EXHIBIT 10.25
CREDIT AND GUARANTY AGREEMENT
DATED AS OF DECEMBER 19, 2003
AMONG
MARINER HEALTH CARE, INC.,
CERTAIN SUBSIDIARIES OF MARINER HEALTH CARE, INC.,
AS GUARANTORS,
VARIOUS LENDERS,
CIBC WORLD MARKETS CORP., ▇.▇. ▇▇▇▇▇▇ SECURITIES INC.,
AND
▇▇▇▇▇▇ BROTHERS INC.,
AS JOINT LEAD ARRANGERS,
JPMORGAN CHASE BANK,
AND
▇▇▇▇▇▇ COMMERCIAL PAPER INC.,
AS CO-SYNDICATION AGENTS,
CITICORP NORTH AMERICA, INC.,
AND
GENERAL ELECTRIC CAPITAL CORPORATION,
AS CO-DOCUMENTATION AGENTS
AND
CANADIAN IMPERIAL BANK OF COMMERCE,
AS ADMINISTRATIVE AGENT AND COLLATERAL AGENT
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$225,000,000 SENIOR SECURED CREDIT FACILITIES
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TABLE OF CONTENTS
Page
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SECTION 1. DEFINITION AND INTERPRETATION................................................... 2
1.1 Definitions........................................................................ 2
1.2 Terms Generally.................................................................... 41
SECTION 2. LOANS AND LETTERS OF CREDIT..................................................... 42
2.1 Term Loans......................................................................... 42
2.2 Revolving Loans.................................................................... 43
2.3 Swing Line Loans................................................................... 44
2.4 Issuance of Letters of Credit and Purchase of Participations Therein............... 46
2.5 Pro Rata Shares; Availability of Funds............................................. 50
2.6 Use of Proceeds.................................................................... 51
2.7 Evidence of Debt; Register; Lenders' Books and Records; Notes...................... 51
2.8 Interest on Loans.................................................................. 52
2.9 Conversion/Continuation............................................................ 55
2.10 Default Interest................................................................... 55
2.11 Fees .............................................................................. 56
2.12 Scheduled Payments/Commitment Reductions........................................... 57
2.13 Voluntary Prepayments/Commitment Reductions........................................ 58
2.14 Mandatory Prepayments/Commitment Reductions........................................ 60
2.15 Application of Prepayments/Reductions.............................................. 62
2.16 General Provisions Regarding Payments.............................................. 64
2.17 Ratable Sharing.................................................................... 65
2.18 Making or Maintaining Eurodollar Rate Loans........................................ 66
2.19 Increased Costs; Capital Adequacy.................................................. 68
2.20 Taxes; Withholding, etc............................................................ 69
2.21 Obligation to Mitigate............................................................. 71
2.22 Defaulting Lenders................................................................. 72
2.23 Removal or Replacement of a Lender................................................. 72
2.24 Incremental Facility............................................................... 73
SECTION 3. CONDITIONS PRECEDENT............................................................ 75
3.1 Closing Date....................................................................... 75
3.2 Conditions to Each Credit Extension................................................ 80
SECTION 4. REPRESENTATIONS AND WARRANTIES.................................................. 82
4.1 Organization; Requisite Power and Authority; Qualification......................... 82
4.2 Capital Stock and Ownership........................................................ 82
4.3 Due Authorization.................................................................. 82
4.4 No Conflict........................................................................ 83
4.5 Governmental Consents.............................................................. 83
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4.6 Binding Obligation................................................................. 83
4.7 Historical Financial Statements.................................................... 83
4.8 Projections........................................................................ 84
4.9 No Material Adverse Change......................................................... 84
4.10 No Restricted Junior Payments...................................................... 84
4.11 Adverse Proceedings, etc........................................................... 84
4.12 Payment of Taxes................................................................... 85
4.13 Properties......................................................................... 85
4.14 Environmental Matters.............................................................. 86
4.15 No Defaults........................................................................ 86
4.16 Material Contracts................................................................. 86
4.17 Material Reimbursement Approvals................................................... 86
4.18 Health Care Permits................................................................ 87
4.19 Governmental Regulation............................................................ 88
4.20 Margin Stock....................................................................... 88
4.21 Employee Matters................................................................... 88
4.22 Employee Benefit Plans............................................................. 89
4.23 Certain Fees....................................................................... 89
4.24 Solvency........................................................................... 90
4.25 Related Agreements................................................................. 90
4.26 Compliance with Statutes, etc...................................................... 90
4.27 Disclosure......................................................................... 90
4.28 Cash Management System............................................................. 91
4.29 Cash Collateral Account............................................................ 91
4.30 Subordination; Designation of the Credit Documents as "Designated Senior
Indebtedness." Etc............................................................. 92
SECTION 5. AFFIRMATIVE COVENANTS........................................................... 92
5.1 Financial Statements and Other Reports............................................. 92
5.2 Existence.......................................................................... 97
5.3 Payment of Taxes and Claims........................................................ 98
5.4 Maintenance of Properties.......................................................... 98
5.5 Insurance.......................................................................... 98
5.6 Inspections........................................................................ 100
5.7 Lenders' Meetings.................................................................. 101
5.8 Compliance with Laws............................................................... 101
5.9 Environmental...................................................................... 101
5.10 Subsidiaries....................................................................... 102
5.11 Additional Material Real Estate Assets............................................. 103
5.12 No Other "Designated Senior Indebtedness".......................................... 104
5.13 Observance of Agreements........................................................... 104
5.14 Cash Management System............................................................. 105
5.15 Further Assurances................................................................. 105
5.16 Ratings Requirements............................................................... 105
5.17 Certain Post-Closing Obligations................................................... 105
5.18 Cash Collateral Account............................................................ 106
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SECTION 6. NEGATIVE COVENANTS.............................................................. 106
6.1 Indebtedness....................................................................... 107
6.2 Liens.............................................................................. 110
6.3 Receivables........................................................................ 112
6.4 No Further Negative Pledges........................................................ 112
6.5 Restricted Junior Payments......................................................... 112
6.6 Restrictions on Subsidiary Distributions........................................... 113
6.7 Investments........................................................................ 113
6.8 Financial Covenants................................................................ 115
6.9 Fundamental Changes; Disposition of Assets; Acquisitions........................... 119
6.10 Disposal of Subsidiary Interests................................................... 121
6.11 Sales and Lease-Backs.............................................................. 121
6.12 Transactions with Shareholders and Affiliates...................................... 121
6.13 Conduct of Business................................................................ 122
6.14 Amendments or Waivers of Certain Related Agreements................................ 122
6.15 Joint Ventures or Partnerships..................................................... 123
6.16 Fiscal Year........................................................................ 123
6.17 Health Care Permits and Approvals.................................................. 123
SECTION 7. GUARANTY........................................................................ 123
7.1 Guaranty of the Obligations........................................................ 123
7.2 Contribution by Guarantors......................................................... 124
7.3 Payment by Guarantors.............................................................. 125
7.4 Liability of Guarantors Absolute................................................... 125
7.5 Waivers by Guarantors.............................................................. 127
7.6 Guarantors' Rights of Subrogation, Contribution, etc............................... 128
7.7 Subordination of Other Obligations................................................. 128
7.8 Continuing Guaranty................................................................ 129
7.9 Authority of Guarantors or Company................................................. 129
7.10 Financial Condition of Company..................................................... 129
7.11 Bankruptcy, etc.................................................................... 129
7.12 Discharge of Guaranty Upon Sale of Guarantor....................................... 130
SECTION 8. EVENTS OF DEFAULT............................................................... 130
8.1 Events of Default.................................................................. 130
SECTION 9. AGENTS.......................................................................... 134
9.1 Appointment of Agents.............................................................. 134
9.2 Powers and Duties.................................................................. 135
9.3 General Immunity................................................................... 135
9.4 Agents Entitled to Act as Lender................................................... 136
9.5 Lenders' Representations, Warranties and Acknowledgment............................ 136
9.6 Right to Indemnity................................................................. 137
9.7 Successor Administrative Agent, Collateral Agent and Swing Line Lender............. 137
9.8 Collateral Documents and Guaranty.................................................. 138
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9.9 Cash Collateral Account............................................................ 139
9.10 Application of Proceeds............................................................ 140
SECTION 10. MISCELLANEOUS................................................................... 141
10.1 Notices............................................................................ 141
10.2 Expenses........................................................................... 141
10.3 Indemnity.......................................................................... 141
10.4 Set-Off............................................................................ 142
10.5 Amendments and Waivers............................................................. 143
10.6 Successors and Assigns; Participations............................................. 145
10.7 Independence of Covenants.......................................................... 149
10.8 Survival of Representations, Warranties and Agreements............................. 149
10.9 No Waiver; Remedies Cumulative..................................................... 149
10.10 Marshalling; Payments Set Aside.................................................... 149
10.11 Severability....................................................................... 150
10.12 Obligations Several; Independent Nature of Lenders' Rights......................... 150
10.13 Headings........................................................................... 150
10.14 APPLICABLE LAW..................................................................... 150
10.15 CONSENT TO JURISDICTION............................................................ 150
10.16 WAIVER OF JURY TRIAL............................................................... 151
10.17 Confidentiality.................................................................... 151
10.18 Usury Savings Clause............................................................... 152
10.19 Counterparts....................................................................... 153
10.20 USA PATRIOT Act.................................................................... 153
10.21 Effectiveness...................................................................... 153
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APPENDIX: A Notice Addresses
SCHEDULES: 1.1(i) Closing Date Guarantors
1.1(ii) Closing Date Subsidiaries of Company which are not
Guarantors
1.1(iii) Closing Date Non-Material Guarantor Subsidiaries
1.1(iv) Certain Adjustments to EBITDA
1.1(v) Existing Purchase Options or Similar Call Rights in
respect of Securities of a Joint Venture
3.1(h) Notifications
3.1(i)(i) Closing Date Mortgaged Properties
3.1(i)(ii) Jurisdictions of Local Counsel Real Estate Opinions
4.1 Jurisdictions of Organization and Qualification
4.2 Capital Stock and Ownership
4.7 Closing Date Contingent Liabilities
4.10 Restricted Junior Payments
4.13(a) Title Deficiencies
4.13(b) Real Estate Assets
4.16 Material Contracts
4.17 Material Reimbursement Approvals
4.18(a) Health Care Permit Deficiencies
4.18(b) Health Care Permits
4.21 Collective Bargaining Agreements
4.28 Cash Management System
6.1 Certain Indebtedness
6.2 Certain Liens
6.6 Certain Restrictions
6.7(g) Certain Closing Date Investments
6.7(l) Captive Insurance Subsidiary Permitted Investments
6.9 Certain Divestitures
6.12 Certain Affiliate Transactions
EXHIBITS: A-1 Funding Notice
A-2 Conversion/Continuation Notice
A-3 Issuance Notice
B-1 Tranche B Term Loan Note
B-2 Revolving Loan Note
B-3 Swing Line Note
C Compliance Certificate
D Opinions of Counsel
E Assignment Agreement
F Certificate Re Non-bank Status
G-1 Closing Date Certificate
G-2 Solvency Certificate
H Counterpart Agreement
I Pledge and Security Agreement
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J Mortgage
K Landlord Consent and Estoppel
L Joinder Agreement
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CREDIT AND GUARANTY AGREEMENT
This CREDIT AND GUARANTY AGREEMENT, dated as of December 19,
2003 is entered into by and among MARINER HEALTH CARE, INC., a Delaware
corporation ("COMPANY"), CERTAIN SUBSIDIARIES OF COMPANY, as Guarantors, the
Lenders party hereto from time to time, CIBC WORLD MARKETS CORP. ("CIBCWM"), as
a Joint Lead Arranger (in such capacity, a "JOINT LEAD ARRANGER"), ▇.▇. ▇▇▇▇▇▇
SECURITIES INC. ("JPMORGAN"), as a Joint Lead Arranger (in such capacity, a
"JOINT LEAD ARRANGER"), ▇▇▇▇▇▇ BROTHERS INC. ("LBI"), as a Joint Lead Arranger
(in such capacity, a "JOINT LEAD ARRANGER", and together with CIBC and JPMorgan,
the "JOINT LEAD ARRANGERS"), ▇▇▇▇▇▇ COMMERCIAL PAPER INC. ("LCPI") and JPMORGAN
CHASE BANK ("JPMCB"), as Co-Syndication Agents (in such capacity, each a
"CO-SYNDICATION AGENT"), CITICORP NORTH AMERICA, INC. ("CITI") and GENERAL
ELECTRIC CAPITAL CORPORTATION ("GECC") as Co-Documentation Agents (in such
capacity, each a "CO-DOCUMENTATION AGENT") and CANADIAN IMPERIAL BANK OF
COMMERCE, ("CIBC") as Administrative Agent, as Collateral Agent, and as Swing
Line Lender (together with its permitted successors in such capacities,
"ADMINISTRATIVE AGENT," "COLLATERAL AGENT," or "SWING LINE LENDER,"
respectively).
RECITALS:
WHEREAS, capitalized terms used in these Recitals shall have
the respective meanings set forth for such terms in Section 1.1 hereof;
WHEREAS, Lenders have agreed to extend certain credit
facilities to Company, in an aggregate amount not to exceed $225,000,000,
consisting of $135,000,000 aggregate principal amount of Tranche B Term Loans,
and up to $90,000,000 aggregate principal amount of Revolving Commitments, the
proceeds of which will be used together with the proceeds of the Senior
Subordinated Notes to refinance Company's existing indebtedness and for general
corporate purposes of Company and its Subsidiaries; and
WHEREAS, Guarantors have agreed to guarantee the obligations
of Company hereunder and to secure their respective Obligations by granting to
the Collateral Agent, for the benefit of Secured Parties, a First Priority Lien
on substantially all of their respective assets, including a pledge of all of
the Capital Stock of each of their respective Subsidiaries which are or become
Guarantors and all intercompany debt.
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the parties hereto agree
as follows:
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SECTION 1. DEFINITION AND INTERPRETATION
1.1 DEFINITIONS. The following terms used herein,
including in the preamble, recitals, exhibits and schedules hereto, shall have
the following meanings:
"ADJUSTED EURODOLLAR RATE" means, for any Interest Rate
Determination Date with respect to an Interest Period for a Eurodollar Rate
Loan, the rate per annum obtained by dividing (i) (a) the rate per annum
(rounded to the nearest 1/100 of 1%) equal to the rate determined by
Administrative Agent to be the offered rate which appears on the page of the
Telerate Screen which displays an average British Bankers Association Interest
Settlement Rate (such page currently being page number 3740 or 3750, as
applicable) for deposits (for delivery on the first day of such period) with a
term equivalent to such period in Dollars, determined as of approximately 11:00
a.m. (London, England time) on such Interest Rate Determination Date, or (b) in
the event the rate referenced in the preceding clause (a) does not appear on
such page or service or if such page or service shall cease to be available, the
rate per annum (rounded to the nearest 1/100 of 1%) equal to the rate determined
by Administrative Agent to be the offered rate on such other page or other
service which displays an average British Bankers Association Interest
Settlement Rate for deposits (for delivery on the first day of such period) with
a term equivalent to such period in Dollars, determined as of approximately
11:00 a.m. (London, England time) on such Interest Rate Determination Date, or
(c) in the event the rates referenced in the preceding clauses (a) and (b) are
not available, the rate per annum (rounded to the nearest 1/100 of 1%) equal to
the offered quotation rate by first class banks in the London interbank market
to CIBC for deposits (for delivery on the first day of the relevant period) in
Dollars of amounts in same day funds comparable to the principal amount of the
applicable Loan of Administrative Agent, in its capacity as a Lender, for which
the Adjusted Eurodollar Rate is then being determined with maturities comparable
to such period as of approximately 11:00 a.m. (London, England time) on such
Interest Rate Determination Date, by (ii) an amount equal to (a) one minus (b)
the Applicable Reserve Requirement.
"ADMINISTRATIVE AGENT" as defined in the preamble hereto.
"ADVERSE PROCEEDING" means any action, suit, proceeding
(whether administrative, judicial or otherwise), governmental investigation or
arbitration (whether or not purportedly on behalf of Company or any of its
Guarantor Subsidiaries) at law or in equity, or before or by any Governmental
Authority, domestic or foreign (including any Environmental Claims), whether
pending or, to the knowledge of Company or any of its Subsidiaries, threatened
against or affecting Company or any of its Guarantor Subsidiaries or any
property of Company or any of its Guarantor Subsidiaries.
"AFFECTED LENDER" as defined in Section 2.18(b).
"AFFECTED LOANS" as defined in Section 2.18(b).
"AFFILIATE" means, as applied to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Person. For the
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purposes of this definition, "control" (including, with correlative meanings,
the terms "controlling," "controlled by" and "under common control with"), as
applied to any Person, means the possession, directly or indirectly, of the
power (i) to vote 15.0% or more of the Securities having ordinary voting power
for the election of directors of such Person or (ii) to direct or cause the
direction of the management and policies of that Person, whether through the
ownership of voting securities or by contract or otherwise.
"AGENT" means each of the Joint Lead Arrangers, the
Co-Syndication Agents, the Co-Documentation Agents, Administrative Agent and
Collateral Agent.
"AGGREGATE AMOUNTS DUE" as defined in Section 2.17.
"AGGREGATE PAYMENTS" as defined in Section 7.2.
"AGREEMENT" means this Credit and Guaranty Agreement, dated as
of December 19, 2003 as it may be amended, restated, supplemented or otherwise
modified from time to time.
"APPLICABLE MARGIN" means (i) with respect to Revolving Loans
that are Eurodollar Rate Loans (a) from the Closing Date until the commencement
of the first interest period occurring after the date of delivery of the
Compliance Certificate and the financial statements for the second full fiscal
quarter after the Closing Date, 2.75% per annum; and (b) thereafter, a
percentage, per annum, determined by reference to the Total Lease Adjusted
Leverage Ratio in effect from time to time as set forth below:
TOTAL LEASE
ADJUSTED LEVERAGE
RATIO APPLICABLE MARGIN
------------------------------------------------
Greater than 2.75%
4.50:1.00
------------------------------------------------
Less than or equal to
4.50:1.00
Greater than 4.00:1.00 2.50%
------------------------------------------------
Less than or equal to
4.00:1.00
Greater than 3.50:1.00 2.25%
------------------------------------------------
Less than or equal to 2.00%
3.50:1.00
------------------------------------------------
and (ii) with respect to Swing Line Loans and Revolving Loans that are Base Rate
Loans, an amount equal to (a) the Applicable Margin for Eurodollar Rate Loans as
set forth in clause (i)(a) or (i)(b) above, as applicable, minus (b) 1.00% per
annum. No change in the Applicable Margin shall be effective until the first to
occur of March 1, June 1,
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September 1, December 1 after the date on which Administrative Agent shall have
received the applicable financial statements and a Compliance Certificate or
Pricing Certificate pursuant to Section 5.1(c) calculating the Total Lease
Adjusted Leverage Ratio. At any time Company has not submitted to Administrative
Agent the applicable information as and when required under Section 5.1(c), the
Applicable Margin and the Applicable Revolving Commitment Fee Percentage shall
be determined as if the Total Lease Adjusted Leverage Ratio were in excess of
4.50:1.00. Promptly upon receipt of the applicable information under Section
5.1(c), Administrative Agent shall give each Lender telefacsimile or telephonic
notice (confirmed in writing) of the Applicable Margin in effect from such date.
"APPLICABLE RESERVE REQUIREMENT" means, at any time, for any
Eurodollar Rate Loan, the maximum rate, expressed as a decimal, at which
reserves (including, without limitation, any basic marginal, special,
supplemental, emergency or other reserves) are required to be maintained with
respect thereto against "Eurocurrency liabilities" (as such term is defined in
Regulation D) under regulations issued from time to time by the Board of
Governors of the Federal Reserve System or other applicable banking regulator.
Without limiting the effect of the foregoing, the Applicable Reserve Requirement
shall reflect any other reserves required to be maintained by such member banks
with respect to (i) any category of liabilities which includes deposits by
reference to which the applicable Adjusted Eurodollar Rate or any other interest
rate of a Loan is to be determined, or (ii) any category of extensions of credit
or other assets which include Eurodollar Rate Loans. A Eurodollar Rate Loan
shall be deemed to constitute Eurocurrency liabilities and as such shall be
deemed subject to reserve requirements without benefits of credit for proration,
exceptions or offsets that may be available from time to time to the applicable
Lender. The rate of interest on Eurodollar Rate Loans shall be adjusted
automatically on and as of the effective date of any change in the Applicable
Reserve Requirement.
"APPLICABLE REVOLVING COMMITMENT FEE PERCENTAGE" means (i) in
the event the Facility Usage is equal to or less than 50%, 0.75% per annum and
(ii) in the event the Facility Usage is greater than 50%, 0.50% per annum.
"APPROVED CAPTIVE INSURANCE SUBSIDIARY" means any captive
insurance subsidiary formed by Company and approved by Administrative Agent
pursuant to Section 5.10(b).
"ASSET SALE" means a sale, lease or sub-lease (as lessor or
sublessor), sale and leaseback, assignment, conveyance, transfer or other
disposition to, or any exchange of property with, any Person (other than Company
or any Guarantor), in one transaction or a series of transactions, of all or any
part of Company's or any of its Guarantor Subsidiaries' businesses, assets or
properties of any kind, whether real, personal, or mixed and whether tangible or
intangible, whether now owned or hereafter acquired, including, without
limitation, the Capital Stock of any of Company's Subsidiaries, other than (i)
inventory (or other assets) sold or leased in the ordinary course of business
(excluding any such sales by operation or divisions discontinued or to be
discontinued), (ii) sales of other assets for aggregate consideration of
$1,000,000 or less with respect to any
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transaction or series of related transactions and $2,500,000 or less in the
aggregate during any Fiscal Year and (iii) sub-leases of any non-performing or
under-performing Health Care Facility, or any Health Care Facility located in a
non-core market, on arms length commercial terms at fair market value, (giving
due regard to the value of divesting an unprofitable Health Care Facility), and
in any event for aggregate consideration (excluding periodic rental payments,
percentage rent and other customary payments under the sub-lease characterized
as "additional rents" or security deposits, but including any other lump sum
payments) since the Closing Date of $1,000,000 or less.
"ASSIGNMENT AGREEMENT" means an Assignment and Assumption
Agreement substantially in the form of Exhibit E, with such amendments or
modifications as may be approved by Administrative Agent.
"AUTHORIZED OFFICER" means, as applied to any Person, any
individual holding the position of chairman of the board (if an officer), chief
executive officer, president or one of its vice presidents (or the equivalent
thereof), and such Person's chief financial officer, chief accounting officer or
treasurer.
"AVAILABILITY" means, as of the date of determination, the sum
of (i) the amount by which the Revolving Commitments then in effect exceed the
Total Utilization of Revolving Commitments as of the last day of the most
recently ended month plus (ii) the aggregate amount of Cash and Cash Equivalents
not subject to a Lien (other than the Liens, if any, granted pursuant to the
Credit Documents and customary set-off rights) of the Company and the Guarantor
Subsidiaries as of the last day of the most recently ended month.
"BANKRUPTCY CODE" means Title 11 of the United States Code
entitled "Bankruptcy," as now and hereafter in effect, or any successor statute.
"BASE RATE" means, for any day, a rate per annum equal to the
greater of (i) the Prime Rate in effect on such day and (ii) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. Any change in the Base Rate
due to a change in the Prime Rate or the Federal Funds Effective Rate shall be
effective on the effective day of such change in the Prime Rate or the Federal
Funds Effective Rate, respectively.
"BASE RATE LOAN" means a Loan bearing interest at a rate
determined by reference to the Base Rate.
"BENEFICIARY" means each Agent, Issuing Bank, Lender and
Lender Counterparty.
"BIG FOUR ACCOUNTING FIRM" means any of Ernst & Young LLP,
PriceWaterhouseCoopers LLP, Deloitte & Touche LLP or KPMG LLP.
"BUSINESS DAY" means (i) any day excluding Saturday, Sunday
and any day which is a legal holiday under the laws of the State of New York or
the State in which the chief executive office of Company is located as of the
relevant date of determination, or is a day on which banking institutions
located in such states are
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authorized or required by law or other governmental action to close, and (ii)
with respect to all notices, determinations, fundings and payments in connection
with the Adjusted Eurodollar Rate or any Eurodollar Rate Loans, the term
"Business Day" shall mean any day which is a Business Day described in clause
(i) and which is also a day for trading by and between banks in Dollar deposits
in the London interbank market.
"CAPITAL LEASE" means, as applied to any Person, any lease of
any property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is or should be accounted for as a capital lease on the
balance sheet of that Person.
"CAPITAL STOCK" means any and all shares, interests,
participations or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person (other than
a corporation), including, without limitation, partnership interests and
membership interests, and any and all warrants, rights or options to purchase or
other arrangements or rights to acquire any of the foregoing.
"CASH" means money, currency or a credit balance in any demand
or Deposit Account.
"CASH COLLATERAL ACCOUNT" as defined in Section 9.9(a).
"CASH EQUIVALENTS" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally guaranteed as
to interest and principal by the United States Government or (b) issued by any
agency of the United States the obligations of which are backed by the full
faith and credit of the United States, in each case maturing within one year
after such date; (ii) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such state or any
public instrumentality thereof, in each case maturing within one year after such
date and having, at the time of the acquisition thereof, a rating of at least
A-1 from S&P or at least P-1 from ▇▇▇▇▇'▇; (iii) commercial paper maturing no
more than one year from the date of creation thereof and having, at the time of
the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from
▇▇▇▇▇'▇; (iv) certificates of deposit or bankers' acceptances maturing within
one year after such date and issued or accepted by any Lender or by any
commercial bank organized under the laws of the United States of America or any
state thereof or the District of Columbia that (a) is at least "adequately
capitalized" (as defined in the regulations of its primary Federal banking
regulator) and (b) has Tier 1 capital (as defined in such regulations) of not
less than $100,000,000; and (v) shares of any money market mutual fund that (a)
has substantially all of its assets invested continuously in the types of
investments referred to in clauses (i) and (ii) above, (b) has net assets of not
less than $500,000,000, and (c) has the highest rating obtainable from either
S&P or ▇▇▇▇▇'▇.
"CASH MANAGEMENT SYSTEM" as defined in Section 5.14.
"CERTIFICATE RE NON-BANK STATUS" means a certificate
substantially in the form of Exhibit F.
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"CHAMPUS" means, collectively, the Civilian Health and Medical
Program of the Uniformed Service, a program of medical benefits covering former
and active members of the uniformed services and certain of their dependents,
financed and administered by the United States Departments of Defense, Health
and Human Services and Transportation, and all laws, rules, regulations,
manuals, order, guidelines or requirements pertaining to such program including
(a) all federal statutes (whether set forth in 10 U.S.C. Sections 1071-1106 or
elsewhere) affecting such program; and (b) all rules, regulations (include 32
C.F.R. Section 199), manuals, orders and administrative, reimbursement and other
guidelines of all Governmental Authorities promulgated in connection with such
program (whether or not having the force of law), in each case as the same may
be amended, restated, supplemented or otherwise modified from time to time.
"CHAMPVA" shall mean, collectively, the Civilian Health and
Medical Program of the Department of Veteran Affairs, a program of medical
benefits covering retirees and dependents of former members of the armed
services administered by the United States Department of Veteran Affairs, and
all laws, rules, regulations, manuals, orders, guidelines or requirements
pertaining to such program including (a) all federal statutes (whether set forth
in 38 U.S.C. Section 1713 or elsewhere) affecting such program or, to the extent
applicable to CHAMPVA; and (b) all rules, regulations (including 38 C.F.R.
Section 17.54), manuals, orders and administrative, reimbursement and other
guidelines of all Governmental Authorities promulgated in connection with such
program (whether or not having the force of law), in each case as the same may
be amended, restated, supplemented or otherwise modified from time to time.
"CHANGE OF CONTROL" means, at any time after the Effective
Date, (i) any Person or "group" (within the meaning of Rules 13d-3 and 13d-5
under the Exchange Act) (a) shall have acquired beneficial ownership of 35% or
more on a fully diluted basis of the voting and/or economic interest in the
Capital Stock of Company or (b) shall have obtained the power (whether or not
exercised) to elect a majority of the members of the board of directors (or
similar governing body) of Company; (ii) the majority of the seats (other than
vacant seats) on the board of directors (or similar governing body) of Company
cease to be occupied by Persons who either (a) were members of the board of
directors of Company on the Closing Date or (b) were nominated for election by
the board of directors of Company, a majority of whom were directors on the
Closing Date or whose election or nomination for election was previously
approved by a majority of such directors; or (iii) any "change of control" or
similar concept shall occur with respect to the Senior Subordinated Notes or
Refinancing Notes that would require Company to tender for (or otherwise give
rise to an accelerated repayment of) the Senior Subordinated Notes or the
Refinancing Notes, as applicable.
"CHARITABLE ORGANIZATION" means any Person that qualifies for
exemption from federal income taxation under Section 501(c)(3) of the Internal
Revenue Code, or which intends to obtain recognition by the Internal Revenue
Service as a 501(c)(3) organization within the applicable time provided under
the Internal Revenue Code, including any such Person formed for the purpose of
providing disaster relief and emergency hardship assistance; provided, however,
that any such Person which fails to obtain a favorable 501(c)(3) determination
letter from the Internal Revenue Service
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within the applicable time provided under the Internal Revenue Code, or whose
501(c)(3) status is revoked by the Internal Revenue Service, shall cease to be a
"Charitable Organization" as herein defined.
"CIBC" means Canadian Imperial Bank of Commerce.
"CIBCWM" means CIBC World Markets Corp.
"CITI" means Citicorp North America, Inc.
"CLASS" means (i) with respect to Lenders, each of the
following classes of Lenders: (a) Lenders having Tranche B Term Loan Exposure,
(b) Lenders having Revolving Exposure (including Swing Line Lender) and (c)
Lenders having New Term Loan Exposure and (ii) with respect to Loans, each of
the following classes of Loans: (a) Tranche B Term Loans, (b) Revolving Loans
(including Swing Line Loans) and (c) New Term Loans.
"CLOSING DATE" means the date on which the Tranche B Term
Loans are made being December 19, 2003.
"CLOSING DATE CERTIFICATE" means a Closing Date Certificate
substantially in the form of Exhibit G-1.
"CLOSING DATE JOINT VENTURES" means those Joint Ventures
which, as of the Closing Date, are consolidated with Company and its
consolidated subsidiaries for financial reporting purposes under GAAP, being
those five Persons indicated as such on Schedule 1.1(ii).
"CLOSING DATE MORTGAGED PROPERTY" as defined in Section
3.1(i).
"CMS" shall mean The Centers for Medicare and Medicaid
Services, formerly known as the Health Care Financing Administration, the entity
within the United States Department of Health and Human Services responsible for
administering the Medicare program and the federal aspects of the Medicaid
programs, directly and through its fiscal intermediaries and agents, and any
successor entities.
"CO-DOCUMENTATION AGENT" as defined in the preamble hereto.
"COLLATERAL" means, collectively, all the real, personal and
mixed property (including Capital Stock) in which Liens are purported to be
granted pursuant to the Collateral Documents as security for the Obligations.
"COLLATERAL AGENT" as defined in the preamble.
"COLLATERAL DOCUMENTS" means the Pledge and Security
Agreement, the Mortgages, the Landlord Consent and Estoppel Agreements, if any,
and all other instruments, documents and agreements delivered by any Credit
Party pursuant to this Agreement or any of the other Credit Documents in order
to (a) grant to Collateral Agent,
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for the benefit of Lenders, a Lien on any real, personal or mixed property of
that Credit Party as security for the Obligations and/or (b) perfect such Liens.
"COLLATERAL QUESTIONNAIRE" means a certificate in form
satisfactory to Administrative Agent that provides information with respect to
the personal or mixed property of each Credit Party.
"COMPANY" as defined in the preamble hereto.
"COMMITMENT" means any Revolving Commitment, Tranche B Term
Loan Commitment or New Term Loan Commitment.
"COMPLIANCE CERTIFICATE" means a Compliance Certificate
substantially in the form of Exhibit C executed by the chief financial officer,
chief accounting officer or treasurer of the Company.
"CONCENTRATION ACCOUNTS" shall have the meaning ascribed to
such term in the Pledge and Security Agreement.
"CONSOLIDATED ADJUSTED EBITDA" means, for any period, an
amount determined for Company and the Guarantor Subsidiaries and the PHCMI Group
Members and the Closing Date Joint Ventures on a consolidated basis equal to (i)
the sum, without duplication, of the amounts for such period of (a) Consolidated
Net Income, (b) Consolidated Interest Expense, (c) provisions for taxes based on
income, (d) total depreciation expense, (e) total amortization expense, (f)
non-recurring cash charges directly related to any Permitted Acquisition or
Asset Sale permitted hereunder (including without limitation those relating to
accruals for accounts receivable, accruals for insurance, severance expenses and
legal, investment banking and other professional fees) and approved by the
Administrative Agent acting reasonably, and (g) other non-Cash items reducing
Consolidated Net Income (excluding any such non-Cash item to the extent that it
represents an accrual or reserve for potential Cash items in any future period
or amortization of a prepaid Cash item that was paid in a prior period) minus
(ii) other non-Cash items increasing Consolidated Net Income for such period
(excluding any such non-Cash item to the extent it represents the reversal of an
accrual or reserve for potential Cash item in any prior period), all as may be
adjusted pursuant to the terms of Schedule 1.1(iv) provided, that to the extent
that the portion of Consolidated Adjusted EBITDA as calculated above
attributable to the Closing Date Joint Ventures exceeds $5,000,000 in any four
Fiscal Quarter period the amount of any such excess shall be excluded from
Consolidated Adjusted EBITDA for the purposes of this Agreement.
"CONSOLIDATED ADJUSTED EBITDAR" means, for any period, an
amount determined for Company and the Guarantor Subsidiaries and the PHCMI Group
Members on a consolidated basis equal to the sum of (i) Consolidated Adjusted
EBITDA plus (ii) Consolidated Rent Expense for such period.
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, the
aggregate of all expenditures of Company and the Guarantor Subsidiaries and the
PHCMI
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Group Members during such period determined on a consolidated basis that, in
accordance with GAAP, are or should be included in "purchase of property and
equipment" or similar items reflected in the consolidated statement of cash
flows of Company and the Guarantor Subsidiaries and the PHCMI Group Members
excluding, to the extent included, any expenditures incurred by Company and the
Guarantor Subsidiaries used in the "purchase of property and equipment" from (or
reimbursed by) Net Insurance/Condemnation Proceeds or from Net Asset Sale
Proceeds and including to the extent not otherwise included any expenditures
incurred by Company and the Guarantor Subsidiaries and the PHCMI Group Members
in the buyback of Capital Leases.
"CONSOLIDATED CASH INTEREST EXPENSE" means, for any period,
Consolidated Interest Expense for such period, excluding any amount not payable
in Cash.
"CONSOLIDATED CURRENT ASSETS" means, as at any date of
determination, the total assets of Company and the Guarantor Subsidiaries on a
consolidated basis that may properly be classified as current assets in
conformity with GAAP, excluding Cash and Cash Equivalents.
"CONSOLIDATED CURRENT LIABILITIES" means, as at any date of
determination, the total liabilities of Company and the Guarantor Subsidiaries
on a consolidated basis that may properly be classified as current liabilities
in conformity with GAAP, excluding the current portion of long term debt.
"CONSOLIDATED EXCESS CASH FLOW" means, for any period, an
amount (if positive) equal to: (i) the sum, without duplication, of the amounts
for such period of (a) Consolidated Adjusted EBITDA, plus (b) the Consolidated
Working Capital Adjustment, and minus (ii) the sum, without duplication, of the
amounts for such period of (a) voluntary and scheduled repayments of
Consolidated Total Debt (excluding (i) repayments of Revolving Loans or Swing
Line Loans except to the extent the Revolving Commitments are permanently
reduced in connection with such repayments), (b) Consolidated Capital
Expenditures (net of any proceeds of (y) any related financings with respect to
such expenditures and (z) any sales of assets used to finance such
expenditures), (c) Consolidated Cash Interest Expense, (d) provisions for taxes
based on income of Company and the Guarantor Subsidiaries and payable (or paid)
in cash in such period, and (e) the aggregate Cash purchase price of all
Permitted Acquisitions (net of any proceeds of any (y) related financing with
respect to such Permitted Acquisitions and (z) sales of assets used to finance
such Permitted Acquisitions) consummated during such period and not included in
clause (b) of this clause (ii).
"CONSOLIDATED FIXED CHARGES" means, for any period, the sum,
without duplication, of the amounts determined for Company and the Guarantor
Subsidiaries and the PHCMI Group Members on a consolidated basis equal to (i)
Consolidated Cash Interest Expense, (ii) scheduled payments of principal on
Consolidated Total Debt, (iii) Consolidated Rent Expense, and (iv) the portion
of taxes based on income actually paid in cash and provisions for cash income
taxes.
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"CONSOLIDATED INTEREST EXPENSE" means, for any period, total
interest expense (including that portion attributable to Capital Leases in
accordance with GAAP and capitalized interest) of Company and the Guarantor
Subsidiaries and the PHCMI Group Members on a consolidated basis (net of
interest income received by Credit Parties, but expressly excluding interest
income derived from Investments permitted by Section 6.7(h), (k) and (l) and
Cash and Cash Equivalents subject to a Lien (other than the Liens, if any, under
the Credit Documents and customary set off rights)) with respect to all
outstanding Indebtedness of Company and the Guarantor Subsidiaries and the PHCMI
Group Members, including all commissions, discounts and other fees and charges
owed with respect to letters of credit and net costs under Interest Rate
Agreements, but excluding, however, any amounts referred to in Section 2.11(d)
payable on or before the Closing Date.
"CONSOLIDATED NET INCOME" means, for any period, (i) the net
income (or loss) of Company and the Guarantor Subsidiaries, the PHCMI Group
Members and the Closing Date Joint Ventures on a consolidated basis for such
period taken as a single accounting period determined in conformity with GAAP,
minus (ii) (a) (1) the income (or loss) of any Person (other than the Closing
Date Joint Ventures) in which any other Person (other than Company or any of the
Guarantor Subsidiaries) has a joint interest, except to the extent of the amount
of cash dividends or other cash distributions actually paid to Company or any of
the Guarantor Subsidiaries by such Person during such period and (2) the amount
of any dividends or distributions or other payments by a Closing Date Joint
Venture to any Person (other than a Guarantor Subsidiary) which has a joint
interest in any Closing Date Joint Ventures during such period, (b) the income
(or loss) of any Person (other than a PHCMI Group Member) accrued prior to the
date it becomes a Guarantor Subsidiary or is merged into or consolidated with
Company or any of the Guarantor Subsidiaries or that Person's assets are
acquired by Company or any of the Guarantor Subsidiaries, (c) the income of any
Guarantor Subsidiary of Company or PHCMI Group Member to the extent that the
declaration or payment of dividends or similar distributions by that Guarantor
Subsidiary or PHCMI Group Member or Closing Date Joint Venture of that income is
not at the time permitted by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Guarantor Subsidiary or that PHCMI Group Member or
Closing Date Joint Venture, (d) any after-tax gains or losses attributable to
Asset Sales or returned surplus assets of any Pension Plan, (e) (to the extent
not included in clauses (a) through (d) above) any net extraordinary gains or
net extraordinary losses, (f) the income (or loss) (1) of any Person which
ceases during such period to be a Guarantor Subsidiary of Company or a PHCMI
Group Member or Closing Date Joint Venture or (2) derived from assets sold or
otherwise disposed of by Company or any of its consolidated Guarantor
Subsidiaries or any PHCMI Group Member or Closing Date Joint Venture during such
period.
"CONSOLIDATED RENT EXPENSE" for any period, the aggregate
amount of fixed and contingent rentals payable by Company and the Guarantor
Subsidiaries and the PHCMI Group Members for such period with respect to leases
of Health Care Facilities, net of rental income from any subleases relating to
any of the aforementioned leases, determined on a consolidated basis in
accordance with GAAP.
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"CONSOLIDATED SENIOR DEBT" means Consolidated Total Debt
excluding any Subordinated Indebtedness.
"CONSOLIDATED TOTAL DEBT" means, as at any date of
determination, the aggregate stated balance sheet amount of all Indebtedness
(excluding for the purposes of calculating Total Lease Adjusted Leverage Ratio
and Total Leverage Ratio (and for the purposes of calculating Consolidated
Senior Debt when such term is used in calculating the Senior Debt Leverage
Ratio), (i) up to $35.0 million of Indebtedness in respect of the letters of
credit issued under the Existing Facilities and outstanding on the Closing Date
and listed on Schedule 6.1 for so long as they remain cash collateralized or
backed by Letters of Credit issued hereunder; (ii) Letters of Credit issued
hereunder and (iii) an amount, if any, not in excess of $35.0 million equal to
(x) the sum of the aggregate amount of Cash and Cash Equivalents of Company and
the Guarantor Subsidiaries (excluding Cash and Cash Equivalents (1) subject to a
Lien (other than the Liens, if any, under the Credit Documents and customary set
off rights) and (2) in the Insurance Concentration Account) as of the close of
business on each day on which no Revolving Loans are outstanding during the
four-Fiscal Quarter period ending on such date divided by (y) 365) of Company
and the Guarantor Subsidiaries and the PHCMI Group Members determined on a
consolidated basis in accordance with GAAP. For purposes of the calculation in
clause (x) of this definition, the amount of Cash and Cash Equivalents for any
day other than a Business Day shall be deemed to be the amount of Cash and Cash
Equivalents at the close of business on the immediately preceding Business Day.
"CONSOLIDATED WORKING CAPITAL" means, as at any date of
determination, the excess of Consolidated Current Assets over Consolidated
Current Liabilities (excluding the amount of insurance obligations otherwise
included as Consolidated Current Liabilities).
"CONSOLIDATED WORKING CAPITAL ADJUSTMENT" means, for any
period on a consolidated basis, the amount (which may be a negative number) by
which Consolidated Working Capital as of the beginning of such period exceeds
(or is less than) Consolidated Working Capital as of the end of such period.
"CONTRACTUAL OBLIGATION" means, as applied to any Person, any
provision of any Security issued by that Person or of any indenture, mortgage,
deed of trust, contract, undertaking, agreement or other instrument to which
that Person is a party or by which it or any of its properties is bound or to
which it or any of its properties is subject.
"CONTRIBUTING GUARANTORS" as defined in Section 7.2.
"CONVERSION/CONTINUATION DATE" means the effective date of a
continuation or conversion, as the case may be, as set forth in the applicable
Conversion/Continuation Notice.
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"CONVERSION/CONTINUATION NOTICE" means a
Conversion/Continuation Notice substantially in the form of Exhibit A-2.
"CO-SYNDICATION AGENT" as defined in the preamble hereto.
"COUNTERPART AGREEMENT" means a Counterpart Agreement
substantially in the form of Exhibit H delivered by a Credit Party pursuant to
Section 5.10.
"CREDIT DATE" means the date of a Credit Extension.
"CREDIT DOCUMENT" means any of this Agreement, the Notes, if
any, the Collateral Documents, any documents or certificates executed by Company
in favor of Issuing Bank relating to Letters of Credit, and all other documents,
instruments or agreements executed and delivered by a Credit Party for the
benefit of any Agent, Issuing Bank or any Lender in connection herewith. Neither
the Senior Subordinated Notes, Senior Subordinated Note Indenture, Refinancing
Notes or Refinancing Note Indenture will be deemed to be a Credit Document.
"CREDIT EXTENSION" means the making of a Loan or the issuing
of a Letter of Credit.
"CREDIT PARTY" means Company and each Guarantor.
"CURRENCY AGREEMENT" means any foreign exchange contract,
currency swap agreement, futures contract, option contract, synthetic cap or
other similar agreement or arrangement, each of which is for the purpose of
hedging the foreign currency risk associated with Company's and its
Subsidiaries' operations.
"DEFAULT" means a condition or event that, after notice or
lapse of time or both, would constitute an Event of Default.
"DEFAULT EXCESS" means, with respect to any Defaulting Lender,
the excess, if any, of such Defaulting Lender's Pro Rata Share of the aggregate
outstanding principal amount of Loans of all Lenders (calculated as if all
Defaulting Lenders (other than such Defaulting Lender) had funded all of their
respective Defaulted Loans) over the aggregate outstanding principal amount of
all Loans of such Defaulting Lender.
"DEFAULT PERIOD" means, with respect to any Defaulting Lender,
the period commencing on the date of the applicable Funding Default and ending
on the earliest of the following dates: (i) the date on which all Commitments
are cancelled or terminated and/or the Obligations are declared or become
immediately due and payable, (ii) the date on which (a) the Default Excess with
respect to such Defaulting Lender shall have been reduced to zero (whether by
the funding by such Defaulting Lender of any Defaulted Loans of such Defaulting
Lender or by the non-pro rata application of any voluntary or mandatory
prepayments of the Loans in accordance with the terms of Section 2.13 or Section
2.14 or by a combination thereof) and (b) such Defaulting Lender shall have
delivered to Company and Administrative Agent a written reaffirmation of its
intention to honor its obligations hereunder with respect to its Commitments,
and (iii) the
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date on which Company, Administrative Agent and Requisite Lenders waive all
Funding Defaults of such Defaulting Lender in writing.
"DEFAULTING LENDER" as defined in Section 2.22.
"DEFAULTED LOAN" as defined in Section 2.22.
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or
like account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate of
deposit.
"DESIGNATED NON-RECOURSE DEBT" means Indebtedness of
Non-Guarantor Subsidiaries of Company that is not guaranteed or secured by and
is otherwise non-recourse to Company or any of the Guarantors.
"DOLLARS" and the sign "$" mean the lawful money of the United
States of America.
"DOMESTIC SUBSIDIARY" means any Subsidiary organized under the
laws of the United States of America, any State thereof or the District of
Columbia.
"ELIGIBLE ASSIGNEE" means (i) any Lender, any Affiliate of any
Lender and any Related Fund (any two or more Related Funds being treated as a
single Eligible Assignee for all purposes hereof), and (ii) any commercial bank,
insurance company, investment or mutual fund or other entity that is an
"accredited investor" (as defined in Regulation D under the Securities Act) and
which extends credit or buys loans as one of its businesses; provided, none of
Company, any Subsidiary of Company nor any Affiliate of Company (unless also a
Lender, an Affiliate of any Lender or a Related Fund) shall be an Eligible
Assignee; provided, however, that any Eligible Assignee with respect to the
Revolving Loan Commitment and the Revolving Credit Exposure shall be in the
business of making revolving loans.
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as
defined in Section 3(3) of ERISA which is or was sponsored, maintained or
contributed to by, or required to be contributed by, Company, any of its
Guarantor Subsidiaries or any of their respective ERISA Affiliates.
"EMPLOYEE EQUITY SALES" means sales of Capital Stock of
Company to directors, officers or employees of Company or any of its
Subsidiaries in connection with permitted employee compensation and incentive
arrangements.
"ENVIRONMENTAL CLAIM" means any investigation, notice (written
or oral), notice of violation, claim, action, suit, proceeding, demand,
abatement order or other order or directive (conditional or otherwise), by any
Governmental Authority, entity or any other Person, arising (i) pursuant to or
in connection with any actual or alleged violation of any Environmental Law;
(ii) in connection with the presence, Release or threatened Release of any
Hazardous Material or any actual or alleged Hazardous Materials Activity at any
location, whether or not owned or operated by the Company; or
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(iii) in connection with any actual or alleged damage, injury, threat or harm to
occupational safety and health, natural resources or the environment (but
excluding, in any event claims pertaining to any violation or alleged violation
of applicable laws, rules, regulations and ordinances specifically governing the
operation of health care facilities not commonly thought of as "environmental
laws").
"ENVIRONMENTAL LAWS" means any and all current or future
foreign or domestic, federal or state (or any subdivision of either of them),
statutes, ordinances, orders, rules, regulations, judgments, Governmental
Authorizations, or any other requirements of Governmental Authorities relating
to (i) environmental matters, including those relating to any Release or
threatened Release of Hazardous Materials, or any Hazardous Materials Activity;
(ii) the generation, use, storage, transportation or disposal of Hazardous
Materials; or (iii) occupational safety and health, industrial hygiene, land use
or the protection of human, plant or animal health or welfare, in any manner
applicable to Company or any of its Subsidiaries or any Facility (other than
laws, rules, regulations and ordinances specifically governing the operation of
health care facilities and that are not commonly thought of as "environmental
laws").
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor thereto.
"ERISA AFFILIATE" means, as applied to any Person, (i) any
corporation which is a member of a controlled group of corporations within the
meaning of Section 414(b) of the Internal Revenue Code of which that Person is a
member; (ii) any trade or business (whether or not incorporated) which is a
member of a group of trades or businesses under common control within the
meaning of Section 414(c) of the Internal Revenue Code of which that Person is a
member; and (iii) any member of an affiliated service group within the meaning
of Section 414(m) or (o) of the Internal Revenue Code of which that Person, any
corporation described in clause (i) above or any trade or business described in
clause (ii) above is a member. Any former ERISA Affiliate of Company or any of
its Subsidiaries shall continue to be considered an ERISA Affiliate of Company
or any such Subsidiary within the meaning of this definition with respect to the
period such entity was an ERISA Affiliate of Company or such Subsidiary and with
respect to liabilities arising after such period for which Company or such
Subsidiary could be liable under the Internal Revenue Code or ERISA.
"ERISA EVENT" means (i) a "reportable event" within the
meaning of Section 4043 of ERISA and the regulations issued thereunder with
respect to any Pension Plan (excluding those for which the provision for 30-day
notice to the PBGC has been waived by regulation); (ii) the failure to meet the
minimum funding standard of Section 412 of the Internal Revenue Code with
respect to any Pension Plan (whether or not waived in accordance with Section
412(d) of the Internal Revenue Code) or the failure to make by its due date a
required installment under Section 412(m) of the Internal Revenue Code with
respect to any Pension Plan or the failure to make any required contribution to
a Multiemployer Plan; (iii) the provision by the administrator of any Pension
Plan pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate
such plan in a distress termination described in Section 4041(c) of ERISA; (iv)
the withdrawal by
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Company, any of its Guarantor Subsidiaries or any of their respective ERISA
Affiliates from any Pension Plan with two or more contributing sponsors or the
termination of any such Pension Plan resulting in liability to Company, any of
its Guarantor Subsidiaries or any of their respective ERISA Affiliates pursuant
to Section 4063 or 4064 of ERISA; (v) the institution by the PBGC of proceedings
to terminate any Pension Plan, or the occurrence of any event or condition which
might constitute grounds under ERISA for the termination of, or the appointment
of a trustee to administer, any Pension Plan; (vi) the imposition of liability
on Company, any of its Guarantor Subsidiaries or any of their respective ERISA
Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason of the
application of Section 4212(c) of ERISA; (vii) the withdrawal of Company, any of
its Guarantor Subsidiaries or any of their respective ERISA Affiliates in a
complete or partial withdrawal (within the meaning of Sections 4203 and 4205 of
ERISA) from any Multiemployer Plan if there is any potential liability
therefore, or the receipt by Company, any of its Subsidiaries or any of their
respective ERISA Affiliates of notice from any Multiemployer Plan that it is in
reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA, or that
it intends to terminate or has terminated under Section 4041A or 4042 of ERISA;
(viii) the occurrence of an act or omission which could give rise to the
imposition on Company, any of its Guarantor Subsidiaries or any of their
respective ERISA Affiliates of fines, penalties, taxes or related charges under
Chapter 43 of the Internal Revenue Code or under Section 409, Section 502(c),
(i) or (l), or Section 4071 of ERISA in respect of any Employee Benefit Plan;
(ix) the assertion of a material claim (other than routine claims for benefits)
against any Employee Benefit Plan other than a Multiemployer Plan or the assets
thereof, or against Company, any of its Guarantor Subsidiaries or any of their
respective ERISA Affiliates in connection with any Employee Benefit Plan; (x)
receipt from the Internal Revenue Service of notice of the failure of any
Pension Plan (or any other Employee Benefit Plan intended to be qualified under
Section 401(a) of the Internal Revenue Code) to qualify under Section 401(a) of
the Internal Revenue Code, or the failure of any trust forming part of any
Pension Plan to qualify for exemption from taxation under Section 501(a) of the
Internal Revenue Code; or (xi) the imposition of a Lien pursuant to Section
401(a)(29) or 412(n) of the Internal Revenue Code or pursuant to ERISA with
respect to any Pension Plan.
"EURODOLLAR RATE LOAN" means a Loan bearing interest at a rate
determined by reference to the Adjusted Eurodollar Rate.
"EVENT OF DEFAULT" means each of the conditions or events set
forth in Section 8.1.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.
"EXCLUDED ENTITIES" means the Joint Ventures existing as of
the Closing Date and identified as such on Schedule 1.1(ii).
"EXISTING FACILITIES" means that certain Credit and Guaranty
Agreement dated as of May 13, 2002 by and among Company, as borrower, certain of
Company's Subsidiaries, as Guarantors, Lenders, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners
L.P., as Joint Lead
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Arranger, Sole Syndication Agent and a Lender, UBS AG, Stamford Branch, as
Administrative Agent, Swing Line Lender, Issuing Bank and a Lender, UBS Warburg
LLC as a Joint Lead Arranger, General Electric Capital Corporation, as
Collateral Monitoring Agent, Documentation Agent and a Lender, Residential
Funding Corporation dba GMAC-RFC Health Capital, as Joint Collateral Agent and a
Lender as it may have been amended through the Closing Date.
"FACILITY" means any real property (including all buildings,
fixtures or other improvements located thereon) now, hereafter or heretofore
owned, leased, operated or used by Company or any of its Guarantor Subsidiaries
or any of their respective predecessors or Affiliates.
"FACILITY USAGE" means a fraction, calculated as of the last
day of each Fiscal Quarter, the numerator or which is equal to the average daily
Total Utilization of Revolving Commitments and the denominator of which is equal
to the average daily aggregate Revolving Commitments of all Lenders during such
Fiscal Quarter (or portion thereof.)
"FAIR SHARE" as defined in Section 7.2.
"FAIR SHARE CONTRIBUTION AMOUNT" as defined in Section 7.2.
"FAIR SHARE SHORTFALL" as defined in Section 7.2.
"FC ASSET PURCHASE AGREEMENT" means that certain Asset
Purchase Agreement dated as of August 19, 2003 by and between Formation
Properties III, LLC, a Delaware limited liability company, the Company, Mariner
Health Care Management Company, certain subsidiaries of the Company and
Formation Properties III, LLC, a Delaware limited liability company, as amended
from time to time in accordance with Section 6.19.
"FC COLLATERAL" means, collectively, the FC Promissory Note
and the collateral support thereto.
"FC DIVESTITURES" means the sale of skilled nursing facilities
by Company to Formation Properties III, LLC, and related transactions, pursuant
to the FC Asset Purchase Agreement.
"FC PLEDGE AND SECURITY AGREEMENT" means that certain Pledge
and Security Agreement, dated as of October 1, 2003, from FC Properties III, LLC
pursuant to which Company is granted a first priority security interest in all
of FC Properties III, LLC's ownership interests in Formation Properties III, LLC
and its managing member.
"FC PROMISSORY NOTE" means that certain Promissory Note dated
as of October 1, 2003, in the principal sum of $13,086,957 made by FC Properties
III, LLC on such date in favor of the Company as agent for the Sellers named
therein, as amended from time to time in accordance with Section 4.4.3(b)(ii) of
the Pledge and Security Agreement.
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"FEDERAL FUNDS EFFECTIVE RATE" means for any day, the rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published by the Federal Reserve Bank of New York
on the Business Day next succeeding such day; provided, (i) if such day is not a
Business Day, the Federal Funds Effective Rate for such day shall be such rate
on such transactions on the next preceding Business Day as so published on the
next succeeding Business Day, and (ii) if no such rate is so published on such
next succeeding Business Day, the Federal Funds Effective Rate for such day
shall be the average rate charged to Administrative Agent, in its capacity as a
Lender, on such day on such transactions as determined by Administrative Agent.
"FINANCIAL OFFICER CERTIFICATION" means, with respect to the
financial statements for which such certification is required, the certification
of the chief financial officer of Company that such financial statements fairly
present, in all material respects, the financial condition of Company and its
Subsidiaries as at the dates indicated and the results of their operations and
their cash flows for the periods indicated, subject to changes resulting from
audit and normal year-end adjustments.
"FINANCIAL PLAN" as defined in Section 5.1(h).
"FIRST PRIORITY" means, with respect to any Lien purported to
be created in any Collateral pursuant to any Collateral Document, that such Lien
is the only Lien to which such Collateral is subject, other than Permitted
Liens.
"FISCAL QUARTER" means a fiscal quarter of any Fiscal Year.
"FISCAL YEAR" means the fiscal year of Company and its
Subsidiaries ending on December 31 of each calendar year.
"FIXED CHARGE COVERAGE RATIO" means the ratio as of the last
day of any Fiscal Quarter of (i) the sum of Consolidated Adjusted EBITDA plus
Consolidated Rental Expenses for the four-Fiscal Quarter Period then ending, to
(ii) Consolidated Fixed Charges for such four-Fiscal Quarter Period.
"FLOOD HAZARD PROPERTY" means any Real Estate Asset subject to
a mortgage in favor of Collateral Agent, for the benefit of Secured Parties, and
located in an area designated by the Federal Emergency Management Agency as
having special flood or mud slide hazards.
"FLORIDA DIVESTITURES" means the FC Divestitures and the
▇▇▇▇▇▇▇ Divesture.
"FOREIGN SUBSIDIARY" means any Subsidiary that is not a
Domestic Subsidiary.
"FUNDING DEFAULT" as defined in Section 2.22.
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"FUNDING GUARANTOR" as defined in Section 7.2.
"FUNDING NOTICE" means a notice substantially in the form of
Exhibit A-1.
"GAAP" means, subject to the limitations on the application
thereof set forth in ▇▇▇▇▇▇▇ ▇.▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ generally accepted accounting
principles in effect as of the date of determination thereof.
"GOVERNMENTAL ACTS" means any act or omission, whether
rightful or wrongful, of any present or future de jure or de facto government or
Governmental Authority.
"GOVERNMENTAL AUTHORITY" means any federal, state, municipal,
national or other government, governmental department, commission, board,
bureau, court, agency or instrumentality or political subdivision thereof or any
entity or officer exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to any government or any court, in
each case whether associated with a state of the United States, the United
States, or a foreign entity or government.
"GOVERNMENTAL AUTHORIZATION" means any permit, license,
authorization, plan, directive, consent order or consent decree of or from any
Governmental Authority.
"GRANTOR" as defined in the Pledge and Security Agreement.
"GUARANTEED OBLIGATIONS" as defined in Section 7.1.
"GUARANTOR" means each wholly-owned Domestic Subsidiary of
Company, other than the Non-Guarantor Subsidiaries. The Subsidiaries of Company
which are Guarantors on the Closing Date are listed on Schedule 1.1(i). The
Subsidiaries of Company in existence on the Closing Date which are not
Guarantors by reason of failing to satisfy the aforementioned criteria are
listed on Schedule 1.1(ii). The term Guarantor shall also include each other
Domestic Subsidiary from time to time made a Guarantor Subsidiary pursuant to
Section 5.10 hereof.
"GUARANTOR SUBSIDIARY" means each Subsidiary of Company that
is a Guarantor.
"GUARANTY" means the guaranty of each Guarantor set forth in
Section 7.
"HAZARDOUS MATERIALS" means any chemical, material or
substance, exposure to which is prohibited, limited or regulated by any
Governmental Authority or which may or could pose a hazard to the health and
safety of the owners, occupants or any Persons in the vicinity of any Facility
or to the indoor or outdoor environment including all substances defined as
Hazardous Substances, Oils, Pollutants or Contaminants in the National Oil and
Hazardous Substances Pollution Contingency Plan,
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40 C.F.R. Section 300.5, toxic mold, or defined as such by, or regulated as such
under, any Environmental Law.
"HAZARDOUS MATERIALS ACTIVITY" means any past, current,
proposed or threatened activity, event or occurrence involving any Hazardous
Materials, including the use, manufacture, possession, storage, holding,
presence, existence, location, Release, threatened Release, discharge,
placement, generation, transportation, processing, construction, treatment,
abatement, removal, remediation, disposal, disposition or handling of any
Hazardous Materials, and any corrective action or response action with respect
to any of the foregoing.
