encumbrances, security interests, claims or restrictions of any nature
whatsoever, except for liens in favor of the Agent, for the benefit of the
Lenders, granted under the Loan Documents, and there are no other equity
securities of any Subsidiary issued and outstanding or reserved for any purpose.
4.12 Financial Statements. The Financial Statements delivered to the
Lenders have been prepared by the Borrower and its Subsidiaries and, in the case
of the annual Financial Statements, audited in accordance with Generally
Accepted Accounting Principles by Coopers & ▇▇▇▇▇▇▇, independent certified
public accountants, contain no material misstatement or omission and fairly
present the financial position, assets and liabilities of the Borrower and its
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Subsidiaries on a consolidated basis as of the respective dates thereof and the
consolidated results of operations of the Borrower and its Subsidiaries for the
respective periods then ended. Since December 31, 1996, there has been no
Material Adverse Change.
4.13 Title to Assets. Except as set forth on Schedule 4.13, (a) the
Borrower and each Subsidiary holds interests as lessee under leases in full
force and effect with respect to all leased real and personal property used in
connection with its business, and has good and indefeasible title to the
Collateral and the other assets owned by it that are reflected in the most
recent Financial Statements, in each case free and clear of all liens, claims,
security interests and encumbrances except Permitted Liens; and (b) no financing
statement that names the Borrower or any Subsidiary as debtor has been filed and
is still in effect or has been authorized to be filed, other than financing
statements evidencing Permitted Liens.
4.14 Solvency. The Borrower and each Subsidiary (i) is Solvent, and (ii)
after giving effect to the transactions contemplated hereby, will be Solvent.
4.15 Use of Proceeds. The Borrower's use of the proceeds of any Loans
made by the Lenders to the Borrower pursuant to this Agreement are and will be
legal and proper corporate uses, duly authorized by the Board of Directors of
the Borrower, and such uses are and will be consistent with all applicable laws
and statutes, as in effect from time to time.
4.16 Assets for Conduct of Business. The Borrower and each Subsidiary
possesses adequate assets, licenses and trade names to continue to conduct its
business as heretofore conducted without any material conflict with the rights
of other Persons.
4.17 Compliance With Laws. The Borrower and each Subsidiary has duly
complied with, and the Collateral and their business operations and leaseholds
are in compliance in all material respects with, all Requirements of Law,
including, without limitation, all federal and state securities laws, OSHA,
Titles XVIII and XIX of the Social Security Act (42 U.S.C. (S)(S) 1395 et seq.
and (S)(S) 1396 et seq., respectively, as amended from time to time), the
Bloodborne Pathogens Standard, the Medicare Regulations and the Medicaid
Regulations, other than those the failure to comply with which would not have,
individually or in the aggregate, a Material Adverse Effect.
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4.18 Environmental Matters.
(a) All activities and operations of the Borrower and its Subsidiaries
are in material compliance with all applicable Environmental Laws.
(b) Neither the Borrower nor any Subsidiary is involved in any suit or
proceeding or has received any notice from any Governmental Authority with
respect to a release of Hazardous Substances or has received notice of any
claims from any Person relating to personal injuries from exposure to Hazardous
Substances.
(c) The Borrower and each Subsidiary has timely filed all reports
required to be filed, has acquired all necessary certificates, approvals and
permits and has generated and maintained in all material respects all required
data, documentation and records under all applicable Environmental Laws.
(d) Neither the Borrower nor any Subsidiary has ever sent a Hazardous
Substance to a site that, pursuant to any Environmental Law, (1) has been placed
on the "National Priorities List" or "CERCLIS List" of hazardous waste sites (or
any similar state list) or (2) that is subject to a claim, an administrative
order or other request to take "removal" or "remedial" action (as defined under
CERCLA) or to pay for the costs of cleaning up such a site.
4.19 Projections. Prior to the date hereof, the Borrower has delivered to
the Lenders projected financial statements of the Borrower and its Subsidiaries
(the "Projections"). The Projections have been prepared by the executive and
financial personnel of the Borrower in light of the past business of the
Borrower and its Subsidiaries and on the basis of the assumptions that are set
forth therein, and give effect to the transactions contemplated by this
Agreement. The Projections have been prepared in good faith, have a reasonable
basis and represent the good faith opinion of the Borrower and senior management
of the Borrower as to the projected results of the operations of the Borrower
and its Subsidiaries, on a consolidated basis.
4.20 First Priority. Except for Permitted Liens, when the initial Loans
are made hereunder, this Agreement, together with the other Loan Documents, will
create valid and perfected first priority security interests and liens in and
upon the Collateral covered thereby, in each case enforceable against the
Borrower or such Subsidiary and all other Persons in all relevant jurisdictions
and securing the payment of all Obligations purported to be secured thereby.
4.21 Contracts; Labor Disputes. Neither the Borrower nor any Subsidiary
is a party to any contract or agreement, or subject to
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any charge, corporate restriction, judgment, injunction, decree, rule,
regulation or order of any court or other Governmental Authority, that has or
could reasonably be expected to have a Material Adverse Effect. Neither the
Borrower nor any Subsidiary is a party to, and there is not pending or, to the
Borrower's knowledge, threatened, any labor dispute, strikes, lock-out,
grievance, work stoppage or walkouts relating to any labor contract to which the
Borrower or any Subsidiary is a party.
4.22 Insurance. Schedule 4.22 accurately summarizes all insurance
policies or programs of the Borrower and its Subsidiaries in effect as of the
Amendment Effective Date, and indicates the insurer's name, policy number,
expiration date, amount of coverage, type of coverage, annual premiums,
exclusions and deductibles, and also indicates any self-insurance program that
is in effect.
4.23 Reimbursement from Third Party Payors. The Accounts of the Borrower
and its Subsidiaries have been and will continue to be adjusted to reflect
reimbursement policies of third party payors such as Medicare, Medicaid, Blue
Cross/Blue Shield, private insurance companies, health maintenance
organizations, preferred provider organizations, alternative delivery systems,
managed care systems and other third party payors. In particular, Accounts
relating to such third party payors do not and shall not exceed amounts the
Borrower and its Subsidiaries are entitled to receive under any capitation
arrangement, fee schedule, discount formula, cost-based reimbursement or other
adjustment or limitation to the usual charges of the Borrower and its
Subsidiaries.
4.24 Fraud and Abuse. Neither the Borrower nor any Subsidiary, nor any of
their respective stockholders, officers or directors have engaged on behalf of
Borrower or any Subsidiary in any activities that are prohibited under the
federal Medicare and Medicaid statutes, 42 U.S.C. (S) 1320a-7b, or the
regulations promulgated pursuant to such statutes or related state or local
statutes or regulations, including but not limited to the following: (i)
knowingly and willfully making or causing to be made a false statement or
representation of a material fact in any applications for any benefit or
payment; (ii) knowingly and willfully making or causing to be made any false
statement or representation of a material fact for use in determining rights to
any benefit or payment; (iii) failing to disclose knowledge by a claimant of the
occurrence of any event affecting the initial or continued right to any benefit
or payment on its own behalf or on behalf of another, with intent to secure such
benefit or payment fraudulently; (iv) knowingly and willfully soliciting or
receiving any remuneration (including any kickback, bribe or rebate), directly
or indirectly, overtly or covertly, in cash or in kind or offering to pay such
remuneration (a) in return for referring an individual to a Person for the
furnishing or arranging for the furnishing of any item or service for which
payment may be made in
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whole or in part by Medicare, Medicaid or other applicable third party payors,
or (b) in return for purchasing, leasing or ordering or arranging for or
recommending the purchasing, leasing or ordering of any good, facility, service,
or item for which payment may be made in whole or in part by Medicare, Medicaid
or other applicable third party payors. With respect to this Section, knowledge
by an individual director or officer of the Borrower or a Subsidiary of any of
the events described in this Section shall not be imputed to the Borrower or
such Subsidiary unless such knowledge was obtained or learned by the director or
officer in his or her official capacity as a director or officer of the Borrower
or such Subsidiary. No activity of the Borrower or any Subsidiary shall be
considered to be a breach of this Section, except in the case of a knowing and
willful violation thereof, until the Borrower or such Subsidiary has received
notification, written or oral, by a Governmental Authority of competent
jurisdiction as to any such violation.
4.25 Single Business Enterprise. The Borrower and the Guarantors have
historically operated as, and intend to continue operating as, a single business
enterprise. Although separate entities, the Borrower and the Guarantors operate
under a common business plan. Each of the Borrower and the Guarantors will
accordingly benefit from the financing arrangement established by this
Agreement. The Borrower acknowledges that, but for the agreement by each
Guarantor to execute and deliver the Guaranty Documents, the Borrower would not
have qualified separately for the total amount of the credit facilities
established hereby.
ARTICLE V
AFFIRMATIVE COVENANTS
Until payment in full of all Obligations and the termination of the
Lenders' obligation to make Loans and the Issuing Bank's obligation, on behalf
of the Lenders, to issue Letters of Credit, the Borrower covenants and agrees
that:
5.1 Repayment of Obligations. The Borrower will repay the Obligations
when due, whether due by maturity, acceleration of maturity or otherwise,
including, without limitation, the amounts due under the Revolving Credit/Term
Notes, according to the terms of this Agreement and the other Loan Documents.
5.2 Performance Under Loan Documents. The Borrower will perform, and
will cause each of its Subsidiaries to perform, all obligations required to be
performed by it under the terms of this Agreement and the other Loan Documents
and any other agreements now or hereafter existing or entered into between the
Borrower or any of its Subsidiaries and the Lenders (or the Agent on their
behalf).
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5.3 Financial and Business Information about the Borrower. The Borrower
shall deliver to the Agent and the Lenders:
(a) Within forty-five (45) days after the close of each of the first
three fiscal quarters of each fiscal year of the Borrower, beginning with the
current fiscal quarter, an unaudited consolidated balance sheet of the Borrower
and its Subsidiaries as of the close of such fiscal quarter and unaudited
consolidated statements of income, retained earnings and cash flows for the
Borrower and its Subsidiaries for the fiscal quarter then ended and for that
portion of the fiscal year then ended, all prepared in accordance with Generally
Accepted Accounting Principles (subject to the absence of notes required by
Generally Accepted Accounting Principles and subject to normal and reasonable
year-end audit adjustment) applied on a basis consistent with that of the
preceding quarter or containing disclosure of the effect on the financial
position or results of operation of any change in the application of accounting
principles and practices during the quarter, and certified by the Vice
President - Finance of the Borrower to be true and accurate in all material
respects (subject to normal and reasonable year-end audit adjustment);
(b) Within one hundred (100) days after the close of each fiscal year of
the Borrower, beginning with the current fiscal year, an audited consolidated
and unaudited consolidating balance sheet of the Borrower and its Subsidiaries
as of the close of such fiscal year and audited consolidated and unaudited
consolidating statements of operations, retained earnings and cash flows for the
Borrower and its Subsidiaries for the fiscal year then ended, including the
notes to each, prepared by Coopers & ▇▇▇▇▇▇▇ or any other independent certified
public accountant acceptable to the Required Lenders, in accordance with
Generally Accepted Accounting Principles applied on a basis consistent with that
of the preceding year or containing disclosure of the effect on the financial
position or results of operation of any change in the application of accounting
principles and practices during the year, and accompanied by a report thereon by
such certified public accountants, containing an opinion that is not qualified
with respect to scope limitations imposed by the Borrower or its Subsidiaries or
with respect to accounting principles followed by the Borrower or its
Subsidiaries not in accordance with Generally Accepted Accounting Principles;
(c) Concurrently with the delivery of the financial statements described
in subsection (b) above, a report from the independent certified public
accountant that in making its audit of the consolidated financial statements of
the Borrower and its Subsidiaries, that nothing came to their attention
regarding any Event of Default, or Default under Sections 6.9 through 6.16 as of
December 31 of the fiscal year subject to audit or a statement specifying the
nature and period of existence of any such Default
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or Event of Default disclosed by their examination, it being understood that
such audit was not performed primarily for the purpose of obtaining knowledge of
noncompliance with this Agreement or the Loan Documents;
(d) Concurrently with the delivery of the financial statements described
in subsections (a) and (b) above, a Compliance Certificate with respect to the
period covered by the financial statements then being delivered, attaching an
Interest Rate Calculation Worksheet and a Covenant Compliance Worksheet
reflecting the computation of the financial covenants set forth in Article VI as
of the last day of the period covered by such financial statements;
(e) As soon as practicable and in any event within thirty (30) days after
the close of each fiscal year of the Borrower, beginning with the current fiscal
year, an annual operating budget and capital budget prepared on a quarterly
basis for the Borrower and its Subsidiaries on a consolidated basis, in form and
detail acceptable to the Agent;
(f) Promptly upon their becoming available, copies of (i) all financial
statements, reports, notices and proxy statements that the Borrower or any
Subsidiary shall send or make available generally to its stockholders, (ii) all
regular, periodic and special reports, registration statements and prospectuses
that the Borrower or any Subsidiary shall render to or file with the Securities
and Exchange Commission, the National Association of Securities Dealers or any
national securities exchange, (iii) all material reports and other statements
(other than routine reports prepared in the ordinary course of business that
would not result in any adverse action) that the Borrower or any Subsidiary may
render to or file with any other Governmental Authority, including, without
limitation, HCFA, the Environmental Protection Agency, OSHA and state
environmental and health authorities and agencies, (iv) all press releases and
other statements that the Borrower or any Subsidiary shall make available
generally to the public concerning developments in the business of the Borrower
or any of its Subsidiaries, other than press releases or statements issued in
the ordinary course of business, and (v) all material consulting reports and
other similar business reports that the Borrower or any Subsidiary shall request
of any Person from time to time, other than routine reports received in the
ordinary course of business;
(g) Promptly after review by the Borrower's Board of Directors, but in
any event within thirty (30) days after the Borrower's receipt thereof, copies
of any management letters from certified public accountants;
(h) Concurrently with each delivery of the financial statements described
in Subsections (a) and (b) an aging of the
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accounts receivable of the Borrower and its Subsidiaries by payor class as of
the end of such fiscal quarter;
(i) Concurrently with the delivery thereof or immediately (but not more
than three (3) Business Days after receipt) upon the receipt thereof, copies of
any notices to or from the trustee or the noteholders delivered pursuant to the
Indenture.
(j) Upon the Agent's or any Lender's request, such other information
about the Collateral or the financial condition and operations of the Borrower
and its Subsidiaries as the Agent or any Lender may from time to time reasonably
request.
5.4 Notice of Certain Events. The Borrower shall promptly, but in no
event later than five (5) Business Days after the Borrower obtains knowledge
thereof, give written notice to the Agent and the Lenders of:
(a) Any litigation or proceeding brought against the Borrower or any
Subsidiary that could reasonably be expected to have a Material Adverse Effect;
(b) Any written notice of a violation received by the Borrower or any
Subsidiary from any Governmental Authority that, if such violation were
established and not promptly corrected, could reasonably be expected to have a
Material Adverse Effect;
(c) Any attachment, judgment, lien, levy or order in excess of $100,000
that may be placed on, assessed against or threatened against the Borrower or
any Subsidiary or any of the Collateral, except for Permitted Liens;
(d) Any Default or Event of Default;
(e) Any material default or event of default under any agreement or
instrument to which the Borrower or any Subsidiary is a party or by which the
Borrower or any Subsidiary, or any of their respective property, is bound, the
termination of which could reasonably be expected to have a Material Adverse
Effect; and
(f) Any other matter that has resulted in a Material Adverse Change.
5.5 Corporate Existence and Maintenance of Properties. The Borrower
shall, and shall cause each of its Subsidiaries to:
(a) Maintain and preserve in full force and effect its corporate
existence, except as otherwise permitted by Section 6.1, and all material
rights, privileges and franchises;
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(b) Conduct its business in an orderly and efficient manner, keep its
properties in good working order and condition (normal wear and tear excepted)
and from time to time make all needed repairs to, renewals of or replacements of
its properties (except to the extent that any of such properties are obsolete or
are being replaced) so that the efficiency of its business operations shall be
fully maintained and preserved; and
(c) File or cause to be filed in a timely manner all reports,
applications, estimates and licenses required by any Governmental Authority
that, if not timely filed, could reasonably be expected to have a Material
Adverse Effect.
5.6 Payment of Debt. The Borrower shall, and shall cause each of its
Subsidiaries to, pay all Debt when due and all other obligations in accordance
with customary trade practices.
5.7 Maintenance of Insurance.
(a) The Borrower shall, and shall cause each of its Subsidiaries to,
maintain and pay for insurance on its properties, assets and business, now owned
or hereafter acquired, against such casualties, risks and contingencies, and in
such types and amounts and with such insurance companies, as shall be
satisfactory to the Agent (and in any event in such amounts as shall be adequate
to cover the Collateral), and deliver certificates and policies of such
insurance to the Agent with satisfactory standard loss payable endorsements
naming the Agent as loss payee, additional insured and mortgagee thereunder, as
appropriate.
