EXHIBIT 10.30
EXECUTION COPY
TOTAL RENAL CARE HOLDINGS, INC.
THIRD AMENDMENT TO TERM LOAN AGREEMENT
AND FIRST AMENDMENT TO SUBSIDIARY GUARANTY
This THIRD AMENDMENT TO TERM LOAN AGREEMENT AND FIRST AMENDMENT TO
SUBSIDIARY GUARANTY (this "AMENDMENT") is dated as of February 17, 1998, and
entered into by and among TOTAL RENAL CARE HOLDINGS, INC., a Delaware
corporation (the "Borrower"), the financial institutions listed on the
signature pages hereof and their respective successors and assigns (the
"Lenders", each a "Lender"), DLJ CAPITAL FUNDING, INC., as Syndication Agent
(the "Syndication Agent"), THE BANK OF NEW YORK, as collateral agent and as
administrative agent for the Lenders (in such capacity, the "Administrative
Agent"), and, for purposes of Sections 2 and 5 hereof, the Credit Support
Parties (as defined in Section 5 hereof) listed on the signature pages hereof,
and is made with reference to that certain Term Loan Agreement dated as of
October 24, 1997, as amended by that certain First Amendment to Term Loan
Agreement dated as of December 1, 1997 and that certain Second Amendment to
Term Loan Agreement dated as of January 13, 1998 (as so amended, the "TERM
LOAN AGREEMENT"), by and among Borrower, Lenders, Syndication Agent and
Administrative Agent. Capitalized terms used herein without definition shall
have the same meanings herein as set forth in the Term Loan Agreement.
RECITALS
WHEREAS, Borrower and Lenders desire to amend the Term Loan Agreement to
permit Borrower to guaranty, on a subordinated basis, obligations of RTC under
the RTC Convertible Subordinated Notes on and after the effectiveness of the
RTC Merger Agreement;
WHEREAS, the Subsidiary Guarantors and the Collateral Agent desire to amend
the Subsidiary Guaranty to provide that the obligations thereunder are
expressly designated as "Designated Senior Indebtedness," as that term is
defined in the RTC Convertible Subordinated Indenture; and
WHEREAS, subject to the terms and conditions of this Amendment, Lenders are
willing to agree to such amendments.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as
follows:
SECTION 1. AMENDMENTS TO THE TERM LOAN AGREEMENT
1.1 Amendments to Section 4: Representations and Warranties
Section 4 of the Term Loan Agreement is hereby amended by adding a new
Section 4.22 thereto as follows:
"4.22 Subordinated Indebtedness
The subordination provisions of (i) the RTC Convertible Subordinated
Indenture, (ii) any Guarantee by the Borrower of the Indebtedness under the
RTC Convertible Subordinated Indenture and the RTC Convertible Subordinated
Notes, (iii) any Subordinated Indebtedness of the Borrower now existing or
hereafter incurred or assumed by the Borrower and (iv) any Guarantee by any
Subsidiary of the Borrower of any Subordinated Indebtedness of the Borrower
will be enforceable against the holders thereof, and the Loans and all
other monetary Obligations hereunder and all monetary obligations under the
Subsidiary Guaranty will constitute "Senior Indebtedness' and "Designated
Senior Indebtedness' (or any comparable terms) as defined in such
provisions."
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1.2 Amendments to Section 8: Negative Covenants
A. Section 8.1(b) of the Term Loan Agreement is hereby further amended by
(i) deleting the "and" at the end of clause (xiii) thereof, (ii) relabeling
clause (xiv) thereof as clause (xv) and (iii) adding a new clause (xiv)
thereto as follows:
"(xiv) a Guarantee by the Borrower of RTC's obligations under the RTC
Convertible Subordinated Notes provided that (a) such Guarantee is
subordinated to at least the same extent as the Indebtedness under the RTC
Convertible Subordinated Notes is subordinated to the Obligations of RTC
under the Subsidiary Guaranty and (b) such Guarantee is otherwise on market
terms for guaranties of subordinated debt instruments prevailing at or
around the time such Guarantee is entered into; and".
1.3 Amendments to Section 11: Other Provisions
Section 11 of the Term Loan Agreement is hereby amended by adding a new
Section 11.20 thereto as follows:
"11.20 Designation as Designated Senior Indebtedness
This Agreement, the Subsidiary Guaranty, and all Loans and all other
monetary Obligations hereunder and thereunder, are hereby expressly
designated as "Designated Senior Indebtedness,' as that term is defined in
the RTC Convertible Subordinated Indenture and in any Guarantee thereof."
