Exhibit 4.1
EXECUTION COPY
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$200,000,000
CREDIT AGREEMENT
Dated as of April 21, 2003
among
MANOR CARE, INC.,
as the Borrower,
BANK OF AMERICA, N.A.,
as Administrative Agent, Swing Line Lender
and
L/C Issuer,
and
The Other Lenders Party Hereto
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JPMORGAN CHASE BANK,
as Syndication Agent
THE BANK OF NEW YORK
AND
SUNTRUST BANK,
as Documentation Agents
BANC OF AMERICA SECURITIES LLC,
as
Sole Lead Arranger and Sole Book Manager
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TABLE OF CONTENTS
PAGE
ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS...........................................................1
1.01 Defined Terms..................................................................................1
1.02 Other Interpretive Provisions.................................................................20
1.03 Accounting Terms..............................................................................21
1.04 Rounding......................................................................................21
1.05 References to Agreements and Laws.............................................................22
1.06 Times of Day..................................................................................22
1.07 Letter of Credit Amounts......................................................................22
ARTICLE II. THE COMMITMENTS AND CREDIT EXTENSIONS.....................................................22
2.01 Loans.........................................................................................22
2.02 Borrowings, Conversions and Continuations of Loans............................................22
2.03 Letters of Credit.............................................................................24
2.04 Swing Line Loans..............................................................................31
2.05 Prepayments...................................................................................34
2.06 Termination or Reduction of Commitments.......................................................35
2.07 Repayment of Loans............................................................................35
2.08 Interest......................................................................................35
2.09 Fees..........................................................................................36
2.10 Computation of Interest and Fees..............................................................36
2.11 Evidence of Debt..............................................................................37
2.12 Payments Generally............................................................................37
2.13 Sharing of Payments...........................................................................39
ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY....................................................39
3.01 Taxes.........................................................................................39
3.02 Illegality....................................................................................42
3.03 Inability to Determine Rates..................................................................42
3.04 Increased Cost and Reduced Return; Capital Adequacy...........................................42
3.05 Funding Losses................................................................................43
3.06 Matters Applicable to all Requests for Compensation...........................................44
3.07 Survival......................................................................................44
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TABLE OF CONTENTS
(continued)
PAGE
ARTICLE IV. CONDITIONS PRECEDENT TO CREDIT EXTENSIONS.................................................44
4.01 Conditions of Initial Credit Extension........................................................44
4.02 Conditions to all Credit Extensions...........................................................46
ARTICLE V. REPRESENTATIONS AND WARRANTIES............................................................47
5.01 Organization, Power, Authority, etc...........................................................47
5.02 Authorization; No Contravention...............................................................47
5.03 Governmental Approval; Regulation.............................................................48
5.04 Validity, etc.................................................................................48
5.05 Audited Financial Statements..................................................................48
5.06 No Material Adverse Effect....................................................................48
5.07 Litigation....................................................................................48
5.08 Regulations U and X...........................................................................49
5.09 Pension and Welfare Plans.....................................................................49
5.10 Subsidiaries, etc.............................................................................50
5.11 Taxes.........................................................................................50
5.12 Absence of Default............................................................................50
5.13 Labor Controversies...........................................................................50
5.14 Ownership of Property.........................................................................50
5.15 Intellectual Property.........................................................................50
5.16 Environmental Matters.........................................................................51
5.17 Accuracy of Information.......................................................................51
5.18 Insurance.....................................................................................51
5.19 Health Care Regulatory Matters................................................................51
5.20 Compliance with Laws..........................................................................52
5.21 Tax Shelter Regulations.......................................................................52
ARTICLE VI. AFFIRMATIVE COVENANTS.....................................................................52
6.01 Financial Statements..........................................................................53
6.02 Maintenance of Existence, etc.................................................................55
6.03 Foreign Qualification.........................................................................55
6.04 Payment of Taxes..............................................................................55
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TABLE OF CONTENTS
(continued)
PAGE
6.05 Insurance.....................................................................................55
6.06 Notice of Default, Litigation, etc............................................................55
6.07 Performance of Obligations....................................................................56
6.08 Books and Records; Inspection Rights..........................................................56
6.09 Compliance with Laws..........................................................................57
6.10 Pari Passu....................................................................................57
6.11 Maintenance of Property.......................................................................57
6.12 Additional Guarantors.........................................................................57
6.13 Use of Proceeds...............................................................................58
ARTICLE VII. NEGATIVE COVENANTS........................................................................58
7.01 Business Activities...........................................................................58
7.02 Indebtedness..................................................................................58
7.03 Liens.........................................................................................59
7.04 Financial Condition...........................................................................61
7.05 Restricted Payments...........................................................................61
7.06 Consolidation, Merger, etc....................................................................62
7.07 Asset Dispositions, etc.......................................................................62
7.08 Modification of Certain Instruments, Organization Documents, etc..............................62
7.09 Transactions with Affiliates..................................................................63
7.10 Restrictive Agreements........................................................................63
7.11 Environmental Matters.........................................................................63
7.12 Acquisitions..................................................................................63
ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES............................................................64
8.01 Events of Default.............................................................................64
8.02 Remedies Upon Event of Default................................................................66
8.03 Application of Funds..........................................................................67
ARTICLE IX. ADMINISTRATIVE AGENT......................................................................68
9.01 Appointment and Authorization of Administrative Agent.........................................68
9.02 Delegation of Duties..........................................................................68
9.03 Liability of Administrative Agent.............................................................68
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TABLE OF CONTENTS
(continued)
PAGE
9.04 Reliance by Administrative Agent..............................................................69
9.05 Notice of Default.............................................................................69
9.06 Credit Decision; Disclosure of Information by Administrative Agent............................70
9.07 Indemnification of Administrative Agent.......................................................70
9.08 Administrative Agent in its Individual Capacity...............................................71
9.09 Successor Administrative Agent................................................................71
9.10 Administrative Agent May File Proofs of Claim.................................................72
9.11 Guaranty Matters..............................................................................72
9.12 Other Agents; Arrangers and Managers..........................................................73
ARTICLE X. MISCELLANEOUS.............................................................................73
10.01 Amendments, Etc...............................................................................73
10.02 Notices and Other Communications; Facsimile Copies............................................74
10.03 No Waiver; Cumulative Remedies................................................................75
10.04 Attorney Costs, Expenses and Taxes............................................................75
10.05 Indemnification by the Borrower...............................................................76
10.06 Payments Set Aside............................................................................77
10.07 Successors and Assigns........................................................................77
10.08 Confidentiality...............................................................................80
10.09 Set-off.......................................................................................81
10.10 Interest Rate Limitation......................................................................81
10.11 Counterparts; Effectiveness...................................................................82
10.12 Integration...................................................................................82
10.13 Survival of Representations and Warranties....................................................82
10.14 Severability..................................................................................82
10.15 Tax Forms.....................................................................................82
10.16 Replacement of Lenders........................................................................84
10.17 Governing Law.................................................................................84
10.18 Waiver of Right to Trial by Jury..............................................................85
10.19 Entire Agreement..............................................................................85
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SCHEDULES
A Existing Letters of Credit
2.01 Commitments and Pro Rata Shares
10.02 Administrative Agent's Office, Certain Addresses for Notices
DISCLOSURE SCHEDULE
Item 5.07 Litigation
Item 5.09 Pension and Welfare Plans
Item 5.10(a) Subsidiaries
Item 5.10(b) Other Investments
Item 5.19 Regulatory Matters
Item 7.02(l) Existing Indebtedness
Item 7.02(n) Insurance Indebtedness
Item 7.03(a) Existing Liens
EXHIBITS
FORM OF
A Loan Notice
B Swing Line Loan Notice
C Note
D Compliance Certificate
E Assignment and Assumption
F Guaranty
G Opinion Matters
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CREDIT AGREEMENT
This CREDIT AGREEMENT ("Agreement") is entered into as of April 21,
2003, among MANOR CARE, INC., a Delaware corporation (the "Borrower"), each
lender from time to time party hereto (collectively, the "Lenders" and
individually, a "Lender"), BANK OF AMERICA, N.A., as Administrative Agent, Swing
Line Lender and L/C Issuer, JPMorgan Chase Bank, as Syndication Agent, The Bank
of New York and Suntrust Bank, as Documentation Agents, UBS AG, Cayman Islands
Branch and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Bank USA, as Senior Managing Agents, and Banc of
America Securities LLC, as Sole Lead Arranger and Sole Book Manager.
The Borrower has requested that the Lenders provide a revolving credit
facility, and the Lenders are willing to do so on the terms and conditions set
forth herein.
In consideration of the mutual covenants and agreements herein
contained, the parties hereto covenant and agree as follows:
ARTICLE I.
DEFINITIONS AND ACCOUNTING TERMS
1.01 DEFINED TERMS. As used in this Agreement, the following terms
shall have the meanings set forth below:
"Acquisition" means any transaction or series of related transactions
for the purpose of or resulting, directly or indirectly, in (a) the acquisition
of all or substantially all of the assets of a Person, or of any line or segment
of business or division of a Person, (b) the acquisition of in excess of 50% of
the Equity Interests of any Person, or otherwise causing any Person to become a
Subsidiary, or (c) a merger or consolidation or any other combination with
another Person (other than a Person that is a Subsidiary) provided that (i) the
Borrower or the Subsidiary is the surviving entity or (ii) after giving effect
to such merger or consolidation, such other Person has become a Subsidiary of
the Borrower.
"Administrative Agent" means Bank of America in its capacity as
administrative agent under any of the Loan Documents, or any successor
administrative agent.
"Administrative Agent's Office" means the Administrative Agent's
address and, as appropriate, account as set forth on Schedule 10.02, or such
other address or account as the Administrative Agent may from time to time
notify the Borrower and the Lenders.
"Administrative Questionnaire" means an administrative questionnaire,
in substantially the form supplied by the Administrative Agent to be completed
by each Lender.
"Affiliate" means, as to any Person, another Person that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by or
is under common Control with the Person specified. "Control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the ability
to exercise voting power, by contract or otherwise. "Controlling" and
"Controlled" have meanings correlative thereto; provided, however, that the
existence of a management contract by the Borrower or one of its Affiliates to
manage another entity shall not be deemed to be control.
"Agent-Related Persons" means the Administrative Agent, together with
its Affiliates (including, in the case of Bank of America, in its capacity as
the Administrative Agent, and, in the case of BAS, in its capacity as the
Arranger), and the officers, directors, employees, agents and attorneys-in-fact
of such Persons and Affiliates.
"Aggregate Commitments" means the Commitments of all the Lenders.
"Agreement" is defined in the introductory paragraph hereto.
"Applicable Law" means, as to any Person or matter, (a) any Law
relating to such Person or matter and, where applicable, any official
interpretation thereof by any Person having jurisdiction with respect thereto or
charged with the administration or interpretation thereof, and (b) all
judgments, injunctions, orders and decrees of all courts and arbitrators in
proceedings or actions in which such Person is a party or by which any of its
assets or properties are bound.
"Applicable Margin" means the following rates per annum, based upon the
Leverage Ratio as set forth in the most recent Compliance Certificate received
by the Administrative Agent pursuant to Section 6.01(a)(iii) or 6.01(b)(ii), as
applicable:
Applicable Margin
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Applicable Margin
for Offshore Rate
Pricing Leverage Loans and Letters of
Level Ratio Facility Fee Credit
------------- --------------------------------------- -------------- -----------------------
I Less than 1.0:1.0 0.225% 1.025%
II Greater than or equal to 1.0:1.0 but
less than 1.5:1.0 0.275% 1.100%
III Greater than or equal to 1.5:1.0 but
less than 2.0:1.0 0.325% 1.175%
IV Greater than or equal to 2.0:1.0 but
less than 2.5:1.0 0.375% 1.250%
V Greater than or equal to 2.5:1.0 0.425% 1.325%
------------- --------------------------------------- -------------- -----------------------
From the Effective Date until the delivery of the first Compliance Certificate,
the Applicable Margin shall be based upon the Leverage Ratio as set forth in the
officer's certificate received by the Administrative Agent pursuant to Section
4.01(a)(ix). Any increase or decrease in the Applicable Margin resulting from a
change in the Leverage Ratio shall become effective as of the first Business Day
immediately following the date a Compliance Certificate is delivered pursuant to
Section 6.01(a)(iii) or 6.01(b)(ii), as applicable; provided, however, that if a
Compliance Certificate is not delivered when due in accordance with such
Section, then Pricing Level V shall apply as of the first Business Day after the
date on which such Compliance Certificate was required to have been delivered,
and pricing Level V shall remain in effect to (and including) the date the
Administrative Agent receives such Compliance Certificate.
"Arranger" means BAS, in its capacity as sole lead arranger and sole
book manager.
2
"Assignment and Assumption" means an agreement of assignment and
assumption substantially in the form of Exhibit E.
"Attorney Costs" means and includes all reasonable fees, expenses and
disbursements of any law firm or other external counsel and, without
duplication, the allocated cost of internal legal services and all expenses and
disbursements of internal counsel.
"Audited Financial Statements" means the audited consolidated balance
sheet of the Borrower and its Subsidiaries for the fiscal year ended December
31, 2002, and the related consolidated statements of income or operations,
shareholders' equity and cash flows for such fiscal year of the Borrower and its
Subsidiaries, including the notes thereto.
"Auto-Renewal Letter of Credit" is defined in Section 2.03(b)(iii).
"Availability Period" means the period from and including the Closing
Date to the earliest of (a) the Maturity Date, (b) the date of termination of
the Aggregate Commitments pursuant to Section 2.06, and (c) the date of
termination of the Aggregate Commitments pursuant to Section 8.02.
"Bank of America" means Bank of America, N.A. and its successors.
"BAS" means Banc of America Securities LLC and its successors.
"Base Rate" means for any day a fluctuating rate per annum equal to the
higher of (a) the sum of Federal Funds Rate plus 1/2 of 1% and (b) the rate of
interest in effect for such day as publicly announced from time to time by Bank
of America as its "prime rate." The "prime rate" is a rate set by Bank of
America based upon various factors including Bank of America's costs and desired
return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above, or below
such announced rate. Any change in such rate announced by Bank of America shall
take effect at the opening of business on the day specified in the public
announcement of such change.
"Base Rate Loan" means a Loan that bears interest at a rate based on
the Base Rate.
"Borrower" is defined in the introductory paragraph hereto.
"Borrowing" means a borrowing consisting of simultaneous Loans of the
same Type and, in the case of Offshore Rate Loans, having the same Interest
Period made by each Lender pursuant to Section 2.01.
"Business Day" means any day other than a Saturday, Sunday or other day
on which commercial banks are authorized to close under the Laws of, or are in
fact closed in, the state where the Administrative Agent's Office is located
and, if such day relates to any Offshore Rate Loan, means any such day on which
dealings are conducted in the applicable offshore dollar interbank market.
"Capitalized Lease Liabilities" means, as to any Person, all monetary
obligations of such Person under any leasing or similar arrangement which have
been (or, in accordance with
3
GAAP, should be) classified as capitalized leases, and for purposes of each Loan
Document the amount of such obligations shall be the capitalized amount thereof,
determined in accordance with GAAP.
"Cash Collateralize" is defined in Section 2.03(g).
"Cash Equivalent Investment" means, at any time:
(a) any direct obligation of (or unconditionally guaranteed by) the
United States or a State thereof (or any agency or political subdivision
thereof, to the extent such obligations are supported by the full faith and
credit of the United States or a State thereof) maturing not more than one year
after such time;
(b) commercial paper maturing not more than one year from the date of
issue, which is issued by (i) a corporation (other than an Affiliate of any
Obligor) organized under the laws of any State of the United States or of the
District of Columbia and rated A-1 or higher by S&P or P-1 or higher by ▇▇▇▇▇'▇,
or (ii) any Lender (or its holding company);
(c) any certificate of deposit, time deposit (including Eurodollar time
deposits) or bankers acceptance, maturing not more than one year after its date
of issuance, which is issued by either (i) any bank organized under the laws of
the United States (or any State thereof) and which has (A) a credit rating of A2
or higher from ▇▇▇▇▇'▇ or A or higher from S&P and (B) a combined capital and
surplus greater than $100,000,000, or (ii) any Lender;
(d) any repurchase agreement having a term of one year or less entered
into with any Lender or any commercial banking institution satisfying the
criteria set forth in clause (c)(i) which (i) is secured by a fully perfected
security interest in any obligation of the type described in clause (a), and
(ii) has a market value at the time such repurchase agreement is entered into of
not less than 100% of the repurchase obligation of such commercial banking
institution thereunder; or
(e) investments in money market funds that invest solely in items
described in clauses (a) through (d).
"Change of Control" means, as to any Person, an event or series of
events by which:
(a) at any time, any Person or group of Persons (as such terms are used
in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934) (other than
underwriters holding pending distribution) owns beneficially (as defined in
Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934) more than 50%
of the issued and outstanding shares of Equity Interests of the Borrower having
ordinary voting power for the election of directors of the Borrower; or
(b) at any time, a majority of the seats (other than vacant seats) on
the Borrower's board of directors shall be occupied by persons who were neither
(i) recommended by the Borrower's management in connection with an annual
meeting of the Borrower's stockholders, nor (ii) appointed by directors who were
recommended as described in clause (i); or
4
(c) the occurrence of any "Change of Control Trigger Event" (or other
similar term) under (and as defined in) any of the Notes Documents or any other
agreement, note or instrument evidencing Indebtedness issued or otherwise
incurred after the Effective Date and not otherwise prohibited hereunder (the
"New Indebtedness"), but only to the extent such "Change of Control Trigger
Event" (or other similar term) is, as a result of (i) any amendment, supplement
or other modification (including pursuant to any refinancing) to any of the
Notes Documents or (ii) the documentation of the New Indebtedness, more onerous
on the Borrower than the "Change of Control Trigger Event" (or other similar
term) under (and as defined in) any of the Notes Documents as of the Effective
Date.
"Closing Date" means the first date all the conditions precedent in
Section 4.01 are satisfied or waived in accordance with Section 4.01 (or, in the
case of Section 4.01(b), waived by the Person entitled to receive the applicable
payment).
"CMS" means the Centers for Medicare and Medicaid Services of HHS and
any Person succeeding to the functions thereof.
"Code" means the Internal Revenue Code of 1986.
"Commitment" means, as to each Lender, its obligation to (a) make Loans
to the Borrower pursuant to Section 2.01, (b) purchase participations in L/C
Obligations, and (c) purchase participations in Swing Line Loans, in an
aggregate principal amount at any one time outstanding not to exceed the amount
set forth opposite such Lender's name on Schedule 2.01 or in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto, as applicable,
as such amount may be adjusted from time to time in accordance with this
Agreement.
"Compensation Period" is defined in Section 2.12(c)(ii).
"Compliance Certificate" means a certificate duly completed and
executed by the chief financial or accounting Responsible Officer of the
Borrower, substantially in the form of Exhibit D, together with such changes
thereto as the Administrative Agent may from time to time request for the
purpose of monitoring the Borrower's compliance with the financial covenants
contained herein.
"CON" means a certificate of need or other license or permit issued by
a state health facilities planning board or similar agency or body required for
the construction, expansion, or investment in a health facility.
"Consolidated" means, as to any financial term, the aggregate for each
Person and its Subsidiaries of the amounts signified by such term for all such
Persons determined on a consolidated basis in accordance with GAAP including
principles of consolidation, and, in the case of the Borrower and Subsidiaries,
consistent with those applied in the preparation of the Audited Financial
Statements.
"Consolidated Capitalization" means the sum of (a) Consolidated
Indebtedness for Borrowed Money of the Borrower and its Subsidiaries plus (b)
Consolidated Net Worth of the Borrower and Subsidiaries.
5
"Consolidated EBITDA" means, for any period, the Borrower's and
Subsidiaries' earnings before Consolidated Interest Expense, taxes,
depreciation, amortization, extraordinary items of gain and all Specified
Losses.
"Consolidated Interest Expense" means, for any period, for the Borrower
and Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP), all interest in respect of Indebtedness for Borrowed
Money accrued or capitalized during such period (whether or not actually paid
during such period), excluding amortization of fees related to the closing of
this Agreement and each of the Notes Documents.
"Consolidated Net Worth" means, at any time, the sum of the following
amounts with respect to the Borrower and its Subsidiaries on a Consolidated
basis set forth in the Consolidated balance sheet of the Borrower, prepared in
accordance with GAAP: (a) the par or stated value of all outstanding capital
stock less the amount of treasury stock separately classified plus (b) capital
surplus plus (c) retained earnings (without deduction for Specified Losses) plus
(d) accumulated other comprehensive income or loss.
"Contingent Liability" means any agreement, undertaking or arrangement
by which any Person (a) guarantees, endorses or otherwise becomes or is
contingently liable upon (by direct or indirect agreement, contingent or
otherwise, to provide funds for payment, to supply funds to, or otherwise to
invest in, a debtor, or otherwise to assure a creditor against loss) the debt,
obligation or other liability of any other Person (other than by endorsements of
instruments in the course of collection), (b) guarantees the payment of
dividends or other distributions upon the shares of any other Person, or (c)
undertakes or agrees (contingently or otherwise) (i) to purchase, repurchase, or
otherwise acquire any Indebtedness, obligation or liability of any other Person
or any security therefor, (ii) to provide funds for the payment or discharge
thereof (whether in form of loans, advances, stock purchases, capital
contributions or otherwise), (iii) to maintain solvency, assets, level of
income, or other financial condition of any other Person, or (iv) to make
payment on behalf of any other Person other than for value received. The amount
of any Person's obligation under any Contingent Liability shall (subject to any
limitation set forth therein) be deemed to be the outstanding principal amount
(or maximum permitted principal amount, if larger) of the debt, obligation or
other liability guaranteed or supported thereby.
"Contractual Undertaking" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Control" is defined in the definition of "Affiliate."
"Convertible Notes" means, collectively, the 2.125% senior unsecured
convertible notes issued by the Borrower pursuant to the terms of the Indenture,
dated as of April 15, 2003, between the Borrower, the subsidiary guarantors
party thereto and National City Bank, as Trustee, and all other notes accepted
from time to time in substitution or exchange therefor or renewal thereof in
accordance with such Indenture.
"Convertible Notes Offering" is defined in Section 4.01(a)(xiv).
"Credit Extension" means a Borrowing or an L/C Credit Extension.
6
"Debt to Capitalization Ratio" means, as of any date of determination,
the ratio of (a) the aggregate outstanding principal amount of Consolidated
Indebtedness for Borrowed Money of the Borrower and its Subsidiaries as of such
date to (b) the Consolidated Capitalization of the Borrower and its Subsidiaries
as of such date.
"Debtor Relief Laws" means the Bankruptcy Code of the United States,
and all other liquidation, conservatorship, bankruptcy, assignment for the
benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States or other
applicable jurisdictions from time to time in effect and affecting the rights of
creditors generally.
"Default" means any event or condition that constitutes an Event of
Default or that, with the giving of any notice, the passage of time, or both,
would (if not cured or otherwise remedied during such time in accordance with
this Agreement) constitute an Event of Default.
"Default Rate" means a rate per annum equal to, (a) in the case of
overdue principal on any Loan, the sum of the interest rate (including any
Applicable Margin) otherwise applicable from time to time to such Loan plus 2%
per annum, and (b) in the case of overdue interest, fees, and other monetary
Obligations, the sum of the interest rate otherwise applicable to Base Rate
Loans plus 2% per annum, in each case to the fullest extent permitted by
Applicable Law.
"Defaulting Lender" means any Lender that (a) has failed to fund any
portion of the Loans, participations in L/C Obligations or participations in
Swing Line Loans required to be funded by it hereunder within one Business Day
of the date required to be funded by it hereunder, (b) has otherwise failed to
pay over to the Administrative Agent or any other Lender any other amount
required to be paid by it hereunder within one Business Day of the date when
due, unless the subject of a good faith dispute, or (c) has been deemed
insolvent or become the subject of a proceeding under any Debtor Relief Laws.
"Disclosure Schedule" means the Disclosure Schedule attached hereto as
Schedule I.
"Disposition" or "Dispose" means the sale, transfer, license or other
disposition (including any sale and leaseback transaction) of any property by
any Person, including any sale, assignment, transfer or other disposal, with or
without recourse, of any notes or accounts receivable or any rights and claims
associated therewith.
"Dollar" and "$" mean lawful money of the United States.
"Domestic Subsidiary" means any Subsidiary that is organized under the
laws of any State of the United States or the District of Columbia.
"Effective Date" means the date this Agreement becomes effective
pursuant to Section 10.11.
"Eligible Assignee" has the meaning set forth in Section 10.07(g).
7
"Environmental Claims" means all claims, however asserted, by any
Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law, or for release or injury
to the environment.
"Environmental Laws" means any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including
those related to hazardous substances or wastes, air emissions and discharges to
waste or public systems.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower or any Subsidiary directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"Equity Interest" means, as to any Person, all shares, interests,
participations or other equivalents (however designated, whether voting or
non-voting) of such Person's capital, whether now outstanding or issued after
the Effective Date.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with the Borrower within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension
Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension
Plan subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is
in reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Sections 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the
imposition of any liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower
or any ERISA Affiliate.
"Eurodollar Reserve Percentage" means, for any day during any Interest
Period, the reserve percentage (expressed as a decimal, carried out to five
decimal places) in effect on such
8
day, whether or not applicable to any Lender, under regulations issued from time
to time by the FRB for determining the maximum reserve requirement (including
any emergency, supplemental or other marginal reserve requirement) with respect
to Eurocurrency funding (currently referred to as "Eurocurrency liabilities").
The Offshore Rate for each outstanding Offshore Rate Loan shall be adjusted
automatically as of the effective date of any change in the Eurodollar Reserve
Percentage.
"Event of Default" is defined in Section 8.01.
"Existing Credit Agreement" means that certain Five-Year Credit
Agreement, dated as of September 25, 1998, among the Borrower, Manor Care of
America, each as a borrower, Bank of America, as agent, and a syndicate of
lenders.
"Existing Letters of Credit" means the letters of credit issued under
the Existing Credit Agreement and described in Schedule A.
"Existing Senior Notes" means, collectively, the senior unsecured notes
issued by the Borrower pursuant to the terms of the Indenture, dated as of March
8, 2001, between the Borrower and National City Bank, as Trustee, and all other
notes accepted from time to time in substitution or exchange therefor or renewal
thereof in accordance with such Indenture.
"Facility" means any nursing home or other health care facility
(including any facility operating an assisted living unit) operated by the
Borrower or any Subsidiary.
"Federal Funds Rate" means, for any day, the rate per annum equal to
the weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank on the Business Day next
succeeding such day; provided, however, that (a) if such day 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 (b) if no such rate is so published on such next succeeding
Business Day, the Federal Funds Rate for such day shall be the average rate
(rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to
Bank of America on such day on such transactions as determined by the
Administrative Agent.
"Fee Letter" means the letter agreement, dated March 31, 2003, among
the Borrower, the Administrative Agent and the Arranger.
"Fiscal Quarter" means a quarter ending on the last day of March, June,
September or December. Unless the context otherwise specifically requires, the
term "Fiscal Quarter" shall be a reference to a Fiscal Quarter of the Borrower.
"Fiscal Year" means any period of twelve consecutive calendar months
ending on December 31; references to a Fiscal Year with a number corresponding
to any calendar year (e.g., the "2002 Fiscal Year") refer to the Fiscal Year
ending on December 31 of such calendar year. Unless the context otherwise
specifically requires, the term "Fiscal Year" shall be a reference to a Fiscal
Year of the Borrower.
9
"Fixed Charge Coverage Ratio" means, as of the close of any Fiscal
Quarter, the ratio computed for the period consisting of such Fiscal Quarter and
each of the three immediately preceding Fiscal Quarters of:
(a) an amount equal to the sum of (i) Consolidated EBITDA for all such
Fiscal Quarters plus (ii) rental expense of the Borrower and its Subsidiaries
incurred during such Fiscal Quarters minus (iii) capital expenditures (excluding
capital expenditures associated with Acquisitions) made during such Fiscal
Quarters,
to
(b) the sum of (i) Consolidated Interest Expense plus (ii) scheduled
payments of principal actually made during such period on Consolidated
Indebtedness for Borrowed Money of the Borrower and Subsidiaries having a final
maturity of at least one year from the date of origin thereof (or which is
renewable or extendible at the option of the obligor for a period or periods
more than one year from the date of origin) other than Credit Extensions under
this Agreement for the period of determination plus (iii) rental expense of the
Borrower and its Subsidiaries incurred during such Fiscal Quarters.
