EXHIBIT 10.2
SECOND AMENDED AND RESTATED
TERM LOAN AGREEMENT
by and among
TOTAL RENAL CARE HOLDINGS, INC.,
THE LENDERS PARTY HERETO,
DLJ CAPITAL FUNDING, INC.,
as Syndication Agent,
and
THE BANK OF NEW YORK,
as Administrative Agent
with
BNY CAPITAL MARKETS, INC. and DLJ CAPITAL FUNDING, INC.
as Co-Lead Arrangers,
Dated as of July 14, 2000
TABLE OF CONTENTS
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1. DEFINITIONS AND PRINCIPLES OF CONSTRUCTION........................ 1
1.1. Definitions.................................................... 1
1.2. Principles of Construction.....................................23
2. AMOUNT AND TERMS OF TERM LOANS....................................24
2.1. Term Loans.....................................................24
2.2. Term Notes.....................................................24
2.3. [Intentionally Omitted]........................................25
2.4. Prepayments of the Term Loans..................................25
2.5. Conversions and Continuations..................................29
2.6. Interest Rate and Payment Dates................................30
2.7. Substituted Interest Rate......................................32
2.8. Taxes..........................................................32
2.9. Illegality.....................................................35
2.10. Increased Costs...............................................35
2.11. Indemnification for Loss......................................36
2.12. Option to Fund................................................37
2.13. Use of Proceeds...............................................38
2.14. Capital Adequacy..............................................38
2.15. Administrative Agent's Records................................39
3. FEES; PAYMENTS....................................................39
3.1. Pro Rata Treatment and Application of Principal Payments.......39
4. REPRESENTATIONS AND WARRANTIES....................................39
4.1. Subsidiaries; Capitalization...................................39
4.2. Existence and Power............................................40
4.3. Authority......................................................40
4.4. Binding Agreement..............................................40
4.5. Litigation.....................................................41
4.6. Required Consents..............................................41
4.7. No Conflicting Agreements......................................41
4.8. Compliance with Applicable Laws................................41
4.9. Taxes..........................................................42
4.10. Governmental Regulations......................................42
4.11. Federal Reserve Regulations; Use of Proceeds..................42
4.12. Plans.........................................................43
4.13. Financial Statements..........................................43
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4.14. Property......................................................44
4.15. Franchises, Intellectual Property, Etc. ......................44
4.16. Environmental Matters.........................................44
4.17. Labor Relations...............................................45
4.18. Burdensome Obligations........................................45
4.19. Medicare Participation/Accreditation..........................45
4.20. Fraud and Abuse...............................................46
4.21. No Misrepresentation..........................................46
4.22. Subordinated Indebtedness.....................................47
4.23. Survival of Rights Created under Existing Term Agreement......47
5. CONDITIONS TO EFFECTIVENESS OF AGREEMENT..........................47
5.1. Evidence of Action.............................................47
5.2. This Agreement.................................................48
5.3. Subsidiary Guaranty............................................48
5.4. Security Agreement.............................................48
5.5. Intercreditor Agreement........................................49
5.6. Revolving Credit Facility......................................49
5.7. Litigation.....................................................49
5.8. Opinion of Counsel to the Credit Parties.......................49
5.9. Compliance Certificate.........................................50
5.10. Term Loan Prepayment..........................................50
5.11. Fees..........................................................50
5.12. Fees and Expenses of Steering Committee, Agents and
Special Counsel...............................................50
5.13. Documentation and Proceedings.................................50
5.14. Required Acts and Conditions..................................50
5.15. Approval of Special Counsel and Counsel to Syndication Agent..51
5.16. Other Documents...............................................51
5.17. Officers' Certificate Regarding Certain Conditions............51
6. [INTENTIONALLY OMITTED]...........................................51
7. AFFIRMATIVE COVENANTS.............................................51
7.1. Financial Statements...........................................52
7.2. Certificates; Other Information................................53
7.3. Legal Existence................................................55
7.4. Taxes..........................................................56
7.5. Insurance......................................................56
7.6. Payment of Indebtedness and Performance of Obligations.........57
7.7. Condition of Property..........................................58
7.8. Observance of Legal Requirements...............................58
7.9. Inspection of Property; Books and Records; Discussions.........58
7.10. Licenses, Intellectual Property...............................58
7.11. Additional Guarantors; Additional Collateral..................59
7.12. Interest Coverage Ratio.......................................59
7.13. Minimum Net Worth.............................................59
7.14. Minimum Consolidated EBITDA Ratio.............................60
7.15. Leverage Ratio................................................61
7.16. Asset Swap Transactions.......................................61
7.17. Cash Management...............................................62
7.18. Further Assurances............................................62
8. NEGATIVE COVENANTS................................................63
8.1. Indebtedness...................................................63
8.2. Liens..........................................................64
8.3. Merger, Consolidation and Certain Dispositions of Property....65
8.4. Restricted Payments............................................65
8.5. Investments, Loans, Etc........................................66
8.6. Business Change................................................68
8.7. Sale of Property...............................................69
8.8. Subsidiaries...................................................70
8.9. Amendments, Etc. of Certain Documents..........................70
8.10. ERISA.........................................................71
8.11. Acquisition or Issuance of Additional Stock...................71
8.12. Limitation on Upstream Dividends and Advances by Subsidiaries.72
8.13. Fiscal Year...................................................72
8.14. Transactions with Affiliates..................................72
8.15. Limitation on Permitted Acquisitions and Development
Capital Expenditures..........................................73
8.16. Maintenance Capital Expenditures..............................74
8.17. Non-Wholly-Owned Subsidiaries.................................74
9. DEFAULT...........................................................74
9.1. Events of Default..............................................74
10. THE ADMINISTRATIVE AGENT.........................................78
10.1. Appointment...................................................78
10.2. Delegation of Duties..........................................78
10.3. Exculpatory Provisions........................................78
10.4. Reliance by Administrative Agent..............................79
10.5. Notice of Default.............................................79
10.6. Non-Reliance on Administrative Agent and Other Lenders........80
10.7. Indemnification...............................................80
10.8. Administrative Agent in Its Individual Capacity...............81
10.9. Successor Administrative Agent................................81
10.10. Appointment of Collateral Agent..............................81
10.11. The Co-Arrangers.............................................82
10.12. The Syndication Agent........................................82
11. OTHER PROVISIONS.................................................82
11.1. Amendments and Waivers........................................82
11.2. Notices.......................................................83
11.3. No Waiver; Cumulative Remedies................................84
11.4. Survival of Representations and Warranties....................85
11.5. Payment of Expenses and Taxes.................................85
11.6. Lending Offices...............................................86
11.7. Assignments and Participations................................86
11.8. Counterparts; Effectiveness...................................88
11.9. Adjustments; Set-off..........................................89
11.10. Construction.................................................90
11.11. Indemnity....................................................90
11.12. GOVERNING LAW................................................91
11.13. Headings Descriptive.........................................91
11.14. Severability.................................................91
11.15. Integration..................................................91
11.16. Consent to Jurisdiction......................................91
11.17. Service of Process...........................................92
11.18. No Limitation on Service or Suit.............................92
11.19. [Intentionally Omitted]......................................92
11.20. WAIVER OF TRIAL BY JURY......................................92
11.21. Treatment of Confidential Information........................93
11.22. Designation as Designated Senior Indebtedness................93
11.23. Waiver of Past Defaults and Events of Default................93
EXHIBITS
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Exhibit A List of Commitments
Exhibit B Form of Term Note
Exhibit C Form of Compliance Certificate
Exhibit D Form of Assignment and Acceptance Agreement
Exhibit E-1 Form of Opinion of general counsel to Credit Parties
Exhibit E-2 Form of Opinion of special counsel to Credit Parties
Exhibit F Form of Notice of Conversion/Continuation
Exhibit G List of Agent Payment Offices
Exhibit H Form of Intercreditor Agreement
Exhibit I Form of Security Agreement
Exhibit J Form of Subsidiary Guaranty
SCHEDULES
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Schedule 1.1 List of Lending Offices
Schedule 1.1(P) List of Excluded Pension Plans
Schedule 1.1(S) List of Scheduled Existing Deferred Payment Obligations
Schedule 4.1 List of Subsidiaries; Capitalization
Schedule 4.5 List of Litigation
Schedule 4.9 List of Taxes
Schedule 4.12 List of Existing Pension Plans
Schedule 4.19 List of Exceptions to Medicare/Medicaid Participation
Schedule 7.17 Cash Management and Collateral Program
Schedule 8.1 List of Existing Indebtedness
Schedule 8.2 List of Existing Liens
Schedule 8.5 List of Existing Investments
SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT, dated as of July 14,
2000, by and among TOTAL RENAL CARE HOLDINGS, INC., a Delaware corporation (the
"Borrower"), the lenders party hereto (together with their respective successors
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and assigns, the "Lenders", each a "Lender"), DLJ CAPITAL FUNDING, INC., as
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syndication agent (the "Syndication Agent") and THE BANK OF NEW YORK, as
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administrative agent for the Lenders (in such capacity, the "Administrative
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Agent") (the "Agreement").
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PRELIMINARY STATEMENTS
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A. The Borrower, the Lenders (or their predecessors), the Syndication
Agent and the Administrative Agent have heretofore entered into that certain
Amended and Restated Term Loan Agreement, dated as of April 30, 1998, as amended
by the First Amendment, dated as of August 5, 1998, the Limited Waiver and
Second Amendment, dated as of August 9, 1999, and the Limited Waiver and Third
Amendment, dated as of November 8, 1999 (as so amended, the "Existing Term Loan
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Agreement").
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B. The Borrower, the Lenders, the Syndication Agent and the
Administrative Agent desire to amend and restate the Existing Term Loan
Agreement in its entirety.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the Borrower, the Lenders, the
Syndication Agent and the Administrative Agent agree that the Existing Term Loan
Agreement shall be amended and restated, without novation, as follows:
1. DEFINITIONS AND PRINCIPLES OF CONSTRUCTION
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1.1. Definitions
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As used in this Agreement, terms defined in the preamble have the
meanings therein indicated, and the following terms have the following meanings:
"ABR Advances": the Term Loans (or any portions thereof) at such time
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as they (or such portions) are made and/or being maintained in Dollars at a rate
of interest based upon the Alternate Base Rate.
"Accountants": PriceWaterhouseCoopers LLP (or any successor thereto),
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or such other firm of certified public accountants of recognized national
standing selected by the Borrower.
"Accumulated Funding Deficiency": as defined in Section 302 of ERISA.
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"Acquisition": the acquisition by the Borrower or any Subsidiary of
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the Borrower of 50% or more of the capital Stock of or other equity interests in
another Person, whether by purchase, merger, consolidation or otherwise (such
that, after giving effect thereto, such Person shall qualify as a Subsidiary of
the Borrower), or substantially all of the assets of another Person,
1
or the assets comprising a division or line of business of another Person, or
one or more facilities of an ESRD-Related Business.
"Additional Guarantor Event": any time when any Person that is not a
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Guarantor becomes a wholly-owned Domestic Subsidiary of the Borrower after the
Effective Date.
"Adjusted Net Cash Proceeds": with respect to any Asset Sale as of any
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date of determination, the amount equal to the difference between (i) the Net
Cash Proceeds from such Asset Sale that have not been previously applied to the
prepayment of the Term Loans and the Revolving Credit Loans pursuant to Section
2.4(f)(i) hereof and Section 2.7(f)(i) of the Revolving Credit Facility, and
(ii) the Reinvested Proceeds in connection with such Asset Sale that have been
used prior to the date prepayment is required to be made under Section
2.4(f)(ii).
"Advance": an ABR Advance or a Eurodollar Advance, as the case may be.
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"Affected Advance": as defined in Section 2.7.
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"Affected Principal Amount": in the event that (i) the Borrower shall
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fail for any reason to borrow, convert or continue after it shall have notified
the Administrative Agent of its intent to do so in any instance in which it
shall have requested a Eurodollar Advance, an amount equal to the principal
amount of such Eurodollar Advance; (ii) a Eurodollar Advance shall terminate for
any reason prior to the last day of the Interest Period applicable thereto, an
amount equal to the principal amount of such Eurodollar Advance; and (iii) the
Borrower shall prepay or repay all or any part of the principal amount of a
Eurodollar Advance prior to the last day of the Interest Period applicable
thereto, an amount equal to the principal amount of such Eurodollar Advance so
prepaid or repaid.
"Affiliate": as to any Person, any other Person that, directly or
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indirectly, is in control of, is controlled by, or is under common control with,
such Person. For purposes of this definition, control of a Person shall mean
the power, direct or indirect, (i) to vote 20% or more of the securities or
other interests having ordinary voting power for the election of directors or
other managing Persons thereof or (ii) to direct or cause the direction of the
management and policies of such Person, whether by contract or otherwise.
"Affiliate Transaction": as defined in Section 8.14.
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"Agent Payment Office": with respect to all amounts owing under the
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Loan Documents, initially, the office, branch, affiliate, or correspondent bank
of the Administrative Agent designated as its "Domestic Payment Office" in
Exhibit G and, thereafter, such other office, branch, affiliate, or
correspondent bank thereof as it may from time to time designate in writing as
such to the Borrower and each Lender.
"Aggregate Credit Exposure": at any time, the sum at such time of the
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Credit Exposures of all Lenders.
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"Aggregate Revolving Credit Commitments": as defined in the Revolving
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Credit Facility.
"Agreement": this Second Amended and Restated Term Loan Agreement, as
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the same may be amended, supplemented or otherwise modified from time to time.
"Alternate Base Rate": on any date, a rate of interest per annum equal
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to the higher of (i) the Federal Funds Rate in effect on such date plus 1/2 of
1% or (ii) the BNY Rate in effect on such date.
"Ancillary Services": services relating to the needs of patients with
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"End Stage Renal Disease" and ancillary to the provision of Dialysis Services,
including, but not limited to, the administration of erythropoietin,
intradialytic parenteral nutrition, bone densimetry studies, EKGs, nerve
conduction studies, Doppler Flow Testing, blood transfusions, pharmacy and
laboratory services, technical services with respect to equipment used in
connection with the provision of Dialysis Services and management services with
respect to the provision of Dialysis Services.
"Applicable Lending Office": in respect of any Lender, (i) in the case
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of such Lender's ABR Advances, its Domestic Lending Office and (ii) in the case
of such Lender's Eurodollar Advances, its Eurodollar Lending Office.
"Applicable Margin": at all times (i) 3.75% with respect to the unpaid
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principal amount of Eurodollar Advances and (ii) 2.50% with respect to the
unpaid principal amount of ABR Advances.
"Approved Fund": with respect to any Lender that is a fund that
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invests in commercial loans, any other fund that invests in commercial loans and
is advised or managed by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
"Asset Sale": any direct or indirect sale, issuance, conveyance,
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transfer, lease (other than operating leases entered into in the ordinary course
of business), assignment or other transfer for value by the Borrower or any of
its Subsidiaries (including any sale and leaseback transaction) to any Person of
(a) any capital Stock of any Subsidiary of the Borrower, or (b) any other
Property or assets of the Borrower or any Subsidiary of the Borrower other than
in the ordinary course of business; provided that Asset Sales shall not include
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(i) any transfer of Property or assets in connection with a dividend to holders
of capital Stock if such payment is permitted by Section 8.4, (ii) the granting
of Permitted Liens, (iii) a merger permitted under Section 8.3, (iv) the sale or
other disposition of Cash Equivalents or inventory in the ordinary course of
business or obsolete equipment in the ordinary course of business consistent
with past practices of the Borrower or (v) the lease or sublease of any real or
personal property in the ordinary course of business (provided that, for
purposes of this definition, "ordinary course of business" shall not include the
sale or disposition of any Subsidiary of the Borrower, any ESRD-Related Business
or any interest therein).
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"Asset Sales Application Method": With respect to the prepayment of
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the Term Loans required pursuant to Section 2.4(f) (each, a "Required Asset Sale
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Prepayment"), with respect to any Asset Sale (other than the Puerto Rico Asset
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Sale), such Required Asset Sale Prepayment shall be applied to the remaining
Mandatory Scheduled Prepayments as follows: first, pro rata among each of the
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remaining Mandatory Scheduled Prepayments scheduled through and including
December 31, 2002 (each a "Remaining Group I Mandatory Scheduled Prepayment") in
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an amount equal to such Required Asset Sale Prepayment multiplied by a fraction,
the numerator of which is the amount of such Remaining Group I Mandatory
Scheduled Prepayment (as in effect on the Effective Date) and the denominator of
which is the aggregate of all Remaining Group I Mandatory Scheduled Prepayments
(as in effect on the Effective Date), and, second, after payment in full of the
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Remaining Group I Mandatory Scheduled Prepayments, pro rata among each of the
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remaining Mandatory Scheduled Prepayments scheduled through and including the
Maturity Date (each, a "Remaining Group II Mandatory Scheduled Prepayment") in
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an amount equal to such Required Asset Sale Prepayment multiplied by a fraction,
the numerator of which is the amount of such Remaining Group II Mandatory
Scheduled Prepayment (as in effect on the Effective Date) and the denominator of
which is the aggregate of all Remaining Group II Mandatory Scheduled Prepayments
(as in effect on the Effective Date.
"Asset Sale Prepayment Percentage": with respect to any Asset Sale,
--------------------------------
(i) 50% or (ii) 25% if the Leverage Ratio is less than 3.75:1.00 immediately
before and after giving effect to such Asset Sale and at all times during the
immediately preceding two fiscal quarters in respect of which financial
statements and a Compliance Certificate have been delivered to the
Administrative Agent and the Lenders; provided that if a Default or Event of
Default shall exist such percentage shall be 100.
"Asset Swap Transaction": any (i) Asset Sale (excluding the issuance
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of Stock) occurring after the Effective Date (excluding the Puerto Rico Asset
Sale) followed by a Permitted Acquisition or (ii) Permitted Acquisition
occurring after the Effective Date followed by an Asset Sale (excluding the
Puerto Rico Asset Sale), in either case with the same counterparty, that closes
within 365 days following the closing of the first transaction.
"Assignment and Acceptance Agreement": an assignment and acceptance
-----------------------------------
agreement executed by an assignor and an assignee pursuant to which the assignor
assigns to the assignee all or any portion of such assignor's Notes,
substantially in the form of Exhibit D.
"Assignment Fee": as defined in Section 11.7(b).
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"Authorized Signatory": as to (i) any Person that is a corporation,
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the chairman of the board, the president, any vice president, the chief
financial officer or any other duly authorized officer (acceptable to the
Administrative Agent) of such Person and (ii) any Person that is not a
corporation, the general partner or other managing Person thereof.
"Benefited Lender": as defined in Section 11.9.
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"BNY": The Bank of New York.
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"BNY Rate": a rate of interest per annum equal to the rate of interest
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publicly announced in New York City by BNY from time to time as its prime
commercial lending rate, such rate to be adjusted automatically (without notice)
on the effective date of any change in such publicly announced rate.
"Business Day":
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(i) for all purposes (other than as covered by clause (ii) below),
any day except Saturday, Sunday or a day which in New York City is a legal
holiday or a day on which banking institutions are authorized or required by law
or other government action to close, and
(ii) with respect to all notices and determinations in connection
with, and payments of principal and interest on, a Eurodollar Advance, any day
which is a Business Day described in clause (i) above and which is also a day
for trading by and between banks in the London interbank market.
"Capital Expenditures": of any Person means expenditures (whether paid
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in cash or other consideration or accrued as a liability) for fixed or capital
assets (excluding any replacement assets acquired with the proceeds of
insurance) made by such Person, excluding any Permitted Acquisition.
"Capital Lease Obligations": with respect to any Person, obligations
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of such Person with respect to leases that, in accordance with GAAP, are
required to be capitalized on the financial statements of such Person.
"Cash Equivalents": (a) securities with maturities of one year or
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less from the date of acquisition, issued, fully guaranteed or insured by the
United States Government, (b) securities with maturities of one year or less
from the date of acquisition issued, fully guaranteed or insured by any State of
the United States of America or any political subdivision thereof rated at least
AA- by Standard & Poor's Ratings Services or Aa3 by ▇▇▇▇▇'▇ Investors Service,
Inc., or carrying an equivalent rating by a nationally recognized rating agency
if both of the two named rating agencies cease publishing ratings of
investments, (c) certificates of deposit, time deposits, overnight bank
deposits, bankers' acceptances and repurchase agreements issued by a Qualified
Issuer having maturities of 270 days or less from the date of acquisition, (d)
commercial paper of an issuer rated at least A-2 by Standard & Poor's Ratings
Services or P-2 by ▇▇▇▇▇'▇ Investors Service, Inc., or carrying an equivalent
rating by a nationally recognized rating agency if both of the two named rating
agencies cease publishing ratings of investments, and having maturities of 270
days or less from the date of acquisition, (e) money market accounts or funds, a
substantial portion of the assets of which constitute Cash Equivalents described
in clauses (a) through (d) above, with, issued by or managed by Qualified
Issuers, and (f) money market accounts or funds, a substantial portion of the
assets of which constitute Cash Equivalents described in clauses (a) through (d)
above, which money market accounts or funds have net assets of not less than
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$500,000,000 and have the highest rating available of either Standard & Poor's
Ratings Services or ▇▇▇▇▇'▇ Investors Service, Inc., or carrying an equivalent
rating by a nationally recognized rating agency if both of the two named rating
agencies cease publishing ratings of investments.
"Change of Control": any of the following:
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(i) the acquisition, directly or indirectly, by any Person or group
(as such term is used in Section 13(d)(3) of the Exchange Act) of more than
50% of the voting power of the Stock of the Borrower by way of merger,
consolidation or otherwise; or
(ii) the Continuing Directors cease for any reason to constitute a
majority of the directors of the Borrower then in office.
"Co-Arrangers": BNY Capital Markets, Inc. and DLJ Capital Funding,
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Inc.
"Code": the Internal Revenue Code of 1986, as the same may be amended
----
from time to time, or any successor thereto, and the rules and regulations
issued thereunder, as from time to time in effect.
"Collateral": collectively, the Collateral under and as defined in the
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Collateral Documents.
"Collateral Agent": BNY acting in its capacity as Collateral Agent
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under the Intercreditor Agreement, the Collateral Documents and the Subsidiary
Guaranty, and its successors in such capacity.
"Collateral Documents": collectively, the Security Agreement, and all
--------------------
other instruments or documents delivered by any Credit Party in order to grant
to the Collateral Agent Liens on any Collateral.
"Compensatory Interest Payment": as defined in Section 2.6(c).
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"Compliance Certificate": a certificate substantially in the form of
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Exhibit C.
"Consolidated": when applied to an accounting term used with respect
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to more than one Person, such accounting term determined on a consolidated basis
for such Persons in accordance with GAAP, including principles of consolidation
under GAAP.
"Consolidated EBITDA": EBITDA of the Borrower and its Subsidiaries on
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a Consolidated basis determined in accordance with GAAP.
"Consolidated Pre-Minority EBITDA": Consolidated EBITDA plus minority
--------------------------------
interests in income of consolidated Subsidiaries of the Borrower to the extent
deducted in determining net income of the Borrower and its Subsidiaries on a
Consolidated basis in the calculation of Consolidated EBITDA.
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"Contingent Obligation": as to any Person (the "secondary obligor"),
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any obligation of such secondary obligor (i) guaranteeing or in effect
guaranteeing any return on any Investment made in another Person, or (ii)
guaranteeing or in effect guaranteeing any Indebtedness, lease, dividend or
other obligation ("primary obligation") of any other Person (the "primary
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obligor") in any manner, whether directly or indirectly, including, without
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limitation, any obligation of such secondary obligor, whether contingent, (A) to
purchase any such primary obligation or any Property constituting direct or
indirect security therefor, (B) to advance or supply funds (x) for the purchase
or payment of any such primary obligation or (y) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (C) to purchase Property, securities or
services primarily for the purpose of assuring the beneficiary of any such
primary obligation of the ability of the primary obligor to make payment of such
primary obligation, (D) otherwise to assure or hold harmless the beneficiary of
such primary obligation against loss in respect thereof, and (E) in respect of
the liabilities of any partnership in which such secondary obligor is a general
partner, except to the extent that such liabilities of such partnership are
nonrecourse to such secondary obligor and its separate Property, provided,
however, that the term "Contingent Obligation" shall not include the indorsement
of instruments for deposit or collection in the ordinary course of business.
The amount of any Contingent Obligation of a Person shall be deemed to be an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Contingent Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof as
determined by such Person in good faith.
"Continuing Director": means any member of the Board of Directors of
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the Borrower who (i) is a member of that Board of Directors on the Effective
Date or (ii) has been nominated for election by the Board of Directors a
majority of whom were directors at the Effective Date or whose election or
nomination for election has been previously approved by a majority of such
directors.
"Conversion/Continuation Date": the date on which (i) a Eurodollar
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Advance is converted to an ABR Advance, (ii) an ABR Advance is converted to a
Eurodollar Advance, or (iii) a Eurodollar Advance is continued as a new
Eurodollar Advance.
"Credit Exposure": with respect to any Lender as at any time, the sum
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at such time of the outstanding principal balance of such Lender's Term Loans.
"Credit Party": the Borrower and each Guarantor.
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"Default": any event or condition that constitutes an Event of Default
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or that, with the giving of notice, the lapse of time, or any other condition,
would, unless cured or waived, become an Event of Default.
"Designated Amount": as defined in Section 8.15.
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"Development Capital Expenditures": Capital Expenditures attributable
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to the creation of new renal treatment centers or the relocation or expansion of
existing renal treatment centers.
"Dialysis Services": hemodialysis services and peritoneal dialysis
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services, hemoperfusion, plasmapheresis, continuous arteriovenous hemofiltration
and bio-medical services related to the foregoing.
"Dollars" and "$": lawful currency of the United States of America.
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"Domestic Acquisition": any Acquisition that is not a Foreign
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Acquisition.
"Domestic Lending Office": in respect of any Lender, initially, the
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office or offices of such Lender designated as such on Schedule 1.1; thereafter,
such other office of such Lender through which it shall be making or maintaining
ABR Advances, as reported by such Lender to the Administrative Agent and the
Borrower.
"Domestic Subsidiary": any Subsidiary of the Borrower that is not a
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Foreign Subsidiary.
"EBITDA": for any period, for any Person, net income of such Person
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for such period, determined in accordance with GAAP, plus the sum of, without
duplication, (i) Interest Expense of such Person, (ii) provision for income
taxes of such Person and (iii) depreciation, amortization and all other non-cash
charges (except minority interests in income of consolidated Subsidiaries) of
such Person, each to the extent deducted in determining net income of such
Person for such period. EBITDA shall exclude (to the extent otherwise included
therein) (x) extraordinary gains and losses and (y) gains and losses on the
sale, transfer or other disposition of assets (other than inventory and cash
management investments sold in the ordinary course of business) ((x) and (y),
collectively, the "Gains and Losses"), provided that this sentence shall not be
----------------
applicable with respect to any fiscal quarter if the net aggregate amount of
Gains and Losses for such fiscal quarter is between ($100,000) and $100,000.
Other than for purposes of calculating the Asset Sale Prepayment Percentage and
the release and regranting of Collateral pursuant to Section 22 of the Security
Agreement and the corresponding section of any other Collateral Document, EBITDA
for any period shall further exclude the following non-recurring charges
incurred during such period: (i) charges not exceeding in the aggregate during
the period from April 1, 2000 and continuing through the term of this Agreement
$12,000,000 resulting from the settlement of shareholder class action lawsuits
existing on the Effective Date, (ii) charges not exceeding in the aggregate
during the period from April 1, 2000 and continuing through the term of this
Agreement $45,000,000 resulting from the write-off of accounts receivable as a
result of the pending third party carrier review of claims for Medicare
reimbursement submitted by the Subsidiary of the Borrower operating the
Borrower's Florida laboratory, and (iii) other cash charges not exceeding in the
aggregate during the period from April 1, 2000 and continuing through the term
of this Agreement $5,000,000 (the "Non-Recurring Charges").
---------------------
-8-
"Effective Date": the date upon which the conditions as set forth in
--------------
Section 5 have been or simultaneously will be satisfied.
"Employee Benefit Plan": an employee benefit plan within the meaning
---------------------
of Section 3(3) of ERISA maintained, sponsored or contributed to by the
Borrower, any of its Subsidiaries or any ERISA Affiliate.
"Environmental Laws": any and all federal, state and local laws
------------------
relating to the environment, the use, storage, transporting, manufacturing,
handling, discharge, release, disposal or recycling of hazardous substances,
materials or pollutants or industrial hygiene, and including, without
limitation, (i) the Comprehensive Environmental Response, Compensation and
Liability Act, as amended, 42 USCA (S)9601 et seq.; (ii) the Resource
-- ---
Conservation and Recovery Act of 1976, as amended, 42 ▇▇▇▇ (▇)▇▇▇▇ et seq.;
-- ---
(iii) the Toxic Substance Control Act, as amended, 15 USCA (S)2601 et seq.; (iv)
-- ---
the Water Pollution Control Act, as amended, 33 USCA (S)1251 et seq.; (v) the
-- ---
Clean Air Act, as amended, 42 USCA (S)7401 et seq.; (vi) the Hazardous Materials
Transportation Authorization Act of 1994, 49 U.S.C. 5101 et seq. and (vii) all
-- ---
rules, regulations, judgments, decrees, injunctions and restrictions thereunder
and any analogous state law.
"Equity Interests": capital Stock and all warrants, options or other
----------------
rights to acquire capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, capital Stock).
"ERISA": the Employee Retirement Income Security Act of 1974, as
-----
amended from time to time, and the rules and regulations issued thereunder, as
from time to time in effect.
"ERISA Affiliate": when used with respect to an Employee Benefit Plan,
---------------
ERISA, the PBGC or a provision of the Code pertaining to employee benefit plans,
any Person that is a member of any group of organizations within the meaning of
Sections 414(b), (c), (m) or (o) of the Code of which the Borrower or any of its
Subsidiaries is a member.
"ESRD-Related Business": the business of providing Dialysis Services
---------------------
and/or Ancillary Services.
"Eurodollar Advances": collectively, the Term Loans (or any portions
-------------------
thereof) at such time as they (or such portions) are made and/or being
maintained in Dollars at a rate of interest based upon the Eurodollar Rate.
"Eurodollar Lending Office": in respect of any Lender, initially, the
-------------------------
office, branch or affiliate of such Lender designated as such on Schedule 1.1
(or, if no such office branch or affiliate is specified, its Domestic Lending
Office); thereafter, such other office, branch or affiliate of such Lender
through which it shall be making or maintaining Eurodollar Advances, as reported
by such Lender to the Administrative Agent and the Borrower.
