EXHIBIT 10.46
EXECUTION COPY
AMENDED AND RESTATED
CREDIT AGREEMENT
DATED AS OF FEBRUARY 24, 2005
AMONG
CHEMED CORPORATION
THE LENDERS FROM TIME TO TIME PARTIES HERETO
AND
JPMORGAN CHASE BANK, N.A.
AS ADMINISTRATIVE AGENT
J.P. MORGAN SECURITIES INC.,
AS SOLE LEAD ARRANGER AND SOLE BOOK RUNNER
TABLE OF CONTENTS
ARTICLE I DEFINITIONS.......................................................... 2
1.1. Certain Defined Terms................................................... 2
1.2. Plural Forms............................................................ 26
ARTICLE II THE CREDITS.......................................................... 26
2.1. Revolving Loan Commitments and Term Loan Commitments.................... 26
2.2. Required Payments; Termination.......................................... 27
2.3. Ratable Loans; Types of Advances........................................ 30
2.4. Swing Line Loans........................................................ 30
2.5. Commitment Fee; Aggregate Revolving Loan Commitment..................... 31
2.6. Minimum Amount of Each Advance.......................................... 32
2.7. Optional Principal Payments............................................. 32
2.8. Method of Selecting Types and Interest Periods for New Advances......... 32
2.9. Conversion and Continuation of Outstanding Advances; No Conversion or
Continuation of Eurodollar Advances After Event of Default........... 33
2.10. Changes in Interest Rate, etc........................................... 34
2.11. Rates Applicable After Event of Default................................. 34
2.12. Method of Payment....................................................... 34
2.13. Noteless Agreement; Evidence of Indebtedness............................ 35
2.14. Telephonic Notices...................................................... 36
2.15. Interest Payment Dates; Interest and Fee Basis.......................... 36
2.16. Notification of Advances, Interest Rates, Prepayments and Revolving
Loan Commitment Reductions; Availability of Loans.................... 36
2.17. Lending Installations................................................... 37
2.18. Non-Receipt of Funds by the Administrative Agent........................ 37
2.19. Replacement of Lender................................................... 37
2.20. Facility LCs............................................................ 38
2.21. Senior Unsecured Indenture Documents.................................... 44
ARTICLE III YIELD PROTECTION; TAXES.............................................. 44
3.1. Yield Protection........................................................ 44
3.2. Changes in Capital Adequacy Regulations................................. 45
3.3. Availability of Types of Advances....................................... 45
3.4. Funding Indemnification................................................. 45
3.5. Taxes................................................................... 46
3.6. Lender Statements; Survival of Indemnity................................ 49
3.7. Alternative Lending Installation........................................ 49
ARTICLE IV CONDITIONS PRECEDENT................................................. 49
4.1. Initial Credit Extension................................................ 49
4.2. Each Credit Extension................................................... 51
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ARTICLE V REPRESENTATIONS AND WARRANTIES.......................................... 51
5.1. Existence and Standing.................................................. 51
5.2. Authorization and Validity.............................................. 52
5.3. No Conflict; Government Consent......................................... 52
5.4. Financial Statements.................................................... 52
5.5. Material Adverse Change................................................. 53
5.6. Taxes................................................................... 53
5.7. Litigation and Contingent Obligations................................... 53
5.8. Subsidiaries............................................................ 53
5.9. ERISA................................................................... 53
5.10. Accuracy of Information................................................. 54
5.11. Regulations T, U, and X................................................. 54
5.12. Material Agreements; Restrictions on Dividends.......................... 54
5.13. Compliance With Laws.................................................... 54
5.14. Ownership of Properties; Priority of Liens.............................. 54
5.15. Plan Assets; Prohibited Transactions.................................... 54
5.16. Environmental Matters................................................... 55
5.17. Investment Company Act.................................................. 55
5.18. Public Utility Holding Company Act...................................... 55
5.19. Insurance............................................................... 55
5.20. No Event of Default or Unmatured Event of Default....................... 55
5.21. SDN List Designation.................................................... 55
5.22. Solvency................................................................ 55
ARTICLE VI COVENANTS.............................................................. 56
6.1. Financial Reporting..................................................... 56
6.2. Use of Proceeds......................................................... 58
6.3. Notice of Event of Default.............................................. 58
6.4. Conduct of Business..................................................... 58
6.5. Taxes................................................................... 58
6.6. Insurance............................................................... 58
6.7. Compliance with Laws.................................................... 59
6.8. Maintenance of Properties............................................... 59
6.9. Inspection; Keeping of Books and Records................................ 59
6.10. Restricted Payments..................................................... 60
6.11. Merger or Dissolution................................................... 61
6.12. Sale of Assets.......................................................... 61
6.13. Investments and Acquisitions............................................ 62
6.14. Indebtedness............................................................ 66
6.15. Liens................................................................... 68
6.16. Transactions with Affiliates............................................ 71
6.17. Financial Contracts..................................................... 71
6.18. Subsidiary Covenants.................................................... 71
6.19. Contingent Obligations.................................................. 72
6.20. Leverage Ratio; Senior Leverage Ratio................................... 72
6.21. Fixed Charge Coverage Ratio............................................. 74
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6.22. Minimum Consolidated Net Worth.......................................... 75
6.23. Capital Expenditures.................................................... 75
6.24. Operating Leases........................................................ 75
6.25. Guarantors.............................................................. 76
6.26. Collateral.............................................................. 76
6.27. Sale and Leaseback Transactions......................................... 77
6.28. Intentionally Omitted................................................... 77
6.29. Intentionally Omitted................................................... 77
6.30. Prepayment of Indebtedness.............................................. 77
6.31. Amendments to Senior Unsecured Indenture Documents...................... 77
ARTICLE VII EVENTS OF DEFAULT..................................................... 78
ARTICLE VIII ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES....................... 80
8.1. Acceleration............................................................ 80
8.2. Amendments.............................................................. 82
8.3. Preservation of Rights.................................................. 83
ARTICLE IX GENERAL PROVISIONS..................................................... 83
9.1. Survival of Representations............................................. 83
9.2. Governmental Regulation................................................. 83
9.3. Headings................................................................ 83
9.4. Entire Agreement........................................................ 83
9.5. Several Obligations; Benefits of this Agreement......................... 84
9.6. Expenses; Indemnification............................................... 84
9.7. Numbers of Documents.................................................... 85
9.8. Accounting.............................................................. 85
9.9. Severability of Provisions.............................................. 85
9.10. Nonliability of Lenders................................................. 85
9.11. Confidentiality......................................................... 86
9.12. Lenders Not Utilizing Plan Assets....................................... 86
9.13. Nonreliance............................................................. 86
9.14. Disclosure.............................................................. 86
9.15. Performance of Obligations.............................................. 87
9.16. USA Patriot Act Notification............................................ 87
IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT................. 87
9.17. Subordination of Intercompany Indebtedness.............................. 88
ARTICLE X THE ADMINISTRATIVE AGENT................................................ 89
10.1. Appointment; Nature of Relationship..................................... 89
10.2. Powers.................................................................. 89
10.3. General Immunity........................................................ 89
10.4. No Responsibility for Loans, Recitals, etc.............................. 90
10.5. Action on Instructions of Lenders....................................... 90
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10.6. Employment of Agents and Counsel........................................ 90
10.7. Reliance on Documents; Counsel.......................................... 91
10.8. Administrative Agent's Reimbursement and Indemnification................ 91
10.9. Notice of Event of Default.............................................. 91
10.10. Rights as a Lender...................................................... 92
10.11. Lender Credit Decision.................................................. 92
10.12. Successor Administrative Agent.......................................... 92
10.13. Administrative Agent and Arranger Fees.................................. 93
10.14. Delegation to Affiliates................................................ 93
10.15. Intentionally Omitted................................................... 93
10.16. Collateral Documents.................................................... 93
ARTICLE XI SETOFF; RATABLE PAYMENTS............................................... 94
11.1. Setoff.................................................................. 94
11.2. Ratable Payments........................................................ 94
ARTICLE XII BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS..................... 95
12.1. Successors and Assigns.................................................. 95
12.2. Participations.......................................................... 96
12.3. Assignments............................................................. 96
12.4. Dissemination of Information............................................ 98
12.5. Tax Treatment........................................................... 98
ARTICLE XIII NOTICES.............................................................. 99
13.1. Notices; Effectiveness; Electronic Communication........................ 99
13.2. Change of Address, Etc.................................................. 100
ARTICLE XIV COUNTERPARTS; INTEGRATION; EFFECTIVENESS; ELECTRONIC EXECUTION........ 100
14.1. Counterparts; Effectiveness............................................. 100
14.2. Electronic Execution of Assignments..................................... 100
ARTICLE XV CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL........... 100
15.1. CHOICE OF LAW........................................................... 100
15.2. CONSENT TO JURISDICTION................................................. 101
15.3. WAIVER OF JURY TRIAL.................................................... 101
ARTICLE XVI PRIOR CREDIT AGREEMENT................................................ 101
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SCHEDULES
Commitment Schedule
Pricing Schedule
Schedule 2.20 - Existing Letters of Credit
Schedule 5.8 - Subsidiaries
Schedule 6.13 - Existing Investments
Schedule 6.14 - Existing Indebtedness
Schedule 6.15 - Existing Liens; Closing Date Surety Bond Liens
Schedule 6.16 - Transactions with Affiliates
Schedule 6.18 - Subsidiary Covenants
EXHIBITS
Exhibit A-1 - Form of Borrower's In-House Counsel's Opinion
Exhibit A-2 - Form of Cravath, Swaine & Moore LLP (Special New York Counsel)
Opinion
Exhibit B - Form of Compliance Certificate
Exhibit C - Form of Assignment and Assumption Agreement
Exhibit D - Form of Loan/Credit Related Money Transfer Instruction
Exhibit E-1 - Form of Promissory Note for Revolving Loan (if requested)
Exhibit E-2 - Form of Promissory Note for Term Loan (if requested)
Exhibit F - Officer's Certificate
Exhibit G - List of Closing Documents
AMENDED AND RESTATED
CREDIT AGREEMENT
This Amended and Restated Credit Agreement, dated as of February 24, 2005,
is entered into by and among Chemed Corporation (formerly known as Roto-Rooter,
Inc.), a Delaware corporation, the Lenders, the LC Issuer, and JPMorgan Chase
Bank, N.A., a national banking association, as Administrative Agent. The parties
hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1. Certain Defined Terms. As used in this Agreement:
"Accounting Changes" is defined in Section 9.8 hereof.
"Acquisition" means any transaction, or any series of related transactions,
consummated on or after the Closing Date, by which the Borrower or any of its
Subsidiaries (i) acquires any going business or all or substantially all of the
assets of any firm, corporation or limited liability company, or division
thereof, whether through purchase of assets, merger or otherwise or (ii)
directly or indirectly acquires (in one transaction or as the most recent
transaction in a series of transactions) at least a majority (in number of
votes) of the securities of a corporation which have ordinary voting power for
the election of directors (other than securities having such power only by
reason of the happening of a contingency) or a majority (by percentage of voting
power) of the outstanding ownership interests of a partnership or limited
liability company of any Person.
"Administrative Agent" means JPMorgan Chase in its capacity as contractual
representative of the Lenders pursuant to Article X, and not in its individual
capacity as a Lender, as Administrative Agent, and any successor Administrative
Agent appointed pursuant to Article X.
"Advance" means a borrowing hereunder consisting of the aggregate amount of
several Revolving Loans or Term Loans, as the case may be (i) made by some or
all of the Lenders on the same Borrowing Date, or (ii) converted or continued by
the Lenders on the same date of conversion or continuation, consisting, in
either case, of the aggregate amount of the several Loans of the same Type and,
in the case of Eurodollar Loans, for the same Interest Period. The term
"Advance" shall include Swing Line Loans unless otherwise expressly provided.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person is the
"beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934) of 10% or more of any class of voting securities (or other ownership
interests) of the controlled Person or possesses, directly or indirectly, the
power to direct or cause the direction of the management or policies of the
controlled Person, whether through ownership of voting securities, by contract
or otherwise.
"Aggregate Outstanding Revolving Credit Exposure" means, at any time, the
aggregate of the Outstanding Revolving Credit Exposure of all the Lenders.
"Aggregate Revolving Loan Commitment" means the aggregate of the Revolving
Loan Commitments of all the Lenders, as may be increased or reduced from time to
time pursuant to
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the terms hereof. The initial Aggregate Revolving Loan Commitment is One Hundred
Seventy-Five Million and 00/100 Dollars ($175,000,000).
"Aggregate Term Loan Commitment" means the aggregate of the Term Loan
Commitments of all the Lenders, as may be reduced from time to time pursuant
hereto. The initial Aggregate Term Loan Commitment is Eighty-Five Million and
00/100 Dollars ($85,000,000).
"Agreement" means this Amended and Restated Credit Agreement, as it may be
amended, restated, supplemented or otherwise modified and as in effect from time
to time.
"Agreement Accounting Principles" means generally accepted accounting
principles as in effect in the United States from time to time, applied in a
manner consistent with that used in preparing the financial statements of the
Borrower referred to in Section 5.4; provided, however, that except as provided
in Section 9.8, with respect to the calculation of the financial covenants set
forth in Sections 6.20 through 6.24 (and the defined terms used in such
Sections), "Agreement Accounting Principles" means generally accepted accounting
principles as in effect in the United States as of the Closing Date, applied in
a manner consistent with that used in preparing the financial statements of the
Borrower referred to in Section 5.4.
"Alternate Base Rate" means, for any day, a rate of interest per annum
equal to the higher of (i) the Prime Rate for such day and (ii) the sum of the
Federal Funds Effective Rate for such day plus 1/2 of 1% per annum.
"Applicable Fee Rate" means, with respect to the Commitment Fee at any
time, the percentage rate per annum which is applicable at such time with
respect to such fee as set forth in the Pricing Schedule.
"Applicable Margin" means, with respect to Advances of any Type at any
time, the percentage rate per annum which is applicable at such time with
respect to Advances of such Type as set forth in the Pricing Schedule.
"Applicable Pledge Percentage" means 100%, but (x) 65% in the case of a
pledge of capital stock of a Foreign Subsidiary or (y) 0% in the case of a
pledge of capital stock of a Foreign Subsidiary to the extent a pledge would
cause a Financial Assistance Problem.
"Approved Fund" means any Fund that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.
"Arranger" means J.P. Morgan Securities Inc., a Delaware corporation, and
its successors, in its capacity as Sole Lead Arranger and Sole Book Runner.
"Article" means an article of this Agreement unless another document is
specifically referenced.
"Asset Sale" means, with respect to the Borrower or any Subsidiary, the
sale, lease, conveyance, disposition or other transfer by such Person of any of
its assets (including by way of
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a sale-leaseback transaction, and including the sale or other transfer of any of
the capital stock or other equity interests of such Person or any Subsidiary of
such Person but excluding cash and cash equivalents other than Cash Equivalent
Investments) to any Person other than the Borrower or any of its Wholly-Owned
Subsidiaries other than (i) the sale or other disposition of inventory in the
ordinary course of business, (ii) the sale or other disposition of any obsolete,
excess, damaged, surplus or worn-out Equipment or overdue Receivables disposed
of in the ordinary course of business, (iii) leases or licenses of assets in the
ordinary course of business consistent with past practice, (iv) transfers
consisting of Restricted Payments permitted under Section 6.10, dispositions
permitted by Section 6.12.11, Investments permitted under Section 6.13 and Liens
permitted under Section 6.15, and (v) sales or liquidiations of Cash Equivalent
Investments.
"Assignment Agreement" is defined in Section 12.3.1.
"Authorized Officer" means any of the Chief Executive Officer, President,
Chief Financial Officer, Treasurer or Controller of the Borrower, or such other
officer of the Borrower as may be designated by the Borrower in writing to the
Administrative Agent from time to time, acting singly.