"Foreign Lender" is defined in Section 10.15(a)(i).
"Foreign Subsidiary" means any Subsidiary that is not a Domestic
Subsidiary.
"FRB" means the Board of Governors of the Federal Reserve System of the
United States.
"GAAP" means generally accepted accounting principles in the United
States 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 in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, administrative tribunal, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
"Granting Lender" is defined in Section 10.07(h).
"Guarantors" means, collectively, each Domestic Subsidiary of the
Borrower that executes a counterpart of the Guaranty on the Closing Date or from
time to time thereafter pursuant to the terms of this Agreement, and is not
otherwise released from the Guaranty in accordance with the terms of a Loan
Document.
"Guaranty" means the Guaranty made by each Domestic Subsidiary of the
Borrower in favor of the Administrative Agent on behalf of the Lenders,
substantially in the form of Exhibit F.
10
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos-containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Health Facility License" means a license or permit to provide skilled
and/or intermediate care nursing services, operate an assisted living unit or
otherwise operate a Facility, including any permit under Medicare Regulations,
Medicaid Regulations and/or other Applicable Law.
"HHS" means the United States Department of Health and Human Services
and any Person succeeding to the functions thereof.
"▇▇▇▇-▇▇▇▇▇▇ Act" means, collectively, the ▇▇▇▇-▇▇▇▇▇▇ Act established
by Title VI and XVI of the Public Health Service Act, the Health Manpower
Program established by Title VII of the Public Health Service Act or other
grant, loan, subsidy or assistance program of a Governmental Authority.
"Honor Date" is defined in Section 2.03(c)(i).
"IBOR" means the rate of interest per annum determined by the
Administrative Agent to be the arithmetic mean (rounded upward, if necessary, to
the nearest 1/16th of 1%) of the rates of interest per annum at which dollar
deposits in the approximate amount of the amount of the Loan to be made or
continued as, or converted into, an Offshore Rate Loan and having a maturity
comparable to such Interest Period would be offered by Bank of America to major
banks in the interbank market at their request at approximately 11:00 a.m. two
Business Days prior to the commencement of such Interest Period.
"Impermissible Qualification" means, as to the opinion or certification
of any independent public accountant as to any financial statement of any
Person, any qualification or exception to such opinion or certification which:
(a) is of a "going concern" or similar nature;
(b) relates to the limited scope of examination of matters relevant to
such financial statement; or
(c) which relates to the treatment or classification of any item in
such financial statement and which, as a condition to its removal, would require
an adjustment to such item the effect of which would be to cause the Borrower to
be in Default under Section 7.04.
"Indebtedness" means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:
(a) all obligations of such Person for borrowed money (including all
notes payable and drafts accepted representing extensions of credit) and all
obligations evidenced by bonds, debentures, notes or other similar instruments;
11
(b) all obligations, contingent or otherwise, relative to the face
amount of all letters of credit, whether or not drawn, and banker's acceptances
issued for the account of such Person;
(c) all obligations as lessee under leases which have been or should
be, in accordance with GAAP, recorded as Capitalized Lease Liabilities; and
(d) whether or not so included as liabilities in accordance with GAAP:
(i) all obligations of such Person to pay the deferred
purchase price of property or services, and indebtedness (excluding
prepaid interest thereon) secured by a Lien on property owned or being
purchased by such Person (including indebtedness arising under
conditional sales or other title retention agreements), whether or not
such indebtedness shall have been assumed by such Person or is limited
in recourse, and
(ii) all Contingent Liabilities of such Person (but not to
exceed the net worth of such Person) in respect of any Indebtedness of
any Person.
"Indebtedness for Borrowed Money" means, as to any Person, without
duplication, any obligation of such Person for borrowed money, but in any event
shall include (a) any obligation incurred for all or any part of the purchase
price of property or other assets or for the cost of property or other assets
constructed or of improvements thereto, other than accounts payable included in
current liabilities and incurred in respect of property purchased in the
ordinary course of business, (b) the face amount of all letters of credit issued
for the account of such Person (other than documentary letters of credit
including commercial and trade letters of credit issued to secure payment
obligations in respect of goods and services in the ordinary course of business)
and all drafts drawn thereunder, (c) obligations of the type described in
clauses (a), (b), (d), or (e) (whether or not such Person has assumed or become
liable for the payment of such obligation) secured by Liens on assets of such
Person, (d) the amount of all Capitalized Lease Liabilities, and (e) all
Contingent Liabilities of such Person (but not to exceed the net worth of such
Person) with respect to Indebtedness for Borrowed Money described in the
foregoing clauses (a) through (d); provided, however, that Indebtedness for
Borrowed Money shall not include Indebtedness fully secured by the cash
surrender value of life insurance policies.
"Indemnified Liabilities" is defined in Section 10.05.
"Indemnitees" is defined in Section 10.05.
"Interest Payment Date" means, (a) as to any Loan other than a Base
Rate Loan, the last day of each Interest Period applicable to such Loan and the
Maturity Date; provided, however, that if any Interest Period for an Offshore
Rate Loan exceeds three months, the respective dates that fall every three
months after the beginning of such Interest Period shall also be Interest
Payment Dates; and (b) as to any Base Rate Loan (including a Swing Line Loan),
the last Business Day of each March, June, September and December and the
Maturity Date.
"Interest Period" means, as to each Offshore Rate Loan, the period
commencing on the date such Offshore Rate Loan is disbursed or converted to or
continued as an Offshore Rate Loan and ending on the date one, two, three or six
months thereafter, as selected by the Borrower in its Loan Notice; provided,
however, that:
12
(a) any Interest Period that would otherwise end on a day that is not a
Business Day shall be extended to the next succeeding Business Day unless such
Business Day falls in another calendar month, in which case such Interest Period
shall end on the next preceding Business Day;
(b) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall end on the last
Business Day of the calendar month at the end of such Interest Period; and
(c) no Interest Period for any Loan shall extend beyond the Maturity
Date.
"IRS" means the United States Internal Revenue Service.
"Laws" means, collectively, all international, foreign, Federal, state
and local statutes, treaties, rules, guidelines, regulations, ordinances, codes
and administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.
"L/C Advance" means, as to each Lender, such Lender's funding of its
participation in any L/C Borrowing in accordance with its Pro Rata Share.
"L/C Borrowing" means an extension of credit resulting from a drawing
under any Letter of Credit which has not been reimbursed on the date when made
or refinanced as a Borrowing.
"L/C Credit Extension" means, as to any Letter of Credit, the issuance
thereof or extension of the expiry date thereof, or the renewal or increase of
the amount thereof.
"L/C Issuer" means Bank of America in its capacity as issuer of Letters
of Credit hereunder, or any successor issuer of Letters of Credit hereunder. In
the event any proposed beneficiary of a requested Letter of Credit does not
accept Bank of America as the issuer or Bank of America otherwise declines to
issue a Letter of Credit pursuant to the terms hereof, the Borrower may, after
notice to Bank of America, request another Lender to act as L/C Issuer with
respect to such Letter of Credit.
"L/C Obligations" means, as at any date of determination, the aggregate
undrawn amount of all outstanding Letters of Credit plus the aggregate of all
Unreimbursed Amounts, including all L/C Borrowings.
"Lender" is defined in the introductory paragraph hereto and, as the
context requires, includes the L/C Issuer and the Swing Line Lender.
"Lending Office" means, as to any Lender, the office or offices of such
Lender described as such in such Lender's Administrative Questionnaire, or such
other office or offices as a Lender may from time to time notify the Borrower
and the Administrative Agent.
13
"Letter of Credit" means any standby letter of credit issued hereunder
and shall include the Existing Letters of Credit.
"Letter of Credit Application" means an application and agreement for
the issuance or amendment of a Letter of Credit in the form from time to time in
use by the L/C Issuer.
"Letter of Credit Expiration Date" means the day that is seven days
prior to the Maturity Date then in effect (or, if such day is not a Business
Day, the next preceding Business Day).
"Letter of Credit Sublimit" means an amount equal to $100,000,000. The
Letter of Credit Sublimit is part of, and not in addition to, the Aggregate
Commitments.
"Leverage Ratio" means, as of any date of determination, the ratio of
(a) Consolidated Indebtedness for Borrowed Money of the Borrower and
Subsidiaries as of such date to (b) Consolidated EBITDA for the period of the
four fiscal quarters most recently ended for which the Borrower has or is
required to have delivered financial statements pursuant to Section 6.01(a) or
6.01 (b).
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement of any kind or
nature whatsoever (including any conditional sale or other title retention
agreement, and any financing lease having substantially the same economic effect
as any of the foregoing).
"Loan" has the meaning set forth in Section 2.01.
"Loan Documents" means, collectively, this Agreement, each Note, the
Fee Letter, the Guaranty, each Compliance Certificate, each Loan Notice, each
Swing Line Loan Notice, each Letter of Credit Application, and each other
agreement, certificate, document or instrument delivered by any Obligor in
connection with any of the foregoing Loan Documents which is expressly
identified as a "Loan Document".
"Loan Notice" means a notice of (a) a Borrowing, (b) a conversion of
Loans from one Type to the other, or (c) a continuation of Offshore Rate Loans,
pursuant to Section 2.02(a), which, if in writing, shall be substantially in the
form of Exhibit A.
"Manor Care of America" means Manor Care of America, Inc., a Delaware
corporation and a wholly owned Subsidiary of the Borrower.
"Manor Care of America Notes" means, collectively, the unsecured notes
issued by Manor Care of America pursuant to the terms of the Indenture, dated as
of June 4, 1996, between Manor Care of America and Wilmington Trust Company, as
Trustee, and all other notes accepted from time to time in substitution or
exchange therefor or renewal thereof in accordance with such Indenture.
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, liabilities
(actual or contingent), or condition (financial or otherwise) of the Borrower
and Subsidiaries taken as a whole; or (b) a material
14
impairment of the ability of the Borrower and the other Obligors taken as a
whole to perform their payment or other material Obligations under any Loan
Document to which any of them is a party.
"Material Group of Subsidiaries" means any Subsidiary or Subsidiaries
having 5% or more of the Consolidated assets of the Borrower and Subsidiaries.
"Maturity Date" means April 21, 2006.
"Maximum Rate" has the meaning set forth in Section 10.10.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., and any successor
thereto.
"Medicaid Certification" means certification by a state agency that the
health facility is in substantial compliance with the requirements for
participation in the Medicaid program.
"Medicaid Provider Agreement" means an agreement entered into between a
state agency or other such entity administering the Medicaid program and a
health facility under which the agency agrees to pay for services provided by
the health facility to qualified Medicaid beneficiaries in accordance with the
terms of the agreement and Medicaid program as required by the Medicaid
Regulations.
"Medicaid Regulations" means, collectively, (a) all federal statutes
(whether set forth in Title XIX of the Social Security Act or elsewhere)
affecting the medical assistance program established by Title XIX of the Social
Security Act (42 U.S.C. ▇▇.▇▇. 1396, et seq.); (b) all applicable provisions of
all federal rules, regulations, manuals, orders and administrative,
reimbursement and other guidelines of all Governmental Authorities (whether or
not having the force of law) promulgated pursuant to or in connection with the
statutes described in clause (a); (c) all state statutes and plans for medical
assistance enacted in connection with the statutes and provisions described in
clauses (a) and (b); and (d) all applicable provisions of all rules,
regulations, manuals, orders and administrative, reimbursement and other
guidelines of all Governmental Authorities (whether or not having the force of
law) promulgated pursuant to or in connection with any of the foregoing.
"Medicare Certification" means certification by CMS or a state agency
or entity under contract with CMS that the health facility is in substantial
compliance with the requirements for participation in the Medicare program.
"Medicare Provider Agreement" means an agreement entered into between
CMS or other Person under contract with CMS and a health facility under which
CMS agrees to pay for services provided by the health facility to qualified
Medicare beneficiaries in accordance with the terms of the agreement and
Medicare Regulations.
"Medicare Regulations" means, collectively, all federal statutes
(whether set forth in Title XVIII of the Social Security Act or elsewhere)
affecting the health insurance program for the aged and disabled established by
Title XVIII of the Social Security Act (42 U.S.C. ▇▇.▇▇. 1395, et seq.),
together with all applicable provisions of all rules, regulations, manuals,
orders and administrative, reimbursement and other guidelines of all
Governmental Authorities including
15
HHS, CMS, the Office of the Inspector General of HHS, or any Person succeeding
to the functions of any of the foregoing (whether or not having the force of
law).
"Multiemployer Plan" means any employee benefit plan of the type
described in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA
Affiliate makes or is obligated to make contributions, or during the preceding
five plan years, has made or been obligated to make contributions.
"New Indebtedness" is defined in clause (c) of the definition of
"Change of Control."
"Non-Obligor" means (a) (i) any Subsidiary identified as a Non-Obligor
on Item 5.10(a) of the Disclosure Schedule; provided, however, that any
Subsidiary identified thereon as dormant shall cease to be a Non-Obligor at such
time as it ceases to be dormant, and a Subsidiary having minority shareholders
or other joint venturers or partners shall cease to be a Non-Obligor at such
time as it is wholly-owned by the Borrower or any of its Subsidiaries, and (ii)
any Foreign Subsidiary; and (b) any Subsidiary of any Obligor created after the
Effective Date that is designated as such by such Obligor by written notice to
the Administrative Agent within 30 days of its formation or Acquisition;
provided, however, that (x) such Subsidiary has an asset value not exceeding
$1,000,000 and (y) the total Consolidated asset value of all Non-Obligors,
excluding those Non-Obligors described in clause (a), shall not exceed
$25,000,000 at any time; provided, however, that, notwithstanding any of the
foregoing to the contrary, no Subsidiary which has otherwise guaranteed any
obligation of the Borrower or any other Subsidiary under any Notes Documents
shall be permitted to be a Non-Obligor under this Agreement so long as such
Subsidiary remains a guarantor under the terms of any such Notes Documents.
"Non-Renewal Notice Date" is defined in Section 2.03(b)(iii).
"Note" means a promissory note made by the Borrower in favor of a
Lender evidencing Loans made by such Lender, substantially in the form of
Exhibit C.
"Notes Documents" means, collectively, the loan agreements, indentures,
note purchase agreements, promissory notes, guarantees, and all other documents,
instruments, certificates, filings, consents, approvals, board of directors
resolutions and opinions furnished pursuant to or in connection the terms of
each of the Existing Senior Notes, the Convertible Notes, the Senior Notes and
the Manor Care of America Notes.
"Obligations" means all advances to, and debts, liabilities,
obligations, covenants and duties of, any Obligor arising under any Loan
Document or otherwise with respect to any Loan, Swing Line Loan or Letter of
Credit, whether direct or indirect (including those acquired by assignment or
assumption), absolute or contingent, due or to become due, now existing or
hereafter arising and including interest and fees that accrue after the
commencement by or against any Obligor or any Affiliate thereof of any
proceeding under any Debtor Relief Laws naming such Person as the debtor in such
proceeding, regardless of whether such interest and fees are allowed claims in
such proceeding.
"Obligors" means, collectively, the Borrower and each Guarantor.
16
"Offshore Rate" means, for any Interest Period with respect to any
Offshore Rate Loan, a rate per annum determined by the Administrative Agent
pursuant to the following formula:
Offshore Rate = IBOR
---------------------------------------------
1.00 - Eurodollar Reserve Percentage
"Offshore Rate Loan" means a Loan that bears interest at a rate based
on the Offshore Rate.
"Organization Documents" means, (a) as to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) as to any limited liability company, the certificate or articles of
formation or organization and operating agreement; and (c) as to any
partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.
"Other Taxes" is defined in Section 3.01(b).
"Outstanding Amount" means (a) as to Loans and Swing Line Loans on any
date, the aggregate outstanding principal amount thereof after giving effect to
any borrowings and prepayments or repayments of Loans and Swing Line Loans, as
the case may be, occurring on such date; and (b) as to any L/C Obligations on
any date, the amount of such L/C Obligations on such date after giving effect to
any L/C Credit Extension occurring on such date and any other changes in the
aggregate amount of the L/C Obligations as of such date, including as a result
of any reimbursements of outstanding unpaid drawings under any Letters of Credit
or any reductions in the maximum amount available for drawing under Letters of
Credit taking effect on such date.
"Participant" is defined in Section 10.07(d).
"Partner" means any Person who is a party to a partnership, joint
venture or other management agreement with the Borrower or any Subsidiary
regarding goods and services provided to any Facilities.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plan" means any "employee pension benefit plan" (as such term
is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by the Borrower or
any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes
or has an obligation to contribute, or in the case of a multiple employer or
other plan described in Section 4064(a) of ERISA, has made contributions at any
time during the immediately preceding five plan years.
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
17
"Plan" means any "employee benefit plan" (as such term is defined in
Section 3(3) of ERISA) established by the Borrower or, with respect to any such
plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA
Affiliate.
"Pro Rata Share" means, as to each Lender at any time, a fraction
(expressed as a percentage, carried out to the ninth decimal place), the
numerator of which is the amount of the Commitment of such Lender at such time
and the denominator of which is the amount of the Aggregate Commitments at such
time; provided, however, that if the Aggregate Commitments have been terminated
pursuant to the terms hereof, then the Pro Rata Share of each Lender shall be
determined based on the Pro Rata Share of such Lender immediately prior to such
termination and after giving effect to any subsequent assignments made pursuant
to the terms hereof. The initial Pro Rata Share of each Lender is set forth
opposite the name of such Lender on Schedule 2.01 or in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto, as applicable.
"Register" is defined in Section 10.07(c).
"Reportable Event" means any of the events set forth in Section 4043(c)
of ERISA, other than events for which the 30 day notice period has been waived.
"Request for Credit Extension" means (a) as to a Borrowing, conversion
or continuation of Loans, a Loan Notice, (b) as to an L/C Credit Extension, a
Letter of Credit Application, and (c) as to a Swing Line Loan, a Swing Line Loan
Notice.
"Required Lenders" means, as of any date of determination, Lenders
having more than 50% of the Aggregate Commitments or, if the Aggregate
Commitments have been terminated pursuant to the terms hereof, Lenders holding
in the aggregate more than 50% of the Total Outstandings (with the aggregate
amount of each Lender's risk participation and funded participation in L/C
Obligations and Swing Line Loans being deemed "held" by such Lender for purposes
of this definition); provided, however, that the Commitment of, and the portion
of the Total Outstandings held or deemed held by, any Defaulting Lender shall be
excluded for purposes of making a determination of Required Lenders.
"Responsible Officer" means the chief executive officer, president,
chief financial officer, treasurer or assistant treasurer of an Obligor. Any
document delivered hereunder that is signed by a Responsible Officer of an
Obligor shall be conclusively presumed to have been authorized by all necessary
corporate, partnership or other action on the part of such Obligor and such
Responsible Officer shall be conclusively presumed to have acted on behalf of
such Obligor.
"Restricted Payment" means the declaration or payment of any dividend
or other distribution (whether in cash, securities or other property) with
respect to any Equity Interest of the Borrower or any Subsidiary, or any payment
(whether in cash, securities or other property), including any sinking fund or
similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any such Equity Interest or of any
option, warrant or other right to acquire any such Equity Interest.
18
"S&P" means Standard & Poor's Ratings Services, a division of The
McGrawHill Companies, Inc., and any successor thereto.
"SEC" means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.
"Senior Notes" means, collectively, the 6.25% senior unsecured notes
issued by the Borrower pursuant to the terms of the Indenture, dated as of April
15, 2003, between the Borrower, the subsidiary guarantors party thereto and
National City Bank, as Trustee, and all other notes accepted from time to time
in substitution or exchange therefor or renewal thereof in accordance with such
Indenture.
"Senior Notes Offering" is defined in Section 4.01(a)(xiii).
"SPC" has the meaning set forth in Section 10.07(h).
"Specified Losses" means up to $25,000,000 of extraordinary losses of
the Borrower and Subsidiaries in each Fiscal Year.
"Subsidiary" of a Person means a corporation, partnership, joint
venture, limited liability company or other business entity of which a majority
of the shares of securities or other interests having ordinary voting power for
the election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise specified, all references herein to a
"Subsidiary" or to "Subsidiaries" shall refer to a Subsidiary or Subsidiaries of
the Borrower.
"Swing Line" means the revolving credit facility made available by the
Swing Line Lender pursuant to Section 2.04.
"Swing Line Borrowing" means a borrowing of a Swing Line Loan pursuant
to Section 2.04.
"Swing Line Lender" means Bank of America in its capacity as provider
of Swing Line Loans, or any successor swing line lender hereunder.
"Swing Line Loan" is defined in Section 2.04(a).
"Swing Line Loan Notice" means a notice of a Swing Line Borrowing
pursuant to Section 2.04(b), which, if in writing, shall be substantially in the
form of Exhibit B.
"Swing Line Sublimit" means an amount equal to the lesser of (a)
$15,000,000 and (b) the Aggregate Commitments. The Swing Line Sublimit is part
of, and not in addition to, the Aggregate Commitments.
"Taxes" is defined in Section 3.01(a).
19
"Termination Date" means the date on which all Obligations have been
performed and otherwise paid in full in cash, all Letters of Credit have been
terminated or expired (or Cash Collateralized), and the Aggregate Commitments
have terminated.
"Total Outstandings" means the aggregate Outstanding Amount of all
Loans and all L/C Obligations.
"Trigger Event" is defined in Section 3.06(c).
"Type" means, as to a Loan, its character as a Base Rate Loan or an
Offshore Rate Loan.
"Unfunded Pension Liability" means the excess of (a) a Pension Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over (b) the current
value of that Pension Plan's assets, determined in accordance with the
assumptions used for funding the Pension Plan pursuant to Section 412 of the
Code for the applicable plan year.
"United States" and "U.S." mean the United States of America.
"Unreimbursed Amount" is defined in Section 2.03(c)(i).
1.02 OTHER INTERPRETIVE PROVISIONS. With reference to this Agreement
and each other Loan Document, unless otherwise specified herein or in such other
Loan Document:
(a) The meanings of defined terms are equally applicable to the
singular and plural forms of the defined terms.
(b) (i) The words "herein," "hereto," "hereof" and "hereunder" and
words of similar import when used in any Loan Document shall refer to such Loan
Document as a whole and not to any particular provision thereof.
(ii) Article, Section, Exhibit and Schedule references are to
the Loan Document in which such reference appears.
(iii) The term "documents" includes any and all instruments,
documents, agreements, certificates, notices, reports, financial
statements and other writings, however evidenced, whether in physical
or electronic form.
(iv) The term "including" is by way of example and not
limitation.
(v) The term "or" is not exclusive
(c) In the computation of periods of time from a specified date to a
later specified date, the word "from" means "from and including;" the words "to"
and "until" each mean "to but excluding;" and the word "through" means "to and
including."
(d) Section headings herein and in the other Loan Documents are
included for convenience of reference only and shall not affect the
interpretation of this Agreement or any other Loan Document.
20
(e) References in any Section to any clause or item refer to such
clause or item within such Section.
1.03 ACCOUNTING TERMS. (a) All accounting terms not specifically or
completely defined herein shall be construed in conformity with, and all
financial data (including financial ratios and other financial calculations)
required to be submitted pursuant to this Agreement shall be prepared in
conformity with, GAAP applied on a consistent basis, as in effect from time to
time, applied in a manner consistent with that used in preparing the Audited
Financial Statements, except as otherwise specifically prescribed herein.
(b) If at any time any change in GAAP would affect the computation of
any financial ratio or requirement set forth in any Loan Document, 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 preserve the original intent thereof in light of such change
in GAAP (subject to the approval of the Required Lenders); provided, however,
that, until so amended, (i) such ratio or requirement shall 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.
(c) For purposes of computing the Debt to Capitalization Ratio, the
Fixed Charge Coverage Ratio and the Leverage Ratio, such ratios (and any
financial calculations or components required to be made or included therein)
shall be determined, for the relevant period, after giving pro forma effect to
each material Acquisition and Disposition of a Person, business or asset
consummated during such period, together with all transactions relating thereto
consummated during such period (including any incurrence, assumption,
refinancing or repayment of Indebtedness), as if such material Acquisition,
Disposition and related transactions had been consummated on the first day of
such period, in each case based on historical actual results accounted for in
accordance with GAAP. For purposes of this clause, (i) a "material Acquisition"
means a transaction or a series of related transactions in which the Borrower or
any Subsidiary acquires assets, the value of which is at least 5% of the
Consolidated total assets of the Borrower and its Subsidiaries on the date of
(and immediately prior to) such Acquisition, and (ii) a "material Disposition"
means a transaction or series of related transactions in which the Borrower or
any Subsidiary Disposes of assets, the value of which is at least 5% of the
Consolidated total assets of the Borrower and its Subsidiaries on the date of
(and immediately prior to) such Disposition.
1.04 ROUNDING. Any financial ratios required to be maintained by the
Borrower pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed herein and
rounding the result up or down to the nearest number (with a rounding-up if
there is no nearest number).
1.05 REFERENCES TO AGREEMENTS AND LAWS. Unless otherwise expressly
provided herein, (a) references to Organization Documents, agreements (including
the Loan Documents)
21
and other contractual instruments shall be deemed to include all subsequent
amendments, restatements, extensions, supplements and other modifications
thereto, but only to the extent that such amendments, restatements, extensions,
supplements and other modifications are not prohibited by any Loan Document; and
(b) references to any Law shall include all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting such Law.
1.06 TIMES OF DAY. Unless otherwise specified, all references herein to
times of day shall be references to Eastern time (daylight or standard, as
applicable).
1.07 LETTER OF CREDIT AMOUNTS. Unless otherwise specified, all
references herein to the amount of a Letter of Credit at any time shall be
deemed to mean the maximum face amount of such Letter of Credit after giving
effect to all increases thereof contemplated by such Letter of Credit or the
Letter of Credit Application therefor, whether or not such maximum face amount
is in effect at such time.
ARTICLE II.
THE COMMITMENTS AND CREDIT EXTENSIONS
2.01 LOANS. Subject to the terms and conditions set forth herein, each
Lender severally agrees to make loans (each such loan, a "Loan") to the Borrower
from time to time, on any Business Day during the Availability Period, in an
aggregate amount not to exceed at any time outstanding the amount of such
Lender's Commitment; provided, however, that after giving effect to any
Borrowing, (a) the Total Outstandings shall not exceed the Aggregate Commitments
and (b) the aggregate Outstanding Amount of the Loans of any Lender, plus such
Lender's Pro Rata Share of the Outstanding Amount of all L/C Obligations, plus
such Lender's Pro Rata Share of the Outstanding Amount of all Swing Line Loans
shall not exceed such Lender's Commitment. Within the limits of each Lender's
Commitment, and subject to the other terms and conditions hereof, the Borrower
may borrow under this Section, prepay under Section 2.05, and reborrow under
this Section. Loans may be Base Rate Loans or Offshore Rate Loans, as further
provided herein.
