EXHIBIT 4.1
$1,750,000,000 CREDIT AGREEMENT
dated as of
March 17, 1997
as amended as of March 31, 1997
among
VENCOR, INC.
THE BANKS PARTY HERETO
THE SWINGLINE BANK PARTY HERETO
THE LC ISSUING BANKS PARTY HERETO
THE MANAGING AGENTS AND CO-AGENTS PARTY HERETO
▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW YORK,
as Documentation Agent and Collateral Agent
and
NATIONSBANK, N.A.,
as Administrative Agent
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Arranged by
▇.▇. ▇▇▇▇▇▇ Securities Inc. and
NationsBanc Capital Markets, Inc.,
as Co-Arrangers
TABLE OF CONTENTS
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ARTICLE 1
DEFINITIONS
PAGE
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SECTION 1.01. Definitions...............................................3
SECTION 1.02. Accounting Terms and Determinations......................27
SECTION 1.03. Classes and Types of Loans...............................27
SECTION 1.04. Other Definitional Provisions............................27
ARTICLE 2
THE FACILITIES
SECTION 2.01. Commitments to Lend......................................28
SECTION 2.02. Notice of Committed Borrowing............................29
SECTION 2.03. Money Market Borrowings..................................30
SECTION 2.04. Notice to Banks; Funding of Loans........................35
SECTION 2.05. Notes....................................................36
SECTION 2.06. Interest Rates...........................................37
SECTION 2.07. Method of Electing Interest Rates........................39
SECTION 2.08. Letters of Credit........................................41
SECTION 2.09. Swingline Loans..........................................49
SECTION 2.10. Facility Fee.............................................52
SECTION 2.11. Maturity of Loans........................................52
SECTION 2.12. Optional Prepayments.....................................52
SECTION 2.13. Termination or Reduction of Commitments..................53
SECTION 2.14. General Provisions as to Payments........................54
SECTION 2.15. Funding Losses...........................................55
SECTION 2.16. Computation of Interest and Fees.........................55
SECTION 2.17. Regulation D Compensation................................56
SECTION 2.18. Atria Supporting Guaranties..............................57
ARTICLE 3
CONDITIONS
SECTION 3.01. Effectiveness of this Agreement; Closing.................57
SECTION 3.02. Consequences of Effectiveness............................59
SECTION 3.03. Credit Events............................................60
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES
PAGE
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SECTION 4.01. Corporate Existence and Power............................60
SECTION 4.02. Corporate and Governmental Authorization; No
Contravention.....................................61
SECTION 4.03. Binding Effect; Liens of Collateral Documents............61
SECTION 4.04. Financial Information....................................61
SECTION 4.05. Litigation...............................................62
SECTION 4.06. Compliance with ERISA....................................62
SECTION 4.07. Taxes....................................................63
SECTION 4.08. Compliance with Laws.....................................63
SECTION 4.09. No Regulatory Restrictions on Borrowing..................63
SECTION 4.10. Environmental Matters....................................63
SECTION 4.11. Related Documents........................................64
SECTION 4.12. Effect of Merger on Outstanding Debt.....................64
SECTION 4.13. Full Disclosure..........................................64
SECTION 4.14. Information as to Material Subsidiaries and Pledged
Instruments.......................................64
SECTION 4.15. Subsidiary Guaranties....................................64
ARTICLE 5
COVENANTS
SECTION 5.01. Information..............................................65
SECTION 5.02. Maintenance of Property..................................68
SECTION 5.03. Insurance................................................68
SECTION 5.04. Compliance with Law......................................68
SECTION 5.05. Maintenance of Existence, Rights, Etc....................68
SECTION 5.06. Use of Proceeds and Letters of Credit....................69
SECTION 5.07. Limitation on Debt of Vencor.............................69
SECTION 5.08. Limitation on Debt of Subsidiaries.......................72
SECTION 5.09. Negative Pledge..........................................74
SECTION 5.10. Consolidations, Mergers and Asset Sales..................75
SECTION 5.11. Restricted Payments......................................76
SECTION 5.12. Limitations on Investments in Minority-Owned
Affiliates........................................77
SECTION 5.13. Transactions with Affiliates.............................78
SECTION 5.14. Limitation on Restrictions Affecting Subsidiaries........79
SECTION 5.15. No Modification of Certain Documents Without
Consent...........................................81
SECTION 5.16. Minimum Consolidated Net Worth...........................81
SECTION 5.17. Leverage Ratio...........................................81
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PAGE
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SECTION 5.18. Fixed Charge Coverage Ratio..............................82
SECTION 5.19. Reduction of Amount of Parent Guaranty...................82
SECTION 5.20. Designation of Material Subsidiaries.....................82
SECTION 5.21. Guaranty by Future Wholly-Owned Material
Subsidiaries......................................83
SECTION 5.22. Pledge of Stock of Future Material Subsidiaries..........83
SECTION 5.23. No Change of Fiscal Periods..............................83
SECTION 5.24. TheraTx's 8% Convertible Subordinated Notes..............84
ARTICLE 6
DEFAULTS
SECTION 6.01. Defaults.................................................84
SECTION 6.02. Notice of Default........................................87
SECTION 6.03. Cash Cover...............................................87
ARTICLE 7
THE AGENTS
SECTION 7.01. Appointment and Authorization............................87
SECTION 7.02. Agents and Affiliates....................................88
SECTION 7.03. Action by Agents.........................................88
SECTION 7.04. Consultation with Experts................................88
SECTION 7.05. Liability of Agents......................................88
SECTION 7.06. Indemnification..........................................89
SECTION 7.07. Credit Decision..........................................89
SECTION 7.08. Agents' Fees.............................................89
SECTION 7.09. Successor Agents.........................................89
SECTION 7.10. Collateral Agent.........................................89
SECTION 7.11. Obligations of Managing Agents and Co-Agents.............90
ARTICLE 8
CHANGES IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate Inadequate or
Unfair............................................90
SECTION 8.02. Illegality...............................................91
SECTION 8.03. Increased Cost and Reduced Return........................91
SECTION 8.04. Taxes....................................................93
SECTION 8.05. Base Rate Loans Substituted for Affected Euro-Dollar
Loans.............................................95
SECTION 8.06. Substitution of Banks....................................95
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ARTICLE 9
MISCELLANEOUS
SECTION 9.01. Notices..................................................96
SECTION 9.02. No Waiver................................................97
SECTION 9.03. Expenses; Indemnification................................97
SECTION 9.04. Sharing of Set-offs......................................97
SECTION 9.05. Amendments and Waivers...................................98
SECTION 9.06. Successors and Assigns...................................99
SECTION 9.07. Margin Stock............................................101
SECTION 9.08. Failure of Bank to Satisfy Minimum Rating Condition.....101
SECTION 9.09. Governing Law; Submission to Jurisdiction...............102
SECTION 9.10. Counterparts; Integration...............................102
SECTION 9.11. WAIVER OF JURY TRIAL....................................102
SECTION 9.12. Confidentiality.........................................102
SIGNATURES.............................................................111
Commitment Schedule
Pricing Schedule
Schedule I -- Existing Letters of Credit
Schedule II -- Minority-Owned Affiliates
Schedule III -- Affiliate Agreements
Schedule IV -- Material Subsidiaries (as of the Amendment Effective Date)
Schedule V -- Pledged Instruments (as of the Amendment Effective Date)
Exhibit A -- Form of Note
Exhibit B -- Form of Swingline Note
Exhibit C -- Form of Security Agreement
Exhibit D -- Financial Officer's Certificate
Exhibit E -- Form of Opinion of the General Counsel
of Vencor
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Exhibit F -- Form of Opinion of General Counsel of TheraTx
Exhibit G -- Form of Opinion of Special Counsel for
Vencor
Exhibit H -- Form of Opinion of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇,
Special Counsel for the Agents
Exhibit I -- Form of Notice of Committed Borrowing
Exhibit J -- Form of Notice of Prepayment
Exhibit K -- Form of Money Market Quote Request
Exhibit L -- Form of Invitation for Money Market Quote
Exhibit M -- Form of Money Market Quote
Exhibit N -- Form of Notice of Swingline Borrowing
Exhibit O -- Form of Subsidiary Guaranty Agreement
Exhibit P -- Calculation of Funding Losses
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CREDIT AGREEMENT
AGREEMENT dated as of March 17, 1997 among VENCOR, INC., the BANKS
party hereto, the SWINGLINE BANK party hereto, the LC ISSUING BANKS party
hereto, the MANAGING AGENTS and CO-AGENTS party hereto, ▇▇▇▇▇▇ GUARANTY TRUST
COMPANY OF NEW YORK, as Documentation Agent and Collateral Agent, and
NATIONSBANK, N.A., as Administrative Agent, as amended as of March 31, 1997.
WHEREAS, pursuant to a Merger Agreement dated as of February 9,
1997, Vencor acquired TheraTx by (i) causing Merger Sub to make a tender
offer for all the outstanding common stock (including the associated rights
to purchase Series A Junior Participating Preferred Stock) of TheraTx at a
price of $17.10 per share and (ii) causing Merger Sub to merge into TheraTx
(with TheraTx as the surviving corporation);
WHEREAS, Vencor entered into this Agreement as originally executed
(the "Initial Credit Agreement") in order to have available to it a
revolving credit facility pursuant to which Vencor could (i) borrow to make
(or enable Merger Sub to make) the cash payments that holders of TheraTx
Shares were entitled to receive pursuant to such tender offer and, upon
consummation of such merger, under the Merger Agreement, (ii) borrow to
finance other acquisitions and refinance debt in connection with such
acquisitions, (iii) borrow for the general corporate purposes of Vencor and
its Subsidiaries, including (without limitation) refinancing debt of
Vencor, TheraTx and certain of their respective Subsidiaries outstanding on
March 17, 1997 and paying expenses associated with the acquisition of
TheraTx, (iv) borrow to finance capital expansion projects or refinance
debt that was incurred to finance such projects, (v) obtain letters of
credit (and maintain certain existing letters of credit) not to exceed
$150,000,000 in aggregate outstanding available amount for the general
corporate purposes of Vencor, TheraTx and their respective Subsidiaries,
including (without limitation) providing credit support for industrial
revenue bonds, and (vi) borrow swingline loans for any or all of the
foregoing purposes;
WHEREAS, Vencor's obligations under this Agreement and certain
obligations owed by Vencor in connection with derivatives transactions are
secured pursuant to a Security Agreement by (i) all Equity Interests in
Vencor's present and future Material Subsidiaries owned directly by Vencor,
(ii) all present and future intercompany debt owed to Vencor by its
Subsidiaries and (iii) from time to time certain notes secured by mortgages
on specific facilities; provided that Vencor may (x) cause collateral
described in clauses (i) and (ii) above to be released when Vencor's senior
unsecured long-term debt (without any third-party credit enhancement)
receives Investment Grade Ratings from
both ▇▇▇▇▇'▇ and S&P and (y) cause collateral described in clause (iii) above to
be released at any time;
WHEREAS, Vencor has caused each of its Wholly-Owned Material
Subsidiaries (i) to guarantee Vencor's obligations under this Agreement and
(ii) to secure its guarantee thereof by granting a security interest in all
Equity Interests (if any) in other Material Subsidiaries owned directly by
it;
WHEREAS, ▇▇▇▇▇▇ and NationsBank were the only banks with Commitments
under the Initial Credit Agreement and in such capacity made loans thereunder
and purchased participations in letters of credit outstanding thereunder;
WHEREAS, on the Amendment Effective Date (as hereinafter defined),
(i) ▇▇▇▇▇▇ and NationsBank wish to reduce their respective Commitments to
the amounts set forth opposite their respective names on the Commitment
Schedule attached hereto and (ii) the other Banks listed on such Commitment
Schedule wish to assume Commitments in the amounts set forth opposite their
respective names on such Commitment Schedule;
WHEREAS, on the Amendment Effective Date (i) the loans outstanding
hereunder from ▇▇▇▇▇▇ and NationsBank are to be repaid and replaced by
loans made by all the Banks listed on such Commitment Schedule in
proportion to their respective Commitments set forth therein and (ii) the
participations held by ▇▇▇▇▇▇ and NationsBank in letters of credit
outstanding hereunder are to be cancelled and replaced by participations
held by all the Banks listed on such Commitment Schedule in proportion to
their respective Commitments set forth therein;
WHEREAS, such Banks are willing to make the foregoing loans and to
participate pro rata in the foregoing letters of credit, the LC Issuing
Banks that issued such existing letters of credit are willing to maintain
them under this Agreement, such LC Issuing Banks or any other Banks may
(but are not obligated to) issue additional letters of credit hereunder
from time to time and the Swingline Bank is willing to make Swingline
Loans, all on and subject to the terms and conditions herein provided; and
WHEREAS, on such Amendment Effective Date, in order to make the
changes described above and certain other changes in the Initial Credit
Agreement, the Initial Credit Agreement will be amended to read in full as
this Amended Agreement reads;
NOW, THEREFORE, the parties hereto agree as follows:
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ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. The following terms, as used herein, have
the following meanings:
"Absolute Rate Auction" means a solicitation of Money Market Quotes
setting forth Money Market Absolute Rates pursuant to Section 2.03(b).
"Account Party" means (i) for each Existing Letter of Credit, the
party identified on Schedule I hereto as the Account Party for such
Existing Letter of Credit and (ii) for each Additional Letter of Credit,
the party identified as the Account Party for such Additional Letter of
Credit pursuant to Section 2.08(d).
"Acquisition Loan" means a loan made by a Bank pursuant to Section
2.01(a); provided that if any such loan or loans (or portions thereof) are
combined or subdivided pursuant to a Notice of Interest Rate Election, the
term "Acquisition Loan" shall refer to the combined principal amount
resulting from such combination or to each of the separate principal
amounts resulting from such subdivision, as the case may be.
"Additional Letter of Credit" means any letter of credit issued
hereunder by an LC Issuing Bank on or after the Amendment Effective Date.
"Adjusted CD Rate" has the meaning set forth in Section 2.06(b).
"Adjusted Consolidated Net Income" means, for any period,
Consolidated Net Income for such period, adjusted to exclude therefrom,
without duplication, (i) gains or losses from the sale of assets (other
than inventory sold in the ordinary course of business) net of related tax
effects and (ii) the net income (or loss) of any Person (other than a
Consolidated Subsidiary or Non-Consolidated Partnership) in which a
Combined Company has an ownership interest, except to the extent that such
Person pays dividends or distributions in cash to a Combined Company during
such period.
"Administrative Agent" means NationsBank, in its capacity as
administrative agent for the Banks under the Financing Documents, and its
successors in such capacity.
"Administrative Questionnaire" means, with respect to each Bank, an
administrative questionnaire in the form prepared by the Administrative Agent,
duly completed by such Bank and submitted to the Administrative Agent (with a
copy to Vencor and the Documentation Agent).
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"Affiliate" means any Person (other than a Subsidiary) directly or
indirectly controlling, controlled by or under common control with Vencor.
As used in this definition, the term "control" means possession, directly
or indirectly, of the power to vote 10% or more of any class of voting
securities of a Person or 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.
"Affiliate Agreements" means the agreements listed in Schedule III
hereto.
"Agents" means the Documentation Agent, the Administrative Agent and
the Collateral Agent.
"Aggregate LC Exposure" means, at any time, the sum, without
duplication, of (i) the aggregate amount that is (or may thereafter become)
available for drawing under all Letters of Credit outstanding at such time and
(ii) the aggregate unpaid principal amount of all LC Reimbursement Obligations
outstanding at such time.
"Agreement" when used with respect to this Agreement, means the
Initial Credit Agreement as originally executed, as amended on the
Amendment Effective Date and as it may be amended from time to time
thereafter.
"Amended Agreement" means this Agreement as amended on the Amendment
Effective Date and as it may be amended from time to time thereafter.
"Amendment Effective Date" means the date on which the
Documentation Agent shall have received the documents specified in or
pursuant to Section 3.01 and the other conditions specified in Section 3.01
shall have been satisfied.
"Applicable Lending Office" means, with respect to any Bank, (i)
in the case of its Base Rate Loans and CD Loans and its participations in
Letters of Credit, its Domestic Lending Office, (ii) in the case of its
Euro-Dollar Loans, its Euro-Dollar Lending Office and (iii) in the case of
its Money Market Loans, its Money Market Lending Office.
"Assignee" has the meaning set forth in Section 9.06(c).
"Atria" means Atria Communities, Inc., a Delaware corporation, and
its successors.
"Atria's Credit Agreement" means the $200,000,000 Credit Agreement
dated as of August 15, 1996 among Atria, the lending institutions named
therein, PNC Bank, National Association, as Administrative Agent, National
City Bank of Kentucky, as Documentation Agent and the Syndication Agents
named therein.
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"Atria Supporting Guaranties" means guaranties by Vencor's Wholly-
Owned Material Subsidiaries that Vencor will perform its obligations under
the Parent Guaranty, such guaranties to be substantially in the form of
Section 19 of the Parent Guaranty.
"Bank" means each bank or other financial institution listed on the
Commitment Schedule, each Assignee which becomes a "Bank" for purposes hereof
pursuant to Section 8.06 or 9.06(c), and their respective successors. The term
"Bank" does not include the Swingline Bank in its capacity as such.
"Bank Parties" means the Banks, the LC Issuing Banks, the Swingline
Bank and the Agents.
"Base Rate" means, for any day, a rate per annum equal to the
higher of (i) the Prime Rate for such day and (ii) the sum of 1/2 of 1%
plus the Federal Funds Rate for such day.
"Base Rate Loan" means a Committed Loan which bears interest at a
rate based on the Base Rate pursuant to the applicable Notice of Borrowing
or Notice of Interest Rate Election or the provisions of Article 8.
"Borrowing" has the meaning set forth in Section 1.03.
"Capital Lease" means a lease that would be capitalized on a
balance sheet of the lessee prepared in accordance with GAAP.
"CD Loan" means a Committed Loan which bears interest at a rate
based on the Adjusted CD Rate pursuant to the applicable Notice of
Committed Borrowing or Notice of Interest Rate Election or the provisions
of Article 8.
"CD Margin" has the meaning set forth in the Pricing Schedule.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended from time to time, and
the regulations promulgated thereunder.
"Charter Documents" means, in relation to any corporation, the
certificate or articles of incorporation, by-laws and other constitutional
documents of such corporation, including the certificate of designation for
any series of its preferred stock.
"Class" has the meaning set forth in Section 1.03.
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"Co-Agents" means the Banks designated as Co-Agents on the
signature pages hereof, in their respective capacities as Co-Agents in
connection with the credit facility provided hereunder.
"Collateral" means all property, real and personal, tangible and
intangible, with respect to which Liens are created or are purported to be
created pursuant to the Collateral Documents.
"Collateral Agent" means ▇▇▇▇▇▇ in its capacity as Collateral
Agent for the holders of the Secured Obligations under the Collateral
Documents, and its successors in such capacity.
"Collateral Documents" means the Security Agreement, the Security
Agreement Supplements and all other supplemental or additional security
agreements, mortgages or similar instruments delivered pursuant hereto or
thereto, except the Project Mortgage Notes and Project Mortgages.
"Combined Basis", when used with respect to determining any amount
for any period (or portion of a period) before TheraTx becomes a
Subsidiary, means that such amount is to be determined by combining (i) the
relevant amount determined with respect to Vencor and its Consolidated
Subsidiaries on a consolidated basis and (ii) the relevant amount
determined with respect to TheraTx and its Consolidated Subsidiaries on a
consolidated basis.
"Combined Companies" means Vencor and its Subsidiaries and TheraTx
and its Subsidiaries. Unless the context otherwise requires, whenever an
amount is to be determined hereunder with respect to the Combined Companies
for any period, such amount shall be determined (i) for any portion of such
period before TheraTx becomes a Subsidiary, on a Combined Basis and (ii)
for any portion of such period after TheraTx becomes a Subsidiary, for
Vencor and its Consolidated Subsidiaries on a consolidated basis.
"Commitment" means (i) with respect to any Bank listed on the
Commitment Schedule, the amount set forth therein opposite the name of such
Bank and (ii) with respect to any Assignee, the amount of the transferor
Bank's Commitment assigned to such Assignee pursuant to Section 8.06 or
9.06(c), in each case as such amount may be reduced from time to time
pursuant to Section 2.13 or changed as a result of an assignment pursuant
to Section 8.06 or 9.06(c). The term "Commitment" does not include the
Swingline Commitment.
"Commitment Percentage" means, with respect to any Bank at any
time, the percentage which the amount of its Commitment at such time
represents of the aggregate
6
amount of all the Commitments at such time. At any time after the Commitments
shall have terminated, the term "Commitment Percentage" shall refer to a Bank's
Commitment Percentage immediately before such termination, adjusted to reflect
any subsequent assignments pursuant to Section 8.06 or 9.06(c).
"Commitment Reduction Date" means March 31, 2001 or, if such day
is not a Euro-Dollar Business Day, the next preceding Euro-Dollar Business
Day.
"Commitment Schedule" means the Commitment Schedule attached hereto.
"Committed Borrowing" means a borrowing hereunder consisting of Loans
made to Vencor at the same time by the Banks pursuant to Section 2.01 or
2.09(i).
"Committed Loan" means a loan made by a Bank pursuant to Section
2.01 or 2.09(i); provided that if any such loan or loans (or portions
thereof) are combined or subdivided pursuant to a Notice of Interest Rate
Election, the term "Committed Loan" shall refer to the combined principal
amount resulting from such combination or to each of the separate principal
amounts resulting from such subdivision, as the case may be.
"Consolidated Debt for Borrowed Money" means at any date the sum,
without duplication, of (x) the aggregate amount of Debt of the types
described in clauses (i), (ii) and (iv) of the definition of "Debt" which
is Debt of Vencor and its Consolidated Subsidiaries, (y) the aggregate
amount of Debt of the type described in clause (vi) of the definition of
"Debt" which is non-contingent Debt of Vencor and its Consolidated
Subsidiaries and (z) the aggregate amount of Guarantees by Vencor and its
Consolidated Subsidiaries with respect to Debt of others of the types
described in clauses (i), (ii) and (iv) of the definition of Debt and non-
contingent Debt of others of the type described in clause (vi) of the
definition of Debt, all determined on a consolidated basis as of such date
after excluding accrued interest for the then current period not yet due
and payable.
"Consolidated EBITDA" means, for any period, Adjusted Consolidated
Net Income for such period plus, to the extent deducted in determining
Adjusted Consolidated Net Income for such period, the sum of (i)
Consolidated Interest Expense, (ii) income tax expense, (iii) depreciation,
amortization and other similar non-cash charges and (iv) non-cash
compensation expense and minus any cash paid during such period in respect
of non-cash compensation expense accrued during any prior period; provided
that:
(x) for any portion of such period before TheraTx becomes a
Subsidiary, Consolidated EBITDA shall be determined on a Combined
Basis; and
(y) Consolidated EBITDA shall be calculated so as to exclude the
effect of any income or expense that (A) is classified as
extraordinary, (B) is reported
7
separately as an unusual or non-recurring item, (C) is attributable to
discontinued operations or (D) represents the effect of an accounting
change on prior periods, in each case in accordance with GAAP.
If any Subsidiary of Vencor is subject to a limitation permitted by clause
(2) of Section 5.14(f) at the end of the relevant period, Consolidated
EBITDA for such period shall also be adjusted (except for purposes of said
clause (2)) to exclude any portion thereof that is attributable to such
Subsidiary and that, as a result of such limitation, it would be prohibited
from paying directly or indirectly, to Vencor at the end of such period.
"Consolidated EBITDAR" means, for any period, Consolidated EBITDA
for such period plus, to the extent deducted in determining Consolidated
EBITDA for such period, Consolidated Rental Expense for such period.
"Consolidated Interest Expense" means, for any period, the
interest expense of Vencor and its Consolidated Subsidiaries, determined on
a consolidated basis for such period; provided that (i) for any portion of
such period before TheraTx becomes a Subsidiary, Consolidated Interest
Expense shall be determined on a Combined Basis and (ii) Consolidated
Interest Expense shall not (x) include interest capitalized in accordance
with GAAP or (y) be reduced by any interest income.
"Consolidated Net Income" means, for any period, the net income
(or loss) of Vencor and its Consolidated Subsidiaries, determined on a
consolidated basis for such period; provided that, for any portion of such
period before TheraTx becomes a Subsidiary, Consolidated Net Income shall
be determined on a Combined Basis.
"Consolidated Net Worth" means, at any date, the consolidated
stockholders' equity of Vencor and its Consolidated Subsidiaries determined
as of such date.
"Consolidated Rental Expense" means, for any period, the total
rental expense (reduced by rental income) for operating leases of Vencor
and its Consolidated Subsidiaries, determined on a consolidated basis for
such period; provided that, for any portion of such period before TheraTx
becomes a Subsidiary, Consolidated Rental Expense shall be determined on a
Combined Basis.
"Consolidated Subsidiary" means, as to any Person at any date, any
Subsidiary or other entity the accounts of which would be consolidated with
those of such Person in its consolidated financial statements if such
statements were prepared as of such date. Unless otherwise specified,
"Consolidated Subsidiary" means (i) when used with respect to any time or
period before TheraTx becomes a Subsidiary, a Consolidated Subsidiary of
either Vencor or TheraTx and (ii) when used with respect to any time or
period after TheraTx becomes a Subsidiary, a Consolidated Subsidiary of
Vencor.
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"Credit Event" means (i) the making of a Loan or Swingline Loan,
(ii) the issuance of a Letter of Credit or (iii) the extension of the
expiry date of a Letter of Credit.
"Credit Exposure" means, as to any Bank at any time:
(i) the amount of its Commitment (whether used or unused)
at such time; or
(ii) if the Commitments have terminated in their entirety,
the sum of (x) its Outstanding Committed Amount and (y) the
aggregate outstanding principal amount of all Money Market Loans
held by it or by a Designated Money Market Lender designated by
it,
all determined at such time after giving effect to any prior assignments by or
to such Bank pursuant to Section 9.06(c).
"Debt" of any Person means, without duplication, (i) all obligations of
such Person for borrowed money, (ii) all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments, (iii) all obligations of
such Person to pay the deferred purchase price of property or services, (iv) all
obligations of such Person as lessee under Capital Leases, (v) all obligations
of such Person to purchase securities which arise out of or in connection with
the sale of the same or substantially similar securities, (vi) all obligations
of such Person (whether contingent or non-contingent) to reimburse any bank or
other Person in respect of amounts paid under a letter of credit, banker's
acceptance or similar instrument, (vii) all Debt secured by a Lien on any asset
of such Person, whether or not such Debt is otherwise an obligation of such
Person, and (viii) all Guarantees by such Person of Debt of another Person (each
such Guarantee to constitute Debt in an amount equal to the maximum amount of
such other Person's Debt Guaranteed thereby); provided that neither trade
accounts payable arising in the ordinary course of business nor obligations in
respect of insurance policies or performance or surety bonds which are not
themselves Guarantees of Debt (nor drafts, acceptances or similar instruments
evidencing the same nor obligations in respect of letters of credit supporting
the payment of the same) shall constitute Debt.
"Default" means any condition or event that constitutes an Event of
Default or that with the giving of notice or lapse of time or both would, unless
cured or waived, become an Event of Default.
"Designating Bank" has the meaning set forth in Section 2.03(h).
"Designated Money Market Lender" has the meaning set forth in Section
2.03(h).
9
"Direct Pay IRB Letter of Credit" has the meaning set forth in
Section 2.08(s).
"Documentation Agent" means ▇▇▇▇▇▇, in its capacity as documentation
agent for the Banks under the Financing Documents, and its successors in such
capacity.
"Domestic Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in New York, New York or Charlotte, North
Carolina are authorized by law to close.
"Domestic Lending Office" means, as to each Bank, its office located at
its address set forth in its Administrative Questionnaire (or identified in its
Administrative Questionnaire as its Domestic Lending Office) or such other
office as such Bank may hereafter designate as its Domestic Lending Office by
notice to Vencor and the Administrative Agent.
"Eastern Time" means local time in the Eastern time zone of the
United States.
"Enforceable Judgment" means a judgment or order of a court or arbitral
or regulatory authority as to which the period, if any, during which the
enforcement of such judgment or order is stayed shall have expired. A judgment
or order which is under appeal or as to which the time in which to perfect an
appeal has not expired shall not be deemed an Enforceable Judgment so long as
enforcement thereof is effectively stayed pending the outcome of such appeal or
the expiration of such period, as the case may be.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, codes, plans, injunctions, permits, concessions,
grants, franchises, licenses, agreements and governmental restrictions relating
to the environment or to the effect of the environment on human health or to
emissions, discharges or releases of pollutants, contaminants, Hazardous
Substances or wastes into the environment, including ambient air, surface water,
ground water or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, Hazardous Substances or wastes or the clean-up or
other remediation thereof.
"Environmental Liabilities" means any and all liabilities of or
relating to any of the Combined Companies (including any entity which is,
in whole or in part, a predecessor of any of the Combined Companies),
whether vested or unvested, contingent or fixed, actual or potential, known
or unknown, which arise under or relate to matters covered by Environmental
Laws.
10
"Equity Interest" means (i) in the case of a corporation, any
shares of its capital stock, (ii) in the case of a partnership, any
partnership interest (whether general or limited), (iii) in the case of any
other business entity, any participation or other interest in the equity or
profits thereof or (iv) any warrant, option or other right to acquire any
Equity Interest described in the foregoing clauses (i), (ii) and (iii).
"Equity Security" of any Person means any security issued by such
Person that constitutes or evidences an Equity Interest in such Person.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
"ERISA Group" means the Vencor Companies and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with any of the Vencor
Companies, are treated as a single employer under Section 414 of the Internal
Revenue Code.
"Euro-Dollar Business Day" means any Domestic Business Day on which
commercial banks are open for international business (including dealings in
dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to each Bank, its office,
branch or affiliate located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as its
Euro-Dollar Lending Office) or such other office, branch or affiliate of
such Bank as it may hereafter designate as its Euro-Dollar Lending Office
by notice to Vencor and the Administrative Agent.
"Euro-Dollar Loan" means a Loan which bears interest at a rate
based on the London Interbank Offered Rate pursuant to the applicable
Notice of Committed Borrowing or Notice of Interest Rate Election.
"Euro-Dollar Margin" has the meaning set forth in the Pricing
Schedule.
"Euro-Dollar Reserve Percentage" has the meaning set forth in Section
2.17.
"Events of Default" has the meaning set forth in Section 6.01.
"Evergreen Letter of Credit" means a Letter of Credit that is
automatically renewed or extended unless the relevant LC Issuing Bank gives
notice to the account party and/or beneficiary thereof stating that such
Letter of Credit will not be extended or renewed.
