EXHIBIT 10.59
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ATRIA COMMUNITIES, INC.
as Borrower
And
VENCOR, INC.
as Parent Guarantor
FIRST HEALTHCARE CORPORATION
NORTHWEST HEALTHCARE, INC.
MEDISAVE PHARMACIES, INC.
HILLHAVEN OF CENTRAL FLORIDA, INC.
NATIONWIDE CARE, INC.
as Support Guarantors
With
PNC BANK, NATIONAL ASSOCIATION
as Administrative Agent
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PARENT GUARANTY
dated as of
August 15, 1996
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PARENT GUARANTY
PARENT GUARANTY ("this Agreement"), dated as of August 15, 1996, by:
(a) ATRIA COMMUNITIES, INC., a Delaware corporation (herein,
together with its successors and assigns, the "Borrower");
(b) VENCOR, INC., a Delaware corporation and the record and
beneficial owner of more than 60% of all of the issued and outstanding
shares of Common Stock of the Borrower (herein, together with its
successors and assigns, the "Parent Guarantor"); and
(c) FIRST HEALTHCARE CORPORATION, a Delaware corporation,
NORTHWEST HEALTHCARE, INC., an Idaho corporation, MEDISAVE PHARMACIES,
INC., a Delaware corporation, HILLHAVEN OF CENTRAL FLORIDA, INC., a
Delaware corporation, and NATIONWIDE CARE, INC., an Indiana corporation
(each, together with its successors and assigns, a "Supporting
Guarantor" and collectively, the "Supporting Guarantors");
with PNC BANK, NATIONAL ASSOCIATION, a national banking association, as
Administrative Agent (herein, together with its successors and assigns in such
capacity, the "Administrative Agent") for itself and the other Lenders (defined
below), for the benefit of (i) the Administrative Agent, (ii) the Lenders from
time to time party to the Credit Agreement referred to below, and (iii) the
Interest Rate Creditors referred to below:
PRELIMINARY STATEMENTS:
(1) This Agreement is made pursuant to the Credit Agreement, dated as
of the date hereof (herein, as amended or otherwise modified from time to time,
the "Credit Agreement"), among the Borrower, the financial institutions named as
lenders therein, and the Administrative Agent, as agent for the Lenders (as
defined in the Credit Agreement), providing, among other things, for loans or
advances or other extensions of credit to or for the benefit of the Borrower of
up to $200,000,000, with such loans or advances being evidenced by promissory
notes (the "Notes", such term to include all notes and other securities issued
in exchange therefor or in replacement thereof), and is made to induce the
Lenders to make Loans to the Borrower, and to issue and participate in Letters
of Credit for the account of the Borrower or any of its Subsidiaries, pursuant
to the Credit Agreement.
(2) The Borrower may from time to time be party to one or more
Designated Interest Rate Agreements (as defined in the Credit Agreement). Any
institution that participates, and in each case their subsequent assigns, as a
counterparty to any Designated Interest Rate Agreement (collectively, the
"Interest Rate Creditors," and the Interest Rate Creditors together with the
Lenders, collectively the "Creditors"), shall benefit hereunder as herein
provided.
(3) This Agreement is made for the pro rata benefit of the
Administrative Agent and the Creditors to guarantee the payment of the principal
of and interest on the Notes and the payment and performance by the Borrower of
its obligations under the Credit Agreement, the other Credit Documents to which
the Borrower is a party and the Designated Interest Rate Agreements. This
Agreement is one of the Credit Documents referred to in the Credit Agreement.
(4) The Supporting Guarantors are entering into this Agreement to
guarantee the obligations of the Parent Guarantor hereunder, as set forth in
section 19 hereof.
NOW, THEREFORE, it is agreed as follows:
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1. Defined Terms. Certain capitalized terms used herein without
definition shall have the respective meanings specified in the Credit Agreement
and the other Credit Documents.
2. Guaranty by the Parent Guarantor, etc.
2.1. Required Payments. The Parent Guarantor hereby guarantees to the
Administrative Agent and the Creditors, for the ratable benefit of the
Administrative Agent and the Creditors, the due and punctual payment, when and
as the same shall become due and payable, of the following amounts, including
amounts that would become due but for the operation of the automatic stay under
section 362(a) of the Bankruptcy Code, 11 U.S.C. ss. 362(a) (the "Required
Payments"):
(a) all amounts of principal becoming due and payable on the
DPP Revolving Loans in accordance with the terms thereof and of the
Credit Agreement, whether at stated maturity or as an installment or by
required prepayment or notice of optional prepayment or declaration of
acceleration or otherwise;
(b) all amounts of interest becoming due and payable on the
DPP Revolving Loans in accordance with the terms thereof and of the
Credit Agreement, including interest on any overdue principal and (to
the extent permitted by applicable law) on any overdue interest;
(c) all amounts payable by the Borrower to the Administrative
Agent or any Letter of Credit Issuer as reimbursement for any payment
or disbursement made by such Letter of Credit Issuer under any Letter
of Credit issued (or deemed issued) as contemplated by the Credit
Agreement, to the extent the same relates to Allocated DPP Letter of
Credit Outstandings;
(d) all other amounts payable by the Borrower to the
Administrative Agent, the Lenders and any Letter of Credit Issuer under
the Credit Agreement and the other Credit Documents which are related
to any of the foregoing; and
(e) with respect to all amounts payable by the Borrower to all
Interest Rate Creditors under all Designated Interest Rate Agreements,
the portion thereof, as reasonably determined by the Administrative
Agent at any time or from time to time (any such determination being
conclusive on all persons affected thereby, in the absence of manifest
error), which is equal to (i) a fraction the numerator of which is the
Allocated Measured DPP Swap Credit Exposure at such time, and the
denominator of which is the Aggregate Measured Swap Credit Exposure at
such time, times (ii) the aggregate of all amounts payable by the
Borrower to all Interest Rate Creditors under all Designated Interest
Rate Agreements.
Such guaranty is an absolute, unconditional, present and continuing guaranty of
payment and not of collectibility and is in no way conditioned or contingent
upon any attempt to collect from the Borrower, or any other action, occurrence
or circumstance whatsoever. If the Borrower shall fail to make any Required
Payment when and as the same shall become due and payable, the Parent Guarantor
shall forthwith make such Required Payment upon demand by the Administrative
Agent, in U. S. Dollars, in immediately available funds, directly to the
Administrative Agent, at its address specified in or pursuant to this Agreement,
or at such other place as the Administrative Agent shall direct, for application
as provided in section 27.
2.2. Maximum Guaranteed Amount. Notwithstanding any provisions of this
Agreement to the contrary, the maximum amount which the Parent Guarantor shall
be required to pay under section 2.1 hereof, together with any further amounts
or damages to which the Administrative Agent (on behalf of itself and the
Creditors) would be entitled for any breach by the Parent Guarantor of its
representations, warranties and covenants contained in sections 10, 11, 12, 13,
14, 15, 16 or 17 of this Agreement, specifically exclusive of any amounts or
damages to which the Administrative Agent (on behalf of itself and the
Creditors) would be entitled under sections 23, 24 and 26 of this Agreement,
shall be the amount identified below (the "Maximum Guaranteed Amount")
corresponding to the applicable period during which the Administrative Agent
shall have made demand upon the Parent Guarantor under section 2.1 hereof:
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is made by the Administrative Agent Maximum Guaranteed Amount
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On or prior to the first anniversary
of the Closing Date $100,000,000
Thereafter and on or prior to the
second anniversary of the
Closing Date $75,000,000
Thereafter and on or prior to the
third anniversary of the
Closing Date $50,000,000
Thereafter and on or prior to the
fourth anniversary of the
Closing Date $25,000,000
Thereafter $-0-
; provided, however, that the Parent Guarantor may irrevocably elect, upon
written notice from the Parent Guarantor which is received by the Administrative
Agent prior to any date identified in the above table on which the Maximum
Guaranteed Amount is scheduled to reduce in amount, that the reduction so
scheduled to occur on such date shall not be effective and that the Parent
Guarantor elects either of the following: (i) that the Maximum Guaranteed Amount
shall not be reduced on such scheduled date of reduction, or (ii) that the
Maximum Guaranteed Amount shall be reduced on such scheduled date of reduction,
but by an amount less than the amount of the reduction scheduled to occur on
such date, specifying such lesser amount of reduction; and any such notice from
the Parent Guarantor shall specify any such election; and provided, further,
that no reduction in the Maximum Guaranteed Amount scheduled to take place in
accordance with the foregoing table shall become effective for any purpose
unless (A) during the entire 30-day period ending on any such scheduled date of
reduction, the sum of the aggregate outstanding DPP Revolving Loans, the
Allocated DPP Letter of Credit Outstandings and the Allocated Measured DPP Swap
Credit Exposure, is not greater than the amount to which the Maximum Guaranteed
Amount is scheduled to reduce on such date (taking into account any actions of
the Parent Guarantor pursuant to the preceding proviso), and (B) during the
period commencing 30 days prior to such scheduled date of reduction and ending
15 days prior to such scheduled date of reduction, the Borrower shall have
delivered to the Administrative Agent and the Managing Agent a written notice,
referring specifically to this section 2.2, advising the Administrative Agent
and the Managing Agent of the reduction in the Maximum Guaranteed Amount which
is scheduled to occur, and certifying that the condition specified in the
preceding clause (A) will be satisfied with reference to the scheduled reduction
in the Maximum Guaranteed Amount.
2.3. Early Termination of Guaranty of Required Payments. The guaranty
provided in section 2.1 will terminate, except with respect to any outstanding
demands by the Administrative Agent in respect thereof, at any time after the
third anniversary of the Closing Date if, at such time, each of the following
conditions is satisfied:
(a) the Borrower's ratio of Total Indebtedness to Total
Capitalization as of the end of the most recent fiscal period for which
financial statements have been delivered pursuant to section 7.1(a) or
(b) of the Credit Agreement, expressed as a percentage, is less than
60%;
(b) the Borrower's ratio of Total Indebtedness to EBITDA for the
most recent Testing Period for which financial statements have been
delivered pursuant to section 7.1(a) or (b) of the Credit Agreement, is
less than 3.50 to 1.00;
(c) the Borrower shall have delivered to the Administrative
Agent its financial statements pursuant to section 7.1(a) or (b) of the
Credit Agreement, together with the certificate referred to in section
7.1(e) of the Credit Agreement relating thereto, demonstrating to the
satisfaction of the Managing Agent that the conditions specified in
clauses (a) and (b) above have been satisfied;
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(d) the number of the individual properties in the Mature
Property Pool which are owned or leased by the Borrower or any of its
Subsidiaries shall be at least three times the number of individual
properties in the Development Property Pool;
(e) no Default or Event of Default shall have occurred and be
continuing, or would result from such termination; and
(f) no Change of Control shall have occurred.
