1
Exhibit 10.24
$460,000,000 REVOLVING CREDIT FACILITY
CREDIT AGREEMENT
by and among
MARINER HEALTH GROUP, INC.
and
THE BANKS PARTY HERETO
and
PNC BANK, NATIONAL ASSOCIATION, as Agent
Dated as of May 18, 1994, as amended
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TABLE OF CONTENTS
ARTICLE I - CERTAIN DEFINITIONS............................................................................... 1
1.01 Certain Definitions.............................................................................. 1
1.02 Construction..................................................................................... 25
1.03 Accounting Principles............................................................................ 25
ARTICLE II - REVOLVING CREDIT FACILITY........................................................................ 25
2.01 Revolving Credit Commitments; Limitation on Borrowings........................................... 25
(a) Revolving Credit Commitments............................................................... 25
(b) Extension by Banks of the Expiration Date.................................................. 26
(c) Limitation on Borrowings................................................................... 26
2.02 Nature of Banks' Obligations With Respect to Revolving Credit Loans.............................. 26
2.03 Commitment Fees.................................................................................. 27
2.04 [Intentionally Omitted].......................................................................... 28
2.05 Revolving Credit Loan Requests................................................................... 28
2.06 Making Revolving Credit Loans.................................................................... 28
2.07 Revolving Credit Note............................................................................ 29
2.08 Use of Proceeds.................................................................................. 29
2.09 Letter of Credit Subfacility..................................................................... 29
2.10 Voluntary Reduction of Revolving Credit Commitments.............................................. 34
ARTICLE III - COLLATERAL...................................................................................... 34
3.01 Collateral....................................................................................... 34
ARTICLE IV - INTEREST RATES................................................................................... 35
4.01 Interest Rate Options............................................................................ 35
(a) Revolving Credit Interest Rate Options..................................................... 35
(b) Rate Quotations............................................................................ 36
4.02 Interest Periods................................................................................. 37
4.03 Interest After Default........................................................................... 37
4.04 Euro-Rate Unascertainable........................................................................ 37
4.05 Selection of Interest Rate Options............................................................... 39
ARTICLE V - PAYMENTS.......................................................................................... 39
5.01 Payments......................................................................................... 39
5.02 Pro Rata Treatment of Banks...................................................................... 39
5.03 Interest Payment Dates........................................................................... 39
5.04 Voluntary Prepayments............................................................................ 40
5.05 Mandatory Prepayments............................................................................ 41
(a) Sale of Assets............................................................................. 41
(b) Application Among Interest Rate Options.................................................... 41
5.06 Additional Compensation in Certain Circumstances................................................. 41
(a) Increased Costs or Reduced Return Resulting From Taxes, Reserves, Capital Adequacy
Requirements, Expenses, Etc............................................................. 41
(b) Indemnity.................................................................................. 42
ARTICLE VI - REPRESENTATIONS AND WARRANTIES................................................................... 43
6.01 Representations and Warranties - Effective On and After Date of This Agreement................... 43
(a) Organization and Qualification............................................................. 43
(b) [Intentionally Omitted].................................................................... 43
(c) Excluded Entities; Subsidiaries............................................................ 43
(d) Power and Authority........................................................................ 44
(i)
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(e) Validity and Binding Effect................................................................ 44
(f) No Conflict................................................................................ 44
(g) Litigation................................................................................. 44
(h) Title to Properties........................................................................ 45
(i) Financial Statements....................................................................... 45
(j) Margin Stock............................................................................... 45
(k) Full Disclosure............................................................................ 46
(l) Taxes...................................................................................... 46
(m) Consents and Approvals..................................................................... 46
(n) Compliance with Instruments................................................................ 46
(o) Patents, Trademarks, Copyrights, Etc....................................................... 46
(p) Security Interests in the Collateral....................................................... 47
(q) [Intentionally Omitted.]................................................................... 47
(r) Status of the Pledged Collateral........................................................... 47
(s) Insurance.................................................................................. 48
(t) Compliance with Laws....................................................................... 48
(u) Material Contracts, Licenses, Permits and Approvals........................................ 48
(v) Investment Companies....................................................................... 49
(w) Plans and Benefit Arrangements............................................................. 49
(x) Employment Matters......................................................................... 50
(y) Environmental Matters...................................................................... 51
(z) Senior Debt Status......................................................................... 52
(aa) Matters Regarding Leased Facilities and Certain Indebtedness of Subsidiaries............. 52
(bb) Mortgage and Leasehold Mortgage Liens..................................................... 53
6.02 Updates to Schedules............................................................................. 53
ARTICLE VII - CONDITIONS OF LENDING........................................................................... 54
7.01 Each Additional Loan............................................................................. 54
ARTICLE VIII - COVENANTS...................................................................................... 54
8.01 Affirmative Covenants............................................................................ 54
(a) Preservation of Existence, Etc............................................................. 54
(b) Payment of Liabilities, Including Taxes, Etc............................................... 54
(c) Maintenance of Insurance................................................................... 55
(d) Maintenance of Properties and Leases....................................................... 55
(e) Maintenance of Patents, Trademarks, Etc.................................................... 55
(f) Visitation Rights.......................................................................... 55
(g) Keeping of Records and Books of Account.................................................... 55
(h) Plans and Benefit Arrangements............................................................. 56
(i) Compliance with Laws....................................................................... 56
(j) Use of Proceeds............................................................................ 56
(k) [Intentionally Omitted.]................................................................... 56
(l) Subordination of Intercompany Loans, Other Loans and Advances to the Borrower.............. 56
(m) Approval of Financial Statements in Permitted Acquisitions; Notice of Permitted
Acquisition............................................................................. 56
(n) Dissolution of Certain Subsidiaries........................................................ 58
(o) [Intentionally Omitted].................................................................... 58
(p) Further Assurances......................................................................... 58
(q) Owned Facilities - Termination of Liens; Intercreditor Agreements.......................... 58
(r) Leased Facilities - Termination of Liens; Intercreditor Agreements; Trustee Agreements..... 59
8.02 Negative Covenants............................................................................... 60
(a) Indebtedness............................................................................... 60
(b) Liens...................................................................................... 61
(ii)
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(c) Guaranties................................................................................. 61
(d) Loans and Investments...................................................................... 62
(e) Dividends and Related Distributions........................................................ 63
(f) Liquidations, Mergers, Consolidations, Acquisitions........................................ 63
(g) Dispositions of Assets or Subsidiaries..................................................... 65
(h) Affiliate Transactions..................................................................... 66
(i) Subsidiary, Partnerships and Joint Ventures................................................ 66
(j) Continuation of or Change in Business...................................................... 66
(k) Plans and Benefit Arrangements............................................................. 66
(l) Fiscal Year................................................................................ 67
(m) Issuance of Stock.......................................................................... 67
(n) [Intentionally Omitted.]................................................................... 68
(o) [Intentionally Omitted.]................................................................... 68
(p) Capital Expenditures and Leases............................................................ 68
(q) Minimum Fixed Charge Coverage Ratio........................................................ 68
(r) Maximum Leverage Ratio..................................................................... 68
(s) [Intentionally Omitted.]................................................................... 68
(t) Minimum Net Worth.......................................................................... 68
(u) Senior Indebtedness to Cash Flow From Operations Ratio..................................... 69
(v) Incurrence of Indebtedness Permitted By the Indenture...................................... 69
(w) [Intentionally Omitted.]................................................................... 69
(x) Negative Pledges........................................................................... 69
(y) Prohibition of Defeasance of Subordinated Notes............................................ 69
8.03 Reporting Requirements........................................................................... 69
(a) [Intentionally Omitted.]................................................................... 69
(b) Quarterly Financial Statements............................................................. 69
(c) Annual Financial Statements................................................................ 70
(d) Certificate of the Borrower................................................................ 70
(e) Notice of Default.......................................................................... 70
(f) Notice of Litigation....................................................................... 71
(g) Certain Events............................................................................. 71
(h) Budgets, Forecasts, Other Reports and Information.......................................... 71
(i) Notices Regarding Plans and Benefit Arrangements........................................... 72
(j) Notices with Respect to Indenture.......................................................... 73
ARTICLE IX - DEFAULT.......................................................................................... 73
9.01 Events of Default................................................................................ 73
9.02 Consequences of Event of Default................................................................. 76
9.03 Notice of Sale................................................................................... 79
ARTICLE X - THE AGENT......................................................................................... 79
10.01 Appointment..................................................................................... 79
10.02 Delegation of Duties............................................................................ 79
10.03 Nature of Duties; Independent Credit Investigation.............................................. 79
10.04 Actions in Discretion of Agent; Instructions from the Banks..................................... 80
10.05 Reimbursement and Indemnification of Agent by the Borrower...................................... 80
10.06 Exculpatory Provisions.......................................................................... 81
10.07 Reimbursement and Indemnification of Agent by Banks............................................. 81
10.08 Reliance by Agent............................................................................... 82
10.09 Notice of Default............................................................................... 82
10.10 Notices......................................................................................... 82
10.11 Banks in Their Individual Capacities............................................................ 82
10.12 Holders of Notes................................................................................ 82
(iii)
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10.13 Equalization of Banks........................................................................... 83
10.14 Successor Agent................................................................................. 83
10.15 Agent's Fee..................................................................................... 83
10.16 Availability of Funds........................................................................... 83
10.17 Calculations.................................................................................... 84
10.18 Beneficiaries................................................................................... 84
10.19 Holding of Loan Documents....................................................................... 84
ARTICLE XI - MISCELLANEOUS.................................................................................... 84
11.01 Modifications, Amendments or Waivers............................................................ 84
11.02 No Implied Waivers; Cumulative Remedies; Writing Required....................................... 85
11.03 Reimbursement and Indemnification of Banks by the Borrower; Taxes............................... 85
11.04 Holidays........................................................................................ 86
11.05 Funding by Branch, Subsidiary or Affiliate...................................................... 86
(a) Notional Funding........................................................................... 86
(b) Actual Funding............................................................................. 86
11.06 Notices......................................................................................... 87
11.07 Severability.................................................................................... 87
11.08 Governing Law................................................................................... 87
11.09 Prior Understanding............................................................................. 87
11.10 Duration; Survival.............................................................................. 87
11.11 Successors and Assigns.......................................................................... 88
11.12 Confidentiality................................................................................. 89
11.13 Counterparts.................................................................................... 89
11.14 Agent's or Bank's Consent....................................................................... 89
11.15 Exceptions...................................................................................... 89
11.16 Consent to Forum; Waiver of Jury Trial.......................................................... 89
11.17 Tax Withholding Clause.......................................................................... 90
11.18 Effect on Prior Credit Agreement; Continuing Effectiveness of Certain Provisions
Regarding Interest Rates and Fees....................................................... 90
(iv)
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SCHEDULES
SCHEDULE 1.01(P) PERMITTED LIENS
SCHEDULE 1.01(R)(2) COMMITMENTS OF BANKS
SCHEDULE 2.09(a) EXISTING LETTERS OF CREDIT; LOANS, INTEREST
AND OTHER OBLIGATIONS UNDER PRIOR CREDIT
AGREEMENT
SCHEDULES 6.01(a) QUALIFICATIONS TO DO BUSINESS, SUBSIDIARIES
AND and 6.01(c) EXCLUDED ENTITIES
SCHEDULE 6.01(u) MATERIAL CONTRACTS
SCHEDULE 6.01(y) ENVIRONMENTAL DISCLOSURES
SCHEDULE 6.01(z) CERTAIN DISCLOSURES REGARDING OTHER DEBT OF
THE BORROWER
SCHEDULE 6.01(aa) MATTERS REGARDING CERTAIN LEASED FACILITIES
AND INDEBTEDNESS OF CERTAIN
SUBSIDIARIES
SCHEDULE 8.01(l) CERTAIN DISCLOSURES REGARDING SUBORDINATION
OF INDEBTEDNESS
SCHEDULE 8.02(a) PERMITTED INDEBTEDNESS
SCHEDULE 8.02(c) CERTAIN GUARANTIES
SCHEDULE 8.02(x) EXISTING NEGATIVE PLEDGE COVENANTS
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EXHIBITS
EXHIBIT 1.01(A) ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT 1.01(C) CONDITIONS FOR INCURRENCE OF CERTAIN LIENS
AND CERTAIN INDEBTEDNESS
EXHIBIT 1.01(G) GUARANTY AND SURETYSHIP AGREEMENT
EXHIBITS 1.01(I)(1) INTERCREDITOR AGREEMENT - LEASED FACILITY
(A) and (B)
EXHIBITS 1.01(I)(2) INTERCREDITOR AGREEMENT - OWNED FACILITY
(A) and (B)
EXHIBIT 1.01(L) LEASEHOLD MORTGAGE
EXHIBIT 1.01(M) MORTGAGE
EXHIBIT 1.01(P)(1) PLEDGE AGREEMENT (Borrower)
EXHIBIT 1.01(P)(2) PLEDGE AGREEMENT
(Subsidiaries Pledging Stock)
EXHIBIT 1.01(P)(3) PLEDGE AGREEMENT (Subsidiaries Pledging
Partnership Interests)
EXHIBIT 1.01(R) REVOLVING CREDIT NOTE
EXHIBIT 1.01(S) SUBORDINATION AGREEMENT (Intercompany)
EXHIBIT 1.01(T) TRUSTEE AGREEMENT
EXHIBIT 2.05 REVOLVING CREDIT LOAN REQUEST
EXHIBIT 8.01(l) TERMS OF CERTAIN SUBORDINATED INDEBTEDNESS
EXHIBIT 8.01(m)(i) ACQUISITION APPROVAL CERTIFICATE
EXHIBIT 8.01(m)(ii) ACQUISITION NOTICE CERTIFICATE
EXHIBIT 8.03(d) COMPLIANCE CERTIFICATE
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT is dated as of May 18, 1994, as amended
and is made by and among MARINER HEALTH GROUP, INC., a Delaware corporation (the
"Borrower"), the BANKS (as hereinafter defined), and PNC BANK, NATIONAL
ASSOCIATION, in its capacity as agent for the Banks under this Agreement
(hereinafter referred to in such capacity as the "Agent").
WITNESSETH:
WHEREAS, the Borrower has requested the Banks to provide a
revolving credit facility to the Borrower in an aggregate principal amount not
to exceed $460,000,000; and
WHEREAS, the Banks are willing to provide such credit upon the
terms and conditions hereinafter set forth.
NOW, THEREFORE, the parties hereto, in consideration of their
mutual covenants and agreements hereinafter set forth and intending to be
legally bound hereby, covenant and agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.01 Certain Definitions. In addition to words and terms
defined elsewhere in this Agreement, the following words and terms shall have
the following meanings, respectively, unless the context hereof clearly requires
otherwise:
Acquisition Approval Certificate shall have the meaning
set forth in Section 8.01(m)(i).
Acquisition Income Reporting Period shall mean the period
during which Borrower shall measure Consolidated Cash Flow from Operations
pursuant to Section 8.01(m) for purposes of computing Borrower's leverage ratio
and its other financial covenants on the date on which Borrower makes any
Permitted Acquisition, which period shall be either:
(1) the four fiscal quarters ending immediately
before the date of such Permitted Acquisition (the "Immediately Preceding Four
Quarters") if such Permitted Acquisition occurs after the Delivery Date for the
financial statements of Borrower for such Immediately Preceding Four Quarters,
or
(2) the four fiscal quarters ending one quarter
period prior to the end of the Immediately Preceding Four Quarters (the "Second
Preceding Four Quarters") if such Permitted Acquisition occurs before the
Delivery Date for the financial statements of Borrower for the Immediately
Preceding Four Quarters.
Acquisition Notice Certificate shall have the meaning
given to such term in Section 8.01(m)(ii).
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Acquisition Reporting Certification shall mean any
Permitted Acquisition with respect to which Borrower delivers or is required to
deliver either an Acquisition Notice Certificate or an Acquisition Approval
Certificate pursuant to Section 8.01(m).
Adjusted Consolidated Net Income shall mean for any
period of determination an amount equal to the net income of the Borrower and
its Subsidiaries for such period determined and consolidated in accordance with
GAAP, plus such extraordinary nonrecurring charges as are approved by the
Required Banks pursuant to Section 8.01(m), to the extent such expenses are
deducted in computing such net income.
Affiliate as to any person shall mean any other person
(i) which directly or indirectly controls, is controlled by, or is under common
control with such person, (ii) which beneficially owns or holds 50% or more of
any class of the voting stock of the Borrower, or (iii) 50% or more of the
voting stock (or in the case of a person which is not an individual or a
corporation, 50% or more of the equity interest) of which is beneficially owned
or held, directly or indirectly, by the Borrower. Control, as used herein, shall
mean the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a person, whether through the
ownership of voting securities, by contract or otherwise, including the power to
elect a majority of the directors or trustees of a corporation or trust, as the
case may be.
Agent shall mean PNC Bank, National Association and its
successors.
Agent's Fee shall have the meaning assigned to that term
in Section 10.15 hereof.
Agreement shall mean this Credit Agreement as the same
may be supplemented, amended, modified or restated from time to time including
all schedules and exhibits hereto.
Amendment No. 15 shall mean that certain Amendment No 15
to Credit Agreement dated October 3, 1997 among Borrower, the Banks and Agent,
together with schedules and exhibits thereto.
Amendment No. 16 shall mean that certain Amendment No. 16
to Credit Agreement dated January 2, 1998 among Borrower, the Banks and Agent,
together with schedules and exhibits thereto.
Ansonia shall mean Mariner Health Care of Southern
Connecticut, a corporation organized and existing under the laws of the State of
Connecticut.
Applicable Percentage Over Euro-Rate shall have the
meaning assigned to such term in Section 4.01(a)(ii).
Assignment and Assumption Agreement shall mean an
Assignment and Assumption Agreement by and among a Purchasing Bank, the
Transferor Bank and the Agent, as Agent and on behalf of the remaining Banks,
substantially in the form of Exhibit 1.01(A) hereto.
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Authorized Officer shall mean with respect to each Loan
Party those persons designated by written notice to the Agent from the Borrower,
authorized to execute notices, reports and other documents required hereunder.
The Borrower may amend such list of persons from time to time by giving written
notice of such amendment to the Agent.
Banks shall mean the financial institutions named on
Schedule 1.01(R)(2) hereto and their respective successors and assigns as
permitted hereunder, each of which is referred to herein as a Bank.
Base Rate shall mean the greater of (i) the interest rate
per annum announced from time to time by the Agent at its Principal Office as
its then prime rate, which rate may not necessarily be the lowest rate then
being charged commercial borrowers by the Agent, or (ii) the Federal Funds
Effective Rate plus one-half percent (0.5%) per annum.
Base Rate Option shall mean Loans subject to the
Revolving Credit Base Rate Option.
Benefit Arrangement shall mean at any time an "employee
benefit plan," within the meaning of Section 3(3) of ERISA, which is neither a
Plan or a Multiemployer Plan and which is maintained, sponsored or otherwise
contributed to, by any member of the ERISA Group.
Borrower shall mean Mariner Health Group, Inc., a
corporation organized and existing under the laws of the State of Delaware.
Borrowing Date shall mean, with respect to any Loan, the
date for the making thereof or the renewal thereof or conversion thereof to the
same or a different Interest Rate Option, which shall be a Business Day.
Borrowing Tranche shall mean (i) with respect to the
Revolving Credit Euro-Rate Portion of the Loans, Loans to which a Euro-Rate
Option applies by reason of the selection of, conversion to or renewal of such
Interest Rate Option on the same day and having the same Euro-Rate Interest
Period, and (ii) with respect to the Revolving Credit Base Rate Portion of the
Loans, Loans to which the Base Rate Option applies by reason of the selection of
or conversion of such Interest Rate Option.
Business Day shall mean (i) with respect to matters
relating to the Euro-Rate Option, a day on which banks in the London interbank
market are dealing in U.S. Dollar deposits and on which commercial banks are
open for domestic and international business in Pittsburgh, Pennsylvania and New
York, New York, and (ii) with respect to any other matter, a day on which
commercial banks are open for business in Pittsburgh, Pennsylvania and New York,
New York.
Change in Ownership shall mean if, from and after the
Closing Date, any person or group within the meaning of Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended (the "1934 Act") and the rules and
regulations promulgated thereunder (other than a
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person or group owning stock of the Borrower prior to the initial public
offering of the Borrower's stock consummated on June 15, 1993) shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 of the 1934
Act), directly or indirectly, of securities of the Borrower (or other securities
convertible into such securities) representing 50% or more of combined voting
power of all securities of the Borrower entitled to a vote in the election of
directors (hereinafter called a "Controlling Person"). For purposes of this
definition, a person or group shall not be a Controlling Person if such person
or group holds voting power in good faith and not for the purpose of
circumventing this definition as an agent, bank, broker, nominee, trustee, or
holder of irrevocable proxies given in response to a solicitation pursuant to
the 1934 Act, for one or more beneficial owners who do not individually, or, if
they are a group acting in concert, as a group, have the voting power specified
in this definition.
Class A Excluded Entities shall mean collectively those
Excluded Entities which have not incurred any Restricted Indebtedness nor are
subject to or bound by the terms of any agreement with respect to Restricted
Indebtedness, and Class A Excluded Entity shall mean separately any Class A
Excluded Entity.
Closing Date shall mean May 18, 1994, which is the
Business Day on which the first Loan was made.
Collateral shall mean the Pledged Collateral, all of the
collateral under the Mortgages and the Leasehold Mortgages and any other
collateral security in which any of the Loan Parties may hereafter grant a
security interest or other lien to the Agent for the benefit of the Banks as
security for their obligations under the Loan Documents.
Commitment shall mean as to any Bank its Revolving Credit
Commitment, and Commitments shall mean the aggregate of the Revolving Credit
Commitments of all of the Banks.
Commitment Fee shall have the meaning assigned to that
term in Section 2.03 hereof.
Conditions for Incurrence of Certain Liens and Certain
Indebtedness shall mean those conditions set forth on Exhibit 1.01(C).
Consolidated Cash Flow from Operations for any period of
determination shall mean the difference between the amounts determined under the
following clauses (i) and (ii): (i) the sum of (X) the sum of Consolidated Net
Income, depreciation, amortization, other non-cash charges to Consolidated Net
Income, interest expense and income tax expense of the Borrower and its
Restricted Subsidiaries for such period determined in accordance with GAAP, plus
(Y) the sum of the Consolidated Cash Flow from Operations Adjustment Amount for
all Class A Excluded Entities, minus (ii) non-cash credits to net income of the
Borrower and its Restricted Subsidiaries for such period determined in
accordance with GAAP, subject to the adjustments described in this definition
below.
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If the Loan Parties make a Permitted Acquisition and the
Banks approve of the historical and pro forma financial statements of the
business acquired in such Permitted Acquisition pursuant to Section 8.01(m)
hereof, Consolidated Cash Flow from Operations shall be adjusted as set forth in
paragraphs (A), (B) and (C) below. The adjustments in Paragraphs (A), (B) and
(C) below shall apply to computations of the ratios in Sections 2.01, 2.03,
4.01(a), 8.02(f), 8.02(r) and 8.02(u) on the date of such Permitted Acquisition
and at the end of each of the four fiscal quarters after such Permitted
Acquisition. (The adjustments described in Paragraphs (A) and (B) below shall
not apply to computations of such ratios made as of the end of the fiscal
quarter immediately preceding the date of such Permitted Acquisition.)
(A) Consolidated Cash Flow from Operations for
periods prior to such Permitted Acquisition shall include (i) the sum of net
income, depreciation, amortization, other non-cash charges to net income,
interest expense and income tax expense of the acquired business, plus the
adjustment, if any pursuant to clause (C) below, minus (ii) non-cash credits to
net income of such business, in each case as determined in accordance with GAAP,
(B) Extraordinary or nonrecurring expenses under GAAP
incurred in connection with such Permitted Acquisition shall be excluded from
the net income of the acquired business when computing Consolidated Cash Flow
from Operations in the preceding sentence if the Required Banks have agreed to
such exclusion pursuant to Section 8.01(m), and
(C) To the extent, in the determination of net income
of the acquired business utilized in clause (A) above, deductions were taken in
respect of rental expense pursuant to operating leases in accordance with GAAP
and following the consummation of a Permitted Acquisition the Borrower
appropriately amends such leases so that, in accordance with GAAP, such rental
expense pursuant to operating leases may properly be treated as rental expense
pursuant to capital leases (and the Borrower treats such leases as capital
leases for periods following the consummation by the Borrower of such Permitted
Acquisition) then, such net income for purposes of clause (A) above shall be
increased by the deductions taken in respect of rental expense pursuant to such
operating leases during the period of determination.
Consolidated Cash Flow from Operations Adjustment Amount
shall mean, for each Class A Excluded Entity, for any period of determination,
the amount equal to the product of (A) a percentage, as determined by the Agent
in its reasonable discretion, multiplied by (B) the difference between (i) the
sum of net income, depreciation, amortization, other non-cash charges to such
net income, interest expense and income tax expense of such Class A Excluded
Entity for such period, as determined in accordance with GAAP, minus (ii)
non-cash credits to net income of such Class A Excluded Entity for such period,
as determined in accordance with GAAP. In determining the applicable percentage
under clause (A) above, the Agent shall review with the Borrower the constituent
documents of each Excluded Entity, including without limitation, partnership
agreements, shareholder agreements and other relevant documents which the
Borrower agrees to provide as the Agent may reasonably request, and the Agent
shall also review the equity ownership interests of the Loan Parties in each
Excluded
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Entity and the actual cash flow available to be distributed to the Loan Parties
from the operations of each Excluded Entity.
Consolidated Net Income shall mean for any period of
determination an amount equal to the net income of the Borrower and its
Restricted Subsidiaries for such period determined in accordance with GAAP, but
without regard to net income attributable to Excluded Entities, plus such
extraordinary nonrecurring charges as approved by the Required Banks pursuant to
Section 8.01(m), to the extent such expenses are deducted in computing such net
income.
Consolidated Net Worth shall mean as of any date of
determination total stockholders' equity of the Borrower and its Subsidiaries as
of such date determined and consolidated in accordance with GAAP.
Corporate Shares shall have the meaning assigned to that
term in Section 6.01(c).
Corporate Subsidiaries shall mean collectively the
Subsidiaries of Borrower which are corporations, and Corporate Subsidiary shall
mean individually any of them.
Delivery Date shall mean the date which is the earlier of
(i) the date on which the Borrower delivers its consolidated financial
statements to the Agent and the Banks pursuant to Sections 8.03(b) and (c), or
(ii) one Business Day following the date on which such financial statements are
due to be delivered pursuant to such Sections.
Dollar Dollars U.S. Dollars and the symbol $ shall mean
lawful money of the United States of America.
Drawing Date shall have the meaning assigned to that term
in Section 2.09(d).
Environmental Complaint shall mean any written complaint
setting forth a cause of action for personal, property or natural resource
damage or equitable relief, order, notice of violation, citation, request for
information issued pursuant to any Environmental Laws by an Official Body,
subpoena or other written notice of any type relating to, arising out of, or
issued pursuant to any of the Environmental Laws or any Environmental
Conditions, as the case may be, in each case with respect to any violation or
alleged violation of Environmental Laws or release or threatened release of a
Regulated Substance.
Environmental Conditions shall mean any conditions of the
environment, including, without limitation, the work place, the ocean, natural
resources (including flora or fauna), soil, surface water, ground water, any
actual or potential drinking water supply sources, substrata or the ambient air,
relating to or arising out of, or caused by the use, handling, storage,
treatment, recycling, generation, transportation, release, spilling, leaking,
pumping, emptying, discharging, injecting, escaping, leaching, disposal,
dumping, threatened release or other
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management or mismanagement of Regulated Substances resulting from the use of,
or operations on, the Property.
Environmental Laws shall mean all federal, state, local
and foreign laws and regulations, including without limitation permits,
licenses, authorizations, bonds, orders, judgments, consent decrees issued, or
entered into, pursuant thereto, relating to pollution or protection of human
health or the environment or employee safety in the work place or the operation
of the activities of the Borrower and its Subsidiaries.
ERISA shall mean the Employee Retirement Income Security
Act of 1974, as the same may be amended or supplemented from time to time, and
any successor statute of similar import, and the rules and regulations
thereunder, as from time to time in effect.
ERISA Group shall mean, at any time, the Borrower and all
members of a controlled group of corporations and all trades or businesses
(whether or not incorporated) under common control and all other entities which,
together with the Borrower, are treated as a single employer under Section 414
of the Internal Revenue Code.
Euro-Rate shall mean with respect to the Loans comprising
any Borrowing Tranche to which the Euro-Rate Option applies for any Euro-Rate
Interest Period, the interest rate per annum determined by the Agent by dividing
(the resulting quotient rounded upward to the nearest 1/100 of 1% per annum) (i)
the rate of interest determined by the Agent in accordance with its usual
procedures (which determination shall be conclusive absent manifest error) to be
the "offered" eurodollar rate as quoted by Exco-▇▇▇▇▇▇ Incorporated (or
appropriate successor or, if Exco-▇▇▇▇▇▇ or its successor ceases to provide such
quotes, a comparable replacement as determined by the Agent) as evidenced on Dow
▇▇▇▇▇ Markets Service (formerly known as Telerate) display page 4756 (or such
other display page on the Dow ▇▇▇▇▇ Markets Service system as may replace Dow
▇▇▇▇▇ Markets Service display page 4756), two (2) Business Days prior to the
first day of such Euro-Rate Interest Period for an amount comparable to such
Borrowing Tranche and having a borrowing date and maturity comparable to such
Euro-Rate Interest Period by (ii) a number equal to 1.00 minus the Euro-Rate
Reserve Percentage. The Euro-Rate may also be expressed by the following
formula:
Dow ▇▇▇▇▇ Markets Service page 4756 as quoted by Exco-▇▇▇▇▇▇,
Euro-Rate = (or appropriate successor)
1.00 - Euro-Rate Reserve Percentage
The Euro-Rate shall be adjusted with respect to any Euro-Rate Option outstanding
on the effective date of any change in the Euro-Rate Reserve Percentage as of
such effective date. The Agent shall give prompt notice to the Borrower of the
Euro-Rate as determined or adjusted in accordance herewith, which determination
shall be conclusive absent manifest error.
Euro-Rate Interest Period shall have the meaning assigned
to that term in Section 4.02 hereof.
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Euro-Rate Option shall mean Loans subject to the
Revolving Credit Euro-Rate Option.
Euro-Rate Reserve Percentage shall mean the maximum
percentage (expressed as a decimal rounded upward to the nearest 1/100 of 1%) as
determined by the Agent (which determination shall be conclusive absent manifest
error) which is in effect during any relevant period, as prescribed by the Board
of Governors of the Federal Reserve System (or any successor) for determining
the reserve requirements (including, without limitation, supplemental, marginal
and emergency reserve requirements) with respect to eurocurrency funding
(currently referred to as "Eurocurrency Liabilities") of a member bank in such
System.
Event of Default shall mean any of the Events of Default
described in Section 9.01 of this Agreement.
Excluded Entities shall mean (i) any partnership,
corporation or limited liability company which is not a Subsidiary of any Loan
Party and with respect to which a Loan Party has made a Restricted Investment
permitted by Section 8.02(d)(iv), and (ii) any Unrestricted Subsidiary of the
Borrower which the Borrower has designated as one of the Excluded Entities and
with respect to which a Loan Party has made a Restricted Investment permitted by
Section 8.02(d)(iv), and Excluded Entity shall mean separately any Excluded
Entity.