(b) Each such policy of insurance shall contain a clause requiring the
insurer to give not less than ten (10) days prior written notice to the Agent
before any cancellation of the policies due to nonpayment and not less than
thirty (30) days prior written notice before any cancellation of the policies
for any other reason whatsoever, and a clause that the interest of the Agent
shall not be impaired or invalidated by any act or neglect of the Borrower or
any Subsidiary or the owner of the property nor by the occupation of the
premises wherein such property is located for purposes more hazardous than are
permitted by such policy. The Borrower hereby directs, and will cause each of
its Subsidiaries to direct, all insurers under policies of property and casualty
insurance on the Collateral to pay all proceeds payable thereunder for losses in
excess of $250,000 per occurrence directly to the Agent. The Agent, on behalf
of the Lenders, shall hold all such proceeds for the account of the Borrower and
its Subsidiaries. So long as no Default or Event of Default has occurred and is
continuing, the Agent shall, at the Borrower's request, disburse such proceeds
as payment for the purpose of replacing or repairing destroyed or damaged
assets, as and when required to be paid and upon presentation of evidence
satisfactory to the Agent of such required
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payments and such other documents as the Agent may reasonably request, or shall
apply such proceeds in whole or in part as a prepayment of the Loans, in such
order as the Borrower may determine. Upon and during the continuance of a
Default or Event of Default, the Agent shall apply such proceeds as a prepayment
of the Revolving Credit/Term Loans in accordance with Section 2.5(a). The
Borrower hereby irrevocably makes, constitutes and appoints the Agent (and all
officers, employees or agents designated by the Agent) as its true and lawful
attorney (and agent-in-fact) for the purpose of making, settling and adjusting
claims under such policies of insurance, endorsing its name or the name of any
Subsidiary on any check, draft, instrument or other item or payment for the
proceeds of such policies of insurance and for making all determinations and
decisions with respect to such policies of insurance.
(c) If the Borrower or any Subsidiary fails to obtain and maintain any of
the policies of insurance required to be maintained hereunder or to pay any
premium in whole or in part, then the Agent may, at the Borrower's expense,
without waiving or releasing any obligation or Default by the Borrower
hereunder, procure the same, but shall not be required to do so. All sums so
disbursed by the Agent, including reasonable attorneys' fees, court costs,
expenses and other charges related thereto, shall be payable on demand by the
Borrower to the Lenders and shall be additional Obligations hereunder, secured
by the Collateral.
(d) Upon the reasonable request of the Agent from time to time, the
Borrower shall deliver to the Agent evidence that the insurance required to be
maintained pursuant to this Agreement is in effect.
5.8 Inspection. The Borrower shall, and shall cause each of its
Subsidiaries to, permit employees or agents of the Agent (or any Lender, at the
Lenders' expense), at any reasonable time during normal business hours upon
reasonable notice to inspect its properties and to examine or audit its books,
records, reports, accounts and other papers and make copies and memoranda of
them, and to discuss its affairs, finances and accounts with its officers and
employees and, upon notice to the Borrower, the independent public accountants
of the Borrower and its Subsidiaries (and by this provision the Borrower and
each Subsidiary authorizes said accountants to discuss the finances and affairs
of the Borrower or such Subsidiary), all at such reasonable times and as often
as may be reasonably requested without undue interference in the business and
operations of the Borrower and its Subsidiaries.
5.9 COBRA. The Employee Plans of the Borrower and its Subsidiaries shall
be operated in such a manner that neither the Borrower nor any Subsidiary will
incur any material tax liability
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under Section 4980B of the Internal Revenue Code or any material liability to
any qualified beneficiary as defined in Section 4980B.
5.10 Payment of Taxes. The Borrower shall, and shall cause each of its
Subsidiaries to, pay and discharge all taxes, assessments and governmental
charges or levies imposed upon it or upon its income or profits, or upon any
properties belonging to it, prior to the date on which penalties would attach
thereto, and all lawful claims that, if unpaid, might become a lien or charge
upon any of its properties; provided, however, that the Borrower or any
Subsidiary may in good faith by appropriate proceedings and with due diligence
contest any such tax, assessment, charge, levy or claim if the Borrower or such
Subsidiary establishes any reserves reasonably requested by the Agent with
respect thereto in accordance with Generally Accepted Accounting Principles.
5.11 Compliance with Laws. The Borrower shall, and shall cause each of
its Subsidiaries to, (i) have all material licenses, permits, certifications,
approvals and authorizations required by Governmental Authorities necessary to
the ownership, occupation or use of its properties or the conduct of its
business, including, without limitation, certificates of need, and maintain the
same at all times in full force and effect, and (ii) comply with all
Requirements of Law in respect of the conduct of its business, the ownership of
its property and the Collateral, including, without limitation, Titles XVIII and
XIX of the Social Security Act, Medicare Regulations, Medicaid Regulations,
ERISA, OSHA and the Bloodborne Pathogens Standard, other than those the failure
to comply with which would not have, individually or in the aggregate, a
Material Adverse Effect.
5.12 Name Change. The Borrower shall notify the Agent and the Lenders at
least thirty (30) days prior to the effective date of any change of its name or
the name of any Subsidiary, and prior to such effective date the Borrower or
such Subsidiary shall have taken such actions and executed such documents as the
Agent shall reasonably require.
5.13 Creation or Acquisition of New Subsidiaries. The Borrower and its
Subsidiaries may from time to time create or acquire new Subsidiaries, provided
that, at any time promptly upon request by the Agent (and in any event, with
respect to any new Subsidiary that is created or acquired in connection with a
Permitted Acquisition or that receives proceeds of any Borrowings, prior to or
concurrently with satisfaction of the conditions set forth in clauses (y) and
(z) of clause (i) below or, if earlier, the consummation of such Permitted
Acquisition), (i) each such new Subsidiary (y) having assets with a gross value
(determined in accordance with Generally Accepted Accounting Principles) in
excess of $25,000, or (z) having commenced the conduct of an active business,
will execute and deliver to the Agent (with sufficient copies for each Lender)
an
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amendment or supplement to the Guaranty Agreement and such other Guaranty
Documents as may be requested by the Required Lenders, each in form and
substance satisfactory to the Agent, pursuant to which such new Subsidiary shall
become a party thereto, (ii) the Borrower or any Subsidiary that is the parent
of such new Subsidiary, as applicable, will execute and deliver to the Agent
(with sufficient copies for each Lender) an amendment or supplement to the
Pledge Agreement or the Subsidiary Pledge Agreement, in form and substance
satisfactory to the Agent, pursuant to which all of the capital stock or other
ownership interests of such new Subsidiary that is directly or indirectly owned
by the Borrower or such parent Subsidiary shall be pledged to the Agent under
the Pledge Agreement or the Subsidiary Pledge Agreement, together with the
certificates representing such capital stock or other ownership interests and
stock powers duly executed in blank, and (iii) the Borrower will cause each such
new Subsidiary to execute and deliver, and will cause to be delivered, all
documentation of the type described in Sections 3.2.2(b), (c) and (d) as such
new Subsidiary would have had to deliver were it a Subsidiary on the Amendment
Effective Date. In addition, with respect to any newly created or acquired
Foreign Subsidiary, the Borrower shall cause to be delivered an opinion of
counsel in form and substance satisfactory to the Agent and each Lender
regarding the due organization of such Foreign Subsidiary and the due
authorization, execution and enforceability of the Loan Documents related
thereto. The Borrower will provide the Agent with written notice concurrently
with or prior to the creation or acquisition of any new Subsidiary that is
required to become a Guarantor pursuant to this Section 5.13.
5.14 Disbursement of Proceeds By the Borrower.
(a) The Borrower shall obtain Intercompany Loan Documents with respect to
advances of any portion of the Loans to any Subsidiary and such other amounts
owing from any Subsidiary to the Borrower from time to time, and shall promptly
thereafter grant to the Agent a first priority perfected security interest in
such Intercompany Loan Documents as security for the Obligations. The Borrower
will not be required to obtain a security interest in the assets of such
Subsidiaries to secure any amounts owing under the Intercompany Loan Documents,
nor will the Borrower be required to assign any such intercompany security
interest to the Lenders.
(b) Subject to the security interest of the Agent therein under the
Pledge Agreement, the Borrower may assign any Intercompany Loan Documents to RTC
Holdings as a contribution to capital, pursuant to the Assignment Agreement and
in accordance with Section 6.6. In such instance, RTC Holdings need not enter
into any Intercompany Loan Documents as a borrower thereunder in order to
evidence such assignment. For purposes of this Agreement, the receipt and
possession by Mellon, as custodian under the
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Notification and Consent Agreement and pursuant to the terms thereof, of any
Intercompany Loan Documents assigned by the Borrower to RTC Holdings, shall be
deemed evidence of perfection of the assignment thereof.
(c) Should any Subsidiary become a debtor under the Bankruptcy Code, the
Agent, on behalf of the Lenders, is authorized, but not required, to file proofs
of claim on the Borrower's behalf and vote the rights of the Borrower in any
plan of reorganization. The Agent, on behalf of the Lenders, is further
empowered to demand, ▇▇▇ for, collect and receive every payment and distribution
on such Debt owing to the Borrower in such Subsidiary's bankruptcy proceeding.
5.15 Certain Acquisitions. Subject to the provisions of this Section and
the requirements contained in the definition of Permitted Acquisition, and
subject to the other terms and conditions of this Agreement, the Borrower may
from time to time after the Amendment Effective Date effect Permitted
Acquisitions, provided that (unless consented to in writing by the Required
Lenders):
(a) With respect to each Permitted Acquisition financed, in whole or in
part, with the proceeds of Revolving Credit/Term Loans, the conditions set forth
in Section 2.2(a) shall be satisfied with respect to all Borrowings comprised of
such Revolving Credit/Term Loans;
(b) With respect to each Permitted Acquisition, no Default or Event of
Default shall have occurred and be continuing at the time of the consummation of
such Permitted Acquisition or would exist immediately after giving effect
thereto;
(c) Not less than five (5) days prior to the consummation of any
Permitted Acquisition with respect to which the Acquisition Amount is
$12,000,000 or more, the Borrower shall have delivered to the Agent (and the
Agent shall provide the Lenders) the following items:
(i) a reasonably detailed description of the material terms of such
Acquisition (including, without limitation, the purchase price and
method and structure of payment) and of each Person or business that
is the subject of such Permitted Acquisition (each, a "Target") and
draft copies of the primary material acquisition documents (it being
understood that, with respect to the Satellite Acquisition, the
Agent shall be satisfied in its reasonable discretion with the terms
of the definitive acquisition documents);
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(ii) historical financial statements of each Target for the two (2) most
recent fiscal years available and for any interim periods since the
most recent fiscal year-end for which such interim statements are
available;
(iii) projected income statements with respect to each Target for the five-
year period following the consummation of such Permitted
Acquisition, in reasonable detail, together with any appropriate
statement of assumptions and pro forma adjustments; and
(iv) a certificate executed by the chief financial officer or Vice
President-Finance of the Borrower setting forth the Borrower's good
faith calculation of the Acquisition Amount (together with any
supporting calculations) and further to the effect that, to the best
of his knowledge, (A) the consummation of such Permitted Acquisition
will not result in a violation of any provision of this Section 5.15,
(B) after giving effect to any Borrowings made in connection
therewith, the Borrower is in covenant compliance with the financial
covenants contained in Sections 6.9 through 6.16 at the most recent
calculation period taking into account the Borrowing (such
calculations to be attached to the certificate) and (C) the Borrower
believes in good faith that such financial covenants will continue to
be met for the one-year period following the date of the consummation
of such Permitted Acquisition (such calculations to be based on the
projections required by subparagraph (iii) above and attached to the
certificate).
(d) Within forty-five (45) days after the end of each fiscal quarter, the
Borrower will deliver to the Agent (i) with respect to any Permitted Acquisition
during such fiscal quarter, a copy of the fully executed acquisition agreement
(including schedules and exhibits thereto) and (ii) with respect to any
Permitted Acquisition during such fiscal quarter with respect to which the
Acquisition Amount is less than $12,000,000, the items described in clauses (i),
(ii) and (iii) of subsection (c) above, each in form and substance reasonably
satisfactory to the Agent.
The consummation of each Permitted Acquisition subject to this Section
shall be deemed to be a representation and warranty by the Borrower that all
conditions thereto have been satisfied, that the same is permitted in accordance
with the terms of this Agreement and that the matters certified to by the chief
financial officer of the Borrower in the certificate referred to in subsection
(c)(iv) above are true and correct as of the date such certificate is given,
which representation and warranty shall be deemed to be a representation and
warranty for all purposes hereunder, including, without limitation, for purposes
of Sections 3.3 and 7.1.
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5.16 Year 2000. The Borrower shall take all action necessary to assure
that the Borrower's computer based systems are able to operate and effectively
process data including dates on and after January 1, 2000. At the request of
the Agent, the Borrower shall provide the Agent assurance acceptable to the
Agent of the Borrower's year 2000 capability.
ARTICLE VI
NEGATIVE COVENANTS
Until payment in full of the Obligations and termination of the Lenders'
obligation to make Loans and the Issuing Bank's obligation, on behalf of the
Lenders, to issue Letters of Credit, the Borrower covenants and agrees that the
Borrower will not, and will not permit any of its Subsidiaries to, individually
or in the aggregate:
6.1 Merger, Consolidation. Liquidate, wind up or dissolve, or enter into
any consolidation, merger or other combination, or agree to do any of the
foregoing; provided, however, that:
(i) the Borrower may merge or consolidate with another Person so long as
(x) the Borrower is the surviving corporation, (y) if such merger or
consolidation is in connection with a Permitted Acquisition, the
applicable conditions of Section 5.15 shall be satisfied and (z)
immediately after giving effect thereto, no Default or Event of
Default would exist;
(ii) any Subsidiary may merge or consolidate with another Person so long
as (w) the Person surviving such merger or consolidation is the
Borrower or a Guarantor, (y) if such merger or consolidation is in
connection with a Permitted Acquisition, the applicable conditions of
Sections 5.13 and 5.15 shall be satisfied and (z) immediately after
giving effect thereto, no Default or Event of Default would exist.
6.2 Debt. Create, incur, assume or suffer to exist any Debt other than:
(i) Debt incurred pursuant to this Agreement;
(ii) Subordinated Debt;
(iii) accrued expenses, current trade payables and other current
liabilities arising in the ordinary course of business and not
incurred through the borrowing of money;
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(iv) unsecured Debt (x) of any Subsidiary to the Borrower (pursuant to
Intercompany Loan Documents), (y) of any Subsidiary to a Subsidiary
and (z) of the Borrower to any Subsidiary, provided that any such
Debt under this clause (iv) is incurred in the ordinary course of
business consistent with past practice, is evidenced by one or more
promissory notes pledged to the Agent pursuant to the Pledge
Agreement or Subsidiary Pledge Agreement, is payable on demand and is
fully subordinated in right of payment to the Obligations;
(v) Contingent Obligations permitted by Section 6.3; and
(vi) other Consolidated Senior Debt (including, without limitation, Debt
secured by liens described in clauses (e) and (h) of the definition
of Permitted Liens and Capital Lease Obligations) in an aggregate
principal amount at any time outstanding not to exceed $20,000,000
for the Borrower and its Subsidiaries.
6.3 Contingent Obligations. Create, incur, assume or suffer to exist any
Contingent Obligation other than:
(i) endorsements of instruments or items of payment for deposit or
collection in the ordinary course of business;
(ii) Contingent Obligations incurred pursuant to the Guaranty
Agreements;
(iii) customary indemnification obligations of the Borrower and its
Subsidiaries incurred in connection with Permitted Acquisitions made
in compliance with Section 5.15;
(iv) guarantees by the Borrower of obligations of Subsidiaries under
leases permitted hereunder;
(v) guarantees by the Borrower of any other Debt permitted under Section
6.2; and
(vi) other guarantees, not covered in clauses (i) through (v) above, of
Debt of Domestic Subsidiaries in an aggregate amount not to exceed
$2,500,000 at any time.
6.4 Liens and Encumbrances. Create, assume or suffer to exist any deed
of trust, mortgage or encumbrance, lien (including a lien of attachment,
judgment or execution) or security interest (including the interest of a
conditional seller of goods), securing a charge or obligation, in or on any of
its property, real or
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personal, whether now owned or hereafter acquired, except for Permitted Liens.
6.5 Disposition of Assets. Sell, lease, transfer, convey or otherwise
dispose of any of its assets or property, including, without limitation, the
Collateral, except for (i) sales of inventory in the ordinary course of
business; (ii) the sale or exchange of used equipment, to the extent the
proceeds of such sale are applied towards, or such equipment is exchanged for,
similar replacement equipment; (iii) dispositions not exceeding $2,000,000 in
the aggregate, for the Borrower and its Subsidiaries, for any fiscal year; (iv)
the assignment of any Intercompany Loan Documents by the Borrower to RTC
Holdings pursuant to the Assignment Agreement; and (v) any sale, lease, transfer
or conveyance from one Subsidiary to another Subsidiary or to the Borrower or
from the Borrower to any, Subsidiary in accordance with Section 6.6, provided
that, (y) immediately after giving effect thereto, no Default or Event of
Default would exist, and (z) with respect to any transfer from the Borrower or a
Guarantor to a Subsidiary that is not a Guarantor, the Borrower shall notify the
Agent and the Lenders thereof and shall cause the transferee Subsidiary to
comply with the provisions of Section 5.13 as if such transferee Subsidiary were
a new Subsidiary; and provided further that in no event shall the Borrower or
any Subsidiary sell or otherwise transfer any of the capital stock of any other
Subsidiary to RTC Holdings, RTC Holdings International or RTC TN or take any
other action that would impair the security interest of the Agent in any such
capital stock.
