EXHIBIT 10.6
EXECUTION VERSION
TOTAL RENAL CARE HOLDINGS, INC.
LIMITED WAIVER AND THIRD AMENDMENT
TO AMENDED AND RESTATED TERM LOAN AGREEMENT
This LIMITED WAIVER AND THIRD AMENDMENT TO AMENDED AND RESTATED TERM LOAN
AGREEMENT (this "Amendment") is dated as of November 8, 1999, 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
(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 Section 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 Amended and Restated Term Loan Agreement dated
as of April 30, 1998, as amended to the date hereof (as so amended, the "Term
Loan Agreement"), by and among the 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, the Borrower, the undersigned Lenders, constituting Required Lenders,
the Administrative Agent, and the Syndication Agent desire to amend the Term
Loan Agreement for the purpose of increasing the interest rates payable on the
Loans;
WHEREAS, the Borrower has requested the lenders that are parties to the
Revolving Credit Facility to enter into an Amendment No. 4 and Waiver to and
under Amended and Restated Revolving Credit Agreement substantially in the form
of Annex I hereto (the "Revolving Credit Facility Waiver"), pursuant to which
such lenders would waive certain defaults that may have arisen under the
Revolving Credit Facility resulting from, among other things, the Borrower's
failure to comply with subsection 7.15 thereof;
WHEREAS, the Borrower has requested Lenders to waive any Defaults or Events of
Default that may have arisen under subsection 9.1(f) of the Term Loan Agreement
as a direct or indirect result of the delivery to the Administrative Agent of a
Notice of Conversion/Continuation dated October 5, 1999;
WHEREAS, the Borrower has requested Lenders to waive any Defaults or Events of
Default that may have arisen under subsection 9.1(g) of the Term Loan Agreement
as a result of any defaults that may have arisen under the Revolving Credit
Facility that will be waived or cured upon the effectiveness of the Revolving
Credit Facility Waiver, and Lenders are willing to waive any such Defaults and
Events of Default, subject to the terms and conditions hereof;
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 1: Definitions and Principals of Construction
A. Section 1.1 of the Term Loan Agreement is hereby amended effective as of
September 30, 1999, by deleting the definition of "Applicable Margin" in its
entirety and substituting the following therefor:
"Applicable Margin": at all times, 3.75% with respect to the unpaid
principal amount of Eurodollar Advances and 2.50% with respect to the
unpaid principal amount of ABR Advances."
Section 2. LIMITED WAIVER TO TERM LOAN AGREEMENT
A. Subject to the terms and conditions set forth herein and in reliance on the
representations and warranties of the Borrower herein contained, Lenders hereby
waive any Defaults and Events of Default that may have arisen under subsection
9.1(f) the Term Loan Agreement as a direct or indirect result of the delivery
to the Administrative Agent of a Notice of Conversion/Continuation dated
October 5, 1999.
B. Subject to the terms and conditions set forth herein and in reliance on the
representations and warranties of the Borrower herein contained, Lenders hereby
waive any Defaults and Events of Default that may have arisen during the period
from and including September 30, 1999, to and including the Third Amendment
Effective Date under subsection 9.1(g) of the Term Loan Agreement as a result
of any defaults that may have arisen under the Revolving Credit Facility that
will be waived or cured upon the effectiveness of the Revolving Credit Facility
Waiver.
Without limiting the generality of the provisions of subsection 11.1 of the
Term Loan Agreement, the waivers set forth above shall be limited precisely as
written and nothing in this Amendment shall be deemed to:
(a) constitute a waiver of any Defaults or Events of Default arising under
subsections 9.1(f) or 9.1(g) of the Term Loan Agreement in any other
instance, or a waiver of any other term, provision or condition of the Term
Loan Agreement or any other instrument or agreement referred to therein; or
(b) prejudice any right or remedy that Agents or any Lender may now have
(except to the extent such right or remedy was based upon any existing
defaults that will not exist after giving effect to this Waiver) or may
have in the future under or in connection with the Term Loan Agreement or
any other instrument or agreement referred to therein.
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 the Revolving Credit Facility Waiver, Administrative
Agent and Syndication Agent shall have received an executed copy thereof, and
such Revolving Credit Facility Waiver shall have become effective
simultaneously with the effectiveness hereof.
B. Borrower shall have paid to Administrative Agent, for distribution to each
Approving Lender (as defined in Section 7C hereof), the fees set forth in
Section 7C hereof.