Existing Letters of Credit shall have the meaning given
to such term in Section 2.09.
Expiration Date shall mean, with respect to the Revolving
Credit Commitment, January 2, 2003, subject to extension as provided in Section
2.01(b).
Facility Purchase Option shall mean an option provided by
a Lessor Lender or Owned Facility Lender in an Intercreditor Agreement giving
the Agent or the Banks the right to purchase the Lessor Indebtedness or Owned
Facility Indebtedness from such Lessor Lender or Owned Facility Lender upon
certain events of default relating to such Indebtedness.
Federal Funds Effective Rate for any day shall mean the
rate per annum (based on a year of 360 days and actual days elapsed and rounded
upward to the nearest 1/100 of 1%) announced by the Federal Reserve Bank of New
York (or any successor) on such day as being the weighted average of the rates
on overnight Federal funds transactions arranged by Federal funds brokers on the
previous trading day, as computed and announced by such Federal Reserve Bank (or
any successor) in substantially the same manner as such Federal Reserve Bank
computes and announces the weighted average it refers to as the "Federal Funds
Effective Rate" as of the date of this Agreement; provided, if such Federal
Reserve Bank (or its successor) does not announce such rate on any day, the
"Federal Funds Effective Rate" for such day shall be the Federal Funds Effective
Rate for the last day of which such rate was announced.
GAAP shall mean generally accepted accounting principles
as are in effect on the Closing Date, subject to the provisions of Section 1.03
hereof, and applied on a consistent
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basis (except for changes in application in which the Borrower's independent
certified public accountants concur) both as to classification of items and
amounts.
Guaranty of any person shall mean any obligation of such
person guaranteeing or in effect guaranteeing any liability or obligation of any
other person in any manner, whether directly or indirectly, including, without
limiting the generality of the foregoing, any agreement to indemnify or hold
harmless any other person, any performance bond or other suretyship arrangement
and any other form of assurance against loss, except endorsement of negotiable
or other instruments for deposit or collection in the ordinary course of
business.
Guaranty Agreements shall mean collectively the Guaranty
and Suretyship Agreements, in substantially the form attached hereto as Exhibit
1.01(G) executed and delivered by the Subsidiaries of Borrower except for
Pinnacle Rehab of Gwinnette and Pinnacle's Kansas Joint Venture to the Agent for
the benefit of the Banks, and Guaranty Agreement shall mean separately any
Guaranty Agreement.
Historical Statements shall have the meaning given to
such term in Section 6.01(i)(i).
Indebtedness shall mean as to any person at any time, any
and all indebtedness, obligations or liabilities (whether matured or unmatured,
liquidated or unliquidated, direct or indirect, absolute or contingent, or joint
or several) of such person for or in respect of: (i) borrowed money, including,
without limitation the Subordinated Notes, (ii) amounts raised under or
liabilities in respect of any note purchase or acceptance credit facility, (iii)
reimbursement obligations under any letter of credit, currency swap agreement,
interest rate swap, cap, collar or floor agreement or other interest rate
protection agreement, (iv) any other transaction (including without limitation
forward sale or purchase agreements, capitalized (not operating) leases required
under GAAP to be disclosed as a liability on the Loan Party's balance sheet and
conditional sales agreements) having the commercial effect of a borrowing of
money entered into by such person to finance its operations or capital
requirements (but not including the deferred portion of any Restricted
Investment in an Excluded Entity if such amount is to be paid from available
cash flow from operations of the Borrower and its Subsidiaries and also not
including trade payables and accrued expenses incurred in the ordinary course of
business which are not represented by a promissory note, instrument or other
evidence of indebtedness and which are not more than ninety (90) days past due
(unless such past due indebtedness is being disputed in good faith and an
appropriate reserve has been established with respect to such indebtedness in
accordance with GAAP)), provided that, for purposes of this clause (iv) the
phrase "other evidence of indebtedness" shall not include any ordinary course
evidence of trade accounts payable of the Borrower or any Subsidiary such as
purchase orders or invoices, or (v) any Guaranty of Indebtedness for borrowed
money.
Indenture shall mean that certain Indenture dated April
4, 1996, between the Borrower and State Street Bank and Trust Company, as
trustee, in respect of the
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Subordinated Notes, as the same may be amended, modified, supplemented or
restated from time to time in accordance with this Agreement.
Insolvency Proceedings shall mean, with respect to any
Person, (a) a case, action or proceeding with respect to such Person (i) before
any court or any other Official Body under any bankruptcy, insolvency,
reorganization or other, similar Law now or hereafter in effect, or (ii) for the
appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator, conservator (or similar official) of any Loan Party or otherwise
relating to the liquidation, dissolution, winding-up or relief of such Person,
or (b) any general assignment for the benefit of creditors, composition,
marshaling of assets for creditors, or other, similar arrangement in respect of
such Person's creditors generally or any substantial portion of its creditors;
undertaken under any Law.
Intercreditor Agreements shall mean collectively, as of
any date of determination, each Intercreditor Agreement entered into between the
Agent and a Lessor Lender, each Intercreditor Agreement entered into between the
Agent and an Owned Facility Lender, each Intercreditor Agreement entered into as
required by Section 8.02(d)(iv), and each other Intercreditor Agreement entered
into between the Agent and any other Person, as required pursuant to this
Agreement, and Intercreditor Agreement shall mean, individually, any of the
Intercreditor Agreements.
Interest Payment Date shall mean each date specified for
the payment of interest in Section 5.03.
Interest Rate Option shall mean the Revolving Credit
Euro-Rate Option or Revolving Credit Base Rate Option.
Internal Revenue Code shall mean the Internal Revenue
Code of 1986, as the same may be amended or supplemented from time to time, and
any successor statute of similar import, and the rules and regulations
thereunder, as from time to time in effect.
Labor Contracts shall have the meaning assigned to that
term in Section 6.01(u).
Law shall mean any law (including common law),
constitution, statute, treaty, regulation, rule, ordinance, opinion, release,
ruling, order, injunction, writ, decree or award of any Official Body.
Leased Facilities shall mean collectively all health care
facilities leased by a Subsidiary of Borrower, as lessee, and Leased Facility
shall mean any of the Leased Facilities, individually.
Leasehold Mortgages shall mean collectively, as of any
date of determination, each Leasehold Mortgage granted by a Subsidiary Lessee in
favor of the Agent for the benefit of the Banks with respect to the Leased
Facility leased by such Subsidiary Lessee, and Leasehold Mortgage shall mean
individually any of the Leasehold Mortgages.
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Lessor shall mean with respect to a Leased Facility, the
person which owns such facility and leases such facility to a Subsidiary Lessee.
Lessor Indebtedness shall mean Indebtedness of a Lessor
either secured by the assets of or related to the Leased Facility owned by such
Lessor or which includes restrictive covenants or other provisions related or
applicable to such Leased Facility.
Lessor Lender shall mean, with respect to any Lessor
Indebtedness, the obligee thereof.
Letter of Credit shall have the meaning assigned to that
term in Section 2.09.
Letter of Credit Borrowing shall mean an extension of
credit resulting from a drawing under any Letter of Credit which shall not have
been reimbursed on the date when made and shall not have been converted into a
Revolving Credit Loan under Section 2.09(d).
Letter of Credit Fee shall have the meaning assigned to
that term in Section 2.09.
Letters of Credit Outstanding shall mean at any time the
sum of (i) the aggregate undrawn face amount of outstanding Letters of Credit
and (ii) the aggregate amount of all unpaid and outstanding Reimbursement
Obligations.
Lien shall mean any mortgage, deed of trust, pledge,
lien, security interest, charge or other encumbrance or security arrangement of
any nature whatsoever, whether voluntarily or involuntarily given, including but
not limited to any conditional sale or title retention arrangement, and any
assignment, deposit arrangement or capitalized lease intended as, or having the
effect of, security and any filed financing statement or other notice of any of
the foregoing (whether or not a lien or other encumbrance is created or exists
at the time of the filing).
Loan Documents shall mean this Agreement, the Notes, the
Guaranty Agreements, the Pledge Agreements, the Mortgages, the Leasehold
Mortgages, the Intercreditor Agreements, the Trustee Agreement, the
Subordination Agreement (Intercompany), and any other instruments, certificates
or documents delivered or contemplated to be delivered hereunder or thereunder
or in connection herewith or therewith, as the same may have previously been or
in the future be supplemented or amended from time to time in accordance
herewith or therewith, and Loan Document shall mean any of the Loan Documents.
Loan Parties shall mean the Borrower and its
Subsidiaries, other than those Subsidiaries which are permitted Excluded
Entities.
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Loan Request shall mean a request for Revolving Credit
Loans made in accordance with Section 2.05 hereof or a request to select,
convert to or renew a Euro-Rate Option in accordance with Section 4.02 hereof.
Loans shall mean collectively and Loan shall mean
separately all Revolving Credit Loans or any Revolving Credit Loan.
Mariner Maryland shall mean Mariner Health Care of
Baltimore, Inc., a corporation organized and existing under the laws of the
Commonwealth of Massachusetts.
Mariner Nashville shall mean Mariner Health Care of
Nashville, Inc., a Delaware corporation, a Subsidiary of the Borrower and the
successor by merger to Convalescent Services Inc., a Georgia corporation.
Material Adverse Change shall mean any set of
circumstances or events which (a) has or could reasonably be expected to have
any material adverse effect whatsoever upon the validity or enforceability of
this Agreement or any other Loan Document, (b) is or could reasonably be
expected to be material and adverse to the business, properties, assets,
financial condition, results of operations or prospects of the Borrower and its
Subsidiaries taken as a whole, (c) impairs materially or could reasonably be
expected to impair materially the ability of the Borrower or any of its
Subsidiaries to duly and punctually pay or perform its Indebtedness, or (d)
impairs materially or could reasonably be expected to impair materially the
ability of the Agent or any of the Banks, to the extent permitted, to enforce
their legal remedies pursuant to this Agreement or any other Loan Document.
Material Subsidiary shall mean any Subsidiary the revenue
or net income of which represented more than five percent (5%) of the Borrower's
consolidated revenues or consolidated net income during the preceding four (4)
fiscal quarters.
Member Interests shall have the meaning assigned to that
term in Section 6.01(c).
month, with respect to a Euro-Rate Interest Period, shall
mean the interval between the days in consecutive calendar months numerically
corresponding to the first day of such Euro-Rate Interest Period. The last day
of a calendar month shall be deemed to be such numerically corresponding day for
such calendar month (i) if there is no such numerically corresponding day in
such calendar month, or (ii) if the first day of such Euro-Rate Interest Period
is the last Business Day of a calendar month.
Mortgages shall mean collectively, as of any date of
determination, the second lien Mortgages granted by a Subsidiary Owner in favor
of the Agent for the benefit of the Banks with respect to the Owned Facility of
such Subsidiary Owner, and Mortgage shall mean individually any of the
Mortgages.
Multiemployer Plan shall mean any employee benefit plan
which is a "multiemployer plan" within the meaning of Section 4001(a)(3) of
ERISA and to which the
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Borrower or any member of the ERISA Group is then making or accruing an
obligation to make contributions or, within the preceding five Plan years, has
made or had an obligation to make such contributions.
Multiple Employer Plan shall mean a Plan which has two or
more contributing sponsors (including the Borrower or any member of the ERISA
Group) at least two of whom are not under common control, as such a plan is
described in Sections 4063 and 4064 of ERISA.
NBG shall mean NationsBank of Georgia, N.A.
NBT shall mean NationsBank of Tennessee, N.A.
Ninth Amendment Effective Date shall mean April 30, 1996,
which shall be the effective date of the Amendment No. 9 to this Agreement.
Non-Disturbance Agreements shall mean collectively, as of
any date of determination, the non-disturbance agreements executed by a Lessor
Lender and the applicable Subsidiary Lessee, each providing in part that the
Lessor Lender shall recognize the rights of the Subsidiary Lessee which is
lessee of the Leased Facility so financed by such Lessor Lender should such
Lessor Lender foreclose upon such Leased Facility.
Notes shall mean collectively the Revolving Credit Notes.
Official Body shall mean any national, federal, state,
local or other government or political subdivision thereof or any agency,
authority, bureau, central bank, commission, department or instrumentality of
any government or political subdivision thereof, or any court, tribunal, grand
jury or arbitrator, in each case whether foreign or domestic.
Owned Facilities shall mean all health care facilities
acquired by a Subsidiary of the Borrower (or the health care facilities which
are owned by a person which is acquired by a Loan Party and such person thereby
becomes a Subsidiary of the Borrower), which facilities (as of the date of
acquisition by a Loan Party or the date the owner of such facility becomes a
Subsidiary of the Borrower) have outstanding Indebtedness payable to a lender,
other than Indebtedness payable to the Banks pursuant to the Loan Documents, and
Owned Facility shall mean any Owned Facilities, individually.
Owned Facility Indebtedness shall mean with respect to an
Owned Facility, the Indebtedness of the Subsidiary Owner thereof payable to a
lender other than the Banks under this Agreement, which Indebtedness is secured
by the assets of such Owned Facility.
Owned Facility Lender shall mean with respect to a
Subsidiary Owner, the obligee of the Owned Facility Indebtedness payable by such
Subsidiary Owner.
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Participation Advance shall mean, with respect to any
Bank, such Bank's payment in respect of its participation in a Letter of Credit
Borrowing according to its Ratable Share pursuant to Section 2.09(g).
Partnership Interest shall have the meaning given to such
term in Section 6.01(c).
Partnership Subsidiaries shall mean collectively the
Subsidiaries of Borrower which are general or limited partnerships and
Partnership Subsidiary shall mean individually any of them.
PBGC shall mean the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA or any successor.
Permitted Acquisition shall mean any merger,
consolidation or acquisition after the Closing Date described in and permitted
under clause (iii) or (iv) of Section 8.02(f).
Permitted Distribution Amount shall mean:
(A) for any Subsidiary (the "Payor Subsidiary"),
other than those Subsidiaries listed in (B) below, the permitted amount of
distributions to be made by the Payor Subsidiary which shall equal the
applicable amount so that the ratio of the following (x) to (y) shall be at
least equal to or greater than 2.0 to 1.0: (x) the sum of (i) net income, plus
(ii) to the extent deducted in determining net income for the applicable period
of determination under the preceding clause (i), interest expense, income tax
expense, depreciation, amortization, operating lease expense, and expense in
respect of capital leases of the Payor Subsidiary, plus (iii) capital
expenditures, all for the Payor Subsidiary, as determined in accordance with
GAAP, for the four fiscal quarters of the Payor Subsidiary immediately preceding
the date of the proposed distribution, to (y) the sum of (i) all payments of
principal and other amounts due in respect of Indebtedness (without limitation,
prepayment fees, penalties or other amounts) of the Payor Subsidiary during the
fiscal quarter when the proposed distribution shall be made and the following
three fiscal quarters, plus (ii) the sum of the amounts in respect of income tax
expense, operating lease expense, expense in respect of capital leases, and
capital expenditures under clauses (x)(ii) and (iii) above for the Payor
Subsidiary for the four fiscal quarters immediately preceding the date of the
proposed distribution, plus (iii) the aggregate amount of the proposed
distribution by the Payor Subsidiary; and
(B) for each of Alimar Physicians resources, LLC.
Mariner Health of Forest Hills, LLC, Mariner Health of Bel Air, LLC, Medwin of
connecticut, LLC, Tampa Health Properties, LTD (Bay-to-Bay), Westbury
Associates, New Hanover/Mariner Health, LLC (Wilmington), and Global Healthcare
Center - Bethesda, LLC, the permitted amount of distributions to be made by each
of them shall equal the amount permitted to be made in accordance with the
distribution provisions of their respective joint venture agreement, limited
liability company agreement, partnership agreement or similar agreement in
effect on the Sixteenth Amendment Effective Date ( a copy of which has been
delivered to the Agent), and no amendment shall be made to such provisions
regarding distributions in such joint venture
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agreements, limited liability company agreements, partnership agreements or
similar agreements following the Sixteenth Amendment Effective Date without the
prior written approval of the Agent unless any distributions by such Subsidiary
are permitted by the provisions of clause (A) above and distributions by such
Subsidiary are otherwise in compliance with Section 8.02(e).
Permitted General Intangibles shall mean licenses,
permits, certificates or Medicare/Medicaid reimbursement contracts.
Permitted Investments shall mean:
(i) direct obligations of the United States of
America or any agency or instrumentality thereof or obligations backed by the
full faith and credit of the United States of America maturing in twelve months
or less from the date of acquisition;
(ii) commercial paper maturing in 180 days or
less rated not lower than A-1 by Standard & Poor's Corporation or P-1 by ▇▇▇▇▇'▇
Investors Service on the date of acquisition;
(iii) demand deposits, time deposits or
certificates of deposit maturing within one year in commercial banks whose
obligations are rated A-1, A or the equivalent or better by Standard & Poor's
Corporation or ▇▇▇▇▇'▇ Investors Service on the date of acquisition;
(iv) publicly traded debt securities or
preferred stocks rated at least A or better by either Standard & Poor's
Corporation or by ▇▇▇▇▇'▇ Investors Service which in the aggregate do not have,
at any time, a cost basis under GAAP in excess of $1,000,000;
(v) common stocks, or mutual funds which invest
in common stocks provided that (A) such stocks are of corporations organized and
existing under the laws of the United States of America, (B) such stocks are
traded publicly on a national securities exchange or the "over the counter
market", (C) the Borrower or its Subsidiaries do not have a cost basis in excess
of $15,000,000 in the aggregate in such stocks and mutual funds, (D) the
Borrower or its Subsidiaries invest in such stocks or mutual funds using funds
obtained from sources other than, directly or indirectly, proceeds of Loans
hereunder and (E) the cost basis of the Borrower or its Subsidiaries in such
stocks and mutual funds does not exceed at any time the amount of cash invested
in investments described in clauses (i) through (iv) and (vi) of this definition
of Permitted Investments; and
(vi) investments in money market funds rated AA
or AAm-G or higher by Standard & Poor's Corporation (or equivalent rating) whose
net asset value remains a constant $1.00 per share.
Permitted Leased Facility Liens shall mean, with
respect to a Subsidiary Lessee, Liens, meeting all of the criteria specified
below, solely on certain of the Permitted General Intangibles of such Subsidiary
Lessee, granted in favor of the Lessor Lender providing financing to the Lessor
which is the lessor of such Subsidiary Lessee's Leased Facility, and such
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Liens secure the Lessor Indebtedness provided by such Lessor Lender. Such Liens
are permitted under this Agreement and shall be deemed to be "Permitted Leased
Facility Liens" only if the following limitations are satisfied:
(i) Such Liens must be terminated on or before
the earlier of: (i) the maturity of the Lessor Indebtedness which such Liens
secure (without giving effect to any extension of such maturity after the
Sixteenth Amendment Effective Date , unless the extension of such maturity is
otherwise permitted by and is in accordance with this Agreement) or (ii) any
refinancing, replacement or substitution of such Lessor Indebtedness which such
Lien secures;
(ii) Such Subsidiary Lessee shall have granted
to Agent perfected security interests in each of the assets of such Subsidiary
Lessee encumbered by such Liens, and the Agent's security interests shall have
priority over all other Liens on such assets, except that they shall be
subordinate to the Liens in favor of the Lessor Lender unless the Lessor Lender
is listed on Schedule 6.01(aa) hereto and such Schedule states that such Lessor
Lender has refused to consent to the grant to Agent of such second Liens;
(iii) The amount of Lessor Indebtedness secured
by such Liens may not be increased after the date such Subsidiary Lessee becomes
a Subsidiary of the Borrower, and any reductions in the amount of such Lessor
Indebtedness after such date shall be permanent; and
(iv) Any termination by such Lessor Lender of
such Liens in an asset after the date such Subsidiary Lessee becomes a
Subsidiary of the Borrower shall be permanent, and no Loan Party shall
thereafter grant any new Lien on assets of any Loan Party in favor of such
Lessor Lender.
Permitted Liens shall mean:
(i) Liens for taxes, assessments, or similar
charges, incurred in the ordinary course of business and which are not yet due
and payable;
(ii) Pledges or deposits made in the ordinary
course of business to secure payment of workers' compensation, or to participate
in any fund in connection with workers' compensation, unemployment insurance,
old-age pensions or other social security programs;
(iii) Liens of mechanics, materialmen,
warehousemen, carriers, or other like Liens, securing obligations incurred in
the ordinary course of business that are not yet due and payable and Liens of
landlords securing obligations to pay lease payments that are not yet due and
payable or in default;
(iv) Good faith pledges or deposits made in the
ordinary course of business to secure performance of bids, tenders, progress or
advance payments, contracts (other than for the repayment of borrowed money) or
leases, not in excess of the aggregate
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amount due thereunder, or to secure statutory obligations, or surety, appeal,
indemnity, performance or other similar bonds required in the ordinary course of
business;
(v) Encumbrances consisting of zoning
restrictions, easements, reservations, rights of way or other restrictions on
the use of real property, none of which materially impairs the use of such
property as currently used or the value thereof, and none of which is violated
in any material respect by existing or proposed structures or land use;
(vi) Liens, security interests and mortgages in
favor of the Agent for the benefit of the Banks;
(vii) Liens in respect of capital leases as and
to the extent permitted in Section 8.02(p) and Liens in respect of operating
leases;
(viii) Any Lien existing on the Sixteenth
Amendment Effective Date and described on Schedule 1.01(P) hereto (excluding
Permitted Leased Facility Liens and Permitted Owned Facility Liens which are
addressed in clauses (xi) and (xii) below) provided that the principal amount
secured thereby is not hereafter increased and no additional assets become
subject to such Lien (other than through after-acquired property clauses in
effect on the date hereof);
(ix) Purchase Money Security Interests or other
liens, provided that the aggregate amount of loans and deferred payments secured
by such Purchase Money Security Interests or other liens shall not exceed
$5,000,000 (excluding for the purpose of this computation any loans or deferred
payments secured by Liens described on Schedule 1.01(P) hereto);
(x) The following, (A) if the validity or
amount thereof is being contested in good faith by appropriate and lawful
proceedings diligently conducted so long as levy and execution thereon have been
stayed and continue to be stayed or (B) if a final judgment is entered and such
judgment is discharged within thirty (30) days of entry, and in either case they
do not materially affect the Collateral or, in the aggregate, materially impair
the ability of any Loan Party to perform its obligations hereunder or under the
other Loan Documents:
(1) Claims or Liens for taxes, assessments
or charges due and payable and subject to interest or penalty,
provided that such Loan Party maintains such reserves or other
appropriate provisions as shall be required by GAAP and pays
all such taxes, assessments or charges forthwith upon the
commencement of proceedings to foreclose any such Lien;
(2) Claims, Liens or encumbrances upon, and
defects of title to, real or personal property other than a
material portion of the Collateral, including any attachment
of personal or real property or other legal process prior to
adjudication of a dispute on the merits; or
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25
(3) Claims or Liens of mechanics,
materialmen, warehousemen, carriers, or other statutory
nonconsensual Liens;
(xi) Permitted Leased Facility Liens existing
as of the Sixteenth Amendment Effective Date which are described on Schedule
6.01(aa) as of such date, and, after the Sixteenth Amendment Effective Date,
subject to the approval of the Required Banks (including without limitation
satisfaction of all applicable conditions set forth on Exhibit 1.01(C)),
additional Permitted Leased Facility Liens;
(xii) Permitted Owned Facility Liens existing
as of the Sixteenth Amendment Effective Date which are described on Schedule
6.01(aa) as of such date, and, after the Sixteenth Amendment Effective Date,
subject to the approval of the Required Banks (including without limitation,
satisfaction of all applicable conditions set forth on Exhibit 1.01(C)),
additional Permitted Owned Facility Liens; and
(xiii) With respect to an Unrestricted
Subsidiary which is an Excluded Entity, Liens securing Indebtedness incurred by
such Unrestricted Subsidiary, provided that the sole assets subject to such Lien
are assets of such Unrestricted Subsidiary or assets of a person other than any
Loan Party or other Unrestricted Subsidiary.
Permitted Owned Facility Liens shall mean, with
respect to a Subsidiary Owner, Liens, meeting all of the criteria specified
below, on real and personal property of such Subsidiary Owner relating to the
Owned Facility of such Subsidiary Owner, granted in favor of the Owned Facility
Lender providing financing with respect to such Owned Facility, and such Liens
secure the Owned Facility Indebtedness provided by such Owned Facility Lender.
Such Liens are permitted under this Agreement and shall be deemed to be
"Permitted Owned Facility Liens" only if the following limitations are
satisfied:
(i) Such Liens must be terminated on or before
the earlier of: (i) the maturity of the Owned Facility Indebtedness which such
Liens secure (without giving effect to any extension of such maturity after the
Sixteenth Amendment Effective Date, unless the extension of such maturity is
otherwise permitted by and is in accordance with this Agreement) or (ii) any
refinancing, replacement or substitution of the Owned Facility Indebtedness
which such Lien secures;
(ii) The Subsidiary Owner shall have granted to
Agent second priority mortgage liens and security interests in each of the
assets which is encumbered by such Liens;
(iii) The amount of Owned Facility Indebtedness
secured by such Liens may not be increased after the earlier of the date such
Owned Facility was acquired by a Loan Party or the person owning such facility
becomes a Subsidiary of the Borrower and any reductions in the amount of such
Owned Facility Indebtedness after such date shall be permanent; and
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(iv) Any termination by an Owned Facility
Lender of such Liens in an asset after the earlier of the date such Owned
Facility was acquired by a Loan Party or the person owning such facility becomes
a Subsidiary of the Borrower shall be permanent and the Subsidiaries of Borrower
may not thereafter grant any new Lien on assets of any Loan Party in favor of
such Owned Facility Lender.
Permitted Redemption Period shall have the meaning as
set forth in Section 8.02(e).
Person shall mean any individual, corporation,
partnership, association, joint-stock company, trust, unincorporated
organization, joint venture, government or political subdivision or agency
thereof, or any other entity.
Pinnacle shall mean Pinnacle Care Corporation, a
corporation organized and existing under the laws of the State of Delaware.
Pinnacle Rehab of Gwinnette shall mean Pinnacle Rehab
of Gwinnette, a general partnership formed and existing under the laws of the
State of Georgia, with Pinnacle Rehabilitation of Georgia, Inc., a Georgia
corporation, ▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇ as its general partners.
Pinnacle's Kansas Joint Venture shall mean Pinnacle's
Kansas Joint Venture, a general partnership formed and existing under the laws
of the State of Kansas, with Pinnacle Rehabilitation of Missouri, Inc., a
Missouri corporation, and Jusker Corporation, a Kansas corporation as its
general partners.
Plan shall mean at any time an employee pension
benefit plan (including a Multiple Employer Plan but not a Multiemployer Plan)
which is covered by Title IV of ERISA or is subject to the minimum funding
standards under Section 412 of the Internal Revenue Code and either (i) is
maintained by any member of the ERISA Group for employees of any member of the
ERISA Group or (ii) has at any time within the preceding five years been
maintained by any entity which was at such time a member of the ERISA Group for
employees of any entity which was at such time a member of the ERISA Group.
Pledge Agreements shall mean collectively the Pledge
Agreements in substantially the form attached hereto as: (i) Exhibit 1.01(P)(1)
executed and delivered by the Borrower to the Agent for the benefit of the
Banks; (ii) Exhibit 1.01(P)(2) executed and delivered by any Subsidiary which
owns any equity ownership interest in another Corporate Subsidiary to the Agent
for the benefit of the Banks; (iii) Exhibit 1.01(P)(3) executed by any
Subsidiary which owns any interest in a Partnership Subsidiary; and (iv) any
other agreement pledging equity interests of a Subsidiary to the Agent for the
benefit of the Banks, in form and substance satisfactory to the Agent, as any
such Pledge Agreement may hereinafter be modified, amended, restated or replaced
from time to time in form and substance satisfactory to the Agent, and Pledge
Agreement shall mean separately any Pledge Agreement.
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Pledged Collateral shall have the meaning assigned to
that term in the respective Pledge Agreements.
PNC Bank shall mean PNC Bank, National Association, a
national banking association, its successors and assigns.
Potential Default shall mean any event or condition
which with notice, passage of time or a determination by the Agent or the
Required Banks, or any combination of the foregoing, would constitute an Event
of Default.
Principal Office shall mean the main banking office
of the Agent, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
Prior Credit Agreement shall mean that certain Credit
Agreement dated as of October 6, 1993 among Borrower, certain of the Banks and
PNC Bank, as Agent.
Prior Security Interest shall mean a valid and
enforceable perfected first priority security interest under the Uniform
Commercial Code in the UCC Collateral which is subject only to Permitted Liens.
Prohibited Transaction shall mean any prohibited
transaction as defined in Section 4975 of the Internal Revenue Code or Section
406 of ERISA for which neither an individual nor a class exemption has been
issued by the United States Department of Labor.
Property shall mean all real property, both owned and
leased, of the Loan Parties.
Purchase Money Security Interest shall mean Liens
upon tangible personal property securing loans to a Loan Party or deferred
payments by a Loan Party for the purchase of such tangible personal property.
Purchase Price shall mean, with respect to any
Permitted Acquisition by the Loan Parties, the sum of (i) cash paid at closing,
(ii) the amount of any deferred payments, which are not contingent on the
financial performance of the business being acquired, (iii) the projected amount
of any deferred payments which are contingent on the financial performance of
the business being acquired following the acquisition, provided that it shall be
assumed for purposes of such projection that the cash flow and other financial
performance of the acquired business in each year after the acquisition date
shall be the same as the financial performance of such business during the
twelve (12) months preceding such date, (iv) the amount of any debt assumed or
guaranteed by any Loan Party, (v) if the Loan Parties are acquiring stock of
another person (whether by purchase, merger or otherwise) the amount of debt of
such person outstanding after the acquisition, plus (vi) the value of any stock,
securities or other consideration given by any of the Loan Parties in connection
therewith. If the consideration to be paid in connection with a Permitted
Acquisition includes deferred payments which are contingent on the financial
performance of the acquired business after the acquisition, the Loan Parties
shall compare the amount of deferred payments which the Loan Parties actually
pay (or which become
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ascertainable if the Loan Parties can ascertain the amount of any deferred
payments before paying them) with the amount which the Loan Parties projected
they would pay pursuant to clause (iii) in the preceding sentence. The Purchase
Price in connection with such acquisition shall be deemed to increase by the
amount of such excess for purposes of determining the aggregate Purchase Price
paid by the Loan Parties in connection with Permitted Acquisitions pursuant to
Sections 8.02(f)(iii)(v) and 8.02(f)(iv)(x).
Purchasing Bank shall mean a Bank which becomes a
party to this Agreement by executing an Assignment and Assumption Agreement.
Ratable Share shall mean the proportion that a Bank's
Revolving Credit Commitment bears to the Revolving Credit Commitments of all of
the Banks, respectively.