SECTION 2. AMENDMENT TO THE SUBSIDIARY GUARANTY
The Subsidiary Guaranty is hereby amended by adding a new Section 4.15
thereto as follows:
"4.15 Designation as Designated Senior Indebtedness; Incorporation of
Defaults
This Guaranty, the Financing Documents, and all monetary obligations
hereunder and thereunder, are hereby expressly designated as 'Designated
Senior Indebtedness', as that term is defined in the 5 5/8% Indenture. The
occurrence of any Default or Event of Default constitutes a default under
this Guaranty."
SECTION 3. CONDITIONS TO EFFECTIVENESS
Sections 1 and 2 of this Amendment shall become effective only upon the
satisfaction of all of the following conditions precedent (the date of
satisfaction of such conditions being referred to herein as the "THIRD
AMENDMENT EFFECTIVE DATE"):
A. Required Lenders (as such term is defined in the Revolving Credit
Agreement) shall have entered into an amendment and consent thereto that
consents to this Amendment, which amendment and consent shall be in form and
substance satisfactory to the Administrative Agent and Syndication Agent, and
all conditions to the effectiveness thereof (other than effectiveness hereof)
shall have been satisfied or waived.
B. All fees and expenses incurred by Syndication Agent and its counsel,
O'Melveny & Myers LLP, in connection with the preparation, negotiation and
closing of this Amendment shall have been paid by Borrower.
SECTION 4. BORROWER'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Amendment and to amend the
Term Loan Agreement in the manner provided herein, Borrower represents and
warrants to each Lender that the following statements are true, correct and
complete:
A. CORPORATE POWER AND AUTHORITY. Each Credit Party has all requisite
corporate power and authority to enter into this Amendment and to carry out
the transactions contemplated by, and perform its obligations under, the Term
Loan Agreement as amended by this Amendment (the "AMENDED AGREEMENT").
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B. AUTHORIZATION OF AGREEMENTS. The execution and delivery of this Amendment
have been duly authorized by all necessary corporate action on the part of
each Credit Party. The performance of the Amended Agreement has been duly
authorized by all necessary corporate action on the part of each Credit Party.
C. NO CONFLICT. The execution and delivery by each Credit Party of this
Amendment, and the performance by each Credit Party of the Amended Agreement
do not and will not (i) violate any provision of any law or any governmental
rule or regulation applicable to Borrower or any of its Subsidiaries, the
Certificate or Articles of Incorporation or Bylaws of Borrower or any of its
Subsidiaries or any order, judgment or decree of any court or other agency of
government binding on Borrower or any of its Subsidiaries, (ii) conflict with,
result in a breach of or constitute (with due notice or lapse of time or both)
a default under any contractual obligation of Borrower or any of its
Subsidiaries, (iii) result in or require the creation or imposition of any
Lien upon any of the properties or assets of Borrower or any of its
Subsidiaries (other than Liens created under any of the Loan Documents in
favor of Administrative Agent on behalf of Lenders), or (iv) require any
approval of stockholders or any approval or consent of any Person under any
contractual obligation of Borrower or any of its Subsidiaries.
D. GOVERNMENTAL CONSENTS. The execution and delivery by each Credit Party of
this Amendment, and the performance by each Credit Party of the Amended
Agreement do not and will not require any registration with, consent or
approval of, or notice to, or other action to, with or by, any federal, state
or other governmental authority or regulatory body.
E. BINDING OBLIGATION. This Amendment and the Amended Agreement have been
duly executed and delivered by each Credit Party and are the legally valid and
binding obligations of each Credit Party, enforceable against each Credit
Party in accordance with their respective terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors' rights generally or by equitable principles relating to
enforceability.
F. INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM TERM LOAN
AGREEMENT. The representations and warranties contained in Section 4 of the
Term Loan Agreement are and will be true, correct and complete in all material
respects on and as of the Third Amendment Effective Date to the same extent as
though made on and as of that date, except to the extent such representations
and warranties specifically relate to an earlier date, in which case they were
true, correct and complete in all material respects on and as of such earlier
date.
G. ABSENCE OF DEFAULT. No event has occurred and is continuing or will
result from the consummation of the transactions contemplated by this
Amendment that would constitute an Event of Default.