"HEALTH CARE FACILITY" any facility which provides any level
of geriatric care, home care, medical care (including, without limitation,
sub-acute care), assisted living or rehabilitative services, whether licensed as
a skilled nursing facility, intermediate care facility, personal care facility,
out-patient clinic or hospital (including, without limitation, any long-term
acute care hospital) or any products or services reasonably related thereto.
"HEALTH CARE PERMIT" means any and all licenses, provisional
licenses, JCAHO and/or other accreditations, franchising rights to conduct
business, approvals by a Governmental Authority, authorizations, certificates of
need, consents, qualifications, operating authority, and/or any other permit
that is related to the provision of health care services required by any
applicable Governmental Authority or otherwise necessary for a Credit Party or
any of its Subsidiaries to operate their business or to own, lease, operate or
manage a Health Care Facility of Company or any of its Subsidiaries.
"HEDGE AGREEMENT" means an Interest Rate Agreement entered
into with a Lender Counterparty.
"HIGHEST LAWFUL RATE" means the maximum lawful interest rate,
if any, that at any time or from time to time may be contracted for, charged, or
received under the laws applicable to any Lender which are presently in effect
or, to the extent allowed by law, under such applicable laws which may hereafter
be in effect and which allow a higher maximum nonusurious interest rate than
applicable laws now allow.
"HISTORICAL FINANCIAL STATEMENTS" means as of the Closing
Date, (i) the audited financial statements of Company and its consolidated
Subsidiaries, for the Fiscal Year ended December 31, 2002, the stub Fiscal Year
ended December 31, 2001, and the prior Fiscal Year ended September 30, 2001,
consisting of balance sheets and the related consolidated statements of income,
stockholders' equity and cash flows for such Fiscal Years, and (ii) the
unaudited financial statements of Company and its consolidated Subsidiaries as
at the most recent Fiscal Quarter ending no less than forty-five (45) days prior
to the Closing Date consisting of a balance sheet and the related consolidated
statements of income, stockholders' equity and cash flows for the period ending
on such date, and, in the case of clauses (i) and (ii), certified by the chief
financial officer of Company that they fairly present, in all material respects,
the financial condition of Company and its consolidated Subsidiaries as at the
dates indicated and the results of
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their operations and their cash flows for the periods indicated, subject to
changes resulting from audit and normal year-end adjustments.
"INCREASED-COST LENDERS" as defined in Section 2.23.
"INCREASED AMOUNT DATE" as defined in Section 2.24.
"INDEBTEDNESS," as applied to any Person, means, without
duplication, (i) all indebtedness for borrowed money; (ii) that portion of
obligations with respect to Capital Leases that is properly classified as a
liability on a balance sheet in conformity with GAAP; (iii) notes payable and
drafts accepted representing extensions of credit whether or not representing
obligations for borrowed money; (iv) any obligation owed for all or any part of
the deferred purchase price of property or services (excluding any such
obligations incurred under ERISA), which purchase price is (a) due more than six
months from the date of incurrence of the obligation in respect thereof or (b)
evidenced by a note or similar written instrument; (v) all indebtedness secured
by any Lien on any property or asset owned or held by that Person regardless of
whether the indebtedness secured thereby shall have been assumed by that Person
or is nonrecourse to the credit of that Person; (vi) the face amount of any
letter of credit issued for the account of that Person or as to which that
Person is otherwise liable for reimbursement of drawings; (vii) the direct or
indirect guaranty, endorsement (otherwise than for collection or deposit in the
ordinary course of business), co-making, discounting with recourse or sale with
recourse by such Person of the obligation of another; (viii) any obligation of
such Person the primary purpose or intent of which is to provide assurance to an
obligee that the monetary obligation of the obligor thereof will be paid or
discharged, or the holders thereof will be protected (in whole or in part)
against loss in respect thereof; and (ix) any liability of such Person for the
obligation of another through any agreement (contingent or otherwise) (a) to
purchase, repurchase or otherwise acquire such obligation or any security
therefor, or to provide funds for the payment or discharge of such obligation
(whether in the form of loans, advances, stock purchases, capital contributions
or otherwise) or (b) to maintain the solvency or any balance sheet item, level
of income or financial condition of another if, in the case of any agreement
described under subclauses (a) or (b) of this clause (ix), the primary purpose
or intent thereof is as described in clause (viii) above; and (x) obligations of
such Person in respect of any exchange traded or over the counter derivative
transaction, including, without limitation, any Interest Rate Agreement and
Currency Agreement, whether entered into for hedging or speculative purposes;
provided, in no event shall obligations under any Interest Rate Agreement and
Currency Agreement be deemed "Indebtedness" for any purpose under Section 6.8;
and (xi) any obligation under any lease (a "synthetic lease") treated as an
operating lease under GAAP and as a loan or financing for United States income
tax purposes or creditors rights purposes.
"INDEMNIFIED LIABILITIES" means, collectively, any and all
liabilities, obligations, losses, damages (including natural resource damages),
penalties, claims (including Environmental Claims), costs (including the costs
of any investigation, study, sampling, testing, abatement, cleanup, removal,
remediation or other response action necessary to remove, remediate, clean up or
▇▇▇▇▇ any Hazardous Materials Activity), expenses and disbursements of any kind
or nature whatsoever (including the reasonable
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fees and disbursements of counsel for Indemnitees in connection with any
investigative, administrative or judicial proceeding commenced or threatened by
any Person, whether or not any such Indemnitee shall be designated as a party or
a potential party thereto, and any fees or expenses incurred by Indemnitees in
enforcing this indemnity), whether direct, indirect or consequential and whether
based on any federal, state or foreign laws, statutes, rules or regulations
(including securities and commercial laws, statutes, rules or regulations and
Environmental Laws), on common law or equitable cause or on contract or
otherwise, that may be imposed on, incurred by, or asserted against any such
Indemnitee, in any manner relating to or arising out of (i) this Agreement or
the other Credit Documents or the transactions contemplated hereby or thereby
(including Lenders' agreement to make Credit Extensions or the use or intended
use of the proceeds thereof, or any enforcement of any of the Credit Documents
(including any sale of, collection from, or other realization upon any of the
Collateral or the enforcement of the Guaranty)); (ii) the statements contained
in the commitment letter delivered by any Lender to Company with respect to the
transactions contemplated by this Agreement; or (iii) any Environmental Claim or
any Hazardous Materials Activity relating to or arising from, directly or
indirectly, any past or present activity, operation, land ownership, or practice
of Company or any of its Subsidiaries.
"INDEMNITEE" as defined in Section 10.3.
"INSTALLMENT" means a Tranche B Term Loan Installment and the
New Term Loan Installment.
"INSURANCE CONCENTRATION ACCOUNT" as defined in the Pledge and
Security Agreement.
"INTEREST PAYMENT DATE" means with respect to (i) any Base
Rate Loan, each March 31, June 30, September 30 and December 31 of each year,
commencing on the first such date to occur after the Closing Date and the final
maturity date of such Loan; and (ii) any Eurodollar Rate Loan, the last day of
each Interest Period applicable to such Loan; provided, in the case of each
Interest Period of longer than three months "Interest Payment Date" shall also
include each date that is three months, or an integral multiple thereof, after
the commencement of such Interest Period.
"INTEREST PERIOD" means, in connection with a Eurodollar Rate
Loan, an interest period of one-, three- or six-months, or to the extent
available to all Lenders, nine- or twelve-months (or such other periods as may
be generally available to all Lenders) as selected by Company in the applicable
Funding Notice or Conversion/Continuation Notice, (i) initially, commencing on
the Credit Date or Conversion/Continuation Date thereof, as the case may be; and
(ii) thereafter, commencing on the day on which the immediately preceding
Interest Period expires; provided, (a) if an Interest Period would otherwise
expire on a day that is not a Business Day, such Interest Period shall expire on
the next succeeding Business Day unless no further Business Day occurs in such
month, in which case such Interest Period shall expire on the immediately
preceding Business Day; (b) any Interest Period that begins on the last Business
Day of a calendar month (or on a day for which there is no numerically
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corresponding day in the calendar month at the end of such Interest Period)
shall, subject to clauses (c) and (d), of this definition, end on the last
Business Day of a calendar month; (c) no Interest Period with respect to any
portion of the Term Loan shall extend beyond such Class's Term Loan Maturity
Date; and (d) no Interest Period with respect to any portion of the Revolving
Loans shall extend beyond the Revolving Commitment Termination Date.
"INTEREST RATE AGREEMENT" means any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement, interest
rate hedging agreement or other similar agreement or arrangement, each of which
is for the purpose of hedging the interest rate exposure associated with
Company's and its Subsidiaries' operations and not for speculative purposes.
"INTEREST RATE DETERMINATION DATE" means, with respect to any
Interest Period, the date that is two Business Days prior to the first day of
such Interest Period.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of
1986, as amended to the date hereof and from time to time hereafter, and any
successor statute.
"INVESTMENT" means (i) any direct or indirect purchase or
other acquisition by Company or any of its Subsidiaries of, or of a beneficial
interest in, any of the Securities of any other Person (other than a Guarantor);
(ii) any direct or indirect redemption, retirement, purchase or other
acquisition for value, by any Subsidiary of Company from any Person (other than
Company or any Guarantor), of any Capital Stock of such Person; and (iii) any
direct or indirect loan, advance (other than advances to employees for moving,
entertainment and travel expenses, drawing accounts and similar expenditures in
the ordinary course of business) or capital contribution by Company or any of
its Subsidiaries to any other Person (other than Company or any Guarantor),
including all indebtedness and accounts receivable from that other Person that
are not current assets or did not arise from sales to that other Person in the
ordinary course of business. The amount of any Investment shall be the original
cost of such Investment plus the cost of all additions thereto, without any
adjustments for increases or decreases in value, or write-ups, write-downs or
write-offs with respect to such Investment.
"ISSUANCE NOTICE" means an Issuance Notice substantially in
the form of Exhibit A-3.
"ISSUING BANK" means (i) with respect to Standby Letters of
Credit, CIBC or (ii) with respect to commercial letters of credit, any Lender(s)
having Revolving Exposure (but expressly excluding CIBC) designated by Company
from time to time and that has agreed in writing to act as an Issuing Bank
hereunder, together with its permitted successors and assigns in such capacity.
"JCAHO" shall mean the Joint Commission on Accreditation of
Healthcare Organizations.
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"JOINDER AGREEMENT" means an agreement substantially in the
form of Exhibit L.
"JOINT LEAD ARRANGER" as defined in the preamble hereto.
"JOINT VENTURE" means a joint venture, partnership or other
similar arrangement, whether in corporate, partnership or other legal form;
provided, in no event shall any corporate Subsidiary of any Person be considered
to be a Joint Venture to which such Person is a party.
"JOINT VENTURE HOLDING COMPANY" means a Guarantor Subsidiary
which (i) does not engage in any business activities or own any assets or
properties other than the Capital Stock of a Joint Venture and otherwise as
incident to its existence as a holding company, (ii) does not directly or
indirectly, create, incur, assume or guaranty, or otherwise become or remain
directly or indirectly liable with respect to any Indebtedness (other than the
Obligations, any intercompany Indebtedness expressly permitted pursuant to
Section 6.1(b) hereof and Indebtedness expressly permitted pursuant to Section
6.1(c) and (l) hereof) and (iii) does not have any employees, material
Contractual Obligations, Investments (other than in the Joint Venture, the
Capital Stock of which it owns, and expressly permitted by Section 6.7(k)),
accounts, liabilities, claims or assets other then incidental to its existence
as a holding company.
"JPMCB" as defined in the preamble hereto.
"JPMORGAN" as defined in the preamble hereto.
"▇▇▇▇▇▇▇ DIVESTITURE" means the divestiture of the ▇▇▇▇▇▇▇
Florida Facilities (as defined in the Existing Credit Facility) to the
respective ▇▇▇▇▇▇▇ Florida Landlords (as defined in the Existing Credit
Facility) including without limitation the assignment of net working capital
associated with such facilities, in an amount not to exceed $5,000,000, the
consideration for which shall consist of the termination of capital lease
obligations associated with the ▇▇▇▇▇▇▇ Florida Facilities, or as otherwise may
be reasonably satisfactory to the Administrative Agent; provided, however, that
any material change to the economic or financial terms of any ▇▇▇▇▇▇▇
Divestiture shall be subject to approval by Requisite Lenders.
"LANDLORD CONSENT AND ESTOPPEL" means, with respect to any
Leasehold Property, a landlord consent and estoppel agreement in the form of
Exhibit K with such amendments and modifications as may be approved by
Collateral Agent.
"LBI" as defined in the preamble hereto.
"LCPI" as defined in the preamble hereto.
"LEASEHOLD PROPERTY" means any leasehold interest of any
Credit Party as lessee under any lease of real property, other than any such
leasehold interest designated from time to time by Collateral Agent in their
sole discretion as not being required to be included in the Collateral.
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"LENDER" means each financial institution listed on the
signature pages hereto as a Lender, and any other Person that becomes a party
hereto pursuant to an Assignment Agreement.
"LENDER COUNTERPARTY" means each Lender or any Affiliate of a
Lender counterparty to a Hedge Agreement including, without limitation, each
such Lender or Affiliate that enters into a joinder agreement with the
Collateral Agent.
"LETTER OF CREDIT" means a commercial or standby letter of
credit issued or to be issued by Issuing Bank pursuant to this Agreement.
"LETTER OF CREDIT SUBLIMIT" means the lesser of $60,000,000
and the aggregate unused amount of the Revolving Commitments then in effect.
"LETTER OF CREDIT USAGE" means, as at any date of
determination, the sum of (i) the maximum aggregate amount which is, or at any
time thereafter may become, available for drawing under all Letters of Credit
then outstanding, and (ii) the aggregate amount of all drawings under Letters of
Credit honored by Issuing Bank and not theretofore reimbursed by or on behalf of
Company.
"LEVERAGE RATIOS" means each of the Senior Debt Leverage Ratio
and the Total Lease Adjusted Leverage Ratio.
"LIEN" means (i) any lien, mortgage, pledge, assignment,
security interest, charge or encumbrance of any kind (including any agreement to
give any of the foregoing, any conditional sale or other title retention
agreement, and any lease in the nature thereof) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing and
(ii) in the case of Securities (other than Securities of a Joint Venture subject
to rights of first refusal or put or call rights as identified on Schedule
1.1(v) in favor of other participants in such Joint Venture), any purchase
option, call or similar right of a third party (other than Company or any
Guarantor Subsidiary) with respect to such Securities.
"LOAN" means a Tranche B Term Loan, a Revolving Loan, a Swing
Line Loan or a New Term Loan. "LOANS" means the Tranche B Term Loans, the
Revolving Loans, the Swing Line Loans and the New Term Loans.
"LOUISIANA DIVESTITURES" means the transfer of operations at
the Facilities leased by National Heritage Realty, Inc. in Metairie and ▇▇▇▇▇▇,
Louisiana, in connection with the expiration of such leases and the sale of
Jefferson Healthcare Center in Jefferson, Louisiana, to Plantation Management
LLC or an affiliate thereof for $5,000,000.
"LTM EBITDA" means as of the date of determination thereof
with respect to any Swapped Asset or any asset exchanged for a Swapped Asset
property level pre-corporate overhead unadjusted EBITDA for the prior twelve
fiscal months calculated solely for such Swapped Asset or exchanged asset in
accordance with GAAP.
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"MANAGEMENT AGREEMENT" shall mean all management agreements to
which any Credit Party is a party providing for (i) the operation and management
by a third party of a Health Care Facility owned or leased by such Credit Party
or (ii) the operation and management by such Credit Party of a healthcare
facility owned or leased by a third party.
"MARGIN STOCK" as defined in Regulation U of the Board of
Governors of the Federal Reserve System as in effect from time to time.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on
(i) the business, operations, properties, assets, condition (financial or
otherwise) or prospects of Company and the Guarantor Subsidiaries taken as a
whole; (ii) a significant portion of the industry or business segment in which
Company or the Guarantor Subsidiaries operate or rely upon if such effect or
development is reasonably likely to have a material adverse effect on Company
and the Guarantor Subsidiaries taken as a whole; (iii) the ability of any Credit
Party (other than a Non-Material Guarantor Subsidiary) to fully and timely
perform its Obligations; (iv) the legality, validity, binding effect or
enforceability against a Credit Party (other than a Non-Material Guarantor
Subsidiary) of a Credit Document to which it is a party; or (v) the rights,
remedies and benefits available to, or conferred upon, any Agent and any Lender
or any Secured Party under any Credit Document.
"MATERIAL CONTRACT" means any contract or other written
agreement to which a Credit Party (other than the Non-Guarantor Subsidiaries) is
or becomes a party (other than the Credit Documents) pursuant to the terms of
which, any Credit Party or a Subsidiary thereof could reasonably be expected to
(A) recognize future revenues in excess of $20,000,000 per annum, (B) incur
liabilities or obligations in excess of $20,000,000 per annum or (C) likely
suffer damages or losses in excess of $20,000,000 by reason of the breach or
termination thereof.
"MATERIAL LEASE" any lease agreement with respect to a Health
Care Facility or Health Care Facilities for which either (a) the portion of
Consolidated Net Income contributed by the operation of such Health Care
Facility or Health Care Facilities for the most recent Fiscal Quarter or Fiscal
Year for which the relevant financial information is available represent 3% or
more of the Consolidated Net Income of Company and its Guarantor Subsidiaries
during such period or (b) the portion of Consolidated Adjusted EBITDA
contributed by the operation of such Health Care Facility or Health Care
Facilities for the most recent Fiscal Quarter or Fiscal Year for which the
relevant financial information is available represents 3% or more of
Consolidated Adjusted EBITDA during such period.
"MATERIAL REAL ESTATE ASSET" means (i) (a) any fee-owned Real
Estate Asset having a fair market value (as reasonably determined by Company) in
excess of $1,000,000 as of the date of the acquisition thereof, and (b) all
Leasehold Properties other than those with respect to which the aggregate
payments under the term of the lease during any calendar year are less than
$250,000 per annum, or (ii) any Real Estate Asset that the Requisite Lenders
have reasonably determined is material to the business,
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operations, properties, assets, condition (financial or otherwise) or prospects
of the Credit Parties, taken as a whole.
"MEDICAID" shall mean collectively, the healthcare assistance
program established by Title XIX of the Social Security Act (42 U.S.C.
Sections 1396 et seq.) and any statutes succeeding thereto, and all laws, rules,
regulations, manuals, orders, guidelines or requirements pertaining to such
program including (a) all federal statutes (whether set forth in Title XIX of
the Social Security Act or elsewhere) affecting such program; (b) all state
statutes, regulations and plans for medical assistance enacted in connection
with such program and federal rules and regulations promulgated in connection
with such program; and (c) all applicable provisions of all rules, regulations,
manuals, orders and administrative, reimbursement, guidelines and requirements
of all Governmental Authorities promulgated in connection with such program
(whether or not having the force of law), in each case as the same may be
amended, restated, supplemented or otherwise modified from time to time.
"MEDICAID PROVIDER AGREEMENT" shall mean an agreement entered
into between a health care facility, supplier or physician and CMS or any
federal or state agency or other entity administering Medicaid in such state, or
any other grant of authority by CMS or any federal or state agency or other
entity administering Medicaid in such state, under which the health care
facility, supplier or physician is authorized to provide medical goods and
services to Medicaid recipients and to be reimbursed by Medicaid for such goods
and services.
"MEDICARE" shall mean collectively, the health insurance
program for the aged and disabled established by Title XVIII of the Social
Security Act (42 U.S.C. Sections 1395 et seq.) and any statutes succeeding
thereto, and all laws, rules, regulations, manuals, orders or guidelines
pertaining to such program including (a) all federal statutes (whether set forth
in Title XVIII of the Social Security Act or elsewhere) affecting such program;
and (b) all applicable provisions of all rules, regulations, manuals, orders and
administrative, reimbursement, guidelines and requirements of all Governmental
Authorities promulgated in connection with such program (whether or not having
the force of law), in each case as the same may be amended, restated,
supplemented or otherwise modified from time to time.
"MEDICARE PROVIDER AGREEMENT" shall mean an agreement entered
into between a health care facility, supplier or physician and CMS or any
federal or state agency or other entity administering Medicare in such state, or
other grant of authority by CMS or any federal or state agency or other entity
administering Medicare in such state, under which the health care facility,
supplier or physician is authorized to provide medical goods and services to
Medicare patients and to be reimbursed by Medicare for such goods and services.
"MOODY'S" means Moody's Investor Services, Inc.
"MORTGAGE" means a Mortgage substantially in the form of
Exhibit J, as it may be amended, restated, supplemented or otherwise modified
from time to time.
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"MULTIEMPLOYER PLAN" means any Employee Benefit Plan which is
a "multiemployer plan" as defined in Section 3(37) of ERISA.
"NAIC" means The National Association of Insurance
Commissioners, and any successor thereto.
"NET ASSET SALE PROCEEDS" means, with respect to any Asset
Sale, an amount equal to: (i) Cash payments (including any Cash received by way
of deferred payment pursuant to, or by monetization of, a note receivable or
otherwise, but only as and when so received, but expressly excluding interest in
respect of the FC Promissory Note as provided for therein as of the Closing
Date) received by Company or any of its Guarantor Subsidiaries from such Asset
Sale, minus (ii) any bona fide direct costs incurred in connection with such
Asset Sale, including (a) brokers' fees, commissions, legal fees, transfer
taxes, recording costs and other customary transaction costs, (b) income or
gains taxes payable by the seller as a result of any gain recognized in
connection with such Asset Sale, (c) payment of the outstanding principal amount
of, premium or penalty, if any, and interest on any Indebtedness (other than the
Loans) that is secured by a Lien on the stock or assets in question and that is
required to be repaid under the terms thereof as a result of such Asset Sale,
and (d) a reasonable reserve for any indemnification payments (fixed or
contingent) attributable to seller's indemnities and representations and
warranties to purchaser in respect of such Asset Sale undertaken by Company or
any of its Guarantor Subsidiaries in connection with such Asset Sale. In
connection with any Asset Sale involving the sale of an Investment made pursuant
to Section 6.7(k) (without regard to the parenthetical therein), the term Net
Asset Sale Proceeds shall be deemed to exclude that portion of the sale price
representing the historical cost of such Investment, as certified to the Agents
and the Lenders by the chief financial officer or chief accounting officer of
the Company.
"NET INSURANCE/CONDEMNATION PROCEEDS" means an amount equal
to: (i) any Cash payments or proceeds received by any Credit Party (a) under any
casualty insurance policy in respect of a covered loss thereunder or (b) as a
result of the taking of any assets of any Credit Party by any Person pursuant to
the power of eminent domain, condemnation or otherwise, or pursuant to a sale of
any such assets to a purchaser with such power under threat of such a taking,
minus (ii) (a) any actual and reasonable costs incurred by any Credit Party in
connection with the adjustment or settlement of any claims of any Credit Party
in respect thereof, and (b) any bona fide direct costs incurred in connection
with any sale of such assets as referred to in clause (i)(b) of this definition,
including income taxes payable as a result of any gain recognized in connection
therewith.
"NEW TERM LOAN" as defined in Section 2.24.
"NEW TERM LOAN COMMITMENTS" as defined in Section 2.24.
"NEW TERM LOAN EXPOSURE" means, with respect to any Lender, as
of any date of determination, the outstanding principal amount of the New Term
Loans of such Lender.
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"NEW TERM LOAN INSTALLMENT" as defined in the Joinder
Agreement.
"NEW TERM LOAN LENDER" as defined in Section 2.24.
"NEW TERM LOAN MATURITY DATE" means the date that New Term
Loans shall become due and payable in full hereunder, as specified in the
Joinder Agreement, including by acceleration or otherwise.
"NEW TERM LOAN NOTE" means a promissory note in respect of a
New Term Loan similar in form to the form of Tranche B Term Loan Note in Exhibit
B-1, as it may be amended, restated, supplemented or otherwise modified from
time to time.
"NON-GUARANTOR SUBSIDIARIES" means the PHCMI Group Members
(until such time as they are required to become Guarantors in accordance with
Section 5.10), MPN Insurance Co. Ltd., GCI Indemnity, Inc. and such other
Subsidiaries as may be created or acquired from time to time as permitted by
this Agreement, which are not required to guarantee the Obligations pursuant to
Section 5.10. The Non-Guarantor Subsidiaries in existence on the Closing Date
which are not Guarantors by reason of satisfaction of the aforementioned
criteria are listed on Schedule 1.1(iii).
"NON-MATERIAL GUARANTOR SUBSIDIARY" means a Guarantor
Subsidiary designated by Company in accordance with the provisions of this
definition and each of its Subsidiaries. Company may at the time of delivery of
a Compliance Certificate pursuant to Section 5.1(c) designate a Guarantor
Subsidiary a "Non-Material Guarantor Subsidiary" provided: (i) immediately prior
to, and after giving effect thereto, no Default or Event of Default shall have
occurred and be continuing, (ii) Company shall have delivered a certificate of
designation of an Authorized Officer evidencing, and further representing and
warranting (and setting forth in reasonable detail the relevant information)
compliance with the designation requirements contained herein, (iii) such
Guarantor together with its Subsidiaries, as of the end of the most recent
Fiscal Quarter either individually or when aggregated with all existing and
(contemporaneously therewith) proposed Non-Material Guarantor Subsidiaries
accounted for less than 5% of Company's and its Subsidiaries consolidated total
assets, shareholders' equity or operating income (calculated for the four most
recent Fiscal Quarters), determined in each case in accordance with GAAP. A
Guarantor Subsidiary which has been duly and validly designated as a
Non-Material Guarantor Subsidiary shall cease to be deemed as such for the
purposes of this Agreement at any time that it together with its Subsidiaries,
either individually, or when aggregated with the Non-Material Guarantor
Subsidiaries designated at any time prior to its designation collectively
account for 5% or more of Company's and its Subsidiaries' consolidated (a) total
assets, or (b) shareholders' equity or (c) operating income (calculated for the
four most recent Fiscal Quarters), determined in each case in accordance with
GAAP. It is hereby acknowledged that Company shall be deemed to designate on the
Closing Date (in the order thereon listed) the Non-Material Guarantor
Subsidiaries listed on Schedule 1.1(iii). Company hereby represents and warrants
that as of the Closing Date, the conditions of this provision to the valid
designation of each Subsidiary listed on such Schedule 1.1(iii) are satisfied.
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"NON-US LENDER" as defined in Section 2.20(c).
"NOTE" means a Tranche B Term Loan Note, a Revolving Loan
Note, a Swing Line Note or New Term Loan Note.
"NOTICE" means a Funding Notice, an Issuance Notice, or a
Conversion/Continuation Notice.
"OBLIGATIONS" means all obligations of every nature of each
Credit Party from time to time owed to the Agents (including former Agents), the
Lenders or any of them and Lender Counterparties, under any Credit Document or
Hedge Agreement (including, without limitation, with respect to a Hedge
Agreement, obligations owed thereunder to any Person who was a Lender or an
Affiliate of a Lender at the time such Hedge Agreement was entered into),
whether for principal, interest (including interest which, but for the filing of
a petition in bankruptcy with respect to such Credit Party, would have accrued
on any Obligation, whether or not a claim is allowed against such Credit Party
for such interest in the related bankruptcy proceeding), reimbursement of
amounts drawn under Letters of Credit, payments for early termination of Hedge
Agreements, fees, expenses, indemnification or otherwise.
"OBLIGEE GUARANTOR" as defined in Section 7.7.
"OMEGA" means Omega Healthcare Investors, Inc., a Maryland
corporation.
"OMEGA LOAN" means that certain loan in the principal amount
of $59,688,449.83, evidenced by an amended and restated promissory note dated
September 1, 2001, executed by PHCMI and payable to the order of Omega, and
guaranteed by the other PHCMI Group Members.
"ORGANIZATIONAL DOCUMENTS" means (i) with respect to any
corporation, its certificate or articles of incorporation or organization, as
amended, and its by-laws, as amended, (ii) with respect to any limited
partnership, its certificate of limited partnership, as amended, and its
partnership agreement, as amended, (iii) with respect to any general
partnership, its partnership agreement, as amended, and (iv) with respect to any
limited liability company, its articles of organization, as amended, and its
operating agreement, as amended. In the event any term or condition of this
Agreement or any other Credit Document requires any Organizational Document to
be certified by a secretary of state or similar governmental official, the
reference to any such "Organizational Document" shall only be to a document of a
type customarily certified by such governmental official.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code
or Section 302 of ERISA.
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"PERMITTED ACQUISITION" means any acquisition by Company or
any of its wholly-owned Subsidiaries, whether by purchase, merger or otherwise,
of all or substantially all of the assets of, all of the Capital Stock of, or a
business line or unit or a division of, any Person, or of one or more Health
Care Facilities of any Person; provided,
(i) immediately prior to, and after
giving effect thereto, no Default or Event of Default shall have
occurred and be continuing or would result therefrom;
(ii) immediately prior to, and after
giving pro forma effect thereto as of the last day of the most recently
ended month, Availability shall be greater than $40,000,000;
(iii) all transactions in connection
therewith shall be consummated, in all material respects, in accordance
with all applicable laws and in conformity with all applicable
Governmental Authorizations;
(iv) in the case of the acquisition of
Capital Stock, all of the Capital Stock (except for any such Securities
in the nature of directors' qualifying shares required pursuant to
applicable law) acquired or otherwise issued by such Person or any
newly formed Subsidiary of Company in connection with such acquisition
shall be owned 100% by Company or a Guarantor Subsidiary thereof, and
Company shall have taken, or caused to be taken, as of the date such
Person becomes a Subsidiary of Company, each of the actions set forth
in Sections 5.10 and/or 5.11, as applicable;
(v) Company and its Subsidiaries shall
be in compliance with the financial covenants set forth in Section 6.8
on a pro forma basis after giving effect to such acquisition as of the
last day of the Fiscal Quarter most recently ended, (as determined in
accordance with Section 6.8(d));
(vi) Company shall have delivered to
Administrative Agent at least five (5) Business Days prior to such
proposed acquisition, a Compliance Certificate evidencing compliance
with (A) clause (ii) above, and (B) Section 6.8 as required under
clause (v) above, together with all relevant financial information with
respect to such acquired assets, including, without limitation, the
aggregate consideration for such acquisition and any other information
required to demonstrate compliance with Section 6.8 and clause (ii)
above; and
(vii) any Person or assets or division as
acquired in accordance herewith (y) shall be in same business or lines
of business in which Company and/or its Subsidiaries are engaged as of
the Closing Date or (subject to Section 6.9(e)) in any other healthcare
business or line of business deemed in the reasonable business judgment
of Company's Board of Directors to be reasonably related to such
existing business or lines of business and (z) unless expressly
approved by Company's Board of Directors, shall have generated positive
cash
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flow for the four quarter period most recently ended prior to the date
of such acquisition.
"PERMITTED ANCILLARY LEASE" means a short-term lease or
sub-lease of a non-material portion of an operational Health Care Facility, in
any event such portion not to exceed 5,000 square feet, to a third-party to
facilitate the provision of services by such third-party at such Health Care
Facility related or reasonably incident to the primary business of the lessor or
sublessor Credit Party permitted by Section 6.13(a), entered into in the
ordinary course of business, having a term of no longer than one year provided
that such lease may be renewed with the consent of the applicable Credit Party
party thereto at the end of the initial one year term for additional one year
terms.
"PERMITTED LIENS" means each of the Liens permitted pursuant
to Section 6.2.
"PERMITTED PHCMI MORTGAGE LOAN" means Indebtedness of the
PHCMI Group Members used to repay the Omega Loan incurred after the Closing Date
as expressly permitted under Section 6.1(h).
"PERSON" means and includes natural persons, corporations,
limited partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and Governmental Authorities.
"PHCMI GROUP MEMBERS" means, collectively, (i) Professional
Health Care Management, Inc. ("PHCMI") and (ii) all of the subsidiaries of PHCMI
that are indebted to Omega, and any affiliates, successors or assigns thereof.
"PLEDGE AND SECURITY AGREEMENT" means the Pledge and Security
Agreement to be executed by Company, the Collateral Agent and each Guarantor
substantially in the form of Exhibit I, as it may be amended, restated,
supplemented or otherwise modified from time to time.
"POST-CLOSING MORTGAGED PROPERTY" means each of those Real
Estate Assets identified as such on Schedule 4.13(b), each being a Real Estate
Asset which is owned by a Credit Party in fee simple as of the Closing Date but
which is not a Closing Date Mortgaged Property.
"PREPAYMENT DATE" as defined in Section 2.15(b)(v).
"PRICING CERTIFICATE" means a Pricing Certificate detailing
the Total Lease Adjusted Leverage Ratio as of December 31 to the same extent as
such covenant compliance is detailed with respect to other Fiscal Quarters in
the Compliance Certificate.
"PRIME RATE" means the rate of interest per annum that CIBC
announces from time to time as its prime lending rate for its United States
commercial lending units,
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as in effect from time to time. The Prime Rate is a reference rate and does not
necessarily represent the lowest or best rate actually charged to any customer.
CIBC or any other Lender may make commercial loans or other loans at rates of
interest at, above or below the Prime Rate.
"PRINCIPAL OFFICE" means, for each of Administrative Agent,
Swing Line Lender and Issuing Bank, such Person's "Principal Office" as set
forth on Appendix A, or such other office as such Person may from time to time
designate in writing to Company, Administrative Agent and each Lender.
"PRO RATA SHARE" means (i) with respect to all payments,
computations and other matters relating to the Tranche B Term Loan of any
Lender, the percentage obtained by dividing (a) the Tranche B Term Loan Exposure
of that Lender by (b) the aggregate Tranche B Term Loan Exposure of all Lenders;
(ii) with respect to all payments, computations and other matters relating to
the Revolving Commitment or Revolving Loans of any Lender or any Letters of
Credit issued or participations purchased therein by any Lender or any
participations in any Swing Line Loans purchased by any Lender, the percentage
obtained by dividing (a) the Revolving Exposure of that Lender by (b) the
aggregate Revolving Exposure of all Lenders, (iii) with respect to all payments,
computations and other matters relating to the New Term Loan of any Lender, the
percentage obtained by dividing (a) the New Term Loan Exposure of that Lender by
(b) the aggregate New Term Loan Exposure of all Lenders and (iv) with respect to
all payments, computations and other matters relating to the Term Loan of any
Lender, the percentage obtained by dividing (a) the Term Loan Exposure of that
Lender by (b) the aggregate Term Loan Exposure of all Lenders. For all other
purposes with respect to each Lender, "Pro Rata Share" means the percentage
obtained by dividing (A) an amount equal to the sum of the Tranche B Term Loan
Exposure, the Revolving Exposure and the New Term Loan Exposure, by (B) an
amount equal to the sum of the aggregate Term Loan Exposure, the aggregate
Revolving Exposure and the aggregate New Term Loan Exposure.
"PROJECTIONS" as defined in Section 4.8.
"REAL ESTATE ASSET" means, at any time of determination, any
interest (fee, leasehold or otherwise) then owned by any Credit Party (other
than a Non-Material Guarantor Subsidiary) in any real property.
"RECORD DOCUMENT" means, with respect to any Leasehold
Property, (i) the lease evidencing such Leasehold Property or a memorandum
thereof, executed and acknowledged by the owner of the affected real property,
as lessor, or (ii) if such Leasehold Property was acquired or subleased from the
holder of a Recorded Leasehold Interest, the applicable assignment or sublease
document, executed and acknowledged by such holder, in each case in form
sufficient to give such constructive notice upon recordation and otherwise in
form reasonably satisfactory to Collateral Agent.
"RECORDED LEASEHOLD INTEREST" means a Leasehold Property with
respect to which a Record Document has been recorded in all places necessary or
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desirable, in Administrative Agent's reasonable judgment, to give constructive
notice of such Leasehold Property to third-party purchasers and encumbrancers of
the affected real property.
"REFINANCING NOTE INDENTURE" means the trust indenture in form
and substance reasonably satisfactory to the Administrative Agent pursuant to
which any Refinancing Notes may be issued in accordance with the terms of this
Agreement, as such indenture may be further amended, restated, supplemented,
modified, extended, renewed or replaced from time to time in accordance with
Section 6.14 of this Agreement.
"REFINANCING NOTES" as defined in Section 6.1(l).
"REFUNDED SWING LINE LOANS" as defined in Section 2.3(b)(iv).
"REGISTER" as defined in Section 2.7(b).
"REGULATION D" means Regulation D of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"REIMBURSEMENT APPROVALS" shall mean, with respect to all
Third Party Payor Arrangements, any and all certifications, provider numbers,
provider agreements (including, without limitation, Medicare Provider Agreements
and Medicaid Provider Agreements), participation agreements, accreditations
(including JCAHO accreditation) and/or any other agreements with or approvals by
organizations and Governmental Authorities.
"REIMBURSEMENT DATE" as defined in Section 2.4(d).
"RELATED AGREEMENTS" means, collectively, all documents,
instruments and agreements now or hereafter evidencing, or guaranteeing the
Indebtedness evidenced by the Senior Subordinated Notes, the Refinancing Notes,
the Omega Loan and any Permitted PHCMI Mortgage Loan.
"RELATED FUND" means, with respect to any Lender that is a
fund, any investment fund or other fund that is engaged in making, purchasing,
holding or otherwise investing in commercial loans and similar extensions of
credit in the ordinary course of business and that is managed or advised by the
same investment advisor as such Lender or by an Affiliate of such investment
advisor.
"RELEASE" means any release, spill, emission, leaking,
pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal,
dumping, leaching or migration of any Hazardous Material into the indoor or
outdoor environment (including the abandonment or disposal of any barrels,
containers or other closed receptacles containing any Hazardous Material),
including the movement of any Hazardous Material through the air, soil, surface
water or groundwater.
"RELEVANT ENTITY" as defined in Section 8.1(g).
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"REPLACEMENT LENDER" as defined in Section 2.23.
"REQUIREMENT OF LAW" as to any Person, the certificate or
articles of incorporation and by-laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"REQUISITE CLASS LENDERS" means, at any time of determination,
(i) for the Class of Lenders having Term Loan Exposure, Lenders holding more
than 50% of the aggregate Term Loan Exposure of all Lenders and (ii) for the
Class of Lenders having Revolving Exposure, Lenders holding more than 50% of the
aggregate Revolving Exposure of all Lenders.
"REQUISITE LENDERS" means one or more Lenders having or
holding Term Loan Exposure and/or Revolving Exposure and representing more than
50% of the sum of (i) the aggregate Term Loan Exposure or Term Loan Commitment
of all Lenders, and (ii) the aggregate Revolving Exposure or Revolving
Commitment of all Lenders.
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
of Company now or hereafter outstanding, except a dividend payable solely in
shares of that class of stock to the holders of that class; (ii) any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any shares of any class of stock of Company now or
hereafter outstanding; (iii) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of stock of Company now or hereafter outstanding (excluding
any cash payments in lieu of fractional shares upon the exercise of such
warrants or options); and (iv) any payment or prepayment of principal of,
premium, if any, or interest on, or redemption, purchase, retirement, defeasance
(including in-substance or legal defeasance), sinking fund or similar payment
with respect to, the Senior Subordinated Notes or any Refinancing Notes.
"REVOLVING COMMITMENT" means the commitment of a Lender to
make or otherwise fund any Revolving Loan and to acquire participations in
Letters of Credit and Swing Line Loans hereunder and "Revolving Commitments"
means such commitments of all Lenders in the aggregate. The amount of each
Lender's Revolving Commitment, if any, is set forth on its respective signature
page hereto or in the applicable Assignment Agreement, subject to any adjustment
or reduction pursuant to the terms and conditions hereof. The aggregate amount
of the Revolving Commitments as of the Closing Date is $90,000,000.
"REVOLVING COMMITMENT PERIOD" means the period from the
Closing Date to but excluding the Revolving Commitment Termination Date.
"REVOLVING COMMITMENT TERMINATION DATE" means the earliest to
occur of (i) January 2, 2008; (ii) the date the Revolving Commitments are
permanently
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reduced to zero pursuant to Section 2.13(b) or 2.14, and (iii) the date of the
termination of the Revolving Commitments pursuant to Section 8.1.
"REVOLVING EXPOSURE" means, with respect to any Lender as of
any date of determination, (i) prior to the termination of the Revolving
Commitments, that Lender's Revolving Commitment; and (ii) after the termination
of the Revolving Commitments, the sum of (a) the aggregate outstanding principal
amount of the Revolving Loans of that Lender, (b) in the case of Issuing Bank,
the aggregate Letter of Credit Usage in respect of all Letters of Credit issued
by that Lender (net of any participations by Lenders in such Letters of Credit),
(c) the aggregate amount of all participations by that Lender in any outstanding
Letters of Credit or any unreimbursed drawing under any Letter of Credit, (d) in
the case of Swing Line Lender, the aggregate outstanding principal amount of all
Swing Line Loans (net of any participations therein by other Lenders), and (e)
the aggregate amount of all participations therein by that Lender in any
outstanding Swing Line Loans.
"REVOLVING LOAN" means a Loan made by a Lender to Company
pursuant to Section 2.2(a).
"REVOLVING LOAN NOTE" means a promissory note in the form of
Exhibit B-2, as it may be amended, restated, supplemented or otherwise modified
from time to time.
"ROLLOVER NOTE INDENTURE" means the Indenture dated May 13,
2002 pursuant to which Company has issued up to $150,000,000 of its Second
Priority Secured Notes due 2009 in accordance with the Second Amended Joint Plan
of Reorganization for Mariner Post-Acute-Network, Inc., Mariner Health Group,
Inc., and their respective Debtor Affiliates, dated as of February 1, 2002 as
modified on March 25, 2002 for Confirmation, as such indenture may be further
amended, amended and restated, supplemented, modified, extended, renewed or
replaced from time to time in accordance with Section 6.14 of this Agreement.
"ROLLOVER NOTES" means those certain notes issued under the
Rollover Note Indenture.
"S&P" means Standard & Poor's Ratings Group, a division of The
McGraw Hill Corporation.
"SEC" means the federal Securities and Exchange Commission, or
any successor entity thereto.
"SECURED PARTIES" has the meaning assigned to that term in the
Pledge and Security Agreement.
"SECURITIES" means any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general
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any instruments commonly known as "securities" or any certificates of interest,
shares or participations in temporary or interim certificates for the purchase
or acquisition of, or any right to subscribe to, purchase or acquire, any of the
foregoing.
"SECURITIES ACT" means the Securities Act of 1933, as amended
from time to time, and any successor statute.
"SENIOR DEBT LEVERAGE RATIO" means the ratio as of the last
day of any Fiscal Quarter or other date of determination of (i) Consolidated
Senior Debt as of such day to (ii) Consolidated Adjusted EBITDA for the
four-Fiscal Quarter period ending on such date (or if such date of determination
is not the last of a Fiscal Quarter, for the four-Fiscal Quarters period ending
as of the most recently concluded Fiscal Quarter) which ratio shall, in any
event, exclude income of and distributions in respect of Capital Stock or other
equity interests made by Non-Guarantor Subsidiaries (other than the PHCMI Group
Members), except to the extent of the amount of dividends or other distributions
actually received in Cash by Company or any Guarantor from any such
Non-Guarantor Subsidiary.
"SENIOR SUBORDINATED NOTE INDENTURE" means the Indenture dated
as of the date hereof pursuant to which Company has issued its Senior
Subordinated Notes due 2013, as such indenture may be further amended, restated,
supplemented, modified, extended, renewed or replaced from time to time in
accordance with Section 6.14 of this Agreement.
"SENIOR SUBORDINATED NOTES" means Company's unsecured Senior
Subordinated Notes due December 15, 2013, dated the date hereof, and any
registered senior subordinated notes having substantially identical terms and
issued pursuant to the Senior Subordinated Indenture in exchange for the
initial, unregistered Senior Subordinated Notes, together with any additional
senior subordinated notes issued under the Senior Subordinated Note Indenture
after the Closing Date and expressly permitted hereunder.
"SOLVENCY CERTIFICATE" means a Solvency Certificate of the
chief financial officer of Company substantially in the form of Exhibit G-2.
"SOLVENT" means, with respect to any Credit Party, that as of
the date of determination both (i) (a) the sum of such Credit Party's debt
(including contingent liabilities) does not exceed the present fair saleable
value of such Credit Party's present assets; (b) such Credit Party's capital is
not unreasonably small in relation to its business as contemplated on the
Closing Date and reflected in the Projections or with respect to any transaction
contemplated or undertaken after the Closing Date; and (c) such Person has not
incurred and does not intend to incur, or believe (nor should it reasonably
believe) that it will incur, debts beyond its ability to pay such debts as they
become due (whether at maturity or otherwise); and (ii) such Person is "solvent"
within the meaning given that term and similar terms under applicable laws
relating to fraudulent transfers and conveyances. For purposes of this
definition, the amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and
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circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability (irrespective of whether
such contingent liabilities meet the criteria for accrual under Statement of
Financial Accounting Standard No. 5).
"SUBJECT TRANSACTION" as defined in Section 6.8(d).
"SUBORDINATED INDEBTEDNESS" means the Senior Subordinated
Notes and any other debt of any Credit Party or any Subsidiary thereof that is
on terms and conditions (including, without limitation, amount of debt,
subordination provisions, payment terms, interest rates, covenants, remedies,
defaults and other material terms) reasonably satisfactory to Administrative
Agent and is subject to a subordination agreement in form and substance
reasonably satisfactory to Administrative Agent, whereby the payment of such
debt is subordinated to the prior payment and satisfaction in full in cash of
all of the Obligations.
"SUBSIDIARY" means, with respect to any Person, any
corporation, partnership, limited liability company, association, joint venture
or other business entity of which more than 50% of the total voting power of
shares of stock or other ownership interests entitled (without regard to the
occurrence of any contingency) to vote in the election of the Person or Persons
(whether directors, managers, trustees or other Persons performing similar
functions) having the power to direct or cause the direction of the management
and policies thereof is at the time owned or controlled, directly or indirectly,
by that Person or one or more of the other Subsidiaries of that Person or a
combination thereof; provided, in determining the percentage of ownership
interests of any Person controlled by another Person, no ownership interest in
the nature of a "qualifying share" of the former Person shall be deemed to be
outstanding. In no event shall any Excluded Entity be deemed to constitute a
Subsidiary unless and until Company or any Subsidiary thereof shall acquire all
of the issued and outstanding equity interests in such Excluded Entity; provided
further that no Person shall be deemed to be a Subsidiary of Company or any
Credit Party for so long as (i) such Person constitutes a Charitable
Organization, (ii) such Charitable Organization is not consolidated with Company
and its consolidated Subsidiaries for financial reporting purposes under GAAP,
and (iii) the aggregate amount of all gifts, loans, contributions or other
Investments made by any Credit Party in or to Charitable Organizations falling
within this proviso shall not exceed $20,000 in aggregate in any Fiscal Year or
$150,000 in aggregate since the Closing Date.
"SUPERMAJORITY LENDERS" means one or more Lenders having or
holding Term Loan Exposure and Revolving Exposure and representing more than
662/3% of the sum of (i) the aggregate Term Loan Exposure or Term Loan
Commitment of all Lenders, and (ii) the aggregate Revolving Exposure or
Revolving Commitment of all Lenders.
"SWING LINE LENDER" means CIBC in its capacity as Swing Line
Lender hereunder, together with its permitted successors and assigns in such
capacity.
"SWING LINE LOAN" means a Loan made by Swing Line Lender to
Company pursuant to Section 2.3.
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"SWING LINE NOTE" means a promissory note in the form of
Exhibit B-3, as it may be amended, restated, supplemented or otherwise modified
from time to time.
"SWING LINE SUBLIMIT" means the lesser of (i) $10,000,000, and
(ii) the aggregate unused amount of Revolving Commitments then in effect.
"TAMPA MORTGAGE LOAN" means the approximately $5,200,000 loan
to Tampa Health Properties, Ltd. held by the Company and secured by a mortgage
on the Facility known as Mariner Health of Tampa.
"TAMPA DIVESTITURE" means either of the following (i) the
acquisition of joint venture interests in Tampa Health Properties, Ltd. (the
owner of the Facility formerly known as Mariner Health of Tampa) from the 99%
limited partner in that equity, in connection with the sale of the Mariner
Health of Tampa Facility, or (ii) the assignment by Tampa Medical Associates,
Inc. of the lease for that Facility to Formation Properties III, LLC or another
operator, which transaction may (but need not) include the transfer of the 1%
general partnership interest in Tampa Health Properties, Ltd.
"TAX" means any present or future tax, levy, impost, duty,
assessment, charge, fee, deduction or withholding of any nature and whatever
called, by any Governmental Authority, on whomsoever and wherever imposed,
levied, collected, withheld or assessed; provided, "Tax on the overall net
income" of a Person shall be construed as a reference to a tax imposed by the
jurisdiction in which that Person is organized or in which that Person's
applicable principal office (and/or, in the case of a Lender, its lending
office) is located or in which that Person (and/or, in the case of a Lender, its
lending office) is deemed to be doing business on all or part of the net income,
profits or gains (whether worldwide, or only insofar as such income, profits or
gains are considered to arise in or to relate to a particular jurisdiction, or
otherwise) of that Person (and/or, in the case of a Lender, its applicable
lending office).
"TERM LOAN" means a Tranche B Term Loan or New Term Loan made
by a Lender to Company pursuant to Section 2.1.
"TERM LOAN COMMITMENT" means the commitment of a Lender to
make or otherwise fund a Tranche B Term Loan or New Term Loan and "TERM LOAN
COMMITMENTS" means such commitments of all Lenders in the aggregate.
"TERM LOAN EXPOSURE" means, with respect to any Lender, as of
any date of determination, the outstanding principal amount of the Tranche B
Term Loans or New Term Loans of such Lender.
"TERM LOAN MATURITY DATE" means the Tranche B Term Loan
Maturity Date and the New Term Loan Maturity Date.
"TERMINATED LENDER" as defined in Section 2.23.
"THIRD PARTY PAYOR ARRANGEMENTS" shall mean any and all
arrangements with Medicare, Medicaid, CHAMPUS, CHAMPVA, TRICARE and any
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other Governmental Authority, or quasi-public agency, Blue Cross, Blue Shield,
any and all managed care plans and organizations, including but not limited to
health maintenance organizations and preferred provider organizations, private
commercial insurance companies, employee assistance programs and/or any other
third party arrangements, plans or programs for payment or reimbursement in
connection with health care services, products or supplies.
"TITLE POLICY" as defined in Section 3.1(i)(iii).
"TOTAL LEASE ADJUSTED LEVERAGE RATIO" means the ratio as of
the last day of any Fiscal Quarter or other date of determination of (i) the sum
of (x) Consolidated Total Debt as of such day plus (y) eight (8) multiplied by
Consolidated Rent Expense for the four-Fiscal Quarter period ending on such date
(or if such date of determination is not the last of a Fiscal Quarter, for the
four-Fiscal Quarters period ending as of the most recently concluded Fiscal
Quarter) to (ii) Consolidated Adjusted EBITDAR for the four-Fiscal Quarter
period ending on such date (or if such date of determination is not the last of
a Fiscal Quarter, for the four-Fiscal Quarters period ending as of the most
recently concluded Fiscal Quarter) which ratio shall, in any event, exclude
income of and distributions in respect of capital stock or other equity
interests made by Non-Guarantor Subsidiaries (other than the PHCMI Group
Members), except to the extent of the amount of dividends or other distributions
actually received in cash by Company or any Guarantor Subsidiary from any such
Non-Guarantor Subsidiary.
"TOTAL LEVERAGE RATIO" means the ratio as of the last day of
any Fiscal Quarter or other date of determination of (i) Consolidated Total Debt
as of such day to (ii) Consolidated Adjusted EBITDA for the four-Fiscal Quarter
period ending on such date (or if such date of determination is not the last of
a Fiscal Quarter, for the four-Fiscal Quarters period ending as of the most
recently concluded Fiscal Quarter).
"TOTAL UTILIZATION OF REVOLVING COMMITMENTS" means, as at any
date of determination, the sum of (i) the aggregate principal amount of all
outstanding Revolving Loans (other than Revolving Loans made for the purpose of
repaying any Refunded Swing Line Loans or reimbursing Issuing Bank for any
amount drawn under any Letter of Credit, but not yet so applied), (ii) the
aggregate principal amount of all outstanding Swing Line Loans, and (iii) the
Letter of Credit Usage.
"TRANCHE B TERM LOAN" means a Tranche B Term Loan made by a
Lender to Company pursuant to Section 2.1(b)(ii).
"TRANCHE B TERM LOAN COMMITMENT" means the commitment of a
Lender to make or otherwise fund a Tranche B Term Loan and "TRANCHE B TERM LOAN
COMMITMENTS" means such commitments of all Lenders in the aggregate. The amount
of each Lender's Tranche B Term Loan Commitment, if any, is set forth on its
respective signature page hereto or in the applicable Assignment Agreement,
subject to any adjustment or reduction pursuant to the terms and conditions
hereof. The aggregate amount of the Tranche B Term Loan Commitments as of the
Closing Date is $135,000,000.
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"TRANCHE B TERM LOAN EXPOSURE" means, with respect to any
Lender, as of any date of determination, the outstanding principal amount of the
Tranche B Term Loans of such Lender; provided, at any time prior to the making
of the Tranche B Term Loans, the Tranche B Term Loan Exposure of any Lender
shall be equal to such Lender's Tranche B Term Loan Commitment.
"TRANCHE B TERM LOAN INSTALLMENT" as defined in Section
2.12(b).
"TRANCHE B TERM LOAN MATURITY DATE" means the earlier of (i)
January 2, 2010, and (ii) the date that all Term Loans shall become due and
payable in full hereunder, whether by acceleration or otherwise.
"TRANCHE B TERM LOAN NOTE" means a promissory note in the form
of Exhibit B-1, as it may be amended, restated, supplemented or otherwise
modified from time to time.
"TRICARE" shall mean, collectively, a program of medical
benefits covering former and active members of the uniformed services and
certain of their dependents, financed and administered by the United States
Departments of Defense, Health and Human Services and Transportation, which
program was formerly known as the Civilian Health and Medical Program of the
Uniformed Services (CHAMPUS), and all laws, rules, regulations, manuals, orders
and administrative, reimbursement and other guidelines of all Governmental
Authorities promulgated in connection with such program (whether or not having
the force of law), in each case as the same may be amended, restated,
supplemented or otherwise modified from time to time.
"TYPE OF LOAN" means (i) with respect to the Term Loan or
Revolving Loans, a Base Rate Loan or a Eurodollar Rate Loan, and (ii) with
respect to Swing Line Loans, a Base Rate Loan.
"UCC" means the Uniform Commercial Code (or any similar or
equivalent legislation) as in effect in any applicable jurisdiction.
1.2 TERMS GENERALLY. The definitions in Section 1.1 shall
apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
All references herein to Sections, Exhibits and Schedules shall be deemed
references to Sections of, and Exhibits and Schedules to, this Agreement unless
the context shall otherwise require. Except as otherwise expressly provided
herein, (a) any reference in this Agreement to any Credit Document shall mean
such document as amended, restated, supplemented or otherwise modified from time
to time and (b) all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided,
however, that for purposes of determining compliance with the covenants
contained in Sections 2.14(e) and Section 6 all accounting terms herein shall be
interpreted and all accounting determinations hereunder (in each case, unless
otherwise provided for or defined herein)
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shall be made in accordance with GAAP as in effect on the date of this Agreement
and applied on a basis consistent with the application used in the financial
statements referred to in Section 4.7; and provided further, that if Company
notifies Administrative Agent that Company wishes to amend any covenant in
Sections 2.14 or Section 6 or any related definition to eliminate the effect of
any change in GAAP occurring after the date of this Agreement on the operation
of such covenant (or if Administrative Agent notifies Company that the Requisite
Lenders wish to amend Section 2.14 or Section 6 or any related definition for
such purpose), then (i) Company and the Administrative Agent shall negotiate in
good faith to agree upon an appropriate amendment to such covenant and (ii)
Company's compliance with such covenant shall be determined on the basis of GAAP
in effect immediately before the relevant change in GAAP became effective until
such covenant is amended in a manner satisfactory to Company and the Requisite
Lenders.
SECTION 2. LOANS AND LETTERS OF CREDIT
2.1 TERM LOANS.
(a) Loan Commitments. Subject to the terms and
conditions hereof, each Lender severally agrees to make, on the Closing Date, a
Tranche B Term Loan to Company in an amount equal to such Lender's Tranche B
Term Loan Commitment. Company may make only one borrowing under the Tranche B
Term Loan Commitment which shall be on the Closing Date. Any amount borrowed
under this Section 2.1(a) and subsequently repaid or prepaid may not be
reborrowed. Subject to Sections 2.13(a) and 2.14, all amounts owed hereunder
with respect to the Tranche B Term Loans shall be paid in full no later than the
Term Loan Maturity Date. Each Lender's Tranche B Term Loan Commitment shall
terminate immediately and without further action on the Closing Date after
giving effect to the funding of such Lender's Tranche B Term Loan Commitment on
such date.
(b) Borrowing Mechanics for Tranche B Term
Loans.
(i) Company shall deliver to
Administrative Agent a fully executed Funding Notice no later than
12:00 p.m. (New York City time) one (1) Business Day prior to the
Closing Date. Promptly upon receipt by Administrative Agent of such
Certificate, Administrative Agent shall notify each Lender of the
proposed borrowing. Tranche B Term Loans borrowed on the Closing Date
shall initially be Base Rate Loans.
(ii) Each Lender shall make its Tranche
B Term Loan, as the case may be, available to Administrative Agent not
later than 12:00 p.m. (New York City time) on the Closing Date, by wire
transfer of same day funds in Dollars, at Administrative Agent's
Principal Office. Upon satisfaction or waiver of the conditions
precedent specified herein, Administrative Agent shall make the
proceeds of the Tranche B Term Loan available to Company on the Closing
Date
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by causing an amount of same day funds in Dollars equal to the proceeds
of the Loans received by Administrative Agent from Lenders to be
credited to the account of Company at Administrative Agent's Principal
Office or to such other account as may be designated in writing to
Administrative Agent by Company.
2.2 REVOLVING LOANS.
(a) Revolving Commitments. During the Revolving
Commitment Period, subject to the terms and conditions hereof, each Lender
severally agrees to make Revolving Loans to Company in the aggregate amount up
to but not exceeding such Lender's Revolving Commitment; provided, after giving
effect to the making of any Revolving Loans in no event shall the Total
Utilization of Revolving Commitments exceed the Revolving Commitments then in
effect. Subject to the terms and conditions hereof, amounts borrowed pursuant to
this Section 2.2(a) may be repaid and reborrowed during the Revolving Commitment
Period. Each Lender's Revolving Commitment shall expire on the Revolving
Commitment Termination Date and all Revolving Loans and all other amounts owed
hereunder with respect to the Revolving Loans and the Revolving Commitments
shall be paid in full no later than such date.
(b) Borrowing Mechanics for Revolving Loans.
(i) Except pursuant to Sections
2.3(b)(iv) and 2.4(d), Revolving Loans that are Base Rate Loans shall
be made in an aggregate minimum amount of $1,000,000 and integral
multiples of $100,000 in excess of that amount, and Revolving Loans
that are Eurodollar Rate Loans shall be in an aggregate minimum amount
of $5,000,000 and integral multiples of $100,000 in excess of that
amount.
(ii) Whenever Company desires that
Lenders make Revolving Loans, Company shall deliver to Administrative
Agent a fully executed and delivered Funding Notice no later than 10:00
a.m. (New York City time) at least three (3) Business Days in advance
of the proposed Credit Date in the case of a Eurodollar Rate Loan, and
on the proposed Credit Date in the case of a Revolving Loan that is a
Base Rate Loan. Except as otherwise provided herein, a Funding Notice
for a Revolving Loan that is a Eurodollar Rate Loan shall be
irrevocable on and after the related Interest Rate Determination Date,
and Company shall be bound to make a borrowing in accordance therewith.
(iii) Notice of receipt of each Funding
Notice in respect of Revolving Loans, together with the amount of each
Lender's Pro Rata Share thereof, if any, together with the applicable
interest rate, shall be provided by Administrative Agent to each
applicable Lender by telefacsimile with reasonable promptness, but
(provided Administrative Agent shall have received such notice by 10:00
a.m. (New York City time)) not later than 12:00 p.m. (New York City
time) on the same day as Administrative Agent's receipt of such Notice
from Company.