2.02 BORROWINGS, CONVERSIONS AND CONTINUATIONS OF LOANS.
(a) Each Borrowing, each conversion of Loans from one Type to the
other, and each continuation of Offshore Rate Loans shall be made upon the
Borrower's irrevocable notice to the Administrative Agent, which may be given by
telephone. Each such notice must be received by the Administrative Agent not
later than 11:00 a.m. (i) two Business Days prior to the requested date of any
Borrowing of, conversion to or continuation of Offshore Rate Loans or of any
conversion of Offshore Rate Loans to Base Rate Loans and (ii) on the requested
date of any Borrowing of Base Rate Loans. Each telephonic notice by the Borrower
pursuant to this clause (a) must be confirmed promptly by delivery to the
Administrative Agent of a written Loan Notice, appropriately completed and
signed by a Responsible Officer of the Borrower. Each Borrowing of, conversion
to or continuation of Offshore Rate Loans shall be in a principal amount of
$3,000,000 or a whole multiple of $1,000,000 in excess thereof. Except as
provided in Sections 2.03(c) and 2.04(c), each Borrowing of or conversion to
Base Rate Loans shall be in a principal amount of $3,000,000 or a whole multiple
of $1,000,000 in excess thereof. Each
22
Loan Notice (whether telephonic or written) shall specify (i) whether the
Borrower is requesting a Borrowing, a conversion of Loans from one Type to the
other, or a continuation of Offshore Rate Loans, (ii) the requested date of the
Borrowing, conversion or continuation, as the case may be (which shall be a
Business Day), (iii) the principal amount of Loans to be borrowed, converted or
continued, (iv) the Type of Loans to be borrowed or to which existing Loans are
to be converted, and (v) if applicable, the duration of the Interest Period with
respect thereto. If the Borrower fails to specify a Type of Loan in a Loan
Notice or if the Borrower fails to give a timely notice requesting a conversion
or continuation, then the applicable Loans shall be made as, or converted to,
Base Rate Loans. Any such automatic conversion to Base Rate Loans shall be
effective as of the last day of the Interest Period then in effect for the
applicable Offshore Rate Loans. If the Borrower requests a Borrowing of,
conversion to, or continuation of Offshore Rate Loans in any such Loan Notice,
but fails to specify an Interest Period, it will be deemed to have specified an
Interest Period of one month.
(b) Following receipt of a Loan Notice, the Administrative Agent shall
promptly notify each Lender of the amount of its Pro Rata Share of the
applicable Loans, and if no timely notice of a conversion or continuation is
provided by the Borrower, the Administrative Agent shall notify each Lender of
the details of any automatic conversion to Base Rate Loans described in clause
(a). In the case of a Borrowing, each Lender shall make the amount of its Loan
available to the Administrative Agent in immediately available funds at the
Administrative Agent's Office not later than 1:00 p.m. on the Business Day
specified in the applicable Loan Notice. Upon satisfaction of the applicable
conditions set forth in Section 4.02 (and, if such Borrowing is the initial
Credit Extension, Section 4.01), the Administrative Agent shall make all funds
so received available to the Borrower in like funds as received by the
Administrative Agent either by (i) crediting the account of the Borrower on the
books of Bank of America with the amount of such funds or (ii) wire transfer of
such funds, in each case in accordance with instructions provided to (and
reasonably acceptable to) the Administrative Agent by the Borrower; provided,
however, that if, on the date the Loan Notice with respect to such Borrowing is
given by the Borrower, there are Swing Line Loans or L/C Borrowings outstanding,
then the proceeds of such Borrowing shall be applied, first, to the payment in
full of any such L/C Borrowings, second, to the payment in full of any such
Swing Line Loans, and third, to the Borrower as provided above.
(c) Except as otherwise provided herein, an Offshore Rate Loan may be
continued or converted only on the last day of an Interest Period for such
Offshore Rate Loan. During the existence of an Event of Default, no Loans may be
requested as, converted to or continued as Offshore Rate Loans without the
consent of the Required Lenders.
(d) The Administrative Agent shall promptly notify the Borrower and the
Lenders in writing of the interest rate applicable to any Interest Period for
Offshore Rate Loans upon determination of such interest rate. The determination
of the Offshore Rate by the Administrative Agent shall be conclusive in the
absence of manifest error. At any time that Base Rate Loans are outstanding, the
Administrative Agent shall notify the Borrower and the Lenders in writing of any
change in Bank of America's prime rate used in determining the Base Rate
promptly following the public announcement of such change.
23
(e) After giving effect to all Borrowings, all conversions of Loans
from one Type to the other, and all continuations of Loans as the same Type,
there shall not be more than fifteen Interest Periods in effect with respect to
Loans.
2.03 LETTERS OF CREDIT.
(a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A)
the L/C Issuer agrees, in reliance upon the agreements of the other
Lenders set forth in this Section, (1) from time to time on any
Business Day during the period from the Closing Date until the Letter
of Credit Expiration Date, to issue Letters of Credit for the account
of the Borrower or its Subsidiaries, and to amend or renew Letters of
Credit previously issued by it, in accordance with clause (b), and (2)
to honor drafts under the Letters of Credit; and (B) the Lenders
severally agree to participate in Letters of Credit issued for the
account of the Borrower or any Subsidiary; provided that the L/C Issuer
shall not be obligated to make any L/C Credit Extension with respect to
any Letter of Credit, and no Lender shall be obligated to participate
in any Letter of Credit if, as of the date of such L/C Credit
Extension, (x) the Total Outstandings would exceed the Aggregate
Commitments, (y) the aggregate Outstanding Amount of the Loans of any
Lender, plus such Lender's Pro Rata Share of the Outstanding Amount of
all L/C Obligations, plus such Lender's Pro Rata Share of the
Outstanding Amount of all Swing Line Loans would exceed such Lender's
Commitment, or (z) the Outstanding Amount of the L/C Obligations would
exceed the Letter of Credit Sublimit. Within the foregoing limits, and
subject to the terms and conditions hereof, the Borrower's ability to
obtain Letters of Credit shall be fully revolving, and accordingly the
Borrower may, during the foregoing period, obtain Letters of Credit to
replace Letters of Credit that have expired or that have been drawn
upon and reimbursed. All Existing Letters of Credit shall be deemed to
have been issued pursuant hereto, and from and after the Closing Date
shall be subject to and governed by the terms and conditions hereof.
(ii) The L/C Issuer shall be under no obligation to issue any
Letter of Credit if:
(A) any order, judgment or decree of any Governmental
Authority or arbitrator shall by its terms purport to enjoin
or restrain the L/C Issuer from issuing such Letter of Credit,
or any Law applicable to the L/C Issuer or any request or
directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over the L/C Issuer
shall prohibit, or request that the L/C Issuer refrain from,
the issuance of letters of credit generally or such Letter of
Credit in particular or shall impose upon the L/C Issuer with
respect to such Letter of Credit any restriction, reserve or
capital requirement (for which the L/C Issuer is not otherwise
compensated hereunder) not in effect on the Closing Date, or
shall impose upon the L/C Issuer any unreimbursed loss, cost
or expense which was not applicable on the Closing Date and
which the L/C Issuer in good ▇▇▇▇▇ ▇▇▇▇▇ material to it;
24
(B) subject to Section 2.03(b)(iii), the expiry date
of such requested Letter of Credit would occur more than
twelve months after the date of issuance or last renewal,
unless the Required Lenders have approved such expiry date;
(C) the expiry date of such requested Letter of
Credit would occur after the Letter of Credit Expiration Date,
unless all the Lenders have approved such expiry date;
(D) the issuance of such Letter of Credit would
violate one or more policies of the L/C Issuer; or
(E) such Letter of Credit is in an initial amount
less than $500,000 or is to be used for the purpose of
supporting the issuance of any letter of credit by any other
Person or denominated in a currency other than Dollars.
(iii) The L/C Issuer shall be under no obligation to amend any
Letter of Credit if (A) the L/C Issuer would have no obligation at such
time to issue such Letter of Credit in its amended form under the terms
hereof, or (B) the beneficiary of such Letter of Credit does not accept
the proposed amendment to such Letter of Credit.
(b) Procedures for Issuance and Amendment of Letters of Credit;
Auto-Renewal Letters of Credit.
(i) Each Letter of Credit shall be issued or amended, as the
case may be, upon the request of the Borrower delivered to the L/C
Issuer (with a copy to the Administrative Agent) in the form of a
Letter of Credit Application, appropriately completed and signed by a
Responsible Officer of the Borrower. Such Letter of Credit Application
must be received by the L/C Issuer and the Administrative Agent not
later than 11:00 a.m. at least two Business Days (or such later date
and time as the L/C Issuer may agree in a particular instance in its
sole discretion) prior to the proposed issuance date or date of
amendment, as the case may be. In the case of a request for an initial
issuance of a Letter of Credit, such Letter of Credit Application shall
specify in form and detail satisfactory to the L/C Issuer: (A) the
proposed issuance date of the requested Letter of Credit (which shall
be a Business Day); (B) the amount thereof; (C) the expiry date
thereof; (D) the name and address of the beneficiary thereof; (E) the
documents to be presented by such beneficiary in case of any drawing
thereunder; (F) the full text of any certificate to be presented by
such beneficiary in case of any drawing thereunder; and (G) such other
matters as the L/C Issuer may require. In the case of a request for an
amendment of any outstanding Letter of Credit, such Letter of Credit
Application shall specify in form and detail satisfactory to the L/C
Issuer (A) the Letter of Credit to be amended; (B) the proposed date of
amendment thereof (which shall be a Business Day); (C) the nature of
the proposed amendment; and (D) such other matters as the L/C Issuer
may require.
(ii) Promptly after receipt of any Letter of Credit
Application, the L/C Issuer will confirm with the Administrative Agent
(by telephone or in writing) that the
25
Administrative Agent has received a copy of such Letter of Credit
Application from the Borrower and, if not, the L/C Issuer will provide
the Administrative Agent with a copy thereof. Upon receipt by the L/C
Issuer of confirmation from the Administrative Agent that the requested
issuance or amendment is permitted in accordance with the terms hereof,
then, subject to the terms and conditions hereof, the L/C Issuer shall,
on the requested date, issue a Letter of Credit for the account of the
Borrower or enter into the applicable amendment, as the case may be, in
each case in accordance with the L/C Issuer's usual and customary
business practices. Immediately upon the issuance of each Letter of
Credit, each Lender shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from the L/C Issuer a risk
participation in such Letter of Credit in an amount equal to the
product of such Lender's Pro Rata Share times the amount of such Letter
of Credit.
(iii) If the Borrower so requests in any applicable Letter of
Credit Application, the L/C Issuer may, in its sole and absolute
discretion, agree to issue a Letter of Credit that has automatic
renewal provisions (each, an "Auto-Renewal Letter of Credit");
provided, however, that any such Auto-Renewal Letter of Credit must
permit the L/C Issuer to prevent any such renewal at least once in each
twelve-month period (commencing with the date of issuance of such
Letter of Credit) by giving prior notice to the beneficiary thereof not
later than a day prior to the date of termination (the "Nonrenewal
Notice Date") in each such twelve-month period to be agreed upon at the
time such Letter of Credit is issued. Unless otherwise directed by the
L/C Issuer, the Borrower shall not be required to make a specific
request to the L/C Issuer for any such renewal. Once an Auto-Renewal
Letter of Credit has been issued, the Lenders shall be deemed to have
authorized (but may not require) the L/C Issuer to permit the renewal
of such Letter of Credit at any time to an expiry date not later than
the Letter of Credit Expiration Date; provided, however, that the L/C
Issuer shall not permit any such renewal if (A) the L/C Issuer has
determined that it would have no obligation at such time to issue such
Letter of Credit in its renewed form under the terms hereof (by reason
of the provisions of Section 2.03(a)(ii) or otherwise), or (B) it has
received notice (which may be by telephone or in writing) on or before
the day that is two Business Days before the Nonrenewal Notice Date (1)
from the Administrative Agent that the Required Lenders have elected
not to permit such renewal or (2) from the Administrative Agent, any
Lender or the Borrower that one or more of the applicable conditions
specified in Section 4.02 is not then satisfied.
(iv) Promptly after its delivery of any Letter of Credit or
any amendment to a Letter of Credit to an advising bank with respect
thereto or to the beneficiary thereof, the L/C Issuer will also deliver
to the Borrower and the Administrative Agent a true and complete copy
of such Letter of Credit or amendment.
(c) Drawings and Reimbursements; Funding of Participations.
(i) Upon receipt from the beneficiary of any Letter of Credit
of any notice of a drawing under such Letter of Credit, the L/C Issuer
shall notify the Borrower and the Administrative Agent thereof. Not
later than 11:00 a.m. on the date of any payment by the L/C Issuer
under a Letter of Credit (each such date, an "Honor Date"), the
Borrower
26
shall reimburse the L/C Issuer through the Administrative Agent in an
amount equal to the amount of such drawing. If the Borrower fails to so
reimburse the L/C Issuer by such time, the Administrative Agent shall
promptly notify each Lender of the Honor Date, the amount of the
unreimbursed drawing (the "Unreimbursed Amount"), and the amount of
such Lender's Pro Rata Share thereof. In such event, the Borrower shall
be deemed to have requested a Borrowing of Base Rate Loans to be
disbursed on the Honor Date in an amount equal to the Unreimbursed
Amount, without regard to the minimum and multiples specified in
Section 2.02 for the principal amount of Base Rate Loans, but subject
to the amount of the unutilized portion of the Aggregate Commitments
and the conditions set forth in Section 4.02 (other than the delivery
of a Loan Notice). Any notice given by the L/C Issuer or the
Administrative Agent pursuant to this clause (c)(i) may be given by
telephone if immediately confirmed in writing; provided, however, that
the lack of such an immediate confirmation shall not affect the
conclusiveness or binding effect of such notice.
(ii) Each Lender (including the Lender acting as L/C Issuer)
shall upon any notice pursuant to Section 2.03(c)(i) make funds
available to the Administrative Agent for the account of the L/C Issuer
at the Administrative Agent's Office in an amount equal to its Pro Rata
Share of the Unreimbursed Amount not later than 1:00 p.m. on the
Business Day specified in such notice by the Administrative Agent,
whereupon, subject to the provisions of Section 2.03(c)(iii), each
Lender that so makes funds available shall be deemed to have made a
Base Rate Loan to the Borrower in such amount. The Administrative Agent
shall remit the funds so received to the L/C Issuer.
(iii) With respect to any Unreimbursed Amount that is not
fully refinanced by a Borrowing of Base Rate Loans because the
conditions set forth in Section 4.02 cannot be satisfied or for any
other reason, the Borrower shall be deemed to have incurred from the
L/C Issuer an L/C Borrowing in the amount of the Unreimbursed Amount
that is not so refinanced, which L/C Borrowing shall be due and payable
on demand (together with interest) and shall bear interest at the
Default Rate for Base Rate Loans. In such event, each Lender's payment
to the Administrative Agent for the account of the L/C Issuer pursuant
to Section 2.03(c)(ii) shall be deemed payment in respect of its
participation in such L/C Borrowing and shall constitute an L/C Advance
from such Lender in satisfaction of its participation obligation under
this Section.
(iv) Until each Lender funds its Loan or L/C Advance pursuant
to this clause (c) to reimburse the L/C Issuer for any amount drawn
under any Letter of Credit, interest in respect of such Lender's Pro
Rata Share of such amount shall be solely for the account of the L/C
Issuer.
(v) Each Lender's obligation to make Loans or L/C Advances to
reimburse the L/C Issuer for amounts drawn under Letters of Credit, as
contemplated by this clause (c), shall be absolute and unconditional
and shall not be affected by any circumstance, including (A) any
set-off, counterclaim, recoupment, defense or other right which such
Lender may have against the L/C Issuer, the Borrower or any other
Person for any reason whatsoever; (B) the occurrence or continuance of
a Default, or (C) any other occurrence, event or condition, whether or
not similar to any of the foregoing; provided, however,
27
that each Lender's obligation to make Loans pursuant to this clause (c)
is subject to the conditions set forth in Section 4.02 (other than
delivery by the Borrower of a Loan Notice). No such making of an L/C
Advance shall relieve or otherwise impair the obligation of the
Borrower to reimburse the L/C Issuer for the amount of any payment made
by the L/C Issuer under any Letter of Credit, together with interest as
provided herein.
(vi) If any Lender fails to make available to the
Administrative Agent for the account of the L/C Issuer any amount
required to be paid by such Lender pursuant to the foregoing provisions
of this clause (c) by the time specified in Section 2.03(c)(ii), the
L/C Issuer shall be entitled to recover from such Lender (acting
through the Administrative Agent), on demand, such amount with interest
thereon for the period from the date such payment is required to the
date on which such payment is immediately available to the L/C Issuer
at a rate per annum equal to the Federal Funds Rate from time to time
in effect. A certificate of the L/C Issuer submitted to any Lender
(through the Administrative Agent) with respect to any amounts owing
under this clause (vi) shall be conclusive absent manifest error.
(d) Repayment of Participations.
(i) At any time after the L/C Issuer has made a payment under
any Letter of Credit and has received from any Lender such Lender's L/C
Advance in respect of such payment in accordance with Section 2.03(c),
if the Administrative Agent receives for the account of the L/C Issuer
any payment in respect of the related Unreimbursed Amount or interest
thereon (whether directly from the Borrower or otherwise, including
proceeds of Cash Collateral applied thereto by the Administrative
Agent), the Administrative Agent will distribute to such Lender its Pro
Rata Share thereof (appropriately adjusted, in the case of interest
payments, to reflect the period of time during which such Lender's L/C
Advance was outstanding) in the same funds as those received by the
Administrative Agent.
(ii) If any payment received by the Administrative Agent for
the account of the L/C Issuer pursuant to Section 2.03(c)(i) is
required to be returned under any of the circumstances described in
Section 10.06 (including pursuant to any settlement entered into by the
L/C Issuer in its discretion), each Lender shall pay to the
Administrative Agent for the account of the L/C Issuer its Pro Rata
Share thereof on demand of the Administrative Agent, plus interest
thereon from the date of such demand to the date such amount is
returned by such Lender, at a rate per annum equal to the Federal Funds
Rate from time to time in effect.
(e) Obligations Absolute. The obligation of the Borrower to reimburse
the L/C Issuer for each drawing under each Letter of Credit and to repay each
L/C Borrowing shall be absolute, unconditional and irrevocable, and shall be
paid strictly in accordance with the terms of this Agreement under all
circumstances, including the following:
(i) any lack of validity or enforceability of such Letter of
Credit, this Agreement, or any other agreement or instrument relating
thereto;
28
(ii) the existence of any claim, counterclaim, set-off,
defense or other right that the Borrower may have at any time against
any beneficiary or any transferee of such Letter of Credit (or any
Person for whom any such beneficiary or any such transferee may be
acting), the L/C Issuer or any other Person, whether in connection with
this Agreement, the transactions contemplated hereby or by such Letter
of Credit or any agreement or instrument relating thereto, or any
unrelated transaction;
(iii) any draft, demand, certificate or other document
presented under such Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect; or any loss or delay in the
transmission or otherwise of any document required in order to make a
drawing under such Letter of Credit;
(iv) any payment by the L/C Issuer under such Letter of Credit
against presentation of a draft or certificate that does not strictly
comply with the terms of such Letter of Credit; or any payment made by
the L/C Issuer under such Letter of Credit to any Person purporting to
be a trustee in bankruptcy, debtor-in-possession, assignee for the
benefit of creditors, liquidator, receiver or other representative of
or successor to any beneficiary or any transferee of such Letter of
Credit, including any arising in connection with any proceeding under
any Debtor Relief Law; or
(v) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing, including any other circumstance
that might otherwise constitute a defense available to, or a discharge
of, the Borrower.
The Borrower shall promptly examine a copy of each Letter of Credit and each
amendment thereto that is delivered to it and, in the event of any claim of
noncompliance with the Borrower's instructions or other irregularity, the
Borrower will immediately notify the L/C Issuer. The Borrower shall be
conclusively deemed to have waived any such claim against the L/C Issuer and its
correspondents unless such notice is given as aforesaid.
(f) Role of L/C Issuer. Each Lender and the Borrower agree that, in
paying any drawing under a Letter of Credit, the L/C Issuer shall not have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document. None of the L/C Issuer,
any Agent-Related Person nor any of the respective correspondents, participants
or assignees of the L/C Issuer shall be liable to any Lender for (i) any action
taken or omitted in connection herewith at the request or with the approval of
the Lenders or the Required Lenders, as applicable; (ii) any action taken or
omitted in the absence of gross negligence or willful misconduct; or (iii) the
due execution, effectiveness, validity or enforceability of any document or
instrument related to any Letter of Credit or Letter of Credit Application. The
Borrower hereby assumes all risks of the acts or omissions of any beneficiary or
transferee with respect to its use of any Letter of Credit; provided, however,
that this assumption is not intended to, and shall not, preclude the Borrower's
pursuing such rights and remedies as it may have against the beneficiary or
transferee at law or under any other agreement. None of the L/C Issuer, any
Agent-Related Person, nor any of the respective correspondents, participants or
assignees of the
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L/C Issuer, shall be liable or responsible for any of the matters described in
clauses (i) through (v) of Section 2.03(e); provided, however, that anything in
such clauses to the contrary notwithstanding, the Borrower may have a claim
against the L/C Issuer, and the L/C Issuer may be liable to the Borrower, to the
extent, but only to the extent, of any direct, as opposed to consequential or
exemplary, damages suffered by the Borrower which the Borrower proves were
caused by the L/C Issuer's willful misconduct or gross negligence or the L/C
Issuer's willful failure to pay under any Letter of Credit after the
presentation to it by the beneficiary of a sight draft and certificate(s)
strictly complying with the terms and conditions of a Letter of Credit. In
furtherance and not in limitation of the foregoing, the L/C Issuer may accept
documents that appear on their face to be in order, without responsibility for
further investigation, regardless of any notice or information to the contrary,
and the L/C Issuer shall not be responsible for the validity or sufficiency of
any instrument transferring or assigning or purporting to transfer or assign a
Letter of Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, which may prove to be invalid or ineffective for any reason.
(g) Cash Collateral. Upon the request of the Administrative Agent if an
Event of Default shall have occurred and be continuing, (i) if the L/C Issuer
has honored any full or partial drawing request under any Letter of Credit and
such drawing has resulted in an L/C Borrowing, or (ii) if, as of the Letter of
Credit Expiration Date, any Letter of Credit may for any reason remain
outstanding and partially or wholly undrawn, the Borrower shall immediately Cash
Collateralize the then Outstanding Amount of all L/C Obligations (in an amount
equal to such Outstanding Amount determined as of the date of such L/C Borrowing
or the Letter of Credit Expiration Date, as the case may be). For purposes
hereof, "Cash Collateralize" means to pledge and deposit with or deliver to the
Administrative Agent, for the benefit of the L/C Issuer and the Lenders, as
collateral for the L/C Obligations, cash or deposit account balances pursuant to
documentation in form and substance satisfactory to the Administrative Agent and
the L/C Issuer (which documents are hereby consented to by the Lenders).
Derivatives of such term have corresponding meanings. The Borrower shall,
simultaneously with any Cash Collateralization, grant to the Administrative
Agent, for the benefit of the L/C Issuer and the Lenders, a security interest in
all such cash, deposit accounts and all balances therein and all proceeds of the
foregoing. Cash collateral shall be maintained in blocked, non-interest bearing
deposit accounts at Bank of America.
(h) Applicability of ISP98. Unless otherwise expressly agreed by the
L/C Issuer and the Borrower when a Letter of Credit is issued (including any
such agreement applicable to an Existing Letter of Credit), the rules of the
"International Standby Practices 1998" published by the Institute of
International Banking Law & Practice (or such later version thereof as may be in
effect at the time of issuance) shall apply to each Letter of Credit.
(i) Letter of Credit Fees. The Borrower shall pay to the Administrative
Agent, for the account of each Lender in accordance with its Pro Rata Share, a
Letter of Credit fee for each Letter of Credit equal to the product of the
Applicable Margin times the daily maximum amount available to be drawn under
such Letter of Credit (after giving effect to all increases thereof contemplated
by such Letter of Credit or the Letter of Credit Application therefor, whether
or not such maximum amount is then in effect under such Letter of Credit). Such
letter of credit fees shall be computed on a quarterly basis in arrears. Such
letter of credit fees shall be due and payable on the last Business Day of each
March, June, September and December, commencing
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with the first such date to occur after the issuance of such Letter of Credit,
on the Letter of Credit Expiration Date and thereafter on demand. If there is
any change in the Applicable Margin during any quarter, the daily maximum amount
of each Letter of Credit shall be computed and multiplied by the Applicable
Margin separately for each period during such quarter that such Applicable
Margin was in effect.
(j) Fronting Fee and Documentary and Processing Charges Payable to L/C
Issuer. The Borrower shall pay directly to the L/C Issuer for its own account a
fronting fee with respect to each Letter of Credit in an amount equal to 0.125%
per annum on the stated amount of each Letter of Credit (including to the extent
of any increase), payable quarterly in arrears on the last Business Day of each
March, June, September and December for the immediately preceding quarter (or a
portion thereof) following the issuance of such Letter of Credit and (if
earlier) on the date of any termination or expiration of such Letter of Credit.
In addition, the Borrower shall pay directly to the L/C Issuer for its own
account the customary issuance, presentation, amendment and other processing
fees, and other standard costs and charges, of the L/C Issuer relating to
letters of credit as from time to time in effect. Such customary fees and
standard costs and charges are due and payable on demand and are nonrefundable.
(k) Conflict with Letter of Credit Application. In the event of any
conflict between the terms hereof and the terms of any Letter of Credit
Application, the terms hereof shall control.
2.04 SWING LINE LOANS.
(a) The Swing Line. Subject to the terms and conditions set forth
herein, the Swing Line Lender agrees to make loans (each such loan, a "Swing
Line Loan") to the Borrower from time to time on any Business Day during the
Availability Period in an aggregate amount not to exceed at any time outstanding
the amount of the Swing Line Sublimit, notwithstanding the fact that such Swing
Line Loans, when aggregated with the Pro Rata Share of the Outstanding Amount of
Loans and L/C Obligations of the Lender acting as Swing Line Lender, may exceed
the amount of such Lender's Commitment; provided, however, that, after giving
effect to any Swing Line Loan, (i) the Total Outstandings shall not exceed the
Aggregate Commitments, and (ii) the aggregate Outstanding Amount of the Loans of
any Lender, plus such Lender's Pro Rata Share of the Outstanding Amount of all
L/C Obligations, plus such Lender's Pro Rata Share of the Outstanding Amount of
all Swing Line Loans shall not exceed such Lender's Commitment, and provided,
however, further, that the Borrower shall not use the proceeds of any Swing Line
Loan to refinance any outstanding Swing Line Loan. Within the foregoing limits,
and subject to the other terms and conditions hereof, the Borrower may borrow
under this Section, prepay under Section 2.05, and reborrow under this Section.
Each Swing Line Loan shall be a Base Rate Loan. Immediately upon the making of a
Swing Line Loan, each Lender shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from the Swing Line Lender a risk
participation in such Swing Line Loan in an amount equal to the product of such
Lender's Pro Rata Share times the amount of such Swing Line Loan.
(b) Borrowing Procedures. Each Swing Line Borrowing shall be made upon
the Borrower's irrevocable notice to the Swing Line Lender and the
Administrative Agent, which may be given by telephone. Each such notice must be
received by the Swing Line Lender and the Administrative Agent not later than
1:00 p.m. on the requested borrowing date, and shall specify
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(i) the amount to be borrowed, which shall be a minimum of $100,000 and (ii) the
requested borrowing date, which shall be a Business Day. Each such telephonic
notice must be confirmed promptly by delivery to the Swing Line Lender and the
Administrative Agent of a written Swing Line Loan Notice, appropriately
completed and signed by a Responsible Officer of the Borrower. Promptly after
receipt by the Swing Line Lender of any telephonic Swing Line Loan Notice, the
Swing Line Lender will confirm with the Administrative Agent (by telephone or in
writing) that the Administrative Agent has also received such Swing Line Loan
Notice and, if not, the Swing Line Lender will notify the Administrative Agent
(by telephone or in writing) of the contents thereof. Unless the Swing Line
Lender has received notice (by telephone or in writing) from the Administrative
Agent (including at the request of any Lender) prior to 2:00 p.m. on the date of
the proposed Swing Line Borrowing (A) directing the Swing Line Lender not to
make such Swing Line Loan as a result of the limitations set forth in the
proviso to the first sentence of Section 2.04(a), or (B) that one or more of the
applicable conditions specified in Article IV is not then satisfied, then,
subject to the terms and conditions hereof, the Swing Line Lender will, not
later than 3:00 p.m. on the borrowing date specified in such Swing Line Loan
Notice, make the amount of its Swing Line Loan available to the Borrower at its
office by crediting the account of the Borrower on the books of the Swing Line
Lender in immediately available funds.