Regulated Substances shall mean any substance,
including without limitation any solid, liquid, gaseous, thermal or thoriated
material, refuse, garbage, wastes, chemicals, petroleum products or by-products,
dust, scrap, PCB's, heavy metals, any substances defined as "hazardous
substances," "pollutants," "pollution," "contaminant," "hazardous or toxic
substances," "toxic wastes," "regulated substances," "industrial waste,"
"residual waste," "solid wastes," "municipal wastes," "infectious waste,"
"chemotherapeutic waste," "medical waste" or any related materials or substances
as now or hereafter defined pursuant to any Environmental Laws, ordinances,
rules or directives of any Official Body, the generation, manufacture,
processing, distribution, treatment, storage, disposal, transport, recycling,
reclamation, use, reuse or other management or mismanagement of which is
regulated by the Environmental Laws.
Regulation U shall mean Regulation U, T, G or X as
promulgated by the Board of Governors of the Federal Reserve System, as amended
from time to time.
Reimbursement Obligations shall have the meaning
assigned to such term in Section 2.09(d).
Reportable Event means a reportable event described
in Section 4043 of ERISA and regulations thereunder with respect to a Plan or
Multiemployer Plan.
Required Banks shall mean: (i) if there are no Loans
outstanding, Banks whose Commitments aggregate at least 51% of the Commitments
of all of the Banks, or (ii) if there are Loans outstanding, Banks whose Loans
outstanding aggregate at least 51% of the total principal amount of the Loans
outstanding hereunder.
Restricted Indebtedness shall mean with respect to
the Excluded Entities, Indebtedness secured by any Liens, other than
Indebtedness not to exceed $250,000 in the aggregate for all Excluded Entities
secured by Purchase Money Security Interests.
Restricted Investments shall mean collectively the
following with respect to the Excluded Entities: (i) investments or
contributions by any of the Loan Parties directly or indirectly in or to the
capital of or other payments to (except in connection with transactions for fair
value in the ordinary course of business) an Excluded Entity, (ii) loans by any
of the Loan
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Parties directly or indirectly to an Excluded Entity, (iii) guaranties by any of
the Loan Parties directly or indirectly of the obligations of an Excluded
Entity, or (iv) other obligations, contingent or otherwise, of any of the Loan
Parties to or for the benefit of an Excluded Entity. If the nature of a
Restricted Investment is tangible property then the amount of such Restricted
Investment shall be determined by valuing such property at fair value in
accordance with the past practice of the Loan Parties and such fair values shall
be satisfactory to the Agent, in its sole discretion.
Restricted Subsidiaries shall mean all Subsidiaries
of the Borrower other than the Unrestricted Subsidiaries of the Borrower which
as of the date of determination are Excluded Entities.
Revolving Credit Base Rate Option shall have the
meaning assigned to that term in Section 4.01(a)(i).
Revolving Credit Base Rate Portion shall mean the
portion of the Revolving Credit Loans bearing interest at any time under the
Revolving Credit Base Rate Option.
Revolving Credit Commitment shall mean as to any Bank
at any time, the amount initially set forth opposite its name on Schedule
1.01(R)(2) hereto in the column labeled "Amount of Commitment for Revolving
Credit Loans," and thereafter on Schedule I to the most recent Assignment and
Assumption Agreement, as such amount shall be reduced from time to time pursuant
to Sections 2.01 and 2.10 hereof, and Revolving Credit Commitments shall mean
the aggregate Revolving Credit Commitments of all of the Banks.
Revolving Credit Euro-Rate Option shall have the
meaning assigned to that term in Section 4.01(a)(ii).
Revolving Credit Euro-Rate Portion shall mean the
portion of the Revolving Credit Loans bearing interest at any time under the
Revolving Credit Euro-Rate Option.
Revolving Credit Loan Request shall have the meaning
set forth in Section 2.05.
Revolving Credit Loans shall mean collectively and
Revolving Credit Loan shall mean separately all Revolving Credit Loans or any
Revolving Credit Loan made by the Banks or one of the Banks to the Borrower
pursuant to Section 2.01 hereof.
Revolving Credit Notes shall mean collectively all
the Revolving Credit Notes of the Borrower in the form of Exhibit 1.01(R) hereto
evidencing the Revolving Credit Loans together with all amendments, extensions,
renewals, replacements, refinancings or refundings thereof in whole or in part
and Revolving Credit Note shall mean separately any Revolving Credit Note.
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Revolving Facility Usage shall mean at any time the
sum of the Revolving Credit Loans outstanding and the Letters of Credit
Outstanding.
Sixteenth Amendment Effective Date shall mean January
2, 1998.
Solvent shall mean, with respect to any person on a
particular date, that on such date (i) the fair value of the property of such
person is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such person, (ii) the present fair
saleable value of the assets of such person is not less than the amount that
will be required to pay the probable liability of such person on its debts as
they become absolute and matured, (iii) such person is able to realize upon its
assets and pay its debts and other liabilities, contingent obligations and other
commitments as they mature in the normal course of business, (iv) such person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such person's ability to pay as such debts and liabilities
mature, and (v) such person is not engaged in business or a transaction, and is
not about to engage in business or a transaction, for which such person's
property would constitute unreasonably small capital after giving due
consideration to the prevailing practice in the industry in which such person is
engaged. In computing the amount of contingent liabilities at any time, it is
intended that such liabilities will be computed at the amount which, in light of
all the facts and circumstances existing at such time, represents the amount
that can reasonably be expected to become an actual or matured liability.
Subordinated Indebtedness Incurrence Date shall mean
March 28, 1996, the date of issuance by the Borrower of the Subordinated Notes
pursuant to and in accordance with the Indenture.
Subordinated Notes shall mean the $150 million in
original principal amount of Subordinated Notes due 2006 issued by the Borrower
pursuant to the Indenture. It is acknowledged that prior to the Exchange Offer,
the Subordinated Notes shall consist of the Series A Securities, and following
the Exchange Offer, the Subordinated Notes shall consist of the Series B
Securities and any Series A Securities which are not exchanged in the Exchange
Offer, as such terms are defined in the Indenture.
Subordination Agreement (Intercompany) shall mean
that certain Subordination Agreement (Intercompany) in the form of Exhibit
1.01(S) hereto executed and delivered by each Loan Party to the Agent for the
benefit of the Banks.
Subsidiary of any person at any time shall mean (i)
any corporation, limited liability company or trust of which more than 50% (by
number of shares or number of votes) of the outstanding capital stock, member
interests or shares of beneficial interest normally entitled to vote for the
election of one or more directors or trustees (regardless of any contingency
which does or may suspend or dilute the voting rights) is at such time owned
directly or indirectly by such Person or one or more of such Person's
Subsidiaries, or any partnership of which such Person is a general partner or of
which more than 50% of the general or voting partnership interests is at the
time directly or indirectly owned by such Person or one or more of such Person's
Subsidiaries, and (ii) any corporation, trust, limited liability company,
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partnership or other entity which is controlled or capable of being controlled
by such Person or one or more of such Person's Subsidiaries.
Subsidiary Lessee shall mean each Subsidiary of
Borrower which is the lessee of a Leased Facility.
Subsidiary Owner shall mean, with respect to an Owned
Facility, the Subsidiary of Borrower which is the owner thereof.
Total Indebtedness shall mean as of any date of
determination, without duplication, the total Indebtedness of the Borrower and
its Subsidiaries.
Transferor Bank shall mean the selling Bank pursuant
to an Assignment and Assumption Agreement.
Tri-State shall mean Tri-State Health Care, Inc., a
West Virginia corporation, which is a Subsidiary of Pinnacle and the sole
general partner of Seventeenth Street Partnership.
Trustee Agreement shall mean, as of any date of
determination, collectively (i) that certain Paying Agency Agreement executed by
Mariner Nashville, PNC Bank and certain of the Lessors listed on Schedule
6.01(aa), in the form of Exhibit 1.01(T) providing for the payment by Mariner
Nashville to PNC Bank, as trustee for Mariner Nashville and such Lessors, of
monies due to such Lessors under the leases between such Lessors and Mariner
Nashville, and the subsequent payment of such monies by PNC Bank to the Lessors;
and (ii) in accordance with the requirements of this Agreement, each other
similar agreement, in form and substance satisfactory to the Agent relating to
certain Subsidiaries of the Borrower and certain Lessors.
UCC Collateral shall mean the Pledged Collateral and
that portion of the Collateral under the Mortgages and the Leasehold Mortgages
which consists of personal property in which a security interest may be granted
under the Uniform Commercial Code.
Uniform Commercial Code shall have the meaning
assigned to that term in Section 6.01(p).
Unrestricted Subsidiary of any person at any time
shall mean any corporation or limited liability company of which more than 50%
but less than 80% (by number of shares or number of votes) of the outstanding
capital stock or member interests normally entitled to vote for the election of
one or more directors (regardless of any contingency which does or may suspend
or dilute the voting rights) is at such time owned directly or indirectly by
such Person or one or more of such Person's Subsidiaries, or any partnership of
which such Person is a general partner or of which more than 50% but less than
80% of the general or voting partnership interests is at the time directly or
indirectly owned by such Person or one or more of such Person's Subsidiaries.
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1.02 Construction. Unless the context of this Agreement
otherwise clearly requires, references to the plural include the singular, the
singular the plural and the part the whole, "or" has the inclusive meaning
represented by the phrase "and/or," and "including" has the meaning represented
by the phrase "including without limitation." References in this Agreement to
"determination" of or by the Agent or the Banks shall be deemed to include good
faith calculations by the Agent or the Banks (in the case of quantitative
determinations) and good faith beliefs by the Agent or the Banks (in the case of
qualitative determinations). Whenever the Agent or the Banks are granted the
right herein to act in its or their sole discretion or to grant or withhold
consent such right shall be exercised in good faith. The words "hereof,"
"herein," "hereunder" and similar terms in this Agreement refer to this
Agreement as a whole and not to any particular provision of this Agreement. The
section and other headings contained in this Agreement and the Table of Contents
preceding this Agreement are for reference purposes only and shall not control
or affect the construction of this Agreement or the interpretation thereof in
any respect. Section, subsection, schedule and exhibit references are to this
Agreement unless otherwise specified.
1.03 Accounting Principles. Except as otherwise provided in
this Agreement, all computations and determinations as to accounting or
financial matters and all financial statements to be delivered pursuant to this
Agreement shall be made and prepared in accordance with GAAP (including
principles of consolidation where appropriate), and all accounting or financial
terms shall have the meanings ascribed to such terms by GAAP. In the event of:
(i) any dissolution or liquidation of any Subsidiary pursuant to Section 8.02(f)
of this Agreement, (ii) any consolidation or merger of any Subsidiary with or
into any person (other than the Borrower or another Subsidiary) pursuant to
Section 8.02(f) of this Agreement, or (iii) the sale, transfer, lease or
disposition of assets of the Borrower or any Subsidiary permitted pursuant to
Section 8.02(g)(v) of this Agreement, then, in the case of any of the foregoing
clauses (i), (ii) or (iii), any financial covenant to be calculated hereunder
(including, without limitation, those set forth in Sections 2.01(c), 4.01, and
8.02(q) through 8.02(u), inclusive) shall be calculated for the period during
which such sale, transfer, lease or other disposition occurs, excluding all
financial items (for example and without limitation, all cash flow, revenues,
expenses, and income) attributable to the assets sold, transferred, leased or
otherwise disposed of.
ARTICLE II
REVOLVING CREDIT FACILITY
2.01 Revolving Credit Commitments; Limitation on
Borrowings.
(a) Revolving Credit Commitments. Subject to the
terms and conditions hereof and relying upon the representations and warranties
herein set forth, each Bank severally agrees to make revolving credit loans (the
"Revolving Credit Loans") to the Borrower at any time and from time to time on
or after the date hereof to, but not including, the Expiration Date in an
aggregate principal amount not to exceed at any one time such Bank's Revolving
Credit Commitment minus such Bank's Ratable Share of the Letters of Credit
Outstanding. Within such limits of time and amount and subject to the other
provisions of this Agreement, the Borrower may borrow, repay and reborrow
pursuant to this Section 2.01. In no event shall the
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aggregate of outstanding Revolving Credit Loans and Letters of Credit
Outstanding as of any date exceed the Revolving Credit Commitments as of such
date, and the entire outstanding principal amount of the Revolving Credit Loans
shall be due and payable on the Expiration Date.
(b) Extension by Banks of the Expiration Date. Upon
or promptly after delivery by the Borrower of the annual financial statements to
be provided under Section 8.03(c) for the fiscal year ending December 31, 1998
or any subsequent fiscal year, the Borrower may request a one-year extension of
the Expiration Date by written notice to the Banks, and the Banks agree to
respond to the Borrower's request for an extension by the later of sixty (60)
days following receipt of the request or May 31 of such year; provided, however,
that all the Banks must consent to any extension of the Expiration Date and the
failure of the Banks to respond within such time period shall not in any manner
constitute an extension of the Expiration Date.
(c) Limitation on Borrowings. Notwithstanding the
provisions of Sections 2.01(a) and 2.01(b) of this Agreement, the outstanding
principal amount of Revolving Credit Loans to the Borrower shall not exceed at
any time an amount such that after giving effect to such borrowings, the ratio
of (i) Total Indebtedness to (ii) Consolidated Cash Flow from Operations
exceeds: (A) 5.25 to 1.0 through and including September 30, 1998; (B) 5.00 to
1.0 from October 1, 1998 through and including September 30, 1999; (C) 4.75 to
1.0 from October 1, 1999 through and including September 30, 2000; and (D) 4.5
to 1.0 from October 1, 2000 and thereafter.
For purposes of such ratio, the amount determined
under clause (i) shall be as of the date of determination and the amount
determined under clause (ii) shall be for the twelve-month period ending on the
last day of the month which precedes such date of determination.
Notwithstanding the provisions of this subsection
(c), at no time shall the outstanding principal amount of proceeds of Revolving
Credit Loans made to the Borrower which are used by the Borrower or any
Subsidiary of the Borrower to, directly or indirectly, make an investment in or
loan to Ansonia, exceed Two Million Dollars ($2,000,000). Notwithstanding the
provisions of this subsection (c), at no time shall proceeds of Revolving Credit
Loans be used by the Borrower or any Subsidiary of the Borrower to, directly or
indirectly, make an investment in or loan to Pinnacle Rehab of Gwinnette or
Pinancle's Kansas Joint Venture.
2.02 Nature of Banks' Obligations With Respect to Revolving
Credit Loans. Each Bank shall be obligated to participate in each request for
Revolving Credit Loans pursuant to Section 2.05 hereof in accordance with its
Ratable Share. The aggregate of each Bank's Revolving Credit Loans outstanding
hereunder to the Borrower at any time shall never exceed its Revolving Credit
Commitment minus its Ratable Share of Letters of Credit Outstanding. The
obligations of each Bank hereunder are several. The failure of any Bank to
perform its obligations hereunder shall not affect the obligations of the
Borrower to any other party nor shall any other party be liable for the failure
of such Bank to perform its obligations hereunder. The
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Banks shall have no obligation to make Revolving Credit Loans hereunder on or
after the Expiration Date.
2.03 Commitment Fees. Accruing from January 1, 1998 until the
Expiration Date, the Borrower agrees to pay to the Agent for the account of each
Bank, as consideration for such Bank's Revolving Credit Commitment hereunder, a
commitment fee (the "Commitment Fee") equal to the applicable percentage set
forth below based on the ratio of Total Indebtedness to Consolidated Cash Flow
from Operations.
Ratio of Total Indebtedness
to Consolidated Commitment Fee
Cash Flow From Operations (per annum)
------------------------- -----------
Greater than 5.0 to 1.0 .350%
Greater than 4.5 to 1.0 but .300%
less than or equal to 5.0 to 1.0
Greater than 4.0 to 1.0 but .275%
less than or equal to 4.5 to 1.0
Greater than 3.5 to 1.0 but .250%
less than or equal to 4.0 to 1.0
Greater than 3.0 to 1.0 .225%
but less than or equal to 3.5 to 1.0
Greater than 2.5 to 1.0 .200%
but less than or equal to 3.0 to 1.0
Less than or equal to 2.5 to 1.0 .150%
Such ratio shall be computed on the date of each Acquisition Requiring
Certification as more fully set forth in the third sentence of Section
8.01(m)(i) or the second sentence of Section 8.01(m)(ii), as applicable, and any
adjustment to the Commitment Fee attributable to such computation shall be
effective on the date of such Acquisition Requiring Certification. If Borrower
does not make any Acquisition Requiring Certification during any fiscal quarter,
(1) such ratio shall also be computed as of the end of such fiscal quarter, with
Consolidated Cash Flow from Operations computed for the four fiscal quarters
then ended and Total Indebtedness computed as of the end of such fiscal quarter,
and (2) any increase in the Commitment Fee attributable to a change in such
ratio shall be effective as of the Delivery Date for the Borrower's consolidated
financial statements for such quarter and (3) any decrease of the Commitment
Fees attributable to a change in such ratio shall be effective as of the later
of the Delivery Date for such financial statements and the date on which such
financial statements are actually delivered to the Agent and the Banks.
Commitment Fees shall be computed on the basis of a year of 365 or 366 days, as
the case may be, and actual days elapsed on the average daily unborrowed amount
of such Bank's Revolving Credit Commitment (less its Ratable Share of the
Letters of
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Credit Outstanding) as the same may be constituted from time to time. All
Commitment Fees shall be payable in arrears on the first Business Day of each
April, July, October and January after the date hereof commencing on April 1,
1998 and on the Expiration Date or upon acceleration of maturity of the Notes.
2.04 [Intentionally Omitted].
2.05 Revolving Credit Loan Requests. Except as otherwise
provided herein, the Borrower may from time to time prior to the Expiration Date
request the Banks to make Revolving Credit Loans, or renew or convert the
Interest Rate Option applicable to existing Revolving Credit Loans, by the
delivery to the Agent, not later than 10:00 A.M. Pittsburgh time (i) three (3)
Business Days prior to the proposed Borrowing Date with respect to the making of
Revolving Credit Loans to which the Revolving Euro-Rate Option applies or the
conversion to or the renewal of the Euro-Rate Option for any Revolving Credit
Loans; and (ii) on the Business Day which is the proposed Borrowing Date with
respect to the making of a Revolving Credit Loan to which the Revolving Credit
Base Rate Option applies or the last day of the preceding Euro-Rate Interest
Period with respect to the conversion to the Revolving Credit Base Rate Option
for any Revolving Credit Loan, of a duly completed request therefor
substantially in the form of Exhibit 2.05 hereto or a request by telephone
immediately confirmed in writing by letter, facsimile or telex in such form
(each, a "Revolving Credit Loan Request"), it being understood that the Agent
may rely in good faith on the authority of any person making such a telephonic
request and purporting to be an Authorized Officer. Each Revolving Credit Loan
Request shall be irrevocable and shall (i) specify the proposed Borrowing Date;
(ii) specify the aggregate amount of the proposed Revolving Credit Loans
comprising the Borrowing Tranche, which shall be in integral multiples of
$500,000 and not less than $5,000,000 for Revolving Credit Loans to which the
Revolving Credit Euro-Rate Option applies and not less than the lesser of
$500,000 or the maximum amount available for Revolving Credit Loans to which the
Revolving Credit Base Rate Option applies; (iii) specify whether the Revolving
Euro-Rate Option or Base Rate Option shall apply to the proposed Revolving
Credit Loans comprising the Borrowing Tranche; (iv) specify in the case of
Revolving Credit Loans to which the Revolving Euro-Rate Option applies, an
appropriate Euro-Rate Interest Period for the proposed Revolving Credit Loans
comprising the Borrowing Tranche; (v) specify the use by the Borrower of the
Loan proceeds; (vi) certify that no Event of Default or Potential Default has
occurred and is continuing after giving effect to the proposed Revolving Credit
Loan and without limiting the generality of this clause (vi), certify compliance
with Section 2.01(c) of this Agreement; and (vii) in the event that the proceeds
of the proposed Revolving Credit Loan will be used to acquire a new health care
facility or other business, permitted to be acquired pursuant to this Agreement,
certify, in detail satisfactory to the Agent, a calculation of the ratio
specified in Section 2.01(c).
2.06 Making Revolving Credit Loans. The Agent shall, promptly
after receipt by it of a Loan Request pursuant to Section 2.05, notify the Banks
of its receipt of such Loan Request specifying: (i) the proposed Borrowing Date
and the time and method of disbursement of such Revolving Credit Loan; (ii) the
amount and type of such Revolving Credit Loan and the applicable Euro-Rate
Interest Period (if any); and (iii) the apportionment among the Banks of the
Revolving Credit Loans as determined by the Agent in accordance with Section
2.02 hereof.
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Each Bank shall remit the principal amount of each Revolving Credit Loan to the
Agent such that the Agent is able to, and the Agent shall, to the extent the
Banks have made funds available to it for such purpose, fund such Revolving
Credit Loan to the Borrower in U.S. Dollars and immediately available funds at
the Principal Office prior to 2:00 P.M. Pittsburgh time on the Borrowing Date,
provided that if any Bank fails to remit such funds to the Agent in a timely
manner the Agent may elect in its sole discretion to fund with its own funds the
Revolving Credit Loan of such Bank on the Borrowing Date.
2.07 Revolving Credit Note. The obligation of the Borrower to
repay the aggregate unpaid principal amount of the Revolving Credit Loans made
to it by each Bank, together with interest thereon, shall be evidenced by a
promissory note of the Borrower dated the Closing Date in substantially the form
attached hereto as Exhibit 1.01(R) payable to the order of each Bank in a face
amount equal to the Revolving Credit Commitment of such Bank.
2.08 Use of Proceeds. The proceeds of the Revolving Credit
Loans shall be used for (a) the acquisition and development of health care
related businesses and facilities and (b) general corporate purposes, which,
among other things, may include working capital or intercompany loans to a
Subsidiary of the Borrower provided the Borrower and such Subsidiary comply with
Section 8.01(1) hereof.
2.09 Letter of Credit Subfacility.
(a) Borrower may request the issuance of, on the terms
and conditions hereinafter set forth, standby letters of credit (each a "Letter
of Credit" and collectively, "Letters of Credit") by delivering to the Agent a
completed application and agreement for letters of credit in such form as the
Agent may specify from time to time by no later than 10:00 a.m., Pittsburgh
time, at least three (3) Business Days, or such shorter period as may be agreed
to by the Agent, in advance of the proposed date of issuance. Subject to the
terms and conditions hereof and in reliance on the agreements of the other Banks
set forth in this Section 2.09, the Agent will issue a Letter of Credit provided
that each Letter of Credit shall (A) have a maximum maturity of twelve (12)
months from the date of issuance, and (B) in no event expire later than ten (10)
Business Days prior to the Expiration Date and providing that in no event shall
(i) the Letters of Credit Outstanding exceed, at any one time, $30,000,000 or
(ii) the Revolving Facility Usage exceed, at any one time, the Revolving Credit
Commitments. Schedule 2.09(a) hereto lists letters of credit which PNC Bank
issued for the accounts of certain of the Loan Parties prior to the date hereof
pursuant to the Prior Credit Agreement and which shall remain outstanding after
the Closing Date (the "Existing Letters of Credit"). Each Existing Letter of
Credit shall be a Letter of Credit hereunder on and after the Closing Date and
the provisions of this Section 2.09 shall apply to such Existing Letter of
Credit. (Schedule 2.09(a) also lists all amounts of Loans, interest and expenses
outstanding under the Prior Credit Agreement.)
(b) The Borrower shall pay to the Agent for the ratable
account of the Banks a fee (the "Letter of Credit Fee") equal to the applicable
interest rate per annum then in effect for Revolving Credit Loans which are
subject to the Euro-Rate Option less the Euro-Rate, which fee shall be computed
on the daily average Letters of Credit Outstanding (computed on the
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basis of a year of 360 days and actual days elapsed) and shall be payable
quarterly in arrears commencing with the first Business Day of each April, July,
October and January following issuance of the first Letter of Credit and on the
expiration date for the last Letter of Credit then outstanding, with such fees
accruing through and including the expiration date for each Letter of Credit.
The Borrower shall pay to the Agent for its own account a fronting fee equal to
1/8% per annum, which fee shall be computed on the daily average Letters of
Credit Outstanding (computed on the basis of a year of 360 days and actual days
elapsed) and shall be payable quarterly in arrears commencing with the first
business day of each October, January, April and July following issuance of the
first Letter of Credit and on the expiration date for the last Letter of Credit
then outstanding. The Borrower shall also pay to the Agent the Agent's then in
effect customary fees and administrative expenses payable with respect to
Letters of Credit as the Agent may generally charge or incur from time to time
in connection with the issuance, maintenance, modification (if any), assignment
or transfer (if any), negotiation and administration of Letters of Credit.
(c) Immediately upon the issuance of each Letter of
Credit, each Bank shall be deemed to, and hereby irrevocably and unconditionally
agrees to, purchase from the Agent a participation in such Letter of Credit and
each drawing thereunder in an amount equal to such Bank's Ratable Share of the
maximum amount available to be drawn under such Letter of Credit and the amount
of such drawing, respectively.
(d) In the event of any request for a drawing under a
Letter of Credit by the beneficiary or transferee thereof, the Agent will
promptly notify the Borrower. Provided that it shall have received such notice,
the Borrower shall reimburse (such obligation to reimburse the Agent shall
sometimes be referred to as a "Reimbursement Obligation") the Agent prior to
11:00 a.m., Pittsburgh time on each date that an amount is paid by the Agent
under any Letter of Credit (each such date, a "Drawing Date") in an amount equal
to the amount so paid by the Agent. In the event the Borrower fails to reimburse
the Agent for the full amount of any drawing under any Letter of Credit by 11:00
a.m., Pittsburgh time, on the Drawing Date, the Agent will promptly notify each
Bank thereof, and the Borrower shall be deemed to have requested that Revolving
Credit Loans be made by the Banks under the Base Rate Option to be disbursed on
the Drawing Date under such Letter of Credit, subject to the amount of the
unutilized portion of the Revolving Credit Commitment and subject to the
conditions set forth in Section 7.1 [Each Additional Loan] other than any notice
requirements. Any notice given by the Agent pursuant to this Section 2.09(d) may
be oral if immediately confirmed in writing; provided that the lack of such an
immediate confirmation shall not affect the conclusiveness or binding effect of
such notice.
(e) Each Bank shall upon any notice pursuant to Section
2.09(d) make available to the Agent an amount in immediately available funds
equal to its Ratable Share of the amount of the drawing, whereupon the
participating Banks shall (subject to Section 2.09(f)) each be deemed to have
made a Revolving Credit Loan under the Base Rate Option to the Borrower in that
amount. If any Bank so notified fails to make available to the Agent for the
account of the Agent the amount of such Bank's Ratable Share of such amount by
no later than 2:00 p.m., Pittsburgh time on the Drawing Date, then interest
shall accrue on such Bank's obligation to
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make such payment, from the Drawing Date to the date on which such Bank makes
such payment at a rate per annum equal to the Federal Funds Effective Rate. The
Agent will promptly give notice of the occurrence of the Drawing Date, but
failure of the Agent to give any such notice on the Drawing Date or in
sufficient time to enable any Bank to effect such payment on such date shall not
relieve such Bank from its obligation under this Section 2.09(e).
(f) With respect to any unreimbursed drawing that is not
converted into Revolving Credit Loans under the Base Rate Option to the Borrower
in whole or in part as contemplated by Section 2.09(d), because of the
Borrower's failure to satisfy the conditions set forth in Section 7.1 [Each
Additional Loan] other than any notice requirements or for any other reason, the
Borrower shall be deemed to have incurred from the Agent a Letter of Credit
Borrowing in the amount of such drawing. Such Letter of Credit Borrowing shall
be due and payable on demand (together with interest) and shall bear interest at
the rate per annum applicable to the Revolving Credit Loans under the Base Rate
Option. Each Bank's payment to the Agent pursuant to Section 2.09(e) shall be
deemed to be a payment in respect of its participation in such Letter of Credit
Borrowing and shall constitute a Participation Advance from such Bank in
satisfaction of its participation obligation under this Section 2.09.
(g)(i) Upon (and only upon) receipt by the Agent for its
account of immediately available funds from the Borrower (i) in reimbursement of
any payment made by the Agent under the Letter of Credit with respect to which
any Bank has made a Participation Advance to the Agent, or (ii) in payment of
interest on such a payment made by the Agent under such a Letter of Credit, the
Agent will pay to each Bank, in the same funds as those received by the Agent,
the amount of such Bank's Ratable Share of such funds, except the Agent shall
retain the amount of the Ratable Share of such funds of any Bank that did not
make a Participation Advance in respect of such payment by Agent.
(g)(ii) If the Agent is required at any time to return to
any Loan Party, or to a trustee, receiver, liquidator, custodian, or any
official in any Insolvency Proceeding, any portion of the payments made by any
Loan Party to the Agent pursuant to Section 2.09(g)(i) in reimbursement of a
payment made under the Letter of Credit or interest or fee thereon, each Bank
shall, on demand of the Agent, forthwith return to the Agent the amount of its
Ratable Share of any amounts so returned by the Agent plus interest thereon from
the date such demand is made to the date such amounts are returned by such Bank
to the Agent, at a rate per annum equal to the Federal Funds Effective Rate in
effect from time to time.
(h) Each Loan Party agrees to be bound by the terms of
the Agent's application and agreement for letters of credit and the Agent's
written regulations and customary practices relating to letters of credit,
though such interpretation may be different from the such Loan Party's own. In
the event of a conflict between such application or agreement and this
Agreement, this Agreement shall govern. It is understood and agreed that, except
in the case of gross negligence or willful misconduct, the Agent shall not be
liable for any error, negligence and/or mistakes, whether of omission or
commission, in following any Loan Party's instructions or those contained in the
Letters of Credit or any modifications, amendments or supplements thereto.
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(i) In determining whether to honor any request for
drawing under any Letter of Credit by the beneficiary thereof, the Agent shall
be responsible only to determine that the documents and certificates required to
be delivered under such Letter of Credit have been delivered and that they
comply on their face with the requirements of such Letter of Credit.
(j) Each Bank's obligation in accordance with this
Agreement to make the Revolving Credit Loans or Participation Advances, as
contemplated by Section 2.09, as a result of a drawing under a Letter of Credit,
and the Obligations of the Borrower to reimburse the Agent upon a draw under a
Letter of Credit, shall be absolute, unconditional and irrevocable, and shall be
performed strictly in accordance with the terms of this Section 2.09 under all
circumstances, including the following circumstances:
(i) any set-off, counterclaim, recoupment, defense or
other right which such Bank may have against the Agent, the Borrower or any
other Person for any reason whatsoever;
(ii) the failure of any Loan Party or any other
Person to comply, in connection with a Letter of Credit Borrowing, with the
conditions set forth in Section 2.01 [Revolving Credit Commitments], 2.05
[Revolving Credit Loan Requests], 2.06 [Making Revolving Credit Loans] or 7.1
[Each Additional Loan] or as otherwise set forth in this Agreement for the
making of a Revolving Credit Loan, it being acknowledged that such conditions
are not required for the making of a Letter of Credit Borrowing and the
obligation of the Banks to make Participation Advances under Section 2.09;
(iii) any lack of validity or enforceability of any
Letter of Credit;
(iv) the existence of any claim, set-off, defense or
other right which any Loan Party or any Bank may have at any time against a
beneficiary or any transferee of any Letter of Credit (or any Persons for whom
any such transferee may be acting), the Agent or any Bank or any other Person
or, whether in connection with this Agreement, the transactions contemplated
herein or any unrelated transaction (including any underlying transaction
between any Loan Party or Subsidiaries of a Loan Party and the beneficiary for
which any Letter of Credit was procured);
(v) any draft, demand, certificate or other document
presented under any 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 even if the Agent has been notified thereof;
(vi) payment by the Agent under any Letter of Credit
against presentation of a demand, draft or certificate or other document which
does not comply with the terms of such Letter of Credit;
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(vii) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or prospects of any Loan
Party or Subsidiaries of a Loan Party;
(viii) any breach of this Agreement or any other Loan
Document by any party thereto;
(ix) the occurrence or continuance of an Insolvency
Proceeding with respect to any Loan Party;
(x) the fact that an Event of Default or a Potential
Default shall have occurred and be continuing;
(xi) the fact that the Expiration Date shall have
passed or this Agreement or the Commitments hereunder shall have been
terminated; and
(xii) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing.