11
"Executive Officer" means any "executive officer" (within the meaning
of Rule 3b-7 under the Securities Exchange Act of 1934, as amended) of Vencor.
"Existing Letters of Credit" means the letters of credit issued by LC
Issuing Banks before the Amendment Effective Date and listed in Schedule I
hereto.
"Facility Fee Rate" means a rate per annum determined in accordance
with the Pricing Schedule.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upward, if necessary, to the nearest 1/100th of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on
such day, as published by the Federal Reserve Bank of New York on the
Domestic Business Day next succeeding such day, provided that (i) if such
day is not a Domestic Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the next preceding Domestic
Business Day as so published on the next succeeding Domestic Business Day,
and (ii) if no such rate is so published on such next succeeding Domestic
Business Day, the Federal Funds Rate for such day shall be the average rate
quoted to the Administrative Agent on such day on such transactions as
determined by the Administrative Agent.
"Financial Accommodations" means arrangements for the extension of
credit or other financial accommodation to one or more of the Vencor
Companies, including committed or uncommitted lines of credit for advances
or other financial accommodation, letters of credit, performance and surety
bonds and the like, committed or uncommitted agreements for the purchase of
accounts receivable or other financial assets, with or without recourse or
repurchase obligation, forward and future contracts for purchase of bullion
or foreign currencies and other similar arrangements and interest rate
swaps and other similar arrangements, but excluding trade accounts payable
arising in the ordinary course of business.
"Financial Officer" means the principal financial officer, principal
accounting officer or treasurer of Vencor.
"Financing Documents" means this Agreement (including the
Schedules and Exhibits hereto), the Notes, the Swingline Note, each
Subsidiary Guaranty Agreement and the Collateral Documents.
"First Healthcare" means First Healthcare Corporation, a Delaware
corporation, and its successors.
"Fiscal Quarter" means a fiscal quarter of Vencor.
12
"Fiscal Year" means a fiscal year of Vencor.
"Fixed Rate Loans" means CD Loans or Euro-Dollar Loans or Money
Market Loans (excluding Money Market LIBOR Loans bearing interest at the
Base Rate pursuant to Section 8.01) or any combination of the foregoing.
"GAAP" means generally accepted accounting principles as in effect
from time to time, applied on a basis consistent (except for changes
concurred in by Vencor's independent public accountants) with the most
recent audited consolidated financial statements of Vencor and its
Consolidated Subsidiaries theretofore delivered to the Banks.
"General Purpose Loan" means a loan made by a Bank pursuant to
Section 2.01(b); provided that if any such loan or loans (or portions
thereof) are combined or subdivided pursuant to a Notice of Interest Rate
Election, the term "General Purpose Loan" shall refer to the combined
principal amount resulting from such combination or to each of the separate
principal amounts resulting from such subdivision, as the case may be.
"Group of Loans" means at any time a group of Committed Loans
consisting of (i) all Loans that are Base Rate Loans at such time, (ii) all
Loans that are Euro-Dollar Loans having the same Interest Period at such
time or (iii) all Loans that are CD Loans having the same Interest Period
at such time; provided that, if a Committed Loan of any particular Bank is
converted to or made as a Base Rate Loan pursuant to Section 8.02 or 8.05,
such Loan shall be included in the same Group or Groups of Loans from time
to time as it would have been in if it had not been so converted or made.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt of
any other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i)
to purchase or pay (or advance or supply funds for the purchase or payment
of) such Debt (whether arising by virtue of partnership arrangements, by
agreement to keep-well, to purchase assets, goods, securities or services,
to take-or-pay, or to maintain financial statement conditions or
otherwise), (ii) to reimburse a bank for drawings under a letter of credit
for the purpose of paying such Debt or (iii) entered into for the purpose
of assuring in any other manner the holder of such Debt of the payment
thereof or to protect such holder against loss in respect thereof (in whole
or in part); provided that the term "Guarantee" shall not include
endorsements for collection or deposit in the ordinary course of business.
The term "Guarantee", when used as a verb, has a corresponding meaning.
"Hazardous Substances" means any toxic, radioactive, corrosive or
otherwise hazardous substance, including petroleum, its derivatives, by-
products and other
13
hydrocarbons, or any substance having any constituent elements displaying any of
the foregoing characteristics, whether or not regulated under Environmental
Laws.
"Hillhaven" means The Hillhaven Corporation, a Nevada corporation,
and its successors.
"Implied Rating or Private Letter Rating" means, at any time when
Vencor has no outstanding senior unsecured long-term debt securities without
third party credit enhancement (or when either S&P or Moody's has not publicly
rated any such securities of Vencor);
(a) a rating of Vencor's senior unsecured long-term debt securities
that is implied by a rating that S&P or Moody's, as the case may be,
has assigned to Vencor's outstanding subordinated unsecured long-term
debt securities without third party credit enhancement or Vencor's
outstanding senior secured long-term debt securities without third
party credit enhancement; or
(b) if no such implied rating by S&P or Moody's, as the case may be,
is available and Vencor has obtained a private letter from S&P or
Moody's, as the case may be, rating Vencor's senior unsecured long-term
debt securities without third party credit enhancement, such private
letter rating by S&P or Moody's, as the case may be.
"Indemnitee" has the meaning set forth in Section 9.03(b).
"Initial Credit Agreement" means this Agreement as originally
executed.
"Initial Banks" means ▇▇▇▇▇▇ and NationsBank, each in its capacity
as a Bank under the Initial Credit Agreement.
"Initial Closing Date" means March 18, 1997, which was the date of
the closing under the Initial Credit Agreement.
"Interest Period" means: (1) with respect to each Euro-Dollar
Loan, a period commencing on the date of borrowing specified in the
applicable Notice of Committed Borrowing or on the date specified in the
applicable Notice of Interest Rate Election and ending one, two, three or
six months thereafter, as Vencor may elect in the applicable notice;
provided that:
(a) any Interest Period that would otherwise end on a day that
is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar
14
Business Day unless such day falls in another calendar month, in which
case such Interest Period shall end on the next preceding Euro-Dollar
Business Day;
(b) any Interest Period that begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is
no numerically corresponding day in the calendar month at the end
of such Interest Period) shall, subject to clauses (c) and (d) of
this proviso, end on the last Euro-Dollar Business Day of a
calendar month;
(c) if any Interest Period includes the Commitment Reduction
Date but does not end on such date, then (i) the principal amount
(if any) of each Euro-Dollar Loan required to be repaid on such
date shall have an Interest Period ending on such date and (ii)
the remainder (if any) of each such Euro-Dollar Loan shall have an
Interest Period determined as set forth above; and
(d) any Interest Period that would otherwise end after the
Termination Date shall end on the Termination Date;
(2) with respect to each CD Borrowing, the period commencing on the
date of borrowing specified in the applicable Notice of Committed Borrowing
or on the date specified in the applicable Notice of Interest Rate Election
and ending 30, 60, 90 or 180 days thereafter, as Vencor may elect in the
applicable notice; provided that:
(a) any Interest Period that would otherwise end on a day which
is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day;
(b) if any Interest Period includes the Commitment Reduction
Date but does not end on such date, then (i) the principal amount
(if any) of each CD Loan required to be repaid on such date shall
have an Interest Period ending on such date and (ii) the remainder
(if any) of each such CD Loan shall have an Interest Period
determined as set forth above; and
(c) any Interest Period that would otherwise end after the
Termination Date shall end on the Termination Date;
(3) with respect to each Money Market LIBOR Loan, the period
commencing on the date of borrowing specified in the applicable Notice of
Money Market Borrowing and ending such whole number of months thereafter as
Vencor may elect in accordance with Section 2.03(f); provided that:
15
(a) any Interest Period that would otherwise end on a day that
is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day unless such Euro-Dollar
Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Euro-Dollar
Business Day;
(b) any Interest Period that begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is
no numerically corresponding day in the calendar month at the end
of such Interest Period) shall, subject to clause (c) of this
proviso, end on the last Euro-Dollar Business Day of a calendar
month; and
(c) any Interest Period that would otherwise end after the
Termination Date shall end on the Termination Date; and
(4) with respect to each Money Market Absolute Rate Loan, the
period commencing on the date of borrowing specified in the applicable
Notice of Money Market Borrowing and ending such number of days thereafter
(but not less than seven days) as Vencor may elect in accordance with
Section 2.03(f); provided that:
(a) any Interest Period that would otherwise end on a day which
is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day; and
(b) any Interest Period that would otherwise end after the
Termination Date shall end on the Termination Date.
"Interest Type" has the meaning set forth in Section 1.03.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended, or any successor statute.
"IRB Debt" means industrial revenue bonds or similar instruments
issued for the benefit of a Vencor Company or a partnership in which a
Vencor Company is a general partner (or for which a Vencor Company is
otherwise liable).
"Investment" means, with respect to any Person (the "Investor"),
any investment by the Investor in any other Person, whether by means of
share purchase, capital contribution, loan, advance, purchase of Debt,
payment in respect of a Guarantee of Debt, time deposit or otherwise.
16
"Investment Grade Rating" means a rating of senior long-term
unsecured debt securities of Vencor without any third-party credit
enhancement as both (i) BBB- or higher by S&P and (ii) Baa3 or higher by
Moody's. Each such rating shall be a publicly available rating or, if
either S&P or Moody's has not publicly rated such securities of Vencor and
Vencor has obtained a private letter from S&P or Moody's, as the case may
be, rating such securities of Vencor, such rating shall be the rating set
forth in such private letter.
"LC Exposure" means, with respect to any Bank at any time, its
Commitment Percentage of the Aggregate LC Exposure at such time.
"LC Fee Rate" means a rate per annum determined in accordance with
the Pricing Schedule.
"LC Indemnitees" has the meaning set forth in Section 2.08(o).
"LC Issuing Bank" means (i) NationsBank, National City Bank,
Kentucky, PNC Bank, National Association, Seattle First National Bank,
Wachovia Bank of North Carolina, N.A., and (ii) any other Bank designated
as an "LC Issuing Bank" for purposes hereof in a notice to the
Administrative Agent signed by Vencor and such Bank, acting in each case in
the capacity of an LC Issuing Bank under the letter of credit facility
described in Section 2.08, and their respective successors.
"LC Office" means, with respect to any LC Issuing Bank, the office
at which it books any Letter of Credit issued by it.
"LC Payment Date" has the meaning set forth in Section 2.08(i).
"LC Reimbursement Obligations" means, at any time, all obligations
of Vencor to reimburse the LC Issuing Banks pursuant to Section 2.08 for
amounts paid by the LC Issuing Banks in respect of drawings under Letters
of Credit, including any portion of any such obligation to which a Bank has
become subrogated pursuant to Section 2.08(k)(i).
"Letter of Credit" means any Existing Letter of Credit or
Additional Letter of Credit.
"LIBOR Auction" means a solicitation of Money Market Quotes
setting forth Money Market Margins based on the London Interbank Offered
Rate pursuant to Section 2.03(b).
17
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of
such asset or any other arrangement the economic effect of which is to give
a creditor preferential access to such asset to satisfy its claim. For the
purpose of this Agreement, any Vencor Company shall be deemed to own
subject to a Lien any asset that it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement or
other title retention agreement relating to such asset or any Capital
Lease.
"Loan" means a Committed Loan or a Money Market Loan and "Loans"
means any or all of the foregoing, as the context may require. The term
"Loan" does not include a Swingline Loan.
"London Interbank Offered Rate" has the meaning set forth in
Section 2.06(c).
"Managing Agents" means The Chase Manhattan Bank and PNC Bank,
Kentucky, Inc., in their respective capacities as Managing Agents in
connection with the credit facility provided hereunder.
"Margin Stock" has the meaning set forth in Regulation U.
"Margin Stock Loan" means any amount borrowed by Vencor hereunder
for the purpose of enabling Vencor or Merger Sub (i) to purchase or carry
TheraTx Shares purchased by Merger Sub pursuant to the Tender Offer, (ii)
after the Merger is consummated, to pay cash to the holders of TheraTx
Shares that were not purchased pursuant to the Tender Offer or (iii) to
refinance any Debt incurred for the foregoing purposes; provided that no
amount borrowed hereunder shall be classified as a Margin Stock Loan at any
time after the Regulation U Inapplicability Date.
"Material Adverse Effect" means (i) any material adverse effect
upon the condition (financial or otherwise), results of operations,
business or prospects of the Combined Companies, taken as a whole, (ii) a
material adverse effect on the validity, binding effect or enforceability
of any Financing Document or (iii) a material adverse effect on the
validity, perfection or priority of any Lien on any of the Collateral
created or purported to be created under the Collateral Documents.
"Material Debt" means Debt (other than Debt arising under this
Agreement) of one or more Vencor Companies, arising in one or more related
or unrelated transactions, in an aggregate outstanding amount (excluding
interest) of $25,000,000 or more.
"Material Plan" means at any time a Plan or Plans having aggregate
Unfunded Liabilities in excess of $1,000,000.
18
"Material Subsidiary" means (i) each Subsidiary of Vencor listed
on Schedule IV hereto, (ii) each additional Subsidiary designated by Vencor
from time to time after the Amendment Effective Date, by notice to the
Agents, as a Material Subsidiary and (iii) each Subsidiary of Vencor that
owns any Equity Interest in any Material Subsidiary described in clause (i)
or (ii) of this definition; provided that Vencor may terminate the status
of any Subsidiary as a Material Subsidiary as provided in Section 5.20.
"Merger" means the merger of Merger Sub into TheraTx (with TheraTx
as the surviving corporation) pursuant to the Merger Agreement.
"Merger Agreement" means the Agreement and Plan of Merger dated as
of February 9, 1997 among TheraTx, Vencor and Merger Sub.
"Merger Sub" means Peach Acquisition Corp., a Delaware corporation
and a wholly-owned subsidiary of Vencor.
"Minority-Owned Affiliate" means any Person (other than a
Subsidiary) in which (i) the Vencor Companies own 10% or more of any class
of capital stock or other equity interests or (ii) any Vencor Company is a
general partner.
"Money Market Absolute Rate" has the meaning set forth in Section
2.03(d).
"Money Market Absolute Rate Loan" means a loan made or to be made
by a Bank pursuant to an Absolute Rate Auction.
"Money Market Lending Office" means, as to each Bank, its Domestic
Lending Office or such other office, branch or affiliate of such Bank as it
may hereafter designate as its Money Market Lending Office by notice to
Vencor and the Administrative Agent; provided that any Bank may from time
to time by notice to Vencor and the Administrative Agent designate separate
Money Market Lending Offices for its Money Market LIBOR Loans, on the one
hand, and its Money Market Absolute Rate Loans, on the other hand, in which
case all references herein to the Money Market Lending Office of such Bank
shall be deemed to refer to either or both of such offices, as the context
may require.
"Money Market LIBOR Loan" means a loan made or to be made by a
Bank pursuant to a LIBOR Auction (including such a loan bearing interest at
the Base Rate pursuant to Section 8.01(a)).
"Money Market Loan" means a Money Market LIBOR Loan or a Money
Market Absolute Rate Loan.
"Money Market Margin" has the meaning set forth in Section
2.03(d).
19
"Money Market Quote" means an offer by a Bank to make a Money
Market Loan in accordance with Section 2.03.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"▇▇▇▇▇▇" means ▇▇▇▇▇▇ Guaranty Trust Company of New York and its
successors.
"Multiemployer Plan" means at any time an employee pension benefit
plan within the meaning of Section 4001(a)(3) of ERISA to which any member
of the ERISA Group is then making or accruing an obligation to make
contributions or has within the preceding five plan years made
contributions, including for these purposes any Person which ceased to be a
member of the ERISA Group during such five year period.
"NationsBank" means NationsBank, N.A., and its successors.
"Non-Consolidated Partnership" means any partnership (other than a
Consolidated Subsidiary) in which a Vencor Company is a general partner.
"Note" means a promissory note of Vencor payable to the order of a
Bank evidencing Vencor's obligation to repay the Loans made by such Bank.
Each Note shall be substantially in the form of Exhibit A hereto (modified
as provided in Section 2.05(b), if applicable). "Notes" means any or all of
such promissory notes, as the context may require.
"Notice of Borrowing" means a Notice of Committed Borrowing (as
defined in Section 2.02), a Notice of Money Market Borrowing (as defined in
Section 2.03(f) or a Notice of Swingline Borrowing (as defined in Section
2.09(b)).
"Notice of Designation" has the meaning set forth in Section
2.03(h).
"Notice of Interest Rate Election" has the meaning set forth in
Section 2.07(a).
"Offering Memorandum" means the confidential offering memorandum
dated February 20, 1997 furnished to the Banks in connection with the
transactions contemplated hereby.
"Optional Additional Collateral" has the meaning set forth in the
Security Agreement.
"Outstanding Committed Amount" means, with respect to any Bank at
any time, the sum of (i) the aggregate outstanding principal amount of its
Committed Loans,
20
(ii) its Commitment Percentage of the aggregate outstanding principal amount of
the Swingline Loans (if any) and (iii) its LC Exposure, all determined at such
time after giving effect to any prior assignments by or to such Bank pursuant to
Section 8.06 or 9.06(c).
"Parent" means, with respect to any Bank, any Person controlling
such Bank.
"Parent Guaranty" means Vencor's guaranty dated as of August 15,
1996 of the obligations of Atria under Atria's Credit Agreement, as such
guaranty may be amended from time to time; provided that no such amendment
shall, without the prior written consent of the Required Banks, (i)
increase the "Maximum Guaranteed Amount" (as defined therein) or, except as
expressly provided in Section 5.19 hereof, postpone or reduce the amount of
any scheduled reduction of said Maximum Guaranteed Amount specified in
Section 2.02 thereof or (ii) change any provision of Atria's Supporting
Guaranties or the meaning of any defined term used therein.
"Participant" has the meaning set forth in Section 9.06(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Permitted Encumbrances" means, with respect to any real property
owned or leased by any of the Vencor Companies:
(a) Liens for taxes, assessments or other governmental charges
not yet due or which are being contested in good faith and by
appropriate proceedings if adequate reserves with respect thereto
are maintained on the books of such Vencor Company, in accordance
with GAAP;
(b) carriers', warehousemen's, mechanics', materialmens',
repairmens' or other like Liens arising by operation of law in the
ordinary course of business so long as (A) the underlying
obligations are not overdue for a period of more than 60 days or
(B) such Liens are being contested in good faith and by
appropriate proceedings and adequate reserves with respect thereto
are maintained on the books of such Vencor Company in accordance
with GAAP; and
(c) other Liens or title defects (including matters which an
accurate survey might disclose) which (x) do not secure Debt and
(y) do not materially detract from the value of such real property
or materially impair the use thereof by such Vencor Company in the
operation of its business.
"Permitted Intercompany Debt" means:
21
(a) Debt of Vencor owing to any Subsidiary;
(b) Debt of any Subsidiary owing to Vencor; provided that such Debt
is either evidenced by a promissory note or maintained in the form of
open account balances in which, in either case, the Collateral Agent
possesses a first priority, perfected security interest under the
Security Agreement at all times until such security interest is
released pursuant to Section 16 thereof; and
(c) Debt of any Subsidiary owing to any other Subsidiary.
"Permitted Liens" means Liens permitted to exist under Section 5.09.
"Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a
government or political subdivision or an agency or instrumentality
thereof.
"Plan" means at any time an employee pension benefit plan (other
than a Multiemployer Plan) which is covered by Title IV of ERISA or subject
to the minimum funding standards under Section 412 of the Internal Revenue
Code and either (i) is maintained, or contributed to, 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, or contributed
to, by any Person which was at such time a member of the ERISA Group for
employees of any Person which was at such time a member of the ERISA Group.
"Pricing Level" has the meaning set forth in the Pricing Schedule.
"Pricing Schedule" means the Pricing Schedule attached hereto.
"Prime Rate" means the rate of interest established by the
Administrative Agent from time to time as its Prime Rate.
"Project Loan" means a loan made by a Bank to Vencor pursuant to
Section 2.01(c); provided that if any such loan or loans (or portions
thereof) are combined or subdivided pursuant to a Notice of Interest Rate
Election, the term "Project Loan" shall refer to the combined principal
amount resulting from such combination or to each of the separate principal
amounts resulting from such subdivision, as the case may be.
"Project Mortgage Notes" means the promissory notes secured by
Project Mortgages that are included in the Collateral from time to time
pursuant to Section 3(G) of the Security Agreement.
22
"Project Mortgages" means mortgages, deeds of trust and similar
instruments relating to facilities financed with the proceeds of Project
Loans (or the proceeds of Debt refinanced by Project Loans).
"Qualification" means, with respect to any report of independent
public accountants covering financial statements, a qualification to such
report (such as a "subject to" or "except for" statement therein) (i)
resulting from a limitation on the scope of examination of such financial
statements or the underlying data, (ii) as to the capability of the Person
whose financial statements are being examined to continue operations as a
going concern or (iii) which could be eliminated by changes in financial
statements or notes thereto covered by such report (such as, by the
creation of or increase in a reserve or a decrease in the carrying value of
assets); provided that neither of the following shall constitute a
Qualification: (a) a consistency exception relating to a change in
accounting principles with which the independent public accountants for the
Person whose financial statements are being examined have concurred or (b)
a qualification relating to the outcome or disposition of any uncertainty,
including but not limited to threatened litigation, pending litigation
being contested in good faith, pending or threatened claims or other
contingencies, the impact of which litigation, claims, contingencies or
uncertainties cannot be determined with sufficient certainty to permit
quantification in such financial statements.
"Rate Period" has the meaning set forth in the Pricing Schedule.
"Regulated Activity" means any generation, treatment, storage,
recycling, transportation or disposal of any Hazardous Substance.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Regulation U Inapplicability Date" means the first day after the
date hereof on which the common stock of TheraTx no longer appears on the
list of OTC margin stocks periodically published by the Board of Governors
of the Federal Reserve System for purposes of Regulation U.
"Release" means any discharge, emission or release, including a
Release as defined in CERCLA at 42 U.S.C. Section 9601(22). The term
"Release", when used as a verb, has a corresponding meaning.
"Required Banks" means, at any time, Banks having more than 50% of
the aggregate amount of the Credit Exposures at such time.
23
"Restricted Payment" means (i) any dividend or other distribution
on any Equity Securities of Vencor (except dividends payable solely in
Equity Securities of the same class) and (ii) any payment on account of the
purchase, redemption, retirement or acquisition of any such Equity
Securities of Vencor.
"S&P" means Standard and Poor's Ratings Group.
"SEC" means the United States Securities and Exchange Commission.
"Secured Obligations" has the meaning set forth in Section 1 of
the Security Agreement.
"Security Agreement" means the Security Agreement dated as of
March 17, 1997 among Vencor, the Subsidiary Grantors party thereto and the
Collateral Agent, substantially in the form of Exhibit C hereto, as amended
as of March 31, 1997 and as it may be further amended from time to time.
"Security Agreement Supplement" means a Security Agreement
Supplement, substantially in the form of Annex A to the Security Agreement,
whereby Vencor or a Subsidiary Grantor grants (or confirms its grant of) a
security interest in additional Collateral to the Collateral Agent and, if
the grantor of such security interest is a Subsidiary that is not already a
Grantor under the Security Agreement, such Subsidiary becomes a Grantor
thereunder.
"Subsidiary" means, as to any Person, (i) any corporation or other
entity of which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other persons
performing similar functions are at the time directly or indirectly owned
by such Person or (ii) any partnership that, in accordance with GAAP, is a
Consolidated Subsidiary of such Person. Unless otherwise specified,
"Subsidiary" means a Subsidiary of Vencor.
"Subsidiary Grantor" means a Wholly-Owned Material Subsidiary that
grants a security interest in one or more Equity Interests in other
Material Subsidiaries to the Collateral Agent under the Security Agreement
to secure such Wholly-Owned Material Subsidiary's Subsidiary Guaranty.
"Subsidiary Guarantor" means a Wholly-Owned Material Subsidiary
that guarantees the obligations of Vencor hereunder pursuant to a
Subsidiary Guaranty Agreement.
24
"Subsidiary Guaranty" means a guaranty by a Subsidiary Guarantor
that Vencor will perform its obligations under this Agreement, such
guaranty to be set forth in a Subsidiary Guaranty Agreement.
"Subsidiary Guaranty Agreement" means an instrument, substantially
in the form of Exhibit O hereto, setting forth the Subsidiary Guaranties of
one or more Subsidiary Guarantors.
"Super-Majority Banks" means, at any time, Banks having more than
75% of the aggregate amount of the Credit Exposures at such time (said 75%
to be calculated net of any participating interests as to which such Banks
are not permitted to vote favorably pursuant to directions given in
accordance with Section 9.06(b)).
"Swingline Availability Period" means the period from and
including the Amendment Effective Date to but excluding the Swingline
Maturity Date.
"Swingline Bank" means NationsBank, in its capacity as the
Swingline Bank under the Swingline facility described in Section 2.09, and
its successors in such capacity.
"Swingline Borrowing" means a borrowing of a Swingline Loan
pursuant to Section 2.09(a).
"Swingline Commitment" means the obligation of the Swingline Bank
to make Swingline Loans to Vencor in aggregate principal amount at any one
time outstanding not to exceed $20,000,000.
"Swingline Loan" means a loan made by the Swingline Bank pursuant
to Section 2.09(a).
"Swingline Maturity Date" means the day that is 30 days before the
Termination Date.
"Swingline Note" has the meaning set forth in Section 2.09(d).
"Tender Offer" means the Offer dated February 14, 1997 by Merger
Sub to purchase for cash all of the outstanding shares of common stock
(including associated rights to purchase Series A Junior Participating
Preferred Stock) of TheraTx.
"Tenet Guarantee Reimbursement Agreement" means the Guarantee
Reimbursement Agreement dated as of January 31, 1990, as amended, between
▇▇▇▇▇ Healthcare Corporation (formerly named National Medical Enterprises,
Inc.) and Vencor (as successor by merger to Hillhaven).
25
"Termination Date" means March 31, 2002 or, if such day is not a
Euro-Dollar Business Day, the next preceding Euro-Dollar Business Day.
"TheraTx" means TheraTx, Incorporated, a Delaware corporation, and
its successors.
"TheraTx Shares" means shares of common stock (including the
associated rights to purchase Series A Junior Participating Preferred
Stock) of TheraTx.
"Total Commitments" means, at any time, the aggregate amount of
the Commitments (whether used or unused) at such time.
"Total Usage" means, at any time, the sum of (i) the aggregate
outstanding principal amount of all Loans and Swingline Loans and (ii) the
Aggregate LC Exposure, all determined at such time.
"UCC" has the meaning set forth in Section 1 of the Security
Agreement.
"UCP" means the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No.
500, or any successor publication governing the rights and obligations of
the parties in connection with Letters of Credit.
"Unfunded Liabilities" means, with respect to any Plan at any
time, the amount (if any) by which (i) the value of all benefit liabilities
under such Plan, determined on a plan termination basis using the
assumptions prescribed by the PBGC for purposes of Section 4044 of ERISA,
exceeds (ii) the fair market value of all Plan assets allocable to such
liabilities under Title I of ERISA (excluding any accrued but unpaid
contributions), all determined as of the then most recent valuation date
for such Plan, but only to the extent that such excess represents a
potential liability of a member of the ERISA Group to the PBGC or any other
Person under Title IV of ERISA.
"United States" means the United States of America, including the
States and the District of Columbia, but excluding its territories and
possessions.
"Vencor" means Vencor, Inc., a Delaware corporation, and its
successors.
"Vencor Company" means Vencor or any Subsidiary of Vencor.
"Vencor's 10 1/8% Subordinated Notes" means Vencor's 10 1/8% Senior
Subordinated Notes due 2001 which were outstanding in the aggregate
principal amount of approximately $3,300,000 at March 1, 1997.
26
"Wholly-Owned Material Subsidiary" means a Wholly-Owned Subsidiary
that is a Material Subsidiary.
"Wholly-Owned Subsidiary" means, at any time, a Subsidiary, all
the outstanding Equity Interests in which are owned, directly or
indirectly, by Vencor at such time.
SECTION 1.02. Accounting Terms and Determinations. Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared
in accordance with GAAP; provided that, if Vencor notifies the
Documentation Agent that Vencor wishes to amend any provision hereof to
eliminate the effect of any change in GAAP on the operation of such
provision (or if the Documentation Agent notifies Vencor that the Required
Banks wish to amend any provision hereof for such purpose), then such
provision shall be applied on the basis of GAAP in effect immediately
before the relevant change in GAAP became effective, until either such
notice is withdrawn or such provision is amended in a manner satisfactory
to Vencor and the Required Banks.
SECTION 1.03. Classes and Types of Loans. Loans hereunder are
distinguished by "Class" and by "Interest Type". The "Class" of a Loan
refers to whether such Loan is an Acquisition Loan, a Project Loan or a
General Purpose Loan, each of which constitutes a Class. The "Interest
Type" of a Loan refers to whether such Loan is a Euro-Dollar Loan, a CD
Loan, a Base Rate Loan, a Money Market LIBOR Loan or a Money Market
Absolute Rate Loan. A Loan may be identified by both Class and Interest
Type (e.g., a "General Purpose Euro-Dollar Loan" indicates that such Loan
is both a General Purpose Loan and a Euro-Dollar Loan). Identification of
a Borrowing or Group of Loans by Class and/or Interest Type indicates that
such Borrowing or Group of Loans is comprised of Loans of the specified
Class and/or Interest Type. The term "Borrowing" denotes the aggregation
of Loans to be made to Vencor by one or more Banks pursuant to Article 2 on
the same day, all of which Loans are of the same Class and Interest Type
(subject to Article 8) and, except in the case of Base Rate Loans, have the
same initial Interest Period. Borrowings are classified for purposes
hereof either (i) by reference to the pricing of Loans comprising such
Borrowing (e.g., a "Euro-Dollar Borrowing" is a Borrowing comprised of
Euro-Dollar Loans) or (ii) by reference to the provisions of Article 2
under which participation therein is determined (i.e., a "Committed
Borrowing" is a Borrowing under Section 2.01 in which all Banks participate
in proportion to their Commitments, while a "Money Market Borrowing" is a
Borrowing under Section 2.03 in which one or more Banks participate on the
basis of their bids).
SECTION 1.04. Other Definitional Provisions. References in this
Agreement to "Articles", "Sections", "Schedules" or "Exhibits" are to
Articles, Sections, Schedules or Exhibits of or to this Agreement unless
otherwise specifically provided. Any of the terms
27
defined in Section 1.01 may, unless the context otherwise requires, be used in
the singular or plural depending on the reference. "Include", "includes" and
"including" are deemed to be followed by "without limitation" whether or not
they are in fact followed by such words or words of like import. "Writing",
"written" and comparable terms refer to printing, typing, facsimile and other
means of reproducing words on paper. References to any agreement or contract are
to such agreement or contract as amended, modified or supplemented from time to
time (whether before, on or after the Amendment Effective Date) in accordance
with the terms hereof and thereof. "Hereto", "herein" and "hereof" refer to this
Amended Agreement and not to the Initial Credit Agreement.