In the event the Parent Guarantor believes such conditions are satisfied as
herein contemplated, it will so notify the Administrative Agent and the Managing
Agent in writing and will provide to the Administrative Agent and the Managing
Agent contemporaneously with any such notice such supporting materials upon
which such belief is based, and the Administrative Agent will promptly notify
the Creditors in writing of such notification by the Parent Guarantor and will
provide to the Creditors contemporaneously therewith copies of any such
supporting materials provided by the Parent Guarantor. Upon the Managing Agent's
determination that such conditions are satisfied as herein contemplated, it will
so notify the Administrative Agent, the Parent Guarantor and the Borrower in
writing (and the Administrative Agent shall promptly provide a copy of such
notice to the Creditors) and such termination shall be effective when such
notice is so given by the Managing Agent.
2.4. Subrogation. In the event the Parent Guarantor shall at any time
make any Required Payment, in the performance of its obligations to guarantee
payment thereof by the Borrower in accordance with the terms and provisions of
this Agreement, all rights of the Parent Guarantor for subrogation,
reimbursement, indemnity, contribution or otherwise against the Borrower in
respect thereof, together with all rights of the Parent Guarantor in any
collateral securing payment or performance obligations of the Borrower, shall in
all respects be subordinated and junior in right of payment to the indefeasible
payment in full of all Required Payments owed to the Administrative Agent and
the Creditors and all other Obligations of the Borrower under the Credit
Documents and the Designated Interest Rate Agreements; provided, however, that
to the extent any such right of subrogation, reimbursement, indemnity,
contribution or otherwise, or right in collateral, would constitute the Parent
Guarantor a creditor of the Borrower in respect thereof within the meaning of
section 547(b) of the Bankruptcy Code, as now in effect or hereafter amended, or
any comparable provisions of any successor statute, in the event a case
involving the Borrower shall at any time be commenced under the Bankruptcy Code,
as now in effect or hereafter amended, or any comparable provision of any
successor statute, the Parent Guarantor hereby irrevocably waives such right and
agrees that it will not assert, enforce or otherwise exercise any such right.
2.5. Reinstatement. This Agreement shall continue to be effective or be
reinstated, as the case may be, if at any time payment, or any part thereof, of,
or in respect of, any Required Payment is rescinded or must otherwise be
restored by the Administrative Agent or any Creditor, or any other creditor of
the Borrower, upon the bankruptcy or reorganization of the Borrower or
otherwise.
2.6. Guarantor Familiar with Borrower's Affairs, etc. The Parent
Guarantor confirms that it has executed and delivered this Agreement after
reviewing the terms and conditions of the Credit Agreement, this Agreement and
the other Credit Documents and such other information as it has deemed
appropriate in order to make its own credit analysis and decision to execute and
deliver this Agreement. The Parent Guarantor confirms that it has made its own
independent investigation with respect to the Borrower's creditworthiness and is
not executing and delivering this Agreement in reliance on any representation or
warranty by the Administrative Agent or any Creditor or any other person acting
on behalf of the Administrative Agent or any Creditor as to such
creditworthiness. The Parent Guarantor expressly assumes all responsibilities to
remain informed of the financial condition of the Borrower and any circumstances
affecting (a) the Borrower's ability to perform its obligations under the Credit
Agreement, the other Credit Documents to which it is a party, and any Designated
Interest Rate Agreement, or (b) any collateral securing, or other guaranty
supporting, all or any part of the Borrower's payment and performance
obligations thereunder.
3. Subordination. The Parent Guarantor agrees that all Indebtedness
of the Borrower to the Parent Guarantor, whether now outstanding or hereafter
incurred or assumed and whether arising out of any prior loans or advances or
this Agreement or otherwise, in each case whether for principal, premium, if
any, or interest (all such Indebtedness being herein called "Subordinated
Indebtedness") shall be subordinate and junior in right of payment
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to all Indebtedness of the Borrower included in the Required Payments, all other
Obligations of the Borrower under the Credit Documents and all obligations under
any of the Designated Interest Rate Agreements, including any extensions,
modifications or renewals of any thereof and any amounts accruing after the
commencement of any proceeding of the character referred to in subdivision (b)
of this section 3 (all such Indebtedness being herein called "Senior
Indebtedness"), as follows:
(a) Unless and until all Senior Indebtedness shall have been paid
in full, the Borrower will not directly or indirectly purchase or
otherwise acquire any Subordinated Indebtedness, and the Borrower will
not make and neither the Parent Guarantor nor any other holder of
Subordinated Indebtedness will demand, accept or receive, any direct or
indirect payment (in cash, property, by set-off or otherwise) of or on
account of any Subordinated Indebtedness, and no such payment shall be
due, and neither the Parent Guarantor nor any other holder of
Subordinated Indebtedness will commence any action, suit or other
proceeding, or otherwise take any enforcement action, against the
Borrower with respect thereto; provided that nothing contained in this
subdivision (a) shall prevent the Borrower from making, or the Parent
Guarantor from accepting and receiving, any payment to the Parent
Guarantor on account of Subordinated Indebtedness if at the time of
such payment (i) no Default or Event of Default shall have occurred and
be continuing under the Credit Agreement or would result therefrom, and
(ii) the Administrative Agent shall not have given notice to the
Borrower and the Parent Guarantor that a Default or Event of Default
shall have occurred and be continuing under the Credit Agreement.
(b) In the event of any proceeding with respect to the Borrower or
any significant part of its properties or assets involving insolvency
or bankruptcy, including without limitation, any insolvency,
bankruptcy, receivership, liquidation, reorganization, readjustment,
composition, arrangement or other similar proceeding, or any such
proceeding by, among or on behalf of any of its creditors, as such, or
any proceeding for the voluntary liquidation, dissolution or other
winding up of the Borrower (whether or not involving insolvency or
bankruptcy proceedings) or any assignment for the benefit of its
creditors, or any other marshalling of its assets, then and in any such
event:
(i) all Senior Indebtedness shall first be paid in full
before any payment or distribution of any character, whether in
cash, securities or other property, shall be made on account of
any Subordinated Indebtedness;
(ii) payment or distribution of any character, whether in
cash, securities or other property, which would otherwise (but for
the terms of this section 3) be payable or deliverable in respect
of any Subordinated Indebtedness shall be paid or delivered
directly to the Administrative Agent or any Lender for application
as provided in the Credit Agreement, to the extent necessary to
pay all Senior Indebtedness in full;
(iii) the holders of Subordinated Indebtedness irrevocably
authorize and empower the Administrative Agent to demand, sue for,
collect and receive all such payments and distributions and
receipt therefor, and to file and prove all such claims and take
all such other action in the name of the holders of Subordinated
Indebtedness or otherwise as the Administrative Agent may
determine to be necessary or appropriate for the enforcement of
this Agreement; and
(iv) the holders of Subordinated Indebtedness will execute
and deliver to the Administrative Agent and each Creditor all such
further instruments confirming the above authorization, and all
such powers of attorney, proofs of claim, assignments of claim and
other instruments, and will, take all such other action, as may be
requested by the Administrative Agent or any Creditor in order to
enable the Administrative Agent and the Creditors to enforce all
claims upon or in respect of any such payment or distribution in
respect of Subordinated Indebtedness.
(c) If any payment or distribution of any character, whether
in cash, securities or other property, in respect of any Subordinated
Indebtedness (other than payments permitted pursuant to subdivision (a)
of this section 3) shall, despite the terms of this section 3, be
received by the Parent Guarantor or any other holder of Subordinated
Indebtedness before all Senior Indebtedness shall have been paid
in full, such payment or distribution shall be held in trust
for the benefit of the holders of Senior Indebtedness and shall
forthwith be paid
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over or delivered to the Administrative Agent, for application
as provided in the Credit Agreement, to the extent necessary to pay all
Senior Indebtedness in full.
(d) In the event that, notwithstanding any of the terms of this
section 3, any Subordinated Indebtedness is declared or otherwise
becomes due and payable under circumstances when neither the terms of
subdivision (a) nor of subdivision (b) of this section 3 are
applicable, neither the Parent Guarantor nor any other holder of
Subordinated Indebtedness shall be entitled to receive any payment
thereon until all Senior Indebtedness shall have been paid in full.
(e) Without limiting the effect of any of the other terms of this
section 3, during the continuance of any Event of Default no payment of
or on account of any Subordinated Indebtedness shall be made unless and
until all Senior Indebtedness shall have been paid in full.
(f) The Borrower will not execute and deliver, issue or give, and
neither the Parent Guarantor nor any other holder of Subordinated
Indebtedness will demand, accept or receive, any instrument or other
evidence of, or any security for, any Subordinated Indebtedness, except
that notwithstanding the foregoing the Borrower may issue to the Parent
Guarantor a single promissory note evidincing all Subordinated
Indebtedness owed to the Parent Guarantor if such promissory note
contains a legend, or has attached thereto an allonge, satisfactory in
form and substance to the Administrative Agent, indicating that the
indebtedness evidenced thereby has been subordinated to the Senior
Indebtedness in accordance with the provisions of this Agreement and
that any holder of such promissory note shall be bound by the
subordination provisions of this Agreement applicable to the
indebtedness evidenced by such promissory note.
(g) Upon payment in full of all Senior Indebtedness, the holders
of Subordinated Indebtedness shall be subrogated to the rights of the
holders of Senior Indebtedness to receive any further payments or
distributions in respect of the Senior Indebtedness, as and to the
extent provided in section 2.4.
(h) For the purposes of this section 3, Senior Indebtedness shall
not be deemed to have been paid in full unless and until the holders of
Senior Indebtedness shall have received cash or marketable securities,
taken at their then market value, or both, equal to the amount of such
Senior Indebtedness at the time outstanding.
(i) The Borrower and the Parent Guarantor will cause their
respective books of account, and those of any other holder of
Subordinated Indebtedness, to be marked in such manner as shall be
effective to give proper notice of the provisions of this section 3.