(k) In addition to amounts payable as provided in Section
10.05 [Reimbursement of Agent by Borrower, Etc.], the Borrower hereby agrees to
protect, indemnify, pay and save harmless the Agent from and against any and all
claims, demands, liabilities, damages, losses, costs, charges and expenses
(including reasonable fees, expenses and disbursements of counsel and allocated
costs of internal counsel) which the Agent may incur or be subject to as a
consequence, direct or indirect, of (i) the issuance of any Letter of Credit,
other than as a result of (A) the gross negligence or willful misconduct of the
Agent as determined by a final judgment of a court of competent jurisdiction or
(B) subject to the following clause (ii), the wrongful dishonor by the Agent of
a proper demand for payment made under any Letter of Credit, or (ii) the failure
of the Agent to honor a drawing under any such Letter of Credit as a result of
any act or omission, whether rightful or wrongful, of any present or future de
jure or de facto government or governmental authority (all such acts or
omissions herein called "Governmental Acts").
(l) As between any Loan Party and the Agent, such Loan Party
assumes all risks of the acts and omissions of, or misuse of the Letters of
Credit by, the respective beneficiaries of such Letters of Credit. In
furtherance and not in limitation of the foregoing, the Agent shall not be
responsible for: (i) the form, validity, sufficiency, accuracy, genuineness or
legal effect of any document submitted by any party in connection with the
application for an issuance of any such Letter of Credit, even if it should in
fact prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged (even if the Agent shall have been notified thereof); (ii)
the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (iii) the failure of the beneficiary
of any such Letter of Credit, or any other party to which such Letter of Credit
may be transferred, to comply fully with any conditions required in order to
draw upon such Letter of Credit or any other claim of any Loan Party against any
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beneficiary of such Letter of Credit, or any such transferee, or any dispute
between or among any Loan Party and any beneficiary of any Letter of Credit or
any such transferee; (iv) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex or
otherwise, whether or not they be in cipher; (v) errors in interpretation of
technical terms; (vi) any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any such Letter of Credit or
of the proceeds thereof; (vii) the misapplication by the beneficiary of any such
Letter of Credit of the proceeds of any drawing under such Letter of Credit; or
(viii) any consequences arising from causes beyond the control of the Agent,
including any Governmental Acts, and none of the above shall affect or impair,
or prevent the vesting of, any of the Agent's rights or powers hereunder.
Nothing in the preceding sentence shall relieve the Agent from liability for the
Agent's gross negligence or willful misconduct in connection with actions or
omissions described in such clauses(i) through (viii) of such sentence.
In furtherance and extension and not in limitation of
the specific provisions set forth above, any action taken or omitted by the
Agent under or in connection with the Letters of Credit issued by it or any
documents and certificates delivered thereunder, if taken or omitted in good
faith, shall not put the Agent under any resulting liability to the Borrower or
any Bank.
2.10 Voluntary Reduction of Revolving Credit Commitments. The
Borrower shall have the right at any time and from time to time upon not less
than three (3) Business Days' prior written notice (which notice shall be
irrevocable) to the Agent to terminate or to permanently and ratably reduce, in
an aggregate amount of not less than $1,000,000 or an integral multiple thereof,
the respective Revolving Credit Commitments without penalty or premium, except
as hereinafter set forth. The Agent shall promptly advise each Bank of the date
and amount of each such reduction. After each such reduction, the Commitment Fee
shall be calculated upon the unused portion of the Revolving Credit Commitments
as so reduced and the amount of reduction may not be reinstated.
ARTICLE III
COLLATERAL
3.01 Collateral. The Borrower shall execute and deliver the
Pledge Agreement in the form of Exhibit 1.01(P)(1) pledging all of the stock,
partnership interests or other ownership interests owned by the Borrower in each
existing or hereafter formed or acquired Subsidiary and in each existing or
hereafter formed or acquired Excluded Entity. Each of the Borrower's Restricted
Subsidiaries (whether now existing or hereafter formed or acquired, including
without limitation any Excluded Entity which becomes a Restricted Subsidiary,
upon so becoming a Restricted Subsidiary) shall execute and deliver a Guaranty
Agreement in the form of Exhibit 1.01(G). Each of the Borrower's Subsidiaries
(whether now owned or hereafter acquired) owning stock, partnership interests or
other ownership interests of each existing or hereafter formed or acquired
Subsidiary or each existing or hereafter formed or acquired
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Excluded Entity shall execute a Pledge Agreement in the form of Exhibit
1.01(P)(2) or (3), as the case may be or other Pledge Agreement in form and
substance satisfactory to the Agent.
ARTICLE IV
INTEREST RATES
4.01 Interest Rate Options. The Borrower shall pay interest in
respect of the outstanding unpaid principal amount of the Loans as selected by
it from the Base Rate Option or Euro-Rate Option set forth below applicable to
the Loans (it being understood that, subject to the provisions of this
Agreement, the Borrower may select different Interest Rate Options and different
Euro-Rate Interest Periods to apply simultaneously to the Loans comprising
different Borrowing Tranches and may convert to or renew one or more Interest
Rate Options with respect to all or any portion of the Loans comprising any
Borrowing Tranche; provided that there shall not be at any one time outstanding
more than fourteen (14) Borrowing Tranches in the aggregate among all the Loans
accruing interest at a Euro-Rate Option). The Agent's determination of a rate of
interest and any change therein shall in the absence of manifest error be
conclusive and binding upon all parties hereto. If at any time the designated
rate applicable to any Loan made by any Bank exceeds such Bank's highest lawful
rate, the rate of interest on such Bank's Loan shall be limited to such Bank's
highest lawful rate.
(a) Revolving Credit Interest Rate Options. The Borrower
shall have the right to select from the following Interest Rate Options
applicable to the Loans for the period commencing on January 1, 1998 and
thereafter:
(i) Revolving Credit Base Rate Option: A fluctuating
rate per annum (computed on the basis of a year of 365 or 366 days, as the case
may be, and actual days elapsed) equal to the Base Rate plus the applicable
percentage set forth below, based upon the ratio of (a) Total Indebtedness, to
(b) Consolidated Cash Flow from Operations, such interest rate to change
automatically from time to time effective as of the effective date of each
change in the Base Rate.
Ratio of Total
Indebtedness to
Consolidated
Cash Flow from Applicable
Operations Interest Rate
---------- -------------
Greater than 5.0 to 1.0 Base Rate plus 1/4%
Less than or equal to 5.0 to 1.0 Base Rate
(ii) Revolving Credit Euro-Rate Option: A fluctuating
rate per annum (computed on the basis of a year of 360 days and actual days
elapsed) equal to the Euro-Rate plus the applicable percentage (such percentage
is sometimes hereafter referred to as the
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"Applicable Percentage Over Euro-Rate") set forth below, based upon the ratio of
(a) Total Indebtedness, to (b) Consolidated Cash Flow from Operations.
(iii) The ratios pursuant to clauses (i) and (ii)
above shall be computed on the date of each Acquisition Requiring Certification
as more fully set forth in the third sentence of Section 8.01(m)(i) or the
second sentence of Section 8.01(m)(ii), as applicable, and any interest rate
adjustment attributable to such computation shall be effective on the date of
such Acquisition Requiring Certification. If Borrower does not make any
Acquisition Requiring Certification during any fiscal quarter, such ratio shall
also be computed as of the end of such quarter with Consolidated Cash Flow from
Operations computed for the four fiscal quarters then ended and Total
Indebtedness computed as of the end of such fiscal quarter, but any interest
adjustments attributable to a change in such ratio shall be effective (a) with
respect to an increase of the applicable interest rate, as of the Delivery Date
for the Borrower's consolidated financial statements for such quarter and (b)
with respect to a decrease of the applicable interest rate, as of the later of
the Delivery Date for such financial statements and the date on which such
financial statements are actually delivered to the Agent and the Banks.
Ratio of Total Indebtedness
to Consolidated
Cash Flow from Operations Applicable Interest Rate
------------------------- ------------------------
Greater than 5.0 to 1.0 Euro-Rate plus 1.75%
Greater than 4.5 to 1.0 but less than or
equal to 5.0 to 1.0 Euro-Rate plus 1.50%
Greater than 4.0 to 1.0 but less than or
equal to 4.5 to 1.0 Euro-Rate plus 1.25%
Greater than 3.5 to 1.0 but less than or
equal to 4.0 to 1.0 Euro-Rate plus 1%
Greater than 3.0 to 1.0 but less than or
equal to 3.5 to 1.0 Euro-Rate plus .875%
Greater than 2.5 to 1.0 but less than or
equal to 3.0 to 1.0 Euro-Rate plus .625%
Less than or equal to 2.5 to 1.0 Euro-Rate plus .500%
(b) Rate Quotations. The Borrower may call the Agent
on or before the date on which a Loan Request is to be delivered to receive an
indication of the rates then in effect, but it is acknowledged that such
indication shall not be binding on the Agent or the Banks nor affect the rate of
interest which thereafter is actually in effect when the election is made.
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4.02 Interest Periods. At any time when the Borrower shall
select, convert to or renew a Euro-Rate Option, the Borrower shall notify the
Agent thereof at least three (3) Business Days prior to the effective date of
such Euro-Rate Option by delivering a Loan Request. The notice shall specify an
interest period during which such Interest Rate Option shall apply, such periods
to be one, two, three or six months in the event of a Euro-Rate Option
("Euro-Rate Interest Period"), provided, that:
(a) any Euro-Rate Interest Period which would otherwise
end on a date which is not a Business Day shall be extended to the next
succeeding Business Day unless such Business Day falls in the next calendar
month, in which case such Euro-Rate Interest Period shall end on the next
preceding Business Day;
(b) any Euro-Rate Interest Period which begins on the
last day of a calendar month for which there is no numerically corresponding day
in the subsequent calendar month during which such Euro-Rate Interest Period is
to end shall end on the last Business Day of such subsequent month;
(c) the Revolving Credit Euro-Rate Portion for each
Euro-Rate Interest Period shall be in integral multiples of $500,000 and not
less than $5,000,000;
(d) the Borrower shall not select, convert to or renew a
Euro-Rate Interest Period for any portion of the Loans that would end after the
Expiration Date; and
(e) in the case of the renewal of a Euro-Rate Option at
the end of a Euro-Rate Interest Period, the first day of the new Euro-Rate
Interest Period shall be the last day of the preceding Euro-Rate Interest
Period, without duplication in payment of interest for such day.
4.03 Interest After Default. To the extent permitted by Law,
upon the occurrence and during the continuation of an Event of Default, any
principal, interest, fee or other amount payable hereunder shall bear interest
for each day thereafter until paid in full (before and after judgment) at a rate
per annum which shall be equal to two hundred (200) basis points (2% per annum)
above the rate of interest otherwise applicable with respect to such amount or
two hundred (200) basis points (2% per annum) above the Base Rate if no rate of
interest is otherwise applicable, but in no event in excess of the highest rate
permitted under applicable law. The Borrower acknowledges that such increased
interest rate reflects, among other things, the fact that such Loans or other
amounts have become a substantially greater risk given their default status and
that the Banks are entitled to additional compensation for such risk. If an
Event of Default shall occur and be continuing, the Agent may in its discretion
limit the Borrower to the Base Rate Option.
4.04 Euro-Rate Unascertainable.
(a) If on any date on which a Euro-Rate would otherwise
be determined, the Agent shall have determined (which determination shall be
conclusive absent manifest error) that:
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(i) adequate and reasonable means do not exist
for ascertaining such Euro-Rate, or
(ii) a contingency has occurred which
materially and adversely affects the London interbank market relating to the
Euro-Rate, or
(b) if at any time any Bank shall have determined
(which determination shall be conclusive absent manifest error) that:
(i) the making, maintenance or funding of any
Loan to which a Euro-Rate Option applies has been made impracticable or unlawful
by compliance by such Bank in good faith with any Law or any interpretation or
application thereof by any Official Body or with any request or directive of any
such Official Body (whether or not having the force of Law), or
(ii) such Euro-Rate Option will not adequately
and fairly reflect the cost to such Bank of the establishment or maintenance of
any such Loan, or
(iii) after making all reasonable efforts that
deposits of the relevant amount in Dollars for the relevant Euro-Rate Interest
Period for a Loan to which a Euro-Rate Option applies, respectively, are not
available to such Bank with respect to a proposed Euro-Rate Loan in the London
interbank market, in the case of any event specified in subsection (a) above,
then the Agent shall promptly so notify the Banks and the Borrower thereof and
in the case of an event specified in subsection (b) above, such Bank shall
promptly so notify the Agent and endorse a certificate to such notice as to the
specific circumstances of such notice and the Agent shall promptly send copies
of such notice and certificate to the other Banks and the Borrower. Upon such
date as shall be specified in such notice (which shall not be earlier than the
date such notice is given) the obligation of (A) the Banks in the case of such
notice given by the Agent or (B) such Bank in the case of such notice given by
such Bank to allow the Borrower to select, convert to or renew a Euro-Rate
Option shall be suspended until the Agent shall have later notified the Borrower
or such Bank shall have later notified the Agent, of the Agent's or such Bank's,
as the case may be, determination (which determination shall be conclusive
absent manifest error) that the circumstances giving rise to such previous
determination no longer exist. If at any time the Agent makes a determination
under subsection (a) or (b) of this Section 4.04 and the Borrower has previously
notified the Agent of its selection of, conversion to or renewal of a Euro-Rate
Option and such Interest Rate Option has not yet gone into effect, such
notification shall be deemed to provide for selection of, conversion to or
renewal of the Base Rate Option otherwise available with respect to such Loans.
If any Bank notifies the Agent of a determination under subsection (b) of this
Section 4.04, the Borrower shall, subject to the Borrower's indemnification
obligations under Section 5.06(b), as to any Loan of the Bank to which a
Euro-Rate Option applies, on the date specified in such notice either convert
such Loan to the Base Rate Option otherwise available with respect to such Loan
or prepay such Loan in accordance with Section 5.04 hereof. Absent due notice
from the Borrower of conversion or prepayment such Loan shall automatically be
converted to the Base Rate Option otherwise available with respect to such Loan
upon such specified date.
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4.05 Selection of Interest Rate Options. If the Borrower fails
to select a Euro-Rate Interest Period in accordance with the provisions of
Section 4.02 in the case of renewal of the Revolving Credit Euro-Rate Portion,
the Borrower shall be deemed to have converted such Loan or portion thereof to
the Base Rate Option otherwise available with respect to such Loans, commencing
upon the last day of that Euro-Rate Interest Period. If an Event of Default
shall occur and be continuing, the Agent may in its discretion limit the
Borrower to the Base Rate Option hereunder.
ARTICLE V
PAYMENTS
5.01 Payments. All payments and prepayments to be made in
respect of principal, interest, Commitment Fees, Closing Fee, Letter of Credit
Fees, Agent's Fee or other fees or amounts due from the Borrower hereunder shall
be payable prior to 11:00 A.M. (Pittsburgh time) on the date when due without
presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived by the Borrower, and without setoff, counterclaim or other
deduction of any nature, and an action therefor shall immediately accrue. Such
payments shall be made to the Agent at the Principal Office for the ratable
accounts of the Banks with respect to the Loans in U.S. Dollars and in
immediately available funds, and the Agent shall promptly distribute such
amounts to the Banks in immediately available funds, provided that in the event
payments are received by 11:00 A.M. (Pittsburgh time) by the Agent with respect
to the Loans and such payments are not distributed to the Banks on the same day
received by the Agent, the Agent shall pay the Banks the Federal Funds Effective
Rate with respect to the amount of such payments for each day held by the Agent
and not distributed to the Banks. The Agent's and each Bank's statement of
account, ledger or other relevant record shall, in the absence of manifest
error, be conclusive as the statement of the amount of principal of and interest
on the Loans and other amounts owing under this Agreement and shall be deemed an
"account stated."
5.02 Pro Rata Treatment of Banks. Each borrowing, and each
selection of, conversion to or renewal of any Interest Rate Option and each
payment or prepayment by the Borrower with respect to principal, interest,
Commitment Fees, Closing Fee, Letter of Credit Fees, or other fees or amounts
due from the Borrower hereunder to the Banks with respect to the Loans, shall
(except as provided in Section 4.04(b) [Euro-Rate Unascertainable], 5.04(b)
[Voluntary Prepayments] or 5.06(a) [Additional Compensation in Certain
Circumstances] hereof) be made in proportion to the Loans outstanding from each
Bank and if no such Loans are then outstanding, in proportion to the Ratable
Share of each Bank.
5.03 Interest Payment Dates. Interest on Loans to which the
Base Rate Option applies shall be due and payable in arrears on the first
Business Day of each April, July, October and January after the date hereof and
on the Expiration Date or upon acceleration of the Notes. Interest on Loans to
which a Euro-Rate Option applies shall be due and payable on the last day of
each Euro-Rate Interest Period for those Loans, and if any such Euro-Rate
Interest Period is longer than three months, also on the last day of every third
month during such period.
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5.04 Voluntary Prepayments.
(a) The Borrower shall have the right at its option
from time to time to prepay the Loans in whole or part without premium or
penalty (except as provided in subsection (b) below or in Section 5.06 hereof):
(i) at any time with respect to any Loan to which
the Base Rate Option applies,
(ii) on the last day of the applicable Euro-Rate
Interest Period with respect to Loans to which a Euro-Rate Option applies,
(iii) on the date specified in a notice by any
Bank pursuant to Section 4.04(b) [Euro-Rate Unascertainable] hereof with respect
to any Loan to which a Euro-Rate Option applies.
Whenever the Borrower desires to prepay any part of the Loans,
it shall provide a prepayment notice to the Agent at least one (1) Business Day
prior to the date of prepayment of Loans setting forth the following
information:
(x) the date, which shall be a
Business Day, on which the proposed prepayment is to be made;
and
(y) the total principal amount of
such prepayment, which shall not be less than $5,000,000.
All prepayment notices shall be irrevocable. The principal
amount of the Loans for which a prepayment notice is given, together with
interest on such principal amount except with respect to Loans to which the Base
Rate Option applies, shall be due and payable on the date specified in such
prepayment notice as the date on which the proposed prepayment is to be made.
Unless otherwise specified by the Borrower with respect to prepayments of the
Revolving Credit Euro-Rate Portion of the Loans permitted under (ii) or (iii)
above, all prepayments shall be applied first to the Revolving Credit Base Rate
Portion of such Loans, and then to the Revolving Credit Euro-Rate Portion of
such Loans, subject to Section 5.06(b) hereof.
(b) In the event any Bank gives notice under Section
4.04(b) [Euro-Rate Unascertainable] or Section 5.06(a) [Additional Compensation
in Certain Circumstances] hereof, the Borrower shall have the right, with the
consent of the Agent, which shall not be unreasonably withheld, to: (y) prepay
the Loans of such Bank, in whole together with all interest accrued thereon and
thereby permanently and irrevocably terminate the Revolving Credit Commitment of
such Bank, or (z) replace such Bank, so long as, in the case of (y) or (z), such
replacement or prepayment occurs within ninety (90) days after receipt of such
Bank's notice under Section 4.04(b) or 5.06(a), provided the Borrower shall also
pay to such Bank in the case of either the foregoing (y) or (z) at the time of
such prepayment or replacement any amounts required under Section 5.06 and
accrued Commitment Fees due on such amount and all other costs, fees and any
amounts due to such Bank being prepaid or replaced.
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5.05 Mandatory Prepayments.
(a) Sale of Assets. Within five (5) Business Days of
any sale of assets authorized by Section 8.02(g)(v) hereof, the Borrower shall
make a mandatory prepayment of principal on the Revolving Credit Loans in the
amount, if any, necessary to bring the Borrower into compliance with Section
8.02(r) [Maximum Leverage Ratio] after giving effect to such disposition. In
addition to the foregoing mandatory prepayment provisions, in the event that any
sale of assets will result in the Borrower or any Subsidiary receiving "Net Cash
Proceeds" which would otherwise become "Excess Proceeds" (as each of those terms
are defined in the Indenture), then at least sixty (60) days prior to the date
any Net Cash Proceeds would become Excess Proceeds under the Indenture, the
Borrower shall give written notice to the Agent thereof setting forth the amount
of Net Cash Proceeds at issue. Upon the direction of the Agent with the consent
of the Required Banks, the Borrower shall make a permanent payment of principal
on the Revolving Credit Loans in the amount of said Net Cash Proceeds, and the
Revolving Credit Commitment of each Bank shall be reduced by its Ratable Share
of the principal payment made to such Bank from the Net Cash Proceeds.
(b) Application Among Interest Rate Options. All
prepayments required pursuant to this Section 5.05 shall first be applied among
the Interest Rate Options to the principal amount of the Loans subject to a Base
Rate Option, then to Loans subject to Euro-Rate Option. In accordance with
Section 5.06(b), the Borrower shall indemnify the Banks for any loss or expense
including loss of margin incurred with respect to any such prepayments applied
against Loans subject to a Euro-Rate Option on any day other than the last day
of the applicable Euro-Rate Interest Period.
5.06 Additional Compensation in Certain Circumstances.
(a) Increased Costs or Reduced Return Resulting From
Taxes, Reserves, Capital Adequacy Requirements, Expenses, Etc. If any Law,
guideline or interpretation or any change in any Law, guideline or
interpretation or application thereof by any Official Body charged with the
interpretation or administration thereof or compliance with any request or
directive (whether or not having the force of Law) of any central bank or other
Official Body:
(i) subjects any Bank to any tax or changes the
basis of taxation with respect to this Agreement, the Notes, the Loans or
payments by the Borrower of principal, interest, Commitment Fees, or other
amounts due from the Borrower hereunder or under the Notes (except for taxes on
the overall net income of such Bank),
(ii) imposes, modifies or deems applicable any
reserve, special deposit or similar requirement against credits or commitments
to extend credit extended by, or assets (funded or contingent) of, deposits with
or for the account of, or other acquisitions of funds by, any Bank, or
(iii) imposes, modifies or deems applicable any
capital adequacy or similar requirement (A) against assets (funded or
contingent) of, or letters of credit,
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other credits or commitments to extend credit extended by, any Bank, or (B)
otherwise applicable to the obligations of any Bank under this Agreement,
and the result under any of the foregoing clauses (i), (ii) or (iii) is to
increase the cost to, reduce the income receivable by, or impose any expense
(including loss of margin) upon any Bank with respect to this Agreement, the
Notes or the making, maintenance or funding of any part of the Loans (or, in the
case of any capital adequacy or similar requirement, to have the effect of
reducing the rate of return on any Bank's capital, taking into consideration
such Bank's customary policies with respect to capital adequacy) by an amount
which such Bank in its sole discretion deems to be material, such Bank shall
from time to time notify the Borrower and the Agent of the amount determined in
good faith (using any averaging and attribution methods employed in good faith)
by such Bank (which determination shall be conclusive absent manifest error) to
be necessary to compensate such Bank for such increase in cost, reduction of
income or additional expense. Such notice shall set forth in reasonable detail
the basis for such determination. Such amount shall be due and payable by the
Borrower to such Bank ten (10) Business Days after such notice is given.
(b) Indemnity. In addition to the compensation required by
subsection (a) of this Section 5.06, the Borrower shall indemnify each Bank
against all liabilities, losses or expenses (including loss of margin, any loss
or expense incurred in liquidating or employing deposits from third parties and
any loss or expense incurred in connection with funds acquired by a Bank to fund
or maintain Loans subject to the Euro-Rate Option) which such Bank sustains or
incurs as a consequence of any:
(i) payment, prepayment, conversion or renewal of any Loan
to which the Euro-Rate Option applies on a day other than the last day of the
corresponding Euro-Rate Interest Period (whether or not such payment or
prepayment is mandatory, voluntary or automatic and whether or not such payment
or prepayment is then due),
(ii) attempt by the Borrower to revoke (expressly, by later
inconsistent notices or otherwise) in whole or part any notice relating to Loan
Requests under Section 2.05 or Section 4.02 or prepayments under Section 5.04,
or reductions of Revolving Credit Commitments under Section 2.10, or
(iii) Event of Default by the Borrower in the performance or
observance of any covenant or condition contained in this Agreement or any other
Loan Document, including without limitation any failure of the Borrower to pay
when due (by acceleration or otherwise) any principal, interest, Commitment Fee
or any other amount due hereunder.
If any Bank sustains or incurs any such loss or expense it shall from
time to time notify the Borrower of the amount determined in good faith by such
Bank (which determination shall be conclusive absent manifest error and may
include such assumptions, allocations of costs and expenses and averaging or
attribution methods as such Bank shall deem reasonable) to be necessary to
indemnify such Bank for such loss or expense. Such notice shall set forth in
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reasonable detail the basis for such determination. Such indemnification may
include an amount equal to the excess, if any, of (i) the amount of interest
which would have accrued on the amount so prepaid, or not so borrowed, converted
or continued, for the period from the date of such prepayment or of such failure
to borrow, convert or continue to the last day of the applicable Interest Period
(or, in the case of a failure to borrow, convert or continue, the Interest
Period that would have commenced on the date of such failure) in each case at
the applicable rate of interest for such Loans, subject to the Euro-Rate Option
provided for herein (excluding, however, the Applicable Percentage Over
Euro-Rate included therein, if any) over (ii) the amount of interest (as
reasonably determined by such Bank) which would have accrued to such Bank on
such amount by placing such amount on deposit for a comparable period with
leading banks in the interbank Eurodollar market. This covenant shall survive
the termination of this Agreement and the payment of the Loans and all other
amounts payable hereunder. Such amount shall be due and payable by the Borrower
to such Bank ten (10) Business Days after such notice is given.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.01 Representations and Warranties - Effective On and After Date of
This Agreement. The Borrower represents and warrants to the Agent and each of
the Banks as follows:
(a) Organization and Qualification. The Borrower, each Restricted
Subsidiary of the Borrower and each Excluded Entity in which a Restricted
Investment has been made are duly organized, validly existing and in good
standing under the laws of their respective jurisdiction of organization; the
Borrower, each Restricted Subsidiary of the Borrower and each Excluded Entity in
which a Restricted Investment has been made have the power to own or lease their
properties and to engage in the business they presently conduct or propose to
conduct; and the Borrower and each Subsidiary of the Borrower are duly qualified
as a foreign corporation, limited liability company or partnership and in good
standing in each jurisdiction listed on Schedule 6.01(a) hereto and in all other
jurisdictions where the property owned or leased by them or the nature of the
business transacted by them or both makes such qualification necessary, except
where the failure to so qualify would not have a material adverse effect on the
Borrower or any Subsidiary.
(b) [Intentionally Omitted.]
(c) Excluded Entities; Subsidiaries. Schedule 6.01(c) attached
hereto states (i) the name of each of the Borrower's Restricted Subsidiaries and
each Excluded Entity in which a Restricted Investment has been made, (ii) in the
case of each Corporate Subsidiary or Excluded Entity which is a corporation, its
jurisdiction of incorporation, its authorized capital stock, the issued and
outstanding shares (referred to herein as the "Corporate Shares") and the owners
thereof, (iii) in the case of each Partnership Subsidiary or Excluded Entity
which is a partnership, the jurisdiction in which it is organized, the type of
organization (limited or general partnership) and the owners of its partnership
interests (the "Partnership Interests"), and (iv) in the case of each Subsidiary
or Excluded Entity which is a limited liability company, the
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jurisdiction in which it is organized, its authorized member interests, the
issued and outstanding member interests (the "Member Interests") and the owners
thereof. The Borrower and each Subsidiary have good and valid title to all of
the Corporate Shares, Partnership Interests or Member Interests they purport to
own, free and clear in each case of any Lien other than under the Loan
Documents. All Corporate Shares, Partnership Interests and Member Interests have
been validly issued. All Corporate Shares are fully paid and nonassessable.
There are no options, warrants or other rights outstanding to purchase any
Member Interests, Corporate Shares or Partnership Interests except as indicated
on Schedule 6.01(c).
(d) Power and Authority. Each Loan Party has full power to enter
into, execute, delivery and carry out this Agreement, the other Loan Documents
to which it is a party, to incur the Indebtedness contemplated by the Loan
Documents and to perform its obligations under the Loan Documents to which it is
a party and all such actions have been duly authorized by all necessary
proceedings on its part.
(e) Validity and Binding Effect. This Agreement has been duly
executed and delivered by each Loan Party that is a party hereto, and each other
Loan Document, when duly executed and delivered by each Loan Party which is a
party thereto, will have been duly executed and delivered by such Loan Party.
This Agreement and each other Loan Document delivered by the Loan Parties
pursuant to the provisions hereof will constitute legal, valid and binding
obligations of the Loan Parties thereto, enforceable against such Loan Party in
accordance with their respective terms, except to the extent that (i)
enforceability of any of the foregoing Loan Documents may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforceability of creditors' rights generally or limiting the
right of specific performance or by general equitable principles and (ii) the
exercise by the Banks of their rights with respect to the Collateral would be
subject to the prior approval of health care regulatory authorities.
(f) No Conflict. Neither the execution and delivery of this
Agreement or the other Loan Documents by the Loan Parties nor the consummation
of the transactions herein or therein contemplated or compliance with the terms
and provisions hereof or thereof by them will conflict with, constitute a
default under or result in any breach of (i) the terms and conditions of the
certificate of incorporation, by-laws or other organizational documents of any
Loan Party or (ii) of any Law or of any material agreement or instrument or
order, writ, judgment, injunction or decree to which any Loan Party is a party
or by which it is bound or to which it is subject, or result in the creation or
enforcement of any Lien, charge or encumbrance whatsoever upon any property (now
or hereafter acquired) of any Loan Party (other than Liens granted under the
Loan Documents).
(g) Litigation. Except as previously disclosed to the Agent in
that certain letter dated January 2, 1996 by the Borrower, there are no actions,
suits, proceedings or investigations pending or, to the knowledge of the
Borrower, threatened against the Borrower or any Subsidiary of the Borrower at
law or equity before any Official Body which individually or in the aggregate
would constitute a Material Adverse Change. Neither the Borrower nor any
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Subsidiary of the Borrower is in violation of any order, writ, injunction or any
decree of any Official Body which would constitute a Material Adverse Change.
(h) Title to Properties. The Borrower and each Subsidiary of the
Borrower have good and marketable title to or valid leasehold interest in all
material properties, assets and other rights which they purport to own or lease
or which are reflected as owned or leased on their respective books and records,
free and clear of all Liens and encumbrances except Permitted Liens, and subject
to the terms and conditions of the applicable leases. All material leases of
real property are in full force and effect without the necessity for any consent
which has not previously been obtained for the consummation of the transactions
contemplated hereby.
(i) Financial Statements.
(i) Historical Statements.