-9-
"Eurodollar Rate": with respect to the Interest Period applicable to
---------------
any Eurodollar Advance, a rate of interest per annum, as determined by the
Administrative Agent, obtained by dividing (and then rounding to the nearest
1/16 of 1% or, if there is no nearest 1/16 of 1%, then to the next higher 1/16
of 1%):
(a) the rate quoted by the Administrative Agent, in its capacity as a
Lender, to leading banks in the interbank eurodollar market as the rate at
which it is offering Dollar deposits in an amount equal approximately to
its Eurodollar Advance to which such Interest Period shall apply for a
period equal to such Interest Period, as quoted at approximately 11:00 A.M.
two Business Days prior to the first day of such Interest Period, by
(b) a number equal to 1.00 minus the aggregate of the then stated
maximum rates during such Interest Period of all reserve requirements
(including, without limitation, marginal, emergency, supplemental and
special reserves), expressed as a decimal, established by the Board of
Governors of the Federal Reserve System and any other banking authority to
which BNY and other major United States money center banks are subject, in
respect of eurocurrency funding (currently referred to as "Eurocurrency
liabilities" in Regulation D of the Board of Governors of the Federal
Reserve System) or in respect of any other category of liabilities
including deposits by reference to which the interest rate on Eurodollar
Advances is determined or any category of extensions of credit or other
assets that includes loans by non-domestic offices of any Lender to United
States residents. Such reserve requirements shall include, without
limitation, those imposed under such Regulation D. Eurodollar Advances
shall be deemed to constitute Eurocurrency liabilities and as such shall be
deemed to be subject to such reserve requirements without benefit of
credits for proration, exceptions or offsets that may be available from
time to time to any Lender under such Regulation D. The Eurodollar Rate
shall be adjusted automatically on and as of the effective date of any
change in any such reserve requirement.
"Event of Default": any of the events specified in Section 9.1,
----------------
provided that any requirement for the giving of notice, the lapse of time, or
any other condition has been satisfied.
"Exchange Act": the Securities Exchange Act of 1934, as amended, and
------------
the rules and regulations promulgated thereunder.
"Excluded Contingent Obligations": all Contingent Obligations of the
-------------------------------
Borrower and its Subsidiaries on a Consolidated basis in accordance with GAAP
that are not in respect of Indebtedness described in items (i), (ii), (iii),
(iv)(B), (v) or (vi) of the definition of Indebtedness.
"Existing Pension Plans": as defined in Section 4.12.
----------------------
"Existing Term Loan Agreement": as defined in paragraph A of the
----------------------------
Preliminary Statements to this Agreement.
-10-
"Federal Funds Rate": for any day, a rate per annum (expressed as a
------------------
decimal, rounded upwards, if necessary, to the next higher 1/100 of 1%), equal
to the weighted average of the rates on overnight federal funds transactions
with members of the Federal Reserve System arranged by federal funds brokers on
such day, as published by the Federal Reserve Bank of New York on the Business
Day next succeeding such day, provided that (i) if the day for which such rate
is to be determined is not a Business Day, the Federal Funds 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 such rate is not so
published for any day, the Federal Funds Rate for such day shall be the average
of the quotations for such day on such transactions received by the
Administrative Agent.
"Financial Statements": as defined in Section 4.13.
--------------------
"First Additional Term Loan Commitment": [Intentionally Omitted]
-------------------------------------
"First Additional Term Loan Pro Rata Share" with respect to each
-----------------------------------------
Lender, the percentage obtained by dividing (x) the First Additional Term Loan
--------
Commitment of that Lender by (y) the aggregate amount of First Additional Term
--
Loan Commitments of all Lenders, as such percentage may be adjusted by
assignments permitted pursuant to Section 11.7. The initial First Additional
Term Loan Pro Rata Share of each Lender shall be set forth on the signature page
for such Lender.
"Foreign Acquisition": the Acquisition of Stock or Property of a
-------------------
Person that is not organized under the laws of, or whose property is not located
in, a jurisdiction within the United States.
"Foreign Subsidiary": any Subsidiary of the Borrower which is a
------------------
"controlled foreign corporation" within the meaning of Section 957 of the Code.
"Funded Current Liability Percentage": as defined in Section
-----------------------------------
401(a)(29) of the Code.
"Funding Date": [Intentionally Omitted]
------------
"GAAP": generally accepted accounting principles set forth in the
----
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or such other principles as may be
approved by a significant segment of the accounting profession, that are
applicable to the circumstances as of the date of determination, consistently
applied. If at any time any change in GAAP would affect the computation of any
financial ratio or requirement set forth in this Agreement, and either the
Borrower or the Required Lenders shall so request, the Administrative Agent, the
Lenders and the Borrower shall negotiate in good faith to amend such ratio or
requirement to reflect such change in GAAP (subject to the approval of the
Required Lenders), provided that, until so amended, (i) such ratio or
requirement shall
-11-
continue to be computed in accordance with GAAP prior to such change therein and
(ii) the Borrower shall provide to the Administrative Agent and the Lenders
financial statements and other documents required under this Agreement or as
reasonably requested hereunder setting forth a reconciliation between
calculations of such ratio or requirement made before and after giving effect to
such change in GAAP.
"Governmental Authority": any nation or government, any state or other
----------------------
political subdivision thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government
and any court or arbitrator.
"Guarantors": collectively, (i) each wholly-owned Subsidiary of the
----------
Borrower on the Effective Date and (ii) each other Domestic Subsidiary of the
Borrower that becomes a party to the Subsidiary Guaranty pursuant to Section
7.11; each a "Guarantor".
---------
"Hazardous Substance": any hazardous or toxic substance, material or
-------------------
waste, including, but not limited to, (i) those substances, materials, and
wastes listed in the United States Department of Transportation Hazardous
Materials Table (49 CFR 172.101) or by the Environmental Protection Agency as
hazardous substances (40 CFR Part 302) and amendments thereto and replacements
therefor and (ii) any substance, pollutant or material defined as, or designated
in, any Environmental Law as a "hazardous substance," "toxic substance,"
"hazardous material," "hazardous waste," "restricted hazardous waste,"
"pollutant," "toxic pollutant" or words of similar import.
"Hedging Obligations": with respect to any Person, the obligations of
-------------------
such Person under Interest Rate Agreements designed to protect such Person
against fluctuations in interest rates.
"Highest Lawful Rate": with respect to any Lender, the maximum rate of
-------------------
interest, if any, that at any time or from time to time may be contracted for,
taken, charged or received by such Lender on its Loans or that may be owing to
such Lender pursuant to this Agreement under the laws applicable to such Lender
and this Agreement.
"Indebtedness": as to any Person, at a particular time, all items that
------------
constitute, without duplication, (i) indebtedness for borrowed money or the
deferred purchase price of Property (other than trade payables incurred in the
ordinary course of business), (ii) indebtedness evidenced by notes, bonds,
debentures or similar instruments, (iii) obligations with respect to any
conditional sale or title retention agreement, (iv) indebtedness arising under
(A) acceptance facilities and the amount available to be drawn under all letters
of credit issued for the account of such Person, and (B) without duplication,
all drafts drawn thereunder to the extent such Person shall not have reimbursed
the issuer in respect of the issuer's payment of such drafts, (v) all
liabilities secured by any Lien on any Property owned by such Person even though
such Person has not assumed or otherwise become liable for the payment thereof
(other than carriers', warehousemen's, mechanics', repairmen's or other like
non-consensual statutory Liens arising in
-12-
the ordinary course of business), (vi) the principal portion of obligations
under Capital Lease Obligations and (vii) Contingent Obligations.
"Indemnified Person": as defined in Section 11.11.
------------------
"Indemnified Tax": as to any Person, any Tax, except (i) a Tax on the
---------------
Income imposed on such Person and (ii) any interest, fees or penalties for late
payment imposed on such Person, in each case to the extent not attributable to
the failure of the Borrower or any of its Subsidiaries to obtain any necessary
approvals or consents of, or file or cause to be filed any reports,
applications, documents, instruments or information required to be filed
pursuant to any applicable law, rule, regulation or request of, any Governmental
Authority.
"Indemnified Tax Person": the Administrative Agent, the Collateral
----------------------
Agent, the Syndication Agent, a Co-Arranger, or any Lender, as the case may be.
"Intellectual Property": all copyrights, trademarks, servicemarks,
---------------------
patents, trade names and service names.
"Intercreditor Agreement": the Amended and Restated Intercreditor and
-----------------------
Collateral Agency Agreement, substantially in the form of Exhibit H, as amended,
supplemented or otherwise modified from time to time.
"Interest Coverage Ratio": at any date of determination, the ratio of
-----------------------
(i) Consolidated Pre-Minority EBITDA to (ii) Interest Expense of the Borrower
and its Subsidiaries on a Consolidated basis, in each case for (a) the two
fiscal quarter period ending June 30, 2000, if the date of determination is at
any time during the period from the Effective Date through September 29, 2000,
(b) the three fiscal quarter period ended September 30, 2000, if the date of
determination is at any time during the period from September 30, 2000 through
December 30, 2000, and (c) the immediately preceding four fiscal quarters of the
Borrower (or in the event that the date of determination is a fiscal quarter
ending date, the four fiscal quarter period then ended), if the date of
determination is at any time on or after December 31, 2000.
"Interest Expense": for any Person, with respect to any period,
----------------
without duplication, the sum of all interest, including (whether in the form of
cash or Property) whether paid or required to be accrued (including, without
limitation, paid-in-kind or PIK interest) in respect of all Indebtedness of such
Person for such period determined in accordance with GAAP less capitalized
financing costs, each to the extent included in Interest Expense of such Person
for such period.
"Interest Payment Date": (i) as to any ABR Advance, the last day of
---------------------
each March, June, September and December commencing on the first of such days to
occur after such ABR Advance is made or any Eurodollar Advance is converted to
an ABR Advance, (ii) as to any Eurodollar Advance in respect of which the
Borrower has selected an Interest Period of one, two or three months, the last
day of such Interest Period, and (iii) as to any Eurodollar Advance in
-13-
respect of which the Borrower has selected an Interest Period of six months, the
day that is three months after the first day of such Interest Period and the
last day of such Interest Period.
"Interest Period": with respect to any Eurodollar Advance requested by
---------------
the Borrower, the period commencing on, as the case may be, the
Conversion/Continuation Date with respect to such Advance and ending one, two,
three or six months thereafter, as selected by the Borrower in its irrevocable
Notice of Conversion/Continuation, provided, however, that (i) if any Interest
Period would otherwise end on a day that is not a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless the result
of such extension would be to carry such Interest Period into another calendar
month, in which event such Interest Period shall end on the immediately
preceding Business Day, (ii) any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of a calendar month, and (iii) the Borrower
shall select Interest Periods so as not to have more than 10 different Interest
Periods outstanding at any one time for all Term Loans.
"Interest Rate Agreement": any interest rate swap agreement, interest
-----------------------
rate cap agreement, interest rate collar agreement or other similar agreement or
arrangement to which the Borrower or any of its Subsidiaries is a party.
"Investments": with respect to any Person, all investments by such
-----------
Person in other Persons (including Affiliates of such Person) in the form of
loans, Contingent Obligations, advances or capital contributions (excluding
commission, travel and similar advances to officers and employees made in the
ordinary course of business), purchases or other acquisitions for consideration
of Indebtedness, Equity Interests or other securities and all other items that
are or would be classified as investments on a balance sheet prepared in
accordance with GAAP. 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.
"Leverage Ratio": at any date of determination, the ratio of: (i)
--------------
Total Debt to (ii) the sum of (A) Consolidated Pre-Minority EBITDA for (a) the
two fiscal quarter period ending June 30, 2000 multiplied by two, if the date of
determination is at any time during the period from the Effective Date through
September 29, 2000, (b) the three fiscal quarter period ended September 30, 2000
multiplied by four-thirds, if the date of determination is at any time during
the period from September 30, 2000 through December 30, 2000, and (c) the
immediately preceding four fiscal quarters (or, in the event that the date of
determination is a fiscal quarter ending date, the four fiscal quarter period
then ended), if the date of determination is at any time during the period from
and after December 31, 2000, less any Consolidated EBITDA during such period
----
(multiplied by the same multiplication factors, if applicable, and adjusted
appropriately if such Permitted Acquisition occurred at any time after the first
day of such period) attributable to any Permitted Acquisition which occurred
during such period, plus (B) EBITDA attributable to any Permitted Acquisition
----
which occurred during such period, calculated in the manner set forth
-14-
in the next sentence. For purposes of calculating the Leverage Ratio under this
clause (b), (i) Consolidated EBITDA and Consolidated Pre-Minority EBITDA shall
be adjusted to reflect any Asset Sale which occurred during such period as if it
occurred on the first day of such period and (ii) EBITDA attributable to any
Permitted Acquisition which occurred during such period as referred to in clause
(ii)(B) above shall be calculated as the EBITDA attributable to such Permitted
Acquisition for the immediately preceding four fiscal quarters (or in the event
that the date of determination is a fiscal quarter ending date, the four fiscal
quarter period then ended), which for the pre-acquisition period from the first
date of such four fiscal quarter period to the date such Permitted Acquisition
occurred shall equal the EBITDA attributable to the assets or Stock constituting
such Permitted Acquisition for such pre-acquisition period, as demonstrated to
the reasonable satisfaction of the Administrative Agent and as adjusted in a
manner reasonably satisfactory to the Administrative Agent to eliminate non-
continuing expenses included in such EBITDA.
"Lien": any mortgage, pledge, hypothecation, assignment, deposit or
----
preferential arrangement, encumbrance, lien (statutory or other), or other
security agreement or security interest of any kind or nature whatsoever,
including, without limitation, any conditional sale or other title retention
agreement and any capital or financing lease having substantially the same
economic effect as any of the foregoing.
"Loan Documents": collectively, this Agreement, the Notes, the
--------------
Collateral Documents, the Subsidiary Guaranty, and the Intercreditor Agreement.
"Loan": a Term Loan.
----
"Loans": the Term Loans.
-----
"Maintenance Capital Expenditures": all Capital Expenditures other
--------------------------------
than Development Capital Expenditures.
"Mandatory Scheduled Commitment Reductions": as defined in the
-----------------------------------------
Revolving Credit Facility.
"Mandatory Scheduled Payments": the mandatory scheduled payments of
----------------------------
the Term Loans required pursuant to Section 2.4(b).
"Margin Stock": any "margin stock", as defined in Regulation U of the
------------
Board of Governors of the Federal Reserve System, as the same may be amended or
supplemented from time to time.
"Material Adverse Change": a material adverse change in (i) the
-----------------------
financial condition, operations, business, prospects or Property of the Borrower
and its Subsidiaries taken as a whole, (ii) the ability of any Credit Party to
perform its obligations under the Loan
-15-
Documents to which it is a party or (iii) the ability of the Administrative
Agent, the Collateral Agent or the Lenders to enforce the Loan Documents.
"Material Adverse Effect": a material adverse effect on (i) the
-----------------------
financial condition, operations, business, prospects or Property of the Borrower
and its Subsidiaries taken as a whole, (ii) the ability of any Credit Party to
perform its obligations under the Loan Documents to which it is a party or (iii)
the ability of the Administrative Agent, the Collateral Agent or the Lenders to
enforce the Loan Documents.
"Maturity Date": March 31, 2006, or such earlier date on which the
-------------
Notes shall become due and payable, whether by acceleration or otherwise.
"Minority Investment": as defined in Section 8.5(g).
-------------------
"Multiemployer Plan": a Pension Plan that is a multiemployer plan as
------------------
defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds": with respect to any Asset Sale by any Person, the
-----------------
excess, if any, of (i) the cash received by such Person and/or its Affiliates
(including any cash payments received by way of deferred payment pursuant to, or
monetization of, a note or installment receivable or otherwise, or release of
any sum from escrow or the deposit arrangement, but only as and when received)
in connection with such Asset Sale (provided that with respect to any Asset Sale
constituting the first transaction of an Asset Swap Transaction, the cash
proceeds received by such Person and/or any of its Affiliates shall not be
deemed received until the earliest to occur of (A) the closing date of the
Permitted Acquisition constituting the second transaction of such Asset Swap
Transaction, (B) the date on which the Borrower shall have determined that such
Permitted Acquisition will not occur, (C) the 366th day following the closing of
such Asset Sale and (D) the occurrence of an Event of Default), over (ii) the
sum of (A) the amount of any Indebtedness (other than Indebtedness under this
Agreement and the Revolving Credit Facility) that is secured by such asset and
which is required to be repaid by such Person in connection with such Asset
Sale, plus (B) the out-of-pocket expenses (1) incurred by such Person in
----
connection with such Asset Sale and (2) if such Person is a Subsidiary, incurred
in connection with the transfer of such amount to the parent company or entity
of such Person, plus (C) provision for taxes, including income taxes,
----
attributable to the Asset Sale or attributable to required prepayments or
repayments of Indebtedness with the proceeds of such Asset Sale, plus (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 the Borrower or any of its
Subsidiaries in connection with such Asset Sale (which reserve amount shall be
reduced to the extent that it is reasonably determined that such reserve is in
excess of the amount reasonably required), plus (E) if such Person is a
----
Subsidiary, any dividends or distributions payable to holders of minority
interests in such Subsidiary from the proceeds of such Asset Sale, less (F) if
----
such Asset Sale is part of an Asset Swap Transaction, the sum of the aggregate
purchase price (to the extent paid in cash) of the Permitted Acquisition
-16-
constituting a part of such Asset Swap Transaction and the out-of-pocket
expenses incurred by such Person in connection with such Permitted Acquisition,
provided that Net Cash Proceeds shall not be less than $0.
"New Subsidiary": as defined in Section 8.11.
--------------
"Note": a Term Loan Note.
----
"Notes": the Term Loan Notes.
-----
"Notice of Conversion/Continuation": a notice substantially in the
---------------------------------
form of Exhibit F.
"Obligations": all obligations of every nature of the Credit Parties
-----------
from time to time owed to the Administrative Agent, the Collateral Agent, the
Lenders or any of them under the Loan Documents, whether for principal,
interest, fees, expenses, indemnification or otherwise.
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
----
to Subtitle A of Title IV of ERISA, or any Governmental Authority succeeding to
the functions thereof.
"Pension Plan": at any date of determination, any employee pension
------------
benefit plan (including a Multiemployer Plan) that is covered by Title IV of
ERISA or subject to the minimum funding standards under Section 412 of the Code,
the funding requirements of which (under Section 302 of ERISA or Section 412 of
the Code) are, or at any time within the five years immediately preceding such
date, were in whole or in part, the responsibility of the Borrower, any of its
Subsidiaries or any ERISA Affiliate, provided that the term Pension Plan shall
not include the employee benefit pension plans listed on Schedule 1.1(P).
"Permitted Acquisition": any Acquisition permitted by Section 8.5(f).
---------------------
"Permitted Lien": any Lien permitted under Section 8.2.
--------------
"Permitted Preferred Stock": preferred Stock of the Borrower that (i)
-------------------------
is not redeemable or otherwise subject to any mandatory prepayment, repurchase,
sinking fund or other similar obligation, in whole or in part, for any reason
prior to March 31, 2007, except in the case of a change of control of the
Borrower (such definition of change of control to be not more restrictive than
the definition of "Change of Control" herein), such redemption or mandatory
prepayment, repurchase, sinking fund or other similar obligation in the event of
change of control to be fully and absolutely subordinated to the indefeasible
prior payment in full of all principal, interest and other obligations of the
Credit Parties under the Loan Documents pursuant to subordination terms
satisfactory to the Administrative Agent and the Syndication Agent, (ii) permits
dividends to be payable in additional shares of Permitted Preferred Stock or
common
-17-
Stock of the Borrower and does not require dividends to be payable in cash or
other Property, (iii) contains restrictions and covenants reasonably
satisfactory to the Administrative Agent and the Syndication Agent, and (iv) is
not convertible into or exchangeable for any security other than Permitted
Preferred Stock or common Stock of the Borrower.
"Person": any individual, firm, partnership, joint venture,
------
corporation, association, business enterprise, joint stock company,
unincorporated association, trust, Governmental Authority or any other entity,
whether acting in an individual, fiduciary, or other capacity, and for the
purpose of the definition of "ERISA Affiliate", a trade or business.
"Process Administrative Agent": as defined in Section 11.17.
----------------------------
"Prohibited Transaction": a transaction that is prohibited under
----------------------
Section 4975 of the Code or Section 406 of ERISA and not exempt under Section
4975 of the Code or Section 408 of ERISA.
"Property": all types of real, personal, tangible, intangible or mixed
--------
property.
"Pro Rata Share": with respect to each Lender, the percentage obtained
--------------
by dividing (x) the Credit Exposure of that Lender by (y) the Aggregate Credit
Exposure of all Lenders, as such percentage may be adjusted by assignments
permitted pursuant to Section 11.7 and by prepayments made pursuant to Section
2.4(d). The initial Pro Rata Share of each Lender is set forth opposite the
name of that Lender in Exhibit A.
"Public Debt": as defined in Section 8.1.
-----------
"Puerto Rico Asset Sale": the sale of certain assets of Total Renal
----------------------
Care Puerto Rico, Inc. pursuant to the Asset Purchase Agreement, dated January
18, 2000, by and between Fresenius Medical Care Holdings, Inc. and TRC, as
amended.
"Qualified Issuer": (A) any Lender hereunder, (B) any lender that is
----------------
a party to the Revolving Credit Facility and (C) any commercial bank that has
capital and surplus in excess of $100,000,000.
"Real Property": all real property owned or leased by the Borrower or
-------------
any of its Subsidiaries.
"Register": as defined in Section 11.7(b).
--------
"Reinvested Proceeds": with respect to any Asset Sale as of any date
-------------------
of determination, the amount of Net Cash Proceeds from such Asset Sale that is
not required to be immediately applied to the prepayment of the Term Loans or
the Revolving Credit Loans pursuant to Section 2.4(f)(i) hereof and Section
2.7(f)(i) of the Revolving Credit Facility and that
-18-
has been used by the Borrower or any of its Subsidiaries to acquire, during the
Reinvestment Period, Property that is to be used in the same or a related line
of business of the Borrower.
"Reinvestment Period": the period beginning on, and ending 730 days
-------------------
after, the date that proceeds from an Asset Sale are received by the Borrower or
any of its Subsidiaries, as the case may be.
"Relevant Date": (i) in the case of each Lender listed on the
-------------
signature pages hereof, the Effective Date, and (ii) in the case of each other
Lender, the effective date of the Assignment and Acceptance Agreement or other
document pursuant to which it became a Lender.
"Remaining Interest Period": (i) in the event that the Borrower shall
-------------------------
fail for any reason to convert an Advance to, or continue an Advance as, a
Eurodollar Advance after it shall have notified the Administrative Agent of its
intent to do so, a period equal to the Interest Period that the Borrower elected
in respect of such Eurodollar Advance; or (ii) in the event that a Eurodollar
Advance shall terminate for any reason prior to the last day of the Interest
Period applicable thereto, a period equal to the remaining portion of such
Interest Period if such Interest Period had not been so terminated; or (iii) in
the event that the Borrower shall prepay or repay all or any part of the
principal amount of a Eurodollar Advance prior to the last day of the Interest
Period applicable thereto, a period equal to the period from and including the
date of such prepayment or repayment to but excluding the last day of such
Interest Period.
"Reportable Event": with respect to any Pension Plan, (i) any event
----------------
set forth in Sections 4043(b) (other than a Reportable Event as to which the 30
day notice requirement is waived by the PBGC under applicable regulations),
4062(c) or 4063(a) of ERISA or the regulations thereunder or (ii) an event
requiring the Borrower, any of its Subsidiaries or any ERISA Affiliate to
provide security to a Pension Plan under Section 401(a)(29) of the Code.
"Required Lenders": Lenders having Credit Exposure equal to at least
----------------
51% of the Aggregate Credit Exposure.
"Required Payment": as defined in Section 2.8(a).
----------------
"Restricted Payment": as to any Person (i) any dividend or other
------------------
distribution, direct or indirect, on account of any shares of any class of Stock
or other equity interest in such Person now or hereafter outstanding (other than
a dividend payable solely in shares of such Stock to the holders of such
shares), (ii) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition, direct or indirect, of any shares of any class of
Stock or other equity interest in such Person now or hereafter outstanding and
(iii) any tax sharing or similar payment payable by such Person to another
Person.
"Revolving Credit Commitment": as defined in the Revolving Credit
---------------------------
Facility.
-19-
"Revolving Credit Facility": the Second Amended and Restated Revolving
-------------------------
Credit Agreement, dated as of the date hereof, by and among the Borrower, the
lenders party thereto, DLJ Capital Funding, Inc., as syndication agent, First
Union National Bank, as documentation agent, and BNY, as administrative agent,
together with all other documents executed in connection therewith, as the same
may be amended, supplemented, refinanced or otherwise modified from time to time
in accordance with Section 8.9. Upon any amendment, supplement, refinancing or
other modification of the Revolving Credit Facility, all references herein to
definitions or sections in the Revolving Credit Facility shall be deemed to
refer to the corresponding definitions or sections in the Revolving Credit
Facility as so amended, supplemented, refinanced or modified.
"Revolving Credit Loan" and "Revolving Credit Loans": as defined in
--------------------- ----------------------
the Revolving Credit Facility.
"Revolving Credit Term Tranche Loan" and "Revolving Credit Term
---------------------------------- ---------------------
Tranche Loans": shall mean a "Term Tranche Loan" and the "Term Tranche Loans",
-------------
respectively, as defined in the Revolving Credit Facility.
"Revolving Credit Tranche Loan" and "Revolving Credit Tranche Loans":
----------------------------- ------------------------------
shall mean a "Revolving Tranche Loan" and the "Revolving Tranche Loans",
respectively, as defined in the Revolving Credit Facility.
"Revolver Prepayment Fraction": a fraction equal to 1.00 minus the
----------------------------
Term Prepayment Fraction.
"RTC": Renal Treatment Centers, Inc., a Delaware corporation and a
---
wholly-owned Subsidiary of the Borrower.
"RTC Convertible Subordinated Guaranty": The Guaranty, dated as of
-------------------------------------
March 31, 1998, made by the Borrower in favor of Chase Manhattan Trust Company,
N. A., as trustee, pursuant to which the Borrower guaranteed, on a subordinated
basis, the RTC Convertible Subordinated Notes, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with Section
8.9.
"RTC Convertible Subordinated Indenture": the Indenture, dated as of
--------------------------------------
June 12, 1996, between RTC and Chase Manhattan Trust Company, N. A., as trustee,
pursuant to which RTC issued the RTC Convertible Subordinated Notes, as amended
by that certain First Supplemental Indenture dated as of February 27, 1998 and
that certain Second Supplemental Indenture dated as of March 31, 1998, and as
the same may be further amended, supplemented or otherwise modified from time to
time in accordance with Section 8.9.
"RTC Convertible Subordinated Notes": the 5-5/8% Convertible
----------------------------------
Subordinated Notes, due 2006, issued by RTC pursuant to the RTC Convertible
Subordinated Indenture, as the
-20-
same may be amended, supplemented or otherwise modified from time to time in
accordance with Section 8.9.
"Scheduled Existing Deferred Payment Obligations": the joint venture
-----------------------------------------------
put obligations and deferred acquisition/earnout payment obligations of the
Borrower and its Subsidiaries, in each case payable under contracts existing on
the Effective Date as set forth on Schedule 1.1(S).
"SEC": the Securities and Exchange Commission or any Governmental
---
Authority succeeding to the functions thereof.
"Security Agreement": the Security Agreement, substantially in the
------------------
form of Exhibit I, as amended, supplemented or otherwise modified from time to
time.
"Special Counsel": such counsel as the Administrative Agent may from
---------------
time to time consult with in connection with the Loan Documents and the
transactions contemplated hereby.
"Stock": any and all shares, rights, interests, participations,
-----
warrants or other equivalents (however designated) of corporate stock.
"Subordinated Indebtedness": any unsecured Indebtedness of the
-------------------------
Borrower subordinated in right of payment to the payment in full of the
Obligations of the Borrower and other senior obligations of the Borrower;
provided that (i) the negative covenants in such subordinated Indebtedness are
less restrictive than the negative covenants in this Agreement as in effect at
the time such subordinated Indebtedness is incurred, (ii) the affirmative
covenants in such subordinated Indebtedness are no more restrictive that the
affirmative covenants in this Agreement as in effect at the time such
subordinated Indebtedness is incurred, (iii) the events of default in such
subordinated Indebtedness relating to insolvency and nonpayment of amounts owed
thereunder are no more restrictive than the corresponding defaults in this
Agreement as in effect at the time such subordinated Indebtedness is incurred,
(iv) such subordinated Indebtedness does not cross-default to other Indebtedness
(but may cross-accelerate to other Indebtedness of Borrower or any Guarantor
that has guarantied such subordinated Indebtedness), (v) the subordination
provisions in such subordinated Indebtedness are on market terms for
subordinated debt instruments prevailing at or around the time such subordinated
Indebtedness is incurred and (vi) such subordinated Indebtedness provides for no
scheduled payment or mandatory prepayments of principal before March 31, 2007
other than (x) redemptions made at the option of the holders of such
subordinated Indebtedness upon a change in control of the Borrower in
circumstances where the Lenders under this Agreement would have rights to
prepayment under Section 2.4(c), provided that any such redemptions are made not
fewer than 30 days after such change in control and provided that such
redemptions are fully and absolutely subordinated to the indefeasible payment in
full of all principal, interest and other amounts under the Loan Documents and
(y) mandatory prepayments required as a result of asset dispositions if such
subordinated Indebtedness allows the Borrower to satisfy such mandatory
prepayment
-21-
requirement by prepayment of Loans under this Agreement or other senior
obligations of the Borrower or reinvestment of the asset disposition proceeds
within a specified period of time.
"Subsidiary": as to any Person, any corporation, association,
----------
partnership, joint venture or other business entity of which such Person or any
Subsidiary of such Person, directly or indirectly, either (i) in respect of a
corporation, owns or controls more than 50% of the outstanding Stock having
ordinary voting power to elect a majority of the board of directors or similar
managing body, irrespective of whether a class or classes shall or might have
voting power by reason of the happening of any contingency, or (ii) in respect
of an association, partnership, joint venture or other business entity, is
entitled to share in more than 50% of the profits and losses, however
determined.
"Subsidiary Guaranty": the Amended and Restated Subsidiary Guaranty,
-------------------
substantially in the form of Exhibit J, as amended, supplemented or otherwise
modified from time to time.
"Tax": any present or future tax, levy, impost, duty, charge, fee,
---
deduction or withholding of any nature and whatever called, by a Governmental
Authority, imposed, levied, collected, withheld or assessed with respect to any
payment by the Borrower pursuant to this Agreement or any other Loan Document,
and all liabilities with respect thereto.
"Tax on the Income": as to any Person, a Tax imposed by one of the
-----------------
following jurisdictions or by any political subdivision or taxing authority
thereof: (i) the United States, (ii) the jurisdiction in which such Person is
organized, (iii) the jurisdiction in which such Person's principal office is
located, or (iv) in the case of each Lender, any jurisdiction in which such
Person is deemed to be doing business; which Tax is an income tax (or any tax
in lieu thereof or equivalent thereto) or franchise tax imposed on all or part
of the net income or net profits of such Person or with respect to the net
increase in the shareholders' or owners' equity or capital in such Person or
which Tax represents interest, fees or penalties for payment of any such income
tax or franchise tax.
"Termination Event": with respect to any Pension Plan, (i) a
-----------------
Reportable Event, (ii) the termination of a Pension Plan, or the filing of a
notice of intent to terminate a Pension Plan, or the treatment of a Pension Plan
amendment as a termination, in each case under Section 4041(c) of ERISA, (iii)
the institution of proceedings to terminate a Pension Plan under Section 4042 of
ERISA, or (iv) the appointment of a trustee to administer any Pension Plan under
Section 4042 of ERISA.
"Term Loan" and "Term Loans": as defined in Section 2.1.
--------- ----------
"Term Note" and "Term Notes": as defined in Section 2.2.