SECTION 5. ACKNOWLEDGEMENT AND CONSENT
Borrower is a party to the Borrower Pledge Agreement pursuant to which
Borrower has pledged certain Collateral to Administrative Agent to secure the
Obligations. TRC is a party to the Subsidiary Guaranty and the Subsidiary
Pledge Agreement pursuant to which TRC has (i) guarantied the Obligations and
(ii) pledged certain Collateral to Administrative Agent to secure the
Obligations and to secure the obligations of TRC under the Subsidiary
Guaranty. TRC West, Inc. is a party to the Subsidiary Guaranty pursuant to
which TRC West, Inc. has guarantied the Obligations. Total Renal Care
Acquisition Corp. is a party to the Subsidiary Guaranty pursuant to which
Total Renal Care Acquisition Corp. has guarantied the Obligations. Borrower,
TRC, TRC West, Inc. and Total Renal Care Acquisition Corp. are collectively
referred to herein as the "CREDIT SUPPORT PARTIES", and the Borrower Pledge
Agreement, the Subsidiary Pledge Agreement and the Subsidiary Guaranty are
collectively referred to herein as the "CREDIT SUPPORT DOCUMENTS".
Each Credit Support Party hereby acknowledges that it has reviewed the terms
and provisions of the Term Loan Agreement and this Amendment and consents to
the amendment of the Term Loan Agreement effected pursuant to this Amendment.
Each Credit Support Party hereby confirms that each Credit Support Document to
which it is a party or otherwise bound and all Collateral encumbered thereby
will continue to guaranty or secure,
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as the case may be, to the fullest extent possible the payment and performance
of all "Guarantied Obligations" and "Secured Obligations," as the case may be
(in each case as such terms are defined in the applicable Credit Support
Document), including without limitation the payment and performance of all
such "Guarantied Obligations" and "Secured Obligations," as the case may be,
in respect of the Obligations of Borrower now or hereafter existing under or
in respect of the Amended Agreement and the Notes defined therein.
Each Credit Support Party acknowledges and agrees that any of the Credit
Support Documents to which it is a party or otherwise bound shall continue in
full force and effect and that all of its obligations thereunder shall be
valid and enforceable and shall not be impaired or limited by the execution or
effectiveness of this Amendment. Each Credit Support Party represents and
warrants that all representations and warranties contained in the Amended
Agreement and the Credit Support Documents to which it is a party or otherwise
bound are true, correct and complete in all material respects on and as of the
Third Amendment Effective Date to the same extent as though made on and as of
that date, except to the extent such representations and warranties
specifically relate to an earlier date, in which case they were true, correct
and complete in all material respects on and as of such earlier date.
Each Credit Support Party acknowledges and agrees that (i) notwithstanding
the conditions to effectiveness set forth in this Amendment, such Credit
Support Party is not required by the terms of the Term Loan Agreement or any
other Loan Document to consent to the amendments to the Term Loan Agreement
effected pursuant to this Amendment and (ii) nothing in the Term Loan
Agreement, this Amendment or any other Loan Document shall be deemed to
require the consent of such Credit Support Party to any future amendments to
the Term Loan Agreement.
SECTION 6. MISCELLANEOUS
A. REFERENCE TO AND EFFECT ON THE TERM LOAN AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
(i) On and after the Third Amendment Effective Date, each reference in
the Term Loan Agreement to "this Agreement", "hereunder", "hereof",
"herein" or words of like import referring to the Term Loan Agreement, and
each reference in the other Loan Documents to the "Term Loan Agreement",
"thereunder", "thereof" or words of like import referring to the Term Loan
Agreement shall mean and be a reference to the Amended Agreement.
(ii) On and after the Third Amendment Effective Date, each reference in
the Subsidiary Guaranty to "this Agreement", "hereunder", "hereof",
"herein" or words of like import referring to the Subsidiary Guaranty and
each reference in the other Loan Documents to the "Subsidiary Guaranty",
"thereunder", "thereof" or words of like import referring to the Subsidiary
Guaranty shall mean and be a reference to the Subsidiary Guaranty as
amended by this Amendment.
(iii) Except as specifically amended by this Amendment, the Term Loan
Agreement and the other Loan Documents shall remain in full force and
effect and are hereby ratified and confirmed.
(iv) The execution, delivery and performance of this Amendment shall not,
except as expressly provided herein, constitute a waiver of any provision
of, or operate as a waiver of any right, power or remedy of Administrative
Agent or any Lender under, the Term Loan Agreement or any of the other Loan
Documents.