The Borrower has delivered to the Agent copies of
its audited consolidated year-end financial statements for and as of the end of
the fiscal years ended December 31, 1992, 1993, 1994, 1995, 1996 and the
unaudited consolidated statements for 1997 for the three quarters ending on
September 30, 1997 (collectively the "Historical Statements"). The Mariner
Historical Statements were compiled from the books and records maintained by the
Borrower's management, fairly present the consolidated financial condition of
the Loan Parties (which were Loan Parties as of the date of the respective
Mariner Historical Statements) as of their dates and the results of operations
for the fiscal periods then ended and have been prepared in accordance with GAAP
consistently applied, subject (in the case of the interim statements) to normal
year-end audit adjustments.
(ii) Accuracy of Financial Statements. Neither the
Borrower nor any Subsidiary of Borrower has any liabilities, contingent or
otherwise, or material forward or long-term commitments that are not disclosed
in the Historical Statements or in the notes thereto or that are required to be
disclosed under GAAP, and except as disclosed therein there are no unrealized or
anticipated losses from any commitments of the Borrower or any Subsidiary which
may cause a Material Adverse Change. Since December 31, 1996, no Material
Adverse Change has occurred; provided, however, that with the written approval
of the Required Banks, express disclosures to the Banks by the Borrower in the
reports provided by the Borrower to the Banks, pursuant to Section 8.03 hereof,
shall be deemed to be an update and an exception to the representation made in
the foregoing portion of this sentence.
(j) Margin Stock. Neither the Borrower nor any Subsidiary engages
or intends to engage principally, or as one of its important activities, in the
business of extending credit for the purpose, immediately, incidentally or
ultimately, of purchasing or carrying margin stock (within the meaning of
Regulation U). No part of the proceeds of any Loan has been or will be used,
immediately, incidentally or ultimately, to purchase or carry any margin stock
or to extend credit to others for the purpose of purchasing or carrying any
margin stock or to refund Indebtedness originally incurred for such purpose, or
for any purpose which entails a violation of or which is inconsistent with the
provisions of the regulations of the Board of Governors of the Federal Reserve
System.
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(k) Full Disclosure. Neither this Agreement nor any other Loan
Document contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained herein and
therein, in light of the circumstances under which they were made, not
misleading considered as a whole; provided that any information provided after
the date hereof shall be deemed to supersede any prior inconsistent information.
There is no fact known to the Borrower or any Subsidiary which materially
adversely affects the business, property, assets, financial condition, results
of operations or prospects of the Borrower or any Material Subsidiary, which:
(i) prior to or at the date hereof, has not been set forth in the Agreement or
in the certificates, statements, agreements or other documents furnished in
writing to the Agent and the Banks in connection with the transactions
contemplated hereby or in the Borrower's public filings with the Securities and
Exchange Commission, or (ii) following the date hereof and with the written
approval of the Required Banks, has not been set forth in other documents
furnished in writing to the Agent and the Banks.
(l) Taxes. All material federal, state, local and other tax
returns required to have been filed with respect to the Borrower or any
Subsidiary have been filed and payment or adequate provision has been made for
the payment of all taxes, fees, assessments and other governmental charges which
have or may become due pursuant to said returns or to assessments received
except to the extent that such taxes, fees, assessments and other charges are
being contested in good faith by appropriate proceedings diligently conducted
and for which such reserves or other appropriate provisions, if any, as shall be
required by GAAP shall have been made. As of the date hereof, there are no
agreements or waivers extending the statutory period of limitations applicable
to any federal income tax return of the Borrower or any Subsidiary for any
period.
(m) Consents and Approvals. No consent, approval, exemption, order
or authorization of, or a registration or filing with any Official Body or any
other person is required by any Law or any agreement in connection with the
execution, delivery and carrying out of this Agreement, or the other Loan
Documents by any Loan Party, all of which have been obtained or made; provided,
however, that it is acknowledged that consent of health care regulatory
authorities issuing any licenses or regulating any health care facilities may be
required if the Agent on behalf of the Banks exercises the rights and remedies
in respect of the Pledged Collateral and such exercise of remedies results in or
constitutes an assignment of any health care license issued by a health care
regulatory authority or constitutes a change of control with respect to the
ownership of a health care facility.
(n) Compliance With Instruments. Neither the Borrower nor any
Subsidiary is in violation of (i) any term of its certificate of incorporation,
by-laws, or other organizational documents or (ii) any material agreement or
instrument to which it is a party or by which it or any of its properties may be
subject or bound where such violation would constitute a Material Adverse
Change.
(o) Patents, Trademarks, Copyrights, Etc. The Borrower and each
Subsidiary owns or possesses all the material patents, trademarks, service
marks, trade names,
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copyrights and other intellectual property rights necessary to own and operate
its properties and to carry on its business as presently conducted and planned
to be conducted by the Borrower and each Subsidiary, without known conflict with
the rights of others.
(p) Security Interests in the Collateral. The Liens and security
interests granted to the Agent for the benefit of the Banks pursuant to the
Pledge Agreements, Mortgages and Leasehold Mortgages in the UCC Collateral
constitute, and will continue to constitute, Prior Security Interests under the
Uniform Commercial Code as in effect in each applicable jurisdiction (the
"Uniform Commercial Code") or other applicable Law entitled to all the rights,
benefits and priorities provided by the Uniform Commercial Code or such Law to
the fullest extent permitted by applicable law, except that the security
interests in the Collateral under the Mortgages and Leasehold Mortgages may be
subordinated to the security interests granted to certain of the Lessor Lenders
or Owned Facility Lenders, as indicated on Schedule 6.01 (aa). Upon the filing
of financing statements relating to said security interests in each office and
in each jurisdiction where required in order to perfect the security interests
described above and taking possession of the stock certificates or certificates
of ownership of member interests in a limited liability company, as the case may
be, evidencing the Pledged Collateral which constitutes stock of a corporation
or member interests of a limited liability company, as the case may be, all such
action as is necessary or advisable to establish such rights of the Agent will
have been taken, and there will be upon execution and delivery of the Pledge
Agreements, Mortgages and Leasehold Mortgages, such filings, and such taking of
possession no necessity for any further action in order to preserve, protect and
continue such rights, except for maintaining possession of such certificates and
filing continuation statements with respect to such financing statements within
six (6) months prior to each five-year anniversary of the filing of such
financing statements. Any expenses in connection with each such action have been
or will be paid by the Borrower. It is acknowledged that the exercise by the
Banks of their rights and remedies in respect of the Pledged Collateral which
would result in or constitute any assignment of any license issued by a health
care regulatory authority or any change of control with respect to a health care
facility may be subject to the prior approval of such health care regulatory
authorities.
(q) [Intentionally Omitted.]
(r) Status of the Pledged Collateral. All the shares of capital
stock, partnership interests, or member interests in a limited liability
company, as the case may be, included in the Pledged Collateral to be pledged
pursuant to the Pledge Agreements are or will be upon issuance duly authorized
and validly issued. All shares of capital stock included in the Pledged
Collateral are or will be upon issuance fully paid and nonassessable. All of the
Pledged Collateral is owned beneficially and of record by the pledgor free and
clear of any Lien or restriction on transfer, except as otherwise provided in
the Pledge Agreements and except as the right of the Banks to dispose of the
Pledged Collateral may be limited by the Securities Act of 1933, as amended, and
the regulations promulgated by the Securities and Exchange Commission thereunder
and by applicable state securities laws. Except as otherwise disclosed to the
Banks, in writing, there are no shareholder or other agreements or
understandings with respect to the Pledged Collateral.
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(s) Insurance. The insurance policies and bonds to which the
Borrower or any Subsidiary is a party provide adequate coverage from reputable
and financially sound insurers in amounts sufficient to insure the assets and
risks of the Borrower and its Subsidiaries in accordance with prudent business
practice in the industry of the Borrower and its Subsidiaries, including
self-insurance to the extent customary, and such policies and bonds are valid
and in full force and effect.
(t) Compliance with Laws. The Borrower and its Subsidiaries are
in compliance in all material respects with all applicable Laws (other than
Environmental Laws which are specifically addressed in subsection (y)) in all
jurisdictions in which the Borrower or any Subsidiary is presently or will be
doing business except where the failure to do so would not constitute a Material
Adverse Change.
(u) Material Contracts, Licenses, Permits and Approvals.
(A) As of the date hereof, Schedule 6.01(u) hereto lists
the following contracts relating to the business operations of the Borrower and
its Subsidiaries: (i) all employee benefit plans, employment agreements where
the compensation paid by the Borrower or any Subsidiary exceeds $250,000 in any
fiscal year, collective bargaining agreements and labor contracts (the "Labor
Contracts"), (ii) all written provider or similar agreements (the "Provider
Agreements") pursuant to which the Borrower and its Subsidiaries have received
or may claim any entitlement to receive reimbursement from or as a result of (1)
Medicaid, Medicare or Blue Cross programs, or (2) any other public or private
reimbursement programs where the payments received by the Borrower or any
Subsidiary exceeded or are expected to exceed $6,000,000 in the current fiscal
year, (iii) all leases of real property where the payments made by the Borrower
or any Subsidiary in the current fiscal year exceed or are expected to exceed
$250,000, (iv) any contract or series of contracts with the same person for the
furnishing or purchase of machinery, equipment, goods or services, where the
payments made by the Borrower or any Subsidiary exceeded or are expected to
exceed $1,000,000 in the aggregate in the current fiscal year; (v) all
management contracts pursuant to which the Borrower or a Subsidiary provides
management services to any other person where the payments received or expected
to be received by the Borrower or any Subsidiary exceed $500,000 in the current
fiscal year; and (vi) all other material contracts filed as exhibits to any
report filed by the Borrower with the SEC during the past twelve months. All
contracts listed on Schedule 6.01(u) and any Provider Agreements which provide
for annual payments in excess of $6,000,000 which are not listed on Schedule
6.01(u) are valid, binding and enforceable upon the Borrower or its
Subsidiaries, as the case may be, and, to the best knowledge of the Borrower,
each of the other parties thereto in accordance with their respective terms and
there is no default thereunder, to the knowledge of the Borrower and of its
Subsidiaries, with respect to parties other than the Borrower or any of its
Subsidiaries. There are no patient care agreements with patients or any other
person or organization which deviate in such a material respect from the
standard patient care forms used by the Borrower or any of its Subsidiaries as
to constitute a Material Adverse Change.
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(B) Except as set forth on Schedule 6.01(u), the Borrower
and each of its Subsidiaries has all material accreditations, authorizations,
approvals, certificates of need, consents, licenses, permits and qualifications
(collectively, "Approvals") required (i) for them to construct, acquire, own,
manage, lease and/or operate their facilities and services, (ii) for them to
receive payment and reimbursement from any patient or third party payor, to the
extent in the case of (i) and (ii) such Approvals are presently required. The
Borrower and each of its Subsidiaries have all other material Approvals required
for the lawful operation of their businesses. All material Approvals of the
Borrower and each of its Subsidiaries are in full force and effect and have not
been amended or otherwise modified (except for modifications which would not
have a material adverse effect upon the Borrower or any Subsidiary) rescinded,
revoked or assigned, and no notice has been received of any violation of
applicable Laws or any refusal to renew any Approval which could reasonably be
expected to cause any of such Approvals to be modified, rescinded or revoked
(except for modifications, rescissions or revocations which would not have a
material adverse effect upon the Borrower and its Subsidiaries taken as a
whole). The continuation, validity and effectiveness of all such Approvals will
in no way be adversely affected by the transactions contemplated by this
Agreement. Neither the Borrower nor any of its Subsidiaries knows of any reason
why any of them will not be able to maintain all material Approvals necessary or
appropriate to construct, own, lease, manage and operate all of their facilities
and to otherwise conduct their businesses as now conducted and presently
proposed to be conducted. There are no deficiencies to the conditions for
participation by the Borrower or any Subsidiary in any Medicare, Medicaid or
other reimbursement programs which would preclude such participation.
(v) Investment Companies; Public Utility Holding Company. The
Borrower is not an "investment company" registered or required to be registered
under the Investment Company Act of 1940 or under the "control" of an
"investment company" as such terms are defined in the Investment Company Act of
1940 and shall not become such an "investment company" or under such "control."
The Borrower is not a "holding company" nor a "subsidiary" or "affiliate" of any
Person that is a "holding company" as those terms are defined in the Public
Utility Holding Company Act of 1935.
(w) Plans and Benefit Arrangements.
(i) The Borrower and each member of the ERISA Group are in
compliance in all material respects with any applicable provisions of ERISA with
respect to all Benefit Arrangements, Plans and Multiemployer Plans. There has
been no Prohibited Transaction with respect to any Benefit Arrangement or any
Plan or, to the best knowledge of the Borrower, with respect to any
Multiemployer Plan or Multiple Employer Plan, which could result in any material
liability of the Borrower or any other member of the ERISA Group. The Borrower
and all members of the ERISA Group have made when due any and all payments
required to be made under any agreement relating to a Multiemployer Plan or a
Multiple Employer Plan or any Law pertaining thereto. With respect to each Plan
and Multiemployer Plan, the Borrower and each member of the ERISA Group (i) have
fulfilled in all material respects their obligations under the minimum funding
standards of ERISA, (ii) have not incurred
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any liability to the PBGC and (iii) have not had asserted against them any
penalty for failure to fulfill the minimum funding requirements of ERISA.
(ii) To the best of the Borrower's knowledge, each
Multiemployer Plan and Multiple Employer Plan is able to pay benefits thereunder
when due.
(iii) Neither the Borrower nor any other
member of the ERISA Group has instituted or intends to institute proceedings to
terminate any Plan.
(iv) No event requiring notice to the PBGC under Section
302(f)(4)(A) of ERISA has occurred or is reasonably expected to occur with
respect to any Plan, and no amendment with respect to which security is required
under Section 307 of ERISA has been made or is reasonably expected to be made to
any Plan.
(v) The aggregate actuarial present value of all benefit
liabilities (whether or not vested) under each Plan, determined on a plan
termination basis, as disclosed in, and as of the date of, the most recent
actuarial report for such Plan, does not exceed the aggregate fair market value
of the assets of such Plan by an amount in excess of $250,000.
(vi) Neither the Borrower nor any other member of the ERISA
Group has incurred or reasonably expects to incur any material withdrawal
liability under ERISA to any Multiemployer Plan or Multiple Employer Plan.
Neither the Borrower nor any other member of the ERISA Group has been notified
by any Multiemployer Plan or Multiple Employer Plan that such Multiemployer Plan
or Multiple Employer Plan has been terminated within the meaning of Title IV of
ERISA and, to the best knowledge of the Borrower, no Multiemployer Plan or
Multiple Employer Plan is reasonably expected to be reorganized or terminated,
within the meaning of Title IV of ERISA.
(vii) To the extent that any Benefit Arrangement is
insured, the Borrower and all members of the ERISA Group have paid when due all
premiums required to be paid for all periods. To the extent that any Benefit
Arrangement is funded other than with insurance, the Borrower and all members of
the ERISA Group have made when due all contributions required to be paid for all
periods.
(x) Employment Matters. The Borrower and each of its Subsidiaries
are in compliance with the Labor Contracts and all applicable federal, state and
local labor and employment Laws including, but not limited to, those related to
equal employment opportunity and affirmative action, labor relations, minimum
wage, overtime, child labor, medical insurance continuation, worker adjustment
and relocation notices, immigration controls and worker and unemployment
compensation, where the failure to comply would constitute a Material Adverse
Change. There are no outstanding grievances, arbitration awards or appeals
therefrom arising out of the Labor Contracts or current or threatened strikes,
picketing, handbilling or other work stoppages or slowdowns at facilities of the
Borrower or any of its Subsidiaries which in any case would constitute a
Material Adverse Change. The Borrower has delivered to the Agent true and
correct copies of each of the Labor Contracts in effect as of the date hereof.
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(y) Environmental Matters. Except as disclosed on Schedule
6.01(y) hereto:
(i) Neither the Borrower nor any of its Subsidiaries has
received any Environmental Complaint from any Official Body or private person
alleging that the Borrower, any of its Subsidiaries or any prior or subsequent
owner of the Property is a potentially responsible party under the Comprehensive
Environmental Response, Cleanup and Liability Act ("CERCLA"), 42
U.S.C. Section 9601, et seq., or is potentially liable under the Solid Waste
Disposal Act, as amended, ("SWDA") 42 U.S.C. Section 6901, et seq., or any
comparable state or foreign law, statute or regulation of either CERCLA or SWDA
and the Borrower has no reason to believe that such an Environmental Complaint
might be received. There are no pending or, to the Borrower's knowledge,
threatened Environmental Complaints relating to the Borrower, any of its
Subsidiaries or, to the Borrower's knowledge, any prior or subsequent owner of
the Property pertaining to, or arising out of, any Environmental Conditions
which, individually or in the aggregate, if adversely determined could
reasonably be expected to have a material adverse effect on the Borrower or any
Subsidiary of the Borrower taken as a whole.
(ii) Except for conditions, violations or failure which
individually and in the aggregate are not reasonably likely to result in a
Material Adverse Change, there are no circumstances at, on or, to the best of
the Borrower's knowledge, under the Property that constitute a breach of or
non-compliance with any of the Environmental Laws, and there are, to the best of
the Borrower's knowledge, no past or present Environmental Conditions at, on or
under the Property or, to the Borrower's knowledge, at, on or, to the best of
the Borrower's knowledge, under adjacent property, that prevent compliance with
the Environmental Laws at the Property.
(iii) Neither the Property nor any structures, improvements,
equipment, fixtures, activities or facilities thereon or thereunder contain or
use Regulated Substances except in compliance in all material respects with
Environmental Laws. There are no processes, facilities, operations, equipment or
any other activities at, on or, to the best of the Borrower's knowledge, under
the Property, or, to the Borrower's knowledge, at, on or under adjacent
property, that currently result in the release or threatened release of
Regulated Substances onto the Property, except to the extent that such releases
or threatened releases are not a material breach of or otherwise not a material
violation of the Environmental Laws, or are not likely to result in a Material
Adverse Change.
(iv) There are no above ground storage tanks, underground
storage tanks, or underground piping associated with such tanks, used for the
management of Regulated Substances at, on or under the Property that (a) do not
have, to the extent required by applicable Environmental Laws, a full
operational secondary containment system in place, and (b) are not otherwise in
compliance in all material respects with all Environmental Laws. To Borrower's
best knowledge, there are no abandoned underground storage tanks or underground
piping associated with such tanks, previously used for the management of
Regulated Substances at, on or under the Property that have not been either
abandoned in place, or removed, in accordance with the Environmental Laws.
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(v) The Borrower and each of its Subsidiaries have all
material permits, licenses, authorizations, plans and approvals necessary under
the Environmental Laws for the conduct of the business of the Borrower and each
such Subsidiary as presently conducted. The Borrower and each such Subsidiary
have submitted all material notices, reports and other filings required by the
Environmental Laws to be submitted to an Official Body which pertain to past and
current operations on the Property.
(vi) Except for violations which individually and in the
aggregate are not likely to result in a Material Adverse Change, all present
and, to the best knowledge of the Borrower, past on-site generation, storage,
processing, treatment, recycling, reclamation or disposal of Regulated
Substances at, on, or under the Property and, to the best knowledge of the
Borrower, all off-site transportation, storage, processing, treatment,
recycling, reclamation or disposal of Regulated Substances has been done in
accordance with the Environmental Laws.
(z) Senior Debt Status. The obligations of the Borrower under
this Agreement and the Notes and the obligations of the Subsidiaries of Borrower
under the Guaranties do rank and will rank at least pari passu in priority of
payment with all other Indebtedness of the Borrower or such Subsidiaries, as the
case may be, except Indebtedness of the Borrower or its Subsidiaries to the
extent secured by Permitted Liens. The obligations of the Borrower under this
Agreement and the Notes constitute "Designated Senior Indebtedness" as such term
is defined in the Indenture. There is no Lien upon or with respect to any of the
properties or income of the Borrower or any of its Subsidiaries which secures
Indebtedness or other obligations of any person except for Permitted Liens.
(aa) Matters Regarding Leased Facilities and Certain Indebtedness
of Subsidiaries.
(i) Indebtedness Related to Leased Facilities. Schedule
6.01(aa) describes each Leased Facility and with respect thereto: (1) the
Subsidiary Lessee which is the lessee thereof; (2) the Lessor thereof; (3) the
amount of Lessor Indebtedness secured by any assets of such Leased Facility; (4)
the Lessor Lender which is the obligee under such Lessor Indebtedness; (5) any
assets of the Subsidiary Lessee leasing such Leased Facility which relate to
such facility in which such Subsidiary Lessee has granted Liens in favor of the
Lessor (it is acknowledged that the Lessor has assigned such Liens to the Lessor
Lender) or Lessor Lender and confirmation that such Liens are Permitted Leased
Facility Liens and Permitted Liens; (6) the original maturity date of such
Lessor Indebtedness, without giving effect to subsequent amendments unless
permitted by this Agreement; (7) whether a Facility Purchase Option has been
granted as part of an Intercreditor Agreement between the Agent and the Lessor
Lender with respect to such Leased Facility; (8) whether the Lessor Lender and
Lessor have consented to the grant by the Subsidiary Lessee of a Leasehold
Mortgage, in favor of the Agent for the benefit of the Banks and Liens on the
assets of such Subsidiary Lessee (such Liens to be second in priority to the
Liens granted by such Subsidiary Lessee to such Lessor Lender in such assets if
such Subsidiary granted Liens in such assets to such Lessor Lender) with respect
to such Leased Facility; (9) whether the applicable Lessor Lender has agreed to
release its liens in the
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assets of the applicable Subsidiary Lessee leasing such Leased Facility related
to such facility; (10) whether the applicable Lessor Lender has entered into a
Non-Disturbance Agreement; (11) whether the applicable Lessor Lender has entered
into an Intercreditor Agreement with the Agent; and (12) whether the applicable
Lessor Lender has entered into a Trustee Agreement with the Agent.
(ii) Indebtedness Related to Subsidiary Owned Facilities.
Schedule 6.01(aa) describes each Owned Facility and with respect thereto: (1)
the Subsidiary Owner; (2) the amount of the Owned Facility Indebtedness, secured
by any assets of such Owned Facility; (3) the Owned Facility Lender which is the
obligee under such Owned Facility Indebtedness; (4) the assets of the Subsidiary
Owner relating to such Owned Facility in which the Subsidiary Owner has granted
Liens in favor of such Owned Facility Lender and confirmation that such Liens
are Permitted Owned Facility Liens and Permitted Liens; (5) the original
maturity date of such Owned Facility Indebtedness, without giving effect to
subsequent amendments unless permitted by this Agreement; (6) whether a Facility
Purchase Option has been granted as part of an Intercreditor Agreement between
the Agent and the Owned Facility Lender with respect to such Owned Facility; (7)
whether the Owned Facility Lender has consented to the grant by the Subsidiary
Owner of a Mortgage, in favor of the Agent for the benefit of the Banks and
Liens on the assets of such Subsidiary Owner (such Liens to be second in
priority to the Liens granted by such Subsidiary Owner to such Owned Facility
Lender in such assets if such Subsidiary Owner granted Liens in such assets to
such Owned Facility Lender) with respect to such Owned Facility; and (8) whether
the applicable Owned Facility Lender entered into an Intercreditor Agreement
with Agent.
(bb) Mortgage and Leasehold Mortgage Liens. The Liens granted to
the Agent for the benefit of the Banks pursuant to the Mortgages and the
Leasehold Mortgages constitute valid Liens under applicable law having priority
over all other Liens except that if otherwise permitted by this Agreement they
may be subordinate to Liens in favor of the Owned Facility Lenders and Lessor
Lenders, as the case may be, and Schedule 6.01(aa) indicates if such Liens are
subordinated. All such action as will be necessary or advisable to establish
such Liens of the Agent and its priority as described in the preceding sentence
will be taken at or prior to the time required for such purpose, and there will
be as of the date of execution and delivery of the Mortgages and Leasehold
Mortgages no necessity for any further action in order to protect, preserve and
continue such Liens and such priority.
6.02 Updates to Schedules. Should any of the information or disclosures
provided on any of the Schedules attached hereto (other than Schedules relating
solely to representations and warranties made solely as of the date expressly
specified therein, which representations and warranties shall be true and
correct as of such specified date) become outdated or incorrect in any material
respect, the Borrower shall promptly provide the Agent in writing with such
revisions or updates to such Schedule as may be necessary or appropriate to
update or correct the same; provided, however that no Schedule shall be deemed
to have been amended, modified or superseded by any such correction or update
that would disclose the occurrence of an event or condition which constitutes a
Potential Default or Event of Default, nor shall any breach of warranty or
representation resulting from the inaccuracy or incompleteness of
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any such Schedule be deemed to have been cured thereby, unless and until the
Required Banks, in their sole and absolute discretion, shall have accepted in
writing such revisions or updates to such Schedule.
ARTICLE VII
CONDITIONS OF LENDING
The obligation of each Bank to make Loans and of the Agent to issue
Letters of Credit hereunder is subject to the performance by the Borrower of its
obligations to be performed hereunder at or prior to the making of any such
Loans or issuance of such Letters of Credit and to the satisfaction of the
following conditions:
7.01 Each Additional Loan. At the time of making any Loans or issuing
any Letters of Credit other than the Loan made on the Closing Date hereunder and
after giving effect to the proposed borrowings: the representations and
warranties of the Borrower contained in Article VI hereof shall be true on and
as of the date of such additional Loan with the same effect as though such
representations and warranties had been made on and as of such date (except
representations and warranties which expressly relate solely to an earlier date
or time, which representations and warranties shall be true and correct on and
as of the specific dates or times referred to therein) and the Borrower shall
have performed and complied with all covenants and conditions hereof; no Event
of Default or Potential Default shall have occurred and be continuing or shall
exist; the making of the Loans or issuing of such Letters of Credit shall not
contravene any Law applicable to the Borrower or any of the Banks; and the
Borrower shall have delivered to the Agent a duly executed and completed Loan
Request.
ARTICLE VIII
COVENANTS
8.01 Affirmative Covenants. The Borrower covenants and agrees that
until payment in full of the Loans and interest thereon, satisfaction of all of
the Borrower's other obligations hereunder and termination of the Revolving
Credit Commitments, the Borrower shall comply at all times with the following
affirmative covenants:
(a) Preservation of Existence, Etc. The Borrower shall, and shall
cause each of its Subsidiaries to, maintain its corporate existence and its
qualification to do business as a foreign corporation and good standing in each
jurisdiction in which its ownership or lease of property or the nature of its
business makes such qualification necessary, except where the failure to be so
qualified or in such good standing would not constitute a Material Adverse
Change.
(b) Payment of Liabilities, Including Taxes, Etc. The Borrower
shall, and shall cause each of its Subsidiaries to, duly pay and discharge all
liabilities to which it is subject or which are asserted against it, promptly as
and when the same shall become due and payable, including all taxes, assessments
and governmental charges upon it or any of its properties, assets, income or
profits, prior to the date on which penalties attach thereto, except to the
extent that such liabilities, including taxes, assessments or charges, are being
contested in
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good faith and by appropriate and lawful proceedings diligently conducted and
for which such reserve or other appropriate provisions, if any, as shall be
required by GAAP shall have been made, but only to the extent that failure to
discharge any such liabilities would not result in any additional liability
which would adversely affect to a material extent the financial condition of the
Borrower and its Subsidiaries taken as a whole and which would affect the
Collateral.
(c) Maintenance of Insurance. The Borrower shall, and shall cause
each of its Subsidiaries to, insure its properties and assets against loss or
damage by fire and such other insurable hazards as such assets are commonly
insured (including fire, extended coverage, property damage, worker's
compensation, public liability and business interruption insurance) and against
other risks (including errors and omissions) in such amounts as similar
properties and assets are insured by prudent companies in similar circumstances
carrying on similar businesses, and with reputable and financially sound
insurers, including self-insurance to the extent customary. At the request of
the Agent, the Borrower shall deliver (x) on the Closing Date and annually
thereafter an original certificate of insurance signed by the Borrower's
independent insurance broker describing and certifying as to the existence of
the insurance on the Collateral required to be maintained by this Agreement and
the other Loan Documents and (y) from time to time a summary schedule indicating
all insurance then in force with respect to the Borrower.
(d) Maintenance of Properties and Leases. The Borrower shall, and
shall cause each of its Subsidiaries to, maintain in good repair, working order
and condition (ordinary wear and tear excepted) in accordance with the general
practice of other businesses of similar character and size, all of those
properties useful or necessary to its business, and from time to time, the
Borrower will make or cause to be made all appropriate repairs, renewals or
replacements thereof.
(e) Maintenance of Patents, Trademarks, Etc. The Borrower shall,
and shall cause each of its Subsidiaries to, maintain in full force and effect
all patents, trademarks, trade names, copyrights, licenses, franchises, permits
and other authorizations necessary for the ownership and operation of its
properties and business if the failure so to maintain the same would constitute
a Material Adverse Change.
(f) Visitation Rights. The Borrower shall, and shall cause each of
its Subsidiaries to, permit any of the officers or authorized employees or
representatives of the Agent or any of the Banks to visit and inspect any of its
properties and to examine and make excerpts from its books and records and
discuss its business affairs, finances and accounts with its officers, all in
such detail and at such times during normal business hours and as often as any
of the Banks may reasonably request, provided that each Bank shall provide the
Borrower and the Agent with reasonable notice prior to any visit or inspection.
In the event any Bank desires to conduct an audit of the Borrower, such Bank
shall make a reasonable effort to conduct such audit contemporaneously with any
audit to be performed by the Agent.
(g) Keeping of Records and Books of Account. The Borrower shall,
and shall cause each of its Subsidiaries to, maintain and keep proper books of
record and account which enable the Borrower and its Subsidiaries to issue
financial statements in accordance with
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GAAP and as otherwise required by applicable Laws of any Official Body having
jurisdiction over the Borrower or any of its Subsidiaries, and which accurately
and fairly reflect the transactions and dispositions of assets of the Borrower
or such Subsidiary.
(h) Plans and Benefit Arrangements. The Borrower shall, and shall
cause each member of the ERISA Group to, comply with ERISA, the Internal Revenue
Code and other applicable Laws applicable to Plans and Benefit Arrangements
except where such failure, alone or in conjunction with any other failure, would
not result in a Material Adverse Change. Without limiting the generality of the
foregoing, the Borrower shall cause all of its Plans and all Plans maintained by
any member of the ERISA Group to be funded in accordance with the minimum
funding requirements of ERISA and shall make, and cause each member of the ERISA
Group to make, in a timely manner, all contributions due to Plans, Benefit
Arrangements and Multiemployer Plans.
(i) Compliance With Laws. The Borrower shall, and shall cause
each of its Subsidiaries to, comply with all applicable Laws, including all
Environmental Laws, in all respects provided that it shall not be deemed to be a
violation of this Section 8.01(i) if any failure to comply with any Law would
not result in fines, penalties, other similar liabilities or injunctive relief
which in the aggregate would constitute a Material Adverse Change.
(j) Use of Proceeds. The Borrower will use the proceeds of the
Loans only for lawful purposes in accordance with Section 2.08 hereof as
applicable and such uses shall not contravene any applicable Law or any other
provision hereof.
(k) [Intentionally Omitted.]