--------- ----------
"Term Prepayment Fraction": on any date of calculation, a fraction
------------------------
determined by dividing (a) the aggregate outstanding principal amount of the
Term Loans as of such date by
-22-
(b) the sum of (i) the aggregate outstanding principal amount of the Term Loans
as of such date plus (ii) the Aggregate Revolving Credit Commitments as of such
date.
"Total Debt": the difference between (i) all Indebtedness (less
----------
Excluded Contingent Obligations) and (ii) cash and cash equivalents, in each
case, of the Borrower and its Subsidiaries on a Consolidated basis in accordance
with GAAP.
"Transactions": the transactions contemplated under this Agreement,
------------
the other Loan Documents and the Revolving Credit Facility, including the
borrowing of loans, the issuances of letters of credit and other transactions
related to any of the foregoing.
"TRC": Total Renal Care, Inc., a California corporation.
---
"Unfunded Pension Liabilities": with respect to any Pension Plan, at
----------------------------
any date of determination, the amount determined by taking the accumulated
benefit obligation, as disclosed in accordance with Statement of Accounting
Standards No. 87, "Employers' Accounting for Pensions", over the fair market
value of Pension Plan assets.
"United States": the United States of America (including the States
-------------
thereof, the District of Columbia, Guam and Puerto Rico).
"Unqualified Amount": as defined in Section 2.6(c).
------------------
"Unrecognized Retiree Welfare Liability": with respect to any Employee
--------------------------------------
Benefit Plan that provides postretirement benefits other than pension benefits,
the amount of the transition obligation, as determined in accordance with
Statement of Financial Accounting Standards No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions," as of the most recent valuation
date, that has not been recognized as an expense in an income statement of the
Borrower and its Subsidiaries, provided that (i) prior to the date such
Statement is applicable to the Borrower, such amount shall be based on an
estimate made in good faith of such transition obligation, and (ii) for purposes
of determining the aggregate amount of the Unrecognized Retiree Welfare
Liability, Plans maintained by a Subsidiary that is not otherwise an ERISA
Affiliate shall be included.
1.2. Principles of Construction
--------------------------
(a) All terms defined in this Agreement shall have the meanings given
such terms herein when used in the other Loan Documents or any certificate,
opinion or other document made or delivered pursuant hereto, unless otherwise
expressly provided therein.
(b) As used in the Loan Documents and in any certificate, opinion or
other document made or delivered pursuant thereto, accounting terms not defined
in Section 1.1, and accounting terms partly defined in Section 1.1, to the
extent not defined, shall have the respective meanings given to them under GAAP.
-23-
(c) The words "hereof", "herein", "hereto" and "hereunder" and
similar words when used in a Loan Document shall refer to such Loan Document as
a whole and not to any particular provision thereof, and Section, schedule and
exhibit references contained therein shall refer to Sections thereof or
schedules or exhibits thereto unless otherwise expressly provided therein.
(d) The phrase "may not" is prohibitive and not permissive.
(e) Unless the context otherwise requires, words in the singular
number include the plural, and words in the plural include the singular.
(f) Unless specifically provided in a Loan Document to the contrary,
references to a time shall refer to New York City time.
(g) Unless specifically provided in a Loan Document to the contrary,
in the computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and "until"
each mean "to but excluding".
2. AMOUNT AND TERMS OF TERM LOANS
-------------------------------
2.1. Term Loans
---- ----
The aggregate outstanding principal amount of the Term Loans (under
and as defined in the Existing Term Loan Agreement) was $338,773,386 immediately
prior to the effectiveness of this Agreement (including, without limitation,
immediately prior to the prepayment of the Term Loans referred to in Section
5.10 of this Agreement). Simultaneously with the effectiveness of this
Agreement (and after giving effect to the prepayment of the Term Loans referred
to in Section 5.10 of this Agreement): (i) such aggregate outstanding Term Loans
shall be equal to $312,247,715 and (ii) each such Lender's outstanding Term Loan
shall be equal to its Pro Rata Share of such Term Loans (as so prepaid pursuant
to Section 5.10, a "Term Loan" and as the context may require, collectively with
---------
all other Term Loans, as so prepaid pursuant to Section 5.10, of such Lender and
with the Term Loans, as so prepaid pursuant to Section 5.10, of all other
Lenders, the "Term Loans"). Term Loans, to the extent repaid or prepaid, may
----------
not be reborrowed.
2.2. Term Notes
----------
(a) Each Lender's Term Loans shall be evidenced by the Term Note (as
defined in the Existing Term Loan Agreement) delivered to it pursuant to the
Existing Term Loan Agreement. Upon request of any Lender, and in exchange for
its existing Term Note, the Borrower shall execute and deliver to such Lender a
new promissory note of the Borrower, substantially in the form of Exhibit B (the
Term Note (as defined in the Existing Term Loan Agreement) and each such new
promissory note, in each case as indorsed or modified from time
-24-
to time, including all replacements thereof and substitutions therefor, a "Term
----
Note" and, collectively with the Term Notes of all other Lenders, the "Term
---- ----
Notes"), payable to the order of such Lender for the account of its Applicable
-----
Lending Office and representing the obligation of the Borrower to pay the
aggregate unpaid principal balance of such Lender's Term Loans, with interest
thereon as prescribed in Section 2.6.
(b) The Term Loans shall be due and payable on the Maturity Date.
2.3. [Intentionally Omitted]
2.4. Prepayments of the Term Loans
-----------------------------
(a) Voluntary Prepayments.
---------------------
(i) The Borrower may, at its option, subject to
Section 2.4(a)(ii) below, prepay the Term Loans, without premium or
penalty, in full at any time or in part from time to time, by notifying the
Administrative Agent in writing at least one Business Day prior to the
proposed prepayment date, in the case of Loans consisting of ABR Advances,
and at least three Business Days prior to the proposed prepayment date, in
the case of Loans consisting of Eurodollar Advances, specifying the Term
Loans to be prepaid, whether such Loans consist of ABR Advances, Eurodollar
Advances, or a combination thereof, the amount to be prepaid and the date
of prepayment. Such notice shall be irrevocable and the amount specified in
such notice shall be due and payable on the date specified, together with
accrued interest to the date of such payment on the amount prepaid. Upon
receipt of such notice, the Administrative Agent shall promptly notify each
Lender thereof. Each partial prepayment made pursuant to this subsection of
Term Loans (when added to the prepayment of the Revolving Credit Term
Tranche Loans required by Section 2.4(a)(ii) below) shall be in an
aggregate principal amount of $1,000,000 or such amount plus a whole
multiple of $250,000 in excess thereof (or, if less, the outstanding
principal balance of the Revolving Credit Term Tranche Loan and Term Loans
being prepaid). After giving effect to any partial prepayment with respect
to Eurodollar Advances that were made (whether as the result of a borrowing
or a conversion) on the same date and that had the same Interest Period,
the outstanding principal amount of such Eurodollar Advances shall equal
(subject to Section 2.5) $5,000,000 or such amount plus a whole multiple of
$500,000 in excess thereof.
(ii) The Borrower may not (x) make a voluntary prepayment of
the Term Loans pursuant to Section 2.4(a)(i) unless, concurrently with such
prepayment, the Borrower makes a voluntary prepayment of the Revolving
Credit Term Tranche Loans pursuant to Section 2.7(a) of the Revolving
Credit Facility or (y) make a voluntary prepayment of the Revolving Credit
Term Tranche Loans pursuant to Section 2.7(a) of the Revolving Credit
Facility unless, concurrently with such prepayment, the Borrower makes a
voluntary prepayment of the Term Loans pursuant to this Section 2.4(a).
Such prepayments shall be in an amount equal to (A) in the case of the
Revolving Credit Term Tranche Loans, the aggregate amount of such voluntary
prepayment of the Revolving Credit Term Tranche Loans and Term Loans
multiplied
-25-
by the Revolver Prepayment Fraction and (B) in the case of the Term Loans,
the aggregate amount of such voluntary prepayment of the Revolving Credit
Term Tranche Loans and Term Loans multiplied by the Term Prepayment
Fraction.
(b) Mandatory Scheduled Prepayments.
-------------------------------
(i) The Borrower shall make principal payments of the Term Loans in
installments on (or, subject to Section 2.4(b)(ii) below, at the Borrower's
option, upon three Business Days' written notice to the Administrative Agent
(which notice shall be irrevocable), at any time prior to) each of the following
dates in the amount set forth next to such date:
Mandatory
Scheduled
Dates Payments
----- ---------
---------------------------------------------------------------------
September 30, 2000 $ 969,000
---------------------------------------------------------------------
December 31, 2000 $ 1,123,000
---------------------------------------------------------------------
March 31, 2001 $ 1,146,000
---------------------------------------------------------------------
June 30, 2001 $ 1,146,000
---------------------------------------------------------------------
September 30, 2001 $ 1,146,000
---------------------------------------------------------------------
December 31, 2001 $ 1,146,000
---------------------------------------------------------------------
March 31, 2002 $ 1,253,000
---------------------------------------------------------------------
June 30, 2002 $ 1,253,000
---------------------------------------------------------------------
September 30, 2002 $ 1,253,000
---------------------------------------------------------------------
December 31, 2002 $ 1,253,000
---------------------------------------------------------------------
March 31, 2003 $ 1,425,000
---------------------------------------------------------------------
June 30, 2003 $ 15,484,000
---------------------------------------------------------------------
September 30, 2003 $ 15,484,000
---------------------------------------------------------------------
December 31, 2003 $ 15,484,000
---------------------------------------------------------------------
March 31, 2004 $ 17,489,000
---------------------------------------------------------------------
June 30, 2004 $ 17,489,000
---------------------------------------------------------------------
September 30, 2004 $ 17,489,000
---------------------------------------------------------------------
December 31, 2004 $ 17,489,000
---------------------------------------------------------------------
March 31, 2005 $ 17,489,000
---------------------------------------------------------------------
June 30, 2005 $ 17,489,000
---------------------------------------------------------------------
September 30, 2005 $ 17,489,000
---------------------------------------------------------------------
December 31, 2005 $ 17,489,000
---------------------------------------------------------------------
March 31, 2006 $112,770,715
---------------------------------------------------------------------
; provided that the Term Loans and all other amounts owed hereunder with respect
to the Term Loans shall be paid in full no later than the Maturity Date, and the
final installment payable by the Borrower in respect of the Term Loans on such
date shall be in an amount, if such amount is
-26-
different from that specified above, sufficient to repay all amounts owing by
the Borrower under this Agreement with respect to the Term Loans.
(ii) The Borrower may not (x) make a principal payment of the Term Loans
pursuant to Section 2.4(b)(i) above prior to the scheduled due date thereof
unless, concurrently with such payment, the Borrower makes a reduction of the
Aggregate Revolving Credit Commitments (and corresponding payment of the
Revolving Credit Loans) pursuant to Section 2.6(b) of the Revolving Credit
Facility or (y) make a reduction of the Aggregate Revolving Credit Commitments
(and corresponding payment of the Revolving Credit Loans) pursuant to Section
2.6(b) of the Revolving Credit Facility prior to the scheduled due date thereof
unless, concurrently with such reduction, the Borrower makes a payment of the
Term Loans pursuant to this Section 2.4(b). In such event, (A) the Borrower
shall specify the Mandatory Scheduled Payment and Mandatory Scheduled Commitment
Reduction against which such payment and reduction shall be applied, which
Mandatory Scheduled Payment and Mandatory Scheduled Commitment Reduction shall
have been originally scheduled to have been paid and reduced on the same date,
(B) such payment of the Term Loans (when added to the concurrent reduction of
the Aggregate Revolving Credit Commitments (and corresponding payment of the
Revolving Credit Loans)) shall be in an aggregate amount of $1,000,000 or such
amount plus a whole multiple of $250,000 in excess thereof (or, if less, the
aggregate amount of the Mandatory Scheduled Payment and Mandatory Scheduled
Commitment Reduction against which such payment and reduction shall be applied),
(C) such payment of the Term Loans shall be in an amount equal to the aggregate
amount of such proposed payment of the Term Loans and reduction of the Aggregate
Revolving Credit Commitments (and corresponding payment of the Revolving Credit
Loans) multiplied by a fraction, (x) the numerator of which is the amount of the
originally scheduled Mandatory Scheduled Payment (as in effect on the Effective
Date) against which such payment is to be applied and (y) the denominator of
which is the sum of the amount of the originally scheduled Mandatory Scheduled
Payment (as in effect on the Effective Date) against which such payment is to be
applied and the amount of the originally scheduled Mandatory Scheduled
Commitment Reduction (as in effect on the Effective Date) against which such
reduction is to be applied, and (D) such reduction of the Aggregate Revolving
Credit Commitments (and corresponding payment of the Revolving Credit Loans)
shall be in an amount equal to the aggregate amount of such proposed payment of
the Term Loans and reduction of the Aggregate Revolving Credit Commitments (and
corresponding payment of the Revolving Credit Loans) multiplied by a fraction,
(x) the numerator of which is the amount of the originally scheduled Mandatory
Scheduled Commitment Reduction (as in effect on the Effective Date) against
which such payment is to be applied and (y) the denominator of which is the sum
of the amount of the originally scheduled Mandatory Scheduled Payment (as in
effect on the Effective Date) against which such payment is to be applied and
the amount of the originally scheduled Mandatory Scheduled Commitment Reduction
(as in effect on the Effective Date) against which such reduction is to be
applied.
(c) Mandatory Prepayments Relating to a Change of Control. Upon the
-----------------------------------------------------
occurrence of a Change of Control, the Borrower shall (i) prepay in full the
outstanding principal
-27-
balance of the Term Loans, together with accrued and
unpaid interest thereon and (ii) pay in full all fees and other amounts payable
under the Loan Documents
(d) Mandatory Prepayments Relating to Issuances of Public Debt. Upon
----------------------------------------------------------
the date of any issuance of Public Debt by the Borrower, the Borrower shall
prepay the Term Loans in an amount equal to the Term Prepayment Fraction
multiplied by the aggregate proceeds of such issuance of Public Debt (net of
sales and other commissions and legal and other related expenses incurred in
connection with such issuance).
(e) Mandatory Prepayments Relating to Issuances of Subordinated
-----------------------------------------------------------
Indebtedness. Upon the date of any issuance of Subordinated Indebtedness by the
------------
Borrower, the Borrower shall prepay the Term Loans in an amount equal to the
Term Prepayment Fraction multiplied by the sum of the first $100,000,000 plus
50% (100% if immediately before or after giving effect thereto a Default or
Event of Default shall exist) of the excess over $100,000,000 of the aggregate
proceeds (net of sales and other commissions and legal and other related
expenses incurred in connection with such issuance) received by the Borrower in
connection with such issuance of Subordinated Indebtedness.
(f) Mandatory Prepayments Relating to Sales of Property. With respect
---------------------------------------------------
to each Asset Sale (excluding the Puerto Rico Asset Sale), (i) the Borrower
shall prepay the Term Loans within one Business Day of each date that it shall
receive Net Cash Proceeds resulting from such Asset Sale in an amount equal to
the applicable Asset Sale Prepayment Percentage of the Term Prepayment Fraction
multiplied by such Net Cash Proceeds, and (ii) in no event later than the
earlier to occur of the first Business Day after the end of the Reinvestment
Period with respect to such Asset Sale or the occurrence of an Event of Default,
the Borrower shall prepay the Term Loans in an amount equal to the Term
Prepayment Fraction multiplied by the Adjusted Net Cash Proceeds applicable to
such Asset Sale.
(g) Mandatory Prepayments relating to Issuances of Preferred Stock.
---------------------------------------------------------------
Upon the date of any issuance of Permitted Preferred Stock, the Borrower shall
prepay the Term Loans in an amount equal to the Term Prepayment Fraction
multiplied by 50% (100% if immediately before or after giving effect thereto a
Default or Event of Default shall exist) of the aggregate proceeds (net of sales
and other commissions and legal and other related expenses incurred in
connection with such issuance) received by the Borrower in connection with such
issuance of Permitted Preferred Stock.
(h) Application of Term Loan Prepayments. Prepayments of the Term
------------------------------------
Loans made pursuant to: (A) Section 2.4(a) shall be applied to the remaining
Mandatory Scheduled Payments in inverse order of maturity, (B) Section 2.4(b)
shall be applied to the applicable Mandatory Scheduled Payment(s) being paid,
(C) Section 2.4(d) or 2.4(e) shall be applied to the remaining Mandatory
Scheduled Payments in inverse order of maturity, (D) Section 2.4(f) shall be
applied to the remaining Mandatory Scheduled Payments in accordance with the
Asset Sales
-28-
Application Method, and (E) Section 2.4(g) shall be applied on a pro rata
weighted basis among the remaining Mandatory Scheduled Payments.
(i) In General. Each prepayment of Term Loans shall first be applied
----------
to the ABR Advances thereunder. If any prepayment is made in respect of any
Eurodollar Advance in whole or in part, prior to the last day of the applicable
Interest Period, the Borrower agrees to indemnify the Lenders in accordance with
Section 2.11.
2.5. Conversions and Continuations
-----------------------------
(a) The Borrower may elect from time to time to convert Eurodollar
Advances to ABR Advances by giving the Administrative Agent at least one
Business Day's prior irrevocable notice of such election (confirmed by the
delivery of a Notice of Conversion/Continuation), specifying the amount to be so
converted. In addition, the Borrower may elect from time to time to (i) convert
ABR Advances to Eurodollar Advances and (ii) continue Eurodollar Advances by
selecting a new Interest Period therefor, in each case by giving the
Administrative Agent irrevocable notice no later than 2:00 P.M. at least three
Business Days prior to such election (confirmed by the delivery of a Notice of
Conversion/Continuation), in the case of a conversion to, or continuation of,
Eurodollar Advances, specifying the amount to be so converted or continued and
the initial Interest Period relating thereto, provided that any such conversion
of ABR Advances to Eurodollar Advances shall only be made on a Business Day and
any such continuation of Eurodollar Advances shall only be made on the last day
of the Interest Period applicable to the Eurodollar Advances that are to be
continued as such new Eurodollar Advances. The Administrative Agent shall
promptly provide the Lenders with a copy of each such Notice of
Conversion/Continuation. Advances may be converted or continued pursuant to this
Section in whole or in part, provided that conversions of ABR Advances to
Eurodollar Advances, or continuations of Eurodollar Advances, shall be in an
aggregate principal amount of $5,000,000 or such amount plus a whole multiple of
$500,000 in excess thereof.
(b) Notwithstanding anything in this Section to the contrary, no ABR
Advance may be converted to a Eurodollar Advance and no Eurodollar Advance may
be continued if the Borrower or the Administrative Agent has knowledge that a
Default or Event of Default has occurred and is continuing either (i) at the
time the Borrower shall notify the Administrative Agent of its election to
convert or continue or (ii) on the requested Conversion/Continuation Date. In
such event, (A) each ABR Advance shall be automatically continued as an ABR
Advance and (B) each Eurodollar Advance shall be automatically converted to an
ABR Advance on the last day of the Interest Period applicable to such Eurodollar
Advance.
(c) No Interest Period selected in respect of conversion or
continuation of any Eurodollar Advance shall end after the Maturity Date.
Notwithstanding anything herein to the contrary, the Borrower shall select
Interest Periods such that, on each date that a mandatory principal payment is
required to be made pursuant to Section 2.4(b), the outstanding principal
-29-
balance of all ABR Advances, when added to the aggregate principal amount of
each Eurodollar Advance, the applicable Interest Period of which shall end on
such date, shall equal or exceed the aggregate principal amount of the Term
Loans required to be paid on such date pursuant to Section 2.4(b).
(d) Each conversion or continuation shall be effected by each Lender
by applying the proceeds of its new ABR Advance or Eurodollar Advance, as the
case may be, to its Advances (or portion thereof) being converted (it being
understood that such conversion shall not constitute a borrowing for purposes of
Section 4).
(e) Notwithstanding anything to the contrary contained in any Loan
Document, if the Borrower shall fail, for any reason, to convert or continue a
Eurodollar Advance under this Section 2.5 in connection with the expiration of
an Interest Period with respect to any existing Eurodollar Advance, then such
Eurodollar Advance shall be converted to an ABR Advance until such time, if any,
as the Borrower shall elect a new Eurodollar Advance pursuant to this Section
2.5.
(f) Notices in respect of a conversion or continuation given by
telecopy shall be deemed given when received by telecopy and shall be promptly
confirmed in writing within five Business Days. The Administrative Agent and the
Lenders may rely on a telecopied notice of conversion or continuation whether
such notice is confirmed by the delivery of a Notice of Conversion/Continuation.
2.6. Interest Rate and Payment Dates
-------------------------------
(a) Prior to Maturity. Except as otherwise provided in
-----------------
Section 2.6(b), prior to maturity the Loans shall bear interest on the
outstanding principal balance thereof at the applicable interest rate or rates
per annum set forth below:
Loans Rate
----- ----
---------------------------------------------------------------------------
Each ABR Advance Alternate Base Rate plus the
Applicable Margin.
---------------------------------------------------------------------------
Each Eurodollar Advance Eurodollar Rate applicable to such
Eurodollar Advance for the
applicable Interest Period plus
the Applicable Margin.
---------------------------------------------------------------------------
(b) Event of Default. After the occurrence and during the continuance
----------------
of an Event of Default under Section 9.1(a), (b) (with respect to interest), (h)
or (i), the outstanding principal balance of the Loans shall bear interest at a
rate per annum equal to 2% plus the rate that would otherwise be applicable
under Section 2.6(a) until, in the case of Eurodollar Advances
-30-
the end of the applicable Interest Period therefor, and, thereafter, at the
Alternate Base Rate plus the Applicable Margin plus 2%, payable in the case of
interest on any overdue principal, on demand. Any overdue interest or other
amount payable under the Loan Documents shall bear interest at a rate per annum
equal to the Alternate Base Rate plus 2% and shall be payable on demand.
(c) In General. Interest on (i) ABR Advances, to the extent based on
----------
the BNY Rate, shall be calculated on the basis of a 365 or 366-day year (as the
case may be) and (ii) ABR Advances, to the extent based on the Federal Funds
Rate, and Eurodollar Advances shall be calculated on the basis of a 360-day
year, in each case for the actual number of days elapsed, including the first
day but excluding the last. Except as otherwise provided in Section 2.6(b),
interest shall be payable in arrears on each Interest Payment Date and upon each
payment (including prepayment) or conversion of the Loans. Any change in the
interest rate on the Loans resulting from a change in the Alternate Base Rate or
reserve requirements or charges described in clause (b) of the definition of
"Eurodollar Rate" shall become effective as of the opening of business on the
day on which such change shall become effective. The Administrative Agent shall,
as soon as practicable, notify the Borrower and the Lenders of the effective
date and the amount of each such change in the BNY Rate, but any failure to so
notify shall not in any manner affect the obligation of the Borrower to pay
interest on the Loans in the amounts and on the dates required. Each
determination of the Alternate Base Rate or a Eurodollar Rate by the
Administrative Agent pursuant to this Agreement shall be conclusive and binding
on the Borrower absent manifest error. At no time shall the interest rate
payable on the Loans, together with all other amounts payable under the Loan
Documents, to the extent the same are construed to constitute interest, exceed
the Highest Lawful Rate. If in respect of any period during the term of this
Agreement, any amount paid hereunder, to the extent the same shall (but for the
provisions of this Section) constitute or be deemed to constitute interest,
would exceed the maximum amount of interest permitted by the Highest Lawful Rate
during such period (such excess amount being hereinafter referred to as an
"Unqualified Amount"), then (i) such Unqualified Amount shall be applied or
------------------
shall be deemed to have been applied as a prepayment of the Loans, and (ii) if
in any subsequent period during the term of this Agreement, all amounts payable
hereunder in respect of such period that constitute or shall be deemed to
constitute interest shall be less than the maximum amount of interest permitted
by the Highest Lawful Rate during such period, then the Borrower shall pay to
the Lender in respect of such period an amount (each a "Compensatory Interest
---------------------
Payment") equal to the lesser of (x) a sum that, when added to all such amounts,
-------
would equal the maximum amount of interest permitted by the Highest Lawful Rate
during such period, and (y) an amount equal to the Unqualified Amount less all
other Compensatory Interest Payments made in respect thereof. The Borrower
acknowledges that to the extent interest payable on ABR Advances is based on the
BNY Rate, such Rate is only one of the bases for computing interest on loans
made by the Lenders, and by basing interest payable on ABR Advances on the BNY
Rate, the Lenders have not committed to charge, and the Borrower has not in any
way bargained for, interest based on a lower or the lowest rate at which the
Lenders may now or in the future make loans to other borrowers.
-31-
2.7. Substituted Interest Rate
-------------------------
In the event that (i) the Administrative Agent shall have determined
(which determination shall be conclusive and binding upon the Borrower) that by
reason of circumstances affecting the interbank eurocurrency market either
adequate and reasonable means do not exist for ascertaining the Eurodollar Rate
applicable pursuant to Section 2.6 or (ii) the Required Lenders shall have
notified the Administrative Agent that they have determined (which determination
shall be conclusive and binding on the Borrower) that the applicable Eurodollar
Rate will not adequately and fairly reflect the cost to such Lenders of
maintaining or funding loans bearing interest based on such Eurodollar Rate with
respect to any portion of the Loans that the Borrower has requested be made as
Eurodollar Advances or Eurodollar Advances that will result from the requested
conversion or continuation of any portion of the Advances into or as Eurodollar
Advances (each, an "Affected Advance"), the Administrative Agent shall promptly
----------------
notify the Borrower and the Lenders (by telephone or otherwise, to be promptly
confirmed in writing) of such determination and the reasons therefor, on or, to
the extent practicable, prior to the requested Conversion/Continuation Date for
such Affected Advances. If the Administrative Agent shall give such notice, (A)
any Affected Advances shall be made as ABR Advances, (B) the Advances (or any
portion thereof) that were to have been converted to or continued as Affected
Advances shall be converted to or continued as ABR Advances and (C) any
outstanding Affected Advances shall be converted, on the last day of the then
current Interest Period with respect thereto, to ABR Advances. Until any notice
under clauses (i) or (ii), as the case may be, of this Section has been
withdrawn by the Administrative Agent (by notice to the Borrower and the Lenders
promptly upon either (x) the Administrative Agent having determined that such
circumstances affecting the interbank eurocurrency market no longer exist and
that adequate and reasonable means do exist for determining the Eurodollar Rate
pursuant to Section 2.6 or (y) the Administrative Agent having been notified by
such Required Lenders that circumstances no longer render the Advances (or any
portion thereof) Affected Advances), (1) no further Eurodollar Advances shall be
required to be made by the Lenders and (2) the Borrower shall not have the right
to convert or continue all or any portion of the Loans to or as Eurodollar
Advances.
2.8. Taxes
-----
(a) Payments to Be Free and Clear. Subject to Sections 2.8(d), 2.8(e)
-----------------------------
and 2.8(f), all payments by each Credit Party under the Loan Documents shall be
made free and clear of, and without any deduction or withholding for, any
Indemnified Tax. If any Credit Party or any other Person is required by any
law, rule, regulation, order, directive, treaty or guideline to make any
deduction or withholding (which deduction or withholding would constitute an
Indemnified Tax) from any amount required to be paid by any Credit Party to or
on behalf of any Indemnified Tax Person under any Loan Document (each a
"Required Payment"), then:
----------------
-32-
(i) such Credit Party shall notify the Administrative Agent
and such Indemnified Tax Person of any such requirement or any change in any
such requirement as soon as such Credit Party becomes aware thereof;
(ii) such Credit Party shall pay such Indemnified Tax prior
to the date on which penalties attach thereto, such payment to be made (to the
extent that the liability to pay is imposed on such Credit Party) for its own
account or (to the extent that the liability to pay is imposed on such
Indemnified Tax Person) on behalf and in the name of such Indemnified Tax
Person;
(iii) such Credit Party shall pay to such Indemnified Tax
Person an additional amount such that such Indemnified Tax Person shall receive
on the due date therefor an amount equal to the Required Payment had no such
deduction or withholding been required; and
(iv) such Credit Party shall, within 30 days after paying
such Indemnified Tax, deliver to the Administrative Agent and such Indemnified
Tax Person satisfactory evidence of such payment to the relevant Governmental
Authority.
(b) Other Indemnified Taxes. If any Indemnified Tax Person or any
-----------------------
affiliate thereof is required by any law, rule, regulation, order, directive,
treaty or guideline to pay any Indemnified Tax (excluding an Indemnified Tax
which is subject to Section 2.8(a)) with respect to any sum paid or payable by
any Credit Party to such Indemnified Tax Person under the Loan Documents, then,
within five days after such Indemnified Tax Person shall have notified such
Credit Party thereof (which notice shall be accompanied by a statement setting
forth the reasonable calculation thereof), such Credit Party shall pay to such
Indemnified Tax Person the amount of such Indemnified Tax.
(c) Tax on Indemnified Taxes. If any amounts are payable by any
------------------------
Credit Party in respect of Indemnified Taxes pursuant to Section 2.8(a) or (b),
such Credit Party agrees to pay to the applicable Indemnified Tax Person, within
five days of written request therefor (which request shall set forth the
reasonable calculations thereof), an amount equal to all Taxes imposed with
respect to such amounts as such Indemnified Tax Person shall determine in good
faith are payable by such Indemnified Tax Person or any affiliate thereof in
respect of such amounts and in respect of any amounts paid to or on behalf of
such Indemnified Tax Person pursuant to this Section 2.8(c).
(d) Exception for Existing Taxes. No amount shall be required to be
----------------------------
paid to any Indemnified Tax Person under Section 2.8(a) or (b) with respect to
any Indemnified Tax to the extent that such Indemnified Tax would have been
required to have been paid under any law, rule, regulation, order, directive,
treaty or guideline in effect on the Relevant Date.
-33-
(e) U.S. Tax Certificates. Each Lender that is organized under the
---------------------
laws of any jurisdiction other than the United States or any political
subdivision thereof shall deliver to the Administrative Agent for transmission
to the Borrower, on or prior to the Relevant Date, and at such other times as
may be necessary in the determination of the Borrower, any other Credit Party or
the Administrative Agent (each in the reasonable exercise of its discretion),
such certificates, documents or other evidence, properly completed and duly
executed by such Lender (including Internal Revenue Service Form 1001 or Form
4224 (or, in each case, any equivalent or successor form)) to establish that
such Lender is not subject to deduction or withholding of United States federal
income tax under Section 1441 or 1442 of the Code or otherwise (or under any
comparable provisions of any successor statute) with respect to any payments to
such Lender of principal, interest, fees or other amounts payable under the Loan
Documents or in the case of a Lender that is claiming an exemption from United
States withholding tax under Section 871(h) or 881(c) of the Internal Revenue
Code with respect to payments of "portfolio interest" two accurate and complete
signed original Forms W-8 (or any successor form prescribed by the Internal
Revenue Service, certifying that such Lender is exempt from United States
withholding tax on payments under this Agreement or the Notes) and, if such
Lender delivers such Forms W-8 (or successor form), two signed certificates that
such Lender is not (1) a "bank" for purposes of Section 881(c) of the Internal
Revenue Code, (2) is not a 10% shareholder (within the meaning of Section
871(h)(3)(B) of the Internal Revenue Code) of the Borrower and (3) is not a
controlled foreign corporation related to the Borrower (within the meaning of
Section 864(d)(4) of the Internal Revenue Code). No Credit Party shall be
required to pay any additional amount to any such Lender under Section
2.8(a)(iii) if such Lender shall have failed to satisfy the requirements of the
immediately preceding sentence; provided that, if such Lender shall have
satisfied such requirements on the Relevant Date, nothing in this Section 2.8(e)
shall relieve any Credit Party of its obligation to pay any additional amounts
pursuant to Section 2.8(a)(iii) in the event that, as a result of any change in
applicable law (including any change in the interpretation thereof), such Lender
is no longer properly entitled to deliver certificates, forms, documents or
other evidence at a subsequent date establishing the fact that such Lender is
not subject to deduction or withholding as described in the immediately
preceding sentence.