(j) Unless and until all Senior Indebtedness shall have been paid
in full, neither the Parent Guarantor nor any other holder of
Subordinated Indebtedness will assign or otherwise transfer, or in any
way encumber, any Subordinated Indebtedness or any interest therein,
without the prior written consent of the Administrative Agent, except
that all Subordinated Indebtedness at the time held by the Parent
Guarantor may be transferred to any corporation assuming the
obligations of the Parent Guarantor hereunder in connection with a
transaction permitted by section 12.
4. Certain Notices by the Borrower and the Administrative Agent.
Without diminishing in any respect any of the waivers contained in section 6, or
the absolute and unconditional nature of the obligations of the Parent Guarantor
under section 2 or under section 5:
(i) the Borrower agrees to give the Parent Guarantor prompt notice
of (A) any events which might affect any scheduled reduction in the
Maximum Guaranteed Amount pursuant to section 2.2 hereof; and (B) any
of the matters referred to in section 5, or any other events or
circumstances involving the Borrower, which could reasonably be
expected to be materially adverse to the interests of the Parent
Guarantor; and
(ii) if the Administrative Agent (A) believes that the Borrower
has failed to give the Parent Guarantor notice of any material
amendment to, or other material modification of, any of the
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Credit Documents, or (B) gives any formal written notice to the
Borrower concerning an Event of Default under the Credit Agreement, or
concerning an acceleration of the maturity of the Notes upon the
occurrence of an Event of Default under the Credit Agreement, then the
Administrative Agent shall use reasonable efforts to give reasonably
prompt notice thereof to the Parent Guarantor, but failure to give any
such notice shall not result in any monetary liability on the part of
the Administrative Agent.
5. Guarantor's Obligations Absolute, etc. The obligations of the Parent
Guarantor under sections 2.1, 2.4, 2.5 and 3 of this Agreement shall, except as
limited in section 2.2, (i) be absolute and unconditional, (ii) not be subject
to any counterclaim, setoff, deduction or defense based on any claim the Parent
Guarantor may have against the Borrower, the Administrative Agent, any Creditor,
or any of their respective Affiliates, and (iii) remain in full force and effect
without regard to, and shall not be released, suspended, abated, deferred,
reduced, discharged, terminated or otherwise affected by any circumstance or
occurrence whatsoever (whether or not the Parent Guarantor or any of its
Affiliates shall have any knowledge or notice thereof), including, without
limitation: (a) any renewal, extension, amendment or modification of or addition
or supplement to or deletion from the Credit Agreement, the Notes, any other
Credit Document, or any other instrument or agreement applicable to the Parent
Guarantor, the Borrower, or any other person, or any part thereof, or any
assignment, transfer or other disposition of any thereof; (b) any failure of the
Credit Agreement, the Notes, any other Credit Document, or any other instrument
or agreement applicable to the Parent Guarantor, the Borrower, or any other
person, to constitute the legal, valid and binding agreement or obligation of
any party thereto, enforceable in accordance with its terms; (c) any failure on
the part of the Borrower or any other person to perform or comply with any term
or provision of the Credit Agreement, the Notes, any other Credit Document, or
any such instrument or agreement; (d) any waiver, consent, extension, indulgence
or other action or inaction (including, without limitation, any lack of
diligence or failure to mitigate damages) under or in respect of the Credit
Agreement, the Notes, any other Credit Document, or any such instrument or
agreement, or any obligation or liability of the Borrower or any other person,
or any exercise or non-exercise of any right, power or remedy under or in
respect of the Credit Agreement, the Notes, any other Credit Document, or any
such instrument or agreement, or any such obligation or liability; (e) the
existence of any right of offset or banker's lien, or any failure to exercise
rights in respect thereof, or any release thereof; (f) any furnishing of any
additional security or any additional guaranty to the Administrative Agent or
any Creditor or any acceptance thereof or any release of any security or any
guaranty by the Administrative Agent or any Creditor; (g) any limitation on any
other person's liability or obligation under the Credit Agreement, the Notes,
any other Credit Document, or any such instrument or agreement or any such
obligation or liability or any termination, cancellation, commercial or other
frustration, invalidity, unenforceability or ineffectiveness, in whole or in
part, of the Credit Agreement, the Notes, any other Credit Document, or any such
instrument or agreement or any such obligation or liability or any term or
provision of any thereof; (h) any insolvency, bankruptcy, receivership,
liquidation, reorganization, readjustment, composition, arrangement or other
similar proceeding relating to the Borrower or to any of its properties or
assets, or any such proceeding by, among or on behalf of any of its creditors,
as such, or any proceeding for the voluntary liquidation or dissolution or other
winding up of the Borrower, whether or not insolvency or bankruptcy proceedings,
or any assignment for the benefit of its creditors, or any other marshalling of
its assets, or any action taken by any trustee or receiver or by any court in
any such proceeding; (i) any disallowance or limitation of any claim of the
Administrative Agent or any Creditor, or any other person, in any such
proceeding; (j) any change in the ownership of all or any part of the capital
stock of the Borrower, or any merger or consolidation involving the Borrower or
any of its Affiliates, or any purchase, sale or lease by the Borrower or any of
its Affiliates of any assets; (k) any inability of the Borrower to create or
incur Subordinated Indebtedness, or the existence of any contractual or other
restriction upon the ability of the Borrower to issue and sell shares of its
capital stock, to purchase, sell, lease or otherwise dispose of assets, to incur
Indebtedness, or to otherwise conduct its business affairs; (l) any assignment,
transfer or other disposition, in whole or in part, by the Borrower or any other
person of its interest in any of the property subjected to the liens and
security interests created by the Security Documents; (m) any failure of any of
the Security Documents to effectively subject any property to the liens and
security interests purported to be created thereunder, or any failure of any
such liens or security interests to establish or maintain the priority over
other liens and security interests contemplated thereby; (n) any taking of or
any encumbrance on or interference with any use of or any damage to or
destruction of such property, or any part thereof or interest therein; or
(o) any other circumstance or occurrence, whether similar or dissimilar to any
of the foregoing.
6. Waiver. The Parent Guarantor unconditionally waives, to the
maximum extent permitted under any applicable law now or hereafter in effect,
insofar as its obligations under section 2.1, 2.4, 2.5 and 3 of this Agreement
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are concerned, (a) notice of any of the matters referred to in section 4 or
section 5, (b) all notices required by statute, rule of law or otherwise to
preserve any rights against the Parent Guarantor hereunder, including, without
limitation, any demand, presentment, proof or notice of non-payment of any
Required Payments or any Senior Indebtedness, and notice of any failure on the
part of the Borrower to perform or comply with any term or provision of the
Credit Agreement, the Notes, the other Credit Documents or any other agreement
or instrument to which the Borrower or any other person is a party, (c) any
right to the enforcement, assertion or exercise against the Borrower or against
any other person or any collateral of any right, power or remedy under or in
respect of the Credit Agreement, the Notes, the other Credit Documents or any
other agreement or instrument, and (d) any requirement that the Parent Guarantor
be joined as a party to any proceedings against the Borrower or any other person
for the enforcement of any term or provision of the Credit Agreement, the Notes,
the other Credit Documents or any other agreement or instrument.
7. Financial Statements and Other Information. The Parent Guarantor
will deliver to the Administrative Agent, in sufficient quantities for each
Lender (and the Administrative Agent shall promptly furnish to the Lenders the
copies thereof intended for the Lenders), so long as the Credit Agreement is in
effect and until such time as the Total Commitment has been terminated, no Notes
are outstanding and the Loans, together with interest, Fees and all other
Obligations under the Credit Documents, have been paid in full:
(a) within 45 days after the end of each of the first three
quarterly fiscal periods of each fiscal year, commencing with the first
such quarterly period ending on or after the date hereof, a condensed
consolidated balance sheet of the Parent Guarantor and its consolidated
subsidiaries as at the end of such period, and the related condensed
consolidated statements of income and cash flows of the Parent
Guarantor and its consolidated subsidiaries for such period, setting
forth in each case in comparative form figures for the corresponding
periods of the previous fiscal year, and certified, subject to changes
resulting from year-end audit adjustments, as fairly presenting the
consolidated financial position of the Parent Guarantor and its
consolidated subsidiaries as at the end of such period and the
consolidated results of their operations and cash flows for such period
in conformity with GAAP (except for the omission of any footnotes which
would be required under GAAP) consistently applied (except as noted
therein), by a responsible financial officer of the Parent Guarantor;
(b) within 90 days after the end of each fiscal year, commencing
with the first such fiscal year ending on or after the date hereof, a
consolidated balance sheet of the Parent Guarantor and its consolidated
subsidiaries as at the end of such year, and the related consolidated
statements of income, cash flows and of shareholders' equity of the
Parent Guarantor and its consolidated subsidiaries for such year,
setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail and accompanied by the
opinion thereon of independent public accountants of recognized
national standing selected by the Parent Guarantor, which opinion shall
state that such accountants audited such consolidated financial
statements in accordance with generally accepted auditing standards,
that such accountants believe that such audit provides a reasonable
basis for their opinion, and that in their opinion such consolidated
financial statements present fairly, in all material respects, the
consolidated financial position of the Parent Guarantor and its
consolidated subsidiaries as at the end of such fiscal year and the
consolidated results of their operations and cash flows for such fiscal
year in conformity with GAAP;
(c) together with each delivery of the consolidated financial
statements of the Parent Guarantor and its consolidated subsidiaries
pursuant to subdivision (a) or (b) above, a certificate of a
responsible financial or accounting officer the Parent Guarantor to the
effect that the signer has reviewed the relevant terms of the Credit
Agreement, this Agreement and the other Credit Documents, and has made
or caused to be made under his or her supervision an adequate review of
the transactions and condition of the Parent Guarantor and its
subsidiaries during the fiscal period covered by such financial
statements and as at the date of such certificate, and that such review
has not disclosed the existence, during such fiscal period or as at the
date of such certificate, of any condition or event which constitutes
or which, after notice or lapse of time or both, would constitute an
Event of Default, or, if any such condition or event existed or exists,
specifying the nature and period of existence thereof and what action
the Parent Guarantor has taken or is taking or proposes to take with
respect thereto, which certificate shall set forth the calculations
required to establish compliance with the provisions of section 14 and
(if the Parent Guarantor has notified the Administrative Agent that it
believes the conditions specified in section 2.3 have been satisfied so
as to entitle the Parent Guarantor to an early
8
termination of this Agreement) any necessary information related to
establishing satisfaction of the conditions specified in section 2.3;
(d) unless the Parent Guarantor has an Investment Grade Rating,
together with each delivery of the consolidated financial statements of
the Parent Guarantor and its consolidated subsidiaries pursuant to
subdivision (b) above, a certificate of the independent public
accountants reporting thereon, stating whether or not their examination
has disclosed the existence, during the fiscal year covered by such
financial statements, of any condition or event which constitutes or
which, after notice or lapse of time or both, would constitute an Event
of Default and, if their examination has disclosed any such condition
or event, specifying the nature and period of existence thereof (it
being understood that such certificate may state that, in making their
examination, such accountants have not carried out or performed any
special procedures which are beyond the scope of generally accepted
auditing standards and procedures for examination of financial
statements);
(e) forthwith upon any principal officer of the Parent Guarantor
obtaining knowledge of any condition or event which constitutes or
which, after notice of lapse of time or both, would constitute an Event
of Default, an officers' certificate of the Parent Guarantor,
specifying the nature and period of existence thereof and what action
the Parent Guarantor has taken or is taking or proposes to take with
respect thereto;
(f) promptly after execution thereof, copies of any amendment to
its existing Credit Agreement, dated as of September 11, 1995, with the
banks named therein and Morgan Guaranty Trust Company of New York, as
Documentation Agent, and NationsBank, N.A. (Carolinas), as
Administrative Agent, as in effect on the Closing Date (as so in effect
on the Closing Date, and as the same may be amended, supplemented or
modified, or replaced with an agreement with substantially the same
bank group (whether in the same or a larger or smaller aggregate amount
of credit facilities), the "1995 Credit Agreement"), and copies of any
other credit agreement entered into after the Closing Date in
connection with a replacement or refinancing thereof (and any
amendments thereto); and
(g) promptly upon transmission thereof or other filing with the
SEC, copies of all registration statements (other than the exhibits
thereto and any registration statement on Form S-8 or its equivalent)
and annual, quarterly or current reports that the Parent Guarantor or
any of its Subsidiaries (other than the Borrower or any of its
Subsidiaries) files with the SEC; and
(h) with reasonable promptness, such other information or
documents (financial or otherwise) relating to the Parent Guarantor or
any of its Subsidiaries (other than the Borrower or any of its
Subsidiaries) as the Administrative Agent on its own behalf or on
behalf of the Required Lenders may reasonably request from time to
time.