6.6 Transactions with Related Persons. Except as otherwise permitted by
Sections 5.15, 6.2 and 6.7, directly or indirectly make any loan or advance to,
or purchase, assume or guarantee any Debt to or from, any of its officers,
directors, stockholders or Affiliates, or subcontract any operations to any
Affiliate, or enter into any transaction with any Affiliate, except (a) in the
ordinary course of and pursuant to the reasonable requirements of the Borrower's
or such Subsidiary's business and (b) upon fair and reasonable terms no less
favorable to the Borrower or such Subsidiary than would obtain in a comparable
arm's-length transaction with a Person not an Affiliate; provided, however, that
the provisions of this Section shall not prohibit the assignment of any
Intercompany Loan Documents by the Borrower to RTC Holdings made in compliance
with subsection (b) above.
6.7 Restricted Investments. Purchase, own, invest in or otherwise
acquire, directly or indirectly, any Stock, evidence of indebtedness or other
obligation or security or any interest whatsoever in any other Person, or make
or permit to exist any loans, advances or extensions of credit to, or any
investment in cash or by delivery of property in, any Person, or consummate an
Acquisition, or make a commitment or otherwise agree to do any of the foregoing,
except for (a) investments in Cash Investments,
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(b) investments in Domestic Subsidiaries evidenced by the Intercompany Loan
Documents, (c) loans and advances to employees for reasonable travel and
business expenses in the ordinary course of business, (d) prepaid expenses
incurred in the ordinary course of business, (e) trade accounts receivable
created in the ordinary course of business, (f) investments in corporations that
are Domestic Subsidiaries in existence as of the Amendment Effective Date or in
new Domestic Subsidiaries created or acquired in compliance with Sections 5.13
and 6.19, (g) Permitted Acquisitions other than Foreign Acquisitions in
compliance with Section 5.15, (h) investments related to Foreign Acquisitions or
in Foreign Subsidiaries in compliance with Sections 5.13, 5.15 and 6.19 in an
aggregate amount for the Borrower and its Subsidiaries on a consolidated basis
not to exceed (1) at any time during the fiscal quarter ending September 30,
1997 and the fiscal quarter ending December 31, 1997, seventeen and one-half
percent (17 1/2%) of Consolidated Net Assets in the aggregate for the most
recently ended quarter and (2) at any time during any fiscal quarter ending
thereafter, twenty percent (20%) of Consolidated Net Assets as of the last day
of the most recently ended fiscal quarter, (i) other investments not covered in
clauses (a) through (h) having an aggregate cost to the Borrower and its
Subsidiaries not to exceed $5,000,000 at any time.
6.8 Restricted Payments. Except as set forth on Schedule 6.8, declare or
pay any dividends upon any of its Stock (other than dividends paid in Stock and
dividends paid to the Borrower or by a Subsidiary to another Subsidiary), or
purchase, redeem, retire or otherwise acquire for value other than Stock,
directly or indirectly, any shares of its Stock, any shares of Stock of any
Affiliate or any option, warrant or other right to acquire shares of its Stock
or Stock of any Affiliate, or make any distribution of cash, property or assets
other than Stock among the holders of shares of its Stock.
6.9 Capital Expenditures. Make any Capital Expenditure not as part of an
Acquisition if, after giving effect to such Capital Expenditure, (a) the
aggregate amount of all such Capital Expenditures made by the Borrower and its
Subsidiaries (other than Capital Expenditures described in clause (b) below)
during any fiscal year, beginning with the current fiscal year, shall exceed an
amount equal to ten percent (10%) of Consolidated Net Revenue for such fiscal
year, and (b) the amount of all such Capital Expenditures made by the Borrower
and its Subsidiaries associated with the construction and start-up of the
Borrower's laboratory operations shall exceed $10,000,000 in the aggregate after
May 2, 1997.
6.10 Consolidated Net Worth. Permit Consolidated Net Worth at the end of
any fiscal quarter after the Amendment Effective Date, beginning with the
current fiscal quarter, to be less than
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(i) $125,000,000, increased by 80% of Consolidated Net Income (if positive) for
each full fiscal quarter after the Closing, plus (ii) 90% of the positive amount
----
of all increases in capital stock and additional paid-in capital from issuances
of equity securities or other capital investments.
6.11 Foreign Subsidiary EBITDA. The Borrower will not permit Foreign
Subsidiary EBITDA, as of the end of any fiscal quarter, to be less than $1.
6.12 Cash Available to Fixed Charges. Permit the ratio of Cash Available
to Fixed Charges at the end of any fiscal quarter to be less than 2.25 to 1.0.
6.13 Cash Available to Debt Service Ratio. Permit the ratio of Cash
Available to Debt Service at the end of any fiscal quarter to be less than 1.20
to 1.0.
6.14 Consolidated Senior Debt to Annualized Cash Flow. Permit the ratio
of Consolidated Senior Debt to Annualized Cash Flow as of the end of any fiscal
quarter to be greater than 3.0 to 1.0.
6.15 Consolidated Debt to Annualized Cash Flow. Permit the ratio of
Consolidated Debt to Annualized Cash Flow as of the end of any fiscal quarter to
be greater than 4.25 to 1.0.
6.16 Consolidated Debt to Consolidated Total Capital. Permit the ratio of
Consolidated Debt to Consolidated Total Capital to be greater than 0.70 to 1.0
for any fiscal quarter beginning with the fiscal quarter ending September 30,
1997 to and including the fiscal quarter ending June 30, 1998 and 0.65 to 1.0
for any fiscal quarter thereafter.
6.17 Sale and Leaseback. Except as set forth in Schedule 6.17, enter into
any arrangement with any Person (other than the Borrower or any Subsidiary,
provided the provisions of Section 6.6 are satisfied) providing for the leasing
by the Borrower or any Subsidiary of any asset that has been sold or transferred
by the Borrower or such Subsidiary to such Person.
6.18 New Business. Engage in any business other than the business in
which the Borrower or such Subsidiary is currently engaged or a business
reasonably related thereto, including, without limitation, laboratories
predominately performing dialysis related functions, or make any material change
in any of its business objectives, purposes and operations that would be
reasonably likely to materially adversely affect the repayment of the
Obligations.
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6.19 Subsidiaries or Partnerships. (a) Become a partner or joint venturer
in any partnership or joint venture, or (b) create or acquire any new
Subsidiary; provided that the Borrower or any Subsidiary may (i) create or
acquire one or more Subsidiaries in connection with a Permitted Acquisition
consummated in compliance with this Agreement, and (ii) create a Subsidiary de
novo; provided further that, in any such instance, the created or acquired
Subsidiary complies with the provisions of Section 5.13. None of RTC Holdings
International, RTC Holdings or RTC TN will engage in any activities other than
holding the stock of its operating Subsidiaries and ordinary course
administrative functions (provided that RTC TN may continue to acquire, own and
license trademarks to the Borrower and its Subsidiaries consistent with past
practice).
6.20 Transactions Affecting the Collateral. Enter into any transaction
that adversely affects the Collateral or the ability of the Borrower to repay
any Debt or the Obligations, commit or allow the commission of any forgiveness
or release of Collateral pursuant to the Intercompany Loan Documents or permit
or agree to any material extension, compromise or settlement or make any
material change or modification of any kind or nature with respect to any
Account.
6.21 Hazardous Wastes. Permit any Hazardous Substances the removal of
which is required or the maintenance of which is restricted, prohibited or
penalized by any Governmental Authority, to be unlawfully brought on to any real
property owned or leased by the Borrower or any Subsidiary, or if so brought or
found located thereon, fail to immediately remove such materials, with proper
disposal, in accordance with required cleanup procedures under applicable
Environmental Laws.
6.22 Fiscal Year. Change its fiscal year from a December 31 year end.
6.23 Amendments; Prepayments of Debt, etc. Except with respect to the
Debt created under the Loan Documents, (a) amend or modify (or permit the
amendment or modification of) any of the terms or provisions of any Debt or any
agreement related thereto (including without limitation, the Indenture) or (b)
make any voluntary or optional payment or prepayment or redemption or
acquisition (other than for Stock) for value of (including, without limitation,
by way of depositing with any trustee with respect thereto money or securities
before due for the purpose of paying when due), or exchange (other than for
Stock), any Debt (including, without limitation, any redemption pursuant to
Article III of the Indenture or any deposit of funds by the Borrower with the
trustee pursuant to Article XIII of the Indenture). Notwithstanding the
foregoing, conversion of the Convertible Notes for Stock (and cash for
fractional shares) in accordance the terms of the Indenture shall be permitted.
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6.24 Fraud and Abuse. Neither the Borrower nor any Subsidiary, nor any of
their respective officers or directors, shall engage on behalf of Borrower or
any Subsidiary in any activities that are prohibited under the federal Medicare
and Medicaid statutes, 42 U.S.C. (S) 1320a-7b, or the regulations promulgated
pursuant to such statutes or related state or local statutes or regulations,
including but not limited to the following: (i) knowingly and willfully making
or causing to be made a false statement or representation of a material fact in
any applications for any benefit or payment; (ii) knowingly and willfully making
or causing to be made any false statement or representation of a material fact
for use in determining rights to any benefit or payment; (iii) failing to
disclose knowledge by a claimant of the occurrence of any event affecting the
initial or continued right to any benefit or payment on its own behalf or on
behalf of another, with intent to secure such benefit or payment fraudulently;
(iv) knowingly and willfully soliciting or receiving any remuneration (including
any kickback, bribe or rebate), directly or indirectly, overtly or covertly, in
cash or in kind or offering to pay such remuneration (a) in return for referring
an individual to a person for the furnishing or arranging for the furnishing of
any item or service for which payment may be made in whole or in part by
Medicare, Medicaid or other applicable third party payors, or (b) in return for
purchasing, leasing or ordering or arranging for or recommending the purchasing,
leasing or order of any good, facility, service, or item for which payment may
be made in whole or in part by Medicare, Medicaid or other applicable third
party payors. With respect to this Section, knowledge by an individual director
or officer of the Borrower or a Subsidiary of any events described in this
Section shall not be imputed to the Borrower or such Subsidiary unless such
knowledge was obtained or learned by the director or officer in his or her
official capacity as a director or officer of the Borrower or such Subsidiary.
Neither the Borrower nor any Subsidiary shall be considered to have breached
this Section, except in the case of a knowing and willful violation thereof,
until the Borrower or such Subsidiary has received notification, written or
oral, by a Governmental Authority of competent jurisdiction as to any such
violation.
6.25 Limitation on Certain Restrictions. The Borrower will not, and will
not permit or cause any of its Subsidiaries to, directly or indirectly, create
or otherwise cause or suffer to exist or become effective any restriction or
encumbrance on (i) the ability of the Borrower and its Subsidiaries to perform
and comply with their respective obligations under the Loan Documents or (ii)
the ability of any Subsidiary of the Borrower to make any dividend payments or
other distributions in respect of its Stock, to repay Debt owed to the Borrower
or any other Subsidiary, to make loans or advances to the Borrower or any other
Subsidiary, or to transfer any of its assets or properties to the Borrower or
any other Subsidiary, in each case other than such restrictions or encumbrances
existing
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under or by reason of (i) the Loan Documents, (ii) applicable Requirements of
Law, and (iii) customary non-assignment provisions in any lease governing a
leasehold interest.
6.26 No Other Negative Pledges. The Borrower will not, and will not
permit or cause any of its Subsidiaries to, directly or indirectly, enter into
or suffer to exist any agreement or restriction that prohibits or conditions the
creation, incurrence or assumption of any Lien upon or with respect to any part
of its properties or assets, whether now owned or hereafter acquired, or agree
to do any of the foregoing, other than as set forth in this Agreement and the
other Loan Documents.
6.27 Accounting Changes. The Borrower will not, and will not permit or
cause any of its Subsidiaries to, make or permit any material change in its
accounting policies or reporting practices, except as may be required by
Generally Accepted Accounting Principles.
ARTICLE VII
EVENTS OF DEFAULT
7.1 Events of Default. The occurrence of any one or more of the
following events shall constitute an "Event of Default":
(a) The Borrower fails to pay when due any principal, fees or interest on
the Obligations;
(b) The Borrower or any Subsidiary fails or neglects to observe, perform
or comply with any term, provision, condition or covenant contained in Sections
2.14, 5.1, 5.3, 5.4 or 5.5 (a), 5.13, 5.15 or Article VI;
(c) The Borrower or any Subsidiary fails or neglects to observe, perform
or comply with any term, provision, condition or covenant contained herein
except those specified in subsections (a) and (b) above (and except to the
extent that violations of any such provisions or covenants otherwise trigger an
Event of Default under any of the other subparagraphs of this Section 7.1,
including, without limitation, violations of Section 5.6 to the extent covered
by subparagraph (e) below), and the same is not cured to the Required Lenders'
satisfaction within thirty (30) Business Days after the Borrower or such
Subsidiary acquires knowledge thereof;
(d) If any representation, warranty, certification or statement made in
writing by or on behalf of the Borrower or any Subsidiary in this Agreement, in
the other Loan Documents or in any other agreement now existing or hereafter
executed between the Borrower or any Subsidiary and the Agent or any Lender, or
in
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connection with the transactions contemplated hereby or thereby, or in any
certificate, financial statement or other document delivered pursuant thereto,
shall prove to have been false or misleading in any material respect when made;
(e) (i) the occurrence of any payment default on the part of the Borrower
or any Subsidiary under the terms of any agreement, document or instrument
pursuant to which the Borrower or such Subsidiary has incurred any Debt
(including, without limitation, the Indenture) having an individual or aggregate
principal amount of greater than $500,000 (other than the Obligations and Debt
under the Intercompany Loan Documents), or (ii) the occurrence of any nonpayment
default or event of default on the part of the Borrower or any Subsidiary under
the terms of any agreement, document or instrument pursuant to which the
Borrower or such Subsidiary has incurred any Debt (including, without
limitation, the Indenture) having an individual principal amount greater than
$1,000,000 or aggregate principal amount greater than $2,500,000 (other than the
Obligations and Debt under the Intercompany Loan Documents);
(f) The termination of any agreement, contract or instrument to which a
Borrower or any Subsidiary is a party or by which it or any of its properties
are bound, and such termination results in a Material Adverse Effect;
(g) The occurrence of an event of default under any of the Loan Documents
or in any other agreement now existing or hereafter executed evidencing or
securing any of the Obligations;
(h) The occurrence of any material uninsured damage to or loss, theft or
destruction of the Collateral or other assets of the Borrower or any Subsidiary
that has a Material Adverse Effect;
(i) The filing by the Borrower or any Subsidiary of any voluntary petition
seeking liquidation, reorganization, arrangement, readjustment of debts or for
any other relief under the Bankruptcy Code or under any other act or law
pertaining to insolvency or debtor relief, whether state, federal or foreign,
now or hereafter existing;
(j) The filing against the Borrower or any Subsidiary of any involuntary
petition seeking liquidation, reorganization, arrangement, readjustment of debts
or for any other relief under the Bankruptcy Code or under any other act or law
pertaining to insolvency or debtor relief, whether state, federal or foreign,
now or hereafter existing, which petition is not dismissed within sixty (60)
days after the date of filing;
(k) A custodian, trustee, receiver or assignee for the benefit of creditors
is appointed or takes possession of the Collateral or any other assets of the
Borrower or any Subsidiary;
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(l) The Borrower or any of its Subsidiaries (other than an immaterial
Subsidiary) ceases to be Solvent (taking into account any rights of
contribution), or ceases to conduct its business as now conducted or is
enjoined, restrained or in any way prevented by court order from conducting all
or any material part of its business affairs, except as otherwise specifically
permitted under Section 6.1;
(m) A notice of lien, levy or assessment in excess of $500,000 is filed of
record against any portion of the assets of the Borrower or any Subsidiary by
the United States, or any department, agency or instrumentality thereof, or by
any other Governmental Authority, including, without limitation, the Pension
Benefit Guaranty Corporation, or if any taxes or debts owing at any time or
times hereafter to any one of them becomes a lien or encumbrance (other than a
Permitted Lien) upon the Collateral or any other asset of the Borrower or any
Subsidiary, and the same is not dismissed, released or discharged within thirty
(30) days after the same becomes a lien or encumbrance or, in the case of ad
valorem taxes, prior to the last day when payment may be made without penalty;
(n) The entry of a judgment or the issuance of a warrant of attachment,
execution or similar process against the Borrower or any Subsidiary or any of
their respective assets in excess of $500,000 which shall not be dismissed,
discharged, stayed pending appeal or bonded within thirty (30) days after entry
or is otherwise covered by insurance;
(o) The occurrence of any of the following events: (i) the happening of a
Reportable Event that could give rise to liability (that is not waived by the by
the Pension Benefit Guaranty Corporation or by the Required Lenders, or if such
liability can be avoided by any corrective action of the Borrower, such
corrective action is not completed within ninety (90) days after the occurrence
of such Reportable Event) with respect to any Pension Plan; (ii) the termination
of any Pension Plan in a "distress termination" under the provisions of Section
4041 of ERISA; (iii) the appointment of a trustee by an appropriate United
States District Court to administer any Pension Plan; (iv) the institution of
any proceedings by the Pension Benefit Guaranty Corporation to terminate any
Pension Plan or to appoint a trustee to administer any such plan; and (v) the
failure of the Borrower to notify the Lenders promptly upon receipt by the
Borrower of any notice of the institution of any proceeding or any other actions
that may result in the termination of any such plan;
(p) The Borrower or any Subsidiary, to the extent presently participating
or required by law to participate, in Medicaid or Medicare programs shall fail
to be eligible for any reason to participate in Medicaid or Medicare programs or
to accept assignments or rights to reimbursement under Medicaid Regulations
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or Medicare Regulations except in the case where such failure is de minimis or
immaterial;
(q) The occurrence of any Material Adverse Change; or
(r) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. shall cease (i) to be the chief executive officer
of the Borrower, (ii) to perform for the Borrower the normal and customary
duties of a chief executive officer, or (iii) to be involved in the day-to-day
operations of the Borrower, unless in any such event the Borrower shall have
hired a new chief executive officer of comparable skill and expertise,
reasonably acceptable to the Required Lenders, within ninety (90) days of such
occurrence.