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(iv) Each Lender shall make the amount
of its Revolving Loan available to Administrative Agent not later than
2:00 p.m. (New York City time) on the applicable Credit Date by wire
transfer of same day funds in Dollars, at Administrative Agent's
Principal Office. Except as provided herein, upon satisfaction or
waiver of the conditions precedent specified herein, Administrative
Agent shall make the proceeds of such Revolving Loans available to
Company on the applicable Credit Date by causing an amount of same day
funds in Dollars equal to the proceeds of all such Revolving Loans
received by Administrative Agent from Lenders to be credited to the
account of Company at Administrative Agent's Principal Office or such
other account as may be designated in writing to Administrative Agent
by Company.
2.3 SWING LINE LOANS.
(a) Swing Line Loans Commitments. During the
Revolving Commitment Period, subject to the terms and conditions hereof, Swing
Line Lender hereby agrees to make Swing Line Loans to Company in the aggregate
amount up to but not exceeding the Swing Line Sublimit; provided, after giving
effect to the making of any Swing Line Loan, in no event shall the Total
Utilization of Revolving Commitments exceed the Revolving Commitments then in
effect. Amounts borrowed pursuant to this Section 2.3 may be repaid and
reborrowed during the Revolving Commitment Period. Swing Line Lender's Revolving
Commitment shall expire on the Revolving Commitment Termination Date and all
Swing Line Loans and all other amounts owed hereunder with respect to the Swing
Line Loans and the Revolving Commitments shall be paid in full no later than
such date.
(b) Borrowing Mechanics for Swing Line Loans.
(i) Swing Line Loans shall be made in
an aggregate minimum amount of $250,000 and integral multiples of
$50,000 in excess of that amount.
(ii) Whenever Company desires that Swing
Line Lender make a Swing Line Loan, Company shall deliver to
Administrative Agent a Funding Notice no later than 12:00 p.m. (New
York City time) on the proposed Credit Date.
(iii) Swing Line Lender shall make the
amount of its Swing Line Loan available to Company in immediately
available funds not later than 2:00 p.m. (New York City time) on the
applicable Credit Date by wire transfer of same day funds in Dollars,
at Administrative Agent's Principal Office. Except as provided herein,
upon satisfaction or waiver of the conditions precedent specified
herein, Administrative Agent shall make the proceeds of such Swing Line
Loans available to Company on the applicable Credit Date by causing an
amount of same day funds in Dollars equal to the proceeds of all such
Swing Line Loans received by Administrative Agent from Swing Line
Lender to be credited to the account of Company at Administrative
Agent's Principal Office, or to such
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other account as may be designated in writing to Administrative Agent
by Company.
(iv) With respect to any Swing Line
Loans which have not been voluntarily prepaid by Company pursuant to
Section 2.13, Swing Line Lender may at any time in its sole and
absolute discretion, deliver to Administrative Agent (with a copy to
Company), no later than 11:00 a.m. (New York City time) at least one
(1) Business Day in advance of the proposed Credit Date, a notice
(which shall be deemed to be a Funding Notice given by Company)
requesting that each Lender holding a Revolving Commitment make
Revolving Loans that are Base Rate Loans to Company on such Credit Date
in an amount equal to the amount of such Swing Line Loans (the
"REFUNDED SWING LINE LOANS") outstanding on the date such notice is
given which the Swing Line Lender requests Lenders to prepay. Anything
contained in this Agreement to the contrary notwithstanding, (1) the
proceeds of such Revolving Loans made by the Lenders other than Swing
Line Lender shall be immediately delivered by Administrative Agent to
Swing Line Lender (and not to Company) and applied to repay a
corresponding portion of the Refunded Swing Line Loans and (2) on the
day such Revolving Loans are made, Swing Line Lender's Pro Rata Share
of the Refunded Swing Line Loans shall be deemed to be paid with the
proceeds of a Revolving Loan made by Swing Line Lender to Company, and
such portion of the Swing Line Loans deemed to be so paid shall no
longer be outstanding as Swing Line Loans and shall no longer be due
under the Swing Line Note of Swing Line Lender but shall instead
constitute part of Swing Line Lender's outstanding Revolving Loans to
Company and shall be due under the Revolving Loan Note issued by
Company to Swing Line Lender. Company hereby authorizes Administrative
Agent and Swing Line Lender to charge Company's accounts with
Administrative Agent and Swing Line Lender (up to the amount available
in each such account) in order to immediately pay Swing Line Lender the
amount of the Refunded Swing Line Loans to the extent the proceeds of
such Revolving Loans made by Lenders, including the Revolving Loan
deemed to be made by the Swing Line Lender, are not sufficient to repay
in full the Refunded Swing Line Loans. If any portion of any such
amount paid (or deemed to be paid) to Swing Line Lender should be
recovered by or on behalf of Company from Swing Line Lender in
bankruptcy, by assignment for the benefit of creditors or otherwise,
the loss of the amount so recovered shall be ratably shared among all
Lenders in the manner contemplated by Section 2.17.
(v) If for any reason Revolving Loans
are not made pursuant to Section 2.3(b)(iv) in an amount sufficient to
repay any amounts owed to Swing Line Lender in respect of any
outstanding Swing Line Loans on or before the third Business Day after
demand for payment thereof by Swing Line Lender, each Lender holding a
Revolving Commitment shall be deemed to, and hereby agrees to, have
purchased a participation in such outstanding Swing Line Loans, and in
an amount equal to its Pro Rata Share of the applicable unpaid amount
together with accrued interest thereon. Upon one (1) Business Day's
notice from Swing Line Lender, each Lender holding a Revolving
Commitment
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shall deliver to Swing Line Lender an amount equal to its respective
participation in the applicable unpaid amount in same day funds at the
Principal Office of Swing Line Lender. In order to evidence such
participation each Lender holding a Revolving Commitment agrees to
enter into a participation agreement at the request of Swing Line
Lender in form and substance reasonably satisfactory to Swing Line
Lender. In the event any Lender holding a Revolving Commitment fails to
make available to Swing Line Lender the amount of such Lender's
participation as provided in this paragraph, Swing Line Lender shall be
entitled to recover such amount on demand from such Lender together
with interest thereon for three Business Days at the rate customarily
used by Swing Line Lender for the correction of errors among banks and
thereafter at the Base Rate, as applicable.
(vi) Notwithstanding anything contained
herein to the contrary, (1) each Lender's obligation to make Revolving
Loans for the purpose of repaying any Refunded Swing Line Loans
pursuant to the second preceding paragraph and each Lender's obligation
to purchase a participation in any unpaid Swing Line Loans pursuant to
the immediately preceding paragraph shall be absolute and unconditional
and shall not be affected by any circumstance, including without
limitation (A) any set-off, counterclaim, recoupment, defense or other
right which such Lender may have against Swing Line Lender, any Credit
Party or any other Person for any reason whatsoever; (B) the occurrence
or continuation of a Default or Event of Default; (C) any adverse
change in the business, operations, properties, assets, condition
(financial or otherwise) or prospects of any Credit Party; (D) any
breach of this Agreement or any other Credit Document by any party
thereto; or (E) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing; provided that such
obligations of each Lender are subject to the condition that Swing Line
Lender believed in good faith that all conditions under Section 3.2 to
the making of the applicable Refunded Swing Line Loans or other unpaid
Swing Line Loans, were satisfied at the time such Refunded Swing Line
Loans or unpaid Swing Line Loans were made, or the satisfaction of any
such condition not satisfied had been waived by Requisite Lenders prior
to or at the time such Refunded Swing Line Loans or other unpaid Swing
Line Loans were made; and (2) Swing Line Lender shall not be obligated
to make any Swing Line Loans (A) if it has elected not to do so after
the occurrence and during the continuation of a Default or Event of
Default or (B) at a time when a Funding Default exists unless Swing
Line Lender has entered into arrangements satisfactory to it and
Company to eliminate Swing Line Lender's risk with respect to the
Defaulting Lender's participation in such Swing Ling Loan, including by
cash collateralizing such Defaulting Lender's Pro Rata Share of the
outstanding Swing Line Loans.
2.4 ISSUANCE OF LETTERS OF CREDIT AND PURCHASE OF
PARTICIPATIONS THEREIN.
(a) Letters of Credit. During the Revolving
Commitment Period, subject to the terms and conditions hereof, Issuing Bank
agrees to issue Letters of Credit for the account of Company in the aggregate
amount up to but not exceeding the
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Letter of Credit Sublimit at any time outstanding; provided, (i) each Letter of
Credit shall be denominated in Dollars; (ii) the stated amount of each Letter of
Credit shall not be less than $50,000 or such lesser amount as is acceptable to
Issuing Bank; (iii) after giving effect to such issuance, in no event shall the
Total Utilization of Revolving Commitments exceed the aggregate amount of all
Revolving Commitments then in effect; (iv) after giving effect to such issuance,
in no event shall the Letter of Credit Usage exceed the Letter of Credit
Sublimit then in effect; and (v) in no event shall any Letter of Credit have an
expiration date later than the earlier of (1) the Revolving Commitment
Termination Date and (2) the date which is one year from the date of issuance of
such Letter of Credit. Subject to the foregoing, Issuing Bank may agree that a
Letter of Credit will automatically be extended for one or more successive
periods not to exceed one year each, unless Issuing Bank elects not to extend
for any such additional period; provided, Issuing Bank shall not, without the
prior written consent of the Requisite Lenders, extend any such Letter of Credit
if it has received written notice that an Event of Default has occurred and is
continuing at the time Issuing Bank must elect to allow such extension;
provided, further, in the event a Funding Default exists, Issuing Bank shall not
be required to issue any Letter of Credit unless Issuing Bank has entered into
arrangements satisfactory to it and Company to eliminate Issuing Bank's risk
with respect to the participation in Letters of Credit of the Defaulting Lender,
including by cash collateralizing such Defaulting Lender's Pro Rata Share of the
Letter of Credit Usage.
(b) Notice of Issuance. Whenever Company desires
the issuance of a Letter of Credit, it shall deliver to Administrative Agent an
Issuance Notice no later than 12:00 p.m. (New York City time) at least five (5)
Business Days or such shorter period as may be agreed to by Issuing Bank in any
particular instance, in advance of the proposed date of issuance. Upon
satisfaction or waiver of the conditions set forth in Section 3.2, Issuing Bank
shall issue the requested Letter of Credit only in accordance with Issuing
Bank's standard operating procedures. Upon the issuance of any Letter of Credit
or amendment or modification to a Letter of Credit, Issuing Bank shall promptly
notify each Lender of such issuance, which notice shall include the amount of
such Lender's respective participation in such Letter of Credit pursuant to
Section 2.4(e).
(c) Responsibility of Issuing Bank With Respect
to Requests for Drawings and Payments. In determining whether to honor any
drawing under any Letter of Credit by the beneficiary thereof, Issuing Bank
shall be responsible only to examine the documents delivered under such Letter
of Credit with reasonable care so as to ascertain whether they appear on their
face to be in accordance with the terms and conditions of such Letter of Credit.
As between Company and Issuing Bank, Company assumes all risks of the acts and
omissions of, or misuse of the Letters of Credit issued by Issuing Bank, by the
respective beneficiaries of such Letters of Credit. In furtherance and not in
limitation of the foregoing, Issuing Bank shall not be responsible for: (i) the
form, validity, sufficiency, accuracy, genuineness or legal effect of any
document submitted by any party in connection with the application for and
issuance of any such Letter of Credit, even if it should in fact prove to be in
any or all respects invalid, insufficient, inaccurate, fraudulent or forged;
(ii) the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be
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invalid or ineffective for any reason; (iii) failure of the beneficiary of any
such Letter of Credit to comply fully with any conditions required in order to
draw upon such Letter of Credit; (iv) errors, omissions, interruptions or delays
in transmission or delivery of any messages, by mail, cable, telegraph, telex or
otherwise, whether or not they be in cipher; (v) errors in interpretation of
technical terms; (vi) any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any such Letter of Credit or
of the proceeds thereof; (vii) the misapplication by the beneficiary of any such
Letter of Credit of the proceeds of any drawing under such Letter of Credit; or
(viii) any consequences arising from causes beyond the control of Issuing Bank,
including any Governmental Acts; none of the above shall affect or impair, or
prevent the vesting of, any of Issuing Bank's rights or powers hereunder.
Without limiting the foregoing and in furtherance thereof, any action taken or
omitted by Issuing Bank under or in connection with the Letters of Credit or any
documents and certificates delivered thereunder, if taken or omitted in good
faith, (and without gross negligence or willful misconduct and in accordance
with the standard of care specified in the UCC with respect to Letter of
Credit), shall not give rise to any liability on the part of Issuing Bank to
Company. Notwithstanding anything to the contrary contained in this Section
2.4(c), Company shall retain any and all rights it may have against Issuing Bank
for any liability arising solely out of the gross negligence or willful
misconduct of Issuing Bank.
(d) Reimbursement by Company of Amounts Drawn or
Paid Under Letters of Credit. In the event Issuing Bank has determined to honor
a drawing under a Letter of Credit, it shall immediately notify Company and
Administrative Agent, and Company shall reimburse Issuing Bank on the Business
Day such drawing is honored (the "REIMBURSEMENT DATE") in an amount in Dollars
and in same day funds equal to the amount of such honored drawing; provided,
anything contained herein to the contrary notwithstanding, (i) unless Company
shall have notified Administrative Agent and Issuing Bank prior to 10:00 a.m.
(New York City time) on the date such drawing is honored that Company intends to
reimburse Issuing Bank for the amount of such honored drawing with funds other
than the proceeds of Revolving Loans, Company shall be deemed to have given a
timely Funding Notice to Administrative Agent requesting Lenders to make
Revolving Loans that are Base Rate Loans on the Reimbursement Date in an amount
in Dollars equal to the amount of such honored drawing, and (ii) subject to
satisfaction or waiver of the conditions specified in Section 3.2, Lenders
shall, on the Reimbursement Date, make Revolving Loans that are Base Rate Loans
in the amount of such honored drawing, the proceeds of which shall be applied
directly by Administrative Agent to reimburse Issuing Bank for the amount of
such honored drawing; and provided further, if for any reason proceeds of
Revolving Loans are not received by Issuing Bank on the Reimbursement Date in an
amount equal to the amount of such honored drawing, Company shall reimburse
Issuing Bank, on demand, in an amount in same day funds equal to the excess of
the amount of such honored drawing over the aggregate amount of such Revolving
Loans, if any, which are so received. Nothing in this Section 2.4(d) shall be
deemed to relieve any Lender from its obligation to make Revolving Loans on the
terms and conditions set forth herein, and Company shall retain any and all
rights it may have against any Lender resulting from the failure of such Lender
to make such Revolving Loans under this Section 2.4(d).
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(e) Lenders' Purchase of Participations in
Letters of Credit. Immediately upon the issuance of each Letter of Credit, each
Lender having a Revolving Commitment shall be deemed to have purchased, and
hereby agrees to irrevocably purchase, from Issuing Bank a participation in such
Letter of Credit and any drawings honored thereunder in an amount equal to such
Lender's Pro Rata Share (with respect to the Revolving Commitments) of the
maximum amount which is or at any time may become available to be drawn
thereunder. In the event that Company shall fail for any reason to reimburse
Issuing Bank as provided in Section 2.4(d), Issuing Bank shall promptly notify
each Lender of the unreimbursed amount of such honored drawing and of such
Lender's respective participation therein based on such Lender's Pro Rata Share
of the Revolving Commitments. Each Lender shall make available to Issuing Bank
an amount equal to its respective participation, in Dollars and in same day
funds, at the office of Issuing Bank specified in such notice (provided Issuing
Bank shall have given such notice by 10:00 a.m. (New York City time)), not later
than 3:00 p.m. (New York City time) on the date notified by Issuing Bank. In the
event that any Lender fails to make available to Issuing Bank on such business
day the amount of such Lender's participation in such Letter of Credit as
provided in this Section 2.4(e), Issuing Bank shall be entitled to recover such
amount on demand from such Lender together with interest thereon for three
Business Days at the rate customarily used by Issuing Bank for the correction of
errors among banks and thereafter at the Base Rate. Nothing in this Section
2.4(e) shall be deemed to prejudice the right of any Lender to recover from
Issuing Bank any amounts made available by such Lender to Issuing Bank pursuant
to this Section in the event that it is determined that the payment with respect
to a Letter of Credit in respect of which payment was made by such Lender
constituted gross negligence or willful misconduct on the part of Issuing Bank.
In the event Issuing Bank shall have been reimbursed by other Lenders pursuant
to this Section 2.4(e) for all or any portion of any drawing honored by Issuing
Bank under a Letter of Credit, such Issuing Bank shall distribute to each Lender
which has paid all amounts payable by it under this Section 2.4(e) with respect
to such honored drawing such Lender's Pro Rata Share of all payments
subsequently received by Issuing Bank from Company in reimbursement of such
honored drawing when such payments are received. Any such distribution shall be
made to a Lender at its primary address set forth below its name on Appendix A
or at such other address as such Lender may request.
(f) Obligations Absolute. The obligation of
Company to reimburse Issuing Bank for drawings honored under the Letters of
Credit issued by it and to repay any Revolving Loans made by Lenders pursuant to
Section 2.4(d) and the obligations of Lenders under Section 2.4(e) shall be
unconditional and irrevocable and shall be paid strictly in accordance with the
terms hereof under all circumstances including any of the following
circumstances: (i) any lack of validity or enforceability of any Letter of
Credit; (ii) the existence of any claim, set-off, defense or other right which
Company or any Lender may have at any time against a beneficiary or any
transferee of any Letter of Credit (or any Persons for whom any such transferee
may be acting), Issuing Bank, Lender or any other Person or, in the case of a
Lender, against Company, whether in connection herewith, the transactions
contemplated herein or any unrelated transaction (including any underlying
transaction between Company or one of its Subsidiaries and the beneficiary for
which any Letter of Credit was procured); (iii) any
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draft or other document presented under any Letter of Credit proving to be
forged, fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect; (iv) payment by Issuing Bank
under any Letter of Credit against presentation of a draft or other document
which does not substantially comply with the terms of such Letter of Credit; (v)
any adverse change in the business, operations, properties, assets, condition
(financial or otherwise) or prospects of Company or any of its Subsidiaries;
(vi) any breach hereof or any other Credit Document by any party thereto; (vii)
any other circumstance or happening whatsoever, whether or not similar to any of
the foregoing; or (viii) the fact that an Event of Default or a Default shall
have occurred and be continuing; provided, in each case, that payment by Issuing
Bank under the applicable Letter of Credit shall not have constituted gross
negligence or willful misconduct of such Issuing Bank or failure to use the
standard of care specified in the UCC with respect to such Letters of Credit
Issuing Bank under the circumstances in question.
(g) Indemnification. Without duplication of any
obligation of Company under Section 10.2 or 10.3, in addition to amounts payable
as provided herein, Company hereby agrees to protect, indemnify, pay and save
harmless Issuing Bank from and against any and all claims, demands, liabilities,
damages, losses, costs, charges and expenses (including reasonable and
documented fees and out-of-pocket disbursements of counsel) which Issuing Bank
may incur or be subject to as a consequence, direct or indirect, of (i) the
issuance of any Letter of Credit by Issuing Bank, other than as a result of (1)
the gross negligence or willful misconduct of Issuing Bank or (2) the wrongful
dishonor by Issuing Bank of a proper demand for payment made under any Letter of
Credit issued by it, or (ii) the failure of Issuing Bank to honor a drawing
under any such Letter of Credit as a result of any Governmental Act.
2.5 PRO RATA SHARES; AVAILABILITY OF FUNDS.
(a) Pro Rata Shares. All Loans shall be made,
and all participations purchased, by Lenders simultaneously and proportionately
to their respective Pro Rata Shares, it being understood that no Lender shall be
responsible for any default by any other Lender in such other Lender's
obligation to make a Loan requested hereunder or purchase a participation
required hereby nor shall any Term Loan Commitment or any Revolving Commitment
of any Lender be increased or decreased as a result of a default by any other
Lender in such other Lender's obligation to make a Loan requested hereunder or
purchase a participation required hereby.
(b) Availability of Funds. Unless Administrative
Agent shall have been notified by any Lender prior to 10 a.m. (New York City
time) on the applicable Credit Date that such Lender does not intend to make
available to Administrative Agent the amount of such Lender's Loan requested on
such Credit Date, Administrative Agent may assume that such Lender has made such
amount available to Administrative Agent on such Credit Date and Administrative
Agent may, in its sole discretion, but shall not be obligated to, make available
to Company a corresponding amount on such Credit Date. If such corresponding
amount is not in fact made available to Administrative Agent by such Lender,
Administrative Agent shall be entitled to
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recover such corresponding amount on demand from such Lender together with
interest thereon, for each day from such Credit Date until the date such amount
is paid to Administrative Agent, at the customary rate set by Administrative
Agent for the correction of errors among banks for three Business Days and
thereafter at the Base Rate. If such Lender does not pay such corresponding
amount forthwith upon Administrative Agent's demand therefor, Administrative
Agent shall promptly notify Company and Company shall immediately pay such
corresponding amount to Administrative Agent together with interest thereon, for
each day from such Credit Date until the date such amount is paid to
Administrative Agent, at the rate payable hereunder for Base Rate Loans for such
Class of Loans. Nothing in this Section 2.5(b) shall be deemed to relieve any
Lender from its obligation to fulfill its Term Loan Commitments and Revolving
Commitments hereunder or to prejudice any rights that Company may have against
any Lender as a result of any default by such Lender hereunder.
2.6 USE OF PROCEEDS. The proceeds of the Tranche B Term
Loan made on the Closing Date shall be applied by Company together with the
proceeds of the Senior Subordinated Notes issued on the Closing Date to
refinance Company's existing indebtedness and to pay transaction fees and other
expenses. The proceeds of the Revolving Loans or Swing Line Loans made, and
Letters of Credit issued, on or after the Closing Date shall be applied by
Company for general corporate purposes of Company and its Subsidiaries,
including working capital and Permitted Acquisitions; provided that no more than
$25,000,000 of borrowings under the Revolving Facility may be used to finance
Permitted Acquisitions. The proceeds of the New Term Loans made on the Increased
Amount Date shall be applied by Company to refinance the Omega Loan in full and
to pay transaction fees and expenses. Without limiting the generality of the
foregoing, Letters of Credit may, among other things, be issued for purposes of
replacing or backing any letters of credit previously issued under the Existing
Facilities. No portion of the proceeds of any Credit Extension shall be used in
any manner that causes or might cause such Credit Extension or the application
of such proceeds to violate Regulation T, Regulation U or Regulation X of the
Board of Governors of the Federal Reserve System or any other regulation thereof
or to violate the Exchange Act. Without limiting the generality of the
foregoing, the parties hereto acknowledge that a portion of the proceeds of the
Term Loan is being used, directly or indirectly, to refinance debt which in turn
refinanced prepetition Indebtedness of the Company relating to the Health Care
Facility known as Superior ▇▇▇▇▇ in Ypsilanti, Michigan, and to the Health Care
Facilities operated by the PHCMI Group Members.
2.7 EVIDENCE OF DEBT; REGISTER; LENDERS' BOOKS AND
RECORDS; NOTES.
(a) Lenders' Evidence of Debt. Each Lender shall
maintain on its internal records an account or accounts evidencing the
Indebtedness of Company to such Lender, including the amounts of the Loans made
by it and each repayment and prepayment in respect thereof. Any such recordation
shall be conclusive and binding on Company, absent manifest error; provided,
failure to make any such recordation, or any error in such recordation, shall
not affect any Lender's Revolving Commitments or Company's Obligations in
respect of any applicable Loans; and provided further, in the
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event of any inconsistency between the Register and any Lender's records, absent
manifest error the recordations in the Register shall govern.
(b) Register. Administrative Agent shall
maintain at its Principal Office a register for the recordation of the names and
addresses of Lenders and the Revolving Commitments and Loans of each Lender from
time to time (the "REGISTER"). The Register shall be available for inspection by
Company or any Lender at any reasonable time and from time to time upon
reasonable prior notice. Administrative Agent shall record in the Register the
Revolving Commitments and the Loans, and each repayment or prepayment in respect
of the principal amount of the Loans, and any such recordation shall be
conclusive and binding on Company and each Lender, absent manifest error;
provided, failure to make any such recordation, or any error in such
recordation, shall not affect any Lender's Revolving Commitments or Company's
Obligations in respect of any Loan. Company hereby designates Administrative
Agent to serve as Company's agent solely for purposes of maintaining the
Register as provided in this Section 2.7, and Company hereby agrees that, to the
extent Administrative Agent serves in such capacity, Administrative Agent and
its officers, directors, employees, agents and affiliates shall constitute
"INDEMNITEES."
(c) Notes. If so requested by any Lender by
written notice to Company (with a copy to Administrative Agent) at least two (2)
Business Days prior to the Closing Date, or at any time thereafter, Company
shall execute and deliver to such Lender (and/or, if applicable and if so
specified in such notice, to any Person who is an assignee of such Lender
pursuant to Section 10.6) on the Closing Date (or, if such notice is delivered
after the Closing Date, promptly after Company's receipt of such notice) a Note
or New Term Loan or Notes to evidence such Lender's Tranche B Term Loan,
Revolving Loan, Swing Line Loan or New Term Loan, as the case may be.
2.8 INTEREST ON LOANS.
(a) Except as otherwise set forth herein, each
Class of Loan shall bear interest on the unpaid principal amount thereof from
the date made through repayment (whether by acceleration or otherwise) thereof
as follows:
(i) in the case of Revolving Loans:
(1) if a Base Rate Loan, at
the Base Rate plus the Applicable Margin; or
(2) if a Eurodollar Rate
Loan, at the Adjusted Eurodollar Rate plus the Applicable Margin;
(ii) in the case of Swing Line Loans, at
the Base Rate plus the Applicable Margin; and
(iii) in the case of Tranche B Term
Loans:
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(1) if a Base Rate Loan, at
the Base Rate plus 1.75% per annum; or
(2) if a Eurodollar Rate
Loan, at the Adjusted Eurodollar Rate plus 2.75% per annum.
provided that each of the above rates in this Section
2.8(a)(iii) in respect of Tranche B Term Loans shall decrease by 0.25% per annum
if the Total Lease Adjusted Leverage Ratio is less than 4.25:1.00, such change
to be effective on the earliest to occur of March 1, June 1, September 1,
December 1 after the date on which the Administrative Agent shall have received
the applicable Compliance Certificate or Pricing Certificate pursuant to Section
5.1(c) calculating such Total Lease Adjusted Leverage Ratio.
(b) The basis for determining the rate of
interest with respect to any Loan (except a Swing Line Loan which can be made
and maintained as Base Rate Loans only), and the Interest Period with respect to
any Eurodollar Rate Loan, shall be selected by Company and notified to
Administrative Agent and Lenders pursuant to the applicable Funding Notice or
Conversion/Continuation Notice, as the case may be, provided that the Term Loans
initially shall be made as Base Rate Loans, and until a date which is at least
five (5) Business Days after the Closing Date or such earlier date as
Administrative Agent may determine in its sole discretion, the Term Loans shall
be maintained as Base Rate Loans, and unless the Administrative Agent otherwise
consents in its sole discretion, no such initial Base Rate Loan shall be
converted into a Eurodollar Rate Loan having an Interest Period of longer than
one month. If on any day a Loan is outstanding with respect to which a Funding
Notice or Conversion/Continuation Notice has not been delivered to
Administrative Agent in accordance with the terms hereof specifying the
applicable basis for determining the rate of interest, then for that day such
Loan shall be a Base Rate Loan.
(c) In connection with Eurodollar Rate Loans
there shall be no more than ten (10) Interest Periods outstanding at any time.
In the event Company fails to specify between a Base Rate Loan or a Eurodollar
Rate Loan in the applicable Funding Notice or Conversion/Continuation Notice,
such Loan (if outstanding as a Eurodollar Rate Loan) will be automatically
converted into a Base Rate Loan on the last day of the then-current Interest
Period for such Loan (or if outstanding as a Base Rate Loan will remain as, or
(if not then outstanding) will be made as, a Base Rate Loan). In the event
Company fails to specify an Interest Period for any Eurodollar Rate Loan in the
applicable Funding Notice or Conversion/Continuation Notice, Company shall be
deemed to have selected an Interest Period of one month. As soon as practicable
after 10:00 a.m. (New York City time) on each Interest Rate Determination Date,
Administrative Agent shall determine (which determination shall, absent manifest
error, be final, conclusive and binding upon all parties) the interest rate that
shall apply to the Eurodollar Rate Loans for which an interest rate is then
being determined for the applicable Interest Period and shall promptly give
notice thereof (in writing or by telephone confirmed in writing) to Company and
each Lender.
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(d) Interest payable pursuant to Section 2.8(a)
shall be computed (i) in the case of Base Rate Loans on the basis of a 365-day
or 366-day year, as the case may be, and (ii) in the case of Eurodollar Rate
Loans, on the basis of a 360-day year, in each case for the actual number of
days elapsed in the period during which it accrues. In computing interest on any
Loan, the date of the making of such Loan or the first day of an Interest Period
applicable to such Loan or, with respect to a Base Rate Loan being converted
from a Eurodollar Rate Loan, the date of conversion of such Eurodollar Rate Loan
to such Base Rate Loan, as the case may be, shall be included, and the date of
payment of such Loan or the expiration date of an Interest Period applicable to
such Loan or, with respect to a Base Rate Loan being converted to a Eurodollar
Rate Loan, the date of conversion of such Base Rate Loan to such Eurodollar Rate
Loan, as the case may be, shall be excluded; provided, if a Loan is repaid on
the same day on which it is made, one day's interest shall be paid on that Loan.
(e) Except as otherwise set forth herein,
interest on each Loan shall be payable in arrears on and to (i) each Interest
Payment Date applicable to that Loan; (ii) any prepayment of that Loan, whether
voluntary or mandatory, to the extent accrued on the amount being prepaid; and
(iii) at maturity, including final maturity; provided, however, with respect to
any voluntary prepayment of a Base Rate Loan, accrued interest shall instead be
payable on the applicable Interest Payment Date.
(f) Company agrees to pay to Issuing Bank, with
respect to drawings honored under any Letter of Credit, interest on the amount
paid by Issuing Bank in respect of each such honored drawing from the date such
drawing is honored to but excluding the date such amount is reimbursed by or on
behalf of Company at a rate equal to (i) for the period from the date such
drawing is honored to but excluding the applicable Reimbursement Date, the rate
of interest otherwise payable hereunder with respect to Revolving Loans that are
Base Rate Loans, and (ii) thereafter, a rate which is 2% per annum in excess of
the rate of interest otherwise payable hereunder with respect to Revolving Loans
that are Base Rate Loans.
(g) Interest payable pursuant to Section 2.8(f)
shall be computed on the basis of a 365/366-day year for the actual number of
days elapsed in the period during which it accrues, and shall be payable on
demand or, if no demand is made, on the date on which the related drawing under
a Letter of Credit is reimbursed in full. Promptly upon receipt by Issuing Bank
of any payment of interest pursuant to Section 2.8(f), Issuing Bank shall
distribute to each Lender, out of the interest received by Issuing Bank in
respect of the period from the date such drawing is honored to but excluding the
date on which Issuing Bank is reimbursed for the amount of such drawing
(including any such reimbursement out of the proceeds of any Revolving Loans),
the amount that such Lender would have been entitled to receive in respect of
the letter of credit fee that would have been payable in respect of such Letter
of Credit for such period if no drawing had been honored under such Letter of
Credit. In the event Issuing Bank shall have been reimbursed by Lenders for all
or any portion of such honored drawing, Issuing Bank shall distribute to each
Lender which has paid all amounts payable by it under Section 2.4(e) with
respect to such honored drawing such Lender's Pro Rata Share of any interest
received by Issuing Bank in respect of that portion of such honored drawing so
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reimbursed by Lenders for the period from the date on which Issuing Bank was so
reimbursed by Lenders to but excluding the date on which such portion of such
honored drawing is reimbursed by Company.
2.9 CONVERSION/CONTINUATION.
(a) Subject to Section 2.18 and so long as no
Default or Event of Default shall have occurred and then be continuing, Company
shall have the option:
(i) to convert at any time all or any
part of any Term Loan or Revolving Loan equal to $5,000,000 and
integral multiples of $100,000 in excess of that amount from one Type
of Loan to another Type of Loan; provided, a Eurodollar Rate Loan may
only be converted on the expiration of the Interest Period applicable
to such Eurodollar Rate Loan unless Company shall pay all amounts due
under Section 2.18 in connection with any such conversion; or
(ii) upon the expiration of any Interest
Period applicable to any Eurodollar Rate Loan, to continue all or any
portion of such Loan equal to $5,000,000 and integral multiples of
$100,000 in excess of that amount as a Eurodollar Rate Loan.
(b) Company shall deliver a
Conversion/Continuation Notice to Administrative Agent no later than 10:00 a.m.
(New York City time) at least one (1) Business Day in advance of the proposed
conversion date (in the case of a conversion to a Base Rate Loan) and at least
three (3) Business Days in advance of the proposed conversion/continuation date
(in the case of a conversion to, or a continuation of, a Eurodollar Rate Loan).
Except as otherwise provided herein, a Conversion/Continuation Notice for
conversion to, or continuation of, any Eurodollar Rate Loans (or telephonic
notice in lieu thereof) shall be irrevocable on and after the related Interest
Rate Determination Date, and Company shall be bound to effect a conversion or
continuation in accordance therewith.
2.10 DEFAULT INTEREST. Upon the occurrence and during the
continuance of (i) an Event of Default under Section 8.1(a), the principal
amount of all Loans and, to the extent permitted by applicable law, any interest
payments on the Loans and any fees or other amounts owed hereunder not paid when
due, shall thereafter bear interest (including post-petition interest in any
proceeding under the Bankruptcy Code or other applicable bankruptcy laws)
payable on demand at a rate that is 2% per annum in excess of the interest rate
otherwise payable hereunder for Base Rate Loans and (ii) at any time following
the occurrence and during the continuance of an Event of Default (other than an
Event of Default under Section 8.1(a)) Administrative Agent may, and at the
direction of Requisite Lenders shall, declare that the principal amount of all
Loans shall bear interest (retroactively from the occurrence of such Event of
Default and including post petition interest in any proceeding under the
Bankruptcy Code or other applicable bankruptcy laws) payable on demand at a rate
that is 2% per annum in excess of the interest rate otherwise payable hereunder
for Base Rate Loans; provided, in the case of Eurodollar Rate Loans, upon the
expiration of the Interest Period in effect at the time any
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such increase in interest rate is effective such Eurodollar Rate Loans shall
thereupon become Base Rate Loans and shall thereafter bear interest payable upon
demand at a rate which is 2% per annum in excess of the interest rate otherwise
payable hereunder for Base Rate Loans. Payment or acceptance of the increased
rates of interest provided for in this Section 2.10 is not a permitted
alternative to timely payment and shall not constitute a waiver of any Event of
Default or otherwise prejudice or limit any rights or remedies of Administrative
Agent or any Lender.
2.11 FEES.
(a) Company agrees to pay to Lenders having
Revolving Exposure:
(i) a Commitment fee equal to (1) the
average daily unused Revolving Commitments (to be calculated as of the
end of each day as the amount by which the aggregate Revolving
Commitments exceeds the Total Utilization of Revolving Commitments) of
the Lender during the preceding calendar quarter multiplied by (2) the
Applicable Revolving Commitment Fee Percentage; and
(ii) Letter of Credit fees for the
account of Lenders having Revolving Exposure only, equal to (i) the
Applicable Margin then in effect for Eurodollar Rate Loans made under
the Revolving Facility, times (ii) the average daily maximum amount
available to be drawn (and then undrawn) under all outstanding Letters
of Credit (regardless of whether any conditions for drawing could then
be met and determined as of the close of business on any date of
determination).
All fees referred to in this Section 2.11(a) shall be paid to Administrative
Agent at its Principal Office and upon receipt, Administrative Agent shall
promptly distribute to each Lender its Pro Rata Share thereof.
(b) Company agrees to pay directly to Issuing
Bank, for its own account, the following fees:
(i) a fronting fee to be separately
agreed upon between Company and Issuing Bank (but in no event more than
0.250% per annum), times the average aggregate daily maximum amount
available to be drawn (and then undrawn) under all Letters of Credit
(regardless of whether any conditions for drawing could then be met and
determined as of the close of business on any date of determination);
and
(ii) such documentary and processing
charges for any issuance, amendment, transfer or payment of a Letter of
Credit as are in accordance with Issuing Bank's standard schedule for
such charges and as in effect at the time of such issuance, amendment,
transfer or payment, as the case may be.
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(c) All fees referred to in Section 2.11(a) and
2.11(b)(i) shall be calculated on the basis of a 360-day year and the actual
number of days elapsed and shall be payable quarterly in arrears on March 31,
June 30, September 30 and December 31 of each year during the Revolving
Commitment Period, commencing on the first such date to occur after the Closing
Date, and on the Revolving Commitment Termination Date.
(d) In addition to any of the foregoing fees,
Company agrees to pay to Agents and Lenders such other fees in the amounts and
at the times separately agreed upon by Company and such Agents and/or such
Lenders.
2.12 SCHEDULED PAYMENTS/COMMITMENT REDUCTIONS.
(a) Revolving Commitments. The Revolving Commitments hereunder
shall be permanently reduced to zero and cancelled on the Revolving Commitment
Termination Date.
(b) Tranche B Term Loan Scheduled Installments. The principal
amounts of the Tranche B Term Loan shall be repaid in consecutive quarterly
installments (each, a "TRANCHE B TERM LOAN INSTALLMENT") in the Tranche B
aggregate amounts representing a percentage of the aggregate principal amount of
the Tranche B Term Loans outstanding as of the Closing Date set forth below on
the last day of each Fiscal Quarter commencing March 31, 2004, and on December
31, 2009 in an amount representing the entire aggregate principal amount of the
Tranche B Term Loans outstanding as of such date.
TRANCHE B TERM LOAN
FISCAL QUARTER INSTALLMENTS
--------------------------------------------------------
March 31, 2004 0.25%
--------------------------------------------------------
June 30, 2004 0.25%
--------------------------------------------------------
September 30, 2004 0.25%
--------------------------------------------------------
December 31, 2004 0.25%
--------------------------------------------------------
March 31, 2005 0.25%
--------------------------------------------------------
June 30, 2005 0.25%
--------------------------------------------------------
September 30, 2005 0.25%
--------------------------------------------------------
December 31, 2005 0.25%
--------------------------------------------------------
March 31, 2006 0.25%
--------------------------------------------------------
June 30, 2006 0.25%
--------------------------------------------------------
September 30, 2006 0.25%
--------------------------------------------------------
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TRANCHE B TERM LOAN
FISCAL QUARTER INSTALLMENTS
--------------------------------------------------------
December 31, 2006 0.25%
--------------------------------------------------------
March 31, 2007 0.25%
--------------------------------------------------------
June 30, 2007 0.25%
--------------------------------------------------------
September 30, 2007 0.25%
--------------------------------------------------------
December 31, 2007 0.25%
--------------------------------------------------------
March 31, 2008 0.25%
--------------------------------------------------------
June 30, 2008 0.25%
--------------------------------------------------------
September 30, 2008 0.25%
--------------------------------------------------------
December 31, 2008 0.25%
--------------------------------------------------------
March 31, 2009 0.25%
--------------------------------------------------------
June 30, 2009 0.25%
--------------------------------------------------------
September 30, 2009 0.25%
--------------------------------------------------------
December 31, 2009 0.25%
--------------------------------------------------------
January 2, 2010 94.00%
--------------------------------------------------------
Notwithstanding the foregoing, the Installments shall be reduced in connection
with any voluntary or mandatory prepayment of the Tranche B Term Loans in
accordance with Sections 2.13, 2.14, and 2.15, as applicable, and all other
amounts owed hereunder with respect thereto shall, in any event, be paid in full
on the Tranche B Term Loan Maturity Date.
2.13 VOLUNTARY PREPAYMENTS/COMMITMENT REDUCTIONS.
(a) Voluntary Prepayments.
(i) Any time and from time to time:
(1) with respect to Base Rate
Loans, Company may prepay any such Loans on any Business Day in whole
or in part, in an aggregate minimum amount of $1,000,000 and integral
multiples of $100,000 in excess of that amount;
(2) with respect to
Eurodollar Rate Loans, Company may prepay any such Loans on any
Business Day in whole or in part in an aggregate minimum amount of
$5,000,000 and integral multiples of $100,000 in excess of that amount
(provided that
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Company shall pay any related breakage costs related to prepaying
Eurodollar Rate Loans on any Business Day other than the last day of
the related interest period); and
(3) with respect to Swing
Line Loans, Company may prepay any such Loans on any Business Day in
whole or in part in an aggregate minimum amount of $50,000 or an
integral multiple thereof.
(ii) All such prepayments shall be made:
(1) upon not less than one
Business Day's prior written or telephonic notice in the case of Base
Rate Loans;
(2) upon not less than three
Business Days' prior written or telephonic notice in the case of
Eurodollar Rate Loans; and
(3) upon written or
telephonic notice on the date of prepayment, in the case of Swing Line
Loans;
in each case given to Administrative Agent or Swing Line Lender, as the case may
be, by 12:00 p.m. (New York City time) on the date required and, if given by
telephone, promptly confirmed in writing to Administrative Agent (and
Administrative Agent will promptly transmit such telephonic or original notice
for Term Loan or Revolving Loans, as the case may be, by telefacsimile or
telephone to each Lender) or Swing Line Lender, as the case may be. Upon the
giving of any such notice, the principal amount of the Loans specified in such
notice shall become due and payable on the prepayment date specified therein.
(b) Voluntary Commitment Reductions.
(i) Company may, upon not less than
three Business Days' prior written or telephonic notice confirmed in
writing to Administrative Agent (which original written or telephonic
notice Administrative Agent will promptly transmit by telefacsimile or
telephone to each applicable Lender), at any time and from time to time
terminate in whole or permanently reduce in part, without premium or
penalty, the Revolving Commitments in an amount up to the amount by
which the Revolving Commitments exceed the Total Utilization of
Revolving Commitments at the time of such proposed termination or
reduction; provided, any such partial reduction of the Revolving
Commitments shall be in an aggregate minimum amount of $5,000,000 and
integral multiples of $100,000 in excess of that amount.
(ii) Company's notice to Administrative
Agent shall designate the date (which shall be a Business Day) of such
termination or
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reduction and the amount of any partial reduction, and such termination
or reduction of the Revolving Commitments shall be effective on the
date specified in Company's notice and shall reduce the Revolving
Commitment of each Lender proportionately to its Pro Rata Share
thereof.
2.14 MANDATORY PREPAYMENTS/COMMITMENT REDUCTIONS.
(a) Asset Sales. No later than the first
Business Day following the date of receipt by Company or any of its Subsidiaries
of any Net Asset Sale Proceeds, Company shall prepay the Loans and/or the
Revolving Commitments shall be permanently reduced as set forth in Section
2.15(b) in an aggregate amount equal to such Net Asset Sale Proceeds; provided,
(i) so long as no Default or Event of Default shall have occurred and be
continuing, (ii) to the extent that aggregate Net Asset Sale Proceeds received
in any Fiscal Year do not exceed $20,000,000 in aggregate, Company shall have
the option, directly or through one or more of its Guarantor Subsidiaries, to
invest such Net Asset Sale Proceeds within two hundred seventy (270) days of
receipt thereof in long-term useful assets of the general type used in the
business of Company and its Guarantor Subsidiaries (provided that "long-term"
assets for such purpose shall mean any property having a remaining useful life
of at least five (5) years); provided further, that pending any such investment
all such Net Asset Sale Proceeds shall be applied to prepay Revolving Loans to
the extent outstanding on the date of such Asset Sale (without a reduction in
Revolving Commitments); provided, still further, that to the extent not so
reinvested at the expiration of such 270 day period, such Net Asset Sale
Proceeds shall be prepaid in accordance with this Section 2.14(a).
(b) Insurance/Condemnation Proceeds. No later
than the first Business Day following the date of receipt by Company or any of
its Subsidiaries, or Collateral Agent as loss payee, of any Net
Insurance/Condemnation Proceeds on account of any separate loss of any property
or assets of Company or its Subsidiaries in excess of $2,000,000, Company shall
prepay the Loans and/or the Revolving Commitments shall be permanently reduced
as set forth in Section 2.15(b) in an aggregate amount equal to such Net
Insurance/Condemnation Proceeds; provided, (i) so long as no Default or Event of
Default shall have occurred and be continuing, and (ii) Company shall have the
option, directly or through one or more of its Subsidiaries to invest such Net
Insurance/Condemnation Proceeds within three hundred-sixty (360) days of receipt
thereof in the repair, restoration or replacement of the applicable assets
thereof or in other long term useful assets of the general type used in the
business of Company and its Subsidiaries (provided that "long-term" assets for
such purpose shall mean any property having a remaining useful life of at least
five (5) years); provided further, pending any such investment all such Net
Insurance/Condemnation Proceeds, as the case may be, shall be applied to prepay
Revolving Loans to the extent outstanding on the date of such Asset Sale
(without a reduction in Revolving Commitments) or, in the case of proceeds
arising in connection with a Health Care Facility subject to the Omega Loan or a
Lease which prohibits such prepayment, shall be paid into a restricted account
for use as required by the Omega Loan documents or such Lease, subject to
arrangements reasonably satisfactory to the Administrative Agent; provided,
still further that, to the extent not so
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reinvested at the expiration of such 360 day period, such Net
Insurance/Condemnation Proceeds shall be prepaid in accordance with this Section
2.14(b).
(c) Issuance of Equity Securities. On the date
of receipt by Company of any Cash proceeds from a capital contribution to, or
the issuance of any Capital Stock of, Company or any of its Subsidiaries (other
than pursuant to any employee stock or stock option compensation plan), Company
shall prepay the Loans and/or the Revolving Commitments shall be permanently
reduced as set forth in Section 2.15(b) in an aggregate amount equal to 50.0% of
such proceeds, net of underwriting discounts and commissions and other
reasonable costs and expenses associated therewith, including reasonable legal
fees and expenses.
(d) Issuance of Debt. On the second Business Day
after the date of receipt by Company or any of its Subsidiaries of any Cash
proceeds from incurrence of any Indebtedness of Company or any of its
Subsidiaries (other than with respect to any Indebtedness permitted to be
incurred pursuant to Section 6.1), Company shall prepay the Loans and/or the
Revolving Commitments shall be permanently reduced as set forth in Section
2.15(b) in an aggregate amount equal to 100% of such proceeds, net of
underwriting discounts and commissions and other reasonable costs and expenses
associated therewith, including reasonable legal fees and expenses.
Notwithstanding the foregoing, on the second Business Day after the date of
receipt by Company or any of its Subsidiaries of any Cash proceeds in excess of
$175,000,000 from the incurrence of any Indebtedness of Company or any of its
Subsidiaries pursuant to Section 6.1(c) or 6.1(l), Company shall prepay (i) the
Loans (and/or the Revolving Commitments shall be permanently reduced as set
forth in Section 2.15(b)) and/or (ii) the Omega Loan in an aggregate amount
equal to 100% of such proceeds, net of underwriting discounts and commissions
and other reasonable costs and expenses associated therewith, including
reasonable legal fees and expenses.
(e) Consolidated Excess Cash Flow. In the event
that there shall be Consolidated Excess Cash Flow for any Fiscal Year,
commencing with Fiscal Year 2004, Company shall, on the earlier of the date on
which Company's annual Compliance Certificate is delivered, or is required to be
delivered, prepay the Loans and/or the Revolving Commitments shall be
permanently reduced as set forth in Section 2.15(b) in an aggregate amount equal
to 75.0% of such Consolidated Excess Cash Flow; provided, if the Total Leverage
Ratio as of the last day of such Fiscal Year (determined by reference to the
Compliance Certificate delivered pursuant to Section 5.1(c) calculating the
Total Leverage Ratio as of the last day of such Fiscal Year and giving pro forma
effect to such prepayment) shall be less than 3.0:1.00, Company shall only be
required to make the prepayments and/or reductions otherwise required hereby in
an amount equal to 50% of such Excess Cash Flow.
(f) Revolving Loans and Swing Loans. Company
shall from time to time prepay first, the Swing Line Loans, and second, the
Revolving Loans to the extent necessary so that the Total Utilization of
Revolving Commitments shall not at any time exceed the Revolving Commitments
then in effect.
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(g) Prepayment Certificate. Concurrently with
any prepayment of the Loans and/or reduction of the Revolving Commitments
pursuant to Sections 2.14(a) through 2.14(e), Company shall deliver to
Administrative Agent a certificate of an Authorized Officer demonstrating the
calculation of the amount of the applicable net proceeds or Consolidated Excess
Cash Flow, as the case may be. In the event that Company shall subsequently
determine that the actual amount received exceeded the amount set forth in such
certificate, Company shall promptly make an additional prepayment of the Loans
and/or the Revolving Commitments shall be permanently reduced in an amount equal
to such excess, and Company shall concurrently therewith deliver to
Administrative Agent a certificate of an Authorized Officer demonstrating the
derivation of such excess.
2.15 APPLICATION OF PREPAYMENTS/REDUCTIONS.
(a) Application of Voluntary Prepayments by Type
of Loans. Any prepayment of any Loan pursuant to Section 2.13(a) shall be
applied as specified by Company in the applicable notice of prepayment;
provided, in the event Company fails to specify the Loans to which any such
prepayment shall be applied, such prepayment shall be applied as follows:
FIRST, to repay outstanding Swing Line Loans to the full
extent thereof;
SECOND, to repay outstanding Revolving Loans to the full
extent thereof; and
THIRD, to prepay the Term Loans to the full extent thereof.
Any prepayment of any Term Loan pursuant to Section 2.13(a)
shall be further applied to reduce the scheduled remaining Installments of
principal on such Term Loan in inverse order of maturity.
(b) Application of Mandatory Prepayments by Type
of Loans.
(i) Any amount required to be paid
pursuant to Sections 2.14(a) through 2.14(e) shall be applied as
follows:
FIRST, to prepay Term Loans on a pro rata basis applied on a
pro rata basis and reduce the remaining scheduled Installments
in inverse order of maturity;
SECOND, to prepay the Swing Line Loans to the full extent
thereof and to permanently reduce the Revolving Commitments by
the amount of such prepayment;
THIRD, to prepay the Revolving Loans to the full extent
thereof and so long as an Event of Default exists and is
continuing, to further permanently reduce the Revolving
Commitments by the amount of such prepayment;
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FOURTH, to prepay outstanding reimbursement obligations with
respect to Letters of Credit and so long as an Event of
Default exists and is continuing, to further permanently
reduce the Revolving Loan Commitments by the amount of such
prepayment;
Notwithstanding the foregoing, so long as an Event of Default
exists and is continuing, any amount required to be paid pursuant to Section
2.14(a) through Section 2.14(e) shall be applied to prepay the Term Loans and
outstanding Revolving Loans on a pro rata basis and, in respect of the Term
Loans, any such amounts shall be applied on a pro rata basis and reduce the
remaining scheduled Installments of principal on each such Term Loan in inverse
order of maturity.
(ii) Any amount required to be paid
pursuant to Section 2.14 (f) shall be applied, first, to the prepayment
of Revolving Loans (without reduction of the Revolving Commitments)
outstanding on such date, and, second, to the prepayment of Term Loans
or otherwise as provided in Section 2.14(f). Each such prepayment of
the Term Loans shall be applied to reduce scheduled Installments in
inverse order of maturity and may not be reborrowed.
(iii) If a Default or an Event of Default
has occurred and is then continuing, at any time a prepayment is
required under Section 2.15(b)(i) or 2.15(b)(ii), then such prepayment
shall be applied to the outstanding principal balance (in inverse order
of maturity in the case of Term Loans) of Term Loans and Revolving
Loans ratably to each Class of Loans in accordance with each Lender's
proportionate share of each Class of such Loans.
(iv) All prepayments of Loans under this
Section 2.15(b) shall, as regards a Type of Loan, be applied first to
Base Rate Loans, and subject to Section 2.15(b)(v) hereof, then to
Eurodollar Loans in the order of the scheduled expiry of Interest
Periods with respect thereto (i.e. those Eurodollar Loans with Interest
Periods which end sooner would be paid before those with Interest
Periods which end later).
(v) If on any day on which Loans would
otherwise be required to be prepaid pursuant to this Section 2.15,
(each a "PREPAYMENT DATE"), the amount of such required prepayment
exceeds the then outstanding aggregate principal amount of Base Rate
Loans which are of the Class required to be prepaid, and no Default or
Event of Default exists or is continuing, then on such Prepayment Date,
then, at any time following the establishment of the Cash Collateral
Account pursuant to Section 9.9, at the election of Company, (i)
Company shall deposit Dollars into the Cash Collateral Account in an
amount equal to such excess, and only the outstanding Base Rate Loans
which are of the Class required to be prepaid shall be required to be
prepaid on such Prepayment Date and (ii) on the last day of each
Interest Period after such Prepayment Date in effect with respect to a
Eurodollar Loan which is of the Class required to be prepaid,
Administrative Agent is irrevocably authorized and directed to apply
funds from the Cash Collateral Account (and liquidate investments held
in the
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Cash Collateral Account as necessary) to prepay such Eurodollar Loans
for which the Interest Period is then ending to the extent funds are
available in the Cash Collateral Account.
2.16 GENERAL PROVISIONS REGARDING PAYMENTS.
(a) All payments by Company of principal,
interest, fees and other Obligations shall be made in Dollars in same day funds,
without defense, setoff or counterclaim, free of any restriction or condition,
and delivered to Administrative Agent not later than 12:00 p.m. (New York City
time) on the date due at Administrative Agent's Principal Office for the account
of Lenders; funds received by Administrative Agent after that time on such due
date shall be deemed to have been paid by Company on the next succeeding
Business Day.
(b) All payments in respect of the principal
amount of any Loan (other than voluntary prepayments of Revolving Loans) shall
include payment of accrued interest on the principal amount being repaid or
prepaid, and all such payments (and, in any event, any payments in respect of
any Loan on a date when interest is due and payable with respect to such Loan)
shall be applied to the payment of interest before application to principal.
(c) Administrative Agent shall promptly
distribute to each Lender at such address as such Lender shall indicate in
writing, such Lender's applicable Pro Rata Share of all payments and prepayments
of principal and interest due hereunder, together with all other amounts due
thereto, including, without limitation, all fees payable with respect thereto,
to the extent received by Administrative Agent.
(d) Notwithstanding the foregoing provisions
hereof, if any Conversion/Continuation Notice is withdrawn as to any Affected
Lender or if any Affected Lender makes Base Rate Loans in lieu of its Pro Rata
Share of any Eurodollar Rate Loans, Administrative Agent shall give effect
thereto in apportioning payments received thereafter.
(e) Subject to the provisos set forth in the
definition of "INTEREST PERIOD," whenever any payment to be made hereunder shall
be stated to be due on a day that is not a Business Day, such payment shall be
made on the next succeeding Business Day and such extension of time shall be
included in the computation of the payment of interest hereunder or of the
Revolving Commitment fees hereunder.
(f) Company hereby authorizes Administrative
Agent to charge any of Company's accounts with Administrative Agent in order to
cause timely payment to be made to Administrative Agent of all principal,
interest, fees and expenses and other Obligations due and payable hereunder
(subject to sufficient funds being available in its accounts for that purpose),
Administrative Agent shall promptly notify Company of each occasion on which
Administrative Agent so charges any of Company's accounts, including the amount
of such charge and how such amounts were applied to the Obligations.
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(g) Administrative Agent shall deem any payment
by or on behalf of Company hereunder that is not made in same day funds prior to
12:00 p.m. (New York City time) to be a non-conforming payment. Any such payment
shall not be deemed to have been received by Administrative Agent until the
later of (i) the time such funds become available funds, and (ii) the applicable
next Business Day. Administrative Agent shall give prompt telephonic notice to
Company and each applicable Lender (confirmed in writing) if any payment is
non-conforming. Any non-conforming payment may constitute or become a Default or
Event of Default in accordance with the terms of Section 8.1(a). Interest shall
continue to accrue on any principal as to which a non-conforming payment is made
until such funds become available funds (but in no event less than the period
from the date of such payment to the next succeeding applicable Business Day) at
the rate determined pursuant to Section 2.10 from the date such amount was due
and payable until the date such amount is paid in full.
(h) If an Event of Default shall have occurred
and not otherwise been waived, and the maturity of the Obligations shall have
been accelerated pursuant to Section 8.1, all payments or proceeds received by
Agents hereunder in respect of any of the Obligations, shall be applied in
accordance with the application arrangements described in Section 9.10.
2.17 RATABLE SHARING. Lenders hereby agree among
themselves that, except as may otherwise be provided in the Collateral Documents
with respect to amounts realized from the exercise of rights with respect to
Liens on the Collateral, if any of them shall, whether by voluntary payment
(other than a voluntary prepayment of Loans made and applied in accordance with
the terms hereof), through the exercise of any right of set-off or banker's
lien, by counterclaim or cross action or by the enforcement of any right under
the Credit Documents or otherwise, or as adequate protection of a deposit
treated as cash collateral under the Bankruptcy Code, receive payment or
reduction of a proportion of the aggregate amount of principal, interest,
amounts payable in respect of Letters of Credit, fees and other amounts then due
and owing to such Lender hereunder or under the other Credit Documents
(collectively, the "AGGREGATE AMOUNTS DUE" to such Lender) which is greater than
the proportion received by any other Lender in respect of the Aggregate Amounts
Due to such other Lender, then the Lender receiving such proportionately greater
payment shall (a) notify Administrative Agent and each other Lender of the
receipt of such payment and (b) apply a portion of such payment to purchase
participations (which it shall be deemed to have purchased from each seller of a
participation simultaneously upon the receipt by such seller of its portion of
such payment) in the Aggregate Amounts Due to the other Lenders so that all such
recoveries of Aggregate Amounts Due shall be shared by all Lenders in proportion
to the Aggregate Amounts Due to them; provided, if all or part of such
proportionately greater payment received by such purchasing Lender is thereafter
recovered from such Lender upon the bankruptcy or reorganization of Company or
otherwise, those purchases shall be rescinded and the purchase prices paid for
such participations shall be returned to such purchasing Lender ratably to the
extent of such recovery, but without interest. Company expressly consents to the
foregoing arrangement and agrees that any holder of a participation so purchased
may exercise any and all rights of banker's lien, set-off or counterclaim with
respect to any and all monies
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owing by Company to that holder with respect thereto as fully as if that holder
were owed the amount of the participation held by that holder.
2.18 MAKING OR MAINTAINING EURODOLLAR RATE LOANS.
(a) Inability to Determine Applicable Interest
Rate. In the event that Administrative Agent shall have determined (which
determination shall be final and conclusive and binding upon all parties
hereto), on any Interest Rate Determination Date with respect to any Eurodollar
Rate Loans, that by reason of circumstances affecting the London interbank
market adequate and fair means do not exist for ascertaining the interest rate
applicable to such Loans on the basis provided for in the definition of Adjusted
Eurodollar Rate, Administrative Agent shall on such date give notice (by
telefacsimile or by telephone confirmed in writing) to Company and each Lender
of such determination, whereupon (i) no Loans may be made as, or converted to,
Eurodollar Rate Loans until such time as Administrative Agent notifies Company
and Lenders that the circumstances giving rise to such notice no longer exist,
and (ii) any Funding Notice or Conversion/Continuation Notice given by Company
with respect to the Loans in respect of which such determination was made shall
be deemed to be rescinded by Company.
(b) Illegality or Impracticability of Eurodollar
Rate Loans. In the event that on any date any Lender shall have determined
(which determination shall be final and conclusive and binding upon all parties
hereto but shall be made only after consultation with Company and Administrative
Agent) that the making, maintaining or continuation of its Eurodollar Rate Loans
(I) has become unlawful as a result of compliance by such Lender in good faith
with any law, treaty, governmental rule, regulation, guideline or order (or
would conflict with any such treaty, governmental rule, regulation, guideline or
order not having the force of law even though the failure to comply therewith
would not be unlawful), or (ii) has become impracticable, as a result of
contingencies occurring after the date hereof which materially and adversely
affect the London interbank market or the position of such Lender in that
market, then, and in any such event, such Lender shall be an "AFFECTED LENDER"
and it shall on that day give notice (by telefacsimile or by telephone confirmed
in writing) to Company and Administrative Agent of such determination (which
notice Administrative Agent shall promptly transmit to each other Lender).