As used herein, the term "Investment Grade Rating" means the publicly held
senior unsecured and unsupported debt securities of the Parent Guarantor have a
rating from Standard & Poor's Ratings Group, or its successor, of BBB- or
better, and a rating from Moody's Investors Service, Inc., or its successor, of
Baa3 or better, or the equivalent of such ratings if such rating agencies change
their terminology for such ratings.
8. Further Assurance, etc. The Borrower and the Parent Guarantor, at
their respective expense, will duly execute, acknowledge and deliver all such
instruments and take all such action as the Administrative Agent may reasonably
request in order to effectuate the purposes of this Agreement and to carry out
the terms hereof.
9. Consent to Performance by the Borrower. The Parent Guarantor, as
the record and beneficial owner of a majority of all of the issued and
outstanding shares of Common Stock of the Borrower, consents to and approves the
execution, delivery and performance by the Borrower of the Credit Agreement,
this Agreement and the other Credit Documents to which the Borrower is a party.
10. Representations and Warranties by the Parent Guarantor. The Parent
Guarantor represents and warrants to the Administrative Agent, for the benefit
of the Administrative Agent and the Creditors, that:
9
(a) Organization, Standing, etc. The Parent Guarantor is a
corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware and has all requisite corporate power
and authority to carry on its business and to enter into this
Agreement, to guarantee the Required Payments as herein provided, and
to carry out the terms hereof.
(b) Qualification. The Parent Guarantor is duly qualified and in
good standing as a foreign corporation authorized to do business in all
jurisdictions wherein the character of the properties owned by it or
the nature of the business carried on by it makes such qualification
necessary, except in such respects as do not and could not reasonably
be expected to, individually or in the aggregate, result in a Material
Adverse Effect.
(c) Ownership of Borrower Stock. The Parent Guarantor is at the
Closing Date the record and beneficial owner of 10,000,000 shares of
Common Stock of the Borrower.
(d) Authorization, Validity and Enforceability of Agreement, etc.
This Agreement has been duly authorized by all necessary corporate or
other organizational action on the part of the Parent Guarantor and
each Supporting Guarantor (no approval of the shareholders or partners
of the Parent Guarantor or any Supporting Guarantor, as the case may
be, being required), has been duly executed and delivered by a duly
authorized officer or officers of the Parent Guarantor and each
Supporting Guarantor (or a partner thereof, in the case of any
Supporting Guarantor which is a partnership), and constitutes the valid
and binding agreement or obligation of the Parent Guarantor and each
Supporting Guarantor, enforceable against the Parent Guarantor and each
Supporting Guarantor in accordance with its terms, except as such
enforceability may be limited by (i) bankruptcy, insolvency,
moratorium, reorganization or other similar laws affecting the rights
of creditors generally, or (ii) principles of equity (regardless of
whether such principles are considered in a proceeding at law or in
equity).
(e) Financial Statements; Changes, etc. The Parent Guarantor has
furnished to the Lenders complete and correct copies of (i) the audited
consolidated balance sheet of the Parent Guarantor and its consolidated
subsidiaries at December 31, 1995 and 1994, and the related audited
consolidated statements of operations, shareholders' equity and cash
flows for the three years in the period ended December 31, 1995,
together with the report thereon of Ernst & Young LLP, its independent
public accountants, as included in the Parent Guarantor's Form 10-K
filed with the SEC for the fiscal year ended December 31, 1995, and
(ii) its unaudited condensed consolidated statement of income for the
three months ended March 31, 1996 and 1995, its unaudited condensed
consolidated balance sheet at March 31, 1996 and December 31, 1995, and
its unaudited condensed consolidated statement of cash flows for the
three months ended March 31, 1996 and 1995, as included in the Parent
Guarantor's Form 10-Q filed with the SEC for the quarterly period ended
March 31, 1996. Such consolidated financial statements are complete and
correct, have been prepared in accordance with GAAP, consistently
applied (except as stated therein), and fairly present the consolidated
financial position of the Parent Guarantor and its consolidated
subsidiaries as at the respective dates indicated and the results of
their consolidated operations and cash flows for the respective periods
indicated. Since the date of the most recent audited balance sheet
furnished pursuant to this section 10(e), no condition has come into
existence which has had, or is reasonably likely to have, a Material
Adverse Effect.
(f) Tax Payments. The Parent Guarantor and its consolidated
subsidiaries have filed all United States Federal income tax returns
that are required to be filed by them and have paid all taxes due
pursuant to such returns or pursuant to any assessment received by any
of them, except such taxes, if any, as are being contested in good
faith as to which reserves have been provided. The charges, accruals
and reserves on the books of the Parent Guarantor and its consolidated
subsidiaries in respect of taxes or other governmental charges are, in
the opinion of the Parent Guarantor, adequate.
(g) Litigation, etc. There is no action, suit or proceeding
pending against, or to the knowledge of the Parent Guarantor or any of
its consolidated subsidiaries threatened against or affecting, the
Parent Guarantor or any of its consolidated subsidiaries before any
court or arbitrator or any governmental body, agency or official (i) in
which there is a reasonable possibility of an adverse decision which
could have a Material Adverse Effect, except as disclosed in item 3
entitled "Legal Proceedings" in the Parent Guarantor's
10
Form 10-K annual report for its fiscal year ended December 31, 1995,
filed with the SEC, or (ii) which in any manner questions this
Agreement.
(h) Compliance with Other Instruments, etc. The execution,
delivery and performance by the Parent Guarantor, the Borrower, or any
Supporting Guarantor, as the case may be, of this Agreement, the Credit
Agreement, the Notes, and the other Credit Documents to which it is a
party do not violate or result in any violation of or conflict with or
constitute a default under or result in the creation of, or impose any
obligation on the Parent Guarantor, the Borrower or any Supporting
Guarantor to create, any Lien, other than pursuant to the Security
Documents, on any of the Parent Guarantor's or its subsidiaries'
properties or assets pursuant to, any provision of the charter or by-
laws of the Parent Guarantor, or of any agreement, indenture or other
instrument, or of any license, permit or other authorization or of any
judgment, decree, order, law, statute, ordinance or governmental rule
or regulation applicable to the Parent Guarantor or any of its
subsidiaries.
(i) Governmental Consent, etc. No consent, approval, order or
authorization of, or registration, declaration or filing with, any
governmental or public body or authority on the part of the Parent
Guarantor or any Supporting Guarantor, or consent, approval or
authorization of its shareholders (or partners, in the case of any
Supporting Guarantor which is a partnership), is required for the valid
execution, delivery or performance of this Agreement.
(j) Investment Company Act. The Parent Guarantor is not an
"investment company" or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as
amended.
(k) Full Disclosure. All information heretofore furnished in
writing by the Parent Guarantor to the Administrative Agent or the
Documentation Agent for inclusion in the Information Memorandum or any
of the Agents or any Lender for purposes of or in connection with this
Agreement or any transaction contemplated hereby was, and all such
information hereafter furnished in writing by the Parent Guarantor to
any of the Agents or any Lender will be, true and accurate in every
material respect or based on reasonable estimates on the date as of
which such information is or was stated or certified. The Parent
Guarantor has disclosed to the Lenders in writing all facts which are
known to it and which have had or could reasonably be expected to have
a Material Adverse Effect.