ARTICLE 2
THE FACILITIES
SECTION 2.01. Commitments to Lend. (a) Acquisition Loans.
Subject to the terms and conditions set forth in this Agreement, each Bank
severally agrees to make loans to Vencor pursuant to this subsection, from
time to time during the period from and including the Amendment Effective
Date to but excluding the Termination Date, for the purposes of refinancing
loans made under the Initial Credit Agreement to finance the acquisition of
TheraTx, financing other acquisitions, refinancing outstanding Debt in
connection with such other acquisitions and/or refinancing Debt incurred
for any of the foregoing purposes and for other general corporate purposes
of Vencor and its Subsidiaries (excluding their working capital
requirements); provided that, immediately after each such loan is made (and
after giving effect to any substantially concurrent application of the
proceeds thereof to repay outstanding Loans and Swingline Loans):
(i) such Bank's Outstanding Committed Amount shall not exceed its
Commitment; and
(ii) the Total Usage shall not exceed the Total Commitments.
(b) General Purpose Loans. Subject to the terms and
conditions set forth in this Agreement, each Bank severally agrees to make
loans to Vencor pursuant to this subsection, from time to time during the
period from and including the Amendment Effective Date to but excluding the
Termination Date, for the general corporate purposes of Vencor and its
Subsidiaries, including (without limitation) their working capital
requirements and any purpose for which Acquisition Loans may be borrowed;
provided that, immediately after each such loan is made (and after giving
effect to any substantially concurrent application of the proceeds thereof
to repay outstanding Loans and Swingline Loans):
28
(i) such Bank's Outstanding Committed Amount shall not exceed its
Commitment; and
(ii) the Total Usage shall not exceed the Total Commitments.
(c) Project Loans. Subject to the terms and conditions set
forth in this Agreement, each Bank severally agrees to make loans to Vencor
pursuant to this subsection, from time to time during the period from and
including the Amendment Effective Date to but excluding the Termination
Date, for the purpose of financing capital expansion projects or
refinancing Debt that was incurred to finance such projects; provided that,
immediately after each such loan is made (and after giving effect to any
substantially concurrent application of the proceeds thereof to repay
outstanding Loans and Swingline Loans):
(i) such Bank's Outstanding Committed Amount shall not exceed its
Commitment; and
(ii) the Total Usage shall not exceed the Total Commitments.
(d) Amount of Each Borrowing. Each Committed Borrowing under this Section
2.01 shall be made from the several Banks ratably in proportion to their
respective Commitments. Each such Borrowing shall be in an aggregate principal
amount of (i) $5,000,000 or any larger multiple of $1,000,000 in the case of a
Euro-Dollar Borrowing or a CD Borrowing or (ii) $1,000,000 or any larger
multiple of $100,000 in the case of a Base Rate Borrowing; provided that (x) any
Committed Borrowing may be in an aggregate amount equal to the aggregate unused
amount of the Commitments and (y) if such Committed Borrowing is made on the
Swingline Maturity Date, such Committed Borrowing may be in the aggregate amount
of the Swingline Loans outstanding on such date.
(e) Ability to Repay and Reborrow. Within the limits specified in this
Agreement, Vencor may borrow pursuant to any provision of this Article 2, repay
such borrowing and reborrow pursuant to any provision of this Article 2.
(f) No Comingling of Margin Stock Loans and Other Loans. Prior to the
Regulation U Inapplicability Date, the entire principal amount of each Committed
Borrowing, Money Market Borrowing or Swingline Loan shall either (i) consist
entirely of amounts that are Margin Stock Loans or (ii) not include any amount
that is a Margin Stock Loan.
SECTION 2.02. Notice of Committed Borrowing. (a) Vencor shall give the
Administrative Agent notice, substantially in the form of Exhibit I hereto (a
"Notice of Committed Borrowing"), not later than 12:00 Noon (Eastern Time) on
(x) the date of
29
each Base Rate Borrowing, (y) the second Domestic Business Day before each CD
Borrowing and (z) the third Euro-Dollar Business Day before each Euro-Dollar
Borrowing, specifying:
(i) the proposed date of such Borrowing, which shall be a
Domestic Business Day in the case of a CD Borrowing or a Base Rate
Borrowing or a Euro-Dollar Business Day in the case of a Euro-
Dollar Borrowing;
(ii) the aggregate amount of such Borrowing;
(iii) whether the Committed Loans comprising such Borrowing are to
be Acquisition Loans, General Purpose Loans or Project Loans;
(iv) whether the Committed Loans comprising such Borrowing are to
bear interest initially at the Base Rate, a CD Rate or a Euro-
Dollar Rate;
(v) in the case of a CD Borrowing or a Euro-Dollar Borrowing,
the duration of the initial Interest Period applicable thereto,
subject to the provisions of the definition of Interest Period;
and
(vi) if such notice is given before the Regulation U
Inapplicability Date, whether such Committed Loans are or are not
to be Margin Stock Loans.
No Notice of Committed Borrowing shall create a new Group of Loans if,
immediately after giving effect thereto, there would be more than 15 Groups
of Loans (other than Base Rate Loans) outstanding hereunder.
SECTION 2.03. Money Market Borrowings. (a) The Money Market
Option. In addition to Committed Borrowings pursuant to Section 2.01,
Vencor may, as set forth in this Section, request the Banks to make offers
to make Money Market Loans to Vencor, from time to time during the period
from and including the Amendment Effective Date to but excluding the
Termination Date, for any purpose for which Committed Loans may be
borrowed; provided that:
(i) Vencor may not borrow any Money Market Loans unless, at the
time of such borrowing, its senior long-term unsecured debt
securities without any third-party credit enhancement are publicly
rated (or, if not rated, have an Implied Rating or Private Letter
Rating) no lower than BB by S&P and no lower than Ba2 by ▇▇▇▇▇'▇;
and
(ii) immediately after each borrowing under this Section (and
after giving effect to any substantially concurrent application of
the proceeds thereof to repay
30
outstanding Money Market Loans), the aggregate outstanding principal
amount of all Money Market Loans shall not exceed $100,000,000 unless
Vencor has an Investment Grade Rating.
The Banks may, but shall have no obligation to, make such offers and Vencor
may, but shall have no obligation to, accept any such offers in the manner
set forth in this Section.
(b) Money Market Quote Request. When Vencor wishes to request
offers to make Money Market Loans under this Section, it shall transmit to
the Administrative Agent by telex or facsimile transmission a Money Market
Quote Request substantially in the form of Exhibit K hereto so as to be
received no later than 10:30 A.M. (Eastern Time) on (x) the fourth Euro-
Dollar Business Day prior to the date of borrowing proposed therein, in the
case of a LIBOR Auction or (y) the Domestic Business Day next preceding the
date of borrowing proposed therein, in the case of an Absolute Rate Auction
(or, in either case, such other time or date as Vencor and the
Administrative Agent shall have mutually agreed and shall have communicated
to the Banks not later than the date of the Money Market Quote Request for
the first LIBOR Auction or Absolute Rate Auction for which such change is
to be effective) specifying:
(i) the proposed date of such Borrowing, which shall be a Euro-
Dollar Business Day in the case of a LIBOR Auction or a Domestic
Business Day in the case of an Absolute Rate Auction;
(ii) the aggregate amount of such Borrowing, which shall be
$5,000,000 or a larger multiple of $1,000,000;
(iii) whether the Money Market Loans comprising such Borrowing
are to be Acquisition Loans, General Purpose Loans or Project
Loans;
(iv) whether the Money Market Quotes requested are to set forth
a Money Market Margin or a Money Market Absolute Rate;
(v) the duration of the Interest Period applicable to such
Money Market Loans, subject to the provisions of the definition of
Interest Period; and
(vi) if such request is made before the Regulation U
Inapplicability Date, whether such Money Market Loans are or are
not to be Margin Stock Loans.
Vencor may request offers to make Money Market Loans for more than one
Interest Period in a single Money Market Quote Request. No Money Market
Quote Request shall be given within five Euro-Dollar Business Days (or such
other number of days as Vencor and the Administrative Agent may agree) of
any other Money Market Quote Request.
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(c) Invitation for Money Market Quotes. Promptly upon receipt
of a Money Market Quote Request, the Administrative Agent shall send to the
Banks by telex or facsimile transmission an Invitation for Money Market
Quotes substantially in the form of Exhibit L hereto, which shall
constitute an invitation by Vencor to each Bank to submit Money Market
Quotes offering to make the Money Market Loans to which such Money Market
Quote Request relates in accordance with this Section.
(d) Submission and Contents of Money Market Quotes. (i) Each
Bank may submit a Money Market Quote containing an offer or offers to make
Money Market Loans in response to any Invitation for Money Market Quotes.
Each Money Market Quote must comply with the requirements of this
subsection (d) and must be submitted to the Administrative Agent by telex
or facsimile transmission at its address specified in or pursuant to
Section 9.01 not later than (x) 4:30 P.M. (Eastern Time) on the fourth
Euro- Dollar Business Day prior to the proposed date of borrowing, in the
case of a LIBOR Auction or (y) 9:30 A.M. (Eastern Time) on the proposed
date of borrowing, in the case of an Absolute Rate Auction (or, in either
case, such other time or date as Vencor and the Administrative Agent shall
have mutually agreed and shall have communicated to the Banks not later
than the date of the Money Market Quote Request for the first LIBOR Auction
or Absolute Rate Auction for which such change is to be effective);
provided that Money Market Quotes submitted by the Administrative Agent (or
any affiliate of the Administrative Agent) in the capacity of a Bank may be
submitted, and may only be submitted, if the Administrative Agent or such
affiliate notifies Vencor of the terms of the offer or offers contained
therein not later than (x) one hour before the deadline for the other
Banks, in the case of a LIBOR Auction or (y) 15 minutes before the deadline
for the other Banks, in the case of an Absolute Rate Auction. Subject to
Articles 3 and 6, any Money Market Quote so made shall be irrevocable
except with the written consent of the Administrative Agent given on the
instructions of Vencor.
(ii) Each Money Market Quote shall be in substantially the form
of Exhibit M hereto and shall in any case specify:
(A) the proposed date of the relevant Borrowing;
(B) the principal amount of the Money Market Loan
for which each such offer is being made, which principal
amount (w) may be greater than or less than the
Commitment of the quoting Bank, (x) must be $5,000,000 or
a larger multiple of $1,000,000, (y) may not exceed the
principal amount of Money Market Loans for which offers
were requested and (z) may be subject to an aggregate
limitation as to the principal amount of Money Market
Loans for which offers being made by such quoting Bank
may be accepted;
32
(C) in the case of a LIBOR Auction, the margin above
or below the applicable London Interbank Offered Rate
(the "Money Market Margin") offered for each such Money
Market Loan, expressed as a percentage (specified to the
nearest 1/10,000 of 1%) to be added to or subtracted from
such base rate;
(D) in the case of an Absolute Rate Auction, the
rate of interest per annum (specified to the nearest
1/10,000 of 1%) (the "Money Market Absolute Rate")
offered for each such Money Market Loan, and
(E) the identity of the quoting Bank.
A Money Market Quote may set forth up to five separate offers by the
quoting Bank with respect to each Interest Period specified in the related
Invitation for Money Market Quotes.
(iii) Any Money Market Quote shall be disregarded if it:
(A) is not substantially in conformity with Exhibit L hereto or
does not specify all of the information required by subsection (d)(ii);
(B) contains qualifying, conditional or similar language;
(C) proposes terms other than or in addition to those set forth
in the applicable Invitation for Money Market Quotes; or
(D) arrives after the time set forth in subsection (d)(i).
(e) Notice to Vencor. The Administrative Agent shall promptly
notify Vencor of the terms (x) of any Money Market Quote submitted by a
Bank that is in accordance with subsection (d) and (y) of any Money Market
Quote that amends, modifies or is otherwise inconsistent with a previous
Money Market Quote submitted by such Bank with respect to the same Money
Market Quote Request. Any such subsequent Money Market Quote shall be
disregarded by the Administrative Agent unless such subsequent Money Market
Quote is submitted solely to correct a manifest error in such former Money
Market Quote. The Administrative Agent's notice to Vencor shall specify
(A) the aggregate principal amount of Money Market Loans for which offers
have been received for each Interest Period specified in the related Money
Market Quote Request, (B) the respective principal amounts and Money Market
Margins or Money Market Absolute Rates, as the case may be, so offered and
(C) if applicable, limitations on the aggregate principal amount of Money
Market Loans for which offers in any single Money Market Quote may be
accepted.
33
(f) Acceptance and Notice by Vencor. Not later than 10:30 A.M.
(Eastern Time) on (x) the third Euro-Dollar Business Day prior to the proposed
date of Borrowing, in the case of a LIBOR Auction or (y) the proposed date of
Borrowing, in the case of an Absolute Rate Auction (or, in either case, such
other time or date as Vencor and the Administrative Agent shall have mutually
agreed and shall have communicated to the Banks not later than the date of the
Money Market Quote Request for the first LIBOR Auction or Absolute Rate Auction
for which such change is to be effective), Vencor shall notify the
Administrative Agent of its acceptance or non-acceptance of the offers so
notified to it pursuant to subsection (e). In the case of acceptance, such
notice (a "Notice of Money Market Borrowing") shall specify the aggregate
principal amount of offers for each Interest Period that are accepted. Vencor
may accept any Money Market Quote in whole or in part; provided that:
(i) the aggregate principal amount of each Money Market Borrowing
may not exceed the applicable amount set forth in the related Money
Market Quote Request;
(ii) the principal amount of each Money Market Borrowing must be
$5,000,000 or a larger multiple of $1,000,000;
(iii) acceptance of offers may only be made on the basis of
ascending Money Market Margins or Money Market Absolute Rates, as
the case may be;
(iv) Vencor may not accept any offer that is described in
subsection (d)(iii) or that otherwise fails to comply with the
requirements of this Agreement; and
(v) immediately after such Money Market Borrowing is made (and
after giving effect to any substantially concurrent application of
the proceeds thereof to repay outstanding Loans and Swingline
Loans):
(A) the aggregate outstanding principal amount of
all Money Market Loans shall not exceed the applicable
limit specified in subsection (a) of this Section;
(B) the Total Usage shall not exceed the Total
Commitments; and
(C) no more than eight Money Market Borrowings shall
be outstanding hereunder.
34
(g) Allocation by Administrative Agent. If offers are made by
two or more Banks with the same Money Market Margins or Money Market
Absolute Rates, as the case may be, for a greater aggregate principal
amount than the amount in respect of which such offers are accepted for the
related Interest Period, the principal amount of Money Market Loans in
respect of which such offers are accepted shall be allocated by the
Administrative Agent among such Banks as nearly as possible (in multiples
of $1,000,000, as the Administrative Agent may deem appropriate) in
proportion to the aggregate principal amounts of such offers.
Determinations by the Administrative Agent of the amounts of Money Market
Loans shall be conclusive in the absence of manifest error.
(h) Designated Lenders. Any Bank (a "Designating Bank") may at
any time, by notice to Vencor and the Administrative Agent, designate
another Person (a "Designated Money Market Lender") to bid in place of such
Designating Bank for Money Market Loans and/or to fund Money Market Loans
which such Designating Bank is required to fund pursuant to this Section
2.03, all as specified in such notice (a "Notice of Designation"). Each
Designating Bank shall cause each Designated Money Market Lender so
designated by it to comply with the provisions of this Agreement applicable
to Banks in respect of their Money Market Loans and to be bound by the
provisions of this Agreement (including, without limitation, the provisions
of Article 7 and Section 9.04). A Designated Money Market Lender shall
constitute a "Bank" (i) for purposes of the provisions of this Section, to
the extent that they apply to the Absolute Rate Auctions and LIBOR Auctions
for which it has been designated as a bidder and/or to the extent that they
apply to Money Market Loans which it has been designated to fund and (ii)
for purposes of all other provisions of this Agreement to the extent that
such provisions apply to holders of Money Market Loans; provided that (x)
such Designating Bank shall be responsible for causing each Designated
Money Market Lender designated by it to perform its obligations hereunder
and (y) to the extent specified in the applicable Notice of Designation,
such Designating Bank shall act as the agent of each such Designated Money
Market Lender and give and receive notices and other communications
hereunder and take actions hereunder as agent on its behalf.
SECTION 2.04. Notice to Banks; Funding of Loans. (a) Upon
receipt of a Notice of Committed Borrowing or a Notice of Money Market
Borrowing, the Administrative Agent shall promptly notify each Bank
participating in such Borrowing of the contents thereof and of such Bank's
ratable share of such Borrowing. Such Notice of Borrowing shall not
thereafter be revocable by Vencor.
(b) Not later than (i) 2:00 P.M. (Eastern Time) on the date of
each Base Rate Borrowing and (ii) 1:00 P.M. (Eastern Time) on the date of
each other Borrowing, each Bank shall make available its ratable share of
such Borrowing, in Federal or other funds immediately available in
Charlotte, North Carolina, to the Administrative Agent at its address for
payments specified in or pursuant to Section 9.01. Unless the
Administrative
35
Agent determines that any applicable condition specified in Article 3 has not
been satisfied, the Administrative Agent shall (i) to the extent required by
Section 2.09(g), apply the funds so received from the Banks to prepay all
Swingline Loans that are of the same Class as such Borrowing, together with
interest accrued thereon, and (ii) make the remainder of such funds available to
Vencor on such date at the Administrative Agent's aforesaid address.
(c) Unless the Administrative Agent shall have received notice
from a Bank prior to the date of any Borrowing that such Bank will not make
available to the Administrative Agent such Bank's share of such Borrowing,
the Administrative Agent may assume that such Bank has made such share
available to the Administrative Agent on the date of such Borrowing in
accordance with Section 2.04(b) and the Administrative Agent may (but shall
not be obligated to), in reliance upon such assumption, make available to
Vencor on such date a corresponding amount. If and to the extent that such
Bank shall not have so made such share available to the Administrative
Agent, such Bank and Vencor severally agree to repay to the Administrative
Agent forthwith on demand such corresponding amount together with interest
thereon, for each day from the day such amount is made available to Vencor
until the day such amount is repaid to the Administrative Agent, at (i) in
the case of Vencor, a rate per annum equal to the higher of the Federal
Funds Rate and the interest rate applicable thereto pursuant to Section
2.06, and (ii) in the case of such Bank, a rate per annum equal to (x) for
each day from the day such amount is made available to Vencor to the third
succeeding Domestic Business Day, inclusive, the Federal Funds Rate for
such day as determined by the Administrative Agent and (y) for each day
thereafter until the day such amount is repaid to the Administrative Agent,
the sum of 2% plus the Base Rate for such day. If such Bank shall repay to
the Administrative Agent such corresponding amount, such amount so repaid
shall constitute such Bank's Loan included in such Borrowing for purposes
of this Agreement.
SECTION 2.05. Notes. (a) Each Bank's Loans shall be evidenced
by a single Note payable to the order of such Bank for the account of its
Applicable Lending Office.
(b) Each Bank may, by notice to Vencor and the Documentation
Agent, request that its Loans of a particular Class and/or Interest Type be
evidenced by a separate Note. Each such Note shall be substantially in the
form of Exhibit A hereto, with appropriate modifications to reflect the
fact that it evidences solely Loans of the relevant Class and/or Interest
Type. Each reference in this Agreement to the "Note" of such Bank shall be
deemed to refer to and include any or all of such Notes, as the context may
require.
(c) Upon receipt of each Bank's Note pursuant to Section
3.01(b), the Documentation Agent shall forward such Note to such Bank.
Each Bank shall record the date, amount, Class and Interest Type of each
Loan made by it and the date and amount of each payment of principal made
by Vencor with respect thereto, and may, in connection
36
with any transfer or enforcement of its Note, endorse on the schedule forming a
part thereof appropriate notations to evidence the foregoing information with
respect to the then outstanding Loans evidenced by such Note; provided that
neither the failure of any Bank to make any such recordation or endorsement nor
any error therein shall affect the obligations of Vencor under any of the
Financing Documents. Each Bank is hereby irrevocably authorized by Vencor so to
endorse its Note and to attach to and make a part of its Note a continuation of
any such schedule as and when required.
SECTION 2.06. Interest Rates. (a) Each Base Rate Loan shall
bear interest on the outstanding principal amount thereof, for each day
from and including the day such Loan is made (or is converted from a Euro-
Dollar Loan or CD Loan to become a Base Rate Loan) to but excluding the day
it becomes due (or is converted to a Euro-Dollar Loan or CD Loan), at a
rate per annum equal to the Base Rate for such day. Such interest shall be
payable quarterly in arrears on the last Domestic Business Day of each
calendar quarter. Any overdue principal of or interest on any Base Rate
Loan shall bear interest, payable on demand, for each day until paid at a
rate per annum equal to the sum of 2% plus the Base Rate for such day.
(b) Each CD Loan shall bear interest on the outstanding
principal amount thereof, for each day during each Interest Period
applicable thereto, at a rate per annum equal to the sum of the CD Margin
for such day plus the Adjusted CD Rate applicable to such Interest Period;
provided that if any CD Loan or any portion thereof shall, as a result of
clause (2)(b)(i) or 2(c) of the definition of Interest Period, have an
Interest Period of less than 30 days, such portion shall bear interest for
each day during such Interest Period at the Base Rate for such day. Such
interest shall be payable for each Interest Period on the last day thereof
and, if such Interest Period is longer than 90 days, 90 days after the
first day thereof. Any overdue principal of or interest on any CD Loan
shall bear interest, payable on demand, for each day until paid at a rate
per annum equal to the sum of 2% plus the Base Rate for such day.
The "Adjusted CD Rate" applicable to any Interest Period means a rate
per annum determined pursuant to the following formula:
[CDBR ]*
ACDR = [-----------] + AR
[1.00 - DRP ]
ACDR = Adjusted CD Rate
CDBR = CD Base Rate
DRP = Domestic Reserve Percentage
AR = Assessment Rate
37
-------------
* The amount in brackets being rounded upward, if necessary, to the
next higher 1/100 of 1%.
The "CD Base Rate" applicable to any Interest Period is the rate of
interest determined by the Administrative Agent to be the average (rounded
upward, if necessary, to the next higher 1/100 of 1%) of the prevailing rates
per annum bid at 10:00 A.M. (Eastern Time) (or as soon thereafter as
practicable) on the first day of such Interest Period by two or more New York
certificate of deposit dealers of recognized standing for the purchase at face
value from NationsBank of its certificates of deposit in an amount comparable to
the principal amount of the CD Loan of NationsBank to which such Interest Period
applies and having a maturity comparable to such Interest Period.
"Domestic Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including without limitation any
basic, supplemental or emergency reserves) for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars in
respect of new non-personal time deposits in dollars in New York City having a
maturity comparable to the related Interest Period and in an amount of $100,000
or more. The Adjusted CD Rate shall be adjusted automatically on and as of the
effective date of any change in the Domestic Reserve Percentage.
"Assessment Rate" means for any day the annual assessment rate in
effect on such day which is payable by a member of the Bank Insurance Fund
classified as adequately capitalized and within supervisory subgroup "A" (or a
comparable successor assessment risk classification) within the meaning of 12
C.F.R. Section 327.4(a) (or any successor provision) to the Federal Deposit
Insurance Corporation (or any successor) for such Corporation's (or such
successor's) insuring time deposits at offices of such institution in the United
States. The Adjusted CD Rate shall be adjusted automatically on and as of the
effective date of any change in the Assessment Rate.
(c) Each Euro-Dollar Loan shall bear interest on the outstanding
principal amount thereof, for each day during each Interest Period applicable
thereto, at a rate per annum equal to the sum of the Euro-Dollar Margin for such
day plus the London Interbank Offered Rate applicable to such Interest Period.
Such interest shall be payable for each Interest Period on the last day thereof
and, if such Interest Period is longer than three months, three months after the
first day thereof.
The "London Interbank Offered Rate" applicable to any Interest Period
means (i) the rate per annum for deposits in dollars for a maturity most nearly
comparable to such Interest Period which appears on page 3740 or 3750, as
applicable, of the Dow ▇▇▇▇▇
38
Telerate Screen as of 11:00 A.M. (Eastern Time) two Euro-Dollar Business Days
before the first day of such Interest Period or (ii) if such a rate does not
appear on such page, the rate per annum at which deposits in dollars are offered
to the principal London office of NationsBank in the London interbank market at
approximately 11:00 A.M. (London time) two Euro-Dollar Business Days before the
first day of such Interest Period in an amount approximately equal to the
principal amount of the Euro-Dollar Loan of NationsBank to which such Interest
Period is to apply and for a period of time comparable to such Interest Period.
(d) Any overdue principal of or interest on any Euro-Dollar Loan
shall bear interest, payable on demand, for each day until paid, at a rate
per annum equal to the sum of 2% plus the Euro-Dollar Margin for such day
plus the quotient obtained (rounded upward, if necessary, to the next
higher 1/100 of 1%) by dividing (x) the average (rounded upward, if
necessary, to the next higher 1/16 of 1%) of the respective rates per annum
at which one day (or, if such amount due remains unpaid more than three
Euro-Dollar Business Days, then for such other period of time not longer
than six months as the Administrative Agent may select) deposits in dollars
in an amount approximately equal to such overdue payment due to NationsBank
are offered to NationsBank in the London interbank market for the
applicable period determined as provided above by (y) 1.00 minus the Euro-
Dollar Reserve Percentage (or, if the circumstances described in clause (a)
or (b) of Section 8.01 shall exist, at a rate per annum equal to the sum of
2% plus the Base Rate for such day).
(e) Subject to Section 8.01, each Money Market LIBOR Loan shall
bear interest on the outstanding principal amount thereof, for the Interest
Period applicable thereto, at a rate per annum equal to the sum of the
London Interbank Offered Rate for such Interest Period (determined in
accordance with Section 2.06(c) as if the related Money Market LIBOR
Borrowing were a Committed Euro-Dollar Borrowing) plus (or minus) the Money
Market Margin quoted by the Bank making such Loan. Each Money Market
Absolute Rate Loan shall bear interest on the outstanding principal amount
thereof, for the Interest Period applicable thereto, at a rate per annum
equal to the Money Market Absolute Rate quoted by the Bank making such
Loan. Such interest shall be payable for each Interest Period on the last
day thereof and, if such Interest Period is longer than three months, at
intervals of three months after the first day thereof. Any overdue
principal of or interest on any Money Market Loan shall bear interest,
payable on demand, for each day until paid at a rate per annum equal to the
sum of 2% plus the Base Rate for such day.
SECTION 2.07. Method of Electing Interest Rates. (a) The Loans
included in each Committed Borrowing shall bear interest initially at the
type of rate specified by Vencor in the applicable Notice of Committed
Borrowing. Thereafter, Vencor may from time to time elect to change or
continue the type of interest rate borne by each Group of Loans (subject in
each case to the provisions of Article 8), as follows:
39
(i) if such Loans are Base Rate Loans, Vencor may elect to
convert such Loans to Euro-Dollar Loans of the same Class as of
any Euro-Dollar Business Day or to CD Loans of such Class as of
any Domestic Business Day; provided that notice of such election
may not be given if an Event of Default shall have occurred and be
continuing on the third Euro-Dollar Business Day before such
conversion is to be effective (in the case of a conversion to
Euro-Dollar Loans) or the second Domestic Business Day before such
conversion is to be effective (in the case of a conversion to CD
Loans);
(ii) if such Loans are CD Loans, Vencor may elect to convert such
Loans to Euro-Dollar Loans of the same Class or to Base Rate Loans
of such Class or to continue such Loans as CD Loans of such Class
for an additional Interest Period, in each case effective on the
last day of the then current Interest Period applicable to such
Loans; and
(iii) if such Loans are Euro-Dollar Loans, Vencor may elect to
convert such Loans to Base Rate Loans of the same Class or to CD
Loans of such Class or elect to continue such Loans as Euro-Dollar
Loans of such Class for an additional Interest Period, in each
case effective on the last day of the then current Interest Period
applicable to such Loans.
Each such election shall be made by delivering a notice (a "Notice of
Interest Rate Election") to the Administrative Agent not later than 12:00
Noon (Eastern Time) on the third Euro-Dollar Business Day (or the second
Domestic Business Day in the case of a conversion to CD Loans) before the
conversion or continuation selected in such notice is to be effective. A
Notice of Interest Rate Election may, if it so specifies, apply to only a
portion of the aggregate principal amount of the relevant Group of Loans;
provided that (i) such portion is allocated ratably among the Loans
comprising such Group, (ii) the portion to which such notice applies, and
the remaining portion to which it does not apply, are each at least
$5,000,000 (if such portion is to be comprised of CD Loans or Euro-Dollar
Loans) or at least $1,000,000 (if such portion is to be comprised of Base
Rate Loans) and (iii) immediately after giving effect to such Notice of
Interest Rate Election, there shall be no more than 15 Groups of Loans
(other than Base Rate Loans) outstanding hereunder.
(b) Each Notice of Interest Rate Election shall specify:
(i) the Class and Group of Loans (or portion thereof) to which
such notice applies;
40
(ii) the date on which the conversion or continuation selected in
such notice is to be effective, which shall comply with the
applicable clause of Section 2.07(a);
(iii) if the Loans comprising such Group are to be converted, the
new Interest Type of such Loans and, if such Loans are to be
converted to Euro-Dollar Loans of the same Class or CD Loans of
such Class, the duration of the initial Interest Period applicable
thereto; and
(iv) if such Loans are to be continued as Euro-Dollar Loans of the
same Class or CD Loans of such Class for an additional Interest Period,
the duration of such additional Interest Period.
Each Interest Period specified in a Notice of Interest Rate Election shall
comply with the provisions of the definition of Interest Period.
(c) Upon receipt of a Notice of Interest Rate Election from
Vencor pursuant to Section 2.07(a), the Administrative Agent shall promptly
notify each Bank of the contents thereof and such notice shall not
thereafter be revocable by Vencor. If Vencor fails to deliver a timely
Notice of Interest Rate Election to the Administrative Agent for any Group
of Euro-Dollar Loans or CD Loans, such Loans shall be converted to Base
Rate Loans of the same Class on the last day of the then current Interest
Period applicable thereto.