Thereafter (1) the obligation of the Affected Lender to make Loans as, or to
convert Loans to, Eurodollar Rate Loans shall be suspended until such notice
shall be withdrawn by the Affected Lender, (2) to the extent such determination
by the Affected Lender relates to a Eurodollar Rate Loan then being requested by
Company pursuant to a Funding Notice or a Conversion/Continuation Notice, the
Affected Lender shall make such Loan as (or continue such Loan as or convert
such Loan to, as the case may be) a Base Rate Loan, (3) the Affected Lender's
obligation to maintain its outstanding Eurodollar Rate Loans (the "AFFECTED
LOANS") shall be terminated at the earlier to occur of the expiration of the
Interest Period then in effect with respect to the Affected Loans or when
required by law, and (4) the Affected Loans shall automatically convert into
Base Rate Loans on the date of such termination. Notwithstanding the foregoing,
to the extent a determination by an Affected Lender as described above relates
to a Eurodollar Rate Loan then being requested by Company
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pursuant to a Funding Notice or a Conversion/Continuation Notice, Company shall
have the option, subject to the provisions of Section 2.18(c), to rescind such
Funding Notice or Conversion/Continuation Notice as to all Lenders by giving
notice (by telefacsimile or by telephone confirmed in writing) to Administrative
Agent of such rescission on the date on which the Affected Lender gives notice
of its determination as described above (which notice of rescission
Administrative Agent shall promptly transmit to each other Lender). Except as
provided in the immediately preceding sentence, nothing in this Section 2.18(b)
shall affect the obligation of any Lender other than an Affected Lender to make
or maintain Loans as, or to convert Loans to, Eurodollar Rate Loans in
accordance with the terms hereof.
(c) Compensation for Breakage or
Non-Commencement of Interest Periods. Company shall compensate each Lender, upon
written request by such Lender (which request shall set forth the basis for
requesting such amounts), for all losses, expenses and liabilities (including
any interest paid by such Lender to lenders of funds borrowed by it to make or
carry its Eurodollar Rate Loans and any loss, expense or liability sustained by
such Lender in connection with the liquidation or re-employment of such funds
but excluding loss of anticipated profits) which such Lender may sustain: (i) if
for any reason (other than a default by such Lender) a borrowing of any
Eurodollar Rate Loan does not occur on a date specified therefor in a Funding
Notice or a telephonic request for borrowing, or a conversion to or continuation
of any Eurodollar Rate Loan does not occur on a date specified therefor in a
Conversion/Continuation Notice or a telephonic request for conversion or
continuation; (ii) if any prepayment or other principal payment or any
conversion of any of its Eurodollar Rate Loans occurs on a date prior to the
last day of an Interest Period applicable to that Loan; or (iii) if any
prepayment of any of its Eurodollar Rate Loans is not made on any date specified
in a notice of prepayment given by Company.
(d) Booking of Eurodollar Rate Loans. Any Lender
may make, carry or transfer Eurodollar Rate Loans at, to, or for the account of
any of its branch offices or the office of an Affiliate of such Lender.
(e) Assumptions Concerning Funding of Eurodollar
Rate Loans. Calculation of all amounts payable to a Lender under this Section
2.18 and under Section 2.19 shall be made as though such Lender had actually
funded each of its relevant Eurodollar Rate Loans through the purchase of a
Eurodollar deposit bearing interest at the rate obtained pursuant to clause (I)
of the definition of Adjusted Eurodollar Rate in an amount equal to the amount
of such Eurodollar Rate Loan and having a maturity comparable to the relevant
Interest Period and through the transfer of such Eurodollar deposit from an
offshore office of such Lender to a domestic office of such Lender in the United
States of America; provided, however, each Lender may fund each of its
Eurodollar Rate Loans in any manner it sees fit and the foregoing assumptions
shall be utilized only for the purposes of calculating amounts payable under
this Section 2.18 and under Section 2.19.
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2.19 INCREASED COSTS; CAPITAL ADEQUACY.
(a) Compensation For Increased Costs and Taxes.
Subject to the provisions of Section 2.20 (which shall be controlling with
respect to the matters covered thereby), in the event that any Lender (which
term shall include Issuing Bank for purposes of this Section 2.19(a)) shall
determine (which determination shall, absent manifest error, be final and
conclusive and binding upon all parties hereto) that any law, treaty or
governmental rule, regulation or order, or any change therein or in the
interpretation, administration or application thereof (including the
introduction of any new law, treaty or governmental rule, regulation or order),
or any determination of a court or governmental authority, in each case that
becomes effective after the date hereof, or compliance by such Lender with any
guideline, request or directive issued or made after the date hereof by any
central bank or other governmental or quasi-governmental authority (whether or
not having the force of law): (I) subjects such Lender (or its applicable
lending office) to any additional Tax (other than any Tax on the overall net
income of such Lender) with respect to this Agreement or any of the other Credit
Documents or any of its obligations hereunder or thereunder or any payments to
such Lender (or its applicable lending office) of principal, interest, fees or
any other amount payable hereunder; (ii) imposes, modifies or holds applicable
any reserve (including any marginal, emergency, supplemental, special or other
reserve), special deposit, compulsory loan, FDIC insurance or similar
requirement against assets held by, or deposits or other liabilities in or for
the account of, or advances or loans by, or other credit extended by, or any
other acquisition of funds by, any office of such Lender (other than any such
reserve or other requirements with respect to Eurodollar Rate Loans that are
reflected in the definition of Adjusted Eurodollar Rate); or (iii) imposes any
other condition (other than with respect to a Tax matter) on or affecting such
Lender (or its applicable lending office) or its obligations hereunder or the
London interbank market; and the result of any of the foregoing is to increase
the cost to such Lender of agreeing to make, making or maintaining Loans
hereunder or to reduce any amount received or receivable by such Lender (or its
applicable lending office) with respect thereto; then, in any such case, Company
shall promptly pay to such Lender, upon receipt of the statement referred to in
the next sentence, such additional amount or amounts (in the form of an
increased rate of, or a different method of calculating, interest or otherwise
as such Lender in its sole discretion shall determine) to the extent such
increased costs of capital are due to changes in applicable law or regulatory
policy first occurring after the execution of the Commitment Letter, as may be
necessary to compensate such Lender for any such increased cost or reduction in
amounts received or receivable hereunder. Such Lender shall deliver to Company
(with a copy to Administrative Agent) a written statement, setting forth in
reasonable detail the basis for calculating the additional amounts owed to such
Lender under this Section 2.19(a), which statement shall be conclusive and
binding upon all parties hereto absent manifest error.
(b) Capital Adequacy Adjustment. In the event
that any Lender (which term shall include Issuing Bank for purposes of this
Section 2.19(b)) shall have determined that the adoption, effectiveness,
phase-in or applicability after the Closing Date of any law, rule or regulation
(or any provision thereof) regarding capital adequacy, or any change therein or
in the interpretation or administration thereof by any
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Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender (or its
applicable lending office) with any guideline, request or directive issued or
made after the date hereof regarding capital adequacy (whether or not having the
force of law) of any such Governmental Authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on the
capital of such Lender or any corporation controlling such Lender as a
consequence of, or with reference to, such Lender's Loans or Revolving
Commitments or Letters of Credit, or participations therein or other obligations
hereunder with respect to the Loans or the Letters of Credit to a level below
that which such Lender or such controlling corporation could have achieved but
for such adoption, effectiveness, phase-in, applicability, change or compliance
(taking into consideration the policies of such Lender or such controlling
corporation with regard to capital adequacy), then from time to time, within
five (5) Business Days after receipt by Company from such Lender of the
statement referred to in the next sentence, Company shall pay to such Lender
such additional amount or amounts as will compensate such Lender or such
controlling corporation on an after-tax basis for such reduction. Such Lender
shall deliver to Company (with a copy to Administrative Agent) a written
statement, setting forth in reasonable detail the basis for calculating the
additional amounts owed to Lender under this Section 2.19(b), which statement
shall be conclusive and binding upon all parties hereto absent manifest error.
2.20 TAXES; WITHHOLDING, ETC.
(a) Payments to Be Free and Clear. All sums
payable by any Credit Party hereunder and under the other Credit Documents shall
(except to the extent required by law) be paid free and clear of, and without
any deduction or withholding on account of, any Tax (other than a Tax on the
overall net income of any Lender or a franchise Tax) imposed, levied, collected,
withheld or assessed by or within the United States of America or any political
subdivision in or of the United States of America or any other jurisdiction from
or to which a payment is made by or on behalf of any Credit Party or by any
federation or organization of which the United States of America or any such
jurisdiction is a member at the time of payment.
(b) Withholding of Taxes. If any Credit Party or
any other Person is required by law to make any deduction or withholding on
account of any such Tax from any sum paid or payable by any Credit Party to
Administrative Agent or any Lender (which term shall include Issuing Bank for
purposes of this Section 2.20(b)) under any of the Credit Documents: (i) Company
shall notify Administrative Agent of any such requirement or any change in any
such requirement as soon as Company becomes aware of it; (ii) Company shall pay
any such Tax before the date on which penalties attach thereto, such payment to
be made (if the liability to pay is imposed on any Credit Party) for its own
account or (if that liability is imposed on Administrative Agent or such Lender,
as the case may be) on behalf of and in the name of Administrative Agent or such
Lender; (iii) the sum payable by such Credit Party in respect of which the
relevant deduction, withholding or payment is required shall be increased to the
extent necessary to ensure that, after the making of that deduction, withholding
or payment, Administrative Agent or such Lender, as the case may be, receives on
the due date a net
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sum equal to what it would have received had no such deduction, withholding or
payment been required or made; and (iv) within thirty (30) days after paying any
sum from which it is required by law to make any deduction or withholding, and
within thirty (30) days after the due date of payment of any Tax which it is
required by clause (ii) above to pay, Company shall deliver to Administrative
Agent evidence satisfactory to the other affected parties of such deduction,
withholding or payment and of the remittance thereof to the relevant taxing or
other authority; provided, no such additional amount shall be required to be
paid to any Lender under clause (iii) above except to the extent that any change
after the date hereof (in the case of each Lender listed on the signature pages
hereof on the Closing Date) or after the effective date of the Assignment
Agreement pursuant to which such Lender became a Lender (in the case of each
other Lender) in any such requirement for a deduction, withholding or payment as
is mentioned therein shall result in an increase in the rate of such deduction,
withholding or payment from that in effect at the date hereof or at the date of
such Assignment Agreement, as the case may be, in respect of payments to such
Lender.
(c) Evidence of Exemption From U.S. Withholding
Tax. Each Lender that is not a United States Person (as such term is defined in
Section 7701(a)(30) of the Internal Revenue Code) for U.S. federal income tax
purposes (a "NON-US LENDER") shall deliver to Administrative Agent for
transmission to Company, on or prior to the Closing Date (in the case of each
Lender listed on the signature pages hereof on the Closing Date) or on or prior
to the date of the Assignment Agreement pursuant to which it becomes a Lender
(in the case of each other Lender), and at such other times as may be necessary
in the determination of Company or Administrative Agent (each in the reasonable
exercise of its discretion), (I) two original copies of Internal Revenue Service
Form W-8BEN or W-8ECI (or any successor forms), properly completed and duly
executed by such Lender, and such other documentation required under the
Internal Revenue Code and reasonably requested by Company to establish that such
Lender is not subject to deduction or withholding of United States federal
income tax with respect to any payments to such Lender of principal, interest,
fees or other amounts payable under any of the Credit Documents, or (ii) if such
Lender is not a "bank" or other Person described in Section 881(c)(3) of the
Internal Revenue Code and cannot deliver either Internal Revenue Service Form
W-8BEN or W-8ECI pursuant to clause (I) above, a Certificate re Non-Bank Status
together with two original copies of Internal Revenue Service Form W-8 (or any
successor form), properly completed and duly executed by such Lender, and such
other documentation required under the Internal Revenue Code and reasonably
requested by Company to establish that such Lender is not subject to deduction
or withholding of United States federal income tax with respect to any payments
to such Lender of interest payable under any of the Credit Documents. Each
Lender required to deliver any forms, certificates or other evidence with
respect to United States federal income tax withholding matters pursuant to this
Section 2.20(c) hereby agrees, from time to time after the initial delivery by
such Lender of such forms, certificates or other evidence, whenever a lapse in
time or change in circumstances renders such forms, certificates or other
evidence obsolete or inaccurate in any material respect, that such Lender shall
promptly deliver to Administrative Agent for transmission to Company two new
original copies of Internal Revenue Service Form W-8BEN or W-8ECI, or a
Certificate re Non-Bank Status and two original copies of Internal Revenue
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Service Form W-8, as the case may be, properly completed and duly executed by
such Lender, and such other documentation required under the Internal Revenue
Code and reasonably requested by Company to confirm or establish that such
Lender is not subject to deduction or withholding of United States federal
income tax with respect to payments to such Lender under the Credit Documents,
or notify Administrative Agent and Company of its inability to deliver any such
forms, certificates or other evidence. Company shall not be required to pay any
additional amount to any Non-US Lender under Section 2.20(b)(iii) if such Lender
shall have failed (1) to deliver the forms, certificates or other evidence
referred to in the second sentence of this Section 2.20(c), or (2) to notify
Administrative Agent and Company of its inability to deliver any such forms,
certificates or other evidence, as the case may be; provided, if such Lender
shall have satisfied the requirements of the first sentence of this Section
2.20(c) on the Closing Date or on the date of the Assignment Agreement pursuant
to which it became a Lender, as applicable, nothing in this last sentence of
Section 2.20(c) shall relieve Company of its obligation to pay any additional
amounts pursuant to Section 2.19(a) in the event that, as a result of any change
in any applicable law, treaty or governmental rule, regulation or order, or any
change in the interpretation, administration or application thereof, such Lender
is no longer properly entitled to deliver forms, certificates or other evidence
at a subsequent date establishing the fact that such Lender is not subject to
withholding as described herein.
2.21 OBLIGATION TO MITIGATE. Each Lender (which term shall
include Issuing Bank for purposes of this Section 2.21) agrees that, as promptly
as practicable after the officer of such Lender responsible for administering
its Loans or Letters of Credit, as the case may be, becomes aware of the
occurrence of an event or the existence of a condition that would cause such
Lender to become an Affected Lender or that would entitle such Lender to receive
payments under Section 2.18, 2.19 or 2.20, it will, to the extent not
inconsistent with the internal policies of such Lender and any applicable legal
or regulatory restrictions, use reasonable efforts to (a) make, issue, fund or
maintain its Credit Extensions, including any Affected Loans, through another
office of such Lender, or (b) take such other measures as such Lender may deem
reasonable, if as a result thereof the circumstances which would cause such
Lender to be an Affected Lender would cease to exist or the additional amounts
which would otherwise be required to be paid to such Lender pursuant to Section
2.19, or 2.20 would be materially reduced and if, as determined by such Lender
in its sole discretion, the making, issuing, funding or maintaining of such
Revolving Commitments, Loans or Letters of Credit through such other office or
in accordance with such other measures, as the case may be, would not otherwise
adversely affect such Revolving Commitments, Loans or Letters of Credit or the
interests of such Lender; provided, such Lender will not be obligated to utilize
such other office pursuant to this Section 2.21 unless Company agrees to pay all
incremental expenses incurred by such Lender as a result of utilizing such other
office as described in clause (I) above. A certificate as to the amount of any
such expenses payable by Company pursuant to this Section 2.21 (setting forth in
reasonable detail the basis for requesting such amount) submitted by such Lender
to Company (with a copy to Administrative Agent) shall be conclusive absent
manifest error.
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2.22 DEFAULTING LENDERS. Anything contained herein to the
contrary notwithstanding, in the event that any Lender defaults (a "DEFAULTING
LENDER") in its obligation to fund (a "FUNDING DEFAULT") any Revolving Loan or
its portion of any unreimbursed payment under Section 2.3(b)(iv) or 2.4(e) (in
each case, a "DEFAULTED LOAN"), then (a) during any Default Period with respect
to such Defaulting Lender, such Defaulting Lender shall be deemed not to be a
"LENDER" for purposes of voting on any matters (including the granting of any
consents or waivers) with respect to any of the Credit Documents; (b) to the
extent permitted by applicable law, until such time as the Default Excess with
respect to such Defaulting Lender shall have been reduced to zero, (I) any
voluntary prepayment of the Revolving Loans shall, if Company so directs at the
time of making such voluntary prepayment, be applied to the Revolving Loans of
other Lenders as if such Defaulting Lender had no Revolving Loans outstanding
and the Revolving Exposure of such Defaulting Lender were zero, and (ii) any
mandatory prepayment of the Revolving Loans shall, if Company so directs at the
time of making such mandatory prepayment, be applied to the Revolving Loans of
other Lenders (but not to the Revolving Loans of such Defaulting Lender) as if
such Defaulting Lender had funded all Defaulted Loans of such Defaulting Lender,
it being understood and agreed that Company shall be entitled to retain any
portion of any mandatory prepayment of the Revolving Loans that is not paid to
such Defaulting Lender solely as a result of the operation of the provisions of
this clause (b); (c) such Defaulting Lender's Revolving Commitment and
outstanding Revolving Loans and such Defaulting Lender's Pro Rata Share of the
Letter of Credit Usage shall be excluded for purposes of calculating the
Revolving Commitment fee payable to Lenders in respect of any day during any
Default Period with respect to such Defaulting Lender, and such Defaulting
Lender shall not be entitled to receive any Revolving Commitment fee pursuant to
Section 2.11 with respect to such Defaulting Lender's Revolving Commitment in
respect of any Default Period with respect to such Defaulting Lender; and (d)
the Total Utilization of Revolving Commitments as at any date of determination
shall be calculated as if such Defaulting Lender had funded all Defaulted Loans
of such Defaulting Lender. No Revolving Commitment of any Lender shall be
increased or otherwise affected, and, except as otherwise expressly provided in
this Section 2.22, performance by Company of its obligations hereunder and the
other Credit Documents shall not be excused or otherwise modified as a result of
any Funding Default or the operation of this Section 2.22. The rights and
remedies against a Defaulting Lender under this Section 2.22 are in addition to
other rights and remedies which Company may have against such Defaulting Lender
with respect to any Funding Default and which Administrative Agent or any Lender
may have against such Defaulting Lender with respect to any Funding Default.
2.23 REMOVAL OR REPLACEMENT OF A LENDER. Anything
contained herein to the contrary notwithstanding, in the event that: (a) any
Lender (an "INCREASED-COST LENDER") shall give notice to Company that such
Lender is an Affected Lender or that such Lender is entitled to receive payments
under Section 2.18, 2.19 or 2.20, the circumstances which have caused such
Lender to be an Affected Lender or which entitle such Lender to receive such
payments shall remain in effect, and such Lender shall fail to withdraw such
notice within five (5) Business Days after Company's request for such
withdrawal; or (b) any Lender shall become a Defaulting Lender, the Default
Period for such Defaulting Lender shall remain in effect, and such Defaulting
Lender shall fail to
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cure the default as a result of which it has become a Defaulting Lender within
five (5) Business Days after Company's request that it cure such default; or (c)
in connection with any proposed amendment, modification, termination, waiver or
consent with respect to any of the provisions hereof as contemplated by Section
10.5(b), the consent of Requisite Lenders shall have been obtained but the
consent of one or more of such other Lenders (each a "NON-CONSENTING LENDER")
whose consent is required shall not have been obtained; then, with respect to
each such Increased-Cost Lender, Defaulting Lender or Non-Consenting Lender (the
"TERMINATED LENDER"), Company may, by giving written notice to Administrative
Agent and any Terminated Lender of its election to do so, elect to cause such
Terminated Lender (and such Terminated Lender hereby irrevocably agrees) to
assign the full amount of any or all of its outstanding Tranche B Term Loans,
Revolving Loans, New Term Loans, and its Revolving Commitments, in each case, if
any, to one or more Eligible Assignees (each a "REPLACEMENT LENDER") in
accordance with the provisions of Section 10.6 and Terminated Lender shall pay
any fees payable thereunder in connection with such assignment; provided, (1) on
the date of such assignment, the Replacement Lender shall pay to Terminated
Lender an amount equal to the sum of (A) an amount equal to the principal of,
and all accrued interest on, all outstanding Loans of the Terminated Lender, (B)
an amount equal to all unreimbursed drawings that have been funded by such
Terminated Lender, together with all then unpaid interest with respect thereto
at such time and (C) an amount equal to all accrued, but theretofore unpaid fees
owing to such Terminated Lender pursuant to Section 2.11; (2) on the date of
such assignment, Company shall pay any amounts payable to such Terminated Lender
pursuant to Section 2.18(c), 2.19 or 2.20 or otherwise as if it were a
prepayment; and (3) in the event such Terminated Lender is a Non-Consenting
Lender, each Replacement Lender shall consent, at the time of such assignment,
to each matter in respect of which such Terminated Lender was a Non-Consenting
Lender; provided, Company may not make such election with respect to any
Terminated Lender that is also (x) an Issuing Bank unless, prior to the
effectiveness of such election, Company shall have caused each outstanding
Letter of Credit issued thereby to be cancelled and (y) the Collateral Agent,
unless a replacement Collateral Agent agrees to be appointed as Collateral Agent
and assumes the duties and responsibilities of the Collateral Agent hereunder
and under the Credit Documents. Upon the prepayment of all amounts owing to any
Terminated Lender and the termination of such Terminated Lender's Revolving
Commitments, if any, such Terminated Lender shall no longer constitute a
"Lender" for purposes hereof; provided, any rights of such Terminated Lender to
indemnification hereunder shall survive as to such Terminated Lender.
2.24 INCREMENTAL FACILITY. Company may by written notice
to Administrative Agent elect (one time only) to request the establishment of
new term loan commitments (the "NEW TERM LOAN COMMITMENTS"), by an amount not in
excess of $65,000,000. Each such notice shall specify (A) the date (the
"INCREASED AMOUNT DATE") on which Company proposes that the New Term Loan
Commitments shall be effective, which shall be a date (i) not less than 10
Business Days after the date on which such notice is delivered to Administrative
Agent and (ii) prior to the second anniversary of the Closing Date, and (B) the
identity of each Lender or other Person that is an Eligible Assignee (each, a
"NEW TERM LOAN LENDER") to whom Company proposes a portion of such New Term Loan
Commitments be allocated and the amounts of such allocations;
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provided that any Lender approached to provide all or a portion of the New Term
Loan Commitments may elect or decline, in its sole discretion, to provide a New
Term Loan Commitment. Such New Term Loan Commitments shall become effective, as
of the Increased Amount Date; provided that (1) no Default or Event of Default
shall exist on the Increased Amount Date before or after giving effect to such
New Term Loan Commitments; (2) both before and after giving effect to the making
of any New Term Loans, each of the conditions set forth in Section 3.2 shall be
satisfied; (3) the proceeds of the New Term Loans shall immediately be used
within one (1) Business Day after the Increased Amount Date, together with (to
the extent after giving pro forma effect to such Cash payment as of the last day
of the most recently ended month, Availability is at least $40,000,000) other
Cash of the Company or the PHCMI Group Members, solely to, repay the then
outstanding Omega Loan and related interest, fees and expenses in full and the
Company shall comply with its obligations in the respect of the PHCMI Group
Members pursuant to Section 5.10; (4) Company and its Subsidiaries shall be in
pro forma compliance with each of the covenants set forth in Section 6.8 as of
the last day of the most recently ended Fiscal Quarter after giving effect to
such New Term Loan Commitments and the use of proceeds thereof; (5) the New Term
Loan Commitments shall be effected pursuant to one or more Joinder Agreements
executed and delivered by Company, Administrative Agent, and each New Term Loan
Lender and each of which shall be recorded in the Register and shall be subject
to the requirements set forth in Section 2.20(c); and (6) Company shall deliver
or cause to be delivered any legal opinions or other documents reasonably
requested by Administrative Agent in connection with any such transaction.
On the Increased Amount Date on which the New Term Loan
Commitments are effective, subject to the satisfaction of the foregoing terms
and conditions, (i) each New Term Loan Lender shall make a Loan to Company (a
"NEW TERM LOAN") in an amount equal to its New Term Loan Commitment, and (ii)
each New Term Loan Lender shall become a Lender hereunder with respect to the
New Term Loan Commitment and the New Term Loans made pursuant thereto.
Administrative Agent shall notify Lenders promptly upon
receipt of Company's notice of the Increased Amount Date and in respect thereof
the New Term Loan Commitments and the New Term Loan Lenders.
The terms and provisions of the New Term Loans and New Term
Loan Commitments shall be, except as otherwise set forth herein or in the
Joinder Agreement, identical to the Tranche B Term Loans. In any event (i) the
weighted average life to maturity of the New Term Loans shall be no shorter than
the weighted average life to maturity of the Tranche B Terms Loans, (ii) the
applicable New Term Loan Maturity Date shall be no shorter than the final
maturity of the Tranche B Term Loans, (iii) the rate of interest applicable to
the New Term Loans shall be determined by Company and the applicable new Lenders
and shall be set forth in each applicable Joinder Agreement; provided, however,
in the event that: (i) the interest rate margin applicable to the New Term Loans
is greater than that applicable to the Tranche B Term Loans by more than 0.25%
per annum, then (x) the interest rate margins applicable to the Tranche B Term
Loans set out in Section 2.8(a)(iii) shall be increased to an amount equal to
the interest
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rate margin on the New Term Loans less 0.25% per annum, and (y) if
the aggregate amount of any original issue discount and any upfront or similar
fees (excluding arrangement fees) paid to new Lenders on the New Term Loans is
greater than that on the Tranche B Term Loans, the Company shall pay such fees
and/or original issue discount to the existing Lenders having Term Loan
Exposure, as determined by the Administrative Agent in order to ratably increase
the aggregate original issue discount and such upfront fees on the Tranche B
Term Loans to that of the New Term Loans; or (ii) the interest rate margin
applicable to the New Term Loans is no greater than that applicable to the
Tranche B Term Loans then, if the aggregate amount of any original issue
discount and any upfront or similar fees (excluding arrangement fees) paid to
new Lenders on the New Term Loans is ratably greater than that on the Tranche B
Term Loans by more than 0.25%, the Company shall pay such fees and/or original
issue discount to the existing Lenders having Term Loan Exposure, as determined
by the Administrative Agent in order to ratably increase the aggregate original
issue discount and such upfront fees on the Tranche B Term Loans to that of the
New Term Loans less 0.25% per annum; or (iii) the interest rate margin
applicable to the New Term Loans is greater than that applicable to the Tranche
B Term Loans by less than 0.25% per annum, then (x) the interest rate margins
applicable to the Tranche B Term Loans set out in Section 2.8(a)(iii) shall not
be increased, and (y) the aggregate amount of any original issue discount and
any upfront or similar fees (excluding arrangement fees) paid to new Lenders on
the New Term Loans shall ratably be no greater than the aggregate original issue
discount and such upfront fees on the Tranche B Term Loans.
SECTION 3. CONDITIONS PRECEDENT
3.1 CLOSING DATE. The obligation of any Lender to make a
Credit Extension on the Closing Date is subject to the satisfaction, or waiver
in accordance with Section 10.5, of the following conditions on or before the
Closing Date:
(a) Credit Documents. Administrative Agent shall
have received each Credit Document originally executed and delivered by each
applicable Credit Party and required to be delivered on the Closing Date, and
provision for the receipt by Administrative Agent of sufficient copies of each
such Credit Document sufficient for each Lender shall have been made to the
satisfaction of Administrative Agent.
(b) Consents and Approvals. All governmental and
third party approvals necessary or reasonably advisable (in Administrative
Agent's judgment) in connection with the financing and transactions contemplated
hereby or otherwise referred to herein, including the Loans, and the continuing
operations of Company and its Subsidiaries, shall have been obtained and be in
full force and effect and in form and substance reasonably satisfactory to
Administrative Agent, and all applicable waiting periods shall have expired
without any action being taken or threatened by any competent authority, which
without limitation, would restrain, prevent or otherwise impose adverse
conditions on the transactions contemplated by the Credit Documents, and no
action,
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request for stay, petition for review or rehearing, reconsideration, or appeal
with respect to any of the foregoing shall be pending, and the time for any
applicable agency to take action to set aside its consent on its own motion
shall have expired.
(c) Payments of Amounts Due. All costs, fees,
expenses (including, without limitation, invoiced legal fees and expenses, title
premiums, survey charges and recording taxes and fees) and other compensation
contemplated hereby payable to the Joint Lead Arrangers, Administrative Agent or
the Lenders shall have been paid to the extent due.
(d) Organizational Documents; Incumbency.
Administrative Agent shall have received (i) sufficient copies of each
Organizational Document executed and delivered by each Credit Party, as
applicable, for each Lender; (ii) signature and incumbency certificates of the
officers of such Person executing the Credit Documents to which it is a party;
(iii) resolutions of the Board of Directors or similar governing body of each
Credit Party adopted prior to the Closing Date, approving and authorizing the
execution, delivery and performance of this Agreement and the other Credit
Documents and the Related Agreements to which it is a party or by which it or
its assets may be bound of the Closing Date, certified as of the Closing Date by
its secretary or an assistant secretary as being in full force and effect
without modification or amendment; (iv) a good standing certificate from the
applicable Governmental Authority of each Credit Party's jurisdiction of
incorporation, organization or formation and in each jurisdiction in which it is
qualified as a foreign corporation or other entity to do business, each dated a
recent date prior to the Closing Date; and (v) such other documents as
Administrative Agent may reasonably request.
(e) Organizational and Capital Structure. The
organizational structure and capital structure of Company and its Subsidiaries
shall be as set forth on Schedule 4.1.
(f) Related Agreements. Administrative Agent has
received a fully executed or conformed copy of each (i) Related Agreement and
any documents executed in connection therewith, together with copies of each of
the opinions of counsel delivered to the parties under the Related Agreements as
executed on the Closing Date and (ii) all documents evidencing the Indebtedness
and Liens existing as of the Closing Date and permitted pursuant to Sections
6.1(h) or 6.2(o).
(g) No Litigation. There shall not exist any
action, suit, investigation, litigation or proceeding or other legal or
regulatory developments, pending or threatened in any court or before any
arbitrator or Governmental Authority that, in the reasonable opinion of
Administrative Agent, singly or in the aggregate, materially impairs the other
transactions contemplated by the Credit Documents, or that could reasonably be
expected to have a Material Adverse Effect.
(h) Health Care Permits. As of the Closing Date,
except as set forth on Schedule 3.1(h) hereto, during the last twenty-four (24)
months, no Credit Party nor any Subsidiary of a Credit Party has been notified
by JCAHO or any relevant
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Governmental Authority or other Person with respect to any Health Care Permit,
or any Reimbursement Approval necessary to operate its business as currently
being conducted, of such Governmental Authority's or other Person's actual
revocation, suspension, termination, rescission, or non-renewal, of such Health
Care Permit or Reimbursement Approval.
(i) Real Estate Assets. In order to create in
favor of Collateral Agent, for the benefit of Secured Parties, a valid and,
subject to any filing and/or recording referred to herein, perfected First
Priority security interest in certain Real Estate Assets, Company and the
Guarantor Subsidiary shall have used their commercially reasonable best efforts
to obtain and deliver to Administrative Agent and Collateral Agent, in the case
of each Leasehold Property, (I) a Landlord Consent and Estoppel and (II)
evidence that such Leasehold Property is a Recorded Leasehold Interest, and
Collateral Agent shall have received from Company and each applicable Guarantor:
(i) fully executed and notarized
Mortgages, in proper form for recording in all appropriate places in
all applicable jurisdictions, encumbering each Real Estate Asset listed
in Schedule 3.1(i)(i) (each, a "CLOSING DATE MORTGAGED PROPERTY");
(ii) an opinion of counsel (which
counsel shall be reasonably satisfactory to Administrative Agent and
Collateral Agent) in each of the nine (9) states listed on Schedule
3.1(i)(ii) in which a Closing Date Mortgaged Property is located with
respect to the enforceability of the form(s) of Mortgages to be
recorded in such state and such other matters as Administrative Agent
and Collateral Agent may reasonably request, in each case in form and
substance reasonably satisfactory to Administrative Agent and
Collateral Agent;
(iii) (a) ALTA mortgagee title insurance
policies or unconditional commitments therefor issued by one or more
title companies reasonably satisfactory to Administrative Agent and
Collateral Agent (it being acknowledged that Fidelity National Title
Insurance Company is so satisfactory) with respect to Closing Date
Mortgaged Properties constituting at least 90% in number of Facilities
and 90% in number of total beds of all Closing Date Mortgaged
Properties which are fee interests (each, a "TITLE POLICY"), in amounts
not less than the lower of (i) the fair market value of each Closing
Date Mortgaged Property and (ii) $1,000,000, together with a title
report issued by a title company with respect thereto, dated not more
than thirty (30) days prior to the Closing Date and copies of all
recorded documents listed as exceptions to title or otherwise referred
to therein (other than Permitted Liens of the type described in Section
6.2(e)), each in form and substance reasonably satisfactory to
Administrative Agent and (b) evidence satisfactory to Administrative
Agent that such Credit Party has paid to the title company or to the
appropriate Governmental Authorities (or made adequate provision for
such payment, in the reasonable judgment of Administrative Agent) all
expenses and premiums of the title company and all other sums required
in connection with the issuance of each Title Policy and all recording
and stamp taxes (including mortgage recording and
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intangible taxes) payable in connection with recording the Mortgages
for each Closing Date Mortgaged Property in the appropriate real estate
records; and
(iv) evidence of flood insurance with
respect to each Flood Hazard Property that is located in a community
that participates in the National Flood Insurance Program, in each case
in compliance with any applicable regulations of the Board of Governors
of the Federal Reserve System, in form and substance reasonably
satisfactory to Administrative Agent and Collateral Agent.
(j) Personal Property Collateral. In order to
create in favor of Collateral Agent, for the benefit of Secured Parties, a
valid, perfected First Priority security interest in the personal property
Collateral, Administrative Agent shall have received:
(i) evidence satisfactory to
Administrative Agent and Collateral Agent of the compliance by each
Credit Party of their obligations under the Pledge and Security
Agreement and the other Collateral Documents (including, without
limitation, their obligations to authorize the filing of and deliver
UCC financing statements, originals of securities, instruments and
chattel paper and any agreements perfecting the security interest in
the deposit and/or securities accounts as provided therein).
(ii) A completed Collateral
Questionnaire dated the Closing Date and executed by an Authorized
Officer of each Credit Party, together with all attachments
contemplated thereby, including (A) lien searches requested by
Administrative Agent with respect to Company and its Guarantor
Subsidiaries, and such search shall reveal no liens on any of the
assets of Company or such Guarantor Subsidiaries except for liens
permitted by the Credit Documents or Liens to be discharged on or prior
to the Closing Date pursuant to documentation (duly executed if
required) satisfactory to Administrative Agent, together with copies of
all such filings disclosed by such search, and (B) UCC amendment
financing statements (or similar documents) duly authorized for filing
by all applicable Persons for filing in all applicable jurisdictions as
may be necessary to terminate any effective UCC financing statements
(or equivalent filings) disclosed in such search (other than any such
financing statements in respect of Permitted Liens);
(iii) opinions of counsel (which counsel
shall be reasonably satisfactory to Administrative Agent) with respect
to the creation and perfection of the security interests in favor of
Collateral Agent in such Collateral and such other matters governed by
the laws of each jurisdiction in which any Credit Party is "located"
(for the purposes of the UCC) and the laws of other applicable
jurisdictions, in each case as Administrative Agent may reasonably
request, addressing the matters set out in Exhibit D of the Pledge and
Security Agreement and otherwise in form and substance reasonably
satisfactory to Administrative Agent; and
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(iv) evidence that each Credit Party
shall have taken or caused to be taken any other action, executed and
delivered or caused to be executed and delivered any other agreement,
document and instrument and made or caused to be made any other filing
and recording (other than as set forth herein) reasonably required by
Administrative Agent or made arrangements for such filing or recording
reasonably satisfactory to Administrative Agent.
(k) Environmental Reports. The Lenders shall
have received such reports and other information as any may have been reasonably
requested, in form, scope and substance satisfactory to the Agents, regarding
environmental matters relating to any Facilities including matters that (1) are
the subject of any Environmental Claim and (2) relate to the furnishing or
receipt of indemnification for any actual or potential Environmental Claim.
(l) Financial Statements; Projections. Lenders
shall have received from Company (i) the Historical Financial Statements, (ii)
pro forma consolidated balance sheets of Company and its consolidated
Subsidiaries as at the Closing Date plus the separate, consolidated balance
sheet of the PHCMI Group Members as at the Closing Date, and reflecting the
consummation of the other transactions contemplated by the Credit Documents to
occur on or prior to the Closing Date, which pro forma financial statements
shall be in form and substance satisfactory to Lenders, and (iii) the
Projections.
(m) Evidence of Insurance. Administrative Agent
shall have received a certificate from Company's insurance broker or other
evidence satisfactory to it that all insurance required to be maintained
pursuant to Section 5.5 is in full force and effect and that Collateral Agent,
for the benefit of Secured Parties has been named as additional insured and loss
payee thereunder to the extent required under Section 5.5.
(n) Opinions of Counsel to Credit Parties.
Lenders and their respective counsel shall have received originally executed
copies of the favorable written opinions of Powell, Goldstein, ▇▇▇▇▇▇ & ▇▇▇▇▇▇,
LLP, counsel for Credit Parties, in the form of Exhibit D and as to such other
matters as the Agents may reasonably request, dated as of the Closing Date and
otherwise in form and substance reasonably satisfactory to the Agents (and each
Credit Party hereby instructs such counsel to deliver such opinions to Agents
and Lenders).
(o) Fees. Company shall have paid to the Joint
Lead Arrangers, Co-Syndication Agents, Documentation Agent, Administrative Agent
and Lenders the fees payable on the Closing Date referred to in Section 2.11(d).
(p) Solvency Certificate. On the Closing Date,
Administrative Agent shall have received a Solvency Certificate demonstrating
that, Company and the Guarantor Subsidiaries (other than Non-Material Guarantor
Subsidiaries) are and will, after giving effect to the funding of the Tranche B
Term Loans and other Credit Extensions on the Closing Date be Solvent.
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(q) Closing Date Certificate. Company shall have
delivered to Administrative Agent an originally executed Closing Date
Certificate, together with all attachments thereto.
(r) Closing Date. Lenders shall, simultaneously
with the satisfaction hereof, have made the Tranche B Term Loans to Company on
or before December 31, 2003 in one borrowing of an amount no less than
$135,000,000.
(s) Issuance of Senior Subordinated Notes.
Company shall have issued the Senior Subordinated Notes in the aggregate
principal amount of not less than $175,000,000 pursuant to the Senior
Subordinated Note Indenture.
(t) Existing Facility and the Rollover Notes. On
the Closing Date, Company and its Subsidiaries shall have (i) repaid in full the
Existing Facility, the Rollover Notes, (ii) terminated any commitments to lend
or make other extensions of credit thereunder, (iii) delivered to Administrative
Agent all documents or instruments necessary to release all Liens securing other
obligations of Company and its Subsidiaries thereunder being repaid on the
Closing Date, and (iv) made arrangements satisfactory to Administrative Agent
with respect to the cancellation or cash-collateralization of any letters of
credit outstanding thereunder or the issuance of Letters of Credit to support
the obligations of Company and its Subsidiaries with respect thereto.
(u) Florida Divestitures, Louisiana Divestitures
and Tampa Divestiture. Company shall have consummated the Florida Divestitures,
Louisiana Divestitures and Tampa Divestiture in form and substance reasonably
satisfactory to Administrative Agent.
(v) Completion of Proceedings. All partnership,
corporate and other proceedings taken or to be taken in connection with the
transactions contemplated hereby and all documents incidental thereto not
previously found acceptable by Administrative Agent and its counsel shall be
satisfactory in form and substance to Administrative Agent and such counsel, and
Administrative Agent, and such counsel shall have received all such counterpart
originals or certified copies of such documents as Administrative Agent may
reasonably request.
Each Lender, by delivering its signature page to this Agreement and/or funding a
Loan on the Closing Date, shall be deemed to have acknowledged receipt of, and
consented to and approved, each Credit Document and each other document required
to be approved by any Agent, Requisite Lenders or Lenders, as applicable on the
Closing Date.
3.2 CONDITIONS TO EACH CREDIT EXTENSION.
(a) Conditions Precedent. The obligation of each
Lender to make any Loan, or Issuing Bank to issue any Letter of Credit, or Swing
Line Lender to make any Swing Line Loan on any Credit Date, including the
Closing Date (other than with respect to (vi) below which shall not be required
to be satisfied on the Closing
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Date), are subject to the satisfaction, or waiver in accordance with Section
10.5, of the following conditions precedent:
(i) Administrative Agent shall have received a
fully executed and delivered Funding Notice or Issuance Notice, as the
case may be;
(ii) after making the Credit Extensions requested
on such Credit Date, the Total Utilization of Revolving Commitments
shall not exceed the Revolving Commitments then in effect;
(iii) as of such Credit Date, the representations
and warranties contained herein and in the other Credit Documents shall
be true and correct in all material respects on and as of that Credit
Date to the same extent as though made on and as of that date, except
to the extent such representations and warranties specifically relate
to an earlier date, in which case such representations and warranties
shall have been true and correct in all material respects on and as of
such earlier date;
(iv) as of such Credit Date, no Event of Default
or Default shall have occurred and be continuing or would result from
the consummation of the applicable Credit Extension;
(v) on or before the date of issuance of any
Letter of Credit, Administrative Agent shall have received all other
information required by the applicable Issuance Notice, and such other
documents or information as Issuing Bank may reasonably require in
connection with the issuance of such Letter of Credit; and
(vi) as of such Credit Date, the Leverage Ratios
set forth in Section 6.8 determined as of such date after giving pro
forma effect to the contemplated Credit Extension shall not exceed the
maximum Leverage Ratios permitted as of the last day of the immediately
preceding Fiscal Quarter pursuant to Section 6.8.
Any Agent or Requisite Lenders shall be entitled, but not
obligated to, request and receive, prior to the making of any Credit Extension,
additional information reasonably satisfactory to the requesting party
confirming the satisfaction of any of the foregoing if, in the good faith
judgment of such Agent or Requisite Lender such request is warranted under the
circumstances.
(b) Notices. Any Notice shall be executed by an
Authorized Officer in a writing delivered to Administrative Agent. In lieu of
delivering a Notice, Company may give Administrative Agent telephonic notice by
the required time of any proposed borrowing, conversion/continuation or issuance
of a Letter of Credit, as the case may be; provided each such notice shall be
promptly confirmed in writing by delivery of the applicable Notice to
Administrative Agent on or before the applicable date of borrowing,
continuation/conversion or issuance. Neither Administrative Agent nor any
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Lender shall incur any liability to Company in acting upon any telephonic notice
referred to above that Administrative Agent believes in good faith to have been
given by a duly authorized officer or other person authorized on behalf of
Company or for otherwise acting in good faith.
SECTION 4. REPRESENTATIONS AND WARRANTIES
In order to induce the Agents, Lenders, Swing Line Lender and
Issuing Bank to enter into this Agreement and to make each Credit Extension to
be made thereby, each Credit Party represents and warrants to each Agent,
Lender, Swing Line Lender and Issuing Bank, on the Closing Date and on each
Credit Date, that the following statements are true and correct:
4.1 ORGANIZATION; REQUISITE POWER AND AUTHORITY;
QUALIFICATION. Company and each of the Guarantor Subsidiaries (a) is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization as identified in Schedule 4.1, (b) has all
requisite power and authority to own and operate its properties, to carry on its
business as now conducted and as proposed to be conducted, to enter into the
Credit Documents to which it is a party and to carry out the transactions
contemplated thereby, and (c) is qualified to do business and in good standing
in every jurisdiction where its assets are located and wherever necessary to
carry out its business and operations, except in jurisdictions where the failure
to be so qualified or in good standing has not had, and could not be reasonably
expected to have, a Material Adverse Effect.
4.2 CAPITAL STOCK AND OWNERSHIP. The Capital Stock of
Company and each of the Guarantor Subsidiaries has been duly authorized and
validly issued and is fully paid and non-assessable. Except as set forth on
Schedule 4.2, as of the date hereof, there is no existing option, warrant, call,
right, commitment or other agreement to which Company or any of the Subsidiaries
is a party requiring, and there is no membership interest or other Capital Stock
of Company or any of its Subsidiaries outstanding which upon conversion or
exchange would require, the issuance by Company or any of the Subsidiaries of
any additional membership interests or other Capital Stock of Company or any of
the Subsidiaries or other Securities convertible into, exchangeable for or
evidencing the right to subscribe for or purchase, a membership interest or
other Capital Stock of Company or any of the Subsidiaries. Schedule 4.2
correctly sets forth the ownership interest of Company and each of the
Subsidiaries in their respective Subsidiaries as of the Closing Date. Schedule
4.2 further correctly sets forth as of the Closing Date the Joint Ventures in
which Company or any of the Subsidiaries has an interest, and the extent of such
interest and the material agreements relating thereto.
4.3 DUE AUTHORIZATION. The execution, delivery and
performance of the Credit Documents have been duly authorized by all necessary
action on the part of each Credit Party that is a party thereto.
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4.4 NO CONFLICT. The execution, delivery and performance
by Credit Parties of the Credit Documents to which they are parties and the
consummation of the transactions contemplated by the Credit Documents do not and
will not (a) violate any provision of any law or any governmental rule or
regulation applicable to Company or any of the Guarantor Subsidiaries, any of
the Organizational Documents of Company or any of the Guarantor Subsidiaries, or
any order, judgment or decree of any court or other agency of government binding
on Company or any of the Guarantor Subsidiaries; (b) conflict with, result in a
breach of or constitute (with due notice or lapse of time or both) a default
under any material Contractual Obligation of Company or any of the Guarantor
Subsidiaries; (c) result in or require the creation or imposition of any Lien
upon any of the properties or assets of Company or any of the Guarantor
Subsidiaries (other than any Liens created under any of the Credit Documents in
favor of Collateral Agent, on behalf of Secured Parties); (d) require any
approval of stockholders, members or partners or any approval or consent of any
Person under any Contractual Obligation of Company or any of the Guarantor
Subsidiaries, except for such approvals or consents which will be obtained on or
before the Closing Date and except for any Landlord Consents and Estoppels or
other approvals or consents permitted hereunder to be obtained after the Closing
Date; (e) violate any provision of any material Health Care Permit,
Reimbursement Approval, Management Agreement, indenture, agreement, bond, note,
mortgage, deed of trust, or other similar instrument to which such Credit Party
is a party or by which such Credit Party or any of its respective properties or
assets are bound or to which such Credit Party is subject; and (f) conflict
with, result in a breach of, or constitute (with due notice) or lapse of time or
both) a default under or create any right to terminate, any such Health Care
Permit, Reimbursement Approval, Management Agreement, indenture, agreement,
bond, note, mortgage, deed of trust, or other instrument.
4.5 GOVERNMENTAL CONSENTS. The execution, delivery and
performance by Credit Parties of the Credit Documents to which they are parties
and the consummation of the transactions contemplated by the Credit Documents do
not and will not require any registration with, consent or approval of, or
notice to, or other action to, with or by, any Governmental Authority, except
for filings and recordings with respect to the Collateral to be made, or
otherwise delivered to Collateral Agent for filing and/or recordation, as of the
Closing Date.
4.6 BINDING OBLIGATION. Each Credit Document has been
duly executed and delivered by each Credit Party that is a party thereto and is
the legally valid and binding obligation of such Credit Party, enforceable
against such Credit Party in accordance with its respective terms, except as may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable principles
relating to enforceability (whether considered in a proceeding at law or in
equity).
4.7 HISTORICAL FINANCIAL STATEMENTS. The Historical
Financial Statements were prepared in conformity with GAAP and fairly present,
in all material respects, the financial position, on a consolidated basis, of
the Persons described in such financial statements as at the respective dates
thereof and the results of operations and
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cash flows, on a consolidated basis, of the entities described therein for each
of the periods then ended, subject, in the case of any such unaudited financial
statements, to changes resulting from audit and normal year-end adjustments. As
of the Closing Date, except as disclosed on Schedule 4.7 neither Company nor any
of its Subsidiaries has any contingent liability or liability for taxes,
long-term lease or unusual forward or long-term commitment that is not reflected
in the Historical Financial Statements or the notes thereto and which in any
such case is, in the reasonable business judgment of Company's senior
management, material in relation to the business, operations, properties,
assets, condition (financial or otherwise) or prospects of Company and its
Subsidiaries taken as a whole.
4.8 PROJECTIONS. On and as of the Closing Date, the
projections of Company and the Guarantor Subsidiaries for each of the full
Fiscal Years ended December 31, 2004 through 2009 as provided to the Lenders
(the "PROJECTIONS") are based on good faith estimates and assumptions made by
the management of Company; provided, the Projections are not to be viewed as
facts and that actual results during the period or periods covered by the
Projections may differ from such Projections and that the differences may be
material; provided further, as of the Closing Date, management of Company
believed that the Projections were reasonable and attainable.
4.9 NO MATERIAL ADVERSE CHANGE. Since December 31, 2002,
no event, circumstance or change has occurred that has caused or evidences,
either in any case or in the aggregate, a Material Adverse Effect.
4.10 NO RESTRICTED JUNIOR PAYMENTS. Since December 31,
2002, neither Company nor any of the Guarantor Subsidiaries has directly or
indirectly declared, ordered, paid or made, or set apart any sum or property
for, any Restricted Junior Payment or agreed to do so except as permitted
pursuant to Section 6.5 or as disclosed on Schedule 4.10.
4.11 ADVERSE PROCEEDINGS, ETC.
(a) There are no Adverse Proceedings,
individually or in the aggregate, that could reasonably be expected to have a
Material Adverse Effect. Neither Company nor any of the Subsidiaries (a) is in
violation of any applicable laws (including Environmental Laws) that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect, or (b) is subject to or in default with respect to any
final judgments, writs, injunctions, decrees, rules or regulations of any court
or any federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
(b) There is no pending investigation of the
Credit Parties by JCAHO, which investigation is not otherwise conducted in the
ordinary course of business and no criminal, civil or administrative action,
audit, or investigation by a fiscal intermediary or by the federal government or
any state government exists or is threatened with respect to the Credit Parties,
which in either case could reasonably be expected to
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adversely affect the Credit Parties' right to receive a material portion of
Medicare and Medicaid reimbursement to which it would otherwise be entitled,
right to participate in the Medicare and Medicaid programs, or otherwise have a
Material Adverse Effect on the receipt of Medicare and Medicaid reimbursement by
the Credit Parties, and none of the Credit Parties is subject to any pending but
unassessed Medicare or Medicaid claim payment adjustments, except to the extent
Company has established adequate reserves for such adjustments in accordance
with GAAP and are reflected on the most recent financial statements received by
Administrative Agent.
4.12 PAYMENT OF TAXES. Except as otherwise permitted under
Section 5.3 all tax returns and reports of Company and Guarantor Subsidiaries
required to be filed by any of them have been timely filed, and all taxes shown
on such tax returns to be due and payable and all assessments, fees and other
governmental charges upon Company and its Subsidiaries and upon their respective
properties, assets, income, businesses and franchises which are due and payable
have been paid when due and payable. Company knows of no proposed tax assessment
against Company or any of its Subsidiaries which is not being actively contested
by Company or such Subsidiary in good faith and by appropriate proceedings other
than any such proposed tax assessments the maximum aggregate liability in
respect of which does not or could not reasonably be expected to exceed
$1,000,000; provided, such reserves or other appropriate provisions, if any, as
shall be required in conformity with GAAP shall have been made or provided
therefor.
4.13 PROPERTIES.
(a) Title. Except as set forth on Schedule
4.13(a), each of Company and the Guarantor Subsidiaries has (i) good and
insurable legal title to (in the case of fee interests in real property), (ii)
valid leasehold interests in (in the case of leasehold interests in real or
personal property), and (iii) good title to (in the case of all other personal
property), all of their respective properties and assets reflected in their
respective Historical Financial Statements referred to in Section 4.7 and in the
most recent financial statements delivered pursuant to Section 5.1, in each case
except for assets disposed of since the date of such financial statements in the
ordinary course of business or as otherwise permitted under Section 6.9. Except
as permitted by this Agreement, all such properties and assets are free and
clear of Liens.
(b) Real Estate. As of the Closing Date,
Schedule 4.13(b) contains a true, accurate and complete list of (i) all Real
Estate Assets owned in fee simple by any Credit Party, and (ii) all Real Estate
Assets leased or sub-leased by any Credit Party, regardless of whether such
Credit Party is the landlord or tenant (whether directly or as an assignee or
successor in interest) under such lease, sublease or assignment. Each lease or
sub-lease relating to a Real Estate Asset listed in clause (ii) of the
immediately preceding sentence is in full force and effect and Company does not
have knowledge of any material default that has occurred and is continuing
thereunder. As of the Closing Date, no Credit Party owns any Real Estate Asset
in fee simple, which is neither a Closing Date Mortgaged Property or a
Post-Closing Mortgaged Property other than as expressly set forth on Schedule
4.13(b)
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4.14 ENVIRONMENTAL MATTERS. Neither Company nor any of its
Subsidiaries nor any of their respective Facilities or operations are subject to
any outstanding written order, consent decree or settlement agreement with any
Person relating to any Environmental Law, any Environmental Claim, or any
Hazardous Materials Activity that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect. Neither Company nor
any of its Subsidiaries has received and is currently the subject of any letter
or request for information under Section 104 of the Comprehensive Environmental
Response, Compensation, and Liability Act (42 U.S.C. Section 9604) or any
comparable state law, except as has been disclosed in writing to Administrative
Agent. There are and, to each of Company's and its Subsidiaries' knowledge, have
been, no conditions, occurrences, or Hazardous Materials Activities which could
reasonably be expected to form the basis of an Environmental Claim against
Company or any of its Subsidiaries that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect. Neither Company nor
any of its Subsidiaries nor, to any Credit Party's knowledge, any predecessor of
Company or any of its Subsidiaries has filed any notice under any Environmental
Law indicating past or present treatment of Hazardous Materials at any Facility,
and none of Company's or any of its Subsidiaries' operations involves the
generation, transportation, treatment, storage or disposal of hazardous waste,
as defined under 40 C.F.R. Parts 260-270 or any state equivalent, except as has
been disclosed in writing to Administrative Agent. Compliance with all current
or reasonably foreseeable future requirements pursuant to or under Environmental
Laws could not be reasonably expected to have, individually or in the aggregate,
a Material Adverse Effect. No event or condition has occurred or is occurring on
the Closing Date, or to the knowledge of the Company as of the date of any other
Credit Extension, with respect to Company or any of its Subsidiaries relating to
any Environmental Law, any Release of Hazardous Materials, or any Hazardous
Materials Activity which individually or in the aggregate has had, or could
reasonably be expected to have, a Material Adverse Effect.
4.15 NO DEFAULTS. Neither Company nor any of the Guarantor
Subsidiaries is in default in the performance, observance or fulfillment of any
of the obligations, covenants or conditions contained in any of its Contractual
Obligations, and no condition exists which, with the giving of notice or the
lapse of time or both, could constitute such a default, except where the
consequences, direct or indirect, of such default or defaults, if any, could not
reasonably be expected to have a Material Adverse Effect.
4.16 MATERIAL CONTRACTS. Schedule 4.16 contains a true,
correct and complete list of all the Material Contracts in effect on the Closing
Date, and except as described thereon, all such Material Contracts are in full
force and effect and no defaults currently exist thereunder.
4.17 MATERIAL REIMBURSEMENT APPROVALS. (a) Each Credit
Party and each Subsidiary of a Credit Party has obtained and holds in full force
and effect all Reimbursement Approvals necessary to carry on its respective
business as now being, or now intended to be, conducted, other than those the
absence of which could not reasonably be expected to have a Material Adverse
Effect, (b) Schedule 4.17 contains a
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true, correct and complete list of all the material Reimbursements Approvals in
effect on the Closing Date. For the purposes of this Section 4.17(b), a
Reimbursement Approval shall be deemed "material" if the Credit Parties or a
Subsidiary thereof could reasonably expect that any Credit Party or a Subsidiary
would, pursuant to the terms thereof, (i) recognize future revenues in excess of
$20,000,000 per annum, (ii) incur liabilities or obligations in excess of
$20,000,000 per annum or (c) likely suffer damages or losses in excess of
$20,000,000 by reason of breach or termination thereof.
4.18 HEALTH CARE PERMITS.
(a) Except as disclosed on Schedule 4.18(a):
(i) Except as, in the aggregate, could
not reasonably be expected to have a Material Adverse Effect: (i) each
of Company and its Guarantor Subsidiaries now has all Health Care
Permits necessary for the lawful conduct of its business or operations
wherever now conducted and as planned to be conducted, including,
without limitation, the ownership and operation of its Health Care
Facilities pursuant to all Requirements of Law, (ii) all such Health
Care Permits are in full force and effect and have not been amended or
otherwise modified, rescinded, revoked or assigned, (iii) Company and
each of the Guarantor Subsidiaries is substantially complying with the
requirements of each such Health Care Permit, and no event has
occurred, and no condition exists, which, with the giving of notice,
the passage of time, or both, would constitute a violation thereof,
(iv) neither Company nor any of the Guarantor Subsidiaries, has
received any written notice of any violation of any Requirement of Law,
(v) no condition exists or event has occurred which in itself or with
the giving of notice or the lapse of time, or both, would result in the
suspension, revocation, impairment, forfeiture or non-renewal of any
such Health Care Permit, other than those the absence of which could
not reasonably be expected to have a Material Adverse Effect, (vi)
there is no claim filed with any Governmental Authority of which
Company or any of the Guarantor Subsidiaries has been notified in
writing challenging the validity of any such Health Care Permit and
(vii) the continuation, validity and effectiveness of all such Health
Care Permits will not be adversely affected by the execution and
performance of any of the Credit Documents.
(ii) Except as, in the aggregate, could
not reasonably be expected to have a Material Adverse Effect (i) all
Health Care Facilities owned, leased, managed or operated by Company or
any of its Subsidiaries are entitled to participate in, and receive
payment under, the appropriate Medicare, Medicaid and related
reimbursement programs, and any similar state or local
government-sponsored program, to the extent that Company or any of its
Guarantor Subsidiaries has decided to participate in any such program,
and to receive reimbursement from private and commercial payers and
health maintenance organizations to the extent applicable thereto; and
(ii) there are no proceedings pending or, to the knowledge of Company,
any proceedings threatened or investigations pending or threatened, by
any Governmental Authority with respect
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to Company's or any of the Guarantor Subsidiaries' participation in the
Medicare, Medicaid or related reimbursement programs.
(b) Schedule 4.18(b) contains a true, correct
and complete list of all the material Health Care Permits in effect on the
Closing Date. For the purposes of this Section 4.18(b), a Health Care Permit
shall be deemed "material" if the Credit Parties or a Subsidiary thereof could
reasonably expect that any Credit Party or a Subsidiary would, pursuant to the
terms thereof, (i) recognize future revenues in excess of $20,000,000 per annum,
(ii) incur liabilities or obligations in excess of $20,000,000 per annum or (c)
likely suffer damages or losses in excess of $20,000,000 by reason of breach or
termination thereof.
4.19 GOVERNMENTAL REGULATION. Neither Company nor any of
the Guarantor Subsidiaries is subject to regulation under the Public Utility
Holding Company Act of 1935, the Federal Power Act or the Investment Company Act
of 1940 or under any other federal or state statute or regulation which may
limit its ability to incur Indebtedness or which may otherwise render all or any
portion of the Obligations unenforceable. Neither Company nor any of the
Guarantor Subsidiaries is a "registered investment company" or a company
"controlled" by a "registered investment company" or a "principal underwriter"
of a "registered investment company" as such terms are defined in the Investment
Company Act of 1940.
4.20 MARGIN STOCK. Neither Company nor any of the
Guarantor Subsidiaries is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing or
carrying any Margin Stock. No part of the proceeds of the Loans made to such
Credit Party will be used to purchase or carry any such margin stock or to
extend credit to others for the purpose of purchasing or carrying any such
margin stock or for any purpose that violates, or is inconsistent with, the
provisions of Regulation T, U or X of said Board of Governors.
4.21 EMPLOYEE MATTERS. Neither Company nor any of the
Subsidiaries is engaged in any unfair labor practice that could reasonably be
expected to have a Material Adverse Effect. There is (a) no unfair labor
practice complaint pending against Company or any of the Subsidiaries, or to the
best knowledge of Company, threatened against any of them before the National
Labor Relations Board and no grievance or arbitration proceeding arising out of
or under any collective bargaining agreement that is so pending against Company
or any of the Subsidiaries or to the best knowledge of Company, threatened
against any of them, (b) no strike or work stoppage in existence or threatened
involving Company or any of the Subsidiaries and (c) to the best knowledge of
Company, no union representation question existing with respect to the employees
of Company or any of the Subsidiaries and, to the best knowledge of Company, no
union organization activity that is taking place, except (with respect to any
matter specified in clause (a), (b) or (c) above, either individually or in the
aggregate) such as is not reasonably likely to have a Material Adverse Effect.