"Borrower" means Chemed Corporation (formerly known as Roto-Rooter, Inc.),
a Delaware corporation, and its permitted successors and assigns (including,
without limitation, a debtor in possession on its behalf).
"Borrowing Date" means a date on which an Advance is made hereunder.
"Borrowing Notice" is defined in Section 2.8.
"Business Day" means (i) with respect to any borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in Chicago, Illinois for the conduct of
substantially all of their commercial lending activities, interbank wire
transfers can be made on the Fedwire system and dealings in Dollars are carried
on in the London interbank market and (ii) for all other purposes, a day (other
than a Saturday or Sunday) on which banks generally are open in Chicago,
Illinois for the conduct of substantially all of their commercial lending
activities and interbank wire transfers can be made on the Fedwire system.
"Capital Expenditures" means, without duplication, any expenditures for any
purchase or other acquisition of any asset which would be classified as a fixed
or capital asset on a consolidated balance sheet of the Borrower and its
Subsidiaries prepared in accordance with Agreement Accounting Principles.
"Capitalized Lease" of a Person means any lease of Property by such Person
as lessee which would be capitalized on a balance sheet of such Person prepared
in accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be classified as
a liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.
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"Cash Equivalent Investments" means (i) direct obligations of, or fully
guaranteed by, the United States of America, (ii) commercial paper rated A-1 or
better by S&P or P-1 or better by Moody's, (iii) demand deposit accounts
maintained in the ordinary course of business, (iv) certificates of deposit,
bankers' acceptances, money market deposit accounts, and time deposits issued by
or maintained with, as applicable, commercial banks (whether domestic or
foreign) having capital and surplus in excess of $100,000,000, (v) fully
collateralized repurchase agreements with a term of not more than 30 days for
securities described in clause (i) above and entered into with a financial
institution satisfying the criteria described in clause (iv) above, and (vi) in
the case of any Foreign Subsidiary, (A) marketable direct obligations issued by,
or unconditionally guaranteed by, the sovereign nation in which such Foreign
Subsidiary is organized and is conducting business or issued by any agency of
such sovereign nation and backed by the full faith and credit of such sovereign
nation, in each case maturing within one year from the date of acquisition, so
long as the Indebtedness of such sovereign nation is rated at least A-1 or
better by S&P or P-1 or better by Moody's or carries an equivalent rating from a
comparable foreign rating agency or (B) Investments of the type and maturity
described in clauses (ii) through (v) above of foreign obligors, which
Investments or obligors have ratings described in such clauses or equivalent
ratings from comparable foreign rating agencies..
"Cash Flow Period" means each fiscal year of the Borrower, beginning with
the fiscal year ending 2005.
"CHAMPVA" means, collectively, the Civilian Health and Medical Program of
the Department of Veteran Affairs, a program of medical benefits covering
retirees and dependents of former members of the armed services administered by
the United States Department of Veteran Affairs, and all laws, rules,
regulations, manuals, orders, guidelines or requirements pertaining to such
program including (a) all federal statutes (whether set forth in 38 U.S.C.
Section 1713 or elsewhere) affecting such program or, to the extent applicable
to CHAMPVA; and (b) all rules, regulations (including 38 C.F.R. Section 17.54),
manuals, orders and administrative, reimbursement and other guidelines of all
governmental authorities promulgated in connection with such program (whether or
not having the force of law), in each case as the same may be amended,
supplemented or otherwise modified from time to time.
"CHAMPVA Receivable" means a Receivable payable pursuant to the CHAMPVA
program.
"Change of Control" means (i) the acquisition by any Person, or any group
of Persons (within the meaning of Section 13 or 14 of the Securities Exchange
Act of 1934, as amended) acting in concert, of beneficial ownership (within the
meaning of Rule 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as amended) of 50% or more of the outstanding
shares of common stock of the Borrower; or (ii) the occurrence of a "Change of
Control" as defined in the Senior Secured Indenture Documents.
"Chemed Capital Trust" means Chemed Capital Trust, a Delaware statutory
business trust and a Wholly-Owned Subsidiary of the Borrower, together with its
permitted successors and assigns.
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"Chemed Trust Securities" means the 575,503 convertible trust preferred
securities of Chemed Capital Trust issued in exchange for shares of the
Borrower's capital stock pursuant to an exchange offer completed on February 1,
2000.
"Chemed Stock Issuance" means any issuance of equity interests in the
Borrower to non-Affiliates.
"Closing Date" means February 24, 2005.
"Closing Date Stock Award Plan" means the Borrower's employee stock award
plan in existence on the Closing Date.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time, and any rule or regulation issued
thereunder.
"Collateral" means all Property and interests in Property now owned or
hereafter acquired by the Borrower or any of its Domestic Subsidiaries in or
upon which a security interest, lien or mortgage is granted to the Collateral
Agent, for the benefit of the Holders of Secured Obligations and the other
creditors of the Borrower subject to the Intercreditor Agreement, whether under
the Pledge and Security Agreement, under any of the other Collateral Documents
or under any of the other Loan Documents.
"Collateral Agent" means JPMorgan Chase Bank, N.A. (successor by merger to
Bank One, NA (Illinois)), together with its permitted successors and assigns.
"Collateral Documents" means all agreements, instruments and documents
executed in connection with this Agreement or the Intercreditor Agreement that
are intended to create or evidence Liens to secure the Secured Obligations,
including, without limitation, the Pledge and Security Agreement, the
Intellectual Property Security Agreements, and all other security agreements,
mortgages, deeds of trust, loan agreements, notes, guarantees, subordination
agreements, pledges, powers of attorney, consents, assignments, contracts, fee
letters, notices, leases, financing statements and all other written matter
whether heretofore, now, or hereafter executed by the Borrower or any of its
Subsidiaries and delivered to the Collateral Agent.
"Collateral Shortfall Amount" is defined in Section 8.1.
"Commitment Fee" is defined in Section 2.5.1.
"Commitment Schedule" means the Schedule identifying each Lender's
Revolving Loan Commitment and Term Loan Commitment as of the Closing Date
attached hereto and identified as such.
"Consolidated Capital Expenditures" means, with reference to any period,
the Capital Expenditures of the Borrower and its consolidated Subsidiaries
calculated on a consolidated basis for such period.
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"Consolidated Current Maturities" means, with reference to any period, all
payments of principal due within twelve (12) calendar months on and after the
last day of such period with respect to all Consolidated Indebtedness of the
Borrower.
"Consolidated EBITDA" means Consolidated Net Income from continuing
operations plus, to the extent deducted from revenues in determining
Consolidated Net Income, (i) Consolidated Interest Expense, (ii) expense for
taxes paid or accrued, (iii) depreciation, (iv) amortization expense of the
Borrower and its consolidated Subsidiaries (including amortization recorded in
connection with the application of Financial Accounting Standard No. 142
(Goodwill and Other Intangibles)), (v) payments made in connection with the
Westbrook Agreement in the amount of $25,000,000 and transaction fees and
expenses paid in connection with the Transactions, (vi) any severance payments
related to the VITAS Healthcare Acquisition not to exceed $14,500,000 plus any
employment taxes and employee benefit charges payable in connection therewith,
(vii) dividends, distributions and payments not in excess of $2,800,000 under
the Closing Date Stock Award Plan plus any employment taxes and employee benefit
charges payable in connection therewith, (viii) all other non-cash charges of
the Borrower and its consolidated Subsidiaries (excluding any such non-cash
charge to the extent it represents an accrual of or reserve for cash
expenditures in any future period) less interest income and all non-cash items
of income of the Borrower and its consolidated Subsidiaries in each case for
such period, (ix) the aggregate amount of the awards remitted by the Borrower to
its senior management under the current Multi-Year Management Incentive Plans;
provided, however, that no more than $5,000,000 of cash compensation, payments
or awards remitted to senior management shall be included in this calculation,
(x) non-cash charges arising from compensation expense as a result of the
adoption of the proposed amendment to Financial Accounting Standards Board
Statement 123, "Share Based Payments", which would require certain stock based
compensation to be recorded as expense within the Borrower's consolidated
statement of operation, less the amount of any subsequent cash payments in
respect of any such non-cash charges, (xi) up to $5,000,000 of the amount of the
settlement payment made in respect of the Robert Harris class-action litigation,
(xii) any loss incurred by the Borrower as a result of the prepayment of the
Senior Secured Notes, and (xiii) Yellow Pages Advertising Expense. For purposes
of calculating Consolidated EBITDA for the Borrower and its consolidated
Subsidiaries for those periods that require financial information for the fiscal
quarter ending March 31, 2004, the Borrower shall include VITAS Healthcare on a
pro forma basis as though the VITAS Healthcare Acquisition had occurred on
January 1, 2004.
"Consolidated Funded Indebtedness" means, at any time, with respect to any
Person, without duplication, (i) the aggregate Dollar amount of Consolidated
Indebtedness which would be classified on the balance sheet of such Person, as
of the applicable determination date, as long-term Indebtedness, plus (ii) the
aggregate stated or face amount of all Letters of Credit at such time for which
such Person is the account party or is otherwise liable.
"Consolidated Indebtedness" means, at any time, with respect to any Person,
the Indebtedness of such Person and its consolidated Subsidiaries calculated on
a consolidated basis as of such time.
"Consolidated Interest Expense" means, with reference to any period, the
interest expense of the Borrower and its consolidated Subsidiaries calculated on
a consolidated basis for
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such period, in accordance with Agreement Accounting Principles. Notwithstanding
anything to the contrary herein, any premium paid in connection with the
repayment of Indebtedness of the Borrower in connection with the Transactions
and interest on the Trust Securities paid on or prior to January 1, 2005 shall
not be included in Consolidated Interest Expense.
"Consolidated Net Income" means, with reference to any period, the net
income (or loss) of the Borrower and its consolidated Subsidiaries calculated on
a consolidated basis for such period in accordance with Agreement Accounting
Principles.
"Consolidated Net Worth" means at any time, with respect to any Person, the
consolidated stockholders' equity of such Person and its consolidated
Subsidiaries, plus minority interests in Subsidiaries, calculated on a
consolidated basis in accordance with Agreement Accounting Principles.
"Consolidated Senior Funded Debt" means Indebtedness outstanding under the
Loan Documents.
"Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any operating agreement,
take-or-pay contract or the obligations of any such Person as general partner of
a partnership with respect to the liabilities of the partnership (except to the
extent expressly without recourse to such Person).
"Continuing Director" means, with respect to any Person as of any date of
determination, any member of the board of directors of such Person who (i) was a
member of such board of directors on the Closing Date, or (ii) was nominated for
election or elected to such board of directors with the approval of the required
majority of the Continuing Directors who were members of such board at the time
of such nomination or election.
"Controlled Group" means all members of a controlled group of corporations
or other business entities and all trades or businesses (whether or not
incorporated) under common control which, together with the Borrower or any of
its Subsidiaries, are treated as a single employer under Section 414 of the
Code.
"Conversion/Continuation Notice" is defined in Section 2.9.
"Credit Extension" means the making of an Advance or the issuance of a
Facility LC hereunder.
"Credit Extension Date" means the Borrowing Date for an Advance or the
issuance date for a Facility LC.
"Credit Party" means, at any time, any of the Borrower and any Person which
is a Guarantor at such time; provided, however, that VNF shall not be deemed a
Credit Party.
8
"Deemed Dividend Problem" means, with respect to any Foreign Subsidiary,
such Foreign Subsidiary's accumulated and undistributed earnings and profits
being deemed to be repatriated to the Borrower or the applicable parent Domestic
Subsidiary for U.S. federal income tax purposes and the effect of such
repatriation causing adverse tax consequences to the Borrower or such parent
Domestic Subsidiary, in each case as determined by the Borrower in its
commercially reasonable judgment acting in good faith and, if applicable, in
consultation with its legal and tax advisors.
"Disqualified Stock" means any capital stock or other equity interest that,
by its terms (or by the terms of any security into which it is convertible or
for which it is exchangeable), matures or is mandatorily redeemable, pursuant to
a sinking fund obligation or otherwise, or redeemable at the option of the
holder thereof, in whole or in part, on or prior to the date that is 91 days
after the later of the (i) the Revolving Loan Termination Date and (ii) the Term
Loan Maturity Date.
"Dollar", "dollar" and "$" means the lawful currency of the United States
of America.
"Domestic Subsidiary" means any Subsidiary of any Person organized under
the laws of a jurisdiction located in the United States of America.
"Environmental Laws" means any and all federal, state, local and foreign
statutes, laws, judicial decisions, regulations, ordinances, rules, judgments,
orders, decrees, injunctions, permits, and legally enforceable governmental
concessions, grants, franchises, licenses, agreements and other governmental
restrictions relating to (i) the protection of the environment, (ii) emissions,
discharges or releases of pollutants, contaminants, hazardous substances or
wastes into surface water, ground water or land, or (iii) the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, hazardous substances or wastes or the
clean-up or other remediation thereof.
"Equipment" means all of the Borrower's and each Subsidiary's present and
future (i) equipment, including, without limitation, machinery, manufacturing,
distribution, data processing and office equipment, assembly systems, tools,
molds, dies, fixtures, appliances, furniture, furnishings, vehicles, vessels,
aircraft, aircraft engines, and trade fixtures, (ii) other tangible personal
property (other than inventory), and (iii) any and all accessions, parts and
appurtenances attached to any of the foregoing or used in connection therewith,
and any substitutions therefor and replacements, products and proceeds thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rules or regulations promulgated thereunder.
"Eurodollar Advance" means an Advance which, except as otherwise provided
in Section 2.11, bears interest at the applicable Eurodollar Rate.
"Eurodollar Base Rate" means, with respect to any Eurodollar Advance for
any Interest Period, the rate appearing on Page 3750 of the Dow Jones Market
Service (or on any successor or substitute page of such Service, or any
successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service, as
determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to dollar deposits in the
London interbank market) at approximately
9
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period, as the rate for dollar deposits with a maturity comparable to
such Interest Period. In the event that such rate is not available at such time
for any reason, then the "Eurodollar Base Rate" with respect to such Eurodollar
Advance for such Interest Period shall be the rate at which dollar deposits in a
comparable amount and for a maturity comparable to such Interest Period are
offered by the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.
"Eurodollar Loan" means a Loan which, except as otherwise provided in
Section 2.11, bears interest at the applicable Eurodollar Rate.
"Eurodollar Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the sum of (i) the quotient of (a) the Eurodollar Base
Rate applicable to such Interest Period, divided by (b) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Interest Period, plus
(ii) the Applicable Margin then in effect, changing as and when the Applicable
Margin changes.
"Event of Default" means an event described in Article VII.
"Event of Loss" means, with respect to any Property, any of the following:
(i) any loss, destruction or damage of such Property or (ii) any condemnation,
seizure, or taking, by exercise of the power of eminent domain or otherwise, of
such Property, or confiscation of such Property or the requisition of the use of
such Property by any Governmental Authority.
"Excess Cash Flow" means, for any Cash Flow Period, an amount, determined
without duplication for any items or components thereof, equal to the Borrower's
Consolidated EBITDA plus the sum of (i) the amount, if any, by which Net Working
Capital decreased during such Cash Flow Period plus (ii) the net amount, if any,
by which the consolidated deferred revenues of the Borrower and its consolidated
Subsidiaries increased during such Cash Flow Period minus income taxes paid in
cash during such period minus Capital Expenditures permitted under this
Agreement that are paid in cash during such period minus Interest Expense for
such period minus repaid and prepaid principal payments in respect of
Indebtedness (including Indebtedness in respect of Revolving Loans to the extent
accompanied by a permanent reduction in Revolving Loan Commitments) owing by the
Borrower and its Subsidiaries during such period other than pursuant to Section
2.7 minus the cash portion of the Purchase Price paid in connection with any
Permitted Acquisition during such Cash Flow Period minus cash dividends paid by
the Borrower on its capital stock during such Cash Flow Period to the extent
such cash dividends were permitted under this Agreement and minus the sum of (i)
any non-cash gains included in determining such consolidated net income (or
loss) for such Cash Flow Period plus (ii) the amount, if any by which Net
Working Capital increased during such fiscal year plus (iii) the net amount, if
any, by which the consolidated deferred revenues of the Borrower and its
consolidated Subsidiaries decreased during such fiscal year.