(f) Other Tax Certificates. Each Indemnified Tax Person agrees to
----------------------
use reasonable efforts to deliver to any Credit Party or the Administrative
Agent, promptly upon any reasonable request therefor from time to time by such
Credit Party or the Administrative Agent, such certificates, forms, documents
and information as may be required by applicable law, regulation, order,
directive, guideline or treaty from time to time, provided, however, that if
-------- -------
such Indemnified Tax Person is or becomes unable by virtue of any change in
applicable law, regulation or treaty, to establish such exemption or reduction,
such Credit Party shall nonetheless remain obligated under Section 2.8(a) to pay
the amounts described therein, and provided further that no Indemnified Tax
-------- -------
Person shall be required to take any action under this Section 2.8(f) which, in
the sole discretion of such Indemnified Tax Person, would cause such Indemnified
Tax Person or any affiliate thereof to suffer a material economic, legal or
regulatory disadvantage.
-34-
(g) Other Taxes. Each Credit Party agrees to pay any current or
-----------
future stamp or documentary taxes or any other excise or property taxes, charges
or similar levies that arise from any payment made hereunder or from the
execution, delivery or registration of, or any amendment, supplement or
modification of, or any waiver or consent under or in respect of, the Loan
Documents or otherwise with respect to, the Loan Documents.
(h) Refunds. Upon the reasonable request of a Credit Party, and at
-------
such Credit Party's expense, each Indemnified Tax Person shall cooperate with
the such Credit Party in seeking to obtain refunds of Taxes paid by such Credit
Party, provided that each such Indemnified Tax Person shall have no obligation
to (i) engage in any litigation, hearing or proceeding with respect thereto or
(ii) disclose any tax return or other confidential information other than
information reasonably requested by the applicable taxing authority which, in
the opinion of such Indemnified Tax Person, is not detrimental to such
Indemnified Tax Person. If an Indemnified Tax Person shall receive a refund (or
a refund in the form of a credit) from a taxing authority (as a result of any
error in the imposition of Tax by such taxing authority) of any Taxes paid by
such Credit Party pursuant to this Section 2.8, such Indemnified Tax Person, so
long as no Event of Default shall then exist, shall promptly pay to such Credit
Party the amount so received.
2.9. Illegality
----------
Notwithstanding any other provisions herein, if any law,
regulation, treaty or directive, or any change therein or in the interpretation
or application thereof, in each case enacted, adopted, promulgated, approved or
issued after the date hereof, shall make it unlawful for any Lender to make or
maintain its Eurodollar Advances as contemplated by this Agreement, (i) the
commitment of such Lender hereunder to (A) make Eurodollar Advances, (B) convert
ABR Advances to Eurodollar Advances or (C) continue Eurodollar Advances to new
Eurodollar Advances, shall forthwith be suspended and (ii) such Lender's Loans
then outstanding as Eurodollar Advances affected hereby, if any, shall be
converted automatically to ABR Advances on the last day of the then current
Interest Period applicable thereto or within such earlier period as required by
law. If the commitment of any Lender with respect to Eurodollar Advances is
suspended pursuant to this Section and such Lender shall notify the
Administrative Agent and the Borrower that it is once again legal for such
Lender to make or maintain Eurodollar Advances, such Lender's commitment to make
or maintain Eurodollar Advances shall be reinstated.
2.10. Increased Costs
---------------
In the event that any law, regulation, treaty or directive
hereafter enacted, adopted, promulgated, approved or issued or any change in any
existing law, regulation, treaty or directive or in the interpretation or
application thereof by any Governmental Authority charged with the
administration thereof or compliance by any Lender (or any Person directly or
indirectly owning
-35-
or controlling such Lender) with any request or directive from any central bank
or other Governmental Authority made or issued after the date hereof:
(a) does or shall subject any Lender to any Taxes of any kind
whatsoever with respect to any Eurodollar Advances or its obligations under this
Agreement to make Eurodollar Advances, or change the basis of taxation of
payments to any Lender of principal, interest or any other amount payable
hereunder in respect of its Eurodollar Advances, including any Taxes required to
be withheld from any amounts payable under the Loan Documents (except for
imposition of, or change in the rate of, Tax on the Income of such Lender or its
Applicable Lending Office for any of such Advances by the jurisdiction in which
such Lender is incorporated or has its principal office or such Applicable
Lending Office, including, in the case of Lenders incorporated in any State of
the United States, such tax imposed by the United States); or
(b) does or shall impose, modify or make applicable any reserve,
special deposit, compulsory loan, assessment, increased cost or similar
requirement against assets held by, or deposits of, or advances or loans by, or
other credit extended by, or any other acquisition of funds by, any office of
such Lender in respect of its Eurodollar Advances that is not otherwise included
in the determination of a Eurodollar Rate; and the result of any of the
foregoing is to increase the cost to such Lender of making, renewing,
converting, continuing or maintaining its Eurodollar Advances or its commitment
to make such Eurodollar Advances, or to reduce any amount receivable hereunder
in respect of its Eurodollar Advances then, in any such case, the Borrower shall
pay such Lender, upon its demand, any additional amounts necessary to compensate
such Lender for such additional cost or reduction in such amount receivable that
such Lender deems to be material as determined by such Lender; provided,
however, that nothing in this Section shall require the Borrower to indemnify
the Lenders with respect to Taxes for which the Borrower has no obligation under
Section 2.8. No failure by any Lender to demand compensation for any increased
cost during any Interest Period shall constitute a waiver of such Lender's right
to demand such compensation at any time. A statement setting forth the
calculations of any additional amounts payable pursuant to the foregoing
sentence submitted by a Lender to the Borrower shall be conclusive absent
manifest error.
2.11. Indemnification for Loss
------------------------
Notwithstanding anything contained herein to the contrary, if (i)
the Borrower shall fail to borrow or convert or continue a Eurodollar Advance on
the Funding Date or Conversion/Continuation Date after it shall have given
notice to do so in which it shall have requested a Eurodollar Advance, (ii) a
Eurodollar Advance shall be terminated or repaid or prepaid for any reason prior
to the last day of the Interest Period applicable thereto, or (iii) while a
Eurodollar Advance is outstanding, any repayment or prepayment of such
Eurodollar Advance is made for any reason (including, without limitation, as a
result of acceleration or illegality) on a date which is prior to the last day
of the Interest Period applicable thereto, the Borrower agrees to indemnify each
Lender against, and to pay on demand directly to such Lender, any loss or
-36-
expense suffered by such Lender as a result of such failure to borrow, convert
or continue, termination, repayment or prepayment, including, without
limitation, an amount, if greater than zero, equal to:
A x (B-C) x D/360
where:
"A" equals, in the case of a Eurodollar Advance, such Lender's Pro Rata Share of
the Affected Principal Amount;
"B" equals the Eurodollar Rate (expressed as a decimal), applicable to such
Eurodollar Advance;
"C" equals the applicable Eurodollar Rate (expressed as a decimal), in effect on
or about the first day of the applicable Remaining Interest Period, based on the
applicable rates offered or bid, as the case may be, on or about such date, for
deposits in an amount equal approximately to such Lender's Pro Rata Share of the
Affected Principal Amount, in each case, with an Interest Period equal
approximately to the applicable Remaining Interest Period, as determined by such
Lender; and
"D" equals the number of days from and including the first day of the applicable
Remaining Interest Period to but excluding the last day of such Remaining
Interest Period;
and any other out-of-pocket loss or expense (including any internal processing
charge customarily charged by such Lender) suffered by such Lender in connection
with such Eurodollar Advance, including, without limitation, in liquidating or
employing deposits acquired to fund or maintain the funding of its Pro Rata
Share of the Affected Principal Amount, or redeploying funds prepaid or repaid,
in amounts that correspond to its Pro Rata Share of the Affected Principal
Amount. Each determination by the Administrative Agent or a Lender pursuant to
this Section shall be conclusive and binding on the Borrower absent manifest
error.
2.12. Option to Fund
--------------
Each Lender has indicated that, if the Borrower requests a Eurodollar
Advance, such Lender may wish to purchase one or more deposits in order to fund
or maintain its funding of such Eurodollar Advance during the Interest Period in
question; it being understood that the provisions of this Agreement relating to
such funding are included only for the purpose of determining the rate of
interest to be paid on such Eurodollar Advance and for purposes of determining
amounts owing under Sections 2.10, 2.11, and 2.14. Each Lender shall be
entitled to fund and maintain its funding of all or any part of each Eurodollar
Advance made by it in any manner it sees fit, but all such determinations shall
be made as if such Lender had actually funded and maintained its funding of such
Eurodollar Advance during the applicable Interest
-37-
Period through the purchase of deposits in an amount equal to such Eurodollar
Advance and having a maturity corresponding to such Interest Period. The
obligations of the Borrower under Sections 2.7, 2.8, 2.9, 2.10, 2.11, and 2.14
shall survive the termination of the Aggregate Term Loan Commitments, the
payment of the Notes, and all other amounts payable under the Loan Documents.
2.13. Use of Proceeds
---------------
The proceeds of the Loans have been and shall be used for the general
corporate purposes of the Borrower and its Subsidiaries. Notwithstanding
anything to the contrary contained in any Loan Document, the Borrower agrees
that no part of the proceeds of any Loan has been or will be used, directly or
indirectly, for a purpose that violates any law, including, without limitation,
the provisions of Regulations T, U or X of the Board of Governors of the Federal
Reserve System, as amended.
2.14. Capital Adequacy
----------------
If (i) the enactment or promulgation of, or any change or phasing
in of, any United States or foreign law or regulation or in the interpretation
thereof by any Governmental Authority charged with the administration thereof
after the date hereof or (ii) compliance with any directive or guideline from
any central bank or United States or foreign Governmental Authority (whether
having the force of law) promulgated or made after the date hereof, affects or
would affect the amount of capital required to be maintained by a Lender (or any
lending office of such Lender) or any Person directly or indirectly owning or
controlling such Lender, or imposes any restriction on or otherwise adversely
affects such Lender (or any lending office of such Lender) or any Person
directly or indirectly owning or controlling such Lender, and such Lender shall
have determined that such enactment, promulgation, change or compliance has the
effect of reducing the rate of return on such Lender's (or such Person's)
capital or the asset value to such Lender of any Loan made by such Lender as a
consequence, directly or indirectly, of its obligations to make and maintain the
funding of its Loans at a level below that which such Lender (or such Person)
could have achieved but for such enactment, promulgation, change or compliance
(after taking into account such Lender's (or such Person's) policies regarding
capital adequacy) by an amount deemed by such Lender to be material, then, upon
demand by such Lender, the Borrower shall promptly pay to such Lender such
additional amount or amounts as shall be sufficient to compensate such Lender
(or such Person) for such reduction in such rate of return or asset value. A
certificate in reasonable detail as to such amounts submitted to the Borrower
and the Administrative Agent setting forth the determination of such amount or
amounts that will compensate such Lender for such reductions shall be presumed
correct absent manifest error.
-38-
2.15. Administrative Agent's Records
------------------------------
The Administrative Agent's records regarding the amount of each
Loan each payment by the Borrower of principal and interest on the Loans and
other information relating to the Loans shall be presumptively correct absent
manifest error.
3. FEES; PAYMENTS
--------------
3.1. Pro Rata Treatment and Application of Principal Payments
--------------------------------------------------------
Each payment, including each prepayment, of principal and interest
on the Loans shall be made by the Borrower without set-off or counterclaim and
shall be made to the Administrative Agent in Dollars at the applicable Agent
Payment Office in funds immediately available to the Administrative Agent at
such office by 1:30 P.M. on the due date for such payment, and, promptly upon
receipt thereof by the Administrative Agent, shall be remitted by the
Administrative Agent, in like funds as received, to the Lenders according to the
Pro Rata Share of each Lender. The failure of the Borrower to make any such
payment by such time shall not constitute a default hereunder, provided that
such payment is made on such due date, but any such payment made after 1:30 P.M.
on such due date shall be deemed to have been made on the next Business Day for
the purpose of calculating interest on amounts outstanding on the Loans. If any
payment hereunder or under the Notes shall be due and payable on a day that is
not a Business Day, the due date thereof (except as otherwise provided in the
definition of Interest Period) shall be extended to the next Business Day and
interest shall be payable at the applicable rate specified herein during such
extension. If any payment is made with respect to any Eurodollar Advance prior
to the last day of the applicable Interest Period, the Borrower shall indemnify
each Lender in accordance with Section 2.11.
4. REPRESENTATIONS AND WARRANTIES
------------------------------
In order to induce the Administrative Agent and the Lenders to
enter into this Agreement, the Borrower makes the following representations and
warranties to the Administrative Agent and each Lender as of the date of this
Agreement :
4.1. Subsidiaries; Capitalization
----------------------------
The Borrower has only the Subsidiaries permitted by this Agreement.
Schedule 4.1 sets forth the Subsidiaries of the Borrower as of the Effective
Date. The shares of each corporate Subsidiary are duly authorized, validly
issued, fully paid and nonassessable and are owned free and clear of any Liens
(except for Liens created in favor of the Collateral Agent by the Collateral
Documents). The interest of the Borrower in each non-corporate Subsidiary is
owned free and clear of any Liens (except for Liens created in favor of the
Collateral Agent by the Collateral Documents). The outstanding capital Stock of
each corporate Subsidiary of the
-39-
Borrower on the Effective Date and the ownership interest in each non-corporate
Subsidiary are as set forth on Schedule 4.1. As of the Effective Date, the owner
of each issue of capital Stock listed on Schedule 4.1 is the registered and
beneficial owner thereof. No Subsidiary has issued any securities convertible
into Stock (or other equity interest) of such Subsidiary and there are no
outstanding options or warrants to purchase Stock of such Subsidiary of any
class or kind, and there are no voting trusts or similar agreements with respect
thereto or other agreements or understandings with respect thereto which would
restrict or limit the sale, pledge, assignment or other disposition thereof,
including, without limitation, any right of first refusal, option, redemption,
call or other rights with respect thereto, whether similar or dissimilar to any
of the foregoing, or which would dilute the interest of the Borrower therein.
4.2. Existence and Power
-------------------
Each of the Borrower, its Subsidiaries and the Credit Parties is
duly organized or formed and validly existing in good standing under the laws of
the jurisdiction of its incorporation or formation, has all requisite power and
authority to own its Property and to carry on its business as now conducted, and
is in good standing and authorized to do business as a foreign corporation in
each jurisdiction in which the nature of the business conducted therein or the
Property owned therein makes such qualification necessary, except in each case
where such failure so to qualify, and, in the case of East End Dialysis Center,
Inc., Elberton Dialysis Facility, Inc., ▇▇▇▇▇▇▇ County Dialysis Facility, Inc.
and RTC Texas Acquisition, Inc., where such failure so to be in good standing
under the laws of the jurisdiction of its incorporation or formation (which such
failure to be in good standing shall be promptly remedied following the
Effective Date), could not reasonably be expected to have a Material Adverse
Effect.
4.3. Authority
---------
Each of the Borrower, its Subsidiaries and the Credit Parties has
full legal power and authority to enter into, execute, deliver and perform the
terms of the Loan Documents to which it is a party, and the transactions
contemplated thereby (including the Transactions) and, in the case of the
Borrower, to make the borrowings contemplated hereby and by the Notes, to
execute, deliver and carry out the terms of the Notes and to incur the
obligations provided for herein and therein, all of which have been duly
authorized by all proper and necessary corporate or other applicable action and
are in full compliance with its Certificate of Incorporation or By-Laws or its
other organization documents.
4.4. Binding Agreement
-----------------
The Loan Documents (other than the Notes) constitute, and the
Notes, when issued and delivered pursuant hereto for value received, will
constitute, the valid and legally binding obligations of the Credit Parties in
each case, to the extent it is a party thereto, enforceable in accordance with
their respective terms, except as such enforceability may be
-40-
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights generally.
4.5. Litigation
----------
Except as set forth on Schedule 4.5, there are no actions, suits or
proceedings at law or in equity or by or before any Governmental Authority
(whether purportedly on behalf of the Borrower, any of its Subsidiaries or any
Credit Party) pending or, to the knowledge of the Borrower, threatened against
the Borrower, any of its Subsidiaries or any Credit Party or any of their
respective Properties or rights, that (i) if adversely determined, could
reasonably be expected to have a Material Adverse Effect, (ii) expressly call
into question the validity or enforceability of any of the Loan Documents, or
(iii) could reasonably be expected to result in the rescission, termination or
cancellation of any material franchise, right, license, permit or similar
authorization held by the Borrower or any of its Subsidiaries or any Credit
Party.
4.6. Required Consents
-----------------
Except for information filings required to be made in the ordinary
course of business that are not a condition to the Borrower's performance under
the Loan Documents, no consent, authorization or approval of, filing with,
notice to, or exemption by, stockholders, any Governmental Authority or any
other Person is required to authorize, or is required in connection with the
execution, delivery and performance of the Loan Documents and the transactions
contemplated thereby (including the Transactions), or is required as a condition
to the validity or enforceability of the Loan Documents.
4.7. No Conflicting Agreements
-------------------------
Neither the Borrower, any of its Subsidiaries nor any Credit Party
is in default under any mortgage, indenture, contract or agreement to which it
is a party, or by which it or any of its Property is bound, the effect of which
default could reasonably be expected to have a Material Adverse Effect. The
execution, delivery or carrying out of the terms of the Loan Documents and the
transactions contemplated hereby and thereby (including the Transactions), will
not constitute a default under, or result in the creation or imposition of, or
obligation to create, any Lien upon any Property of the Borrower or any of its
Subsidiaries or result in a breach of or require the mandatory repayment of or
other acceleration of payment under or pursuant to the terms of any such
mortgage, indenture, contract or agreement.
4.8. Compliance with Applicable Laws
-------------------------------
Neither the Borrower, any of its Subsidiaries nor any Credit Party
is in default with respect to any judgment, order, writ, injunction, decree or
decision of any Governmental Authority the effect of which default could
reasonably be expected to have a Material Adverse Effect. The Borrower, each of
its Subsidiaries and each Credit Party is complying in all material respects
with all statutes, regulations, rules and orders applicable to Borrower, such
Subsidiary or
-41-
such Credit Party of all Governmental Authorities, including, without
limitation, Environmental Laws and ERISA, the violation of which could
reasonably be expected to have a Material Adverse Effect, provided that this
sentence shall not extend to matters relating to compliance with federal
Medicaid and Medicare statutes or the regulations promulgated pursuant to such
statutes or related state or local statutes or regulations to the extent such
matters are covered by Sections 4.19 and 4.20.
4.9. Taxes
-----
Except as provided on Schedule 4.9, all tax returns required to be
filed by or on behalf of the Borrower, its Subsidiaries and each Credit Party
have been filed and payment, and adequate provision for the payment, has been
made for all taxes shown to be due and payable on said returns or in any
assessments made against the Borrower, its Subsidiaries or any Credit Party
(other than those being contested as required under Section 7.4) that would be
material to the Borrower or its Subsidiaries taken as a whole, and no tax liens
(other than a Permitted Lien described in Section 8.2(i)) have been filed with
respect to the Borrower, its Subsidiaries or any Credit Party. The charges,
accruals and reserves on the books of the Borrower, each of its Subsidiaries and
each Credit Party with respect to all federal, state, local and other taxes are,
to the best knowledge of the Borrower, adequate for the payment of all such
material taxes, and the Borrower knows of no unpaid assessment that is due and
payable against it, any of its Subsidiaries or any Credit Party or any claims
being asserted that could reasonably be expected to have a Material Adverse
Effect, except such thereof as are being contested as required under Section
7.4, and for which adequate reserves have been set aside in accordance with
GAAP.
4.10. Governmental Regulations
------------------------
Neither the Borrower, any of its Subsidiaries nor any Credit Party
is subject to regulation under the Public Utility Holding Company Act of 1935,
as amended, the Federal Power Act or the Investment Company Act of 1940, as
amended, and neither the Borrower, any of its Subsidiaries nor any Credit Party
is subject to any statute or regulation that prohibits or restricts the
incurrence of Indebtedness under the Loan Documents, including, without
limitation, statutes or regulations relative to common or contract carriers or
to the sale of electricity, gas, steam, water, telephone, telegraph or other
public utility services.
4.11. Federal Reserve Regulations; Use of Proceeds
--------------------------------------------
Neither the Borrower, any of its Subsidiaries nor any Credit Party
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 has been or will be used, directly or
indirectly, for a purpose that violates any law, rule or regulation of any
Governmental Authority, including, without limitation, the provisions of
Regulations T, U or X of the Board of Governors of the Federal Reserve System,
as amended. No part of the proceeds of the Loans has been or will be used,
directly or indirectly, to purchase or carry Margin Stock or to extend credit to
others for the purpose of purchasing or carrying Margin Stock.
-42-
4.12. Plans
-----
The only Pension Plans in effect as of the Effective Date (the
"Existing Pension Plans") are listed on Schedule 4.12. Each Employee Benefit
-----------------------
Plan of the Borrower, its Subsidiaries, the Credit Parties and the ERISA
Affiliates is in compliance with ERISA and the Code, where applicable, in all
material respects. As of the Effective Date (i) the amount of all Unfunded
Pension Liabilities under the Pension Plans, excluding any plan that is a
Multiemployer Plan, does not exceed $0, and (ii) the amount of the aggregate
Unrecognized Retiree Welfare Liability under all applicable Employee Benefit
Plans does not exceed $100,000. Each of the Borrower, its Subsidiaries, the
Credit Parties and the ERISA Affiliates has complied with the requirements of
Section 515 of ERISA with respect to each Pension Plan that is a Multiemployer
Plan. As of the Effective Date, the aggregate potential annual withdrawal
liability payments, as determined in accordance with Title IV of ERISA, of the
Borrower, its Subsidiaries, the Credit Parties and the ERISA Affiliates with
respect to all Pension Plans that are Multiemployer Plans is approximately $0.
Each of the Borrower, its Subsidiaries, the Credit Parties and/or any ERISA
Affiliate has, as of the Effective Date, made all material contributions or
payments to or under each such Pension Plan required by law or the terms of such
Pension Plan or any contract or agreement with respect thereto. No material
liability to the PBGC has been, or is expected by the Borrower, any of its
Subsidiaries, any Credit Party or any ERISA Affiliate to be, incurred by the
Borrower, such Subsidiary, such Credit Party or any ERISA Affiliate. Liability,
as referred to in this Section includes any joint and several liability. Each
Employee Benefit Plan that is a group health plan within the meaning of Section
5000(b)(1) of the Code is in material compliance with the continuation of health
care coverage requirements of Section 4980B of the Code.
4.13. Financial Statements
--------------------
The Borrower has heretofore delivered to the Administrative Agent
and the Lenders copies of (i) the audited consolidated balance sheet of the
Borrower as of December 31, 1999 and the related consolidated statements of
income, stockholders' equity and cash flows for the fiscal year then ended and
(ii) the unaudited consolidated balance sheet of the Borrower as of March 31,
2000 and the related consolidated statements of income and cash flows for the
fiscal quarter then ended (with the related notes and schedules, the "Financial
---------
Statements"). The Financial Statements fairly present the consolidated financial
----------
condition and results of the operations of the Borrower and its Subsidiaries, as
the case may be, as of the dates and for the periods indicated therein and have
been prepared in conformity with GAAP (except that the March 31, 2000 Financial
Statements are subject to customary year end adjustments and do not include all
footnotes required by GAAP). As of the Effective Date, except as reflected in
the Financial Statements or in the notes thereto, neither the Borrower nor any
of its Subsidiaries has any obligation or liability of any kind (whether fixed,
accrued, contingent, unmatured or otherwise) that, in accordance with GAAP,
should have been shown on the Financial Statements and was not. Since March 31,
2000 there has been no Material Adverse Change.
-43-
4.14. Property
--------
Each of the Borrower, its Subsidiaries and each Credit Party has
good and marketable title to all of its Property, title to which is material to
the Borrower and its Subsidiaries taken as a whole, subject to no Liens, except
for Permitted Liens.
4.15. Franchises, Intellectual Property, Etc.
---------------------------------------
Each of the Borrower, its Subsidiaries and each Credit Party
possesses or has the right to use all franchises, Intellectual Property,
licenses and other rights as are material and necessary for the conduct of its
business, and with respect to which it is in compliance, with no known conflict
with the valid rights of others that would reasonably be expected to have a
Material Adverse Effect. No event has occurred that permits or, to the best
knowledge of the Borrower, after notice or the lapse of time or both, or any
other condition, could reasonably be expected to permit, the revocation or
termination of any such franchise, Intellectual Property, license or other right
which revocation or termination could reasonably be expected to have a Material
Adverse Effect.
4.16. Environmental Matters
---------------------
(a) The Borrower, each of its Subsidiaries and each Credit Party
is in material compliance with the requirements of all applicable Environmental
Laws.
(b) No Hazardous Substances have been generated or manufactured
on, transported to or from, treated at, stored at or discharged from any Real
Property in material violation of any Environmental Laws; no Hazardous
Substances have been discharged into subsurface waters under any Real Property
in material violation of any Environmental Laws; no Hazardous Substances have
been discharged from any Real Property on or into Property or waters (including
subsurface waters) adjacent to any Real Property in material violation of any
Environmental Laws; and there are not now, nor ever have been, on any Real
Property any underground or above ground storage tanks in material violation of
any Environmental Laws.
(c) Neither the Borrower, nor any of its Subsidiaries or any
Credit Party (i) has received notice (written or oral) or otherwise learned of
any claim, demand, suit, action, proceeding, event, condition, report,
directive, Lien, violation, non-compliance or investigation indicating or
concerning any potential or actual material liability (including, without
limitation, potential material liability for enforcement, investigatory costs,
cleanup costs, government response costs, removal costs, remedial costs, natural
resources damages, Property damages, personal injuries or penalties) arising in
connection with: (x) any non-compliance with or violation of the requirements of
any applicable Environmental Laws, or (y) the presence of any Hazardous
Substance on any Real Property (or any Real Property previously owned by the
Borrower, any of its Subsidiaries or any Credit Party) or the release or
threatened release of any Hazardous Substance into the environment, (ii) has
knowledge of any threatened or actual material liability in connection with the
presence of any Hazardous Substance on any Real Property (or any Real Property
previously owned by the Borrower, any of its Subsidiaries or any Credit Party)
or the release or threatened release of any Hazardous Substance into the
environment, (iii) has received notice of any federal or state investigation
evaluating whether any material remedial action is needed to respond to the
presence of any Hazardous Substance on any Real
-44-
Property (or any Real Property previously owned by the Borrower, any of its
Subsidiaries or any Credit Party) or a release or threatened release of any
Hazardous Substance into the environment for which the Borrower, any of its
Subsidiaries or any Credit Party is or may be liable, or (iv) has received
notice that the Borrower, any of its Subsidiaries or any Credit Party is or may
be liable for a material amount to any Person under any Environmental Law.
(d) For purposes of subsections (a), (b) and (c) of this Section
4.16 "material" shall mean any liability or potential liability of the Borrower
and its Subsidiaries on a Consolidated basis for an aggregate amount in excess
of $1,000,000.
4.17. Labor Relations
---------------
There are no material controversies pending between the Borrower,
any of its Subsidiaries or any Credit Party and any of their respective
employees, that could reasonably be expected to have a Material Adverse Effect.
4.18. Burdensome Obligations
----------------------
Neither the Borrower, any of its Subsidiaries nor any Credit Party
is a party to or bound by any franchise, agreement, deed, lease or other
instrument, or subject to any restriction that, in the opinion of the management
of the Borrower, is so unusual or burdensome, in the context of its business, as
in the foreseeable future might materially and adversely affect or impair the
revenue or cash flow of the Borrower and its Subsidiaries taken as a whole, or
the ability of the Borrower or its Subsidiaries taken as a whole to perform its,
or their, obligations under the Loan Documents to which it is, or they are, a
party. The Borrower does not presently anticipate that future expenditures by
the Borrower, any of its Subsidiaries or any Credit Party needed to meet the
provisions of federal or state statutes, orders, rules or regulations will be so
burdensome as to result in a Material Adverse Effect or Material Adverse Change.
4.19. Medicare Participation/Accreditation
------------------------------------
Except as set forth in Schedule 4.19, the facilities operated by
each of the Borrower and its Subsidiaries (the "Facilities") are qualified for
----------
participation in the Medicare and Medicaid programs (together with their
respective intermediaries or carriers, the "Government Reimbursement Programs")
---------------------------------
and are entitled to reimbursement under the Medicare program for services
rendered to qualified Medicare beneficiaries, and comply in all material
respects with the conditions of participation in all Government Reimbursement
Programs in which it participates or has participated. There is no pending or,
to Borrower's knowledge, threatened proceeding or investigation by any of the
Government Reimbursement Programs in which it participates or has participated
with respect to (i) the Borrower's or any of its Subsidiaries'
-45-
qualification or right to participate in any Government Reimbursement Program in
which it participates or has participated, (ii) the compliance or non-compliance
by the Borrower or any of its Subsidiaries with the terms or provisions of any
Government Reimbursement Program, or (iii) the right of the Borrower or any of
its Subsidiaries to receive or retain amounts received or due or to become due
from any Government Reimbursement Program in which it participates or has
participated, which proceeding or investigation, together with all other such
proceedings and investigations, could reasonably be expected to (x) have a
Material Adverse Effect or (y) result in Consolidated net operating revenues for
any (including any future) four fiscal quarter period of the Borrower
constituting less than 95% of Consolidated net operating revenues for the
immediately preceding four fiscal quarter period of the Borrower.
4.20. Fraud and Abuse
---------------
Neither the Borrower nor any of its Subsidiaries, nor any of their
respective officers or directors has, on behalf of the Borrower or any of its
Subsidiaries, knowingly or willfully violated the federal Medicare and Medicaid
statutes, 42 U.S.C. (S)1320a-7b, or the regulations promulgated pursuant to such
statutes or related state or local statutes or regulations, including but not
limited to the following: (i) knowingly and willfully making or causing to be
made a false statement or representation of a material fact in any applications
for any benefit or payment; (ii) knowingly and willfully making or causing to be
made any false statement or representation of a material fact for use in
determining rights to any benefit or payment; (iii) failing to disclose
knowledge by a claimant of the occurrence of any event affecting the initial or
continued right to any benefit or payment on its own behalf or on behalf of
another, with intent to secure such benefit or payment fraudulently; (iv)
knowingly and willfully soliciting or receiving any remuneration (including any
kickback, bribe or rebate), directly or indirectly, overtly or covertly, in cash
or in kind or offering to pay such remuneration (a) in return for referring an
individual to a Person for the furnishing or arranging for the furnishing of any
item or service for which payment may be made in whole or in part by Medicare,
Medicaid or other applicable third-party payers, or (b) in return for
purchasing, leasing or ordering or arranging for or recommending the purchasing,
leasing or ordering of any good, facility, service or item for which payment may
be made in whole or in part by Medicare, Medicaid or other applicable third-
party payers. With respect to this Section, knowledge of an individual director
or officer of the Borrower or a Subsidiary of any of the events described in
this Section shall not be imputed to the Borrower or such Subsidiary unless such
knowledge was obtained or learned by the director or officer in his or her
official capacity as a director or officer of the Borrower or such Subsidiary.