(l) Subordination of Intercompany Loans, Other Loans and Advances
to the Borrower. Except for Indebtedness described on Schedule 8.01(l), the
Borrower shall cause any intercompany Indebtedness, and shall cause any other
Indebtedness, loans or advances owed by any Loan Party to any other person
(other than a Loan Party) to be subordinated to the Loan Parties' obligations
under the Loan Documents on the terms set forth in Exhibit 8.01(l), with such
revisions thereto as are reasonably satisfactory to the Agent.
(m) Approval of Financial Statements in Permitted Acquisitions;
Notice of Permitted Acquisition.
(i) Approval of Financial Statements. The Borrower shall
deliver to the Banks a certificate in the form of Exhibit 8.01(m)(i) hereof (the
"Acquisition Approval Certificate") before making a Permitted Acquisition if
they desire that the cash flow of the business to be acquired during periods
prior to the acquisition shall be included when they compute Cash Flow from
Operations under this Agreement. The Borrower shall attach to such Acquisition
Approval Certificate copies of the historical financial statements of the
business to be acquired including the annual and interim balance sheets and
income statements for at least three (3) fiscal years prior to the Permitted
Acquisition and pro forma statements which shall include a combined balance
sheet as of the acquisition date and cash flow statements for the preceding
year. The pro forma statements shall set forth: (1) Consolidated Cash Flow from
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Operations of the Loan Parties and the acquired business, adjusted in accordance
with clause (A) of the definition of Consolidated Cash Flow from Operations, for
the Acquisition Income Reporting Period in connection with such Permitted
Acquisition, and (2) Total Indebtedness on the date of the Permitted Acquisition
after giving effect to the acquisition and the Loans to be made on such date,
and (3) the ratio of the amount in clause (2) to the amount in clause (1), which
ratio shall not exceed (A) 5.25 to 1.0 through and including September 30, 1998;
(B) 5.00 to 1.0 from October 1, 1998 through and including September 30, 1999;
(C) 4.75 to 1.0 from October 1, 1999 through and including September 30, 2000;
and (D) 4.5 to 1.0 from October 1, 2000 and thereafter. The Acquisition Approval
Certificate shall confirm the accuracy of the foregoing computations and that,
after giving effect to the Permitted Acquisition and the Loans made on the date
thereof, no Event of Default shall exist and the Loan Parties shall be in
compliance with all of their covenants hereunder, assuming, for purposes of
Borrower's financial covenants, that all items of income, expense and cash flow
are reported for the Acquisition Income Reporting Period and that all balance
sheet items (such as Indebtedness) are measured on the date of such Permitted
Acquisition. The Loan Parties may make the Permitted Acquisition prior to
receiving the Required Banks' approval of Borrower's Acquisition Approval
Certificate with respect thereto; provided that the Loan Parties may not, until
they have received such approval, include the cash flow of the business to be
acquired for periods prior to the acquisition in their net income when they
compute Consolidated Cash Flow from Operations. The Banks shall use their best
efforts to respond to the Borrower's request for approval of each Acquisition
Approval Certificate within two (2) Business Days following the Banks' receipt
of such certificate and shall not unreasonably withhold or delay such approval.
The Borrower may request that extraordinary, nonrecurring expenses under GAAP
incurred in connection with such Permitted Acquisition be excluded from the
Consolidated Net Income of the Loan Parties and from the net income of the
business to be acquired when they compute Consolidated Cash Flow from Operations
pursuant to clause (1) above. Examples of such expenses include, without
limitation, transaction costs, debt prepayments and similar charges, brokers'
fees, attorneys' fees and accountants' fees. The foregoing expenses shall be
excluded from net income in such computations of Consolidated Cash Flow from
Operations if the Required Banks agree in writing to such request.
(ii) Notice. The Borrower shall deliver to the Banks a
notice in the form of Exhibit 8.01(m)(ii) (the "Acquisition Notice Certificate")
at least two (2) Business Days before making any Permitted Acquisition except
for: (1) a Permitted Acquisition described in Section 8.01(m)(i) with respect to
which the Borrower is delivering an Acquisition Approval Certificate, or (2) a
Permitted Acquisition if the Purchase Price in connection therewith is less than
$2,500,000. The Acquisition Notice Certificate shall set forth the ratio of (1)
Consolidated Cash Flow From Operations (excluding the cash flow of the acquired
business) for the Acquisition Income Reporting Period in connection with such
Permitted Acquisition, and (2) Total Indebtedness on the date of the Permitted
Acquisition after giving effect to the acquisition and the Loans to be made on
such date, which ratio shall not exceed (A) 5.25 to 1.0 through and including
September 30, 1998; (B) 5.00 to 1.0 from October 1, 1998 through and including
September 30, 1999; (C) 4.75 to 1.0 from October 1, 1999 through and including
September 30, 2000; and (D) 4.5 to 1.0 from October 1, 2000 and thereafter. The
Acquisition Notice Certificate also shall confirm that, after giving effect to
the Permitted Acquisition and the
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Loans made on the date thereof, no Event of Default shall exist and the Loan
Parties shall be in compliance with all of their covenants hereunder, assuming,
for purposes of Borrower's financial covenants, that all items of income,
expense and cash flow are reported for the Acquisition Income Reporting Period
and that all balance sheet items (such as Indebtedness) are measured on the date
of such Permitted Acquisition.
(iii) Additional Information. With respect to any Acquisition
Approval Certificate or Acquisition Notice Certificate, the Borrower shall
provide to the Banks, as the Banks may reasonably request detailed calculations
and information supporting the financial calculations therein and the financial
statements attached thereto.
(n) Dissolution of Certain Subsidiaries. Borrower shall cause
Pinnacle Rehab of Gwinnette and Pinnacle's Kansas Joint Venture to be dissolved
on or before December 31, 1998. Borrower shall not, directly or indirectly, make
any capital contributions or other investments in, loans to, guarantees or other
obligations on behalf of, or other payments, distributions or contributions to
or for the benefit of, Pinnacle Rehab of Gwinnette or Pinnacle's Kansas Joint
Venture on or after the Closing Date, except for payment of immaterial expenses
on behalf of such entities relating to their dissolution.
(o) [Intentionally Omitted] .
(p) Further Assurances. Each Loan Party shall, from time to time,
at its expense, faithfully preserve and protect the Agent's Lien on or perfected
security interest in the Collateral as a continuing perfected Lien, subject only
to Permitted Liens, and shall do such other acts and things as the Agent in its
sole discretion may deem necessary or advisable from time to time in order to
preserve, perfect and protect the Liens granted under the Loan Documents and to
exercise and enforce its rights and remedies thereunder with respect to the
Collateral.
(q) Owned Facilities - Termination of Liens; Intercreditor
Agreements.
The Borrower shall:
(i) Cause any Lien securing any Owned Facility Indebtedness
to be terminated on or before the earlier of: the maturity of such Owned
Facility Indebtedness (without giving effect to any extension of such maturity
after the Sixteenth Amendment Effective Date, unless such extension of maturity
is otherwise approved in accordance with this Agreement) or any refinancing,
replacement or substitution of such Owned Facility Indebtedness, unless, in the
case of a refinancing, such refinancing is otherwise approved in accordance with
this Agreement;
(ii) Not permit the amount of Owned Facility Indebtedness
secured by Liens in favor of an Owned Facility Lender to exceed the amount of
such Owned Facility Indebtedness existing on the Sixteenth Amendment Effective
Date;
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(iii) Cause each Subsidiary Owner not to ▇▇▇▇▇ ▇ ▇▇▇▇ on any
asset of such Subsidiary Owner if the Owned Facility Lender has previously
terminated its Liens or has never obtained a Lien on such asset; and
(iv) Cause each Owned Facility Lender and any other person
which loans money to any Subsidiary Owner, or otherwise obtains a Lien in any of
the assets of any Subsidiary Owner relating to any of the Owned Facilities
(whether by assignment of the Owned Facility Indebtedness or otherwise), on the
date of such loan or lien to execute and deliver to Agent an Intercreditor
Agreement and Borrower shall deliver or cause to be delivered to Agent a true
and correct copy of the original of each Intercreditor Agreement within one (1)
Business Day after such agreement has been executed. The Borrower shall use its
best efforts to obtain each Intercreditor Agreement in the form of Exhibit
1.01(I)(2)(A), and if the Borrower is not successful in obtaining such form of
Intercreditor Agreement after using best efforts, then the Borrower shall use
best efforts to obtain an Intercreditor Agreement in the form of Exhibit
1.01(I)(2)(B). If the Borrower is not successful, after using best efforts, in
obtaining either such form of Intercreditor Agreement, then the Borrower shall
negotiate such other Intercreditor Agreement as is reasonably satisfactory, in
form and substance, to the Agent.
(r) Leased Facilities - Termination of Liens; Intercreditor
Agreements; Trustee Agreements.
The Borrower shall:
(i) Cause any Lien securing any Lessor Indebtedness to be
terminated on or before the earlier of: (i) the maturity of such Lessor
Indebtedness (without giving effect to any extension of such maturity after the
Sixteenth Amendment Effective Date unless such extension of maturity is
otherwise approved in accordance with this Agreement) or (ii) any refinancing,
replacement or substitution of such Lessor Indebtedness unless, in the case of a
refinancing, such refinancing is otherwise approved in accordance with this
Agreement;
(ii) Not permit the amount of Lessor Indebtedness secured by
Liens in favor of the Lessor Lenders to exceed the amount of such Indebtedness
existing on the Sixteenth Amendment Effective Date; and
(iii) Cause each Subsidiary Lessee not to ▇▇▇▇▇ ▇ ▇▇▇▇ on any
asset of such Subsidiary Lessee if the applicable Lessor or Lessor Lender has
previously terminated its Liens or has never obtained a Lien on such asset;
(iv) Deliver to the Agent for the benefit of the Banks an
Intercreditor Agreement with respect each Lessor Lender and, if reasonably
requested by the Agent, a Non-Disturbance Agreement. Each Non-Disturbance
Agreement shall be satisfactory, in form and substance to the Agent. Borrower
shall deliver or cause to be delivered to Agent a true and correct copy of each
Non-Disturbance Agreement and the original of each Intercreditor Agreement
within one (1) Business Day after such agreement has been executed pursuant to
the preceding sentence. The Borrower shall use its best efforts to obtain each
Intercreditor Agreement in the form of Exhibit 1.01(I)(1)(A), and if the
Borrower is not successful in
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obtaining such form of Intercreditor Agreement after using best efforts, then
the Borrower shall use best efforts to obtain an Intercreditor Agreement in the
form of Exhibit 1.01(I)(1)(B). If the Borrower is not successful, after using
best efforts, in obtaining either such form of Intercreditor Agreement, then the
Borrower shall negotiate such other Intercreditor Agreement as is reasonably
satisfactory, in form and substance, to the Agent; and
(v) Cause if reasonably requested by the Agent, each Lessor
listed on Schedule 6.01(aa) to execute and deliver to the Agent a Trustee
Agreement; provided, however, that if, with respect to Leased Facilities leased
by Loan Parties prior to the Sixteenth Amendment Effective Date, following the
Sixteenth Amendment Effective Date the Loan Parties are otherwise in compliance
with all requirements under this Agreement relating to Lessor Indebtedness,
Leased Facilities and Permitted Leased Facility Liens, then no additional
Trustee Agreements will be required with respect to such Leased Facilities so
long as the lease of such facility continues following the Sixteenth Amendment
Effective Date on terms and conditions identical to those approved by the
Required Banks prior to the Sixteenth Amendment Effective Date. Each Trustee
Agreement shall be satisfactory, in form and substance to the Agent.
8.02 Negative Covenants. The Borrower covenants and agrees that until
payment in full of the Loans and interest thereon, satisfaction of all of the
Borrower's other obligations hereunder and termination of the Revolving Credit
Commitments, the Borrower shall comply with the following negative covenants:
(a) Indebtedness. Subject to Section 8.02(v), the Borrower shall
not, and shall not permit any of its Restricted Subsidiaries to, at any time
create, incur, assume or suffer to exist any Indebtedness, except:
(i) Indebtedness under the Loan Documents;
(ii) Existing Indebtedness as of the Sixteenth Amendment
Effective Date as set forth on Schedule 8.02(a) hereto (including, subject to
the other provisions of this Agreement, any extensions or renewals thereof
provided there is no increase in the amount thereof or other significant change
in the terms thereof adverse to any Loan Party or to any Bank unless otherwise
specified on Schedule 8.02(a)); provided further that the Owned Facility
Indebtedness and Lessor Indebtedness are also subject to the covenants and
limitations described in Sections 8.01(q) and (r) and any refinancing, extension
or renewal of any Owned Facility Indebtedness or Lessor Indebtedness is also
subject to satisfaction of the conditions set forth in Exhibit 1.01(C) hereto;
(iii) Capitalized leases as and to the extent permitted under
Section 8.02(p);
(iv) Indebtedness which is subordinated in accordance with
the provisions of Section 8.01(1);
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(v) Indebtedness secured by Purchase Money Security
Interests in an aggregate amount for the Borrower and its Subsidiaries on a
consolidated basis at any time not exceeding $5,000,000;
(vi) Indebtedness of a Loan Party to the Borrower or to a
wholly-owned Subsidiary of the Borrower;
(vii) the Subordinated Notes, provided that neither the
subordination provisions contained in the Indenture nor Section 1008 [Limitation
on Indebtedness] of the Indenture shall be amended after the Subordinated
Indebtedness Incurrence Date and provided further that the Indenture is not
otherwise amended after the Subordinated Indebtedness Incurrence Date if the
effect thereof would (i) accelerate the due date or increase the amount of any
payment due from the Borrower thereunder, (ii) change the rate at which interest
is charged thereunder, or (iii) impose material restrictions or obligations on
the Borrower or the other Loan Parties which are not imposed thereunder on the
Closing Date or add any term thereto which is less favorable in any material
respect to the Loan Parties than the terms of the Indenture on the Subordinated
Indebtedness Incurrence Date or which is more restrictive to any of the Loan
Parties than the terms of the Credit Agreement;
(viii) Guaranties which constitute Indebtedness as permitted
pursuant to Section 8.02(c);
(ix) Indebtedness not exceeding $500,000 of the Borrower to
CoreStates Bank, N.A. in respect of an overnight unsecured overdraft facility at
any time; and
(x) Owned Facility Indebtedness incurred after the Sixteenth
Amendment Effective Date, if the principal amount of and other terms and
conditions with respect to such Owned Facility Indebtedness are acceptable to
the Required Banks, (including, without limitation, satisfaction of all
conditions set forth on Exhibit 1.01(C)); provided, that all Owned Facility
Indebtedness is subject to the covenants and limitations set forth in Section
8.01(q).
(b) Liens. The Borrower shall not, and shall not permit any of
the other Loan Parties or Unrestricted Subsidiary which is an Excluded Entity
with respect to which Restricted Investments have been made as permitted
pursuant to Section 8.02(d)(iv) to, at any time create, incur, assume or suffer
to exist any Lien on any of its or their property or assets, tangible or
intangible, now owned or hereafter acquired, or agree or become liable to do so,
except Permitted Liens.
(c) Guaranties. Except as described in Schedule 8.02(c), the
Borrower shall not, and shall not permit any of the other Loan Parties to, at
any time, directly or indirectly, become or be liable in respect of any Guaranty
except: (i) Guaranties of any obligation or liability of another Loan Party that
is permitted under the other provisions of this Agreement, (ii) Guaranties which
are not required by GAAP to be disclosed in the Borrower's audited consolidated
financial statements (including the footnotes thereto), (iii) Guaranties of
Indebtedness incurred as part of a permitted Restricted Investment pursuant to
Section
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8.02(d)(iv), and (iv) Guaranties which are subordinated on terms reasonably
acceptable to the Agent.
(d) Loans and Investments. The Borrower shall not, and shall not
permit any of the other Loan Parties, to, at any time make or suffer to remain
outstanding any loan or advance to, or purchase, acquire or own any stock,
bonds, notes or securities of, or any partnership interest (whether general or
limited) in, or any other investment or interest in, or make any capital
contribution to, any other person, or agree, become or remain liable to do any
of the foregoing, except:
(i) trade credit extended on usual and customary terms in
the ordinary course of business;
(ii) advances to employees to meet expenses incurred by such
employees in the ordinary course of business;
(iii) Permitted Investments;
(iv) Restricted Investments not to exceed in the aggregate
for the Borrower and the other Loan Parties Seventy-Five Million Dollars
($75,000,000) outstanding at any time; provided that (i) the Excluded Entity in
which the Restricted Investment is made is engaged in a business which is
ancillary and related to the business of the Loan Parties; (ii) the Loan Party
making a Restricted Investment is either a shareholder, member or partner of the
Excluded Entity in which a Restricted Investment is made; (iii) the stock,
equity interests in a limited liability company or partnership interests owned
by a Loan Party in the Excluded Entity in which a Restricted Investment is made
are pledged to the Agent on a first priority basis for the benefit of the Banks;
(iv) to the extent that any Excluded Entity incurs Indebtedness payable to any
person other than a Loan Party (the "Third Party Lender") in excess of
$5,000,000, prior to incurring such Indebtedness, the Borrower shall cause the
Third Party Lender to enter into an intercreditor agreement with the Agent on
behalf of the Banks, in form and substance satisfactory to the Agent in its sole
discretion with respect to the Indebtedness of such Excluded Entity payable to
the Third Party Lender and any Indebtedness of such Excluded Entity payable to
either the Banks or any Loan Party; and (v) to the extent that any individual
Restricted Investment exceeds $7,500,000 or any series of related Restricted
Investments in the aggregate exceed $7,500,000 prior to making any such
Restricted Investment, the Borrower shall have obtained the written approval of
the Required Banks;
(v) loans, advances and investments in Restricted
Subsidiaries; and
(vi) loans and advances in the aggregate not to exceed
$8,000,000 at any time outstanding to officers and senior management of the Loan
Parties, so long as each such advance is on terms and conditions reasonably
satisfactory to the Agent and so long as the Borrower gives five (5) Business
Days' prior notice to the Agent of each loan or advance and the recipient of
each loan or advance is reasonably satisfactory to the Agent.
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(e) Dividends and Related Distributions. The Borrower shall not,
and shall not permit any of its Subsidiaries to, make or pay, or agree to become
or remain liable to make or pay, any dividend or other distribution of any
nature (whether in cash, property, securities or otherwise) on account of or in
respect of their respective shares of capital stock or partnership interests, as
the case may be, or on account of the purchase, redemption, retirement or
acquisition of their respective shares of capital stock (or warrants, options or
rights therefor) or partnership interests, as the case may be, except (i)
dividends or distributions in respect of a partnership interest payable by any
Subsidiary to the Borrower, (ii) dividends payable by the Borrower solely in
shares of capital stock of the Borrower, and (iii) up to the Permitted
Distribution Amount of distributions per year payable in the aggregate by any
Subsidiary of the Borrower which is a limited liability company or partnership
to non Affiliate members of such limited liability company or non Affiliate
limited partners of such partnership, so long as after giving effect thereto no
Event of Default or Potential Default has occurred and is continuing and so long
as at least five (5) Business Days prior to the making of any such distribution
the Borrower provides written notice to the Agent, together with a detailed
calculation, certified by the Chief Financial Officer of Borrower, setting forth
in detail the relevant Subsidiary's compliance with the ratio set forth in
clause (A) of the definition of Permitted Distribution Amount or, as the case
may be, such Subsidiary's compliance with clause (B) of the definition of
Permitted Distribution Amount, in either case with respect to the proposed
distribution as of the date of the making thereof. Notwithstanding the
foregoing, during the period commencing on the Sixteenth Amendment Effective
Date through, but not including the Expiration Date (the "Permitted Redemption
Period") the Borrower may purchase or redeem its stock up to an aggregate of $50
million (including in such aggregate amount all purchases or redemptions during
the Permitted Redemption Period) of such stock, provided that, after giving
effect to each such purchase or redemption, no Potential Default or Event of
Default has occurred and is continuing and, without limiting the generality of
the foregoing, that: (x) after giving effect to each such purchase or redemption
the Borrower is in compliance (and the Borrower demonstrates such compliance to
the Agent in detail satisfactory to the Agent) with the covenant set forth in
Section 8.02(r) [Maximum Leverage Ratio] and with the covenant set forth in
Section 8.02(t) [Minimum Net Worth].
For purposes of demonstrating compliance with the financial covenant
set forth in Section 8.02(r), Total Indebtedness shall be calculated as of each
date of determination (after giving effect to each purchase or redemption of the
Borrower's stock) and Consolidated Cash Flow from Operations shall be calculated
as of each date of determination (after giving effect to each purchase or
redemption of the Borrower's stock) for the four fiscal quarters then ended.
(f) Liquidations, Mergers, Consolidations, Acquisitions. The
Borrower shall not, and shall not permit any of the other Loan Parties to,
dissolve, liquidate or wind-up its affairs, or become a party to any merger or
consolidation, or acquire by purchase, lease or otherwise all or substantially
all of the assets or capital stock of any other person, provided that:
(i) any wholly owned Subsidiary may consolidate or merge
into the Borrower or any other wholly owned Subsidiary;
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(ii) a Subsidiary that is not a Material Subsidiary may be
dissolved, liquidated or wound up provided that from the date of this Agreement
through the Expiration Date, the total assets of the non-Material Subsidiaries
which so dissolve, liquidate or wind up shall not exceed $25,000,000 in the
aggregate;
(iii) the Borrower or a Restricted Subsidiary of the Borrower
may acquire all of the capital stock of another corporation so long as (u) the
Purchase Price for such acquisition shall not exceed $100,000,000, (v) the
aggregate Purchase Price for such acquisition together with all previous
acquisitions permitted under clauses (iii) and (iv) of this Section 8.02(f)
shall not exceed $200,000,000 in any fiscal year of Borrower, (v) such acquired
corporation, simultaneous with the acquisition thereof by a Loan Party, executes
and delivers to the Agent for the benefit of the Banks a Guaranty Agreement and
a Pledge Agreement substantially in the form of Exhibits 1.01(G) and 1.01(P),
respectively, and also delivers to the Agent such opinions of counsel and other
documents in connection therewith as the Agent may reasonably request, (w) all
of the issued and outstanding capital stock of such acquired corporation owned
by a Loan Party is pledged to the Agent for the benefit of the Banks pursuant to
a Pledge Agreement substantially in the form of Exhibit 1.01(P) hereto, (x)
after giving effect to such proposed acquisition, no Event of Default shall have
occurred and be continuing, (y) after giving effect to such proposed acquisition
(and without limiting the generality of the preceding clause (iii)(x)), the
Borrower is in compliance with the Leverage Ratio set forth in Section 8.02(r)
and the Borrower demonstrates such compliance pursuant to Section 8.01(m) (if
Section 8.01(m) requires such demonstration of compliance), and (z) in the case
of a merger involving the Borrower, the Borrower shall be the survivor of such
merger, and in the case of a merger involving any Restricted Subsidiary the
survivor of such merger shall be either such Restricted Subsidiary or a Person
which, effective upon consummation of such merger shall have become a Restricted
Subsidiary of the Borrower, shall have joined this Agreement and the other Loan
Documents as a Loan Party (including , without limitation, execution and
delivery of a Guaranty Agreement substantially in the form of Exhibit 1.01(G)),
shall have delivered such opinions of counsel and other documents as the Agent
may reasonably request and whose equity interests shall have been pledged to the
Agent for the benefit of the Banks on a first priority perfected basis pursuant
to a Pledge Agreement; and
(iv) the Borrower or any Restricted Subsidiary may merge or
consolidate with, or acquire all or substantially all of the assets of another
person so long as (w) the Purchase Price for such acquisition, merger or
consolidation shall not exceed $100,000,000, (x) the aggregate Purchase Price
for such acquisition together with all previous acquisitions permitted under
clauses (iii) and (iv) of this Section 8.02(f) shall not exceed $200,000,000 in
any fiscal year of Borrower, (y) after giving effect to such proposed
acquisition, merger or consolidation, no Event of Default shall have occurred
and be continuing, and (z) after giving effect to such proposed acquisition,
merger or consolidation, the Borrower is in compliance with the Leverage Ratio
set forth in Section 8.02(r) and the Borrower demonstrates such compliance
pursuant to Section 8.01(m) (if Section 8.01(m) requires such demonstration of
compliance).
For purposes of the preceding clauses (iii)(z) and (iv)(z),
the Leverage Ratio set forth in Section 8.02(r) shall be calculated as follows:
(i) Total Indebtedness
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shall be determined as of the date of the proposed acquisition, after giving
effect thereto, and (ii) Consolidated Cash Flow from Operations shall be
calculated for the twelve-month period ending on the last day of the fiscal
quarter of the Borrower which precedes such date of acquisition.
(g) Dispositions of Assets or Subsidiaries. The Borrower shall
not, and shall not permit any of the other Loan Parties to, sell, convey,
assign, lease, abandon or otherwise transfer or dispose of, voluntarily or
involuntarily, any of its properties or assets, tangible or intangible
(including but not limited to sale, assignment, discount or other disposition of
accounts, contract rights, chattel paper, equipment or general intangibles with
or without recourse or of capital stock, shares of beneficial interest or
partnership interests of a Subsidiary), except:
(i) any sale, transfer or lease of assets in the ordinary
course of business which are no longer necessary or required in, or which are
not material to, the conduct of the Borrower's or such Subsidiary's business;
(ii) any sale, transfer or lease of assets by any
wholly-owned Loan Party to the Borrower or any other wholly owned Loan Party (or
by the Borrower to a wholly owned Loan Party);
(iii) any sale, transfer or lease of assets in the ordinary
course of business which are replaced by substitute assets acquired or leased
within the parameters of Section 8.02(p) provided such substitute assets are
subject to the Banks' Prior Security Interest;
(iv) any sale or transfer of assets which are obsolete or no
longer used or useful in the business of the Borrower or its Subsidiaries;
provided that such sales, transfers or dispositions shall not exceed, in any
fiscal year, $1 million in the aggregate for the Borrower and its Subsidiaries;
or
(v) any sale, transfer or lease of assets, other than those
specifically excepted pursuant to clauses (i) through (iv) above, which is
approved by the Required Banks so long as (x) the proceeds of such sale,
transfer or lease are applied as a mandatory prepayment of the Loans to the
extent required by the provisions of Section 5.05 of this Agreement, (y) after
giving effect to such proposed disposition, no Event of Default shall have
occurred and be continuing, and (z) after giving effect to such proposed
disposition (and without limiting the generality of the foregoing clause (y)),
the Borrower is in compliance (and, with respect to sales, transfers or leases
of assets of Subsidiaries which are not Material Subsidiaries, which sales,
transfers or leases individually or in the aggregate exceed $35 million for the
period from October 1, 1997 through and including the Expiration Date, the
Borrower demonstrates such compliance to the Agent in detail reasonably
satisfactory to the Agent) with the leverage ratio set forth in Section 8.02(r).
For purposes of this Section 8.02(g)(v), the leverage ratio set forth in Section
8.02(r) shall be calculated as follows: (i) Indebtedness of the Borrower and its
Subsidiaries shall be determined as of the date of the proposed disposition,
after giving effect thereto, and (ii) Consolidated Cash Flow from Operations
shall be calculated for the twelve-month period ending on the last day of the
fiscal quarter of the Borrower which precedes
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such date of disposition but shall exclude therefrom all amounts attributable to
the assets which are sold, transferred or leased.
(h) Affiliate Transactions. The Borrower shall not, and shall not
permit any of its Subsidiaries to, enter into or carry out any transaction with
any Affiliate (including, without limitation, purchasing property or services
from or selling property or services) unless such transaction is entered into in
the ordinary course of business upon fair and reasonable arm's-length terms and
conditions and is in accordance with all applicable Law or unless such
transaction is not otherwise prohibited by this Agreement.
(i) Subsidiary, Partnerships and Joint Ventures. The Borrower
shall not, and shall not permit any Subsidiary to, own or create directly or
indirectly any Subsidiaries other than those listed in Schedule 6.01(c);
provided, however, that the Borrower or a Restricted Subsidiary may acquire a
Subsidiary pursuant to Section 8.02(f) or form a new Subsidiary so long as (A)
if such Subsidiary is a Restricted Subsidiary it executes and delivers to the
Agent for the benefit of the Banks a Guaranty Agreement substantially in the
form of Exhibit 1.01(G), and also delivers to the Agent such opinions of counsel
and other documents as the Agent may reasonably request; and (B) all of the
issued and outstanding capital stock or other equity interests of such
Subsidiary owned by a Loan Party are pledged to the Agent for the benefit of the
Banks, such pledge to be a first priority perfected pledge pursuant to a Pledge
Agreement. If Borrower is forming a new Subsidiary (as opposed to acquiring a
Subsidiary) the obligations set forth in clauses (A) and (B) of the preceding
sentence shall arise only at such time as such new Subsidiary either commences
construction of a health care facility or related health care business, acquires
a health care facility or makes another acquisition permitted under this
Agreement or has a net book value, as determined under GAAP, of at least
$250,000. Except for investments permitted under Section 8.02(d)(iv), neither
the Borrower nor any Subsidiary shall become or agree to become a general or
limited partner in any general or limited partnership or a joint venturer in any
joint venture.
(j) Continuation of or Change in Business. The Borrower shall
not, and shall not permit any Subsidiary to, engage in any business other than
(i) its existing business, substantially as conducted and operated as of the
Closing Date and (ii) related health care businesses.
(k) Plans and Benefit Arrangements. The Borrower shall not, and
shall not permit any of its Subsidiaries to:
(i) fail to satisfy the minimum funding requirements of
ERISA and the Internal Revenue Code with respect to any Plan;
(ii) request a minimum funding waiver from the Internal
Revenue Service with respect to any Plan;
(iii) engage in a Prohibited Transaction with any Plan,
Benefit Arrangement or Multiemployer Plan which, alone or in conjunction with
any other circumstances
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or set of circumstances resulting in liability under ERISA, would constitute a
Material Adverse Change;
(iv) permit the aggregate actuarial present value of all
benefit liabilities (whether or not vested) under each Plan, determined on a
plan termination basis, as disclosed in the most recent actuarial report
completed with respect to such Plan, to exceed, as of any actuarial valuation
date, the fair market value of the assets of such Plan by an amount in excess of
$250,000;
(v) fail to make when due any contribution to any
Multiemployer Plan that the Borrower or any member of the ERISA Group may be
required to make under any agreement relating to such Multiemployer Plan, or any
Law pertaining thereto;
(vi) withdraw (completely or partially) from any
Multiemployer Plan or withdraw (or be deemed under Section 4062(e) of ERISA to
withdraw) from any Multiple Employer Plan, where any such withdrawal is likely
to result in a material liability of Borrower or any member of the ERISA Group;
(vii) terminate, or institute proceedings to terminate, any
Plan, where such termination is likely to result in a material liability to the
Borrower or any member of the ERISA Group;
(viii) make any amendment to any Plan with respect to which
security is required under Section 307 of ERISA; or
(ix) fail to give any and all notices and make all
disclosures and governmental filings required under ERISA or the Internal
Revenue Code, where such failure is likely to result in a Material Adverse
Change.
(l) Fiscal Year. The Borrower shall not permit any of its
Subsidiaries to, change its fiscal year from the twelve-month period beginning
January 1 and ending December 31.