"Excess Cash Flow Prepayment Percentage" means, with respect to any
mandatory prepayment of the Loans made in accordance with Section 2.2(d), a
percentage based on the then applicable Leverage Ratio as follows:
10
Leverage Ratio Applicable Percentage
-------------- ---------------------
Greater than or equal to 3.0 to 1.0 50%
Greater than or equal to 2.5 to 1.0 but less than 25%
3.0 to 1.0
Less than 2.5 to 1.0 0%
"Excluded Taxes" means, in the case of each Lender or applicable Lending
Installation and the Administrative Agent, (i) taxes imposed on its overall net
income, and franchise taxes imposed on it, by (a) the jurisdiction under the
laws of which such Lender or the Administrative Agent is incorporated or
organized or any political combination or subdivision or taxing authority
thereof or (b) the jurisdiction in which the Administrative Agent's or such
Lender's principal executive office or such Lender's applicable Lending
Installation or office making or booking a Loan or Facility LC is located, (ii)
any branch profits taxes imposed by the United States of America or any similar
tax imposed by any other jurisdiction in which the Borrower is located and (iii)
in the case of a Non U.S. Lender (as defined in Section 3.5), any withholding
tax that is imposed on amounts payable to such Non U.S. Lender at the time such
Non U.S. Lender becomes a party to this Agreement (or designates a new lending
office).
"Exhibit" refers to an exhibit to this Agreement, unless another document
is specifically referenced.
"Existing Letters of Credit" means those Letters of Credit identified in
Schedule 2.20.
"Facility LC" is defined in Section 2.20.1.
"Facility LC Application" is defined in Section 2.20.3.
"Facility LC Collateral Account" is defined in Section 2.20.11.
"Federal Funds Effective Rate" means, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any date that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Financial Contract" of a Person means (i) any exchange-traded or
over-the-counter future, forward, swap or option contract or other financial
instrument with similar characteristics or (ii) any Rate Management Transaction.
11
"Financial Assistance Problem" means, with respect to any Foreign
Subsidiary, the inability of such Foreign Subsidiary to become a Subsidiary
Guarantor or to permit its assets from being pledged pursuant to a pledge or
security agreement on account of legal or financial limitations imposed by the
jurisdiction of organization of such Foreign Subsidiary or other relevant
jurisdictions having authority over such Foreign Subsidiary, in each case as
determined by the Borrower in its commercially reasonable judgment acting in
good faith and in consultation with its legal and tax advisors.
"Financing" means, with respect to any Person, (i) the issuance or sale by
such Person of any equity interests in such Person, or (ii) the issuance or sale
by such Person of any Indebtedness other than Indebtedness permitted under
Section 6.14; provided, however, that the foregoing clause (ii) shall not permit
the incurrence by the Borrower or any Subsidiary of any Indebtedness if such
incurrence is not otherwise permitted by Section 6.14.
"FIRREA" means the Financial Institutions Reform, Recovery, and Enforcement
Act of 1989, as amended, modified or supplemented from time to time.
"First Tier Foreign Subsidiary" means each Foreign Subsidiary with respect
to which any one or more of the Borrower and its Domestic Subsidiaries directly
owns more than 50% of such Foreign Subsidiary's issued and outstanding ordinary
equity interests.
"Floating Rate" means, for any day, a rate per annum equal to the sum of
(i) the Alternate Base Rate for such day, changing when and as the Alternate
Base Rate changes plus (ii) the Applicable Margin then in effect, changing as
and when the Applicable Margin changes.
"Floating Rate Advance" means an Advance which, except as otherwise
provided in Section 2.11, bears interest at the Floating Rate.
"Floating Rate Loan" means a Loan which, except as otherwise provided in
Section 2.11, bears interest at the Floating Rate.
"Foreign Subsidiary" means any Subsidiary of any Person which is not a
Domestic Subsidiary of such Person.
"Fund" means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.
"Governmental Authority" means any nation or government, any foreign,
federal, state, local or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Governmental Receivables" means, collectively, any and all Receivables
which are (a) Medicare Receivables, (b) Medicaid Receivables, (c) CHAMPVA
Receivables, (d) TRICARE Receivables, or (e) any other Receivables payable by a
Governmental Authority approved by the Administrative Agent.
12
"Guarantor" means each Subsidiary (other than VNF) of the Borrower which is
a party to the Guaranty Agreement, including each Subsidiary of the Borrower
which becomes a party to the Guaranty Agreement pursuant to a joinder or other
supplement thereto.
"Guaranty Agreement" means the Guaranty Agreement, dated as of the Closing
Date, made by the Guarantors in favor of the Administrative Agent for the
benefit of the Holders of Secured Obligations, as the same may be amended,
restated, supplemented or otherwise modified from time to time.
"Holders of Secured Obligations" means the holders of the Secured
Obligations from time to time and shall refer to (i) each Lender in respect of
its Loans, (ii) the LC Issuer in respect of Reimbursement Obligations, (iii) the
Administrative Agent, the Lenders and the LC Issuer in respect of all other
present and future obligations and liabilities of the Borrower or any of its
Domestic Subsidiaries of every type and description arising under or in
connection with this Agreement or any other Loan Document, (iv) each Lender (or
affiliate thereof), in respect of all Rate Management Obligations of the
Borrower to such Lender (or such affiliate) as exchange party or counterparty
under any Rate Management Transaction, unless the Borrower and such Lender
mutually agree that such Rate Management Obligations do not constitute Secured
Obligations, (v) each Person benefiting from indemnities made by the Borrower or
any Subsidiary hereunder or in any Loan Document in respect of the obligations
and liabilities of the Borrower or such Subsidiary to such Person, and (vi)
their respective permitted successors, transferees and assigns.
"Indebtedness" of a Person means, at any time, without duplication, such
Person's (i) obligations for borrowed money, (ii) obligations representing the
deferred purchase price of Property or services (other than current accounts
payable arising in the ordinary course of such Person's business), (iii)
obligations, whether or not assumed, secured by Liens or payable out of the
proceeds or production from Property now or hereafter owned or acquired by such
Person, (iv) obligations which are evidenced by notes, bonds, debentures,
acceptances, or other similar instruments, (v) obligations to purchase
securities or other Property arising out of or in connection with the sale of
the same or substantially similar securities or Property, (vi) Capitalized Lease
Obligations, (vii) Contingent Obligations of such Person in respect of
Indebtedness, (viii) reimbursement obligations under Letters of Credit, bankers'
acceptances, surety bonds and similar instruments, including, without
limitation, the Letters of Credit described in Section 6.14.19, (ix) for
purposes of Section 6.14 only, Net Mark-to-Market Exposure under Rate Management
Transactions and other Financial Contracts, and (x) any other obligation for
borrowed money which in accordance with Agreement Accounting Principles would be
classified as indebtedness on the consolidated balance sheet of such Person.
"Intellectual Property Security Agreements" means the intellectual property
security agreements as any Credit Party may from time to time make in favor of
the Collateral Agent for the benefit of the Holders of Secured Obligations and
the other creditors of the Borrower subject to the Intercreditor Agreement, in
each case as the same may be amended, restated, supplemented or otherwise
modified from time to time.
"Intercreditor Agreement" means the Collateral Sharing Agreement, dated as
of February 24, 2004, by and among the Administrative Agent on behalf of the
Lenders, Wells Fargo Bank,
13
National Association, as Trustee on behalf of certain noteholders, the
Collateral Agent, and the Borrower, as the same may be amended, restated,
supplemented or otherwise modified from time to time.
"Interest Period" means, with respect to a Eurodollar Advance, a period of
one, two, three or six months, or, to the extent available as determined by the
Administrative Agent in its reasonable judgment, nine or twelve months,
commencing on a Business Day selected by the Borrower pursuant to this
Agreement. Such Interest Period shall end on but exclude the day which
corresponds numerically to such date one, two, three, six, or, if applicable,
nine or twelve months thereafter, provided, however, that if there is no such
numerically corresponding day in such next, second, third, sixth or, if
applicable, ninth or twelfth succeeding month, such Interest Period shall end on
the last Business Day of such next, second, third, sixth or, if applicable,
ninth or twelfth succeeding month. If an Interest Period would otherwise end on
a day which is not a Business Day, such Interest Period shall end on the next
succeeding Business Day, provided, however, that if said next succeeding
Business Day falls in a new calendar month, such Interest Period shall end on
the immediately preceding Business Day.
"Investment" of a Person means any loan, advance (other than commission,
travel, relocation and other loans and advances to officers or employees made in
the ordinary course of business), extension of credit (other than Receivables
arising in the ordinary course of business) or contribution of capital by such
Person; stocks, bonds, mutual funds, partnership interests, notes, debentures or
other securities owned by such Person; any deposit accounts and certificate of
deposit owned by such Person; and structured notes, derivative financial
instruments and other similar instruments or contracts owned by such Person.
"JPMorgan Chase" means JPMorgan Chase Bank, N.A., a national banking
association, in its individual capacity, and its successors.
"LC Fee" is defined in Section 2.20.4.
"LC Issuer" means JPMorgan Chase (or any subsidiary or affiliate of
JPMorgan Chase designated by JPMorgan Chase) in its capacity as issuer of
Facility LCs hereunder.
"LC Obligations" means, at any time, the sum, without duplication, of (i)
the aggregate undrawn stated amount under all Facility LCs outstanding at such
time plus (ii) the aggregate unpaid amount at such time of all Reimbursement
Obligations.
"LC Payment Date" is defined in Section 2.20.5.
"Lenders" means the lending institutions listed on the signature pages of
this Agreement and their respective permitted successors and assigns. Unless
otherwise specified, the term "Lenders" includes the Swing Line Lender and the
LC Issuer.
"Lending Installation" means, with respect to a Lender or the
Administrative Agent, the office, branch, subsidiary or affiliate of such Lender
or the Administrative Agent listed on the signature pages hereof or on the
administrative information sheets provided to the Administrative Agent in
connection herewith or on a Schedule or otherwise selected by such Lender or the
Administrative Agent pursuant to Section 2.17.
14
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"Leverage Ratio" has the meaning set forth in Section 6.20.1.
"Lien" means any lien (statutory or other), security interest, mortgage,
pledge, hypothecation, assignment, deposit arrangement, or encumbrance of any
kind or nature whatsoever (including, without limitation, the interest of a
vendor or lessor under any conditional sale, Capitalized Lease or other title
retention agreement, and, in the case of stock agreements, any purchase option,
call or similar right of a Person with respect to such stock).
"Loan" means, with respect to a Lender, such Lender's loan made pursuant to
Article II (or any conversion or continuation thereof), whether constituting a
Term Loan, Revolving Loan or a Swing Line Loan.
"Loan Documents" means this Agreement, the Facility LC Applications, the
Intercreditor Agreement, the Collateral Documents, the Guaranty Agreement and
all other documents, instruments, notes (including any Notes issued pursuant to
Section 2.13 (if requested)) and agreements executed in connection herewith or
therewith or contemplated hereby or thereby, as the same may be amended,
restated or otherwise modified and in effect from time to time.
"Material Adverse Effect" means a material adverse effect on (i) the
business, condition (financial or otherwise), operations, performance or
Property of the Borrower and its Subsidiaries taken as a whole, (ii) the ability
of the Borrower or any Subsidiary to perform its material obligations under the
Loan Documents, or (iii) the validity or enforceability of the Loan Documents or
the rights or remedies of the Administrative Agent, the Collateral Agent, the LC
Issuer or the Lenders thereunder or their rights with respect to the Collateral.
"Material Indebtedness" means any Indebtedness in an outstanding principal
amount of $10,000,000 or more in the aggregate (or the equivalent thereof in any
currency other than Dollars).
"Material Indebtedness Agreement" means any agreement under which any
Material Indebtedness is outstanding or is governed.
"Medicaid" shall mean, collectively, the health care assistance program
established by Title XIX of the Social Security Act (42 U.S.C. Sections 1396 et
seq.) and any statutes succeeding thereto, and all laws, rules, regulations,
manuals, orders, guidelines or requirements pertaining to such program including
(a) all federal statutes (whether set forth in Title XIX of the Social Security
Act or elsewhere) affecting such program; (b) all state statutes and plans for
medical assistance enacted in connection with such program and federal rules and
regulations promulgated in connection with such program; and (c) all applicable
provisions of all rules, regulations, manuals, orders and administrative
reimbursement guidelines and requirements of all government authorities
promulgated in connection with such program (whether or not having the force of
law), in each case as the same may be amended, supplemented or otherwise
modified from time to time.
15
"Medicaid Receivable" shall mean a Receivable payable pursuant to the
Medicaid program.
"Medicare" shall mean, collectively, the health insurance program for the
aged and disabled established by Title XVIII of the Social Security Act (42
U.S.C. Sections 1395 et seq.) and any statutes succeeding thereto, and all laws,
rules, regulations, manuals, orders or guidelines pertaining to such program
including (a) all federal statutes (whether set forth in Title XVIII of the
Social Security Act or elsewhere) affecting such program; and (b) all applicable
provisions of all rules, regulations, manuals, orders and administrative
reimbursement guidelines and requirements of all governmental authorities
promulgated in connection with such program (whether or not having the force of
law), in each case as the same may be amended, supplemented or otherwise
modified from time to time.
"Medicare Receivable" shall mean a Receivable payable pursuant to the
Medicare program.
"Modify" and "Modification" are defined in Section 2.20.1.
"Moody's" means Moody's Investors Services, Inc. and any successor thereto.
"Multiemployer Plan" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, which is covered by Title IV of ERISA and to which the
Borrower or any member of the Controlled Group is obligated to make
contributions.
"Multi-Year Management Incentive Plans" means the Borrower's incentive
plans in effect on the Closing Date that run to the benefit of Borrower's senior
management and that award cash and/or non-cash bonuses (such as equity interests
or options to purchase equity interests in the Borrower) to senior management
based upon increases in Consolidated EBITDA and/or the share price for equity
interests of the Borrower or similar items that evidence increases in the
Borrower's profitability.
"Net Cash Proceeds" means, (1) with respect to any Asset Sale or any
Financing by any Person, (a) cash (freely convertible into Dollars) received by
such Person from such Asset Sale (including cash received as consideration for
the assumption or incurrence of liabilities incurred in connection with or in
anticipation of such Asset Sale) or such Financing, after (i) provision for all
income or other taxes measured by or resulting from such sale of Property
(including reasonably estimated taxes), and the amount of any reserves
established by such Person to fund contingent liabilities reasonably estimated
to be payable that are directly attributable to such Asset Sale or Financing (as
determined reasonably and in good faith by the chief financial officer of such
Person), (ii) payment of all reasonable brokerage commissions or discounts and
other fees and expenses related to such Asset Sale or Financing, (iii) all
amounts used to repay, redeem or repurchase Indebtedness secured by a Lien on
any asset disposed of, sold, leased, conveyed or otherwise transferred in such
Asset Sale or which is or may be required (by the express terms of the
instrument governing such Indebtedness) to be repaid, redeemed or repurchased in
connection with such Asset Sale (including payments made to obtain or avoid the
need for the consent of any holder of such Indebtedness) or Financing and (2)
with respect to an Event of Loss of a Person, cash (freely convertible in
Dollars) received by or for such Person's account,
16
net of (i) reasonable costs or expenses incurred in connection with such Event
of Loss, including those costs and expenses incurred in investigating or
recovering such cash and reasonable reserves associated therewith in accordance
with Agreement Accounting Principles, (ii) amounts required to repay, redeem or
repurchase any Indebtedness or statutory or other obligations secured by any
Lien on the property (or portion thereof) so damaged or taken (other than the
Secured Obligations) or which is required to be and is repaid, redeemed or
repurchased in connection with such Event of Loss, and (iii) provision for all
income or other taxes measured by or resulting from such Event of Loss
(including reasonably estimated taxes), and the amount of any reserves
established by such Person to fund contingent liabilities reasonably estimated
to be payable that are directly attributable to such Event of Loss (as
determined reasonably and in good faith by the chief financial officer of such
Person).