SECTION 2.08. Letters of Credit. (a) Existing Letters of
Credit. On the Amendment Effective Date, (i) the participations in the
Existing Letters of Credit purchased by ▇▇▇▇▇▇ and NationsBank under the
Initial Credit Agreement shall be canceled without further action by any of
the parties thereto and (ii) each LC Issuing Bank that has issued an
Existing Letter of Credit shall be deemed, without further action by any
party hereto, to have sold to each other Bank, and each such Bank shall be
deemed, without further action by any party hereto, to have purchased from
such LC Issuing Bank, a participation in such Existing Letter of Credit, on
the terms specified in this Section, equal to such Bank's Commitment
Percentage thereof.
(b) Issuance of Additional Letters of Credit. Any LC Issuing
Bank may, but shall not be obligated to, issue a letter of credit at the
request of Vencor pursuant to this subsection, from time to time during the
period from and including the Amendment Effective Date to but excluding the
date that is 30 days before the Termination Date; provided that,
immediately after each such letter of credit is issued and participations
therein are sold to the Banks as provided in this subsection:
(i) the Aggregate LC Exposure shall not exceed $150,000,000;
41
(ii) in the case of each Bank, its Outstanding Committed Amount
shall not exceed its Commitment; and
(iii) the Total Usage shall not exceed the Total Commitments.
Upon the issuance by any LC Issuing Bank of an Additional Letter of Credit
pursuant to this subsection, such LC Issuing Bank shall be deemed, without
further action by any party hereto, to have sold to each other Bank, and
each such Bank shall be deemed, without further action by any party hereto,
to have purchased from such LC Issuing Bank, a participation in such
Additional Letter of Credit, on the terms specified in this Section, equal
to such Bank's Commitment Percentage thereof.
(c) Expiry Dates. No Letter of Credit shall have an expiry date
later than the fifth Domestic Business Day before the Termination Date.
(d) Notice of Proposed Issuance. With respect to each
Additional Letter of Credit, Vencor shall give the relevant LC Issuing Bank
and the Administrative Agent at least three Domestic Business Days' prior
notice (i) specifying the date such Additional Letter of Credit is to be
issued, (ii) describing the proposed terms of such Additional Letter of
Credit and the nature of the transactions proposed to be supported thereby
and (iii) specifying the Account Party for such Additional Letter of
Credit, which may be Vencor, any of its Subsidiaries or any partnership in
which it is a general partner or any other entity managed by it. Upon
receipt of such notice, the Administrative Agent shall promptly notify each
Bank of the contents thereof.
(e) Conditions to Issuance. No LC Issuing Bank shall issue any
Additional Letter of Credit unless:
(i) such Letter of Credit shall be satisfactory in form and
substance to such LC Issuing Bank;
(ii) Vencor shall have executed and delivered such other
instruments and agreements relating to such Additional Letter of
Credit as such LC Issuing Bank shall have reasonably requested;
(iii) if the Account Party for such Letter of Credit is not
Vencor, such Account Party shall have executed and delivered such other
instruments and agreements relating to such Letter of Credit as such LC
Issuing Bank shall have reasonably requested;
42
(iv) if such Letter of Credit is a Direct Pay IRB Letter of
Credit, the Administrative Agent shall have notified the relevant
LC Issuing Bank pursuant to Section 2.08(s) that the form of the
Underlying LC Documents is satisfactory, the applicable conditions
specified in Section 2.08(s)(i) shall have been satisfied and such
Direct Pay IRB Letter of Credit shall be issued prior to March 31,
2001;
(v) such LC Issuing Bank shall have confirmed with the
Administrative Agent on the date of such issuance that the
limitations specified in clauses (i), (ii) and (iii) of subsection
(b) of this Section will not be exceeded immediately after such
Letter of Credit is issued; and
(vi) such LC Issuing Bank shall not have been notified in writing
by Vencor, the Administrative Agent, the Documentation Agent or
the Required Banks expressly to the effect that any condition
specified in clause (c) or (d) of Section 3.03 is not satisfied at
the time such Letter of Credit is to be issued.
(f) Notice of Proposed Extensions of Expiry Dates. The relevant
LC Issuing Bank or Vencor shall give the Administrative Agent at least
three Domestic Business Days' notice before such LC Issuing Bank extends
(or allows an automatic extension of) the expiry date of any Letter of
Credit issued by it (whether such extension results from a request therefor
by Vencor or, in the case of an Evergreen Letter of Credit, from the
absence of a request by Vencor for the termination thereof). Such notice
shall (i) identify such Letter of Credit, (ii) specify the date on which
such extension is to be made (or the last day on which such LC Issuing Bank
can give notice to prevent such extension from occurring) and (iii) specify
the date to which such expiry date is to be so extended. Upon receipt of
such notice, the Administrative Agent shall promptly notify each Bank of
the contents thereof. No LC Issuing Bank shall extend (or allow the
extension of) the expiry date of any Letter of Credit if (x) the extended
expiry date would be after the fifth Domestic Business Day before the
Termination Date or (y) such LC Issuing Bank shall have been notified by
the Administrative Agent, the Documentation Agent or the Required Banks
expressly to the effect that any condition specified in clause (c) or (d)
of Section 3.03 is not satisfied on the date such Letter of Credit is to be
extended.
(g) Notice of Actual Issuances and Extensions. Promptly upon
issuing any Additional Letter of Credit or extending any Letter of Credit
(or allowing any Evergreen Letter of Credit to be extended), the relevant
LC Issuing Bank will notify the Administrative Agent of the date of such
Letter of Credit, the amount thereof, the beneficiary or beneficiaries
thereof and the expiry date or extended expiry date thereof. Upon receipt
of such notice the Administrative Agent shall promptly notify each Bank of
the contents thereof and the amount of such Bank's participation in the
relevant Letter of Credit. Promptly upon issuing any Additional Letter of
Credit, the relevant LC Issuing Bank will send a copy of such Additional
Letter of Credit to the Administrative Agent.
43
(h) Fees. Vencor shall pay to the Administrative Agent, for the
account of the Banks ratably in accordance with their respective Commitment
Percentages, a letter of credit fee for each day at the LC Fee Rate on the
aggregate amount available for drawings (whether or not conditions for
drawing thereunder have been satisfied) under all Letters of Credit
outstanding at the close of business on such day. Such letter of credit
fee shall be payable with respect to each Letter of Credit in arrears on
the last Domestic Business Day of each calendar quarter for so long as such
Letter of Credit is outstanding and on the final expiry date thereof.
Vencor shall pay to each LC Issuing Bank additional fronting fees,
quarterly in arrears, and reasonable expenses in the amounts and at the
times agreed between Vencor and such LC Issuing Bank.
(i) Drawings. Upon receiving a demand for payment under any
Letter of Credit from the beneficiary thereof, the relevant LC Issuing Bank
shall determine in accordance with the terms of such Letter of Credit
whether such demand for payment should be honored. If such LC Issuing Bank
determines that any such demand for payment should be honored, such LC
Issuing Bank shall (i) promptly notify Vencor and the Administrative Agent
as to the amount to be paid by such LC Issuing Bank as a result of such
demand and the date on which such amount is to be paid (an "LC Payment
Date") and (ii) on such LC Payment Date make available to such beneficiary
in accordance with the terms of such Letter of Credit the amount of the
drawing under such Letter of Credit.
(j) Reimbursement and Other Payments by Vencor. If any amount is
drawn under any Letter of Credit:
(i) Vencor irrevocably and unconditionally agrees to reimburse
the relevant LC Issuing Bank for all amounts paid by such LC
Issuing Bank upon such drawing, together with any and all
reasonable charges and expenses which such LC Issuing Bank may pay
or incur relative to such drawing and interest on the amount drawn
at the Federal Funds Rate for each day from and including the date
such amount is drawn to but excluding the date such reimbursement
payment is due and payable. Such reimbursement payment shall be
due and payable at or before 3:00 P.M. (Eastern Time) (x) on the
relevant LC Payment Date if such LC Issuing Bank notifies Vencor
of such drawing before 11:00 A.M. (Eastern Time) on such date or
(y) on the date such notice is given, if such notice is given
after the LC Payment Date; provided that any notice given to
Vencor after 11:00 A.M. (Eastern Time) on any day shall be deemed
for purposes of the foregoing clause (y) to have been given on the
next succeeding Domestic Business Day.
(ii) In addition, Vencor agrees to pay to the relevant LC Issuing
Bank interest on any and all amounts not paid by Vencor when due
hereunder with respect to a Letter of Credit, for each day from
and including the date when such
44
amount becomes due to but excluding the date such amount is paid
in full, whether before or after judgment, payable on demand, at a
rate per annum equal to the sum of 2% plus the Base Rate for such
day.
Each payment to be made by Vencor pursuant to this subsection (j) shall be
made to the relevant LC Issuing Bank in Federal or other funds immediately
available to it at its address specified in or pursuant to Section 9.01.
(k) Payments by Banks with Respect to Letters of Credit. If
Vencor fails to reimburse the relevant LC Issuing Bank as and when required
by subsection (j) above for all or any portion of any amount drawn under a
Letter of Credit issued by it:
(i) such LC Issuing Bank may notify the Administrative Agent of
such unreimbursed amount and request that the Banks reimburse such
LC Issuing Bank for their respective Commitment Percentages
thereof. Upon receiving any such notice from an LC Issuing Bank,
the Administrative Agent shall promptly notify each Bank of the
unreimbursed amount and such Bank's Commitment Percentage thereof.
Upon receiving such notice from the Administrative Agent, each
Bank shall make available to such LC Issuing Bank, at its address
specified in or pursuant to Section 9.01, an amount equal to such
Bank's Commitment Percentage of such unreimbursed amount as set
forth in such notice, in Federal or other funds immediately
available to such LC Issuing Bank, by 3:00 P.M. (Eastern Time)
(A) on the day such Bank receives such notice if it is received at
or before 12:00 Noon (Eastern Time) on such day or (B) on the
first Domestic Business Day following such Bank's receipt of such
notice if it is received after 12:00 Noon (Eastern Time) on the
date of receipt, in each case together with interest on such
amount for each day from and including the relevant LC Payment
Date to but excluding the day such payment is due from such Bank
at the Federal Funds Rate for such day. Upon payment in full
thereof, such Bank shall be subrogated to the rights of such LC
Issuing Bank against Vencor to the extent of such Bank's
Commitment Percentage of the related LC Reimbursement Obligation
(including interest accrued thereon). Nothing in this subsection
(k) shall affect any rights any Bank may have against any LC
Issuing Bank for any action or omission for which such LC Issuing
Bank is not indemnified under subsection (o) of this Section; and
(ii) if any Bank fails to pay any amount required to be paid by it
pursuant to clause (i) of this subsection (k) on the date on which
such payment is due, interest shall accrue on such Bank's
obligation to make such payment, for each day from and including
the date such payment became due to but excluding the date such
Bank makes such payment, whether before or after judgment, at a
rate per annum equal to (x) for each day from the day such payment
is due to the third succeeding Domestic Business Day, inclusive,
the Federal Funds Rate for such day
45
as determined by the relevant LC Issuing Bank and (y) for each day
thereafter the sum of 2% plus the Base Rate for such day. Any payment
made by any Bank after 3:00 P.M. (Eastern Time) on any Domestic
Business Day shall be deemed for purposes of the preceding sentence to
have been made on the next succeeding Domestic Business Day.
If Vencor shall reimburse any LC Issuing Bank for any drawing with respect
to which any Bank shall have made funds available to such LC Issuing Bank
in accordance with clause (i) of this subsection (k), such LC Issuing Bank
shall promptly upon receipt of such reimbursement distribute to such Bank
its pro rata share thereof, including interest, to the extent received by
such LC Issuing Bank.
(l) Increased Cost and Reduced Return. If, on or after the date
hereof, the adoption of any applicable law, rule or regulation, or any
change in any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank or LC Issuing Bank with
any request or directive (whether or not having the force of law) of any
such authority, central bank or comparable agency, shall impose, modify or
deem applicable any tax, reserve, special deposit or similar requirement
against or with respect to or measured by reference to letters of credit or
participations therein, and the result of any of the foregoing is to
increase the cost to such Bank or LC Issuing Bank of issuing or maintaining
any Letter of Credit or any participation therein, or to reduce any amount
receivable by any Bank or LC Issuing Bank under this Section 2.08 in
respect of any Letter of Credit or any participation therein (which
increase in cost, or reduction in amount receivable, shall be the result of
such Bank's or LC Issuing Bank's reasonable allocation of the aggregate of
such increases or reductions resulting from such event), then, within 15
days after demand by such Bank or LC Issuing Bank (with a copy to the
Administrative Agent), Vencor agrees to pay to such Bank or LC Issuing
Bank, from time to time as specified by such Bank or LC Issuing Bank, such
additional amounts as shall be sufficient to compensate such Bank or LC
Issuing Bank for such increased cost or reduction. A certificate of such
Bank or LC Issuing Bank submitted to Vencor pursuant to this Section
2.08(l) and setting forth the additional amount or amounts to be paid to it
hereunder shall be conclusive in the absence of manifest error.
(m) Exculpatory Provisions. Vencor's obligations under this
Section 2.08 shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to
payment which any Vencor Company or any Account Party may have or have had
against any LC Issuing Bank, any Bank, the beneficiary of any Letter of
Credit or any other Person. Vencor assumes all risks of the acts or
omissions of any beneficiary of any Letter of Credit with respect to the
use of such Letter of Credit by such beneficiary. None of the LC Issuing
Banks, the Banks and their respective officers,
46
directors, employees and agents shall be responsible for, and the obligations of
each Bank to make payments to each LC Issuing Bank and of Vencor to reimburse
each LC Issuing Bank for drawings pursuant to this Section (other than
obligations resulting solely from the gross negligence or willful misconduct of
the relevant LC Issuing Bank) shall not be excused or affected by, among other
things, (i) the use which may be made of any Letter of Credit or any acts or
omissions of any beneficiary or transferee in connection therewith; (ii) the
validity, sufficiency or genuineness of documents presented under any Letter of
Credit or of any endorsements thereon, even if such documents should in fact
prove to be in any or all respects invalid, insufficient, fraudulent or forged;
(iii) payment by any LC Issuing Bank against presentation of documents to it
which do not comply with the terms of the relevant Letter of Credit or (iv) any
dispute between or among any of the Vencor Companies or their Affiliates, the
beneficiary of any Letter of Credit or any other Person or any claims or
defenses whatsoever of any of the Vencor Companies or their Affiliates or any
other Person against the beneficiary of any Letter of Credit. No LC Issuing Bank
shall be liable for any error, omission, interruption or delay in transmission,
dispatch or delivery of any message or advice, however transmitted, in
connection with any Letter of Credit. Any action taken or omitted by any LC
Issuing Bank or any Bank under or in connection with any Letter of Credit and
the related drafts and documents, if done without willful misconduct or gross
negligence, shall be binding upon Vencor and shall not place any LC Issuing Bank
or any Bank under any liability to any Vencor Company.
(n) Reliance, Etc. Each LC Issuing Bank shall be entitled (but
not obligated) to rely, and shall be fully protected in relying, on the
representation and warranty by Vencor set forth in the last sentence of
Section 3.03 to establish whether the conditions specified in clauses (c)
and (d) of Section 3.03 are met in connection with any issuance or
extension of a Letter of Credit. The rights and obligations of each LC
Issuing Bank under each Letter of Credit issued by it shall be governed by
the provisions thereof and the provisions of the UCP and/or UCC referred to
therein or otherwise applicable thereto.
(o) Indemnification by Vencor. Vencor agrees to indemnify and
hold harmless each Bank, each LC Issuing Bank and the Administrative Agent
(collectively, the "LC Indemnitees") from and against any and all claims
and damages, losses, liabilities, costs or expenses (including, without
limitation, the reasonable fees and disbursements of counsel) which such LC
Indemnitee may reasonably incur (or which may be claimed against any such
LC Indemnitee by any Person whatsoever) by reason of or in connection with
the execution and delivery or transfer of or payment or failure to pay
under any Letter of Credit or any actual or proposed use of any Letter of
Credit, including any claims, damages, losses, liabilities, costs or
expenses which any LC
47
Issuing Bank may incur by reason of or in connection with the failure of any
Bank to fulfill or comply with its obligations to any LC Issuing Bank hereunder
in connection with any Letter of Credit (but nothing herein contained shall
affect any rights Vencor may have against any such defaulting Bank); provided
that Vencor shall not be required to indemnify any LC Indemnitee for any claims,
damages, losses, liabilities, costs or expenses to the extent, but only to the
extent, caused by (i) the willful misconduct or gross negligence of any LC
Issuing Bank in determining whether a request presented under any Letter of
Credit issued by it complied with the terms of such Letter of Credit or (ii) any
LC Issuing Bank's failure to pay under any Letter of Credit issued by it after
the presentation to it of a request strictly complying with the terms and
conditions of such Letter of Credit. Nothing in this subsection (o) is intended
to limit the obligations of Vencor under any other provision of this Section.
(p) Indemnification by the Banks. Each Bank shall, ratably in
accordance with its Commitment Percentage, indemnify each LC Issuing Bank,
its affiliates and their respective directors, officers, agents and
employees (to the extent not reimbursed by Vencor) against any cost,
expense (including reasonable fees and disbursements of counsel), claim,
demand, action, loss or liability (except such as result from such
indemnitees' gross negligence or willful misconduct or such LC Issuing
Bank's failure to pay under any Letter of Credit issued by it after the
presentation to it of a request strictly complying with the terms and
conditions of such Letter of Credit) that any such indemnitee may suffer or
incur in connection with this Section or any action taken or omitted by
such indemnitee under this Section.
(q) Liability for Damages. Nothing in this Section shall
preclude Vencor or any Bank from asserting against any LC Issuing Bank any
claim for direct (but not consequential) damages suffered by Vencor or such
Bank to the extent, but only to the extent, caused by (i) the willful
misconduct or gross negligence of such LC Issuing Bank in determining
whether a request presented under any Letter of Credit issued by it
complied with the terms thereof or (ii) such LC Issuing Bank's failure to
pay under any such Letter of Credit after the presentation to it of a
request strictly complying with the terms and conditions thereof.
(r) Dual Capacities. In its capacity as a Bank, each LC Issuing
Bank shall have the same rights and obligations under this Section as any
other Bank.
(s) Direct Pay IRB Letters of Credit. From time to time after
the Amendment Effective Date Vencor may, by notice to the Administrative
Agent, the Documentation Agent and the relevant LC Issuing Bank, request
that such LC Issuing Bank determine whether it would be willing to issue
one or more direct-pay letters of credit to support IRB Debt (each, a
"Direct Pay IRB Letter of Credit"). Such notice shall be accompanied by
the proposed form of the Direct Pay IRB Letter of Credit, the proposed form
of the related reimbursement agreement and such other instruments and
agreements relating thereto as the Administrative Agent, the Documentation
Agent or such LC Issuing Bank may reasonably request (collectively, the
"Underlying LC Documents"). Upon receipt of such notice and other
documents, the Administrative Agent shall promptly
48
provide such documents to each Bank. If (x) such LC Issuing Bank shall have
notified Vencor and the Administrative Agent that such Underlying LC Documents
are satisfactory in form and substance to it and (y) the Administrative Agent
shall not have received notice from any Bank, within ten Domestic Business Days
after delivery of copies of such Underlying LC Documents to the Banks, stating
that such Bank objects to the terms of such Direct Pay IRB Letter of Credit or
the related reimbursement agreement for the reasons identified in such notice,
the Administrative Agent shall promptly notify Vencor and such LC Issuing Bank
that the form of the Underlying LC Documents is satisfactory and such LC Issuing
Bank may, subject to the terms and conditions of this Agreement, issue Direct
Pay IRB Letters of Credit based on documents in such form from time to time upon
request by Vencor; provided that:
(i) any notice given by Vencor pursuant to Section 2.08(d)
requesting the issuance of a Direct Pay IRB Letter of Credit shall
include definitive copies of such Direct Pay IRB Letter of Credit,
the related reimbursement agreement and such other instruments and
agreements relating thereto as the Administrative Agent may
reasonably request, all of which shall be substantially in the
forms previously furnished to the Administrative Agent pursuant to
this subsection (s); and
(ii) the issuance by an LC Issuing Bank of any Direct Pay IRB
Letter of Credit shall be subject to the conditions specified in
Section 2.08(e) and to the additional conditions that, if Vencor
is not the Account Party, Vencor shall enter into an agreement
with such LC Issuing Bank, in form and substance satisfactory to
the Documentation Agent, providing that any differences between
(x) the reimbursement obligations of such Account Party under its
reimbursement agreement and (y) the reimbursement obligations of
Vencor hereunder shall be adjusted so that such LC Issuing Bank
receives and retains the amounts required to be paid by Vencor
hereunder (and no more than such amounts).
(t) Information to be Provided to Administrative Agent. The LC
Issuing Banks shall furnish to the Administrative Agent upon request such
information as the Administrative Agent shall reasonably request in order
to calculate (i) the Aggregate LC Exposure existing from time to time and
(ii) the amount of any fee payable for the account of the Banks under
Section 2.08(h).
SECTION 2.09. Swingline Loans. (a) Swingline Commitment. The
Swingline Bank agrees, on the terms and conditions set forth in this
Agreement, to make loans to Vencor pursuant to this Section from time to
time during the Swingline Availability Period for any purpose for which
Committed Loans may be borrowed; provided that, immediately after each such
loan is made (and after giving effect to any substantially concurrent
application of the proceeds thereof to repay outstanding Loans):
49
(i) the aggregate outstanding principal amount of the Swingline
Loans shall not exceed the Swingline Commitment;
(ii) in the case of each Bank, its Outstanding Committed Amount
shall not exceed its Commitment; and
(iii) the Total Usage shall not exceed the Total Commitments.
Within the foregoing limits, Vencor may borrow Swingline Loans, prepay
Swingline Loans and reborrow Swingline Loans at any time during the
Swingline Availability Period.
(b) Notice of Swingline Borrowing. Vencor shall give the
Swingline Bank notice (a "Notice of Swingline Borrowing"), substantially in
the form of Exhibit N hereto, not later than 2:00 P.M. (Eastern Time) on
the date of each Swingline Borrowing, specifying:
(i) the date of such Borrowing, which shall be a Domestic
Business Day;
(ii) the amount of such Borrowing, which shall be at least
$1,000,000;
(iii) whether the Swingline Loan being borrowed is an Acquisition
Loan, a General Purpose Loan or a Project Loan; and
(iv) if such notice is given before the Regulation U
Inapplicability Date, whether such Swingline Loan is or is not a
Margin Stock Loan.
(c) Funding of Swingline Loans. Not later than 3:00 P.M.
(Eastern Time) on the date of each Swingline Borrowing, the Swingline Bank
shall, unless the Swingline Bank determines that any applicable condition
specified in Article 3 has not been satisfied, make available the amount of
such Swingline Borrowing, in Federal or other funds immediately available
in Charlotte, North Carolina, to Vencor at the Swingline Bank's address
specified in or pursuant to Section 9.01.
(d) Swingline Note. Vencor's obligation to repay the Swingline
Loans shall be evidenced by a single Note substantially in form of Exhibit
B hereto (the "Swingline Note"). Upon receipt of the Swingline Note
pursuant to Section 3.01(c), the Documentation Agent shall forward the
Swingline Note to the Swingline Bank.
(e) Interest. Each Swingline Loan shall bear interest on the
outstanding principal amount thereof, for each day from and including the
day such Swingline Loan is made to but excluding the day it becomes due, at
a rate per annum equal to the Base Rate for such day or any lower rate
determined by mutual agreement between the Swingline Bank and Vencor. Such
interest shall be payable quarterly in arrears on the last Domestic
Business
50
Day of each calendar quarter. Any overdue principal of or interest on any
Swingline Loan shall bear interest, payable on demand, for each day until paid
at a rate per annum equal to the sum of 2% plus the Base Rate for such day.
(f) Optional Prepayment of Swingline Loans. Vencor may prepay the
Swingline Loans in whole at any time, or from time to time in part in a
principal amount of at least $1,000,000, by giving notice of such prepayment to
the Swingline Bank not later than 12:00 Noon (Eastern Time) on the date of
prepayment and paying the principal amount to be prepaid, together with interest
accrued thereon to the date of prepayment, to the Swingline Bank at its address
specified in or pursuant to Section 9.01, in Federal or other funds immediately
available in Charlotte, North Carolina, not later than 3:00 P.M. (Eastern Time)
on the date of prepayment.
(g) Mandatory Prepayment of Swingline Loans. On the date of each
Borrowing of any Class pursuant to Section 2.01 or 2.03, the Administrative
Agent shall apply the proceeds thereof to prepay all Swingline Loans of such
Class then outstanding, together with interest accrued thereon to the date of
prepayment; provided that, prior to the Regulation U Inapplicability Date, (i)
the proceeds of Margin Stock Loans shall not be applied to prepay Swingline
Loans that are not Margin Stock Loans and (ii) the proceeds of Loans that are
not Margin Stock Loans shall not be applied to prepay Swingline Loans that are
Margin Stock Loans.
(h) Maturity of Swingline Loans. All Swingline Loans outstanding on
the Swingline Maturity Date shall be due and payable on such date, together with
interest accrued thereon to such date.
(i) Refunding Unpaid Swingline Loans. If (i) the Swingline Loans are
not paid in full on the Swingline Maturity Date or (ii) the Swingline Loans
become immediately due and payable pursuant to Section 6.01, the Swingline Bank
(or the Administrative Agent on its behalf) may, by notice to the Banks
(including the Swingline Bank, in its capacity as a Bank), require each Bank to
pay to the Swingline Bank an amount equal to such Bank's Commitment Percentage
of the aggregate unpaid principal amount of the Swingline Loans then
outstanding. Such notice shall specify the date on which such payments are to be
made, which shall be the first Domestic Business Day after such notice is given.
Not later than 12:00 Noon (Eastern Time) on the date so specified, each Bank
shall pay the amount so notified to it to the Swingline Bank at its address
specified in or pursuant to Section 9.01, in Federal or other funds immediately
available in Charlotte, North Carolina. The amount so paid by each Bank shall
constitute a Base Rate Loan to Vencor; provided that, if the Banks are prevented
from making such Base Rate Loans to Vencor by the provisions of the United
States Bankruptcy Code or otherwise, the amount so paid by each Bank shall
constitute a purchase by it of a participation in the unpaid principal amount of
the Swingline Loans (and interest accruing thereon after the date of such
51
payment). Each Bank's obligation to make such payment to the Swingline Bank
under this subsection shall be absolute and unconditional and shall not be
affected by any circumstance, including, without limitation, (i) any set-off,
counterclaim, recoupment, defense or other right which such Bank or any other
Person may have against the Swingline Bank or Vencor, (ii) the occurrence or
continuance of a Default or an Event of Default or the termination of the
Commitments, (iii) any adverse change in the condition (financial or otherwise)
of Vencor or any other Person, (iv) any breach of this Agreement by Vencor or
any other party hereto or (v) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing; provided that no
Bank shall be obligated to make any payment to the Swingline Bank under this
subsection with respect to a Swingline Loan made by the Swingline Bank at a time
when it knew that a Default had occurred and was continuing.
(j) Termination of Swingline Commitment. Vencor may, upon at least
three Domestic Business Days' notice to the Swingline Bank and the
Administrative Agent, terminate the Swingline Commitment at any time, if no
Swingline Loans are outstanding at such time. Unless previously terminated, the
Swingline Commitment shall terminate at the close of business on the Swingline
Maturity Date.
SECTION 2.10. Facility Fee. Vencor shall pay to the Administrative
Agent for the account of each Bank a facility fee, calculated for each day at
the Facility Fee Rate for such day, on the amount of such Bank's Credit Exposure
on such day. Such facility fees shall accrue from and including the Amendment
Effective Date to but excluding the day on which the Credit Exposures are
reduced to zero and shall be payable quarterly on the last Domestic Business Day
of each calendar quarter and on the day on which the Credit Exposures are
reduced to zero.
SECTION 2.11. Maturity of Loans. (a) Committed Loans. Each Committed
Loan shall mature on the Termination Date, and any Committed Loans then
outstanding shall be due and payable on such date.
(b) Money Market Loans. Each Money Market Loan included in any Money
Market Borrowing shall mature, and the principal amount thereof shall be due and
payable on the last day of the Interest Period applicable to such Borrowing.
SECTION 2.12. Optional Prepayments. (a) Base Rate Loans. Vencor may,
upon giving notice to the Administrative Agent, substantially in the form of
Exhibit J hereto, before 12:00 Noon (Eastern Time) on the date of prepayment,
prepay the Base Rate Loans (including any Money Market Borrowing bearing
interest at the Base Rate pursuant to Section 8.01) on any Domestic Business Day
in whole, or in part in amounts aggregating $1,000,000 or any larger multiple of
$100,000.
52
(b) CD Loans. Vencor may, upon at least two Domestic Business
Days' notice to the Administrative Agent, substantially in the form of
Exhibit J hereto, prepay any Group of CD Loans on any Domestic Business Day
in whole, or in part in amounts aggregating $5,000,000 or any larger
multiple of $1,000,000. Unless such Loans are prepaid on the last day of
an Interest Period applicable thereto, Vencor shall comply with Section
2.15 in connection with such prepayment.
(c) Euro-Dollar Loans. Vencor may, upon at least three Euro-
Dollar Business Days' notice to the Administrative Agent, substantially in
the form of Exhibit J hereto, prepay any Group of Euro-Dollar Loans on any
Euro-Dollar Business Day in whole, or in part in amounts aggregating
$5,000,000 or any larger multiple of $1,000,000. Unless such Loans are
prepaid on the last day of an Interest Period applicable thereto, Vencor
shall comply with Section 2.15 in connection with such prepayment.
(d) Money Market Loans. Except as provided in Section 2.12(a),
Vencor may not prepay all or any portion of the principal amount of any Money
Market Loan before the maturity thereof.
(e) Notice to Banks. Upon receipt of a notice of prepayment
pursuant to this Section, the Administrative Agent shall promptly notify
each Bank of the contents thereof and of such Bank's share of such
prepayment and such notice shall not thereafter be revocable by Vencor.
(f) Ratable Application. Each repayment or prepayment of any
Group of Loans (or Money Market Borrowing) pursuant to this Section shall
be applied ratably to the Loans of the several Banks included in such Group
of Loans (or Money Market Borrowing).
(g) Payment of Accrued Interest. On the date of each prepayment
of Loans (other than Base Rate Loans) pursuant to this Section, Vencor
shall pay interest accrued on the principal amount prepaid to the date of
prepayment.
SECTION 2.13. Termination or Reduction of Commitments. (a)
Mandatory Reduction. On the Commitment Reduction Date, the Commitments
shall be reduced pro rata to the extent (if any) required so that the
aggregate amount of the Commitments shall not exceed $1,200,000,000 and
Vencor shall repay such principal amount (together with accrued interest
thereon) of each Bank's Loans as may be necessary so that, immediately
after such repayment, such Bank's Outstanding Committed Amount shall not
exceed its Commitment as then reduced.