4.21. No Misrepresentation
--------------------
The information provided by the Borrower, any of its Subsidiaries
or any Credit Party in connection with the transactions contemplated hereby,
taken as a whole does not contain a misstatement of material fact, or, to the
best knowledge of the Borrower, omit to state a material fact required to be
stated in order to make the statements therein contained not
-46-
misleading in the light of the circumstances under which made. All financial
projections, if any, delivered by the Borrower to the Administrative Agent and
the Lenders were based on good faith estimates and assumptions believed by the
Borrower to be reasonable at the time made.
4.22. Subordinated Indebtedness
-------------------------
The subordination provisions of (i) the RTC Convertible
Subordinated Indenture, (ii) the RTC Convertible Subordinated Notes, (iii) the
RTC Convertible Subordinated Guaranty, (iv) any Subordinated Indebtedness now
existing or hereafter incurred or assumed by the Borrower and (v) any guarantee
by any Subsidiary of the Borrower of any Subordinated Indebtedness will be
enforceable against the holders thereof, and the Loans and all other monetary
obligations hereunder and all monetary obligations under the Subsidiary Guaranty
will constitute "Senior Indebtedness" and "Designated Senior Indebtedness" (or
any comparable terms) as defined in such provisions.
4.23. Survival of Rights Created under Existing Term Agreement
--------------------------------------------------------
The Borrower acknowledges and agrees that any choses in action or
other rights created in favor of any Lender and their respective successors and
assigns arising out of the representations and warranties of the Borrower
contained in or delivered (including representations and warranties delivered in
connection with the making of loans thereunder) in connection with the Existing
Term Loan Agreement, shall survive the execution and delivery of this Agreement.
The Borrower and Lenders acknowledge that certain representations and warranties
made by the Borrower under the Existing Term Loan Agreement (including
representations and warranties as to the future consequences of certain events
which occurred prior to the date of this Agreement) were made subject to changes
in the facts and conditions on which such representations and warranties were
based, which such changes were permitted or required under the Existing Term
Loan Agreement or this Agreement and any such representations and warranties
incorporated herein are so incorporated subject to such changes permitted or
required under the Existing Term Loan Agreement or this Agreement.
5. CONDITIONS TO EFFECTIVENESS OF AGREEMENT
----------------------------------------
The effectiveness of this Agreement shall be subject to the
fulfillment of the following conditions precedent:
5.1. Evidence of Action
------------------
(a) The Borrower. The Administrative Agent shall have received a
------------
certificate, dated the Effective Date, of the Secretary or Assistant Secretary
of the Borrower (i) attaching a true and complete copy of the resolutions of its
Board of Directors and of all documents evidencing other necessary corporate
action (in form and substance satisfactory to the Administrative Agent) taken by
it to authorize the Loan Documents to which it is a party and the
-47-
transactions contemplated thereby, (ii) attaching a true and complete copy of
its Certificate of Incorporation and By-Laws, (iii) setting forth the incumbency
of its officer or officers who may sign such Documents, including therein a
signature specimen of such officer or officers and (iv) attaching a certificate
of good standing of the Secretary of State of the States of Delaware and
California.
(b) The Guarantors. The Administrative Agent shall have received a
--------------
certificate, dated the Effective Date, of the Secretary or Assistant Secretary
of each Guarantor (i) attaching a true and complete copy of the resolutions of
its Board of Directors and of all documents evidencing other necessary corporate
action (in form and substance satisfactory to the Administrative Agent) taken by
it to authorize the Loan Documents to which it is a party and the transactions
contemplated thereby, (ii) attaching a true and complete copy of its Articles of
Incorporation and By-Laws, (iii) setting forth the incumbency of its officer or
officers who may sign such Documents, including therein a signature specimen of
such officer or officers and (iv) attaching a certificate of good standing of
the Secretary of State of such Guarantor's jurisdiction of organization and
principal place of business.
5.2. This Agreement
--------------
The Administrative Agent shall have received counterparts of this
Agreement signed by each of the Borrower, the Administrative Agent, the
Syndication Agent and the Required Lenders (or receipt by the Administrative
Agent from a party hereto of a fax signature page signed by such party which
shall have agreed to promptly provide the Administrative Agent with originally
executed counterparts hereof).
5.3. Subsidiary Guaranty
-------------------
The Administrative Agent shall have received counterparts of the
Subsidiary Guaranty duly signed by each Guarantor.
5.4. Security Agreement
------------------
The Administrative Agent shall have received counterparts of the
Security Agreement duly signed by the Borrower and each Guarantor, together with
the following:
(a) any stock certificates representing shares of capital stock
owned by or on behalf of any Credit Party constituting Collateral as of the
Effective Date;
(b) any promissory notes and other instruments evidencing all
loans, advances and other debt owed or owing to any Credit Party constituting
Collateral as of the Effective Date;
(c) stock powers and instruments of transfer, endorsed in blank,
with respect to such stock certificates, promissory notes and other instruments;
and
-48-
(d) all instruments and other documents, including Uniform
Commercial Code financing statements and grants of intellectual property
interests as required by the Security Agreement, required by law or reasonably
requested by the Collateral Agent to be filed, registered or recorded to create
or perfect the Liens intended to be created under the Security Agreement.
5.5. Intercreditor Agreement
-----------------------
The Intercreditor Agreement shall have been executed and delivered
by the Administrative Agent, the Administrative Agent (under and as defined in
the Revolving Credit Facility), the Collateral Agent and the Credit Parties.
5.6. Revolving Credit Facility
-------------------------
The Revolving Credit Facility shall have been duly executed and
shall have become effective, and the Administrative Agent shall have received a
certificate of an Authorized Signatory of the Borrower attaching a true and
correct copy of the executed Revolving Credit Facility. The Lenders hereby
consent to the Revolving Credit Facility as in effect on the Effective Date.
5.7. Litigation
----------
There shall be no injunction, writ, preliminary restraining order
or other order of any nature issued by any Governmental Authority in any respect
affecting the transactions provided for herein and no action or proceeding by or
before any Governmental Authority shall have been commenced and be pending or,
to the knowledge of the Borrower, threatened, seeking to prevent or delay the
transactions contemplated by the Loan Documents or challenging any other terms
and provisions thereof or seeking any damages in connection therewith, and the
Administrative Agent shall have received a certificate of an Authorized
Signatory of the Borrower to the foregoing effects.
5.8. Opinion of Counsel to the Credit Parties
----------------------------------------
The Administrative Agent shall have received opinions of (i) the
general counsel to the Borrower and the other Credit Parties, addressed to the
Administrative Agent, the Collateral Agent, the Syndication Agent and the
Lenders, and dated the Effective Date, substantially in the form of Exhibit E-1,
and (ii) ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, special counsel to the Borrower and the other
Credit Parties, addressed to the Administrative Agent, the Collateral Agent, the
Syndication Agent and the Lenders, and dated the Effective Date, substantially
in the form of Exhibit E-2. It is understood that such opinions are being
delivered to the Administrative Agent, the Collateral Agent, the Syndication
Agent and the Lenders upon the direction of the Borrower and the Credit Parties
and that the Administrative Agent, the Collateral Agent, the Syndication Agent
and the Lenders may and will rely upon such opinions.
-49-
5.9. Compliance Certificate
----------------------
The Administrative Agent shall have received a compliance
certificate, dated the Effective Date, certified by an Authorized Signatory of
the Borrower to the effect that the Borrower is in compliance with Sections 7.12
through 7.15 and 8.17 on the Effective Date (after giving effect to this
Agreement).
5.10. Term Loan Prepayment
--------------------
Immediately prior to the effectiveness of this Agreement, the
Borrower shall have made a prepayment of the Term Loans (as defined in the
Existing Term Loan Agreement) in an amount equal to $26,525,671 which prepayment
shall be deemed to have been applied to the scheduled prepayments of such Term
Loans required by Section 2.4(b) of the Existing Term Loan Agreement in direct
order of their maturity.
5.11. Fees
----
All fees payable to the Administrative Agent, the Co-Arrangers, the
Syndication Agent and the Lenders on or prior to the Effective Date shall have
been paid.
5.12. Fees and Expenses of Steering Committee, Agents and Special Counsel
-------------------------------------------------------------------
The reasonable fees and expenses of the steering committee, its
counsel, the Administrative Agent, the Special Counsel, the Syndication Agent
and counsel to the Syndication Agent in connection with the preparation,
negotiation and closing of the Loan Documents shall have been paid.
5.13. Documentation and Proceedings
-----------------------------
All corporate or other organizational and legal proceedings and all
documents and papers in connection with the transactions contemplated by the
Loan Documents shall be satisfactory in form and substance to the Administrative
Agent, and the Administrative Agent shall have received all information and
copies of all documents that the Administrative Agent or the Required Lenders
may reasonably have requested in connection therewith, such documents (where
appropriate) to be certified by an Authorized Signatory of the Borrower or
proper Governmental Authorities.
5.14. Required Acts and Conditions
----------------------------
All acts, conditions and things (including, without limitation, the
obtaining of any necessary regulatory approvals and the making of any filings,
recordings or registrations) required to be done, performed and to have happened
on or prior to the Effective Date and that are necessary for the continued
effectiveness of the Loan Documents shall have been done and performed and shall
have happened in due compliance with all applicable laws.
-50-
5.15. Approval of Special Counsel and Counsel to Syndication Agent
------------------------------------------------------------
All legal matters in connection with the effectiveness of this
Agreement shall be reasonably satisfactory to Special Counsel and counsel to the
Syndication Agent.
5.16. Other Documents
---------------
The Administrative Agent shall have received such other documents
as the Administrative Agent, the Syndication Agent or the Required Lenders shall
reasonably request.
5.17. Officers' Certificate Regarding Certain Conditions.
--------------------------------------------------
The following conditions shall be satisfied and the Borrower shall
have delivered to the Administrative Agent a certificate of an Authorized
Signatory of the Borrower in form and substance satisfactory to the
Administrative Agent, to the following effect:
(a) Representations and Warranties. The representations and
------------------------------
warranties contained herein and in the other Loan Documents shall be true,
correct and complete in all material respects on and as of the Effective Date
(after giving effect to this Agreement) 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, correct and complete in all material respects
on and as of such earlier date.
(b) No Event of Default. No event shall have occurred and be
-------------------
continuing as of the Effective Date (after giving effect to this Agreement) that
would constitute a Default or an Event of Default.
(c) Performance of Agreements. Each Credit Party shall have
-------------------------
performed in all material respects all agreements and satisfied all conditions
which the Loan Documents provide shall be performed or satisfied by such Credit
Party on or before the Effective Date.
6. [INTENTIONALLY OMITTED]
-----------------------
7. AFFIRMATIVE COVENANTS
---------------------
The Borrower agrees that, so long as this Agreement is in effect,
any Loan remains outstanding and unpaid, or any other amount is owing under any
Loan Document to any Lender or the Administrative Agent, the Borrower shall:
-51-
7.1. Financial Statements
--------------------
Maintain a standard system of accounting in accordance with sound
business practices sufficient to permit preparation of financial statements in
conformity with GAAP, and furnish or cause to be furnished to the Administrative
Agent and each Lender:
(a) As soon as available, but in any event within 90 days after
the end of each fiscal year, (i) a copy of the consolidated balance sheet of the
Borrower and its Subsidiaries as at the end of such fiscal year, together with
the related consolidated statements of income, stockholders' equity and cash
flows as of and through the end of such fiscal year, setting forth in each case
in comparative form the figures for the preceding fiscal year, (ii) a copy of
the letter (such letter to conform to the then existing AICPA reporting
guidelines) of the Accountants addressed to the board of directors of the
Borrower to the effect that, in connection with the procedures performed in
obtaining a basis for certification of the audited consolidated financial
statements of the Borrower, the Accountants obtained no knowledge, in the course
of performing their audit, that would indicate that the Borrower was in
violation of any financial covenant contained in this Agreement or of the
existence of any Default by the Borrower under this Agreement, and (iii) a copy
of any management letter delivered by the Accountants. The consolidated balance
sheet and consolidated statements of income, stockholders' equity and cash flows
shall be audited and certified without qualification by the Accountants, which
certification shall (i) state that the examination by such Accountants in
connection with such consolidated financial statements has been made in
accordance with generally accepted auditing standards and, accordingly, included
such tests of the accounting records and such other auditing procedures as were
considered necessary in the circumstances, and (ii) include the opinion of such
Accountants that such consolidated financial statements have been prepared in
accordance with GAAP in a manner consistent with prior fiscal periods, except as
otherwise specified in such opinion.
(b) As soon as available, but in any event within 45 days after
the end of each fiscal quarter (90 days after the end of the fourth quarter), a
copy of the consolidated and consolidating balance sheets of the Borrower and
its Subsidiaries as at the end of each such quarterly period, together with the
related consolidated and consolidating statements of income and cash flows for
such period and for the elapsed portion of the fiscal year through such date,
setting forth in each case in comparative form the figures for the corresponding
periods of the preceding fiscal year, certified by the chief financial officer
of the Borrower (or such other officer acceptable to the Administrative Agent),
as being complete and correct in all material respects and as presenting fairly
the consolidated and consolidating financial condition and the consolidated and
consolidating results of operations of the Borrower and its Subsidiaries;
provided that such consolidating financial statements shall not be required when
the Leverage Ratio shall be less than 3.75:1.00 at all times during the
immediately preceding two fiscal quarters in respect of which financial
statements and a Compliance Certificate have been delivered to the
Administrative Agent and the Lenders pursuant to this Section 7.1.
-52-
(c) Within 45 days after the end of each of the first three fiscal
quarters in each year and within 90 days after the end of the last fiscal
quarter in each year, a Compliance Certificate, certified by the chief financial
officer of the Borrower (or such other officer as shall be acceptable to the
Administrative Agent).
(d) Within 90 days after the end of each fiscal year, updated
projections in reasonable detail prepared on a quarterly basis for the current
fiscal year and on an annual basis for each fiscal year thereafter through the
Maturity Date, and at least once each year hold an annual meeting for the
Lenders regarding the Borrower's performance, projections and business plan.
(e) Such other information as the Administrative Agent, the
Syndication Agent or any Lender may reasonably request from time to time.
7.2. Certificates; Other Information
-------------------------------
Furnish to the Administrative Agent and each Lender:
(a) Prompt written notice if: (i) any Indebtedness of the Borrower
and/or any of its Subsidiaries in excess of $1,000,000 on an aggregate basis is
declared or shall become due and payable prior to its stated maturity, or is
called and not paid when due, (ii) a default shall have occurred under any note
(other than the Notes) or the holder of any such note, or other evidence of
Indebtedness, certificate or security evidencing any such Indebtedness or any
obligee with respect to any other Indebtedness of the Borrower and/or any of its
Subsidiaries in excess of $1,000,000 on an aggregate basis has the right to
declare any such Indebtedness due and payable prior to its stated maturity, or
(iii) there shall occur and be continuing a Default or an Event of Default;
(b) Prompt written notice of: (i) any citation, summons, subpoena,
order to show cause or other document naming the Borrower or any of its
Subsidiaries a party to any proceeding before any Governmental Authority that
could reasonably be expected to have a Material Adverse Effect or that expressly
calls into question the validity or enforceability of any of the Loan Documents,
and include with such notice a copy of such citation, summons, subpoena, order
to show cause or other document, (ii) any lapse or other termination of any
material Intellectual Property, license, permit, franchise or other
authorization issued to the Borrower or any of its Subsidiaries by any Person or
Governmental Authority, or (iii) any refusal by any Person or Governmental
Authority to renew or extend any such material Intellectual Property, license,
permit, franchise or other authorization, which lapse, termination, refusal or
dispute could reasonably be expected to have a Material Adverse Effect;
(c) Promptly upon becoming available, copies of all (i) regular,
periodic or special reports, schedules and other material that the Borrower or
any of its Subsidiaries may now or hereafter be required to file with or deliver
to any securities exchange or the SEC, or any
-53-
other Governmental Authority succeeding to the functions thereof and (ii)
material news releases and annual reports relating to the Borrower or any of its
Subsidiaries;
(d) Prompt written notice in the event that the Borrower, any of
its Subsidiaries or any ERISA Affiliate knows, or has reason to know, that (i)
any Termination Event with respect to a Pension Plan has occurred or will occur,
(ii) any condition exists with respect to a Pension Plan that presents a
material risk of termination of the Pension Plan, imposition of an excise tax,
requirement to provide security to the Pension Plan or other liability on the
Borrower, any of its Subsidiaries or any ERISA Affiliate, (iii) the Borrower,
any of its Subsidiaries or any ERISA Affiliate has applied for a waiver of the
minimum funding standard under Section 412 of the Code with respect to a Pension
Plan, (iv) the aggregate amount of the Unfunded Pension Liabilities under all
Pension Plans is in excess of $500,000, (v) the aggregate amount of Unrecognized
Retiree Welfare Liability under all applicable Employee Benefit Plans is in
excess of $500,000, (vi) the Borrower, any of its Subsidiaries or any ERISA
Affiliate has engaged in a Prohibited Transaction with respect to an Employee
Benefit Plan in which the aggregate "amount involved" (as defined in Section
4975(f) of the Code) is in excess of $500,000, (vii) the imposition of any tax
in excess of $500,000 in the aggregate on the Borrower, its Subsidiaries and
ERISA Affiliates under Section 4980B(a) of the Code or (viii) the assessment of
a civil penalty under Section 502(c) of ERISA in excess of $500,000 in the
aggregate on the Borrower, its Subsidiaries and ERISA Affiliates, together with
a certificate of the president or chief financial officer of the Borrower (or
such other officer as shall be acceptable to the Administrative Agent) setting
forth the details of such event and the action that the Borrower, such
Subsidiary or such ERISA Affiliate proposes to take with respect thereto,
together with a copy of all notices and filings with respect thereto.
(e) Prompt written notice in the event that the Borrower, any of
its Subsidiaries or any ERISA Affiliate shall receive a demand letter from the
PBGC notifying the Borrower, such Subsidiary or such ERISA Affiliate of any
final decision finding liability in an aggregate amount in excess of $500,000
and the date by which such liability must be paid, together with a copy of such
letter and a certificate of the president or chief financial officer of the
Borrower (or such other officer as shall be acceptable to the Administrative
Agent) setting forth the action that the Borrower, such Subsidiary or such ERISA
Affiliate proposes to take with respect thereto.
(f) Promptly upon the same becoming available, and in any event by
the date such amendment is adopted, a copy of any Pension Plan amendment that
the Borrower, any of its Subsidiaries or any ERISA Affiliate proposes to adopt
that would require the posting of security under Section 401(a)(29) of the Code,
together with a certificate of the president or chief financial officer of the
Borrower (or such other officer as shall be acceptable to the Administrative
Agent) setting forth the reasons for the adoption of such amendment and the
action that the Borrower, such Subsidiary or such ERISA Affiliate proposes to
take with respect thereto.
-54-
(g) As soon as possible and in any event by the tenth Business Day
after any required installment or other payment under Section 412 of the Code
owed to a Pension Plan shall have become due and owing and remain unpaid, a copy
of the notice of failure to make required contributions provided to the PBGC by
the Borrower, any of its Subsidiaries or any ERISA Affiliate under Section
412(n) of the Code, together with a certificate of the president or chief
financial officer of the Borrower (or such other officer as shall be acceptable
to the Administrative Agent) setting forth the action that the Borrower, such
Subsidiary or such ERISA Affiliate proposes to take with respect thereto.
(h) Prompt written notice of any order, notice, claim or
proceeding received by, or brought against, the Borrower or any of its
Subsidiaries, or with respect to any of the Real Property, under any
Environmental Law that could have a Material Adverse Effect.
(i) Prompt written notice of any loss, forfeiture, non-renewal or
termination, or the commencement of any action or proceeding or the issuance of
any notice to effect any of the foregoing, with respect to any license,
agreement or authorization that could reasonably be expected to have a Material
Adverse Effect.
(j) A certificate no later than three Business Days prior to the
consummation of any Permitted Acquisition: (i) identifying such Permitted
Acquisition, (ii) specifying the total consideration to be paid with respect to
such Permitted Acquisition, the aggregate total consideration paid with respect
to all Permitted Acquisitions (including such proposed Permitted Acquisition)
made after the Effective Date and such other information as the Administrative
Agent shall reasonably require, and (iii) certifying that immediately before and
after giving effect thereto no Default or Event of Default shall exist.
(k) Within 40 days after the end of each calendar month, a report
specifying (in a format reasonably acceptable to the Administrative Agent): (i)
Permitted Acquisitions made (A) during such calendar month and (B) during the
period from July 1, 2000 through the end of such calendar month, (ii)
Maintenance Capital Expenditures and Development Capital Expenditures (stated
separately) of the Borrower and its Subsidiaries (on a Consolidated basis
determined in accordance with GAAP) made (A) during such calendar month and (B)
during the period from July 1, 2000 through the end of such calendar month, and
(iii) an accounts receivable aging summary by account debtor group as at the end
of such month, provided that this subsection (k) shall not be applicable when
the Leverage Ratio shall be less than 3.75:1.00 at all times during the
immediately preceding two fiscal quarters in respect of which financial
statements and a Compliance Certificate have been delivered to the
Administrative Agent and the Lenders pursuant to Section 7.1.
7.3. Legal Existence
---------------
Maintain, and cause each of its Subsidiaries so to maintain, its
corporate, partnership or other existence, as the case may be, in good standing
in the jurisdiction of its incorporation or formation and in each other
jurisdiction in which it is required to do so, except,
-55-
in each case, where the failure to do so could not reasonably be expected to
have a Material Adverse Effect.
7.4. Taxes
-----
Pay and discharge when due, and cause each of its Subsidiaries so
to do, all Taxes, assessments and governmental charges, license fees and levies
upon, or with respect to the Borrower or such Subsidiary and all Taxes upon the
income, profits and Property of the Borrower and its Subsidiaries, that, if
unpaid, could reasonably be expected to have a Material Adverse Effect or become
a Lien on the Property of the Borrower or such Subsidiary (other than a Lien
described in Section 8.2(i)), unless and to the extent only that such Taxes,
assessments, charges, license fees and levies shall be contested in good faith
and by appropriate proceedings diligently conducted by the Borrower or such
Subsidiary, provided that the Borrower shall give the Administrative Agent
prompt notice of such contest and that such reserve or other appropriate
provision as shall be required by the Accountants in accordance with GAAP shall
have been made therefor.
7.5. Insurance
---------
(a) Maintain, and cause each of its Subsidiaries to maintain, (i)
insurance with financially sound insurance carriers on such of its Property,
against at least such risks, and in at least such amounts, as are usually
insured against by similar businesses, including, without limitation, public
liability (bodily injury and property damage), fidelity, and workers'
compensation, and file with the Administrative Agent within ten Business Days
after request therefor a detailed list of such insurance then in effect, stating
the names of the carriers thereof, the policy numbers, the insureds thereunder,
the amounts of insurance, dates of expiration thereof, and the Property and
risks covered thereby, together with a certificate of the chief financial
officer of the Borrower (or such other officer as shall be acceptable to the
Administrative Agent) certifying that in the opinion of such officer such
insurance is adequate in nature and amount, complies with the obligations of the
Borrower under this Section, and is in full force and effect, and (ii) such
other insurance as is required under the Collateral Documents.
(b) Maintain, and cause each of its Subsidiaries to maintain,
insurance covering (i) physical loss or damage to the Collateral against all
risks and (ii) liability arising from the use or intended use, or otherwise
attributable or relating to, the Collateral, in each case in accordance with
Section 7.5(a). The policies covering such insurance (A) shall, in the case of
each policy under clause (i) of this subsection, contain a standard loss payable
clause and shall name the Collateral Agent as loss payee (and, if required by
the Collateral Agent, sole loss payee) in respect of each claim relating to the
Collateral and resulting in a payment thereunder in excess of $100,000, (B)
shall, in the case of each policy under clause (ii) of this paragraph, be
indorsed to provide, in respect of the interests of the Collateral Agent and the
other secured parties under the Collateral Documents, that the Collateral Agent
shall be an additional insured and (C) shall, in the case of each policy under
clauses (i) and (ii) of this subsection, provide (if
-56-
required by the Collateral Agent) that 30 days' prior written notice of any
cancellation or modification thereof or any reduction of amounts payable
thereunder shall be given to the Collateral Agent and in the event that the
Borrower at any time or times shall fail to pay any premium in whole or part
relating thereto, the Administrative Agent or the Collateral Agent may, in its
sole discretion, pay such premium. The Borrower, on behalf of itself and each of
its Subsidiaries, irrevocably makes, constitutes and appoints each of the
Administrative Agent and the Collateral Agent (and all officers, employees or
agents designated by the Administrative Agent or the Collateral Agent) as its
true and lawful agent (and attorney-in-fact) for the purpose, during the
continuance of an Event of Default, of making, settling and adjusting claims in
respect of Collateral under policies of insurance, endorsing the name of the
Borrower or such Subsidiary on any check, draft, instrument or other item of
payment for the proceeds of such policies of insurance and for making all
determinations and decisions with respect thereto. In the event that the
Borrower or any Subsidiary at any time or times shall fail to obtain or maintain
any of the policies of insurance required hereby or to pay any premium in whole
or part relating thereto, the Administrative Agent or the Collateral Agent may,
without waiving or releasing any obligation or liability of the Borrower
hereunder or any Event of Default, in its sole discretion, obtain and maintain
such policies of insurance and pay such premium and take any other actions with
respect thereto as the Administrative Agent or the Collateral Agent deems
advisable. All sums disbursed by the Administrative Agent or the Collateral
Agent in connection with this subsection, including reasonable attorneys' fees,
court costs, expenses and other charges relating thereto, shall be payable, upon
demand, by the Borrower to the Administrative Agent or the Collateral Agent, as
applicable, and shall be additional Obligations secured by the Collateral.
Provided that no Event of Default shall exist, the Collateral Agent, upon its
receipt thereof, shall pay over to the Borrower the proceeds of any such
insurance payment received by the Collateral Agent in its capacity as Collateral
Agent to enable the Borrower to repair or replace the Property in respect of
which such insurance payment was received. To the extent that the Borrower shall
not repair or replace such Property within 365 days from its receipt of such
insurance payment or if an Event of Default shall exist, the Borrower, at the
request of the Administrative Agent, shall prepay the Revolving Credit Term
Tranche Loans (and if no Revolving Credit Term Tranche Loans are outstanding,
the Revolving Credit Tranche Loans) and the Term Loans (based on the Revolver
Prepayment Fraction and the Term Prepayment Fraction thereof) in an amount equal
to the total amount of such insurance payment less any amounts previously
applied to the repair or replacement of the Property in respect of which such
property insurance proceeds were received and, until such time, any such amount
held by the Collateral Agent shall continue to be held by the Collateral Agent
as Collateral.
7.6. Payment of Indebtedness and Performance of Obligations
------------------------------------------------------
Pay and discharge when due, and cause each of its Subsidiaries to
pay and discharge when due, all lawful Indebtedness, obligations and claims for
labor, materials and supplies or otherwise that, if unpaid, could reasonably be
expected to (i) have a Material Adverse Effect or (ii) become a Lien upon
Property of the Borrower or any of its Subsidiaries in excess of $1,000,000 on
an aggregate consolidated basis for the Borrower and its Subsidiaries, other
than a
-57-
Permitted Lien, unless and to the extent only that the validity of such
Indebtedness, obligation or claim shall be contested in good faith and by
appropriate proceedings diligently conducted by it, provided that the Borrower
shall give the Administrative Agent prompt notice of any such contest and that
such reserve or other appropriate provision as shall be required by the
Accountants in accordance with GAAP shall have been made therefor.
7.7. Condition of Property
---------------------
At all times, maintain, protect and keep in good repair, working
order and condition (ordinary wear and tear excepted), and cause each of its
Subsidiaries so to do, all Property necessary to the operation of the Borrower's
or such Subsidiary's business.
7.8. Observance of Legal Requirements
--------------------------------
Observe and comply in all respects, and cause each of its
Subsidiaries so to do, with all laws, ordinances, orders, judgments, rules,
regulations, certifications, franchises, permits, licenses, directions and
requirements of all Governmental Authorities, that now or at any time hereafter
may be applicable to it, including, without limitation, ERISA and all
Environmental Laws, a violation of which could reasonably be expected to have a
Material Adverse Effect, except such thereof as shall be contested in good faith
and by appropriate proceedings diligently conducted by it, provided that the
Borrower shall give the Administrative Agent prompt notice of such contest and
that such reserve or other appropriate provision as shall be required by the
Accountants in accordance with GAAP shall have been made therefor.
7.9. Inspection of Property; Books and Records; Discussions
------------------------------------------------------
Keep proper books of record and account in which full, true and
correct entries sufficient to permit preparation of financial statements in
conformity with GAAP and all requirements of law shall be made of all dealings
and transactions in relation to its business and activities and permit
representatives of the Administrative Agent, the Syndication Agent and any
Lender to visit its offices, to inspect any of its Property and examine and make
copies or abstracts from any of its books and records at any reasonable time and
as often as may reasonably be desired, and to discuss the business, operations,
prospects, licenses, Property and financial condition of the Borrower and its
Subsidiaries with the officers thereof and the Accountants (provided that the
Borrower is given reasonable notice and an opportunity to attend or participate
in any such discussion).
7.10. Licenses, Intellectual Property
-------------------------------
Maintain, and cause each of its Subsidiaries to maintain, in full
force and effect, all licenses, franchises, Intellectual Property, permits,
licenses, authorizations and other rights as are necessary for the conduct of
its business, the failure of which to maintain could reasonably be expected to
have a Material Adverse Effect.
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7.11. Additional Guarantors; Additional Collateral
--------------------------------------------
Within 30 days after the occurrence of an Additional Guarantor
Event, (i) cause such Person that became a wholly-owned Domestic Subsidiary of
the Borrower and that is not a Guarantor to become a party to the Subsidiary
Guaranty and the Security Agreement, and (ii) deliver or cause to be delivered
to the Administrative Agent with respect to each such Subsidiary, simultaneously
with the execution and delivery of the same, (A) a certificate, dated the date
such Subsidiary shall have become a party to the Subsidiary Guaranty and the
Security Agreement, executed by such Subsidiary and substantially in the form
of, and with substantially the same attachments as, the certificate which would
have been required under Section 5.1 if such Subsidiary had become a party to
the Subsidiary Guaranty and the Security Agreement on or before the Effective
Date, (B) an opinion of counsel to such Subsidiary, in form and substance
satisfactory to the Administrative Agent, (C) for delivery by the Administrative
Agent to the Collateral Agent, 100% of the issued and outstanding capital Stock
of such Subsidiary owned directly or indirectly, by the Borrower, together with
an undated stock power, executed in blank by an Authorized Signatory of each
applicable owner of such Stock, and (D) such UCC-1 forms and such other
documents as may by required by the Security Agreement and as the Administrative
Agent or the Collateral Agent shall request.