(s) The occurrence of a Change of Control.
ARTICLE VIII
RIGHTS AND REMEDIES AFTER EVENT OF DEFAULT
8.1 Remedies: Termination of Commitments, Acceleration, etc. Upon and
at any time after the occurrence and during the continuance of any Event of
Default, the Agent shall at the direction, or may with the consent, of the
Required Lenders, take any or all of the following actions at the same or
different times:
(a) Declare the Commitments of each Lender, and the Issuing Bank's
obligation to issue Letters of Credit, to be terminated, whereupon the same
shall terminate (provided that, upon the occurrence of an Event of Default
pursuant to Sections 7.1(i), (j) or (k), all of the Commitments, together with
the Issuing Bank's obligation to issue Letters of Credit, shall automatically be
terminated);
(b) Declare all or any part of the outstanding principal amount of the
Loans, all unpaid interest accrued thereon, and all other amounts payable under
this Agreement, the Revolving Credit/Term Notes and the other Loan Documents to
be immediately due and payable, whereupon such outstanding principal amounts,
accrued interest and other such amounts shall become immediately due and payable
without presentment, demand, protest, notice of intent to accelerate or other
notice or legal process of any kind, all of which are hereby knowingly and
expressly waived by the Borrower (provided that, upon the occurrence of an Event
of Default pursuant to Sections 7.1(i), (j) or (k), all of such outstanding
principal amounts, accrued interest and other such amounts shall automatically
become immediately due and payable);
(c) Direct the Borrower to deliver (and the Borrower hereby agrees, upon
receipt of notice of such direction from the Agent, to
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deliver) to the Agent from time to time such additional amount of cash as is
equal to the aggregate Stated Amount of all Letters of Credit then outstanding
(whether or not any beneficiary under any Letter of Credit shall have drawn or
be entitled at such time to draw thereunder), such amount to be held by the
Agent in the Cash Collateral Account as security for the Borrower's
Reimbursement Obligations as described in Section 2.17(i); and
(d) Exercise all rights and remedies available to it under this Agreement,
the other Loan Documents and applicable law.
8.2 Right of Set-off. The Agent and each Lender (and each of their
Affiliates) may, and are hereby authorized by the Borrower, at any time and from
time to time, to the fullest extent permitted by applicable law, without advance
notice to the Borrower (any such notice being expressly waived by the Borrower)
and irrespective of demand for payment, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held in other than a fiduciary account and any other indebtedness at any time
owing by such Lender (or any of its Affiliates) to or for the credit or the
account of the Borrower against any or all of the Obligations now or hereafter
existing, whether or not such Obligations have matured. The Agent agrees to
notify the Borrower after any such set-off or application, provided that the
failure to give such notice shall not affect the validity of such set-off and
application.
8.3 Rights and Remedies Cumulative; Non-Waiver; etc. The enumeration of
the Agent's and the Lenders' rights and remedies set forth in this Agreement is
not intended to be exhaustive, and the exercise by the Agent or any Lender of
any right or remedy shall not preclude the exercise of any other rights or
remedies, all of which shall be cumulative, and shall be in addition to any
other right or remedy given hereunder, under the Loan Documents or under any
other agreement between the Borrower or any Subsidiary and the Agent or the
Lenders or that may now or hereafter exist in law or in equity or by suit or
otherwise. No delay or failure to take action on the part of the Agent or any
Lender in exercising any right, power or privilege shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
privilege preclude other or further exercise thereof or the exercise of any
other right, power or privilege or shall be construed to be a waiver of any
Event of Default. No course of dealing between the Borrower or any Subsidiary
and the Agent or the Lenders or their agents or employees shall be effective to
change, modify or discharge any provision of this Agreement or any of the other
Loan Documents or to constitute a waiver of any Event of Default.
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ARTICLE IX
THE AGENT
9.1 Appointment. The Lenders and the Issuing Bank (for purposes of this
Article, any reference to the Lenders or any Lender shall be deemed also to
include a reference to the Issuing Bank) hereby designate and appoint First
Union as Agent to act as specified herein and in the other Loan Documents. Each
Lender hereby authorizes, and each holder of any Revolving Credit/Term Note by
the acceptance of such Revolving Credit/Term Note shall be deemed to authorize,
the Agent to take such action as agent on its behalf under the provisions of
this Agreement and the other Loan Documents and any other instruments and
agreements referred to herein or therein, and to exercise such powers and to
perform such duties hereunder and thereunder, as are specifically delegated to
or required of the Agent by the terms hereof or thereof and such other powers as
are reasonably incidental thereto. The Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents or
attorneys-in-fact and shall not be responsible for the negligence or misconduct
of any agents or attorneys-in-fact that it selects with reasonable care.
9.2 Nature of Duties. The Agent shall have no duties or responsibilities
other than those expressly set forth in this Agreement and the other Loan
Documents. Neither the Agent nor any of its officers, directors, employees or
agents shall be liable for any action taken or omitted by it or them as such
hereunder or under any other Loan Document or in connection herewith or
therewith, unless caused by its or their gross negligence or willful misconduct.
The duties of the Agent shall be mechanical and administrative in nature; the
Agent shall not have by reason of this Agreement or any other Loan Document a
fiduciary relationship in respect of any Lender or the holder of any Revolving
Credit/Term Note; and nothing in this Agreement or any other Loan Document,
express or implied, is intended to or shall be so construed as to impose upon
the Agent any obligations or liabilities in respect of this Agreement or any
other Loan Document except as expressly set forth herein or therein.
9.3 Absence of Reliance on the Agent.
(a) Each Lender acknowledges that neither the Agent nor any of its
officers, directors, employees or agents has made any representation or warranty
to it and that no act by the Agent hereinafter taken, including any review of
the affairs of the Borrower and its Subsidiaries, shall be deemed to constitute
any representation or warranty by the Agent to any Lender.
(b) Each Lender acknowledges that, independently and without reliance upon
the Agent or any other Lender and based on such
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documents and information as it has deemed and may deem appropriate, (i) it has
made its own appraisal of and investigation into the business, prospects,
operations, properties, financial and other condition and creditworthiness of
the Borrower and its Subsidiaries in connection with its decision to enter into
this Agreement and extend credit to the Borrower hereunder, and (ii) it will
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action hereunder.
(c) Except as expressly provided in this Agreement, the Agent shall have no
duty or responsibility, either initially or on a continuing basis, to provide
any Lender or the holder of any Revolving Credit/Term Note with any credit or
other information concerning the business, prospects, operations, properties,
financial or other condition or creditworthiness of the Borrower, its
Subsidiaries or any other Person that may come into its possession, whether
before the making of the initial Loans, the participation in the initial Letters
of Loan or at any time or times thereafter.
(d) The Agent shall not be responsible to any Lender or the holder of any
Revolving Credit/Term Note for any recitals, statements, information,
representations or warranties herein or in any other Loan Document or in any
document, instrument, certificate or other writing delivered in connection
herewith or therewith or for the execution, effectiveness, genuineness,
validity, enforceability, perfection, priority or sufficiency of this Agreement
or any other Loan Document or the financial condition of the Borrower, its
Subsidiaries or any other Person, or be required to make any inquiry concerning
either the performance or observance of any of the terms, provisions or
conditions of this Agreement or any other Loan Document, or the financial
condition of the Borrower, its Subsidiaries or any other Person or the existence
or possible existence of any Default or Event of Default.
(e) The Agent shall be under no obligation or duty to take any action under
this Agreement or any other Loan Document if taking such action (i) would
subject the Agent to a tax in any jurisdiction where it is not then subject to a
tax, (ii) would require the Agent to qualify to do business in any jurisdiction
where it is not then so qualified, unless the Agent receives security or
indemnity satisfactory to it against any tax or other liability in connection
with such qualification or resulting from the taking of such action in
connection therewith or (iii) would subject the Agent to in personam
jurisdiction in any location where it is not then so subject.
9.4 Certain Rights of the Agent. If the Agent shall request instructions
from the Required Lenders with respect to any act or action (including failure
to act) in connection with this Agreement or any other Loan Document, the Agent
shall be entitled to refrain
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from such act or taking such action unless and until it shall have received such
instructions, and the Agent shall incur no liability by reason of so refraining.
The Agent shall not be obligated to take any action hereunder or under any other
Loan Document (i) if such action would, in the reasonable opinion of the Agent,
be contrary to applicable law or this Agreement or the other Loan Documents,
(ii) if it shall not receive such advice or concurrence of the Required Lenders
as it reasonably deems appropriate or (iii) if it shall not first be indemnified
to its satisfaction by the Lenders requesting such action against any and all
liability and expense that may be incurred by it by reason of taking or
continuing to take any such action. Without limiting the foregoing, no Lender
or holder of any Revolving Credit/Term Note shall have any right of action
whatsoever against the Agent as a result of the Agent's acting or refraining
from acting hereunder or under any other Loan Document in accordance with the
instructions of the Required Lenders.
9.5 Notice of Default. The Agent shall not be deemed to have knowledge
or notice of the occurrence of any Default or Event of Default, other than any
Default or Event of Default arising out of the failure to pay any principal,
interest, fees or other amounts payable to the Agent for the account of the
Lenders, unless the Agent has received written notice from the Borrower or a
Lender describing such Default or Event of Default and stating that such notice
is a "notice of default." In the event that the Agent receives such a notice,
the Agent shall give notice thereof to the Lenders as soon as reasonably
practicable; provided, however, that if any such notice has also been furnished
to the Lenders, the Agent shall have no obligation to notify the Lenders with
respect thereto. Each Lender shall promptly give the Agent such a notice upon
its actual knowledge of a Default or an Event of Default; provided, however,
that the failure of any Lender to deliver such notice in the absence of gross
negligence or willful misconduct shall not affect its rights hereunder or under
the other Loan Documents.
9.6 Reliance by Agent. The Agent shall be entitled to rely, and shall be
fully protected in relying, upon any note, writing, resolution, notice,
statement, consent, certificate, telex, teletype or facsimile message, order or
other documentary, teletransmission or telephone message believed by it in good
faith to be genuine and correct and to have been signed, sent or made by the
proper Person. The Agent may consult with legal counsel (including counsel for
the Borrower), independent public accountants and other experts selected by it
with respect to all matters pertaining to this Agreement and the other Loan
Documents and its duties hereunder and thereunder and shall not be liable for
any action taken or omitted to be taken by it in good faith in accordance with
the advice of such counsel, accountants or experts.
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9.7 Indemnification. To the extent the Agent is not reimbursed by or on
behalf of the Borrower, and without limiting the obligation of the Borrower to
do so, the Lenders will reimburse and indemnify the Agent, in proportion to
their respective percentages as used in determining the Required Lenders, from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses (including attorneys' fees and
expenses) or disbursements of any kind or nature whatsoever that may at any time
(including at any time following the indefeasible repayment in full of the
Loans) be imposed on, incurred by or asserted against the Agent in any way
relating to or arising out of this Agreement or any other Loan Document or the
transactions contemplated hereby or thereby or any action taken or omitted by
the Agent under or in connection with any of the foregoing, and in particular
will reimburse the Agent for out-of-pocket expenses promptly upon demand by the
Agent therefor; 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 finally determined by a court
of competent jurisdiction and not subject to any appeal (or pursuant to
arbitration as set forth herein) to have resulted from the Agent's gross
negligence or willful misconduct.
9.8 The Agent in its Individual Capacity. With respect to its
Commitments, the Loans made by it and the Revolving Credit/Term Notes issued to
it, the Agent shall have the same rights and powers under the Loan Documents as
any other Lender or holder of a Revolving Credit/Term Note and may exercise the
same as though it were not performing the agency duties specified herein; and
the terms "Lenders," "Required Lenders," "holders of Revolving Credit/Term
Notes" and any similar terms shall, unless the context clearly otherwise
indicates, include the Agent in its individual capacity. The Agent may accept
deposits from, lend money to and generally engage in any kind of banking, trust,
financial advisory or other business with the Borrower or any of its
Subsidiaries or any of their respective Affiliates as if it were not performing
the agency duties specified herein, and may accept fees and other consideration
from the Borrower for services in connection with this Agreement and otherwise
without having to account for the same to the Lenders.
9.9 Holders. The Agent may deem and treat the payee of any Revolving
Credit/Term Note as the holder thereof for all purposes hereof unless and until
a written notice of the assignment, transfer or endorsement thereof, as the case
may be, shall have been filed with the Agent. Any request, authority or consent
of any Person that, at the time of making such request or giving such authority
or consent, is the holder of any Revolving Credit/Term Note, shall be conclusive
and binding on any subsequent holder, transferee, assignee or endorsee, as the
case may be, of such
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Revolving Credit/Term Note or of any Revolving Credit/Term Note or Revolving
Credit/Term Notes issued in exchange therefor.
9.10 Successor Agent. The Agent may resign at any time upon sixty (60)
days' prior written notice to the Borrower and the Lenders. The Agent may be
removed with or without cause by the Required Lenders (and, so long as no
Default or Event of Default has occurred and is continuing, with the consent of
the Borrower, which consent shall not be unreasonably withheld), at any time
upon sixty (60) days' prior written notice to the Borrower and the Agent. Such
resignation or removal, as the case may be, shall take effect upon the
appointment and acceptance of a successor Agent as provided hereinbelow. Upon
any such notice of resignation or removal (and, in the case of removal, upon the
consent of the Borrower, if required as provided hereinabove), the Required
Lenders (so long as no Default or Event of Default has occurred and is
continuing, with the consent of the Borrower, which consent shall not be
unreasonably withheld) will appoint from among the Lenders a successor Agent.
If no successor Agent shall have been appointed and accepted such appointment
within such sixty-day period, the Agent may appoint, after consulting with the
Lenders and the Borrower, a successor agent from among the Lenders, who shall
serve as Agent until such time, if any, as the Required Lenders shall have
appointed a successor Agent as provided hereinabove. Upon the written
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder and under
the other Loan Documents. After any retiring Agent's resignation as Agent, the
provisions of this Article shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent.
9.11 Collateral Matters.
(a) The Agent is hereby authorized on behalf of all the Lenders, without
the necessity of any notice to or further consent from the Lenders, from time to
time (but without any obligation) to take any action with respect to the
Collateral, the Pledge Agreement and the Subsidiary Pledge Agreement that may be
necessary to perfect and maintain perfected the liens upon the Collateral
granted pursuant to the Pledge Agreement, the Subsidiary Pledge Agreement or the
other Loan Documents.
(b) The Lenders hereby irrevocably authorize the Agent, at its option and
in its discretion, to release any lien granted to or held by the Agent upon any
Collateral (i) upon termination of the Commitments and indefeasible payment in
full of all Obligations, (ii) constituting property sold or to be sold or
disposed of as part of or in connection with a disposition permitted hereunder,
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(iii) constituting property in which neither the Borrower nor any Subsidiary
owned any interest at the time such lien was granted or at any time thereafter
or (iv) if approved, authorized or ratified in writing by the Lenders or the
Required Lenders, as may be required with respect to any such release in
accordance with Section 10.8(b). Upon request by the Agent at any time, the
Lenders will confirm in writing the Agent's authority to release Collateral
pursuant to this subsection (b).
9.12 Issuing Bank. The provisions of this Article (other than Section
9.10) shall apply to the Issuing Bank mutatis mutandis to the same extent as
such provisions apply to the Agent.
9.13 Documentation Agent and Co-agents. Notwithstanding any other
provision of this Agreement or any of the other Loan Documents, the
Documentation Agent and the Co-agents are named as such for recognition purposes
only, and in their capacities as such shall have no powers, rights, duties,
responsibilities or liabilities with respect to this Agreement and the other
Loan Documents and the transactions contemplated hereby and thereby.