(c) Refinancing of Swing Line Loans.
(i) The Swing Line Lender at any time in its sole and absolute
discretion may request, on behalf of the Borrower (which hereby
irrevocably authorizes the Swing Line Lender to so request on its
behalf), that each Lender make a Base Rate Loan in an amount equal to
such Lender's Pro Rata Share of the amount of Swing Line Loans then
outstanding. Such request shall be made in writing (which written
request shall be deemed to be a Loan Notice for purposes hereof) and in
accordance with the requirements of Section 2.02, without regard to the
minimum and multiples specified therein for the principal amount of
Base Rate Loans, but subject to the unutilized portion of the Aggregate
Commitments and the conditions set forth in Section 4.02. The Swing
Line Lender shall furnish the Borrower with a copy of the applicable
Loan Notice promptly after delivering such notice to the Administrative
Agent. Each Lender shall make an amount equal to its Pro Rata Share of
the amount specified in such Loan Notice available to the
Administrative Agent in immediately available funds for the account of
the Swing Line Lender at the Administrative Agent's Office not later
than 1:00 p.m. on the day specified in such Loan Notice, whereupon,
subject to Section 2.04(c)(ii), each Lender that so makes funds
available shall be deemed to have made a Base Rate Loan to the Borrower
in such amount. The Administrative Agent shall remit the funds so
received to the Swing Line Lender.
(ii) If for any reason any Swing Line Loan cannot be
refinanced by such a Borrowing in accordance with Section 2.04(c)(i),
the request for Base Rate Loans submitted by the Swing Line Lender as
set forth herein shall be deemed to be a request by the Swing Line
Lender that each of the Lenders fund its risk participation in the
relevant Swing Line Loan and each Lender's payment to the
Administrative Agent for the account of the Swing Line Lender pursuant
to Section 2.04(c)(i) shall be deemed payment in respect of such
participation.
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(iii) If any Lender fails to make available to the
Administrative Agent for the account of the Swing Line Lender any
amount required to be paid by such Lender pursuant to the foregoing
provisions of this clause (c) by the time specified in Section
2.04(c)(i), the Swing Line Lender shall be entitled to recover from
such Lender (acting through the Administrative Agent), on demand, such
amount with interest thereon for the period from the date such payment
is required to the date on which such payment is immediately available
to the Swing Line Lender at a rate per annum equal to the Federal Funds
Rate from time to time in effect. A certificate of the Swing Line
Lender submitted to any Lender (through the Administrative Agent) with
respect to any amounts owing under this clause (iii) shall be
conclusive absent manifest error.
(iv) Each Lender's obligation to make Loans or to purchase and
fund risk participations in Swing Line Loans pursuant to this clause
(c) shall be absolute and unconditional and shall not be affected by
any circumstance, including (A) any set-off, counterclaim, recoupment,
defense or other right which such Lender may have against the Swing
Line Lender, the Borrower or any other Person for any reason
whatsoever, (B) the occurrence or continuance of a Default, or (C) any
other occurrence, event or condition, whether or not similar to any of
the foregoing; provided, however, that each Lender's obligation to make
Loans pursuant to this clause (c) is subject to the conditions set
forth in Section 4.02. No such funding of risk participations shall
relieve or otherwise impair the obligation of the Borrower to repay
Swing Line Loans, together with interest as provided herein.
(d) Repayment of Participations.
(i) At any time after any Lender has purchased and funded a
risk participation in a Swing Line Loan, if the Swing Line Lender
receives any payment on account of such Swing Line Loan, the Swing Line
Lender will distribute to such Lender its Pro Rata Share of such
payment (appropriately adjusted, in the case of interest payments, to
reflect the period of time during which such Lender's risk
participation was funded) in the same funds as those received by the
Swing Line Lender.
(ii) If any payment received by the Swing Line Lender in
respect of principal or interest on any Swing Line Loan is required to
be returned by the Swing Line Lender under any of the circumstances
described in Section 10.06 (including pursuant to any settlement
entered into by the Swing Line Lender in its discretion), each Lender
shall pay to the Swing Line Lender its Pro Rata Share thereof on demand
of the Administrative Agent, plus interest thereon from the date of
such demand to the date such amount is returned, at a rate per annum
equal to the Federal Funds Rate. The Administrative Agent will make
such demand upon the request of the Swing Line Lender.
(e) Interest for Account of Swing Line Lender. The Swing Line Lender
shall be responsible for invoicing the Borrower for interest on the Swing Line
Loans. Until each Lender funds its Base Rate Loan or risk participation pursuant
to this Section to refinance such Lender's Pro Rata Share of any Swing Line
Loan, interest in respect of such Pro Rata Share shall be solely for the account
of the Swing Line Lender.
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(f) Payments Directly to Swing Line Lender. The Borrower shall make all
payments of principal and interest in respect of the Swing Line Loans directly
to the Swing Line Lender.
2.05 PREPAYMENTS.
(a) The Borrower may, upon notice to the Administrative Agent, at any
time or from time to time on any Business Day voluntarily prepay Loans in whole
or in part; provided that (i) such notice must be received by the Administrative
Agent not later than 11:00 a.m. (A) one Business Day prior to any date of
prepayment of Offshore Rate Loans and (B) on the date of prepayment of Base Rate
Loans; and (ii) any prepayment of Loans shall be in a principal amount of
$3,000,000 or a whole multiple of $1,000,000 in excess thereof or, if less, the
entire principal amount thereof then outstanding. Each such notice shall specify
the date and amount of such prepayment and the Type(s) of Loans to be prepaid.
The Administrative Agent will promptly notify each Lender of its receipt of each
such notice, and of the amount of such Lender's Pro Rata Share of such
prepayment. If such notice is given by the Borrower, the Borrower shall make
such prepayment and the payment amount specified in such notice shall be due and
payable on the date specified therein. Any prepayment of an Offshore Rate Loan
shall be accompanied by all accrued interest thereon.
(b) The Borrower may, upon notice to the Swing Line Lender (with a copy
to the Administrative Agent), at any time or from time to time, voluntarily
prepay Swing Line Loans in whole or in part; provided, however, that (i) such
notice must be received by the Swing Line Lender and the Administrative Agent
not later than 1:00 p.m. on the date of the prepayment, and (ii) any such
prepayment shall be in a minimum principal amount of $100,000 or, if less, the
entire amount outstanding thereunder. Each such notice shall specify the date
and amount of such prepayment. If such notice is given by the Borrower, the
Borrower shall make such prepayment and the payment amount specified in such
notice shall be due and payable on the date specified therein.
(c) If for any reason the Total Outstandings at any time exceed the
Aggregate Commitments then in effect, the Borrower shall immediately prepay
Loans and/or Cash Collateralize the L/C Obligations in an aggregate amount equal
to such excess; provided, however, that the Borrower shall not be required to
Cash Collateralize the L/C Obligations pursuant to this clause unless after the
prepayment in full of the Loans and Swing Line Loans the Total Outstandings
exceed the Aggregate Commitments then in effect.
(d) Immediately upon any acceleration of the Maturity Date of any Loans
pursuant to Section 8.02, the Borrower shall repay all the Loans, unless,
pursuant to Section 8.02, only a portion of all the Loans is so accelerated (in
which case the portion so accelerated shall be so repaid).
Each such prepayment or repayment of the principal of any Loans made pursuant to
this Section shall be (x) applied to such Loans in accordance with each Lender's
Pro Rata Share, (y) without premium or penalty, except as may be required by
Section 3.05, and (z) applied, to the extent of such prepayment or repayment,
and except as otherwise requested by the Borrower pursuant to clause (a), first,
to the principal amount thereof being maintained as Base Rate Loans, and
34
second, subject to the terms of Section 3.05, to the principal amount thereof
being maintained as Offshore Rate Loans.
2.06 TERMINATION OR REDUCTION OF COMMITMENTS. The Borrower may, upon
notice to the Administrative Agent, terminate the Aggregate Commitments, or from
time to time permanently reduce the Aggregate Commitments; provided, however,
that (i) any such notice shall be received by the Administrative Agent not later
than 11:00 a.m. three Business Days prior to the date of termination or
reduction, (ii) any such partial reduction shall be in an aggregate amount of
$5,000,000 or any whole multiple of $1,000,000 in excess thereof, (iii) the
Borrower shall not terminate or reduce the Aggregate Commitments if, after
giving effect thereto and to any concurrent prepayments hereunder, the Total
Outstandings would exceed the Aggregate Commitments, and (iv) if, after giving
effect to any reduction of the Aggregate Commitments, the Letter of Credit
Sublimit or the Swing Line Sublimit exceeds the amount of the Aggregate
Commitments, such Sublimit shall be automatically reduced by the amount of such
excess. The Administrative Agent will promptly notify the Lenders of any such
notice of termination or reduction of the Aggregate Commitments. Any reduction
of the Aggregate Commitments shall be applied to the Commitment of each Lender
according to its Pro Rata Share. All facility fees accrued until the effective
date of any termination or reduction of the Aggregate Commitments shall be paid
on the effective date of such termination or reduction.
2.07 REPAYMENT OF LOANS.
(a) The Borrower shall repay to the Lenders on the Maturity Date the
aggregate principal amount of Loans outstanding on such date.
(b) The Borrower shall repay each Swing Line Loan on the earlier to
occur of (i) demand made by the Swingline Lender and (ii) the Maturity Date.
2.08 INTEREST.
(a) Subject to the provisions of clause (b), (i) each Offshore Rate
Loan shall bear interest on the outstanding principal amount thereof for each
Interest Period at a rate per annum equal to the Offshore Rate for such Interest
Period plus the Applicable Margin for Offshore Rate Loans; (ii) each Base Rate
Loan shall bear interest on the outstanding principal amount thereof from the
applicable borrowing date at a rate per annum equal to the Base Rate; and (iii)
each Swing Line Loan shall bear interest on the outstanding principal amount
thereof from the applicable borrowing date at a rate per annum equal to the Base
Rate.
(b) If any amount payable by the Borrower under any Loan Document is
not paid when due (without regard to any applicable grace periods), whether at
stated maturity, by acceleration or otherwise, such amount shall thereafter bear
interest at a fluctuating interest rate per annum at all times equal to the
relevant Default Rate to the fullest extent permitted by applicable Laws.
Furthermore, while any Event of Default exists, the Borrower shall pay interest
on the principal amount of all outstanding Obligations hereunder at an interest
rate per annum at all times equal to the relevant Default Rate to the fullest
extent permitted by Applicable Law. Accrued and unpaid interest on past due
amounts (including interest on past due interest) shall be due and payable upon
demand.
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(c) Interest on each Loan shall be due and payable in arrears on each
Interest Payment Date applicable thereto and at such other times as may be
specified herein. Interest hereunder shall be due and payable in accordance with
the terms hereof before and after judgment, and before and after the
commencement of any proceeding under any Debtor Relief Law.
2.09 FEES. In addition to certain fees described in clauses (i) and (j)
of Section 2.03:
(a) Facility Fee. The Borrower shall pay to the Administrative Agent
for the account of each Lender in accordance with its Pro Rata Share, a facility
fee equal to the Applicable Margin for the facility fee times the actual daily
amount of the Aggregate Commitments (or, if the Aggregate Commitments have
terminated, on the Outstanding Amount of all Loans, Swing Line Loans and L/C
Obligations), regardless of usage. The facility fee shall accrue at all times
during the Availability Period (and thereafter so long as any Loans, Swing Line
Loans or L/C Obligations remain outstanding), including at any time during which
one or more of the conditions in Article IV is not met, and shall be due and
payable quarterly in arrears on the last Business Day of each March, June,
September and December, commencing with the first such date to occur after the
Effective Date, and on the Maturity Date (and, if applicable, thereafter on
demand). The facility fee shall be calculated quarterly in arrears, and if there
is any change in the Applicable Margin during any quarter, the actual daily
amount shall be computed and multiplied by the Applicable Margin separately for
each period during such quarter that such Applicable Margin was in effect.
(b) Other Fees. (i) The Borrower shall pay to the Arranger and the
Administrative Agent for their own respective accounts fees in the amounts and
at the times specified in the Fee Letter. Such fees shall be fully earned when
paid and shall not be refundable for any reason whatsoever.
(ii) The Borrower shall pay to the Lenders such fees as shall
have been separately agreed upon in writing in the amounts and at the
times so specified. Such fees shall be fully earned when paid and shall
not be refundable for any reason whatsoever.
2.10 COMPUTATION OF INTEREST AND FEES. All computations of interest for
Base Rate Loans when the Base Rate is determined by Bank of America's "prime
rate" shall be made on the basis of a year of 365 or 366 days, as the case may
be, and actual days elapsed. All other computations of fees and interest shall
be made on the basis of a 360-day year and actual days elapsed (which results in
more fees or interest, as applicable, being paid than if computed on the basis
of a 365-day year). Interest shall accrue on each Loan for the day on which the
Loan is made, and shall not accrue on a Loan, or any portion thereof, for the
day on which the Loan or such portion is paid, provided that any Loan that is
repaid on the same day on which it is made shall, subject to Section 2.12(a),
bear interest for one day.
2.11 EVIDENCE OF DEBT.
(a) The Credit Extensions made by each Lender shall be evidenced by one
or more accounts or records maintained by such Lender and by the Administrative
Agent in the ordinary course of business. The accounts or records maintained by
the Administrative Agent and each
36
Lender shall be conclusive absent manifest error of the amount of the Credit
Extensions made by the Lenders to the Borrower and the interest and payments
thereon. Any failure to so record or any error in doing so shall not, however,
limit or otherwise affect the obligation of the Borrower hereunder to pay any
amount owing with respect to the Obligations. In the event of any conflict
between the accounts and records maintained by any Lender and the accounts and
records of the Administrative Agent in respect of such matters, the accounts and
records of the Administrative Agent shall control in the absence of manifest
error. Upon the request of any Lender made through the Administrative Agent, the
Borrower shall execute and deliver to such Lender (through the Administrative
Agent) a Note, which shall evidence such Lender's Loans in addition to such
accounts or records. Each Lender may attach schedules to its Note and endorse
thereon the date, Type (if applicable), amount and maturity of its Loans and
payments with respect thereto.
(b) In addition to the accounts and records referred to in clause (a),
each Lender and the Administrative Agent shall maintain in accordance with its
usual practice accounts or records evidencing the purchases and sales by such
Lender of participations in Letters of Credit and Swing Line Loans. In the event
of any conflict between the accounts and records maintained by the
Administrative Agent and the accounts and records of any Lender in respect of
such matters, the accounts and records of the Administrative Agent shall control
in the absence of manifest error.
2.12 PAYMENTS GENERALLY.
(a) All payments to be made by the Borrower shall be made without
condition or deduction for any counterclaim, defense, recoupment or setoff.
Except as otherwise expressly provided herein, all payments by the Borrower
hereunder shall be made to the Administrative Agent, for the account of the
respective Lenders to which such payment is owed, at the Administrative Agent's
Office in Dollars and in immediately available funds not later than 2:00 p.m. on
the date specified herein. The Administrative Agent will promptly distribute to
each Lender its Pro Rata Share (or other applicable share as provided herein) of
such payment in like funds as received by wire transfer to such Lender's Lending
Office. All payments received by the Administrative Agent after 2:00 p.m. shall
be deemed received on the next succeeding Business Day and any applicable
interest or fee shall continue to accrue.
(b) If any payment to be made by the Borrower shall come due on a day
other than a Business Day, payment shall be made on the next following Business
Day, and such extension of time shall be reflected in computing interest or
fees, as the case may be.
(c) Unless the Borrower or any Lender has notified the Administrative
Agent, prior to the date any payment is required to be made by it to the
Administrative Agent hereunder, that the Borrower or such Lender, as the case
may be, will not make such payment, the Administrative Agent may assume that the
Borrower or such Lender, as the case may be, has timely made such payment and
may (but shall not be so required to), in reliance thereon, make available a
corresponding amount to the Person entitled thereto. If and to the extent that
such payment was not in fact made to the Administrative Agent in immediately
available funds, then:
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(i) if the Borrower failed to make such payment, each Lender
shall forthwith on demand repay to the Administrative Agent the portion
of such assumed payment that was made available to such Lender in
immediately available funds, together with interest thereon in respect
of each day from and including the date such amount was made available
by the Administrative Agent to such Lender to the date such amount is
repaid to the Administrative Agent in immediately available funds at
the Federal Funds Rate from time to time in effect; and
(ii) if any Lender failed to make such payment, such Lender
shall forthwith on demand pay to the Administrative Agent the amount
thereof in immediately available funds, together with interest thereon
for the period from the date such amount was made available by the
Administrative Agent to the Borrower to the date such amount is
recovered by the Administrative Agent (the "Compensation Period") at a
rate per annum equal to the Federal Funds Rate from time to time in
effect. If such Lender pays such amount to the Administrative Agent,
then such amount shall constitute such Lender's Loan, included in the
applicable Borrowing. If such Lender does not pay such amount forthwith
upon the Administrative Agent's demand therefor, the Administrative
Agent may make a demand therefor upon the Borrower, and the Borrower
shall pay such amount to the Administrative Agent, together with
interest thereon for the Compensation Period at a rate per annum equal
to the rate of interest applicable to the applicable Borrowing. Nothing
herein shall be deemed to relieve any Lender from its obligation to
fulfill its Commitment or to prejudice any rights which the
Administrative Agent or the Borrower may have against any Lender as a
result of any default by such Lender hereunder.
A notice of the Administrative Agent to any Lender or the Borrower with respect
to any amount owing under this clause (c) shall be conclusive, absent manifest
error.
(d) If any Lender makes available to the Administrative Agent funds for
any Loan to be made by such Lender as provided in the foregoing provisions of
this Article II, and such funds are not made available to the Borrower by the
Administrative Agent because the conditions to the applicable Credit Extension
set forth in Article IV are not satisfied or waived in accordance with the terms
hereof, the Administrative Agent shall return such funds (in like funds as
received from such Lender) to such Lender, without interest.
(e) The obligations of the Lenders hereunder to make Loans and to fund
participations in Letters of Credit and Swing Line Loans are several and not
joint. The failure of any Lender to make any Loan or to fund any such
participation on any date required hereunder shall not relieve any other Lender
of its corresponding obligation to do so on such date, and no Lender shall be
responsible for the failure of any other Lender to so make its Loan or purchase
its participation.
(f) Nothing herein shall be deemed to obligate any Lender to obtain the
funds for any Loan in any particular place or manner or to constitute a
representation by any Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.
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2.13 SHARING OF PAYMENTS. If, other than as expressly provided
elsewhere herein, any Lender shall obtain on account of the Loans made by it, or
the participations in L/C Obligations or in Swing Line Loans held by it, any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) in excess of its ratable share (or other share
contemplated hereunder) thereof, such Lender shall immediately (a) notify the
Administrative Agent of such fact, and (b) purchase from the other Lenders such
participations in the Loans made by them and/or such subparticipations in the
participations in L/C Obligations or Swing Line Loans held by them, as the case
may be, as shall be necessary to cause such purchasing Lender to share the
excess payment in respect of such Loans or such participations, as the case may
be, pro rata with each of them; provided, however, that if all or any portion of
such excess payment is thereafter recovered from the purchasing Lender under any
of the circumstances described in Section 10.06 (including pursuant to any
settlement entered into by the purchasing Lender in its discretion), such
purchase shall to that extent be rescinded and each other Lender shall repay to
the purchasing Lender the purchase price paid therefor, together with an amount
equal to such paying Lender's ratable share (according to the proportion of (i)
the amount of such paying Lender's required repayment to (ii) the total amount
so recovered from the purchasing Lender) of any interest or other amount paid or
payable by the purchasing Lender in respect of the total amount so recovered,
without further interest thereon. The Borrower agrees that any Lender so
purchasing a participation from another Lender may, to the fullest extent
permitted by law, exercise all its rights of payment (including the right of
set-off, but subject to Section 10.09) with respect to such participation as
fully as if such Lender were the direct creditor of the Borrower in the amount
of such participation. The Administrative Agent will keep records (which shall
be conclusive and binding in the absence of manifest error) of participations
purchased under this Section and will in each case notify the Lenders following
any such purchases or repayments. Each Lender that purchases a participation
pursuant to this Section shall from and after such purchase have the right to
give all notices, requests, demands, directions and other communications under
this Agreement with respect to the portion of the Obligations purchased to the
same extent as though the purchasing Lender were the original owner of the
Obligations purchased.
ARTICLE III.
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 TAXES.
(a) Any and all payments by the Borrower to or for the account of the
Administrative Agent, any Lender or any Tax Transferee under any Loan Document
shall be made free and clear of and without deduction for any and all present or
future taxes, duties, levies, imposts, deductions, assessments, fees,
withholdings or similar charges, and all liabilities with respect thereto,
excluding, however, (i) in the case of the Administrative Agent, each Lender,
and each Tax Transferee taxes (including income taxes and branch profits taxes)
imposed on or measured by its overall net income, and franchise taxes imposed on
it (in lieu of net income taxes), by the jurisdiction (or any political
subdivision thereof) under the Laws of which the Administrative Agent or such
Lender, as the case may be, is organized or maintains a lending office; (ii) in
the case of the Administrative Agent and each Lender, such taxes (including
income taxes and branch profits taxes) imposed on or measured by the
Administrative Agent's or each Lender's overall net income and franchise taxes
imposed as a result of a present or former connection
39
between the Administrative Agent or such Lender and the jurisdiction of the
Governmental Authority imposing such tax or any political subdivision thereof or
taxing authority thereof or therein (other than any such connection arising
solely from the Administrative Agent or such Lender having executed, delivered
or performed its obligations or received a payment under, or enforced, this
Agreement or any other Loan Document); (iii) in the case of the Administrative
Agent and each Lender, any taxes, levies, imposts, duties, charges, fees,
deductions or withholdings that are in effect and that would apply to a payment
hereunder or under any other Loan Document made to the Administrative Agent or
such Lender as of the Effective Date or the date such Lender becomes a party to
this Agreement; (iv) in the case of any other Lender which changes its lending
office with respect to the Loan to an office outside the United States, any
taxes that are in effect and would apply to a payment to such Lender as of the
date of the change of the lending office; and (v) if any Person acquires any
interest in this Agreement pursuant to the provisions hereof, including, without
limitation, a participation (whether or not by operation of law) (any such
Person, a "Tax Transferee"), any taxes, levies, imposts, duties, charges, fees,
deductions or withholdings in excess of amounts treated as Taxes pursuant to
this clause in the hands of the Person from whom such interest was acquired or
prior to any change in the office in which the Loan was made, accounted for or
booked (all such non-excluded taxes, duties, levies, imposts, deductions,
assessments, fees, withholdings or similar charges, and liabilities being
hereinafter referred to as "Taxes"). If the Borrower shall be required by any
Laws to deduct any Taxes from or in respect of any sum payable under any Loan
Document to the Administrative Agent, any Lender or any Tax Transferee, (i) the
sum payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section), each of the Administrative Agent, such Lender and such Tax
Transferee receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Borrower shall make such deductions, (iii)
the Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable Laws, and (iv) within
30 days after the date of such payment, the Borrower shall furnish to the
Administrative Agent (which shall forward the same to such Lender) the original
or a certified copy of a receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any and all present or
future stamp, court or documentary taxes and any other excise or property taxes
or charges or similar levies which arise from any payment made under any Loan
Document or from the execution, delivery, performance, enforcement or
registration of, or otherwise with respect to, any Loan Document (hereinafter
referred to as "Other Taxes").
(c) If the Borrower shall be required to deduct or pay any Taxes or
Other Taxes from or in respect of any sum payable under any Loan Document to the
Administrative Agent any Lender or any Tax Transferee, the Borrower shall also
pay to the Administrative Agent, to such Lender or to such Tax Transferee, as
the case may be, at the time interest is paid, such additional amount that the
Administrative Agent, such Lender or such Tax Transferee specifies is necessary
to preserve the after-tax yield (after factoring in all taxes, including taxes
imposed on or measured by net income) that the Administrative Agent, such Lender
or Tax Transferee would have received if such Taxes or Other Taxes had not been
imposed.
(d) The Borrower agrees to indemnify the Administrative Agent, each
Lender and each Tax Transferee for (i) the full amount of Taxes and Other Taxes
(including any Taxes or
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Other Taxes imposed or asserted by any jurisdiction on amounts payable under
this Section) paid by the Administrative Agent, such Lender and such Tax
Transferee, (ii) amounts payable under Section 3.01(c) and (iii) any liability
(including additions to tax, penalties, interest and expenses) arising therefrom
or with respect thereto, in each case whether or not such Taxes or Other Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority. Payment under this clause (d) shall be made within 30 days after the
date the Lender, the Tax Transferee or the Administrative Agent makes a demand
therefor; provided, however, that the Borrower shall not be obligated to make
payment to a Lender, Tax Transferee or the Administrative Agent (as the case may
be) pursuant to this clause in respect of penalties, interest and other
liabilities attributable to any Taxes or Other Taxes, if such penalties,
interest and other liabilities are attributable to the gross negligence or
willful misconduct of such Lender, such Tax Transferee or the Administrative
Agent or its Affiliates. After a Lender, a Tax Transferee or an Administrative
Agent (as the case may be) receives written notice of the imposition of the
Taxes or Other Taxes which are subject to this Section, such Lender, such Tax
Transferee or the Administrative Agent will act in good faith to promptly notify
the Borrower of its obligations hereunder.
(e) If the Borrower is required to pay additional amounts to or for the
account of any Lender, Tax Transferee, or the Administrative Agent pursuant to
this Section as a result of a change in Laws occurring after such Lender, Tax
Transferee, or the Administrative Agent first became a party to this Agreement,
then such Lender, Tax Transferee, or the Administrative Agent, as the case may
be, will, at the request of the Borrower, change the jurisdiction of its
applicable lending office if such change (i) will eliminate or reduce any such
additional payment which may thereafter accrue and (ii) is, in such Lender's,
Tax Transferee's or the Administrative Agent's sole, reasonable discretion,
determined not to be materially disadvantageous or cause unreasonable hardship
to such Lender, Tax Transferee, or the Administrative Agent, as the case may be,
provided that fees, charges, costs or expenses that are related to such change
shall be borne by the Borrower on behalf of a Lender, a Tax Transferee, or the
Administrative Agent, and the mere existence of such expenses, fees or costs
shall not be deemed to be materially disadvantageous or cause undue hardship to
the Lender, the Tax Transferee, or the Administrative Agent, as the case may be.
(f) If and to the extent that any Lender or Tax Transferee is able, in
its reasonable discretion, to apply or otherwise take advantage of any
offsetting tax credit or other similar tax benefit arising out of or in
conjunction with any deduction or withholding which gives rise to an obligation
on the Borrower to pay any Taxes or Other Taxes pursuant to this Section then
such Lender or Tax Transferee shall, to the extent that in its sole opinion it
can do so without prejudice to the retention of the amount of such credit or
benefit and without any other adverse tax consequences for such Lender or Tax
Transferee, reimburse (less any costs and expenses incurred in connection with
or in prosecution of such applications) to the Borrower at such time as such tax
credit or benefit shall have actually been received by such Lender or Tax
Transferee such amount as such Lender or Tax Transferee shall have determined to
be attributable to the relevant deduction or withholding and as will leave such
Lender or Tax Transferee in no better or worse position than it would have been
in if the payment of such Taxes or Other Taxes had not been required.
(g) Notwithstanding anything to the contrary contained in this Section,
if a Lender or Tax Transferee is a conduit entity participating in a conduit
financing arrangement (as defined in
41
Section 7701(L) of the Code and Treasury Regulations issued thereunder) with
respect to any payments made by the Borrower under this Agreement or under any
Loan Document, the Borrower shall not be obligated to pay additional amounts to
such Lender or Tax Transferee pursuant to this Section to the extent that the
amount of Taxes exceeds the amount that would have been otherwise payable had
such Lender or Tax Transferee not been a conduit entity participating in a
conduit financing arrangement.