(b) Optional Termination or Reduction. Vencor may, upon at least
three Domestic Business Days' notice to the Administrative Agent, (i)
terminate the
53
Commitments at any time, if no Bank has an Outstanding Committed Amount at such
time, or (ii) ratably reduce the Commitments from time to time by an aggregate
amount of $10,000,000 or any larger multiple of $1,000,000; provided that
immediately after such reduction no Bank's Outstanding Committed Amount shall
exceed its Commitment as so reduced.
(c) Mandatory Termination. Unless previously terminated, the
Commitments shall terminate in their entirety on the Termination Date.
SECTION 2.14. General Provisions as to Payments. (a) Vencor
shall make each payment of principal of, and interest on, the Loans and the
LC Reimbursement Obligations and each payment of facility fees and letter
of credit fees (other than fees payable directly to the LC Issuing Banks)
hereunder not later than 1:00 P.M. (Eastern Time) on the date when due, in
Federal or other funds immediately available in Charlotte, North Carolina,
to the Administrative Agent at its address for payments specified in or
pursuant to Section 9.01. The Administrative Agent will promptly
distribute to each Bank its ratable share of each such payment received by
the Administrative Agent for the account of the Banks. Whenever any
payment of principal of, or interest on, Base Rate Loans, CD Loans,
Swingline Loans or LC Reimbursement Obligations or any payment of facility
fees or letter of credit fees shall be due on a day which is not a Domestic
Business Day, the date for payment thereof shall be extended to the next
succeeding Domestic Business Day. Whenever any payment of principal of, or
interest on, Euro-Dollar Loans shall be due on a day which is not a Euro-
Dollar Business Day, the date for payment thereof shall be extended to the
next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business
Day falls in another calendar month, in which case the date for payment
thereof shall be the next preceding Euro-Dollar Business Day. Whenever any
payment of principal of, or interest on, Money Market Loans shall be due on
a day which is not a Euro-Dollar Business Day, the date for payment shall
be extended to the next succeeding Euro-Dollar Business Day. If the date
for any payment of principal is extended by operation of law or otherwise,
interest thereon shall be payable for such extended time.
(b) Unless the Administrative Agent shall have received notice
from Vencor prior to the date on which any payment is due to the Banks
hereunder that Vencor will not make such payment in full, the
Administrative Agent may assume that Vencor has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may
(but shall not be obligated to), in reliance upon such assumption, cause to
be distributed to each Bank on such due date an amount equal to the amount
then due such Bank. If and to the extent that Vencor shall not have so
made such payment, each Bank shall repay to the Administrative Agent
forthwith on demand such amount distributed to such Bank together with
interest thereon, for each day from the date such amount is distributed to
such Bank until the date such Bank repays such amount to the Administrative
Agent, at the Federal Funds Rate.
54
SECTION 2.15. Funding Losses. (a) If Vencor makes any payment
of principal with respect to any Fixed Rate Loan or if any Fixed Rate Loan
is converted to a Base Rate Loan (whether such payment or conversion is
pursuant to Article 2, 6 or 8 or otherwise) on any day other than the last
day of an Interest Period applicable thereto, or the last day of an
applicable period fixed pursuant to Section 2.06(d), or if Vencor fails to
borrow, prepay, convert or continue any Fixed Rate Loans after notice has
been given to any Bank in accordance with Section 2.04(a), 2.07(c) or 2.12,
Vencor shall pay to each Bank an amount calculated as provided in Exhibit P
hereto to compensate such Bank for any resulting loss or expense incurred
by such Bank (or by any existing or prospective Participant in the related
Loan), including any loss incurred in obtaining, liquidating or employing
deposits from third parties.
(b) Each Bank wishing to demand compensation pursuant to this
Section shall, within seven Domestic Business Days after the relevant
payment or conversion or failure to borrow, prepay, convert or continue
occurs, notify the Administrative Agent that it demands such compensation
and deliver to the Administrative Agent a certificate as to the amount of
compensation which such Bank is entitled to receive pursuant to subsection
(a) of this Section, showing the calculation thereof in reasonable detail.
Such certificate shall be conclusive in the absence of manifest error.
Promptly after the end of such period of seven Domestic Business Days, the
Administrative Agent shall notify Vencor of all demands for such
compensation received by it during such period and deliver to Vencor copies
of the supporting certificates received by it from the Banks. Within 15
days thereafter, Vencor shall pay to the Administrative Agent the aggregate
amount properly demanded by the Banks pursuant to this Section and, upon
receipt thereof, the Administrative Agent shall distribute such amount to
the Banks entitled thereto.
SECTION 2.16. Computation of Interest and Fees. (a) Interest
based on the Prime Rate and facility fees hereunder shall be computed on
the basis of a year of 365 days (or 366 days in a leap year) and paid for
the actual number of days elapsed (including the first day but excluding
the last day). All other interest and all letter of credit fees hereunder
shall be computed on the basis of a year of 360 days and paid for the
actual number of days elapsed (including the first day but excluding the
last day).
(b) The Administrative Agent shall determine each interest rate
applicable to the Loans hereunder and each Facility Fee Rate and LC Fee
Rate applicable hereunder. The Administrative Agent shall give prompt
notice to Vencor and the Banks of each rate of interest, Facility Fee Rate
and LC Fee Rate so determined, and its determination thereof shall be
conclusive in the absence of manifest error; provided that, if the
Administrative Agent makes such determinations for any Rate Period on the
basis of an estimated Pricing Level set forth in a certificate delivered by
Vencor pursuant to Section 5.01(e) and subsequently determines (or receives
a certificate pursuant to Section 5.01(e) establishing)
55
that a higher Pricing Level applies during such Rate Period, the Administrative
Agent shall promptly notify Vencor and the Banks of such higher Pricing Level
and, within two Domestic Business Days after receiving such notice, Vencor shall
pay to the Administrative Agent, for the accounts of the Banks, the additional
interest and fees that should have been paid prior to such time by reason of the
applicability of such higher Pricing Level. If the Administrative Agent makes
such determinations on the basis of a Pricing Level estimated by Vencor and
subsequently determines (or receives a certificate pursuant to Section 5.01(e)
establishing) that a lower Pricing Level applied during the relevant Rate
Period, no adjustment shall be made for any resulting overpayments of interest
or fees theretofore made by Vencor on the basis of the higher Pricing Level
estimated by Vencor.
SECTION 2.17. Regulation D Compensation. For so long as any Bank
maintains reserves against "Eurocurrency liabilities" (or any other
category of liabilities which includes deposits by reference to which the
interest rate on Euro-Dollar Loans is determined or any category of
extensions of credit or other assets which includes loans by a non-United
States office of such Bank to United States residents), and as a result the
cost to such Bank (or its Euro-Dollar Lending Office) of making or
maintaining its Euro- Dollar Loans is increased, then such Bank may require
Vencor to pay, contemporaneously with each payment of interest on the Euro-
Dollar Loans, additional interest on the related Euro-Dollar Loan of such
Bank at a rate per annum up to but not exceeding the amount by which (x)
(A) the applicable London Interbank Offered Rate divided by (B) one minus
the Euro-Dollar Reserve Percentage exceeds (y) the applicable London
Interbank Offered Rate. Any Bank wishing to require payment of such
additional interest (i) shall so notify Vencor and the Administrative
Agent, in which case such additional interest on the Euro- Dollar Loans of
such Bank shall be payable to such Bank at the place indicated in such
notice with respect to each Interest Period commencing at least three Euro-
Dollar Business Days after such notice is given and (ii) shall furnish to
Vencor, at least five Euro-Dollar Business Days prior to each date on which
interest is payable on the Euro-Dollar Loans, an officer's certificate
setting forth the amount to which such Bank is then entitled under this
Section.
"Euro-Dollar Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by
the Board of Governors of the Federal Reserve System (or any successor),
for determining the maximum reserve requirement for a member bank of the
Federal Reserve System in New York City with deposits exceeding five
billion dollars in respect of "Eurocurrency liabilities" (or in respect of
any other category of liabilities which includes deposits by reference to
which the interest rate on Euro-Dollar Loans is determined or any category
of extensions of credit or other assets which includes loans by a non-
United States office of any Bank to United States residents).
56
SECTION 2.18. Atria Supporting Guaranties. Vencor will not
permit any Subsidiary of Vencor (other than Atria and its Subsidiaries) to
enter into (i) any Guaranty of any obligation of Atria or of any Subsidiary
of Atria or (ii) any Guaranty of Vencor's obligations under the Parent
Guaranty; provided that Vencor may permit any such Subsidiary to enter into
an Atria Supporting Guaranty if such Subsidiary shall simultaneously enter
into a Subsidiary Guaranty.
ARTICLE 3
CONDITIONS
SECTION 3.01. Effectiveness of this Agreement; Closing. The
Initial Credit Agreement shall be amended to read in full as this Amended
Agreement reads when (i) the Documentation Agent shall have received the
following documents, each dated the Amendment Effective Date unless
otherwise indicated, and (ii) the other conditions specified below shall
have been satisfied:
(a) a counterpart hereof signed by each party listed on the
signature pages hereof or facsimile or other written confirmation
satisfactory to the Documentation Agent that each such party has
signed a counterpart hereof;
(b) a duly executed Note for the account of each Bank complying
with the provisions of Section 2.05;
(c) a duly executed Swingline Note complying with the provisions
of Section 2.09 for the account of the Swingline Bank;
(d) a counterpart of a Subsidiary Guaranty Agreement signed by
TheraTx and by each Subsidiary of TheraTx listed in Parts III, IV
and V of Schedule IV hereto (the Documentation Agent having
received on the Initial Closing Date a duly executed counterpart
of a Subsidiary Guaranty Agreement signed by each Subsidiary of
Vencor listed in Parts I and II of Schedule IV hereto, except
TheraTx and Atria);
(e) a counterpart of the Security Agreement, as amended to be
substantially in the form of Exhibit C hereto, signed by each of
the parties listed on the signature pages thereof and Security
Agreement Supplements signed by TheraTx, PersonaCare, Inc.,
PersonaCare of Connecticut, Inc., Horizon Healthcare Services,
Inc., Stamford Health Facilities, Inc., PersonaCare of Rhode
Island, Inc. and Care Venture Partners, L.P., together with stock
certificates evidencing the capital stock listed in Parts III, IV,
V and VI of Schedule IV hereto
57
and signed stock powers relating thereto (the Documentation Agent
having received on the Initial Closing Date (i) stock certificates
evidencing the capital stock listed in Parts I and II of Schedule IV
hereto and signed stock powers relating thereto and (ii) the
instruments listed in Schedule V hereto);
(f) all signed UCC financing statements reasonably requested by
the Collateral Agent to perfect its security interests in the
Collateral and evidence satisfactory to the Documentation Agent
that arrangements satisfactory to it have been made for filing
such UCC financing statements on or promptly after the Amendment
Effective Date;
(g) evidence satisfactory to the Documentation Agent that, on the
Amendment Effective Date, Vencor will pay in full all loans and
reimbursement obligations then outstanding under the Initial Credit
Agreement, and all interest and fees accrued to but excluding the
Amendment Effective Date thereunder;
(h) the Documentation Agent shall not have received notice from
the Required Banks stating that they have determined in good faith that
(i) any action, suit or proceeding is pending or threatened against any
Vencor Company in which there is a reasonable possibility of an adverse
decision which would have a Material Adverse Effect or (ii) since
December 31, 1996 any event has occurred or any condition has come into
existence which has had, or is reasonably likely to have, a Material
Adverse Effect;
(i) a properly completed Federal Reserve Form FR U-1 for each Bank
signed by Vencor;
(j) evidence satisfactory to the Documentation Agent that, since
December 31, 1996, none of the Combined Companies (i) declared or paid
any dividend or made any other distribution on any Equity Securities of
Vencor or TheraTx, (ii) entered into any Guarantee of Debt of any
Minority-Owned Affiliate, (iii) made any payment on account of the
purchase, redemption, retirement or acquisition of any Equity
Securities of Vencor or TheraTx, except payments pursuant to and
described in the Tender Offer and the Merger Agreement or (iv) made any
Investment in any Minority-Owned Affiliate, except payments made
pursuant to Guarantees of Debt of Minority-Owned Affiliates entered
into before December 31, 1996;
(k) evidence satisfactory to the Documentation Agent and the
Administrative Agent that Vencor has paid or will pay on the Amendment
Effective Date all fees, expenses and other amounts payable by Vencor
on or
58
before the Amendment Effective Date to the Agents and the Banks in
connection with this Agreement;
(l) an opinion of ▇▇▇▇ ▇. Force, General Counsel of Vencor,
substantially in the form of Exhibit E hereto;
(m) an opinion of ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, General Counsel of TheraTx,
substantially in the form of Exhibit F hereto;
(n) an opinion of ▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, special counsel for
Vencor, substantially in the form of Exhibit G hereto;
(o) an opinion of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, special counsel for the
Agents, substantially in the form of Exhibit H hereto;
(p) all approvals, consents and other actions by or in respect of,
or filings with, any governmental body, agency, official, authority or
other Person required in connection with the transactions contemplated
by the Financing Documents shall have been obtained, taken or made
(except for any such approvals, consents, actions or filings with any
Person (other than any governmental body, agency, official or
authority) as to which the failure to have obtained, taken or made them
is not, in the aggregate, material); and
(q) all documents the Documentation Agent may reasonably request
relating to the existence of the Vencor Companies, the corporate
authority for and the validity of the Financing Documents, the creation
and perfection of the Liens contemplated by the Collateral Documents
and any other matters relevant thereto, all in form and substance
satisfactory to the Documentation Agent.
Promptly after the closing hereunder occurs, the Documentation Agent shall
notify Vencor, the Administrative Agent and the Banks of the Amendment
Effective Date, and such notice shall be conclusive and binding on all
parties hereto.
SECTION 3.02. Consequences of Effectiveness. On the Amendment
Effective Date, without further action by any of the parties thereto, the
Initial Credit Agreement will be automatically amended to read as this Agreement
reads. On and after the Amendment Effective Date, the rights and obligations of
the parties hereto shall be governed by the provisions hereof. The rights and
obligations of the parties to the Initial Credit Agreement with respect to the
period prior to the Amendment Effective Date shall continue to be governed by
the provisions thereof as in effect prior to the Amendment Effective Date,
except that all interest and fees accrued under the Initial Credit Agreement to
but excluding the Amendment Effective Date shall be paid on the Amendment
Effective Date.
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SECTION 3.03. Credit Events. The obligation (i) of each Bank to make
a Loan on the occasion of each Borrowing (except a Committed Borrowing pursuant
to Section 2.09(i) to refund outstanding Swingline Loans), (ii) of an LC Issuing
Bank to sell and of each Bank to purchase each participation in a Letter of
Credit as and when provided in Section 2.08, (iii) of each LC Issuing Bank to
extend (or allow the extension of) the expiry date of a Letter of Credit issued
by it hereunder as and when provided in Section 2.08 and (iv) of the Swingline
Bank to make any Swingline Loan are each subject to the satisfaction of the
following conditions:
(a) the fact that the Amendment Effective Date shall have occurred
on or prior to April 15, 1997;
(b) receipt by the Administrative Agent of notice of the relevant
Credit Event as required by Section 2.02(a), 2.03(f), 2.08(d) or
2.09(b), as the case may be;
(c) the fact that, immediately before and after such Credit Event,
no Default shall have occurred and be continuing; and
(d) the fact that each of the representations and warranties made
by Vencor or any of its Subsidiaries in or pursuant to any Financing
Document to which it is a party shall be true on and as of the date of
such Credit Event as if made on and as of such date.
Each Credit Event under this Agreement shall be deemed to be a representation
and warranty by Vencor on the date of such Credit Event as to the facts
specified in clauses (c) and (d) of this Section.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
Vencor represents and warrants to the Bank Parties that:
SECTION 4.01. Corporate Existence and Power. Each Vencor Company is a
corporation or partnership duly incorporated or organized, as the case may be,
validly existing and in good standing under the laws of its jurisdiction of
incorporation or organization, as the case may be, and has all corporate or
partnership powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted and as
proposed to be conducted; provided that the
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foregoing representation and warranty shall not apply to Helian Health Group,
Inc. and its subsidiaries.
SECTION 4.02. Corporate and Governmental Authorization; No
Contravention. The execution and delivery by each Vencor Company of the
Financing Documents to which it is a party and its performance of its
obligations thereunder are within its corporate or partnership powers, have been
duly authorized by all necessary corporate or partnership action, require no
action by or in respect of, or filing with, any governmental body, agency or
official (except such as shall have been made at or prior to the time required
by the Financing Documents and shall be in full force and effect on and after
the date when made to the extent required by the Financing Documents) and do not
contravene, or constitute a default under, any provision of applicable law or
regulation or of its Charter Documents or partnership agreement, as the case may
be, or of any agreement, judgment, injunction, order, decree or other instrument
binding upon it or result in or require the imposition of any Lien (other than
the Liens created by the Collateral Documents) on any of its assets.
SECTION 4.03. Binding Effect; Liens of Collateral Documents. This
Agreement constitutes a valid and binding agreement of Vencor, and the other
Financing Documents, when executed and delivered as contemplated by this
Agreement, will constitute valid and binding obligations of each Vencor Company
that is a party thereto, in each case enforceable in accordance with its terms,
except as limited by bankruptcy, insolvency or other similar laws affecting
creditors' rights generally and by general equitable principles. The Collateral
Documents create valid security interests in the Collateral purported to be
covered thereby, which security interests are and will remain perfected security
interests prior to all other Liens, until such security interests are released
pursuant to Section 16 of the Security Agreement.
SECTION 4.04. Financial Information. (a) The consolidated balance
sheet of Vencor and its Consolidated Subsidiaries as of December 31, 1995 and
the related consolidated statements of operations, cash flows and shareholders'
equity for the Fiscal Year then ended, reported on by Ernst & Young LLP and set
forth in Vencor's 1995 Annual Report to Shareholders, a copy of which has been
delivered to each of the Banks, fairly present, in conformity with GAAP, the
consolidated financial position of Vencor and its Consolidated Subsidiaries as
of such date and their consolidated results of operations and cash flows for
such Fiscal Year.
(b) The unaudited condensed consolidated balance sheet of Vencor and
its Consolidated Subsidiaries as of September 30, 1996 and the related unaudited
condensed consolidated statements of operations and cash flows for the nine
months then ended, set forth in Vencor's report on Form 10-Q for its Fiscal
Quarter ended September 30, 1996, a copy of which has been delivered to each of
the Banks, fairly present, on a basis consistent with the financial statements
referred to in Section 4.04(a), the consolidated financial
61
position of Vencor and its Consolidated Subsidiaries as of such date and their
consolidated results of operations and cash flows for such nine-month period
(subject to normal year-end adjustments).
(c) The consolidated balance sheet of TheraTx and its Consolidated
Subsidiaries as of December 31, 1995 and the related consolidated statements of
operations, cash flows and changes in stockholders' equity for its fiscal year
then ended, reported on by Ernst & Young LLP and set forth in TheraTx's report
on Form 10-K for such fiscal year, a copy of which has been delivered to each of
the Banks, fairly present, in conformity with generally accepted accounting
principles, the consolidated financial position of TheraTx and its Consolidated
Subsidiaries as of such date and their consolidated results of operations and
cash flows for such fiscal year.
(d) The unaudited condensed consolidated balance sheet of TheraTx and
its Consolidated Subsidiaries as of September 30, 1996 and the related unaudited
condensed consolidated statements of income and cash flows for the nine months
then ended, set forth in TheraTx's report on Form 10-Q for its fiscal quarter
ended September 30, 1996, a copy of which has been delivered to each of the
Banks, fairly present, on a basis consistent with the financial statements
referred to in Section 4.04(c), the consolidated financial position of TheraTx
and its Consolidated Subsidiaries as of such date and their consolidated results
of operations and cash flows for such nine-month period (subject to normal year-
end adjustments).
(e) Since December 31, 1996, no event has occurred and no condition
has come into existence which has had, or is reasonably likely to have, a
Material Adverse Effect.
SECTION 4.05. Litigation. Except as disclosed under the heading
"Legal Proceedings" in TheraTx's report on Form 10-Q for its fiscal quarter
ended September 30, 1996, there is no action, suit or proceeding pending
against, or to the knowledge of Vencor threatened against or affecting, any
Vencor Company before any court or arbitrator or any governmental body, agency
or official (i) in which there is a reasonable possibility of an adverse
decision which could have a Material Adverse Effect or (ii) which in any manner
questions the validity of any Financing Document.
SECTION 4.06. Compliance with ERISA. Each member of the ERISA Group
has fulfilled its obligations under the minimum funding standards of ERISA and
the Internal Revenue Code with respect to each Plan and is in compliance in all
material respects with the presently applicable provisions of ERISA and the
Internal Revenue Code with respect to each Plan. No member of the ERISA Group
has (i) sought a waiver of the minimum funding standard under Section 412 of the
Internal Revenue Code in respect of any Plan, (ii) failed to make any
contribution or payment to any Plan or Multiemployer Plan or made any amendment
to any Plan, which has resulted or could result in the imposition of a Lien
62
or the posting of a bond or other security under ERISA or the Internal Revenue
Code or (iii) incurred any liability under Title IV of ERISA other than a
liability to the PBGC for premiums under Section 4007 of ERISA.
SECTION 4.07. Taxes. The Vencor Companies have filed all United
States Federal income tax returns that are required to be filed by them and have
paid all taxes due pursuant to such returns or pursuant to any assessment
received by any of them, except such taxes, if any, as are being contested in
good faith and as to which reserves have been provided. The charges, accruals
and reserves on the books of the Vencor Companies in respect of taxes or other
governmental charges are, in the opinion of Vencor, adequate.
SECTION 4.08. Compliance with Laws. The Vencor Companies are in
compliance in all material respects with all applicable laws, rules and
regulations, other than such laws, rules or regulations (i) the validity or
applicability of which the relevant Vencor Company is contesting in good faith
or (ii) the failure to comply with which could not, in the aggregate, have a
Material Adverse Effect.
SECTION 4.09. No Regulatory Restrictions on Borrowing. Vencor is not
(i) an "investment company", within the meaning of the Investment Company Act of
1940, as amended, (ii) a "holding company", or an "affiliate" of a "holding
company" or a "subsidiary company" of a "holding company", within the meaning of
the Public Utility Holding Company Act of 1935, as amended or (iii) otherwise
subject to any regulatory scheme which restricts its ability to incur Debt.
SECTION 4.10. Environmental Matters. (a) Each of Vencor and TheraTx
has from time to time reviewed the effect of Environmental Laws on its business,
operations and properties and those of its Subsidiaries, in the course of which
reviews it has identified and evaluated associated liabilities and costs. On the
basis of such reviews, Vencor has reasonably concluded that such associated
liabilities and costs are unlikely to have a Material Adverse Effect.
(b) Except to the extent that the Environmental Liabilities of the
Vencor Companies that relate to or could result from the matters referred to in
this Section 4.10(b) would not exceed $1,000,000 for any one occurrence, no
material notice, notification, demand, request for information, citation,
summons, complaint or order with respect to Hazardous Substances or any
violation of Environmental Laws is in existence or, to the knowledge of Vencor
or TheraTx, proposed, threatened or anticipated with respect to or in connection
with the operation of any properties now or previously owned, leased or operated
by any Vencor Company.
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SECTION 4.11. Related Documents. The copies of the Merger Agreement
and the Disclosure Letter and Purchaser Disclosure Letter referred to therein
which Vencor has heretofore delivered to the Agents are correct and complete
copies thereof.
SECTION 4.12. Effect of Merger on Outstanding Debt. No Debt or other
securities of any Vencor Company outstanding immediately after the Amendment
Effective Date will become subject to acceleration or mandatory repayment,
repurchase or other retirement by any Vencor Company by reason of the Tender
Offer or the Merger or any change of control of TheraTx and its Subsidiaries
effected thereby, except:
(i) $100,000,000 aggregate principal amount of TheraTx's 8%
Convertible Subordinated Notes due 2002, which TheraTx will offer to
purchase at the principal amount thereof plus accrued interest as and
when required by Section 5.24; and
(ii) other Debt not exceeding $10,000,000 in aggregate outstanding
principal amount.
SECTION 4.13. Full Disclosure. All information heretofore furnished
in writing by any Vencor Company to the Documentation Agent or the
Administrative Agent for inclusion in the Offering Memorandum or to any of the
Agents or any Bank for purposes of or in connection with this Agreement or any
transaction contemplated hereby was, and all such information hereafter
furnished in writing by the Vencor Companies to any of the Agents or any Bank
will be, true and accurate in every material respect or based on reasonable
estimates on the date as of which such information is or was stated or
certified. Vencor has disclosed to the Banks in writing any and all facts which
are known to it and which have had or could reasonably be expected to have a
Material Adverse Effect.
SECTION 4.14. Information as to Material Subsidiaries and Pledged
Instruments. Schedule IV hereto sets forth a correct and complete list, as of
the close of business on the Amendment Effective Date, of each Material
Subsidiary, its outstanding Equity Interests, the owners thereof and the
percentage thereof owned by each such owner. Schedule V hereto sets forth a
correct and complete list, as of the close of business on the Amendment
Effective Date, of each instrument evidencing Debt owed to Vencor by its
Subsidiaries.
SECTION 4.15. Subsidiary Guaranties. The representations of each
Subsidiary Guarantor in Section 2 of its Subsidiary Guaranty Agreement are true.
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ARTICLE 5
COVENANTS
Vencor agrees that, so long as any Bank has any Credit Exposure
hereunder or any interest or fees accrued hereunder remain unpaid:
SECTION 5.01. Information. Vencor will deliver the following
information to the Administrative Agent (with copies thereof for each Bank if
requested by the Administrative Agent) and, promptly upon receipt thereof, the
Administrative Agent will deliver a copy thereof to each Bank:
(a) as soon as available and in any event within 90 days after the
end of each Fiscal Year, a consolidated balance sheet of Vencor and its
Consolidated Subsidiaries as of the end of such Fiscal Year, and the
related consolidated statements of operations, cash flows and changes
in stockholders' equity for such Fiscal Year, setting forth in each
case in comparative form the figures for the previous Fiscal Year, all
reported on in a manner acceptable to the SEC by independent public
accountants of nationally recognized standing, which report (x) shall
state that such financial statements present fairly, in all material
respects, the consolidated financial position of Vencor and its
Consolidated Subsidiaries as of the date of such financial statements
and their consolidated results of operations and cash flows for the
period covered by such financial statements in conformity with GAAP and
(y) shall not contain any Qualification;
(b) as soon as available and in any event within 45 days after the
end of each of the first three Fiscal Quarters of each Fiscal Year, (i)
an unaudited condensed consolidated balance sheet of Vencor and its
Consolidated Subsidiaries and the related condensed consolidated
statements of operations for such Fiscal Quarter and for the portion of
the Fiscal Year ended at the end of such Fiscal Quarter and of cash
flows for the portion of the Fiscal Year ended at the end of such
Fiscal Quarter, setting forth in each case in comparative form the
unaudited consolidated statements of operations and cash flows for the
corresponding Fiscal Quarter and the corresponding portion of the
previous Fiscal Year, all prepared in accordance with Rule 10-01 of
Regulation S-X of the General Rules and Regulations under the
Securities Act of 1933, or any successor rule that sets forth the
manner in which interim financial statements shall be prepared, and
(ii) a certificate (subject to normal year-end adjustments) of a
Financial Officer as to the fairness of presentation and consistency of
such financial statements;
(c) simultaneously with the delivery of each set of financial
statements referred to in Sections 5.01(a) and (b), a certificate of a
Financial Officer, substantially in the form of Exhibit D hereto, (i)
setting forth in reasonable detail
65
such calculations as are required to establish whether Vencor was in
compliance with the requirements of Sections 5.11, 5.12, 5.16, 5.17 and
5.18 on the date of such financial statements, (ii) stating whether any
Default exists on the date of such certificate and, if any Default then
exists, setting forth the details thereof and the action that Vencor is
taking or proposes to take with respect thereto, (iii) stating whether,
since the date of the most recent financial statements delivered
pursuant to Section 5.01(a) or (b), an event has occurred or condition
arisen which has had a Material Adverse Effect which is not reflected
in the financial statements delivered simultaneously therewith and, if
so, the nature of such Material Adverse Effect, and (iv) stating
whether, since the date of the most recent financial statements
previously delivered pursuant to Section 5.01(a) or (b), there has been
a change in the GAAP applied in preparing the financial statements then
being delivered from those applied in preparing the most recent audited
financial statements previously so delivered which is material to the
financial statements then being delivered;
(d) unless Vencor has an Investment Grade Rating, simultaneously
with the delivery of each set of annual financial statements referred
to in Section 5.01(a), a letter from the firm of independent public
accountants that reported on such statements stating (i) whether
anything has come to their attention in the course of their normal
audit procedures to cause them to believe that any Default existed on
the date of such financial statements and (ii) whether in their opinion
the calculations of compliance with the requirements of Sections 5.16,
5.17 and 5.18 set forth in the Financial Officer's certificate
delivered simultaneously therewith pursuant to Section 5.01(c), to the
extent derived from data contained in the accounting records of Vencor
and its Consolidated Subsidiaries, have been determined in accordance
with the relevant provisions of this Agreement;
(e) within 45 days after the end of each Fiscal Quarter, a
certificate signed by a Financial Officer setting forth the Pricing
Level applicable during the Rate Period that begins 46 days after the
end of such Fiscal Quarter and in reasonable detail the calculations
required to establish that such Pricing Level will be applicable;
provided that (x) in the case of the last Fiscal Quarter of any Fiscal
Year, such certificate may set forth only Vencor's estimate of the
applicable Pricing Level (it being understood that, if Vencor in good
faith cannot determine with reasonable certainty which of two Pricing
Levels applies, Vencor may, in view of the provisions of Section
2.16(b), appropriately estimate that the lower of such Pricing Levels
applies), and (y) if such certificate sets forth only an estimated
Pricing Level, Vencor will, within 90 days after the end of such Fiscal
Year, deliver a further certificate signed by a Financial Officer
setting forth the calculations contemplated by this clause (e) and
either confirming that such estimated Pricing Level applies or, if not,
setting forth the Pricing Level that does
66
apply during the relevant Rate Period and requesting the Administrative
Agent to determine the amounts of any additional interest and/or
additional fees payable by Vencor pursuant to Section 2.16(b);
(f) within five Domestic Business Days after any Executive Officer
obtains knowledge of any Default, if such Default is then continuing, a
certificate of a Financial Officer setting forth the details thereof
and the action that Vencor is taking or proposes to take with respect
thereto;
(g) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration
statements on Form S-8 or its equivalent) and annual, quarterly or
current reports that Vencor or any of its Subsidiaries shall have filed
with the SEC;
(h) promptly after any member of the ERISA Group (i) gives or is
required to give notice to the PBGC of any "reportable event" (as
defined in Section 4043 of ERISA) with respect to any Plan which might
constitute grounds for a termination of such Plan under Title IV of
ERISA, or knows that the plan administrator of any Plan has given or is
required to give notice of any such reportable event, a copy of the
notice of such reportable event given or required to be given to the
PBGC; (ii) receives notice of complete or partial withdrawal liability
under Title IV of ERISA or notice that any Multiemployer Plan is in
reorganization, is insolvent or has been terminated, a copy of such
notice; (iii) receives notice from the PBGC under Title IV of ERISA of
an intent to terminate, impose liability (other than for premiums under
Section 4007 of ERISA) in respect of, or appoint a trustee to
administer any Plan, a copy of such notice; (iv) applies for a waiver
of the minimum funding standard under Section 412 of the Internal
Revenue Code, a copy of such application; (v) gives notice of intent to
terminate any Plan under Section 4041(c) of ERISA, a copy of such
notice and other information filed with the PBGC; (vi) gives notice of
withdrawal from any Plan pursuant to Section 4063 of ERISA, a copy of
such notice; or (vii) fails to make any payment or contribution to any
Plan or Multiemployer Plan or makes any amendment to any Plan which has
resulted or could result in the imposition of a Lien or the posting of
a bond or other security, a certificate of a Financial Officer setting
forth details as to such occurrence and the action, if any, which
Vencor or the applicable member of the ERISA Group is required or
proposes to take;
(i) as soon as reasonably practicable after any Executive Officer
obtains knowledge of the commencement of an action, suit or proceeding
against Vencor or any of its Subsidiaries before any court or
arbitrator or any governmental body, agency or official in which there
is a reasonable possibility of an adverse decision which could have a
Material Adverse Effect or which in any manner questions the
67
validity of any Financing Document, a certificate of a Financial
Officer setting forth the nature of such action, suit or proceeding and
such additional information as may be reasonably requested by any Bank;
(j) promptly upon Vencor's receipt from its independent public
accountants of any management letter which indicates a material
weakness in the reporting practices of Vencor or any of its
Subsidiaries, a description of such material weakness and any action
being taken with respect thereto
(k) promptly upon their becoming available, copies of all press
releases and other statements made available generally by Vencor or any
of its Subsidiaries to the public concerning material developments in
the business of Vencor and its Subsidiaries; and
(l) from time to time such additional information regarding the
financial position, results of operations or business of any of the
Vencor Companies as any Bank may reasonably request through the
Documentation Agent or the Administrative Agent.