Except as set forth on Schedule 4.21 hereto, there are no collective bargaining
agreements or Multiemployer Plans covering the employees of any Credit Party or
any Subsidiary of a Credit Party and no Credit Party
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nor any Subsidiary of a Credit Party has suffered any strikes, walkouts or work
stoppages within the last three (3) years.
4.22 EMPLOYEE BENEFIT PLANS. Company, each of the
Subsidiaries and each of their respective ERISA Affiliates are in compliance
with all applicable provisions and requirements of ERISA and the Internal
Revenue Code and the regulations and published interpretations thereunder with
respect to each Employee Benefit Plan, and have performed all their obligations
under each Employee Benefit Plan. Each Employee Benefit Plan which is intended
to qualify under Section 401(a) of the Internal Revenue Code has received a
favorable determination letter from the Internal Revenue Service indicating that
such Employee Benefit Plan is so qualified and nothing has occurred subsequent
to the issuance of such determination letter which would cause such Employee
Benefit Plan to lose its qualified status. No liability to the PBGC (other than
required premium payments), the Internal Revenue Service (with respect to any
Employee Benefit Plan), any Employee Benefit Plan (excluding routine
contributions) or any trust established under Title IV of ERISA has been or is
expected to be incurred by Company, any of its Subsidiaries or any of their
ERISA Affiliates. No ERISA Event has occurred or is reasonably expected to
occur. Except to the extent required under Section 4980B of the Internal Revenue
Code or similar state laws, no Employee Benefit Plan provides health or welfare
benefits (through the purchase of insurance or otherwise) for any retired or
former employee of Company, any of its Subsidiaries or any of their respective
ERISA Affiliates. The present value of the aggregate benefit liabilities under
each Pension Plan sponsored, maintained or contributed to by Company, any of its
Subsidiaries or any of their ERISA Affiliates (determined as of the end of the
most recent plan year on the basis of the actuarial assumptions specified for
funding purposes in the most recent actuarial valuation for such Pension Plan),
did not exceed the aggregate current value of the assets of such Pension Plan.
As of the most recent valuation date for each Multiemployer Plan for which the
actuarial report is available, the potential liability of Company, its
Subsidiaries and their respective ERISA Affiliates for a complete withdrawal
from such Multiemployer Plan (within the meaning of Section 4203 of ERISA), when
aggregated with such potential liability for a complete withdrawal from all
Multiemployer Plans, based on information available pursuant to Section 4221(e)
of ERISA. is zero. Company, each of its Subsidiaries and each of their ERISA
Affiliates have complied with the requirements of Section 515 of ERISA with
respect to each Multiemployer Plan and are not in material "default" (as defined
in Section 4219(c)(5) of ERISA) with respect to payments to a Multiemployer
Plan. No breach of this Section 4.22 shall arise solely by reason of any of the
aforementioned statements being false to the extent it would not individually or
in the aggregate result, or might reasonably be expected to result, in liability
of Company, any of its Subsidiaries, or any of their respective ERISA Affiliates
in excess $1,000,000 during the term hereof.
4.23 CERTAIN FEES. No broker's or finder's fee or
commission will be payable with respect hereto or any of the transactions
contemplated hereby.
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4.24 SOLVENCY. Each Credit Party (other than a
Non-Material Guarantor Subsidiary) is and, upon the incurrence of any Obligation
by such Credit Party on any date on which this representation and warranty is
made, will be, Solvent.
4.25 RELATED AGREEMENTS.
(a) Delivery. Company has delivered to
Administrative Agent complete and correct copies of (i) each Related Agreement
and of all exhibits and schedules thereto as of the date hereof and (ii) copies
of any material amendment, restatement, supplement or other modification to or
waiver of each Related Agreement entered into after the date hereof.
(b) Representations and Warranties. Except to
the extent otherwise expressly set forth herein or in the schedules hereto, and
subject to the qualifications set forth therein, each of the representations and
warranties given by any Credit Party in any Related Agreement is true and
correct in all material respects as of the Closing Date (or as of any earlier
date to which such representation and warranty specifically relates).
Notwithstanding anything in the Related Agreement to the contrary, the
representations and warranties of each Credit Party set forth in this Section
4.25 (b) shall, solely for purposes hereof, survive the Closing Date for the
benefit of Lenders.
(c) Governmental Approvals. All Governmental
Authorizations and all other authorizations, approvals and consents of any other
Person required by the Related Agreements have been obtained and are in full
force and effect.
4.26 COMPLIANCE WITH STATUTES, ETC.
(a) Each of Company and the Guarantor
Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all Governmental
Authorities, in respect of the conduct of its business and the ownership of its
property (including compliance with all applicable Environmental Laws with
respect to any Real Estate Asset or governing its business and the requirements
of any permits issued under such Environmental Laws with respect to any such
Real Estate Asset or the operations of Company or any of the Guarantor
Subsidiaries), except such non-compliance that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
(b) Each Credit Party has caused to be
accurately prepared and filed (or obtained extensions for) all applicable cost
reports with respect to all Third Party Payor Arrangements.
(c) Each Credit Party participates in an
internal comprehensive compliance program with respect to all applicable
statutes, regulations and orders of, and all applicable restrictions imposed by,
all Governmental Authorities.
4.27 DISCLOSURE. No statement or information contained in
this Agreement, any other Credit Document, or any other document, certificate or
statement furnished to any Agent or the Lenders or any of them, by or on behalf
of any Credit Party
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for use in connection with the transactions contemplated by this Agreement or
the other Credit Documents, contained as of the date such statement,
information, document or certificate was so furnished, any untrue statement of a
material fact or, when taken together with all such other agreements, documents,
certificates and statements, omitted to state a material fact regarding the
Credit Parties necessary in order to make the statements contained herein or
therein not misleading. Any projections and pro forma financial information
contained in such materials are based upon good faith estimates and assumptions
believed by Company to be reasonable at the time made, it being recognized by
Lenders that such projections as to future events are not to be viewed as facts
and that actual results during the period or periods covered by any such
projections may differ from the projected results. There are no facts known (or
which should upon the reasonable exercise of diligence be known) to Company
(other than matters of a general economic nature) that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect
and that have not been disclosed herein or in such other documents, certificates
and statements furnished to Lenders for use in connection with the transactions
contemplated hereby.
4.28 CASH MANAGEMENT SYSTEM. The cash management system
described on Schedule 4.28 is an accurate and complete description of the cash
management system maintained by Credit Parties and in effect on the date hereof
at all times thereafter with respect to the deposit and transfer of funds from
the collection of all receivables (subject to the right of the Credit Parties to
consolidate multiple Concentration Accounts or to transfer or create new
Concentration Accounts in accordance with the applicable express provisions
hereof and of the Pledge and Security Agreement).
4.29 CASH COLLATERAL ACCOUNT.
(a) Company is, following their establishment,
the sole entitlement holder or account holder of the Cash Collateral Account,
and Company has not consented to, and is not otherwise aware of, any Person
(other than Administrative Agent pursuant to the Credit Documents) having
"control" (within the meanings of Sections 8-106 and 9-106 or 9-104 as
applicable of the UCC) over, or any other interest in, any such Cash Collateral
Account or any securities or other property credited thereto or deposited
therein; and
(b) Company has, following their establishment,
taken all actions necessary or desirable to establish Administrative Agent's
"control" (within the meanings of Sections 8-106 and 9-106 or 9-104, as
applicable of the UCC) over the Cash Collateral Account by delivering an
agreement substantially in the form of Exhibit C (with such modifications and
Administrative Agent may, in its reasonable discretion, approve) to the Pledge
and Security Agreement entered into by Company, Administrative Agent and the
securities intermediary or depositary institution, as the case may be,
maintaining such Cash Collateral Account pursuant to which such securities
intermediary or depositary institution, as the case may be, has agreed to comply
with Administrative Agent's "entitlement orders" or "instructions," as the case
may be, without further consent by Company.
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4.30 SUBORDINATION; DESIGNATION OF THE CREDIT DOCUMENTS AS
"DESIGNATED SENIOR INDEBTEDNESS." ETC.
(a) (i) The subordination provisions contained
in documents governing the Senior Subordinated Notes or the Refinancing Notes,
if any, are enforceable against the Company and any of its Subsidiaries party
thereto and the holders of such Indebtedness, and (ii) all Obligations of the
Credit Parties (to the extent they are obligors with respect to Senior
Subordinated Notes or the Refinancing Notes, if any) hereunder and in the other
Credit Documents are within the definitions of "Designated Senior Indebtedness"
and "Senior Indebtedness" included in the respective subordination provisions.
In addition, Company hereby designates the Obligations under this Agreement as
"Designated Senior Indebtedness" for the purposes of the definition of
"Designated Senior Indebtedness" contained in the documents governing the Senior
Subordinated Notes.
(b) All incurrences of Loans and issuances of
Letters of Credit as permitted under this Agreement are, and when incurred or
issued will be, permitted under (and shall give rise to no breach or violation
of) the Senior Subordinated Notes or the Refinancing Notes, if any, or any other
Subordinated Indebtedness.
SECTION 5. AFFIRMATIVE COVENANTS
Each Credit Party covenants and agrees that so long as any
Commitment is in effect and until payment in full of all Obligations and
cancellation or expiration of all Letters of Credit, each Credit Party shall
perform, and (where so indicated herein) shall cause each of its Subsidiaries to
perform, all covenants in this Section 5.
5.1 FINANCIAL STATEMENTS AND OTHER REPORTS. Company will
deliver by e-mail to Administrative Agent (and Administrative Agent hereby
agrees promptly upon receipt to deliver to each Lender by the posting thereof to
intralinks) and, if expressly requested by the Administrative Agent, Company
will further deliver to Administrative Agent in hard copy, sufficient hard
copies for each of the Lenders:
(a) Quarterly Financial Statements. As soon as
available, and in any event within forty-five (45) days after the end of each of
the first three Fiscal Quarters of each Fiscal Year (or such shorter period, if
applicable, within which the Company is required to make such filings with the
SEC), (i) the unaudited consolidated balance sheets of Company and its
consolidated Subsidiaries as at the end of such Fiscal Quarter and the related
consolidated statements of income, stockholders' equity and cash flows of
Company and its consolidated Subsidiaries for such Fiscal Quarter and for the
period from the beginning of the then current Fiscal Year to the end of such
Fiscal Quarter, setting forth in each case in comparative form the corresponding
figures for the corresponding periods of the previous Fiscal Year and the
corresponding figures from the Financial Plan for the current Fiscal Year; (ii)
the Form 10K or Form 10Q, if any, filed in connection with such financial
statements; (iii) copies of any quarterly financial
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statements required to be provided (pursuant to relevant documentation as of the
date hereof) and such copies which are in fact provided by Company or PHCMI to
Omega for such Fiscal Quarter with respect to PHCMI and its Subsidiaries, (iv)
quarterly percentage statistics concerning occupancy rate, payor mix, any other
statistical and operating information that Company deems relevant in the
operation of its business and that of the Guarantor Subsidiaries, together with
such other information as Administrative Agent may reasonably request; all in
reasonable detail, together with a Financial Officer Certification with respect
thereto;
(b) Annual Financial Statements. As soon as
available, and in any event within ninety (90) days after the end of each Fiscal
Year (or such shorter period, if applicable, within which the Company is
required to make such filings with the SEC), (i) the consolidated balance sheets
of Company and its consolidated Subsidiaries as at the end of such Fiscal Year
and the related consolidated statements of income, stockholders' equity and cash
flows of Company and its consolidated Subsidiaries for such Fiscal Year, setting
forth in each case in comparative form the corresponding figures for the
previous Fiscal Year and the corresponding figures from the Financial Plan for
the Fiscal Year covered by such financial statements, in reasonable detail,
together with a Financial Officer Certification with respect thereto; (ii) the
Form 10K, if any, filed in connection with such financial statements; (iii)
annual percentage statistics concerning occupancy rate, payor mix, any other
statistical and operating information that Company deems relevant in the
operation of its business and that of the Guarantor Subsidiaries together with
such other information as Administrative Agent may reasonably request; and (iv)
with respect such consolidated financial statements a report thereon of Ernst &
Young LLP, a Big Four Accounting Firm or other independent certified public
accountants of recognized national standing selected by Company, reasonably
satisfactory to Administrative Agent (which report shall be unqualified as to
going concern and scope of audit, and shall state that such consolidated
financial statements fairly present, in all material respects, the consolidated
financial position of Company and its Subsidiaries as at the dates indicated and
the results of their operations and their cash flows for the periods indicated
in conformity with GAAP applied on a basis consistent with prior years (except
as otherwise disclosed in such financial statements) and that the examination by
such accountants in connection with such consolidated financial statements has
been made in accordance with generally accepted auditing standards) together
with a written statement by such independent certified public accountants
stating (1) that their audit examination has included a review of the terms of
the Credit Documents, (2) whether, in connection therewith, any condition or
event that constitutes a Default or an Event of Default has come to their
attention and, if such a condition or event has come to their attention,
specifying the nature and period of existence thereof, and (3) whether anything
has come to their attention that causes them to believe that the information
contained in any Compliance Certificate is not correct or that the matters set
forth in such Compliance Certificate are not stated in accordance with the terms
hereof. Contemporaneously with the delivery of such financial statements,
Company shall deliver copies of any annual financial statements required to be
provided (pursuant to relevant documentation as of the date hereof) and such
copies which are in fact provided by Company or PHCMI to Omega for the
immediately preceding Fiscal Year with respect to PHCMI and its Subsidiaries;
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(c) Compliance Certificate/Pricing Certificate.
Together with each delivery of financial statements of Company and its
Subsidiaries pursuant to Sections 5.1(a) (other than with respect to any Fiscal
Quarter ending December 31 in respect of which a duly executed and completed
Pricing Certificate is hereby required to be delivered within forty-five (45)
days after the end of such Fiscal Quarter) and 5.1(b), a duly executed and
completed Compliance Certificate;
(d) Statements of Reconciliation after Change in
Accounting Principles. If, as a result of any change in accounting principles
and policies from those used in the preparation of the Historical Financial
Statements, the consolidated financial statements of Company and its
Subsidiaries delivered pursuant to Section 5.1(a) or 5.1(b) will differ in any
material respect from the consolidated financial statements that would have been
delivered pursuant to such subdivisions had no such change in accounting
principles and policies been made, then, together with the first delivery of
such financial statements after such change, one or more a statements of
reconciliation for all such prior financial statements in form and substance
satisfactory to Administrative Agent;
(e) Notice of Default. Promptly (and in any
event within five (5) Business Days) upon any "executive officer" (as defined in
Rule 3b-7 under the Securities Exchange Act of 1934, as amended) of Company
obtaining knowledge (i) of any condition or event that constitutes a Default or
an Event of Default or that notice has been given to Company with respect
thereto; (ii) that any Person has given any notice to Company or any of its
Subsidiaries or taken any other action with respect to any event or condition
set forth in Section 8.1(b); or (iii) of the occurrence of any event or change
that has caused or evidences, either in any case or in the aggregate, a Material
Adverse Effect, a certificate of its Authorized Officers specifying the nature
and period of existence of such condition, event or change, or specifying the
notice given and action taken by any such Person and the nature of such claimed
Event of Default, Default, default, event or condition, and what action Company
has taken, is taking and proposes to take with respect thereto;
(f) Notice of Litigation. Promptly (and in any
event within five (5) Business Days) upon any "executive officer" (as defined in
Rule 3b-7 under the Securities Exchange Act of 1934, as amended) of Company
obtaining knowledge of (i) the institution of, or non-frivolous threat of, any
Adverse Proceeding not previously disclosed in writing by Company to Lenders, or
(ii) any material development in any Adverse Proceeding that, in the case of
either (i) or (ii) if adversely determined, could be reasonably expected to have
a Material Adverse Effect, or seeks to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain relief as a result of, the
transactions contemplated hereby, written notice thereof together with such
other information as may be reasonably available to Company to enable Lenders
and their counsel to evaluate such matters;
(g) ERISA. (i) Promptly (and in any event within
five (5) Business Days) upon becoming aware of the occurrence of or forthcoming
occurrence of any ERISA Event, a written notice specifying the nature thereof,
what action Company, any of its Subsidiaries or any of their respective ERISA
Affiliates has taken, is taking or
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proposes to take with respect thereto and, when known, any action taken or
threatened by the Internal Revenue Service, the Department of Labor or the PBGC
with respect thereto; and (ii) with reasonable promptness, copies of (1) each
Schedule B (Actuarial Information) to the annual report (Form 5500 Series) filed
by Company, any of its Subsidiaries or any of their respective ERISA Affiliates
with the Internal Revenue Service with respect to each Pension Plan; (2) all
notices received by Company, any of the Guarantor Subsidiaries or any of their
respective ERISA Affiliates from a Multiemployer Plan sponsor concerning an
ERISA Event; and (3) copies of such other documents or governmental reports or
filings relating to any Employee Benefit Plan as Administrative Agent shall
reasonably request;
(h) Financial Plan. As soon as practicable and
in any event no later than the earlier to occur of (i) the date falling five (5)
Business Days after the meeting of the board of directors approving the same
(but in no event earlier than January 15) and (ii) the end of February during
each Fiscal Year, a consolidated plan and financial forecast for such Fiscal
Year (a "FINANCIAL PLAN"), including (i) a forecasted consolidated balance sheet
and forecasted consolidated statements of income and cash flows of Company and
its Subsidiaries for such Fiscal Year, together with pro forma Compliance
Certificates for such Fiscal Year and an explanation of the assumptions on which
such forecasts are based; (ii) forecasts demonstrating projected compliance with
the requirements of Section 6.8 through the end of such Fiscal Year and (iii)
forecasts demonstrating adequate liquidity through the end of such Fiscal Year
without giving effect to any additional debt or equity offerings not reflected
in the Projections, and detailed line item assumptions underlying such
Projections;
(i) Insurance Report. Together with delivery of
the quarterly Compliance Certificates pursuant to Section 5.1(c), a report in
form and substance satisfactory to Administrative Agent outlining any material
change in insurance coverage maintained by Company and its Subsidiaries in
accordance with this Agreement and, to the extent Company is aware, any planned
material change in insurance coverage for the immediately succeeding Fiscal
Year. At all times following the formation of an Approved Captive Insurance
Subsidiary in accordance with the provisions of Section 5.10 such report shall
also include a detailed description of the services provided by such Subsidiary
and the claims history during the relevant Fiscal Quarter most recently ended,
the material Contractual Obligations (together with a copy of all documents
evidencing such) of such Subsidiary (including details of all insurance
contracts and fronting arrangements), of such Subsidiary's balance sheet,
statement of income, stockholder's equity and cash flows for the Fiscal Quarters
most recently ended;
(j) Notice of Change in Board of Directors. With
reasonable promptness, written notice of any change in the board of directors
(or similar governing body) of Company;
(k) Environmental Reports and Audits. As soon as
practicable following receipt thereof, copies of all environmental audits and
reports with respect to environmental matters at any Facility or which relate to
any environmental liabilities
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of Company or its Subsidiaries which, in any such case, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect;
(l) Information Regarding Collateral. Company
will furnish to Collateral Agent prompt written notice of (and in any event
within 30 days after) any change after the Closing Date (i) in any Credit
Party's corporate name, (ii) in any Credit Party's identity or corporate
structure or (iii) in any Credit Party's Federal Taxpayer Identification Number
or organizational identification number. Company agrees not to effect or permit
any change referred to in the preceding sentence unless all filings have been
made under the Uniform Commercial Code or otherwise that are required in order
for the Collateral Agent to continue at all times following such change to have
a valid, legal and perfected security interest in all the Collateral and for the
Collateral at all times following such change to have a valid, legal and
perfected security interest as contemplated in the Collateral Documents. Company
also agrees promptly (and in any event within two (2) Business Days) to notify
the Collateral Agent if any material portion of the Collateral is damaged or
destroyed;
(m) Audits. Promptly upon their becoming
available, copies of all financial audits prepared for, or submitted to, any of
the Credit Parties or any Approved Captive Insurance Subsidiary by any outside
professional firm or service, including, without limitation, any comment letter
submitted by Company's accountants to management in connection with their annual
audit;
(n) Insurance Notices and Reports. Promptly and
in any event within ten (10) Business Days after the occurrence of any casualty
affecting any Health Care Facility that could reasonably be expected to result
in casualty insurance proceeds in excess of $2,000,000 (a "MATERIAL LOSS"),
notice of such material loss, and thereafter, within five (5) Business Days
after receipt thereof by Company, copies of any notices or correspondence from
any company or agent for any company providing insurance coverage to any Credit
Party or any Subsidiary of a Credit Party (including, without limitation, any
Approved Captive Insurance Subsidiary) relating to any material loss;
(o) Disposals. Together with each delivery of
the Compliance Certificate pursuant to Section 5.1(c), and without limiting any
Credit Party's other obligations to give notice under the Credit Documents, a
schedule setting forth each sale or other disposition of any asset or property
effected outside the ordinary course of business during such quarter, the date
of each such sale or disposition, the sales price with respect to such asset or
property sold or disposed of and the Net Cash Proceeds received during such
quarter from each such sale or disposition;
(p) Other Information. (A) Promptly upon their
becoming available, copies of (i) all financial statements, reports, notices and
proxy statements sent or made available generally by Company to its security
holders acting in such capacity or by any Guarantor Subsidiary of Company to its
security holders other than Company or another Guarantor Subsidiary, (ii) all
regular and periodic reports and all registration statements and prospectuses,
if any, filed by Company or any of its Subsidiaries with any securities exchange
or with the SEC or any Governmental Authority, (iii) all press
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releases and other statements made available generally by Company or any of the
Guarantor Subsidiaries to the public concerning material developments in the
business of Company or any of its Subsidiaries; (B) the following events, as
soon as possible and in any event within five (5) Business Days (i) after
obtaining knowledge thereof, the occurrence of any event that would (with the
giving of notice, the passage of time, or both) be a violation of any Health
Care Permit necessary for the lawful conduct of the business or operations of
Company or any of its Guarantor Subsidiaries (other than those Health Care
Permits the violation of which could not reasonably be expected to have a
Material Adverse Effect), including, without limitation, the ownership and
operation of its Health Care Facilities, (ii) after receipt thereof, any notice
of any violation of any requirements of applicable law which would (with the
giving of notice, the passage of time, or both) cause any of the Health Care
Permits referred to in clause (i) to be modified, rescinded or revoked and which
Company does not reasonably expect to be able to cure within a reasonable period
of time, (iii) after receipt thereof, any notice, summons, citation or other
proceeding seeking to adversely modify in any material respect, revoke, or
suspend any Medicare Provider Agreement, Medicaid Provider Agreement, Medicare
certification or Medicaid certification applicable to any of the Health Care
Facilities of Company or any of its Guarantor Subsidiaries in any manner which
could reasonably be expected to have a Material Adverse Effect, (iv) after
obtaining knowledge thereof, any revocation or involuntary termination of any
Medicare Provider Agreement, Medicaid Provider Agreement, Medicare certification
or Medicaid certification applicable to any of the Health Care Facilities of
Company or any of its Guarantor Subsidiaries that could reasonably be expected
to have a Material Adverse Effect, or (v) any revocation, suspension,
termination, rescission, non-renewal, forfeiture or similar action by any
Governmental Authority to take any of the foregoing actions with respect to a
Health Care Permit or a Reimbursement Approval or any material amendment to any
Health Care Permit or Reimbursement Approval; and (C) such other information and
data with respect to Company or the Guarantor Subsidiaries (including without
limitation the Non-Material Guarantor Subsidiaries and the continued
satisfaction of the eligibility criteria in respect thereof) as from time to
time may be reasonably requested by Administrative Agent or any Lender.
5.2 EXISTENCE. Except as otherwise permitted under
Section 6.9, each Credit Party will, and will cause each of its Guarantor
Subsidiaries (other than Non-Material Guarantor Subsidiaries) and its
Non-Guarantor Subsidiaries that are Approved Captive Insurance Subsidiaries to,
at all times preserve and keep in full force and effect its existence and all
rights and franchises, licenses and permits material to its business; provided,
no Credit Party or any of its Subsidiaries shall be required to preserve any
such existence, right or franchise, licenses or permits of any Subsidiary if
such Person's board of directors (or similar governing body) shall determine
that the preservation thereof is no longer desirable in the conduct of the
business of such Person, and that the loss thereof is not disadvantageous in any
material respect to such Person or to Lenders; provided, further, that, in the
case that such Subsidiary is a Guarantor Subsidiary, such Person shall have
given Administrative Agent and the Collateral Agent 30 days' prior written
notice of the cessation of preservation of any such existence, right or
franchise, license or permit.
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5.3 PAYMENT OF TAXES AND CLAIMS. Each Credit Party will,
and will cause each of its Subsidiaries to, pay all Taxes imposed upon it or any
of its properties or assets or in respect of any of its income, businesses or
franchises before any penalty or fine accrues thereon, and all claims (including
claims for labor, services, materials and supplies) for sums that have become
due and payable and that by law have or may become a Lien upon any of its
properties or assets, prior to the time when any penalty or fine shall be
incurred with respect thereto; provided, no such Tax or claim need be paid if it
is being contested in good faith by appropriate proceedings timely instituted
and diligently conducted, so long as (a) adequate reserve or other appropriate
provision, as shall be required in conformity with GAAP shall have been made
therefor, and (b) in the case of a charge or claim which has or may become a
Lien against any of the Collateral, such contest proceedings conclusively
operate to stay the sale of any portion of the Collateral to satisfy such Tax or
claim. No Credit Party will, nor will it permit any of its Subsidiaries to, file
or consent to the filing of any consolidated income Tax return with any Person
(other than Company or any of its Subsidiaries).
5.4 MAINTENANCE OF PROPERTIES. Each Credit Party will,
and will cause each of its Subsidiaries (other than the PHCMI Group Members for
so long as they are Non-Guarantor Subsidiaries) to, maintain or cause to be
maintained in good repair, working order and condition, ordinary wear and tear
excepted, all material properties used or useful in the business of Company and
its Subsidiaries (other than the PHCMI Group Members for so long as they are
Non-Guarantor Subsidiaries) and from time to time will make or cause to be made
all appropriate repairs, renewals and replacements thereof.
5.5 INSURANCE. Each Credit Party will, and will cause
each of its Subsidiaries to:
(a) Maintain or cause to be maintained, with
financially sound and reputable insurers, such public liability insurance, third
party property damage insurance, business interruption insurance and casualty
insurance with respect to liabilities, losses or damage in respect of the
assets, properties and businesses of Company and its Subsidiaries as may
customarily be carried or maintained under similar circumstances by Persons of
established reputation engaged in similar businesses, in each case in such
amounts (giving effect to self-insurance), with such deductibles, covering such
risks and otherwise on such terms and conditions as shall be customary for such
Persons. Without limiting the generality of the foregoing, Company will maintain
or cause to be maintained (i) flood insurance with respect to each Flood Hazard
Property that is located in a community that participates in the National Flood
Insurance Program, in each case in compliance with any applicable regulations of
the Board of Governors of the Federal Reserve System, (ii) casualty insurance on
the Collateral insuring against all risk of loss or damage including, without
limitation, loss by fire, explosion, theft and such other casualties as may be
reasonably satisfactory to the Collateral Agent and Administrative Agent, but in
no event in an amount less than the replacement cost value thereof, and (iii)
comprehensive general and automobile liability insurance under such policies of
insurance, with such insurance companies, in such amounts, with such
deductibles, and covering such risks as are at all times carried or maintained
under
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similar circumstances by Persons of established reputation of the same or
similar size engaged in similar businesses or as otherwise may be reasonably
satisfactory to the Collateral Agent and Administrative Agent. Each such policy
of insurance shall (i) name Collateral Agent, on behalf of Secured Parties as an
additional insured thereunder as its interests may appear, (ii) in the case of
each casualty insurance policy and each physical damage insurance policy,
contain a loss payable clause or endorsement, satisfactory in form and substance
to Administrative Agent and the Collateral Agent, that names Collateral Agent,
on behalf of Secured Parties as the loss payee thereunder, with the right, if an
Event of Default has occurred and is then continuing, to adjust losses and
claims with respect to any Collateral or Real Estate Asset, and as an additional
insured for liability insurance, provide for at least thirty (30) days' prior
written notice to Administrative Agent and the Collateral Agent of any
modification or cancellation of such policy, (iii) state that neither the
Agents, any of the Lenders, nor any other Secured Party shall be responsible for
premiums, commissions, club calls, assessments or advances, and (iv) be
reasonably satisfactory in all other respects (including deductibles) to
Administrative Agent and the Collateral Agent; provided, however, that clauses
(i) and (ii) of this sentence shall not be applicable to any policy of insurance
which is solely related to any property of one or more PHCMI Group Members which
are not Guarantors that does not constitute Collateral hereunder.
(b) Upon the request of Administrative Agent,
furnish to Administrative Agent, an updated schedule describing all insurance
maintained by the Credit Parties, which schedule shall set forth, for each
insurance policy the policy number, the type of coverage, the policy limits and
deductibles, the insurer and the expiration date.
(c) Furnish to Administrative Agent, to the
extent not previously delivered, original certificates of insurance for all
insurance maintained by a Credit Party which certificates shall comply with the
requirements of this Section 5.5 set forth above and contain signatures of duly
authorized representatives of the insurer, at all times prior to policy
termination, cessation or cancellation.
(d) Maintain such other insurance or
self-insurance as may be required by applicable laws or any material Contractual
Obligation to which any Credit Party or any Subsidiary thereof is a party, and
maintain in respect of the Collateral such other insurance or self-insurance as
either Administrative Agent or the Collateral Agent may reasonably request.
(e) The Company may only make payments into the
Insurance Concentration Account in the ordinary course of business consistent
with historical practices of Company in an aggregate amount together with the
aggregate amount of any Investments pursuant to Section 6.7(h) not in excess of
the reserves as shall be required by GAAP and as shall have been approved by
Company's Board of Directors after taking into account any advice of Company's
actuarial consultants and auditors; provided that as of the date of such
payment, (i) no Default or Event of Default shall have occurred and be
continuing or would result from the consummation of such payment, (ii) Company
shall have demonstrated in a Compliance Certificate (setting forth in reasonable
detail the
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relevant information), that, after giving effect to such proposed payment, each
Credit Party shall be in compliance on a pro forma basis as of the last day of
the Fiscal Quarter most recently ended with each of the financial covenants in
Section 6.8, and (iii) after giving pro forma effect to such proposed payment as
of the day of the month most recently ended, Availability shall be at least
$40,000,000;
(f) The Credit Parties shall apply all amounts
in the Insurance Concentration Account only: (i) to the payment of the
self-insured retention actually required to be paid in respect of any insured
claim and (in an aggregate amount not exceeding, in any Fiscal Year, 5% of the
lesser of (i) the average balance of such account in that current Fiscal Year or
(ii) the maximum Investment permitted to be made into such Account pursuant to
Section 6.7(h) in such Fiscal Year) otherwise in respect of costs and expenses
of the Credit Parties which are directly insurance or risk management related
(but expressly excluding payment of any premiums); (ii) following establishment
of one or more Approved Captive Insurance Subsidiaries in accordance with the
terms of this Agreement, to make Investments pursuant to Section 6.7(h); and
(iii) to the prepayment, in whole or in part, of the Term Loans pursuant to
Section 2.13(a).
5.6 INSPECTIONS. Each Credit Party will, and will cause
each of its Subsidiaries to, permit any authorized representatives designated by
any Lender or any Agent to visit and inspect any of the properties of any Credit
Party and any of its respective Subsidiaries, to inspect, copy and take extracts
from its and their financial and accounting records and to discuss its and their
affairs, finances and accounts with its and their officers and independent
public accountants, all upon reasonable notice and at such reasonable times
during normal business hours and as often as may reasonably be requested,
provided that all visits to and inspections shall be conducted in a manner
calculated to minimize any disruption to the Credit Parties' operations and
consistent with the confidentiality provision set forth in Section 10.17, and
provided, further, that (i) no Credit Party shall be deemed to be in breach of
this Section 5.6 for failure to comply with any Lender or Agent's request solely
to the extent that (x) compliance with such request would violate the Health
Insurance and Portability and Accountability Act of 1996 as in effect at any
time of determination and (y) such Lender or Agent has refused, following
request by such Credit Party, to execute a "business associate" agreement or
such other confidentiality agreement which would avoid such violation, (ii) so
long as no Event of Default has occurred and is then continuing, the Credit
Parties shall not be required to reimburse the costs or expenses incurred by
such representatives of any Lender or any Agent in conducting in each case more
than one (1) such visits or inspections (which may include up to ten (10) Health
Care Facilities and any other facility reasonably requested by the Collateral
Agent having Medicaid/Medicare survey issues) in any Fiscal Year and (iii) upon
the occurrence and during the continuation of an Event of Default, the
Collateral Agent shall be permitted to conduct any and all visits, inspections
and collateral audits as it deems appropriate in its reasonable discretion, and
Credit Parties shall be required to reimburse the Collateral Agent for the
reasonable and documented costs and expenses incurred by it and its
representative in conducting all such visits and inspections.
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5.7 LENDERS' MEETINGS. Company will, upon the request of
Administrative Agent, participate in a meeting of Agents and Lenders once during
each Fiscal Year to be held at Company's corporate offices (or at such other
location as may be agreed to by Company and Administrative Agent) at such time
as may be agreed to by Company and Administrative Agent.
5.8 COMPLIANCE WITH LAWS. Each Credit Party will comply,
and shall cause each of its Guarantor Subsidiaries and all other Persons, if
any, on or occupying any Health Care Facility to comply, with the requirements
of all applicable laws, rules, regulations and orders of any Governmental
Authority (including all Environmental Laws), noncompliance with which could
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect. Each Credit Party will take all action reasonably necessary to
(a) maintain in full force and effect all Health Care Permits reasonably
necessary for the lawful conduct of its business or operations where now
conducted and as planned to be conducted, including the ownership and operation
of its Health Care Facilities, pursuant to all Requirements of Law and (b) to
ensure that all Health Care Facilities owned, leased, managed or operated by
Company or any of its Guarantor Subsidiaries are entitled to participate in, and
receive payment under, the appropriate Medicare, Medicaid and related
reimbursement programs, and any similar state or local government-sponsored
program, to the extent Company or any of its Guarantor Subsidiaries has decided
to participate in any such program, and to receive reimbursement from private
and commercial payers and health maintenance organizations to the extent
applicable thereto, except, in each case, where a failure to do so could not
reasonably be expected to have a Material Adverse Effect.
5.9 ENVIRONMENTAL.
(a) Environmental Disclosure. Company will
deliver to Administrative Agent and Lenders:
(i) promptly upon the occurrence
thereof, written notice describing in reasonable detail (1) any Release
required to be reported to any federal, state or local Governmental
Authority under any applicable Environmental Laws, (2) any remedial
action taken by Company or any other Person in response to (A) any
Hazardous Materials Activities the existence of which has a reasonable
possibility of resulting in one or more Environmental Claims having,
individually or in the aggregate, a Material Adverse Effect, or (B) any
Environmental Claims that, individually or in the aggregate, have a
reasonable possibility of resulting in a Material Adverse Effect, and
(3) Company's discovery of any occurrence or condition on any real
property adjoining or in the reasonable vicinity of any Facility that
could cause such Facility or any part thereof to be subject to any
material restrictions on the ownership, occupancy, transferability or
use thereof under any Environmental Laws;
(ii) as soon as practicable following
the sending or receipt thereof by Company or any of its Subsidiaries, a
copy of any and all
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written communications with respect to (1) any Environmental Claims
that, individually or in the aggregate, have a reasonable possibility
of giving rise to a Material Adverse Effect, (2) any Release required
to be reported to any federal, state or local Governmental Authority,
and (3) any request for information from any governmental agency that
suggests such Governmental Authority is investigating whether Company
or any of its Subsidiaries may be potentially responsible for any
Hazardous Materials Activity;
(iii) prompt written notice describing in
reasonable detail (1) any proposed acquisition of stock, assets, or
property by Company or any of its Subsidiaries that could reasonably be
expected to (A) expose Company or any of its Subsidiaries to, or result
in, Environmental Claims that could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect or (B)
affect the ability of Company or any of its Subsidiaries to maintain in
full force and effect all material Governmental Authorizations required
under any Environmental Laws for their respective operations and (2)
any proposed action to be taken by Company or any of its Subsidiaries
to modify current operations in a manner that could reasonably be
expected to subject Company or any of its Subsidiaries to any
additional material obligations or requirements under any Environmental
Laws; and
(iv) with reasonable promptness, such
other documents and information as from time to time may be reasonably
requested by Administrative Agent in relation to any matters disclosed
pursuant to this Section 5.9(a).
(b) Hazardous Materials Activities, Etc. Each
Credit Party shall promptly take, and shall cause each of its Subsidiaries
promptly to take, any and all actions necessary to (i) cure any violation of
applicable Environmental Laws by such Credit Party or its Subsidiaries that
could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect, and (ii) make an appropriate response to any
Environmental Claim against such Credit Party or any of its Subsidiaries and
discharge any obligations it may have to any Person thereunder where failure to
do so could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
5.10 SUBSIDIARIES.
(a) In the event after the Closing Date that any
Person becomes a wholly owned Domestic Subsidiary of Company (other than an
Approved Captive Insurance Subsidiary but expressly including each of the PHCMI
Group Members upon prepayment or repayment in full of the Omega Loan), Company
shall (a) promptly cause such Domestic Subsidiary to become a Guarantor
hereunder and a Grantor under the Pledge and Security Agreement by executing and
delivering to Administrative Agent and Collateral Agent a Counterpart Agreement,
and (b) take all such actions and execute and deliver, or cause to be executed
and delivered, all such documents, instruments, agreements, and certificates as
are similar to those described in Sections 3.1(d), 3.1(i),
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3.1(j), 3.1(k), and 3.1(v). In the event that any Person becomes a Foreign
Subsidiary of Company (other than an Approved Captive Insurance Subsidiary), and
the ownership interests of such Foreign Subsidiary are owned by Company or by
any wholly owned Domestic Subsidiary thereof, Company shall, or shall cause such
Domestic Subsidiary to, deliver, all such documents, instruments, agreements,
and certificates as are similar to those described in Sections 3.1(d), and
Company shall take, or shall cause such Domestic Subsidiary to take, all of the
actions referred to in Section 3.1(j)(i) necessary to grant and to perfect a
First Priority Lien in favor of Collateral Agent, for the benefit of Secured
Parties, under the Pledge and Security Agreement in such ownership interests,
provided that in no event shall such Domestic Subsidiary be required to pledge
ownership interests exceeding sixty-five percent (65%) of its total ownership
interests in such Foreign Subsidiary. With respect to each such Subsidiary,
Company shall promptly send to Administrative Agent and Collateral Agent written
notice setting forth with respect to such Person (i) the date on which such
Person became a Subsidiary of Company, and (ii) all of the data required to be
set forth in Schedules 4.1 and 4.2 with respect to all Subsidiaries of Company;
provided, such written notice shall be deemed to supplement Schedule 4.1 and 4.2
for all purposes hereof. In addition, upon each such event, Company shall
provide to Administrative Agent and Collateral Agent a Schedule 1.1(i) setting
forth a complete list of Guarantor Subsidiaries, whereupon Schedule 1.1(i) shall
be deemed to be amended accordingly.
(b) At any time no Default or Event of Default
has occurred and is continuing, Company may request in writing that a Subsidiary
be designated by Administrative Agent as an Approved Captive Insurance
Subsidiary. Such request shall include all such documents, instruments,
agreements, and certificates as are similar to those described in Sections
3.1(d) and set forth with respect to such Person (i) the date on which such
Person became a Subsidiary of Company; (ii) the jurisdiction of organization of
such Person; (iii) all of the data required to be set forth in Schedules 4.1 and
4.2 with respect to all Subsidiaries of Company; (iv) descriptions of any
insurance, reinsurance, insurance fronting arrangements, material contracts and
investments proposed to be entered into by any such Subsidiary. Upon receipt of
such notice, Administrative Agent may, in its sole discretion, designate such
Person an Approved Captive Insurance Subsidiary. In no event shall any Person
not designated by Administrative Agent be an Approved Captive Insurance
Subsidiary; provided that such written notice shall be deemed to supplement
Schedules 4.1 and 4.2 for all purposes hereof.
5.11 ADDITIONAL MATERIAL REAL ESTATE ASSETS. In the event
that any Credit Party purchases, leases or otherwise acquires a Material Real
Estate Asset or a Real Estate Asset owned on the Closing Date becomes a Material
Real Estate Asset and such interest has not otherwise been made subject to the
Lien of the Collateral Documents in favor of Collateral Agent, for the benefit
of Secured Parties, then contemporaneously with acquiring such Material Real
Estate Asset (or such Real Estate Asset subsequently becoming a Material Real
Estate Asset, such Credit Party shall (a) promptly, but in any event within
thirty (30) days after such purchase, lease or other acquisition, provide
written notice thereof to Administrative Agent and the Collateral Agent, setting
forth with specificity a description of such Material Real Estate Asset
acquired, a title commitment, a survey (if available) and such Credit Party's
good faith
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estimate of the current fair market value of such Material Real Estate Asset and
(b) if either such Agent so requests, the applicable Credit Party shall promptly
execute and deliver to the Collateral Agent, a Mortgage and such other
documents, instruments as such Persons shall reasonably request with respect to
such Material Real Estate Asset; provided, however that, in the case of any
Leasehold Property, such obligation to deliver a Mortgage shall be contingent
upon such Credit Party's obtaining and delivering to the Collateral Agent a
Landlord Consent and Estoppel and evidence that such Leasehold Property is a
Recorded Leasehold Interest and for which such Credit Party agrees to use
commercially reasonable best efforts to obtain (it being acknowledged and agreed
that "commercially reasonable best efforts" shall not be construed to require
the payment by any Credit Party of any fee or other consideration for such
Landlord Consent and Estoppel other than reimbursement of legal expenses
actually incurred by landlords). In addition to the foregoing, the relevant
Credit Party shall, at the request of Requisite Lenders, deliver, from time to
time, to Administrative Agent and Collateral Agent such appraisals as are
required by law or regulation of Real Estate Assets with respect to which
Collateral Agent has been granted a Lien.
5.12 NO OTHER "DESIGNATED SENIOR INDEBTEDNESS". No Credit
Party shall designate, or permit the designation of, any Indebtedness (other
than under this Agreement or other Credit Documents) as "Designated Senior
Indebtedness" for the purposes of the definition of the same or the
subordination provisions contained in the Senior Subordinated Note Indenture,
Refinancing Note Indenture or any documents governing any other Subordinated
Indebtedness without the consent of Administrative Agent.
5.13 OBSERVANCE OF AGREEMENTS. Each Credit Party shall:
(a) duly observe and perform all material terms
and conditions of any agreement relating to any Management Agreement or any
other agreement which is material to the Credit Parties taken as a whole and
diligently protect and enforce the rights of the Credit Parties and their
Subsidiaries under all such agreements in a manner consistent with prudent
business judgment and subject to the terms and conditions of such agreements;
(b) promptly provide any Agents copies of any
and all agreements amending, altering, modifying, waiving or supplementing in
any material respect the Senior Subordinated Note Indenture, any other Related
Agreement and any Material Contract; and
(c) except where the failure to participate or
comply would not reasonably be expected to have a Material Adverse Effect,
continue its participation in all Third Party Payor Arrangements and comply with
all rules, regulations, standard procedures and decrees necessary to constitute
its participation in such Third Party Payor Arrangements and prepare and file
all applicable cost reports with respect to such Third Party Payor Arrangements.
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5.14 CASH MANAGEMENT SYSTEM. At all times maintain or
cause to be maintained an integrated cash management system in accordance with
Sections 4.3(b)(ii) and 4.4(c) of the Pledge and Security Agreement and the
following provisions:
(a) Each Credit Party shall at all times
maintain in all material respects their current cash management system as
described in Schedule 4.28 (including, without limitation, the timing and
frequency of cash sweeps and other inter-account transfers described herein)
(the "CASH MANAGEMENT SYSTEM") or cause to be maintained another cash management
system reasonably acceptable to Administrative Agent.
(b) So long as no Event of Default shall have
occurred and be continuing, the Credit Parties shall have free access to the
funds in the Concentration Accounts. Upon the occurrence and during the
continuation of an Event of Default, Administrative Agent (for the benefit of
the Secured Parties), subject to applicable law, shall have the right to direct
the Collateral Agent to establish sole dominion and control over the
Concentration Accounts, and the balances in such accounts may be applied toward
the payment of the Obligations in accordance with the provisions hereof.
5.15 FURTHER ASSURANCES. At any time or from time to time
upon the request of Administrative Agent and Collateral Agent, each Credit Party
will, at its expense, promptly execute, acknowledge and deliver such further
documents and do such other acts and things as Administrative Agent or
Collateral Agent may reasonably request in order to effect fully the purposes of
the Credit Documents, including providing Lenders with any information
reasonably requested pursuant to Section 10.20. In furtherance and not in
limitation of the foregoing, each Credit Party shall take such actions as
Administrative Agent or Collateral Agent may reasonably request from time to
time to ensure that the Obligations are guarantied by the Guarantors and, except
as otherwise expressly agreed in the Credit Documents, are secured by
substantially all of the assets of Company, and its Guarantor Subsidiaries and
all of the outstanding Capital Stock of Company and its Guarantor Subsidiaries
(subject to limitations contained in the Credit Documents with respect to
Foreign Subsidiaries).
5.16 RATINGS REQUIREMENTS. At times following the Closing
Date Company shall maintain ratings with respect to the Loans with each of
▇▇▇▇▇'▇ and S&P.
5.17 CERTAIN POST-CLOSING OBLIGATIONS.
(a) For the period of 120 days after the Closing
Date, each Credit Party shall use all its commercially reasonable best efforts
to obtain a Landlord Consent and Estoppel and, upon receipt of same, executed by
the applicable landlord, the applicable Credit Party shall deliver a fully
executed and notarized Mortgage in proper form for recording in all appropriate
places in all appropriate jurisdictions in respect of each Leasehold Property
(other than those in respect of which such has already been delivered prior to
the Closing Date pursuant to Section 3.1(i)), it being acknowledged and agreed
that "commercially reasonable best efforts" shall not be construed to require
the
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payment by any Credit Party of any fee or other consideration for such Landlord
Consent and Estoppel other than reimbursement of legal expenses actually
incurred by landlords.
(b) Within 45 days after the Closing Date, each
applicable Credit Party shall (i) deliver to the Collateral Agent a fully
executed and notarized Mortgage, in proper form for recording in all appropriate
places in all applicable jurisdictions, encumbering each of the Post-Closing
Mortgaged Property and (ii) use all its commercially reasonably best efforts to
obtain an ALTA mortgagee title insurance policy therefor issued by one or more
title companies reasonably satisfactory to Administrative Agent and Collateral
Agent (it being acknowledged that Fidelity National Title Insurace Company is so
satisfactory) with respect to each Post-Closing Mortgaged Property, each in form
and substance reasonably satisfactory to Administrative Agent and evidence
satisfactory to Administrative Agent that such Credit Party has paid to the
title company or to the appropriate Governmental Authorities (or made adequate
provision for such payment, in the reasonable judgment of Administrative Agent)
all expenses and premiums of the title company and all other sums required in
connection with the issuance of each such title policy and all recording and
stamp taxes (including mortgage recording and intangible taxes) payable in
connection with recording the Mortgage for each Post-Closing Mortgaged Property
in the appropriate real estate records.
(c) For the period of 120 days after the Closing
Date, each Credit Party shall use all its commercially reasonable best efforts
to create in favor of Collateral Agent, for the benefit of Secured Parties, a
valid, perfected First Priority security interest in the Capital Stock of each
Joint Venture in which any Credit Party had an interest as of the Closing Date,
except to the extent such security interest was granted on the Closing Date by
delivering to the Collateral Agent a completed Pledge Supplement, substantially
in the form of Exhibit A attached to the Pledge and Security Agreement, together
with all Supplements to Schedules thereto, reflecting such Pledged Stock.
Without limitation, following the Closing Date, no Credit Party shall grant any
other Lien in respect of the Capital Stock in such Joint Ventures.
5.18 CASH COLLATERAL ACCOUNT. Company shall not close or
terminate the Cash Collateral Account without the prior consent of
Administrative Agent and unless a successor or replacement account has been
established with the consent of Administrative Agent with respect to which
successor or replacement account Company has taken all actions necessary to
establish Administrative Agent's "control" (within the meanings of Sections
8-106 and 9-106 or 9-104, as applicable of the UCC).
SECTION 6. NEGATIVE COVENANTS
Each Credit Party covenants and agrees that, so long as any
Commitment is in effect and until payment in full of all Obligations and
cancellation or expiration of all Letters of Credit, such Credit Party shall
perform, and (where so indicated herein) shall cause each of its Subsidiaries to
perform, all covenants in this Section 6.
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6.1 INDEBTEDNESS. No Credit Party shall, nor shall it
permit any of its Subsidiaries to, directly or indirectly, create, incur, assume
or guaranty, or otherwise become or remain directly or indirectly liable with
respect to any Indebtedness, except:
(a) the Obligations;
(b) Indebtedness of any Guarantor to Company or
to any other Guarantor, or of Company to any Guarantor; provided, (i) to the
extent such Indebtedness is evidenced by promissory notes, all such notes shall
be subject to a First Priority Lien pursuant to the Pledge and Security
Agreement, (ii) all such Indebtedness shall be unsecured and subordinated in
right of payment to the payment in full of the Obligations pursuant to the terms
of the applicable promissory notes or an intercompany subordination agreement
that in any such case, is reasonably satisfactory to Administrative Agent, and
(iii) any payment by any such Guarantor under any guaranty of the Obligations
shall result in a pro tanto reduction of the amount of any Indebtedness owed by
such Guarantor Subsidiary to Company or to any of its Guarantor Subsidiaries for
whose benefit such payment is made;
(c) Indebtedness evidenced by the Senior
Subordinated Notes in an aggregate principal amount not to exceed $300,000,000;
(d) Indebtedness incurred by Company or any of
its Subsidiaries arising from agreements providing for indemnification,
adjustment of purchase price or similar obligations, or from guaranties or
letters of credit, surety bonds or performance bonds securing the performance of
Company or any such Subsidiary pursuant to such agreements, in connection with
Permitted Acquisitions or permitted dispositions of any business, assets or
Subsidiary of Company or any of its Subsidiaries;
(e) Indebtedness which may be deemed to exist
pursuant to any guaranties, performance, surety, statutory, appeal or similar
obligations incurred in the ordinary course of business;
(f) Indebtedness in respect of netting services,
overdraft protections and otherwise in connection with Deposit Accounts;
(g) guaranties in the ordinary course of
business of the obligations of suppliers, customers, franchisees and licensees
of Company and its Subsidiaries;
(h) Indebtedness described in Schedule 6.1, but
not any extensions, renewals or replacements of such Indebtedness except (i)
renewals and extensions expressly provided for in the agreements evidencing any
such Indebtedness (other than the Omega Loan) as the same are in effect on the
date of this Agreement and (ii) refinancings and extensions of any such
Indebtedness (other than the Omega Loan) and (iii) refinancing of the Omega
Loan, if, in each case, the terms and conditions thereof (taken as a whole) are
not, in the reasonable judgment of the Administrative Agent, less favorable in
any material respect to the obligor thereon or to the Lenders than the
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Indebtedness being refinanced or extended, and the average life to maturity
thereof is greater than or equal to that of the Indebtedness being renewed,
refinanced or extended; provided, such Indebtedness permitted under the
immediately preceding clause (i), (ii) or (iii) above shall not (A) include
Indebtedness of an obligor that was not an obligor with respect to the
Indebtedness being extended, renewed or refinanced (except that with respect to
(iii), Company may guarantee such Indebtedness that refinances the Omega Loan on
an unsecured basis provided that each PHCMI Group Member simultaneously
guarantees the Obligations on terms consistent with Section 7 hereof and
otherwise on terms reasonably satisfactory to the Administrative Agent), (B)
exceed in a principal amount the Indebtedness being renewed, extended or
refinanced, (C) be incurred, created or assumed if (x) any Default or Event of
Default has occurred and is continuing or would result therefrom, (y) after
giving effect to the incurrence, creation or assumption of such Indebtedness,
Company and its Subsidiaries shall not be in pro forma compliance with the
financial covenants set forth in Section 6.8 or (z) a failure to comply with
Section 6.6 would result therefrom. In addition, if Company desires to refinance
the Omega Loan with other Designated Non-Recourse Debt, the Credit Parties, the
Agents and the Lenders agree to negotiate in good faith to amend this Agreement
in order to permit such refinancing and to modify the covenants contained herein
(and, as may be necessary, the definitions of capitalized terms used in such
covenants) for the purpose of excluding the assets, liabilities and operating
results of the PHCMI Group Members therefrom.
(i) Indebtedness with respect to Capital Leases
not otherwise permitted pursuant to Section 6.1(h).
(j) purchase money Indebtedness not otherwise
permitted pursuant to Section 6.1(h); provided, any such Indebtedness (i) shall
be secured only to the asset acquired in connection with the incurrence of such
Indebtedness, and (ii) shall constitute not less than 75% of the aggregate
consideration paid with respect to such asset;
(k) drafts under a purchase card program
implemented by Company or its Guarantor Subsidiaries for the purchase of goods
and services in the ordinary course of business if and to the extent the charges
evidenced by such drafts (a) are billed to the Company or its Subsidiaries no
less frequently than monthly, (b) are paid within 30 days after being invoiced
(or if such charges are being contested in good faith by appropriate procedures,
are paid within thirty (30) days after such contest is rejected or
discontinued), and (c) do not exceed $2,500,000 at any time outstanding.
(l) senior subordinated unsecured debt
securities issued to redeem the Senior Subordinated Notes in full, in an amount
of up to the aggregate outstanding principal amount of the Senior Subordinated
Notes plus any applicable premium and reasonable and customary transaction costs
incurred in connection therewith, but in any event not to exceed $300,000,000
(the "REFINANCING NOTES"); provided that the proceeds thereof are used to prepay
or redeem the Senior Subordinated Notes and/or prepay the Term Loans, or a
portion thereof, and reasonable and customary fees, commissions, legal fees and
other costs and expenses incurred in connection with
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such issuance and redemption or prepayment; provided further that (i)(A) the
terms of such additional Indebtedness shall not contain any cross-default
provisions (other than material non-payment, and may include a
cross-acceleration provision), (B) the terms of such additional Indebtedness
shall not contain any financial maintenance covenants, (C) such additional
Indebtedness shall not be secured by any asset of Company or any of its
Subsidiaries (other than restricted Cash or Cash Equivalents allocated from the
funds representing such Indebtedness securing prefunded interest payments), (D)
no portion of the principal of such additional Indebtedness shall be scheduled
to be redeemed, repurchased or otherwise repaid or prepaid (other than as a
result of a change of control, acceleration or such other provision as shall be
customary for comparable high-yield debt securities) prior to the date that is
six months after the Term Loan Maturity Date, and (E) such Indebtedness shall
otherwise, taken as a whole, be on terms no less favorable to the Lenders than
the terms of the Senior Subordinated Notes; and (ii) after giving effect to the
incurrence of such Indebtedness, (1) Company and its Subsidiaries shall be in
pro forma compliance with the financial covenants set forth in Section 6.8 and
(2) no Default or Event of Default shall exist or would result therefrom;
(m) Indebtedness of a Person which becomes a
Subsidiary of a Credit Party after the Closing Date pursuant to a Permitted
Acquisition; provided, that (i) such Indebtedness existed at the time the Person
became a Subsidiary and was not created in anticipation of the acquisition of
such Person, (ii) immediately after giving effect to the acquisition of such
Person by a Credit Party, no Default or Event of Default shall have occurred and
be continuing, and (iii) such Indebtedness is non-recourse to Company or any
other Credit Party (other than such Person and its Subsidiaries to the extent
such Indebtedness was with recourse to such Subsidiaries at the time such Person
became a Subsidiary of a Credit Party);
(n) Indebtedness secured by any asset at the
time of acquisition of such asset by a Credit Party or a Subsidiary of a Credit
Party (not in violation of any of the terms hereof) at any time after the
Closing Date pursuant to a Permitted Acquisition; provided, that (i) such
Indebtedness existed at the time the asset was acquired by a Credit Party and
was not created in anticipation of the acquisition thereof, and (ii) such
Indebtedness is non-recourse to Company or any other Credit Party (other than to
the specific asset acquired);
(o) other unsecured Indebtedness of Company and
its Subsidiaries; provided, however, that Indebtedness permitted pursuant to
this Section 6.1(o) shall not include Interest Rate Agreements, which may only
be entered into pursuant to Sections 6.1(a) and (p); and
(p) Interest Rate Agreements entered into in the
ordinary course of business and not for speculative purposes.
Notwithstanding the foregoing, (i) the aggregate amount of
Indebtedness permitted by Sections 6.1(i),(j) (including any Indebtedness
acquired in connection with a Permitted Acquisition), (m), (n) and (o) shall not
exceed $40,000,000 at any time outstanding; and (ii) the aggregate amount of
Indebtedness permitted by Sections
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6.1(i),(j) (including any Indebtedness acquired in connection with a Permitted
Acquisition), (m) and (n) shall not exceed $20,000,000 at any time outstanding.
6.2 LIENS. No Credit Party shall, nor shall it permit any
of its Subsidiaries to, directly or indirectly, create, incur, assume or permit
to exist any Lien on or with respect to any property or asset of any kind
(including any document or instrument in respect of goods or accounts
receivable) of Company or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the UCC of any State or under any similar recording or notice
statute, except:
(a) Liens in favor of Collateral Agent for the
benefit of Secured Parties, or Administrative Agent for the benefit of
Beneficiaries, in each case, granted pursuant to any Credit Document;
(b) Liens for Taxes not yet due or being
contested in good faith by appropriate proceedings timely instituted and
diligently conducted and otherwise meeting the requirements in Section 5.3;
(c) statutory and common law Liens of landlords,
banks (and rights of set-off), and statutory Liens of carriers, warehousemen,
mechanics, repairmen, workmen and materialmen, and other Liens imposed by law
(other than any such Lien imposed pursuant to Section 401 (a)(29) or 412(n) of
the Internal Revenue Code or by ERISA), in each case incurred in the ordinary
course of business for amounts not yet overdue, unless such obligations are
being contested in good faith, so long as such reserves or other appropriate
provisions, if any, as shall be required by GAAP shall have been made for any
such contested amounts;
(d) Liens incurred in the ordinary course of
business in connection with workers' compensation, unemployment insurance and
other types of social security, to secure performance as lessee under leases of
real or personal property, or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government contracts, trade
contracts, performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money or other
Indebtedness), so long as no foreclosure, sale or similar proceedings have been
commenced with respect to any portion of the Collateral on account thereof;
(e) easements, rights-of-way, restrictions,
encroachments, and other minor defects or irregularities in title, in each case
which do not and will not interfere in any material respect with the ordinary
conduct of the business of Company or any of its Subsidiaries;
(f) any interest or title of a lessor or
sublessor under any lease of real estate permitted hereunder;
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(g) Liens solely on any ▇▇▇▇ ▇▇▇▇▇▇▇ money
deposits made by Company or any of its Subsidiaries in connection with any
letter of intent or purchase agreement permitted hereunder;
(h) purported Liens evidenced by the filing of
precautionary UCC financing statements relating solely to operating leases of
personal property entered into in the ordinary course of business;
(i) Liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of customs duties in
connection with the importation of goods;
(j) any zoning or similar law or right reserved
to or vested in any governmental office or agency to control or regulate the use
of any real property;
(k) licenses of patents, trademarks and other
intellectual property rights granted by Company or any of its Subsidiaries in
the ordinary course of business and not interfering in any material respect with
the ordinary conduct of the business of Company or such Subsidiary;
(l) for a period of 45 days after the Closing
Date, any Liens not otherwise permitted hereunder on any Post-Closing Date
Mortgaged Property;
(m) Liens described in Schedule 6.2 or on a
title commitment delivered pursuant to Section 3.1(i)(iii), 5.11 or 5.17(b);
(n) Liens securing Indebtedness permitted
pursuant to 6.1(j); provided, any such Lien shall encumber only the asset
acquired with the proceeds of such Indebtedness;
(o) Liens existing on the Closing Date and
described on Schedule 6.2 securing Indebtedness permitted pursuant to Section
6.1(h);
(p) Liens arising out of attachments, judgments
or awards as to which an appeal or other appropriate proceedings for contest or
review are timely commenced (and as to which foreclosure and other enforcement
proceedings shall not have been commenced, unless fully bonded or otherwise
effectively stayed) and as to which appropriate reserves have been established
in accordance with GAAP;
(q) Liens on the property or assets of a Person
which becomes a Subsidiary of a Credit Party after the Closing Date pursuant to
a Permitted Acquisition securing Indebtedness permitted under Section 6.1(m);
provided, that (i) such Liens existed at the time such Person became a
Subsidiary and were not created in anticipation of the acquisition of such
Person, (ii) any such Lien does not by its terms cover any property or assets
after the time such Person becomes a Subsidiary which were not covered
immediately prior thereto, and (iii) any such Lien does not by its terms secure
any Indebtedness other than Indebtedness existing immediately prior to the time
such
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Person becomes a Subsidiary to the extent such Indebtedness is permitted under
Section 6.1(m);
(r) Liens on assets at the time of acquisition
of the asset by a Credit Party or a Subsidiary thereof; provided, that (i) such
Liens existed at the time of such acquisition and were not created in
anticipation of the acquisition of such asset, (ii) any such Lien does not by
its terms cover any property or assets other than the asset acquired, and (iii)
any such Lien does not by its terms secure any Indebtedness other than
Indebtedness permitted pursuant to Section 6.1(n);
(s) Liens securing the obligations of any Credit
Party with respect to any purchase card program, to the extent such obligations
are permitted pursuant to Section 6.1(k); and
(t) Liens not otherwise permitted hereunder
securing Indebtedness or other obligations permitted hereunder not exceeding
$5,000,000 at any time outstanding.