7.12. Interest Coverage Ratio
-----------------------
Maintain at all times an Interest Coverage Ratio of not less than
the applicable ratio set forth below with respect to the applicable period set
forth below:
---------------------------------------------------------------------------
Period Ratio
------ -----
---------------------------------------------------------------------------
Effective Date through
September 30, 2000 1.80:1.00
---------------------------------------------------------------------------
October 1, 2000 through
June 30, 2001 2.00:1.00
---------------------------------------------------------------------------
July 1, 2001 through
September 30, 2002 2.25:1.00
---------------------------------------------------------------------------
October 1, 2002 and
thereafter 2.50:1.00
---------------------------------------------------------------------------
7.13. Minimum Net Worth
-----------------
Maintain at all times a Consolidated net worth of the Borrower and
its Subsidiaries of not less than $261,385,000, less (i) the after-tax effect of
----
any Non-Recurring
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Charges (as defined in the definition of EBITDA) excluded in the calculation of
Consolidated EBITDA, plus (ii) the sum of 85% of quarterly Consolidated net
----
income of the Borrower and its Subsidiaries (excluding net losses in any fiscal
quarter) and 85% of the net cash proceeds received by the Borrower from its
issuance of Stock, in each case for clauses (i) and (ii) determined on a
cumulative basis for the period commencing April 1, 2000.
7.14. Minimum Consolidated EBITDA Ratio
---------------------------------
Maintain at all times a ratio of (i) Consolidated EBITDA to (ii)
Consolidated Pre-Minority EBITDA of not less than 0.80:1.00, in each case for
(a) the two fiscal quarter period ending June 30, 2000, if the date of
determination is at any time during the period from the Effective Date through
September 29, 2000, (b) the three fiscal quarter period ended September 30,
2000, if the date of determination is at any time during the period from
September 30, 2000 through December 30, 2000, and (c) the immediately preceding
four fiscal quarters (or, in the event that the date of determination is a
fiscal quarter ending date, the four fiscal quarter period then ended), if the
date of determination is at any time during the period from and after December
31, 2000.
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7.15. Leverage Ratio
--------------
Maintain at all times a Leverage Ratio not greater than the
applicable ratio set forth below with respect to the applicable period set forth
below:
---------------------------------------------------------------------------
Period Ratio
------ -----
---------------------------------------------------------------------------
Effective Date through
September 30, 2000 5.25:1.00
---------------------------------------------------------------------------
October 1, 2000 through
March 31, 2001 5.00:1.00
---------------------------------------------------------------------------
April 1, 2001 through
December 31, 2001 4.75:1.00
---------------------------------------------------------------------------
January 1, 2002 through
September 30, 2002 4.50:1.00
---------------------------------------------------------------------------
October 1, 2002 through
June 30, 2003 4.25:1.00
---------------------------------------------------------------------------
July 1, 2003 through March
31, 2004 4.00:1.00
---------------------------------------------------------------------------
April 1, 2004 and thereafter 3.75:1.00
---------------------------------------------------------------------------
7.16. Asset Swap Transactions
-----------------------
(a) Deliver to the Administrative Agent, no later than three
Business Days prior to the consummation of the first transaction constituting a
part of an Asset Swap Transaction, a certificate in reasonable detail describing
such first transaction and stating the intent of the Borrower with regard to the
second transaction, together with such other information as the Administrative
Agent shall reasonably request in connection therewith.
(b) If the first transaction constituting a part of an Asset Swap
Transaction is an Asset Sale, the Borrower shall deposit the Net Cash Proceeds
(without giving effect to clause (ii)(F) and the proviso contained in clause (i)
of the definition of Net Cash Proceeds) thereof with the Collateral Agent to be
held as Collateral, which Collateral shall be eligible for release to the extent
necessary to close the Permitted Acquisition constituting the second transaction
of such Asset Swap transaction, provided that at the time of such release, and
immediately before and after giving effect to the consummation of such Permitted
Acquisition, no Default or Event of Default shall exist. Alternatively, with
respect to the Revolver Prepayment Fraction of such Net Cash Proceeds, the
Borrower shall be permitted to prepay the Revolving Credit Tranche Loans up to
an amount equal to such Revolver Prepayment Fraction of such Net
-61-
Cash Proceeds, provided that the Borrower shall be permitted to prepay the
Revolving Credit Tranch Loans up to an amount equal to such Revolver Prepayment
Fraction of such Net Cash Proceeds, provided that the Borrower may not reborrow
the amount prepaid under the Revolving Tranche Commitments (as defined in the
Revolving Credit Facility) until the consummation of such Permitted Acquisition.
Substantially simultaneously with the consummation of such Permitted
Acquisition, the Borrower shall prepay the Term Loans and the Revolving Credit
Loans to the extent required by Section 2.4(f) hereof and Section 2.7(f) of the
Revolving Credit Facility.
7.17. Cash Management
---------------
Establish and maintain the cash management and collateral program required
by Schedule 7.17 in the manner and at the times required therein.
7.18. Further Assurances
------------------
(a) Execute, and will cause each Guarantor to execute, any and all
further documents, financing statements, agreements (including guarantee
agreements and security agreements) and instruments, and take all such further
actions (including the filing and recording of financing statements, fixture
filings and other documents), that may be required under any applicable law, or
which the Collateral Agent, the Administrative Agent or the Required Lenders may
reasonably request, to effectuate the transactions contemplated by the Loan
Documents or to grant, preserve, protect or perfect (including as a result of
any change in applicable law) the Liens created or intended to be created by the
Collateral Documents or the validity or priority of any such Lien, all at the
expense of the Borrower, and provide to the Collateral Agent and the
Administrative Agent, from time to time upon request, evidence reasonably
satisfactory to the Collateral Agent and the Administrative Agent as to the
perfection and priority of the Liens created or intended to be created by the
Collateral Documents.
(b) If any material assets (including any real property or
improvements thereto or any interest therein other than leasehold interests in
real property) are acquired by the Borrower or any Guarantor after the Effective
Date (other than assets constituting Collateral under the Collateral Documents
that automatically become subject to the Lien of the Collateral Documents upon
acquisition thereof), the Borrower will notify the Administrative Agent thereof,
and, subject to the provisions of the Collateral Documents, if requested by the
Administrative Agent or the Required Lenders, the Borrower will cause such
assets to be subjected to a Lien securing the Obligations and will take, and
cause the Subsidiary Guarantors to take, such actions as shall be necessary or
reasonably requested by the Administrative Agent to grant and perfect such
Liens, including actions described in subsection (a) of this Section, all at the
expense of the Borrower.
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8. NEGATIVE COVENANTS
------------------
The Borrower agrees that, so long as this Agreement is in effect,
any Loan remains outstanding and unpaid, or any other amount is owing under any
Loan Document to any Lender or the Administrative Agent, the Borrower shall not,
directly or indirectly:
8.1. Indebtedness
------------
Create, incur, assume or suffer to exist any liability for
Indebtedness, or permit any of its Subsidiaries so to do, except (i)
Indebtedness due under the Loan Documents, (ii) Indebtedness of the Borrower or
any of its Subsidiaries existing on the date hereof as set forth on Schedule
8.1, as the same may be refinanced from time to time, containing repayment terms
and conditions no less favorable to the Borrower or such Subsidiary than the
Indebtedness being refinanced, (iii) purchase money Indebtedness and Capital
Lease Obligations of the Borrower or its Subsidiaries, as the case may be,
incurred after the Effective Date in connection with the purchase or lease of
Property (including Permitted Acquisitions), in an aggregate outstanding
principal amount not to exceed $25,000,000 at any one time, in the case of the
Borrower, and $25,000,000 at any one time, in the case of TRC and its
Subsidiaries taken as a whole, as the same may be refinanced from time to time,
containing repayment terms and conditions no less favorable to the Borrower or
its Subsidiaries, as the case may be, than the Indebtedness being refinanced,
(iv) other Contingent Obligations of the Borrower or TRC in an aggregate amount
not exceeding $20,000,000 at any one time, (v) other Contingent Obligations of
the Borrower and its Subsidiaries for the benefit of one or more of the Borrower
or its Subsidiaries in an aggregate outstanding amount not exceeding
$30,000,000, (vi) unsecured Indebtedness of the Domestic Subsidiaries of the
Borrower provided that the aggregate outstanding principal amount of such
Indebtedness shall not exceed $20,000,000 at any one time, (vii) [Intentionally
Omitted], (viii) Indebtedness of TRC (excluding Indebtedness incurred under
clause (iii)) assumed in connection with a Permitted Acquisition, provided that
the aggregate outstanding principal amount of such Indebtedness shall not exceed
$40,000,000 at any one time, (ix) [Intentionally Omitted], (x) Hedging
Obligations that are incurred by the Borrower or any of its Subsidiaries for the
purpose of fixing or hedging foreign currency exchange risks or interest rate
risks with respect to any floating rate Indebtedness that is permitted by the
terms of this Agreement to be outstanding, (xi) unsecured Indebtedness of the
Borrower in an aggregate outstanding principal amount not to exceed $25,000,000
at any one time, provided that immediately before and after giving effect to the
incurrence thereof no Default or Event of Default shall exist, (xii) unsecured
Indebtedness of the Borrower to one or more investors under an indenture subject
to the Trust Indenture Act of 1939, as amended ("Public Debt"), provided that
-----------
(A) such Indebtedness shall be designated by the Borrower in a certificate
delivered to the Administrative Agent as constituting Public Debt covered under
this Section 8.1(xii), (B) immediately before and after giving effect to the
incurrence thereof no Default or Event of Default shall exist, (C) such
Indebtedness shall require no payment or prepayment prior to one year after the
Maturity Date, (D) the terms, conditions and covenants of such Indebtedness
shall be less restrictive as to the Borrower and its Subsidiaries than the
terms, covenants and conditions of this Agreement and the terms, amount,
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covenants and conditions of such Indebtedness shall be reasonably satisfactory
to the Required Lenders, and (E) the Borrower shall make the prepayment as
required by Section 2.4(d) upon the issuance of such Public Debt, (xiii)
Subordinated Indebtedness, provided that immediately before and after giving
effect to the incurrence thereof no Default or Event of Default shall exist,
provided that the Borrower shall make the prepayment as required by Section
2.4(e) upon the issuance of such Subordinated Indebtedness, (xiv) subordinated
guaranties by any Guarantor of the Borrower's obligations under any Subordinated
Indebtedness permitted hereunder, provided that (A) all Obligations of the
Borrower are guarantied by such Guarantor under the Subsidiary Guaranty, (B)
each such Guaranty is subordinated to at least the same extent as the
Subordinated Indebtedness guarantied thereby is subordinated to the Obligations
of the Borrower, (C) each such subordinated guaranty contains a limitation as to
the maximum amount guarantied thereby similar to that set forth in subsection
2.2(a) of the Subsidiary Guaranty, provided that in no event shall the liability
of the Guarantor under such subordinated guaranty exceed the maximum amount
permissible under applicable fraudulent conveyance or similar law, and (D) each
such subordinated guaranty is otherwise on market terms for guaranties of
subordinated debt instruments prevailing at or around the time that such
subordinated guaranty is entered into, (xv) Indebtedness permitted under Section
8.5(d), (xvi) Indebtedness under the Revolving Credit Facility, (xvii)
Indebtedness of RTC under the RTC Convertible Subordinated Indenture and the RTC
Convertible Subordinated Notes, (xviii) other Indebtedness of RTC and its
Subsidiaries existing on February 27, 1998 and (xix) Indebtedness under the RTC
Convertible Subordinated Guaranty.
8.2. Liens
-----
Create, incur, assume or suffer to exist any Lien upon any of its
Property, whether now owned or hereafter acquired, or permit any of its
Subsidiaries so to do, or enter into any agreement, other than this Agreement,
the Revolving Credit Facility and secured purchase money Indebtedness and
Capital Lease Obligations permitted by this Agreement (in which cases, any
prohibition or limitation shall only be effective against the Property acquired
or leased thereby), or permit any Subsidiary so to do, which prohibits or limits
the ability of the Borrower or such Subsidiary to create, incur, assume or
suffer to exist any Lien upon any of its Property or revenues, whether now owned
or hereafter acquired, except (i) Liens for Taxes, assessments or similar
charges incurred in the ordinary course of business that are not delinquent or
that are being contested in accordance with Section 7.4, provided that
enforcement of such Liens is stayed pending such contest, (ii) Liens in
connection with workers' compensation, unemployment insurance or other social
security obligations (but not ERISA), (iii) deposits or pledges to secure bids,
tenders, contracts (other than contracts for the payment of money), leases,
statutory obligations, surety and appeal bonds and other obligations of like
nature arising in the ordinary course of business, (iv) zoning ordinances,
easements, rights of way, minor defects, irregularities, and other similar
restrictions affecting Real Property that do not adversely affect the value of
such Real Property or the financial condition of the Borrower or such Subsidiary
or impair its use for the operation of the business of the Borrower or such
Subsidiary, (v) Liens arising by operation of law such as mechanics',
materialmen's, carriers', and warehousemen's liens incurred
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in the ordinary course of business that are not delinquent or that are being
contested in accordance with Section 7.6, provided that enforcement of such
Liens is stayed pending such contest, (vi) Liens arising out of judgments or
decrees that are being contested in accordance with Section 7.6, provided that
enforcement of such Liens is stayed pending such contest, (vii) purchase money
Liens and Liens arising out of Capital Lease Obligations on Property of the
Borrower or any of its Subsidiaries acquired after the date hereof to secure
Indebtedness (and replacement Liens on such Property to secure refinancings of
such Indebtedness in accordance with Section 8.1(iii)) of the Borrower or its
Subsidiaries permitted by Section 8.1(iii), incurred in connection with the
acquisition or lease of such Property, provided that each such Lien is limited
to such Property so acquired or leased, (viii) Liens on Property of the Borrower
and its Subsidiaries existing on the Effective Date as set forth on Schedule
8.2, (ix) [Intentionally Omitted], (x) Liens to secure Indebtedness permitted by
Section 8.1(viii), provided that such Liens shall be limited to Liens on the
Property acquired in connection with such Permitted Acquisition, (xi) Liens
created under the Collateral Documents, and (xii) Liens to secure Indebtedness
permitted by Section 8.1(xviii), provided that such Liens shall be limited to
Liens on the Property acquired in connection with the merger contemplated by the
RTC Merger Agreement.
8.3. Merger, Consolidation and Certain Dispositions of Property
-----------------------------------------------------------
Consolidate with, be acquired by, or merge into or with any Person, or
sell, lease or otherwise dispose of all or substantially all of its Property, or
permit any of its Subsidiaries so to do, except (i) as permitted by Section 8.7,
(ii) any wholly-owned Subsidiary of the Borrower (other than TRC) may merge into
the Borrower or another wholly-owned Subsidiary of the Borrower, provided that
(a) no Event of Default shall exist immediately before or after giving effect
thereto, (b) the representations and warranties contained herein shall be true
and correct immediately before and after giving effect hereto, (c) the Borrower,
TRC or such wholly-owned Subsidiary is the survivor of such merger, (d) the
Borrower is the survivor in the case of any such merger involving the Borrower
and TRC is the survivor in the case of any such merger involving TRC, and (e)
the Borrower shall have delivered a certificate to the Administrative Agent on
the day of the merger as to its compliance with each of the requirements set
forth in clauses (a) through (d) above, and (iii) any Permitted Acquisition;
provided that, in the case of clauses (i) and (ii) above, neither the Borrower
nor TRC shall sell, lease or otherwise dispose of all or substantially all of
its Property and to the extent that the Borrower or TRC is a party to any merger
or consolidation, the Borrower or TRC shall be the survivor, and to the extent
that the Borrower is a party to any merger or consolidation, the Borrower shall
be the survivor.
8.4. Restricted Payments
-------------------
Declare or pay any Restricted Payments payable in cash or otherwise or
apply any of its Property thereto or set apart any sum therefor, or permit any
of its Subsidiaries so to do, except that: (i) a wholly-owned Subsidiary of the
Borrower may declare and pay Restricted Payments to the Borrower or any other
wholly-owned Subsidiary of the Borrower, (ii) provided
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that no Default or Event of Default exists immediately before or after giving
effect thereto, a non-wholly-owned Subsidiary of the Borrower may declare and
pay Restricted Payments in cash provided that such Restricted Payments are
ratable in accordance with the respective equity ownership interests in such
Subsidiary, (iii) each Subsidiary may pay Restricted Payments in the form of tax
sharing payments to the Borrower, and (iv) provided that no Default or Event of
Default exists immediately before and after giving effect thereto, the Borrower
may repurchase its capital Stock owned by management or employees and physicians
under contract with the Borrower or its Subsidiaries, such payments under this
clause not to exceed $5,000,000 in the aggregate (net of cash received by the
Borrower from management or employees and physicians under contract with the
Borrower or its Subsidiaries in exchange for capital Stock of the Borrower) in
any twelve month period, provided that such $5,000,000 amount shall be increased
to $10,000,000 at any time when the Leverage Ratio is less than 3.75:1.00
immediately before and after giving effect to the applicable Acquisition and at
all times during the immediately preceding two fiscal quarters in respect of
which financial statements and a Compliance Certificate have been delivered to
the Administrative Agent and the Lenders pursuant to Section 7.1; provided that
in no event shall the Borrower declare or pay, or become obligated to declare or
pay, any Restricted Payment in respect of Permitted Preferred Stock other than
Restricted Payments payable in Permitted Preferred Stock or common Stock.
8.5. Investments, Loans, Etc.
------------------------
At any time, purchase or otherwise acquire, hold or make any
Investment in or with any Person, or make an Acquisition, or permit any of its
Subsidiaries so to do, except:
(a) Investments in Cash Equivalents;
(b) Investments in accounts and notes payable acquired in the
ordinary course of business;
(c) Investments (i) existing on the date hereof in wholly-owned
Subsidiaries set forth on Schedule 4.1, (ii) existing on the date hereof in non-
wholly-owned Subsidiaries and otherwise as set forth on Schedule 8.5, and (iii)
acquired after the Effective Date and approved by the Board of Directors of the
Borrower and reasonably acceptable to the Administrative Agent, the Syndication
Agent and the Required Lenders;
(d) Investments of the Borrower or any of its Subsidiaries in any
Subsidiary of the Borrower for working capital and capital expenditure purposes
of such Subsidiary or to enable such Subsidiary to make Investments permitted by
subsections (f) and (g) below, provided that (i) such Investments in non-wholly
owned Subsidiaries shall be made in the form of demand loans, the aggregate
outstanding principal amount of which shall not exceed $20,000,000 at any one
time, and (ii) such Investments in wholly-owned Subsidiaries shall be made
either in the form of (x) demand loans or (y) additional paid in equity provided
that the aggregate amount of all such additional paid in equity shall not exceed
$20,000,000 at any one time;
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(e) Investments by the Borrower or TRC (i) in ESRD-Related Businesses
existing on the date hereof as set forth on Schedule 8.5, and (ii) in ESRD-
Related Businesses of Persons (other than the Borrower and its Subsidiaries)
made after the Effective Date an aggregate amount not exceeding $20,000,000 at
any one time, provided that immediately before and after giving effect thereto
no Event of Default shall exist;
(f) Domestic Acquisitions by the Borrower or any wholly-owned
Subsidiary of the Borrower, provided that (i) no Default or Event of Default
shall exist immediately before or after giving effect to such Acquisition, (ii)
each such Acquisition was initially approved by the board of directors (or other
Person performing similar functions) of each of the parties thereto, and (iii)
the following conditions shall have been satisfied:
(A) in the case of stock Acquisitions, the Person whose stock is
to be acquired shall not be a publicly held Person,
(B) upon the consummation of each stock Acquisition, more than
50% of the Stock or other equity interest of the Person so acquired
shall be owned by the Borrower or its Subsidiaries,
(C) the Person acquired in such Domestic Acquisition is in an
ESRD-Related Business, or the assets acquired in such Domestic
Acquisition have been and are to be used in an ESRD-Related Business,
(D) within fifteen Business Days after the consummation of any
Acquisition in respect of which the total consideration therefor
exceeds $30,000,000, the Administrative Agent and the Lenders shall
have received (x) a sources and uses analysis, an equity interest
breakdown and a copy of the historical and pro-forma EBITDA analysis
as provided to the Board of Directors of the Borrower, and (y) a
certificate signed by an Authorized Signatory of the Borrower to the
effect that, immediately before and after giving effect to such
Acquisition, no Event of Default shall exist and setting forth
calculations on a pro-forma basis showing compliance with Sections
7.12 through 7.15 and 8.17,
(E) [Intentionally Omitted]
(F) in the event the total consideration to be paid in connection
with any one Acquisition (or series of related Acquisitions) shall
exceed $40,000,000 ($75,000,000 if the consideration to be paid for
such Acquisition is comprised solely of the common Stock of the
Borrower), the Required Lenders shall have consented thereto,
provided that the $40,000,000 amount shall be increased to
$50,000,000 at any time when the Leverage Ratio is less than
3.75:1.00 immediately before and after giving effect to the
applicable Acquisition and at all times during the immediately
preceding two fiscal quarters in respect of which financial
statements and a Compliance Certificate have been delivered to the
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Administrative Agent and the Lenders pursuant to Section 7.1,
(G) in the case of stock Acquisitions, TRC shall have full
control over all bank accounts of the Person so acquired, and
(H) the Administrative Agent shall have received such other
information or documents as the Administrative Agent shall have
reasonably requested;
(g) Investments by the Borrower or TRC in 50%
or less of the voting Stock or other equity interest in another Person (the
"Minority Investment"), provided that (i) the Borrower or TRC owns at least 20%
-------------------
(on a fully diluted basis) of the issued and outstanding Stock or other equity
interest in such Person, (ii) the aggregate outstanding amount of Minority
Investments made by the Borrower and TRC shall not exceed $60,000,000 at any one
time, (iii) the Borrower or TRC shall have full control over all bank accounts
of such Person if the Borrower or TRC is the largest holder of voting Stock or
other equity interests in such Person, (iv) the Borrower or TRC shall control or
act as the managing general partner of such Person if such Person is a
partnership and if the Borrower or TRC is the largest holder of equity interests
in such Person, and (v) immediately before and after giving effect thereto, no
Event of Default shall exist;
(h) Investments in notes permitted by Section 8.7(ii);
(i) notes from employees issued to the Borrower representing payment
for capital Stock of the Borrower or representing payment of the exercise
price of options to purchase capital Stock of the Borrower in an aggregate
amount at any time outstanding not to exceed $10,000,000;
(j) Investments in Hedging Obligations permitted by Section 8.1(x);
and
(k) Contingent Obligations to the extent permitted by Section 8.1.
For purposes of this Section 8.5, 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.
8.6. Business Change
---------------
Materially change the nature of the business of the Borrower and its
Subsidiaries as conducted on the Effective Date.
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8.7. Sale of Property
----------------
Consummate any Asset Sale, or permit any of its Subsidiaries so to
do, except the Puerto Rico Asset Sale, and except any other Asset Sale by the
Borrower or any of its Subsidiaries as to which the following conditions have
been satisfied:
(i) no Default or Event of Default shall exist immediately
before or after giving effect thereto,
(ii) the consideration received or to be received therefor by
the Borrower or any of its Subsidiaries shall be payable (a) at least 75% in
cash (for purposes of this clause (a), cash shall be deemed to include (i)
amounts deposited in escrow or subject to holdback, in each case to secure
customary indemnification and similar obligations, and (ii) any related
forgiveness or assumption of Indebtedness of the Borrower or any of its
Subsidiaries, provided that, in the case of any such assumption, the Borrower
and its Subsidiaries shall be fully and unconditionally released from the
Indebtedness assumed), by the purchaser on or before the closing thereof, and
such cash consideration shall be in an amount greater than the product of (A)
that portion of Consolidated Pre-Minority EBITDA attributable to the assets sold
in such Asset Sale multiplied by (B) the Leverage Ratio at the end of the last
fiscal quarter in respect of which the Borrower delivered financial statements
and a Compliance Certificate to the Administrative Agent and the Lenders
pursuant to Section 7.1 (provided that this clause (a) shall not be applicable
with respect to any Asset Swap Transaction in which the Asset Sale and Permitted
Acquisition shall occur substantially simultaneously if the Borrower shall have
demonstrated to the reasonable satisfaction of the Administrative Agent that
such Asset Swap Transaction will result in a reduction of the Leverage Ratio
from that in effect as at the end of the last fiscal quarter in respect of which
the Borrower delivered financial statements and a Compliance Certificate to the
Administrative Agent and the Lenders pursuant to Section 7.1), and (b) not
greater than 25% in senior notes, provided that each such note shall be due and
payable within three years, and shall not be less than the fair market value
thereof as reasonably determined by the Board of Directors of the Borrower,
(iii) the aggregate sales price of all Asset Sales (excluding the
Puerto Rico Asset Sale) shall not exceed $300,000,000, provided that (a) with
respect to any Asset Sale constituting a part of an Asset Swap Transaction, the
aggregate sales price of such Asset Sale shall be deemed decreased (but not
below zero) by an amount equal to the purchase price of the Permitted
Acquisition constituting a part of such Asset Swap Transaction and (b) this
clause (iii) shall not be applicable when the Leverage Ratio is less than
3.75:1.00 immediately before and after giving effect to such Asset Sale and at
all times during the immediately preceding two fiscal quarters in respect of
which the Borrower delivered financial statements and a Compliance Certificate
to the Administrative Agent and the Lenders pursuant to Section 7.1, and
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(iv) within fifteen Business Days after each such Asset Sale,
the Administrative Agent and the Lenders shall have received a certificate with
respect thereto signed by an Authorized Signatory of the Borrower identifying
the Property sold and stating (a) that immediately before and after giving
effect thereto, no Default or Event of Default existed, (b) that the
consideration received or to be received by the Borrower or such Subsidiary for
such Property has been determined by the Board of Directors thereof to be not
less than the fair market value of such Property and (c) the total consideration
to be paid in respect of such Asset Sale and (d) the Net Cash Proceeds
(including a calculation in reasonable detail thereof) resulting from such Asset
Sale.
8.8. Subsidiaries
------------
Create or acquire any other Subsidiary, or permit any of its
Subsidiaries so to do, unless the provisions of Sections 7.11, 8.11 and 8.17 are
satisfied.
8.9 . Amendments, Etc. of Certain Documents
-------------------------------------
(a) Amend or otherwise modify its Articles of Incorporation or By-
Laws in any way that would adversely affect the interests of the Administrative
Agent and the Lenders under any of the Loan Documents, or permit any of its
Subsidiaries so to do.
(b) Amend or otherwise modify (i) the Revolving Credit Facility by
shortening the scheduled final maturity of the Revolving Credit Facility,
increasing the amount or shortening the date of any scheduled reduction of the
Revolving Credit Commitments pursuant to Section 2.6(b) of the Revolving Credit
Facility, or increasing the Aggregate Revolving Credit Commitments, (ii) the
definition of "Required Lenders" in the Revolving Credit Facility, (iii) any
mandatory prepayment required pursuant to the Revolving Credit Facility
(including, without limitation, the provisions of Sections 2.6 and 2.7 of the
Revolving Credit Facility and any definition used in such Sections) in any way
that, with respect to this clause (iii), would adversely affect the interests of
the Lenders under any of the Loan Documents, (iv) any affirmative covenant,
negative covenant or default or event of default contained in the Revolving
Credit Facility (including, without limitation, the provisions contained in
Sections 7, 8 and 9 of the Revolving Credit Facility and any definition used in
such Sections), in any way that, with respect to this clause (iv), would
adversely affect the interests of the Lenders under any of the Loan Documents,
or (v) Section 2.6(b) or Section 2.7(a) of the Revolving Credit Facility in any
way that, with respect to this clause (v), would adversely affect the interests
of the Lenders under any of the Loan Documents.
(c) Refinance the Revolving Credit Facility unless the terms and
provisions of such refinancing would be permitted under Section 8.9(b) as if the
Revolving Credit Facility were not being refinanced but were instead being
amended to contain such terms and provisions.
(d) Amend or otherwise modify, or permit RTC or any other Subsidiary
so to do, the RTC Convertible Subordinated Indenture, the RTC Convertible
Subordinated Notes, the
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RTC Convertible Subordinated Guaranty or any other indenture, instrument or
other agreement evidencing any Subordinated Indebtedness or any guaranties
thereof in any way that would adversely affect the interests of the
Administrative Agent and the Lenders under any of the Loan Documents.
(e) The Borrower will not, and will not permit any of its
Subsidiaries to, voluntarily prepay, redeem or repurchase any Subordinated
Indebtedness, except that if such Subordinated Indebtedness is convertible into
common stock of the Borrower, the Borrower may exercise any right it may have to
redeem at any time after November 1, 2001 all or any part of such Subordinated
Indebtedness if on the Determination Date the Applicable Premium is at least
1.05. For purposes of this subsection 8.9(e):
"Determination Date" shall mean, as applicable, either (i) the date
------------------
on which such Subordinated Indebtedness is redeemed if no prior notice of
redemption must be given or (ii) if the Borrower is required under the
terms of such Subordinated Indebtedness to give prior irrevocable notice of
redemption, the date (which date shall not be more than 45 days prior to
the redemption date) on which such notice is given;
"Applicable Premium" shall mean the fraction (i) the numerator of
------------------
which is the "Average Market Value" and (ii) the denominator of which is
the then applicable conversion price under the terms of such Subordinated
Indebtedness; and
"Average Market Value" shall mean the average of the last sale price
--------------------
of the Borrower's common stock as reported on the New York Stock Exchange
(or if not listed for trading thereon, then on the principal national
securities exchange or the principal automated quotation system on which
such common stock is listed or admitted to trading) for the period of 10
trading days ended two trading days prior to the date of redemption or the
date on which notice of redemption is given, whichever is applicable with
respect to such Subordinated Indebtedness.
8.10. ERISA
-----
Permit any Pension Plan to have a Funded Current Liability Percentage
of less than 60 percent.
8.11. Acquisition or Issuance of Additional Stock
-------------------------------------------
(a) Create or acquire the stock or other equity or ownership
in, or Property of, any Person that shall thereupon become a Foreign Subsidiary
(b) Create or acquire the Stock or other equity or ownership
in, or Property of, any Person that shall thereupon become a Domestic Subsidiary
(each, a "New Subsidiary"), or issue any additional Stock or other equity or
--------------
ownership interest, or permit any Subsidiary so to do, except as follows:
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(i) in connection with a Permitted Acquisition;
(ii) any Subsidiary may issue additional Stock to the Borrower
or TRC;
(iii) a non-wholly-owned Subsidiary of the Borrower may issue
additional Stock to its management or to physicians under contract, provided
that after giving effect to such issuance, such Subsidiary shall remain a
Subsidiary of the Borrower;
(iv) The Borrower and its wholly-owned Subsidiaries may create
new wholly-owned Subsidiaries and non-wholly-owned Subsidiaries of the Borrower
may create new Subsidiaries;
(v) the Borrower may issue additional common stock or
Permitted Preferred Stock, provided that the Borrower shall make the prepayment
as required by Section 2.4(g) upon the issuance of such Permitted Preferred
Stock; and
(vi) pursuant to the terms of the RTC Convertible
Subordinated Indenture and the RTC Convertible Subordinated Notes;
Provided, however, that, except for Permitted Preferred Stock issued
pursuant to subsection (b)(v) above, all Stock issued pursuant to this Section
shall constitute common stock with no mandatory dividend, redemption or similar
requirement, or warrants, options or other equivalents (however designated) to
acquire such common stock.