"Net Mark-to-Market Exposure" of a Person means, as of any date of
determination, the excess (if any) of all unrealized losses over all unrealized
profits of such Person arising from Rate Management Transactions, as determined
by such Person in good faith. "Unrealized losses" means the fair market value of
the cost to such Person of replacing such Rate Management Transaction as of the
date of determination (assuming the Rate Management Transaction were to be
terminated as of that date), and "unrealized profits" means the fair market
value of the gain to such Person of replacing such Rate Management Transaction
as of the date of determination (assuming such Rate Management Transaction were
to be terminated as of that date).
"Net Working Capital" means, at any date, (a) the consolidated current
assets of the Borrower and its consolidated Subsidiaries as of such date
(excluding cash, Cash Equivalent Investments, and Unapplied PIP) minus (b) the
consolidated current liabilities of the Borrower and its consolidated
Subsidiaries as of such date (excluding current liabilities in respect of
Indebtedness and PIP Settlements). Net Working Capital at any date may be a
positive or negative number. Net Working Capital increases when it becomes more
positive or less negative and decreases when it becomes less positive or more
negative.
"Non-U.S. Lender" is defined in Section 3.5(iv).
"Note" is defined in Section 2.13.
"Obligations" means all Loans, all Reimbursement Obligations, advances,
debts, liabilities, obligations, covenants and duties owing by the Borrower to
the Administrative Agent, any Lender, the Swing Line Lender, the LC Issuer, the
Arranger, or any indemnitee under the provisions of Section 9.6 or any other
provisions of the Loan Documents, in each case of any kind or nature, present or
future, arising under this Agreement or any other Loan Document, whether or not
evidenced by any note, guaranty or other instrument, whether or not for the
payment of money, whether arising by reason of an extension of credit, loan,
foreign exchange risk, guaranty, indemnification, or in any other manner,
whether direct or indirect (including those acquired by assignment), absolute or
contingent, due or to become due, now existing or hereafter arising and however
acquired. The term includes, without limitation, all interest, charges,
expenses, fees, attorneys' fees and disbursements (in each case whether or not
allowed), and any other sum chargeable to the Borrower or any of its
Subsidiaries under this Agreement or any other Loan Document.
17
"Operating Lease" of a Person means any lease of Property (other than a
Capitalized Lease) by such Person as lessee which has an original term
(including any required renewals and any renewals effective at the option of the
lessor) of one year or more.
"Other Taxes" is defined in Section 3.5(ii).
"Outstanding Revolving Credit Exposure" means, as to any Lender at any
time, the sum of (i) the aggregate principal amount of its Revolving Loans
outstanding at such time, plus (ii) an amount equal to its ratable obligation to
purchase participations in the aggregate principal amount of Swing Line Loans
outstanding at such time, plus (iii) an amount equal to its ratable obligation
to purchase participations in the LC Obligations at such time.
"Participants" is defined in Section 12.2.1.
"Payment Date" means the last day of each March, June, September and
December, the Revolving Loan Termination Date and the Term Loan Maturity Date.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Permitted Acquisition" is defined in Section 6.13.21.
"Person" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.
"PIP" means periodic interim payments (or similar payments) made by any
Governmental Authority to any Credit Party under the Medicare, Medicaid, TRICARE
or CHAMPVA programs or any similar program of any Governmental Authority.
"PIP Settlements" has the meaning ascribed to such term in Section 6.9(ii)
hereof.
"Plan" means an employee pension benefit plan, excluding any Multiemployer
Plan, which is covered by Title IV of ERISA or subject to the minimum funding
standards under Section 412 of the Code as to which the Borrower or any member
of the Controlled Group may have any liability.
"Pledge and Security Agreement" means that certain Pledge and Security
Agreement, dated as of the Closing Date, by and between the Credit Parties and
the Collateral Agent for the benefit of the Holders of Secured Obligations and
the other creditors of the Borrower subject to the Intercreditor Agreement, as
the same may be amended, restated, supplemented, or otherwise modified from time
to time.
"Pledge Subsidiary" means each Domestic Subsidiary and, at the option of
the Administrative Agent, each First Tier Foreign Subsidiary.
"Pricing Schedule" means the Schedule identifying the Applicable Margin and
Applicable Fee Rate attached hereto and identified as such.
18
"Prime Rate" means the rate of interest per annum publicly announced from
time to time by JPMorgan Chase as its prime rate in effect at its principal
office in New York City; each change in the Prime Rate shall be effective from
and including the date such change is publicly announced as being effective.
"Prior Credit Agreement" means that Credit Agreement, dated as of February
24, 2004, by and among the Borrower, certain of the Lenders and the
Administrative Agent, as amended prior to the Closing Date.
"Property" of a Person means any and all property, whether real, personal,
tangible, intangible, or mixed, of such Person.
"Pro Rata Share" means, with respect to any Lender, the percentage obtained
by multiplying 100% by the quotient of (i) the sum of such Lender's Revolving
Loan Commitment and Term Loans at such time divided by (ii) the sum of the
Aggregate Revolving Loan Commitment and the aggregate amount of all of the Term
Loans at such time; provided, however, if all of the Revolving Loan Commitments
and Term Loan Commitments are terminated pursuant to the terms of this
Agreement, then "Pro Rata Share" means the percentage obtained by multiplying
100% by the quotient of (a) the sum of such Lender's Outstanding Revolving
Credit Exposure and outstanding Term Loans at such time divided by (b) the sum
of the Aggregate Outstanding Revolving Credit Exposure and the aggregate
outstanding amount of all Term Loans at such time.
"Purchase Price" means the total consideration and other amounts payable in
connection with any Acquisition, including, without limitation, any portion of
the consideration payable in cash, all Indebtedness, liabilities and contingent
obligations incurred or assumed in connection with such Acquisition and all
transaction costs and expenses incurred in connection with such Acquisition, but
exclusive of the value of any capital stock or other equity interests of the
Borrower or any Subsidiary issued as consideration for such Acquisition.
"Purchasers" is defined in Section 12.3.1.
"Rate Management Obligations" of a Person means any and all obligations of
such Person, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all Rate
Management Transactions, and (ii) any and all cancellations, buy backs,
reversals, terminations or assignments of any Rate Management Transactions.
"Rate Management Transaction" means any transaction (including an agreement
with respect thereto) now existing or hereafter entered by the Borrower or a
Subsidiary which is a rate swap, basis swap, forward rate transaction, commodity
swap, commodity option, equity or equity index swap, equity or equity index
option, bond option, interest rate option, foreign exchange transaction, cap
transaction, floor transaction, collar transaction, forward transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar transaction (including any option with respect to any of
these transactions) or any combination
19
thereof, whether linked to one or more interest rates, foreign currencies,
commodity prices, equity prices or other financial measures.
"Receivable(s)" means and includes all of the Borrower's and each
Subsidiary's presently existing and hereafter arising or acquired accounts,
accounts receivable, and all present and future rights of the Borrower or such
Subsidiary to payment for goods sold or leased or for services rendered (except
those evidenced by instruments or chattel paper), whether or not they have been
earned by performance, and all rights in any merchandise or goods which any of
the same may represent, and all rights, title, security and guarantees with
respect to each of the foregoing, including, without limitation, any right of
stoppage in transit.
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor thereto or other
regulation or official interpretation of said Board of Governors relating to
reserve requirements applicable to member banks of the Federal Reserve System.
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks, non-banks and non-broker lenders for the purpose
of purchasing or carrying margin stocks applicable to member banks of the
Federal Reserve System.
"Regulation X" means Regulation X of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by foreign lenders for the purpose of purchasing or carrying
margin stock (as defined therein).
"Reimbursement Obligations" means, at any time, the aggregate of all
obligations of the Borrower then outstanding under Section 2.20 to reimburse the
LC Issuer for amounts paid by the LC Issuer in respect of any one or more
drawings under Facility LCs.
"Reportable Event" means a reportable event, as defined in Section 4043 of
ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC has by regulation waived
the requirement of Section 4043(a) of ERISA that it be notified within thirty
(30) days of the occurrence of such event, provided, however, that a failure to
meet the minimum funding standard of Section 412 of the Code and of Section 302
of ERISA shall be a Reportable Event regardless of the issuance of any such
waiver of the notice requirement in accordance with either Section 4043(a) of
ERISA or Section 412(d) of the Code.
"Reports" is defined in Section 9.6.
"Required Lenders" means Lenders in the aggregate having more than 50% of
the sum of the Aggregate Revolving Loan Commitment and the Aggregate Term Loan
Commitment (or, if all of the Revolving Loan Commitments and Term Loan
Commitments are terminated pursuant to the terms of this Agreement, the
Aggregate Outstanding Revolving Credit Exposure and aggregate outstanding
principal amount of Term Loans at such time).
20
"Required Mandatory Prepayment Amount" means, with respect to any mandatory
prepayment of the Loans made in accordance with Section 2.2(c)(ii), an amount,
based on the then applicable Leverage Ratio, equal to the Net Cash Proceeds
allocable to the Loans in respect of such prepayment times the then applicable
percentage set forth below.
Percentage of Net Cash Proceeds to be
Leverage Ratio Applied in Reduction of Outstanding Loans
-------------- -----------------------------------------
Greater than 3.50 to 1.00 75%
Less than or equal to 3.50 to 1.00 50%
"Reserve Requirement" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on
"Eurocurrency liabilities" (as defined in Regulation D) for such Interest
Period.
"Restricted Payment" means (i) any dividend or other distribution, direct
or indirect, on account of any equity interests of the Borrower or VITAS
Healthcare now or hereafter outstanding, except a dividend payable solely in the
Borrower's or VITAS Healthcare's capital stock (other than Disqualified Stock)
or in options, warrants or other rights to purchase such capital stock, or (ii)
any redemption, retirement, purchase or other acquisition for value, direct or
indirect, of any equity interests of the Borrower or any of its Subsidiaries now
or hereafter outstanding, other than in exchange for, or out of the proceeds of,
the substantially concurrent sale (other than to a Subsidiary of the Borrower)
of other equity interests of the Borrower (other than Disqualified Stock).
"Revolving Loan" means, with respect to a Lender, such Lender's loan made
pursuant to its commitment to lend set forth in Section 2.1.1 (and any
conversion or continuation thereof).
"Revolving Loan Commitment" means, for each Lender, including without
limitation, each LC Issuer, such Lender's obligation to make Revolving Loans to,
and participate in Facility LCs issued upon the application of, the Borrower in
an aggregate amount not exceeding the amount set forth for such Lender on the
Commitment Schedule or in any Assignment Agreement delivered pursuant to Section
12.3, as such amount may be modified from time to time pursuant to the terms
hereof.
"Revolving Loan Pro Rata Share" means, with respect to any Lender, the
percentage obtained by multiplying 100% by the quotient of (i) such Lender's
Revolving Loan Commitment at such time divided by (ii) the Aggregate Revolving
Loan Commitment at such time; provided, however, if all of the Revolving Loan
Commitments are terminated pursuant to the terms of this Agreement, then
"Revolving Loan Pro Rata Share" means the percentage obtained by multiplying
100% by the quotient of (a) such Lender's Outstanding Revolving Credit Exposure
at such time divided by (b) the Aggregate Outstanding Revolving Credit Exposure
at such time.
21
"Revolving Loan Termination Date" means the earlier of (a) February 24,
2010, and (b) the date of termination in whole of the Aggregate Revolving Loan
Commitment pursuant to Section 2.2 hereof or the Revolving Loan Commitments
pursuant to Section 8.1 hereof.
"S&P" means Standard and Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc., and any successor thereto.
"Sale and Leaseback Transaction" means any sale or other transfer of
Property by any Person with the intent to lease such Property as lessee.
"Schedule" refers to a specific schedule to this Agreement, unless another
document is specifically referenced.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Secured Obligations" means, collectively, (i) the Obligations and (ii) all
Rate Management Obligations owing in connection with Rate Management
Transactions to any Lender or any affiliate of any Lender, unless the Borrower
and any such Lender mutually agree that such Rate Management Obligations do not
constitute Secured Obligations.
"Senior Secured Indenture" means the Indenture, dated as of February 24,
2004, by and between the Borrower and Wells Fargo Bank, National Association as
Trustee for the purchasers of the Senior Secured Notes.
"Senior Secured Indenture Documents" means the Senior Secured Notes, the
Senior Secured Indenture, the "Security Documents" as defined in the Senior
Secured Indenture, the Intercreditor Agreement, the "Intellectual Property
Security Agreements" as defined in the Senior Secured Indenture, and the
agreements, documents, and instruments delivered in connection therewith.
"Senior Secured Notes" means those certain Floating Rate Senior Secured
Notes due 2010, in an initial aggregate principal amount equal to $110,000,000,
issued by the Borrower pursuant to the Senior Secured Indenture.
"Senior Unsecured Indenture" means the Indenture, dated as of February 24,
2004, by and between the Borrower and LaSalle Bank National Association, as
Trustee for the purchasers of the Senior Unsecured Notes, as the same may be
amended, restated, supplemented or otherwise modified from time to time.
"Senior Unsecured Indenture Documents" means the Senior Unsecured Notes,
the Senior Unsecured Indenture, and the agreements, documents, and instruments
delivered in connection therewith, as each of the foregoing may be amended,
restated, supplemented or otherwise modified from time to time.
"Senior Unsecured Notes" means those certain unsecured 8-3/4% Senior
Unsecured Notes due 2011 in an initial aggregate principal amount equal to
$150,000,000, issued by the
22
Borrower pursuant to the Senior Unsecured Indenture, as such Notes may be
amended, restated, supplemented, or otherwise modified from time to time.
"Service America Asset Sale" means the sale, transfer and assignment of
approximately $9,000,000 of assets and approximately $13,000,000 of liabilities
of Service America Network, Inc., a Subsidiary of the Borrower, to certain
members of Service America Network, Inc.'s senior management.
"Single Employer Plan" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.
"Subordinated Chemed Debentures" means the Convertible Junior Subordinated
Debentures due 2030, issued by the Borrower pursuant to the Indenture, dated as
of February 7, 2000, between the Borrower and Firstar Bank, National
Association, as trustee, as the same may be amended, restated, supplemented or
otherwise modified from time to time.
"Subsidiary" of a Person means (i) any corporation of which more than 50%
of the outstanding securities having ordinary voting power shall at the time be
owned or controlled, directly or indirectly, by such Person or by one or more of
its Subsidiaries or by such Person and one or more of its Subsidiaries, or (ii)
any partnership, limited liability company, association, joint venture or
similar business organization of which more than 50% of the ownership interests
having ordinary voting power shall at the time be so owned or controlled. Unless
otherwise expressly provided, all references herein to a "Subsidiary" shall mean
a Subsidiary of the Borrower.
"Substantial Portion" means, with respect to the Property of the Borrower
and its Subsidiaries, Property which represents more than 10% of the
consolidated tangible assets of the Borrower and its Subsidiaries or Property
which is responsible for more than 10% of the consolidated net revenues of the
Borrower and its Subsidiaries, in each case, as would be shown in the
consolidated financial statements of the Borrower and its Subsidiaries as at the
beginning of the twelve-month period ending with the month in which such
determination is made (or if financial statements have not been delivered
hereunder for that month which begins the twelve-month period, then the
financial statements delivered hereunder for the quarter ending immediately
prior to that month).
"Swing Line Borrowing Notice" is defined in Section 2.4.2.