B. FEES AND EXPENSES. Borrower acknowledges that all costs, fees and
expenses as described in Section 11.5 of the Term Loan Agreement incurred by
Administrative Agent, Syndication Agent, Co-Arrangers, and Special Counsel,
with respect to this Amendment and the documents and transactions contemplated
hereby shall be for the account of Borrower.
C. HEADINGS. Section and subsection headings in this Amendment are included
herein for convenience of reference only and shall not constitute a part of
this Amendment for any other purpose or be given any substantive effect.
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D. APPLICABLE LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
E. COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed an original, but all
such counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and
attached to a single counterpart so that all signature pages are physically
attached to the same document. This Amendment (other than the provisions of
Sections 1 and 2 hereof, the effectiveness of which is governed by Section 3
hereof) shall become effective upon the execution of a counterpart hereof by
Borrower, Required Lenders, Administrative Agent, and each of the Credit
Support Parties and receipt by Borrower and Administrative Agent of written or
telephonic notification of such execution and authorization of delivery
thereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered by their respective officers thereunto duly authorized
as of the date first written above.
BORROWER: TOTAL RENAL CARE HOLDINGS, INC.
By: _________________________________
Title: ______________________________
CREDIT SUPPORT PARTIES: TOTAL RENAL CARE, INC., (for
purposes of Sections 2 and 5 only)
as a Credit Support Party
By: _________________________________
Title: ______________________________
TRC WEST, INC., (for purposes of
Sections 2 and 5 only) as a Credit
Support Party
By: _________________________________
Title: ______________________________
TOTAL RENAL CARE ACQUISITION CORP.,
(for purposes of Sections 2 and 5
only) as a Credit Support Party
By: _________________________________
Title: ______________________________
AGENTS: THE BANK OF NEW YORK, Individually
as Administrative Agent, and
Collateral Agent
By: _________________________________
Title: ______________________________
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DLJ CAPITAL FUNDING, INC.,
Individually and as Syndication
Agent
By: _________________________________
Title: ______________________________
LENDERS: BDC FINANCE, LLC
By: _________________________________
Title: ______________________________
CITIBANK, N.A.
By: _________________________________
Title: ______________________________
CONTINENTAL ASSURANCE COMPANY
Separate Account (E)
By: TCW Asset Management Company, as
Attorney-In-Fact, as Assignee
By: _________________________________
Title: ______________________________
By: _________________________________
Title: ______________________________
DEBT STRATEGIES FUND, INC.
By: _________________________________
Title: ______________________________
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DEEPROCK & COMPANY
By: Eaton Vance Management as
Investment Advisor
By: _________________________________
Title: ______________________________
FRANKLIN FLOATING RATE TRUST
By: _________________________________
Title: ______________________________
KZH HOLDING CORPORATION III
By: _________________________________
Title: ______________________________
KZH--CRESCENT CORPORATION
By: _________________________________
Title: ______________________________
KZH--SOLEIL CORPORATION
By: _________________________________
Title: ______________________________
LEHMAN COMMERCIAL PAPER INC.
By: _________________________________
Title: ______________________________
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MERRILL LYNCH SENIOR FLOATING RATE
FUND, INC.
By: _________________________________
Title: ______________________________
MORGAN STANLEY SENIOR FUNDING, INC.
By: _________________________________
Title: ______________________________
OCTAGON CREDIT INVESTORS LOAN
PORTFOLIO (a unit of The Chase
Manhattan Bank)
By: _________________________________
Title: ______________________________
ORIX USA CORP.
By: _________________________________
Title: ______________________________
PARIBAS CAPITAL FUNDING LLC
By: _________________________________
Title: ______________________________
PILGRIM AMERICA PRIME RATE TRUST
By: _________________________________
Title: ______________________________
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SENIOR DEBT PORTFOLIO
By: Boston Management and Research,
as Investment Advisor
By: _________________________________
Title: ______________________________
SENIOR HIGH INCOME PORTFOLIO, INC.
By: _________________________________
Title: ______________________________
T. ROWE PRICE HIGH YIELD FUND INC.
By: _________________________________
Title: ______________________________
VAN KAMPEN AMERICAN CAPITAL PRIME
RATE INCOME TRUST
By: _________________________________
Title: ______________________________
MERRILL LYNCH PRIME RATE PORTFOLIO
By: Merrill Lynch Asset Management,
L.P., as Investment Advisor
By: _________________________________
Title: ______________________________
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