8.12. Limitation on Upstream Dividends and Advances by Subsidiaries
-------------------------------------------------------------
Permit any Subsidiary to enter into or agree, or otherwise become
subject, to any restriction in any agreement, contract or other arrangement with
any Person pursuant to the terms of which (a) such Subsidiary is or would be
prohibited from or otherwise restricted in declaring or paying any cash
dividends or distributions on or on account of any class of its stock or other
equity interest owned directly or indirectly by the Borrower or (b) such
Subsidiary is or would be prohibited from or otherwise restricted in making
advances to the Borrower.
8.13. Fiscal Year
-----------
Change its fiscal year from that in effect on the Effective Date, or
permit any of its Subsidiaries so to do.
8.14. Transactions with Affiliates
----------------------------
Sell, lease, transfer or otherwise dispose of any of its Properties
to, or purchase any Property from, or enter into any contract, agreement,
understanding, loan, advance or guarantee with, or for the benefit of, (i) any
Affiliate of the Borrower or any Subsidiary of the Borrower or (ii) any Person
directly or indirectly owning 5% or more of the voting Stock or other voting
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equity interests of the Borrower or any of its Subsidiaries (each of the
foregoing, an "Affiliate Transaction"), or permit any of its Subsidiaries so to
---------------------
do, unless such Affiliate Transaction is on terms that are no less favorable to
the Borrower or the relevant Subsidiary than those that would have been obtained
in a comparable arm's-length transaction by the Borrower or such Subsidiary with
an unrelated Person; provided that this Section 8.14 shall not restrict the
--------
ability of the Borrower or any of its Subsidiaries to make Restricted Payments
otherwise permitted under Section 8.4.
8.15. Limitation on Permitted Acquisitions and Development Capital
------------------------------------------------------------
Expenditures
------------
Permit the sum of all Permitted Acquisitions (including any Permitted
Acquisitions made during a Reinvestment Period) and Development Capital
Expenditures to exceed $55,000,000 during the period from the Effective Date
through December 31, 2000 and $110,000,000 during each fiscal year thereafter
(the "Designated Amount"), of which no more than $30,000,000 during the period
-----------------
from the Effective Date through December 31, 2000 and $60,000,000 during each
fiscal year thereafter shall be permitted for Development Capital Expenditures,
provided that this Section 8.15 shall not be applicable at any time when the
Leverage Ratio is less than 3.50:1.00 immediately before and after giving effect
to such Permitted Acquisition or Development Capital Expenditure and at all
times during the immediately preceding two fiscal quarters in respect of which
financial statements and a Compliance Certificate have been delivered to the
Administrative Agent and the Lenders pursuant to Section 7.1. The Designated
Amount for any fiscal year shall be increased by an amount equal to 100% of the
portion of net cash proceeds received by the Borrower in such fiscal year from
the issuance of Permitted Preferred Stock and 75% of the portion of Net Cash
Proceeds received by the Borrower or any of its Subsidiaries in such fiscal year
from Asset Sales, in each case that is not required to be used to prepay the
Revolving Credit Loans and the Term Loans. The unused amount of the Designated
Amount in any fiscal year (including the period from the Effective Date through
December 31, 2000) may be carried forward for the next two fiscal years, but not
thereafter, and such unused amount shall be added to the sublimits set forth
above proportionately with the sources of the unused amount. In calculating the
utilization of the Designated Amount with respect to a Permitted Acquisition
that is part of an Asset Swap Transaction, the amount of such utilization shall
be the difference, if positive, between the purchase price of such Permitted
Acquisition and the sale consideration with respect to the Asset Sale
constituting a part of such Asset Swap Transaction. For purposes of calculating
the Designated Amount, the payment when due (without any acceleration of the due
date) of the Scheduled Existing Deferred Payment Obligations shall not be deemed
a usage of the Designated Amount; provided that the payment of the Scheduled
Existing Deferred Payment Obligations made in respect of IHS of New York, Inc.,
if accelerated, shall constitute a usage of the Designated Amount for the
applicable period when paid (i) in the case of the period from the Effective
Date through December 31, 2000, in an amount equal to the amount by which such
Scheduled Existing Deferred Payment Obligations made during such period shall
exceed $7,000,000, provided that, to the extent that such Scheduled Existing
Deferred Payment Obligations made during such period shall exceed $7,000,000,
the Borrower may elect to carry
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forward such excess as a usage of the Designated Amount for fiscal year 2001,
and (ii) in the case of fiscal year 2001, in an amount equal to the sum of such
payments made during fiscal year 2001 and the amount carried forward by the
Borrower pursuant to (i) above.
8.16. Maintenance Capital Expenditures
--------------------------------
Permit Maintenance Capital Expenditures to exceed the applicable
amount set forth below during the applicable fiscal year set forth below:
------------------------------------------------------------------------------
Fiscal Year Amount
----------- ------
------------------------------------------------------------------------------
2000 $35,600,000
------------------------------------------------------------------------------
2001 36,100,000
------------------------------------------------------------------------------
2002 38,600,000
------------------------------------------------------------------------------
2003 41,200,000
------------------------------------------------------------------------------
Unused amounts in any fiscal year may be carried forward to the next fiscal
year, but not thereafter.
8.17. Non-Wholly-Owned Subsidiaries
-----------------------------
Permit at any time (x) the aggregate total assets (calculated without
duplication) at such time of all Subsidiaries of the Borrower formed or acquired
after April 30, 1998 that are not Guarantors, plus (y) the aggregate total
Investments made during the period from April 30, 1998 to such time (calculated
without duplication and excluding Investments made pursuant to Section 8.5(f) to
the extent the proceeds thereof were used to acquire Stock or assets included in
(x) above) by the Credit Parties in all Subsidiaries of the Borrower that are
not Guarantors, less (z) the aggregate total assets at such time of all
Subsidiaries of the Borrower existing on April 30, 1998 that became Guarantors
after April 30, 1998, to exceed 10% of the Consolidated total assets of the
Borrower and its Subsidiaries.
9. DEFAULT
-------
9.1. Events of Default
-----------------
The following shall each constitute an "Event of Default"
----------------
hereunder:
(a) The failure of the Borrower to pay any installment of
principal on any Loan on the date when due and payable; or
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(b) The failure of the Borrower to pay any installment of
interest, fees, expenses or other amounts payable under any Loan Document or
otherwise to the Administrative Agent, or to any other Person to whom such
payment is to be made, with respect to the loan facilities established hereunder
within three Business Days of the date when due and payable; or
(c) The use of the proceeds of any Loan in a manner
inconsistent with or in violation of Section 2.13; or
(d) The failure of the Borrower to observe or perform any
covenant or agreement contained in Section 7.3, 7.11, 7.12, 7.13, 7.14, 7.15,
7.16 or 7.17 or Section 8; or
(e) The failure of any Credit Party to observe or perform any
other term, covenant, or agreement contained in any Loan Document and such
failure shall have continued unremedied for a period of 30 days after the
Borrower shall have obtained knowledge thereof; or
(f) Any representation or warranty made in any Loan Document or
in any certificate, report, opinion (other than an opinion of counsel) or other
document delivered or to be delivered pursuant thereto, shall prove to have been
incorrect or misleading (whether because of misstatement or omission) in any
material respect when made; or
(g) Any obligation or obligations of the Borrower (other than
its obligations under the Notes) and/or any of its Subsidiaries (whether as
principal, guarantor, surety, lessee or other obligor) in excess of $5,000,000
on an aggregate basis for the payment of any Indebtedness or operating leases
(i) shall become or shall be declared to be due and payable prior to the
expressed maturity or expiry thereof, or (ii) shall not be paid when due or
within any grace period for the payment thereof, or (iii) any holder of any such
obligation shall have the right, immediately or with the passage of time or the
giving of notice, to declare such obligation due and payable prior to the
expressed maturity thereof;
(h) An involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation, reorganization or
other relief in respect of the Borrower or any of its Subsidiaries or its debts,
or of a substantial part of its assets, under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in effect
or (ii) the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any of its Subsidiaries or
for a substantial part of its assets, and, in any such case, such proceeding or
petition shall continue undismissed for 45 days or an order or decree approving
or ordering any of the foregoing shall be entered; or
(i) The Borrower or any of its Subsidiaries shall (i)
voluntarily commence any proceeding or file any petition seeking liquidation,
reorganization or other relief under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect, (ii) consent
to the institution of, or fail to contest in a timely and appropriate manner,
any proceeding or petition described in clause (h) above, (iii) apply for or
consent to the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or
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any of its Subsidiaries or for a substantial part of its assets, (iv) file an
answer admitting the material allegations of a petition filed against it in any
such proceeding, (v) make a general assignment for the benefit of creditors,
(vi) take any action for the purpose of effecting any of the foregoing or become
unable, admit in writing its inability or fail generally to pay its debts as
they become due; or
(j) Judgments or decrees against the Borrower and/or any of its
Subsidiaries in excess of $3,500,000 on an aggregate basis shall remain unpaid,
unstayed on appeal, undischarged, unbonded or undismissed for a period of 30
days; or
(k) The occurrence of an Event of Default under and as defined
in (i) any Loan Document, or (ii) the Revolving Credit Facility; or
(l) Any Loan Document shall cease, for any reason, to be in
full force and effect, or any Credit Party shall so assert in writing or shall
disavow any of its Obligations thereunder; or
(m) (i) Any Termination Event (other than an event which
constitutes a Termination Event solely because it is a Reportable Event) shall
occur that could reasonably be expected to result in a liability to the
Borrower, any of its Subsidiaries or any ERISA Affiliate in excess of $2,500,000
in the aggregate; (ii) any Accumulated Funding Deficiency in excess of
$2,500,000 in the aggregate, whether waived, shall exist with respect to any
Pension Plan; (iii) the Borrower, any of its Subsidiaries or any ERISA Affiliate
shall fail to pay when due an amount in excess of $2,500,000 in the aggregate
that is payable by it to the PBGC or to a Pension Plan under Title IV of ERISA;
or
(n) (i) Any Guarantor shall not be a wholly-owned Subsidiary of
the Borrower, or (ii) any Guarantor that was a wholly-owned Subsidiary of the
Borrower on the date such Guarantor became a party to the Subsidiary Guaranty
shall no longer be a wholly-owned Subsidiary of the Borrower, except as a result
of a transaction permitted under Section 8.3(ii); or
(o) (i) A judgment creditor of the Borrower or any of its
Subsidiaries shall obtain possession of any material portion of the Collateral
under the Collateral Documents by any means, including, without limitation,
levy, distraint, replevin or self-help, (ii) any of the Collateral Documents
shall cease for any reason to be in full force and effect, or any party thereto
shall purport to disavow its obligations thereunder or shall declare that it
does not have any further obligations thereunder or shall contest the validity
or enforceability thereof or the Collateral Agent, for the benefit of the
Lenders and others, shall cease to have a valid and perfected first priority
security interest in any material Collateral therein, or (iii) the Collateral
Agent's security interests or liens on any material portion of the Collateral
under the Collateral Documents shall become otherwise impaired or unenforceable;
or
(p) The Borrower or any Subsidiary, in each case to the extent
it is engaged in the business of providing services for which Medicare or
Medicaid reimbursement is sought,
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shall for any reason, including, without limitation, as the result of any
finding, designation or decertification, lose its right or authorization, or
otherwise fail to be eligible, to participate in Medicaid or Medicare programs
or to accept assignments or rights to reimbursements under Medicaid regulations
or Medicare regulations, or the Borrower or any Subsidiary has, for any reason,
had its right to receive reimbursements under Medicaid or Medicare regulations
suspended, and such loss, failure or suspension (together with all such other
losses, failures and suspensions continuing at such time) shall have resulted in
(x) a Material Adverse Effect or (y) Consolidated net operating revenues for the
immediately preceding four fiscal quarter period of the Borrower constituting
less than 95% of Consolidated net operating revenues for any preceding four
fiscal quarter period of the Borrower.
Upon the occurrence of an Event of Default or at any time thereafter
during the continuance thereof, (a) if such event is an Event of Default
specified in clause (h) or (i) above, the Loans, all accrued and unpaid interest
thereon, and all other amounts owing under the Loan Documents shall immediately
become due and payable, and the Administrative Agent may, and, upon the
direction of the Required Lenders shall, exercise any and all remedies and other
rights provided in the Loan Documents, and (b) if such event is any other Event
of Default, any or all of the following actions may be taken: with the consent
of the Required Lenders, the Administrative Agent may, and upon the direction of
the Required Lenders shall, by notice of default to the Borrower, declare the
Loans, all accrued and unpaid interest thereon, and all other amounts owing
under the Loan Documents to be due and payable forthwith, whereupon the same
shall immediately become due and payable, and the Administrative Agent may, and
upon the direction of the Required Lenders shall, exercise any and all remedies
and other rights provided pursuant to the Loan Documents. Except as otherwise
provided in this Section, presentment, demand, protest and all other notices of
any kind are hereby expressly waived. To the extent permitted by applicable
law, each Credit Party hereby further expressly waives and covenants not to
assert any appraisement, valuation, stay, extension, redemption or similar laws,
now or at any time hereafter in force, that might delay, prevent or otherwise
impede the performance or enforcement of any Loan Document.
In the event that the Loans shall have been declared due and payable
pursuant to the provisions of this Section, any funds received by the
Administrative Agent and the Lenders from or on behalf of the Borrower shall be
applied by the Administrative Agent and the Lenders, subject to the
Intercreditor Agreement, in liquidation of the Loans and the obligations of the
Borrower under the Loan Documents and the applicable Interest Rate Agreements in
the following manner and order: (i) first, to the payment of any fees or
expenses due the Administrative Agent and the Syndication Agent from the
Borrower; (ii) second, to reimburse the Administrative Agent, and the Lenders
for any expenses (to the extent not paid pursuant to clause (i) above) due from
the Borrower pursuant to the provisions of Section 11.5; (iii) third, to the
payment of all other fees, expenses and amounts due under the Loan Documents
(other than principal and interest on the Loans); (iv) fourth, pro rata
according to the outstanding principal amount of the Loans, to the payment of
interest due on the Loans; (v) fifth, pro rata according to the outstanding
principal amount of the Loans and the Secured Interest Rate Obligations (as such
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term is defined in the Intercreditor Agreement) of the Lenders and their
Affiliates, to the payment of principal outstanding on the Loans and such
Secured Interest Rate Obligations; and (vi) sixth, to the payment of any other
amounts owing to the Administrative Agent, the Syndication Agent and the Lenders
under any Loan Document.
10. THE ADMINISTRATIVE AGENT
------------------------
10.1. Appointment
-----------
Each Lender hereby irrevocably designates and appoints BNY as the
Administrative Agent of such Lender under the Loan Documents and each such
Lender hereby irrevocably authorizes BNY, as the Administrative Agent for such
Lender, to take such action on its behalf under the provisions of the Loan
Documents (including, without limitation, the Intercreditor Agreement) and to
exercise such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of the Loan Documents, together with such
other powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary elsewhere in any Loan Document, the Administrative
Agent shall not have any duties or responsibilities other than those expressly
set forth therein, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into the Loan Documents or otherwise exist against the Administrative
Agent.
10.2. Delegation of Duties
--------------------
The Administrative Agent may execute any of its duties under the Loan
Documents by or through agents or attorneys-in-fact and shall be entitled to
rely upon the advice of counsel concerning all matters pertaining to such
duties.
10.3. Exculpatory Provisions
----------------------
Neither the Administrative Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates shall be (i) liable for any
action lawfully taken or omitted to be taken by the Administrative Agent or such
Person under or in connection with the Loan Documents (except the Administrative
Agent or such Person for its own gross negligence or willful misconduct), or
(ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by any Credit Party or any
officer thereof contained in the Loan Documents or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Administrative Agent under or in connection with, the Loan Documents or for the
value, validity, effectiveness, genuineness, perfection, enforceability or
sufficiency of any of the Loan Documents or for any failure of any Credit Party
or any other Person to perform its obligations thereunder. The Administrative
Agent shall not be under any obligation to any Lender to ascertain or to inquire
as to the observance or performance of any of the agreements contained in, or
conditions of, the Loan Documents, or to inspect the properties, books or
records of any Credit Party. The Administrative Agent shall not be under
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any liability or responsibility whatsoever, as Administrative Agent, to any
Credit Party or any other Person as a consequence of any failure or delay in
performance, or any breach, by any Lender of any of its obligations under any of
the Loan Documents.
10.4. Reliance by Administrative Agent
--------------------------------
The Administrative Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, opinion, letter, cablegram, telegram, fax, telex or
teletype message, email communication, statement, order or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to any Credit Party),
independent accountants and other experts and advisors selected by the
Administrative Agent. The Administrative Agent may treat each Lender, or the
Person designated in the last notice filed with it under this Section, as the
holder of all of the interests of such Lender in its Loans and in its Notes
until written notice of transfer, signed by such Lender (or the Person
designated in the last notice filed with the Administrative Agent) and by the
Person designated in such written notice of transfer, in form and substance
satisfactory to the Administrative Agent, shall have been filed with the
Administrative Agent. The Administrative Agent shall not be under any duty to
examine or pass upon the validity, effectiveness, enforceability, perfection or
genuineness of the Loan Documents or any instrument, document or communication
furnished pursuant thereto or in connection therewith, and the Administrative
Agent shall be entitled to assume that the same are valid, effective and
genuine, have been signed or sent by the proper parties and are what they
purport to be. The Administrative Agent shall be fully justified in failing or
refusing to take any action under the Loan Documents unless it shall first
receive such advice or concurrence of the Required Lenders as it deems
appropriate. The Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, under the Loan Documents in accordance
with a request or direction of the Required Lenders (or, when expressly required
by a Loan Document, all the Lenders), and such request or direction and any
action taken or failure to act pursuant thereto shall be binding upon all the
Lenders and all future holders of the Notes.
10.5. Notice of Default
-----------------
The Administrative Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default unless the
Administrative Agent has received written notice thereof from a Lender or the
Borrower. In the event that the Administrative Agent receives such a notice,
the Administrative Agent shall promptly give notice thereof to the Lenders and
the Borrower. The Administrative Agent shall take such action with respect to
such Default or Event of Default as shall be directed by the Required Lenders,
provided, however, that unless and until the Administrative Agent shall have
received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem to be in the best interests
of the Lenders.
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10.6. Non-Reliance on Administrative Agent and Other Lenders
------------------------------------------------------
Each Lender expressly acknowledges that neither the Administrative
Agent nor any of its respective officers, directors, employees, agents,
attorneys-in-fact or affiliates has made any representations or warranties to it
and that no act by the Administrative Agent hereafter, including any review of
the affairs of any Credit Party, shall be deemed to constitute any
representation or warranty by the Administrative Agent to any Lender. Each
Lender represents to the Administrative Agent that it has, independently and
without reliance upon the Administrative Agent or any other Lender, and based on
such documents and information as it has deemed appropriate, made its own
evaluation of and investigation into the business, operations, Property,
financial and other condition and creditworthiness of the Credit Parties and
made its own decision to enter into this Agreement. Each Lender also represents
that it will, independently and without reliance upon the Administrative Agent
or any other Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
evaluations and decisions in taking or not taking action under any Loan
Document, and to make such investigation as it deems necessary to inform itself
as to the business, operations, Property, financial and other condition and
creditworthiness of the Credit Parties. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, Property, financial and other condition or
creditworthiness of the Credit Parties that may come into the possession of the
Administrative Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates.
10.7. Indemnification
---------------
Each Lender agrees to indemnify and reimburse the Administrative Agent
in its capacity as such (to the extent not promptly reimbursed by the Borrower
and without limiting the obligation of any Credit Party to do so), according to
its Pro Rata Share, from and against any and all liabilities, obligations,
claims, losses, damages, penalties, actions, judgments, suits, costs, expenses
or disbursements of any kind whatsoever, including, without limitation, any
amounts paid to the Lenders (through the Administrative Agent) by the Borrower
pursuant to the terms of the Loan Documents that are subsequently rescinded or
avoided or must otherwise be restored or returned, that may at any time
(including, without limitation, at any time following the payment of the Loans)
be imposed on, incurred by or asserted against the Administrative Agent in any
way relating to or arising out of the Loan Documents or any other documents
contemplated by or referred to therein or the transactions contemplated thereby
or any action taken or omitted to be taken by the Administrative Agent under or
in connection with any of the foregoing; provided, however, that no Lender shall
be liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements to the extent resulting from the gross negligence or willful
misconduct of the Administrative Agent. The agreements in this Section shall
survive the payment of all amounts payable under the Loan Documents.
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10.8. Administrative Agent in Its Individual Capacity
-----------------------------------------------
BNY and its respective affiliates may make loans to, accept deposits
from, issue letters of credit for the account of, and generally engage in any
kind of business with, any Credit Party as though BNY were not Administrative
Agent hereunder. With respect to the Notes issued to BNY, BNY shall have the
same rights and powers under the Loan Documents as any Lender and may exercise
the same as though it were not the Administrative Agent, and the terms "Lender"
and "Lenders" shall in each case include BNY.
10.9. Successor Administrative Agent
------------------------------
If at any time the Administrative Agent deems it advisable, in its
sole discretion, it may submit to each of the Lenders a written notice of its
resignation as Administrative Agent under the Loan Documents, such resignation
to be effective upon the earlier of (i) the written acceptance of the duties of
the Administrative Agent under the Loan Documents by a successor Administrative
Agent and (ii) on the 30th day after the date of such notice. Upon any such
resignation, the Required Lenders shall have the right to appoint from among the
Lenders a successor Administrative Agent. If no successor Administrative Agent
shall have been so appointed by the Required Lenders and accepted such
appointment in writing within 30 days after the retiring Administrative Agent's
giving of notice of resignation, then the retiring Administrative Agent may, on
behalf of the Lenders, appoint a successor Administrative Agent, which successor
Administrative Agent shall be a commercial bank organized under the laws of the
United States or any State thereof and having a combined capital, surplus, and
undivided profits of at least $100,000,000. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent's rights, powers,
privileges and duties as Administrative Agent under the Loan Documents shall be
terminated. The Borrower and the Lenders shall execute such documents as shall
be necessary to effect such appointment. After any retiring Administrative
Agent's resignation as Administrative Agent, the provisions of the Loan
Documents shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Administrative Agent under the Loan Documents. If at
any time there shall not be a duly appointed and acting Administrative Agent,
the Borrower agrees to make each payment due under the Loan Documents directly
to the Persons entitled thereto during such time.
10.10. Appointment of Collateral Agent
-------------------------------
Each Lender hereby authorizes the Administrative Agent to enter into
the Intercreditor Agreement on behalf of and for the benefit of that Lender and
agrees to be bound by the terms of the Intercreditor Agreement. Each Lender
hereby authorizes the Collateral Agent to enter into the Collateral Documents
and the Intercreditor Agreement and to accept the Subsidiary Guaranty and to
take all action contemplated by the Intercreditor Agreement, the Collateral
Documents, and Subsidiary Guaranty. Each Lender agrees that no Lender shall
have any right
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individually to seek or to enforce the Subsidiary Guaranty or to realize upon
the security granted by any Collateral Document, it being understood and agreed
that such rights and remedies may be exercised by the Collateral Agent for the
benefit of the Lenders and the parties to the Intercreditor Agreement upon the
terms of the Subsidiary Guaranty, the Collateral Documents and the Intercreditor
Agreement.
10.11. The Co-Arrangers
----------------
The Co-Arrangers shall have no duties or obligations under the Loan
Documents in their capacity as Co-Arrangers. The Co-Arrangers, in their
capacity as Co-Arrangers, shall have the same rights, protections, immunities
and indemnities as the Administrative Agent.
10.12. The Syndication Agent
---------------------
The Syndication Agent shall have no duties or obligations under the
Loan Documents in its capacity as Syndication Agent. The Syndication Agent, in
its capacity as Syndication Agent, shall have the same rights, protections,
immunities and indemnities as the Administrative Agent.
11. OTHER PROVISIONS
-----------------
11.1. Amendments and Waivers
----------------------
With the written consent of the Required Lenders, the Administrative
Agent and the appropriate Credit Parties may, from time to time, enter into
written amendments, supplements or modifications of this Agreement, the Notes
and the Intercreditor Agreement and, with the consent of the Required Lenders,
the Administrative Agent on behalf of the Lenders may execute and deliver to any
such parties a written instrument waiving or a consent to a departure from, on
such terms and conditions as the Administrative Agent may specify in such
instrument, any of the requirements of this Agreement, the Notes and the
Intercreditor Agreement or any Default or Event of Default and its consequences;
provided that:
(a) no such amendment, supplement, modification, waiver or consent
shall, without the consent of all of the Lenders, (i) extend the Maturity Date;
(ii) decrease the rate or prepayment penalty or premium, or extend the time of
payment, of interest on, or change or forgive the principal amount of, or change
the pro rata allocation of payments under, any Loan, (iii) except as provided in
Section 11.1(c), release or discharge any Credit Party or release any
Collateral; (iv) change the provisions of Sections 2.8, 2.10, 2.11, 2.12, 2.14,
11.1 or 11.7(a), (v) change the definition of Required Lenders, Pro Rata Share
or First Additional Term Loan Pro Rata Share, (vi) change the several nature of
the obligations of the Lenders, (vii) extend the date or decrease the amount of
any scheduled payment of Term Loans pursuant to Section 2.4(b), (viii) add any
new borrower under this Agreement or (ix) waive Section 5.23;
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(b) without the written consent of the Administrative Agent, no such
amendment, supplement, modification or waiver shall amend, modify or waive any
provision of Section 10 or otherwise change any of the rights or obligations of
the Administrative Agent hereunder or under the other Loan Documents;
(c) notwithstanding anything to the contrary contained in this
Section 11.1, (i) the Collateral Documents, the Intercreditor Agreement, and the
Subsidiary Guaranty may only be amended in accordance with the terms thereof and
of the Intercreditor Agreement, and (ii) the Collateral Agent may, at any time
and from time to time without the consent of any of the Lenders, release all or
any of the obligations of any one or more Subsidiaries under the Collateral
Documents in connection with a disposition of such Subsidiary as permitted by
Section 8.3 or 8.7, and release any Collateral or any security interest therein
in connection with any release specifically provided for in the Collateral
Documents; and
(d) no such amendment, supplement, modification, waiver or consent
shall increase the aggregate principal amount of Term Loans or commitments to
make Term Loans hereunder without the consent of Required Lenders and each
Lender providing such Term Loans or commitments.
Any such amendment, supplement, modification or waiver shall apply
equally to each of the Lenders and shall be binding upon the parties to the
applicable Loan Document, the Lenders, the Administrative Agent and all future
holders of the Notes. In the case of any waiver, the parties to the applicable
Loan Document, the Lenders and the Administrative Agent shall be restored to
their former position and rights hereunder and under the outstanding Notes and
other Loan Documents to the extent provided for in such waiver, and any Default
or Event of Default waived shall not extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon. The Loan Documents
may not be amended orally or by any course of conduct.
11.2. Notices
-------
All notices, requests and demands to or upon the respective parties
to the Loan Documents to be effective shall be in writing and, unless otherwise
expressly provided therein, shall be deemed to have been duly given or made when
delivered by hand, or when deposited in the mail, first-class postage prepaid,
or, in the case of notice by fax, when sent, addressed as follows in the case of
the Borrower or the Administrative Agent, at the Domestic Lending Office, in the
case of each Lender, and to the address of a Credit Party set forth in a Loan
Document, or to such other addresses as to which the Administrative Agent may be
hereafter notified by the respective parties thereto or any future holders of
the Notes:
The Borrower:
Total Renal Care Holdings, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
-▇▇-
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
Chief Financial Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
The Administrative Agent:
The Bank of ▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Agency Function Administration
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ or 6366 or 6367
with a copy to:
The Bank of New York
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
except that any notice, request or demand by the Borrower to or upon the
Administrative Agent or the Lenders pursuant to Sections 2.4 or 2.5 shall not be
effective until received. Any party to a Loan Document may rely on signatures
of the parties thereto that are transmitted by fax or other electronic means as
fully as if originally signed.
11.3. No Waiver; Cumulative Remedies
------------------------------
No failure to exercise and no delay in exercising, on the part of the
Administrative Agent or any Lender, any right, remedy, power or privilege under
any Loan Document shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege under any Loan
Document preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege. The rights, remedies, powers and
privileges under the Loan Documents are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
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11.4. Survival of Representations and Warranties
------------------------------------------
All representations and warranties made under the Loan Documents and
in any document, certificate or statement delivered pursuant thereto or in
connection therewith shall survive the execution and delivery of the Loan
Documents.
11.5. Payment of Expenses and Taxes
-----------------------------
The Borrower agrees, promptly upon presentation of a statement or
invoice therefor, and whether any Loan is made (i) to pay or reimburse the
Administrative Agent, the Syndication Agent and the Co-Arrangers for all their
out-of-pocket costs and expenses reasonably incurred in connection with the
development, preparation and execution of the Loan Documents and any amendment,
supplement or modification thereto (whether or not executed), any documents
prepared in connection therewith and the consummation of the transactions
contemplated thereby, including, without limitation, the reasonable fees and
disbursements of Special Counsel, (ii) to pay or reimburse the Administrative
Agent, the Syndication Agent, the Co-Arrangers, and the Lenders for all of their
respective costs and expenses, including, without limitation, reasonable fees
and disbursements of counsel (including allocated costs of internal counsel),
incurred in connection with (A) any Default or Event of Default and any
enforcement or collection proceedings resulting therefrom or in connection with
the negotiation of any restructuring or "work-out" (whether consummated or not)
of the obligations of the Credit Parties under any of the Loan Documents and (B)
the enforcement of this Section, (iii) to pay, indemnify, and hold the
Administrative Agent, the Syndication Agent, the Co-Arrangers, and each Lender
harmless from and against, any and all recording and filing fees and any and all
liabilities with respect to, or resulting from any delay in paying, stamp,
excise and other similar taxes, if any, that may be payable or determined to be
payable in connection with the execution and delivery of, or consummation of any
of the transactions contemplated by, or any amendment, supplement or
modification of, or any waiver or consent under or in respect of, the Loan
Documents and any such other documents, and (iv) to pay, indemnify and hold the
Administrative Agent, the Syndication Agent, the Co-Arrangers, and each Lender,
and each of their respective officers, directors and employees, harmless from
and against any and all other liabilities, obligations, claims, losses, damages,
penalties, actions, judgments, suits, costs, expenses and disbursements of any
kind or nature whatsoever (including, without limitation, reasonable counsel
fees and disbursements) with respect to the enforcement and performance of the
Loan Documents, the use of the proceeds of the Loans and the enforcement and
performance of the provisions of any subordination agreement in favor of the
Administrative Agent and the Lenders (all the foregoing, collectively, the
"indemnified liabilities") and, if and to the extent that the foregoing
------------------------
indemnity may be unenforceable for any reason, the Borrower agrees to make the
maximum payment permitted or not prohibited under applicable law; provided,
however, that the Borrower shall have no obligation hereunder to pay indemnified
liabilities to the Administrative Agent, the Syndication Agent, the Co-
Arrangers, or any Lender to the extent arising from such indemnified party's
gross negligence or willful misconduct or claims between one indemnified
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party and another indemnified party. The agreements in this Section shall
survive the payment of all amounts payable under the Loan Documents.