ARTICLE X
MISCELLANEOUS
10.1 Survival. The representations and warranties made by or on behalf of
the Borrower or any Subsidiary in this Agreement and in each other Loan Document
shall survive the execution and delivery of this Agreement and each such other
Loan Document. Notwithstanding any other provision herein or anything provided
or implied by law to the contrary, no termination or cancellation (regardless of
cause or procedure) of the Commitments, this Agreement or any of the other Loan
Documents shall in any way affect or impair the rights and obligations of the
parties hereto with respect to any of the provisions of (i) Section 10.3 hereof,
(ii) Section 2.15 or (iii) this Agreement and the other Loan Documents relating
to indemnification or payment of costs and expenses, including, without
limitation, all of the provisions of Sections 2.11(a), 2.11(b), 2.12, 2.13,
2.17(h), 9.7, 10.6 and 10.7, and, in each case, such provisions shall survive
any such termination or cancellation and the making and repayment of the Loans.
10.2 Governing Law; Consent to Jurisdiction. THIS AGREEMENT HAS BEEN
EXECUTED, DELIVERED AND ACCEPTED IN, AND SHALL BE DEEMED TO HAVE BEEN MADE IN,
NORTH CAROLINA AND SHALL BE INTERPRETED, AND THE RIGHTS AND LIABILITIES OF THE
PARTIES HERETO DETERMINED, IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO
CONFLICTS OF LAW PROVISIONS) OF THE STATE OF NORTH CAROLINA; PROVIDED THAT EACH
LETTER OF CREDIT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
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ENFORCED IN ACCORDANCE WITH, THE LAWS OR RULES DESIGNATED IN SUCH LETTER OF
CREDIT OR, IF NO SUCH LAWS OR RULES ARE DESIGNATED, THE UNIFORM CUSTOMS AND
PRACTICES FOR DOCUMENTARY CREDITS, INTERNATIONAL CHAMBER OF COMMERCE, AS IN
EFFECT FROM TIME TO TIME (THE "UNIFORM CUSTOMS") AND, AS TO MATTERS NOT GOVERNED
THEREBY, THE INTERNAL LAWS OF THE STATE OF THE DOMICILE OF THE ISSUING BANK. AS
PART OF THE CONSIDERATION FOR NEW VALUE THIS DAY RECEIVED, THE BORROWER HEREBY
CONSENTS TO THE JURISDICTION OF ANY STATE COURT WITHIN MECKLENBURG COUNTY, NORTH
CAROLINA OR ANY FEDERAL COURT LOCATED WITHIN THE WESTERN DISTRICT OF THE STATE
OF NORTH CAROLINA FOR ANY PROCEEDING INSTITUTED HEREUNDER OR UNDER ANY OF THE
OTHER LOAN DOCUMENTS, OR ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR
ANY OF THE OTHER LOAN DOCUMENTS, OR ANY PROCEEDING TO WHICH THE AGENT, THE
ISSUING BANK, ANY LENDER OR THE BORROWER IS A PARTY, INCLUDING ANY ACTIONS BASED
UPON, ARISING OUT OF, OR IN CONNECTION WITH ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENT (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE AGENT, THE
ISSUING BANK, ANY LENDER OR THE BORROWER. THE BORROWER IRREVOCABLY AGREES TO BE
BOUND (SUBJECT TO ANY AVAILABLE RIGHT OF APPEAL) BY ANY JUDGMENT RENDERED OR
RELIEF GRANTED THEREBY AND FURTHER WAIVES ANY OBJECTION THAT IT MAY HAVE BASED
ON LACK OF JURISDICTION OR IMPROPER VENUE OR FORUM NON CONVENIENS TO THE CONDUCT
OF ANY SUCH PROCEEDING. THE BORROWER CONSENTS THAT ALL SERVICE OF PROCESS BE
MADE BY REGISTERED OR CERTIFIED MAIL DIRECTED TO RENAL TREATMENT CENTERS, INC.
AT ITS ADDRESS SET FORTH HEREINBELOW, AND SERVICE SO MADE SHALL BE DEEMED TO BE
COMPLETED UPON THE EARLIER OF ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER
DEPOSIT IN THE UNITED STATES MAILS, PROPER POSTAGE PREPAID AND PROPERLY
ADDRESSED. NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT TO SERVE LEGAL
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT TO BRING ANY
ACTION OR PROCEEDING AGAINST THE BORROWER OR ITS PROPERTY IN THE COURTS OF ANY
OTHER JURISDICTION.
10.3 Arbitration; Remedies.
(a) Upon demand of any party hereto, whether made before or after
institution of any judicial proceeding, any dispute, claim or controversy
arising out of, connected with or relating to this Agreement or any of the Loan
Documents ("Disputes") between or among parties hereto or thereto shall be
resolved by binding arbitration as provided herein. Institution of a judicial
proceeding by a party does not waive the right of that party to demand
arbitration hereunder. Disputes may include, without limitation, tort claims,
counterclaims, claims brought as class actions, claims arising from documents
executed in the future, or claims arising out of or connected with the
transaction contemplated by this Agreement or any of the Loan Documents.
Arbitration shall be conducted under and governed by the Commercial Financial
Disputes Arbitration Rules (the "Arbitration Rules") of the American Arbitration
Association (the "AAA"), as in effect from time to time, and Title 9 of the U.S.
Code, as amended. All
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arbitration hearings shall be conducted in Charlotte, North Carolina. The
expedited procedures set forth in Rule 51 et seq. of the Arbitration Rules shall
be applicable to claims of less than $1,000,000. All applicable statutes of
limitation shall apply to any Dispute. A judgment upon the award may be entered
in any court having jurisdiction. The panel from which all arbitrators are
selected shall be comprised of licensed attorneys. The single arbitrator
selected for expedited procedure shall be a retired judge from the highest court
of general jurisdiction, state or federal, of the state where the hearing will
be conducted. Notwithstanding the foregoing, this arbitration provision does
not apply to Disputes under or related to any Hedge Agreements.
(b) Notwithstanding the foregoing, the parties hereto agree to preserve,
without diminution, certain remedies, more particularly described below, that
any party hereto may employ or exercise freely, either alone, in conjunction
with or during a Dispute; provided, however, that the Borrower preserves its
right to seek injunctive or other appropriate judicial relief from a court of
competent jurisdiction with respect to the foregoing pending final resolution of
the Dispute pursuant to subsection (a) above. The Agent, on behalf of the
Lenders, shall have the right to proceed in any court of proper jurisdiction or
by self-help to exercise or prosecute the following remedies, as applicable:
(i) all rights to foreclose against any real or personal property or other
security by exercising a power of sale granted under any Loan Documents or under
applicable law or by judicial foreclosure and sale, including a proceeding to
confirm the sale; (ii) all rights of self-help including peaceful occupation of
real property and collection of rents, set-off, and peaceful possession of
personal property; (iii) obtaining provisional or ancillary remedies including
injunctive relief, sequestration, garnishment, attachment, appointment of
receiver and filing an involuntary bankruptcy proceeding; and (iv) when
applicable, a judgment by confession of judgment. Preservation of these
remedies does not limit the power of any arbitrator to grant similar remedies
that may be requested by a party in a Dispute.
The parties hereto agree that they shall not have a remedy of punitive or
exemplary damages against any other party in any Dispute, and hereby waive any
right or claim to punitive or exemplary damages they have now or which may
arise in the future in connection with any Dispute whether the Dispute is
resolved by arbitration or judicially.
10.4 Notice. All notices and other communications provided for hereunder
shall be in writing (including telegraphic, telex, facsimile transmission or
cable communication) and mailed, telegraphed, telexed, telecopied, cabled or
delivered to the party to be notified at the following addresses:
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If to the Borrower: Renal Treatment Centers, Inc.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.,
Vice President and
▇▇▇▇▇▇ ▇. ▇▇▇▇, Vice
President and General Counsel
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to: Duane, Morris & Heckscher
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Agent
or the Issuing Bank: First Union National Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Syndication Agency Services
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: First Union National Bank
One First Union Center, 5th Floor
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Healthcare Finance Group
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
If to any Lender: At the address set forth on its
signature page hereto
or to such other address as any party may designate for itself by like notice to
all other parties hereto. All such notices and communications shall be deemed
to have been given (i) if mailed as provided above by any method other than
overnight delivery service, on the third Business Day after deposit in the
mails, (ii) if mailed by overnight delivery service, telegraphed, telexed,
telecopied or cabled, when delivered for overnight delivery,
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delivered to the telegraph company, confirmed by telex answerback, transmitted
by telecopier or delivered to the cable company, respectively, or (iii) if
delivered by hand, upon delivery; provided that notices and communications to
the Agent shall not be effective until received by the Agent.
All wire transfers to the Agent shall be sent to First Union National Bank
of North Carolina, ABA Routing #▇▇▇▇▇▇▇▇▇, to the credit of First Union National
Bank of North Carolina, Charlotte, North Carolina, Attention: Syndication
Agency Services, ▇/▇ #▇▇▇▇▇▇, ▇▇ #▇▇▇▇, RE: Renal Treatment Centers, Inc.,
unless otherwise instructed by the Agent.
10.5 Assignments, Participations.
(a) With the prior consent of the Agent and the Borrower, which consent
shall not be unreasonably withheld, each Lender may assign to one or more other
Persons all or a portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Commitments, the
outstanding Revolving Credit/Term Loans made by it and the Revolving Credit/Term
Note or Revolving Credit/Term Notes held by it); provided, however, that (i)
except in the case of an assignment to an Affiliate of such Lender or a Person
that, immediately prior to such assignment, was a Lender, the amount of the
Commitments of such assigning Lender being assigned pursuant to each such
assignment (determined as of the date of the Assignment and Acceptance with
respect to each such assignment) shall in no event be less than the lesser of
(y) the aggregate Commitments of such Lender immediately prior to such
assignment or (z) $10,000,000, (ii) each such assignment shall be to an Eligible
Assignee and (iii) the parties to each such assignment will execute and deliver
to the Agent, for its acceptance and recording in the Register, an Assignment
and Acceptance, together with any Revolving Credit/Term Note or Revolving
Credit/Term Notes subject to such assignment, and will pay a processing fee of
$3,000 to the Agent for its own account. Upon such execution, delivery,
acceptance and recording of the Assignment and Acceptance, from and after the
effective date specified therein (a) the assignee thereunder shall be deemed a
party hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, shall have the rights
and obligations of such Lender hereunder with respect thereto and (b) the
assigning Lender shall, to the extent that rights and obligations hereunder have
been assigned by it pursuant to such Assignment and Acceptance, relinquish its
rights (other than rights under the provisions of this Agreement and the other
Loan Documents relating to indemnification or payment of fees, costs and
expenses, to the extent such rights relate to the time prior to the effective
date of such Assignment and Acceptance) and be released from its obligations
under this Agreement (and, in the case of an Assignment
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and Acceptance covering all or the remaining portion of such assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto).
(b) By executing and delivering an Assignment and Acceptance, the assigning
Lender and the assignee thereunder confirm to and agree, with each other and
with the other parties hereto, as follows: (i) other than as may be provided in
such Assignment and Acceptance, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
any other Loan Document or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any other Loan Document
or any other instrument or document furnished hereto or pursuant thereto; (ii)
such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or any of
its Subsidiaries or the performance or observance by the Borrower or any of its
Subsidiaries of any of their respective obligations under this Agreement or any
other Loan Document or any other instrument or document furnished pursuant
hereto or thereto; (iii) such assignee confirms that it has received a copy of
this Agreement, together with copies of the Financial Statements and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Agreement; (iv) such assignee will,
independently and without reliance upon the Agent, the assigning Lender or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (v) such assignee confirms that it is an
Eligible Assignee; (vi) such assignee appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers and discretion
under this Agreement and the other Loan Documents and any other instruments and
agreements referred to herein or therein, and to exercise such powers and to
perform such duties hereunder and thereunder, as are specifically delegated to
or required of the Agent by the terms hereof or thereof and such other powers as
are reasonably incidental thereto; and (vii) such assignee agrees that it will
perform in accordance with their terms all of the obligations that by the terms
of this Agreement are required to be performed by it as a Lender.
(c) The Agent will maintain a copy of each Assignment and Acceptance
delivered to and accepted by it and a register for the recordation of the names
and addresses of the Lenders and the Commitments of, and principal amount of the
Loans owing to, each Lender from time to time (the "Register"). The entries in
the Register shall be conclusive and binding for all purposes, absent manifest
error, and the Borrower, the Agent, the Issuing Bank and the Lenders may treat
each Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement.
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The Register shall be available for inspection by the Borrower, the Issuing Bank
or any Lender at any reasonable time and from time to time upon reasonable prior
notice.
(d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee, together with any Revolving Credit/Term Note
or Revolving Credit/Term Notes subject to such assignment, the Agent will, if
such Assignment and Acceptance has been completed and is in substantially the
form of Exhibit D, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give notice thereof to
the Borrower. Within five (5) Business Days after its receipt of such notice,
the Borrower, at its own expense, will execute and deliver to the Agent in
exchange for the surrendered Revolving Credit/Term Note or Revolving Credit/Term
Notes a new Revolving Credit/Term Note or Revolving Credit/Term Notes to the
order of such assignee in an amount equal to the Commitment or Commitments
assumed by it pursuant to such Assignment and Acceptance and, to the extent the
assigning Lender has retained its Commitments hereunder, a new Revolving
Credit/Term Note or Revolving Credit/Term Notes to the order of the assigning
Lender in an amount equal to the Commitment or Commitments retained by it
hereunder. Such new Revolving Credit/Term Note or Revolving Credit/Term Notes
shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered Revolving Credit/Term Note or Revolving Credit/Term
Notes, shall be dated the effective date of such Assignment and Acceptance and
shall otherwise be in substantially the form of Exhibit A.
(e) Each Lender may sell to one or more other Persons participations in any
portion comprising less than all of its rights and obligations under this
Agreement (including, without limitation, a portion of its Commitments, the
outstanding Loans made by it and the Revolving Credit/Term Note or Revolving
Credit/Term Notes held by it); provided, however, that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible for the performance of such obligations, (iii) the
Borrower, the Issuing Bank, the Agent and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement, (iv) any such participation shall
be in an amount of not less than $5,000,000, (v) no Lender shall sell any
participation that, when taken together with all other participations, if any,
sold by such Lender, covers all of such Lender's rights and obligations under
this Agreement (including, without limitation, all of its Commitments, the
outstanding Loans made by it and the Revolving Credit/Term Note or Revolving
Credit/Term Notes held by it) and (vi) no Lender shall permit any participant to
have any voting rights or any right to control the vote of such Lender with
respect to any amendment, modification, waiver, consent or other action
hereunder or under any other Loan
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Document except as to actions of the type described in Section 10.8(a). In the
case of a participation, the participant shall not have any rights under this
Agreement or any of the other Loan Documents, the participant's rights against
the granting Lender in respect of such participation to be those set forth in
the participation agreement, and all amounts payable by the Borrower hereunder
shall be determined as if such Lender had not sold such participation; provided,
however, that each such participant shall have the rights of a Lender for
purposes of Sections 2.11(a), 2.11(b), 2.12, and 2.13, and shall be entitled to
the benefits thereto, to the extent that the Lender selling such participation
would be entitled to such benefits if the participation had not been sold.
(f) With the prior consent of the Required Lenders and the Borrower, which
consent shall not be unreasonably withheld, the Issuing Bank may assign all, but
not less than all, of its rights and obligations as Issuing Bank under this
Agreement, including, without limitation, its commitment to issue Letters of
Credit, to any Eligible Assignee, and upon acceptance of such assignment, the
successor Issuing Bank shall succeed to such rights and obligations and the
assigning Issuing Bank shall be discharged therefrom.
(g) The Agent, the Issuing Bank and each Lender may, in connection with any
assignment or participation or proposed assignment or participation pursuant to
this Section, disclose to the assignee or participant, or proposed assignee or
participant, any information relating to the Borrower and its Subsidiaries
furnished to it by or on behalf of any other party hereto, provided that such
assignee or participant or proposed assignee or participant agrees in writing to
the Agent, the Issuing Bank or such Lender, as the case may be, to keep such
information confidential to the same extent required of the Lenders under
Section 10.17.
(h) Notwithstanding any other provision set forth in this Agreement, any
Lender may at any time pledge all or any portion of its Loans and Revolving
Credit/Term Note to any Federal Reserve Bank in connection with borrowings from
the Federal Reserve Bank (provided that any such pledge shall not affect the
obligations of such Lender hereunder).