6.3 RECEIVABLES. No Credit Party shall, nor shall any of
its Guarantor Subsidiaries, sell, discount or otherwise dispose of receivables
owing to any Credit Party or any Guarantor Subsidiary of a Credit Party except
(i) for purposes of collection in the ordinary course of business or (ii) in
connection with the sale of the related Credit Party, Guarantor Subsidiary or
Real Estate Asset to the extent not prohibited under Sections 6.10 or 6.11
hereof.
6.4 NO FURTHER NEGATIVE PLEDGES. Except with respect to
(a) specific property encumbered to secure payment of particular Indebtedness or
to be sold pursuant to an executed agreement with respect to a permitted Asset
Sale (b) restrictions contained in the Related Agreements or the Refinancing
Notes or Refinancing Notes Indenture (on terms approved in advance by the
Administrative Agent) and (c) restrictions by reason of customary provisions
restricting assignments, subletting or other transfers contained in leases,
licenses and similar agreements entered into in the ordinary course of business
(provided that such restrictions are limited to the property or assets secured
by such Liens or the property or assets subject to such leases, licenses or
similar agreements, as the case may be) no Credit Party nor any of its
Subsidiaries shall enter into any agreement prohibiting the creation or
assumption of any Lien upon any of its properties or assets, whether now owned
or hereafter acquired.
6.5 RESTRICTED JUNIOR PAYMENTS. No Credit Party shall,
nor shall it permit any of its Subsidiaries or Affiliates through any manner or
through any other Person to, directly or indirectly, declare, order, pay, make
or set apart, or agree to declare, order, pay, make or set apart, or agree to
declare, order, pay, make or set apart, any sum for any Restricted Junior
Payment except that (a) Company and its Subsidiaries may make regularly
scheduled payments of principal and interest owing by it in respect of any
Indebtedness outstanding under the Related Agreements (including the Senior
Subordinated Notes or the Refinancing Notes) in accordance with the terms of,
and only to the extent required by, and subject to the subordination provisions
(if any) contained
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in, the indenture or other agreement pursuant to which such Indebtedness was
issued, (b) Company may prepay or redeem the Senior Subordinated Notes in full
with the proceeds of the Refinancing Notes and (c) so long as no Default or
Event of Default shall have occurred and be continuing or shall be caused
thereby, Company may (i) purchase or redeem Capital Stock of Company (including
related stock appreciation rights or similar securities) held by then present or
former directors, officers or employees of Company or any of its Subsidiaries or
by any Pension Plan upon such Person's death, disability, retirement or
termination of employment or under the terms of any such Pension Plan or any
other agreement under which such shares of stock or related rights were issued,
or (ii) purchase Capital Stock on the open market for the sole purpose of
fulfilling Capital Stock options exercised by such Persons; provided, however,
that the aggregate amount of all such purchases or redemptions under this
subclause (c) (the "RESTRICTED JUNIOR PAYMENT USED BASKET AMOUNT") shall not
exceed in aggregate following the Closing Date $5,000,000 (excluding such
purchase and redemption to the extent of the amount of net proceeds received by
Company from Employee Equity Sales).
6.6 RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS. Except as
provided herein, no Credit Party shall, nor shall it permit any of its
Subsidiaries to, create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction of any kind on the ability
of any Subsidiary of Company to (a) pay dividends or make any other
distributions on any of such Subsidiary's Capital Stock owned by Company or any
other Subsidiary of Company, (b) repay or prepay any Indebtedness owed by such
Subsidiary to Company or any other Subsidiary of Company, (c) make loans or
advances to Company or any other Subsidiary of Company, or (d) transfer any of
its property or assets to Company or any other Subsidiary of Company other than
restrictions (i) in agreements existing as of the Closing Date evidencing
Indebtedness permitted by Section 6.1(j) that impose restrictions on the
property so acquired and (ii) by reason of customary provisions restricting
assignments, subletting or other transfers contained in leases, licenses, joint
venture agreements and similar agreements entered into in the ordinary course of
business, (iii) that are or were created by virtue of any transfer of, agreement
to transfer or option or right with respect to any property, assets or Capital
Stock not otherwise prohibited under this Agreement and (iv) restrictions
described in Schedule 6.6. It is expressly agreed that the Permitted PHCMI
Mortgage Loan shall have no such restrictions on Subsidiary distributions as are
referred to in this Section 6.6.
6.7 INVESTMENTS. No Credit Party shall, nor shall it
permit any of its Subsidiaries to, directly or indirectly, make or own any
Investment in any Person, including without limitation any Joint Venture,
except:
(a) Cash Equivalents;
(b) equity Investments owned as of the Closing
Date in any Subsidiary and Investments made after the Closing Date in Guarantor
Subsidiaries;
(c) Investments (i) in any Securities received
in satisfaction or partial satisfaction thereof from financially troubled
account debtors consistent with the
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past practices of Company and its Subsidiaries and (ii) deposits, prepayments
and other credits to suppliers made in the ordinary course of business
consistent with the past practices of Company and its Subsidiaries;
(d) intercompany loans to the extent permitted
under Section 6.1(b);
(e) Consolidated Capital Expenditures permitted
by Section 6.8(d);
(f) Investments made in connection with
Permitted Acquisitions permitted pursuant to Section 6.9;
(g) Investments existing on the Closing Date and
described in Schedule 6.7(g);
(h) Investments in Approved Captive Insurance
Subsidiaries made in the ordinary course of business consistent with historical
practices of Company in an aggregate amount together with any payments pursuant
to Section 5.5(e) not in excess of the reserves as shall be required by GAAP and
as shall have been approved by Company's Board of Directors after taking into
account any advice of Company's actuarial consultants and auditors; provided
that as of the date of such Investment, (i) no Default or Event of Default shall
have occurred and be continuing or would result from the consummation of such
Investment, (ii) Company shall have demonstrated in a Compliance Certificate
(setting forth in reasonable detail the relevant information), that, after
giving effect to such proposed Investment, each Credit Party shall be in
compliance on a pro forma basis as of the last day of the Fiscal Quarter most
recently ended with each of the financial covenants in Section 6.8, and (iii)
after giving pro forma effect to such proposed Investment as of the day of the
month most recently ended, Availability shall be at least $40,000,000;
(i) Investments made as a result of the receipt
of non-cash consideration from an asset sale made in compliance with Section 6.9
hereof;
(j) Loans and advances to employees of Company
and its Subsidiaries in the ordinary course of business and consistent with the
past practice of Company and its Subsidiaries (including, without limitation,
for travel, entertainment and relocation expenses), which loans and advances, in
the aggregate do not exceed $1,000,000 at any time outstanding;
(k) other Investments (which for the avoidance
of doubt shall include all Investments in any Joint Venture and in the PHCMI
Group Members) in an aggregate outstanding amount which when aggregated with the
Restricted Junior Payment Used Basket Amount not to exceed at any time
$10,000,000 or, at any time when the Total Leverage Ratio is less than 3.0:1.0,
$20,000,000; provided that (i) the aggregate amount of Investments at any time
outstanding shall be reduced by Cash returns or Cash dividends to the extent
actually received by a Credit Party in respect of
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any Investments, and (ii) no Credit Party shall be in breach of this Section
6.7(k) solely, by reason of a decrease in the maximum aggregate amount of
Investments permitted under this Section 6.7(k) to the extent the then
outstanding Investments were permitted at the time made; and
(l) Investments by any Approved Captive
Insurance Subsidiary in Cash and Cash Equivalents or such other Investments
permitted pursuant to the Medicare Provider Reimbursement Manual Section 2162.2
sub-clause A4 as of the Closing Date, the text of which is set out on Schedule
6.7(l); provided and to the extent that, the annual certified statement referred
to therein is provided, at the same time required thereby, to Administrative
Agent.
Notwithstanding the foregoing, in no event shall any Credit Party make any
Investments which results in or facilitates in any manner any Restricted Junior
Payment not otherwise permitted under the terms of Section 6.5.
6.8 FINANCIAL COVENANTS.
(a) Fixed Charge Coverage Ratio. Company shall
not permit the Fixed Charge Coverage Ratio (i) as of the last day for any Fiscal
Quarter, beginning with the Fiscal Quarter ending March 31, 2004, to be less
than the correlative ratio indicated below:
FIXED CHARGE
DATE COVERAGE RATIO
--------------------------------------
March 2004 1.65
--------------------------------------
June 2004 1.65
--------------------------------------
September 2004 1.65
--------------------------------------
December 2004 1.65
--------------------------------------
March 2005 1.65
--------------------------------------
June 2005 1.65
--------------------------------------
September 2005 1.65
--------------------------------------
December 2005 1.70
--------------------------------------
March 2006 1.70
--------------------------------------
June 2006 1.70
--------------------------------------
September 2006 1.70
--------------------------------------
December 2006 1.75
--------------------------------------
March 2007 1.75
--------------------------------------
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FIXED CHARGE
DATE COVERAGE RATIO
--------------------------------------
June 2007 1.75
--------------------------------------
September 2007 1.75
--------------------------------------
December 2007 1.85
--------------------------------------
March 2008 1.85
--------------------------------------
June 2008 1.85
--------------------------------------
September 2008 1.85
--------------------------------------
December 2008
thereafter 1.90
--------------------------------------
(b) Leverage Ratio.
(i) Company shall not permit the Total
Lease Adjusted Leverage Ratio, beginning with the Fiscal Quarter ending
March 31, 2004, to exceed the correlative ratio indicated:
TOTAL LEASE
ADJUSTED
FISCAL LEVERAGE
QUARTER RATIO
-------------------------------------
March 2004 5.50
-------------------------------------
June 2004 5.50
-------------------------------------
September 2004 5.50
-------------------------------------
December 2004 5.50
-------------------------------------
March 2005 5.50
-------------------------------------
June 2005 5.50
-------------------------------------
September 2005 5.50
-------------------------------------
December 2005 5.25
-------------------------------------
March 2006 5.25
-------------------------------------
June 2006 5.25
-------------------------------------
September 2006 5.25
-------------------------------------
December 2006 5.00
-------------------------------------
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TOTAL LEASE
ADJUSTED
FISCAL LEVERAGE
QUARTER RATIO
-------------------------------------
March 2007 5.00
-------------------------------------
June 2007 5.00
-------------------------------------
September 2007 5.00
-------------------------------------
December 2007 4.75
-------------------------------------
March 2008 4.75
-------------------------------------
June 2008 4.75
-------------------------------------
September 2008 4.75
-------------------------------------
December 2008
and thereafter 4.50
-------------------------------------
(ii) Company shall not permit the Senior
Debt Leverage Ratio, beginning with the Fiscal Quarter ending March 31,
2004, to exceed the correlative ratio indicated:
FISCAL SENIOR LEVERAGE
QUARTER RATIO
-----------------------------------------
March 2004 2.25
-----------------------------------------
June 2004 2.25
-----------------------------------------
September 2004 2.25
-----------------------------------------
December 2004 2.25
-----------------------------------------
March 2005 2.25
-----------------------------------------
June 2005 2.25
-----------------------------------------
September 2005 2.25
-----------------------------------------
December 2005 2.00
-----------------------------------------
March 2006 2.00
-----------------------------------------
June 2006 2.00
-----------------------------------------
September 2006 2.00
-----------------------------------------
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FISCAL SENIOR LEVERAGE
QUARTER RATIO
-----------------------------------------
December 2006 1.75
-----------------------------------------
March 2007 1.75
-----------------------------------------
June 2007 1.75
-----------------------------------------
September 2007 1.75
-----------------------------------------
December 2007 and 1.50
thereafter
-----------------------------------------
(c) Maximum Consolidated Capital Expenditures.
(i) Company shall not, and shall not
permit its Guarantor Subsidiaries or PHCMI Group Members to, make or
incur Consolidated Capital Expenditures (which shall for these
purposes, to the extent included, be deemed to exclude the cash portion
of any consideration paid in respect of any Permitted Acquisition in
such period), in any Fiscal Year (or portion thereof) indicated below,
in an aggregate amount for Company and its Guarantor Subsidiaries and
PHCMI Group Members in excess of the corresponding amount set forth
below opposite such Fiscal Year (or portion thereof);
CONSOLIDATED
CAPITAL
FISCAL EXPENDITURES
PERIOD (MILLIONS)
--------------------------------------
Fiscal Year 2004 $75.00
--------------------------------------
Fiscal Year 2005 $60.00
--------------------------------------
Fiscal Year 2006 $60.00
--------------------------------------
Fiscal Year 2007 $55.00
--------------------------------------
Fiscal Year 2008 $55.00
--------------------------------------
Fiscal Year 2009 $55.00
--------------------------------------
(ii) To the extent the amount of
Consolidated Capital Expenditures permitted by the preceding paragraph
(i) for any Fiscal Year (without regard to any carry-over from a prior
Fiscal Year pursuant to this paragraph) is in excess of the actual
amount of Consolidated Capital Expenditures for such period, the amount
of permitted Consolidated Capital Expenditures during the immediately
succeeding Fiscal Year only, shall be increased by the
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lesser of (A) the amount of such excess and (B) the amount equal to 20%
of the amount of Consolidated Capital Expenditures permitted by such
paragraph (i) without regard to any carry-over from a prior Fiscal Year
pursuant to this paragraph) for the period with respect to which such
excess exists.
(d) Certain Calculations. With respect to any
period during which a Permitted Acquisition or an Asset Sale or other
disposition of a Health Care Facility has occurred (each, a "SUBJECT
TRANSACTION"), Consolidated Adjusted EBITDA and the components of Consolidated
Fixed Charges shall be calculated with respect to such period on a pro forma
basis reasonably acceptable to Administrative Agent (including pro forma
adjustments arising out of events which are directly attributable to a specific
transaction, are factually supportable and are expected to have a continuing
impact, in each case determined on a basis consistent with Article 11 of
Regulation S-X promulgated under the Securities Act and as interpreted by the
staff of the SEC, which would include cost savings resulting from head count
reduction, closure of facilities and similar restructuring charges, which pro
forma adjustments shall be certified by the chief financial officer of Company)
using the historical audited financial statements of any business so acquired or
to be acquired or sold or to be sold (or if no such audited financial statements
are available, to the extent reasonably acceptable to the Administrative Agent
using the historical unaudited financial statements of the relevant business)
and the consolidated financial statements of Company and its Subsidiaries which
shall be reformulated as if such Subject Transaction, and any Indebtedness
incurred or repaid in connection therewith, had been consummated or incurred or
repaid at the beginning of such period (and assuming that such Indebtedness
bears interest during any portion of the applicable measurement period prior to
the relevant acquisition at the weighted average of the interest rates
applicable to outstanding Loans incurred during such period).
6.9 FUNDAMENTAL CHANGES; DISPOSITION OF ASSETS;
ACQUISITIONS. No Credit Party shall, nor shall it permit any of its Subsidiaries
to, enter into any transaction of merger or consolidation, or liquidate, wind-up
or dissolve itself (or suffer any liquidation or dissolution), or convey, sell,
lease or sub-lease (as lessor (other than with respect to Permitted Ancillary
Leases) or sublessor), transfer or otherwise dispose of, in one transaction or a
series of transactions, all or any part of its business, assets or property of
any kind whatsoever, whether real, personal or mixed and whether tangible or
intangible, whether now owned or hereafter acquired, or acquire by purchase or
otherwise (other than purchases, leases or other acquisitions of inventory,
materials and equipment in the ordinary course of business and operating leases
of real property for use in the business of the Credit Parties) the business,
property or fixed assets of, or stock or other evidence of beneficial ownership
of, any Person or any division or line of business or other business unit of any
Person, except:
(a) any Guarantor Subsidiary and with the
approval of the Administrative Agents, any other Subsidiary of Company may be
merged with or into Company or any Guarantor, or be liquidated, wound up or
dissolved, or all or any part of its business, property or assets may be
conveyed, sold, leased, transferred or otherwise disposed of, in one transaction
or a series of transactions, to Company or any Guarantor;
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provided, in the case of such a merger, Company or such Guarantor, as applicable
shall be the continuing or surviving Person;
(b) sales or other dispositions of (i) assets
that do not constitute Asset Sales and (ii) assets listed on Schedule 6.9;
(c) Asset Sales, the proceeds of which (valued
at the principal amount thereof in the case of non-Cash proceeds consisting of
notes or other debt Securities and valued at fair market value in the case of
other non-Cash proceeds) (i) when aggregated with the proceeds of all other
Asset Sales made within the same Fiscal Year, are less than $35,000,000;
provided (i) the consideration received for such assets shall be in an amount
equal to the fair market value thereof, determined in good faith by the Board of
Directors (or similar governing body) of the Company or the applicable Credit
Party, (ii) no less than 75% thereof shall be paid in Cash, (iii) for any single
Asset Sale or series of related Asset Sales in an aggregate amount in excess of
$10,000,000, the Company shall deliver to Administrative Agent a Compliance
Certificate at least five (5) Business Days prior to the date of sale (or such
shorter period as Administrative Agent may agree to from time to time),
verifying that immediately after giving pro forma effect to such Asset Sale, the
Company will be in compliance with its financial covenants set forth in Section
6.8, and (iv) the Net Asset Sale Proceeds thereof shall be applied as required
by Section 2.14(a);
(d) disposals of obsolete, worn out or surplus
personal property;
(e) Permitted Acquisitions, the consideration
(including without limitation all Indebtedness assumed in connection with such
acquisition) for which constitutes (i) less than $25,000,000 in the aggregate
during the prior twelve month period, and (ii) less than $75,000,000 in the
aggregate from the Closing Date to the date of determination; provided that in
no event shall any Investment in any business or line of business deemed
"reasonably related" to the Closing Date business or lines of business of
Company pursuant to clause (vi) of the definition of Permitted Acquisitions (as
opposed to any business or line of business actually engaged in by the Credit
Parties on the Closing Date) exceed $2,500,000 during the term of this
Agreement;
(f) swaps of assets used in the business in a
substantially concurrent exchange for other assets to be used in the business
(such newly acquired asset or assets a "SWAPPED ASSET"); provided, however, that
(i) the aggregate LTM EBITDA for all Swapped Assets (determined for each Swapped
Asset as of the time of exchange thereof) during the term of this Agreement
shall not exceed $25,000,000; (ii) after giving effect to the asset swap on a
pro forma basis, no Default or Event of Default has occurred and is continuing;
(iii) LTM EBITDA for the Swapped Asset or aggregate LTM EBITDA for a related
series of Swapped Assets shall be at least 90% of LTM EBITDA for the asset or
related series of assets exchanged therefor; (iv) all aspects of the asset swap
(including, without limitation, the calculation of LTM EBITDA in connection
therewith) shall be satisfactory to Administrative Agent in their sole
discretion; (v) prior to consummating any such asset swap, Company shall deliver
to Administrative Agent a
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certificate signed by the chief financial officer of Company demonstrating to
the reasonable satisfaction of Administrative Agent that, on a pro forma basis,
Company would be in compliance with each of the financial covenants set forth in
Section 6.8, and certifying that no Default or Event of Default exists
immediately prior to and immediately after giving effect to such asset swap; and
(vi) prior to consummating any such asset swap, Company shall have provided
evidence reasonably satisfactory to Administrative Agent demonstrating
satisfaction of the requirements of the Senior Subordinated Note Indenture or
Refinancing Note Indenture (as the case may be) relating to such asset swap;
(g) Investments made in accordance with Section
6.7;
(h) cancellation, termination or surrender by
any Credit Party of any lease other than a Material Lease;
(i) the sale, assignment, payoff or other
disposition of the Tampa Mortgage Loan for Net Asset Sale Proceeds of at least
$3,000,000, provided that such Net Asset Sale Proceeds shall be applied as
prepayment of the Term Loans pursuant to Section 2.14(a) hereto, without giving
effect to any provision for reinvestment of such proceeds.
6.10 DISPOSAL OF SUBSIDIARY INTERESTS. Except for any sale
of all of its interests in the Capital Stock of any of the Subsidiaries in
compliance with the provisions of Section 6.9, no Credit Party shall, nor shall
it permit any of its Subsidiaries to, (a) directly or indirectly sell, assign,
pledge or otherwise encumber or dispose of any Capital Stock of any of the
Guarantor Subsidiaries or any Approved Captive Insurance Subsidiary, except to
qualify directors if required by applicable law; or (b) permit any of its
Subsidiaries directly or indirectly to sell, assign, pledge or otherwise
encumber or dispose of any Capital Stock of any of the Guarantor Subsidiaries or
any Approved Captive Insurance Subsidiary, except to another Credit Party
(subject to the restrictions on such disposition otherwise imposed hereunder),
or to qualify directors if required by applicable law.
6.11 SALES AND LEASE-BACKS. No Credit Party shall, nor
shall it permit any of its Subsidiaries to, directly or indirectly, become
liable as lessee or as a guarantor or other surety with respect to any lease of
any property (whether real, personal or mixed), whether now owned or hereafter
acquired, which such Credit Party (a) has sold or transferred or is to sell or
to transfer to any other Person (other than Company or any of the Guarantor
Subsidiaries), or (b) intends to use for substantially the same purpose as any
other property which has been or is to be sold or transferred by such Credit
Party to any Person (other than Company or any of the Guarantor Subsidiaries) in
connection with such lease.
6.12 TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES. No
Credit Party shall, nor shall it permit any of its Subsidiaries to, directly or
indirectly, enter into or permit to exist any transaction (including the
purchase, sale, lease or exchange of any property or the rendering of any
service) with any holder of 15% or more of any class of
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Capital Stock of Company or any of its Subsidiaries or with any Affiliate of
Company or of any such holder, on terms that are less favorable to Company or
that Subsidiary, as the case may be, than those that might be obtained at the
time from a Person who is not such a holder or Affiliate; provided, the
foregoing restriction shall not apply to (a) any transaction between Company and
any Guarantor; (b) reasonable and customary fees paid to members of the board of
directors (or similar governing body) of Company and its Subsidiaries; (c)
compensation arrangements for officers and other employees of Company and its
Subsidiaries entered into in the ordinary course of business; and (d)
transactions described in Schedule 6.12.
6.13 CONDUCT OF BUSINESS
(a) From and after the Closing Date, no Credit
Party shall, nor shall it permit any of its Subsidiaries to, engage in any
business other than the businesses engaged in by any Credit Party on the Closing
Date and similar or related businesses.
(b) (i) Each Credit Party shall ensure that (1)
from and after the Closing Date, each of its Subsidiaries which is an Approved
Captive Insurance Subsidiary is a wholly owned Subsidiary of a Guarantor
Subsidiary, which Guarantor Subsidiary shall not engage in any business
activities or own any assets or properties other than the Capital Stock of such
Approved Captive Insurance Subsidiary and otherwise as incident to its existence
as a holding company; and (2) from and after the Closing Date, each of its
Subsidiaries which is an Approved Captive Insurance Subsidiary shall not engage
in any business other than (or have any Contractual Obligation or own any assets
or properties (excluding Cash and Cash Equivalents) other than) in connection
with insurance fronting arrangements entered into with financially sound and
reputable insurers for the sole purpose of the Credit Parties satisfying the
requirements of Section 5.5 hereof; (ii) no Approved Captive Insurance
Subsidiary or its direct parent, shall directly or indirectly, create, incur,
assume or guaranty, or otherwise become or remain directly or indirectly liable
with respect to any Indebtedness (other than the Obligations and the Senior
Subordinated Notes); and (iii) no Approved Captive Insurance Subsidiary or its
direct parent, shall have any employees, material Contractual Obligations,
Investments, accounts, liabilities, claims or assets other then incidental to
the business of such entities as described in (i) above.
6.14 AMENDMENTS OR WAIVERS OF CERTAIN RELATED AGREEMENTS.
No Credit Party shall nor shall it permit any of its Subsidiaries to, agree to
any material amendment, restatement, supplement or other modification to, or
waiver of, any of its material rights, interests or obligations under any
Related Agreement after the Closing Date without in each case obtaining the
prior written consent of Requisite Lenders (or in the case of any Related
Agreement relating to the Omega Loan, by Administrative Agent) to such
amendment, restatement, supplement or other modification or waiver. Without
limitation to the generality of the foregoing, no Credit Party shall, nor shall
it permit any of its Guarantor Subsidiaries to, so amend or change the terms of
any Related Agreement, or make any payment consistent with any such amendment
thereof or change thereto without the aforesaid consent of the Required Lenders
or Administrative Agent (as applicable), if the effect of such amendment or
change is to increase the interest rate
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under such Related Agreement, change any dates upon which payments of principal
or interest are due thereon, make stricter any event of default (or amend,
modify or supplement the definition thereof) or condition to an event of default
with respect thereto, change the redemption, prepayment or defeasance provisions
thereof, change the subordination provisions of any such Related Agreement (or
of any guaranty in respect thereof), or if the effect of such amendment or
change, together with all other amendments or changes made, is to increase
materially the obligations of the obligor thereunder or to confer any additional
rights on the holders of such Indebtedness under such Related Agreement (or a
trustee or other representative on their behalf) which would be adverse to any
Credit Party or Lenders; provided that an increase in the principal amount of
the Senior Subordinated Notes up to an aggregate $300,000,000 on the same terms
as the Senior Subordinated Notes issued on the Closing Date shall not be deemed
to be so adverse.
6.15 JOINT VENTURES OR PARTNERSHIPS. Company shall not,
nor shall it permit any other Credit Party to enter into or be party to any
Joint Venture (including, without limitation, by way of selling the Capital
Stock of a Subsidiary), unless (a) (i) any interest received by a Credit Party
in such Joint Venture is pledged to the Collateral Agent (for the benefit of the
Secured Parties) pursuant hereto or (ii) the interest received by a Credit Party
in such Joint Venture is wholly owned by a Joint Venture Holding Company and (b)
is permitted by Sections 6.7(g) or (k).
6.16 FISCAL YEAR. No Credit Party shall, nor shall it
permit any of its Subsidiaries to change its Fiscal Year-end from December 31.
6.17 HEALTH CARE PERMITS AND APPROVALS. No Credit Party
shall (i) fail to maintain in effect all Health Care Permits and Reimbursement
Approvals necessary to the operation of its business, or (ii) shall engage in
any activity that (a) constitutes or, with the giving of notice, the passage of
time, or both, would result in a material violation of, any Health Care Permit
necessary for the lawful conduct of its business or operations or (b)
constitutes or, with the giving of notice, the passage of time, or both, would
result in the loss by any Health Care Facility owned, leased, managed or
operated by Company or any of its Guarantor Subsidiaries of the right to
participate in, and receive payment under, the appropriate Medicare, Medicaid
and related reimbursement programs, and any similar state or local
government-sponsored program, to the extent that such Credit Party has decided
to participate in any such program, and to receive reimbursement from private
and commercial payers and health maintenance organizations to the extent
applicable thereto, in each case under (i) and (ii), except where the loss of
such Health Care Permit or rights to participate in or receive payments under
such programs could not reasonably be expected to have a Material Adverse
Effect.
SECTION 7. GUARANTY
7.1 GUARANTY OF THE OBLIGATIONS. Subject to the
provisions of Section 7.2, Guarantors jointly and severally hereby irrevocably
and unconditionally
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guaranty to Administrative Agent for the ratable benefit of the Beneficiaries
the due and punctual payment in full of all Obligations when the same shall
become due, whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise (including amounts that would become due but
for the operation of the automatic stay under Section 362(a) of the Bankruptcy
Code, 11 U.S.C. Section 362(a)) (collectively, the "GUARANTEED OBLIGATIONS").
7.2 CONTRIBUTION BY GUARANTORS. All Guarantors desire to
allocate among themselves (collectively, the "CONTRIBUTING GUARANTORS"), in a
fair and equitable manner, their obligations arising under this Guaranty.
Accordingly, in the event any payment or distribution is made on any date by a
Guarantor (a "FUNDING GUARANTOR") under this Guaranty that exceeds its Fair
Share as of such date, such Funding Guarantor shall be entitled to a
contribution from each of the other Contributing Guarantors in the amount of
such other Contributing Guarantor's Fair Share Shortfall as of such date, with
the result that all such contributions will cause each Contributing Guarantor's
Aggregate Payments to equal its Fair Share as of such date. "FAIR SHARE" means,
with respect to a Contributing Guarantor as of any date of determination, an
amount equal to (a) the ratio of (i) the Fair Share Contribution Amount with
respect to such Contributing Guarantor to (ii) the aggregate of the Fair Share
Contribution Amounts with respect to all Contributing Guarantors multiplied by
(b) the aggregate amount paid or distributed on or before such date by all
Funding Guarantors under this Guaranty in respect of the obligations Guaranteed.
"FAIR SHARE SHORTFALL" means, with respect to a Contributing Guarantor as of any
date of determination, the excess, if any, of the Fair Share of such
Contributing Guarantor over the Aggregate Payments of such Contributing
Guarantor. "FAIR SHARE CONTRIBUTION AMOUNT" means, with respect to a
Contributing Guarantor as of any date of determination, the maximum aggregate
amount of the obligations of such Contributing Guarantor under this Guaranty
that would not render its obligations hereunder or thereunder subject to
avoidance as a fraudulent transfer or conveyance under Section 548 of Title 11
of the United States Code or any comparable applicable provisions of state law;
provided, solely for purposes of calculating the "FAIR SHARE CONTRIBUTION
AMOUNT" with respect to any Contributing Guarantor for purposes of this Section
7.2, any assets or liabilities of such Contributing Guarantor arising by virtue
of any rights to subrogation, reimbursement or indemnification or any rights to
or obligations of contribution hereunder shall not be considered as assets or
liabilities of such Contributing Guarantor. "AGGREGATE PAYMENTS" means, with
respect to a Contributing Guarantor as of any date of determination, an amount
equal to (1) the aggregate amount of all payments and distributions made on or
before such date by such Contributing Guarantor in respect of this Guaranty
(including, without limitation, in respect of this Section 7.2), minus (2) the
aggregate amount of all payments received on or before such date by such
Contributing Guarantor from the other Contributing Guarantors as contributions
under this Section 7.2. The amounts payable as contributions hereunder shall be
determined as of the date on which the related payment or distribution is made
by the applicable Funding Guarantor. The allocation among Contributing
Guarantors of their obligations as set forth in this Section 7.2 shall not be
construed in any way to limit the liability of any Contributing Guarantor
hereunder. Each Guarantor is a third party beneficiary to the contribution
agreement set forth in this Section 7.2.
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7.3 PAYMENT BY GUARANTORS. Subject to Section 7.2,
Guarantors hereby jointly and severally agree, in furtherance of the foregoing
and not in limitation of any other right which any Beneficiary may have at law
or in equity against any Guarantor by virtue hereof, that upon the failure of
Company to pay any of the Guaranteed Obligations when and as the same shall
become due, whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise (including amounts that would become due but
for the operation of the automatic stay under Section 362(a) of the Bankruptcy
Code, 11 U.S.C. Section 362(a)), Guarantors will upon demand pay, or cause to be
paid, in Cash, to Administrative Agent for the ratable benefit of Beneficiaries,
an amount equal to the sum of the unpaid principal amount of all Guaranteed
Obligations then due as aforesaid, accrued and unpaid interest on such
Guaranteed Obligations (including interest which, but for Company's becoming the
subject of a case under the Bankruptcy Code, would have accrued on such
Guaranteed Obligations, whether or not a claim is allowed against Company for
such interest in the related bankruptcy case) and all other Guaranteed
Obligations then owed to Beneficiaries as aforesaid.
7.4 LIABILITY OF GUARANTORS ABSOLUTE. Each Guarantor
agrees that its obligations hereunder are irrevocable, absolute, independent and
unconditional and shall not be affected by any circumstance which constitutes a
legal or equitable discharge of a guarantor or surety other than payment in full
of the Guaranteed Obligations. In furtherance of the foregoing and without
limiting the generality thereof, each Guarantor agrees as follows:
(a) this Guaranty is a guaranty of payment when
due and not of collectibility. This Guaranty is a primary obligation of each
Guarantor and not merely a contract of surety;
(b) Administrative Agent may enforce this
Guaranty upon the occurrence of an Event of Default notwithstanding the
existence of any dispute between Company and any Beneficiary with respect to the
existence of such Event of Default;
(c) the obligations of each Guarantor hereunder
are independent of the obligations of Company and the obligations of any other
guarantor (including any other Guarantor) of the obligations of Company, and a
separate action or actions may be brought and prosecuted against such Guarantor
whether or not any action is brought against Company or any of such other
guarantors and whether or not Company is joined in any such action or actions;
(d) payment by any Guarantor of a portion, but
not all, of the Guaranteed Obligations shall in no way limit, affect, modify or
abridge any Guarantor's liability for any portion of the Guaranteed Obligations
which has not been paid. Without limiting the generality of the foregoing, if
Administrative Agent is awarded a judgment in any suit brought to enforce any
Guarantor's covenant to pay a portion of the Guaranteed Obligations, such
judgment shall not be deemed to release such Guarantor from its covenant to pay
the portion of the Guaranteed Obligations that is not the subject of such suit,
and such judgment shall not, except to the extent satisfied by such Guarantor,
limit,
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affect, modify or abridge any other Guarantor's liability hereunder in respect
of the Guaranteed Obligations;
(e) any Beneficiary, upon such terms as it deems
appropriate, without notice or demand and without affecting the validity or
enforceability hereof or giving rise to any reduction, limitation, impairment,
discharge or termination of any Guarantor's liability hereunder, from time to
time may (i) renew, extend, accelerate, increase the rate of interest on, or
otherwise change the time, place, manner or terms of payment of the Guaranteed
Obligations; (ii) settle, compromise, release or discharge, or accept or refuse
any offer of performance with respect to, or substitutions for, the Guaranteed
Obligations or any agreement relating thereto and/or subordinate the payment of
the same to the payment of any other obligations; (iii) request and accept other
guaranties of the Guaranteed Obligations and take and hold security for the
payment hereof or the Guaranteed Obligations; (iv) release, surrender, exchange,
substitute, compromise, settle, rescind, waive, alter, subordinate or modify,
with or without consideration, any security for payment of the Guaranteed
Obligations, any other guaranties of the Guaranteed Obligations, or any other
obligation of any Person (including any other Guarantor) with respect to the
Guaranteed Obligations; (v) enforce and apply any security now or hereafter held
by or for the benefit of such Beneficiary in respect hereof or the Guaranteed
Obligations and direct the order or manner of sale thereof, or exercise any
other right or remedy that such Beneficiary may have against any such security,
in each case as such Beneficiary in its discretion may determine consistent
herewith or the applicable Hedge Agreement and any applicable security
agreement, including foreclosure on any such security pursuant to one or more
judicial or nonjudicial sales, whether or not every aspect of any such sale is
commercially reasonable, and even though such action operates to impair or
extinguish any right of reimbursement or subrogation or other right or remedy of
any Guarantor against Company or any security for the Guaranteed Obligations;
and (vi) exercise any other rights available to it under the Credit Documents or
the Hedge Agreements; and
(f) this Guaranty and the obligations of
Guarantors hereunder shall be valid and enforceable and shall not be subject to
any reduction, limitation, impairment, discharge or termination for any reason
(other than payment in full of the Guaranteed Obligations), including the
occurrence of any of the following, whether or not any Guarantor shall have had
notice or knowledge of any of them: (i) any failure or omission to assert or
enforce or agreement or election not to assert or enforce, or the stay or
enjoining, by order of court, by operation of law or otherwise, of the exercise
or enforcement of, any claim or demand or any right, power or remedy (whether
arising under the Credit Documents or the Hedge Agreements, at law, in equity or
otherwise) with respect to the Guaranteed Obligations or any agreement relating
thereto, or with respect to any other guaranty of or security for the payment of
the Guaranteed Obligations; (ii) any rescission, waiver, amendment or
modification of, or any consent to departure from, any of the terms or
provisions (including provisions relating to events of default) hereof, any of
the other Credit Documents, any of the Hedge Agreements or any agreement or
instrument executed pursuant thereto, or of any other guaranty or security for
the Guaranteed Obligations, in each case whether or not in accordance with the
terms hereof or such Credit Document, such Hedge Agreement or any agreement
relating to
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such other guaranty or security; (iii) the Guaranteed Obligations, or any
agreement relating thereto, at any time being found to be illegal, invalid or
unenforceable in any respect; (iv) the application of payments received from any
source (other than payments received pursuant to the other Credit Documents or
any of the Hedge Agreements or from the proceeds of any security for the
Guaranteed Obligations, except to the extent such security also serves as
collateral for indebtedness other than the Guaranteed Obligations) to the
payment of indebtedness other than the Guaranteed Obligations, even though any
Beneficiary might have elected to apply such payment to any part or all of the
Guaranteed Obligations; (v) any Beneficiary's consent to the change,
reorganization or termination of the corporate structure or existence of Company
or any of its Subsidiaries and to any corresponding restructuring of the
Guaranteed Obligations; (vi) any failure to perfect or continue perfection of a
security interest in any collateral which secures any of the Guaranteed
Obligations; (vii) any defenses, set-offs or counterclaims which Company may
allege or assert against any Beneficiary in respect of the Guaranteed
Obligations, including failure of consideration, breach of warranty, payment,
statute of frauds, statute of limitations, accord and satisfaction and usury;
and (viii) any other act or thing or omission, or delay to do any other act or
thing, which may or might in any manner or to any extent vary the risk of any
Guarantor as an obligor in respect of the Guaranteed Obligations.
7.5 WAIVERS BY GUARANTORS. Each Guarantor hereby waives,
for the benefit of Beneficiaries: (a) any right to require any Beneficiary, as a
condition of payment or performance by such Guarantor, to (i) proceed against
Company, any other guarantor (including any other Guarantor) of the Guaranteed
Obligations or any other Person, (ii) proceed against or exhaust any security
held from Company, any such other guarantor or any other Person, (iii) proceed
against or have resort to any balance of any Deposit Account or credit on the
books of any Beneficiary in favor of Company or any other Person, or (iv) pursue
any other remedy in the power of any Beneficiary whatsoever; (b) any defense
arising by reason of the incapacity, lack of authority or any disability or
other defense of Company or any other Guarantor including any defense based on
or arising out of the lack of validity or the unenforceability of the Guaranteed
Obligations or any agreement or instrument relating thereto or by reason of the
cessation of the liability of Company or any other Guarantor from any cause
other than payment in full of the Guaranteed Obligations; (c) any defense based
upon any statute or rule of law which provides that the obligation of a surety
must be neither larger in amount nor in other respects more burdensome than that
of the principal; (d) any defense based upon any Beneficiary's errors or
omissions in the administration of the Guaranteed Obligations, except behavior
which amounts to bad faith; (e) (i) any principles or provisions of law,
statutory or otherwise, which are or might be in conflict with the terms hereof
and any legal or equitable discharge of such Guarantor's obligations hereunder,
(ii) the benefit of any statute of limitations affecting such Guarantor's
liability hereunder or the enforcement hereof, (iii) any rights to set-offs,
recoupments and counterclaims, and (iv) promptness, diligence and any
requirement that any Beneficiary protect, secure, perfect or insure any security
interest or lien or any property subject thereto; (f) notices, demands,
presentments, protests, notices of protest, notices of dishonor and notices of
any action or inaction, including acceptance hereof, notices of default
hereunder, the Hedge Agreements or any agreement or instrument related thereto,
notices of any
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renewal, extension or modification of the Guaranteed Obligations or any
agreement related thereto, notices of any extension of credit to Company and
notices of any of the matters referred to in Section 7.4 and any right to
consent to any thereof; and (g) any defenses or benefits that may be derived
from or afforded by law which limit the liability of or exonerate guarantors or
sureties, or which may conflict with the terms hereof.
7.6 GUARANTORS' RIGHTS OF SUBROGATION, CONTRIBUTION, ETC.
Until the Guaranteed Obligations shall have been indefeasibly paid in full and
the Revolving Commitments shall have terminated and all Letters of Credit shall
have expired or been cancelled, each Guarantor hereby waives any claim, right or
remedy, direct or indirect, that such Guarantor now has or may hereafter have
against Company or any other Guarantor or any of its assets in connection with
this Guaranty or the performance by such Guarantor of its obligations hereunder,
in each case whether such claim, right or remedy arises in equity, under
contract, by statute, under common law or otherwise and including without
limitation (a) any right of subrogation, reimbursement or indemnification that
such Guarantor now has or may hereafter have against Company with respect to the
Guaranteed Obligations, (b) any right to enforce, or to participate in, any
claim, right or remedy that any Beneficiary now has or may hereafter have
against Company, and (c) any benefit of, and any right to participate in, any
collateral or security now or hereafter held by any Beneficiary. In addition,
until the Guaranteed Obligations shall have been indefeasibly paid in full and
the Revolving Commitments shall have terminated and all Letters of Credit shall
have expired or been cancelled, each Guarantor shall withhold exercise of any
right of contribution such Guarantor may have against any other guarantor
(including any other Guarantor) of the Guaranteed Obligations, including,
without limitation, any such right of contribution as contemplated by Section
7.2. Each Guarantor further agrees that, to the extent the waiver or agreement
to withhold the exercise of its rights of subrogation, reimbursement,
indemnification and contribution as set forth herein is found by a court of
competent jurisdiction to be void or voidable for any reason, any rights of
subrogation, reimbursement or indemnification such Guarantor may have against
Company or against any collateral or security, and any rights of contribution
such Guarantor may have against any such other guarantor, shall be junior and
subordinate to any rights any Beneficiary may have against Company, to all
right, title and interest any Beneficiary may have in any such collateral or
security, and to any right any Beneficiary may have against such other
guarantor. If any amount shall be paid to any Guarantor on account of any such
subrogation, reimbursement, indemnification or contribution rights at any time
when all Guaranteed Obligations shall not have been finally and indefeasibly
paid in full, such amount shall be held in trust for Administrative Agent on
behalf of Beneficiaries and shall forthwith be paid over to Administrative Agent
for the benefit of Beneficiaries to be credited and applied against the
Guaranteed Obligations, whether matured or unmatured, in accordance with the
terms hereof.
7.7 SUBORDINATION OF OTHER OBLIGATIONS. Any Indebtedness
of Company or any Guarantor now or hereafter held by any Guarantor (the "OBLIGEE
GUARANTOR") is hereby subordinated in right of payment to the Guaranteed
Obligations, and any such indebtedness collected or received by the Obligee
Guarantor after an Event of Default has occurred and is continuing shall be held
in trust for Administrative Agent on behalf of Beneficiaries and shall forthwith
be paid over to Administrative Agent for
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the benefit of Beneficiaries to be credited and applied against the Guaranteed
Obligations but without affecting, impairing or limiting in any manner the
liability of the Obligee Guarantor under any other provision hereof.
7.8 CONTINUING GUARANTY. This Guaranty is a continuing
guaranty and shall remain in effect until all of the Guaranteed Obligations
shall have been paid in full and the Revolving Commitments shall have terminated
and all Letters of Credit shall have expired or been cancelled. Each Guarantor
hereby irrevocably waives any right to revoke this Guaranty as to future
transactions giving rise to any Guaranteed Obligations.
7.9 AUTHORITY OF GUARANTORS OR COMPANY. It is not
necessary for any Beneficiary to inquire into the capacity or powers of any
Guarantor or Company or the officers, directors or any agents acting or
purporting to act on behalf of any of them.
7.10 FINANCIAL CONDITION OF COMPANY. Any Credit Extension
may be made to Company or continued from time to time, and any Hedge Agreements
may be entered into from time to time, in each case without notice to or
authorization from any Guarantor regardless of the financial or other condition
of Company at the time of any such grant or continuation or at the time such
Hedge Agreement is entered into, as the case may be. No Beneficiary shall have
any obligation to disclose or discuss with any Guarantor its assessment, or any
Guarantor's assessment, of the financial condition of Company. Each Guarantor
has adequate means to obtain information from Company on a continuing basis
concerning the financial condition of Company and its ability to perform its
obligations under the Credit Documents and the Hedge Agreements, and each
Guarantor assumes the responsibility for being and keeping informed of the
financial condition of Company and of all circumstances bearing upon the risk of
nonpayment of the Guaranteed Obligations. Each Guarantor hereby waives and
relinquishes any duty on the part of any Beneficiary to disclose any matter,
fact or thing relating to the business, operations or conditions of Company now
known or hereafter known by any Beneficiary.
7.11 BANKRUPTCY, ETC.
(a) So long as any Guaranteed Obligations remain
outstanding, no Guarantor shall, without the prior written consent of
Administrative Agent acting pursuant to the instructions of Requisite Lenders,
commence or join with any other Person in commencing any bankruptcy,
reorganization or insolvency case or proceeding of or against Company or any
other Guarantor. The obligations of Guarantors hereunder shall not be reduced,
limited, impaired, discharged, deferred, suspended or terminated by any case or
proceeding, voluntary or involuntary, involving the bankruptcy, insolvency,
receivership, reorganization, liquidation or arrangement of Company or any other
Guarantor or by any defense which Company or any other Guarantor may have by
reason of the order, decree or decision of any court or administrative body
resulting from any such proceeding.
(b) Each Guarantor acknowledges and agrees that
any interest on any portion of the Guaranteed Obligations which accrues after
the commencement of any case or proceeding referred to in clause (a) above (or,
if interest on any portion of the Guaranteed Obligations ceases to accrue by
operation of law by reason of the commencement of such case or proceeding, such
interest as would have accrued on such portion of the
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Guaranteed Obligations if such case or proceeding had not been commenced) shall
be included in the Guaranteed Obligations because it is the intention of
Guarantors and Beneficiaries that the Guaranteed Obligations which are
guaranteed by Guarantors pursuant hereto should be determined without regard to
any rule of law or order which may relieve Company of any portion of such
Guaranteed Obligations. Guarantors will permit any trustee in bankruptcy,
receiver, debtor in possession, assignee for the benefit of creditors or similar
person to pay Administrative Agent, or allow the claim of Administrative Agent
in respect of, any such interest accruing after the date on which such case or
proceeding is commenced.
(c) In the event that all or any portion of the
Guaranteed Obligations are paid by Company, the obligations of Guarantors
hereunder shall continue and remain in full force and effect or be reinstated,
as the case may be, in the event that all or any part of such payment(s) are
rescinded or recovered directly or indirectly from any Beneficiary as a
preference, fraudulent transfer or otherwise, and any such payments which are so
rescinded or recovered shall constitute Guaranteed Obligations for all purposes
hereunder.
7.12 DISCHARGE OF GUARANTY UPON SALE OF GUARANTOR. If all
of the Capital Stock of any Guarantor or any of its successors in interest
hereunder shall be sold or otherwise disposed of (including by merger or
consolidation) in accordance with the terms and conditions hereof, the Guaranty
of such Guarantor or such successor in interest, as the case may be, hereunder
shall automatically be discharged and released without any further action by any
Beneficiary or any other Person effective as of the time of such Asset Sale.
SECTION 8. EVENTS OF DEFAULT
8.1 EVENTS OF DEFAULT. If any one or more of the
following conditions or events shall occur:
(a) Failure to Make Payments When Due. Failure
by Company to pay (i) when due any installment of principal of any Loan, whether
at stated maturity, by acceleration, by notice of voluntary prepayment, by
mandatory prepayment or otherwise; (ii) when due any amount payable to Issuing
Bank in reimbursement of any drawing under a Letter of Credit; or (iii) any
interest on any Loan or any fee or any other amount due hereunder within two (2)
Business Days after the date due; or
(b) Default in Other Agreements. (i) Failure of
any Credit Party or any of their respective Subsidiaries to pay when due any
principal of or interest on or any other amount payable in respect of one or
more items of Indebtedness (other than (1) Indebtedness referred to in Section
8.1(a) and (2) Indebtedness of the PHCMI Group Members to Omega, so long as such
Indebtedness constitutes Designated Non-
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Recourse Debt) in an individual or aggregate principal amount of $7,500,000 or
more, in each case beyond the grace period, if any, provided therefor; or (ii)
breach or default by any Credit Party with respect to any other material term of
(1) one or more items of Indebtedness in the individual or aggregate principal
amounts referred to in clause (i) above or (2) any loan agreement, mortgage,
indenture or other agreement relating to such item(s) of Indebtedness, in each
case beyond the grace period, if any, provided therefor, if the effect of such
breach or default is to cause, or to permit the holder or holders of that
Indebtedness (or a trustee on behalf of such holder or holders), to cause, that
Indebtedness to become or be declared due and payable (or redeemable) prior to
its stated maturity or the stated maturity of any underlying obligation, as the
case may be; or
(c) Default in Senior Subordinated Notes. Any
Event of Default (as defined in the Senior Subordinated Note Indenture or any
Refinancing Notes Indenture) shall occur under the Senior Subordinated Note
Indenture or any Refinancing Notes Indenture; or
(d) Breach of Certain Covenants. Failure of any
Credit Party to perform or comply with any term or condition contained in
Section 2.6, Section 5.2, Section 5.14 or Section 6; or
(e) Breach of Representations, etc. Any
representation, warranty, certification or other statement made or deemed made
by any Credit Party in any Credit Document or in any statement or certificate at
any time given by any Credit Party or any of its Subsidiaries in writing
pursuant hereto or thereto or in connection herewith or therewith shall be false
in any material respect as of the date made or deemed made; or
(f) Other Defaults Under Credit Documents. Any
Credit Party shall default in the performance of or compliance with any term
contained herein or any of the other Credit Documents, other than any such term
referred to in any other Section of this Section 8.1, and such default shall not
have been remedied or waived within thirty (30) days after the earlier of (i) an
"executive officer" (as defined in Rule 3b-7 under the Securities Exchange Act
of 1934, as amended) of Company becoming aware of such default or (ii) receipt
by Company of notice from Administrative Agent or any Lender of such default; or
(g) Involuntary Bankruptcy; Appointment of
Receiver, etc. (i) A court of competent jurisdiction shall enter a decree or
order for relief in respect of Company any Approved Captive Insurance Subsidiary
(if any) or any Guarantor Subsidiaries (other than a Non-Material Guarantor
Subsidiary) (Company and any such Approved Captive Insurance Subsidiary and any
such Guarantor Subsidiary, each a "RELEVANT ENTITY") in an involuntary case
under the Bankruptcy Code or under any other applicable bankruptcy, insolvency
or similar law now or hereafter in effect, which decree or order is not stayed;
or any other similar relief shall be granted under any applicable federal or
state law; or (ii) an involuntary case shall be commenced against any Relevant
Entity under the Bankruptcy Code or under any other applicable bankruptcy,
insolvency or similar law now or hereafter in effect; or a decree or order of a
court having
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jurisdiction in the premises for the appointment of a receiver, liquidator,
sequestrator, trustee, custodian or other officer having similar powers over any
Relevant Entity, or over all or a substantial part of its property, shall have
been entered; or there shall have occurred the involuntary appointment of an
interim receiver, trustee or other custodian of any Relevant Entity for all or a
substantial part of its property; or a warrant of attachment, execution or
similar process shall have been issued against any substantial part of the
property of any Relevant Entity, and any such event described in this clause
(ii) shall continue for sixty (60) days without having been dismissed, bonded or
discharged; or
(h) Voluntary Bankruptcy; Appointment of
Receiver, etc. (i) Any Relevant Entity shall have an order for relief entered
with respect to it or shall commence a voluntary case under the Bankruptcy Code
or under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, or shall consent to the entry of an order for relief in an
involuntary case, or to the conversion of an involuntary case to a voluntary
case, under any such law, or shall consent to the appointment of or taking
possession by a receiver, trustee or other custodian for all or a substantial
part of its property; or any Relevant Entity shall make any assignment for the
benefit of creditors; or (ii) any Relevant Entity shall be unable, or shall fail
generally, or shall admit in writing its inability, to pay its debts as such
debts become due; or the board of directors (or similar governing body) of any
Relevant Entity (or any committee thereof) shall adopt any resolution or
otherwise authorize any action to approve any of the actions referred to herein
or in Section 8.1(f); or
(i) Judgments and Attachments. Any money
judgment, writ or warrant of attachment or similar process involving in any
individual case or in the aggregate at any time an amount in excess of
$7,500,000 (in either case to the extent not adequately covered by insurance as
to which a solvent and unaffiliated insurance company has acknowledged coverage,
which coverage may provide for a self-insured retention provided such
self-insured retention is covered by an adequately funded Approved Captive
Insurance Subsidiary or, if none exist, an adequately funded Insurance
Concentration Account) shall be entered or filed against Company or any of its
Subsidiaries (other than a PHCMI Debtor which is not a Guarantor to the extent
such writ or warrant of attachment or similar process is not enforceable against
any of the Collateral) or any of their respective assets and shall remain
undischarged, unvacated, unbonded or unstayed for a period of sixty (60) days
(or in any event later than five days prior to the date of any proposed sale
thereunder); or
(j) Dissolution. Any order, judgment or decree
shall be entered against any Relevant Entity decreeing the dissolution or split
up of such Credit Party and such order shall remain undischarged or unstayed for
a period in excess of thirty (30) days; or
(k) Employee Benefit Plans. (i) There shall
occur one or more ERISA Events which individually or in the aggregate results in
or might reasonably be expected to result in liability of Company, any of its
Subsidiaries or any of their respective ERISA Affiliates in excess of $2,500,000
during the term hereof; or (ii) there exists any fact or circumstance that
reasonably could be expected to result in the
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imposition of a Lien or security interest under Section 412(n) of the Internal
Revenue Code or under ERISA;
(l) Change of Control. A Change of Control shall
occur and shall not have been consented to by the Requisite Lenders;
(m) Guaranties, Collateral Documents and other
Credit Documents. At any time after the execution and delivery thereof, (i) the
Guaranty for any reason, other than the satisfaction in full of all Obligations,
shall cease to be in full force and effect (other than in accordance with its
terms) or shall be declared to be null and void or any Guarantor shall repudiate
its obligations thereunder, (ii) this Agreement or any Collateral Document
ceases to be in full force and effect (other than by reason of a release of
Collateral in accordance with the terms hereof or thereof or the satisfaction in
full of the Obligations in accordance with the terms hereof) or shall be
declared null and void, or Collateral Agent shall not have or shall cease to
have a valid and perfected Lien in any Collateral purported to be covered by the
Collateral Documents with the priority required by the relevant Collateral
Document, which Collateral, individually or in the aggregate, has a fair market
value in excess of $2,500,000 in each case for any reason other than the
negligent or willful failure of Collateral Agent or any Lender to take any
action within its control, (iii) any Credit Party shall contest the validity or
enforceability of any Credit Document in writing or deny in writing that it has
any further liability, including with respect to future advances by Lenders,
under any Credit Document to which it is a party; or (iv) the Obligations shall
cease to constitute senior indebtedness under the subordination provisions of
the Senior Subordinated Notes or the Refinancing Notes, if any, or any other
Subordinated Indebtedness, or, in any case, such subordination provisions shall
be invalidated or otherwise cease to be legal, valid and binding obligations of
the parties thereto, enforceable in accordance with their terms;
(n) Licenses. There shall occur any revocations,
suspensions, terminations, recessions, non-renewals or forfeitures or any
similar final administrative actions with respect to one or more Health Care
Permits or Reimbursement Approvals, which individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect; or
(o) Management Agreement. The termination (other
than by a Credit Party as a result of a default by a third party) of any
Management Agreement which could reasonably be expected to have a Material
Adverse Effect.
THEN, (1) upon the occurrence of any Event of Default described in Section
8.1(g) or 8.1(h), automatically, and (2) upon the occurrence of any other Event
of Default, at the request of (or with the consent of) Requisite Lenders, upon
notice to Company by Administrative Agent, (A) the Revolving Commitments, if
any, of each Lender having such Revolving Commitments and the obligation of
Issuing Bank to issue any Letter of Credit shall immediately terminate; (B) each
of the following shall immediately become due and payable, in each case without
presentment, demand, protest or other requirements of any kind, all of which are
hereby expressly waived by each Credit Party: (I) the unpaid principal amount of
and accrued interest on the Loans, (II) an amount equal
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to the maximum amount that may at any time be drawn under all Letters of Credit
then outstanding (regardless of whether any beneficiary under any such Letter of
Credit shall have presented, or shall be entitled at such time to present, the
drafts or other documents or certificates required to draw under such Letters of
Credit), and (III) all other Obligations; provided, the foregoing shall not
affect in any way the obligations of Lenders under Section 2.3(b)(iv) or Section
2.4(e); (C) Administrative Agent may cause the Collateral Agent to enforce any
and all Liens and security interests created pursuant to Collateral Documents;
and (D) Administrative Agent shall direct Company to pay (and Company hereby
agrees upon receipt of such notice, or upon the occurrence of any Event of
Default specified in Section 8.1(g) and (h) to pay) to Administrative Agent such
additional amounts of cash, to be held as security for Company's reimbursement
Obligations in respect of Letters of Credit then outstanding, equal to the
Letter of Credit Usage at such time.
SECTION 9. AGENTS
9.1 APPOINTMENT OF AGENTS. Each of CIBCWM, JPMorgan and
LBI is hereby appointed a Joint Lead Arranger hereunder. JPMCB and LCPI are
hereby appointed Co-Syndication Agents hereunder. Each Lender hereby authorizes
each Joint Lead Arranger and Co-Syndication Agent to act as its agent in
accordance with the terms hereof and the other Credit Documents. CIBC is hereby
appointed as Collateral Agent under the Pledge and Security Agreement and the
other Credit Documents and each Agent and each Lender hereby authorizes CIBC to
act as Collateral Agent for its benefit and for the benefit of the other Secured
Parties hereunder and under the other Credit Documents and each Agent and each
Lender hereby authorizes Collateral Agent to act as its agent in accordance with
the terms hereof and the other Credit Documents. Citi and GECC are hereby
appointed Co-Documentation Agents hereunder, and each Lender hereby authorizes
each Co- Documentation Agent to act as its agent in accordance with the terms
hereof and the other Credit Documents. Each Agent hereby agrees to act upon the
express conditions contained herein and the other Credit Documents, as
applicable. CIBC is hereby appointed Administrative Agent hereunder and under
the other Credit Documents and each Lender hereby authorizes Administrative
Agent to act as its agent in accordance with the terms hereof and the other
Credit Documents. Each Agent hereby agrees to act upon the express conditions
contained herein and the other Credit Documents, as applicable. The provisions
of this Section 9 (except Section 9.9 and 9.10) are solely for the benefit of
Agents and Lenders and no Credit Party shall have any rights as a third party
beneficiary of any of the provisions thereof. In performing its functions and
duties hereunder, each Agent shall act solely as an agent of Lenders and does
not assume and shall not be deemed to have assumed any obligation towards or
relationship of agency or trust with or for Company or any of its Subsidiaries.