11.6. Lending Offices
---------------
(a) Each Lender shall have the right at any time and from time to
time to transfer its Loans to a different office, provided that it shall
promptly notify the Administrative Agent and the Borrower of any such change of
office. Such office shall thereupon become, with respect to its Loans, its
Lender's Domestic Lending Office or Eurodollar Lending Office, as the case may
be, provided, however, that it shall not be entitled to receive any greater
amount under Sections 2.8, 2.10, 2.11 or 2.14 as a result of any such transfer
to a different office than it would be entitled to immediately prior thereto
unless (i) such claim would have arisen even if such transfer had not occurred,
(ii) such transfer was made pursuant to subsection (b) below, or (iii) such
claims arose as a result of a change of law after such transfer.
(b) Each Lender agrees that, upon the occurrence of any event giving
rise to any increased cost or indemnity under Sections 2.8, 2.10, 2.11 or 2.14
with respect to such Lender, it will, if requested by the Borrower, use
reasonable efforts (subject to its overall policy considerations) to designate
another office for any part of its Loans affected by such event, provided that
such designation is made on such terms that such Lender and its office suffer no
economic, legal or regulatory disadvantage, with the object of avoiding the
consequence of the event giving rise to the operation of any such Section.
11.7. Assignments and Participations
------------------------------
(a) The Loan Documents shall be binding upon and inure to the
benefit of the Borrower, the Lenders, the Administrative Agent, all future
holders of the Notes and their respective successors and assigns, except that no
Credit Party may assign, delegate or transfer any of its rights or obligations
under the Loan Documents without the prior written consent of the Administrative
Agent and each Lender.
(b) Each Lender shall have the right at any time, upon written
notice to the Administrative Agent of its intent to do so and the payment of a
fee (the "Assignment Fee") of $1,500 to the Administrative Agent by the
--------------
assigning or assignee Lender, to sell, assign, transfer or negotiate all or any
part of such Lender's rights and obligations under the Loan Documents (i) to one
or more of the other Lenders, (ii) to one or more of its affiliates or Approved
Funds or the affiliates or Approved Funds of one or more of the other Lenders,
or (iii) with the prior written consent of the Borrower and the Administrative
Agent (which consents shall not be unreasonably withheld or delayed, or with
respect to the Borrower, required during the continuance of an Event of
Default), to any other bank, insurance company, pension fund, mutual fund or
other financial institution or fund, which in the normal course of its business,
purchases loans such as the Loans, provided that each such sale, assignment,
transfer or negotiation pursuant to clause (iii) shall be in a minimum amount of
$1,000,000 (or, if less, a Lender's entire Credit Exposure). For each
assignment, the parties to such assignment shall execute and deliver
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to the Administrative Agent for its acceptance an Assignment and Acceptance
Agreement which the Administrative Agent shall record in a register (the
"Register") maintained by the Administrative Agent on behalf of the Borrower,
--------
for the recordation of the names and addresses of the Lenders and the principal
amount of the Loans owing to, each Lender from time to time and the registered
owners of the Obligation(s) evidenced by the Note(s). The entries in the
Register shall be presumptively correct absent manifest error. No assignment
shall be effective for purposes of this Agreement until it has been recorded in
the Register as provided above. Upon such execution, delivery, acceptance and
recording by the Administrative Agent, from and after the effective date
specified in such Assignment and Acceptance Agreement, the assignee thereunder,
if not already a Lender, shall be a party hereto and, to the extent provided in
such Assignment and Acceptance Agreement, the assignor Lender thereunder shall
be released from its obligations under the Loan Documents. The Borrower agrees
upon written request of the Administrative Agent and at the Borrower's expense
to execute and deliver (i) to such assignee a Note, dated the date of the
assignor's Note subject to such Assignment and Acceptance Agreement, in an
aggregate principal amount equal to the Loans assigned to such assignee and (ii)
to such assignor Lender, a Note, dated the date of the assignor's Note subject
to such Assignment and Acceptance Agreement, in an aggregate principal amount
equal to the balance of such assignor Lender's Loans, if any, and each assignor
Lender shall cancel and return to the Borrower its existing Note. Upon any such
sale, assignment or other transfer, the Pro Rata Shares set forth in Exhibit A
shall be adjusted accordingly by the Administrative Agent.
(c) Each Lender may grant participations in all or any part of its
Loans and its Note to one or more banks, insurance companies, financial
institutions, pension funds, mutual funds or funds which in the normal course of
business purchase loans such as the Loans, provided that (i) such Lender's
obligations under the Loan Documents shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties to the Loan Documents for
the performance of such obligations, (iii) the Borrower, the Administrative
Agent and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under the Loan
Documents and (iv) the voting rights of any holder of any participation shall be
limited to decisions that require the consent of all Lenders as set forth in
Section 11.1(a). The Borrower acknowledges and agrees that any such participant
shall for purposes of Sections 2.8, 2.10, 2.11 and 2.14 be deemed to be a
"Lender"; provided, however, the Borrower shall not, at any time, be obligated
to pay any participant in any interest of any Lender hereunder any sum in excess
of the sum that the Borrower would have been obligated to pay to such Lender in
respect of such interest had such Lender not sold such participation.
(d) If any (i) assignment is made pursuant to subsection (b) above
or (ii) participation is granted pursuant to subsection (c) above to any Person
that is not a U.S. Person, such Person shall furnish such certificates,
documents or other evidence to the Borrower and the Administrative Agent, in the
case of clause (i), and to the Borrower and the Lender that sold such
participation, in the case of clause (ii), as shall be required by Section
2.8(e).
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(e) No Lender shall, as between and among the Borrower, the
Administrative Agent, the Syndication Agent and such Lender, be relieved of any
of its obligations under the Loan Documents as a result of any sale, assignment,
transfer or negotiation of, or granting of participations in, all or any part of
its Loans or its Notes, except that a Lender shall be relieved of its
obligations to the extent of any such sale, assignment, transfer, or negotiation
of all or any part of its Loans or its Notes pursuant to subsection (b) above.
(f) Notwithstanding anything to the contrary contained in this
Section, any Lender may at any time or from time to time assign or pledge all or
any portion of its rights under the Loan Documents to (i) a Federal Reserve Bank
or (ii) if such Lender is a fund which in the normal course of its business
purchases loans such as the Loans, to its lenders or a trustee under an
indenture for the benefit of its creditors, to secure such fund's obligations,
provided that any such assignment or pledge shall not release such assignor from
its obligations thereunder.
(g) In the event that the Borrower shall request that Lenders enter
into any amendment, modification, consent or waiver with respect to this
Agreement or any other Loan Document, which amendment, modification, consent or
waiver cannot become effective without the consent of each Lender, and any
Lender elects not to enter into such amendment, modification, consent or waiver
(each such Lender being a "Dissenting Lender"), then the Borrower shall have the
-----------------
right upon 10 days' written notice to the Administrative Agent and such
Dissenting Lender, to require each such Dissenting Lender to assign 100% of its
Loans and Notes at par to any Lender or any other financial institution which
satisfies the requirements of Section 11.7(b) and has been consented to by the
Administrative Agent (which consent shall not be unreasonably withheld or
delayed), in each case that agrees, in its sole discretion, to assume such Loans
and Notes. Each such assignment shall be made pursuant to an Assignment and
Acceptance Agreement and shall comply with the other terms of this Section 11.7.
The Borrower shall pay to such Dissenting Lender, concurrently with the
effectiveness of such assignment, any amounts payable under Section 2.11 that
would have been payable if the Borrower had voluntarily prepaid such Loans. The
Dissenting Lender shall not be required to pay the Assignment Fee.
11.8. Counterparts; Effectiveness
---------------------------
Each Loan Document (other than the Notes) may be executed by one or
more of the parties thereto on any number of separate counterparts and all of
said counterparts taken together shall be deemed to constitute one and the same
document. It shall not be necessary in making proof of any Loan Document to
produce or account for more than one counterpart signed by the party to be
charged. A counterpart of any Loan Document or of any amendment, modification,
consent or waiver to or of any Loan Document transmitted by fax shall be deemed
to be an originally executed counterpart. A set of the copies of the Loan
Documents signed by all the parties thereto shall be deposited with each of the
Borrower and the Administrative Agent. Any party to a Loan Document may rely
upon the signatures of any other party thereto that are transmitted by fax or
other electronic means to the same extent as if originally signed. On the
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Effective Date, at the time of the effectiveness of this Agreement, (i) this
Agreement shall amend and restate the Existing Term Loan Agreement, (ii) all
Term Loans (as defined in the Existing Term Loan Agreement) outstanding under
the Existing Term Loan Agreement shall continue as and constitute Loans for all
purposes under this Agreement, and (iii) all obligations of the Borrower under
the Existing Term Loan Agreement that have not been paid as of the Effective
Date shall become Obligations of the Borrower under this Agreement.
11.9. Adjustments; Set-off
--------------------
(a) If any Lender shall at any time receive any payment of all or
any part of its Loans, or interest thereon, or receive any collateral in respect
thereof (whether voluntarily or involuntarily, by set-off, pursuant to events or
proceedings of the nature referred to in Section 9.1 (h) or (i), or otherwise)
in a greater proportion than any such payment to and collateral received by any
other Lender in respect of such other Lender's Loans, or interest thereon (each
a "Benefited Lender"), such Benefited Lender shall purchase for cash from each
----------------
of the other Lenders such portion of each such other Lender's Loans, and shall
provide each of such other Lenders with the benefits of any such collateral, or
the proceeds thereof, as shall be necessary to cause such Benefited Lender to
share the excess payment or benefits of such collateral or proceeds ratably with
each of the Lenders, provided, however, that if all or any portion of such
excess payment or benefits is thereafter recovered from such Benefited Lender,
such purchase shall be rescinded, and the purchase price and benefits returned,
to the extent of such recovery, but without interest. The Borrower agrees that
each Lender so purchasing a portion of another Lender's Loans may exercise all
rights of payment (including, without limitation, rights of set-off, to the
extent not prohibited by law) with respect to such portion as fully as if such
Lender were the direct holder of such portion.
(b) In addition to any rights and remedies of the Lenders provided
by law, upon the occurrence of an Event of Default and the acceleration of the
obligations owing in connection with the Loan Documents, or at any time upon the
occurrence and during the continuance of an Event of Default, under Section
9.1(a) or (b), each Lender shall have the right, without prior notice to the
Borrower, any such notice being expressly waived by each Credit Party to the
extent not prohibited by applicable law, to set-off and apply against any
indebtedness, whether matured or unmatured, of such Credit Party to such Lender,
any amount owing from such Lender to such Credit Party, at, or at any time
after, the happening of any of the above-mentioned events. To the extent not
prohibited by applicable law, the aforesaid right of set-off may be exercised by
such Lender against such Credit Party or against any trustee in bankruptcy,
custodian, debtor in possession, assignee for the benefit of creditors,
receiver, or execution, judgment or attachment creditor of such Credit Party, or
against anyone else claiming through or against such Credit Party or such
trustee in bankruptcy, custodian, debtor in possession, assignee for the benefit
of creditors, receiver, or execution, judgment or attachment creditor,
notwithstanding the fact that such right of set-off shall not have been
exercised by such Lender prior to the making, filing or issuance, or service
upon such Lender of, or of notice of, any such petition, assignment for the
benefit of creditors, appointment or application for the
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appointment of a receiver, or issuance of execution, subpoena, order or warrant.
Each Lender agrees promptly to notify the applicable Credit Party and the
Administrative Agent after any such set-off and application made by such Lender,
provided that the failure to give such notice shall not affect the validity of
such set-off and application.
11.10. Construction
------------
Each Credit Party represents that it has been represented by counsel
in connection with the Loan Documents and the transactions contemplated thereby
and that the principle that agreements are to be construed against the draftsman
shall be inapplicable.
11.11. Indemnity
---------
The Borrower agrees to indemnify and hold harmless the Administrative
Agent, the Syndication Agent, the Co-Arrangers and each Lender and their
respective affiliates, directors, officers, employees, attorneys and agents
(each an "Indemnified Person") from and against any loss, cost, liability,
------------------
damage or expense (including the reasonable fees and disbursements of counsel of
such Indemnified Person, including all local counsel hired by any such counsel)
incurred by such Indemnified Person in investigating, preparing for, defending
against, or providing evidence, producing documents or taking any other action
in respect of, any commenced or threatened litigation, administrative proceeding
or investigation under any federal securities law or any other statute of any
jurisdiction, or any regulation, or at common law or otherwise, that is alleged
to arise out of or is based upon (i) any untrue statement or alleged untrue
statement of any material fact by any Credit Party in any document or schedule
executed or filed with any Governmental Authority by or on behalf of any Credit
Party; (ii) any omission or alleged omission to state any material fact required
to be stated in such document or schedule, or necessary to make the statements
made therein, in light of the circumstances under which made, not misleading;
(iii) any acts, practices or omissions or alleged acts, practices or omissions
of any Credit Party or its agents relating to the use of the proceeds of any or
all borrowings made by the Borrower alleged to be in violation of Section 2.13,
or in violation of any federal securities law or of any other statute,
regulation or other law of any jurisdiction applicable thereto; or (iv) any
acquisition or proposed acquisition by any Credit Party of all or a portion of
the Stock, or all or a portion of the assets, of any Person whether such
Indemnified Person is a party thereto, provided that the Borrower shall have no
obligation under this Section to an Indemnified Person with respect to any of
the foregoing to the extent any such loss, cost, liability, damage or expense
resulted from or arose out of the gross negligence or willful misconduct of such
Indemnified Person or arose from claims between one such Indemnified Person and
another such Indemnified Person. The indemnity set forth herein shall be in
addition to any other obligations or liabilities of the Borrower to each
Indemnified Person under the Loan Documents or at common law or otherwise, and
shall survive any termination of the Loan Documents, the expiration of the
Commitments and the payment of all indebtedness of the Borrower under the Loan
Documents.
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11.12. GOVERNING LAW
-------------
THE LOAN DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
THEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
11.13. Headings Descriptive
--------------------
Section headings have been inserted in the Loan Documents for
convenience only and shall not be construed to be a part thereof.
11.14. Severability
------------
Every provision of the Loan Documents is intended to be severable,
and if any term or provision thereof shall be invalid, illegal or unenforceable
for any reason, the validity, legality and enforceability of the remaining
provisions thereof shall not be affected or impaired thereby, and any
invalidity, illegality or unenforceability in any jurisdiction shall not affect
the validity, legality or enforceability of any such term or provision in any
other jurisdiction.
11.15. Integration
-----------
All exhibits to a Loan Document shall be deemed to be a part thereof.
Except for agreements between the Administrative Agent and the Borrower with
respect to certain fees, the Loan Documents embody the entire agreement and
understanding among the Credit Parties, the Administrative Agent and the Lenders
with respect to the subject matter thereof and supersede all prior agreements
and understandings among the Credit Parties, the Administrative Agent and the
Lenders with respect to the subject matter thereof.
11.16. Consent to Jurisdiction
-----------------------
Each Credit Party hereby irrevocably submits to the jurisdiction of
any New York State or Federal court sitting in the City of New York over any
suit, action or proceeding arising out of or relating to the Loan Documents.
Each Credit Party hereby irrevocably waives, to the fullest extent permitted or
not prohibited by law, any objection that it may now or hereafter have to the
laying of the venue of any such suit, action or proceeding brought in such a
court and any claim that any such suit, action or proceeding brought in such a
court has been brought in an inconvenient forum. Each Credit Party hereby
agrees that a final judgment in any such suit, action or proceeding brought in
such a court, after all appropriate appeals, shall be conclusive and binding
upon it.
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11.17. Service of Process
------------------
Each Credit Party hereby agrees that service of process in any such
suit, action or proceeding brought in the State of New York may be made upon CT
Corporation at its offices at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (or
any other location in New York City) (the "Process Administrative Agent") and
----------------------------
each Credit Party hereby irrevocably appoints the Process Administrative Agent
its authorized agent to accept such service of process, and agrees that the
failure of the Process Administrative Agent to give any notice of any such
service shall not impair or affect the validity of such service or of any
judgment rendered in any action or proceeding based thereon. Each Credit Party
hereby further irrevocably consents to the service of process in any suit,
action or proceeding by sending the same by first class mail, return receipt
requested or by overnight courier service, to the address of such Credit Party
set forth in or referred to in Section 11.2 or in the applicable Loan Document
executed by such Credit Party. Each Credit Party hereby agrees that any such
service (i) shall be deemed in every respect effective service of process upon
it in any such suit, action, or proceeding, and (ii) shall to the fullest extent
enforceable by law, be taken and held to be valid personal service upon and
personal delivery to it.
11.18. No Limitation on Service or Suit
--------------------------------
Nothing in the Loan Documents or any modification, waiver, consent or
amendment thereto shall affect the right of the Administrative Agent or any
Lender to serve process in any manner permitted by law or limit the right of the
Administrative Agent or any Lender to bring proceedings against any Credit Party
in the courts of any jurisdiction or jurisdictions in which such Credit Party
may be served.
11.19. [Intentionally Omitted]
11.20. WAIVER OF TRIAL BY JURY
-----------------------
THE ADMINISTRATIVE AGENT, THE SYNDICATION AGENT, THE CO-ARRANGERS,
THE LENDERS AND EACH CREDIT PARTY EACH HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION ARISING OUT OF, UNDER OR IN CONNECTION WITH THE LOAN DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED THEREIN. FURTHER, EACH CREDIT PARTY HEREBY CERTIFIES
THAT NO REPRESENTATIVE OR AGENT OF THE ADMINISTRATIVE AGENT, THE SYNDICATION
AGENT, THE CO-ARRANGERS OR THE LENDERS, OR COUNSEL TO THE ADMINISTRATIVE AGENT,
THE SYNDICATION AGENT, THE CO-ARRANGERS OR THE LENDERS, HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT THE ADMINISTRATIVE AGENT, THE SYNDICATION AGENT,
THE CO-ARRANGERS OR THE LENDERS WOULD NOT, IN THE EVENT OF SUCH LITIGATION, SEEK
TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION. EACH CREDIT PARTY
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ACKNOWLEDGES THAT THE ADMINISTRATIVE AGENT, THE SYNDICATION AGENT, THE CO-
ARRANGERS AND THE LENDERS HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
INTER ALIA, THE PROVISIONS OF THIS SECTION.
----- ----
11.21. Treatment of Confidential Information
-------------------------------------
Each of the Administrative Agent, the Syndication Agent and each
Lender (each an "Agent/Lender") agrees to use reasonable precautions to keep
------------
confidential, in accordance with its customary procedures for handling
confidential information of the same nature, all non-public information supplied
by the Borrower or any Subsidiary pursuant to this Agreement which (i) is
clearly identified by such Person as being confidential at the time the same is
delivered to such Agent/Lender or (ii) constitutes any financial statement,
financial projections or forecasts, budget, compliance certificate, audit
report, management letter or accountants' certification delivered hereunder
("Information"), provided that nothing herein shall limit the disclosure of any
-------------
Information (a) on a confidential basis to its Affiliates, agents or other
advisors, (b) to the extent required by applicable laws or regulations or by any
subpoena or similar legal process, or requested by any regulatory authority, (c)
on a confidential basis, to prospective assignees or participants or their
Affiliates, agents or other advisors, (d) to auditors or accountants, and any
analogous counterpart thereof, (e) to any other Agent/Lender, (f) in connection
with any litigation to which any Agent/Lender is a party, (g) to the extent such
Information (A) becomes publicly available other than as a result of a breach of
this Agreement, (B) becomes available to any Agent/Lender on a non-confidential
basis from a source other than the Borrower or any Subsidiary or (C) was
available to any Agent/Lender on a non-confidential basis prior to its
disclosure to any of them by the Borrower or any Subsidiary; and (h) to the
extent the Borrower shall have consented to such disclosure in writing.
11.22. Designation as Designated Senior Indebtedness
---------------------------------------------
This Agreement, the Subsidiary Guaranty, and all Loans and all other
monetary obligations hereunder and thereunder, are hereby expressly designated
as "Designated Senior Indebtedness", as that term is defined in the RTC
Convertible Subordinated Indenture and in the RTC Convertible Subordinated
Guaranty.
11.23. Waiver of Past Defaults and Events of Default
---------------------------------------------
(a) The Administrative Agent and the Required Lenders hereby waive
any Default or Event of Default (under and as defined in the Existing Revolving
Credit Agreement) that may exist immediately prior to the effectiveness of this
Agreement as a result of any of the following:
(i) the noncompliance with Sections 7.12, 7.13, 7.15, 8.5(d),
8.5(f) and 8.7(iv) of the Existing Revolving Credit Agreement;
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(ii) the failure to have delivered an accountant's letter with
respect to the Borrower's audited consolidated financial statements for the
fiscal year ending December 31, 1999 that complied with the requirements of
Section 7.1(a)(ii) of the Existing Revolving Credit Agreement;
(iii) the late delivery of an officer's certificate with respect
to the Borrower's consolidated financial statements for the fiscal quarter
ending March 31, 2000 as required pursuant to Section 7.1(b) of the Existing
Revolving Credit Agreement;
(iv) the late delivery of the Compliance Certificates relating
to the fiscal year ending December 31, 1999 and the fiscal quarter ending March
31, 2000 as required pursuant to Section 7.1(c) of the Existing Revolving Credit
Agreement;
(v) the failure to deliver certain reports required pursuant
to Section 7.2(k) of the Existing Revolving Credit Agreement;
(vi) the late delivery of notices of the occurrence and
continuance of any Default or Event of Default (as defined in the Existing
Revolving Credit Agreement) as required by 7.2(a) of the Existing Revolving
Credit Agreement; and
(vii) the noncompliance with Section 8.7 of the Existing
Revolving Credit Agreement and Paragraph 1(g)(ii) of Amendment No. 5 and
Consent, dated as of February 18, 2000, to and under the Existing Revolving
Credit Agreement, in each case with respect to the Pharmacy Asset Sale (as
defined in such Amendment No. 5 and Consent).
(b) The Administrative Agent and the Required Lenders hereby waive
any Default or Event of Default (under and as defined in the Existing Revolving
Credit Agreement) that may exist immediately prior to the effectiveness of this
Agreement under Section 9.1(g)(iii) or 9.1(k)(ii) of the Existing Revolving
Credit Agreement as a result of any defaults that may have arisen under the
Existing Term Loan Agreement (as defined in the Term Loan Facility) that will be
waived pursuant to Section 11.23 of the Term Loan Facility.
(c) The foregoing waivers do not constitute a waiver of any other
provision of, or operate as a waiver of any right, power or remedy of the
Administrative Agent or any Lender under, any of the Loan Documents.
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TOTAL RENAL CARE HOLDINGS, INC.
SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
TOTAL RENAL CARE HOLDINGS, INC.
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
TOTAL RENAL CARE HOLDINGS, INC.
SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT
AGENTS:
THE BANK OF NEW YORK, Individually and as
Administrative Agent and Collateral Agent
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
First Additional Term Loan Pro Rata Share: [Intentionally Omitted]
TOTAL RENAL CARE HOLDINGS, INC.
SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT
DLJ CAPITAL FUNDING, INC., Individually and as
Syndication Agent
By:
---------------------------
Name:
-------------------------
Title:
------------------------
First Additional Term Loan Pro Rata Share: [Intentionally Omitted]
TOTAL RENAL CARE HOLDINGS, INC.
SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT
LENDERS: AERIES FINANCE LTD.
By:
---------------------------
Name:
-------------------------
Title:
------------------------
First Additional Term Loan Pro Rata Share: [Intentionally Omitted]
TOTAL RENAL CARE HOLDINGS, INC.
SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT
AMARA 2
By:
---------------------------
Name:
-------------------------
Title:
------------------------
First Additional Term Loan Pro Rata Share: [Intentionally Omitted]
TOTAL RENAL CARE HOLDINGS, INC.
SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT
ARCHIMEDES FUNDING, L.L.C.
By: ING Capital Advisors, as Collateral Manager
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
First Additional Term Loan Pro Rata Share: [Intentionally Omitted]
TOTAL RENAL CARE HOLDINGS, INC.
SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT
ATHENA CDO, LIMITED
By: Pacific Investment Management Company, as
its investment advisor
By: PIMCO Management Inc., a general partner
By:
--------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Senior Vice President
First Additional Term Loan Pro Rata Share: [Intentionally Omitted]
TOTAL RENAL CARE HOLDINGS, INC.
SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT
CAPTIVA II FINANCE LTD.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
First Additional Term Loan Pro Rata Share: [Intentionally Omitted]
TOTAL RENAL CARE HOLDINGS, INC.
SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT
CAPTIVA III FINANCE, LTD., as advised by Pacific
Investment Management Company
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
First Additional Term Loan Pro Rata Share: [Intentionally Omitted]
TOTAL RENAL CARE HOLDINGS, INC.
SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT
CAPTIVA IV FINANCE, LTD., as advised by Pacific
Investment Management Company
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
First Additional Term Loan Pro Rata Share: [Intentionally Omitted]
TOTAL RENAL CARE HOLDINGS, INC.
SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT
DEEP ROCK & COMPANY
By: ▇▇▇▇▇ ▇▇▇▇▇ Management, as Investment
Advisor
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
First Additional Term Loan Pro Rata Share: [Intentionally Omitted]
TOTAL RENAL CARE HOLDINGS, INC.
SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT
DELANO COMPANY
By: Pacific Investment Management Company, as
its Investment Advisor
By: PIMCO Management Inc., a general partner
By:
-----------------------------------------
Name:
Title:
First Additional Term Loan Pro Rata Share: [Intentionally Omitted]
TOTAL RENAL CARE HOLDINGS, INC.
SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT
FRANKLIN FLOATING RATE TRUST
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
First Additional Term Loan Pro Rata Share: [Intentionally Omitted]
TOTAL RENAL CARE HOLDINGS, INC.
SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT
▇▇▇▇▇▇▇ NATIONAL LIFE INSURANCE COMPANY
By: PPM America, Inc., as attorney-in-fact, on
behalf of ▇▇▇▇▇▇▇ National Life Insurance Company
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
First Additional Term Loan Pro Rata Share: [Intentionally Omitted]
TOTAL RENAL CARE HOLDINGS, INC.
SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT
KZH ING-2 LLC
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
First Additional Term Loan Pro Rata Share: [Intentionally Omitted]
TOTAL RENAL CARE HOLDINGS, INC.
SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT
KZH LANGDALE LLC
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
First Additional Term Loan Pro Rata Share: [Intentionally Omitted]
TOTAL RENAL CARE HOLDINGS, INC.
SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT
KZH SOLEIL LLC
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
First Additional Term Loan Pro Rata Share: [Intentionally Omitted]
TOTAL RENAL CARE HOLDINGS, INC.
SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT
KZH SOLEIL-2 LLC
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
First Additional Term Loan Pro Rata Share: [Intentionally Omitted]
TOTAL RENAL CARE HOLDINGS, INC.
SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT
▇▇▇▇▇▇ ▇▇▇▇▇ GLOBAL INVESTMENT SERIES: INCOME
STRATEGIES PORTFOLIO
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Asset Management, L.P., As
Investment Advisor
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
First Additional Term Loan Pro Rata Share: [Intentionally Omitted]
TOTAL RENAL CARE HOLDINGS, INC.
SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT
▇▇▇▇▇▇▇ ▇▇▇▇▇ PRIME RATE PORTFOLIO
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Asset Management, L.P., As
Investment Advisor
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
First Additional Term Loan Pro Rata Share: [Intentionally Omitted]
TOTAL RENAL CARE HOLDINGS, INC.
SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT
▇▇▇▇▇▇▇ ▇▇▇▇▇ SENIOR FLOATING RATE FUND, INC.
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
First Additional Term Loan Pro Rata Share: [Intentionally Omitted]
TOTAL RENAL CARE HOLDINGS, INC.
SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT
ML CLO XIX STERLING (CAYMAN) LTD.
BY: STERLING ASSET MANAGER, L.L.C.,
as its Investment Advisor
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
First Additional Term Loan Pro Rata Share: [Intentionally Omitted]
TOTAL RENAL CARE HOLDINGS, INC.
SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT
NATIONAL WESTMINSTER BANK PLC
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
First Additional Term Loan Pro Rata Share: [Intentionally Omitted]
TOTAL RENAL CARE HOLDINGS, INC.
SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT
THE BANK OF NEW YORK, as Trustee on behalf of
NATS Loan Trust 18 and not in its individual
capacity
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
First Additional Term Loan Pro Rata Share: [Intentionally Omitted]
TOTAL RENAL CARE HOLDINGS, INC.
SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT
OASIS COLLATERALIZED HIGH INCOME
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
First Additional Term Loan Pro Rata Share: [Intentionally Omitted]
TOTAL RENAL CARE HOLDINGS, INC.
SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT
OCTAGON LOAN TRUST
By: Octagon Credit Investors, as Manager
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
First Additional Term Loan Pro Rata Share: [Intentionally Omitted]
TOTAL RENAL CARE HOLDINGS, INC.
SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT
ORIX USA CORPORATION
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
First Additional Term Loan Pro Rata Share: [Intentionally Omitted]
TOTAL RENAL CARE HOLDINGS, INC.
SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT
PACIFICA PARTNERS LLP
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
First Additional Term Loan Pro Rata Share: [Intentionally Omitted]
TOTAL RENAL CARE HOLDINGS, INC.
SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT
PIMCO TOTAL RETURN FUND
By: Pacific Investment Management Company, as
its Investment Advisor, acting through Investors
Fiduciary Trust Company in the Nominee Name of
IFTCO
By: PIMCO Management Inc., a general partner
By:
---------------------------------------
Name:
Title:
First Additional Term Loan Pro Rata Share: [Intentionally Omitted]
TOTAL RENAL CARE HOLDINGS, INC.
SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT
SENIOR DEBT PORTFOLIO
By: Boston Management and Research, as
Investment Advisor
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
First Additional Term Loan Pro Rata Share: [Intentionally Omitted]
TOTAL RENAL CARE HOLDINGS, INC.
SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT
▇▇▇▇▇▇▇▇▇ CLO, LTD.
By: ▇▇▇▇▇▇▇▇▇ Capital Partners LLC as its
collateral manager
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
First Additional Term Loan Pro Rata Share: [Intentionally Omitted]
TOTAL RENAL CARE HOLDINGS, INC.
SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT
SYNDICATED LOAN FUNDING TRUST
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
First Additional Term Loan Pro Rata Share: [Intentionally Omitted]
TOTAL RENAL CARE HOLDINGS, INC.
SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT
TRANSAMERICA LIFE INSURANCE AND ANNUITY COMPANY
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
First Additional Term Loan Pro Rata Share: [Intentionally Omitted]
TOTAL RENAL CARE HOLDINGS, INC.
SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT
▇▇▇ ▇▇▇▇▇▇ PRIME RATE INCOME TRUST
By: ▇▇▇ ▇▇▇▇▇▇ Investment Advisory Corp.
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
First Additional Term Loan Pro Rata Share: [Intentionally Omitted]
TOTAL RENAL CARE HOLDINGS, INC.
SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT
▇▇▇ ▇▇▇▇▇▇ SENIOR INCOME TRUST
By: ▇▇▇ ▇▇▇▇▇▇ Investment Advisory Corp.
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
First Additional Term Loan Pro Rata Share: [Intentionally Omitted]