3.02 ILLEGALITY. If any Lender determines that any Law has made it
unlawful, or that any Governmental Authority has asserted that it is unlawful,
for any Lender or its applicable Lending Office to make, maintain or fund
Offshore Rate Loans, or to determine or charge interest rates based upon the
Offshore Rate, then, on notice thereof by such Lender to the Borrower through
the Administrative Agent, any obligation of such Lender to make or continue
Offshore Rate Loans or to convert Base Rate Loans to Offshore Rate Loans shall
be suspended until such Lender notifies the Administrative Agent and the
Borrower that the circumstances giving rise to such determination no longer
exist. Upon receipt of such notice, the Borrower shall, upon demand from such
Lender (with a copy to the Administrative Agent), prepay or, if applicable,
convert all Offshore Rate Loans of such Lender to Base Rate Loans, either on the
last day of the Interest Period therefor, if such Lender may lawfully continue
to maintain such Offshore Rate Loans to such day, or immediately, if such Lender
may not lawfully continue to maintain such Offshore Rate Loans. Upon any such
prepayment or conversion, the Borrower shall also pay accrued interest on the
amount so prepaid or converted. Each Lender agrees to designate a different
Lending Office if such designation will avoid the need for such notice and will
not, in the good faith judgment of such Lender, otherwise be materially
disadvantageous to such Lender.
3.03 INABILITY TO DETERMINE RATES. If the Required Lenders determine
that for any reason adequate and reasonable means do not exist for determining
the Offshore Rate for any requested Interest Period with respect to a proposed
Offshore Rate Loan, or that the Offshore Rate for any requested Interest Period
with respect to a proposed Offshore Rate Loan does not adequately and fairly
reflect the cost to such Lenders of funding such Loan, the Administrative Agent
will promptly so notify the Borrower and each Lender. Thereafter, the obligation
of the Lenders to make or maintain Offshore Rate Loans shall be suspended until
the Administrative Agent (upon the instruction of the Required Lenders) revokes
such notice. Upon receipt of such notice, the Borrower may revoke any pending
request for a Borrowing of, conversion to or continuation of Offshore Rate Loans
or, failing that, will be deemed to have converted such request into a request
for a Borrowing of Base Rate Loans in the amount specified therein.
3.04 INCREASED COST AND REDUCED RETURN; CAPITAL ADEQUACY.
(a) If any Lender determines that as a result of the introduction of or
any change in or in the interpretation of any Law, in each case occurring after
the Effective Date, or such Lender's compliance therewith, there shall be any
increase in the cost to such Lender of agreeing to make or making, funding or
maintaining Offshore Rate Loans or (as the case may be) issuing or participating
in Letters of Credit, or a reduction in the amount received or receivable by
such Lender in connection with any of the foregoing (excluding, however, for
purposes of this clause (a) any such increased costs or reduction in amount
resulting from (i) Taxes or Other Taxes (as to which Section 3.01 shall govern),
and (ii) changes in the basis of taxation of overall net
42
income or overall gross income by the United States or any foreign jurisdiction
or any political subdivision of either thereof under the Laws of which such
Lender is organized or has its Lending Office, then from time to time upon
demand of such Lender (with a copy of such demand to the Administrative Agent),
the Borrower shall pay to such Lender such additional amounts as will compensate
such Lender for such increased cost or reduction.
(b) If any Lender determines that the introduction of any Law regarding
capital adequacy or any change therein or in the interpretation thereof, in each
case occurring after the Effective Date, or compliance by such Lender (or its
Lending Office) therewith, has the effect of reducing the rate of return on the
capital of such Lender or any corporation controlling such Lender as a
consequence of such Lender's obligations hereunder (taking into consideration
its policies with respect to capital adequacy and such Lender's desired return
on capital), then from time to time upon demand of such Lender (with a copy of
such demand to the Administrative Agent), the Borrower shall pay to such Lender
such additional amounts as will compensate such Lender for such reduction.
3.05 FUNDING LOSSES. Upon demand of any Lender (with a copy to the
Administrative Agent) from time to time, the Borrower shall promptly compensate
such Lender for and hold such Lender harmless from any loss, cost or expense
incurred by it as a result of:
(a) any continuation, conversion, payment or prepayment of any Loan
other than a Base Rate Loan on a day other than the last day of the Interest
Period for such Loan (whether voluntary, mandatory, automatic, by reason of
acceleration, or otherwise);
(b) any failure by the Borrower (for a reason other than the failure of
such Lender to make a Loan) to prepay, borrow, continue or convert any Loan
other than a Base Rate Loan on the date or in the amount notified by the
Borrower; or
(c) any assignment of an Offshore Rate Loan on a day other than the
last day of the Interest Period therefor as a result of a request by the
Borrower pursuant to Section 10.16;
including any loss of anticipated profits and any loss or expense arising from
the liquidation or reemployment of funds obtained by it to maintain such Loan or
from fees payable to terminate the deposits from which such funds were obtained.
For purposes of calculating amounts payable by the Borrower to the Lenders under
this Section, each Lender shall be deemed to have funded each Offshore Rate Loan
made by it at the IBOR used in determining the Offshore Rate for such Loan by a
matching deposit or other borrowing in the interbank eurodollar market for a
comparable amount and for a comparable period, whether or not such Offshore Rate
Loan was in fact so funded.
3.06 MATTERS APPLICABLE TO ALL REQUESTS FOR COMPENSATION.
(a) A certificate of the Administrative Agent or any Lender claiming
compensation under this Article III and setting forth the additional amount or
amounts to be paid to it hereunder shall be conclusive in the absence of
manifest error. In determining such amount, the Administrative Agent or such
Lender may use any reasonable averaging and attribution methods.
43
(b) Upon any Lender's making a claim for compensation under Section
3.01 or 3.04, or in the event any Lender whose obligations to make Offshore Rate
Loans have been suspended under Section 3.02,the Borrower may replace such
Lender in accordance with Section 10.16.
(c) Each Lender will promptly notify the Borrower and the
Administrative Agent of any event of which it has knowledge, occurring after the
Effective Date, which will entitle such Lender to compensation pursuant to this
Article III (each, a "Trigger Event"). Notwithstanding any other provision of
this Article III, no Lender shall be entitled to any compensation pursuant to
this Article III in respect of any Trigger Event for any period of time in
excess of six months prior to such notice unless such Trigger Event is
retroactive and notice is given within six months of such retroactive Trigger
Event.
3.07 SURVIVAL. All of the Borrower's obligations under this Article III
shall survive the Termination Date.
ARTICLE IV.
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
4.01 CONDITIONS OF INITIAL CREDIT EXTENSION. The obligation of each
Lender to make its initial Credit Extension hereunder is subject to satisfaction
of the following conditions precedent:
(a) The Administrative Agent's receipt of the following, each of which
shall be originals or facsimiles (followed promptly by originals) unless
otherwise specified, each properly executed by a Responsible Officer of the
signing Obligor, each dated the Closing Date (or, in the case of certificates of
governmental officials, a recent date before the Closing Date) and each in form
and substance satisfactory to the Administrative Agent and its legal counsel:
(i) executed counterparts of this Agreement and the Guaranty
(including, with respect to the Guaranty, an executed counterpart from
Manor Care of America, as consideration for, among other things, the
repayment by the Borrower of Indebtedness of Manor Care of America
outstanding under the Existing Credit Agreement and Manor Care of
America's release as a borrower under the Existing Credit Agreement),
sufficient in number for distribution to the Administrative Agent, each
Lender and the Borrower;
(ii) a Note executed by the Borrower in favor of each Lender
requesting a Note;
(iii) such certificates of resolutions or other action,
incumbency certificates and other certificates of Responsible Officers
of each Obligor as the Administrative Agent may require evidencing the
identity, authority and capacity of each Responsible Officer thereof
authorized to act as a Responsible Officer in connection with this
Agreement and the other Loan Documents to which such Obligor is a
party;
(iv) such documents and certifications as the Administrative
Agent may reasonably require to evidence that each of the Borrower,
Manor Care of America, ManorCare Health Services, Inc., HCRC Inc.,
Health Care and Retirement Corporation of America, HCR Rehabilitation
Corp., and Heartland Rehabilitation Services, Inc. is duly
44
organized or formed, is validly existing and in good standing in its
jurisdiction of organization;
(v) a favorable opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, special
counsel to the Obligors, addressed to the Administrative Agent and each
Lender, as to certain of the matters set forth in Exhibit G and such
other matters concerning the Obligors and the Loan Documents as the
Required Lenders may reasonably request;
(vi) a favorable opinion of R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, the General
Counsel of the Borrower, addressed to the Administrative Agent and each
Lender, as to those matters set forth in Exhibit G not otherwise
covered in the opinion referenced in clause (v) and such other matters
concerning the Obligors and the Loan Documents as the Required Lenders
may reasonably request;
(vii) a certificate of a Responsible Officer of each Obligor
either (A) attaching copies of all consents, licenses and approvals
required in connection with the execution, delivery and performance by
such Obligor and the validity against such Obligor of the Loan
Documents to which it is a party, and such consents, licenses and
approvals shall be in full force and effect, or (B) stating that no
such consents, licenses or approvals are so required;
(viii) a certificate of a Responsible Officer of the Borrower
certifying (A) that the conditions specified in Section 4.02 have been
satisfied, and (B) that there has been no event or circumstance since
the date of the Audited Financial Statements that has had or could be
reasonably expected to have, either individually or in the aggregate, a
Material Adverse Effect;
(ix) a certificate of the chief financial or accounting
officer of the Borrower certifying as to the Leverage Ratio as of the
Closing Date, calculated on a pro forma basis as if the transactions
contemplated hereby (including the Senior Notes Offering and the
Convertible Notes Offering) had been consummated and the initial Credit
Extensions had been made as of December 31, 2002 (or, if the
corresponding financial statements are made available to the
Administrative Agent for the review and satisfaction of the Lenders
prior to the Closing Date, March 31, 2003);
(x) evidence that there exists no action, suit, investigation,
litigation or proceeding affecting any Obligor or any of its
Subsidiaries pending or threatened before any Governmental Authority
that (A) could reasonably be expected to have a Material Adverse Effect
or (B) purports to affect the legality, validity or enforceability of
any Loan Document or the consummation of any of the transactions
contemplated by the Loan Documents;
(xi) evidence that all insurance required to be maintained
pursuant to the Loan Documents has been obtained and is in effect;
(xii) evidence that, prior to or concurrently with the Closing
Date, all amounts owing in respect of the Existing Credit Agreement
have been paid in full and all commitments thereunder have been
terminated;
45
(xiii) evidence that, prior to or concurrently with the
Closing Date, the Borrower shall have received cash proceeds from the
issuance of at least $200,000,000 of senior unsecured notes (the
"Senior Notes Offering") in a private placement for resale pursuant to
Rule 144A under the Securities Act of 1933, on terms and conditions and
pursuant to documentation reasonably satisfactory to the Lenders;
(xiv) evidence that, prior to or concurrently with the Closing
Date, the Borrower shall have received cash proceeds from the issuance
of at least $90,000,000 of senior unsecured convertible notes (the
"Convertible Notes Offering") in a private placement for resale
pursuant to Rule 144A under the Securities Act of 1933, on terms and
conditions and pursuant to documentation reasonably satisfactory to the
Lenders; and
(xv) such other assurances, certificates, documents, consents
or opinions as the Administrative Agent, the L/C Issuer, the Swing Line
Lender or the Required Lenders reasonably may require.
(b) Any fees and expenses required to be paid on or before the Closing
Date shall have been paid.
(c) Unless waived by the Administrative Agent, the Borrower shall have
paid all Attorney Costs of the Administrative Agent to the extent invoiced prior
to or on the Closing Date, plus such additional amounts of Attorney Costs as
shall constitute its reasonable estimate of Attorney Costs incurred or to be
incurred by it through the closing proceedings and syndication (provided that
such estimate shall not thereafter preclude a final settling of accounts between
the Borrower and the Administrative Agent).
(d) The Closing Date shall have occurred on or before April 30, 2003.
4.02 CONDITIONS TO ALL CREDIT EXTENSIONS.The obligation of each Lender
to honor any Request for Credit Extension (other than a Loan Notice requesting
only a conversion of Loans to the other Type, or a continuation of Offshore Rate
Loans) is subject to the following conditions precedent:
(a) The representations and warranties of the Borrower and each other
Obligor contained in Article V or any other Loan Document shall be true and
correct in all material respects (except that any representation or warranty
that is qualified as to "materiality" or "Material Adverse Effect" shall be true
and correct in all respects) on and as of the date of such Credit Extension,
except to the extent that such representations and warranties specifically refer
to an earlier date, in which case they shall be true and correct as of such
earlier date, and except that for purposes of this Section, the representations
and warranties contained in Section 5.05 shall be deemed to refer to the most
recent statements furnished pursuant to clauses (a) and (b), respectively, of
Section 6.01.
(b) No Default shall exist, or would result from such proposed Credit
Extension.
(c) The Administrative Agent and, if applicable, the L/C Issuer or the
Swing Line Lender shall have received a Request for Credit Extension in
accordance with the requirements hereof.
46
Each Request for Credit Extension (other than a Loan Notice requesting only a
conversion of Loans to the other Type or a continuation of Offshore Rate Loans)
submitted by the Borrower shall be deemed to be a representation and warranty
that the conditions specified in Section 4.02 have been satisfied as of the date
of such request, and on and as of the date of the applicable Credit Extension.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Administrative Agent and
the Lenders that:
5.01 ORGANIZATION, POWER, AUTHORITY, ETC. The Borrower is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware, is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction where the failure so to qualify would
be reasonably likely to have a Material Adverse Effect, and has full power and
authority and holds all requisite governmental licenses, permits and other
approvals to own its assets and hold under lease its property and to conduct its
business substantially as currently conducted by it where the failure to hold
such licenses, permits, and other approvals would be reasonably likely to have a
Material Adverse Effect. Each other Obligor is a corporation duly incorporated
or partnership duly formed, validly existing and in good standing under the laws
of the jurisdiction of its incorporation or formation (to the extent applicable
to partnerships in any such jurisdiction), is duly qualified to do business and
is in good standing as a foreign corporation or partnership in each jurisdiction
where the failure so to qualify would be reasonably likely to have a Material
Adverse Effect, and has full power and authority and holds all requisite
governmental licenses, permits and other approvals to own its assets and hold
under lease its property and to conduct its business substantially as currently
conducted by it where the failure to hold such licenses, permits, and other
approvals would be reasonably likely to have a Material Adverse Effect. The
Borrower and each other Obligor has full power and authority to execute, deliver
and perform its Obligations under each Loan Document to which it is or is to be
a party, to obtain Credit Extensions hereunder, and all other actions incidental
thereto, as applicable.
5.02 AUTHORIZATION; NO CONTRAVENTION. The execution and delivery by the
Borrower and each other Obligor of each Loan Document executed or to be executed
by it, the performance by the Borrower and each other Obligor of its Obligations
hereunder and thereunder, all Credit Extensions obtained hereunder by the
Borrower, the execution, delivery and performance by each other Obligor of each
Loan Document executed or to be executed by it, and all other actions incidental
to any thereof have been duly authorized by all necessary action, do not and
will not conflict with, result in any violation of, or constitute any default
under, any provision of any Organization Document or material Contractual
Undertaking of the Borrower or such Obligor (including under any of the Notes
Documents) or any Law or court decree or order (and, in the case of any such
material Contractual Undertaking or any such Law, decree or order, such
conflict, violation or default would not be reasonably likely to have a Material
Adverse Effect) and will not result in or require the creation or imposition of
any Lien on any of the Borrower's or such Obligor's properties having an
aggregate value in excess of $500,000 pursuant to the provisions of (i) any
Contractual Undertaking (other than under this Agreement) or (ii) any Applicable
Law.
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5.03 GOVERNMENTAL APPROVAL; REGULATION. No authorization or approval or
other action by, and no notice to or filing with, any Governmental Authority is
required for the due execution, delivery or performance by the Borrower or any
other Obligor of this Agreement, the Notes or any other Loan Document to which
it is or is to be a party or the consummation of any other transactions
contemplated hereby or thereby, except for authorizations, approvals, actions,
notices or filings which have been duly obtained or made and are in full force
and effect. Neither the Borrower nor any other Obligor is (i) an "investment
company" within the meaning of the Investment Company Act of 1940 or (ii) a
"holding company", or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company", within the meaning of the Public Utility Holding Company Act of 1935.
5.04 VALIDITY, ETC. This Agreement has been duly executed and delivered
by the Borrower and constitutes the legal, valid and binding obligation of the
Borrower enforceable in accordance with its terms; and each Note and each other
Loan Document to which the Borrower or any other Obligor is or is to be a party
will, on the due execution and delivery thereof, constitute the legal, valid and
binding obligation of the Borrower or such Obligor, as the case may be,
enforceable in accordance with its terms; except, in each case, as enforcement
may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws relating to or limiting creditors' rights generally or by equitable
principles relating to enforceability.
5.05 AUDITED FINANCIAL STATEMENTS. The Audited Financial Statements,
audited by Ernst & Young LLP have been prepared in accordance with GAAP
consistently applied (except as disclosed therein) throughout the period
involved, present fairly the financial position of the Borrower and Subsidiaries
as of the date applicable and the results of their operations and cash flows for
the period then ended and show all material indebtedness and other liabilities,
direct or contingent, of the Borrower and Subsidiaries as of the date thereof,
including liabilities for taxes, material commitments and Contingent
Liabilities.
5.06 NO MATERIAL ADVERSE EFFECT. Since the date of the Audited
Financial Statements, there has been no event or circumstance, either
individually or in the aggregate, that has had or could reasonably be expected
to have a Material Adverse Effect.
5.07 LITIGATION. There is no pending or, to the best knowledge of the
Borrower, threatened litigation, action, suit, proceeding, order, investigation,
dispute or claim, at law or in equity or before or by any governmental
department, commission, board, bureau, agency or instrumentality affecting the
Borrower or any of the other Obligors, or any of their respective properties,
assets or revenues which
(a) purports to affect or pertains to any Loan Document, or any of the
transactions contemplated hereby or thereby; or
(b) individually or in the aggregate would reasonably be expected to
result in or constitute a Material Adverse Effect, except as disclosed in Item
5.07 ("Litigation") of the Disclosure Schedule;
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and none of the Obligors is subject, to the best knowledge of the Borrower, to
any arbitration proceedings under collective bargaining agreements or otherwise
or any governmental investigations or inquiries which individually or in the
aggregate have resulted or would reasonably be expected to result in or
constitute a Material Adverse Effect.
5.08 REGULATIONS U AND X. The Borrower is not engaged, nor will it be
engaged, principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying margin stock, and
less than 25% of the assets of the Borrower, individually and on a consolidated
basis with Subsidiaries, consists of margin stock. The proceeds of any Loans
made hereunder will not be used for a purpose which violates, or would be
inconsistent with, FRB Regulations U or X. Terms for which meanings are provided
in FRB Regulations U or X have such meanings when such terms are used in this
Section.
5.09 PENSION AND WELFARE PLANS. Except as disclosed in Item 5.09
("Pension and Welfare Plans") of the Disclosure Schedule:
(a) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other Laws. Each Plan which is
intended to qualify under Section 401(a) of the Code has received a favorable
determination letter from the IRS and to the best knowledge of the Borrower,
nothing has occurred which would prevent, or cause the loss of, such
qualification. The Borrower and each ERISA Affiliate have made all required
contributions to any Plan subject to Section 412 of the Code, and no application
for a funding waiver or an extension of any amortization period pursuant to
Section 412 of the Code has been made with respect to any Plan.
(b) There are no pending or, to the best knowledge of Borrower,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan which has resulted or could reasonably be expected to
result in a Material Adverse Effect. There has been no prohibited transaction or
violation of the fiduciary responsibility rules with respect to any Plan which
has resulted or could reasonably be expected to result in a Material Adverse
Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected to occur;
(ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither the
Borrower nor any ERISA Affiliate has incurred, or reasonably expects to incur,
any liability under Title IV of ERISA with respect to any Pension Plan (other
than premiums due and not delinquent under Section 4007 of ERISA); (iv) neither
the Borrower nor any ERISA Affiliate has incurred, or reasonably expects to
incur, any liability (and no event has occurred which, with the giving of notice
under Section 4219 of ERISA, would result in such liability) under Section 4201
or 4243 of ERISA with respect to a Multiemployer Plan; and (v) neither the
Borrower nor any ERISA Affiliate has engaged in a transaction that could be
subject to Section 4069 or 4212(c) of ERISA.
5.10 SUBSIDIARIES, ETC. The Borrower has (a) no Subsidiaries, except
those listed on Item 5.10(a) ("Subsidiaries") of the Disclosure Schedule and
those Subsidiaries which are permitted to have been acquired after the Effective
Date in accordance with the terms hereof, and (b) as of the Effective Date, no
equity investments in any other Person except (i) those listed on Item 5.10(b)
("Other Investments") of the Disclosure Schedule, and (ii) other equity
investments in other Persons, the aggregate value of which investments on the
Effective Date is not in excess of $100,000.
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5.11 TAXES. The Borrower and each other Obligor has filed all Federal
and all other material tax returns and reports required by Law to have been
filed by it; all such tax returns are complete and accurate in all material
respects; and the Borrower and each other Obligor has paid or properly accrued
for or withheld (as applicable) all taxes, assessments, fees and other
governmental charges thereby shown to be owing or required to be withheld,
except any such taxes or charges which are being diligently contested in good
faith by appropriate proceedings and for which adequate reserves in accordance
with GAAP shall have been set aside on its books. There is no known proposed tax
assessment against the Borrower or any Subsidiary that would, if made, have a
Material Adverse Effect.
5.12 ABSENCE OF DEFAULT. Neither the Borrower nor any other Obligor is
in default under or with respect to any Applicable Law or any Contractual
Undertaking if such default would be reasonably likely, either individually or
in the aggregate, to have a Material Adverse Effect.
5.13 LABOR CONTROVERSIES. There are no labor controversies pending or,
to the best knowledge of the Borrower, threatened against the Borrower or any
other Obligor, which would be reasonably likely to have a Material Adverse
Effect.
5.14 OWNERSHIP OF PROPERTY. Each Obligor has good record and marketable
title to, or a valid leasehold interest in, all of its properties and assets,
real and personal, of any nature whatsoever, free and clear of all Liens, except
as permitted pursuant to Section 7.03, and except for defects to title which
have not had and would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
5.15 INTELLECTUAL PROPERTY. Each Obligor owns and possesses all such
patents, patent rights, trademarks, trademark rights, trade names, trade name
rights, service marks, service ▇▇▇▇ rights, copyrights franchises, licenses and
other intellectual property rights as the Borrower considers necessary for the
conduct of the businesses of the Borrower and the other Obligors as now
conducted without, to the best knowledge of the Borrower, any infringement upon
rights of other Persons. No claim or litigation regarding any of the foregoing
is pending or, to the best knowledge of the Borrower, threatened, which, either
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
5.16 ENVIRONMENTAL MATTERS. The Borrower conducts in the ordinary
course of business a review of the effect of existing Environmental Laws and
existing Environmental Claims alleging potential liability or responsibility for
violation of any Environmental Law on its business, operations and properties,
and as a result thereof the Borrower has reasonably concluded that such
Environmental Laws and Environmental Claims could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
5.17 ACCURACY OF INFORMATION. The Borrower has disclosed to the
Administrative Agent and the Lenders (either directly or in public filings and
releases) all agreements, instruments and corporate or other restrictions to
which it or any Subsidiary is subject, and all other matters known to it, that
the breach of, or other non-compliance with, which, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect.
No report, financial statement, certificate or other information furnished
(whether in writing or
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orally) by or on behalf of any Obligor to the Administrative Agent or any Lender
in connection with the transactions contemplated hereby and the negotiation of
this Agreement or delivered hereunder (as modified or supplemented by other
information so furnished) contains any material misstatement of fact or omits to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided,
however, that, with respect to projected financial information, the Borrower
represents only that such information was prepared in good faith based upon
assumptions believed to be reasonable at the time.
5.18 INSURANCE. The properties of the Borrower and Subsidiaries are
insured with financially sound and reputable insurance companies not Affiliates
of the Borrower, in such amounts (after giving effect to any self-insurance
compatible with the following standards), with such deductibles and covering
such risks as are customarily carried by companies engaged in similar businesses
and owning similar properties in localities where the Borrower or the applicable
Subsidiary operates.
5.19 HEALTH CARE REGULATORY MATTERS.
(a) Except as disclosed in Item 5.19 ("Regulatory Matters") of the
Disclosure Schedule and except to the extent that the failure to obtain or
maintain any of the items in clauses (i) through (iv) below would not be
material to the conduct of the Borrower's business, each Facility or the
appropriate Subsidiary, as the case may be, has:
(i) where required by Applicable Law, obtained all required
CONs for the construction or expansion of or investment in such
Facility;
(ii) obtained and maintains all Health Facility Licenses
necessary to operate such Facility as a long-term care facility,
whether skilled nursing, intermediate nursing, assisted living,
Alzheimer units or other services;
(iii) obtained and maintains Medicaid Certification and
Medicare Certification with respect to such Facility to the extent such
Facility participates in the Medicaid or Medicare program, as the case
may be;
(iv) entered into and maintains its Medicaid Provider
Agreement and its Medicare Provider Agreement with respect to such
Facility; and
(v) not received, to the knowledge of the Borrower, any
▇▇▇▇-▇▇▇▇▇▇ Act funds nor has any obligations with respect to
▇▇▇▇-▇▇▇▇▇▇ Act charity care.
(b) Except as disclosed in Item 5.19 ("Regulatory Matters") of the
Disclosure Schedule, all necessary steps have been or are being taken to secure
the renewal of any Health Facility License, Medicaid Provider Agreement or
Medicare Provider Agreement issued with respect to any Facility that is to
expire within 60 days after the Effective Date and that is material to the
conduct of the Borrower's business, and there is no reasonable basis known to
the Borrower or its Subsidiaries that any such renewal will not be obtained.
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(c) Except as disclosed in Item 5.19 ("Regulatory Matters") of the
Disclosure Schedule, there are no proceedings pending, or, to the best of the
Borrower's knowledge, threatened by any Governmental Authority against the
Borrower, any Subsidiary or any Affiliate, and/or seeking to modify, revoke or
suspend any Health Facility License, Medicaid Provider Agreement, Medicare
Provider Agreement, Medicare Certification or Medicaid Certification with
respect to any Facility, which would be reasonably likely to have a Material
Adverse Effect. Since the date of the most recent Medicare Certification and
Medicaid Certification with respect to each Facility, none of the Borrower or
any Subsidiary has taken any action that would materially adversely affect such
certification or the Medicare Provider Agreement or Medicaid Provider Agreement
with respect to such Facility that would be material to the conduct of the
Borrower's business.
5.20 COMPLIANCE WITH LAWS. Each of the Borrower and each Subsidiary is
in compliance with the requirements of all Applicable Laws, except in such
instances in which (a) such requirement of Applicable Law is being contested in
good faith by appropriate proceedings diligently conducted or (b) the failure to
comply therewith, either individually or in the aggregate, could not reasonably
be expected to have a Material Adverse Effect.
5.21 TAX SHELTER REGULATIONS. The Borrower does not intend to treat the
Loans and/or Letters of Credit and related transactions as being a "reportable
transaction" (within the meaning of Treasury Regulation Section 1.6011-4). In
the event the Borrower determines to take any action inconsistent with such
intention, it will promptly notify the Administrative Agent thereof. If the
Borrower so notifies the Administrative Agent, the Borrower acknowledges that
one or more of the Lenders may treat its Loans, and/or its interest in Swing
Line Loans and/or Letters of Credit as part of a transaction that is subject to
Treasury Regulation Section 301.6112-1, and such Lender or Lenders, as
applicable, will maintain the lists and other records required by such Treasury
Regulation.
ARTICLE VI.
AFFIRMATIVE COVENANTS
The Borrower agrees with the Administrative Agent and each Lender that,
until the Termination Date has occurred, the Borrower will, and will cause each
Subsidiary to, perform the Obligations set forth in this Article VI.