Each of the Joint Lead Arrangers and Co-Syndication Agents, without consent of
or notice to any party hereto, may assign any and all of its rights or
obligations hereunder to any of its Affiliates. As of the Closing Date, neither
CIBCWM, in its capacities as a Joint Lead Arranger, nor JPMorgan, in its
capacity as a Joint Lead Arranger, nor JPMCB, in its capacity as a
Co-Syndication Agent, nor LBI, in its capacity as Joint Lead Arranger and a
Co-Syndication Agent, nor Citi, in its capacity as
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Co-Documentation Agent, nor GECC in its capacity as a Co-Documentation Agent
shall have any obligations but shall be entitled to all benefits of this Section
9.
9.2 POWERS AND DUTIES. Each Lender irrevocably authorizes
each Agent to take such action on such Lender's behalf and to exercise such
powers, rights and remedies hereunder and under the other Credit Documents as
are specifically delegated or granted to such Agent by the terms hereof and
thereof, together with such powers, rights and remedies as are reasonably
incidental thereto. Each Agent shall have only those duties and responsibilities
that are expressly specified herein and the other Credit Documents. Each Agent
may exercise such powers, rights and remedies and perform such duties by or
through its agents or employees. No Agent shall have, by reason hereof or any of
the other Credit Documents, a fiduciary relationship in respect of any Lender;
and nothing herein or any of the other Credit Documents, expressed or implied,
is intended to or shall be so construed as to impose upon any Agent any
obligations in respect hereof or any of the other Credit Documents except as
expressly set forth herein or therein.
9.3 GENERAL IMMUNITY.
(a) No Responsibility for Certain Matters. No
Agent shall be responsible to any Lender for the execution, effectiveness,
genuineness, validity, enforceability, collectibility or sufficiency hereof or
any other Credit Document or for any representations, warranties, recitals or
statements made herein or therein or made in any written or oral statements or
in any financial or other statements, instruments, reports or certificates or
any other documents furnished or made by any Agent to Lenders or by or on behalf
of any Credit Party to any Agent or any Lender in connection with the Credit
Documents and the transactions contemplated thereby or for the financial
condition or business affairs of any Credit Party or any other Person liable for
the payment of any Obligations, nor shall any Agent be required to ascertain or
inquire as to the performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained in any of the Credit Documents or
as to the use of the proceeds of the Loans or as to the existence or possible
existence of any Event of Default or Default or to make any disclosures with
respect to the foregoing. Anything contained herein to the contrary
notwithstanding, Administrative Agent shall not have any liability arising from
confirmations of the amount of outstanding Loans or the Letter of Credit Usage
or the component amounts thereof.
(b) Exculpatory Provisions. No Agent nor any of
its officers, partners, directors, employees or agents shall be liable to
Lenders for any action taken or omitted by any Agent under or in connection with
any of the Credit Documents except to the extent caused by such Agent's gross
negligence or willful misconduct. Each Agent shall be entitled to refrain from
any act or the taking of any action (including the failure to take an action) in
connection herewith or any of the other Credit Documents or from the exercise of
any power, discretion or authority vested in it hereunder or thereunder unless
and until such Agent shall have received instructions in respect thereof from
Requisite Lenders (or such other Lenders as may be required to give such
instructions under Section 10.5) and, upon receipt of such instructions from
Requisite Lenders (or
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such other Lenders, as the case may be), such Agent shall be entitled to act or
(where so instructed) refrain from acting, or to exercise such power, discretion
or authority, in accordance with such instructions. Without prejudice to the
generality of the foregoing, (i) each Agent shall be entitled to rely, and shall
be fully protected in relying, upon any communication, instrument or document
believed by it to be genuine and correct and to have been signed or sent by the
proper Person or Persons, and shall be entitled to rely and shall be protected
in relying on opinions and judgments of attorneys (who may be attorneys for
Company and its Subsidiaries), accountants, experts and other professional
advisors selected by it; and (ii) no Lender shall have any right of action
whatsoever against any Agent as a result of such Agent acting or (where so
instructed) refraining from acting hereunder or any of the other Credit
Documents in accordance with the instructions of Requisite Lenders (or such
other Lenders as may be required to give such instructions under Section 10.5).
9.4 AGENTS ENTITLED TO ACT AS LENDER. The agency hereby
created shall in no way impair or affect any of the rights and powers of, or
impose any duties or obligations upon, any Agent in its individual capacity as a
Lender hereunder. With respect to its participation in the Loans and the Letters
of Credit, each Agent shall have the same rights and powers hereunder as any
other Lender and may exercise the same as if it were not performing the duties
and functions delegated to it hereunder, and the term "Lender" shall, unless the
context clearly otherwise indicates, include each Agent in its individual
capacity. Any Agent and its Affiliates may accept deposits from, lend money to
and generally engage in any kind of banking, trust, financial advisory or other
business with Company or any of its Affiliates as if it were not performing the
duties specified herein, and may accept fees and other consideration from
Company for services in connection herewith and otherwise without having to
account for the same to Lenders.
9.5 LENDERS' REPRESENTATIONS, WARRANTIES AND
ACKNOWLEDGMENT.
(a) Each Lender represents and warrants that it
has made its own independent investigation of the financial condition and
affairs of Company and its Subsidiaries in connection with Credit Extensions
hereunder and that it has made and shall continue to make its own appraisal of
the creditworthiness of Company and its Subsidiaries. No Agent shall have any
duty or responsibility, either initially or on a continuing basis, to make any
such investigation or any such appraisal on behalf of Lenders or to provide any
Lender with any credit or other information with respect thereto, whether coming
into its possession before the making of the Loans or at any time or times
thereafter, and no Agent shall have any responsibility with respect to the
accuracy of or the completeness of any information provided to Lenders.
(b) Each Lender, by delivering its signature
page to this Agreement and funding its Tranche B Term Loan and/or a Revolving
Loan on the Closing Date, shall be deemed to have acknowledged receipt of, and
consented to and approved, each Credit Document and each other document required
to be approved by any Agent, Requisite Lenders or Lenders, as applicable on the
Closing Date.
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9.6 RIGHT TO INDEMNITY. Each Lender, in proportion to its
Pro Rata Share, severally agrees to indemnify each Agent, to the extent that
such Agent shall not have been reimbursed by any Credit Party, for and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses (including counsel fees and disbursements) or
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by or asserted against such Agent in exercising its powers, rights and remedies
or performing its duties hereunder or under the other Credit Documents or
otherwise in its capacity as such Agent in any way relating to or arising out
hereof or the other Credit Documents; provided, no Lender shall be liable for
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from such
Agent's gross negligence or willful misconduct. If any indemnity furnished to
any Agent for any purpose shall, in the opinion of such Agent, be insufficient
or become impaired, such Agent may call for additional indemnity and cease, or
not commence, to do the acts indemnified against until such additional indemnity
is furnished; provided, in no event shall this sentence require any Lender to
indemnify any Agent against any liability, obligation, loss, damage, penalty,
action, judgment, suit, cost, expense or disbursement in excess of such Lender's
Pro Rata Share thereof; and provided further, this sentence shall not be deemed
to require any Lender to indemnify any Agent against any liability, obligation,
loss, damage, penalty, action, judgment, suit, cost, expense or disbursement
described in the proviso in the immediately preceding sentence.
9.7 SUCCESSOR ADMINISTRATIVE AGENT, COLLATERAL AGENT AND
SWING LINE LENDER. Administrative Agent may resign at any time by giving thirty
(30) days' prior written notice thereof to Lenders and Company, and
Administrative Agent may be removed at any time with or without cause by an
instrument or concurrent instruments in writing delivered to Company and
Administrative Agent and signed by Requisite Lenders. Upon any such notice of
resignation or any such removal, Requisite Lenders shall have the right, upon
five (5) Business Days' notice to Company, to appoint a successor Administrative
Agent. Upon the acceptance of any appointment as Administrative Agent hereunder
by a successor Administrative Agent, that successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring or removed Administrative Agent and the retiring or
removed Administrative Agent shall promptly (i) transfer to such successor
Administrative Agent all records and other documents necessary or appropriate in
connection with the performance of the duties of the successor Administrative
Agent under the Credit Documents, and (ii) take such other actions, as may be
necessary or appropriate in connection with the assignment to such successor
Administrative Agent, whereupon such retiring or removed Administrative Agent
shall be discharged from its duties and obligations hereunder. After any
retiring or removed Administrative Agent's resignation or removal hereunder as
Administrative Agent, the provisions of this Section 9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent hereunder. Any resignation or removal of Administrative
Agent pursuant to this Section shall also constitute the resignation or removal
of CIBC or is successor as Collateral Agent, and any successor Administrative
Agent appointed pursuant to this Section shall, upon its acceptance of such
appointment, become the successor Collateral Agent for all purposes hereunder
and under the Credit Documents
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and such successor Collateral Agent shall thereupon succeed to and become vested
with all the rights, powers, privileges and duties of the retiring or removed
Collateral Agent under this Agreement and the other Credit Documents, and the
retiring or removed Collateral Agent under this Agreement and the other Credit
Documents shall promptly (i) transfer to such successor Collateral Agent all
sums, Securities and other items of Collateral held under this Agreement or the
Credit Documents, together with all records and other documents necessary or
appropriate in connection with the performance of the duties of the successor
Collateral Agent under this Agreement or the other Credit Documents, and (ii)
execute and deliver to such successor Collateral Agent or otherwise authorize
the filing of such amendments to financing statements, and take such other
actions, as may be necessary or appropriate in connection with the assignment to
such successor Collateral Agent of the security interests created under the
Credit Documents, whereupon such retiring or removed Collateral Agent shall be
discharged from its duties and obligations under this Agreement and other Credit
Documents. After any retiring or removed Collateral Agent's resignation or
removal under this Agreement and other Credit Documents, the provisions of this
Section 9 and the other Credit Documents shall inure to its benefit as to any
actions taken or omitted to be taken by it under this Agreement or the other
Credit Documents while it was the Collateral Agent hereunder or thereunder. Any
resignation or removal of Administrative Agent pursuant to this Section shall
also constitute the resignation or removal of CIBC or its successor as Swing
Line Lender, and any successor Administrative Agent appointed pursuant to this
Section shall, upon its acceptance of such appointment, become the successor
Swing Line Lender for all purposes hereunder. In such event (a) Company shall
prepay any outstanding Swing Line Loans made by the retiring or removed
Administrative Agent in its capacity as Swing Line Lender, (b) upon such
prepayment, the retiring or removed Administrative Agent and Swing Line Lender
shall surrender any Swing Line Note held by it to Company for cancellation, and
(c) Company shall issue, if so requested by successor Administrative Agent and
Swing Line Loan Lender, a new Swing Line Note to the successor Administrative
Agent and Swing Line Lender, in the principal amount of the Swing Line Loan
Sublimit then in effect and with other appropriate insertions.
9.8 COLLATERAL DOCUMENTS AND GUARANTY.
(a) Agents under Collateral Documents and
Guaranty. Each Lender hereby further authorizes Administrative Agent or
Collateral Agent, as applicable, on behalf of and for the benefit of Lenders, to
be the agent for and representative of Lenders with respect to the Guaranty, the
Collateral and the Collateral Documents. Subject to Section 10.5, without
further written consent or authorization from Lenders, (i) Administrative Agent
may execute any documents or instruments necessary to release any Guarantor from
the Guaranty pursuant to Section 7.12 or with respect to which Requisite Lenders
(or such other Lenders as may be required to give such consent under Section
10.5) have otherwise consented, and (ii) Collateral Agent may release any Lien
encumbering any item of Collateral that is the subject of a sale or other
disposition of assets permitted hereby or to which Requisite Lenders (or such
other Lenders as may be required to give such consent under Section 10.5) have
otherwise consented.
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(b) Right to Realize on Collateral and Enforce
Guaranty. Anything contained in any of the Credit Documents to the contrary
notwithstanding, Company, Administrative Agent, Collateral Agent and each Lender
hereby agree that (i) no Lender shall have any right individually to realize
upon any of the Collateral or to enforce the Guaranty, it being understood and
agreed that all powers, rights and remedies hereunder may be exercised solely by
Administrative Agent, on behalf of Lenders in accordance with the terms hereof
and all powers, rights and remedies under the Collateral Documents may be
exercised solely by Collateral Agent, and (ii) in the event of a foreclosure by
Collateral Agent on any of the Collateral pursuant to a public or private sale,
Collateral Agent, or any Lender may be the purchaser of any or all of such
Collateral at any such sale and Administrative Agent, as agent for and
representative of Beneficiaries (but not any Lender or Lenders in its or their
respective individual capacities unless Requisite Lenders shall otherwise agree
in writing) shall be entitled, for the purpose of bidding and making settlement
or payment of the purchase price for all or any portion of the Collateral sold
at any such public sale, to use and apply any of the Obligations as a credit on
account of the purchase price for any collateral payable by Collateral Agent at
such sale.
9.9 CASH COLLATERAL ACCOUNT.
(a) Within sixty (60) days following the Closing
Date, Company shall establish with Administrative Agent an account (the "CASH
COLLATERAL ACCOUNT") in the name of Administrative Agent (for the benefit of the
Beneficiaries), into which Company may from time to time deposit Dollars
pursuant to, and in accordance with Section 2.15(v) hereof. Except to the extent
otherwise provided in this Section 9.9, the Cash Collateral Account shall be
under the sole dominion and control of Administrative Agent and shall be subject
to a control agreement entered into between Company and Administrative Agent.
(b) Administrative Agent is hereby authorized
and directed to invest and reinvest the funds from time to time deposited into
the Cash Collateral Account, so long as no Event of Default has occurred and is
continuing, on the instructions of Company (provided, that any such instructions
given verbally shall be confirmed promptly in writing) or, if Company shall fail
to give such instructions upon delivery of any such funds, in the sole
discretion of Administrative Agent; provided, that in no event may Company give
instructions to Administrative Agent to, or may Administrative Agent in its
discretion, invest or reinvest funds in either of the Cash Collateral Account in
other than Cash Equivalents and nor may funds in either of the Cash Collateral
Account be co-mingled.
(c) Any net income or gain on the investment of
funds from time to time held in the Cash Collateral Account, shall be promptly
reinvested by Administrative Agent as a part of the Cash Collateral Account; and
any net loss on any such investment shall be charged against the Cash Collateral
Account.
(d) None of the Agents, the Issuing Bank, any of
the Lenders nor any other Secured Party shall be a trustee for any of the Credit
Parties, or shall have
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any obligations or responsibilities, or shall be liable for anything done or not
done, in connection with the Cash Collateral Account, except as expressly
provided herein and except that Administrative Agent shall have the obligations
of a secured party under the UCC. None of the Agents, the Issuing Bank, any of
the Lenders nor any other Secured Party shall have any obligation or
responsibility or shall be liable in any way for any investment decision made in
accordance with this Section 9.9 or for any decrease in the value of the
investments held in the Cash Collateral Account.
(e) Grant of Security Interest. For value
received and to induce the Issuing Bank to issue Letters of Credit and the
Lenders to enter into this Agreement and to make loans to Company and to acquire
participations in Letters of Credit from time to time as provided for in this
Agreement, as security for the payment of all of the Obligations, each of the
Credit Parties hereby assigns to Administrative Agent (for the benefit of the
Beneficiaries) and grants to Administrative Agent (for the benefit of the
Beneficiaries), a First Priority Lien upon all of such Credit Party's rights in
and to the Cash Collateral Account, all cash, documents, instruments and
securities from time to time held therein, and all rights pertaining to
investments of funds in the Cash Collateral Account and all products and
proceeds of any of the foregoing. All Cash, documents, instruments and
securities from time to time on deposit in the Cash Collateral Account, and all
rights pertaining to investments of funds in the Cash Collateral Account shall
immediately and without any need for any further action on the part of any of
the Credit Parties, Administrative Agent or any Beneficiaries, become subject to
the Lien set forth in this Section, be deemed Collateral for all purposes hereof
and be subject to the provisions of this Credit Agreement.
(f) Remedies. At any time during the
continuation of an Event of Default, Administrative Agent may sell any
documents, instruments and securities held in the Cash Collateral Account and
may immediately apply the proceeds thereof and any other cash held in the Cash
Collateral Account in accordance with Section 9.10.
9.10 APPLICATION OF PROCEEDS. All proceeds received by
Collateral Agent in respect of any sale, any collection from, or other
realization upon all or any part of the Collateral by Collateral Agent) shall be
applied in full or in part by Collateral Agent against, the Obligations in the
following order of priority: first, to the payment of all costs and expenses of
such sale, collection or other realization, including reasonable compensation to
Collateral Agent and its agents and counsel, and all other expenses, liabilities
and advances made or incurred by Collateral Agent in connection therewith, and
all amounts for which Collateral Agent is entitled to indemnification hereunder
(in its capacity as Collateral Agent and not as a Lender) and all advances made
by Collateral Agent hereunder for the account of the applicable Credit Party,
and to the payment of all costs and expenses paid or incurred by Collateral
Agent in connection with the exercise of any right or remedy hereunder or under
any Collateral Document, all in accordance with the terms hereof or thereof;
second, to the extent of any excess, to the payment of all other Obligations for
the ratable benefit of the Beneficiaries; and third, to the extent of any excess
such proceeds, to the payment to or upon the order of such Credit Parties or to
whosoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct.
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SECTION 10. MISCELLANEOUS
10.1 NOTICES. Unless otherwise specifically provided
herein, any notice or other communication herein required or permitted to be
given to a Credit Party, Collateral Agent, Documentation Agent, Administrative
Agent, Swing Line Lender, or Issuing Bank, shall be sent to such Person's
address as set forth on Appendix A or in the other relevant Credit Document, and
in the case of any Lender, the address as indicated on Appendix A or otherwise
indicated to Administrative Agent and Company in writing. Each notice hereunder
shall be in writing and may be personally served, telexed or sent by
telefacsimile or United States mail or courier service and shall be deemed to
have been given when delivered in person or by courier service and signed for
against receipt thereof, upon receipt of telefacsimile or telex, or three
Business Days after depositing it in the United States mail with postage prepaid
and properly addressed; provided, no notice to any Agent shall be effective
until received by such Agent.
10.2 EXPENSES. Whether or not the transactions
contemplated hereby shall be consummated, Company agrees to pay promptly,
without duplication, (a) all the actual and reasonable costs and expenses of
preparation of the Credit Documents and any consents, amendments, waivers or
other modifications thereto; (b) all the costs of furnishing all opinions by
counsel for Company and the other Credit Parties; (c) the reasonable and
documented fees, expenses and disbursements of counsel to the Agents in
connection with the negotiation, preparation, execution and administration of
the Credit Documents and any consents, amendments, waivers or other
modifications thereto and any other documents or matters requested by Company in
connection with the Loans; (d) all the actual costs and reasonable expenses of
creating and perfecting Liens in favor of Administrative Agent, for the benefit
of Beneficiaries pursuant hereto, including filing and recording fees, expenses
and taxes, stamp or documentary taxes, search fees, title insurance premiums
(excluding fees and expenses of any counsel not covered under clause (c) of this
Section 10.2); and (e) after the occurrence and during the continuation of a
Default or an Event of Default, all costs and expenses, including reasonable and
documented attorneys' fees (including allocated costs of internal counsel) and
costs of settlement, incurred by Agents and Lenders in enforcing any Obligations
of or in collecting any payments due from any Credit Party hereunder or under
the other Credit Documents by reason of such Default or Event of Default
(including in connection with the sale of, collection from, or other realization
upon any of the Collateral or the enforcement of the Guaranty) or in connection
with any refinancing or restructuring of the credit arrangements provided
hereunder in the nature of a "work-out" or pursuant to any insolvency or
bankruptcy cases or proceedings.
10.3 INDEMNITY.
(a) In addition to the payment of expenses
pursuant to Section 10.2, whether or not the transactions contemplated hereby
shall be consummated, each Credit Party agrees to defend (subject to
Indemnitees' selection of counsel), indemnify, pay and hold harmless, each Agent
and Lender and the officers, partners, directors, trustees, employees, agents
and Affiliates of each Agent and each Lender (each, an "INDEMNITEE"), from and
against any and all Indemnified Liabilities; provided, no Credit
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Party shall have any obligation to any Indemnitee hereunder with respect to any
Indemnified Liabilities to the extent such Indemnified Liabilities arise from
the gross negligence or willful misconduct of that Indemnitee. To the extent
that the undertakings to defend, indemnify, pay and hold harmless set forth in
this Section 10.3 may be unenforceable in whole or in part because they are
violative of any law or public policy, the applicable Credit Party shall
contribute the maximum portion that it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Indemnified Liabilities
incurred by Indemnitees or any of them. To the extent permitted by applicable
law, no Credit Party shall assert, and each hereby waives, any claim against any
Indemnitee, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, any Credit Document or any agreement or
instrument or transaction contemplated hereby.
(b) To the extent permitted by applicable law,
neither Company nor any of its Subsidiaries or Affiliates shall assert, and
hereby waives, any claim against any Lender or any of their Affiliates,
directors, employees, attorneys or agents, on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) (whether or not the claim therefor is based on contract, tort or
duty imposed by any applicable legal requirement) arising out of, in connection
with, arising out of, as a result of, or in any way related to, this Agreement
or any Credit Document or any agreement or instrument contemplated hereby or
thereby, the transactions contemplated hereby or thereby, any Loan or the use of
the proceeds thereof or any act or omission or event occurring in connection
therewith, and Company hereby waives, releases and agrees not to ▇▇▇ upon any
such claim or any such damages, whether or not accrued and whether or not known
or suspected to exist in its favor.
(c) The indemnification provisions set forth in
this Section 10.3 shall supersede any indemnification obligations of Company and
the Guarantor Subsidiaries contained in any loan commitment or other agreement
executed and delivered by Company prior to the Closing Date with respect to the
financing contemplated by this Agreement, except as it relates to any claim,
action, loss, liability, cost or expense incurred by the Agents or any Lender in
connection with or otherwise arising from acts, omissions or events occurring
prior to the Closing Date.
10.4 SET-OFF. In addition to any rights now or hereafter
granted under applicable law and not by way of limitation of any such rights,
upon the occurrence and during the continuation of any Event of Default each
Lender is hereby authorized by each Credit Party at any time or from time to
time, subject to the consent of Administrative Agent (such consents not to be
unreasonably withheld or delayed), without prior notice to any Credit Party or
to any other Person (other than Administrative Agent), any such notice being
hereby expressly waived, to set off and to appropriate and to apply any and all
deposits (general or special, including Indebtedness evidenced by certificates
of deposit, whether matured or unmatured, but not including trust accounts) and
any other Indebtedness at any time held or owing by such Lender or any of its
affiliates to or for the credit or the account of any Credit Party to such
Lender hereunder, the Letter of Credit and participations therein and under the
other Credit Documents, including all claims of
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any nature or description arising out of or connected hereto, the Letters of
Credit and participations therein or with any other Credit Document,
irrespective of whether or not (a) such Lender shall have made any demand
hereunder or (b) the principal of or the interest on the Loans or any amounts in
respect of the Letters of Credit or any other amounts due hereunder shall have
become due and payable pursuant to Section 2 and although such obligations and
liabilities, or any of them, may be contingent or unmatured. Each Lender so
exercising its right of set off provided herein shall promptly thereafter give
written notice to Company of such action and the amount of the set-off.
10.5 AMENDMENTS AND WAIVERS.
(a) Requisite Lenders' Consent. Subject to
Section 10.5(b) and 10.5(c), and except as may be specifically provided to the
contrary herein or in the other Credit Documents, no amendment, modification,
termination or waiver of any provision of the Credit Documents, or consent to
any departure by any Credit Party therefrom, shall in any event be effective
without the written concurrence of the Requisite Lenders.
(b) Affected Lenders' Consent. Without the
written consent of each Lender (other than a Defaulting Lender) that would be
affected thereby, no amendment, modification, termination, or consent shall be
effective if the effect thereof would:
(i) extend the scheduled final maturity
of any Loan or Note;
(ii) waive, reduce or postpone any
scheduled repayment (but not prepayment);
(iii) extend the stated expiration date
of any Letter of Credit beyond the Revolving Commitment Termination
Date;
(iv) reduce the rate of interest on any
Loan (other than any waiver of any increase in the interest rate
applicable to any Loan pursuant to Section 2.10) or any fee payable to
the Lenders (and not solely to Issuing Bank or any of the Agents)
hereunder;
(v) extend the time for payment of any
such interest or fees;
(vi) reduce the principal amount of any
Loan or any reimbursement obligation in respect of any Letter of
Credit;
(vii) amend, modify, terminate or waive
any provision of this Section 10.5(b) or Section 10.5(c);
(viii) amend the definition of "REQUISITE
LENDERS," "SUPERMAJORITY LENDERS" or "PRO RATA SHARE"; provided, with
the consent of Requisite Lenders, additional extensions of credit
pursuant hereto may be
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included in the determination of "REQUISITE LENDERS" or "PRO RATA
SHARE" on substantially the same basis as the Tranche B Term Loan
Commitments, the Tranche B Term Loan, the Revolving Commitments, the
Revolving Loans and the New Term Loan Commitments, the New Term Loan
are included on the Closing Date;
(ix) release all or substantially all of
the Collateral or all or substantially all of the Guarantors from the
Guaranty except as expressly provided in the Credit Documents; or
(x) consent to the assignment or
transfer by any Credit Party of any of its rights and obligations under
any Credit Document.
(c) Other Consents. No amendment, modification,
termination or waiver of any provision of the Credit Documents, or consent to
any departure by any Credit Party therefrom, shall:
(i) increase any Revolving Commitment
of any Lender over the amount thereof then in effect without the
consent of such Lender; provided, no amendment, modification or waiver
of any condition precedent, covenant, Default or Event of Default shall
constitute an increase in any Revolving Commitment of any Lender;
(ii) increase the Revolving Commitment
or the Tranche B Term Loan Commitment over the amount thereof then in
effect or increase the New Term Loan Commitment over $65,000,000 (as
reduced in accordance with Sections 2.14 and 2.15) without the consent
of the Supermajority Lenders;
(iii) amend, modify, terminate or waive
any provision hereof relating to the Swing Line Sublimit or the Swing
Line Loans without the consent of Swing Line Lender;
(iv) amend the definition of "REQUISITE
CLASS LENDERS" without the consent of Requisite Class Lenders of each
Class; provided, subject to Section 10.5(b)(viii), additional
extensions of credit pursuant hereto may be included in the
determination of such "REQUISITE CLASS LENDERS" on substantially the
same basis as the Term Loan Commitments, the Term Loan, the Revolving
Commitments and the Revolving Loans are included on the Closing Date;
(v) alter the required application of
any repayments or prepayments as between Classes pursuant to Section
2.15 without the consent of Requisite Class Lenders of each Class which
is being allocated a lesser repayment or prepayment as a result
thereof; provided, Requisite Lenders may waive, in whole or in part,
any prepayment so long as the application, as between Classes, of any
portion of such prepayment which is still required to be made is not
altered;
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(vi) amend, modify, terminate or waive
any obligation of Lenders with Revolving Commitments relating to the
purchase of participations in Letters of Credit as provided in Section
2.4(e) without the written consent of Administrative Agent and of
Issuing Bank;
(vii) waive any condition precedent to
the initial Credit Extension set forth in Section 3.1 for which it is
expressly provided in such Section that satisfaction of such condition
is to be acceptable to or approved by the Agents or any specifically
identified Agent, without the consent of the Agents or the Agents so
identified (as the case may be), and in any such event it shall not be
necessary to obtain the consent of any other Lender to such waiver; or
(viii) amend, modify, terminate or waive
any provision of Section 9 as the same applies to any Agent, or any
other provision hereof as the same applies to the rights or obligations
of any Agent, in each case without the consent of such Agent.
(d) Disproportionate Amendments. Any amendment
which would disproportionately affect the obligation of Company to make payment
of the loans under the Revolving Loans or the Term Loans shall not be effective
without the approval of holders of more than 50% of such Class of Loans.
(e) Execution of Amendments, etc. Administrative
Agent may, but shall have no obligation to, with the concurrence of any Lender,
execute amendments, modifications, waivers or consents on behalf of such Lender.
Any waiver or consent shall be effective only in the specific instance and for
the specific purpose for which it was given. No notice to or demand on any
Credit Party in any case shall entitle any Credit Party to any other or further
notice or demand in similar or other circumstances. Any amendment, modification,
termination, waiver or consent effected in accordance with this Section 10.5
shall be binding upon each Lender at the time outstanding, each future Lender
and, if signed by a Credit Party, on such Credit Party.
10.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS.
(a) Generally. This Agreement shall be binding
upon the parties hereto and their respective successors and assigns and shall
inure to the benefit of the parties hereto and the successors and assigns of
Lenders. No Credit Party's rights or obligations hereunder nor any interest
therein may be assigned or delegated by any Credit Party without the prior
written consent of all Lenders. Nothing in this Agreement, expressed or implied,
shall be construed to confer upon any Person (other than the parties hereto,
their respective successors and assigns permitted hereby and, to the extent
expressly contemplated hereby, Affiliates of each of the Agents and the Lenders)
any legal or equitable right, remedy or claim under or by reason of this
Agreement.
(b) Register. Company, Administrative Agent and
Lenders shall deem and treat the Persons listed as Lenders in the Register as
the holders and owners of the corresponding Commitments and Loans listed therein
for all purposes
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hereof, and no assignment or transfer of any such Commitment or Loan shall be
effective, in each case, unless and until an Assignment Agreement effecting the
assignment or transfer thereof shall have been delivered to and accepted by
Administrative Agent and recorded in the Register as provided in Section
10.6(e). Prior to such recordation, all amounts owed with respect to the
applicable Commitment or Loan shall be owed to the Lender listed in the Register
as the owner thereof, and any request, authority or consent of any Person who,
at the time of making such request or giving such authority or consent, is
listed in the Register as a Lender shall be conclusive and binding on any
subsequent holder, assignee or transferee of the corresponding Commitments or
Loans.
(c) Right to Assign. Each Lender shall have the
right at any time to sell, assign or transfer all or a portion of its rights and
obligations under this Agreement, including, without limitation, all or a
portion of its Commitment or Loans owing to it or other Obligation (provided,
however, that each such assignment shall be of a uniform, and not varying,
percentage of all rights and obligations under and in respect of any Loan and
any related Commitments; provided, further, for the avoidance of doubt, that
nothing herein shall require a Lender to make pro rata assignments of both its
Revolving Commitments, Tranche B Term Loan Commitments and New Term Loan
Commitments which shall remain at all times independently assignable):
(i) to any Person meeting the criteria
of clause (i) of the definition of the term of "Eligible Assignee" upon
the giving of notice to Company and Administrative Agent; and
(ii) to any Person meeting the criteria
of clause (ii) of the definition of the term of "Eligible Assignee"
and, in the case of assignments of Revolving Loans or Revolving
Commitments to any such Person, consented to by each of Company (except
(i) during the existence of an Event of Default and (ii) assignments
made by Administrative Agent, or at the direction of Administrative
Agent, in connection with primary syndication on or prior to the date
falling 21 days after the Closing Date), Administrative Agent and
Issuing Bank (each such consent not to be unreasonably withheld or
delayed); provided, further each such assignment pursuant to this
Section 10.6(c)(ii) shall be in an aggregate amount of not less than
(A) $2,500,000 (or such lesser amount as may be agreed to by Company
and Administrative Agent or as shall constitute the aggregate amount of
the Revolving Commitments and Revolving Loans of the assigning Lender)
with respect to the assignment of the Revolving Commitments and
Revolving Loans and (B) $1,000,000 (or such lesser amount as may be
agreed to by Company and Administrative Agent or as shall constitute
the aggregate amount of the Term Loan) with respect to the assignment
of the Term Loan.
(d) Mechanics. The assigning Lender and the
assignee thereof shall execute and deliver to Administrative Agent an Assignment
Agreement, together with (i) a processing and recordation fee of $3,500 (or such
lesser amount as may be agreed by the Administrative Agent, and provided
further, that only one fee shall be payable in the case of contemporaneous
assignments to Related Funds), and (ii) such forms, certificates or other
evidence, if any, with respect to United States federal income
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tax withholding matters as the assignee under such Assignment Agreement may be
required to deliver to Administrative Agent pursuant to Section 2.20(c).
(e) Notice of Assignment. Upon its receipt of a
duly executed and completed Assignment Agreement, together with the processing
and recordation fee referred to in Section 10.6(d) (and any forms, certificates
or other evidence required by this Agreement in connection therewith),
Administrative Agent shall record the information contained in such Assignment
Agreement in the Register, shall give prompt notice thereof to Company and shall
maintain a copy of such Assignment Agreement.
(f) Representations and Warranties of Assignee.
Each Lender, upon execution and delivery hereof or upon executing and delivering
an Assignment Agreement, as the case may be, represents and warrants as of the
Closing Date or as of the applicable Effective Date (as defined in the
applicable Assignment Agreement) that (i) it is an Eligible Assignee; (ii) it
has experience and expertise in the making of or investing in commitments or
loans such as the applicable Commitments or Loans, as the case may be; and (iii)
it will make or invest in, as the case may be, its Commitments or Loans for its
own account in the ordinary course of its business and without a view to
distribution of such Commitments or Loans within the meaning of the Securities
Act or the Exchange Act or other federal securities laws (it being understood
that, subject to the provisions of this Section 10.6, the disposition of such
Commitments or Loans or any interests therein shall at all times remain within
its exclusive control).
(g) Effect of Assignment. Subject to the terms
and conditions of this Section 10.6, as of the "Effective Date" specified in the
applicable Assignment Agreement: (i) the assignee thereunder shall have the
rights and obligations of a "Lender" hereunder to the extent such rights and
obligations hereunder have been assigned to it pursuant to such Assignment
Agreement and shall thereafter be a party hereto and a "Lender" for all purposes
hereof; (ii) the assigning Lender thereunder shall, to the extent that rights
and obligations hereunder have been assigned thereby pursuant to such Assignment
Agreement, relinquish its rights (other than any rights which survive the
termination hereof under Section 10.8) and be released from its obligations
hereunder (and, in the case of an Assignment Agreement covering all or the
remaining portion of an assigning Lender's rights and obligations hereunder,
such Lender shall cease to be a party hereto; provided, anything contained in
any of the Credit Documents to the contrary notwithstanding, (y) Issuing Bank
shall continue to have all rights and obligations thereof with respect to such
Letters of Credit until the cancellation or expiration of such Letters of Credit
and the reimbursement of any amounts drawn thereunder and (z) such assigning
Lender shall continue to be entitled to the benefit of all indemnities hereunder
as specified herein with respect to matters arising out of the prior involvement
of such assigning Lender as a Lender hereunder); (iii) the Commitments shall be
modified to reflect the Commitment of such assignee and any Revolving Commitment
of such assigning Lender, if any; and (iv) if any such assignment occurs after
the issuance of any Note hereunder, the assigning Lender shall, upon the
effectiveness of such assignment or as promptly thereafter as practicable,
surrender its applicable Notes to Administrative Agent for cancellation, and
thereupon Company shall issue and deliver new Notes, if so requested by the
assignee and/or assigning Lender, to such
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assignee and/or to such assigning Lender, with appropriate insertions, to
reflect the new Revolving Commitments and/or outstanding Loans of the assignee
and/or the assigning Lender.
(h) Participations. Each Lender shall have the
right at any time to sell one or more participations to any Person (other than
Company, any of its Subsidiaries or any of its Affiliates (other than an
Affiliate which is also a Lender or an Affiliate of any Lender) in all or any
part of its Commitments, Loans or in any other Obligation. The holder of any
such participation, other than an Affiliate of the Lender granting such
participation, shall not be entitled to require such Lender to take or omit to
take any action hereunder except with respect to any amendment, modification or
waiver that would (i) extend the final scheduled maturity of any Loan, Note or
Letter of Credit (unless such Letter of Credit is not extended beyond the
Revolving Commitment Termination Date) in which such participant is
participating, or reduce the rate or extend the time of payment of interest or
fees thereon (except in connection with a waiver of applicability of any
post-default increase in interest rates) or reduce the principal amount thereof,
or increase the amount of the participant's participation over the amount
thereof then in effect (it being understood that a waiver of any Default or
Event of Default or of a mandatory reduction in the Commitment shall not
constitute a change in the terms of such participation, and that an increase in
any Commitment or Loan shall be permitted without the consent of any participant
if the participant's participation is not increased as a result thereof), (ii)
consent to the assignment or transfer by any Credit Party of any of its rights
and obligations under this Agreement or (iii) release all or substantially all
of the Collateral under the Collateral Documents (except as expressly provided
in the Credit Documents) supporting the Loans hereunder in which such
participant is participating. Company agrees that each participant shall be
entitled to the benefits of Sections 2.18(c), 2.19 and 2.20 to the same extent
as if it were a Lender and had acquired its interest by assignment pursuant to
paragraph (c) of this Section; provided, (i) a participant shall not be entitled
to receive any greater payment under Section 2.19 or 2.20 than the applicable
Lender would have been entitled to receive with respect to the participation
sold to such participant, unless the sale of the participation to such
participant is made with Company's prior written consent and (ii) a participant
that would be a Non-US Lender if it were a Lender shall not be entitled to the
benefits of Section 2.20 unless Company is notified of the participation sold to
such participant and such participant agrees, for the benefit of Company, to
comply with Section 2.20 as though it were a Lender. To the extent permitted by
law, each participant also shall be entitled to the benefits of Section 10.4 as
though it were a Lender, provided such Participant agrees to be subject to
Section 2.17 as though it were a Lender.
(i) Certain Other Assignments. In addition to
any other assignment permitted pursuant to this Section 10.6, (i) any Lender may
assign and/or pledge all or any portion of its Loans, the other Obligations owed
by or to such Lender, and its Notes, if any, to secure obligations of such
Lender including, without limitation, any Federal Reserve Bank as collateral
security pursuant to Regulation A of the Board of Governors of the Federal
Reserve System and any operating circular issued by such Federal Reserve Bank;
provided, no Lender, as between Company and such Lender, shall be relieved of
any of its obligations hereunder as a result of any such assignment and pledge,
and provided further, in no event shall the applicable Federal Reserve Bank or
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trustee be considered to be a "Lender" or be entitled to require the assigning
Lender to take or omit to take any action hereunder.
10.7 INDEPENDENCE OF COVENANTS. All covenants hereunder
shall be given independent effect so that if a particular action or condition is
not permitted by any of such covenants, the fact that it would be permitted by
an exception to, or would otherwise be within the limitations of, another
covenant shall not avoid the occurrence of a Default or an Event of Default if
such action is taken or condition exists.
10.8 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
AGREEMENTS. All representations, warranties and agreements made herein shall
survive the execution and delivery hereof and the making of any Credit
Extension. Notwithstanding anything herein or implied by law to the contrary,
the agreements of each Credit Party set forth in Sections 2.18(c), 2.19, 2.20,
10.2, 10.3 and 10.4 and the agreements of Lenders set forth in Sections 2.17 and
9.6 shall survive the payment of the Loans, the cancellation or expiration of
the Letters of Credit and the reimbursement of any amounts drawn thereunder, and
the termination hereof, though such survival shall not be taken into account for
purposes of determining when the Agents are required to release the Collateral
in connection with the payment in full of the Loans and the termination of the
Revolving Commitment.
10.9 NO WAIVER; REMEDIES CUMULATIVE. No failure or delay
on the part of any Agent or any Lender in the exercise of any power, right or
privilege hereunder or under any other Credit Document shall impair such power,
right or privilege or be construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other power,
right or privilege. The rights, powers and remedies given to each Agent and each
Lender hereby are cumulative and shall be in addition to and independent of all
rights, powers and remedies existing by virtue of any statute or rule of law or
in any of the other Credit Documents or any of the Hedge Agreements. Any
forbearance or failure to exercise, and any delay in exercising, any right,
power or remedy hereunder shall not impair any such right, power or remedy or be
construed to be a waiver thereof, nor shall it preclude the further exercise of
any such right, power or remedy.
10.10 MARSHALLING; PAYMENTS SET ASIDE. Neither any Agent
nor any Lender shall be under any obligation to marshal any assets in favor of
any Credit Party or any other Person or against or in payment of any or all of
the Obligations. To the extent that any Credit Party makes a payment or payments
to Administrative Agent or Lenders (or to Administrative Agent, on behalf of
Lenders), or Collateral Agent, Administrative Agent or Lenders enforce any
security interests or exercise their rights of setoff, and such payment or
payments or the proceeds of such enforcement or setoff or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, any other state or federal law, common law or any equitable
cause, then, to the extent of such recovery, the obligation or part thereof
originally intended to be satisfied, and all Liens, rights and remedies therefor
or related thereto, shall be revived and continued in
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full force and effect as if such payment or payments had not been made or such
enforcement or setoff had not occurred.
10.11 SEVERABILITY. In case any provision in or obligation
hereunder or any Note shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
10.12 OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS'
RIGHTS. The obligations of Lenders hereunder are several and no Lender shall be
responsible for the obligations or Commitment of any other Lender hereunder.
Nothing contained herein or in any other Credit Document, and no action taken by
Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out hereof and it shall not be necessary for any other Lender to
be joined as an additional party in any proceeding for such purpose.
10.13 HEADINGS. Section headings herein are included herein
for convenience of reference only and shall not constitute a part hereof for any
other purpose or be given any substantive effect.
10.14 APPLICABLE LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.
10.15 CONSENT TO JURISDICTION. ALL JUDICIAL PROCEEDINGS
BROUGHT AGAINST ANY CREDIT PARTY ARISING OUT OF OR RELATING HERETO OR ANY OTHER
CREDIT DOCUMENT, OR ANY OF THE OBLIGATIONS, MAY BE BROUGHT IN ANY STATE OR
FEDERAL COURT OF COMPETENT JURISDICTION IN ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇
▇▇▇▇. BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH CREDIT PARTY, FOR ITSELF
AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (a) ACCEPTS GENERALLY AND
UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (b)
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (c) AGREES THAT SERVICE OF ALL
PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE APPLICABLE CREDIT PARTY AT ITS
ADDRESS PROVIDED IN ACCORDANCE WITH SECTION 10.1; (d) AGREES THAT SERVICE AS
PROVIDED IN CLAUSE (c) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER
THE APPLICABLE CREDIT PARTY IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND
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OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; AND (e)
AGREES AGENTS AND LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST ANY CREDIT PARTY IN THE COURTS
OF ANY OTHER JURISDICTION.
10.16 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO
HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING HEREUNDER OR UNDER ANY OF THE OTHER CREDIT
DOCUMENTS OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS
LOAN TRANSACTION OR THE LENDER/COMPANY RELATIONSHIP THAT IS BEING ESTABLISHED.
THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL
DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF
THIS TRANSACTION, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS
AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES
THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP,
THAT EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND
THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS.
EACH PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS
WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS
JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING
(OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION
10.16 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY
TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO OR
ANY OF THE OTHER CREDIT DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS
RELATING TO THE LOANS MADE HEREUNDER. IN THE EVENT OF LITIGATION, THIS AGREEMENT
MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
10.17 CONFIDENTIALITY. Each Lender shall hold all
non-public information regarding Company, its Subsidiaries and their business
identified as such by Company and obtained by such Lender pursuant to the
requirements hereof in accordance with such Lender's customary procedures for
handling confidential information of such nature, it being understood and agreed
by each Credit Party that, in any event, a Lender may make (i) disclosures of
such information to Affiliates of such Lender and to their agents and advisors
(and to other persons authorized by a Lender or Agent to organize, present or
disseminate such information in connection with disclosures otherwise made in
accordance with this Section 10.17), (ii) disclosures of
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such information reasonably required by any bona fide or potential assignee,
transferee or participant in connection with the contemplated assignment,
transfer or participation by such Lender of any Loans or any participations
therein or by any direct or indirect contractual counterparties (or the
professional advisors thereto) in Hedge Agreements (provided, such
counterparties and advisors are advised of and agree to be bound by the
provisions of this Section 10.17), (iii) disclosure to any rating agency when
required by it, provided that, prior to any disclosure, such rating agency shall
undertake in writing to preserve the confidentiality of any confidential
information relating to the Credit Parties received by it from any of the Agents
or any Lender, and (iv) disclosures required or requested by any governmental
agency or representative thereof or by the NAIC or pursuant to legal process;
provided, unless specifically prohibited by applicable law or court order, each
Lender shall make reasonable efforts promptly to notify Company of any request
by any governmental agency or representative thereof (other than any such
request in connection with any examination of the financial condition or other
routine examination of such Lender by such governmental agency) for disclosure
of any such non-public information prior to disclosure of such information.
Notwithstanding anything to the contrary set forth herein, each party (and each
of their respective employees, representatives or other agents) may disclose to
any and all persons, without limitations of any kind, the tax treatment and tax
structure of the transactions contemplated by this Agreement and all materials
of any kind (including opinions and other tax analyses) that are provided to any
such party relating to such tax treatment and tax structure. However, any
information relating to the tax treatment or tax structure shall remain subject
to the confidentiality provisions hereof (and the foregoing sentence shall not
apply) to the extent reasonably necessary to enable the parties hereto, their
respective Affiliates, and their and their respective Affiliates' directors and
employees to comply with applicable securities laws. For this purpose, "tax
structure" means any facts relevant to the federal income tax treatment of the
transactions contemplated by this Agreement but does not include information
relating to the identity of any of the parties hereto or any of their respective
Affiliates.
10.18 USURY SAVINGS CLAUSE. Notwithstanding any other
provision herein, the aggregate interest rate charged with respect to any of the
Obligations, including all charges or fees in connection therewith deemed in the
nature of interest under applicable law shall not exceed the Highest Lawful
Rate. If the rate of interest (determined without regard to the preceding
sentence) under this Agreement at any time exceeds the Highest Lawful Rate, the
outstanding amount of the Loans made hereunder shall bear interest at the
Highest Lawful Rate until the total amount of interest due hereunder equals the
amount of interest which would have been due hereunder if the stated rates of
interest set forth in this Agreement had at all times been in effect. In
addition, if when the Loans made hereunder are repaid in full the total interest
due hereunder (taking into account the increase provided for above) is less than
the total amount of interest which would have been due hereunder if the stated
rates of interest set forth in this Agreement had at all times been in effect,
then to the extent permitted by law, Company shall pay to Administrative Agent
an amount equal to the difference between the amount of interest paid and the
amount of interest which would have been paid if the Highest Lawful Rate had at
all times been in effect. Notwithstanding the foregoing, it is the intention of
Lenders and Company to conform strictly to any
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applicable usury laws. Accordingly, if any Lender contracts for, charges, or
receives any consideration which constitutes interest in excess of the Highest
Lawful Rate, then any such excess shall be cancelled automatically and, if
previously paid, shall at such Lender's option be applied to the outstanding
amount of the Loans made hereunder or be refunded to Company.
10.19 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute but one
and the same instrument.
10.20 USA PATRIOT ACT. Each Lender hereby notifies the
Company that pursuant to the requirements of the USA Patriot Act (Title III of
Pub. L. 107-56 (signed into law October 26, 2001)) (the "Act"), it is required
to obtain, verify and record information that identifies the Company, which
information includes the name and address of the Company and other information
that will allow such Lender to identify the Company in accordance with the Act.
10.21 EFFECTIVENESS. This Agreement shall become effective
upon the execution of a counterpart hereof by each of the parties hereto and
receipt by Company and Administrative Agent of written or telephonic
notification of such execution and authorization of delivery thereof.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
MARINER HEALTH CARE, INC.
By:
_____________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President and Treasurer
CREDIT AND GUARANTY AGREEMENT
434546.21-New York Server 3A - MSW
AMERICAN MEDICAL INSURANCE BILLING SERVICES, INC.
AMERRA PROPERTIES, INC.
APS PHARMACY MANAGEMENT, INC.
BEECHWOOD HERITAGE RETIREMENT COMMUNITY, INC.
▇▇▇▇▇ CENTER NURSING CARE/AUSTELL, INC.
BRIDE BROOK NURSING & REHABILITATION CENTER, INC.
COMPASS PHARMACY SERVICES OF TEXAS, INC.
CORNERSTONE HEALTH MANAGEMENT COMPANY
DEVCON HOLDING COMPANY
EH ACQUISITION CORP. III
GCI HEALTH CARE CENTERS, INC.
GCI REHAB, INC.
GCI-WISCONSIN PROPERTIES, INC.
GRANCARE HOME HEALTH SERVICES, INC.
GRANCARE OF MICHIGAN, INC.
GRANCARE SOUTH CAROLINA, INC.
GRANCARE, LLC
HERITAGE OF LOUISIANA, INC.
IHS REHAB PARTNERSHIP, LTD.
LCR, INC.
LIVING CENTERS-EAST, INC.
LIVING CENTERS LTCP DEVELOPMENT COMPANY
LIVING CENTERS OF TEXAS, INC.
LIVING CENTERS-ROCKY MOUNTAIN, INC.
LIVING CENTERS-SOUTHEAST, INC.
LONG RIDGE NURSING AND REHABILITATION CENTER, INC.
LONGWOOD REHABILITATION CENTER, INC.
MARINER HEALTH AT BONIFAY, INC.
MARINER HEALTH CARE MANAGEMENT COMPANY
MARINER HEALTH MASSACHUSETTS SHELF CORPORATION
MARINER HEALTH CARE OF ATLANTIC SHORES, INC.
MARINER HEALTH CARE OF DELAND, INC.
MARINER HEALTH CARE OF GREATER LAUREL, INC.
MARINER HEALTH CARE OF INVERNESS, INC.
MARINER HEALTH CARE OF LAKE WORTH, INC.
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MARINER HEALTH CARE OF MACCLENNY, INC.
MARINER HEALTH CARE OF METROWEST, INC.
MARINER HEALTH CARE OF NASHVILLE, INC.
MARINER HEALTH CARE OF NORTH HILLS, INC.
MARINER HEALTH CARE OF ORANGE CITY, INC.
MARINER HEALTH CARE OF PALM CITY, INC.
MARINER HEALTH CARE OF PINELLAS POINT, INC.
MARINER HEALTH CARE OF PORT ORANGE, INC.
MARINER HEALTH CARE OF SOUTHERN CONNECTICUT, INC.
MARINER HEALTH CARE OF TOLEDO, INC.
MARINER HEALTH CARE OF TUSKAWILLA, INC.
MARINER HEALTH CARE OF WEST HILLS, INC.
MARINER HEALTH CENTRAL, INC.
MARINER HEALTH OF FLORIDA, INC.
MARINER HEALTH OF JACKSONVILLE, INC.
MARINER HEALTH OF MARYLAND, INC.
MARINER HEALTH OF ORLANDO, INC.
MARINER HEALTH OF PALMETTO, INC.
MARINER HEALTH OF TAMPA, INC.
MARINER HEALTH PROPERTIES IV, LTD.
MARINER MEDICAL SUPPLY, INC. (F/K/A AMERICAN
PHARMACEUTICAL SERVICES, INC.)
MARINERSELECT STAFFING SOLUTIONS, INC.
MEDREHAB OF LOUISIANA, INC.
MERRIMACK VALLEY NURSING & REHABILITATION CENTER, INC.
METHUEN NURSING & REHABILITATION CENTER, INC.
MHC CONSOLIDATING CORPORATION
MHC FLORIDA HOLDING COMPANY
MHC GULF COAST HOLDING COMPANY
MHC HOLDING COMPANY
MHC MIDAMERICA HOLDING COMPANY
MHC MIDATLANTIC HOLDING COMPANY
MHC NORTHEAST HOLDING COMPANY
MHC RECRUITING COMPANY
MHC REHAB CORP.
MHC ROCKY MOUNTAIN HOLDING COMPANY
MHC TEXAS HOLDING COMPANY, LLC
MHC WEST HOLDING COMPANY
MHC/CSI FLORIDA, INC.
MHC/LCA FLORIDA, INC.
MYSTIC NURSING & REHABILITATION CENTER, INC.
▇▇▇-▇▇▇ CORP.
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NATIONAL HEALTH STRATEGIES, INC.
NATIONAL HERITAGE REALTY, INC.
MHC ILLINOIS, INC.
PHCMI HOLDING COMPANY, LLC
▇▇▇▇▇▇▇▇▇ NURSING & REHABILITATION CENTER, INC.
PINNACLE CARE CORPORATION OF HUNTINGTON
PINNACLE CARE CORPORATION OF NASHVILLE
PINNACLE CARE CORPORATION OF WILMINGTON
PRISM CARE CENTERS, INC.
PRISM HEALTH GROUP, INC.
PRISM HOME CARE, INC.
PRISM HOME CARE COMPANY, INC.
PRISM HOME HEALTH SERVICES, INC.
PRISM HOSPITAL VENTURES, INC.
PRISM REHAB SYSTEMS, INC.
PROFESSIONAL RX SYSTEMS, INC.
REHABILITY HEALTH SERVICES, INC.
RENAISSANCE MENTAL HEALTH CENTER, INC.
SASSAQUIN NURSING & REHABILITATION CENTER, INC.
SEVENTEENTH STREET ASSOCIATES LIMITED PARTNERSHIP
SUMMIT MEDICAL HOLDINGS, LTD.
SUMMIT HOSPITAL OF SOUTHEAST ARIZONA, INC.
SUMMIT HOSPITAL OF SOUTHWEST LOUISIANA, INC.
SUMMIT INSTITUTE FOR PULMONARY MEDICINE AND
REHABILITATION, INC.
SUMMIT INSTITUTE OF AUSTIN, INC.
SUMMIT MEDICAL MANAGEMENT, INC.
TAMPA MEDICAL ASSOCIATES, INC.
TRI-STATE HEALTH CARE, INC.
By: ___________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President and Treasurer
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CIBC WORLD MARKETS CORP.,
as a Joint Lead Arranger
By: ___________________________________
Name:
Title:
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CREDIT AND GUARANTY AGREEMENT
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▇▇▇▇▇▇ BROTHERS INC.
as a Joint Lead Arranger
By: ___________________________________
Name:
Title:
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CREDIT AND GUARANTY AGREEMENT
434546.21-New York Server 3A - MSW
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.,
as a Joint Lead Arranger,
By: ___________________________________
Name:
Title:
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JPMORGAN CHASE BANK,
as a Co-Syndication Agent and a Lender,
By: ___________________________________
Name:
Title:
Tranche B Term Loan Commitment:________________
Revolving Commitment:__________________________
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CREDIT AND GUARANTY AGREEMENT
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▇▇▇▇▇▇ COMMERCIAL PAPER INC.
as a Co-Syndication Agent and a Lender
By: ___________________________________
Name:
Title:
Tranche B Term Loan Commitment:_____________
Revolving Commitment:_______________________
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CITICORP NORTH AMERICA, INC.,
as Co-Documentation Agent and a Lender
By: ___________________________________
Name:
Title:
Tranche B Term Loan Commitment:_____________
Revolving Commitment:_______________________
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CANADIAN IMPERIAL BANK OF COMMERCE
as Administrative Agent, Collateral Agent, Swing
Line Lender, and Issuing Bank
By: ___________________________________
Name:
Title:
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CIBC INC.,
as a Lender
By: ___________________________________
Name:
Title:
Tranche B Term Loan Commitment:______________
Revolving Commitment:________________________
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GENERAL ELECTRIC CAPITAL
CORPORATION,
As Co-Documentation Agent and a Lender
By: ___________________________________
Name:
Title:
Tranche B Term Loan Commitment:_______________
Revolving Commitment:_________________________
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FOOTHILL INCOME TRUST, L.P.,
as a Lender
By: FIT GP, LLC, its General Partner
By: ___________________________________
Name:
Title:
Tranche B Term Loan Commitment:______________
Revolving Commitment:________________________
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APPENDIX A
TO CREDIT AND GUARANTY AGREEMENT
NOTICE ADDRESSES
MARINER HEALTH CARE, INC.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇,
Senior Vice President and Treasurer
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
MARINER HEALTH CARE, INC.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.,
Senior Vice President and General Counsel
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
EACH GUARANTOR SUBSIDIARY
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇,
Senior Vice President and Treasurer
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
CIBC WORLD MARKETS CORP.,
as a Joint Lead Arranger;
CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent, Swingline Lender and an Issuing Bank;
CIBC Inc.,
as a Lender
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Agency Services
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Appendix A
CREDIT AND GUARANTY AGREEMENT
434546.21-New York Server 3A - MSW
with a copy to:
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
Telecopier:
with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.,
as a Joint Lead Arranger,
JPMORGAN CHASE BANK,
as a Co-Syndication Agent, and a Lender
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇ ▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ COMMERCIAL PAPER INC.,
as a Joint Lead Arranger, and Co-Syndication Agent
▇▇▇▇▇▇ BROTHERS INC.,
as a Lender
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Appendix A
CREDIT AND GUARANTY AGREEMENT
434546.21-New York Server 3A - MSW
▇▇▇▇▇▇ BROTHERS INC.,
as a Lender
with a copy to:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
CITICORP NORTH AMERICA, INC.,
as Documentation Agent and as a Lender
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
FOOTHILL INCOME TRUST II, L.P.,
as a Lender
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier: [(___) ___-____]
GENERAL ELECTRIC CAPITAL CORPORATION,
as Co-Documentation Agent and Lender
▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Appendix A
CREDIT AND GUARANTY AGREEMENT
434546.21-New York Server 3A - MSW
with a copy to:
▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Appendix A
CREDIT AND GUARANTY AGREEMENT
434546.21-New York Server 3A - MSW
SCHEDULE 1.1(iv)
CERTAIN ADJUSTMENTS TO EBITDA
1. As of each Fiscal Quarter end set forth below, Consolidated Adjusted
EBITDA shall be fixed at the amount set forth below for the periods
indicated.
Period Consolidated Adjusted EBITDA
-------------------------------------------------------------------------------------------
April 1, 2003 through June 30, 2003 $20,612,000
-------------------------------------------------------------------------------------------
July 1, 2003 through September 30, 2003 $23,416,000
-------------------------------------------------------------------------------------------
2. Consolidated Adjusted EBITDA for the Fiscal Quarter ending December 31,
2003, shall without duplication, be calculated with respect to such
period (a) by adding thereto, to the extent deducted in determining
Consolidated Net Income, any non-recurring fees, charges or other
expenses that are directly related to the FC Divestitures, ▇▇▇▇▇▇▇
Divestiture and Louisiana Divestiture that were taken or recorded in
such Fiscal Quarter reasonably acceptable to the Administrative Agent
and in no event in an aggregate amount in excess of $50,000,000, and
(b) on a pro forma basis reasonably acceptable to the Administrative
Agent giving effect to the FC Divestitures, ▇▇▇▇▇▇▇ Divestiture and
Louisiana Divestiture consummated in such period prior to the Closing
Date (including pro forma adjustments which are directly attributable
thereto, are factually supportable and expected to have a continuing
impact, determined on a basis consistent with Article 11 of Regulation
S-X promulgated under the Securities Act and as interpreted by the
staff of the SEC, which would include cost savings resulting from head
count reduction, closure of facilities and similar restructuring
charges, and which pro forma adjustments shall be certified by the
chief financial officer of Company).
SCHEDULE 1.1(iv)
CREDIT AND GUARANTY AGREEMENT
434546.21-New York Server 3A - MSW
EXHIBIT A-1 TO
CREDIT AND GUARANTY AGREEMENT
FUNDING NOTICE
Reference is made to the Credit and Guaranty Agreement, dated as of
December 19, 2003 (as it may be amended, restated, supplemented or otherwise
modified, the "CREDIT AGREEMENT"; the terms defined therein and not otherwise
defined herein being used herein as therein defined), by and among MARINER
HEALTH CARE, INC. (the "COMPANY"), certain Subsidiaries of Company, as
Guarantors, the Lenders party thereto from time to time, CIBC WORLD MARKETS
CORP., as a Joint Lead Arranger, ▇.▇. ▇▇▇▇▇▇ SECURITIES INC., as a Joint Lead
Arranger, ▇▇▇▇▇▇ BROTHERS INC., as a Joint Lead Arranger, ▇▇▇▇▇▇ COMMERCIAL
PAPER INC. and JPMORGAN CHASE BANK, as Co-Syndication Agents, CITICORP NORTH
AMERICA, INC. and GENERAL ELECTRIC CAPITAL CORPORATION, as Co-Documentation
Agents, and CANADIAN IMPERIAL BANK OF COMMERCE, as Administrative Agent, as
Collateral Agent, and as Swing Line Lender.
Pursuant to Section 2.1, Section 2.2, and Section 2.3 of the Credit
Agreement, Company desires that Lenders make the following Loans to Company in
accordance with the applicable terms and conditions of the Credit Agreement on
[_______], 200[_]:
1. Term Loans
[ ] Base Rate Loans: $[___,___,___]
[ ] Eurodollar Rate Loans, with an Initial
Interest Period of ________ Month(s):
$[___,___,___]
2. Revolving Loans
[ ] Base Rate Loans(1): $[___,___,___]
[ ] Eurodollar Rate Loans, with an Initial
Interest Period of ________ Month(s)(2): $[___,___,___]
3. Swing Line Loans(3): $[___,___,___]
---------------------------
(1) Minimum $1,000,000; increments of $100,000.