"Swing Line Commitment" means the obligation of the Swing Line Lender to
make Swing Line Loans up to a maximum principal amount of $10,000,000 at any one
time outstanding.
"Swing Line Lender" means JPMorgan Chase.
"Swing Line Loan" means a Loan made available to the Borrower by the Swing
Line Lender pursuant to Section 2.4.
23
"Taxes" means any and all present or future taxes, duties, levies, imposts,
deductions, charges or withholdings, and any and all liabilities with respect to
the foregoing, but excluding Excluded Taxes and Other Taxes.
"Term Loan" and "Term Loans" are defined in Section 2.1.2.
"Term Loan Commitment" means, as to each Lender, its obligation to make
Term Loans to the Borrower pursuant to Section 2.1.2 in an aggregate principal
amount set forth for such Lender on the Commitment Schedule.
"Term Loan Maturity Date" means August 24, 2010.
"Term Loan Pro Rata Share" means, with respect to any Lender, the
percentage obtained by multiplying 100% by the quotient of (a) such Lender's
Term Loans at such time divided by (b) the aggregate amount of all of the Term
Loans at such time.
"Third Party Payor" shall mean any Governmental Authority, insurance
company, health maintenance organization, preferred provider organization or
similar entity that is obligated to make payments with respect to a Receivable.
"Transactions" means, collectively, the following transactions: (i) the
consummation of the VITAS Healthcare Acquisition, (ii) the repayment of
approximately $74,400,000 of existing Indebtedness of VITAS Healthcare, plus
accrued interest thereon, (iii) the repayment of approximately $30,400,000 of
existing Indebtedness of the Borrower (including a $4,000,000 make whole
premium), plus accrued interest thereon, (iv) the assignment of the Westbrook
Agreement by the Borrower to VITAS Healthcare, the payment of $25,000,000 by
VITAS Healthcare to Hugh Westbrook pursuant to the Westbrook Agreement and the
performance of the other obligations under the Westbrook Agreement, (v) the
consummation of the offering and sale of the Senior Secured Notes, the Senior
Unsecured Notes and the capital stock of the Borrower and the execution and
delivery of notes, indentures and other agreements in connection therewith, and
the full repayment of the Senior Secured Notes or the Senior Unsecured Notes, as
applicable (including all direct and indirect costs and expenses incurred as a
result of such full repayment), (vi) the Borrower and certain of its
Subsidiaries entering into the this Agreement and the other Loan Documents,
(vii) the issuance or deemed issuance of Facility LCs under this Agreement to
replace or backstop, or the cash collateralization of, Letters of Credit issued
for the account of the Borrower or any of its Subsidiaries or VITAS Healthcare
or any of its Subsidiaries, (viii) the cancellation of a warrant held by the
Borrower for shares of the stock of VITAS Healthcare and (ix) the payment of
fees and expenses in connection with the foregoing.
"Transferee" is defined in Section 12.4.
"TRICARE" means, collectively, a program of medical benefits covering
former and active members of the uniformed services and certain of their
dependents, financed and administered by the United States Departments of
Defense, Health and Human Services and Transportation, which program was
formerly known as the Civilian Health and Medical Program of the Uniformed
Services (CHAMPUS), and all laws, rules, regulations, manuals, orders and
administrative, reimbursement and other guidelines of all governmental
authorities promulgated in connection with such program (whether or not having
the force of law), in each case as the
24
same may be amended, supplemented or otherwise modified from time to time.
"TRICARE Receivable" means a Receivable payable pursuant to the TRICARE
program.
"Trust Securities" means the Chemed Trust Securities, the Subordinated
Chemed Debentures, and the guarantee by the Borrower to the holders of the
Chemed Trust Securities of amounts payable thereunder.
"Type" means, with respect to any Advance, its nature as a Floating Rate
Advance or a Eurodollar Advance and with respect to any Loan, its nature as a
Floating Rate Loan or a Eurodollar Loan.
"Unapplied PIP" has the meaning ascribed to such term in Section 6.9(ii).
"Unfunded Liabilities" means the amount (if any) by which the present value
of all vested and unvested accrued benefits under each Single Employer Plan
exceeds the fair market value of all such Plan's assets allocable to such
benefits, all determined as of the then most recent valuation date for such Plan
for which a valuation report is available, using actuarial assumptions for
funding purposes as set forth in such report.
"Unmatured Event of Default" means an event which but for the lapse of time
or the giving of notice, or both, would constitute an Event of Default.
"VITAS Healthcare" means VITAS Healthcare Corporation, a Delaware
corporation.
"VITAS Healthcare Acquisition" means the Acquisition of VITAS Healthcare by
the Borrower or a Subsidiary thereof pursuant to the Agreement and Plan of
Merger, dated as of December 18, 2003, by and among the Borrower, VITAS
Healthcare and Marlin Merger Corp. as the same may be amended, restated,
supplemented or otherwise modified from time to time.
"VITAS Healthcare Severance Program" means the termination or reassignment
of VITAS Healthcare's management team upon the effectiveness of the VITAS
Healthcare Acquisition and the payments received by the members of such
management team as a result of such termination or reassignment.
"VITAS Healthcare Stock Issuance" means any sale of VITAS Healthcare's
equity interests to non-Affiliates in conjunction with a public offering of such
equity interests.
"VNF" means VITAS of North Florida, Inc., a Florida not-for-profit
corporation and a Wholly-Owned Subsidiary of VITAS Healthcare.
"Westbrook Agreement" means the Non-Compete and Consulting Agreement dated
as of December 18, 2003 between the Borrower and Hugh Westbrook.
"Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary all of the
outstanding voting securities of which (other than directors' qualifying shares
or shares issued to third parties to the extent necessary to satisfy any
licensing requirements under applicable law with respect to
25
the Borrower's or any of its Subsidiaries' businesses) shall at the time be
owned or controlled, directly or indirectly, by such Person or one or more
Wholly-Owned Subsidiaries of such Person, or by such Person and one or more
Wholly-Owned Subsidiaries of such Person, or (ii) any partnership, limited
liability company, association, joint venture or similar business organization
100% of the ownership interests having ordinary voting power of which (other
than directors' qualifying shares or shares issued to third parties to the
extent necessary to satisfy any licensing requirements under applicable law with
respect to the Borrower's or any of its Subsidiaries' businesses) shall at the
time be so owned or controlled.
"Yellow Pages Advertising Expense" means, on any determination date, the
excess of (x) costs accrued in accordance with GAAP during the twelve-month
period ending on such date in connection with the Borrower's and its Affiliates'
purchase of advertisements in the Yellow Pages telephone directory and other
similar telephone directories, over (y) amounts deemed by the Borrower to have
been paid in respect of such advertisements during such twelve-month period as
set forth in the Borrower's internal management reports detailing its
advertising expenses.
1.2. Plural Forms. The foregoing definitions shall be equally applicable
to both the singular and plural forms of the defined terms.
ARTICLE II
THE CREDITS
2.1. Revolving Loan Commitments and Term Loan Commitments.
2.1.1 Revolving Loans. From and including the Closing Date and prior
to the Revolving Loan Termination Date, upon the satisfaction of the
conditions precedent set forth in Section 4.1 and 4.2, as applicable, each
Lender severally and not jointly agrees, on the terms and conditions set
forth in this Agreement, to (i) make Revolving Loans to the Borrower from
time to time and (ii) participate in Facility LCs issued upon the request
of the Borrower, in each case in an amount not to exceed in the aggregate
at any one time outstanding of its Revolving Loan Pro Rata Share of the
excess of the Aggregate Revolving Loan Commitment over the Aggregate
Outstanding Revolving Credit Exposure; provided that at no time shall the
Aggregate Outstanding Revolving Credit Exposure hereunder exceed the
Aggregate Revolving Loan Commitment. Subject to the terms of this
Agreement, the Borrower may borrow, repay and reborrow Revolving Loans at
any time prior to the Revolving Loan Termination Date. The commitment of
each Lender to lend hereunder shall automatically expire on the Revolving
Loan Termination Date. The LC Issuer will issue Facility LCs hereunder on
the terms and conditions set forth in Section 2.20.
2.1.2 Term Loans. Each Lender severally and not jointly agrees to
make a term loan, in Dollars, to the Borrower on the Closing Date in an
amount equal to such Lender's Term Loan Commitment (each such loan being
referred to herein individually as a "Term Loan" and collectively as the
"Term Loans"). The unpaid principal balance of the Term Loans shall be
repaid in twenty-one (21) consecutive quarterly principal
26
installments, payable on the last Business Day of each fiscal quarter of
the Borrower, commencing on June 30, 2005, and continuing thereafter until
the Term Loan Maturity Date, and the Term Loans shall be permanently
reduced by the amount of each installment on the date payment thereof is
made hereunder. Each such quarterly installment, other than the installment
due on the Term Loan Maturity Date or such other date on which the Term
Loans are to be fully repaid, shall be in an amount equal to 0.25% of the
aggregate principal amount of the Term Loans outstanding on the Closing
Date. The final installment for the Term Loans shall be in the amount of
the then outstanding principal balance of the Term Loans. In addition,
notwithstanding the immediately preceding sentence, the then outstanding
principal balance of the Term Loans, if any, shall be due and payable on
the Term Loan Maturity Date. No installment of any Term Loan shall be
reborrowed once repaid. In addition to the scheduled payments on the Term
Loans, the Borrower (a) may make the voluntary prepayments described in
Section 2.7 for credit against the scheduled payments on the Term Loans
pursuant to Section 2.7 and (b) shall make the mandatory prepayments
prescribed in Section 2.2 for credit against the scheduled payments on the
Term Loans pursuant to Section 2.2.
2.2. Required Payments; Termination. (a) Any outstanding Revolving Loans
shall be paid in full by the Borrower on the Revolving Loan Termination Date,
any outstanding Term Loans shall be paid in full by the Borrower on the Term
Loan Maturity Date, and all other due and unpaid Secured Obligations shall be
paid in full by the Borrower on the later of the date when due or the Revolving
Loan Termination Date and the Term Loan Maturity Date, as applicable. In
addition, if at any time the Aggregate Outstanding Revolving Credit Exposure
hereunder exceeds the Aggregate Revolving Loan Commitment, the Borrower shall
promptly repay outstanding Revolving Loans and Swing Line Loans (or, if no
Revolving Loans or Swing Line Loans are outstanding, cash collateralize the
outstanding LC Obligations by depositing funds in the Facility LC Collateral
Account in accordance with Section 2.20.11) in an aggregate amount equal to the
excess of the Aggregate Outstanding Revolving Credit Exposure over the Aggregate
Revolving Loan Commitment. Notwithstanding the termination of the Revolving Loan
Commitments under this Agreement on the Revolving Loan Termination Date, until
all of the Obligations (other than obligations to pay fees and expenses with
respect to which the Borrower has not received an invoice and contingent
indemnity obligations) shall have been fully paid and satisfied, all of the
rights and remedies under this Agreement and the other Loan Documents shall
survive to the extent provided herein.
(b) Asset Sales and Casualty Events. Upon (1) the consummation of any
Asset Sale (including sales of equity interests in the Borrower's Subsidiaries
(other than a VITAS Healthcare Stock Issuance), but excluding sales,
dispositions or transfers permitted under Sections 6.12.1, 6.12.2, or 6.12.3),
by the Borrower or any Subsidiary or (2) the Borrower or any Subsidiary
suffering an Event of Loss, in each case within five (5) Business Days after the
Borrower's or any of its Subsidiaries' receipt of any Net Cash Proceeds (or
conversion to cash of non-cash proceeds (whether principal or interest and
including securities and release of escrow arrangements)) received from any such
Asset Sale or Event of Loss, the Borrower shall do one or more of the following,
at its option: (x) redeem or make an offer to repurchase Indebtedness
outstanding under the Senior Unsecured Indenture Documents and (y) make a
mandatory prepayment of Loans outstanding hereunder (with prepayments of Loans
hereunder being
27
applied to reduce outstanding Term Loans, to the extent such Term Loan
prepayments are accepted under Section 2.2(e), and otherwise applied in
accordance with Section 2.2(e)), in an amount equal to one hundred percent
(100%) of such Net Cash Proceeds; provided, however, that the amount of such Net
Cash Proceeds applied pursuant to clause (y) shall be at least equal to, but may
be greater than, the lesser of (A) the aggregate outstanding Term Loans and (B)
the ratable portion of such Net Cash Proceeds so applied pursuant to clauses (x)
and (y) that is allocable to the Term Loans based upon Indebtedness outstanding
under the Senior Unsecured Indenture Documents and the principal amount of the
Term Loans outstanding on the date of such prepayment. To the extent that an
offer to repurchase Indebtedness outstanding under the Senior Unsecured
Indenture Documents is rejected, the Borrower shall not then be required to use
such Net Cash Proceeds to prepay the Loans. Notwithstanding the foregoing, Net
Cash Proceeds of Asset Sales or Events of Loss, with respect to which the
Borrower shall have given the Administrative Agent written notice of its
intention to repair or replace the Property subject to any such Asset Sale or
Event of Loss or invest such Net Cash Proceeds in the purchase of assets (other
than securities, unless those securities represent equity interests in an entity
that becomes a Guarantor) to be used by one or more of the Borrower or the
Guarantors in their businesses within one year following such Asset Sale or
Event of Loss, shall not be subject to the provisions of the first sentence of
this Section 2.2(b) unless and to the extent that such applicable period shall
have expired without such repair, replacement or investment having been made.
(c) Financings.
(i) Indebtedness Financings. Upon the consummation of any Financing
constituting an issuance of Indebtedness by the Borrower or any Subsidiary of
the Borrower, within three (3) Business Days after the Borrower's or any of its
Subsidiaries' receipt of any Net Cash Proceeds, the Borrower shall do one or
more of the following at its option: (x) redeem or make an offer to repurchase
Indebtedness outstanding under the Senior Unsecured Indenture Documents and (y)
make a mandatory prepayment of Loans outstanding hereunder (with prepayments of
Loans hereunder being applied to reduce outstanding Term Loans to the extent
such Term Loan prepayments are accepted under Section 2.2(e), and otherwise
applied in accordance with Section 2.2(e)), in an amount equal to one hundred
percent (100%) of such Net Cash Proceeds; provided, however, that the amount of
such Net Cash Proceeds applied pursuant to clause (y) shall be at least equal
to, but may be greater than, the lesser of (A) the aggregate outstanding Term
Loans and (B) the ratable portion of such Net Cash Proceeds so applied pursuant
to clauses (x) and (y) that is allocable to the Term Loans based upon
Indebtedness outstanding under the Senior Unsecured Indenture Documents, and the
principal amount of the Term Loans outstanding on the date of such prepayment.
To the extent that an offer to repurchase Indebtedness outstanding under the
Senior Unsecured Indenture Documents is rejected, the Borrower shall not then be
required to use such Net Cash Proceeds to prepay the Loans.
(ii) Financings constituting Chemed Stock Issuances or VITAS
Healthcare Stock Issuances. Upon the consummation of a Chemed Stock Issuance or
a VITAS Healthcare Stock Issuance, within three (3) Business Days after the
Borrower's or any of its Subsidiaries' receipt of any Net Cash Proceeds, the
Borrower shall do one or more of the following: (x) redeem or make an offer to
repurchase Indebtedness outstanding under the Senior Unsecured Indenture
Documents and (y) make a mandatory prepayment of Loans outstanding hereunder
28
(with prepayments of Loans hereunder being applied to reduce outstanding Term
Loans, to the extent such Term Loan prepayments are accepted under Section
2.2(e), and otherwise applied in accordance with Section 2.2(e)), in an amount
equal to the Required Mandatory Prepayment Amount; provided, however, that the
Required Mandatory Prepayment Amount payable under clause (y) shall be at least
equal to, but may be greater than, the lesser of, after giving effect to the
percentage of total Net Cash Proceeds used to determine the Required Mandatory
Prepayment Amount, (A) the aggregate outstanding Term Loans and (B) the ratable
portion of such Net Cash Proceeds so applied pursuant to clauses (x) and (y)
that is allocable to the Term Loans based upon Indebtedness outstanding under
the Senior Unsecured Indenture Documents, and the principal amount of the Term
Loans outstanding on the date of such prepayment. To the extent that an offer to
repurchase Indebtedness outstanding under the Senior Unsecured Indenture
Documents is rejected, the Borrower shall not then be required to use such Net
Cash Proceeds to prepay the Loans.