SECTION 5.02. Maintenance of Property. Each Vencor Company will keep
all property useful and necessary in its business in good working order and
condition, ordinary wear and tear excepted.
SECTION 5.03. Insurance. Each Vencor Company will maintain insurance
in responsible companies in such amounts and against such risks as is usually
carried by owners of similar businesses and properties in the same general areas
in which it operates.
SECTION 5.04. Compliance with Law. Each Vencor Company will comply in
all material respects with all applicable laws, ordinances, rules, regulations,
and requirements of governmental authorities (including Environmental Laws and
ERISA and the rules and regulations thereunder), except where (i) the necessity
of compliance therewith is contested in good faith by appropriate proceedings,
in which case adequate and reasonable reserves will be established in accordance
with GAAP, or (ii) failures to comply therewith could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.
SECTION 5.05. Maintenance of Existence, Rights, Etc.. Each Vencor
Company will preserve, renew and keep in full force and effect its corporate
existence and its rights, privileges, licenses and franchises necessary or
desirable in the normal conduct of business; provided that nothing in this
Section 5.05 shall prohibit (i) any merger or consolidation permitted by Section
5.10, (ii) the termination of the corporate existence of any Subsidiary if (A)
Vencor determines that such termination is in its best interest and (B) such
termination is not adverse in any material respect to the Banks, or (iii) the
loss of any
68
rights, privileges, licenses and franchises if the loss thereof, in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
SECTION 5.06. Use of Proceeds and Letters of Credit. (a) The proceeds
of the Acquisition Loans will be used for the purposes of refinancing loans made
under the Initial Credit Agreement to finance the acquisition of TheraTx,
financing other acquisitions, refinancing outstanding Debt in connection with
such other acquisitions and/or refinancing Debt incurred for any of the
foregoing purposes and for other general corporate purposes of Vencor and its
Subsidiaries (excluding their working capital requirements).
(b) The proceeds of the General Purpose Loans will be used for the
general corporate purposes of Vencor and its Subsidiaries, including (without
limitation) their working capital requirements and any purpose for which
Acquisition Loans may be used.
(c) The proceeds of the Project Loans will be used to finance capital
expansion projects or to refinance Debt that was incurred to finance capital
expansion projects.
(d) The Existing Letters of Credit were used, and the Additional
Letters of Credit will be used, for general corporate purposes, including
(without limitation) providing credit support for IRB Debt.
(e) The proceeds of the Margin Stock Loans will be used (i) to
refinance loans made under the Initial Credit Agreement to enable Vencor or
Merger Sub (A) to purchase or carry TheraTx Shares purchased by Merger Sub
pursuant to the Tender Offer and (B) to pay cash to the holders of TheraTx
Shares that were not purchased pursuant to the Tender Offer or (ii) to refinance
loans incurred for the foregoing purposes.
(f) None of the proceeds of the Loans or the Letters of Credit will be
used in violation of any applicable law or regulation and, without limiting the
generality of the foregoing, no use of any such proceeds or Letters of Credit
for general corporate purposes will include any use thereof, directly or
indirectly, for the purpose, whether immediate, incidental or ultimate, of
buying or carrying any Margin Stock except the TheraTx Shares.
SECTION 5.07. Limitation on Debt of Vencor. After the Initial Closing
Date, Vencor will not incur or be liable with respect to (i) any Debt of a type
described in clause (i), (ii) or (iv) of the definition of "Debt" in Section
1.01 or (ii) any Guarantee of any such Debt, except:
(a) Debt outstanding under this Agreement;
(b) Permitted Intercompany Debt;
69
(c) Debt and Guarantees (other than Debt referred to in clauses
(a) and (b) of this Section and Guarantees permitted by clause (f)
of this Section) outstanding at the close of business on the
Initial Closing Date not exceeding $100,000,000 in aggregate
outstanding principal amount;
(d) Debt incurred after the Initial Closing Date and Guarantees of
Debt entered into after the Initial Closing Date; provided that (i) the
Debt so incurred or Guaranteed is incurred in exchange for or to repay,
prepay, repurchase, redeem, defease, retire or refinance ("refinance")
outstanding Debt of Vencor permitted by clauses (c), (d), (e), (g), (h)
and (j) of this Section 5.07 or outstanding Debt of Subsidiaries
permitted by clauses (c), (d), (f), (g) and (i) of Section 5.08; (ii)
the principal amount of the Debt so incurred or Guaranteed shall not
exceed the unpaid principal amount of the Debt so exchanged or
refinanced, (iii) the aggregate principal amount of the Debt so
incurred or Guaranteed that is required to be repaid, on a cumulative
basis, through any date (a "date of determination") prior to the
Termination Date shall not exceed the aggregate principal amount of the
Debt so exchanged or refinanced that would have been required to have
been repaid, on a cumulative basis, after the date of the relevant
exchange or refinancing and on or before the same date of determination
and (iv) no restriction is imposed on any Vencor Company in connection
with the Debt so incurred or Guaranteed that is more restrictive than
the provisions of this Agreement (or, if more restrictive, the
provisions of the documents applicable to the Debt so exchanged or
refinanced);
(e) Debt incurred after the Initial Closing Date and Guarantees of
Debt entered into after the Initial Closing Date; provided that the
Debt so incurred or Guaranteed
(i) matures after March 31, 2003;
(ii) is not subject to any prepayment, instalment
payment, sinking fund, repurchase or other similar
requirement for the retirement thereof (either mandatory
or at the option of the holder thereof) at any time on or
before March 31, 2003 (except pursuant to a change of
control provision that imposes such a requirement only
under circumstances when an Event of Default would exist
under Section 6.01(k)); and
(iii) does not impose any restriction on any Vencor
Company that is more restrictive than the provisions of
this Agreement;
70
provided, further, that if Vencor has an Investment Grade Rating when
such Debt is incurred or such Guarantee is entered into, the date
specified in (i) and (ii) above shall be changed from March 31, 2003 to
June 30, 2002;
(f) (i) a Guarantee of Debt of Atria not exceeding $100,000,000 in
aggregate principal amount, it being understood that such Guarantee of
Debt of Atria may remain in effect even if Atria is no longer a
Subsidiary, and (ii) Guarantees of Debt of Subsidiaries (other than
Atria and its subsidiaries) permitted by Section 5.08;
(g) Debt assumed by Vencor after the Initial Closing Date in
connection with the acquisition of one or more health care facilities
or other businesses; provided in each case that such Debt was
outstanding before such facility or other business was acquired and was
not incurred in contemplation of such acquisition;
(h) Debt evidenced by bonds issued by Vencor (or, prior to the
merger of Hillhaven into Vencor, by Hillhaven) to tenants of
residential units of New Pond Village in Walpole, Massachusetts or The
Greens at Hanover in Nashua, New Hampshire evidencing the obligation to
repay at the end of their tenancies amounts paid by them at the
beginning of their tenancies, provided that the aggregate outstanding
principal amount of all bonds referred to in this clause (h) and
Section 5.08(g) (including any such bonds outstanding on the Initial
Closing Date) shall not at any time exceed $55,000,000;
(i) letters of credit issued to provide credit support for IRB
Debt and reimbursement obligations in respect of drawings thereunder,
provided that such IRB Debt is otherwise permitted under this Section
5.07 or Section 5.08;
(j) Debt incurred or assumed after the Initial Closing Date for
the purpose of financing all or any part of the cost of acquiring or
constructing an asset of Vencor; provided that (i) such Debt is secured
by a Lien on such asset that is permitted by Section 5.09(e) and (ii)
the aggregate outstanding principal amount of all Debt permitted by
this clause (j) and Section 5.08(j) shall not at any time exceed
$25,000,0000;
(k) Debt incurred by Vencor at a time when Vencor has an
Investment Grade Rating, for a consideration consisting entirely of
cash, provided that (i) such Debt matures no more than 90 days after it
is incurred and (ii) the aggregate outstanding principal amount thereof
shall not at any time exceed $150,000,000; and
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(l) any other Debt incurred by Vencor after the Initial Closing
Date and any other Guarantees entered into by Vencor after the Initial
Closing Date; provided that the aggregate outstanding principal amount
of all Debt incurred or Guaranteed pursuant to this clause (l) shall
not at any time exceed $25,000,000.
SECTION 5.08. Limitation on Debt of Subsidiaries. Vencor will not
permit any Subsidiary, at any time after the Initial Closing Date, to incur or
be liable with respect to (i) any Debt of a type described in clause (i), (ii)
or (iv) of the definition of "Debt" in Section 1.01 or (ii) any Guarantee of any
such Debt, except:
(a) Guarantees outstanding under a Subsidiary Guaranty
Agreement;
(b) Permitted Intercompany Debt;
(c) Debt and Guarantees (other than Debt referred to in clauses
(b) and (l) of this Section and Guarantees permitted by clauses
(a), (e) and (l) of this Section) outstanding at the close of
business on the Initial Closing Date not exceeding $350,000,000 in
aggregate outstanding principal amount;
(d) Debt incurred after the Initial Closing Date and Guarantees of
Debt entered into after the Initial Closing Date; provided that (i) the
Debt so incurred or Guaranteed is incurred in exchange for or to repay,
prepay, repurchase, redeem, defease, retire or refinance ("refinance")
any outstanding Debt of Subsidiaries permitted by clauses (c), (d),
(f), (g) and (i) of this Section; (ii) the principal amount of the Debt
so incurred or Guaranteed shall not exceed the unpaid principal amount
of the Debt so exchanged or refinanced, (iii) the aggregate principal
amount of the Debt so incurred or Guaranteed that is required to be
repaid, on a cumulative basis, through any date (a "date of
determination") prior to the Termination Date shall not exceed the
aggregate principal amount of the Debt so exchanged or refinanced that
would have been required to have been repaid, on a cumulative basis,
after the date of the relevant exchange or refinancing and on or before
the same date of determination and (iv) no restriction is imposed on
any Vencor Company in connection with the Debt so incurred or
Guaranteed that is more restrictive than the provisions of this
Agreement (or, if more restrictive, the provisions of the documents
applicable to the Debt so exchanged or refinanced);
(e) Guarantees by one or more Subsidiaries of (i) Vencor's
performance of its obligations under the Parent Guaranty not exceeding
$100,000,000 in aggregate principal amount, it being understood that
such Guarantees may remain in effect even if Atria is no longer a
Subsidiary, and (ii) Debt of Subsidiaries (other than Atria and its
subsidiaries) permitted by this Section, provided that the
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aggregate amount of Debt Guaranteed pursuant to this clause (ii) shall
not exceed $100,000,000 at any time;
(f) Debt of any Person that becomes a Subsidiary after the Initial
Closing Date and any other Debt assumed by a Subsidiary after the
Initial Closing Date in connection with the acquisition of one or more
health care facilities or other businesses; provided that (i) in each
case such Debt was outstanding before such Person became a Subsidiary
or such facility or business was acquired, as the case may be, and was
not incurred in contemplation thereof and (ii) the aggregate
outstanding principal amount of all Debt permitted by this clause (f)
shall not at any time exceed $350,000,000;
(g) Debt evidenced by bonds issued by such Subsidiary to tenants
of residential units of New Pond Village in Walpole, Massachusetts or
The Greens at Hanover in Nashua, New Hampshire evidencing the
obligation to repay at the end of their tenancies amounts paid by them
at the beginning of their tenancies, provided that the aggregate
outstanding principal amount of all bonds referred to in this clause
(g) and Section 5.07(h) (including any such bonds outstanding on the
Initial Closing Date) shall not at any time exceed $55,000,000;
(h) letters of credit issued to provide credit support for IRB
Debt and reimbursement obligations in respect of drawings thereunder,
provided that such IRB Debt is otherwise permitted under Section 5.07
or this Section 5.08;
(i) letters of credit issued for the account of Cornerstone
Insurance Company; provided that its obligations to reimburse the
issuing banks are not Guaranteed by Vencor or any other Subsidiary;
(j) Debt incurred or assumed after the Initial Closing Date for
the purpose of financing all or any part of the cost of acquiring or
constructing an asset of such Subsidiary; provided that (i) such Debt
is secured by a Lien on such asset that is permitted by Section 5.09(e)
and (ii) the aggregate outstanding principal amount of all Debt
permitted by this clause (j) and Section 5.07(j) shall not at any time
exceed $25,000,000;
(k) any other Debt incurred by such Subsidiary after the Initial
Closing Date or any other Guarantees entered into by such Subsidiary
after the Initial Closing Date; provided that the aggregate outstanding
principal amount of all Debt incurred or Guaranteed by Subsidiaries
pursuant to this clause (k) shall not at any time exceed $25,000,000;
and
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(l) Debt incurred after June 30, 1996 by Atria and its
subsidiaries under Atria's Credit Agreement, Guarantees by Atria and
its subsidiaries of such Debt and Guarantees by Atria of Debt of its
subsidiaries permitted by clause (f) of this Section; provided that the
aggregate outstanding principal amount of all Debt incurred or
Guaranteed by Atria and its subsidiaries pursuant to this clause (l)
and clause (h) of this Section, calculated on a consolidated basis,
shall not at any time exceed $350,000,000.
SECTION 5.09. Negative Pledge. After the Initial Closing Date, Vencor
will not, and will not permit any Subsidiary to, create, assume or suffer to
exist any Lien on any asset now owned or hereafter acquired, except:
(a) Liens created pursuant to the Collateral Documents and the
Project Mortgages;
(b) Liens existing on the Initial Closing Date (other than Liens
permitted by clause (a) above) securing Debt outstanding on the Initial
Closing Date in an aggregate principal amount not exceeding
$200,000,000;
(c) any Lien existing on any asset prior to the acquisition
thereof by Vencor or such Subsidiary and not created in contemplation
of such acquisition;
(d) any Lien existing on any asset of any Person at the time such
Person becomes a Subsidiary of Vencor or merges into Vencor or any of
its Subsidiaries; provided that such Lien was not created in
contemplation of such event;
(e) any Lien on any asset securing Debt incurred or assumed for
the purpose of financing all or any part of the cost of acquiring or
constructing such asset, provided that such Lien attaches to such asset
concurrently with or within 180 days after the acquisition or
completion of construction thereof and attaches to no asset other than
such asset so financed;
(f) any Lien arising out of the refinancing, extension, renewal or
refunding of any Debt secured by any Lien permitted by any of the
foregoing clauses of this Section, provided that the principal amount
of such Debt is not increased and such Debt is not secured by any
additional assets;
(g) Permitted Encumbrances;
(h) Liens arising in the ordinary course of business (other than
Liens of the types described in the definition of "Permitted
Encumbrances") which (i) do not secure Debt, (ii) do not secure any
single obligation (or series of related
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obligations) in an amount exceeding $5,000,000; provided that the
limitation in this clause (ii) shall not apply to Liens securing
worker's compensation, unemployment insurance and other types of social
security, and (iii) do not in the aggregate materially detract from the
value of the assets of Vencor and its Subsidiaries, taken as a whole,
or materially impair the use thereof in the operation of their
business;
(i) Liens on cash (not exceeding $10,000,000 in aggregate amount)
of Cornerstone Insurance Company to secure its reimbursement
obligations under letters of credit issued for its account;
(j) other Liens securing Debt of Vencor not exceeding $25,000,000
in aggregate outstanding principal amount;
(k) other Liens securing Debt of Subsidiaries not exceeding
$25,000,000 in aggregate outstanding principal amount; and
(l) Liens on assets of Atria and its subsidiaries securing (x)
Debt and Guarantees of Atria and its subsidiaries permitted by clauses
(f), (g) and (l) of Section 5.08, (y) reimbursement obligations of
Atria and its subsidiaries permitted by Section 5.08(h) and (z)
obligations of Atria and its subsidiaries under "Designated Interest
Rate Agreements" (as such term is defined in Atria's Credit Agreement).
SECTION 5.10. Consolidations, Mergers and Asset Sales. (a) Vencor
will not, and will not permit any Subsidiary (except Ventech Systems, Inc.) to,
consolidate or merge with or into, or sell, lease or otherwise dispose of all or
substantially all of its assets to, any other Person, except that:
(i) Vencor may merge with any Person if Vencor is the surviving
corporation and, immediately after such merger (and giving effect
thereto), no Default shall have occurred and be continuing; and
(ii) any Subsidiary may merge or consolidate with or into, or
transfer all or substantially all of its assets to, any Person if,
immediately after such transaction (and giving effect thereto), no
Default shall have occurred and be continuing and either (A) the
surviving corporation or transferee is Vencor or a Subsidiary or (B)
such merger, consolidation or transfer of all or substantially all
assets is in conjunction with a disposition by Vencor and its
Subsidiaries of their entire investment in such Subsidiary and such
disposition is not prohibited by any provision of the Financing
Documents (other than this subsection (a)).
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(b) No merger, consolidation or transfer of all or substantially all
of the assets of any Subsidiary Guarantor shall be permitted under this Section
5.10 unless:
(i) the surviving corporation or transferee is Vencor or a Wholly-
Owned Material Subsidiary;
(ii) the Required Banks shall have consented to such transaction;
(iii) the assets being disposed of are (x) capital stock of Ventech
Systems, Inc. or Atria or (y) assets of TheraTx's surgery center
business, occupational health clinics business or supply business; or
(iv) immediately after such transaction is consummated, the
aggregate book value of all assets disposed of in transactions
permitted by this clause (iv) during the period of 365 days then ended
(whether disposed of directly or by means of a merger, consolidation or
transfer of Equity Interests) would not exceed 10% of Consolidated Net
Worth as shown on the most recent financial statements of Vencor and
its Consolidated Subsidiaries theretofore delivered to the Banks
pursuant to Section 4.04 or 5.01.
For purposes of the foregoing clause (iv), the book value of the assets
disposed of in each transaction shall be the book value of such assets on
the books of the relevant Subsidiary immediately before such disposition.
(c) If Vencor and its Subsidiaries dispose of their entire investment
in any Subsidiary as permitted by subsection (a) or (b) above, (i) if such
Subsidiary is a Subsidiary Guarantor, its Subsidiary Guaranty shall be
automatically released concurrently with such disposition and (ii) the
Documentation Agent shall, at Vencor's request, instruct the Collateral Agent,
concurrently with or at any time after such disposition, to (i) release all
security interests in Equity Interests in such Subsidiary granted by Vencor and
its Subsidiaries to the Collateral Agent and (ii) if such Subsidiary is a
Subsidiary Grantor, release any security interests granted by it to the
Collateral Agent to secure its Subsidiary Guaranty and return to such Subsidiary
Grantor any of its assets held by the Collateral Agent under the Security
Agreement.
SECTION 5.11. Restricted Payments. Unless Vencor has an Investment
Grade Rating, Vencor will not, and will not permit any Subsidiary to, declare or
make any Restricted Payment on or after the Initial Closing Date, except:
(a) any distribution of shares of Ventech Systems, Inc. by Vencor
to its own shareholders;
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(b) dividends on Equity Securities of Vencor declared and paid
during the period from January 1, 1997 to March 31, 1998, inclusive, in
an aggregate amount not exceeding $10,000,000;
(c) Restricted Payments (other than dividends on Equity Securities
of Vencor) made during the period from January 1, 1997 to March 31,
1998, inclusive, in an aggregate amount not exceeding $50,000,000; and
(d) any other Restricted Payment declared or made after March 31,
1998 if, immediately after such Restricted Payment is declared or made,
the sum of (i) all Restricted Payments made pursuant to clause (c)
above and (ii) the aggregate amount of all Restricted Payments declared
or made pursuant to this clause (d) does not exceed the sum set forth
in the table below opposite the period in which such Restricted Payment
is declared or made:
Period Cumulative Amount
April 1, 1998 through March 31, 1999 $60,000,000
April 1, 1999 through March 31, 2000 $70,000,000
April 1, 2000 through March 31, 2001 $80,000,000
April 1, 2001 through March 31, 2002 $90,000,000
provided that in no event shall Vencor or any Subsidiary declare or make any
Restricted Payment pursuant to this Section if, immediately before or after
giving effect thereto, any Default shall have occurred and be continuing.
SECTION 5.12. Limitations on Investments in Minority-Owned Affiliates.
After the Initial Closing Date Vencor and its Subsidiaries will not make,
acquire or hold any Investment in any Minority-Owned Affiliate, except:
(i) Investments existing on the Initial Closing Date in Minority-
Owned Affiliates existing on the Initial Closing Date and identified on
Schedule II hereto and Investments in shares of common stock of Atria
existing on the Initial Closing Date and the Term Promissory Note dated
August 19, 1996 in the principal amount of $14 million evidencing the
obligation of Hillhaven Properties, Ltd. to repay to Vencor such
principal amount and the interest thereon.
(ii) payments made pursuant to a Guarantee of Debt of Minority-
Owned Affiliates, provided that such Guarantee is not prohibited by
Section 5.07 or 5.08;
(iii) working capital loans to Minority-Owned Affiliates not at any
time exceeding $30,000,000 in aggregate outstanding principal amount;
and
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(iv) any other Investments in Minority-Owned Affiliates made after
the Initial Closing Date; provided that, immediately after each such
Investment is made, the sum of (A) the aggregate amount of all
Investments in Minority-Owned Affiliates made after the Initial Closing
Date and not permitted by clause (i), (ii) or (iii) of this Section
plus (B) the aggregate amount of all Investments in an Affiliate made
pursuant to Section 5.13(h) does not exceed 7% of Consolidated Net
Worth.
For purposes of clause (iv) above and Section 5.13(h), the amount of each
Investment shall be deemed to be the original amount invested less any
principal repaid or capital returned, but not less than zero.
SECTION 5.13. Transactions with Affiliates. After the Initial Closing
Date, no Vencor Company will directly or indirectly, pay any funds to or for the
account of, make any Investment in, lease, sell, transfer or otherwise dispose
of any assets, tangible or intangible, to, or participate in, or effect any
transaction in connection with any joint enterprise or other joint arrangement
with, any Affiliate; provided that the foregoing provisions of this Section
shall not prohibit:
(a) any Vencor Company from making any Investment in Minority-
Owned Affiliates permitted by Section 5.12;
(b) any Vencor Company from making sales to or purchases from any
Affiliate and, in connection therewith, extending credit or making
payments, or from making payments for services rendered by any
Affiliate, if such sales or purchases are made or such services are
rendered in the ordinary course of business and on terms and conditions
at least as favorable to such Vencor Company as the terms and
conditions which would apply in a similar transaction with a Person not
an Affiliate;
(c) any Vencor Company from making payments of principal, interest
and premium on any of its Debt held by an Affiliate if the terms of
such Debt are substantially as favorable to such Vencor Company as the
terms which could have been obtained at the time of the creation of
such Debt from a lender which was not an Affiliate;
(d) any Vencor Company from participating in, or effecting any
transaction in connection with, any joint enterprise or other joint
arrangement with any Affiliate if such Vencor Company participates in
the ordinary course of its business and on a basis no less advantageous
than the basis on which such Affiliate participates;
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(e) any Vencor Company from maintaining, entering into or adopting
any executive or employee incentive or compensation plan, contract or
other arrangement (including any loans or extensions of credit in
connection therewith), or any arrangement to terminate any of the
foregoing, if such plan, contract, or arrangement has been or is
approved either (i) at any time by the shareholders of Vencor or, prior
to the Initial Closing Date, by the shareholders of TheraTx, in each
case in accordance with such voting requirements as may be applicable,
or (ii) at any time by the board of directors of Vencor or, prior to
the Initial Closing Date, by the board of directors of TheraTx (or in
each case a duly constituted committee of such board) at a meeting at
which a quorum of disinterested directors is present;
(f) any Vencor Company from making any loan, guarantee or other
accommodation in accordance with Vencor's policies and practices
concerning employee relocation in the ordinary course of its
business;
(g) performance of the Affiliate Agreements; or
(h) any Vencor Company from contributing capital and/or making loans
to an Affiliate to finance the operation by it of a hospital in the
Midwestern Region of the United States, which hospital is to be leased
by it; provided that (i) the sum of such capital contributions and the
aggregate outstanding principal amount of such loans shall not at any
time exceed $10,000,000 and (ii) immediately after each such capital
contribution or loan is made, the sum of (A) the aggregate amount of
all Investments in Minority-Owned Affiliates made pursuant to Section
5.12(a)(iv) plus (B) the aggregate amount of all Investments made
pursuant to this clause (h) does not exceed 7% of Consolidated Net
Worth.
SECTION 5.14. Limitation on Restrictions Affecting Subsidiaries. No
Vencor Company will enter into, or suffer to exist, any agreement (other than
the Financing Documents) which prohibits or limits the ability of any Subsidiary
(other than Atria and its Subsidiaries) to (i) pay dividends or make other
distributions or pay any Debt owed to any Vencor Company, (ii) make loans or
advances to any Vencor Company or (iii) create, incur, assume or suffer to exist
any Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, to secure the obligations of any Vencor Company under any
Financing Document; provided that the foregoing shall not prohibit any such
prohibition or limitation contained in:
(a) the ▇▇▇▇▇ Guarantee Reimbursement Agreement, insofar as the
provisions thereof in effect immediately before the Initial
Closing Date limit grants to other Persons of Liens on assets of
any Vencor Company that was formerly a Subsidiary of Hillhaven;
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(b) the reimbursement and other agreements relating to existing
letters of credit issued to support outstanding industrial revenue
bonds the proceeds of which were used by First Healthcare and its
Subsidiaries to acquire the Valley Gardens Health Care Center
located in Stockton, California and the Meridian House retirement
housing facility located in Lantan, Florida, insofar as the
provisions thereof in effect on the Initial Closing Date prohibit
distributions to partners of the partnerships which own such
facilities unless certain cash flow tests have been satisfied;
(c) any document relating to Debt secured by a Lien permitted by
Section 5.09, insofar as the provisions thereof limit grants of
junior liens on the assets securing such Debt;
(d) any agreement relating to IRB Debt insofar as the provisions
thereof limit grants to other Persons of Liens on the related health
care facility or on any such IRB Debt held by the remarketing agent
with respect thereto (or, in cases where the obligor thereon is a
partnership, on any other assets of such partnership);
(e) any operating lease or capital lease, insofar as the
provisions thereof limit grants of a security interest in, or
other assignments of, the related leasehold interest to any other
Person;
(f) if a Person becomes a Subsidiary of Vencor after the date
hereof, any agreement that is binding on such Person and was not
entered into in contemplation of its becoming a Subsidiary of
Vencor, insofar as such agreement limits such Person's ability to
take any action described in clause (i), (ii) or (iii) of this
Section, provided that either:
(1) such limitation is terminated within 60 days
after such Person becomes a Subsidiary of Vencor or
(2) not more than 5% of Consolidated EBITDA for any
period of four consecutive Fiscal Quarters is
attributable, in the aggregate, to Persons that become
Subsidiaries of Vencor after the date hereof and remain
subject to such limitations more than 60 days after
becoming Subsidiaries of Vencor; and
(g) the Parent Guaranty, insofar as the provisions thereof
require that, if Vencor secures any Consolidated Debt for Borrowed
Money under this Agreement, it must secure its obligations under
the Parent Guaranty equally and
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ratably with such Consolidated Debt for Borrowed Money; provided that
the foregoing provision of the Parent Guaranty shall not in any event
apply to any of the assets included or required to be included in the
Collateral pursuant to subsections (A), (B), (C), (D), (E) and (F) of
Section 3 of the Security Agreement as in effect on the Initial Closing
Date or any proceeds of such Collateral.
SECTION 5.15. No Modification of Certain Documents Without Consent.
(a) No Vencor Company will consent to or solicit any amendment or supplement to,
or any waiver or other modification of, any Affiliate Agreement if the effect
thereof would be to increase the amount, or to accelerate the date of payment,
of any obligation of any of the Vencor Companies thereunder.
(b) No Vencor Company will consent to or solicit any amendment or
supplement to, or any waiver or other modification of, any agreement or
instrument evidencing or governing TheraTx's 8% Convertible Subordinated Notes
due 2002 if the effect thereof would be adverse in any respect to the Banks.