6.01 FINANCIAL STATEMENTS. The Borrower will furnish, or will cause to
be furnished, to each Lender and to the Administrative Agent copies of the
following financial statements, reports and information:
(a) promptly when available and in any event within 10 days after the
date such information is required to be delivered to the SEC
(i) a consolidated balance sheet at the close of each Fiscal
Year, and related consolidated statements of income or operations,
partners' or stockholders' equity and cash flow for such Fiscal Year,
of the Borrower and its Subsidiaries, in each case (with comparable
information at the close of and for the prior Fiscal Year), prepared in
accordance with GAAP consistently applied and audited without
Impermissible
52
Qualification by a firm of independent, nationally recognized certified
public accountants,
(ii) a letter report of such firm of independent certified
public accountants at the close of such Fiscal Year to the effect that
nothing has come to their attention that has caused them to believe
that the Borrower is not in compliance with any of the terms,
covenants, provisions or conditions of Sections 7.04, 7.05 or 7.09
insofar as such terms, covenants, provisions or conditions relate to
accounting matters, and
(iii) a Compliance Certificate, including computation of the
financial covenants contained in Section 7.04, calculated as of the
close of such Fiscal Year;
(b) promptly when available and in any event within 5 days after the
date such information is required to be delivered to the SEC, beginning with the
Fiscal Quarter ending March 31, 2003,
(i) a consolidated balance sheet at the close of each Fiscal
Quarter, and consolidated statements of income or operations, and
partners' or stockholders' equity for such Fiscal Quarter, and
consolidated statements of earnings, partners' or stockholders' equity
and cash flow for the period commencing at the close of the previous
Fiscal Year and ending with the close of such Fiscal Quarter, of the
Borrower and Subsidiaries, in each case (with comparable information at
the close of and for the corresponding Fiscal Quarter of the prior
Fiscal Year and for the corresponding portion of such prior Fiscal
Year) prepared in accordance with GAAP consistently applied, certified
by the principal accounting or financial officer who is a Responsible
Officer of the Borrower, and
(ii) a Compliance Certificate, including computation of the
financial covenants contained in Section 7.04, calculated as of the
close of such Fiscal Quarter;
(c) promptly upon receipt thereof, copies of all management letters or
recommendations submitted to the board of directors (or the audit committee of
the board of directors) of the Borrower and other detailed information (if any),
including audit reports, prepared with respect to the Borrower by any
independent public accountants in connection with the accounts or books of the
Borrower or any Subsidiary and each annual or interim audit (in the case of
interim audits, if any) made by such independent public accountants of the books
of the Borrower or any Subsidiary;
(d) promptly upon any filing thereof by the Borrower or any Subsidiary
with the SEC or with any securities exchange on which any of their respective
securities are then listed, any annual, periodic or special report or
registration statement that is then generally available to the public and not
otherwise required to be delivered to the Administrative Agent pursuant hereto
and promptly after the same are available, copies of each annual report, proxy
or financial statement or other report or material communication sent to the
stockholders of the Borrower;
(e) promptly following the mailing or receipt of any notice, report or
other information (to the extent not duplicative of any notice, report or other
information delivered to each Lender and the Administrative Agent under the
terms of any Loan Document) delivered under the terms of any Notes Document,
copies of such notice, report or other information;
53
(f) promptly after the Borrower has notified the Administrative Agent
of any intention by the Borrower to treat the Loans and/or Letters of Credit and
related transactions as being a "reportable transaction" (within the meaning of
Treasury Regulation Section 1.6011-4), a duly completed copy of IRS Form 8886 or
any successor form; and
(g) such other information with respect to the financial condition,
business, financial or corporate affairs of the Borrower or any Subsidiary, or
compliance with the terms of the Loan Documents, as the Administrative Agent or
any Lender may from time to time reasonably request.
Each of the financial statements referred to in Sections 6.01(a) and 6.01(b)
will fairly present the financial position of the Borrower and its Subsidiaries
as of the dates and for the periods stated therein, subject, in the case of
unaudited financial statements, only to changes resulting from normal year-end
audit adjustments (none of which would, alone or in the aggregate, have a
Material Adverse Effect) and the absence of footnotes.
Documents required to be delivered pursuant to Sections 6.01(a), 6.01(b) or, to
the extent any such documents are included in materials otherwise filed with the
SEC, 6.01(d) may be delivered electronically and if so delivered, shall be
deemed to have been delivered on the date (i) on which the Borrower posts such
documents, or provides a link thereto on the Borrower's website on the Internet
at the website address listed on Schedule 10.02; or (ii) on which such documents
are posted on the Borrower's behalf on IntraLinks/IntraAgency or another
relevant website, if any, to which each Lender and the Administrative Agent have
access (whether a commercial, third-party website or whether sponsored by the
Administrative Agent); provided, however, that: (x) the Borrower shall deliver
paper copies of such documents to the Administrative Agent or any Lender that
requests the Borrower to deliver such paper copies until a written request to
cease delivering paper copies is given by the Administrative Agent or such
Lender and (y) the Borrower shall notify (which may be by facsimile or
electronic mail) the Administrative Agent and each Lender of the posting of any
such documents and provide to the Administrative Agent by electronic mail
electronic versions (i.e., soft copies) of such documents. Notwithstanding
anything contained herein, in every instance the Borrower shall be required to
provide paper copies of the Compliance Certificates to the Administrative Agent
and each of the Lenders. Except for such Compliance Certificates, the
Administrative Agent shall have no obligation to request the delivery or to
maintain copies of the documents referred to above, and in any event shall have
no responsibility to monitor compliance by the Borrower with any such request
for delivery, and each Lender shall be solely responsible for requesting
delivery to it or maintaining its copies of such documents.
6.02 MAINTENANCE OF EXISTENCE, ETC. Except as expressly otherwise
permitted by Section 8.06 or 8.07, the Borrower will:
(a) cause to be done at all times all things necessary to maintain and
preserve the existences, rights (statutory and other) and franchises (including
licenses, authorizations and permits necessary to the operation of its
businesses) of the Borrower and Subsidiaries, in the case of the Borrower, as a
corporation and in the case of each Subsidiary, as a partnership or corporation
or other business entity, as the case may be, unless the failure so to do in any
case could not reasonably be expected to have a Material Adverse Effect;
54
(b) as of the Effective Date and thereafter, continue to own and hold,
directly or indirectly, free and clear of all Liens (except for the Liens
permitted by Section 7.03(c)), all of the outstanding shares of Equity Interests
(excluding directors' qualifying shares, if any) of each wholly owned
Subsidiary; and
(c) preserve or renew all of its registered patents, trademarks, trade
names and service marks, the non-preservation of which could reasonably be
expected to have a Material Adverse Effect.
6.03 FOREIGN QUALIFICATION. The Borrower will, and will cause each
Subsidiary to, cause to be done at all times all things necessary to be duly
qualified to do business and be in good standing as a foreign corporation or
partnership (to the extent applicable to partnerships in any such jurisdiction)
in each jurisdiction where the failure so to qualify would individually or in
the aggregate reasonably be expected to have a Material Adverse Effect.
6.04 PAYMENT OF TAXES. The Borrower will, and will cause each
Subsidiary to, pay and discharge, as the same may become due and payable, all
Federal, state, local and foreign taxes, assessments, fees and other
governmental charges or levies against it or on any of its property or assets or
the income or profits therefrom in excess of $500,000 in the aggregate;
provided, however, that the foregoing shall not require the Borrower or any
Subsidiary to pay or discharge any such tax, assessment, fee, charge or levy so
long as it shall be diligently contesting the validity thereof in good faith by
appropriate proceedings and shall have set aside on its books adequate reserves
in accordance with GAAP with respect thereto.
6.05 INSURANCE. The Borrower will, and will cause each Subsidiary to,
maintain, with reputable, financially sound insurance companies, insurance with
respect to its properties and business against such loss, damage or casualties
and contingencies and of such types and in such amounts as is customary in
accordance with prudent business practice in the case of similar businesses in
similar locations and will from time to time, upon the reasonable request of the
Administrative Agent, furnish a certificate of a Responsible Officer of the
Borrower setting forth the nature and extent of all insurance maintained by the
Borrower and its Subsidiaries in accordance with this Section.
6.06 NOTICE OF DEFAULT, LITIGATION, ETC. The Borrower will give prompt
notice (but in no event later than ten days after any Responsible Officer of the
Borrower has or should reasonably have obtained knowledge thereof) (with a
description in reasonable detail of the nature and period of existence thereof
and of the actions which the Borrower has taken and proposes to take with
respect thereto) to the Administrative Agent and each Lender of:
(a) the occurrence of any Default;
(b) any litigation, arbitration or governmental investigation,
suspension or proceeding not previously disclosed by the Borrower to the Lenders
which has been instituted or, to the knowledge of the Borrower, is threatened
against, the Borrower or any of its Subsidiaries or to which any of its
properties, assets or revenues is subject which;
(i) would be reasonably likely to have a Material Adverse
Effect, or
55
(ii) relates to any Loan Document;
(c) the occurrence of any other circumstance of which any of the
officers of the Borrower has knowledge and which has a reasonable likelihood of
resulting in a Material Adverse Effect;
(d) any material adverse development which shall occur in any
litigation, arbitration or governmental investigation or proceeding previously
disclosed by the Borrower to the Lenders; and
(e) of the occurrence of any of the following events affecting the
Borrower or any ERISA Affiliate:
(i) an ERISA Event;
(ii) a material increase in the Unfunded Pension Liability of
any Pension Plan:
(iii) the adoption of, or the commencement of contributions
to, any Plan subject to Section 412 of the Code by the Borrower or any
ERISA Affiliate; or
(iv) the adoption of any amendment to a Plan subject to
section 412 of the Code, if such amendment results in a material
increase in contributions or Unfunded Pension Liability.
6.07 PERFORMANCE OF OBLIGATIONS. The Borrower will, and will cause each
Subsidiary to, (a) perform promptly and faithfully all of its Obligations under
each Loan Document executed by it and (b) comply with the provisions of all
contracts or agreements to which it is a party or by which it is bound, whether
oral or written, express or implied, and pay all obligations which it has
incurred or may incur pursuant to any such contract or agreement as such
obligations become due, where the failure so to comply or make such payment
would, individually or in the aggregate with all such other failures, have a
Material Adverse Effect.
6.08 BOOKS AND RECORDS; INSPECTION RIGHTS. The Borrower will, and will
cause each Subsidiary to, (a) keep proper books, accounts and records reflecting
all of its business and financial affairs and transactions so that its
consolidated financial statements are in accordance with GAAP and maintain such
books, accounts and records in material conformity with all applicable
requirements of any Governmental Authority having regulatory jurisdiction over
the Borrower or such Subsidiary, as the case may be, and (b) permit
representatives and independent contractors of the Administrative Agent and the
Lenders, on reasonable notice and at reasonable times during ordinary business
hours and as often as may be reasonably desired, to visit all of its offices and
properties, discuss its financial matters with officers of any Subsidiary and
its independent public accountants, and examine and make copies or abstracts
from any of its books or other corporate records; provided, however, that when
an Event of Default exists the Administrative Agent or any Lender (or any of
their respective representatives or independent contractors) may do any of the
foregoing at the expense of the Borrower at any time during normal business
hours with reasonable prior notice. The Borrower shall pay any reasonable fees
56
of such independent public accountants incurred in connection with the exercise
by the Administrative Agent and the Lenders of their rights pursuant to this
Section.
6.09 COMPLIANCE WITH LAWS. The Borrower will, and will cause each
Subsidiary to, comply with the requirements of all Applicable Laws (including
Environmental Laws), the noncompliance with which would reasonably be expected
to have a Material Adverse Effect.
6.10 PARI PASSU. The Borrower will ensure that the Obligations will at
all times rank at least pari passu with all other unsecured, unsubordinated
Indebtedness of the Obligors, except to the extent any such Indebtedness may be
preferred by law.
6.11 MAINTENANCE OF PROPERTY. The Borrower will, and will cause each
Subsidiary to, at their joint and several expense, maintain and keep its
properties and equipment which are used or useful to its business in good
repair, working order and condition (except for ordinary wear and tear), and
from time to time make all necessary or desirable repairs, renewals and
replacements, so that its businesses may be properly and advantageously
conducted at all times, and use the standard of care typical in the industry in
the operation and maintenance of its facilities.
6.12 ADDITIONAL GUARANTORS.
(a) As soon as practicable (and in any event within 30 days) following
the Acquisition or creation of any Subsidiary by the Borrower or any Subsidiary
after the Effective Date which is not already a Guarantor and which is not a
Non-Obligor, the Borrower shall immediately notify the Administrative Agent and
thereafter cause such Subsidiary to become a Guarantor by executing an
Assumption Agreement in the form of Exhibit 1 to the Guaranty to the extent
permissible under Applicable Law.
(b) If any Non-Obligor of the type referred to in (i) clause (a)(i) of
the definition of "Non-Obligor" ceases to be dormant and/or becomes a wholly
owned Subsidiary, as applicable, at any time, or (ii) clause (b) of the
definition of "Non-Obligor" has a total asset value of greater than $1,000,000
at any Fiscal Quarter end, then, in either case, the Borrower shall notify the
Administrative Agent thereof within 30 days thereof and thereafter cause such
Subsidiary to become a Guarantor by executing an Assumption Agreement in the
form of Exhibit 1 to the Guaranty to the extent permissible under Applicable
Law.
In addition, in each of the foregoing cases, the Borrower shall cause such
Subsidiary to provide the Administrative Agent with such additional instruments
or documents, including opinions of counsel (which shall cover, among other
things, the legality, validity, binding effect and enforceability of the
Assumption Agreement), certified resolutions, incumbency certificates, third
party consents and other evidences of authority, with respect to such
Subsidiary's ratification of, and assumption of all Obligations under, the
Guaranty, as the Administrative Agent shall reasonably request and all in form,
content and scope reasonably satisfactory to the Administrative Agent.
6.13 USE OF PROCEEDS. The Borrower shall use the proceeds of the Credit
Extensions (a) to refinance amounts owing in respect of, and to replace, the
Existing Credit Agreement and (b) for general corporate purposes (including
working capital, capital expenditures and
57
Acquisitions not prohibited hereunder) of the Borrower and Subsidiaries, not in
contravention of any Law or any Loan Document.
ARTICLE VII.
NEGATIVE COVENANTS
The Borrower agrees with the Administrative Agent and each Lender that,
until the Termination Date has occurred, the Borrower will, and will cause each
Subsidiary to, perform the Obligations set forth in this Article VII.
7.01 BUSINESS ACTIVITIES. The Borrower will not, nor will it permit any
Subsidiary to, engage in any business activity other than the businesses carried
on by such Persons on the Effective Date and such other businesses as may be
incidental or related thereto and other businesses relating to health care
services.
7.02 INDEBTEDNESS. The Borrower will not permit any Subsidiary to
create, incur, assume or suffer to exist or otherwise become or be liable in
respect of any Indebtedness other than (without duplication):
(a) Indebtedness in respect of the Loans, the Letters of Credit and
other Obligations;
(b) [Intentionally Omitted];
(c) Indebtedness in respect of taxes, assessments or governmental
charges to the extent that payment thereof shall not at the time be required to
be made in accordance with the provisions of Section 6.04 or which is being
contested in good faith, by diligent proceedings, for which adequate reserves in
accordance with GAAP shall have been set aside and with respect to which no Lien
has attached;
(d) Indebtedness in respect of judgments or awards not constituting an
Event of Default under Section 8.01(h);
(e) Indebtedness for Borrowed Money secured by Liens permitted by
Section 7.03(b), provided, however, that the aggregate outstanding principal
amount of Indebtedness incurred pursuant to this clause (e) shall at no time
exceed $75,000,000;
(f) refinancings, renewals, replacements or extensions of Indebtedness
permitted by clause (e), (g), (h) or (l), in an amount not greater than the
amount required to repay the Indebtedness so refinanced, including reasonable
fees and premiums actually paid in connection therewith, and otherwise
conforming to the terms of such clauses;
(g) Indebtedness secured by Liens permitted by Section 7.03(l);
(h) Indebtedness of Subsidiaries acquired after the Effective Date
existing at the time of such Acquisition or attaching to assets purchased as
part of the purchase of all or substantially all the assets of a Person or any
distinct business segment of a Person and not created in anticipation of such
acquisition, so long as after giving effect to such Indebtedness no Default
shall exist hereunder;
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(i) Contingent Liabilities in respect of any obligation of the Borrower
or any Subsidiary not prohibited by this Agreement;
(j) Indebtedness in respect of interest rate risk management
agreements;
(k) Indebtedness owing to the Borrower or any other Subsidiary;
(l) existing Indebtedness listed on Item 7.02(l) ("Existing
Indebtedness") of the Disclosure Schedule;
(m) Capitalized Lease Liabilities of the Obligors (other than the
Borrower) that together with all Indebtedness outstanding under clause (o) and
all Capitalized Lease Liabilities outstanding (other than Capitalized Lease
Liabilities under clauses (h) and (l)) do not exceed $75,000,000 in the
aggregate outstanding at any one time, so long as after giving effect to the
incurrence of such Capitalized Lease Liabilities no Default shall exist
hereunder;
(n) Indebtedness represented by notes or letters of credit issued in
connection with insurance policies and in a form substantially similar to the
notes or letters of credit set forth in Item 7.02(n) ("Insurance Indebtedness")
of the Disclosure Schedule and issued in connection with existing insurance
policies of any Subsidiary; and
(o) other Indebtedness that together with all Capitalized Lease
Liabilities outstanding under clause (m) (other than Capitalized Lease
Liabilities under clauses (h) and (l) hereof) does not exceed $75,000,000 in the
aggregate outstanding at any one time, so long as after giving effect to the
incurrence of such Indebtedness no Default shall exist hereunder.
7.03 LIENS. The Borrower will not, nor will it permit any Subsidiary
to, create, incur, assume or suffer to exist any Lien upon any of its property,
revenues or assets, whether now owned or hereafter acquired, except (without
duplication):
(a) Liens encumbering the assets of the Borrower or any of its
Subsidiaries which were granted and in effect prior to the Effective Date to
secure Indebtedness permitted pursuant to Section 7.02(l) as listed in Item
7.03(a) ("Existing Liens") of the Disclosure Schedule;
(b) Liens (excluding, however, precautionary filings and Liens in
respect of Capitalized Lease Liabilities) in respect of property acquired or
constructed or improved by any Subsidiary for the account of such Subsidiary or
in connection with CON's held by any Subsidiary, to secure Indebtedness for
Borrowed Money assumed or incurred to finance all or any part of the purchase
price or cost of construction or improvement of such property, but any such Lien
shall cover only the property so acquired or constructed and any improvements
thereto (and any real property on which such property is located, if such
property is a building, improvement or fixture);
(c) Liens for taxes, assessments or other governmental charges or
levies not at the time delinquent or thereafter payable without penalty or being
contested in good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP shall have been set aside on its books;
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(d) Liens of carriers, warehousemen, mechanics, materialmen, repairmen,
landlords or other Liens of a like nature incurred in the ordinary course of
business for sums not overdue or being contested in good faith by appropriate
proceedings and for which adequate reserves shall have been set aside on its
books;
(e) Liens incurred in the ordinary course of business in connection
with workmen's compensation, unemployment insurance or other social security
legislation (other than any Lien imposed by ERISA), or to secure performance of
bids, tenders, trade contracts (other than for Indebtedness), statutory
obligations, leases and contracts (other than for borrowed money) entered into
in the ordinary course of business or to secure obligations on surety or appeal
bonds or performance bonds;
(f) judgment Liens not constituting an Event of Default under Section
8.01(h)
(g) easements, restrictions and other minor defects of title affecting
real property which are not, in the aggregate, material and which do not,
individually or in the aggregate, have a Material Adverse Effect;
(h) extensions, renewals or replacements of any Liens permitted under
clauses (a) and (b), but only if the principal amount of the Indebtedness
secured by such Lien immediately prior to such extension, renewal or replacement
is not increased, and the Lien is not extended to other property;
(i) Liens securing Indebtedness of the type permitted by Section
7.02(m);
(j) Liens in respect of Capitalized Lease Liabilities of Subsidiaries
acquired after the Effective Date existing at the time of the Acquisition and
not created in anticipation of the Acquisition;
(k) leases or subleases granted to others not interfering in any
material respect with the business of the Borrower or any Subsidiary, and any
interest or title of a lessor under any lease permitted by this Agreement;
(l) purchase money Liens securing payables arising from the purchase by
any Subsidiary of any equipment or goods in the ordinary course of business,
provided that such payables do not constitute Indebtedness for Borrowed Money;
(m) rights of set off incidental to Indebtedness permitted hereunder;
(n) Liens securing Indebtedness permitted under Section 7.02(h)
attaching only to the property so acquired and not created in anticipation of
such acquisition; and
(o) other Liens securing Indebtedness otherwise not prohibited under
this Agreement in an aggregate amount not to exceed $25,000,000.
7.04 FINANCIAL CONDITION. The Borrower will not permit any of the
events set forth below to occur.
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(a) Debt to Capitalization Ratio. The Borrower will not permit, at any
time, the Debt to Capitalization Ratio to be greater than 0.55:1.00.
(b) Fixed Charge Coverage Ratio. The Borrower will not, as of the last
day of any Fiscal Quarter, permit the Fixed Charge Coverage Ratio to be less
than 2.50:1.00.
(c) Leverage Ratio. The Borrower will not, as of the last day of any
Fiscal Quarter, permit the Leverage Ratio to be greater than 3.00:1.00.
7.05 RESTRICTED PAYMENTS. The Borrower shall not declare or make,
directly or indirectly, any Restricted Payment, except that the Borrower may:
(a) declare and make dividend payments or other distributions payable
solely in its common stock or make cash payments for the redemption of
fractional shares;
(b) purchase, redeem or otherwise acquire shares of its common stock or
warrants or options to acquire any such shares with the proceeds received from
the substantially concurrent issue of new shares of its common stock;
(c) subdivide its outstanding shares of common stock into a larger
number of shares of common stock, including, without limitation, by means of a
stock split;
(d) purchase, redeem or otherwise acquire shares of its common stock in
connection with the administration of the Borrower's employee benefits and stock
option program; and
(e) declare or pay cash dividends to its stockholders and purchase,
redeem or otherwise acquire shares of its capital stock or warrants, rights or
options to acquire any such shares for cash;
provided, however, that the cumulative amount of such Restricted Payments shall
not exceed (i) $230,000,000 in the aggregate in the 2003 Fiscal Year, (ii)
$200,000,000 in the aggregate in each Fiscal Year thereafter, and (iii) at any
time over the life of this Agreement, the sum of (A) $350,000,000 plus (B) 50%
of net income of the Borrower and its Subsidiaries arising after December 31,
2002, computed on a cumulative consolidated basis; and provided further that, in
no event may any such Restricted Payment be made if, immediately after giving
effect thereto, any Default or Event of Default would exist. The provisions of
this Section shall not be breached by the payment of any dividend within 60 days
after the declaration thereof if, at such date of declaration, the making of
such payment would not have been in violation of this Section.
7.06 CONSOLIDATION, MERGER, ETC. The Borrower will not, and will not
permit any other Obligor to, liquidate or dissolve, consolidate with, or merge
into or with, any other Person, except (i) that any other Obligor may liquidate
or dissolve into, or merge with and into, the Borrower (so long as the Borrower
is the surviving Person) or another Obligor and (ii) in connection with any
merger permitted by Section 7.07 or 7.12.
7.07 ASSET DISPOSITIONS, ETC. The Borrower will not, nor will it permit
any Subsidiary to, Dispose of, or grant options, warrants or other rights with
respect to, any of its assets
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(including accounts receivable and Equity Interests of Subsidiaries but
excluding, however, Borrower's Equity Interests) to any Person, except for:
(a) orderly liquidations of Cash Equivalent Investments;
(b) sales of nutritional products, pharmaceuticals, and other health
care-related products in the ordinary course of business;
(c) Dispositions to the Borrower or any Subsidiary; provided, however,
that if the acquiring Subsidiary is, immediately prior to the Disposition, a
Non-Obligor and, as a result of such Disposition, such acquiring Subsidiary
would be required pursuant to the terms hereof to become a Guarantor, then,
prior to or simultaneously with such Disposition, the Borrower shall cause such
Subsidiary to become a Guarantor by executing an Assumption Agreement in the
form of Exhibit 1 to the Guaranty to the extent permissible under Applicable
Law;
(d) sales by the Borrower or its Subsidiaries of recently constructed
development facilities in accordance with historical practices; and
(e) other Dispositions not in excess of (i) in any Fiscal Year, 15% of
the Consolidated total assets of the Borrower and its Subsidiaries as of the
Effective Date or (ii) over the term of this Agreement, 25% of the Consolidated
total assets of the Borrower and its Subsidiaries as of the Effective Date, so
long as, in each case after giving effect to any such Disposition, no Default
shall have occurred and be continuing.
In connection with any proposed Disposition permitted under this Section of a
Subsidiary that is an Obligor to a Person that is not another Subsidiary, the
Administrative Agent shall, upon request of the Borrower and so long as no
Default shall have occurred and be continuing, provide a release of the Guaranty
with respect to such Subsidiary, such release to be effective upon such
permitted Disposition of such Subsidiary. The Borrower shall provide such
certification or other evidence reasonably satisfactory to the Administrative
Agent demonstrating that such proposed Disposition is permitted under this
Section.
7.08 MODIFICATION OF CERTAIN INSTRUMENTS, ORGANIZATION DOCUMENTS, ETC.
The Borrower will not, and will not permit any Subsidiary to, consent to any
amendment, supplement or other modification of any of the terms or provisions
contained in the Borrower's or any such Subsidiaries' Organization Documents
which would have a Material Adverse Effect.
7.09 TRANSACTIONS WITH AFFILIATES. The Borrower will not, and will not
permit any Subsidiary to, enter into, or cause, suffer or permit to exist, any
arrangement or contract with any of its other Affiliates, whether or not in the
ordinary course of business, unless such arrangement is fair and equitable to
the Borrower or such Subsidiary and is not of a sort which would not be entered
into by a prudent Person in the position of the Borrower or such Subsidiary
with, or which is on terms which are less favorable than are obtainable from,
any Person which is not one of its Affiliates; provided, however, that nothing
in this Section shall restrict (i) compensation, advances or loans payable to
directors or officers of the Obligors in the ordinary course of business
consistent with prior practices and otherwise in compliance with the United
States ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 or (ii) transactions approved by a majority of
the disinterested members of the Board of Directors of Borrower or the
applicable Subsidiary.
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7.10 RESTRICTIVE AGREEMENTS. The Borrower will not, and will not permit
any Subsidiary to, enter into any agreement (other than a Loan Document) which
(a) except with respect to specific property encumbered to secure payment of
Indebtedness related to such property permitted under Sections 7.02 and 7.03,
imposes restrictions greater in the aggregate than those under this Agreement
upon the creation or assumption of any Lien upon its properties, revenues or
assets, whether now owned or hereafter acquired; (b) limits the ability of any
Obligor to guarantee the Obligations in accordance with the terms hereof; or (c)
restricts the making or payment of Restricted Payments by any Subsidiary to the
Borrower or in respect of Indebtedness of the Borrower.
7.11 ENVIRONMENTAL MATTERS. The Borrower will not, nor will it permit
any Subsidiary to, violate any Environmental Law if such violation would be
reasonably likely to have a Material Adverse Effect and, without limiting the
foregoing, the Borrower will not, and will not permit any Person to, except in
accordance with Applicable Law, dispose of any Hazardous Material into, onto or
from any real property owned or operated by the Borrower or any Subsidiary, nor
allow any Lien imposed pursuant to any law, regulation or order relating to
Hazardous Materials or the disposal thereof to remain on such real property,
which disposal or Lien would be reasonably likely to have a Material Adverse
Effect.