C. The Administrative Agent shall have received a certificate, dated the Third
Amendment Effective Date, of the Secretary or Assistant Secretary of the
Borrower (i) attaching a true and complete copy of the resolutions of its Board
of Directors and of all documents evidencing other necessary corporate action
(in form and substance satisfactory to the Administrative Agent and the
Syndication Agent) taken by it to authorize this Amendment and the transactions
contemplated hereby, and (ii) setting forth the incumbency of its officer or
officers (including therein the signature specimen of such officer or officers)
who may sign this Amendment, any Loan Document or any other document, notice or
certificate executed and delivered in connection with any Loan Document.
D. The Administrative Agent shall have received the opinion of the general
counsel of the Borrower, the Guarantors and the Pledgors, dated the Third
Amendment Effective Date and addressed to the Administrative Agent, the
Collateral Agent, the Documentation Agent, the Syndication Agent and the
Lenders, in form and substance reasonably satisfactory to the Administrative
Agent and the Syndication Agent.
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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").
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 (after giving effect to this Amendment) 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, other than any Events of Default that
will be cured or waived upon the effectiveness of this Amendment.
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.
Each of the other Guarantors listed on the signature pages hereof is a party to
the
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Subsidiary Guaranty pursuant to which such Guarantor has guarantied the
Obligations. Borrower and the Guarantors 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, 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. PAYMENT OF ADDITIONAL INTEREST
Simultaneously with the delivery to the Administrative Agent of the Compliance
Certificate for the fiscal quarter of the Borrower ended on September 30, 1999
and in any event no later than November 15, 1999 (the "CC Delivery Date"), the
Borrower shall pay to Administrative Agent, for distribution to Lenders
(including assignors of Notes to Lenders, as applicable) any additional
interest that accrued under the Term Loan Agreement and Notes during the period
from and including September 30, 1999, to and including the CC Delivery Date,
as a result of any increase in the Applicable Margin caused by the amendment to
the definition of "Applicable Margin" effected hereby, to the extent that such
accrued interest would have been payable on any Interest Payment Date during
such period. All such additional interest that accrued under the Term Loan
Agreement and the Notes on and after September 30, 1999, that is not paid on or
before the CC Delivery Date, shall continue to be owed under the Term Loan
Agreement and the Notes, and shall be paid in accordance with the Term Loan
Agreement on the next applicable Interest Payment Date. The definition of
"Applicable Margin" in the Term Loan Agreement as in effect immediately prior
to September 30, 1999, shall continue to govern the calculation of interest
payable thereunder for periods prior to such date.
Section 7. 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
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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) 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.
(iii) 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 and shall be promptly paid by
Borrower following the submission of an invoice therefor.
C. Consent Fee. On the Third Amendment Effective Date, Borrower shall pay to
Administrative Agent, for distribution to each Lender that shall have executed
and delivered (without any reservation or condition) a counterpart of this
Amendment to Administrative Agent before 5:00 p.m. (New York City time) on
November 8, 1999 (each, an "Approving Lender"), non-refundable fees in the
amount of 1/4 of 1% of the aggregate amount of the Loans of each such Approving
Lender (immediately prior to the effectiveness hereof).
E. 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.
F. 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.
G. 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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ANNEX I
REVOLVING CREDIT FACILITY WAIVER
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: _________________________________
Name: _______________________________
Title: ______________________________
CREDIT SUPPORT PARTIES: TOTAL RENAL CARE, INC.,
TOTAL RENAL CARE ACQUISITION CORP.
RENAL TREATMENT CENTERS, INC.,
RENAL TREATMENT CENTERS--MID-
ATLANTIC, INC.
RENAL TREATMENT CENTERS-NORTHEAST,
INC.
RENAL TREATMENT CENTERS-CALIFORNIA,
INC.
RENAL TREATMENT CENTERS-WEST, INC.
RENAL TREATMENT CENTERS-SOUTHEAST,
INC. (for purposes of Section 5
only) each as a Credit Support
Party
Each by: ____________________________
Name: _______________________________
Title: ______________________________
TRC WEST, INC., (for purposes of
Section 5 only) as a Credit Support
Party
By: _________________________________
Name: _______________________________
Title: ______________________________
AGENTS: THE BANK OF NEW YORK, Individually
and as Administrative Agent and
Collateral Agent
By: _________________________________
Name: _______________________________
Title: ______________________________
DLJ CAPITAL FUNDING, INC.,
Individually and as Syndication
Agent
By: _________________________________
Name: _______________________________
Title: ______________________________
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