(m) Issuance of Stock. The Borrower shall not permit any of its
Subsidiaries to issue any additional shares of capital stock, partnership
interests or member interests in a limited liability company or any options,
warrants or other rights in respect thereof; provided, however, that an
Unrestricted Subsidiary which is an Excluded Entity may issue additional capital
stock, partnership interests or member interests in a limited liability company
so long as all such capital stock, partnership interests or member interests in
a limited liability company which are owned, beneficially, of record, or
otherwise, by any Loan Party are pledged to the Banks as a first priority
perfected pledge pursuant to a Pledge Agreement, and provided further that any
Restricted Subsidiary may issue additional capital stock, partnership interests
or member interests in a limited liability company so long as such capital
stock, partnership interests or member interests in a limited liability company
are pledged to the Banks as a first priority perfected pledge pursuant to a
Pledge Agreement.
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(n) [Intentionally Omitted.]
(o) [Intentionally Omitted.]
(p) Capital Expenditures and Leases. The Borrower shall not, and
shall not permit any of its Subsidiaries to make any payments on account of the
purchase of any assets which if purchased would constitute fixed assets or on
account of the lease of any assets which if leased would constitute a capital
lease, in the aggregate exceeding (i) $82,000,000 during the fiscal year of
January 1, 1997 through December 31, 1997; and (ii) $75,000,000 in each fiscal
year thereafter, and all such purchases of fixed assets or payments pursuant to
such capital leases shall be made under usual and customary terms and in the
ordinary course of business.
(q) Minimum Fixed Charge Coverage Ratio. The Borrower shall not
at any time permit the ratio of (x) the sum of Adjusted Consolidated Net Income,
interest expense, depreciation, amortization, income tax expense and operating
lease expense to (y) the sum of its interest expense, operating lease expense
and current maturities of long-term Indebtedness (other than current maturities
of obligations in respect of capital leases) in each case determined and
consolidated in accordance with GAAP to be less than 2.0 to 1.0. Such ratio
shall be calculated as of the end of each fiscal quarter. Calculations as of the
end of each fiscal quarter shall be for the four fiscal quarters then ended.
(r) Maximum Leverage Ratio. The Borrower shall not at any time
permit the ratio of Total Indebtedness to Consolidated Cash Flow from Operations
to exceed (A) 5.25 to 1.0 from October 1, 1997 through and including September
30, 1998; (B) 5.0 to 1.0 from October 1, 1998 through and including September
30, 1999; (C) 4.75 to 1.0 from October 1, 1999 through and including September
30, 2000; and (D) 4.5 to 1.0 from October 1, 2000 and thereafter. For purposes
of this Section 8.02(r), Total Indebtedness shall be calculated as of each date
of determination and Consolidated Cash Flow from Operations shall be calculated
as of each date of determination for the four fiscal quarters then ended.
(s) [Intentionally Omitted.]
(t) Minimum Net Worth. The Borrower shall not at any time after
October 1, 1997, permit Consolidated Net Worth to be less than the sum of (i)
Three Hundred Twenty Four Million Dollars ($324,000,000), (ii) seventy-five
percent (75%) of Adjusted Consolidated Net Income of the Borrower and its
Subsidiaries for each fiscal quarter in which net income was earned (as opposed
to a net loss) during the period from July 1, 1997 through (and including) the
date of determination, (iii) one hundred percent (100%) of all increases in
capital stock and additional paid-in capital from issuances for cash of equity
securities and other equity capital investments after July 1, 1997, and (iv) one
hundred percent (100%) of all increases in capital stock and additional paid-in
capital from issuances of equity securities in connection with the acquisition
of a Subsidiary after July 1, 1997 (so long as the fair market value at the time
of acquisition of the Subsidiary so acquired is at least equal to the value of
the capital stock or other equity securities so issued
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(u) Senior Indebtedness to Cash Flow From Operations Ratio. The
Borrower shall not at any time permit the ratio of (i) Total Indebtedness, other
than the outstanding principal amount of the Subordinated Notes and other than
the outstanding principal amount of Indebtedness permitted pursuant to Section
8.02(a)(iv), to (ii) Consolidated Cash Flow from Operations to exceed (A) 4.0 to
1.0 for periods prior to and including September 30, 1998; (B) 3.75 to 1.0 from
October 1, 1998 through and including September 30, 1999; (C) 3.50 to 1.0 from
October 1, 1999 through and including September 30, 2000; and (D) 3.25 to 1.0
from October 1, 2000 and thereafter. For purposes of this Section 8.02(u), Total
Indebtedness, the outstanding principal amount of the Subordinated Notes and the
outstanding principal amount of Indebtedness permitted pursuant to Section
8.02(a)(iv) shall be calculated as of each date of determination and
Consolidated Cash Flow from Operations shall be calculated as of each date of
determination for the four fiscal quarters then ended.
(v) Incurrence of Indebtedness Permitted by the Indenture. So
long as any Indebtedness or other obligations (monetary or otherwise) are
outstanding under the Indenture the Borrower shall not, and shall not permit any
of its Subsidiaries to, at any time create, incur, assume or suffer to exist any
Indebtedness unless the incurrence thereof complies with the provisions of
Section 1008. [Limitation on Indebtedness] of the Indenture as in effect on the
Ninth Amendment Effective Date without giving any effect to any grace period
under the Indenture or waiver under the Indenture of any default of such
covenant.
(w) [Intentionally Omitted.]
(x) Negative Pledges. Except as set forth on Schedule 8.02(x),
Borrower shall not and shall not permit any of its Subsidiaries to enter into
any agreement with any person which prohibits the Loan Parties from granting
Liens to the Agent or the Banks.
(y) Prohibition of Defeasance of Subordinated Notes. The Borrower
shall not and shall not permit any of its Subsidiaries to make any payments to
the trustee under the Indenture or to any holders of Subordinated Notes in
payment of the defeasance or covenant defeasance of the Subordinated Notes
pursuant to Section 402 or 403 of the Indenture or any similar provision in any
supplement to the Indenture.
8.03 Reporting Requirements. The Borrower covenants and agrees that
until payment in full of the Loans and interest thereon, satisfaction of all of
the Borrower's other obligations hereunder and termination of the Revolving
Credit Commitments, the Borrower will furnish or cause to be furnished to the
Agent and each of the Banks:
(a) [Intentionally Omitted.]
(b) Quarterly Financial Statements. As soon as available and in
any event within forty-five (45) calendar days after the end of each fiscal
quarter in each fiscal year, financial statements of the Borrower, consisting of
a consolidated balance sheet as of the end of such fiscal quarter and related
consolidated statements of income, retained earnings and cash flows for the
fiscal quarter then ended and the fiscal year through that date, all in
reasonable detail and certified by the Chief Executive Officer, President or
Chief Financial Official of the
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Borrower as having been prepared in accordance with GAAP, consistently applied
(subject to normal year-end audit adjustments), and setting forth in comparative
form the respective financial statements for the corresponding date and period
in the previous fiscal year.
(c) Annual Financial Statements. As soon as available and in any
event within ninety (90) days after the end of each fiscal year of the Borrower,
financial statements of the Borrower consisting of a consolidated balance sheet
as of the end of such fiscal year, and related consolidated statements of
income, retained earnings and cash flows for the fiscal year then ended, all in
reasonable detail and setting forth in comparative form the financial statements
as of the end of and for the preceding fiscal year, and certified by independent
certified public accountants of nationally recognized standing satisfactory to
the Agent. The certificate or report of accountants shall be free of
qualifications (other than any consistency qualification that may result from a
change in the method used to prepare the financial statements as to which such
accountants concur) and shall not include a statement which indicates the
occurrence or existence of any event, condition or contingency which would
materially impair the prospect of payment or performance of any covenant,
agreement or duty of the Borrower or any of its Subsidiaries under any of the
Loan Documents, together with a letter of such accountants substantially to the
effect that, based upon their ordinary and customary examination of the affairs
of the Borrower and its Subsidiaries, performed in connection with the
preparation of such consolidated financial statements, and in accordance with
generally accepted auditing standards, they are not aware of the existence of
any condition or event which constitutes an Event of Default or Potential
Default or, if they are aware of such condition or event, stating the nature
thereof.
(d) Certificate of the Borrower. Concurrent with the financial
statements of the Borrower furnished to the Agent and to the Banks pursuant to
Sections 8.03(b) and 8.03(c) hereof, a certificate of the Borrower signed by the
Chief Executive Officer, President or Chief Financial Officer of the Borrower or
by either ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Vice President-Finance of the Borrower or ▇▇▇▇▇
▇▇▇▇▇▇, Vice President-Finance of the Borrower, in the form of Exhibit 8.03(d)
hereto, to the effect that, except as described pursuant to Section 8.03(e)
below, (i) the representations and warranties of the Borrower contained in
Article VI hereof are true on and as of the date of such certificate with the
same effect as though such representations and warranties had been made on and
as of such date (except representations and warranties which expressly relate
solely to an earlier date or time) and the Borrower has performed and complied
with all covenants and conditions hereof, (ii) no Event of Default or Potential
Default exists and is continuing on the date of such certificate, and (iii)
containing calculations in sufficient detail to demonstrate compliance as of the
date of the financial statements with all financial covenants contained in
Section 8.02 hereof and with the covenant contained in Section 1008 [Limitation
on Indebtedness] of the Indenture.
(e) Notice of Default. Promptly after any officer of the Borrower
has learned of the occurrence of an Event of Default or Potential Default, a
certificate signed by the Chief Executive Officer, President or Chief Financial
Officer of the Borrower or by ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Vice President-Finance of the
Borrower, setting forth the details of such Event of
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Default or Potential Default and the action which the Borrower proposes to take
with respect thereto.
(f) Notice of Litigation. Promptly after the commencement
thereof, notice of all actions, suits, proceedings or investigations before or
by any Official Body or any other person against the Borrower which relate to
the Collateral, involve a claim or series of related claims in excess of
$1,000,000 or which if adversely determined would constitute a Material Adverse
Change.
(g) Certain Events. Written notice to the Agent (and upon the
Agent's receipt of such notice, the Agent shall provide a copy thereof to each
Bank) at least thirty (30) calendar days prior thereto, with respect to any
proposed sale or transfer of assets pursuant to Section 8.02(g)(iii) or (iv).
(h) Budgets, Forecasts, Other Reports and Information. Promptly
upon their becoming available to the Borrower:
(i) the annual budget of the Borrower, to be supplied not
later than sixty (60) days prior to commencement of the fiscal year to which
such budget relates,
(ii) any reports including management letters submitted to
the Borrower by independent accountants in connection with any annual, interim
or special audit,
(iii) any reports, notices or proxy statements generally
distributed by the Borrower to its stockholders on a date no later than the date
supplied to the stockholders,
(iv) regular or periodic reports, including Forms 10-K, 10-Q
and 8-K, registration statements and prospectuses, filed by the Borrower with
the Securities and Exchange Commission,
(v) a copy of any material order in any proceeding to which
the Borrower or any of its Subsidiaries is a party issued by any Official Body,
(vi) regular, periodic utilization reports including in
detail reasonably satisfactory to the Agent for the period of such reports the
patient census, the number of occupied beds, the payment source (Medicare,
Medicaid, private pay or otherwise) for each patient,
(vii) such other reports and information as the Banks may
from time to time reasonably request. The Borrower shall also notify the Banks
promptly of the enactment or adoption of any Law which may result in a Material
Adverse Change with respect to the Borrower after the Borrower becomes aware or
should reasonably have become aware thereof, and
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(viii) annual reports in detail satisfactory to the Agent
setting forth the real property owned, leased or managed by the Borrower or any
Subsidiary, to be supplied not later than sixty (60) days prior to commencement
of the fiscal year to which any of the foregoing may be applicable.
(i) Notices Regarding Plans and Benefit Arrangements. (i)
Promptly upon becoming aware of the occurrence thereof, notice (including the
nature of the event and, when known, any action taken or threatened by the
Internal Revenue Service or the PBGC with respect thereto) of:
(A) any Reportable Event with respect to the Borrower
or any member of the ERISA Group (regardless of whether the obligation to report
said Reportable Event to the PBGC has been waived),
(B) any Prohibited Transaction which could be subject
the Borrower or any member of the ERISA Group to a civil penalty assessed
pursuant to Section 502(i) of ERISA or a tax imposed by Section 4975 of the
Internal Revenue Code in connection with any Plan, Benefit Arrangement or any
trust created thereunder,
(C) any assertion of material withdrawal liability
with respect to any Multiemployer Plan,
(D) any partial or complete withdrawal from a
Multiemployer Plan by the Borrower or any member of the ERISA Group under Title
IV of ERISA (or assertion thereof), where such withdrawal is likely to result in
material withdrawal liability,
(E) any cessation of operations (by the Borrower or
any member of the ERISA Group) at a facility in the circumstances described in
Section 4063(e) of ERISA,
(F) withdrawal by the Borrower or any member of the
ERISA Group from a Multiple Employer Plan,
(G) a failure by the Borrower or any member of the
ERISA Group to make a payment to a Plan required to avoid imposition of a lien
under Section 302(f) of ERISA,
(H) the adoption of an amendment to a Plan requiring
the provision of security to such Plan pursuant to Section 307 of ERISA, or
(I) any change in the actuarial assumptions or funding
methods used for any Plan, where the effect of such change is to materially
increase or materially reduce the unfunded benefit liability or obligation to
make periodic contributions.
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(ii) Promptly after receipt thereof, copies of (a) all
notices received by the Borrower or any member of the ERISA Group of the PBGC's
intent to terminate any Plan administered or maintained by the Borrower or any
member of the ERISA Group, or to have a trustee appointed to administer any such
Plan; and (b) at the request of the Agent or any Bank each annual report (IRS
Form 5500 series) and all accompanying schedules, the most recent actuarial
reports, the most recent financial information concerning the financial status
of each Plan administered or maintained by the Borrower or any member of the
ERISA Group, and schedules showing the amounts contributed to each such Plan by
or on behalf of the Borrower or any member of the ERISA Group in which any of
their personnel participate or from which such personnel may derive a benefit,
and each Schedule B (Actuarial Information) to the annual report filed by the
Borrower or any member of the ERISA Group with the Internal Revenue Service with
respect to each such Plan.
(iii) Promptly upon the filing thereof, copies of Form 5310,
or any successor or equivalent form to Form 5310, filed with the PBGC in
connection with the termination of any Plan.
(j) Notices With Respect to Indenture. Written notice to the
Agent (and upon the Agent's receipt of each such notice, the Agent shall provide
a copy thereof to each Bank):
(i) immediately upon the occurrence of a "Default" or an
"Event of Default," as such terms are defined in the Indenture;
(ii) immediately upon a "Change of Control," as such term is
defined in the Indenture;
(iii) immediately upon receipt of a "notice of acceleration"
from either the trustee for the Subordinated Notes or the holders of the
Subordinated Notes pursuant to Section 502 of the Indenture or any similar
provision in any supplement to the Indenture;
(iv) simultaneous with the sending thereof, all notices
required to be sent to the trustee or the holders of the Subordinated Notes
under the Indenture; and
(v) immediately upon the receipt thereof, all notices
received from the trustee under the Indenture.
ARTICLE IX
DEFAULT
9.01 Events of Default. An Event of Default shall mean the occurrence
or existence of any one or more of the following events or conditions (whatever
the reason therefor and whether voluntary, involuntary or effected by operation
of Law):
(a) The Borrower shall fail to pay any principal of any Loan
(including scheduled or mandatory prepayments or the payment due at maturity) or
shall fail to pay any
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interest on any Loan or any other amount owing hereunder or under the other Loan
Documents after such principal or within three (3) Business Days after such
interest or other amount becomes due in accordance with the terms hereof or
thereof;
(b) Any representation or warranty made at any time by the
Borrower herein or by the Borrower or any of its Subsidiaries in any other Loan
Document, or in any certificate, other instrument or statement furnished
pursuant to the provisions hereof or thereof, shall prove to have been false or
misleading in any material respect as of the time it was made or furnished
regardless of whether such representation or warranty was qualified as to
Borrower's knowledge or best knowledge;
(c) The Borrower shall default in the observance or performance
of any covenant contained in Section 8.01(f) or Section 8.02 hereof;
(d) The Borrower or any of its Subsidiaries shall default in the
observance or performance of any other covenant, condition or provision hereof
or of any other Loan Document and such default shall continue unremedied for a
period of thirty (30) Business Days after any officer of the Borrower or any
Subsidiary becomes aware of the occurrence thereof (such grace period to be
applicable only in the event such default can be remedied by corrective action
of the Borrower or such Subsidiary as determined by the Agent in its sole
discretion);
(e) A default or event of default shall occur at any time under
the terms of any other agreement involving borrowed money or the extension of
credit or any other Indebtedness under which the Borrower or any of its
Subsidiaries may be obligated as borrower or guarantor in excess of $1,000,000
in aggregate principal amount, and such breach, default or event of default
consists of the failure to pay (beyond any period of grace permitted with
respect thereto, whether waived or not) any indebtedness when due (whether at
stated maturity, by acceleration or otherwise) or if such breach or default
permits or causes the acceleration of any indebtedness (whether or not such
right shall have been waived) or the termination of any commitment to lend;
(f) Any final judgments or orders for the payment of money in
excess of $1,000,000 in the aggregate (not paid or fully covered by insurance)
shall be entered against the Borrower or any of its Subsidiaries by a court
having jurisdiction in the premises which judgment is not discharged, vacated,
bonded or stayed pending appeal within a period of thirty (30) days from the
date of entry;
(g) Any of the Loan Documents shall cease to be legal, valid and
binding agreements enforceable against the party executing the same or such
party's successors and assigns (as permitted under the Loan Documents) in
accordance with the respective terms thereof or shall in any way be terminated
(except in accordance with its terms) or shall in any way be challenged or
contested or cease to give or provide the respective Liens, security interests,
rights, titles, interests, remedies, powers or privileges intended to be created
thereby;
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(h) The Collateral or any other of the Borrower's or any of its
Subsidiaries' assets are attached, seized, levied upon or subject to a writ or
distress warrant; or such come within the possession of any receiver, trustee,
custodian or assignee for the benefit of creditors and the same is not cured
within thirty (30) days thereafter;
(i) A notice of lien or assessment in excess of $1,000,000 is
filed of record with respect to all or any part of the Borrower's or any of its
Subsidiaries' assets by the United States, or any department, agency or
instrumentality thereof, or by any state, county, municipal or other
governmental agency, 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 these becomes payable and the same is not paid within thirty (30)
days after the same becomes payable unless the same is being contested in good
faith in accordance with Section 8.01(b);
(j) The Borrower or any of its Material Subsidiaries ceases to be
solvent or admits in writing its inability to pay its debts as they mature;
(k) Any of the following occurs: The Agent determines in good
faith that the amount of Borrower's liability is likely to exceed 10% of its
Consolidated Net Worth upon the occurrence of (i), (ii), (iii) or (iv) below:
(i) any Reportable Event constitutes grounds for the termination of any Plan by
the PBGC or the appointment of a trustee to administer or liquidate any Plan,
shall have occurred and be continuing; (ii) proceedings shall have been
instituted or other action taken to terminate any Plan or a termination notice
shall have been filed with respect to any Plan; (iii) a trustee shall be
appointed to administer or liquidate any Plan; or (iv) the PBGC shall give
notice of its intent to institute proceedings to terminate any Plan or Plans or
to appoint a trustee to administer or liquidate any Plan; or, with respect to
any of the events specified in (v), (vi), (vii), (viii) or (ix) below, the Agent
determines in good faith that any such occurrence could be reasonably likely to
materially and adversely affect the total enterprise represented by the Borrower
and the other members of the ERISA Group; (v) the Borrower or any member of the
ERISA Group shall fail to make any contributions when due to a Plan or a
Multiemployer Plan; (vi) the Borrower or any member of the ERISA Group shall
make any amendment to a Plan with respect to which security is required under
Section 307 of ERISA; (vii) the Borrower or any member of the ERISA Group shall
withdraw completely or partially from a Multiemployer Plan; (viii) the Borrower
or any member of the ERISA Group shall withdraw (or shall be deemed under
Section 4062(e) of ERISA to withdraw) from a Multiple Employer Plan; or (ix) any
applicable Law is adopted, changed or interpreted by any Official Body with
respect to or otherwise affecting one or more Plans, Multiemployer Plans or
Benefit Arrangements;
(l) The Borrower ceases to conduct its business as contemplated or
the Borrower or any of its Material Subsidiaries is enjoined, restrained or in
any way prevented by court order from conducting all or any material part of its
business and such injunction, restraint or other preventative order is not
dismissed within thirty (30) days after the entry thereof;
(m) A Change of Ownership occurs;
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(n) A proceeding shall have been instituted in a court having
jurisdiction in the premises seeking a decree or order for relief in respect of
the Borrower or any of its Subsidiaries in an involuntary case under any
applicable bankruptcy, insolvency, reorganization or other similar law now or
hereafter in effect, or a receiver, liquidator, assignee, custodian, trustee,
sequestrator, conservator (or similar official) of the Borrower or any of its
Subsidiaries for any substantial part of its property, or for the winding-up or
liquidation of its affairs, and such proceeding shall remain undismissed or
unstayed and in effect for a period of sixty (60) consecutive days or such court
shall enter a decree or order granting any of the relief sought in such
proceeding; or
(o) The Borrower or any of its Subsidiaries shall commence a
voluntary case under any applicable bankruptcy, insolvency, reorganization or
other similar law now or hereafter in effect, shall consent to the entry of an
order for relief in an involuntary case under any such law, or shall consent to
the appointment or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator, conservator (or other similar official) of
itself or for any substantial part of its property or shall make a general
assignment for the benefit of creditors, or shall fail generally to pay its
debts as they become due, or shall take any action in furtherance of any of the
foregoing.
9.02 Consequences of Event of Default
(a) If an Event of Default specified under subsections (a) through
(m) of Section 9.01 hereof shall occur and be continuing, the Banks shall be
under no further obligation to make Loans hereunder and the Agent upon the
request of the Required Banks, shall (i) by written notice to the Borrower,
declare the unpaid principal amount of the Notes then outstanding and all
interest accrued thereon, any unpaid fees and all other Indebtedness of the
Borrower to the Banks hereunder and thereunder to be forthwith due and payable,
and the same shall thereupon become and be immediately due and payable to the
Agent for the benefit of each Bank without presentment, demand, protest or any
other notice of any kind, all of which are hereby expressly waived, and (ii)
require the Borrower to, and the Borrower shall thereupon, deposit in a
non-interest bearing account with the Agent, as cash collateral for its
obligations under the Loan Documents, an amount equal to the maximum amount
currently or at any time thereafter available to be drawn on all outstanding
Letters of Credit, and the Borrower hereby pledges to the Agent and the Banks,
and grants to the Agent and the Banks a security interest in, all such cash as
security for such obligations. Upon the curing of all existing Events of Default
to the satisfaction of the Required Banks, the Agent shall return such cash
collateral to the Borrower; and
(b) If an Event of Default specified under subsections (n) or (o)
of Section 9.01 hereof shall occur, the Banks shall be under no further
obligations to make Loans hereunder and the unpaid principal amount of the Notes
then outstanding and all interest accrued thereon, any unpaid fees and all other
Indebtedness of the Borrower to the Banks hereunder and thereunder shall be
immediately due and payable, without presentment, demand, protest or notice of
any kind, all of which are hereby expressly waived; and
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(c) If an Event of Default shall occur and be continuing, any
Bank to whom any obligation is owed by any Loan Party hereunder or under any
other Loan Document or any participant of such Bank which has agreed in writing
to be bound by the provisions of Section 10.13 hereof and any branch, subsidiary
or affiliate of such Bank or participant anywhere in the world shall have the
right, in addition to all other rights and remedies available to it, without
notice to such Loan party, to set-off against and apply to the then unpaid
balance of all the Loans and all other obligations of such Loan party hereunder
or under any other Loan Document any debt owing to, and any other funds held in
any manner for the account of, such Loan Party by such Bank or participant or by
such branch, subsidiary or affiliate, including, without limitation, all funds
in all deposit accounts (whether time or demand, general or special,
provisionally credited or finally credited, or otherwise) now or hereafter
maintained by such Loan Party for its own account (but not including funds held
in custodian or trust accounts) with such Bank or participant or such branch,
subsidiary or affiliate. Such right shall exist whether or not any Bank or the
Agent shall have made any demand under this Agreement or any other Loan
Document, whether or not such debt owing to or funds held for the account of
such Loan Party is or are matured or unmatured and regardless of the existence
or adequacy of any Collateral, Guaranty or any other security, right or remedy
available to any Bank or the Agent; and
(d) If an Event of Default shall occur and be continuing, and
whether or not the Agent shall have accelerated the maturity of Loans of the
Borrower pursuant to any of the foregoing provisions of this Section 9.02, the
Agent or any Bank, if owed any amount with respect to the Notes, may proceed to
protect and enforce its rights by suit in equity, action at law and/or other
appropriate proceeding, whether for the specific performance of any covenant or
agreement contained in this Agreement or the Notes, including as permitted by
applicable Law the obtaining of the ex parte appointment of a receiver, and, if
such amount shall have become due, by declaration or otherwise, proceed to
enforce the payment thereof or any other legal or equitable right of the agent
or such Bank; and
(e) From and after the date on which the Agent has taken any
action pursuant to this Section 9.02 and until all obligations of the Loan
Parties have been paid in full, any and all proceeds received by the Agent from
any sale or other disposition of the Collateral, or any part thereof, or the
exercise of any other remedy by the Agent, shall be applied as follows:
(i) first, to reimburse the Agent and the Banks for
reasonable out-of-pocket costs, expenses and disbursements, including without
limitation reasonable attorneys' fees and legal expenses, incurred by the Agent
or the Banks in connection with realizing on the Collateral or collection of any
obligations of the Loan Parties under any of the Loan Documents, including
advances made by the Banks or any one of them or the Agent for the reasonable
maintenance, preservation, protection or enforcement of, or realization upon,
the Collateral, including without limitation, advances for taxes, insurance,
repairs and the like and reasonable expenses incurred to sell or otherwise
realize on, or prepare for sale or other realization on, any of the Collateral;
(ii) second, to the repayment of all Indebtedness then due
and unpaid of the Loan Parties to the Banks incurred under this Agreement or any
of the Loan
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Documents, whether of principal, interest, fees, expenses or otherwise, in such
manner as the Agent may reasonably determine in its discretion and with respect
to principal, interest, and fees, shall be made in proportion to the Ratable
Share of each Bank; and
(iii) the balance, if any, as required by Law.
(f) In addition to all of the rights and remedies contained in
this Agreement or in any of the other Loan Documents, the Agent shall have all
of the rights and remedies with respect to the Collateral of a secured party
under the Uniform Commercial Code or other applicable Law, all of which rights
and remedies shall be cumulative and non-exclusive, to the extent permitted by
Law. The Agent may, and upon the request of the Required Banks shall, exercise
all post-default rights granted to the Agent and the Banks under the Loan
Documents or applicable Law.
(g) Following the occurrence and continuance of an Event of
Default, the Borrower, at its cost and expense (including the cost and expense
of obtaining any of the following referenced consents, approvals, etc.) will
promptly execute and deliver or cause the execution and delivery of all
applications, certificates, instruments, registration statements, and all other
documents and papers the Agent may request in connection with the obtaining of
any consent, approval, registration, qualification, permit, license,
accreditation, or authorization of any other Official Body or other person
necessary or appropriate for the effective exercise of any rights hereunder or
under the other Loan Documents. Without limiting the generality of the
foregoing, the Borrower agrees that in the event the Agent on behalf of the
Banks shall exercise its rights, hereunder or pursuant to the other Loan
Documents, to sell, transfer, or otherwise dispose of, or vote, consent,
operate, or take any other action in connection with any of the Collateral, the
Borrower shall execute and deliver (or cause to be executed and delivered) all
applications, certificates, assignments, and other documents that the Agent
requests to facilitate such actions and shall otherwise promptly, fully, and
diligently cooperate with the Agent and any other necessary persons in making
any application for the prior consent or approval of any Official Body or any
other person to the exercise by the Agent on behalf of the Banks of any of such
rights relating to all or any of the Collateral. Furthermore, because the
Borrower agrees that the remedies at law, of the Agent on behalf of the Banks,
for failure of the Borrower to comply with the provisions of Section 8.01(f) and
of this Section 9.02(g) would be inadequate and that any such failure would not
be adequately compensable in damages, the Borrower agrees that the covenants of
Sections 8.01(f) and 9.02(g) may be specifically enforced.
(h) Upon the occurrence and continuance of an Event of Default,
the Agent may request, without limiting the rights and remedies of the Agent on
behalf of the Banks otherwise provided hereunder and under the other Loan
Documents, that the Borrower do any of the following: (i) give the Agent on
behalf of the Banks specific assignments of the accounts receivable of the
Borrower and each Subsidiary after such accounts receivable come into existence,
and schedules of such accounts receivable, the form and content of such
assignment and schedules to be satisfactory to the Agent, (ii) immediately
notify the Agent if any of such accounts receivable arise out of contracts with
the U.S. Government or any department, agency or instrumentality thereof, and
execute any instruments and take any steps required by the Agent
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in order that all moneys due and to become due under such contract shall be
assigned (to the extent permitted by law) to the Agent on behalf of the Banks
and notice thereof given to the government under the Federal Assignment of
Claims Act, if applicable, or any other applicable law or regulation; and in
order to better secure the Agent on behalf of the Banks, in relation to such
accounts receivable, and (iii) to the extent permitted by Law, enter into such
lockbox agreements and establish such lockbox accounts as the Agent may require,
with the local banks in areas in which the Borrower and its Subsidiaries may be
operating (in such cases, all local lockbox accounts shall be depository
transfer accounts entitled "In trust for PNC Bank, National Association, as
Agent") which shall have agreed in writing to the Agent's requirements for the
handling of such accounts and the transfer of account funds to the Agent on
behalf of the Banks, all at the Borrower's sole expense, and shall direct all
payments from Medicare, Medicaid, Blue Cross and Blue Shield, private payors,
health maintenance organizations, all commercial payors and all other payors due
to the Borrower or any Subsidiary, to such lockbox accounts.
9.03 Notice of Sale. Any notice required to be given by the Agent of a
sale, lease, or other disposition of the Collateral or any other intended action
by the Agent, if given ten (10) days prior to such proposed action, shall
constitute commercially reasonable and fair notice thereof to the relevant Loan
Party.
ARTICLE X
THE AGENT
10.01 Appointment. Each Bank hereby irrevocably designates, appoints
and authorizes PNC Bank to act as Agent for such Bank under this Agreement to
execute and deliver or accept on behalf of each of the Banks the other Loan
Documents. Each Bank hereby irrevocably authorizes, and each holder of any Note
by the acceptance of a Note shall be deemed irrevocably to authorize, the Agent
to take such action on its behalf under the provisions of this Agreement and the
other Loan Documents and any other instruments and agreements referred to
herein, and to exercise such powers and to perform such duties hereunder as are
specifically delegated to or required of the Agent by the terms hereof, together
with such powers as are reasonably incidental thereto. PNC Bank agrees to act as
the Agent on behalf of the Banks to the extent provided in this Agreement.
10.02 Delegation of Duties. The Agent may perform any of its duties
hereunder by or through agents or employees (provided such delegation does not
constitute a relinquishment of its duties as Agent) and, subject to Sections
10.05 and 10.06 hereof, shall be entitled to engage and pay for the advice or
services of any attorneys, accountants or other experts concerning all matters
pertaining to its duties hereunder and to rely upon any advice so obtained.