10.6 Fees and Expenses. Whether or not the transactions contemplated by
this Agreement shall be consummated, the Borrower shall be obligated:
(a) to pay or reimburse the Agent upon demand and after notice in
accordance with Section 10.4 for all reasonable expenses (including, without
limitation, reasonable attorneys' fees, but excluding salaries of the Agent's
regularly employed personnel and overhead) incurred or paid by the Agent in
connection with:
-104-
(i) the preparation, execution, delivery, interpretation, modification,
amendment or termination of this Agreement or the other Loan Documents or any
consent or waiver requested by the Borrower hereunder or thereunder; (ii)
charges for appraisers, examiners, environmental consultants, auditors or
similar Persons whom the Agent may engage with respect to rendering opinions
concerning the financial condition of the Borrower and its Subsidiaries; and
(iii) any commercially reasonable attempt to inspect, verify, protect, preserve,
collect, sell, liquidate or otherwise dispose of the Collateral or any other
assets of the Borrower or any Guarantor;
(b) to pay or reimburse the Agent and each Lender upon demand and after
notice in accordance with Section 10.4 for all reasonable expenses (including,
without limitation, reasonable attorneys' fees, but excluding salaries of the
Agent's or such Lender's regularly employed personnel and overhead) incurred or
paid by the Agent or such Lender in connection with: (i) any litigation,
contest, dispute, suit or proceeding or action (whether instituted by the Agent,
the Lenders, or any of them, the Borrower or any other Person) in any way
relating to this Agreement or the other Loan Documents or to the Borrower's or
any Subsidiary's affairs (other than a dispute solely between or among the
Lenders); (ii) any attempt by the Agent or such Lender to enforce any of its
rights against the Borrower or any other Person that may be obligated to the
Agent or such Lender by virtue of this Agreement or the other Loan Documents;
and (iii) any Default or Event of Default, including without limitation, any
refinancing or restructuring of the credit arrangement provided under this
Agreement in the nature of a "work-out" or in any insolvency or bankruptcy
proceeding;
(c) to pay and hold the Agent and each Lender harmless from and against any
and all liability and loss with respect to or resulting from the nonpayment or
delayed payment of any and all intangibles, documentary stamp and other similar
taxes, fees and excises, if any, including any interest and penalties, that may
be, or be determined to be, payable in connection with the transactions
contemplated by this Agreement and the other Loan Documents or in any
modification hereof or thereof; and
(d) to pay and hold the Agent and each Lender harmless from and against any
and all finder's or brokerage fees and commissions that may be payable in
connection with the transactions contemplated by this Agreement and the other
Loan Documents, other than any fees or commissions of finders or brokers engaged
by the Agent or any Lender.
10.7 Indemnification. From and at all times after the date of this
Agreement, and in addition to the costs and expenses payable under Section 10.6
and all of the Agent's and the Lenders' other
-105-
rights and remedies against the Borrower, the Borrower agrees to indemnify and
hold harmless the Agent, the Issuing Bank and each Lender and each of their
directors, officers, employees, agents and Affiliates (each, an "Indemnified
Person") against any and all claims, losses, damages, liabilities, costs and
expenses of any kind or nature whatsoever, including, without limitation,
attorneys' fees, costs and expenses (collectively, "Indemnified Costs") incurred
by or asserted against any such Indemnified Person from and after the date
hereof, whether direct, indirect or consequential, as a result of or arising
from or in any way relating to any suit, action or proceeding (including any
inquiry or investigation) by any Person, whether threatened or initiated,
asserting a claim for any legal or equitable remedy under any statute or
regulation, including, without limitation, any federal or state securities laws,
or under any common law or equitable cause or otherwise, arising from or in
connection with the negotiation, preparation, execution, performance or
enforcement of this Agreement or the other Loan Documents or any of the
transactions contemplated herein or therein, and including, without limitation,
Environmental Claims, whether or not such Indemnified Person is a party to any
such action, proceeding or suit or the target of any such inquiry or
investigation; provided, however, that no Indemnified Person shall have the
right to be indemnified hereunder for any Indemnified Costs resulting primarily
from the gross negligence or willful misconduct of such Indemnified Person (as
finally determined by a court of competent jurisdiction or pursuant to
arbitration as set forth herein). All of the foregoing losses, damages, costs
and expenses of any Indemnified Person shall be payable by the Borrower, as and
when incurred and upon demand, and shall be additional Obligations hereunder.
In the event that the foregoing indemnity is unavailable or insufficient to hold
each Indemnified Person harmless, then the Borrower will contribute to amounts
paid or payable by such Indemnified Persons in respect of their losses, claims,
damages or liabilities in such proportions as appropriately reflect the relative
benefits received by and fault of the Borrower and such Indemnified Persons in
connection with the matters as to which such losses, claims, damages or
liabilities relate and other equitable considerations.
10.8 Amendments, Waivers, Etc. Except as may be otherwise specifically
set forth in this Agreement or the other Loan Documents, neither this Agreement
nor any other Loan Document nor any provision hereof or thereof may be amended,
modified, waived, discharged or terminated, and no consent to any departure by
the Borrower from any provision hereof or thereof may be given, except in a
writing signed by the Required Lenders; provided, however, that:
(a) no such amendment, modification, waiver, discharge, termination or
consent shall, without the consent of each Lender holding Obligations directly
affected thereby, (i) reduce the principal amount of, or rate of interest on,
any Loan, or reduce
-106-
any fees or other Obligations (other than fees payable to the Agent for its own
account) or any obligations of any Person now or hereafter primarily or
contingently liable with respect to the Obligations or (ii) postpone any date
fixed for any payment of principal, interest (other than additional interest
payable under Section 2.6(b) during the continuance of an Event of Default),
fees (other than fees payable to the Agent for its own account) or any other
Obligations including any mandatory prepayment;
(b) no such amendment, modification, waiver, discharge, termination or
consent shall, without the consent of all Lenders, (i) increase the Commitments
of any Lender (it being understood that a waiver of any Default or Event of
Default or of any mandatory reduction in either Total Commitment shall not
constitute such an increase), (ii) change the definition of "Required Lenders"
or otherwise change the number or percentage of Lenders that shall be required
for the Lenders or any of them to take or approve, or direct the Agent to take,
any action hereunder, (iii) amend, modify or waive any of the provisions for
extending, or take action to extend, the term of the Revolving Credit/Term
Facility, (iv) affect the obligation of the Lenders having Revolving Credit/Term
Commitments to become L/C Participants, (v) amend any provision of this Section,
(vi) release all or substantially all of the Collateral or (vii) consent to the
assignment or transfer by the Borrower, or by any other Person now or hereafter
primarily or contingently liable with respect to the Obligations, of any of its
rights and obligations under this Agreement or any of the other Loan Documents;
(c) no provision relating to the rights or obligations of the Issuing Bank
under this Agreement or any of the other Loan Documents may be amended, modified
or waived without the consent of the Issuing Bank; and
(d) no provision relating to the rights or obligations of the Agent under
this Agreement or any of the other Loan Documents may be amended, modified or
waived without the consent of the Agent.
10.9 Rights and Remedies Cumulative, Non-waiver, etc. The enumeration of
the Agent's and the Lenders' rights and remedies set forth in this Agreement and
the other Loan Documents is not intended to be exhaustive, and the exercise by
the Agent or any Lender of any right or remedy shall not preclude the exercise
of any other rights or remedies, all of which shall be cumulative, and shall be
in addition to any other right or remedy given hereunder, under the other Loan
Documents or under any other agreement between the Borrower and the Lenders, or
any of them (or the Agent on their behalf), or that may now or hereafter exist
in law or in equity or by suit or otherwise. No delay or failure to take action
on the part of the Agent or any Lender in exercising any right, power or
-107-
privilege shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or privilege preclude other or further
exercise thereof or the exercise of any other right, power or privilege or shall
be construed to be a waiver of any Event of Default. No course of dealing
between any of the Borrower and the Agent or the Lenders or their agents or
employees shall be effective to change, modify or discharge any provision of
this Agreement or to constitute a waiver of any Event of Default. No notice to
or demand upon the Borrower in any case shall entitle the Borrower to any other
or further notice or demand in similar or other circumstances or constitute a
waiver of the right of the Agent or any Lender to exercise any right or remedy
or take any other or further action in any circumstances without notice or
demand.
10.10 Binding Effect, Assignment. All of the terms of this Agreement shall
be binding upon, inure to the benefit of and be enforceable by the respective
successors and assigns of the Borrower, the Agent, the Issuing Bank and each
Lender; provided, however, that (i) the Borrower may not sell, assign or
transfer this Agreement or any portion hereof or thereof, including, without
limitation, any of its rights, title, interests, remedies, powers and duties
hereunder or thereunder and (ii) any assignees and participants and any
successor Issuing Bank shall have such rights and obligations with respect to
this Agreement and the other Loan Documents as are provided for in and pursuant
to Section 10.5.
10.11 Severability. To the extent any provision of this Agreement is
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.
10.12 Entire Agreement. THIS AGREEMENT AND THE DOCUMENTS AND INSTRUMENTS
EXECUTED AND DELIVERED CONTEMPORANEOUSLY HEREWITH EMBODY THE ENTIRE AGREEMENT
AND UNDERSTANDING BETWEEN THE PARTIES HERETO AND SUPERSEDE ALL PRIOR AGREEMENTS
AND UNDERSTANDINGS OF SUCH PERSONS, VERBAL OR WRITTEN, RELATING TO THE SUBJECT
MATTER HEREOF EXCEPT FOR THE FEE LETTER AND ANY PRIOR ARRANGEMENTS MADE WITH
RESPECT TO PAYMENT BY THE BORROWER OF (OR ANY INDEMNIFICATION FOR) ANY FEES,
COSTS OR EXPENSES PAYABLE TO OR INCURRED (OR TO BE INCURRED) BY OR ON BEHALF OF
THE AGENT, THE ISSUING BANK OR ANY LENDER, THE PROVISIONS OF WHICH FEE LETTER
AND ANY SUCH PRIOR ARRANGEMENTS ARE HEREBY INCORPORATED INTO THIS AGREEMENT BY
THIS REFERENCE. THIS AGREEMENT, THE REVOLVING CREDIT/TERM NOTES, THE OTHER LOAN
DOCUMENTS AND THE INSTRUMENTS AND DOCUMENTS EXECUTED IN CONNECTION HEREWITH
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
-108-
10.13 Interpretation. The captions to the various sections and subsections
of this Agreement have been inserted for convenience only and shall not limit or
affect any of the terms hereof. Unless the context otherwise requires, words in
the singular include the plural and words in the plural include the singular,
and the use of any gender shall be applicable to all genders.
10.14 Counterparts, Effectiveness. This Agreement may be executed in any
number of counterparts and by different parties hereto on separate counterparts,
each of which, when so executed and delivered, shall be an original, but all of
which shall together constitute one and the same instrument. This Agreement
shall become effective upon the execution of a counterpart hereof by each of the
parties hereto.
10.15 Conflict of Terms. The provisions of the exhibits and schedules
hereto and the other Loan Documents are incorporated in this Agreement by this
reference thereto. Except as otherwise provided in this Agreement and except as
otherwise provided in the other Loan Documents, if any provision contained in
this Agreement is in conflict with, or inconsistent with, any provision of the
other Loan Documents, the provision contained in this Agreement shall control.
10.16 Injunctive Relief. The Borrower recognizes that in the event it
fails to perform, observe or discharge any of its obligations or liabilities
under this Agreement, any remedy of law may prove to be inadequate relief to the
Agent and the Lenders. The Borrower therefore agrees that the Agent and the
Lenders, if the Agent so requests, shall be entitled to temporary and permanent
injunctive relief without the necessity of proving actual damages in any case
where a remedy at law, in the reasonable opinion of the Required Lenders, may
prove to be inadequate relief.
10.17 Confidentiality. Each Lender agrees to take normal and reasonable
precautions and exercise due care to maintain the confidentiality of all non-
public confidential information provided in connection with this Agreement or
any other Loan Document and agrees and undertakes that it shall not use any such
information for any purpose or in any manner other than pursuant to the terms
contemplated by this Agreement. Any Lender may disclose such information (i) at
the request of any bank regulatory authority or in connection with an
examination of such Lender by any such authority, (ii) pursuant to subpoena or
other court process, (iii) when required to do so in accordance with the
provisions of any applicable law, (iv) at the express direction of any agency of
any State of the United States of America or of any other jurisdiction in which
such Lender conducts its business, (v) to such Lender's, directors, employees,
affiliates, independent auditors and other professional advisors that have a
reasonable need or basis for access thereto, (vi) to the extent the same has
-109-
become publicly available other than as a result of a breach of this Agreement
or (vii) pursuant to and in accordance with the provisions of Section 10.5(g).
10.18 Acknowledgement. The Borrower covenants and agrees that it shall not
use any credit facility provided by First Union or any affiliate thereof for the
purpose of making any payment of principal, interest or dividends on any
securities of the Borrower underwritten or privately placed by First Union
Capital Markets Corp. It is understood that it is not practical for the
Borrower to segregate or trace funds and that it does not contemplate doing so.
-110-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their corporate names by their duly authorized corporate officers as
of the date first above written.
RENAL TREATMENT CENTERS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
-----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.,
Vice President
FIRST UNION NATIONAL BANK, AS AGENT
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Senior Vice President
(signatures continued)
ABN AMRO BANK N.V.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Title: VICE PRESIDENT
--------------------------------
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------------
Title: GROUP VICE PRESIDENT
--------------------------------
Address:
Credit and legal matters; mailings of all required
financial information:
ABN AMRO Bank N.V.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Credit
Administration
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Loan Administration Contacts (Domestic
Lending Office, Eurodollar Lending
Office or Bid Loans, as applicable):
ABN AMRO Bank N.V.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Loan Administration
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Wiring Instructions:
ABN AMRO BANK, N.V.
New York, N.Y.
ABA No. ▇▇▇▇▇▇▇▇▇
F/O ABN AMRO Bank N.V. - Chicago
CPU
Account No. 650-001-1789-41
BANQUE PARIBAS
By: /s/[SIGNATURE APPEARS HERE]
-----------------------------------
Title: DIRECTOR
---------------------------
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Title: Vice President
---------------------------
Address:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Wiring Instructions:
Bankers Trust New York
New York, New York
ABA #▇▇▇▇▇▇▇▇▇
For Account of: Banque Paribas
A/C # ▇▇-▇▇▇-▇▇▇
Reference: Renal Treatment Centers,
Inc.
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK, B.A., "RABOBANK NEDERLAND", New York
branch
By: /s/ M. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Title: Vice President
---------------------------
By: /s/ W. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Title: Vice President
---------------------------
Address:
Rabobank Nederland
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Services Dept.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Wiring Instructions:
Bank of New York
New York, New York
ABA #▇▇▇▇▇▇▇▇▇
Account: ▇▇▇-▇▇▇▇-▇▇▇
Account Name: Rabobank Nederland,
New York Branch
Attention: Ref: Renal Treatment
Centers, Inc.
CORESTATES BANK, N.A.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
-----------------------------------
Title: COMMERCIAL OFFICER
---------------------------
Address:
Corestates Bank, N.A.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇-▇-▇-▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇,
Commercial Officer
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Wiring Instructions:
Corestates Bank, N.A.
Philadelphia, Pennsylvania
ABA #▇▇▇▇▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇, Commercial Loan
Account #0132-0452
Reference: Renal Treatment Centers,
Inc.
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Name: Fairbound Tavangar
---------------------------
Title: First Vice President
---------------------------
Address:
Health Care Group
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇,
Vice President
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Wiring Instructions:
Credit Lyonnais
New York Branch
ABA #▇▇▇▇-▇▇▇▇-▇
Account: ▇▇-▇▇▇▇▇-▇▇▇▇
Attn: Loan Servicing
Reference: Renal Treatment Centers,
Inc.
FIRST UNION NATIONAL BANK
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Senior Vice President
Address:
First Union National Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Healthcare Finance Group
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Wiring Instructions:
First Union National Bank
Charlotte, North Carolina
ABA #▇▇▇▇▇▇▇▇▇
Attn: Syndications Agency Services
G/L #465906, RC #5007
Account #465906 ▇▇▇▇▇▇▇
Reference: Renal Treatment Centers,
Inc.
FLEET NATIONAL BANK
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇
-----------------------------------
Title: Senior Vice President
---------------------------
Address:
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇,
Senior Vice President
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Wiring Instructions:
Fleet National Bank
Boston, Massachusetts
ABA #▇▇▇▇▇▇▇▇▇
G/L Acct.: 1510351-03156
Reference: Renal Treatment Centers,
Inc.
LTCB TRUST COMPANY
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Title: SENIOR VICE PRESIDENT
---------------------------
Address:
▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Jun Ebihara,
Vice President
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Wiring Instructions:
Bankers Trust Company
New York, New York
ABA #▇▇▇▇▇▇▇▇▇
Account #: ▇▇▇▇▇▇▇▇
Account Name: LTCB Trust Company
Ref: Renal Treatment Centers, Inc.
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇
MELLON BANK, N.A.
By: /s/ ▇. ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Title: Vice President
---------------------------
Address:
Health Care Banking
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
Plymouth Meeting, Pennsylvania 19462
Attention: ▇.▇. ▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Wiring Instructions:
Mellon Bank, N.A.
ABA #▇▇▇-▇▇▇-▇▇▇
A/C #: 990873703
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Reference: Renal Treatment Centers,
Inc.
NATIONAL CITY BANK OF KENTUCKY
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Title: Vice President
---------------------------
Address:
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
Vice President
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Wiring Instructions:
National City Bank of Kentucky
Louisville, Kentucky
ABA #▇▇▇▇▇▇▇▇▇
Reference: Renal Treatment Centers,
Inc.
NATIONSBANK, N.A.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Title: VICE PRESIDENT
---------------------------
Address:
▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇,
Vice President
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Wiring Instructions:
NationsBank, N.A.
ABA #▇▇▇▇▇▇▇▇▇
Acct #: 136621-22506
Attn: Corporate Credit Services
Reference: Renal Treatment Centers,
Inc.
PNC BANK, NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------------
Title: Vice President
---------------------------
Address:
PNC Bank, National Association
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
Vice President
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Wiring Instructions:
PNC Bank, National Association
Philadelphia, Pennsylvania
ABA #▇▇▇▇▇▇▇▇▇
Credit: Comm'l Loans in Process,
G/L Acct. # 13076-156
Reference: Renal Treatment Centers,
Inc.