7.12 ACQUISITIONS. The Borrower will not, nor will it permit any
Subsidiary to, make any Acquisition unless
(a) immediately before and after giving effect to the consummation of
each Acquisition, no Default has occurred and is continuing or will exist;
(b) for each such Acquisition involving the purchase of a majority of
the Equity Interests of another party, the prior, effective written consent or
approval to such Acquisition of the board of directors or equivalent governing
body of the other party or parties has been obtained; and
(c) the aggregate value of the cash or other non-stock consideration
(including Indebtedness assumed by the Borrower or its Subsidiaries in
connection therewith) for all such Acquisitions (other than those described in
the following proviso) does not exceed $150,000,000 in any Fiscal Year;
provided, however, that notwithstanding the foregoing, any Subsidiary of the
Borrower may be merged or consolidated with or into (i) the Borrower if the
Borrower shall be the continuing or surviving corporation or (ii) any other
Subsidiary of the Borrower (so long as such other Subsidiary, if it is an
Obligor, shall be the continuing or surviving corporation).
ARTICLE VIII.
EVENTS OF DEFAULT AND REMEDIES
8.01 EVENTS OF DEFAULT. The term "Event of Default" shall mean any of
the events set forth in this Section.
(a) Non-Payment. The Borrower or any other Obligor shall default in the
payment or prepayment when due (whether at stated maturity or by acceleration,
mandatory prepayment or
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otherwise) of any principal of, or any interest in respect of, any Loan or any
other amount due under any Loan Document, and, in the case of interest or any
other amount due, continuance of such default for 3 Business Days or more; or
(b) Non-Performance of Specific Covenants. The Borrower shall default
in the due performance or observance of any of its obligations under
(i) Sections 6.01(a), (b) or (c), 6.06, 6.08(b), 6.13, 7.02
through 7.09 or 7.12(a) or (b) and (if such default can be remedied
within the grace period provided in this clause (b) by the Borrower)
such default shall continue unremedied for a period of 5 days after the
earlier of (x) notice thereof having been given to the Borrower by the
Administrative Agent or any Lender or (y) the date on which a
Responsible Officer of the Borrower had actual knowledge of such
default; or
(ii) Section 7.12(c) and (if such default can be remedied
within the grace period provided in this clause (b) by the Borrower)
such default shall continue unremedied for a period of 5 Business Days
after the earlier of (x) notice thereof having been given to the
Borrower by the Administrative Agent or any Lender or (y) the date on
which a Responsible Officer of the Borrower had actual knowledge of
such default; or
(c) Non-Performance of Other Covenants. Any Obligor shall default in
the due performance and observance of any other agreement contained herein or in
any other Loan Document executed by it, and (if such default does not otherwise
constitute an Event of Default under this Article VIII and can be remedied
within the grace period provided in this clause (c) by such Obligor) such
default shall continue unremedied for a period of 30 days after the earlier of
(x) notice thereof having been given to the Borrower by the Administrative Agent
or any Lender or (y) the date on which a Responsible Officer of the applicable
Obligor had actual knowledge of such default.
(d) Bankruptcy, Insolvency, etc. The Borrower or a Material Group of
Subsidiaries shall:
(i) become insolvent or generally fail to pay, or admit in
writing its inability to pay, debts as they become due;
(ii) apply for, consent to, or acquiesce in, the appointment
of a trustee, receiver, sequestrator or other custodian for the
Borrower or any Material Group of Subsidiaries or any property of any
thereof, or make a general assignment for the benefit of creditors;
(iii) in the absence of such application, consent or
acquiescence, permit or suffer to exist the appointment of a trustee,
receiver, sequestrator, conservator, liquidator, rehabilitator or other
custodian for the Borrower or any Material Group of Subsidiaries or for
a substantial part of the property of any thereof, and such trustee,
receiver, sequestrator, conservator, liquidator, rehabilitator or other
custodian shall not be discharged or stayed within 60 days;
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(iv) permit or suffer to exist the commencement of any case or
proceeding under any Debtor Relief Law, or any dissolution, winding up
or liquidation proceeding, in respect of the Borrower or any Material
Group of Subsidiaries and, if such case or proceeding is not commenced
by the Borrower or any Material Group of Subsidiaries, such case or
proceeding shall be consented to or acquiesced in by the Borrower or
any Material Group of Subsidiaries or shall result in the entry of an
order for relief or shall remain for 60 days undismissed or unstayed;
or
(v) take any corporate action authorizing, or in furtherance
of, any of the foregoing.
(e) Representations and Warranties. Any representation, warranty,
certification or statement of fact made by or on behalf of the Borrower
hereunder or of the Borrower or any other Obligor in any other Loan Document or
any other writing furnished by or on behalf of the Borrower or any other Obligor
to the Administrative Agent or any Lender for the purposes of or in connection
with this Agreement or any such Loan Document is or shall be incorrect or
misleading when made or deemed made in any material respect (except that any
representation, warranty, certification or statement of fact that is qualified
as to "materiality" or "Material Adverse Effect" shall be incorrect or
misleading in any respect).
(f) Cross-Default. The Borrower or any Obligor (i) fails to make any
payment in respect of any Indebtedness for Borrowed Money having an aggregate
principal amount (including undrawn committed or available amounts and including
amounts owing to all creditors under any combined or syndicated credit
arrangement) of more than $10,000,000 when due (whether by scheduled maturity,
required prepayment, acceleration, demand, or otherwise) and such failure
continues after the applicable grace or notice period, if any, specified in the
relevant document on the date of such failure; or (ii) fails to perform or
observe any other condition or covenant, or any other event shall occur or
condition exist, under any agreement or instrument relating to any such
Indebtedness, and such failure continues after the applicable grace or notice
period, if any, specified in the relevant document on the date of such failure
if the effect of such failure, event or condition is to cause, or to permit the
holder or holders of such Indebtedness or beneficiary or beneficiaries of such
Indebtedness (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause such Indebtedness to be declared to be
due and payable prior to its stated maturity.
(g) ERISA (i) An ERISA Event shall occur with respect to a Pension Plan
or Multiemployer Plan which has resulted or could reasonably be expected to
result in liability of the Borrower under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of $5,000,000;
(ii) the aggregate amount of Unfunded Pension Liability among all Pension Plans
at any time exceeds $5,000,000; or (iii) the Borrower or any ERISA Affiliate
shall fail to pay when due, after the expiration of any applicable grace period,
any installment payment with respect to its withdrawal liability under Section
4201 of ERISA under a Multiemployer Plan in an aggregate amount in excess of
$5,000,000.
(h) Judgments. Any undischarged, unstayed, unbonded final judgments or
orders for the payment of money in an aggregate amount in excess of 1% of
Consolidated total assets (in
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each case, after giving effect to insurance, if any, available with respect
thereto) shall be rendered against the Borrower or any Obligor which shall
remain in effect for more than 60 days.
(i) Change of Control. Any Change of Control shall occur.
(j) Loss of Licenses. Any Governmental Authority revokes or fails to
renew any material license, permit or franchise of the Borrower or any
Subsidiary, or the Borrower or any Subsidiary for any reason loses any material
license, permit or franchise, or the Borrower or any Subsidiary suffers the
imposition of any restraining order, escrow, suspension or impound of funds in
connection with any proceeding (judicial or administrative) with respect to any
material license, permit or franchise, in each case which would be reasonably
likely to have a Material Adverse Effect.
(k) Invalidity of Loan Documents. Any Loan Document, at any time after
its execution and delivery and for any reason other than as expressly permitted
hereunder or satisfaction in full of all the Obligations, ceases to be in full
force and effect; or any Obligor or any other Person contests in any manner the
validity or enforceability of any Loan Document; or any Obligor denies that it
has any or further liability or obligation under any Loan Document, or purports
to revoke, terminate or rescind any Loan Document.
8.02 REMEDIES UPON EVENT OF DEFAULT. If any Event of Default occurs and
is continuing, the Administrative Agent shall, at the request of, or may, with
the consent of, the Required Lenders, take any or all of the following actions:
(a) declare the commitment of each Lender to make Loans and any
obligation of the L/C Issuer to make L/C Credit Extensions to be terminated,
whereupon such commitments and obligation shall be terminated;
(b) declare the unpaid principal amount of all outstanding Loans, all
interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Borrower;
(c) require that the Borrower Cash Collateralize the L/C Obligations
(in an amount equal to the then Outstanding Amount thereof); and
(d) exercise on behalf of itself and the Lenders all rights and
remedies available to it and the Lenders under the Loan Documents or applicable
law;
provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to the Borrower under the Bankruptcy Code of the
United States, the obligation of each Lender to make Loans and any obligation of
the L/C Issuer to make L/C Credit Extensions shall automatically terminate, the
unpaid principal amount of all outstanding Loans and all interest and other
amounts as aforesaid shall automatically become due and payable, and the
obligation of the Borrower to Cash Collateralize the L/C Obligations as
aforesaid shall automatically become effective, in each case without further act
of the Administrative Agent or any Lender.
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8.03 APPLICATION OF FUNDS. After the exercise of remedies provided for
in Section 8.02 (or after the Loans have automatically become immediately due
and payable and the L/C Obligations have automatically been required to be Cash
Collateralized as set forth in the proviso to Section 8.02), any amounts
received on account of the Obligations shall be applied by the Administrative
Agent in the following order:
First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including Attorney Costs and amounts
payable under Article III) payable to the Administrative Agent in its capacity
as such;
Second, to payment of that portion of the Obligations constituting
fees, indemnities and other amounts (other than principal and interest) payable
to the Lenders (including Attorney Costs and amounts payable under Article III),
ratably among them in proportion to the amounts described in this clause Second
payable to them;
Third, to payment of that portion of the Obligations constituting
accrued and unpaid interest on the Loans and L/C Borrowings, ratably among the
Lenders in proportion to the respective amounts described in this clause Third
payable to them;
Fourth, to payment of that portion of the Obligations constituting
unpaid principal of the Loans and L/C Borrowings, ratably among the Lenders in
proportion to the respective amounts described in this clause Fourth held by
them;
Fifth, to the Administrative Agent for the account of the L/C Issuer,
to Cash Collateralize that portion of L/C Obligations comprised of the aggregate
undrawn amount of Letters of Credit; and
Last, the balance, if any, after all of the Obligations have been
indefeasibly paid in full, to the Borrower or as otherwise required by Law.
Subject to Section 2.03(c), amounts used to Cash Collateralize the
aggregate undrawn amount of Letters of Credit pursuant to clause Fifth above
shall be applied to satisfy drawings under such Letters of Credit as they occur.
If any amount remains on deposit as Cash Collateral after all Letters of Credit
have either been fully drawn or expired, such remaining amount shall be applied
to the other Obligations, if any, in the order set forth above.
ARTICLE IX.
ADMINISTRATIVE AGENT
9.01 APPOINTMENT AND AUTHORIZATION OF ADMINISTRATIVE AGENT.
(a) Each Lender hereby irrevocably appoints, designates and authorizes
the Administrative Agent to take such action on its behalf under the provisions
of this Agreement and each other Loan Document and to exercise such powers and
perform such duties as are expressly delegated to it by the terms of this
Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere herein or in any other Loan Document, the Administrative
Agent shall not have any duties or responsibilities, except those expressly set
forth herein, nor shall the
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Administrative Agent have or be deemed to have any fiduciary relationship with
any Lender or participant, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent. Without limiting the generality of the foregoing sentence,
the use of the term "agent" herein and in the other Loan Documents with
reference to the Administrative Agent is not intended to connote any fiduciary
or other implied (or express) obligations arising under agency doctrine of any
applicable Law. Instead, such term is used merely as a matter of market custom,
and is intended to create or reflect only an administrative relationship between
independent contracting parties.
(b) The L/C Issuer shall act on behalf of the Lenders with respect to
any Letters of Credit issued by it and the documents associated therewith, and
the L/C Issuer shall have all of the benefits and immunities (i) provided to the
Administrative Agent in this Article IX with respect to any acts taken or
omissions suffered by the L/C Issuer in connection with Letters of Credit issued
by it or proposed to be issued by it and the applications and agreements for
letters of credit pertaining to such Letters of Credit as fully as if the term
"Administrative Agent" as used in this Article IX and in the definition of
"Agent-Related Person" included the L/C Issuer with respect to such acts or
omissions, and (ii) as additionally provided herein with respect to the L/C
Issuer.
9.02 DELEGATION OF DUTIES. The Administrative Agent may execute any of
its duties under this Agreement or any other Loan Document by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel and
other consultants or experts concerning all matters pertaining to such duties.
The Administrative Agent shall not be responsible for the negligence or
misconduct of any agent or attorney-in-fact that it selects in the absence of
gross negligence or willful misconduct.
9.03 LIABILITY OF ADMINISTRATIVE AGENT. No Agent-Related Person shall
(a) be liable for any action taken or omitted to be taken by any of them under
or in connection with this Agreement or any other Loan Document or the
transactions contemplated hereby (except for its own gross negligence or willful
misconduct in connection with its duties expressly set forth herein), or (b) be
responsible in any manner to any Lender or participant for any recital,
statement, representation or warranty made by any Obligor or any officer
thereof, contained herein or in any other Loan Document, 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, this Agreement or any
other Loan Document, or the validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document, or for any failure
of any Obligor or any other party to any Loan Document to perform its
obligations hereunder or thereunder. No Agent-Related Person shall be under any
obligation to any Lender or participant to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the properties,
books or records of any Obligor or any Affiliate thereof.
9.04 RELIANCE BY ADMINISTRATIVE AGENT.
(a) The Administrative Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, communication, signature,
resolution, representation, notice, consent,
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certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
electronic mail message, statement 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
counsel to any Obligor), independent accountants and other experts selected by
the Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under any Loan Document unless it shall
first receive such advice or concurrence of the Required Lenders as it deems
appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action. The
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement or any other Loan Document in
accordance with a request or consent of the Required Lenders (or such greater
number of Lenders as may be expressly required hereby in any instance) and such
request and any action taken or failure to act pursuant thereto shall be binding
upon all the Lenders.
(b) For purposes of determining compliance with the conditions
specified in Section 4.01, each Lender that has signed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with, each
document or other matter required thereunder to be consented to or approved by
or acceptable or satisfactory to a Lender unless the Administrative Agent shall
have received notice from such Lender prior to the proposed Closing Date
specifying its objection thereto.
9.05 NOTICE OF DEFAULT. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default, except with respect
to defaults in the payment of principal, interest and fees required to be paid
to the Administrative Agent for the account of the Lenders, unless the
Administrative Agent shall have received written notice from a Lender or the
Borrower referring to this Agreement, describing such Default and stating that
such notice is a "notice of default." The Administrative Agent will notify the
Lenders of its receipt of any such notice. The Administrative Agent shall take
such action with respect to such Default as may be directed by the Required
Lenders in accordance with Article VIII; provided, however, that unless and
until the Administrative Agent has received any such direction, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default as it shall deem
advisable or in the best interest of the Lenders.
9.06 CREDIT DECISION; DISCLOSURE OF INFORMATION BY ADMINISTRATIVE
AGENT. Each Lender acknowledges that no Agent-Related Person has made any
representation or warranty to it, and that no act by the Administrative Agent
hereafter taken, including any consent to and acceptance of any assignment or
review of the affairs of any Obligor or any Affiliate thereof, shall be deemed
to constitute any representation or warranty by any Agent-Related Person to any
Lender as to any matter, including whether Agent-Related Persons have disclosed
material information in their possession. Each Lender represents to the
Administrative Agent that it has, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Obligors and their respective Subsidiaries, and all
applicable bank or other regulatory Laws relating to the transactions
contemplated hereby, and made its own
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decision to enter into this Agreement and to extend credit to the Borrower and
the other Obligors hereunder. Each Lender also represents that it will,
independently and without reliance upon any Agent-Related Person and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Borrower and the other Obligors. Except for notices,
reports and other documents expressly required to be furnished to the Lenders by
the Administrative Agent herein, the Administrative Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the business, prospects, operations, property, financial
and other condition or creditworthiness of any of the Obligors or any of their
respective Affiliates which may come into the possession of any Agent-Related
Person.
9.07 INDEMNIFICATION OF ADMINISTRATIVE AGENT. Whether or not the
transactions contemplated hereby are consummated, the Lenders shall indemnify
upon demand each Agent-Related Person (to the extent not reimbursed by or on
behalf of any Obligor and without limiting the obligation of any Obligor to do
so), pro rata, and hold harmless each Agent-Related Person from and against any
and all Indemnified Liabilities incurred by it; provided, however, that no
Lender shall be liable for the payment to any Agent-Related Person of any
portion of such Indemnified Liabilities to the extent determined in a final,
nonappealable judgment by a court of competent jurisdiction to have resulted
from such Agent-Related Person's own gross negligence or willful misconduct;
provided, however, that no action taken in accordance with the directions of the
Required Lenders shall be deemed to constitute gross negligence or willful
misconduct for purposes of this Section. In the case of any investigation,
litigation or proceeding giving rise to any Indemnified Liabilities, this
Section applies whether any such investigation, litigation or proceeding is
brought by any Lender or any other Person. Without limitation of the foregoing,
each Lender shall reimburse the Administrative Agent upon demand for its ratable
share of any costs or out-of-pocket expenses (including Attorney Costs) incurred
by the Administrative Agent in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement, any other Loan
Document, or any document contemplated by or referred to herein, to the extent
that the Administrative Agent is not reimbursed for such expenses by or on
behalf of the Borrower. The undertaking in this Section shall survive the
occurrence of the Termination Date and the resignation of the Administrative
Agent. The Administrative Agent shall not be required to take any action under
any Loan Document, or to prosecute or defend any suit in respect of any Loan
Document, unless it is indemnified hereunder to its satisfaction. If any
indemnity in favor of the Administrative Agent shall be or become, in the
Administrative Agent's determination, inadequate, the Administrative Agent may
call for additional indemnification from the Lenders and cease to do the acts
indemnified against hereunder until such additional indemnity is given.
9.08 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. Bank of America
and its Affiliates may make loans to, issue letters of credit for the account
of, accept deposits from, acquire equity interests in and generally engage in
any kind of banking, trust, financial advisory, underwriting or other business
with each of the Obligors and their respective Affiliates as though Bank of
America were not the Administrative Agent or the L/C Issuer hereunder and
without
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notice to or consent of the Lenders. The Lenders acknowledge that, pursuant to
such activities, Bank of America or its Affiliates may receive information
regarding any Obligor or its Affiliates (including information that may be
subject to confidentiality obligations in favor of such Obligor or such
Affiliate) and acknowledge that the Administrative Agent shall be under no
obligation to provide such information to them. With respect to its Loans, Bank
of America shall have the same rights and powers under this Agreement as any
other Lender and may exercise such rights and powers as though it were not the
Administrative Agent or the L/C Issuer, and the terms "Lender" and "Lenders"
include Bank of America in its individual capacity.
9.09 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may, and
at the request of Required Lenders shall, resign as Administrative Agent upon 30
days' notice to the Lenders; provided that any such resignation by Bank of
America shall also constitute its resignation as L/C Issuer and Swing Line
Lender. If the Administrative Agent resigns under this Agreement, the Required
Lenders shall appoint from among the Lenders a successor administrative agent
for the Lenders, which successor administrative agent shall be consented to by
the Borrower at all times other than during the existence of an Event of Default
(which consent of the Borrower shall not be unreasonably withheld or delayed).
If no successor administrative agent is appointed prior to the effective date of
the resignation of the Administrative Agent, the Administrative Agent may
appoint, after consulting with the Lenders and the Borrower, a successor
administrative agent from among the Lenders. Upon the acceptance of its
appointment as successor administrative agent hereunder, the Person acting as
such successor administrative agent shall succeed to all the rights, powers and
duties of the retiring Administrative Agent, L/C Issuer and Swing Line Lender
and the respective terms "Administrative Agent," "L/C Issuer" and "Swing Line
Lender" shall mean such successor administrative agent, Letter of Credit issuer
and swing line lender, and the retiring Administrative Agent's appointment,
powers and duties as Administrative Agent shall be terminated and the retiring
L/C Issuer's and Swing Line Lender's rights, powers and duties as such shall be
terminated, without any other or further act or deed on the part of such
retiring L/C Issuer or Swing Line Lender or any other Lender, other than the
obligation of the successor L/C Issuer to issue letters of credit in
substitution for the Letters of Credit, if any, outstanding at the time of such
succession or to make other arrangements satisfactory to the retiring L/C Issuer
to effectively assume the obligations of the retiring L/C Issuer with respect to
such Letters of Credit. After any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the provisions of this Article IX and
Sections 10.04 and 10.05 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Administrative Agent under this
Agreement. If no successor administrative agent has accepted appointment as
Administrative Agent by the date which is 30 days following a retiring
Administrative Agent's notice of resignation, the retiring Administrative
Agent's resignation shall nevertheless thereupon become effective and the
Lenders shall perform all of the duties of the Administrative Agent hereunder
until such time, if any, as the Required Lenders appoint a successor agent as
provided for above.
9.10 ADMINISTRATIVE AGENT MAY FILE PROOFS OF CLAIM. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to any Obligor, the Administrative Agent (irrespective of
whether the principal of any Loan or L/C Obligation shall then be due and
payable as herein expressed or by declaration or otherwise and irrespective of
whether the
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Administrative Agent shall have made any demand on the Borrower) shall be
entitled and empowered, by intervention in such proceeding or otherwise
(a) to file and prove a claim for the whole amount of the principal and
interest owing and unpaid in respect of the Loans, L/C Obligations and all other
Obligations that are owing and unpaid and to file such other documents as may be
necessary or advisable in order to have the claims of the Lenders and the
Administrative Agent (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Lenders and the Administrative Agent
and their respective agents and counsel and all other amounts due the Lenders
and the Administrative Agent under Sections 2.03(i) and (j), 2.09 and 10.04)
allowed in such judicial proceeding; and
(b) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Sections 2.09 and 10.04.
Nothing contained herein shall be deemed to authorize the
Administrative Agent to authorize or consent to or accept or adopt on behalf of
any Lender any plan of reorganization, arrangement, adjustment or composition
affecting the Obligations or the rights of any Lender or to authorize the
Administrative Agent to vote in respect of the claim of any Lender in any such
proceeding.
9.11 GUARANTY MATTERS. The Lenders irrevocably authorize the
Administrative Agent, at its option and in its discretion, to release any
Guarantor from its obligations under the Guaranty if such Person ceases to be a
Subsidiary as a result of a transaction not prohibited hereunder. Upon request
by the Administrative Agent at any time, the Required Lenders will confirm in
writing the Administrative Agent's authority to release any Guarantor from its
obligations under the Guaranty pursuant to this Section.
9.12 OTHER AGENTS; ARRANGERS AND MANAGERS. None of the Lenders or other
Persons identified on the facing page or signature pages of this Agreement as a
"syndication agent," "documentation agent," "co-agent," "book manager," "lead
manager," "arranger," "lead arranger", "co-arranger" or "senior managing agent"
shall have any right, power, obligation, liability, responsibility or duty under
this Agreement other than, in the case of such Lenders, those applicable to all
Lenders as such. Without limiting the foregoing, none of the Lenders or other
Persons so identified shall have or be deemed to have any fiduciary relationship
with any Lender. Each Lender acknowledges that it has not relied, and will not
rely, on any of the Lenders or other Persons so identified in deciding to enter
into this Agreement or in taking or not taking action hereunder.
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ARTICLE X.
MISCELLANEOUS
10.01 AMENDMENTS, ETC. No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent to any departure by the
Borrower or any other Obligor therefrom, shall be effective unless in writing
signed by the Required Lenders and the Borrower or the applicable Obligor, as
the case may be, and acknowledged by the Administrative Agent, and each such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no such amendment,
waiver or consent shall:
(a) waive any condition set forth in Section 4.01(a) without the
written consent of each Lender;
(b) extend or increase the Commitment of any Lender (or reinstate any
Commitment terminated pursuant to Section 8.02) without the written consent of
such Lender;
(c) postpone or delay any date fixed by this Agreement or any other
Loan Document for any payment or mandatory prepayment of principal, interest,
fees or other amounts due to the Lenders (or any of them) or any scheduled or
mandatory reduction of the Aggregate Commitments hereunder or under any other
Loan Document without the written consent of each Lender directly affected
thereby;
(d) reduce the principal of, or the rate of interest specified herein
on, any Loan or L/C Borrowing, or (subject to clause (iv) of the second proviso
to this Section) any fees or other amounts payable hereunder or under any other
Loan Document without the written consent of each Lender directly affected
thereby; provided, however, that only the consent of the Required Lenders shall
be necessary (i) to amend the definition of "Default Rate" or to waive any
obligation of the Borrower to pay interest at the Default Rate or (ii) to amend
any financial covenant hereunder (or any defined term used therein) even if the
effect of such amendment would be to reduce the rate of interest on any Loan or
L/C Borrowing or to reduce any fee payable hereunder;
(e) change Section 2.13 or Section 8.03 in a manner that would alter
the pro rata sharing of payments required thereby without the written consent of
each Lender;
(f) change any provision of this Section or the definition of "Required
Lenders" or any other provision hereof specifying the number or percentage of
Lenders required to amend, waive or otherwise modify any rights hereunder or
make any determination or grant any consent hereunder, without the written
consent of each Lender; or
(g) except as provided in Section 7.07 or in accordance with the terms
of the Guaranty, terminate the Guaranty or release a Material Group of
Subsidiaries from the Guaranty without the written consent of each Lender;
and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the L/C Issuer in addition to the Lenders required above,
affect the rights or duties of the L/C Issuer under this Agreement or any Letter
of Credit Application relating to any Letter of
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Credit issued or to be issued by it; (ii) no amendment, waiver or consent shall,
unless in writing and signed by the Swing Line Lender in addition to the Lenders
required above, affect the rights or duties of the Swing Line Lender under this
Agreement; (iii) no amendment, waiver or consent shall, unless in writing and
signed by the Administrative Agent in addition to the Lenders required above,
affect the rights or duties of the Administrative Agent under this Agreement or
any other Loan Document; and (iv) the Fee Letter may be amended, or rights or
privileges thereunder waived, in a writing executed only by the parties thereto.
Notwithstanding anything to the contrary herein, no Defaulting Lender shall have
any right to approve or disapprove any amendment, waiver or consent hereunder,
except that the Commitment of such Lender may not be increased or extended
without the consent of such Lender.
10.02 NOTICES AND OTHER COMMUNICATIONS; FACSIMILE COPIES.
(a) General. Unless otherwise expressly provided herein, all notices
and other communications provided for hereunder shall be in writing (including
by facsimile transmission). All such written notices shall be mailed, faxed or
delivered to the applicable address, facsimile number or (subject to clause (c)
below) electronic mail address, and all notices and other communications
expressly permitted hereunder to be given by telephone shall be made to the
applicable telephone number, as follows:
(i) if to the Borrower, the Administrative Agent, the L/C
Issuer or the Swing Line Lender, to the address, facsimile number,
electronic mail address or telephone number specified for such Person
on Schedule 10.02 or to such other address, facsimile number,
electronic mail address or telephone number as shall be designated by
such party in a notice to the other parties; and
(ii) if to any other Lender, to the address, facsimile number,
electronic mail address or telephone number specified in its
Administrative Questionnaire or to such other address, facsimile
number, electronic mail address or telephone number as shall be
designated by such party in a notice to the Borrower, the
Administrative Agent, the L/C Issuer and the Swing Line Lender.
All such notices and other communications shall be deemed to be given or made
upon the earlier to occur of (i) actual receipt by the relevant party hereto and
(ii) (A) if delivered by hand or by courier, when signed for by or on behalf of
the relevant party hereto; (B) if delivered by mail, four Business Days after
deposit in the mails, postage prepaid; (C) if delivered by facsimile, when sent
and receipt has been confirmed by telephone; and (D) if delivered by electronic
mail (which form of delivery is subject to the provisions of clause (c)), when
delivered; provided, however, that notices and other communications to the
Administrative Agent, the L/C Issuer and the Swing Line Lender pursuant to
Article II shall not be effective until actually received by such Person. In no
event shall a voicemail message be effective as a notice, communication or
confirmation hereunder.