10.03 Nature of Duties; Independent Credit Investigation. The Agent
shall have no duties or responsibilities except those expressly set forth in
this Agreement and no implied covenants, functions, responsibilities, duties,
obligations, or liabilities shall be read into this Agreement or otherwise
exist. The duties of the Agent shall be mechanical and administrative in nature;
the Agent shall not have by reason of this Agreement a fiduciary or trust
relationship in
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respect of any Bank; and nothing in this Agreement, expressed or implied, is
intended to or shall be so construed as to impose upon the Agent any obligation
in respect of this Agreement except as expressly set forth herein. Each Bank
expressly acknowledges (i) that the Agent has not made any representations or
warranties to it and that no act by the Agent hereafter taken, including any
review of the affairs of the Loan Parties, shall be deemed to constitute any
representation or warranty by the Agent to any Bank; (ii) that it has made and
will continue to make, without reliance upon the Agent, its own independent
investigation of the financial condition and affairs and its own appraisal of
the creditworthiness of the Loan Parties is connection with this Agreement and
the making and continuance of the Loans hereunder; and (iii) except as expressly
provided herein, that the Agent shall have no duty or responsibility, either
initially or on a continuing basis, to provide any Bank with any credit or other
information with respect thereto, whether coming into its possession before the
making of any Loan or at any time or times thereafter.
10.04 Actions in Discretion of Agent; Instructions From the Banks. The
Agent agrees, upon the written request of the Required Banks, to take or refrain
from taking any action of the type specified as being within the Agent's rights,
powers or discretion herein, provided that the Agent shall not be required to
take any action which exposes the Agent to personal liability or which is
contrary to this Agreement or any other Loan Document or applicable Law. In the
absence of a request by the Required Banks, the Agent shall have authority, in
its sole discretion, to take or not to take any such action, unless this
Agreement specifically requires the consent of the Required Banks or all of the
Banks. Any action taken or failure to act pursuant to such instructions or
discretion shall be binding on the Banks, subject to Section 10.06 hereof.
Subject to the provisions of Section 10.06, no Bank shall have any right of
action whatsoever against the Agent as a result of the Agent acting or
refraining from acting hereunder in accordance with the instructions of the
Required Banks, or in the absence of such instructions, in the absolute
discretion of the Agent so long as the Agent is otherwise authorized to act
within its rights and powers as provided in this Agreement.
10.05 Reimbursement and Indemnification of Agent by the Borrower. The
Borrower unconditionally agrees to pay or reimburse the Agent and save the Agent
harmless against (a) liability for the payment of all reasonable out-of-pocket
costs, expenses and disbursements, including but not limited to reasonable fees
and expenses of counsel, appraisers and environmental consultants, incurred by
the Agent (i) in connection with the development, negotiation, preparation,
execution, performance by a Loan Party or an Excluded Entity and interpretation
of this Agreement and the other Loan Documents, (ii) relating to any requested
amendments, waivers or consents pursuant to the provisions hereof, (iii) in
connection with the enforcement of this Agreement or any other Loan Document or
collection of amounts due hereunder or thereunder or the proof and allowability
of any claim arising under this Agreement or any other Loan Document, whether in
bankruptcy or receivership proceedings or otherwise, and (iv) in any workout,
restructuring or in connection with the protection, preservation, exercise or
enforcement of any of the terms hereof or of any rights hereunder or under any
other Loan Document or in connection with any foreclosure, collection or
bankruptcy proceedings, and (b) all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by or
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asserted against the Agent, in its capacity as such, in any way relating to or
arising out of this Agreement or any other Loan Documents or any action taken or
omitted by the Agent hereunder or thereunder, provided that the Borrower shall
not be liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements if the
same results from the Agent's gross negligence or willful misconduct, or if the
Borrower was not given notice of the subject claim and the opportunity to
participate in the defense thereof, at its expense, or if the same results from
a compromise or settlement agreement entered into without the consent of the
Borrower. In addition, upon the occurrence of an Event of Default, the Borrower
agrees to reimburse and pay all reasonable out-of-pocket expenses of the Agent's
regular employees and agents engaged periodically to perform audits of the
Borrower's books, records and business properties.
10.06 Exculpatory Provisions. Neither the Agent nor any of its
directors, officers, employees, agents, attorneys or affiliates shall (a) be
liable to any Bank for any action taken or omitted to be taken by it or them
hereunder, or in connection herewith including without limitation pursuant to
any Loan Document, unless caused by its or their own gross negligence or willful
misconduct, (b) be responsible in any manner to any of the Banks for the
effectiveness, enforceability, genuineness, validity or the due execution of
this Agreement or any other Loan Documents or for any recital, representation,
warranty, document, certificate, report or statement herein or made or furnished
under or in connection with this Agreement or any other Loan Documents, unless
caused by its or their own gross negligence or willful misconduct, or (c) be
under any obligation to any of the Banks to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions hereof or
thereof on the part of the Loan Parties or any Excluded Entity, or the financial
condition of the Loan Parties or any Excluded Entity, or the existence or
possible existence of any Event of Default or Potential Default, unless caused
by its or their own gross negligence or willful misconduct. Neither the Agent
nor any Bank nor any of their respective directors, officers, employees, agents,
attorneys or affiliates shall be liable to the Loan Parties or any Excluded
Entity for consequential damages resulting from any breach of contract, tort or
other wrong in connection with the negotiation, documentation, administration or
collection of the Loans or any of the Loan Documents.
10.07 Reimbursement and Indemnification of Agent by Banks. Each Bank
agrees to reimburse and indemnify the Agent (to the extent not reimbursed by the
Borrower and without limiting the obligation of the Borrower to do so) in
proportion to its Ratable Share from and against all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by or asserted against the Agent, in its capacity as such, in any way relating
to or arising out of this Agreement or any other Loan Documents or any action
taken or omitted by the Agent hereunder or thereunder, provided that no Bank
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
(a) if the same results from the Agent's gross negligence or willful misconduct,
or (b) if such Bank was not given notice of the subject claim and the
opportunity to participate in the defense thereof, at its expense, or (c) if the
same results from a compromise and settlement agreement entered into without the
consent of such Bank. In addition, each Bank agrees promptly to reimburse the
Agent (to the extent not reimbursed by the Borrower and without
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limiting the obligation of the Borrower to do so) in proportion to its Ratable
Share for all amounts due and payable by the Borrower to the Agent in connection
with the Agent's periodic audit of the Borrower's books, records and business
properties. In the event the Banks reimburse or indemnify the Agent pursuant to
this Section 10.07 and subsequent thereto the Agent is reimbursed or indemnified
by the Borrower with respect to the same matter for which indemnification or
reimbursement was previously made by the Banks, the Agent will promptly refund
to the Banks, in accordance with each Bank's Ratable Share, the duplicative
amount.
10.08 Reliance by Agent. The Agent shall be entitled to rely upon any
writing, telegram, telex or teletype message, resolution, notice, consent,
certificate, letter, cablegram, statement, order or other document or
conversation by telephone or otherwise believed by it to be genuine and correct
and to have been signed, sent or made by the proper person or persons, and upon
the advice and opinions of counsel and other professional advisers selected by
the Agent. The Agent shall be fully justified in failing or refusing to take any
action hereunder unless it shall first be indemnified to its satisfaction by the
Banks against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action.
10.09 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Potential Default or Event of
Default unless the Agent has received written notice from a Bank or the Borrower
referring to this Agreement, describing such Potential Default or Event of
Default and stating that such notice is a "notice of default."
10.10 Notices. The Agent shall promptly send to each Bank a copy of all
notices received from any Loan Party pursuant to the provisions of this
Agreement or the other Loan Documents promptly upon receipt thereof. The Agent
shall promptly notify the Borrower and the other Banks of each change in the
Base Rate and the effective date thereof.
10.11 Banks in Their Individual Capacities. With respect to its
Revolving Credit Commitments and the Revolving Credit Loans made by it, the
Agent shall have the same rights and powers hereunder as any other Bank and may
exercise the same as though it were not the Agent, and the term "Banks" shall,
unless the context otherwise indicates, include the Agent in its individual
capacity. PNC Bank and its affiliates and each of the Banks and their respective
affiliates may, without liability to account, except as prohibited herein, make
Loans to, accept deposits from, discount drafts for, act as trustee under
indentures of, and generally engage in any kind of banking or trust business
with, the Borrower and its affiliates, in the case of the Agent, as though it
were not acting as Agent hereunder and in the case of each Bank, as though such
Bank were not a Bank hereunder.
10.12 Holders of Notes. The Agent may deem and treat any payee of any
Note as the owner thereof for all purposes hereof unless and until written
notice of the assignment or transfer thereof shall have been filed with the
Agent. Any request, authority or consent of any person who at the time of making
such request or giving such authority or consent is the holder of any Note shall
be conclusive and binding on any subsequent holder, transferee or assignee of
such Note or of any Note or Notes issued in exchange therefor.
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10.13 Equalization of Banks. The Banks and the holders of any
participations in any Notes agree among themselves that, with respect to all
amounts received by any Bank or any such holder for application on any
obligation hereunder or under any Note or under any such participation, whether
received by voluntary payment, by realization upon security, by the exercise of
the right of set-off or banker's lien, by counterclaim or by any other non-pro
rata source, equitable adjustment will be made in the manner stated in the
following sentence so that, in effect, all such excess amounts will be shared
ratably among the Banks and such holders in proportion to their interests in
payments under the Notes, except as otherwise provided in Sections [4.04(b),
5.04(b) or 5.06(a)] hereof. The Banks or any such holder receiving any such
amount shall purchase for cash from each of the other Banks an interest in such
Bank's Loans in such amount as shall result in a ratable participation by the
Banks and each such holder in the aggregate unpaid amount under the Notes,
provided that if all or any portion of such excess amount is thereafter
recovered from the Bank or the holder making such purchase, such purchase shall
be rescinded and the purchase price restored to the extent of such recovery,
together with interest or other amounts, if any, required by law (including
court order) to be paid by the Bank or the holder making such purchase.
10.14 Successor Agent. The Agent (i) may resign as Agent, or (ii) shall
resign if such resignation is requested by the Required Banks, in the case of
either (i) or (ii) upon not less than thirty (30) days' prior written notice to
the Borrower and the Banks. If the Agent shall resign under this Agreement, then
either (a) the Required Banks shall appoint from among the Banks a successor
Agent for the Banks, or (b) if a successor agent shall not be so appointed and
approved within the thirty (30) day period following the Agent's notice to the
Banks of its resignation, then the Agent shall appoint, with the consent of the
Borrower, such consent not to be unreasonably withheld, a successor agent who
shall serve as Agent until such time as the Required Banks appoint a successor
agent. Upon its appointment pursuant to either clause (a) or (b) above, such
successor agent shall succeed to the rights, powers and duties of the agent and
the term "Agent" shall mean such successor agent, effective upon its
appointment, and the former Agent's rights, powers and duties as Agent shall be
terminated without any other or further act or deed on the part of such former
Agent or any of the parties to this Agreement. After the resignation of any
Agent hereunder, the provisions of this Article X shall inure to the benefit of
such former Agent and such former Agent shall not by reason of such resignation
be deemed to be released from liability for any actions taken or not taken by it
while it was an Agent under this Agreement.
10.15 Agent's Fee. The Borrower shall pay to the Agent a non
refundable, annual fee (the "Agent's Fee") as set forth in the agreement dated
September 8, 1997 between the Borrower and the Agent, such fee to be payable in
the manner and on the dates set forth in such letter agreement.
10.16 Availability of Funds. Unless the Agent shall have been notified
by a Bank prior to the date upon which a Loan is to be made that such Bank does
not intend to make available to the Agent such Bank's portion of such Loan, the
Agent may assume that such Bank has made or will make such proceeds available to
the Agent on such date and the Agent may, in reliance upon such assumption (but
shall not be required to), make available to the Borrower a
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corresponding amount. If such corresponding amount is not in fact made available
to the Agent by such Bank, the Agent shall be entitled to recover such amount on
demand from such Bank (or, if such Bank fails to pay such amount forthwith upon
such demand from the Borrower) together with interest thereon, in respect of
each day during the period commencing on the date such amount was made available
to the Borrower and ending on the date the Agent recovers such amount, at a rate
per annum equal to the Federal Funds Effective Rate in respect of the Loan.
10.17 Calculations. In the absence of gross negligence or willful
misconduct, the Agent shall not be liable for any error in computing the amount
payable to any Bank whether in respect of the Loans, fees or any other amounts
due to the Banks under this Agreement. In the event an error in computing any
amount payable to any Bank is made, the Agent, the Borrower and each affected
Bank shall, forthwith upon discovery of such error, make such adjustments as
shall be required to correct such error, and any compensation therefor will be
calculated at the Federal Funds Effective Rate.
10.18 Beneficiaries. Except as expressly provided herein, the
provisions of this Article X are solely for the benefit of the Agent and the
Banks, and the Borrower shall not have any rights to rely on or enforce any of
the provisions hereof. In performing its functions and duties under this
Agreement, the Agent shall act solely as agent of the Banks and does not assume
and shall not be deemed to have assumed any obligation toward or relationship of
agency or trust with or for the Borrower.
10.19 Holding of Loan Documents. Agent agrees that all original Loan
Documents retained by it shall be retained for the benefit of the Banks, and
Agent shall make available copies of such documents retained by it upon the
reasonable request of any of the Banks.
ARTICLE XI
MISCELLANEOUS
11.01 Modifications, Amendments or Waivers. With the written consent of
the Required Banks, the Agent, acting on behalf of all the Banks, and the
Borrower or the other applicable Loan Party may from time to time enter into
written agreements amending or changing any provision of this Agreement or any
other Loan Document or the rights of the Banks or the Borrower or such Loan
Party hereunder or thereunder, or may grant written waivers or consents to a
departure from the due performance of the obligations of the Borrower or such
Loan Party hereunder or thereunder. Any such agreement, waiver or consent made
with such written consent shall be effective to bind all the Banks; provided
that, without the written consent of all the Banks, no such agreement, waiver or
consent may be made which will:
(a) Reduce the amount of the Commitment Fee or any other fees
payable to any Bank hereunder, or amend Sections 5.02 [Pro Rata Treatment of
Banks], 10.06 [Exculpatory Provisions] and 10.13 [Equalization of Banks] hereof;
(b) Whether or not any Loans are outstanding, extend the time for
payment of principal or interest of any Loan, or reduce the principal amount of
or the rate of
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interest borne by any Loan, or otherwise affect the terms of payment of the
principal of or interest of any Loan;
(c) Except for sales of assets permitted by Section 8.02(g),
release any Collateral or other security, if any, for the Borrower's obligations
hereunder;
(d) Release or terminate any Guaranty Agreement of any Loan party;
(e) Amend Sections 2.01(c), 4.01(a), 8.02(r), or 11.01, change the
definitions or the method of computing the ratios contained within such
foregoing sections, change the definition of Required Banks, or change any
requirement providing for the Banks or the Required Banks to authorize the
taking of any action hereunder; or
(f) Extend the Expiration Date or increase the amount of the
Revolving Credit Commitment of any Bank hereunder.
11.02 No Implied Waivers; Cumulative Remedies; Writing Required. No
course of dealing and no delay or failure of the Agent or any Bank in exercising
any right, power, remedy or privilege under this Agreement or any other Loan
Document shall affect any other or future exercise thereof or operate as a
waiver thereof; nor shall any single or partial exercise thereof or any
abandonment or discontinuance of steps to enforce such a right, power, remedy or
privilege preclude any further exercise thereof or of any other right, power,
remedy or privilege. The rights and remedies of the Agent and the Banks under
this Agreement and any other Loan Documents are cumulative and not exclusive of
any rights or remedies which they would otherwise have. Any waiver, permit,
consent or approval of any kind or character on the part of any Bank of any
breach or default under this Agreement or any such waiver of any provision or
condition of this Agreement must be in writing and shall be effective only to
the extent specifically set forth in such writing.
11.03 Reimbursement and Indemnification of Banks by the Borrower;
Taxes. The Borrower agrees unconditionally upon demand to pay or reimburse to
each Bank (other than the Agent, as to which the Borrower's obligations are set
forth in Section 9.05) and to save such Bank harmless against (i) liability for
the payment of all reasonable out-of-pocket costs, expenses and disbursements
(including reasonable fees and expenses of counsel for each Bank except with
respect to (a) and (b) below), incurred by such Bank (a) in connection with the
interpretation of this Agreement, and other instruments and documents to be
delivered hereunder, (b) relating to any requested amendments, waivers or
consents pursuant to the provisions hereof, (c) in connection with the
enforcement of this Agreement or any other Loan Document, or collection of
amounts due hereunder or thereunder or the proof and allowability of any claim
arising under this Agreement or any other Loan Document, whether in bankruptcy
or receivership proceedings or otherwise, and (d) in any workout, restructuring
or in connection with the protection, preservation, exercise or enforcement of
any of the terms hereof or of any rights hereunder or under any other Loan
Document or in connection with any foreclosure, collection or bankruptcy
proceedings, or (ii) all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against such
Bank, in its capacity as such, in any way relating to or
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arising out of this Agreement or any other Loan Documents or any action taken or
omitted by such Bank hereunder or thereunder, provided that the Borrower shall
not be liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements (A) if
the same results from such Bank's gross negligence or willful misconduct, or (B)
if the Borrower was not given notice of the subject claim and the opportunity to
participate in the defense thereof, at its expense, or (C) if the same results
from a compromise or settlement agreement entered into without the consent of
the Borrower. The Banks will attempt to minimize the fees and expenses of legal
counsel for the Banks which are subject to reimbursement by the Borrower
hereunder by considering the usage of one law firm to represent the Banks and
the Agent if appropriate under the circumstances. The Borrower agrees
unconditionally to pay all stamp, document, transfer, recording or filing taxes
or fees and similar impositions now or hereafter determined by the Agent or any
Bank to be payable in connection with this Agreement or any other Loan Document,
and the Borrower agrees unconditionally to save the Agent and the Banks harmless
from and against any and all present or future claims, liabilities or losses
with respect to or resulting from any omission to pay or delay in paying any
such taxes, fees or impositions.
11.04 Holidays. Whenever any payment or action to be made or taken
hereunder shall be stated to be due on a day which is not a Business Day, such
payment or action shall be made or taken on the next following Business Day
(except as provided in Section 4.02(a) with respect to Euro-Rate Interest
Periods), and such extension of time shall be included in computing interest or
fees, if any, in connection with such payment or action.
11.05 Funding by Branch, Subsidiary or Affiliate.
(a) Notional Funding. Each Bank shall have the right from time to
time, without notice to the Borrower, to deem any branch, subsidiary or
affiliate (which for the purposes of this Section 11.05 shall mean any
corporation or association which is directly or indirectly controlled by or is
under direct or indirect common control with any corporation or association
which directly or indirectly controls such Bank) of such Bank to have made,
maintained or funded any Loan to which the Euro-Rate Option applies at any time,
provided that immediately following (on the assumption that a payment were then
due from the Borrower to such other office) and as a result of such change the
Borrower would not be under any greater financial obligation pursuant to Section
5.06 hereof than it would have been in the absence of such change. Notional
funding offices may be selected by each Bank without regard to the Bank's actual
methods of making, maintaining or funding the Loans or any sources of funding
actually used by or available to such Bank.
(b) Actual Funding. Each Bank shall have the right from time to
time to make or maintain any Loan by arranging for a branch, subsidiary or
affiliate of such Bank to make or maintain such Loan subject to the last
sentence of this Section 11.05(b). If any Bank causes a branch, subsidiary or
affiliate to make or maintain any part of the Loans hereunder, all terms and
conditions of this Agreement shall, except where the context clearly requires
otherwise, be applicable to such part of the Loans to the same extent as if such
Loans were made or maintained by such Banks but in no event shall any Bank's use
of such a branch, subsidiary or
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affiliate to make or maintain any part of the Loans hereunder cause such Bank or
such branch, subsidiary or affiliate to incur any cost or expenses payable by
the Borrower hereunder or require the Borrower to pay any other compensation to
any Bank (including, without limitation, any expenses incurred or payable
pursuant to Section 5.06 hereof) which would otherwise not be incurred.
11.06 Notices. All notices, requests, demands, directions and other
communications (collectively "notices") given to or made upon any party hereto
under the provisions of this Agreement shall be by telephone or in writing
(including telex or facsimile communication) unless otherwise expressly
permitted hereunder and shall be delivered or sent by telex or facsimile to the
respective parties at the addresses and numbers set forth under their respective
names on the signature pages hereof or in accordance with any subsequent
unrevoked written direction from any party to the others. All notices shall,
except as otherwise expressly herein provided, be effective (a) in the case of
telex or facsimile, when received, (b) in the case of hand-delivered notice,
when hand delivered, (c) in the case of telephone, when telephoned, provided,
however, that in order to be effective, telephonic notices must be confirmed in
writing no later than the next day by letter, facsimile or telex, (d) if given
by mail, four (4) days after such communication is deposited in the mails with
first class postage prepaid, return receipt requested, and (e) if given by any
other means (including by air courier), when delivered; provided, that notices
to the Agent shall not be effective until received. Any Bank giving any notice
to the Borrower shall simultaneously send a copy thereof to the Agent, and the
Agent shall promptly notify the other Banks of the receipt by it of any such
notice.
11.07 Severability. The provisions of this Agreement are intended to be
severable. If any provision of this Agreement shall be held invalid or
unenforceable in whole or in part in any jurisdiction such provision shall, as
to such jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without in any manner affecting the validity or enforceability
thereof in any other jurisdiction or the remaining provisions hereof in any
jurisdiction.
11.08 Governing Law. This Agreement shall be deemed to be a contract
under the laws of the Commonwealth of Pennsylvania and for all purposes shall be
governed by and construed and enforced in accordance with the laws of the
Commonwealth of Pennsylvania without regard to its conflict of laws principles.
11.09 Prior Understanding. This Agreement supersedes all prior
understandings and agreements, whether written or oral, between the parties
hereto and thereto relating to the transactions provided for herein and therein,
including any prior confidentiality agreements and commitments.
11.10 Duration; Survival. All representations and warranties of the
Borrower contained herein or made in connection herewith shall survive the
making of Loans and shall not be waived by the execution and delivery of this
Agreement, any investigation by the Agent or the Banks, the making of Loans, or
payment in full of the Loans. All covenants and agreements of the Borrower
contained in Sections 8.01, 8.02 and 8.03 herein shall continue in full force
and
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effect from and after the date hereof so long as the Borrower may borrow
hereunder and until termination of the Revolving Credit Commitments and payment
in full of the Loans. All covenants and agreements of the Borrower contained
herein relating to the payment of principal, interest, premiums, additional
compensation or expenses and indemnification, including those set forth in the
Notes, Article V and Sections 10.05, 10.07 and 11.03 hereof, shall survive
payment in full of the Loans and termination of the Revolving Credit
Commitments.
11.11 Successors and Assigns.
(i) This Agreement shall be binding upon and shall inure to the
benefit of the Banks, the Agent, the Borrower and their respective successors
and assigns, except that the Borrower may not assign or transfer any of its
rights and obligations hereunder or any interest herein. Each Bank may, at its
own cost, make assignments of or sell participations in all or any part of its
Revolving Credit Commitment and the Loans made by it to one or more banks or
other entities, subject in the case of assignments prior to the occurrence of an
Event of Default to the consent of the Borrower and the Agent with respect to
any assignee, such consent not to be unreasonably withheld, and provided that
assignments may not be made in amounts less than $1,000,000. It is expressly
agreed that upon and after the occurrence and during the continuation of an
Event of Default the consent of the Agent shall be required, however the consent
of the Borrower shall not be required for a Bank to make an assignment of all or
any part of its Revolving Credit Commitment. In order for a Bank, at any time to
sell a participation in all or any part of its Revolving Credit Commitment, the
consent of the Agent shall be required, however the consent of the Borrower
shall not be required. In the case of an assignment, upon receipt by the Agent
of the Assignment and Assumption Agreement and payment to the Agent of a fee in
the amount of $3,500, the assignee shall have, to the extent of such assignment
(unless otherwise provided therein), the same rights, benefits and obligations
as it would have if it had been a signatory Bank hereunder, the Commitments in
Section 2.01 shall be adjusted accordingly, and upon surrender of any Note
subject to such assignment, the Borrower shall execute and deliver a new Note to
the assignee in an amount equal to the amount of the Revolving Credit Commitment
or Loan assumed by it and a new Revolving Credit Note to the assigning Bank in
an amount equal to the Revolving Credit Commitment or Loan retained by it
hereunder. In the case of a participation, the participant shall only have the
rights specified in Section 9.02(c) (the participant's rights against such Bank
in respect of such participation to be those set forth in the agreement executed
by such Bank in favor of the participant relating thereto and not to include any
voting rights except with respect to changes of the type referenced in clauses
(a), (b), or (c) under Section 11.01 hereof), all of such Bank's obligations
under this Agreement or any other Loan Document shall remain unchanged and all
amounts payable by any Loan party hereunder or thereunder shall be determined as
if such Bank had not sold such participation. Each Bank may furnish any publicly
available information concerning any Loan Party and any other information
concerning any Loan Party in the possession of such Bank from time to time to
assignees and participants (including prospective assignees or participants)
provided such assignees and participants agree to be bound by the provisions of
Section 11.12 hereof.
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(ii) Notwithstanding any other provision in this Agreement,
any Bank may at any time pledge or grant a security interest in all or any
portion of its rights under this Agreement, its Note and the other Loan
Documents to any Federal Reserve Bank in accordance with Regulation A of the FRB
or U.S. Treasury Regulation 31 CFR Section 203.14 without notice to or consent
of the Borrower or the Agent. No such pledge or grant of a security interest
shall release the transferor Bank of its obligations hereunder or under any
other Loan Document.
11.12 Confidentiality. The Agent and the Banks each agree to keep
confidential all information obtained from any Loan party which is nonpublic and
confidential or proprietary in nature (including any information any Loan Party
specifically designates as confidential), except as provided below, and to use
such information only in connection with their respective capacities under this
Agreement and for the purposes contemplated hereby. The Agent and the Banks
shall be permitted to disclose such information (i) to outside legal counsel,
accountants and other professional advisors who need to know such information in
connection with the administration and enforcement of this Agreement, subject to
agreement of such persons to maintain the confidentiality, (ii) assignees and
participants as contemplated by Section 11.11, (iii) to the extent requested by
any bank regulatory authority or, with notice to the Borrower, as otherwise
required by applicable Law or by any subpoena or similar legal process, or in
connection with any investigation or proceeding arising out of the transactions
contemplated by this Agreement, (iv) if it becomes publicly available other than
as a result of a breach of this Agreement or becomes available from a source not
subject to confidentiality restrictions, or (v) the Borrower shall have
consented to such disclosure.
11.13 Counterparts. This Agreement may be executed by different parties
hereto on any number of separate counterparts, each of which, when so executed
and delivered, shall be an original, and all such counterparts shall together
constitute one and the same instrument.
11.14 Agent's or Bank's Consent. Whenever the Agent's or any Bank's
consent is required to be obtained under this Agreement or any of the other Loan
Documents as a condition to any action, inaction, condition or event, the Agent
and each Bank shall be authorized to give or withhold such consent in its sole
and absolute discretion and to condition its consent upon the giving of
additional collateral, the payment of money or any other matter.
11.15 Exceptions. The representations, warranties and covenants
contained herein shall be independent of each other and no exception to any
representation, warranty or covenant shall be deemed to be an exception to any
other representation, warranty or covenant contained herein unless expressly
provided, nor shall any such exceptions be deemed to permit any action or
omission that would be in contravention of applicable Law.
11.16 Consent to Forum; Waiver of Jury Trial. The Borrower hereby
irrevocably consents to the nonexclusive jurisdiction of the Court of Common
Pleas of Allegheny County and the United States District Court for the Western
District of Pennsylvania, and waives personal service of any and all process
upon it and consents that all such service of process be made by certified or
registered mail directed to the Borrower at the addresses provided for in
Section 11.06 hereof and service so made shall be deemed to be completed upon
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actual receipt thereof. The Borrower waives any objection to jurisdiction and
venue of any action instituted against it as provided herein and agrees not to
assert any defense based on lack of jurisdiction or venue. The Borrower, the
Agent and the Banks hereby waive trial by jury in any action, suit, proceeding
or counterclaim of any kind arising out of or related to this Agreement, any
other Loan Document or the Collateral to the full extent permitted by Law.
11.17 Tax Withholding Clause. At least five (5) Business Days prior to
the first date on which interest or fees are payable hereunder for the account
of any Bank, each Bank that is not incorporated under the laws of the United
States of America or a state thereof agrees that it will deliver to each of the
Borrower and the Agent two (2) duly completed copies of (i) Internal Revenue
Service Form W-9, 4224 or 1001, or other applicable form prescribed by the
Internal Revenue Service, certifying in either case that such Bank is entitled
to receive payments under this Agreement and the other Loan Documents without
deduction or withholding of any United States federal income taxes, or is
subject to such tax at a reduced rate under an applicable tax treaty, or (ii)
Form W-8 or other applicable form or a certificate of the Bank indicating that
no such exemption or reduced rate is allowable with respect to such payments.
Each Bank which so delivers a Form W-8, W-9, 4224 or 1001 further undertakes to
deliver to each of the Borrower and the Agent two (2) additional copies of such
form (or a successor form) on or before the date that such form expires or
becomes obsolete or after the occurrence of any event requiring a change in the
most recent form so delivered by it, and such amendments thereto or extensions
or renewals thereof as may be reasonably requested by the Borrower or the Agent,
either certifying that such Bank is entitled to receive payments under this
Agreement and the other Loan Documents without deduction or withholding of any
United States federal income taxes or is subject to such tax at a reduced rate
under an applicable tax treaty or stating that no such exemption or reduced rate
is allowable. The Agent shall be entitled to withhold United States federal
income taxes at the full withholding rate unless the Bank establishes an
exemption or at the applicable reduced rate as established pursuant to the above
provisions.
11.18 Effect on Prior Credit Agreement; Continuing Effectiveness of
Certain Provisions Regarding Interest Rates and Fees. This Agreement amends and
restates the Prior Credit Agreement effective on the Closing Date except that
(i) the Loan Parties shall comply with the representations, warranties and
covenants contained in the Prior Credit Agreement applicable to periods prior to
the Closing Date, (ii) prior to the Sixteenth Amendment Effective Date, the Loan
Parties shall comply with the representations, warranties and covenants
contained in this Agreement without regard to Amendment No. 16 and (iii) the
interest rate, Commitment Fees, Letter of Credit Fees and other fees applicable
to the Loans or otherwise applicable for periods prior to the Sixteenth
Amendment Effective Date shall be determined as provided in this Agreement
without regard to Amendment No. 16 to this Agreement. Without limiting the
generality of the foregoing clause (iii), it is expressly agreed that for the
period October 1, 1997 through and including December 31, 1997, the applicable
Commitment Fees, interest rates, Letter of Credit Fees and other fees applicable
to the Loans shall be as set forth in this Agreement as amended through and
including Amendment No. 15.
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98
EXHIBIT 1
AMENDED AND RESTATED RECITALS AND ARTICLES I THROUGH XI
OF THE REVOLVING CREDIT AGREEMENT
(Cover Page, table of contents and first
paragraph are also attached for convenience)