(d) Excess Cash Flow. Within 90 days after the end of each Cash Flow
Period that occurs while Term Loans are outstanding, the Borrower shall
calculate Excess Cash Flow for such Cash Flow Period and shall make a mandatory
prepayment of the Term Loans, to the extent such Term Loan prepayments are
accepted under Section 2.2(e), payable not later than 90 days after the end of
such Cash Flow Period, in an amount equal to the excess of (i) the Excess Cash
Flow Prepayment Percentage of such Excess Cash Flow over (ii) prepayments of
Term Loans pursuant to Section 2.7 that were made during such Cash Flow Period.
Each such prepayment shall be subject to the provisions governing the
application of payments set forth in Section 2.2(e)
(e) Application of Designated Prepayments. Each mandatory prepayment
required by clauses (b) and (c) (in each case to the extent payable with respect
to the Term Loans), and (d) of this Section 2.2 shall be referred to herein as a
"Designated Prepayment." Subject to the following, Designated Prepayments shall
be applied to reduce the subsequent scheduled repayments of Term Loans ratably.
The Administrative Agent, upon receipt of any mandatory prepayment required
under Section 2.2 (b), (c) or (d), shall notify the Lenders holding Term Loans
of such prepayment. Within five Business Days of receipt of such notice, each
such Lender shall indicate whether it wishes to receive its ratable portion of
such prepayment. A Lender's failure to respond to the Administrative Agent
within such five Business Day period shall be deemed to constitute such Lender's
acceptance of such prepayment. At the end of such five Business Day period, the
Administrative Agent shall remit to those Lenders that accepted the applicable
prepayment their allocable share of such prepayment. Designated Prepayments of
Term Loans shall first be applied to Floating Rate Loans and to any Eurodollar
Rate Loans maturing on such date and then to subsequently maturing Eurodollar
Rate Loans in order of maturity. Notwithstanding the foregoing, so long as no
Event of Default has occurred and is then continuing and at the Borrower's
option, the Administrative Agent shall hold all Designated Prepayments to be
applied to Eurodollar Rate Loans in escrow for the benefit of the Lenders and
shall release such amounts upon the expiration of the Interest Periods
applicable to any such Eurodollar Rate Loans being prepaid (it being understood
and agreed that interest shall continue to accrue on the Obligations until such
time as such prepayments are released from escrow and applied to reduce the
Obligations); provided, however, that upon the occurrence and continuance of an
Event of Default, such escrowed amounts may be applied to Eurodollar Rate Loans
without
29
regard to the expiration of any Interest Period and the Borrower shall make all
payments under Section 3.4 resulting therefrom.
2.3. Ratable Loans; Types of Advances. (a) Each Advance hereunder (other
than a Swing Line Loan) shall consist of Loans made from the several Lenders.
Such Loans shall be made ratably in proportion to their respective Revolving
Loan Pro Rata Shares or Term Loan Pro Rata Shares, as applicable.
(b) The Advances may be Floating Rate Advances or Eurodollar Advances,
or a combination thereof, selected by the Borrower in accordance with Sections
2.8 and 2.9, or Swing Line Loans selected by the Borrower in accordance with
Section 2.4.
2.4. Swing Line Loans.
2.4.1 Amount of Swing Line Loans. Upon the satisfaction of the
conditions precedent set forth in Section 4.2 and, if such Swing Line Loan
is to be made on the date of the initial Credit Extension hereunder, the
satisfaction of the conditions precedent set forth in Section 4.1 as well,
from and including the date of this Agreement and prior to the Revolving
Loan Termination Date, the Swing Line Lender agrees, on the terms and
conditions set forth in this Agreement, to make Swing Line Loans to the
Borrower from time to time in an aggregate principal amount not to exceed
the Swing Line Commitment, provided that the Aggregate Outstanding
Revolving Credit Exposure shall not at any time exceed the Aggregate
Revolving Loan Commitment, and provided further that at no time shall the
sum of (i) the Swing Line Lender's Pro Rata Share of the Swing Line Loans
then outstanding, plus (ii) the outstanding Revolving Loans made by the
Swing Line Lender pursuant to Section 2.1 (including its participation in
any Facility LCs), exceed the Swing Line Lender's Revolving Loan Commitment
at such time. Subject to the terms of this Agreement, the Borrower may
borrow, repay and reborrow Swing Line Loans at any time prior to the
Revolving Loan Termination Date.
2.4.2 Borrowing Notice. The Borrower shall deliver to the
Administrative Agent and the Swing Line Lender irrevocable notice (a "Swing
Line Borrowing Notice") not later than 12:00 noon (Chicago, Illinois time)
on the Borrowing Date of each Swing Line Loan, specifying (i) the
applicable Borrowing Date (which date shall be a Business Day), and (ii)
the aggregate amount of the requested Swing Line Loan which shall be an
amount not less than $100,000. The Swing Line Loans shall bear interest at
the Floating Rate or at such other rate as is agreed upon by the Borrower
and the Swing Line Lender.
2.4.3 Making of Swing Line Loans. Promptly after receipt of a Swing
Line Borrowing Notice, the Administrative Agent shall notify each Lender by
fax or other similar form of transmission, of the requested Swing Line
Loan. Not later than 2:00 p.m. (Chicago, Illinois time) on the applicable
Borrowing Date, the Swing Line Lender shall make available the Swing Line
Loan, in funds immediately available in Chicago, to the Administrative
Agent at its address specified pursuant to Article XIII. The Administrative
Agent will promptly make the funds so received from the Swing Line Lender
available to the Borrower on the Borrowing Date at the Administrative
Agent's aforesaid address.
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2.4.4 Repayment of Swing Line Loans. Each Swing Line Loan shall be
paid in full by the Borrower on or before the fifth (5th) Business Day
after the Borrowing Date for such Swing Line Loan. In addition, the Swing
Line Lender (i) may at any time in its sole discretion with respect to any
outstanding Swing Line Loan, or (ii) shall, on the fifth (5th) Business Day
after the Borrowing Date of any Swing Line Loan, require each Lender
(including the Swing Line Lender) to make a Revolving Loan in the amount of
such Lender's Revolving Loan Pro Rata Share of such Swing Line Loan
(including, without limitation, any interest accrued and unpaid thereon),
for the purpose of repaying such Swing Line Loan. Not later than 1:00 p.m.
(Chicago, Illinois time) on the date of any notice received pursuant to
this Section 2.4.4, each Lender shall make available its required Revolving
Loan, in funds immediately available in Chicago to the Administrative Agent
at its address specified pursuant to Article XIII. Revolving Loans made
pursuant to this Section 2.4.4 shall initially be Floating Rate Loans and
thereafter may be continued as Floating Rate Loans or converted into
Eurodollar Loans in the manner provided in Section 2.9 and subject to the
other conditions and limitations set forth in Article II. Unless a Lender
shall have notified the Swing Line Lender, prior to its making any Swing
Line Loan, that any applicable condition precedent set forth in Sections
4.1 or 4.2, as applicable, had not been satisfied, such Lender's obligation
to make Revolving Loans pursuant to this Section 2.4.4 to repay Swing Line
Loans shall be unconditional, continuing, irrevocable and absolute and
shall not be affected by any circumstances, including, without limitation,
(a) any set-off, counterclaim, recoupment, defense or other right which
such Lender may have against the Swing Line Lender or any other Person, (b)
the occurrence or continuance of an Event of Default or Unmatured Event of
Default, (c) any adverse change in the condition (financial or otherwise)
of the Borrower, or (d) any other circumstances, happening or event
whatsoever. In the event that any Lender fails to make payment to the
Administrative Agent of any amount due under this Section 2.4.4, the
Administrative Agent shall be entitled to receive, retain and apply against
such obligation the principal and interest otherwise payable to such Lender
hereunder until the Administrative Agent receives such payment from such
Lender or such obligation is otherwise fully satisfied. In addition to the
foregoing, if for any reason any Lender fails to make payment to the
Administrative Agent of any amount due under this Section 2.4.4, such
Lender shall be deemed, at the option of the Administrative Agent, to have
unconditionally and irrevocably purchased from the Swing Line Lender,
without recourse or warranty, an undivided interest and participation in
the applicable Swing Line Loan in the amount of such Revolving Loan, and
such interest and participation may be recovered from such Lender together
with interest thereon at the Federal Funds Effective Rate for each day
during the period commencing on the date of demand and ending on the date
such amount is received. On the Revolving Loan Termination Date, the
Borrower shall repay in full the outstanding principal balance of the Swing
Line Loans.
2.5. Commitment Fee; Aggregate Revolving Loan Commitment.
2.5.1 Commitment Fee. The Borrower shall pay to the Administrative
Agent, for the account of the Lenders with Revolving Loan Commitments in
accordance with their Revolving Loan Pro Rata Shares, from and after the
Closing Date until the date on which the Aggregate Revolving Loan
Commitment shall be terminated in whole, a commitment
31
fee (the "Commitment Fee") accruing at the rate of the then Applicable Fee
Rate on the average daily excess of the Aggregate Revolving Loan Commitment
over the Aggregate Outstanding Revolving Credit Exposure. All such
Commitment Fees payable hereunder shall be payable quarterly in arrears on
each Payment Date.
2.5.2 Reductions in Aggregate Revolving Loan Commitment. The Borrower
may permanently reduce the Aggregate Revolving Loan Commitment in whole, or
in part, ratably among the Lenders in the minimum amount of $5,000,000 (and
in multiples of $1,000,000 in excess thereof), upon at least three (3)
Business Days' written notice to the Administrative Agent, which notice may
be conditional and shall specify the amount of any such reduction,
provided, however, that the amount of the Aggregate Revolving Loan
Commitment may not be reduced below the Aggregate Outstanding Revolving
Credit Exposure. All accrued Commitment Fees shall be payable on the
effective date of any termination of the obligations of the Lenders to make
Credit Extensions hereunder and on the final date upon which all Loans are
repaid.
2.6. Minimum Amount of Each Advance. Each Eurodollar Advance shall be in
the minimum amount of $2,000,000 (and in multiples of $500,000 if in excess
thereof), and each Floating Rate Advance (other than an Advance to repay Swing
Line Loans) shall be in the minimum amount of $1,000,000 (and in multiples of
$250,000 if in excess thereof), provided, however, that any Floating Rate
Advance may be (i) in the amount of the excess of the Aggregate Revolving Loan
Commitment over the Aggregate Outstanding Revolving Credit Exposure or (ii) in
such amount as is required, in accordance with Section 2.20.6, to finance the
reimbursement of a draw under a Facility LC.
2.7. Optional Principal Payments. The Borrower may from time to time pay,
without penalty or premium, all outstanding Floating Rate Advances (other than
Swing Line Loans), or any portion of the outstanding Floating Rate Advances
(other than Swing Line Loans), in a minimum aggregate amount of $500,000 or any
integral multiple of $100,000 in excess thereof, with notice to the
Administrative Agent by 11:00 a.m. (Chicago, Illinois time) on the date of
repayment, which notice may be conditional. The Borrower may at any time pay,
without penalty or premium, all outstanding Swing Line Loans, or, in a minimum
amount of $100,000 and increments of $50,000 in excess thereof, any portion of
the outstanding Swing Line Loans, with notice to the Administrative Agent and
the Swing Line Lender by 11:00 a.m. (Chicago, Illinois time) on the date of
repayment, which notice may be conditional. The Borrower may from time to time
pay, subject to the payment of any funding indemnification amounts required by
Section 3.4 but without penalty or premium, all outstanding Eurodollar Advances,
or, in a minimum aggregate amount of $1,000,000 or any integral multiple of
$500,000 in excess thereof, any portion of the outstanding Eurodollar Advances
upon three (3) Business Days' prior notice to the Administrative Agent, which
notice may be conditional.
2.8. Method of Selecting Types and Interest Periods for New Advances. The
Borrower shall select the Type of Advance and, in the case of each Eurodollar
Advance, the Interest Period applicable thereto from time to time; provided that
there shall be no more than 5 Interest Periods in effect with respect to all of
the Loans at any time, unless such limit has been waived by the Administrative
Agent in its sole discretion. The Borrower shall give the Administrative Agent
irrevocable notice (a "Borrowing Notice") not later than 10:00 a.m.
32
(Chicago, Illinois time) at least one Business Day before the Borrowing Date of
each Floating Rate Advance (other than a Swing Line Loan) and three (3) Business
Days before the Borrowing Date for each Eurodollar Advance, specifying:
(i) the Borrowing Date, which shall be a Business Day, of such Advance,
(ii) the aggregate amount of such Advance,
(iii) the Type of Advance selected, and
(iv) in the case of each Eurodollar Advance, the Interest Period applicable
thereto.
Not later than 12:00 noon (Chicago, Illinois time) on each Borrowing Date, each
Lender shall make available its Loan or Loans in Federal or other funds
immediately available in Chicago to the Administrative Agent at its address
specified pursuant to Article XIII. The Administrative Agent will promptly make
the funds so received from the Lenders available to the Borrower at the
Administrative Agent's aforesaid address.
2.9. Conversion and Continuation of Outstanding Advances; No Conversion or
Continuation of Eurodollar Advances After Event of Default. Floating Rate
Advances (other than Swing Line Advances) shall continue as Floating Rate
Advances unless and until such Floating Rate Advances are converted into
Eurodollar Advances pursuant to this Section 2.9 or are repaid in accordance
with Section 2.7. Each Eurodollar Advance shall continue as a Eurodollar Advance
until the end of the then applicable Interest Period therefor, at which time
such Eurodollar Advance shall be automatically converted into a Floating Rate
Advance unless (x) such Eurodollar Advance is or was repaid in accordance with
Section 2.7 or (y) the Borrower shall have given the Administrative Agent a
Conversion/Continuation Notice (as defined below) requesting that, at the end of
such Interest Period, such Eurodollar Advance continue as a Eurodollar Advance
for the same or another Interest Period. Subject to the terms of Section 2.6,
the Borrower may elect from time to time to convert all or any part of an
Advance of any Type (other than a Swing Line Advance) into any other Type or
Types of Advances; provided that any conversion of any Eurodollar Advance shall
be made on, and only on, the last day of the Interest Period applicable thereto.
Notwithstanding anything to the contrary contained in this Section 2.9, during
the continuance of an Event of Default or an Unmatured Event of Default, the
Administrative Agent may (or shall at the direction of the Required Lenders), by
notice to the Borrower, declare that no Advance may be made, converted or
continued as a Eurodollar Advance. The Borrower shall give the Administrative
Agent irrevocable notice (a "Conversion/Continuation Notice") of each conversion
of an Advance or continuation of a Eurodollar Advance not later than 10:00 a.m.
(Chicago, Illinois time) at least one (1) Business Day, in the case of a
conversion into a Floating Rate Advance, or three (3) Business Days, in the case
of a conversion into or continuation of a Eurodollar Advance, prior to the date
of the requested conversion or continuation, specifying:
(i) the requested date, which shall be a Business Day, of such conversion
or continuation,
(ii) the aggregate amount and Type of the Advance which is to be converted
or continued, and
33
(iii) the amount of such Advance which is to be converted into or continued
as a Eurodollar Advance and the duration of the Interest Period
applicable thereto.