SECTION 5.16. Minimum Consolidated Net Worth. Consolidated Net Worth
will at no time be less than the Minimum Compliance Level. The "Minimum
Compliance Level" means, at any date (the "date of determination"), an amount
equal to the sum of (i) $637,000,000 plus (ii) for each Fiscal Quarter ended
after December 31, 1996 and on or prior to the date of determination for which
Consolidated Net Income is a positive number, an amount equal to 50% of such
positive number plus (iii) 50% of each amount by which Consolidated Net Worth
shall have been increased after December 31, 1996 and on or prior to the date of
determination as a result of any issuance or sale of Equity Securities of Vencor
or any conversion of convertible Debt of Vencor. The Minimum Compliance Level
shall not be reduced if Consolidated Net Income for any Fiscal Quarter is a
negative number.
SECTION 5.17. Leverage Ratio. At the end of each Fiscal Quarter
(a "Quarterly Measurement Date"), the ratio of (x) Consolidated Debt for
Borrowed Money to (y) Consolidated EBITDA for the four consecutive Fiscal
Quarters then ended will not exceed the ratio set forth below opposite the
period in which such Quarterly Measurement Date falls:
Period Ratio
------ -----
Initial Closing Date through December 30, 1998 4.00 to 1
December 31, 1998 through December 30, 1999 3.75 to 1
December 31, 1999 through December 30, 2000 3.50 to 1
December 31, 2000 and thereafter 3.25 to 1
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For purposes of calculating the foregoing ratio at any Quarterly
Measurement Date, if any corporation or other entity shall have been
acquired by any Vencor Company during the relevant period of four
consecutive Fiscal Quarters, Consolidated EBITDA for such period shall be
calculated as if such corporation or other entity had been acquired at the
beginning of such period, to the extent that the relevant financial
information with respect to it for the portion of such period prior to such
acquisition can be determined with reasonable accuracy.
SECTION 5.18. Fixed Charge Coverage Ratio. At the end of each
Fiscal Quarter (a "Quarterly Measurement Date"), the ratio of (i)
Consolidated EBITDAR for the four consecutive Fiscal Quarters then ended to
(ii) the sum of Consolidated Interest Expense and Consolidated Rental
Expense for the same four Fiscal Quarters will not be less than the ratio
set forth below opposite the period in which such Quarterly Measurement
Date falls:
Period Ratio
------ -----
Initial Closing Date through December 30, 1998 2.50 to 1
December 31, 1998 and thereafter 2.75 to 1
SECTION 5.19. Reduction of Amount of Parent Guaranty. Vencor
will cause the maximum amount guaranteed by it pursuant to the Parent
Guaranty to be reduced as and when provided in Section 2.2 of the Parent
Guaranty (and will not elect to defer any such reduction or reduce the
amount of any such reduction); provided that Vencor may elect to defer all
or any portion of any such reduction for a period not exceeding 12 months.
SECTION 5.20. Designation of Material Subsidiaries. (a)
Vencor's Material Subsidiaries as of the Amendment Effective Date are
listed on Schedule IV hereto. After the Amendment Effective Date, Vencor
shall, by notice to the Agents, designate additional Subsidiaries as
Material Subsidiaries if and when required so that the sum of the total
assets of each Subsidiary that is not a Material Subsidiary (or, if any
such Subsidiary itself has Subsidiaries, the consolidated total assets of
such Subsidiary and its Consolidated Subsidiaries), in each case determined
as of the date of the most recent financial statements delivered to the
Banks pursuant to Section 4.04 or 5.01, does not exceed 10% of the
consolidated total assets of Vencor and its Consolidated Subsidiaries at
such date.
(b) Vencor may from time to time, by notice to the Agents,
terminate the status of any Subsidiary as a Material Subsidiary; provided
that, immediately after such notice is given and after giving effect
thereto, (i) no Default shall have occurred and be continuing and (ii) the
conditions specified in subsection (a) of this Section would have been
satisfied as of the date of the most recent financial statements delivered
to the Banks pursuant to Section 4.04 or 5.01.
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SECTION 5.21. Guaranty by Future Wholly-Owned Material
Subsidiaries. Within five Domestic Business Days after any Person becomes
a Wholly-Owned Material Subsidiary, Vencor shall (i) cause such Wholly-
Owned Material Subsidiary to guarantee Vencor's obligations hereunder
pursuant to a Subsidiary Guaranty Agreement and (ii) deliver to the
Documentation Agent such legal opinions and other documents as the
Documentation Agent may reasonably request relating to the existence of
such Wholly- Owned Material Subsidiary, the corporate authority for and
validity of its Subsidiary Guaranty and any other matters relevant thereto,
all in form and substance satisfactory to the Documentation Agent.
SECTION 5.22. Pledge of Stock of Future Material Subsidiaries.
Within five Domestic Business Days after any Person becomes a Material
Subsidiary:
(i) Vencor shall sign and deliver to the Collateral Agent a
Security Agreement Supplement granting (or confirming its grant
of) a security interest in all Equity Interests in such Material
Subsidiary beneficially owned by Vencor (and specifying that such
Equity Interests constitute Required Collateral under the Security
Agreement) and shall comply with the provisions of Section 4 of
the Security Agreement relating to the delivery of such Required
Collateral;
(ii) Vencor shall cause each Subsidiary Guarantor that
beneficially owns any Equity Interests in such Material Subsidiary
to sign and deliver to the Collateral Agent a Security Agreement
Supplement in which (x) such Subsidiary Guarantor grants (or
confirms its grant of) a security interest in such Equity
Interests (and specifies that such Equity Interests constitute
Required Collateral under the Security Agreement) to secure its
Subsidiary Guaranty and (y) if such Subsidiary Guarantor is not
already a Subsidiary Grantor under the Security Agreement, it
agrees to be a Subsidiary Grantor thereunder; and
(iii) Vencor shall deliver to the Documentation Agent such legal
opinions and other documents as the Documentation Agent may
reasonably request relating to the existence of such Material
Subsidiary, the corporate or partnership authority for and
validity of the foregoing security interests in its Equity
Interests (and the foregoing Security Agreement Supplements) and
any other matters relevant thereto, all in form and substance
satisfactory to the Documentation Agent;
SECTION 5.23. No Change of Fiscal Periods. Vencor will not
change the date on which any of its Fiscal Years or Fiscal Quarters ends,
unless the Required Banks shall have consented to such change (which
consent may be conditioned on the amendment of any covenant herein that
would be affected by such change to eliminate the effect thereof).
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SECTION 5.24. TheraTx's 8% Convertible Subordinated Notes.
Vencor shall cause TheraTx to mail to all registered holders of TheraTx's
8% Convertible Subordinated Notes due 2002, as and when required pursuant
to Section 16.2 of the Indenture dated as of February 15, 1995 between
TheraTx and First National Bank of Boston, the notice of repurchase right
required thereby.
ARTICLE 6
DEFAULTS
SECTION 6.01. Defaults. If one or more of the following events
("Events of Default") shall have occurred and be continuing:
(a) any principal of any Loan, Swingline Loan or LC Reimbursement
Obligation shall not be paid when due, or any interest, fee or other
amount payable hereunder shall not be paid within three Domestic
Business Days after the due date thereof; or
(b) Vencor shall fail to observe or perform any covenant
contained in Section 5.01(e), Section 5.01(f) or Sections 5.07
through 5.23, inclusive; or
(c) Vencor shall fail to observe or perform any of its covenants or
agreements contained in the Financing Documents (other than those
covered by clause (a) or (b) above) for 30 days after written notice
thereof has been given to Vencor by the Documentation Agent at the
request of any Bank; or
(d) any representation, warranty, certification or statement made
by any Vencor Company in any Financing Document or in any
certificate, financial statement or other document delivered
pursuant thereto shall prove to have been incorrect in any
material respect when made; or
(e) the Vencor Companies shall fail to make one or more payments
in respect of Material Debt when due or within any period of grace
applicable to such payments; or
(f) any event or condition (other than the Tender Offer, the Merger
and the change in control of TheraTx and its Subsidiaries effected
thereby) shall occur that (i) results in the acceleration of the
maturity of any Financial Accommodation, or (ii) enables the holder or
holders of such Financial Accommodation or any Person acting on behalf
of such holder or holders to accelerate the maturity thereof, and the
aggregate amount that would be payable by the Vencor Companies upon the
acceleration of all Financial Accommodations referred to in clauses (i)
and (ii) above equals or exceeds $25,000,000; or
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(g) any Vencor Company shall commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief
with respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part
of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an
involuntary case or other proceeding commenced against it, 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 corporate action to authorize any of the foregoing; or
(h) an involuntary case or other proceeding shall be commenced
against any Vencor Company seeking liquidation, reorganization or
other relief with respect to it or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part
of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of 60 days; or
an order for relief shall be entered against any Vencor Company
under the Federal bankruptcy laws as now or hereafter in effect;
or
(i) any member of the ERISA Group shall fail to pay when due an
amount or amounts aggregating in excess of $1,000,000 which it
shall have become liable to pay under Title IV of ERISA; or notice
of intent to terminate a Material Plan shall be filed under Title
IV of ERISA by any member of the ERISA Group, any plan
administrator or any combination of the foregoing; or the PBGC
shall institute proceedings under Title IV of ERISA to terminate,
to impose liability (other than for premiums under Section 4007 of
ERISA) in respect of, or to cause a trustee to be appointed to
administer any Material Plan; or a condition shall exist by reason
of which the PBGC would be entitled to obtain a decree
adjudicating that any Material Plan must be terminated; or there
shall occur a complete or partial withdrawal from, or a default,
within the meaning of Section 4219(c)(5) of ERISA, with respect
to, one or more Multiemployer Plans which could cause one or more
members of the ERISA Group to incur a current payment obligation
in excess of $1,000,000; or
(j) one or more Enforceable Judgments for the payment of money
aggregating in excess of $20,000,000 shall be rendered against one
or more of the Vencor Companies (net of any portion thereof
covered by insurance as to which the insurance carrier has
acknowledged its responsibility); or
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(k) any Person or group of Persons (within the meaning of Section 13
or 14 of the Securities Exchange Act of 1934, as amended) shall have
acquired beneficial ownership (within the meaning of Rule 13d-3
promulgated by the SEC under said Act) of 35% or more of the
outstanding shares of common stock of Vencor; or, during any period of
24 consecutive calendar months, individuals who were members of the
board of directors of Vencor or Hillhaven on the first day of such
period shall cease to constitute a majority of the board of directors
of Vencor; or
(l) any Lien created by any of the Collateral Documents shall at
any time fail to constitute a valid and perfected Lien on all of
the Collateral purported to be subject to such Lien, subject to no
prior or equal Lien (except Permitted Liens on Optional Additional
Collateral) or any Vencor Company shall so assert in writing; or
(m) any provision of any Subsidiary Guaranty Agreement shall
cease to be in full force and effect or any Vencor Company, or any
Person acting on behalf of any Vencor Company, shall so assert in
writing;
then, and in every such event, the Documentation Agent shall:
(i) if requested by Banks having more than 50% in aggregate
amount of the Commitments, by notice to Vencor terminate the
Commitments and the Swingline Commitment and they shall thereupon
terminate;
(ii) if requested by Banks having more than 50% of the aggregate
amount of the LC Exposures, by notice to each LC Issuing Bank instruct
such LC Issuing Bank (x) not to extend the expiry date of any
outstanding Letter of Credit and/or (y) in the case of any Evergreen
Letter of Credit, to give notice to the beneficiary thereof terminating
such Letter of Credit as soon as is permitted by the provisions
thereof, whereupon such LC Issuing Bank shall deliver notice to that
effect promptly (or as soon thereafter as is permitted by the
provisions of the relevant Letter of Credit) to the beneficiary of each
such Letter of Credit and Vencor; and
(iii) if requested by Banks holding more than 50% in aggregate
outstanding principal amount of the Loans, by notice to Vencor
declare the Loans and the Swingline Loans (in each case together
with accrued interest thereon) to be, and they shall thereupon
become, immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby
waived by Vencor;
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provided that in the case of an Event of Default specified in Section
6.01(g) or (h) with respect to Vencor, without any notice to Vencor or any
other act by the Documentation Agent or the Banks, the Commitments and the
Swingline Commitment shall thereupon terminate and the Loans and the
Swingline Loans (in each case together with accrued interest thereon) shall
become immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by Vencor.
SECTION 6.02. Notice of Default. The Documentation Agent shall
give notice to Vencor under Section 6.01(c) promptly upon being requested
to do so by any Bank and shall thereupon notify all the Banks thereof.
SECTION 6.03. Cash Cover. Vencor agrees, in addition to the
provisions of Section 6.01, that upon the occurrence and during the
continuance of any Event of Default, it shall, if requested by the
Documentation Agent upon instruction from Banks having more than 50% of the
aggregate amount of the LC Exposures, pay (and, in the case of any of the
Events of Default specified in Section 6.01(g) or (h) with respect to
Vencor, forthwith, without any demand or the taking of any other action by
the Documentation Agent or any Bank, it shall pay) to the Collateral Agent
an amount in immediately available funds equal to the then aggregate amount
available for subsequent drawings under all outstanding Letters of Credit
issued for the account of Vencor to be held for the benefit of the Banks
and the LC Issuing Banks in accordance with the Collateral Documents to
secure the payment of all LC Reimbursement Obligations arising from
subsequent drawings under such Letters of Credit.
ARTICLE 7
THE AGENTS
SECTION 7.01. Appointment and Authorization. (a) Each Bank
irrevocably appoints the Documentation Agent to act as its agent in
connection herewith and authorizes the Documentation Agent to take such
action as agent on such Bank's behalf and to exercise such powers under the
Financing Documents as are delegated to the Documentation Agent by the
terms thereof, together with all such powers as are reasonably incidental
thereto.
(b) Each Bank irrevocably appoints the Administrative Agent to
act as its agent in connection herewith and authorizes the Administrative
Agent to take such action as agent on such Bank's behalf and to exercise
such powers under the Financing Documents as are delegated to the
Administrative Agent by the terms thereof, together with all such powers as
are reasonably incidental thereto.
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(c) Each of the Banks, the LC Issuing Banks, the Documentation
Agent and the Administrative Agent authorizes the Collateral Agent to
execute the Collateral Documents and irrevocably appoints and authorizes
the Collateral Agent to take such action as agent on its behalf and to
exercise such powers under the Collateral Documents as are delegated to the
Collateral Agent by the terms thereof, together with all such powers as are
reasonably incidental thereto.
SECTION 7.02. Agents and Affiliates. Each of ▇▇▇▇▇▇ and
NationsBank shall have the same rights and powers under this Agreement as
any other Bank and may exercise or refrain from exercising the same as
though it were not one of the Agents. Each of ▇▇▇▇▇▇ and NationsBank and
their respective affiliates may accept deposits from, lend money to, and
generally engage in any kind of business with any of the Vencor Companies
or their Affiliates as if it were not one of the Agents.
SECTION 7.03. Action by Agents. The obligations of each of the
Agents under the Financing Documents are only those expressly set forth
therein with respect to it. Without limiting the generality of the
foregoing, none of the Agents shall be required to take any action with
respect to any Default, except as expressly provided in Article 6 hereof
and in the Collateral Documents.
SECTION 7.04. Consultation with Experts. Each of the Agents may
consult with legal counsel (who may be counsel for Vencor), independent
public accountants and other experts selected by it and shall not be liable
for any action taken or omitted to be taken by it in good faith in
accordance with the advice of such counsel, accountants or experts.
SECTION 7.05. Liability of Agents. None of the Agents or their
respective affiliates or their respective directors, officers, agents or
employees shall be liable for any action taken or not taken by it in
connection with the Financing Documents (A) with the consent or at the
request of the Required Banks or (B) in the absence of its own gross
negligence or willful misconduct. None of the Agents or their respective
affiliates or their respective directors, officers, agents or employees
shall be responsible for or have any duty to ascertain, inquire into or
verify (i) any statement, warranty or representation made in connection
with any Financing Document or any Credit Event; (ii) the performance or
observance of any of the covenants or agreements of any Vencor Company
under any Financing Document; (iii) the satisfaction of any condition
specified in Article 3 except, in the case of the Documentation Agent,
receipt of items required to be delivered to it; (iv) the validity,
effectiveness or genuineness of any Financing Document or any other
instrument or writing furnished in connection therewith; or (v) the
existence, genuineness or value of any of the Collateral or the validity,
perfection, priority or enforceability of any Lien on any of the
Collateral. None of the Agents shall incur any liability by acting in
reliance upon any notice, consent, certificate, statement, or other writing
(which may be
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a bank wire, telex, facsimile copy or similar writing) believed by it to be
genuine or to be signed by the proper party or parties.
SECTION 7.06. Indemnification. The Banks shall, ratably in
accordance with their respective Credit Exposures, indemnify each Agent,
their respective affiliates and their respective directors, officers,
agents and employees (to the extent not reimbursed by Vencor) against any
cost, expense (including reasonable counsel fees and disbursements), claim,
demand, action, loss or liability (except such as result from such
indemnitee's gross negligence or willful misconduct) that such indemnitee
may suffer or incur in connection with the Financing Documents or any
action taken or omitted by such indemnitees thereunder.
SECTION 7.07. Credit Decision. Each Bank acknowledges that it
has, independently and without reliance upon the Agents or any other Bank,
and based on such documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement.
Each Bank also acknowledges that it will, independently and without
reliance upon the Agents or any other Bank, and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking any action under the Financing
Documents.
SECTION 7.08. Agents' Fees. Vencor shall pay fees to each of the
Agents in the amounts and at the times agreed to by Vencor and such Agent.
SECTION 7.09. Successor Agents. Each of the Agents may resign at
any time (a "Retiring Agent") by giving notice thereof to the Banks, the
other Agents and Vencor. Upon any such resignation, the Required Banks
shall have the right to appoint a successor for the Retiring Agent (a
"Successor Agent"). If no Successor Agent shall have been so appointed by
the Required Banks, and shall have accepted such appointment, within 30
days after the Retiring Agent gives notice of resignation, then the
Retiring Agent may, on behalf of the Banks, appoint a Successor Agent,
which shall be a Bank or any other commercial bank organized or licensed
under the laws of the United States or of any State thereof and having a
combined capital and surplus of at least $500,000,000. Upon the acceptance
of its appointment as a Successor Agent, such Successor Agent shall
thereupon succeed to and become vested with all the rights and duties of
the Retiring Agent, and the Retiring Agent shall be discharged from its
duties and obligations hereunder. After any Retiring Agent resigns as an
Agent hereunder, the provisions of this Article 7 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
one of the Agents.
SECTION 7.10. Collateral Agent. (a) As to any matters not
expressly provided for in the Collateral Documents (including the timing
and methods of realization upon the Collateral), the Collateral Agent shall
act or refrain from acting in accordance with written
89
instructions from the Required Banks or, in the absence of such instructions, in
accordance with its discretion; provided that the Collateral Agent shall not be
obligated to take any action if the Collateral Agent believes that such action
is or may be contrary to any applicable law or might cause the Collateral Agent
to incur any loss or liability for which it has not been indemnified to its
satisfaction.
(b) The Collateral Agent shall not be responsible for the
existence, genuineness or value of any of the Collateral or for the
validity, perfection, priority or enforceability of any Lien on any of the
Collateral, whether impaired by operation of law or by reason of any action
or omission to act on its part under the Collateral Documents. The
Collateral Agent shall have no duty to ascertain or inquire as to the
performance or observance of any of the terms of the Collateral Documents
by the Vencor Companies.
SECTION 7.11. Obligations of Managing Agents and Co-Agents. The
Managing Agents and Co-Agents, in their capacities as such, shall have no
duties, obligations or liabilities of any kind hereunder.
ARTICLE 8
CHANGES IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate Inadequate or
Unfair. If on or prior to the first day of any Interest Period for any
Euro-Dollar Loan, CD Loan or Money Market LIBOR Loan:
(a) the Administrative Agent is advised by NationsBank that
deposits in dollars (in the applicable amounts) are not being
offered to it in the relevant market for such Interest Period, or
(b) in the case of Euro-Dollar Loans or CD Loans, Banks holding
Notes evidencing 50% or more of the aggregate outstanding
principal amount of the Loans to which such Interest Period will
apply advise the Administrative Agent that the London Interbank
Offered Rate or the Adjusted CD Rate, as the case may be, as
determined by the Administrative Agent will not adequately and
fairly reflect the cost to such Banks of funding their Euro-Dollar
Loans or CD Loans, as the case may be, for such Interest Period,
the Administrative Agent shall forthwith give notice thereof to Vencor and
the Banks, whereupon until the Administrative Agent notifies Vencor that
the circumstances giving rise to such suspension no longer exist, (i) the
obligations of the Banks to make Euro-Dollar Loans or CD Loans, as the case
may be, or to convert outstanding Loans to
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Euro-Dollar Loans or CD Loans, as the case may be, shall be suspended and (ii)
each outstanding Euro-Dollar Loan or CD Loan, as the case may be, shall be
converted into a Base Rate Loan on the last day of the then current Interest
Period applicable thereto. Unless Vencor notifies the Administrative Agent at
least two Domestic Business Days before the date of any affected Borrowing for
which a Notice of Borrowing has previously been given that it elects not to
borrow on such date, (i) if such affected Borrowing is a CD Borrowing or Euro-
Dollar Borrowing, such Borrowing shall instead be made as a Base Rate Borrowing
and (ii) if such affected Borrowing is a Money Market LIBOR Borrowing, the Money
Market LIBOR Loans comprising such Borrowing shall bear interest for each day
from and including the first day to but excluding the last day of the Interest
Period applicable thereto at the Base Rate for such day.
SECTION 8.02. Illegality. If, on or after the Amendment Effective
Date, the adoption of any applicable law, rule or regulation, or any change in
any applicable law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Bank (or its Euro-Dollar Lending Office) with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency shall make it unlawful or impossible for any Bank (or its
Euro-Dollar Lending Office) to make, maintain or fund its Euro-Dollar Loans and
such Bank shall so notify the Administrative Agent, the Administrative Agent
shall forthwith give notice thereof to the other Banks and Vencor, whereupon
until such Bank notifies Vencor and the Administrative Agent that the
circumstances giving rise to such suspension no longer exist, the obligation of
such Bank to make Euro-Dollar Loans, or to convert outstanding Base Rate Loans
or CD Loans into Euro-Dollar Loans, shall be suspended. Before giving any notice
to the Administrative Agent pursuant to this Section, such Bank shall designate
a different Euro-Dollar Lending Office if such designation will avoid the need
for giving such notice and will not, in the judgment of such Bank, be otherwise
disadvantageous to such Bank. If such notice is given, each Euro-Dollar Loan of
such Bank then outstanding shall be converted to a Base Rate Loan either (i) on
the last day of the then current Interest Period applicable to such Euro-Dollar
Loan if such Bank may lawfully continue to maintain and fund such Loan to such
day or (ii) immediately if such Bank shall determine that it may not lawfully
continue to maintain and fund such Loan to such day.
SECTION 8.03. Increased Cost and Reduced Return. (a) If, on or after
(x) the Amendment Effective Date in the case of any Committed Loan or Letter of
Credit or any obligation to make Committed Loans or Swingline Loans or
participate in Letters of Credit or (y) the date of the related Money Market
Quote, in the case of any Money Market Loan, the adoption of any applicable law,
rule or regulation, or any change in any applicable law, rule or regulation, or
any change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with
91
the interpretation or administration thereof, or compliance by any Bank Party
(other than the Agents) with any request or directive (whether or not having the
force of law) of any such authority, central bank or comparable agency, shall
impose, modify or deem applicable any reserve, special deposit, insurance
assessment or similar requirement (including any such requirement imposed by the
Board of Governors of the Federal Reserve System but excluding (i) with respect
to any Euro-Dollar Loan, any such requirement included in an applicable Euro-
Dollar Reserve Percentage and (ii) with respect to any CD Loan, any such
requirement included in an applicable Domestic Reserve Percentage) against
assets of, deposits with or for the account of, or credit extended by, any Bank
Party (other than the Agents) or shall impose on any Bank Party (other than the
Agents) or the London interbank market or the United States market for
certificates of deposit any other condition affecting its Fixed Rate Loans, its
Note, its obligation to make Fixed Rate Loans or Swingline Loans, or its
obligation to participate in any Letter of Credit, and the result of any of the
foregoing is to increase the cost to such Bank Party of making or maintaining
its Fixed Rate Loans or participating in any Letter of Credit or increase the
cost to the Swingline Bank of maintaining the Swingline Commitment or to reduce
the amount of any sum received or receivable by such Bank Party under this
Agreement or under its Note with respect thereto, by an amount deemed by such
Bank Party to be material, then, within 15 days after demand by such Bank Party
(with a copy to the Administrative Agent), Vencor shall pay to such Bank Party
such additional amount or amounts as will compensate such Bank Party for such
increased cost or reduction; provided that Vencor shall not be liable to any
Bank Party in respect of any such increased cost or reduction with respect to
any period of time more than three months before Vencor receives the notice
required by the first sentence of Section 8.03(c) or more than six months before
Vencor receives the relevant certificate referred to in the second sentence of
Section 8.03(c).
(b) If any Bank Party (other than the Agents) shall have determined
that, after the Amendment Effective Date, the adoption of any applicable law,
rule or regulation regarding capital adequacy, or any change in any such law,
rule or regulation, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or any request or directive
regarding capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or would have the effect of
reducing the rate of return on capital of such Bank Party (or its Parent) as a
consequence of such Bank's obligations hereunder to a level below that which
such Bank Party (or its Parent) could have achieved but for such adoption,
change, request or directive (taking into consideration its policies with
respect to capital adequacy) by an amount deemed by such Bank Party to be
material, then from time to time, within 15 days after demand by such Bank Party
(with a copy to the Administrative Agent), Vencor shall pay to such Bank Party
such additional amount or amounts as will compensate it for such reduction;
provided that Vencor shall not be liable to any Bank Party in respect of any
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such reduction with respect to any period of time more than three months prior
to the date of the notice required by the first sentence of Section 8.03(c).
(c) Each Bank Party (other than the Agents) will promptly notify
Vencor and the Administrative Agent of any event of which it has knowledge,
occurring after the Amendment Effective Date, which will entitle it to
compensation pursuant to this Section 8.03 and will designate a different
Applicable Lending Office or LC Office if such designation will avoid the need
for, or reduce the amount of, such compensation and will not, in the judgment of
such Bank Party, be otherwise disadvantageous to it. A certificate of any such
Bank Party claiming compensation under this Section 8.03 and setting forth the
additional amount or amounts to be paid to it hereunder, showing the calculation
thereof in reasonable detail, shall be conclusive in the absence of manifest
error. In determining such amount, such Bank Party may use any reasonable
averaging and attribution methods.
SECTION 8.04. Taxes. (a) Any and all payments by Vencor to or
for the account of any Bank Party hereunder or under any other Financing
Document shall be made free and clear of and without deduction for any and
all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in the
case of each Bank Party, taxes imposed on its income, and franchise or
similar taxes imposed on it, by (i) the jurisdiction under the laws of
which it is organized or any political subdivision thereof, (ii) in the
case of each Bank or the Swingline Bank, the jurisdiction of its Applicable
Lending Office or any political subdivision thereof and (iii) in the case
of each LC Issuing Bank, the jurisdiction of its LC Office or any political
subdivision thereof (all such non-excluded taxes, duties, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter
referred to as "Taxes"). If Vencor shall be required by law to deduct any
Taxes from or in respect of any sum payable hereunder or under any other
Financing Document to any Bank Party, (i) the sum payable shall be
increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this
Section 8.04) such Bank Party receives an amount equal to the sum it would
have received had no such deductions been made, (ii) Vencor shall make
such deductions, (iii) Vencor shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with
applicable law, and (iv) Vencor shall furnish to the Administrative Agent,
at its address specified in or pursuant to Section 9.01, the original or a
certified copy of a receipt evidencing payment thereof.
(b) In addition, Vencor agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, or
charges or similar levies which arise from any payment made hereunder or
under any other Financing Document or from the execution or delivery of, or
otherwise with respect to, this Agreement or any other Financing Document
(hereinafter referred to as "Other Taxes").
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(c) Vencor agrees to indemnify each Bank Party for the full
amount of Taxes or Other Taxes (including any Taxes or Other Taxes imposed
or asserted by any jurisdiction on amounts payable under this Section 8.04)
paid by such Bank Party and any liability (including penalties, interest
and expenses) arising therefrom or with respect thereto. This
indemnification shall be made within 15 days from the date such Bank Party
makes demand therefor.
(d) Each Bank Party organized under the laws of a jurisdiction
outside the United States, on or prior to the date of its execution and
delivery of this Amended Agreement in the case of each Bank Party listed on
the signature pages hereof and on or prior to the date on which it becomes
a Bank Party in the case of each other Bank Party, and from time to time
thereafter if requested in writing by Vencor (but only so long as such Bank
Party remains lawfully able to do so), shall provide Vencor and the
Administrative Agent with Internal Revenue Service form 1001 or 4224, as
appropriate, or any successor form prescribed by the Internal Revenue
Service, certifying that such Bank Party is entitled to benefits under an
income tax treaty to which the United States is a party which reduces the
rate of withholding tax on payments of interest or certifying that the
income receivable pursuant to this Agreement is effectively connected with
the conduct of a trade or business in the United States. If the form
provided by a Bank Party at the time such Bank Party first becomes a party
to this Agreement indicates a United States interest withholding tax rate
in excess of zero, withholding tax at such rate shall be considered
excluded from "Taxes" as defined in Section 8.04(a).
(e) For any period with respect to which a Bank Party has failed
to provide Vencor and the Administrative Agent with the appropriate form
pursuant to Section 8.04(d) (unless such failure is due to a change in
treaty, law or regulation occurring subsequent to the date on which a form
originally was required to be provided), such Bank Party shall not be
entitled to indemnification under Section 8.04(a) with respect to Taxes
imposed by the United States; provided that should a Bank Party, which is
otherwise exempt from or subject to a reduced rate of withholding tax,
become subject to Taxes because of its failure to deliver a form required
hereunder, Vencor shall take such steps as such Bank Party shall reasonably
request to assist such Bank Party to recover such Taxes.
(f) If Vencor is required to pay additional amounts to or for
the account of any Bank Party pursuant to this Section 8.04, then such Bank
Party will change the jurisdiction of its Applicable Lending Office or LC
Office, as the case may be, so as to eliminate or reduce any such
additional payment which may thereafter accrue if such change, in the sole
judgment of such Bank Party, is not otherwise disadvantageous to such Bank
Party.