Add'l Info: Contact ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ upon receipt
UNION BANK OF CALIFORNIA, N.A.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Title: Assistant Vice President
---------------------------
Address:
Union Bank of California
▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
Assistant Vice President
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Wiring Instructions:
Union Bank of California
ABA #070196431
Attn: Wire Clearing Account
Reference: Renal Treatment Centers,
Inc.
UNION BANK OF SWITZERLAND,
NEW YORK BRANCH
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Title: DIRECTOR
---------------------------
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III
-----------------------------------
Title: MANAGING DIRECTOR
---------------------------
Address:
Union Bank of Switzerland
New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇,
Vice President
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Wiring Instructions:
Union Bank of Switzerland
New York Branch
ABA #▇▇▇▇▇▇▇▇▇
Ref: Loan Servicing
By order of: Renal Treatment Centers,
Inc.
Annex A to Sixth Amended and
Restated Loan Agreement
First Union National Bank, as Agent
Renal Treatment Centers, Inc.
September 26, 1997 / $350,000,000
-----------------------------------
=======================================================================================================================
Amount Revolving
Existing Loans Existing Loans Purchased Pro Rata Credit/Term
Lender (Prior to Assignment) (After Assignments) (Sold) Share Commitment
-----------------------------------------------------------------------------------------------------------------------
First Union $ 15,655,000 $ 10,100,000 ($5,555,000) 10.0000000% $ 35,000,000
-----------------------------------------------------------------------------------------------------------------------
Corestates $ 15,150,000 $ 9,234,286 ($5,915,714) 9.1428571% $ 32,000,000
-----------------------------------------------------------------------------------------------------------------------
Rabobank $ 6,312,500 $ 8,080,000 $ 1,767,500 8.0000000% $ 28,000,000
-----------------------------------------------------------------------------------------------------------------------
Credit Lyonnais $ 6,312,500 $ 8,080,000 $ 1,767,500 8.0000000% $ 28,000,000
-----------------------------------------------------------------------------------------------------------------------
Mellon $ 6,312,500 $ 8,080,000 $ 1,767,500 8.0000000% $ 28,000,000
-----------------------------------------------------------------------------------------------------------------------
Fleet $ 6,312,500 $ 8,080,000 $ 1,767,500 8.0000000% $ 28,000,000
-----------------------------------------------------------------------------------------------------------------------
NationsBank $ 6,312,500 $ 7,502,856 $ 1,190,356 7.4285714% $ 26,000,000
-----------------------------------------------------------------------------------------------------------------------
PNC $ 10,857,500 $ 7,214,286 ($3,643,214) 7.1428571% $ 25,000,000
-----------------------------------------------------------------------------------------------------------------------
Union Bank of California $ 6,312,500 $ 7,214,286 $ 901,786 7.1428571% $ 25,000,000
-----------------------------------------------------------------------------------------------------------------------
LTCB $ 6,312,500 $ 7,214,286 $ 901,786 7.1428571% $ 25,000,000
-----------------------------------------------------------------------------------------------------------------------
National City Bank $ 3,787,500 $ 5,771,429 $ 1,983,929 5.7142857% $ 20,000,000
-----------------------------------------------------------------------------------------------------------------------
ABN AMRO $ 3,787,500 $ 5,771,429 $ 1,983,929 5.7142857% $ 20,000,000
-----------------------------------------------------------------------------------------------------------------------
Banque Paribas $ 3,787,500 $ 4,328,571 $ 541,071 4.2857142% $ 15,000,000
-----------------------------------------------------------------------------------------------------------------------
Union Bank-Switzerland $ 3,787,500 $ 4,328,571 $ 541,071 4.2857142% $ 15,000,000
-----------------------------------------------------------------------------------------------------------------------
Total $101,000,000 $101,000,000 --- 100.0000000% $350,000,000
=======================================================================================================================
Exhibit A to Sixth Amended and
Restated Loan Agreement
First Union National Bank, as Agent
Renal Treatment Centers, Inc.
September 26, 1997 / $350,000,000
-----------------------------------
FORM OF
FIFTH AMENDED AND RESTATED RENEWAL
REVOLVING CREDIT/TERM NOTE
$______________ __________________, 1997
Charlotte, North Carolina
FOR VALUE RECEIVED, RENAL TREATMENT CENTERS, INC., a Delaware corporation
(the "Borrower"), hereby promises to pay to the order of
_______________________________________, (the "Lender"), at the offices of
First Union National Bank (the "Agent") located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (or at such other
place or places as the Agent may designate), the principal sum of up to
______________________________ DOLLARS ($__________), or such lesser amount
as may constitute the unpaid principal amount of the Revolving Credit/Term Loans
payable to the Lender, under the terms and conditions of this Fifth Amended and
Restated Renewal Revolving Credit/Term Note (this "Revolving Credit/Term Note")
and that certain Sixth Amended and Restated Loan Agreement, dated as of the date
hereof, by and between the Borrower, the Agent and the Lenders set forth therein
(as the same may be amended, modified, renewed, restated, extended or
supplemented from time to time, the "Loan Agreement"). This Revolving
Credit/Term Note is an amendment, restatement and renewal in part of a series of
Fourth Amended and Restated Renewal Revolving Credit/Term Notes, dated May 2,
1997, in the original aggregate principal amount of up to $200,000,000, each
executed and delivered by the Borrower to certain lenders pursuant to a Fifth
Amended and Restated Loan Agreement, dated as of May 2, 1997, between the
Borrower, the Agent and the lenders set forth therein. Upon execution and
delivery of this Revolving Credit/Term Note, the notes amended, restated and
renewed hereby shall be attached hereto and marked "Renewed and reevidenced by a
series of promissory notes dated September 26, 1997, which are substituted
herefor in entirety."
The Borrower also unconditionally promises to pay interest on the aggregate
unpaid principal amount of this Revolving Credit/Term Note at the rates provided
in the Loan Agreement.
This Revolving Credit/Term Note is one of a series of Revolving Credit/Term
Notes (as defined in the Loan Agreement) issued to evidence the Revolving
Credit/Term Facility made pursuant to Article II of the Loan Agreement. The
defined terms in the Loan
Agreement are used herein with the same meanings. All of the terms, conditions
and covenants of the Loan Agreement are expressly made a part of this Revolving
Credit/Term Note by reference in the same manner and with the same effect as if
set forth herein at length, and any holder of this Revolving Credit/Term Note is
entitled to the benefits of and remedies provided in the Loan Agreement and the
other Loan Documents. Reference is made to the Loan Agreement for provisions
relating to the interest rate, maturity, payment, prepayment, acceleration and
other terms affecting this Revolving Credit/Term Note.
The Borrower may borrow, repay and reborrow under this Revolving
Credit/Term Note in accordance with the terms and conditions of the Loan
Agreement. The Borrower shall repay the Revolving Credit/Term Notes in full on
the Revolving Credit/Term Facility Termination Date; provided, however, that if
the Revolving Credit/Term Facility Termination Date occurs on, and solely
because of, the occurrence of the Revolving Credit/Term Facility Conversion
Date, the aggregate outstanding principal balance of the Revolving Credit/Term
Loans on the Revolving Credit/Term Facility Conversion Date will be converted to
a term loan and shall be due and payable and repaid by the Borrower in sixteen
(16) equal quarterly installments, on March 31, June 30, September 30 and
December 31 in each year, commencing on June 30, 2000 through and including the
Revolving Credit/Term Facility Maturity Date.
In the event of an acceleration of the maturity of this Revolving
Credit/Term Note, this Revolving Credit/Term Note, and all other indebtedness of
the Borrower to the Lender, shall become immediately due and payable, without
presentation, demand, protest or notice of any kind, all of which are hereby
waived by the Borrower.
In the event this Revolving Credit/Term Note is not paid when due at any
stated or accelerated maturity, the Borrower agrees to pay, in addition to the
principal and interest, all costs of collection, including reasonable attorneys'
fees.
This Revolving Credit/Term Note shall be governed by and construed in
accordance with the internal laws and judicial decisions of the State of North
Carolina. The Borrower hereby submits to the jurisdiction and venue of the
federal and state courts located in Mecklenburg County, North Carolina, although
the Lender shall not be limited to bringing an action in such courts.
IN WITNESS WHEREOF, the Borrower has caused this Revolving Credit/Term Note
to be executed under seal by its duly authorized corporate officers as of the
day and year first above written.
RENAL TREATMENT CENTERS, INC.
[CORPORATE SEAL] By:
-------------------------------------
Title:
-------------------------------
ATTEST:
----------------------------
Title: Tax Identification Number: ▇▇-▇▇▇▇▇▇▇
--------------------
Exhibit B-1 to Sixth Amended and
Restated Loan Agreement
First Union National Bank, as Agent
Renal Treatment Centers, Inc.
September 26, 1997 / $350,000,000
-----------------------------------
FORM OF
NOTICE OF BORROWING
[Date]
First Union National Bank, as Agent
Syndication Agency Services
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Syndication Agency Services
Ladies and Gentlemen:
The undersigned, Renal Treatment Centers, Inc. (the "Borrower"), refers to
the Sixth Amended and Restated Loan Agreement, dated as of September 26, 1997,
among the Borrower, certain banks and other financial institutions from time to
time parties thereto (the "Lenders"), and you, as Agent for the Lenders (as
amended, modified, supplemented or restated from time to time, the "Loan
Agreement," the terms defined therein being used herein as therein defined),
and, pursuant to Section 2.2(a) of the Loan Agreement, hereby gives you
irrevocable notice that the undersigned hereby requests a Borrowing under the
Loan Agreement, and to that end sets forth below the information relating to
such Borrowing (the "Proposed Borrowing") as required by Section 2.2(a) of the
Loan Agreement:
(i) The Business Day of the Proposed Borrowing is _______________
(the "Borrowing Date")./1/
(ii) The aggregate principal amount of the Proposed Borrowing is
$_______________.
(iii) The Loans comprising the Proposed Borrowing shall be
initially maintained as [Base Rate Loans] [LIBOR Loans].
--------------------
/1/ Shall be a Business Day at least one Business Day after the date hereof (in
the case of Base Rate Loans) or at least three Business Days after the date
hereof (in the case of LIBOR Loans).
[(iv) The initial Interest Period for each Loan made as part of
the Proposed Borrowing shall be [one/two/three/six months].]/2/
The undersigned hereby certifies that the following statements are true on
the date hereof and will be true on the Borrowing Date:
(A) Each of the representations and warranties contained in Article
IV of the Loan Agreement and in the other Loan Documents are and will be
true and correct before and after giving effect to the Proposed Borrowing
and to the application of the proceeds therefrom, as though made on each
such date (except to the extent any such representation or warranty relates
solely to a prior date); and
(B) No Default or Event of Default has occurred and is continuing
or would result from the Proposed Borrowing or from the application of the
proceeds therefrom.
Very truly yours,
RENAL TREATMENT CENTERS, INC.
By:
-------------------------------
Title:
----------------------------
-------------------------
/2/ To be included for a Proposed Borrowing comprised of LIBOR Loans.
Exhibit B-2 to Sixth Amended and
Restated Loan Agreement
First Union National Bank, as Agent
Renal Treatment Centers, Inc.
September 26, 1997 / $350,000,000
-----------------------------------
FORM OF
NOTICE OF CONVERSION/CONTINUATION
[Date]
First Union National Bank, as Agent
Syndication Agency Services
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Syndication Agency Services
Ladies and Gentlemen:
The undersigned, Renal Treatment Centers, Inc. (the "Borrower"), refers to
the Sixth Amended and Restated Loan Agreement, dated as of September 26, 1997,
among the Borrower, certain banks and other financial institutions from time to
time parties thereto (the "Lenders"), and you, as Agent for the Lenders (as
amended, modified, supplemented or restated from time to time, the "Loan
Agreement," the terms defined therein being used herein as therein defined),
and, pursuant to Section 2.9(b) of the Loan Agreement, hereby gives you
irrevocable notice that the undersigned hereby requests a [conversion]
[continuation] of Loans under the Loan Agreement, and to that end sets forth
below the information relating to such [conversion] [continuation] (the
"Proposed [Conversion] [Continuation]") as required by Section 2.9(b) of the
Loan Agreement:
(i) The Business Day of the Proposed [Conversion] [Continuation] is
_______________./1/
(ii) The Proposed [Conversion] [Continuation] involves $____________
in aggregate principal amount of
------------------
/1/ Shall be a Business Day at least one Business Day after the date hereof (in
the case of any conversion of LIBOR Loans into Base Rate Loans) or at least
three Business Days after the date hereof (in the case of any conversion of
Base Rate Loans into, or continuation of, LIBOR Loans), and additionally, in
the case of any conversion of LIBOR Loans into Base Rate Loans, or
continuation of LIBOR Loans, shall be the last day of the Interest Period
applicable thereto.
Revolving Credit/Term Loans [made pursuant to a Borrowing on
____________.]/2/
(iii) The Loans referred to in clause (ii) above are presently
maintained as [Base Rate] [LIBOR] Loans and are proposed hereby to be
[converted into Base Rate/LIBOR Loans] [continued as LIBOR Loans].
[(iv) The initial Interest Period for each Loan being [converted
into] [continued as] a LIBOR Loan as part of the Proposed [Conversion]
[Continuation] shall be [one/two/three/six months].]/3/
The undersigned hereby certifies that the following statements are true on
the date hereof and will be true on the effective date of the Proposed
[Conversion] [Continuation]:
(A) Each of the representations and warranties contained in
Article IV of the Loan Agreement and in the other Loan Documents are and
will be true and correct before and after giving effect to the Proposed
[Conversion] [Continuation], as though made on each such date (except to
the extent any such representation or warranty relates solely to a prior
date); and
(B) No Default or Event of Default has occurred and is
continuing or would result from the Proposed [Conversion] [Continuation].
Very truly yours,
RENAL TREATMENT CENTERS, INC.
By:
------------------------------
Title:
---------------------------
----------------------
/2/ Applicable to Revolving Credit/Term Loans only.
/3/ To be included in the case of any conversion of Base Rate Loans into, or
continuation of, LIBOR Loans.
Exhibit B-3 to Sixth Amended and
Restated Loan Agreement
First Union National Bank, as Agent
Renal Treatment Centers, Inc.
September 26, 1997 / $350,000,000
-----------------------------------
FORM OF
LETTER OF CREDIT REQUEST
[Date]
First Union National Bank, as Issuing Bank
Specialized Industries/Healthcare
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Healthcare Finance Group
Ladies and Gentlemen:
The undersigned, Renal Treatment Centers, Inc. (the "Borrower"), refers to
the Sixth Amended and Restated Loan Agreement, dated as of September 26, 1997,
among the Borrower, certain banks and other financial institutions from time to
time parties thereto (the "Lenders"), and First Union National Bank of North
Carolina, as Agent for the Lenders (as amended, modified, supplemented or
restated from time to time, the "Loan Agreement," the terms defined therein
being used herein as therein defined), and, pursuant to Section 2.17(b) of the
Loan Agreement, hereby gives you, as Issuing Bank, irrevocable notice that the
undersigned hereby requests the issuance of a Letter of Credit for its account
under the Loan Agreement, and to that end sets forth below the information
relating to Letter of Credit (the "Proposed Letter of Credit") as required by
Section 2.17(b) of the Loan Agreement:
(i) The Business Day on which the Proposed Letter of Credit is to
be issued is _______________ (the "Issuance Date")./1/
(ii) The Stated Amount of the Proposed Letter of Credit is
$________________.
(iii) The expiry date of the Proposed Letter of Credit is
______________.
----------------------
/1/ Shall be at least three Business Days (or such shorter period as is
acceptable to the Issuing Bank in any given case) after the date hereof.
(iv) The name and address of the beneficiary of the Proposed Letter
of Credit is ______________________________________________________________
_________________________________________________________.
The undersigned hereby certifies that the following statements are true on
the date hereof and will be true on the Issuance Date:
(A) Each of the representations and warranties contained in
Article IV of the Loan Agreement and in the other Loan Documents are and
will be true and correct before and after giving effect to the issuance of
the Proposed Letter of Credit, as though made on each such date (except to
the extent any such representation or warranty relates solely to a prior
date); and
(B) No Default or Event of Default has occurred and is continuing
or would result from the issuance of the Proposed Letter of Credit.
The undersigned agrees to complete all application procedures and documents
required by you in connection with the Proposed Letter of Credit.
Very truly yours,
RENAL TREATMENT CENTERS, INC.
By:
---------------------------------
Title:
------------------------------
Exhibit C to Sixth Amended and
Restated Loan Agreement
First Union National Bank, as Agent
Renal Treatment Centers, Inc.
September 26, 1997 / $350,000,000
-----------------------------------
FORM OF
COMPLIANCE CERTIFICATE
THIS CERTIFICATE is given pursuant to Section 5.3(d) of the Sixth Amended
and Restated Loan Agreement, dated as of September 26, 1997, among Renal
Treatment Centers, Inc. (the "Borrower"), certain banks and other financial
institutions from time to time parties thereto (the "Lenders"), and you, as
Agent for the Lenders (as amended, modified, supplemented or restated from time
to time, the "Loan Agreement," the terms defined therein being used herein as
therein defined).