2.10. Changes in Interest Rate, etc. Each Floating Rate Advance (other
than a Swing Line Advance) shall bear interest on the outstanding principal
amount thereof, for each day from and including the date such Advance is made or
is automatically converted from a Eurodollar Advance into a Floating Rate
Advance pursuant to Section 2.9, to but excluding the date it is paid or is
converted into a Eurodollar Advance pursuant to Section 2.9 hereof, at a rate
per annum equal to the Floating Rate for such day. Each Swing Line Loan shall
bear interest on the outstanding principal amount thereof, for each day from and
including the day such Swing Line Loan is made to but excluding the date it is
fully paid at a rate per annum equal to the Floating Rate for such day. Changes
in the rate of interest on that portion of any Advance maintained as a Floating
Rate Advance will take effect simultaneously with each change in the Alternate
Base Rate. Each Eurodollar Advance shall bear interest on the outstanding
principal amount thereof from and including the first day of the Interest Period
applicable thereto to (but not including) the last day of such Interest Period
at the interest rate determined by the Administrative Agent as applicable to
such Eurodollar Advance based upon the Borrower's selections under Sections 2.8
and 2.9 and otherwise in accordance with the terms hereof. No Interest Period in
respect of any Revolving Loan may end after the Revolving Loan Termination Date.
No Interest Period in respect of any Term Loan may end after the Term Loan
Maturity Date.
2.11. Rates Applicable After Event of Default. During the continuance of
an Event of Default (including the Borrower's failure to pay any Loan at
maturity) the Required Lenders may, at their option, by notice to the Borrower
(which notice may be revoked at the option of the Required Lenders
notwithstanding any provision of Section 8.2 requiring unanimous consent of the
Lenders to changes in interest rates), declare that (i) each Eurodollar Advance
shall bear interest for the remainder of the applicable Interest Period at the
rate otherwise applicable to such Interest Period plus 2% per annum, (ii) each
Floating Rate Advance shall bear interest at a rate per annum equal to the
Floating Rate in effect from time to time plus 2% per annum, and (iii) the LC
Fee shall be increased by 2% per annum; provided that, during the continuance of
an Event of Default under Section 7.6 or 7.7, the interest rates set forth in
clauses (i) and (ii) above and the increase in the LC Fee set forth in clause
(iii) above shall be applicable to all Credit Extensions, Advances, fees and
other Obligations hereunder without any election or action on the part of the
Administrative Agent or any Lender.
2.12. Method of Payment. All payments of the Obligations hereunder shall
be made, without setoff, deduction, or counterclaim, in immediately available
funds to the Administrative Agent at the Administrative Agent's address
specified pursuant to Article XIII, or at any other Lending Installation of the
Administrative Agent specified in writing by the Administrative Agent to the
Borrower, by 12:00 noon (Chicago, Illinois time) on the date when due and shall
(except with respect to repayments of Swing Line Loans, and except in the case
of Reimbursement Obligations for which the LC Issuer has not been fully
indemnified by the Lenders, or as otherwise specifically required hereunder) be
applied ratably by the Administrative Agent among the Lenders. Each payment
delivered to the Administrative Agent for the account of any Lender shall be
delivered promptly by the Administrative Agent to such Lender in the same type
of funds that the Administrative Agent received at its address specified
pursuant to Article XIII or at any Lending Installation specified in a notice
received by the
34
Administrative Agent from such Lender. The Administrative Agent is hereby
authorized to charge the account of the Borrower maintained with JPMorgan Chase
for each payment of the Obligations as it becomes due hereunder. Each reference
to the Administrative Agent in this Section 2.12 shall also be deemed to refer,
and shall apply equally, to the LC Issuer in the case of payments required to be
made by the Borrower to the LC Issuer pursuant to Section 2.20.6.
2.13. Noteless Agreement; Evidence of Indebtedness.
(i) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to
such Lender resulting from each Loan made by such Lender from time to
time, including the amounts of principal and interest payable and paid
to such Lender from time to time hereunder.
(ii) The Administrative Agent shall also maintain accounts in which it will
record (a) the date and the amount of each Loan made hereunder, the
Type thereof and the Interest Period (in the case of a Eurodollar
Advance) with respect thereto, (b) the amount of any principal or
interest due and payable or to become due and payable from the
Borrower to each Lender hereunder, (c) the original stated amount of
each Facility LC and the amount of LC Obligations outstanding at any
time, (d) the effective date and amount of each Assignment Agreement
delivered to and accepted by it and the parties thereto pursuant to
Section 12.3, (e) the amount of any sum received by the Administrative
Agent hereunder from the Borrower and each Lender's share thereof, and
(f) all other appropriate debits and credits as provided in this
Agreement, including, without limitation, all fees, charges, expenses
and interest.
(iii) The entries maintained in the accounts maintained pursuant to
paragraphs (i) and (ii) above shall be prima facie evidence of the
existence and amounts of the Obligations therein recorded; provided,
however, that the failure of the Administrative Agent or any Lender to
maintain such accounts or any error therein shall not in any manner
affect the obligation of the Borrower to repay the Obligations in
accordance with their terms.
(iv) Any Lender may request that its Term Loans, Revolving Loans or, in the
case of the Swing Line Lender, the Swing Line Loans, be evidenced by
promissory notes (the "Notes") in substantially the form of Exhibit
E-1 or E-2, with appropriate changes for notes evidencing Swing Line
Loans. In such event, the Borrower shall prepare, execute and deliver
to such Lender such Note(s) payable to such Lender. Thereafter, the
Loans evidenced by such Note(s) and interest thereon shall at all
times (prior to any assignment pursuant to Section 12.3) be
represented by one or more Notes payable to the payee named therein,
except to the extent that any such Lender subsequently returns any
such Note(s) for cancellation and requests that such Loans once again
be evidenced as described in paragraphs (i) and (ii) above.
35
2.14. Telephonic Notices. The Borrower hereby authorizes the Lenders and
the Administrative Agent to extend, convert or continue Advances, effect
selections of Types of Advances and to transfer funds based on telephonic
notices made by any person or persons the Administrative Agent or any Lender in
good faith believes to be acting on behalf of the Borrower, it being understood
that the foregoing authorization is specifically intended to allow Borrowing
Notices and Conversion/Continuation Notices to be given telephonically. The
Borrower agrees to deliver promptly to the Administrative Agent a written
confirmation, signed by an Authorized Officer, if such confirmation is requested
by the Administrative Agent or any Lender, of each telephonic notice. If the
written confirmation differs in any material respect from the action taken by
the Administrative Agent and the Lenders, the records of the Administrative
Agent and the Lenders shall govern absent manifest error.
2.15. Interest Payment Dates; Interest and Fee Basis. Interest accrued on
each Floating Rate Advance shall be payable in arrears on each Payment Date,
commencing with the first such date to occur after the Closing Date, on any date
on which the Floating Rate Advance is prepaid, whether due to acceleration or
otherwise, and at maturity. Interest accrued on that portion of the outstanding
principal amount of any Floating Rate Advance converted into a Eurodollar
Advance on a day other than a Payment Date shall be payable on the date of
conversion. Interest accrued on each Eurodollar Advance shall be payable on the
last day of its applicable Interest Period, on any date on which the Eurodollar
Advance is prepaid, whether by acceleration or otherwise, and at maturity.
Interest accrued on each Eurodollar Advance having an Interest Period longer
than three months shall also be payable on the last day of each three-month
interval during such Interest Period. Interest on Eurodollar Advances, LC Fees
and all other fees hereunder shall be calculated for actual days elapsed on the
basis of a 360-day year. Interest on Floating Rate Advances shall be calculated
for actual days elapsed on the basis of a 365/366-day year. Interest shall be
payable for the day an Advance is made but not for the day of any payment on the
amount paid if payment is received prior to 12:00 noon (Chicago, Illinois time)
at the place of payment. If any payment of principal of or interest on an
Advance, any fees or any other amounts payable to the Administrative Agent or
any Lender hereunder shall become due on a day which is not a Business Day, such
payment shall be made on the next succeeding Business Day and, in the case of a
principal payment, such extension of time shall be included in computing
interest, fees and commissions in connection with such payment.
2.16. Notification of Advances, Interest Rates, Prepayments and Revolving
Loan Commitment Reductions; Availability of Loans. Promptly after receipt
thereof, the Administrative Agent will notify each Lender of the contents of
each Aggregate Revolving Loan Commitment reduction notice, Borrowing Notice,
Swing Line Borrowing Notice, Conversion/Continuation Notice, and repayment
notice received by it hereunder. Promptly after notice from the LC Issuer, the
Administrative Agent will notify each Lender of the contents of each request for
issuance of a Facility LC hereunder. The Administrative Agent will notify the
Borrower and each Lender of the interest rate applicable to each Eurodollar
Advance promptly upon determination of such interest rate and will give the
Borrower and each Lender prompt notice of each change in the Alternate Base
Rate. Not later than 12:00 noon (Chicago, Illinois time) on each Borrowing Date
(except with respect to Revolving Loans made available pursuant to the terms of
Section 2.4.4), each Lender shall make available its Revolving Loan or Revolving
Loans in funds immediately available in Chicago to the Administrative Agent at
its address specified pursuant to Article XIII. The Administrative Agent will
promptly make the funds so
36
received from the Lenders available to the Borrower at the Administrative
Agent's aforesaid address.
2.17. Lending Installations. Each Lender may book its Loans and its
participation in any LC Obligations and the LC Issuer may book the Facility LCs
at any Lending Installation selected by such Lender or the LC Issuer, as
applicable, and may change its Lending Installation from time to time. All terms
of this Agreement shall apply to any such Lending Installation and the Loans,
Facility LCs, participations in LC Obligations and any Notes issued hereunder
shall be deemed held by each Lender or the LC Issuer, as applicable, for the
benefit of any such Lending Installation. Each Lender and the LC Issuer may, by
written notice to the Administrative Agent and the Borrower in accordance with
Article XIII, designate replacement or additional Lending Installations through
which Loans will be made by it or Facility LCs will be issued by it and for
whose account Loan payments or payments with respect to Facility LCs are to be
made.
2.18. Non-Receipt of Funds by the Administrative Agent. Unless the
Borrower or a Lender, as the case may be, notifies the Administrative Agent
prior to the date on which it is scheduled to make payment to the Administrative
Agent of (i) in the case of a Lender, the proceeds of a Loan or (ii) in the case
of the Borrower, a payment of principal, interest or fees to the Administrative
Agent for the account of the Lenders, that it does not intend to make such
payment, the Administrative Agent may assume that such payment has been made.
The Administrative Agent may, but shall not be obligated to, make the amount of
such payment available to the intended recipient in reliance upon such
assumption. If such Lender or the Borrower, as the case may be, has not in fact
made such payment to the Administrative Agent, the recipient of such payment
shall, on demand by the Administrative Agent, repay to the Administrative Agent
the amount so made available together with interest thereon in respect of each
day during the period commencing on the date such amount was so made available
by the Administrative Agent until the date the Administrative Agent recovers
such amount at a rate per annum equal to (x) in the case of payment by a Lender,
the Federal Funds Effective Rate for such day for the first three (3) days and,
thereafter, the interest rate applicable to the relevant Loan or (y) in the case
of payment by the Borrower, the interest rate applicable to the relevant Loan.
2.19. Replacement of Lender. If the Borrower is required pursuant to
Section 3.1, 3.2 or 3.5 to make any additional payment to any Lender or if any
Lender's obligation to make or continue, or to convert Floating Rate Advances
into, Eurodollar Advances shall be suspended pursuant to Section 3.3, or if any
Lender defaults in its obligations to extend Loans or participate in Facility
LCs hereunder (any Lender so affected an "Affected Lender"), the Borrower may
elect to terminate or replace the Revolving Loan Commitment, Term Loan
Commitment and Loans of such Affected Lender, provided that no Event of Default
shall have occurred and be continuing at the time of such termination or
replacement, and provided further that, concurrently with such termination or
replacement, (i) if the Affected Lender is being replaced, another bank or other
entity which is reasonably satisfactory to the Borrower and the Administrative
Agent shall agree, as of such date, to purchase for cash the Outstanding
Revolving Credit Exposure and Term Loans of the Affected Lender pursuant to an
Assignment Agreement substantially in the form of Exhibit C and to become a
Lender for all purposes under this Agreement and to assume all obligations of
the Affected Lender to be terminated as of such
37
date and to comply with the requirements of Section 12.3 applicable to
assignments, and (ii) the Borrower shall pay to such Affected Lender in
immediately available funds on the day of such replacement (A) all interest,
fees and other amounts then accrued but unpaid to such Affected Lender by the
Borrower hereunder to and including the date of termination, including without
limitation payments due to such Affected Lender under Sections 3.1, 3.2 and 3.5,
and (B) an amount, if any, equal to the payment which would have been due to
such Lender on the day of such replacement under Section 3.4 had the Loans of
such Affected Lender been prepaid on such date rather than sold to the
replacement Lender, in each case to the extent not paid by the purchasing lender
and (iii) if the Affected Lender is being terminated, the Borrower shall pay to
such Affected Lender all Obligations due to such Affected Lender (including the
amounts described in the immediately preceding clauses (i) and (ii) plus, to the
extent not paid by the replacement Lender, the outstanding principal balance of
such Affected Lender's Credit Extensions). The Administrative Agent shall record
such payments made by the Borrower in accordance with Section 2.13.
2.20. Facility LCs.
2.20.1 Existing Letters of Credit; Issuance. The Borrower, the
Lenders, the Administrative Agent and the LC Issuer agree and confirm that,
as of the Closing Date, and subject to the satisfaction of the condition
precedent set forth in Section 4.1, the Existing Letters of Credit shall
(x) be deemed to have been issued pursuant to this Agreement, (y)
constitute Facility LCs, and (z) be governed by this Section 2.20, together
with the other terms and conditions of this Agreement. The LC Issuer hereby
agrees, on the terms and conditions set forth in this Agreement, to issue
standby Letters of Credit (each, a "Facility LC") and to renew, extend,
increase, decrease or otherwise modify each Facility LC ("Modify," and each
such action, a "Modification"), from time to time from and including the
date of this Agreement and prior to the Revolving Loan Termination Date
upon the request of the Borrower; provided that immediately after each such
Facility LC is issued or Modified, (i) the aggregate amount of the
outstanding LC Obligations shall not exceed $40,000,000 and (ii) the
Aggregate Outstanding Revolving Credit Exposure shall not exceed the
Aggregate Revolving Loan Commitment. Subject to the remaining terms of this
Section 2.20.1, no Facility LC shall have an expiry date later than the
earlier of (x) the fifth Business Day prior to the Revolving Loan
Termination Date and (y) one year after its issuance; provided that any
Facility LC with a one-year term may provide for the renewal thereof for
additional one-year periods (which in no event shall extend beyond the date
referred to in the preceding clause (x)); provided, further, that so long
as approved by the Administrative Agent and the LC Issuer (which approvals
shall not be unreasonably withheld), Facility LCs with stated face amounts
not in excess of $250,000 in the aggregate may have expiry dates that occur
within three years of the dates of issuance thereof but in any event no
later than the date referred to in the preceding clause (x)).
Notwithstanding anything to the contrary set forth in this Agreement, a
Facility LC may have an expiry date which occurs after the Revolving Loan
Termination Date so long as the Administrative Agent receives from the
Borrower, at least five (5) Business Days prior to the Revolving Loan
Termination Date, an amount in immediately available funds equal to at
least 105% of the LC Obligations owing under or in connection with such
Facility LC. Such funds shall secure the repayment of such LC Obligations
and any other then outstanding Secured Obligations, if
38
any, in respect of such Facility LC and shall be deposited in the Facility
LC Collateral Account. The Borrower shall ensure that the Collateral Agent
for the benefit of the LC Issuer and the Lenders at all times maintains a
perfected first priority Lien upon and control over the Facility LC
Collateral Account. Such funds and any interest accrued thereon (to the
extent not applied to reimburse the LC Issuer for any draw under a Facility
LC) shall be returned to the Borrower within three Business Days after the
expiration of the Facility LC relating to the LC Obligations secured by
such funds.