(g) Without prejudice to the survival of any other agreement of
Vencor hereunder, the agreements and obligations of Vencor contained in
this Section 8.04 shall
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survive the payment in full of the principal of and interest on the Loans, the
Swingline Loans and the LC Reimbursement Obligations.
SECTION 8.05. Base Rate Loans Substituted for Affected Euro-
Dollar Loans. If (x) the obligation of any Bank to make or maintain Euro-
Dollar Loans has been suspended pursuant to Section 8.02 or (y) any Bank
has demanded compensation under Section 8.03 or 8.04 with respect to its
Euro-Dollar Loans and Vencor shall, by at least five Euro-Dollar Business
Days' prior notice to such Bank through the Administrative Agent, have
elected that the provisions of this Section 8.05 shall apply to such Bank,
then, unless and until such Bank notifies Vencor that the circumstances
giving rise to such suspension or demand for compensation no longer exist,
all Loans which would otherwise be made by such Bank as (or continued as or
converted into) Euro-Dollar Loans shall instead be Base Rate Loans (on
which interest and principal shall be payable contemporaneously with the
related Euro-Dollar Loans of the other Banks). If such Bank notifies
Vencor that the circumstances giving rise to such notice no longer apply,
the principal amount of each such Base Rate Loan shall be converted into a
Euro-Dollar Loan on the first day of the next succeeding Interest Period
applicable to the related Euro-Dollar Loans of the other Banks.
SECTION 8.06. Substitution of Banks. (a) If any Bank (a
"Selling Bank") (i) gives notice pursuant to Section 8.02 that it is
unlawful or impossible for such Bank to make, maintain or fund its Euro-
Dollar Loans or (ii) demands compensation under Section 2.08(l), 8.03 or
8.04, Vencor shall have the right, with the assistance of the Documentation
Agent and the Administrative Agent, to seek one or more banks or other
institutions (collectively, the "Purchasing Banks") willing to purchase the
outstanding Committed Loans of the Selling Bank and its participation in
any outstanding LC Reimbursement Obligations and to assume the Selling
Bank's Commitment and its participation in any outstanding Letters of
Credit on the terms specified in this Section 8.06; provided that any such
purchase and assumption by a Purchasing Bank that is not already a Bank
shall be subject to the consent of the Administrative Agent and each LC
Issuing Bank (which consents shall not be unreasonably withheld). The
Selling Bank shall be obligated to sell its outstanding Committed Loans and
its participation in any outstanding LC Reimbursement Obligations to such
Purchasing Bank or Banks (which may include one or more of the Banks)
within 15 days after receiving notice from Vencor requiring it to do so, at
an aggregate price equal to the outstanding principal amount thereof plus
unpaid interest accrued thereon up to but excluding the date of sale.
(b) In connection with any such sale, and as a condition
thereof, Vencor shall pay to the Selling Bank all facility fees and letter
of credit fees accrued for its account hereunder to but excluding the date
of such sale, plus, if demanded by the Selling Bank at least two Domestic
Business Days prior to such sale, (i) the amount of any compensation which
would be due to the Selling Bank under Section 2.15 if Vencor had prepaid
the
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outstanding Euro-Dollar Loans and CD Loans of the Selling Bank on the date
of such sale and (ii) any additional compensation accrued for its account
under Section 8.03 to but excluding said date.
(c) Upon any such sale, the Purchasing Bank or Banks shall
assume the Selling Bank's Commitment and its participation in any
outstanding Letters of Credit, and the Selling Bank shall be released from
its obligations hereunder to a corresponding extent. The Selling Bank, as
assignor, such Purchasing Bank, as assignee, the Administrative Agent and
each LC Issuing Bank shall enter into an appropriate assignment and
assumption agreement, whereupon (x) if such Purchasing Bank is already one
of the Banks, its Commitment shall be increased by an amount equal to its
ratable share of the Selling Bank's Commitment and its participations in
the outstanding Letters of Credit shall be increased by its ratable share
of the Selling Bank's participations therein or (y) if such Purchasing Bank
is not already one of the Banks, it shall become a Bank party to this
Agreement, shall be deemed to be an Assignee hereunder and shall have all
the rights and obligations of a Bank with a Commitment equal to its ratable
share of the Selling Bank's Commitment and with a participation in the
outstanding Letters of Credit equal to its ratable share of the Selling
Bank's participation in such Letters of Credit.
(d) Upon the consummation of any sale pursuant to this Section
8.06, the Selling Bank, the Administrative Agent and Vencor shall make
appropriate arrangements so that, if required, each Purchasing Bank
receives a new Note complying with the provisions of Section 2.05.
ARTICLE 9
MISCELLANEOUS
SECTION 9.01. Notices. Unless otherwise specified herein, all
notices, requests and other communications to any party under any Financing
Document shall be in writing (including bank wire, facsimile copy or
similar writing) and shall be given to such party at its address or
facsimile number set forth on the signature pages hereof (or, in the case
of any Bank, in its Administrative Questionnaire) or such other address or
facsimile number as such party may hereafter specify for the purpose by
notice to the Agents and Vencor. Each such notice, request or other
communication shall be effective (i) if given by facsimile transmission,
when transmitted to the facsimile number specified in or pursuant to this
Section 9.01 and confirmation of receipt is received, (ii) if given by
mail, ten days after such communication is deposited in the mails with
first class postage prepaid, addressed as aforesaid, or (iii) if given by
any other means, when delivered at the address specified in or pursuant to
this Section 9.01, provided that notices and requests to the
96
Documentation Agent or the Administrative Agent under Article 2, 6 or 8 shall
not be effective until received.
SECTION 9.02. No Waiver. No failure or delay by the Bank
Parties, or any of them, in exercising any right, power or privilege under
any Financing Document shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights
and remedies provided in the Financing Documents shall be cumulative and
not exclusive of any rights or remedies provided by law.
SECTION 9.03. Expenses; Indemnification. (a) Vencor shall pay
on demand (i) all reasonable out-of-pocket expenses of the Agents
(including reasonable fees and disbursements of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇,
special counsel for the Agents) in connection with the preparation and
administration of the Financing Documents, any waiver, consent or amendment
of any provision thereof, or any Default or alleged Default hereunder and
(ii) if any Event of Default occurs, all out-of-pocket expenses incurred by
any Bank Party, including fees and disbursements of counsel (including
internal charges reasonably allocated to services performed by in-house
counsel), in connection with such Event of Default and collection and other
enforcement proceedings resulting therefrom.
(b) Vencor shall indemnify each Bank Party, their respective
affiliates and the respective directors, officers, agents and employees of
the foregoing (each an "Indemnitee") and hold each Indemnitee harmless from
and against any and all liabilities, losses, damages, costs and expenses of
any kind (including the reasonable fees and disbursements of counsel for
any Indemnitee in connection with any investigative, administrative or
judicial proceeding, whether or not such Indemnitee shall be designated a
party thereto, and any Environmental Liabilities) which may be incurred by
any Indemnitee relating to or arising out of the Financing Documents or any
actual or proposed use of the proceeds of the Loans or the Letters of
Credit; provided that no Indemnitee shall have the right to be indemnified
hereunder for its own gross negligence or willful misconduct as determined
by a court of competent jurisdiction.
SECTION 9.04. Sharing of Set-offs. (a) Each Bank agrees that if
it shall, by exercising any right of set-off or counterclaim or otherwise,
receive (i) payment of a proportion of the aggregate amount of principal
and interest then due (or overdue) with respect to the Loans and
participations in LC Reimbursement Obligations held by it which is greater
than the proportion received by any other Bank in respect of the aggregate
amount of principal and interest then due (or overdue) with respect to the
Loans and participations in LC Reimbursement Obligations held by such other
Bank, the Bank receiving such proportionately greater payment shall
purchase such participations in the Loans and participations in LC
Reimbursement Obligations (as the case may be) held by the other Banks, and
such other adjustments shall be made, as may be required so that all
97
such payments of principal and interest with respect to the Loans and
participations in LC Reimbursement Obligations held by the Banks shall be
shared by the Banks pro rata.
(b) Nothing in this Section 9.04 shall impair the right of any
Bank to exercise any right of set-off or counterclaim it may have and to
apply the amount subject to such exercise to the payment of indebtedness of
Vencor other than its indebtedness in respect of the Loans and LC
Reimbursement Obligations.
(c) Vencor agrees, to the fullest extent it may effectively do
so under applicable law, that any holder of a participation in a Loan or LC
Reimbursement Obligation, whether or not acquired pursuant to the foregoing
arrangements, may exercise rights of set-off or counterclaim and other
rights with respect to such participation as fully as if such holder of a
participation were a direct creditor of Vencor in the amount of such
participation.
SECTION 9.05. Amendments and Waivers. (a) Any provision of this
Agreement, the Notes or the Swingline Note may be amended or waived if, but
only if, such amendment or waiver is in writing and is signed by Vencor and
the Required Banks (and, if the rights or duties of any Agent, the LC
Issuing Bank, any Additional Issuing Bank or the Swingline Bank are
affected thereby, by it); provided that no such amendment or waiver shall:
(i) unless signed by all the Banks, (A) increase or decrease the
Commitment of any Bank (except for a ratable decrease in the
Commitments of all the Banks) or subject any Bank to any
additional obligation; (B) reduce the principal of or rate of
interest on any Loan or LC Reimbursement Obligation or any fee
hereunder; (C) postpone the date fixed for any scheduled payment
or prepayment of principal of or interest on any Loan, Swingline
Loan or LC Reimbursement Obligation or any fee hereunder or for
any termination or reduction of the Commitments pursuant to
Section 2.13; (D) amend Section 9.03 or release Vencor from its
obligations thereunder; or (E) change the percentage of the
Commitments, the Credit Exposures, the LC Exposures or the
aggregate unpaid principal amount of the Loans, or the number of
Banks, which shall be required for the Banks or any of them to
take any action under this Section 9.05 or any other provision of
this Agreement;
(ii) unless signed by the Super-Majority Banks, release any
Subsidiary Guaranty or any Collateral, except as provided in
Section 5.10 of this Agreement and Section 16 of the Security
Agreement;
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(iii) unless signed by a Designated Money Market Lender or its
Designating Bank, subject any Designated Money Market Lender to
any additional obligation hereunder or otherwise affects its
rights hereunder; or
(iv) unless signed by the Swingline Bank and the Required Banks,
increase the Swingline Commitment, postpone the Swingline Maturity
Date or otherwise affect any of the Swingline Bank's rights or
obligations hereunder.
(b) Any provision of the Security Agreement may be amended as,
and only as, provided in Section 23 thereof. Any provision of any other
Collateral Document may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed or otherwise approved in
writing by Vencor and the Required Banks (and, if the rights or duties of
any Agent are affected thereby, by it).
SECTION 9.06. Successors and Assigns. (a) The provisions of
this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns, except that
Vencor may not assign or otherwise transfer any of its rights under this
Agreement without the prior written consent of all the Banks, the LC
Issuing Banks and the Swingline Bank.
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in its
Commitments or any or all of its Loans or its LC Exposure. If any Bank
grants a participating interest to a Participant, whether or not upon
notice to Vencor and the Agents, such Bank shall remain responsible for the
performance of its obligations hereunder, and Vencor and the Agents shall
continue to deal solely and directly with such Bank in connection with such
Bank's rights and obligations under the Financing Documents. Any agreement
pursuant to which any Bank may grant such a participating interest shall
provide that such Bank shall retain the sole right and responsibility to
enforce the obligations of Vencor under the Financing Documents, including
the right to approve any amendment, modification or waiver of any provision
of the Financing Documents; provided that such participation agreement may
provide that (A) such Bank will not agree to any modification, amendment or
waiver of this Agreement described in clause (i), (ii) or (iii) of Section
9.05(a) without the consent of the Participant and (B) such Bank will agree
to vote the Participant's participating interest with respect to any matter
requiring a vote of the Super-Majority Banks under the Security Agreement
as the Participant may direct. Vencor agrees that each Participant shall,
to the extent provided in its participation agreement, be entitled to the
benefits of Section 2.08(f) and Article 8 with respect to its participating
interest. An assignment or other transfer which is not permitted by
Section 9.06(c) or (d) shall be given effect for purposes of this Agreement
only to the extent of a participating interest granted in accordance with
this subsection (b).
99
(c) Any Bank may at any time assign to one or more banks or
other institutions (each an "Assignee") all, or a ratable portion (in the
case of each Assignee, equivalent to an initial Commitment of not less than
$15,000,000) of all, of its rights and obligations under this Agreement and
the Notes, and such Assignee shall assume such rights and obligations, with
(and subject to) the consent of Vencor, the Administrative Agent, each LC
Issuing Bank and the Swingline Bank (which consents shall not be
unreasonably withheld); provided that (i) if an Assignee is an affiliate of
such transferor Bank or is already a Bank immediately prior to such
assignment, no such consent shall be required, but written notice of such
assignment shall be given to the Administrative Agent and Vencor, (ii) such
assignment may be made to an Assignee that is already a Bank without regard
to the foregoing minimum assignment amount, (iii) such assignment may, but
need not, include rights of such transferor Bank in respect of outstanding
Money Market Loans and (iv) a Designated Money Market Lender may assign
Money Market Loans held by it to its Designating Bank without regard to the
foregoing minimum assignment amount and without the consent of any other
party. Upon execution and delivery of an appropriate instrument and
payment by such Assignee to such transferor Bank of an amount equal to the
purchase price agreed between such transferor Bank and such Assignee, such
Assignee shall be a Bank party to this Agreement and shall have all the
rights and obligations of a Bank with a Commitment as set forth in such
instrument of assumption, and the transferor Bank shall be released from
its obligations hereunder to a corresponding extent, and no further consent
or action by any party shall be required. Upon the consummation of any
assignment pursuant to this Section 9.06(c), the transferor Bank, the
Administrative Agent and Vencor shall make appropriate arrangements so
that, if required, a new Note complying with the provisions of Section 2.05
is issued to the Assignee. In connection with any such assignment, the
transferor Bank shall pay to the Administrative Agent an administrative fee
for processing such assignment in the amount of $2,500. If the Assignee is
not incorporated under the laws of the United States or a state thereof, it
shall deliver to Vencor and the Administrative Agent certification as to
exemption from deduction or withholding of United States federal income
taxes in accordance with Section 8.04.
(d) Any Bank may at any time assign all or any portion of its
rights under this Agreement and its Notes as security to a Federal Reserve
Bank. No such assignment shall release the transferor Bank from its
obligations hereunder.
(e) No Assignee, Participant or other transferee of any Bank's
rights shall be entitled to receive any greater payment under Section
2.08(l), 8.03 or 8.04 than such Bank would have been entitled to receive
with respect to the rights transferred, unless such transfer is made with
Vencor's prior written consent or by reason of the provisions of Section
8.02, 8.03 or 8.04 requiring such Bank to designate a different Applicable
Lending Office under certain circumstances or at a time when the
circumstances giving rise to such greater payment did not exist.
100
SECTION 9.07. Margin Stock. Each of the Banks represents to the
Agents and each of the other Banks that it in good faith is not relying
upon any Margin Stock (except the TheraTx Shares) as collateral in the
extension or maintenance of the credit provided for in this Agreement.
SECTION 9.08. Failure of Bank to Satisfy Minimum Rating
Condition. If at any time any Bank fails to satisfy the Minimum Rating
Condition, such Bank (a "NonComplying Bank") shall (i) promptly notify
Vencor, the Documentation Agent, the Administrative Agent and the LC
Issuing Banks thereof and (ii) assist Vencor in seeking one or more
Eligible Banks to purchase its outstanding Committed Loans and its
participation in any outstanding LC Reimbursement Obligations and to assume
its Commitment and its participation in any outstanding Letters of Credit.
If such a sale and assumption has not been effected within 60 days after
such Non-Complying Bank first fails to satisfy the Minimum Rating
Condition, then, for so long as such failure continues, such Non-Complying
Bank shall cause Eligible Collateral to be pledged, or letters of credit to
be issued by one or more Eligible Banks, in favor of each of the LC Issuing
Banks, in each case in an amount at least equal from time to time to such
Non-Complying Bank's Commitment Percentage of the aggregate amount that is
(or may thereafter become) available for drawing under all Letters of
Credit issued by such LC Issuing Bank and otherwise on terms satisfactory
to such LC Issuing Bank.
For purposes of this Section 9.08:
(i) the "Minimum Rating Condition" is satisfied by a Bank at
any time if (A) the issuer rating of such Bank or its Parent is
then at least "C" by ▇▇▇▇▇▇▇▇ BankWatch, Inc. (or its successors)
(or, in the case of any Bank organized under the laws of any
jurisdiction outside the United States, the individual rating of
the Bank or its Parent is then at least "C" by IBCA Limited (or
its successors)), (B) the scoring of such Bank or its Parent is
then at least "2" by ▇▇▇▇▇▇▇▇ BankWatch, Inc. (or its successors)
or (C) long-term unsecured public debt of such Bank or its Parent
is then rated at least "BBB" by S&P and at least "Baa2" by
▇▇▇▇▇'▇;
(ii) "Eligible Bank" means any bank or other financial
institution whose (or whose Parent's) long-term unsecured public
debt is rated at least "A-" by S&P or at least "A3" by ▇▇▇▇▇'▇;
and
(iii) "Eligible Collateral" means (A) cash, (B) direct
obligations of the United States or any agency thereof, or
obligations guaranteed by the United States or any agency thereof,
and (C) debt securities of an issuer incorporated under the laws
of the United States or any state thereof which are rated at least
101
"A" by S&P or "A1" by ▇▇▇▇▇'▇, in each case (except in the case of
cash) maturing not more than one year after such obligation or
security is pledged pursuant to this Section 9.08.
SECTION 9.09. Governing Law; Submission to Jurisdiction. This
Agreement, each Note and the Swingline Note shall be governed by and
construed in accordance with the laws of the State of New York. Vencor
hereby submits to the nonexclusive jurisdiction of the United States
District Court for the Southern District of New York and of any New York
State court sitting in New York City for purposes of all legal proceedings
arising out of or relating to this Agreement, the Notes or the Swingline
Note or the transactions contemplated hereby or thereby. Vencor
irrevocably waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of the venue of any such
proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.
SECTION 9.10. Counterparts; Integration. This Agreement and any
amendment to this Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the
signatures thereto were upon the same instrument. This Agreement (together
with the other Financing Documents) constitutes the entire agreement and
understanding among the parties hereto and supersedes any and all prior
agreements and understandings, oral or written, relating to the subject
matter hereof.
SECTION 9.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THE FINANCING DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED THEREBY. EACH PARTY HERETO (A) CERTIFIES THAT
NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT
IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT AND THE OTHER FINANCING DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.11.
SECTION 9.12. Confidentiality. Each Bank Party agrees to keep
the information contained in the Offering Memorandum and any other non-
public information delivered or made available by Vencor to it confidential
and to use such information only for the purpose of evaluating, approving,
structuring and administering the Loans, Swingline Loans and Letters of
Credit; provided that nothing herein shall prevent any Bank Party from
disclosing such information (i) to persons employed or retained by such
Bank Party who are engaged or expected to be engaged in evaluating,
approving, structuring or administering the Loans, Swingline Loans and
Letters of Credit, (ii) to any other person if
102
reasonably incidental to the administration of the Loans, Swingline Loans or
Letters of Credit, (iii) to any other Bank Party, (iv) pursuant to any subpoena
or express direction of any court or other authorized government agency or as
otherwise required by law, (v) upon the request or demand of any bank regulatory
agency, bank examiner or comparable authority, (vi) which has theretofore been
publicly disclosed or is otherwise available to such Bank Party on a non-
confidential basis from a source that is not, to its knowledge, subject to a
confidentiality agreement with Vencor, (vii) in connection with any litigation
to which any Bank Party or its subsidiaries or Parent may be a party, (viii) to
the extent necessary in connection with the exercise of any remedy hereunder,
(ix) to such Bank Party's affiliates, legal counsel and independent auditors and
(x) to any actual or proposed Participant or Assignee that has signed a written
agreement containing provisions substantially similar to this Section 9.12. Any
Bank Party that discloses confidential information to other Persons as
contemplated by clause (i), (ii) or (ix) of the foregoing proviso shall inform
such other Persons of the confidential nature of such information and shall
instruct them to keep such information confidential (except for disclosures
permitted by the foregoing proviso). Before any Bank Party discloses
confidential information pursuant to clause (iv) or (vii) of the foregoing
proviso, such Bank Party shall, to the extent permitted by law, advise Vencor of
such proposed disclosure so that Vencor may, in its discretion, seek an
appropriate protective order.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective authorized officers as of the day
and year first above written.
VENCOR, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President Finance &
Corporate Controller
Address: Vencor, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Address: Vencor, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Director of Finance
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
AGENTS
------
▇▇▇▇▇▇ GUARANTY TRUST
COMPANY OF NEW YORK, as
Documentation Agent and a Bank
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ GUARANTY TRUST
COMPANY OF NEW YORK, as
Collateral Agent
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Asset Finance Group
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
NATIONSBANK, N.A., as Administrative
Agent, Swingline Bank and a Bank
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President
For Wire Transfers:
------------------
ABA #▇▇▇▇▇▇▇▇▇
Attention: Corporate Credit Services
Account No. 136621-22506
Reference: Vencor
Notices Relating to Operations:
------------------------------
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇-▇▇▇-▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Credit Services
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
All Other Communications:
------------------------
▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
MANAGING AGENTS
---------------
THE CHASE MANHATTAN BANK
By: /s/ ▇▇▇▇ ▇▇▇ ▇▇▇
---------------------------
Name: ▇▇▇▇ ▇▇▇ ▇▇▇
Title: Vice President
PNC BANK, KENTUCKY, INC
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
CO-AGENTS
---------
BANK OF AMERICA NT & SA
By: /s/ ▇▇▇▇ ▇. Micner
---------------------------
Name: ▇▇▇▇ ▇. Micner
Title: Managing Director
THE BANK OF NEW YORK
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Title: Vice President
THE BANK OF NOVA SCOTIA
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Relationship Manager
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
FIRST AMERICAN NATIONAL
BANK
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
---------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Assistant Vice President
By:
---------------------------
Name:
Title:
BANK OF LOUISVILLE
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇.
---------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇.
Title: Senior Vice President
LC ISSUING BANKS
----------------
NATIONSBANK, N.A., as an LC Issuing
Bank
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President
NATIONAL CITY BANK OF
KENTUCKY, as an LC Issuing Bank
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
TORONTO DOMINION (TEXAS), INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
WACHOVIA BANK OF GEORGIA, N.A.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
BANKS
-----
ABN AMRO BANK N.V.
By: /s/ ▇▇▇▇▇▇▇ ▇. Amoun
---------------------------
Name: ▇▇▇▇▇▇▇ ▇. Amoun
Title: Vice President
By: /s/ [SIGNATURE APPEARS HERE]
----------------------------
Name:
Title:
BANK OF MONTREAL
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Director
THE INDUSTRIAL BANK OF
JAPAN TRUST COMPANY
By: /s/ Takuya Honjo
---------------------------
Name: TAKUYA HONJA
Title: SENIOR VICE PRESIDENT
LTCB TRUST COMPANY
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: SENIOR VICE PRESIDENT
NATIONAL CITY BANK OF KENTUCKY
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
UNION BANK OF CALIFORNIA, N.A.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
---------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
U.S. BANK OF WASHINGTON, N.A.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
CREDIT SUISSE FIRST BOSTON
By: /s/ ▇.▇. ▇▇▇▇▇▇
---------------------------
Name: ▇.▇. ▇▇▇▇▇▇
Title: Managing Director
DEUTSCHE BANK AG NEW YORK
AND/OR CAYMAN ISLAND BRANCHES
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Assistant Vice President
By: /s/ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
---------------------------
Name: ▇▇▇▇ ▇▇▇▇ Goyal
Title: Assistant Vice President
FLEET NATIONAL BANK
By: /s/ Gingen Stulzeu ▇▇▇▇▇▇
---------------------------
Name: G. Stulzeu ▇▇▇▇▇▇
Title: Vice President
MELLON BANK, N.A.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
BANK ONE, KENTUCKY, NA
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: SENIOR VICE PRESIDENT
COMERICA BANK
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
CORESTATES BANK, N.A.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
NBD BANK, N.A.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Authorized Agent
THE FUJI BANK, LIMITED
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Joint General Manager
AMSOUTH BANK OF ALABAMA
By: /s/ [SIGNATURE APPEARS HERE]
---------------------------
Name: [NAME APPEARS HERE]
Title: Commercial Banking Officer
FIRST UNION NATIONAL BANK
OF NORTH CAROLINA
By: /s/ ▇▇▇ ▇. ▇▇▇▇
---------------------------
Name: ▇▇▇ ▇. ▇▇▇▇
Title: SENIOR VICE PRESIDENT
KREDIETBANK N.V.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇
---------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇
Title: VICE PRESIDENT
SOCIETE GENERALE, CHICAGO
BRANCH
By: /s/ [XXXXXXXXXXXXXXX]
---------------------------
Name: [XXXXXXXXXXXXXXXXX]
Title: [XXXXXXXXXXXXXXXXXX]
PNC BANK, NATIONAL ASSOCIATION,
as an LC Issuing Bank
By: /s/ ▇▇▇▇▇▇ ▇. Falgianc
---------------------------
Name: ▇▇▇▇▇▇ ▇. Falgianc
Title: Corporate Banking Officer
BANK OF AMERICA NT & SA dba
SEAFIRST BANK, successor
by merger and name change
to Seattle First National
Bank, as an LC Isuing
Bank
By: /s/ Fl. ▇▇▇▇▇▇
---------------------------
Name: Fl. ▇▇▇▇▇▇
Title: VP-MGR
WACHOVIA BANK OF NORTH
CAROLINA, N.A., as an
LC Issuing Bank
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President
COMMITMENT SCHEDULE
Bank Commitment
---- ----------
▇▇▇▇▇▇ Guaranty Trust
Company of New York $100,000,000
NationsBank, N.A. $100,000,000
The Chase Manhattan Bank $85,000,000
PNC Bank, Kentucky, Inc $85,000,000
Bank of America NT &
SA dba Seafirst Bank $68,000,000
The Bank of New York $68,000,000
The Bank of Nova Scotia $68,000,000
Credit Lyonnais New York Branch $68,000,000
Credit Suisse First Boston $68,000,000
Deutsche Bank AG New York
and/or Cayman Island Branches $68,000,000
Fleet National Bank $68,000,000
Mellon Bank, N.A. $68,000,000
Toronto Dominion (Texas), Inc. $68,000,000
Wachovia Bank of Georgia, N.A. $68,000,000
ABN AMRO Bank N.V. $50,000,000
Bank of Montreal $50,000,000
Bank One, Kentucky, NA $50,000,000
Comerica Bank $50,000,000
CoreStates Bank, N.A. $50,000,000
The Fuji Bank, Limited $50,000,000
The Industrial Bank
of Japan Trust Company $50,000,000
Bank Commitment
---- ----------
National City Bank of Kentucky $50,000,000
NBD Bank, N.A. $50,000,000
LTCB Trust Company $50,000,000
Union Bank of California, N.A. $35,000,000
U.S. Bank of Washington, N.A. $30,000,000
Amsouth Bank of Alabama $25,000,000
First Union National Bank of
North Carolina $25,000,000
Kredietbank N.V. $25,000,000
Societe Generale, Chicago Branch $25,000,000
First American National Bank $20,000,000
Bank of Louisville $15,000,000
================
Total $1,750,000,000
PRICING SCHEDULE
Each of "Euro-Dollar Margin", "CD Margin", "Facility Fee Rate" and
"LC Fee Rate" means:
(i) for any day before May 16, 1997, the rate set forth below in the
row opposite such term and in the column headed "Level V"; and
(ii) for any day on or after May 16, 1997, the rate set forth
below in the row opposite such term and in the column corresponding to the
"Pricing Level" that applies on such day:
=====================================================================================
Pricing Level Level I Level II Level III Level IV Level V Level VI
-------------------------------------------------------------------------------------
Euro-Dollar
Margin 0.2500% 0.3750% 0.4250% 0.5000% 0.6250% 0.6875%
-------------------------------------------------------------------------------------
CD Margin 0.3750% 0.5000% 0.5500% 0.6250% 0.7500% 0.8125%
-------------------------------------------------------------------------------------
Facility
Fee Rate 0.1250% 0.1750% 0.2000% 0.2500% 0.2500% 0.3125%
-------------------------------------------------------------------------------------
LC Fee Rate 0.2500% 0.3750% 0.4250% 0.500% 0.6250% 0.6875%
=====================================================================================
Terms defined in the Agreement and not otherwise defined herein
have, as used herein, the respective meanings provided for therein. For
purposes of this Pricing Schedule, the following additional terms, as used
herein, have the following respective meanings:
"Level I Pricing" applies during any Rate Period if, at the end of
the Preceding Fiscal Quarter, the Leverage Ratio was less than or equal to
2.00 to 1.00.
"Level II Pricing" applies during any Rate Period if, at the end
of the Preceding Fiscal Quarter, the Leverage Ratio was greater than 2.00
to 1.00 and not greater than 2.50 to 1.00.
"Level III Pricing" applies during any Rate Period if, at the end
of the Preceding Fiscal Quarter, the Leverage Ratio was greater than 2.50
to 1.00 and not greater than 3.00 to 1.00.
"Level IV Pricing" applies during any Rate Period if, at the end
of the Preceding Fiscal Quarter, the Leverage Ratio was greater than 3.00
to 1.00 and not greater than 3.25 to 1.00.
"Level V Pricing" applies during any Rate Period if, at the end of
the Preceding Fiscal Quarter, the Leverage Ratio was greater than 3.25 to
1.00 and not greater than 3.50 to 1.00.
"Level VI Pricing" applies during any Rate Period if, at the end
of the Preceding Fiscal Quarter, the Leverage Ratio was greater than 3.50
to 1.00.
1
"Leverage Ratio" means, at the end of any Fiscal Quarter, the
ratio of (x) Consolidated Debt for Borrowed Money at the end of such
Fiscal Quarter to (y) Consolidated EBITDA for the period of four
consecutive Fiscal Quarters then ended.
"Preceding Fiscal Quarter" means, with respect to any Rate Period,
the most recent Fiscal Quarter ended before such Rate Period begins.
"Pricing Level" refers to the determination of which of Level I
Pricing, Level II Pricing, Level III Pricing, Level IV Pricing, Level V
Pricing or Level VI Pricing applies on any day. Pricing Levels are
referred to in ascending order (e.g., Level III Pricing is a higher Pricing
Level than Level II Pricing).
"Rate Period" means any period from and including the 46th day of
a Fiscal Quarter to and including the 45th day of the immediately
succeeding Fiscal Quarter; provided that the first Rate Period shall begin
on and include May 16, 1997.
2