The undersigned hereby certifies that:
i. He is the duly elected [President] [Chief Financial Officer] of the
Borrower.
ii. Enclosed with this Certificate are copies of the financial statements
of the Borrower and its Subsidiaries as of _____________, and for the [________-
month period] [year] then ended, required to be delivered under Section [5.3(a)]
[5.3(b)] of the Loan Agreement. Such financial statements fairly present the
financial condition of the Borrower and its Subsidiaries on a consolidated basis
as of the date indicated and the results of operation of the Borrower and its
Subsidiaries on a consolidated basis for the period covered thereby.
iii. The undersigned has reviewed the terms of the Loan Agreement and has
made, or caused to be made under the supervision of the undersigned, a review in
reasonable detail of the transactions and condition of the Borrower and its
Subsidiaries during the accounting period covered by such financial statements.
iv. The examination described in paragraph 3 above did not disclose, and
the undersigned has no knowledge of the existence of, any Default or Event of
Default during or at the end of the accounting period covered by such financial
statements or as of the date of this Certificate. [, except as set forth below.
Describe here or in a separate attachment any exceptions to paragraph 4
above by listing, in reasonable detail, the nature of the Default or Event of
Default, the period during which it existed and the action that the Borrower has
taken or proposes to take with respect thereto.]
v. Attached to this Certificate as Attachments A and B, respectively, are
a Covenant Compliance Worksheet and an Interest
Rate Calculation Worksheet reflecting the computation of the financial covenants
set forth in Article VI of the Loan Agreement as of the last day of the period
covered by the financial statements enclosed herewith.
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Certificate as of the _______ day of _____________, ____.
[signature of President or CFO or
---------------------------------
VP-Finance]
-----------
Name:
----------------------------------
Title:
---------------------------------
ATTACHMENT A
COVENANT COMPLIANCE WORKSHEET
--------------------------------------------------------------------------------------------------------
Consolidated Net Worth
(Section 6.10 of the Loan Agreement): Not less than the following:
--------------------------------------------------------------------------------------------------------
(1) Base for calculating required Consolidated Net Worth $125,000,000
============
(2) Consolidated Net Income for
each fiscal quarter (if positive) ending
after the Amendment Effective Date $____________
Multiplied by: 80%
Equals: Net income adjustment $
============
(3) Aggregate amount of all increases
in the stated capital and additional
paid-in capital accounts of the Borrower
resulting from the issuance of equity
securities or other capital investments
after the Amendment Effective Date $____________
Multiplied by: 90%
Equals: Capital adjustment $
============
(4) Required Consolidated Net Worth:
Add Lines 1, 2 and 3 $
============
(5) Actual Consolidated Net Worth as of measurement date $
============
--------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------
Ratio of Cash Available to Fixed Charges
(Section 6.12 of the Loan Agreement): Not less than 2.25 to 1.0
Ratio of Cash Available to Debt Service
(Section 6.13 of the Loan Agreement): Not less than 1.20 to 1.0
-------------------------------------------------------------------------------------------------------
(1) Cash Available:
(a) Consolidated Net Income for the period of
two fiscal quarters most recently ended $____________
(b) The sum of the following for such period:
Interest Expense $____________
Lease Expense $____________
Depreciation $____________
Amortization $____________
Other non-cash expenses or charges reducing
income (to the extent taken into account in the
calculation of Consolidated Net Income for
such period) $____________
$____________
(c) To the extent taken into account in the
calculation of Consolidated Net Income for
such period, non-cash credits increasing
income for such period ($____________)
(d) Add Lines 1(a) and 1(b) and subtract Line 1(c) $____________
(e) Cash Available: Multiply Line 1(d) by two $____________
(2) Fixed Charges:
(a) The sum of Interest Expense and Lease
Expense for the period of two fiscal
quarters most recently ended $____________
(b) Fixed Charges: Multiply Line 2(a) by two $____________
(3) Debt Service:
(a) Current maturities of Debt of the Borrower and
its Subsidiaries as of the measurement date $____________
(b) Debt Service: Add Lines 2(b) and 3(a) $
=============
(4) Ratio of Cash Available to Fixed Charges:
Divide Line 1(e) by Line 2(b)
=============
(5) Ratio of Cash Available to Debt Service:
Divide Line 1(e) by Line 3(b)
=============
========================================================================================================
-------------------------------------------------------------------------------------------------------
Ratio of Consolidated Debt to Annualized Cash Flow
(Section 6.14 of the Loan Agreement): Not greater than 3.0 to 1.0
Consolidated Debt to Annualized Cash Flow
(Section 6.15 of the Loan Agreement): Not greater than 4.25 to 1.0
-------------------------------------------------------------------------------------------------------
(1) Consolidated Debt as of the measurement date $
=============
(2) Annualized Cash Flow:
(a) Consolidated Net Income for the period of
two fiscal quarters most recently ended $
=============
(b) Consolidated Net Income for newly-acquired
Subsidiaries on a historical basis for the
period of two fiscal quarters most recently
ended $
=============
(c) The sum of the following for such period:
Interest Expense $____________
Taxes $____________
Depreciation $____________
Amortization $____________
Other non-cash expenses or charges reducing
income (to the extent taken into account in the
calculation of Consolidated Net Income for
such period) $____________
$____________
(d) The sum of the following for newly-acquired
Subsidiaries for such period:
Interest Expense $____________
Taxes $____________
Depreciation $____________
Amortization $____________
Other non-cash expenses or charges reducing
income (to the extent taken into account in the
calculation of Consolidated Net Income for
such period) $____________
$____________
(e) To the extent taken into account in the
calculation of Consolidated Net Income for
such period, non-cash credits increasing
income for such period ($____________)
(f) Add Lines 2(a), 2(b), 2(c) and 2(d) and subtract
Line 2(e) $____________
(g) Annualized Cash Flow: Multiply Line 2(f) by two $
=============
(3) Ratio of Consolidated Debt to Annualized Cash Flow:
Divide Line 1 by Line 2(g)
=============
-------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------
Ratio of Consolidated Debt to Consolidated Total Capital
(Section 6.16 of the Loan Agreement): Not greater than 0.70 to 1.0 through
June 30, 1998
Not greater than 0.65 to 1.0 thereafter
-------------------------------------------------------------------------------------------------------
(1) Consolidated Debt as of the measurement date $
=============
(2) Consolidated Total Capital:
(a) Consolidated Net Worth as of the
measurement date $____________
(b) Consolidated Debt as of the
measurement date $____________
(c) Consolidated Total Capital:
Add Lines 2(a) and 2(b) $____________
(3) Ratio of Consolidated Debt to Consolidated Total Capital:
Divide Line 1 by Line 2(c) $____________
-------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------
Excluded Acquisition Expenses
-------------------------------------------------------------------------------------------------------
Attach Detail
-------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------
Foreign Subsidiary EBITDA Greater than $1
-------------------------------------------------------------------------------------------------------
(1) Foreign Subsidiary Net Income $____________
(2) The sum of the following:
Interest Expense $____________
Taxes $____________
Depreciation $____________
Amortization $____________
Other non-cash expenses or charges reducing
income $____________
$____________
(3) To the extent taken into account in Net
Income, non-cash credits increasing income ($____________)
(4) Add Lines 1 and 2 and subtract Line 3 $____________
-------------------------------------------------------------------------------------------------------
ATTACHMENT B
INTEREST RATE CALCULATION WORKSHEET
------------------------------------------------------------------------------------------------------
Ratio of Consolidated Debt to Annualized Cash Flow:
------------------------------------------------------------------------------------------------------
(1) Consolidated Debt as of the measurement date $
==========
(2) Annualized Cash Flow:
(a) Consolidated Net Income for the period of two
fiscal quarters most recently ended $
(b) Consolidated Net Income for newly-acquired
Subsidiaries on a historical basis for the period
of two fiscal quarters most recently ended $
(c) The sum of the following for such period:
Interest Expense $____________
Taxes $____________
Depreciation $____________
Amortization $____________
Other non-cash expenses or charges reducing income
(to the extent taken into account in the calculation
of Consolidated Net Income for such period) $____________
$____________
(d) The sum of the following for newly-acquired
Subsidiaries for such period:
Interest Expense $____________
Taxes $____________
Depreciation $____________
Amortization $____________
Other non-cash expenses or charges reducing income
(to the extent taken into account in the calculation
of Consolidated Net Income for such period) $____________
$____________
(e) To the extent taken into account in the calculation
of Consolidated Net Income for such period, non-cash
credits increasing income for such period ($____________)
(f) Add Lines 2(a), 2(b), 2(c) and 2(d) and subtract
Line 2(e) $____________
(g) Annualized Cash Flow: Multiply Line 2(f) by two $
=============
(3) Ratio of Consolidated Debt to Annualized Cash Flow:
Divide Line 1 by Line 2(g)
=============
(4) Applicable Margins effective as of the fifth (5th) day
after delivery hereof (based on the matrix set forth in the
definition of Applicable Margin in the Loan Agreement):
Applicable Margin (Base Rate Loans)
=============
Applicable Margin (LIBOR Loans)
=============
------------------------------------------------------------------------------------------------------
Exhibit D to Sixth Amended and
Restated Loan Agreement
First Union National Bank, as Agent
Renal Treatment Centers, Inc.
September 26, 1997 / $350,000,000
-----------------------------------
FORM OF
ASSIGNMENT AND ACCEPTANCE
THIS ASSIGNMENT AND ACCEPTANCE (this "Assignment and Acceptance") is made
this _____ day of ____________, ____, by and between __________________________
(the "Assignor"), and __________________________ (the "Assignee"). Reference is
made to the Sixth Amended and Restated Loan Agreement, dated as of September 26,
1997 (as amended, modified, supplemented or restated from time to time, the
"Loan Agreement"), among Renal Treatment Centers, Inc. (the "Borrower"), certain
banks and other financial institutions from time to time parties thereto (the
"Lenders"), and First Union National Bank, as Agent for the Lenders. Unless
otherwise defined herein, terms defined in the Loan Agreement are used herein
with the same meaning.
The Assignor and the Assignee hereby agree as follows:
1. Assignment and Assumption. Subject to the terms and conditions
-------------------------
hereof, the Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby purchases and assumes from the Assignor, without recourse and, except as
expressly provided herein, without representation or warranty, that interest as
of the Effective Date (as hereinafter defined) in and to all of the Assignor's
rights and obligations under the Loan Agreement (in its capacity as a Lender
thereunder), represented by the percentage interest or interests specified in
Item 4 of Annex I of the aggregated outstanding rights and obligations of the
------ -------
Lenders under the Loan Agreement with respect to the Revolving Credit/Term
Facility (each such assigned interest, an "Assigned Share"), including, without
limitation, all rights and obligations of the Assignor with respect to the
Revolving Credit/Term Note(s) held by the Assignor and the Assigned Share of the
Revolving Credit/Term Loans and the Assignor's participations in Letters of
Credit. After giving effect to such sale and assignment, the Assignee's
Commitments, and the aggregate outstanding principal amounts of the Loans owing
to the Assignee, will be as set forth in Item 4 of Annex I.
------ -------
2. The Assignor. The Assignor (i) represents and warrants that it is the
------------
legal and beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any adverse claim, (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the Loan
Agreement or any other Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or
value of the Loan Agreement or any other Loan Document or any other instrument
or document furnished pursuant thereto and (iii) makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of the Borrower or any of its Subsidiaries or the performance or observance by
the Borrower or any of its Subsidiaries of any of their respective obligations
under the Loan Agreement or any other Loan Document or any other instrument or
document furnished pursuant thereto.
3. The Assignee. The Assignee (i) confirms that it has received a copy of
------------
the Loan Agreement, together with copies of the Financial Statements and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Assignment and Acceptance, (ii)
agrees that it will, independently and without reliance upon the Agent, the
Assignor 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 the Loan Agreement, (iii) confirms that it is
an Eligible Assignee, (iv) appoints and authorizes the Agent to take such action
as agent on its behalf and to exercise such powers and discretion under the Loan
Agreement and the other Loan Documents and any other instruments and agreements
referred to therein, and to exercise such powers and to perform such duties
thereunder, as are specifically delegated to or required of the Agent by the
terms thereof and such other powers as are reasonably incidental thereto, (v)
agrees that it will perform in accordance with their terms all of the
obligations that by the terms of the Loan Agreement are required to be performed
by it as a Lender, [and] (vi) specifies as its address for payments and notices
the office set forth beneath its name on its signature page hereto [, and (vii)
to the extent legally entitled to do so, attaches the forms described in Section
2.12(c) of the Loan Agreement]./2/
4. Effective Date. Following the execution of this Assignment and
--------------
Acceptance by the Assignor and the Assignee, an executed original hereof,
together with all attachments hereto and the processing fee referred to in
Section 10.5(a) of the Loan Agreement, shall be delivered to the Agent. The
effective date of this Assignment and Acceptance (the "Effective Date") shall be
the later of (i) the date of acceptance hereof by the Agent or (ii) the date, if
any, designated as the Effective Date in Item 5 of Annex I. As of the Effective
------ -------
Date, (y) the Assignee shall be a party to the Loan Agreement and, to the extent
provided in this Assignment and Acceptance, shall have the rights and
obligations of a Lender thereunder and under the other Loan Documents, and (z)
the Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its
----------------------
/2/ Insert if the Assignee is organized under the laws of a jurisdiction outside
of the United States.
-2-
obligations under the Loan Agreement and the other Loan Documents [and shall
cease to be a party thereto]/3/.
5. Payments; Settlement. From and after the Effective Date, the Agent
--------------------
will make all payments required to be made by it under the Loan Agreement in
respect of each Assigned Share under the Facilities (including, without
limitation, all payments of principal, interest and fees in respect of the
Assigned Share of all Loans, participations in Letters of Credit and Commitments
assigned hereunder) directly to the Assignee. Upon the Effective Date, and as a
condition to the effectiveness of this Assignment and Acceptance, the Assignee
will pay to the Assignor an amount, to be specified in writing by the Assignor
to the Assignee, that represents the Assigned Share of the principal amount of
all Loans that are outstanding under the Loan Agreement on the Effective Date
and are being assigned to the Assignee hereunder, net of any closing costs. The
Assignor and Assignee will be responsible for making between themselves all
appropriate adjustments in payments due under the Loan Agreement in respect of
the period prior to the Effective Date. [Notwithstanding any other provision of
this Assignment and Acceptance, the Loan Agreement or any of the other Loan
Documents, the Assignor shall be entitled to retain for its own account any fees
that may have been paid or may be payable to the Assignor under the Loan
Agreement or the other Loan Documents in a capacity other than as a Lender,
including, to the extent applicable, as Agent and as Issuing Bank.]/4/
6. Governing Law. This Assignment and Acceptance shall be governed by,
-------------
and construed in accordance with, the internal laws of the State of North
Carolina (without regard to the conflicts of laws principles thereof).
7. Entire Agreement. This Assignment and Acceptance, together with the
----------------
Loan Agreement and the other Loan Documents, embody the entire agreement and
understanding between the parties hereto and supersede all prior agreements and
understandings of the parties, verbal or written, relating to the subject matter
hereof.
8. Successors and Assigns. This Assignment and Acceptance shall be
----------------------
binding upon, and shall inure to the benefit of, the parties hereto and their
respective successors and assigns.
9. Counterparts. This Assignment and Acceptance may be executed in any
------------
number of counterparts and by different parties hereto on separate counterparts,
each of which, when so executed and delivered, shall be an original, but all of
which shall together constitute one and the same instrument.
---------------------------
/3/ Insert if Assignment and Acceptance covers all or the remaining portion of
the Assignor's rights and obligations under the Loan Agreement.
/4/ Insert if First Union is the Assignor.
-3-
IN WITNESS WHEREOF, the parties have caused this Assignment and Acceptance
to be executed by their duly authorized officers as of the date first above
written.
ASSIGNOR:
--------------------------------
By:
--------------------------------
Title:
------------------------------
ASSIGNEE:
--------------------------------
By:
--------------------------------
Title:
------------------------------
Accepted this _______ day of
______________, 19___:
FIRST UNION NATIONAL BANK, as Agent
By:
--------------------------------
Title:
-----------------------------
Consented and agreed to:
RENAL TREATMENT CENTERS, INC.
By:
--------------------------------
Title:
-----------------------------
-4-
ANNEX I
-------
TO ASSIGNMENT AND ACCEPTANCE
----------------------------
1. Borrower: Renal Treatment Centers, Inc.
2. Name and Date of Loan Agreement:
Sixth Amended and Restated Loan Agreement, dated as of September 26, 1997,
among Renal Treatment Centers, Inc., certain Lenders from time to time
parties thereto, and First Union National Bank, as Agent.
3. Date of Assignment and Acceptance: ________________, 19___.
4. Amounts (as of date of Item 3 above):
------
Aggregate Amount of
for all Assigned Assigned
Lenders Share Share
--------- -------- ---------
Revolving Credit/Term
Commitment $_________ _________% $_________
Revolving Credit/Term
Loans $_________ _________% $_________
5. Effective Date:
6. Addresses for Payments and Notices:
Assignor: _________________________________
_________________________________
_________________________________
Attention: ______________________
Telecopy: _______________________
Reference: ______________________
Assignee: _________________________________
_________________________________
_________________________________
Attention: ______________________
Telecopy: _______________________
Reference: ______________________