(2) Minimum $5,000,000; increments of $100,000.
(3) Minimum $250,000,000; increments of $50,000.
EXHIBIT A-1-1
Company hereby certifies that:
(i) after making the Loans requested on the Credit Date,
the Total Utilization of Revolving Commitments shall not exceed the
Revolving Commitments then in effect;
(ii) as of the Credit Date, the Leverage Ratios set forth
in Section 6.8 of the Credit Agreement determined as of such date after
giving pro forma effect to the Loans requested shall not exceed the
maximum Leverage Ratios permitted as of the last day of the immediately
preceding Fiscal Quarter pursuant to Section 6.8 of the Credit
Agreement;
(iii) as of the Credit Date, the representations and
warranties contained in each of the Credit Documents are true and
correct in all material respects on and as of such Credit Date to the
same extent as though made on and as of such date, except to the extent
such representations and warranties specifically relate to an earlier
date, in which case such representations and warranties are true and
correct in all material respects on and as of such earlier date; and
(iv) as of the Credit Date, no Default or Event of Default
has occurred and is continuing or would result from the consummation of
the borrowing contemplated hereby.
Date: __________ MARINER HEALTH CARE, INC.
By: ___________________________
Title:
EXHIBIT ▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇ TO
CREDIT AND GUARANTY AGREEMENT
CONVERSION/CONTINUATION NOTICE
Reference is made to the Credit and Guaranty Agreement, dated as of
December 19, 2003 (as it may be amended, restated, supplemented or otherwise
modified, the "CREDIT AGREEMENT"; the terms defined therein and not otherwise
defined herein being used herein as therein defined), by and among MARINER
HEALTH CARE, INC. (the "COMPANY"), certain Subsidiaries of Company, as
Guarantors, the Lenders party thereto from time to time, CIBC WORLD MARKETS
CORP., as a Joint Lead Arranger, ▇.▇. ▇▇▇▇▇▇ SECURITIES INC., as a Joint Lead
Arranger, ▇▇▇▇▇▇ BROTHERS INC., as a Joint Lead Arranger, ▇▇▇▇▇▇ COMMERCIAL
PAPER INC. and JPMORGAN CHASE BANK, as Co-Syndication Agents, CITICORP NORTH
AMERICA, INC. and GENERAL ELECTRIC CAPITAL CORPORATION, as Co-Documentation
Agents, and CANADIAN IMPERIAL BANK OF COMMERCE, as Administrative Agent, as
Collateral Agent, and as Swing Line Lender.
Pursuant to Section 2.9 of the Credit Agreement, Company desires to
convert or to continue the following Loans, each such conversion and/or
continuation to be effective as of [__________]:
1. TERM LOANS:
$[___,___,___] Eurodollar Rate Loans to be continued with
Interest Period of ____ month(s)
$[___,___,___] Base Rate Loans to be converted to Eurodollar
Rate Loans with Interest Period of ____
month(s)
$[___,___,___] Eurodollar Rate Loans to be converted to Base
Rate Loans
2. REVOLVING LOANS:
$[___,___,___] Eurodollar Rate Loans to be continued with
Interest Period of ____ month(s)
$[___,___,___] Base Rate Loans to be converted to Eurodollar
Rate Loans with Interest Period of ____
month(s)
$[___,___,___] Eurodollar Rate Loans to be converted to Base
Rate Loans
EXHIBIT A-2-1
Company hereby certifies that as of the date hereof, no Event of
Default or a Default has occurred and is continuing or would result from the
consummation of the conversion and/or continuation contemplated hereby.
Date: _________ MARINER HEALTH CARE, INC.
By: _____________________________
Title:
EXHIBIT ▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇ TO
CREDIT AND GUARANTY AGREEMENT
ISSUANCE NOTICE
Reference is made to the Credit and Guaranty Agreement, dated as of
December 19, 2003 (as it may be amended, restated, supplemented or otherwise
modified, the "CREDIT AGREEMENT"; the terms defined therein and not otherwise
defined herein being used herein as therein defined), by and among MARINER
HEALTH CARE, INC. (the "COMPANY"), certain Subsidiaries of Company, as
Guarantors, the Lenders party thereto from time to time, CIBC WORLD MARKETS
CORP., as a Joint Lead Arranger, ▇.▇. ▇▇▇▇▇▇ SECURITIES INC., as a Joint Lead
Arranger, ▇▇▇▇▇▇ BROTHERS INC., as a Joint Lead Arranger, ▇▇▇▇▇▇ COMMERCIAL
PAPER INC. and JPMORGAN CHASE BANK, as Co-Syndication Agents, CITICORP NORTH
AMERICA, INC. and GENERAL ELECTRIC CAPITAL CORPORATION, as Co-Documentation
Agents, and CANADIAN IMPERIAL BANK OF COMMERCE, as Administrative Agent, as
Collateral Agent, and as Swing Line Lender.
Pursuant to Section 2.4 of the Credit Agreement, Company desires a
Letter of Credit to be issued in accordance with the terms and conditions of the
Credit Agreement on [__________], 200[_] (the "CREDIT DATE") in an aggregate
face amount of $[___,___,___].
Attached hereto for each such Letter of Credit are the following:
(a) the stated amount of such Letter of Credit;
(b) the name and address of the beneficiary;
(c) the expiration date; and
(d) either (i) the verbatim text of such
proposed Letter of Credit, or (ii) a description of the proposed terms
and conditions of such Letter of Credit, including a precise
description of any documents to be presented by the beneficiary which,
if presented by the beneficiary prior to the expiration date of such
Letter of Credit, would require the Issuing Lender to make payment
under such Letter of Credit.
Company hereby certifies that:
(i) attached hereto is a copy of the documents delivered
to the Administrative Agent in compliance with the requirements of the
Issuing Bank in connection with the issuance of such Letter of Credit;
(ii) after issuing such Letter of Credit requested on the
Credit Date, the Total Utilization of Revolving Commitments shall not
exceed the Revolving Commitments then in effect;
EXHIBIT A-3-1
(iii) as of the Credit Date, the representations and
warranties contained in each of the Credit Documents are true and
correct in all material respects on and as of such Credit Date to the
same extent as though made on and as of such date, except to the extent
such representations and warranties specifically relate to an earlier
date, in which case such representations and warranties are true and
correct in all material respects on and as of such earlier date;
(iv) as of the Credit Date, the Leverage Ratios set forth
in Section 6.8 of the Credit Agreement determined as of such date after
giving effect pro forma to the Letter of Credit requested shall not
exceed the maximum Leverage Ratios permitted as of the last day of the
immediately preceding Fiscal Quarter pursuant to Section 6.8 of the
Credit Agreement; and
(v) as of such Credit Date, no Event of Default or a
Default has occurred and is continuing or would result from the
consummation of the issuance contemplated hereby.
Date: _________ MARINER HEALTH CARE, INC.
By: __________________________
Title:
EXHIBIT ▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇ TO
CREDIT AND GUARANTY AGREEMENT
TRANCHE B TERM LOAN NOTE
$ [___,___,___][(1)]
[(2)][_________], ▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
FOR VALUE RECEIVED, MARINER HEALTH CARE, INC., a Delaware corporation
("COMPANY"), promises to pay [NAME OF LENDER] ("PAYEE") or its registered
assigns the principal amount of [DOLLARS] ($[___,___,___]) in the installments
referred to below.
Company also promises to pay interest on the unpaid principal amount
hereof, from the date hereof until paid in full, at the rates and at the times
which shall be determined in accordance with the provisions of that certain
Credit and Guaranty Agreement, dated as of December 19, 2003 (as it may be
amended, restated, supplemented or otherwise modified, the "CREDIT AGREEMENT";
the terms defined therein and not otherwise defined herein being used herein as
therein defined), by and among Company, certain Subsidiaries of Company, as
Guarantors, the Lenders party thereto from time to time, CIBC WORLD MARKETS
CORP., as a Joint Lead Arranger, ▇.▇. ▇▇▇▇▇▇ SECURITIES INC., as a Joint Lead
Arranger, ▇▇▇▇▇▇ BROTHERS INC., as a Joint Lead Arranger, ▇▇▇▇▇▇ COMMERCIAL
PAPER INC. and JPMORGAN CHASE BANK, as Co-Syndication Agents, CITICORP NORTH
AMERICA, INC. and GENERAL ELECTRIC CAPITAL CORPORATION, as Co-Documentation
Agents, and CANADIAN IMPERIAL BANK OF COMMERCE, as Administrative Agent, as
Collateral Agent, and as Swing Line Lender.
Company shall make scheduled principal payments on this Note as set
forth in Section 2.12 of the Credit Agreement.
This Note is one of the "Tranche B Term Loan Notes" in the aggregate
principal amount of $135,000,000 and is issued pursuant to and entitled to the
benefits of the Credit Agreement, to which reference is hereby made for a more
complete statement of the terms and conditions under which the Term Loan
evidenced hereby was made and is to be repaid.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in same day funds at the
Principal Office of Administrative Agent or at such other place as shall be
designated in writing for such purpose in accordance with the terms of the
Credit Agreement. Unless and until an Assignment Agreement effecting the
assignment or transfer of the obligations evidenced hereby shall have been
accepted by Administrative Agent and recorded in the Register, Company, each
Agent and Lenders shall
------------------------
(1) Lender's Term Loan Commitment
(2) Date of Issuance
EXHIBIT B-1-1
be entitled to deem and treat Payee as the owner and holder of this Note and the
obligations evidenced hereby. Payee hereby agrees, by its acceptance hereof,
that before disposing of this Note or any part hereof it will make a notation
hereon of all principal payments previously made hereunder and of the date to
which interest hereon has been paid; provided, the failure to make a notation of
any payment made on this Note shall not limit or otherwise affect the
obligations of Company hereunder with respect to payments of principal of or
interest on this Note.
This Note is subject to mandatory prepayment and to prepayment at the
option of Company, each as provided in the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF COMPANY AND PAYEE HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES THEREOF.
Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued and unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Credit Agreement.
The terms of this Note are subject to amendment only in the manner
provided in the Credit Agreement.
No reference herein to the Credit Agreement and no provision of this
Note or the Credit Agreement shall alter or impair the obligations of Company,
which are absolute and unconditional, to pay the principal of and interest on
this Note at the place, at the respective times, and in the currency herein
prescribed.
Company promises to pay all costs and expenses, including reasonable
attorneys' fees actually incurred, all as provided in the Credit Agreement,
incurred in the collection and enforcement of this Note. Company and any
endorsers of this Note hereby consent to renewals and extensions of time at or
after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder.
EXHIBIT B-1-2
IN WITNESS WHEREOF, Company has caused this Note to be duly executed
and delivered by its officer thereunto duly authorized as of the date and at the
place first written above.
MARINER HEALTH CARE, INC.
By: ______________________________
Title:
EXHIBIT ▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇ TO
CREDIT AND GUARANTY AGREEMENT
REVOLVING LOAN NOTE
$ [___,___,___][(1)]
[(2)][__________], ▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
FOR VALUE RECEIVED, MARINER HEALTH CARE, INC., a Delaware corporation
("COMPANY"), promises to pay [NAME OF LENDER] ("Payee") or its registered
assigns, on or before [__________], 200[_], the lesser of (a) [DOLLARS] ($
[___,___,___]) and (b) the unpaid principal amount of all advances made by Payee
to Company as Revolving Loans under the Credit Agreement referred to below.
Company also promises to pay interest on the advanced and unpaid
principal amount hereof, from the date hereof until paid in full, at the rates
and at the times which shall be determined in accordance with the provisions of
that certain Credit and Guaranty Agreement, dated as of December 19, 2003 (as it
may be amended, restated, supplemented or otherwise modified, the "CREDIT
AGREEMENT"; the terms defined therein and not otherwise defined herein being
used herein as therein defined), by and among Company certain Subsidiaries of
Company, as Guarantors, the Lenders party thereto from time to time, CIBC WORLD
MARKETS CORP., as a Joint Lead Arranger, ▇.▇. ▇▇▇▇▇▇ SECURITIES INC., as a Joint
Lead Arranger, ▇▇▇▇▇▇ BROTHERS INC., as a Joint Lead Arranger, ▇▇▇▇▇▇ COMMERCIAL
PAPER INC. and JPMORGAN CHASE BANK, as Co-Syndication Agents, CITICORP NORTH
AMERICA, INC. and GENERAL ELECTRIC CAPITAL CORPORATION, as Co-Documentation
Agents, and CANADIAN IMPERIAL BANK OF COMMERCE, as Administrative Agent, as
Collateral Agent, and as Swing Line Lender.
This Note is one of the "Revolving Loan Notes" in aggregate principal
amount of $90,000,000 and is issued pursuant to and entitled to the benefits of
the Credit Agreement, to which reference is hereby made for a more complete
statement of the terms and conditions under which the Loans evidenced hereby
were made and are to be repaid. Advances borrowed by Company and evidenced
hereby may be prepaid or repaid and reborrowed as provided in the Credit
Agreement.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in same day funds at the
Principal Office of Administrative Agent or at such other place as shall be
designated in writing for such purpose in accordance with the terms of the
Credit Agreement. Unless and until an Assignment Agreement effecting the
assignment or transfer of the obligations evidenced hereby shall have been
accepted by Administrative Agent and recorded in the Register, Company, each
Agent and Lenders shall
----------------------
(1) Lender's Revolving Credit Commitment
(2) Date of Issuance
EXHIBIT B-2-1
be entitled to deem and treat Payee as the owner and holder of this Note and the
obligations evidenced hereby. Payee hereby agrees, by its acceptance hereof,
that before disposing of this Note or any part hereof it will make a notation
hereon of all principal payments previously made hereunder and of the date to
which interest hereon has been paid; provided, the failure to make a notation of
any payment made on this Note shall not limit or otherwise affect the
obligations of Company hereunder with respect to payments of principal of or
interest on this Note.
This Note is subject to mandatory prepayment and to prepayment at the
option of Company, each as provided in the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF COMPANY AND PAYEE HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES THEREOF.
Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued and unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Credit Agreement.
The terms of this Note are subject to amendment only in the manner
provided in the Credit Agreement.
No reference herein to the Credit Agreement and no provision of this
Note or the Credit Agreement shall alter or impair the obligations of Company,
which are absolute and unconditional, to pay the principal of and interest on
this Note at the place, at the respective times, and in the currency herein
prescribed.
Company promises to pay all costs and expenses, including reasonable
attorneys' fees actually incurred, all as provided in the Credit Agreement,
incurred in the collection and enforcement of this Note. Company and any
endorsers of this Note hereby consent to renewals and extensions of time at or
after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder.
EXHIBIT B-2-2
IN WITNESS WHEREOF, Company has caused this Note to be duly executed
and delivered by its officer thereunto duly authorized as of the date and at the
place first written above.
MARINER HEALTH CARE, INC.
By: _____________________________
Title:
EXHIBIT B-2-3
TRANSACTIONS ON
REVOLVING LOAN NOTE
Amount of Loan Made Amount of Principal Paid Outstanding Principal Notation
Date This Date This Date Balance This Date Made By
EXHIBIT B-2-4
EXHIBIT B-3 TO
CREDIT AND GUARANTY AGREEMENT
SWING LINE NOTE
$ [___,___,___][(1)]
[(2)][__________], ▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
FOR VALUE RECEIVED, MARINER HEALTH CARE, INC., a Delaware corporation
("COMPANY"), promises to pay to CANADIAN IMPERIAL BANK OF COMMERCE, as Swing
Line Lender ("PAYEE"), on or before [_________], 200[_], the lesser of (a)
[DOLLARS] ($[___,___,___]) and (b) the unpaid principal amount of all advances
made by Payee to Company as Swing Line Loans under the Credit Agreement referred
to below.
Company also promises to pay interest on the advanced and unpaid
principal amount hereof, from the date hereof until paid in full, at the rates
and at the times which shall be determined in accordance with the provisions of
that certain Credit and Guaranty Agreement, dated as of December 19, 2003 (as it
may be amended, restated, supplemented or otherwise modified, the "CREDIT
AGREEMENT"; the terms defined therein and not otherwise defined herein being
used herein as therein defined), by and among Company, certain Subsidiaries of
Company, as Guarantors, the Lenders party thereto from time to time, CIBC WORLD
MARKETS CORP., as a Joint Lead Arranger, ▇.▇. ▇▇▇▇▇▇ SECURITIES INC., as a Joint
Lead Arranger, ▇▇▇▇▇▇ BROTHERS INC., as a Joint Lead Arranger, ▇▇▇▇▇▇ COMMERCIAL
PAPER INC. and JPMORGAN CHASE BANK, as Co-Syndication Agents, CITICORP NORTH
AMERICA, INC., and GENERAL ELECTRIC CAPITAL CORPORATION, as Co-Documentation
Agents, and CANADIAN IMPERIAL BANK OF COMMERCE, as Administrative Agent,
Collateral Agent and as a Swing Line Lender.
This Note is the "Swing Line Note" and is issued pursuant to and
entitled to the benefits of the Credit Agreement, to which reference is hereby
made for a more complete statement of the terms and conditions under which the
Swing Line Loans evidenced hereby were made and are to be repaid. Advances
borrowed by Company and evidenced hereby may be prepaid or repaid and reborrowed
as provided in the Credit Agreement.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in same day funds at the
Principal Office of Swing Line Lender or at such other place as shall be
designated in writing for such purpose in accordance with the terms of the
Credit Agreement.
----------------------
(1) Swing Line Sublimit
(2) Date of Issuance
EXHIBIT B-3-1
This Note is subject to mandatory prepayment and to prepayment at the
option of Company, each as provided in the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF COMPANY AND PAYEE HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES THEREOF.
Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued and unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Credit Agreement.
The terms of this Note are subject to amendment only in the manner
provided in the Credit Agreement.
No reference herein to the Credit Agreement and no provision of this
Note or the Credit Agreement shall alter or impair the obligations of Company,
which are absolute and unconditional, to pay the principal of and interest on
this Note at the place, at the respective times, and in the currency herein
prescribed.
Company promises to pay all costs and expenses, including reasonable
attorneys' fees actually incurred, all as provided in the Credit Agreement,
incurred in the collection and enforcement of this Note. Company and any
endorsers of this Note hereby consent to renewals and extensions of time at or
after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder.
EXHIBIT B-3-2
IN WITNESS WHEREOF, Company has caused this Note to be duly executed
and delivered by its officer thereunto duly authorized as of the date and at the
place first written above.
MARINER HEALTH CARE, INC.
By:_______________________________
Title:
EXHIBIT B-3-3
TRANSACTIONS ON
SWING LINE NOTE
Amount of Loan Made Amount of Principal Paid Outstanding Principal Notation
Date This Date This Date Balance This Date Made By
EXHIBIT B-3-4
EXHIBIT C TO
CREDIT AND GUARANTY AGREEMENT
COMPLIANCE CERTIFICATE
[To Come]
EXHIBIT C-1
ANNEX A TO
COMPLIANCE CERTIFICATE
[To Come]
EXHIBIT C-2
EXHIBIT D TO
CREDIT AND GUARANTY AGREEMENT
OPINIONS OF COUNSEL
Capitalized terms used in this Exhibit D not otherwise defined herein
shall have the meanings ascribed thereto in the Credit Agreement to which this
Exhibit D is attached.
A. GENERALLY.
1. Company and each other Credit Party is duly organized, validly
existing and in good standing under the laws of its jurisdiction of organization
as identified in Schedule 4.1 to the Credit Agreement, has all requisite power
and authority to own and operate its properties, to carry on its business as now
conducted and as proposed to be conducted, to enter into the Credit Documents to
which it is a party and to carry out the transactions contemplated thereby, and
is qualified to do business and is in good standing in every jurisdiction
identified in Schedule 4.1 to the Credit Agreement. Schedule 4.1 correctly sets
forth the ownership interest of Company and each of its Subsidiaries in their
respective Subsidiaries.
2. The execution, delivery and performance of the Credit Documents have
been duly authorized by all necessary action on the part of each Credit Party
that is a party thereto. The execution, delivery and performance by Credit
Parties of the Credit Documents to which they are parties and the consummation
of the transactions contemplated by the Credit Documents do not and will not
violate any provision of any law or any governmental rule or regulation
applicable to Company or any of its Subsidiaries, any of the Organizational
Documents of Company or any of its Subsidiaries, or any order, judgment or
decree of any court or other agency of government binding on Company or any of
its Subsidiaries; except as otherwise set forth in the Credit Agreement,
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both) a default under any Contractual Obligation of Company or any of
its Subsidiaries; result in or require the creation or imposition of any Lien
upon any of the properties or assets of Company or any of its Subsidiaries
(other than any Liens created under any of the Credit Documents in favor of
Collateral Agent for the benefit of the Agents and the Lenders (the "SECURED
PARTIES")); or require any approval of stockholders or any approval or consent
of any Person under any Contractual Obligation of Company or any of its
Subsidiaries, except for such approvals or consents which will be obtained on or
before the Closing Date and disclosed in writing to Lenders, or as otherwise set
forth in the Credit Agreement.
3. The execution, delivery and performance by Credit Parties of the
Credit Documents to which they are parties and the consummation of the
transactions contemplated by the Credit Documents do not and will not require
any registration with, consent or approval of, or notice to, or other action to,
with or by, any federal, state or other governmental authority or regulatory
body except as otherwise set forth in the Credit Agreement, and except for
filings and recordings with respect to the Collateral to be made, or otherwise
delivered to Collateral Agent, as of the Closing Date.
EXHIBIT D-1
4. Each Credit Document has been duly executed and delivered by each
Credit Party that is a party thereto and is the legally valid and binding
obligation of such Credit Party, enforceable against such Credit Party in
accordance with its respective terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or limiting
creditors' rights generally or by equitable principles relating to
enforceability.
5. Neither Company nor any of its Subsidiaries is subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act or the Investment Company Act of 1940 or under any other
federal or state statute or regulation which may limit its ability to incur
Indebtedness or which may otherwise render all or any portion of the Obligations
unenforceable.
6. Neither Company nor any of its Subsidiaries is engaged principally,
or as one of its important activities, in the business of extending credit for
the purpose of purchasing or carrying any Margin Stock. The pledge of the
Investment Property Collateral pursuant the Pledge and Security Agreement does
not violate Regulation T, U or X of the Board of Governors of the Federal
Reserve System.
Opinions with respect to the Credit Documents may be subject to the
following qualifications:
(i) enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally and by general principles of equity
(regardless of whether enforcement is sought in equity or at law);
(ii) certain of the remedial provisions, including
waivers, with respect to the exercise of remedies contained in the
Credit Documents may be unenforceable in whole or in part, but the
inclusion of such provisions does not affect the validity of any Credit
Document, taken as a whole; and
(iii) counsel may assume that each Credit Document
constitutes the legal, valid and binding obligation of each party to
such agreement (other than Company and each other Credit Party)
enforceable against each such party (other than Company or any other
Credit Party ) in accordance with its terms.
B. COLLATERAL OPINIONS
As required pursuant to the Pledge and Security Agreement.
EXHIBIT D-2
EXHIBIT E TO
CREDIT AND GUARANTY AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement (the "Assignment") is dated as
of the Effective Date set forth below and is entered into by and between [Insert
name of Assignor] (the "Assignor") and [Insert name of Assignee] (the
"Assignee"). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (as amended, the
"Credit Agreement"), receipt of a copy of which is hereby acknowledged by the
Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto
are hereby agreed to and incorporated herein by reference and made a part of
this Assignment as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably
sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases
and assumes from the Assignor, subject to and in accordance with the Standard
Terms and Conditions and the Credit Agreement, as of the Effective Date inserted
by the Administrative Agent as contemplated below, (i) all of the Assignor's
rights and obligations in its capacity as a Lender under the Credit Agreement
and any other documents or instruments delivered pursuant thereto to the extent
related to the amount and percentage interest identified below of all of such
outstanding rights and obligations of the Assignor under the respective
facilities identified below (including without limitation any letters of credit,
guarantees, and swingline loans included in such facilities) and (ii) to the
extent permitted to be assigned under applicable law, all claims, suits, causes
of action and any other right of the Assignor (in its capacity as a Lender)
against any Person, whether known or unknown, arising under or in connection
with the Credit Agreement, any other documents or instruments delivered pursuant
thereto or the loan transactions governed thereby or in any way based on or
related to any of the foregoing, including, but not limited to, contract claims,
tort claims, malpractice claims, statutory claims and all other claims at law or
in equity related to the rights and obligations sold and assigned pursuant to
clause (i) above (the rights and obligations sold and assigned pursuant to
clauses (i) and (ii) above being referred too herein collectively as, the
"ASSIGNED INTEREST"). Such sale and assignment is without recourse to the
Assignor and, except as expressly provided in this Assignment and the Credit
Agreement, without representation or warranty by the Assignor.
1. Assignor: ______________________
2. Assignee: ______________________ [and is an
Affiliate/Related Fund]
3. Borrower: Mariner Health Care, Inc.
4. Administrative Agent: Canadian Imperial Bank of Commerce, as the
administrative agent under the Credit Agreement
EXHIBIT E-1
5. Credit Agreement: The $225,000,000 Senior Secured Credit and
Guaranty Agreement dated as of December 19,
2003 (as it may be amended, restated,
supplemented or otherwise modified, the "CREDIT
AGREEMENT"; the terms defined therein and not
otherwise defined herein being used herein as
therein defined), by and among MARINER HEALTH
CARE, INC. (the "COMPANY"), certain
Subsidiaries of Company, as Guarantors, the
Lenders party thereto from time to time, CIBC
WORLD MARKETS CORP., as a Joint Lead Arranger,
▇.▇. ▇▇▇▇▇▇ SECURITIES INC., as a Joint Lead
Arranger, ▇▇▇▇▇▇ BROTHERS INC., as a Joint Lead
Arranger, ▇▇▇▇▇▇ COMMERCIAL PAPER INC. and
JPMORGAN CHASE BANK, as Co-Syndication Agents,
CITICORP NORTH AMERICA, INC. and GENERAL
ELECTRIC CAPITAL CORPORATION, as
Co-Documentation Agents, and CANADIAN IMPERIAL
BANK OF COMMERCE, as Administrative Agent, as
Collateral Agent, and as Swing Line Lender.
6. Assigned Interest:
Aggregate Amount of Amount of
Commitment/Loans Commitment/Loans Percentage Assigned of
Facility Assigned for all Lenders(1) Assigned Commitment/Loans(2)
-----------------------------------------------------------------------------------------------------
Term Loan $______________ $______________ ____________%
-----------------------------------------------------------------------------------------------------
Revolving Loan $______________ $______________ ____________%
-----------------------------------------------------------------------------------------------------
Swing Line Loan $______________ $______________ ____________%
-----------------------------------------------------------------------------------------------------
[7. Trade Date: _________________](4)
Effective Date: ______________, 20__ [TO BE INSERTED BY ADMINISTRATIVE AGENT AND
WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]
----------------------------
(1) Amount to be adjusted by the counterparties to take into account any
payments or prepayments made between the Trade Date and the Effective
Date.
(2) Set forth, to at least 9 decimals, as a percentage of the
Commitment/Loans of all Lenders thereunder
512082-New York Server 1A EXHIBIT E-2
The terms set forth in this Assignment are hereby agreed to:
ASSIGNOR
[NAME OF ASSIGNOR]
By:_______________________
Title:
ASSIGNEE
--------
[NAME OF ASSIGNEE]
By:_______________________
Title:
[Consented to and(3) Accepted:
CANADIAN IMPERIAL BANK OF COMMERCE, as
Administrative Agent
By:_______________________
Title:
[Consented to:](4)
MARINER HEALTH CARE, INC.
By:_______________________
Title:
---------------------------------
3 To be added only if the consent of the Administrative Agent is required
by the terms of the Credit Agreement.
(4) To be added only if the consent of the Company is required by the terms
of the Credit Agreement
EXHIBIT ▇-▇
▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ AND CONDITIONS FOR ASSIGNMENT
AND ASSUMPTION AGREEMENT
1. Representations and Warranties.
1.1 Assignor. The Assignor (a) represents and warrants
that (i) it is the legal and beneficial owner of the
Assigned Interest, (ii) the Assigned Interest is free
and clear of any lien, encumbrance or other adverse
claim and (iii) it has full power and authority, and
has taken all action necessary, to execute and
deliver this Assignment and to consummate the
transactions contemplated hereby; and (b) assumes no
responsibility with respect to (i) any statements,
warranties or representations made in or in
connection with the Credit Agreement or any Credit
Document, (ii) the execution, legality, validity,
enforceability, genuineness, sufficiency or value of
Credit Documents, or any collateral thereunder, (iii)
the financial condition of Company, any of its
Subsidiaries or Affiliates or any other Person
obligated in respect of any Credit Document or (iv)
the performance or observance by Company, any of its
Subsidiaries or Affiliates or any other Person of any
of their respective obligations under any Credit
Document.
1.2 Assignee. The Assignee (a) represents and warrants
that (i) it has full power and authority, and has
taken all action necessary, to execute and deliver
this Assignment and to consummate the transactions
contemplated hereby and to become a Lender under the
Credit Agreement, (ii) it meets all requirements of
an Eligible Assignee under the Credit Agreement
(subject to receipt of such consents as may be
required under the Credit Agreement), (iii) from and
after the Effective Date, it shall be bound by the
provisions of the Credit Agreement as a Lender
thereunder and, to the extent of the Assigned
Interest, shall have the obligations of a Lender
thereunder, (iv) it has received a copy of the Credit
Agreement together with copies of the most recent
financial statements delivered pursuant to Section
5.1 thereof, as applicable, and such other documents
and information as it has deemed appropriate to make
its own credit analysis and decision to enter into
this Assignment and to purchase the Assigned Interest
on the basis of which it has made such analysis and
decision independently and without reliance on the
Administrative Agent or any other Lender, and (v) if
it is a Non-US Lender, attached to the Assignment is
any documentation required to be delivered by it
pursuant to the terms
EXHIBIT E-4
of the Credit Agreement, duly completed and executed
by the Assignee; and (b) agrees that (i) it will,
independently and without reliance on the
Administrative Agent, the Assignor or any other
Lender, and based on such documents and information
as it shall deem appropriate at that time, continue
to make its own credit decisions in taking or not
taking action under the Credit Documents, and (ii) it
will perform in accordance with their terms all of
the obligations which by the terms of the Credit
Documents are required to be performed by it as a
Lender.
2. Payments. From and after the Effective Date, the
Administrative Agent shall make all payments in respect of the
Assigned Interest (including payments of principal, interest,
fees and other amounts) to the Assignor for amounts which have
accrued to but excluding the Effective Date and to the
Assignee for amounts which have accrued from and after the
Effective Date.
3. General Provisions. This Assignment shall be binding upon, and
inure to the benefit of, the parties hereto and their
respective successors and assigns. This Assignment may be
executed in any number of counterparts, which together shall
constitute one instrument. Delivery of an executed counterpart
of a signature page of this Assignment by telecopy shall be
effective as delivery of a manually executed counterpart of
this Assignment. This Assignment shall be governed by, and
construed in accordance with, the internal laws of the State
of New York.
EXHIBIT E-5
EXHIBIT F TO
CREDIT AND GUARANTY AGREEMENT
CERTIFICATE RE NON-BANK STATUS
Reference is made to the Credit and Guaranty Agreement, dated as of
December 19, 2003 (as it may be amended, restated, supplemented or otherwise
modified, the "CREDIT AGREEMENT"; the terms defined therein and not otherwise
defined herein being used herein as therein defined), by and among MARINER
HEALTH CARE, INC. (the "COMPANY"), certain Subsidiaries of Company, as
Guarantors, the Lenders party thereto from time to time, CIBC WORLD MARKETS
CORP., as a Joint Lead Arranger, ▇.▇. ▇▇▇▇▇▇ SECURITIES INC., as a Joint Lead
Arranger, ▇▇▇▇▇▇ BROTHERS INC., as a Joint Lead Arranger, ▇▇▇▇▇▇ COMMERCIAL
PAPER INC. and JPMORGAN CHASE BANK, as Co-Syndication Agents, CITICORP NORTH
AMERICA, INC. and GENERAL ELECTRIC CAPITAL CORPORATION, as Co-Documentation
Agents, and CANADIAN IMPERIAL BANK OF COMMERCE, as Administrative Agent, as
Collateral Agent, and as Swing Line Lender. Pursuant to Section 2.20(c) of the
Credit Agreement, the undersigned hereby certifies that it is not a "bank" or
other Person described in Section 881(c)(3) of the Internal Revenue Code of
1986, as amended.
[NAME OF LENDER]
By:___________________________
Name:
Title:
EXHIBIT F-1
EXHIBIT G-1 TO
CREDIT AND GUARANTY AGREEMENT
CLOSING DATE CERTIFICATE
THE UNDERSIGNED HEREBY CERTIFY AS FOLLOWS:
1. We are the chief executive officer and the chief financial officer
of MARINER HEALTH CARE, INC., a Delaware corporation ("COMPANY").
2. Pursuant to Section 2.1 of the Credit and Guaranty Agreement, dated
as of the date hereof it may be amended, restated, supplemented or otherwise
modified, the "CREDIT AGREEMENT"; the terms defined therein and not otherwise
defined herein being used herein as therein defined), by and among Company,
certain Subsidiaries of Company, as Guarantors, the Lenders party thereto from
time to time, CIBC WORLD MARKETS CORP., as a Joint Lead Arranger, ▇.▇. ▇▇▇▇▇▇
SECURITIES INC., as a Joint Lead Arranger, ▇▇▇▇▇▇ BROTHERS INC., as a Joint Lead
Arranger, ▇▇▇▇▇▇ COMMERCIAL PAPER INC. and JPMORGAN CHASE BANK, as
Co-Syndication Agents, CITICORP NORTH AMERICA, INC. and GENERAL ELECTRIC CAPITAL
CORPORATION, as Co-Documentation Agents, and CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent, as Collateral Agent, and as Swing Line Lender, Company
requests that Lenders make the following Loans to Company on December 19, 2003
(the "CLOSING DATE"):
Tranche B Term Loans: $135,000,000.
3. We have reviewed the terms of Section 3 of the Credit Agreement and
the definitions and provisions contained in such Credit Agreement relating
thereto, and in our opinion we have made, or have caused to be made under our
supervision, such examination or investigation as is necessary to enable us to
express an informed opinion as to the matters referred to herein.
4. Based upon our review and examination described in paragraph (3)
above, we certify, on behalf of Company, that as of the date hereof:
(i) as of the Closing Date, the representations and
warranties contained in each of the Credit Documents are true and
correct in all respects on and as of the Closing Date to the same
extent as though made on and as of such date, except to the extent such
representations and warranties specifically relate to an earlier date,
in which case such representations and warranties are true and correct
in all respects on and as of such earlier date;
(ii) as of the Closing Date, no injunction or other
restraining order has been issued and remains in effect and no hearing
to cause an injunction or
EXHIBIT G-1-1
other restraining order to be issued is pending or noticed with respect
to any action, suit or proceeding seeking to enjoin or otherwise
prevent the consummation of, or to recover any damages or obtain relief
as a result of, the borrowing contemplated hereby;
(iii) as of the Closing Date, no event has occurred and is
continuing or would result from the consummation of the borrowing
contemplated hereby that would constitute an Event of Default or a
Default;
(iv) all governmental and third party approvals necessary
or reasonably advisable (in the Administrative Agent's judgment in
connection with the financing and transactions contemplated in the
Credit Agreement or otherwise referred to therein, including the Loans,
and the continuing operations of Company and its Subsidiaries, have
been obtained and are in full force and effect, and all applicable
waiting periods have expired without any action being taken or
threatened by any competent authority, which without limitation, would
restrain, prevent or otherwise impose adverse conditions on the
transactions contemplated by the Credit Documents and no action request
for stay, petition for review or rehearing, reconsideration, or appeal
with respect to the foregoing shall be pending, and the time for any
applicable agency to take action to set aside its consent on its own
motion shall have expired;
(v) Company has issued the Senior Subordinated Notes in
the aggregate principal amount of not less than $175,000,000 pursuant
to the Senior Subordinated Note Indenture;
(vi) after giving effect to the application of the
proceeds of the Senior Subordinated Notes ad of the Tranche B Term
Loans, the Existing Facility and the Rollover Notes (i) will have been
repaid in full, (ii) any commitments to lend or make other extensions
of credit thereunder will have been terminated, (iii) all documents or
instruments necessary to release all Liens securing other obligations
of Company and its Subsidiaries thereunder being repaid on the Closing
Date will have been delivered to the Administrative Agent, and (iv)
arrangements satisfactory to the Administrative Agent with respect to
cancellation or cash-collateralization of any letters of credit
outstanding thereunder or the issuance of Letters of Credit to support
the obligations of Company and its Subsidiaries with respect thereto
have been made.
(vii) The Florida Divestitures, the Louisiana Divestitures
and the Tampa Divestiture have been consummated.
(viii) as of the Closing Date, except as set forth on
Schedule 3.1(h) to the Credit Agreement, during the last twenty-four
(24) months, no
EXHIBIT G-1-2
Credit Party nor any Subsidiary of a Credit Party has been notified by
JCAHO or any relevant Governmental Authority or other Person with
respect to any Health Care Permit, any Reimbursement Approval necessary
to operate its business as currently being conducted, of such
Governmental Authority's or other Person's actual revocation,
suspension, termination, rescission, or non-renewal, such Health Care
Permit, Reimbursement Approval;
5. Attached hereto as Annex A (or previously delivered to the
Administrative Agent) are true and complete (and, where applicable, executed and
conformed) copies of each of the Related Agreements, and all other documents
evidencing Indebtedness and Liens existing as of Closing Date and permitted
pursuant to Section 6.1(h) or 6.2(o) of the Credit Agreement and we have
reviewed the terms of each of such documents and in our opinion we have made, or
have caused to be made under our supervision, such examination or investigation
as is necessary to enable us to express an informed opinion as to the matters
referred to in paragraph (4).
6. Each Credit Party has requested Powell, Goldstein, ▇▇▇▇▇▇ & ▇▇▇▇▇▇
LLP, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, P.A., ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLP, Fraser, Trebilcock, ▇▇▇▇▇ & ▇▇▇▇▇▇, Real Estate Law
Group, LLP, Miles, McLaren & ▇▇▇▇▇▇, P.C., Ober, Kaler, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ & Eager PLLC, The ▇▇▇▇▇▇ Law Firm and ▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ to deliver
to Agents and Lenders on the Closing Date favorable written opinions setting
forth substantially the matters in the opinions designated in Exhibit D annexed
to the Credit Agreement, and as to such other matters as Administrative Agent
may reasonably request.
7. Attached hereto as Annex B are true, complete and correct copies of
(a) the Historical Financial Statements, (b) pro forma consolidated balance
sheets of Company and its consolidated Subsidiaries as at the Closing Date plus
the separate, consolidated balance sheet of the PHCMI Group Members as at the
Closing Date, and reflecting the consummation of the other transactions
contemplated by the Credit Documents to occur on or prior to the Closing Date,
which pro forma financial statements shall be in form and substance satisfactory
to Lenders, and (c) the Projections.
[Remainder of page intentionally left blank.]
EXHIBIT G-1-3
The foregoing certifications are made and delivered as of December 19,
2003.
MARINER HEALTH CARE, INC.
________________________________
Title: Chief Executive Officer
________________________________
Title: Chief Financial Officer
EXHIBIT G-1-4
ANNEX A
[Related Agreements, Evidence of Indebtedness
and Liens, and Material Contracts]
EXHIBIT G-1-5
ANNEX B
[Historical Financial Statements, pro forma
consolidated balance sheets, consolidated balance
sheet of the PHCMI Group Members]
EXHIBIT G-1-6
ANNEX D
CERTIFICATE OF ASSISTANT SECRETARY
I, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, hereby certify that I am the Assistant
Secretary of Mariner Health Care, Inc., a Delaware corporation (the "Company"),
and each of the entities listed on Schedule A (the "Guarantors" and together
with Company, the "Credit Parties") and do hereby further certify that:
(a) Attached hereto as Exhibit A are true, complete and
correct copies of the certificates of incorporation and bylaws, certificates of
limited partnership, partnership agreements, articles of organization and
operating agreements, as the case may be, and as amended in each case (the
"Articles") of each of the Credit Parties, certified by the secretary of state
or similar appropriate government official of the state of organization of each
Credit Party (the "Secretary of State's Certificate") or, if not filed with the
applicable Secretary of State, certified by the undersigned. Each of the
Articles has not been amended since the date of the last amendment thereto
indicated on such Secretary of State's Certificate (or for Articles not filed
with the applicable Secretary of State, since the date of the last amendment
attached hereto), and no action has been taken by any Credit Party or its
shareholders, directors, partners, members, managers or officers in
contemplation of the filing of any amendment to such Articles or the
dissolution, merger or consolidation of any of the Credit Parties and no
proceedings therefor have occurred.
(b) The resolutions of the Board of Directors or similar
governing bodies of the Credit Parties attached hereto as Exhibit B and
incorporated herein by this reference thereto, are true, correct and complete
copies of resolutions duly adopted by unanimous consent of all the members of
the Board of Directors or similar governing bodies of the Credit Parties and
that said resolutions are still in full force and effect and have not been
amended, supplemented, or otherwise modified or rescinded.
(c) The following named persons are the [Insert titles of
officers] of each of the Credit Parties, duly elected, qualified and acting as
such; that the signatures appearing opposite the names of such officers are
authentic and genuine and are, in fact, the signatures of such officers:
EXHIBIT G-1-7
NAME OFFICER SIGNATURE
---- ------- ---------
IN WITNESS WHEREOF, I have hereunto signed my name this [__]
day of December, 2003].
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Assistant Secretary
I, [__________], Senior Vice President and Treasurer of
Company, do hereby certify that ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ is the duly elected,
qualified and acting Assistant Secretary of Company, and that the signature of
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ set forth above is his true and genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name this 19th
day of December, 2003.
▇▇▇▇ ▇. ▇▇▇▇▇▇, Senior Vice President and
Treasurer
EXHIBIT G-1-8
EXHIBIT G-2 TO
CREDIT AND GUARANTY AGREEMENT
SOLVENCY CERTIFICATE
THE UNDERSIGNED HEREBY CERTIFIES AS FOLLOWS:
1. I am the chief financial officer of MARINER HEALTH CARE, INC., a
Delaware corporation ("COMPANY").
2. Reference is made to that certain Credit and Guaranty Agreement,
dated as of December 19, 2003 (as it may be amended, restated, supplemented or
otherwise modified, the "CREDIT AGREEMENT"; the terms defined therein and not
otherwise defined herein being used herein as therein defined), by and among
Company, certain Subsidiaries of Company, as Guarantors, the Lenders party
thereto from time to time, CIBC WORLD MARKETS CORP., as a Joint Lead Arranger,
▇.▇. ▇▇▇▇▇▇ SECURITIES INC., as a Joint Lead Arranger, ▇▇▇▇▇▇ BROTHERS INC., as
a Joint Lead Arranger, ▇▇▇▇▇▇ COMMERCIAL PAPER INC. and JPMORGAN CHASE BANK, as
Co-Syndication Agents, CITICORP NORTH AMERICA, INC. and GENERAL ELECTRIC CAPITAL
CORPORATION, as Co-Documentation Agents, and CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent, as Collateral Agent, and as Swing Line Lender.
3. I have reviewed the terms of Sections 3 and 4 of the Credit
Agreement and the definitions and provisions contained in the Credit Agreement
relating thereto, together with each of the Related Agreements, and, in my
opinion, have made, or have caused to be made under my supervision, such
examination or investigation as is necessary to enable me to express an informed
opinion as to the matters referred to herein.
4. Based upon my review and examination described in paragraph (3)
above, I certify that as of the date hereof, each Credit Party (other than any
Non-Material Guarantor Subsidiary, as to which no such certification is made) is
and will, after giving effect to the Funding of the Tranche B Term Loans and
other Credit Extensions on the Closing Date, be Solvent.
The foregoing certifications are made and delivered as of December 19,
2003.
_______________________________
Title: Chief Financial Officer
EXHIBIT G-2-1-
EXHIBIT H TO
CREDIT AND GUARANTY AGREEMENT
COUNTERPART AGREEMENT
This COUNTERPART AGREEMENT, dated [__________] (this "COUNTERPART
AGREEMENT") is delivered pursuant to that certain Credit and Guaranty Agreement,
dated as of December 19, 2003 (as it may be amended, restated, supplemented or
otherwise modified, the "CREDIT AGREEMENT"; the terms defined therein and not
otherwise defined herein being used herein as therein defined), by and among
MARINER HEALTH CARE, INC., a Delaware corporation (the "COMPANY"), certain
Subsidiaries of Company, as Guarantors, the Lenders party thereto from time to
time, CIBC WORLD MARKETS CORP., as a Joint Lead Arranger, ▇.▇. ▇▇▇▇▇▇ SECURITIES
INC., as a Joint Lead Arranger and, ▇▇▇▇▇▇ BROTHERS INC., as a Joint Lead
Arranger, ▇▇▇▇▇▇ COMMERCIAL PAPER INC. and JPMORGAN CHASE BANK, as
Co-Syndication Agents, CITICORP NORTH AMERICA, INC. and GENERAL ELECTRIC CAPITAL
CORPORATION, as Co-Documentation Agents, and CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent, as Collateral Agent, and as Swing Line Lender.
SECTION 1. Pursuant to Section 5.10 of the Credit Agreement, the
undersigned hereby:
(a) agrees that this Counterpart Agreement may be
attached to the Credit Agreement and that by the execution and delivery hereof,
the undersigned becomes a Guarantor under the Credit Agreement and agrees to be
bound by all of the terms thereof;
(b) represents and warrants that each of the
representations and warranties set forth in the Credit Agreement and each other
Credit Document and applicable to the undersigned is true and correct both
before and after giving effect to this Counterpart Agreement, except to the
extent that any such representation and warranty relates solely to any earlier
date (as to which no representation or warranty is made by the undersigned);
(c) no Default or Event of Default has occurred or is
continuing as of the date hereof, or will result from the transactions
contemplated hereby on the date hereof;
(d) agrees to irrevocably and unconditionally guaranty
the due and punctual payment in full of all Obligations when the same shall
become due, whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise (including amounts that would become due but
for the
EXHIBIT H-1
operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11
U.S.C. Section 362(a)) and in accordance with Section 7 of the Credit Agreement;
and
(e) the undersigned hereby (i) agrees that this
counterpart may be attached to the Pledge and Security Agreement, (ii) agrees
that the undersigned will comply with all the terms and conditions of the
Security Agreement as if it were an original signatory thereto, (iii) grants to
Secured Party (as such term is defined in the Pledge and Security Agreement) a
security interest in all of the undersigned's right, title and interest in and
to all "Collateral" (as such term is defined in the Pledge and Security
Agreement) of the undersigned, in each case whether now or hereafter existing or
in which the undersigned now has or hereafter acquires an interest and wherever
the same may be located and (iv) delivers to Collateral Agent supplements to all
schedules attached to the Pledge and Security Agreement. All such Collateral
shall be deemed to be part of the "Collateral" and hereafter subject to each of
the terms and conditions of the Pledge and Security Agreement.
SECTION 2. The undersigned agrees from time to time, upon
request of Administrative Agent, to take such additional actions and to execute
and deliver such additional documents and instruments as Administrative Agent
may reasonably request to effect the transactions contemplated by, and to carry
out the intent of, this Agreement. Neither this Agreement nor any term hereof
may be changed, waived, discharged or terminated, except by an instrument in
writing signed by the party (including, if applicable, any party required to
evidence its consent to or acceptance of this Agreement) against whom
enforcement of such change, waiver, discharge or termination is sought. Any
notice or other communication herein required or permitted to be given shall be
given in pursuant to Section 10.1 of the Credit Agreement, and all for purposes
thereof, the notice address of the undersigned shall be the address as set forth
on the signature page hereof. In case any provision in or obligation under this
Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby. This Agreement may be executed
in multiple counterparts, each of which shall be deemed an original, and all of
which together shall constitute one and the same document.
THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.
EXHIBIT H-2
IN WITNESS WHEREOF, the undersigned has caused this Counterpart
Agreement to be duly executed and delivered by its duly authorized officer as of
the date above first written.
[NAME OF SUBSIDIARY]
By:______________________
Name:
Title:
Address for Notices:
____________________
____________________
____________________
Attention:
Telecopier
with a copy to:
____________________
____________________
____________________
Attention:
Telecopier
ACKNOWLEDGED AND ACCEPTED,
as of the date above first written:
CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent and as Collateral Agent
By:_____________________
Name:
Title:
EXHIBIT H-3
EXHIBIT I TO
CREDIT AND GUARANTY AGREEMENT
PLEDGE AND SECURITY AGREEMENT
[Distributed Separately]
EXHIBIT I-1
EXHIBIT J TO
CREDIT AND GUARANTY AGREEMENT
MORTGAGE
[Distributed Separately]
EXHIBIT K TO
CREDIT AND GUARANTY AGREEMENT
LANDLORD CONSENT AND ESTOPPEL
[Distributed Separately]
EXHIBIT L TO
CREDIT AND GUARANTY AGREEMENT
JOINDER AGREEMENT
THIS JOINDER AGREEMENT, dated as of [__________ __, 200_]
(this "AGREEMENT"), by and among [NEW LENDERS] (each a "LENDER" and collectively
the "LENDERS"), MARINER HEALTH CARE, INC. (the "COMPANY"), certain Subsidiaries
of Company, as Guarantors, the Lenders party thereto from time to time, CIBC
WORLD MARKETS CORP. as a Joint Lead Arranger, ▇.▇. ▇▇▇▇▇▇ SECURITIES INC., as a
Joint Lead Arranger, ▇▇▇▇▇▇ BROTHERS INC., as a Joint Lead Arranger, ▇▇▇▇▇▇
COMMERCIAL PAPER INC. and JPMORGAN CHASE BANK, as Co-Syndication Agents,
CITICORP NORTH AMERICA, INC. and GENERAL ELECTRIC CAPITAL CORPORATION, as
Co-Documentation Agents, and CANADIAN IMPERIAL BANK OF COMMERCE, as
Administrative Agent, as Collateral Agent, and as Swing Line Lender.
RECITALS:
WHEREAS, reference is hereby made to the CREDIT AND GUARANTY
AGREEMENT, dated as of December 19, 2003 (as it may be amended, restated,
supplemented or otherwise modified from time to time, the "CREDIT AGREEMENT ";
the terms defined therein and not otherwise defined herein being used herein as
therein defined), by and among Company, the Guarantors, the Lenders party
thereto from time to time, CIBC WORLD MARKETS CORP. as a Joint Lead Arranger,
▇.▇. ▇▇▇▇▇▇ SECURITIES INC., as a Joint Lead Arranger, ▇▇▇▇▇▇ BROTHERS INC., as
a Joint Lead Arranger, ▇▇▇▇▇▇ COMMERCIAL PAPER INC. and JPMORGAN CHASE BANK, as
Co-Syndication Agents, CITICORP NORTH AMERICA, INC. and GENERAL ELECTRIC CAPITAL
CORPORATION, as Co-Documentation Agents, and CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent, as Collateral Agent, and as Swing Line Lender; and
WHEREAS, subject to the terms and conditions of the Credit
Agreement, Company may provide New Term Loan Commitments by entering into a
Joinder Agreement with the New Term Loan Lenders.
NOW, THEREFORE, in consideration of the premises and
agreements, provisions and covenants herein contained, the parties hereto agree
as follows:
Each Lender party hereto hereby agrees to commit to provide
its respective New Term Loan Commitment as set forth on Schedule A annexed
hereto, on the terms and subject to the conditions set forth below:
EXHIBIT L-1
Each Lender (i) confirms that it has received a copy of the
Credit Agreement and the other Credit Documents, together with copies of the
financial statements referred to therein and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Joinder Agreement (this "AGREEMENT"); (ii) agrees
that it will, independently and without reliance upon the Administrative Agent
or any other Lender or Agent and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Credit Agreement; (iii) appoints and
authorizes Administrative Agent and Collateral Agent to take such action as
agent on its behalf and to exercise such powers under the Credit Agreement and
the other Credit Documents as are delegated to Administrative Agent and
Collateral Agent, as the case may be, by the terms thereof, together with such
powers as are reasonably incidental thereto; and (iv) agrees that it will
perform in accordance with their terms all of the obligations which by the terms
of the Credit Agreement are required to be performed by it as a Lender.
Each Lender hereby agrees to make its New Term Loan Commitment
on the following terms and conditions:
1. APPLICABLE MARGIN. The Applicable Margin for the New Term Loan shall
mean, as of any date of determination, a percentage per annum as set
forth below plus the pricing premium, if any, less the pricing
reduction, if any, in each case as set forth below:
-----------------------------------------------------------
[__] NEW TERM LOANS
-----------------------------------------------------------
TOTAL LEASE
ADJUSTED EURODOLLAR BASE RATE
LEVERAGE RATIO RATE LOANS LOANS
-----------------------------------------------------------
____:____ % %
-----------------------------------------------------------
2. PRINCIPAL PAYMENTS. Company shall make principal payments on the New
Term Loans in installments on the dates and in the amounts (each, a
"NEW TERM LOAN INSTALLMENT") set forth below:
PAYMENT NEW TERM LOAN
DATE INSTALLMENT
-------------------------------------
$__________
$__________
EXHIBIT L-2
PAYMENT NEW TERM LOAN
DATE INSTALLMENT
-------------------------------------
$__________
$__________
$__________
$__________
$__________
$__________
$__________
$__________
$__________
$__________
$__________
$__________
TOTAL $__________
=====================================
EXHIBIT L-3
3. VOLUNTARY AND MANDATORY PREPAYMENTS. Scheduled installments of
principal on the New Term Loans set forth above shall be reduced in
connection with any voluntary or mandatory prepayments of the New Term
Loans in accordance with Sections 2.12, 2.13 and 2.14 of the Credit
Agreement.
4. PREPAYMENT FEES. Company agrees to pay to each New Term Loan Lender the
following prepayment fees, if any: [__________].
[INSERT OTHER ADDITIONAL PREPAYMENT PROVISIONS WITH RESPECT TO NEW TERM LOANS]
5. OTHER FEES. Company agrees to pay each New Term Loan Lender its Pro
Rata Share of an aggregate fee equal to [________ __, ____] on
[_________ __, ____].
6. PROPOSED BORROWING. This Agreement represents Borrower's request to
borrow New Term Loan] from New Term Loan Lender as follows (the
"PROPOSED BORROWING"):
a. Increased Amount Date:___________, ____
b. Amount of Proposed Borrowing: $___________________
c. Interest rate option: [ ] a. Base Rate Loan(s)
[ ] b. Eurodollar Rate Loans
with an initial Interest
Period of ____ month(s)
7. [NEW LENDERS. Each New Term Loan Lender acknowledges and agrees that
upon its execution of this Agreement and the making of New Term Loans,
that such New Term Loan Lender shall become a "Lender" under, and for
all purposes of, the Credit Agreement and the other Credit Documents,
and shall be subject to and bound by the terms thereof, and shall
perform all the obligations of and shall have all rights of a Lender
thereunder.][***************(1)]
8. CREDIT AGREEMENT GOVERNS. Except as set forth in this Agreement, the
New Term Loans shall otherwise be subject to the provisions of the
Credit Agreement and the other Credit Documents.
9. COMPANY'S CERTIFICATIONS. By its execution of this Agreement, the
undersigned officer, to the best of his or her knowledge, and Company
hereby certify that:
i. As of the Increased Amount Date, the representations
and warranties contained in the Credit Agreement and
the other Credit
-----------------------
(1) Insert bracketed language if the lending institution is not already a
Lender.
Documents are true and correct in all material
respects on and as of the Increased Amount Date to
the same extent as though made on and as of the date
hereof, except to the extent such representations and
warranties specifically relate to an earlier date, in
which case such representations and warranties were
true and correct in all material respects on and as
of such earlier date;
ii. As of the Increased Amount Date, no Event of Default
or Default has occurred and is continuing or would
result from the consummation of the Proposed
Borrowing; and
iii. As of the Increased Amount Date, the Leverage Ratios
set forth in Section 6.8 of the Credit Agreement
determined as of such date after giving pro forma
effect to the Proposed Borrowing shall not exceed the
maximum Leverage Ratios permitted as of the last day
of the immediately preceding Fiscal Quarter pursuant
to Section 6.8; and
iv. The proceeds of the New Term Loans shall immediately
be used to within one (1) Business Day after the
Increased Amount Date, [together with other Cash of
Company or the PHCMI Group Members]2, solely to,
repay the Omega Loan and related interest, fees and
expenses in full and Company has complied with its
obligations in the respect of the PHCMI Group Members
pursuant to Section 5.10.
v. Company and its Subsidiaries are in pro forma
compliance with each of the covenants set forth in
Section 6.8 as of the last day of the most recently
ended Fiscal Quarter after giving effect to such New
Term Loan Commitments and the use of proceeds
thereof.
10. COMPANY COVENANTS. By its execution of this Agreement, Company hereby
covenants that:
i. Company shall deliver or cause to be delivered the
following legal opinions and documents:
[___________], together with all other legal opinions
and other documents reasonably requested by
Administrative Agent in connection with this
Agreement; and
iii. Set forth on the attached Officers' Certificate are
the calculations (in reasonable detail) demonstrating
compliance with the financial tests described in
Section 6.8 of the Credit Agreement.
----------------------------
(2) Such Cash may be used only to the extent that after giving pro forma effect
to such Cash payment as of the last day of the most recently ended month,
Availability is at least $40,000,000.
▇▇▇▇▇▇▇ ▇-▇
▇▇. ▇▇▇▇▇▇▇▇ ASSIGNEE. By its execution of this Agreement, each New Term
Loan Lender represents and warrants that it is a Lender or other Person
that is an Eligible Assignee.
12. NOTICE. For purposes of the Credit Agreement, the initial notice
address of each New Term Loan Lender shall be as set forth below its
signature below.
13. NON-US LENDERS. For each New Term Loan Lender that is a Non-US Lender,
delivered herewith to Administrative Agent are such forms, certificates
or other evidence with respect to United States federal income tax
withholding matters as such New Term Loan Lender may be required to
deliver to Administrative Agent pursuant to subsection 2.20(c) of the
Credit Agreement.
14. RECORDATION OF THE NEW LOANS. Upon execution and delivery hereof,
Administrative Agent will record the New Term Loans made by New Term
Loan Lenders in the Register.
15. AMENDMENT, MODIFICATION AND WAIVER. This Agreement may not be amended,
modified or waived except by an instrument or instruments in writing
signed and delivered on behalf of each of the parties hereto.
16. ENTIRE AGREEMENT. This Agreement, the Credit Agreement and the other
Credit Documents constitute the entire agreement among the parties with
respect to the subject matter hereof and thereof and supersede all
other prior agreements and understandings, both written and verbal,
among the parties or any of them with respect to the subject matter
hereof.
17. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
18. SEVERABILITY. Any term or provision of this Agreement which is invalid
or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability
without rendering invalid or unenforceable the remaining terms and
provisions of this Agreement or affecting the validity or
enforceability of any of the terms or provisions of this Agreement in
any other jurisdiction. If any provision of this Agreement is so broad
as to be unenforceable, the provision shall be interpreted to be only
so broad as would be enforceable.
19. COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be deemed to be an original, but all of which shall
constitute one and the same agreement.
EXHIBIT L-3
IN WITNESS WHEREOF, each of the undersigned has caused its duly
authorized officer to execute and deliver this Joinder Agreement as of
[_____________, ______].
[NAME OF LENDER]
By:_____________________________
Name:
Title:
Notice Address:
Attention:
Telephone:
Facsimile:
MARINER HEALTH CARE, INC.
By:_____________________________
Name:
Title:
[GUARANTOR SUBSIDIARIES]
By:_____________________________
Name:
Title:
EXHIBIT L-4
CONSENTED TO BY:
CANADIAN IMPERIAL BANK OF COMMERCE
as Administrative Agent
By: _____________________________
Name:
Title:
EXHIBIT L-5
SCHEDULE A
TO JOINDER AGREEMENT
NAME OF LENDER TYPE OF COMMITMENT AMOUNT
--------------------------------------------------------------------------
[___________________] New Term Loan Commitment $_________________
Total: $__________
EXHIBIT L-6