(b) Effectiveness of Facsimile Documents and Signatures. Loan Documents
may be transmitted and/or signed by facsimile. The effectiveness of any such
documents and signatures shall, subject to applicable Law, have the same force
and effect as manually-signed originals and shall be binding on all Obligors,
the Administrative
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Agent and the Lenders. The Administrative Agent may also require that any such
documents and signatures be confirmed by a manually-signed original thereof;
provided, however, that the failure to request or deliver the same shall not
limit the effectiveness of any facsimile document or signature.
(c) Limited Use of Electronic Mail. Electronic mail and Internet and
intranet websites may be used only to distribute routine communications, such as
financial statements and other information as provided in Section 6.01, and to
distribute Loan Documents for execution by the parties thereto, and may not be
used for any other purpose.
(d) Reliance by Administrative Agent and Lenders. The Administrative
Agent and the Lenders shall be entitled to rely and act upon any notices
(including telephonic Loan Notices and Swing Line Loan Notices) purportedly
given by or on behalf of the Borrower even if (i) such notices were not made in
a manner specified herein, were incomplete or were not preceded or followed by
any other form of notice specified herein, or (ii) the terms thereof, as
understood by the recipient, varied from any confirmation thereof. The Borrower
shall indemnify each Agent-Related Person and each Lender from all losses,
costs, expenses and liabilities resulting from the reliance by such Person on
each notice purportedly given by or on behalf of the Borrower. All telephonic
notices to and other communications with the Administrative Agent may be
recorded by the Administrative Agent, and each of the parties hereto hereby
consents to such recording.
10.03 NO WAIVER; CUMULATIVE REMEDIES. No failure by any Lender or the
Administrative Agent to exercise, and no delay by any such Person in exercising,
any right, remedy, power or privilege hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
10.04 ATTORNEY COSTS, EXPENSES AND TAXES. The Borrower agrees (a) to
pay or reimburse the Administrative Agent for all costs and expenses incurred in
connection with the development, preparation, negotiation and execution of this
Agreement and the other Loan Documents and any amendment, waiver, consent or
other modification of the provisions hereof and thereof (whether or not the
transactions contemplated hereby or thereby are consummated), and the
consummation and administration of the transactions contemplated hereby and
thereby, including all Attorney Costs, and (b) to pay or reimburse the
Administrative Agent and each Lender for all costs and expenses incurred in
connection with the enforcement, attempted enforcement, or preservation of any
rights or remedies under this Agreement or the other Loan Documents (including
all such costs and expenses incurred during any "workout" or restructuring in
respect of the Obligations and during any legal proceeding, including any
proceeding under any Debtor Relief Law), including all Attorney Costs. The
foregoing costs and expenses shall include all out-of-pocket expenses incurred
by the Administrative Agent and the cost of independent public accountants and
other outside experts retained by the Administrative Agent or any Lender. All
amounts due under this Section shall be payable within ten Business Days after
demand therefor. The agreements in this Section shall survive the occurrence of
the Termination Date.
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10.05 INDEMNIFICATION BY THE BORROWER. Whether or not the transactions
contemplated hereby are consummated, the Borrower shall indemnify and hold
harmless each Agent-Related Person, each Lender and their respective Affiliates,
directors, officers, employees, counsel, agents and attorneys-in-fact
(collectively the "Indemnitees") from and against any and all liabilities,
obligations, losses, damages, penalties, claims, demands, actions, judgments,
suits, costs, expenses and disbursements (including Attorney Costs) of any kind
or nature whatsoever which may at any time be imposed on, incurred by or
asserted against any such Indemnitee in any way relating to or arising out of or
in connection with (a) the execution, delivery, enforcement, performance or
administration of any Loan Document or any other agreement, letter or instrument
delivered in connection with the transactions contemplated thereby or the
consummation of the transactions contemplated thereby, (b) any Commitment, Loan
or Letter of Credit or the use or proposed use of the proceeds therefrom
(including any refusal by the L/C Issuer to honor a demand for payment under a
Letter of Credit if the documents presented in connection with such demand do
not strictly comply with the terms of such Letter of Credit), (c) any actual or
alleged presence or release of Hazardous Materials on or from any property
currently or formerly owned or operated by the Borrower or any Subsidiary, or
any Environmental Liability related in any way to the Borrower or any
Subsidiary, or (d) any actual or prospective claim, litigation, investigation or
proceeding relating to any of the foregoing, whether based on contract, tort or
any other theory (including any investigation of, preparation for, or defense of
any pending or threatened claim, investigation, litigation or proceeding) and
regardless of whether any Indemnitee is a party thereto (all the foregoing,
collectively, the "Indemnified Liabilities"), in all cases, whether or not
caused by or arising, in whole or in part, out of the negligence of the
Indemnitee; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such liabilities, obligations, losses, damages,
penalties, claims, demands, actions, judgments, suits, costs, expenses or
disbursements are determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Indemnitee. No Indemnitee shall be liable for any damages
arising from the use by others of any information or other materials obtained
through IntraLinks or other similar information transmission systems in
connection with this Agreement, nor shall any Indemnitee have any liability for
any indirect or consequential damages relating to this Agreement or any other
Loan Document or arising out of its activities in connection herewith or
therewith (whether before or after the Closing Date). All amounts due under this
Section shall be payable within ten Business Days after demand therefor. The
agreements in this Section shall survive the resignation of the Administrative
Agent, the replacement of any Lender, the termination of the Aggregate
Commitments and the repayment, satisfaction or discharge of all the other
Obligations.
10.06 PAYMENTS SET ASIDE. To the extent that any payment by or on
behalf of the Borrower is made to the Administrative Agent or any Lender, or the
Administrative Agent or any Lender exercises its right of set-off, and such
payment or the proceeds of such set-off or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by the Administrative Agent
or such Lender in its discretion) to be repaid to a trustee, receiver or any
other party, in connection with any proceeding under any Debtor Relief Law or
otherwise, then (a) to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such set-off had
not occurred, and (b) each Lender severally agrees to pay to the Administrative
Agent upon demand its applicable
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share of any amount so recovered from or repaid by the Administrative Agent,
plus interest thereon from the date of such demand to the date such payment is
made at a rate per annum equal to the Federal Funds Rate from time to time in
effect.
10.07 SUCCESSORS AND ASSIGNS.
(a) The provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
each Lender and no Lender may assign or otherwise transfer any of its rights or
obligations hereunder except (i) to an Eligible Assignee in accordance with the
provisions of clause (b), (ii) by way of participation in accordance with the
provisions of clause (d), or (iii) by way of pledge or assignment of a security
interest subject to the restrictions of clause (f) or (i) (and any other
attempted assignment or transfer by any party hereto shall be null and void).
Nothing in this Agreement, expressed or implied, shall be construed to confer
upon any Person (other than the parties hereto, their respective successors and
assigns permitted hereby, Participants to the extent provided in clause (d) and,
to the extent expressly contemplated hereby, the Indemnitees) any legal or
equitable right, remedy or claim under or by reason of this Agreement.
(b) Any Lender may at any time assign to one or more Eligible Assignees
all or a portion of its rights and obligations under this Agreement (including
all or a portion of its Commitment and the Loans (including for purposes of this
clause (b), participations in L/C Obligations and in Swing Line Loans) at the
time owing to it); provided that (i) except in the case of an assignment of the
entire remaining amount of the assigning Lender's Commitment and the Loans at
the time owing to it or in the case of an assignment to a Lender or an Affiliate
of a Lender with respect to a Lender, the aggregate amount of the Commitment
(which for this purpose includes Loans outstanding thereunder) subject to each
such assignment, determined as of the date the Assignment and Assumption with
respect to such assignment is delivered to the Administrative Agent or, if
"Trade Date" is specified in the Assignment and Assumption, as of the Trade
Date, shall not be less than $5,000,000 unless each of the Administrative Agent
and, so long as no Event of Default has occurred and is continuing, the Borrower
otherwise consents (each such consent not to be unreasonably withheld or
delayed); (ii) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and obligations under
this Agreement with respect to the Loans or the Commitment assigned, except that
this clause (ii) shall not apply to rights in respect of Swing Line Loans; (iii)
any assignment of a Commitment must be approved by the Administrative Agent, the
L/C Issuer and the Swing Line Lender unless the Person that is the proposed
assignee is itself a Lender (whether or not the proposed assignee would
otherwise qualify as an Eligible Assignee); and (iv) the parties to each
assignment shall execute and deliver to the Administrative Agent an Assignment
and Assumption, together with a processing and recordation fee of $3,500.
Subject to acceptance and recording thereof by the Administrative Agent pursuant
to clause (c), from and after the effective date specified in each Assignment
and Assumption, the Eligible Assignee thereunder shall be a party to this
Agreement and, to the extent of the interest assigned by such Assignment and
Assumption, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Assumption, be released from its obligations
under this Agreement (and, in the case of an
77
Assignment and Assumption covering all of the assigning Lender's rights and
obligations under this Agreement, such Lender shall cease to be a party hereto
but shall continue to be entitled to the benefits of Sections 3.01, 3.04, 3.05,
10.04 and 10.05 with respect to facts and circumstances occurring prior to the
effective date of such assignment). Upon request, the Borrower (at its expense)
shall execute and deliver a Note to the assignee Lender. Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does not
comply with this clause shall be treated for purposes of this Agreement as a
sale by such Lender of a participation in such rights and obligations in
accordance with clause (d).
(c) The Administrative Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at the Administrative Agent's Office a
copy of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amounts of the Loans and L/C Obligations owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The entries in
the Register shall be conclusive, and the Borrower, the Administrative Agent and
the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower and any Lender, at any reasonable time
and from time to time upon reasonable prior notice.
(d) Any Lender may at any time, without the consent of, or notice to,
the Borrower or the Administrative Agent, sell participations to any Person
(other than a natural person or the Borrower or any of the Borrower's Affiliates
or Subsidiaries) (each, a "Participant") in all or a portion of such Lender's
rights and/or obligations under this Agreement (including all or a portion of
its Commitment and/or the Loans (including such Lender's participations in L/C
Obligations and/or Swing Line Loans) owing to it); provided that (i) such
Lender's obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (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 this
Agreement. Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, waiver or other modification described in the first proviso to
Section 10.01 that directly affects such Participant. Subject to clause (e), the
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 3.01, 3.04 and 3.05 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to clause (b). To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 10.09 as though it were a Lender, provided such Participant agrees to be
subject to Section 2.13 as though it were a Lender.
(e) A Participant shall not be entitled to receive any greater payment
under Section 3.01 or 3.04 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the Borrower's
prior written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 3.01 unless the Borrower
is
78
notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with Section 10.15 as though
it were a Lender.
(f) Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement (including under its Note,
if any) to secure obligations of such Lender, including any pledge or assignment
to secure obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.
(g) As used herein, the following terms have the following meanings:
"Eligible Assignee" means (a) a Lender; (b) an Affiliate of a
Lender; and (c) any other Person (other than a natural person) approved
by (i) the Administrative Agent, the L/C Issuer and the Swing Line
Lender, and (ii) unless an Event of Default has occurred and is
continuing, the Borrower (each such approval not to be unreasonably
withheld or delayed); provided that notwithstanding the foregoing,
"Eligible Assignee" shall not include the Borrower or any of the
Borrower's Affiliates or Subsidiaries.
(h) Notwithstanding anything to the contrary contained herein, any
Lender (a "Granting Lender") may grant to a special purpose funding vehicle
identified as such in writing from time to time by the Granting Lender to the
Administrative Agent and the Borrower (an "SPC") the option to provide all or
any part of any Loan that such Granting Lender would otherwise be obligated to
make pursuant to this Agreement; provided that (i) nothing herein shall
constitute a commitment by any SPC to fund any Loan, and (ii) if an SPC elects
not to exercise such option or otherwise fails to make all or any part of such
Loan, the Granting Lender shall be obligated to make such Loan pursuant to the
terms hereof. Each party hereto hereby agrees that (i) neither the grant to any
SPC nor the exercise by any SPC of such option shall increase the costs or
expenses or otherwise increase or change the obligations of the Borrower under
this Agreement (including its obligations under Section 3.04), (ii) no SPC shall
be liable for any indemnity or similar payment obligation under this Agreement
for which a Lender would be liable, and (iii) the Granting Lender shall for all
purposes, including the approval of any amendment, waiver or other modification
of any provision of any Loan Document, remain the lender of record hereunder.
The making of a Loan by an SPC hereunder shall utilize the Commitment of the
Granting Lender to the same extent, and as if, such Loan were made by such
Granting Lender. In furtherance of the foregoing, each party hereto hereby
agrees (which agreement shall survive the Termination Date) that, prior to the
date that is one year and one day after the payment in full of all outstanding
commercial paper or other senior debt of any SPC, it will not institute against,
or join any other Person in instituting against, such SPC any proceeding under
any Debtor Relief Laws. Notwithstanding anything to the contrary contained
herein, any SPC may (i) with notice to, but without prior consent of the
Borrower and the Administrative Agent and with the payment of a processing fee
of $3500, assign all or any portion of its right to receive payment with respect
to any Loan to the Granting Lender and (ii) disclose on a confidential basis any
non-public information relating to its funding of Loans to any rating agency,
commercial paper dealer or provider of any surety or guarantee or credit or
liquidity enhancement to such SPC.
79
(i) Notwithstanding anything to the contrary contained herein, if at
any time Bank of America assigns all of its Commitment and Loans pursuant to
clause (b), Bank of America may, (i) upon 30 days' notice to the Borrower and
the Lenders, resign as L/C Issuer and/or (ii) upon 30 days' notice to the
Borrower, resign as Swing Line Lender. In the event of any such resignation as
L/C Issuer or Swing Line Lender, the Borrower shall be entitled to appoint from
among the Lenders a successor L/C Issuer or Swing Line Lender hereunder;
provided, however, that no failure by the Borrower to appoint any such successor
shall affect the resignation of Bank of America as L/C Issuer or Swing Line
Lender, as the case may be. If Bank of America resigns as L/C Issuer, it shall
retain all the rights and obligations of the L/C Issuer hereunder with respect
to all Letters of Credit outstanding as of the effective date of its resignation
as L/C Issuer and all L/C Obligations with respect thereto (including the right
to require the Lenders to make Base Rate Loans or fund risk participations in
Unreimbursed Amounts pursuant to Section 2.03(c)). If Bank of America resigns as
Swing Line Lender, it shall retain all the rights of the Swing Line Lender
provided for hereunder with respect to Swing Line Loans made by it and
outstanding as of the effective date of such resignation, including the right to
require the Lenders to make Base Rate Loans or fund risk participations in
outstanding Swing Line Loans pursuant to Section 2.04(c).
10.08 CONFIDENTIALITY. Each of the Administrative Agent and the Lenders
agrees to maintain the confidentiality of the Information (as defined below),
except that Information may be disclosed (a) to its and its Affiliates'
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential), (b) to the extent requested
by any regulatory authority (including any self-regulatory authority, such as
the National Association of Insurance Commissioners), (c) to the extent required
by applicable laws or regulations or by any subpoena or similar legal process,
(d) to any other party hereto, (e) in connection with the exercise of any
remedies hereunder or under any other Loan Document or any action or proceeding
relating to this Agreement or any other Loan Document or the enforcement of
rights hereunder or thereunder, (f) subject to an agreement containing
provisions substantially the same as those of this Section, to (i) any assignee
of or Participant in, or any prospective assignee of or Participant in, any of
its rights or obligations under this Agreement or (ii) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to
the Borrower and its obligations, (g) with the consent of the Borrower or (h) to
the extent such Information (x) becomes publicly available other than as a
result of a breach of this Section or (y) becomes available to the
Administrative Agent or any Lender on a nonconfidential basis from a source
other than the Borrower. For purposes of this Section, "Information" means all
information received from any Obligor relating to any Obligor or any of their
respective businesses, other than any such information that is available to the
Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by any Obligor, provided that, in the case of information received
from a Obligor after the Effective Date, such information is clearly identified
at the time of delivery as confidential. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information. Notwithstanding
anything herein to the contrary, "Information" shall not include, and the
Administrative Agent and each Lender may disclose without limitation of any
kind, any information with respect to the
80
"tax treatment" and "tax structure" (in each case, within the meaning of
Treasury Regulation Section 1.6011-4) of the transactions contemplated hereby
and all materials of any kind (including opinions or other tax analyses) that
are provided to the Administrative Agent or such Lender relating to such tax
treatment and tax structure; provided that with respect to any document or
similar item that in either case contains information concerning the tax
treatment or tax structure of the transaction as well as other information, this
sentence shall only apply to such portions of the document or similar item that
relate to the tax treatment or tax structure of the Loans, Letters of Credit and
transactions contemplated hereby.
10.09 SET-OFF. In addition to any rights and remedies of the Lenders
provided by law, upon the occurrence and during the continuance of any Event of
Default, each Lender is authorized at any time and from time to time, without
prior notice to the Borrower or any other Obligor, any such notice being waived
by the Borrower (on its own behalf and on behalf of each Obligor) to the fullest
extent permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held by, and other
indebtedness at any time owing by, such Lender to or for the credit or the
account of the respective Obligors against any and all Obligations owing to such
Lender hereunder or under any other Loan Document, now or hereafter existing,
irrespective of whether or not the Administrative Agent or such Lender shall
have made demand under this Agreement or any other Loan Document and although
such Obligations may be contingent or unmatured or denominated in a currency
different from that of the applicable deposit or indebtedness. Each Lender
agrees promptly to notify the Borrower and the Administrative Agent after any
such set-off and application made by such Lender; provided, however, that the
failure to give such notice shall not affect the validity of such set-off and
application.
10.10 INTEREST RATE LIMITATION. Notwithstanding anything to the
contrary contained in any Loan Document, the interest paid or agreed to be paid
under the Loan Documents shall not exceed the maximum rate of non-usurious
interest permitted by applicable Law (the "Maximum Rate"). If the Administrative
Agent or any Lender shall receive interest in an amount that exceeds the Maximum
Rate, the excess interest shall be applied to the principal of the Loans or, if
it exceeds such unpaid principal, refunded to the Borrower. In determining
whether the interest contracted for, charged, or received by the Administrative
Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent
permitted by applicable Law, (a) characterize any payment that is not principal
as an expense, fee, or premium rather than interest, (b) exclude voluntary
prepayments and the effects thereof, and (c) amortize, prorate, allocate, and
spread in equal or unequal parts the total amount of interest throughout the
contemplated term of the Obligations hereunder.
10.11 COUNTERPARTS; EFFECTIVENESS. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. This Agreement
shall become effective when counterparts hereof executed on behalf of the
Borrower, the Administrative Agent and each Lender (or notice thereof
satisfactory to the Administrative Agent) shall have been received by the
Administrative Agent.
10.12 INTEGRATION. This Agreement, together with the other Loan
Documents, comprises the complete and integrated agreement of the parties on the
subject matter hereof and thereof and supersedes all prior agreements, written
or oral, on such subject matter. In the event
81
of any conflict between the provisions of this Agreement and those of any other
Loan Document, the provisions of this Agreement shall control; provided that the
inclusion of supplemental rights or remedies in favor of the Administrative
Agent or the Lenders in any other Loan Document shall not be deemed a conflict
with this Agreement. Each Loan Document was drafted with the joint participation
of the respective parties thereto and shall be construed neither against nor in
favor of any party, but rather in accordance with the fair meaning thereof.
10.13 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default at the time of any Credit Extension, and shall continue in full
force and effect as long as any Loan or any other Obligation hereunder shall
remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.
10.14 SEVERABILITY. If any provision of this Agreement or the other
Loan Documents is held to be illegal, invalid or unenforceable, (a) the
legality, validity and enforceability of the remaining provisions of this
Agreement and the other Loan Documents shall not be affected or impaired thereby
and (b) the parties shall endeavor in good faith negotiations to replace the
illegal, invalid or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
10.15 TAX FORMS. (a)(i) Each Lender that is not a "United States
person" within the meaning of Section 7701(a)(30) of the Code (a "Foreign
Lender") shall deliver to the Administrative Agent, prior to receipt of any
payment subject to withholding under the Code (or upon accepting an assignment
of an interest herein), two duly signed completed copies of either IRS Form
W-8BEN or any successor thereto (relating to such Foreign Lender and entitling
it to an exemption from, or reduction of, withholding tax on all payments to be
made to such Foreign Lender by the Borrower pursuant to this Agreement) or IRS
Form W-8ECI or any successor thereto (relating to all payments to be made to
such Foreign Lender by the Borrower pursuant to this Agreement) or such other
evidence satisfactory to the Borrower and the Administrative Agent that such
Foreign Lender is entitled to an exemption from, or reduction of, U.S.
withholding tax, including any exemption pursuant to Section 881(c) of the Code.
Thereafter and from time to time, each such Foreign Lender shall (A) promptly
submit to the Administrative Agent such additional duly completed and signed
copies of one of such forms (or such successor forms as shall be adopted from
time to time by the relevant United States taxing authorities) as may then be
available under then current United States laws and regulations to avoid, or
such evidence as is satisfactory to the Borrower and the Administrative Agent of
any available exemption from or reduction of, United States withholding taxes in
respect of all payments to be made to such Foreign Lender by the Borrower
pursuant to this Agreement, (B) promptly notify the Administrative Agent of any
change in circumstances which would modify or render invalid any claimed
exemption or reduction, and (C) take such steps as shall not be materially
82
disadvantageous to it, in the reasonable judgment of such Lender, and as may be
reasonably necessary (including the re-designation of its Lending Office) to
avoid any requirement of applicable Laws that the Borrower make any deduction or
withholding for taxes from amounts payable to such Foreign Lender.
(ii) Each Foreign Lender, to the extent it does not act or
ceases to act for its own account with respect to any portion of any
sums paid or payable to such Lender under any of the Loan Documents
(for example, in the case of a typical participation by such Lender),
shall deliver to the Administrative Agent on the date when such Foreign
Lender ceases to act for its own account with respect to any portion of
any such sums paid or payable, and at such other times as may be
necessary in the determination of the Administrative Agent (in the
reasonable exercise of its discretion), (A) two duly signed completed
copies of the forms or statements required to be provided by such
Lender as set forth above, to establish the portion of any such sums
paid or payable with respect to which such Lender acts for its own
account that is not subject to U.S. withholding tax, and (B) two duly
signed completed copies of IRS Form W-8IMY (or any successor thereto),
together with any information such Lender chooses to transmit with such
form, and any other certificate or statement of exemption required
under the Code, to establish that such Lender is not acting for its own
account with respect to a portion of any such sums payable to such
Lender.
(iii) The Borrower shall not be required to pay any additional
amount to any Foreign Lender under Section 3.01 (A) with respect to any
Taxes required to be deducted or withheld on the basis of the
information, certificates or statements of exemption such Lender
transmits with an IRS Form W-8IMY pursuant to this clause (a) or (B) if
such Lender shall have failed to satisfy the foregoing provisions of
this clause (a); provided that if such Lender shall have satisfied the
requirement of this clause (a) on the date such Lender became a Lender
or ceased to act for its own account with respect to any payment under
any of the Loan Documents, nothing in this clause (a) shall relieve the
Borrower of its obligation to pay any amounts pursuant to Section 3.01
in the event that, as a result of any change in any applicable law,
treaty or governmental rule, regulation or order, or any change in the
interpretation, administration or application thereof, such Lender is
no longer properly entitled to deliver forms, certificates or other
evidence at a subsequent date establishing the fact that such Lender or
other Person for the account of which such Lender receives any sums
payable under any of the Loan Documents is not subject to withholding
or is subject to withholding at a reduced rate.
(iv) The Administrative Agent may, without reduction, withhold
any Taxes required to be deducted and withheld from any payment under
any of the Loan Documents with respect to which the Borrower is not
required to pay additional amounts under this clause (a).
(b) Upon the request of the Administrative Agent, each Lender that is a
"United States person" within the meaning of Section 7701(a)(30) of the Code
shall deliver to the Administrative Agent two duly signed completed copies of
IRS Form W-9. If such Lender fails to deliver such forms, then the
Administrative Agent may withhold from any interest payment to
83
such Lender an amount equivalent to the applicable back-up withholding tax
imposed by the Code, without reduction.
(c) If any Governmental Authority asserts that the Administrative Agent
did not properly withhold or backup withhold, as the case may be, any tax or
other amount from payments made to or for the account of any Lender, such Lender
shall indemnify the Administrative Agent therefor, including all penalties and
interest, any taxes imposed by any jurisdiction on the amounts payable to the
Administrative Agent under this Section, and costs and expenses (including
Attorney Costs) of the Administrative Agent. The obligation of the Lenders under
this Section shall survive the termination of the Aggregate Commitments,
repayment of all other Obligations hereunder and the resignation of the
Administrative Agent.
10.16 REPLACEMENT OF LENDERS. Under any circumstances set forth herein
providing that the Borrower shall have the right to replace a Lender as a party
to this Agreement, the Borrower may, upon notice to such Lender and the
Administrative Agent, replace such Lender by causing such Lender to assign its
Commitment (with the assignment fee to be paid by the Borrower in such instance)
pursuant to Section 10.07(b) to one or more other Lenders or Eligible Assignees
procured by the Borrower; provided, however, that if the Borrower elects to
exercise such right with respect to any Lender pursuant to Section 3.06(b), it
shall be obligated to replace all Lenders that have made similar requests for
compensation pursuant to Section 3.01 or 3.04. The Borrower shall (x) pay in
full all principal, interest, fees and other amounts owing to such Lender
through the date of replacement (including any amounts payable pursuant to
Section 3.05), (y) provide appropriate assurances and indemnities (which may
include letters of credit) to the L/C Issuer and the Swing Line Lender as each
may reasonably require with respect to any continuing obligation to fund
participation interests in any L/C Obligations or any Swing Line Loans then
outstanding, and (z) release such Lender from its obligations under the Loan
Documents. Any Lender being replaced shall execute and deliver an Assignment and
Assumption with respect to such Lender's Commitment and outstanding Loans and
participations in L/C Obligations and Swing Line Loans.
10.17 GOVERNING LAW.
(A) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE ADMINISTRATIVE AGENT AND
EACH LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(B) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
SITTING IN NEW YORK COUNTY OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF
SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER, THE
ADMINISTRATIVE AGENT AND EACH LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE BORROWER, THE
ADMINISTRATIVE AGENT AND EACH LENDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING
ANY
84
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER
DOCUMENT RELATED THERETO. THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER
WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE
MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE.
10.18 WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY TO THIS AGREEMENT
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM
WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH
CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT
OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
10.19 ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
85
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
MANOR CARE, INC.
By:_______________________________________
Name:
Title:
BANK OF AMERICA, N.A.,
as Administrative Agent
By:_______________________________________
Name:
Title:
BANK OF AMERICA, N.A., as a Lender, L/C
Issuer and Swing Line Lender
By:_______________________________________
Name:
Title:
JPMORGAN CHASE BANK
By:_______________________________________
Name:
Title:
SUNTRUST BANK
By:_______________________________________
Name:
Title:
THE BANK OF NEW YORK
By:_______________________________________
Name:
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇ BANK USA
By:_______________________________________
Name:
Title:
UBS AG, CAYMAN ISLANDS BRANCH
By:_______________________________________
Name:
Title:
NATIONAL CITY BANK
By:_______________________________________
Name:
Title:
THE HUNTINGTON NATIONAL BANK
By:_______________________________________
Name:
Title:
SCHEDULE 2.01
COMMITMENTS
AND PRO RATA SHARES
LENDER COMMITMENT PRO RATA SHARE
----------------------------------------------------------------------------------------------------------
Bank of America, N.A. $35,000,000 17.500000000%
JPMorgan Chase Bank $35,000,000 17.500000000%
SunTrust Bank $25,000,000 12.500000000%
The Bank of New York $25,000,000 12.500000000%
▇▇▇▇▇▇▇ ▇▇▇▇▇ Bank USA $25,000,000 12.500000000%
UBS AG, Cayman Islands Branch $25,000,000 12.500000000%
National City Bank $15,000,000 7.500000000%
The Huntington National Bank $15,000,000 7.500000000%
------------------------------------- ------------- ----------------
Total $200,000,000 100.000000000%