11. Disposition of Indebtedness or Securities of the Borrower, etc.
The Parent Guarantor will not:
(a) except for the pledge of any Subordinated Indebtedness and
any shares of capital stock of the Borrower as security for obligations
under the 1995 Credit Agreement, and any sale, assignment or other
transfer of any thereof in connection with the enforcement of such
pledge (through judicial proceedings or otherwise):
(i) directly or indirectly sell, assign, pledge, transfer or
otherwise dispose of any Subordinated Indebtedness; or
(ii) directly or indirectly sell, assign, pledge, transfer or
otherwise dispose of any shares of capital stock of any class (or
any warrants, rights or options to acquire, or any securities
convertible into or exchangeable for, any such shares) of the
Borrower, under circumstances which would result in a Change of
Control, unless effective provision shall have been made for the
prepayment of all Obligations of the Borrower and for termination
of the Commitments of the Lenders under the Credit Agreement; or
(b) permit the Borrower, directly or indirectly, to issue or sell
any shares of its capital stock of any class (or any warrants, rights
or options to acquire, or any securities convertible into or
exchangeable for, any such shares), under circumstances which would
result in a Change of Control, unless effective provision shall have
been made for the prepayment of all Obligations of the Borrower and for
termination of the Commitments of the Lenders under the Credit
Agreement;
11
provided that all the shares of capital stock of all classes (and all warrants,
rights and options to acquire, and all securities convertible into or
exchangeable for, any such shares) of the Borrower and all Subordinated
Indebtedness of the Borrower, at the time owned or held by the Parent Guarantor,
may be sold at the same time in connection with a transaction which meets all
the requirements of section 12.
12. Consolidation, Merger, Sale, etc. The Parent Guarantor will not
directly or indirectly consolidate with or merge into any other corporation,
limited liability company, partnership or other person, or permit any other
corporation, limited liability company, partnership or other person to
consolidate with or merge into it, or sell, lease, assign, transfer, abandon or
otherwise dispose of all or substantially all of its properties or assets,
except that the Parent Guarantor may consolidate with or merge into any other
corporation, or permit any other corporation to consolidate with or merge into
it, or sell or otherwise transfer all or substantially all of its properties and
assets, provided that,
(a) the acquiring or surviving person shall be a solvent
corporation organized and existing under the laws of the United States
of America, or any state thereof or the District of Columbia, and (if
other than the Parent Guarantor) shall prior to the effectiveness of
such transaction, execute and deliver to the Administrative Agent and
the Lenders an agreement by which such acquiring or surviving person
shall expressly and unconditionally assume all the obligations of the
Parent Guarantor hereunder, together with an opinion, satisfactory in
substance and form to the Administrative Agent, of counsel, reasonably
satisfactory to the Administrative Agent, of such acquiring or
surviving person, as to the due authorization, execution and delivery
and the enforceability of such agreement and as to such other matters
as the Administrative Agent may reasonably request;
(b) immediately prior to, and immediately after giving effect to,
such transaction (and such assumption), no Change of Control shall
exist, unless effective provision shall have been made for the
prepayment of all Obligations of the Borrower and for termination of
the Commitments of the Lenders under the Credit Agreement
contemporaneously with such Change of Control; and
(c) immediately prior to, and immediately after giving effect to,
such transaction (and such assumption), no condition or event shall
exist which constitutes or which, after notice or lapse of time or
both, would constitute an Event of Default.
No sale or transfer of properties or assets permitted by this section 12 shall
release the Parent Guarantor from any of its obligations hereunder.
13. Affirmative Covenants. The Parent Guarantor will comply with the
following covenants:
(a) Maintenance of Existence, Rights, etc. The Parent Guarantor
will, and will cause its Subsidiaries to, preserve, renew and keep in
full force and effect its corporate existence and its rights,
privileges, licenses and franchises necessary or desirable in the
normal conduct of its business; provided, that nothing in this section
13(a) shall prohibit (i) any merger or consolidation not prohibited by
section 12, (ii) the termination of the corporate existence of any
Subsidiary if (A) the Parent Guarantor determines that such termination
is in its best interest and (B) such termination is not adverse in any
material respect to the Lenders, or (iii) the loss of any rights,
privileges, licenses and franchises if the loss thereof, in the
aggregate, could not reasonably be expected to have a Material Adverse
Effect.
(b) Compliance with Laws, etc. The Parent Guarantor will comply,
and cause each of its Subsidiaries to comply, in all material respects
with all applicable laws, ordinances, rules, regulations and
requirements of governmental authorities (including Environmental Laws
and ERISA and the rules and regulations thereunder), except where (i)
the necessity of compliance therewith is being contested in good faith
by appropriate proceedings, in which case adequate and reasonable
reserves will be established in accordance with GAAP, or (ii) failures
to comply therewith could not, in the aggregate, reasonably be expected
to have a Material Adverse Effect.
(c) Insurance. The Parent Guarantor will maintain, and cause each
of its Subsidiaries to maintain, insurance with responsible insurance
companies or associations in such amounts and against such
12
risks as is usually carried by owners of similar businesses and
properties in the same general area in which it operates.
(d) Books and Records. The Parent Guarantor will keep proper books
of record and account in which entries in conformity with generally
accepted accounting principles (and all legal requirements) shall be
made of all dealings and transactions in relation to their businesses
and activities.
(e) Payment of Taxes, etc. The Parent Guarantor will pay and
discharge, and will cause each Subsidiary of the Parent Guarantor to
pay and discharge, before the same shall become delinquent, (i) all
taxes, assessments and governmental charges or levies imposed upon it
or upon it or upon its property, and (ii) all lawful claims which, if
unpaid, (x) might by law become a Lien upon its property or (y) would
otherwise be reasonably likely to have a Material Adverse Effect;
provided, however, that neither the Parent Guarantor nor any of its
Subsidiaries shall be required to pay or discharge any such tax,
assessment, charge, levy or claim which is being contested in good
faith by proper proceedings and as to which appropriate reserves have
been provided.
(f) Additional Supporting Guarantors. In the event that any
present or future Subsidiary of the Parent Guarantor, other than the
Supporting Guarantors, becomes a co-borrower or guarantor under the
1995 Credit Agreement, the Parent Guarantor will immediately (i) notify
the Administrative Agent thereof in writing, with reference to this
provision, (ii) include in such notice an offer to cause such
Subsidiary to become a Supporting Guarantor hereunder, and (iii)
provide contemporaneously with such notice a supplement to this
Agreement, satisfactory in form and substance to the Administrative
Agent, duly executed by such Subsidiary of the Parent Guarantor and by
the Parent Guarantor and each Supporting Guarantor, pursuant to which
such Subsidiary shall become a Supporting Guarantor hereunder and be
and become bound by all of the representations, warranties covenants
and provisions hereof applicable to any Supporting Guarantor. Unless
the Administrative Agent acting upon the instructions of the Required
Lenders elects upon written notice to the Parent Guarantor that any
such supplement be ineffective, this Agreement shall be considered
supplemented by any such supplement and such Subsidiary shall become a
Supporting Guarantor hereunder as provided therein.
14. Financial Covenants. The Parent Guarantor will comply with the
following covenants:
(a) Leverage Covenant in 1995 Credit Agreement. The Parent
Guarantor will comply with the covenant contained in Section 5.17 of
the 1995 Credit Agreement.
(b) Separate Leverage Covenant. The Parent Guarantor will maintain
at the end of each Fiscal Quarter (a "Quarterly Measurement Date"), the
ratio of (x) Consolidated Debt for Borrowed Money to (y) Consolidated
EBITDA for the four consecutive Fiscal Quarters then ended not in
excess of 3.50 to 1.00. For purposes of calculating the foregoing ratio
at any Quarterly Measuring Date, if any corporation or other entity
shall have been acquired by any of the Combined Companies during the
relevant period of four consecutive Fiscal Quarters, Consolidated
EBITDA for such period shall be calculated as if such corporation or
other entity had been acquired at the beginning of such period, to the
extent that the relevant financial information with respect to it for
the portion of such period prior to such acquisition can be determined
with reasonable accuracy. As used in this Agreement, the terms "Fiscal
Quarters", "Combined Companies", "Consolidated Debt for Borrowed
Money", "Consolidated EBITDA", "Consolidated Net Worth" and "Debt",
shall have the same meanings as are ascribed to such terms in the 1995
Credit Agreement as in effect on the Closing Date, without giving
effect to any subsequent modification or termination thereof.
15. Negative Pledge. The Parent Guarantor will not:
(i) permit any Subsidiary of the Parent Guarantor (other than the
Borrower and its Subsidiaries) to create, incur or suffer to exist any
Lien upon or with respect to any of its property, whether now owned or
hereafter acquired, or assign any right to receive income, in each case
to secure or provide for the payment of any Consolidated Debt for
Borrowed Money, other than:
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(A) (1) Liens created prior to the Closing Date pursuant to
any document securing obligations under the 1995 Credit Agreement;
(2) the Project Mortgages (as defined in the 1995 Credit Agreement
as in effect on the Closing Date); and (3) Liens on equity
interests in and, debt obligations owed by, any Principal
Subsidiary (as defined in the 1995 Credit Agreement as in effect
on the Closing Date) required to be pledged as security for
obligations under the 1995 Credit Agreement pursuant to
contractual obligations not substantially more onerous to the
Parent Guarantor than those contained in Section 3(C) of the
Security Agreement, dated as of September 11, 1995, in favor of
the Collateral Agent under the 1995 Credit Agreement, as in effect
on the Closing Date;
(B) Liens existing on September 28, 1995 (other than Liens
permitted by clause (A) above) securing Debt outstanding on
September 28, 1995 in an aggregate principal amount not exceeding
$200,000,000;
(C) any Lien existing on any asset prior to the acquisition
thereof by the Parent Guarantor or such Subsidiary and not created
in contemplation of such acquisition;
(D) any Lien existing on any asset of any person at the time
such person becomes a Subsidiary of the Parent Guarantor or merges
into the Parent Guarantor or any of its Subsidiaries; provided
that such Lien was not created in contemplation of such event;
(E) any Lien on any asset securing Debt incurred or assumed
for the purpose of financing all or any part of the cost of
acquiring or constructing such asset, provided that such Lien
attaches to such asset concurrently with or within 180 days after
the acquisition or completion of construction thereof and attaches
to no other asset other than such asset so financed;
(F) any Lien arising out of the refinancing, extension,
renewal or refunding of any Debt secured by any Lien permitted by
the foregoing clauses (A) through (E), provided that the principal
amount of such Debt is not increased and such Debt is not secured
by any additional assets;
(G) Permitted Encumbrances (as defined in the 1995
Credit Agreement, as in effect on the Closing Date);
(H) Liens arising in the ordinary course of business (other
than Liens of the types described in the definition of "Permitted
Encumbrances") which (i) do not secure Debt, (ii) do not secure
any single obligation (or series of related obligations) in an
amount exceeding $5,000,000; provided that the limitation in this
clause (ii) shall not apply to Liens securing worker's
compensation, unemployment insurance and other types of social
security, and (iii) do not in the aggregate materially detract
from the value of the assets of the Parent Guarantor and its
Subsidiaries, taken as a whole, or materially impair the use
thereof in the operation of their business;
(I) other Liens securing Debt of the Parent Guarantor not
exceeding $25,000,000 in aggregate outstanding principal amount;
and
(J) other Liens securing Debt of Subsidiaries not exceeding
$25,000,000 in aggregate outstanding principal amount; or
(ii) itself create, incur or suffer to exist any Lien upon or with
respect to any of its property, whether now owned or hereafter
acquired, or assign any right to receive income, in each case to secure
or provide for the payment of any Consolidated Debt for Borrowed Money
owed pursuant to the 1995 Credit Agreement, other than:
14
(A) Liens on certain Indiana properties, and any other
properties, stock, securities, interests or other assets, granted
as security for obligations under the 1995 Credit Agreement prior
to the Closing Date, including any extensions or renewals
thereof); and
(B) Liens on equity interests in and, debt obligations owed
by, any Principal Subsidiary (as defined in the 1995 Credit
Agreement as in effect on the Closing Date) required to be pledged
as security for obligations under the 1995 Credit Agreement
pursuant to contractual obligations not substantially more onerous
to the Parent Guarantor than those contained in Section 3(C) of
the Security Agreement, dated as of September 11, 1995, in favor
of the Collateral Agent under the 1995 Credit Agreement, as in
effect on the Closing Date,
without making effective provision, and the Parent Guarantor in such case will
make or cause to be made effective provision, whereby the Required Payments and
the obligations of the Parent Guarantor hereunder shall be secured by such Lien
equally and ratably with any and all other indebtedness or obligations thereby
secured.
16. Senior Indebtedness. The Parent Guarantor will at all times ensure
that (i) the claims of the Administrative Agent and the Creditors hereunder will
not be subordinate to, and will in all respects at least rank pari passu with,
the claims of every other senior unsecured creditor of the Parent Guarantor, and
(ii) any indebtedness subordinated in any manner to the claims of any other
senior unsecured creditor of the Parent Guarantor will be subordinated in like
manner to the claims of the Administrative Agent and the Creditors hereunder.
17. Loans or Advances to the Borrower by Supporting Guarantors, etc.
The Parent Guarantor will not permit any of the Supporting Guarantors, or any of
its or their Subsidiaries or Affiliates, other than Subsidiaries of the
Borrower, to make or have outstanding at any time any loan or advance to the
Borrower unless such loan or advance is subordinated to the Senior Indebtedness
in accordance with subordination provisions to the same effect as is provided in
section 3 hereof.
18. No Assignment by the Borrower. Without the prior written consent
of the Administrative Agent, the Borrower will not sell, mortgage, pledge,
transfer or otherwise dispose of or encumber all or any part of its rights under
this Agreement, except for the Liens provided in the Security Documents.
19. Guaranty by the Supporting Guarantors; Deferral of
Enforcement,etc.
19.1. Joint and Several Guaranty. Each Supporting Guarantor hereby,
jointly and severally, unconditionally guarantees, for the benefit of the
Administrative Agent and the Creditors, the full and punctual payment of the
obligations of the Parent Guarantor under this Agreement. Upon failure by the
Parent Guarantor to pay punctually any such amount, each Supporting Guarantor
shall forthwith on demand by the Administrative Agent pay the amount not so
paid, in U. S. Dollars, in immediately available funds, directly to the
Administrative Agent, at its address specified in or pursuant to this Agreement,
or at such other place as the Administrative Agent shall direct, for application
as provided in section 27.
19.2. Guaranty Obligations Absolute, etc. The obligations of the
Supporting Guarantors under this section 19 shall be unconditional and absolute
and, without limiting the generality of the foregoing shall not be released,
discharged or otherwise affected by the occurrence, one or more times, of any of
the following:
(i) any extension, renewal, settlement, compromise, waiver or
release in respect to any obligation of the Parent Guarantor under this
Agreement, by operation of law or otherwise:
(ii) any modification or amendment of or supplement to this
Agreement, the Credit Agreement, any other Credit Document, or any
other agreement or instrument referred to herein;
(iii) any release, non-perfection or invalidity of any direct
or indirect security for any obligation of the Borrower under the
Credit Agreement, any Note or any other Credit Document or of the
Parent Guarantor hereunder;
15
(iv) any change in the corporate existence, structure or
ownership of the Parent Guarantor or any Subsidiary or any insolvency,
bankruptcy, reorganization or other similar proceeding affecting the
Parent Guarantor or any Subsidiary or its assets or any resulting
release or discharge of any obligation of the Parent Guarantor or any
Subsidiary contained in this Agreement or any other agreement or
instrument referred to herein;
(v) the existence of any claim, set-off or other rights which
any Supporting Guarantor may have at any time against the Parent
Guarantor, any Subsidiary of the Parent Guarantor, the Borrower, the
Administrative Agent, any Creditor or any other person, whether in
connection herewith or any unrelated transactions, provided that
nothing herein shall prevent the assertion of any such claim by
separate suit or compulsory counterclaim;
(vi) any invalidity or unenforceability relating to or against
the Parent Guarantor for any reason of this Agreement, or any provision
of applicable law or regulation purporting to prohibit the payment by
the Parent Guarantor of any obligations in respect of this Agreement;
or
(vii) any other act or omission to act or delay of any kind by
the Borrower, the Administrative Agent, any Creditor or any other
person or any other circumstance whatsoever which might, but for the
provisions of this section, constitute a legal or equitable discharge
of a Supporting Guarantor's obligations under this section.
19.3. Reinstatement. The Supporting Guarantors' obligations under this
section shall remain in full force and effect until the obligations of the
Parent Guarantor hereunder shall have terminated in accordance with the terms
and provisions of this Agreement. If at any time any payment of any of the
obligations of the Parent Guarantor hereunder is rescinded or must be otherwise
restored or returned upon the insolvency, bankruptcy or reorganization of the
Parent Guarantor, the Supporting Guarantors' obligations under this section with
respect to such payment shall be reinstated at such time as though such payment
had been due but not made at such time.
19.4. Waiver. Each Supporting Guarantor irrevocably waives acceptance
hereof, presentment, demand, protest and any notice not provided for herein, as
well as any requirement that at any time any action be taken by any person
against the Parent Guarantor or any other person, or against any collateral or
guaranty of any other person.
19.5. Subrogation. Until the indefeasible payment in full of all of the
obligations of the Parent Guarantor under this Agreement and the termination of
this Agreement in accordance with the terms and provisions hereof, no Supporting
Guarantor shall have any rights, by operation of law or otherwise, upon making
any payment under this section to be subrogated to the rights of the payee
against the Parent Guarantor with respect to such payment or otherwise to be
reimbursed, indemnified or exonerated by the Parent Guarantor in respect
thereof.
19.6. Amounts Due Even if Acceleration of Guaranteed Obligations
Stayed. In the event that acceleration of the time for payment of any amount
payable by the Parent Guarantor under this Agreement is stayed upon insolvency,
bankruptcy or reorganization of the Parent Guarantor, all such amounts otherwise
subject to acceleration under the terms of this Agreement shall nonetheless by
payable by the Supporting Guarantors under this section forthwith on demand by
the Administrative Agent.
19.7. Contribution. Each Supporting Guarantor, in addition to the
subrogation rights it shall have against the Parent Guarantor under applicable
law as a result of any payment it makes hereunder, shall also have a right of
contribution against all other Supporting Guarantors in respect of any such
payment pro rata among same based on their respective net fair value as
enterprises, provided any such right of contribution shall be subject and
subordinate to the prior payment in full of the obligations of the Parent
Guarantor under this Agreement (and such Supporting Guarantor's obligations in
respect thereof).
19.8. Deferral of Enforcement; Pro Rata Sharing, etc. The guaranty
obligations of the Supporting Guarantors under this section 19 shall not be
enforced unless one or more Significant Credit Events shall have occurred and be
continuing.
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19.9. Certain Definitions. As used in this section 19:
"Corresponding Vencor Guaranty" means any guaranty or
guaranties entered into by the Supporting Guarantors, as the same may
be amended or modified from time to time, in connection with and as a
guaranty of obligations under the Parent Guarantor's 1995 Credit
Agreement, which guaranty or guaranties contain substantially identical
provisions to those contained in section 19.8 through section 19.13.
"Significant Credit Event" means:
(i) the Parent Guarantor, any Supporting Guarantor or the
Borrower commences a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to
itself or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment
of a trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, or
consents to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other
proceeding commenced against it, or makes a general assignment
for the benefit of creditors, or fails generally to pay its debts
as they become due, or takes any corporate action to authorize
any of the foregoing; or
(ii) an involuntary case or other proceeding is commenced
against the Parent Guarantor, any Supporting Guarantor or the
Borrower seeking liquidation, reorganization or other relief with
respect to it or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its
property, and such involuntary case or other proceeding shall
remain undismissed and unstayed for a period of 60 days; or an
order for relief shall be entered against the Parent Guarantor,
any Supporting Guarantor or the Borrower under the Federal
bankruptcy laws as now or hereafter in effect; or
(iii) all amounts outstanding under either the Credit
Agreement or the 1995 Credit Agreement shall have become due
and payable upon the final maturity thereof or by reason of
acceleration; or
(iv) the Parent Guarantor's Required Banks (as such term is
defined in the 1995 Credit Agreement) have signed and delivered
to the Administrative Agent a certificate stating that (x) an
event of default under the 1995 Credit Agreement has occurred and
is continuing, and (y) the Parent Guarantor's Required Banks have
determined that the credit facility provided under the 1995
Credit Agreement is in a "workout"; or
(v) the Borrower's Required Lenders (as such term is defined
in the Credit Agreement) have signed and delivered to the
Administrative Agent under the Parent Guarantor's 1995 Credit
Agreement a certificate stating that (x) an event of default
under the Borrower's Credit Agreement has occurred and is
continuing, and (y) the Borrower's Required Lenders have
determined that the credit facility provided under the Borrower's
Credit Agreement is in a "workout".
19.10. Fraudulent Transfer Laws. It is the desire and intent of each
Supporting Guarantor and the Creditors that this Agreement shall be enforced to
the fullest extent permissible under the laws and public policies applied in
each jurisdiction in which enforcement is sought. If and to the extent that the
obligations of any Supporting Guarantor under this Agreement would, in the
absence of this sentence, be adjudicated to be invalid or unenforceable because
of any applicable state or federal law relating to fraudulent conveyances or
transfers, then the amount of such Supporting Guarantor's liability hereunder in
respect of the obligations of the Parent Guarantor guaranteed hereunder shall be
deemed to be reduced ab initio to that maximum amount which would be permitted
without causing such Supporting Guarantor's obligations hereunder to be so
invalidated; provided that if, at the time of enforcement of this Agreement
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against any Supporting Guarantor or any Corresponding Vencor Guaranty against
any Supporting Guarantor which is a party thereto, the amount payable under this
Agreement by such Supporting Guarantor or the Corresponding Vencor Guaranty of
such Supporting Guarantor is limited by this section 19.10 or the corresponding
provision of the Corresponding Vencor Guaranty, as the case may be, then the
amounts payable by such Supporting Guarantor under both this Agreement and the
Corresponding Vencor Guaranty shall be limited so that the maximum amount
payable under each of this Agreement and the Corresponding Vencor Guaranty is
proportional to the respective aggregate amount guaranteed under this Agreement
or such Corresponding Vencor Guaranty (without regard to the limits under this
section 19.10 or the substantially identical provision of the Corresponding
Vencor Guaranty), as the case may be, when the Significant Credit Event that
exists at the time of enforcement occurred (or if two or more Significant Credit
Events exist at the time of enforcement, when the earlier of such Significant
Credit Events occurred).
19.11. Pro Rata Payments. Each Supporting Guarantor agrees that, if it
makes any payments upon enforcement of either this Agreement or the
Corresponding Vencor Guaranty of such Supporting Guarantor, it will make a pro
rata payment under the other of this Agreement or such Corresponding Vencor
Guaranty so that (i) the payments under this Agreement and the Corresponding
Vencor Guaranty of such Supporting Guarantor are concurrent and (ii) the total
amount paid by such Supporting Guarantor under each of this Agreement and its
Corresponding Vencor Guaranty is proportional to the aggregate amount guaranteed
under this Agreement or such Corresponding Vencor Guaranty, as the case may be
(without regard to the limits under section 19.10 or the substantially identical
provisions of the Corresponding Vencor Guaranty) when the Significant Credit
Event that exists at the time of enforcement occurred (or if two or more
Significant Credit Events exist at the time of enforcement, when the earlier of
such Significant Credit Events occurred).
19.12. Provisions Intended to Benefit. The provisions of sections 19.8
through 19.13 are intended for the benefit of the beneficiaries of any
Corresponding Vencor Guaranty and shall be directly enforceable by them.
19.13. Corresponding Vencor Guaranty. Each Corresponding Vencor
Guaranty contains provisions substantially identical to the provisions of
sections 19.8 through this section 19.13, which provisions are intended for the
benefit of the beneficiaries of this Agreement and shall be enforceable directly
by them. No Supporting Guarantor will permit such provisions to be terminated,
amended, waived or otherwise changed without the prior written consent of the
Required Lenders.
20. Survival of Agreements, etc. All agreements, representations and
warranties of the Borrower and the Parent Guarantor hereunder shall be deemed to
have been relied upon by the Administrative Agent and the Creditors and shall
survive the execution and delivery of this Agreement, the making of the Loans,
the issue and delivery of the Notes, any disposition thereof by any holder
thereof, and any investigation at any time made by the Administrative Agent or
any Creditor or on its or their behalf. All statements contained in any
certificate or other document delivered to the Administrative Agent or any
Creditor by or on behalf of the Borrower or the Parent Guarantor pursuant hereto
or pursuant to the Credit Agreement or any other Credit Document or otherwise
specifically for use in connection with the transactions contemplated thereby
shall constitute representations and warranties by the Parent Guarantor
hereunder, made as of the respective dates specified therein or, if no date is
specified, as of the respective dates furnished to the Administrative Agent or
any Creditor. Certain sections of this Agreement provide expressly that the
agreements and obligations of the Parent Guarantor thereunder survive
termination of this Agreement.
21. Termination. Upon the earlier of (i) reduction of the Maximum
Guaranteed Amount to zero as provided in section 2.2 and satisfaction by the
Parent Guarantor of any then outstanding demands for payment under section 2.1
hereof, (ii) the termination of this Agreement in accordance with section 2.3
hereof, and (iii) the date after which the Total Commitment and all Designated
Interest Rate Agreements shall have been terminated, no DPP Revolving Loans
shall be outstanding, no Allocated DPP Letter of Credit Outstandings shall
exist, the payment (or the making of provision satisfactory to the
Administrative Agent for the payment) of all other amounts included in the
Required Payments, and no claims in respect of any guaranty payment due under
this Agreement shall be outstanding against the Parent Guarantor or any
Supporting Guarantor hereunder, then this Agreement shall terminate and the
Administrative Agent, at the request and expense of the Parent Guarantor or the
Borrower, will execute and deliver to the Borrower and the Parent Guarantor a
proper instrument or instruments acknowledging the satisfaction and termination
of this Agreement, and will duly assign, transfer and deliver to the Borrower or
as the Borrower may direct all of the rights and moneys at the time held by the
Administrative Agent hereunder for which there has been no provision for
application
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to the Notes, any other amounts included in the Required Payments or the
performance of any obligations guaranteed pursuant to section 2.1. Certain
sections of this Agreement provide expressly that the agreements and obligations
of the Parent Guarantor thereunder survive termination of this Agreement.
22. Notices. All notices and other communications hereunder shall be
in writing and shall be deemed to have been given when delivered or mailed or
registered or certified first class mail, postage prepaid, addressed (i) if to
the Administrative Agent, at the address of the Administrative Agent specified
in or pursuant to the Credit Agreement, or (ii) if to any Lender, at its address
specified in or pursuant to the Credit Agreement, or (iii) if to any other
Creditor, at such address as such Creditor shall have furnished to the Borrower
and the Administrative Agent in writing, or (iv) if to the Borrower, at the
address of the Borrower specified in or pursuant to the Credit Agreement, or (v)
if to the Parent Guarantor, at 3300 Providian Center, 400 West Market Street,
Louisville, Kentucky 40202, attention: Rich Lechleiter, Vice President Finance
(facsimile: (502) 596-4099), or at such other address as the Parent Guarantor
shall have furnished to the Administrative Agent and each Creditor in writing,
or (vi) if to any Supporting Guarantor, to it in care of the Parent Guarantor,
at the address of the Parent Guarantor provided herein.
23. Net Payments. (a) All payments made by the Parent Guarantor
hereunder will be made without setoff, counterclaim or other defense. All such
payments will be made free and clear of, and without deduction or withholding
for, any present or future taxes, levies, imposts, duties, fees, assessments or
other charges of whatever nature now or hereafter imposed by any jurisdiction or
by any political subdivision or taxing authority thereof or therein with respect
to such payments (but excluding, except as provided in the second succeeding
sentence, any tax, imposed on or measured by the net income or net profits of a
Creditor pursuant to the laws of the jurisdiction under which such Creditor is
organized or the jurisdiction in which the principal office or applicable
lending office of such Creditor is located or any subdivision thereof or
therein) and all interest, penalties or similar liabilities with respect to such
non excluded taxes, levies imposts, duties, fees, assessments or other charges
(all such nonexcluded taxes levies, imposts, duties, fees assessments or other
charges being referred to collectively as "Taxes"). If any Taxes are so levied
or imposed, the Parent Guarantor agrees to pay the full amount of such Taxes and
such additional amounts as may be necessary so that every payment of all amounts
due hereunder, after withholding or deduction for or on account of any Taxes
will not be less than the amount provided for herein. If any amounts are payable
in respect of Taxes pursuant to the preceding sentence, the Parent Guarantor
agrees to reimburse each Creditor, upon the written request of such Creditor for
taxes imposed on or measured by the net income or profits of such Creditor
pursuant to the laws of the jurisdiction in which such Creditor is organized or
in which the principal office or applicable lending office of such Creditor is
located or under the laws of any political subdivision or taxing authority of
any such jurisdiction in which the principal office or applicable lending office
of such Creditor is located and for any withholding of income or similar taxes
imposed by the United States of America as such Creditor shall determine are
payable by, or withheld from, such Creditor in respect of such amounts so paid
to or on behalf of such Creditor pursuant to the preceding sentence and in
respect of any amounts paid to or on behalf of such Creditor pursuant to this
sentence. The Parent Guarantor will furnish to the Administrative Agent within
45 days after the date the payment of any Taxes, or any withholding or deduction
on account thereof, is due pursuant to applicable law certified copies of tax
receipts, or other evidence satisfactory to the Creditor, evidencing such
payment by the Parent Guarantor. The Parent Guarantor will indemnify and hold
harmless the Administrative Agent and each Creditor, and reimburse the
Administrative Agent or such Creditor upon its written request, for the amount
of any Taxes so levied or imposed and paid or withheld by such Creditor.
(b) Without prejudice to the survival of any other agreement of the
Parent Guarantor hereunder, the agreements and obligations of the Parent
Guarantor contained in this section shall survive the payment in full of the
principal of and interest on the Notes and termination of this Agreement.
24. Costs and Expenses of Enforcement, etc. The Parent Guarantor
will pay on demand all costs and expenses (including counsel fees and expenses)
in connection with the enforcement (whether through negotiations of proposed
modifications of any of the Credit Documents, legal proceedings or otherwise)
against the Parent Guarantor or any Supporting Guarantor of this Agreement,
including, without limitation, counsel fees and expenses in connection with the
enforcement of rights under this section. Without prejudice to the survival of
any other agreement of the Parent Guarantor hereunder, the agreements and
obligations of the Parent Guarantor contained in this section shall survive the
payment in full of the principal of and interest on the Notes and termination of
this Agreement.
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25. Right of Set-off. Upon (i) the occurrence and during the
continuance of any Event of Default and (ii) the making of the request of the
Required Lenders specified by section 9.2 of the Credit Agreement to authorize
the Administrative Agent to declare the Notes due and payable pursuant to the
provisions of section 9.2 of the Credit Agreement, or the acceleration of the
Notes upon the occurrence of an Event of Default specified in section 9.1(e) of
the Credit Agreement, each Lender is hereby authorized at any time and from time
to time, 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 and other indebtedness at any time owing by such Lender to or for the
credit or the account of the Parent Guarantor or any Supporting Guarantor
against any and all of the obligations of the Parent Guarantor or any such
Supporting Guarantor now or hereafter existing under this Agreement, whether or
not such Lender shall have made any demand under the Credit Agreement or any
other Credit Document and although such obligations may be unmatured. Each
Lender will promptly notify the Parent Guarantor or any applicable Supporting
Guarantor, as the case may be, after any such set-off and application made by
such Lender, provided that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Lender under this
section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which such Lender may have.
26. Interest on Overdue Amounts. If any payment required to be made
by the Parent Guarantor or any Supporting Guarantor hereunder is not paid when
due, the Parent Guarantor or the applicable Supporting Guarantor, as the case
may be, will pay interest, on demand, on the overdue amount from the due date to
the date the same is paid in full at a rate per annum equal to the Base Rate in
effect from time to time under the Credit Agreement plus the sum of (i) 2% per
annum and (ii) the Applicable DPP Base Rate Margin then in effect for DPP
Revolving Loans which are Base Rate Loans.
27. Application of Guaranty Payments, etc. (a) The payments by the
Parent Guarantor under section 2.1 and by any Supporting Guarantor under section
19, and any amounts recovered by the Administrative Agent in respect of any such
payment obligations in connection with any enforcement of this Agreement, shall
be applied by the Administrative Agent as follows:
(i) first, to the payment or reimbursement of all costs and
expenses of the Administrative Agent in enforcing payment thereof, to
the extent not theretofore reimbursed by the Parent Guarantor
hereunder;
(ii) second, to the extent proceeds remain after the
application pursuant to preceding clause (i), an amount equal to the
outstanding Required Payments to the Creditors shall be paid to the
Creditors as provided in section 27(c) with each Creditor receiving an
amount equal to its outstanding Required Payments or, if the proceeds
are insufficient to pay in full all such Required Payments, its Pro
Rata Share of the amount remaining to be distributed; and
(iii) third, to the extent remaining after the application
pursuant to the preceding clauses (i) and (ii) or following the
termination of this Agreement pursuant to section 21 hereof, to the
Parent Guarantor or the Supporting Guarantors, as applicable, or to
whomever may be lawfully entitled to receive such payment.
(b) For purposes of this Agreement, "Pro Rata Share" shall mean, when
calculating a Creditor's portion of any distribution or amount, the amount
(expressed as a percentage) equal to a fraction the numerator of which is the
then outstanding amount of the relevant Required Payments owed such Creditor and
the denominator of which is the then outstanding amount of all Required
Payments.
(c) All payments required to be made to the (i) Lenders hereunder shall
be made to the Administrative Agent for the account of the respective Lenders
and (ii) Interest Rate Creditors hereunder shall be made to the paying agent
under the applicable Designated Interest Rate Agreement or, in the case of
Designated Interest Rate Agreements without a paying agent, directly to the
applicable Interest Rate Creditor.
(d) For purposes of applying payments received in accordance with this
section 27, the Administrative Agent shall be entitled to rely upon any Interest
Rate Creditor for determination (which each Interest Rate Creditor agrees to
provide upon request to the Administrative Agent) of the outstanding Interest
Rate Obligations owed to such Interest Rate Creditor. Unless it has actual
knowledge (including by way of written notice from a Creditor) to the contrary,
the
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Administrative Agent, in acting hereunder, shall be entitled to assume that no
Designated Interest Rate Agreements or Required Payments with respect thereto
are in existence.
28. Jury Trial Waiver. The Parent Guarantor, the Borrower, each
Supporting Guarantor and the Administrative Agent (on behalf of itself and the
Creditors, by its acceptance hereof) each hereby irrevocably waives all right to
a trial by jury in any action, proceeding or counterclaim arising out of or
relating to this Agreement, the other Credit Documents, any other agreements or
instruments referred to herein, or the transactions contemplated hereby or
thereby.
29. Waiver; Amendment. (a) None of the terms and conditions of this
Agreement may be changed, waived, modified or varied in any manner whatsoever
unless in writing duly signed by the Administrative Agent (with the consent of
the Required Lenders or, to the extent required by section 12.12 of the Credit
Agreement, all of the Lenders), provided, however, that no such change, waiver,
modification or variance shall be made to section 27 hereof or this section 29
without the consent of each Creditor adversely affected thereby, provided
further that any change, waiver, modification or variance affecting the rights
and benefits of a single Class of Creditors (and not all Creditors in a like or
similar manner) shall require the written consent of the Requisite Creditors of
such Class of Secured Creditors. For the purpose of this Agreement, the term
"Class" shall mean each class of Creditors, i.e., whether (x) the Lenders as
holders of the Required Payments in respect of the Credit Documents or (y) the
Interest Rate Creditors as holders of the Required Payments in respect of the
Designated Interest Rate Agreements. For the purpose of this Agreement, the term
"Requisite Creditors" of any Class shall mean each of (x) with respect to the
Lenders as holders of the Required Payments in respect of the Credit Documents,
the Required Lenders and (y) with respect to the Interest Rate Creditors as
holders of the Required Payments in respect of the Designated Interest Rate
Agreements, the holders of 51% of all obligations constituting Required Payments
outstanding from time to time under the Designated Interest Rate Agreements.
30. Kentucky Notice of Guaranteed Amount and Termination Date. For
purposes of Kentucky Revised Statutes ss. 371.065, it is hereby declared and
agreed, without, however, increasing, expanding, extending or otherwise changing
or affecting any of the rights or obligations of the Parent Guarantor or any
Supporting Guarantor under the other provisions of this Agreement, that the
maximum principal amount of indebtedness guaranteed hereunder, exclusive of
interest, fees, and charges and costs of collecting guaranteed indebtedness, is
$100,000,000, and that the termination date of the guaranty obligations
hereunder is December 31, 2003.
31. Miscellaneous. This Agreement shall be binding upon and shall
inure to the benefit of and be enforceable by the parties hereto and their
respective successors and assigns. If any term or provision of this Agreement or
any application thereof shall be held to be invalid, illegal or unenforceable,
the remainder of this Agreement and any other application of such term or
provision shall not be affected thereby. Any term or provision of this Agreement
may be amended, waived, discharged or terminated only by an instrument in
writing signed by the party against which enforcement of such amendment, waiver,
discharge or termination is sought, entered into as provided in section 29. No
Lender or other Creditor shall have any power to amend, discharge or terminate
this Agreement, all such actions being within the powers of the Administrative
Agent (acting on behalf of the Lenders and other Creditors pursuant to the terms
and provisions of the Credit Agreement and section 30 hereof). No waiver by any
Creditor, as such, of any obligations of the Borrower or the Parent Guarantor or
any Supporting Guarantor shall be binding on any other Creditor or the
Administrative Agent. No delay or failure on the part of the Administrative
Agent, any Lender or any other Creditor to exercise any power or right hereunder
shall operate as a waiver thereof, nor as an acquiesence in any default or
breach of any term or provision of this Agreement, nor shall any single or
partial exercise of any power or right preclude any other or further exercise
thereof, or the exercise of any other power or right. The Parent Guarantor and
each Supporting Guarantor each hereby approves each and every determination, in
the absence of manifest error, of amounts payable by the Borrower under the
Credit Agreement, the Notes, the other Credit Documents and any Designated
Interest Rate Agreement, whether made by the Administrative Agent, any Lender,
any other Creditor or by a third person used for the purpose of making such
determination. Each and every Default and Event of Default under the Credit
Agreement and each and every default in payment or performance of any
obligation, covenant or agreement of the Borrower under any Credit Document or
Designated Interest Rate Agreement, shall give rise to a separate claim and
cause of action hereunder, and separate claims or suits may be made and brought,
as the case may be, hereunder as each such Default, Event of Default or default
occurs. The obligations of the Parent Guarantor and the Supporting Guarantors
set forth in this Agreement constitute full recourse obligations of the Parent
Guarantor and the Supporting Guarantors. The powers,
21
rights and remedies herein provided or otherwise available under applicable
law are cumulative, may be exercised singly or cumulatively, and are not
exclusive of any other rights or remedies provided by law. The Lenders and any
other Creditor are third party beneficiaries of this Agreement, but any legal
proceedings or other enforcement actions on behalf of any Lender or other
Creditor against the Parent Guarantor or any Supporting Guarantor with respect
to this Agreement shall be undertaken and maintained by the Administrative
Agent, acting on behalf and for the ratable benefit of the Administrative Agent,
the Lenders and any other Creditors, with the proceeds of any such proceedings
or enforcement actions to be applied as provided section 27 hereof and after
such application as provided in the Credit Agreement or the applicable
Designated Interest Rate Agreement, as the case may be. This Agreement
supersedes all prior agreements and understandings, both written and oral, among
the parties hereto with respect to the subject matter hereof. This Agreement
shall be construed and enforced in accordance with and governed by the laws of
the Commonwealth of Kentucky. The headings in this Agreement are for
purposes of reference only and shall not limit or define the meaning hereof.
This Agreement may be executed in any number of counterparts, each of which
shall be an original, but all of which together shall constitute one instrument.
[The balance of this page is intentionally blank.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their respective officers thereunto duly authorized as
of the date first above written.
ATRIA COMMUNITIES, INC.
By: /s/ J. Timothy Wesley
-------------------------------
Chief Financial Officer
VENCOR, INC.
By: /s/ James H. Gillenwater, Jr.
-------------------------------
Vice President
FIRST HEALTHCARE CORPORATION
By: /s/ James H. Gillenwater, Jr.
-------------------------------
Vice President
NORTHWEST HEALTHCARE, INC.
By: /s/ James H. Gillenwater, Jr.
-------------------------------
Vice President
MEDISAVE PHARMACIES, INC.
By: /s/ James H. Gillenwater, Jr.
-------------------------------
Vice President
HILLHAVEN OF CENTRAL FLORIDA, INC.
By: /s/ James H. Gillenwater, Jr.
-------------------------------
Vice President
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NATIONWIDE CARE, INC.
By: /s/ James H. Gillenwater, Jr.
-------------------------------
Vice President
PNC BANK, NATIONAL ASSOCIATION, as
Administrative Agent
By: /s/ Edward J. Weisto
-------------------------------
Vice President
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