2.20.2 Participations. Upon the issuance or Modification by the LC
Issuer of a Facility LC in accordance with this Section 2.20, the LC Issuer
shall be deemed, without further action by any party hereto, to have
unconditionally and irrevocably sold to each Lender, and each Lender shall
be deemed, without further action by any party hereto, to have
unconditionally and irrevocably purchased from the LC Issuer, a
participation in such Facility LC (and each Modification thereof) and the
related LC Obligations in proportion to its Revolving Loan Pro Rata Share.
2.20.3 Notice. Subject to Section 2.20.1, the Borrower shall give the
LC Issuer notice prior to 10:00 a.m. (Chicago, Illinois time) at least five
(5) Business Days prior to the proposed date of issuance or Modification of
each Facility LC, specifying the beneficiary, the proposed date of issuance
(or Modification) and the expiry date of such Facility LC, and describing
the proposed terms of such Facility LC and the nature of the transactions
proposed to be supported thereby. Upon receipt of such notice, the LC
Issuer shall promptly notify the Administrative Agent, and, upon issuance
only, the Administrative Agent shall promptly notify each Lender, of the
contents thereof and of the amount of such Lender's participation in such
proposed Facility LC. The issuance or Modification by the LC Issuer of any
Facility LC shall, in addition to the conditions precedent set forth in
Article IV (the satisfaction of which the LC Issuer shall have no duty to
ascertain), be subject to the conditions precedent that such Facility LC
shall be satisfactory to the LC Issuer and that the Borrower shall have
executed and delivered such application agreement and/or such other
instruments and agreements relating to such Facility LC as the LC Issuer
shall have reasonably requested (each, a "Facility LC Application"). In the
event of any conflict between the terms of this Agreement and the terms of
any Facility LC Application, the terms of this Agreement shall control.
2.20.4 LC Fees. The Borrower shall pay to the Administrative Agent,
for the account of the Lenders ratably in accordance with their respective
Revolving Loan Pro Rata Shares, a letter of credit fee at a per annum rate
equal to the Applicable Margin for Eurodollar Advances of Revolving Loans
then in effect times the average daily undrawn stated amount under the
Facility LCs, such fee to be payable in arrears on each Payment Date. The
Borrower shall also pay to the LC Issuer for its own account (x) at the
time of issuance of each Facility LC, a fronting fee in an amount equal to
0.125% times the face amount of such Facility LC, and (y) documentary and
processing charges in connection with the issuance or Modification of and
draws under Facility LCs in accordance with the LC Issuer's standard
schedule for such charges as in effect from time to time. Each fee
described in this Section 2.20.4 shall constitute an "LC Fee".
39
2.20.5 Administration; Reimbursement by Lenders. Upon receipt from
the beneficiary of any Facility LC of any demand for payment under such
Facility LC, the LC Issuer shall notify the Administrative Agent and the
Administrative Agent shall promptly notify the Borrower and each other
Lender as to the amount to be paid by the LC Issuer as a result of such
demand and the proposed payment date (the "LC Payment Date"). The
responsibility of the LC Issuer to the Borrower and each Lender shall be
only to determine that the documents (including each demand for payment)
delivered under each Facility LC in connection with such presentment shall
be in conformity in all material respects with such Facility LC. The LC
Issuer shall endeavor to exercise the same care in the issuance and
administration of the Facility LCs as it does with respect to letters of
credit in which no participations are granted, it being understood that in
the absence of any gross negligence or willful misconduct by the LC Issuer,
each Lender shall be unconditionally and irrevocably liable without regard
to the occurrence of any Event of Default or any condition precedent
whatsoever, to reimburse the LC Issuer on demand for (i) such Lender's
Revolving Loan Pro Rata Share of the amount of each payment made by the LC
Issuer under each Facility LC to the extent such amount is not reimbursed
by the Borrower pursuant to Section 2.20.6 below, plus (ii) interest on the
foregoing amount to be reimbursed by such Lender, for each day from the
date of the LC Issuer's demand for such reimbursement (or, if such demand
is made after 11:00 a.m. (Chicago, Illinois time) on such date, from the
next succeeding Business Day) to the date on which such Lender pays the
amount to be reimbursed by it, at a rate of interest per annum equal to the
Federal Funds Effective Rate for the first three (3) days and, thereafter,
at a rate of interest equal to the rate applicable to Floating Rate
Advances.
2.20.6 Reimbursement by Borrower. The Borrower shall be irrevocably
and unconditionally obligated to reimburse the LC Issuer for any amounts to
be paid by the LC Issuer. Upon any drawing under any Facility LC, a
reimbursement in respect thereof shall be made by the Borrower on the date
of the drawing if the Borrower shall have received written notice of such
drawing prior to 10:00 a.m. Chicago time on such date, or, if such notice
has not been received by the Borrower prior to such time on such date, then
not later than 12:00 noon Chicago time on (i) the Business Day that the
Borrower receives such notice, if such notice is received prior to 10:00
a.m. Chicago time on the day of receipt or (ii) the Business Day
immediately following the day that the Borrower receives such notice, if
such notice is not received prior to such time on the day of receipt;
provided that neither the Borrower nor any Lender shall hereby be precluded
from asserting any claim for direct (but not consequential) damages
suffered by the Borrower or such Lender to the extent, but only to the
extent, caused by (i) the willful misconduct or gross negligence of the LC
Issuer in determining whether a request presented under any Facility LC
issued by it complied with the terms of such Facility LC or (ii) the LC
Issuer's failure to pay under any Facility LC issued by it after the
presentation to it of a request strictly complying with the terms and
conditions of such Facility LC. Whether or not an Event of Default or
Unmatured Event of Default has occurred and is continuing, unless the
Borrower elects to repay a Reimbursement Obligation, regardless of whether
the conditions for making a Revolving Loan under Section 4.2 have been
satisfied, such unpaid Reimbursement Obligation shall be automatically
converted into a Revolving Loan as of the date of the payment by the LC
Issuer giving rise to the Reimbursement Obligation. Such Revolving Loan
shall be in an
40
amount equal to the amount of the unpaid Reimbursement Obligation. Such
Revolving Loan shall initially constitute a Floating Rate Advance and the
proceeds of such Advance shall be used to repay such Reimbursement
Obligation. Such Floating Rate Advance may be converted into a Eurodollar
Advance in accordance with the terms of Section 2.9. If the Borrower at any
time fails to repay a Reimbursement Obligation pursuant to this Section
2.20, such unpaid Reimbursement Obligation shall at that time be
automatically converted into an Obligation and the Borrower shall be deemed
to have elected to borrow a Revolving Loan from the Lenders, as of the date
of the payment by the LC Issuer giving rise to the Reimbursement
Obligation, in an amount equal to the amount of the unpaid Reimbursement
Obligation. Such Revolving Loan shall be made as of the date of the payment
giving rise to such Reimbursement Obligation, automatically, without notice
and without any requirement to satisfy the conditions precedent otherwise
applicable to a Revolving Loan if the Borrower shall have failed to make
such payment to the Administrative Agent for the account of the LC Issuer
prior to such time. Such Revolving Loan shall constitute a Floating Rate
Advance and the proceeds of such Advance shall be used to repay such
Reimbursement Obligation. If, for any reason, the Borrower fails to repay a
Reimbursement Obligation on the day such Reimbursement Obligation arises
and, for any reason, the Lenders are unable to make or have no obligation
to make a Revolving Loan, then such Reimbursement Obligation shall bear
interest from and after such day, until paid in full, at the interest rate
applicable to a Floating Rate Advance. The Borrower agrees to indemnify the
LC Issuer against any loss or expense determined by the LC Issuer in good
faith to have resulted from any conversion pursuant to this Section 2.20 by
reason of the inability of the LC Issuer to convert the amount received
from the Borrower or from the Lenders, as applicable, into an amount equal
to the amount of such Reimbursement Obligation. The LC Issuer will pay to
each Lender ratably in accordance with its Revolving Loan Pro Rata Share
all amounts received by it from the Borrower for application in payment, in
whole or in part, of the Reimbursement Obligation in respect of any
Facility LC issued by the LC Issuer, but only to the extent such Lender has
made payment to the LC Issuer in respect of such Facility LC pursuant to
Section 2.20.5.
2.20.7 Obligations Absolute. The Borrower's obligations under this
Section 2.20 shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to
payment which the Borrower may have or have had against the LC Issuer, any
Lender or any beneficiary of a Facility LC. The Borrower further agrees
with the LC Issuer and the Lenders that the LC Issuer and the Lenders shall
not be responsible for, and the Borrower's Reimbursement Obligation in
respect of any Facility LC shall not be affected by, among other things,
the validity or genuineness of documents or of any endorsements thereon,
even if such documents should in fact prove to be in any or all respects
invalid, fraudulent or forged, or any dispute between or among the
Borrower, any of its Affiliates, the beneficiary of any Facility LC or any
financing institution or other party to whom any Facility LC may be
transferred or any claims or defenses whatsoever of the Borrower or of any
of its Affiliates against the beneficiary of any Facility LC or any such
transferee. The LC Issuer shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message
or advice, however transmitted, in connection with any Facility LC. The
Borrower agrees that any action taken or omitted by the LC Issuer or any
Lender under or in connection
41
with each Facility LC and the related drafts and documents, if done without
gross negligence or willful misconduct, shall be binding upon the Borrower
and shall not put the LC Issuer or any Lender under any liability to the
Borrower. Nothing in this Section 2.20.7 is intended to limit the right of
the Borrower to make a claim against the LC Issuer for damages as
contemplated by the proviso to the first sentence of Section 2.20.6.
2.20.8 Actions of LC Issuer. The LC Issuer shall be entitled to rely,
and shall be fully protected in relying, upon any Facility LC, draft,
writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, telecopy, telex or teletype message, statement, order
or other document believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons, and upon advice and
statements of legal counsel, independent accountants and other experts
selected by the LC Issuer. The LC Issuer shall be fully justified in
failing or refusing to take any action under this Agreement unless it shall
first have received such advice or concurrence of the Required Lenders as
it reasonably deems appropriate or it shall first be indemnified to its
reasonable satisfaction by the Lenders against any and all liability and
expense which may be incurred by it by reason of taking or continuing to
take any such action. Notwithstanding any other provision of this Section
2.20, the LC Issuer shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement in accordance with a request
of the Required Lenders, and such request and any action taken or failure
to act pursuant thereto shall be binding upon the Lenders and any future
holders of a participation in any Facility LC.
2.20.9 Indemnification. The Borrower hereby agrees to indemnify and
hold harmless each Lender, the LC Issuer and the Administrative Agent, and
their respective directors, officers, agents and employees from and against
any and all claims and damages, losses, liabilities and related reasonable
out-of-pocket costs or expenses which such Lender, the LC Issuer or the
Administrative Agent may incur (or which may be claimed against such
Lender, the LC Issuer or the Administrative Agent by any Person whatsoever)
by reason of or in connection with the issuance, execution and delivery or
transfer of or payment or failure to pay under any Facility LC or any
actual or proposed use of any Facility LC, including, without limitation,
any such claims, damages, losses, liabilities, costs or expenses which the
LC Issuer may incur by reason of or in connection with (i) the failure of
any other Lender to fulfill or comply with its obligations to the LC Issuer
hereunder (but nothing herein contained shall affect any rights the
Borrower may have against any defaulting Lender) or (ii) by reason of or on
account of the LC Issuer issuing any Facility LC which specifies that the
term "Beneficiary" included therein includes any successor by operation of
law of the named Beneficiary, but which Facility LC does not require that
any drawing by any such successor Beneficiary be accompanied by a copy of a
legal document, satisfactory to the LC Issuer, evidencing the appointment
of such successor Beneficiary; provided that the Borrower shall not be
required to indemnify any Lender, the LC Issuer or the Administrative Agent
for any claims, damages, losses, liabilities, costs or expenses to the
extent, but only to the extent, caused by (x) the willful misconduct or
gross negligence of the LC Issuer in determining whether a request
presented under any Facility LC complied with the terms of such Facility LC
or (y) the LC Issuer's failure to pay under any Facility LC after the
presentation to it of a request strictly complying with the terms and
conditions of such Facility LC. Nothing in
42
this Section 2.20.9 is intended to limit the obligations of the Borrower
under any other provision of this Agreement.
2.20.10 Lenders' Indemnification. Each Lender shall, ratably in
accordance with its Revolving Loan Pro Rata Share, indemnify the LC Issuer,
its affiliates and their respective directors, officers, agents and
employees (to the extent not reimbursed by the Borrower) against any cost,
expense (including reasonable counsel fees and disbursements), claim,
demand, action, loss or liability (except such as result from such
indemnitees' gross negligence or willful misconduct or the LC Issuer's
failure to pay under any Facility LC after the presentation to it of a
request strictly complying with the terms and conditions of the Facility
LC) that such indemnitees may suffer or incur in connection with this
Section 2.20 or any action taken or omitted by such indemnitees hereunder.
2.20.11 Facility LC Collateral Account. The Borrower agrees that it
will, upon the request of the Administrative Agent or the Required Lenders
and until the final expiration date of any Facility LC and thereafter as
long as any amount is payable to the LC Issuer or the Lenders in respect of
any Facility LC, maintain a special collateral account pursuant to
arrangements reasonably satisfactory to the Administrative Agent and the
Borrower (the "Facility LC Collateral Account") at the Administrative
Agent's office at the address specified pursuant to Article XIII, in the
name of the Borrower but under the sole dominion and control of the
Collateral Agent for the benefit of the LC Issuers and the Lenders and in
which the Borrower shall have no interest other than as set forth in
Section 8.1. The Borrower hereby pledges, assigns and grants to the
Collateral Agent, on behalf of and for the ratable benefit of the Lenders
and the LC Issuer, a security interest in all of the Borrower's right,
title and interest in and to all funds which may from time to time be on
deposit in the Facility LC Collateral Account to secure the prompt and
complete payment and performance of the Secured Obligations in respect of
Facility LCs. The Borrower shall deposit cash collateral pursuant to this
paragraph as and to the extent required by Section 2.2 as collateral for
the payment and performance of the LC Obligations and the other Secured
Obligations in respect of Facility LCs. Each such deposit shall be held by
the Collateral Agent as collateral for the payment and performance of the
obligations of the Borrower for the portion of the LC Obligations relating
to Facility LCs issued for the account of the Borrower under this
Agreement. The Collateral Agent will invest any funds on deposit from time
to time in the Facility LC Collateral Account in certificates of deposit of
JPMorgan Chase having a maturity not exceeding thirty (30) days. Interest
or profits, if any, on such investments shall accumulate in such account.
Moneys in such account shall be applied to reimburse the LC Issuer for
Reimbursement Obligations for which it has not been reimbursed and as
collateral for the remaining LC Obligations. If the Borrower is required to
provide an amount of cash collateral hereunder pursuant to Section 8.1,
such amount (to the extent not applied) shall be returned to such Borrower
within three Business Days after all Events of Default have been cured or
waived. If the Borrower is required to provide an amount of cash collateral
hereunder pursuant to Section 2.2, such amount (to the extent not applied
as aforesaid) shall be returned to the Borrower as and to the extent that,
after giving effect to such return, the Borrower would remain in compliance
with Section 2.2. Nothing in this Section 2.20.11 shall either require the
Borrower or any Guarantor to
43
deposit any funds in the Facility LC Collateral Account or limit the right
of the Administrative Agent or the Collateral Agent to release any funds
held in the Facility LC Collateral Account in each case other than as
required by this Section, Section 2.2 or Section 8.1.
2.20.12 Rights as a Lender. In its capacity as a Lender, the LC
Issuer shall have the same rights and obligations as any other Lender.
2.21. Senior Unsecured Indenture Documents. The Borrower shall not be
entitled to request a Credit Extension, and no Credit Extension shall be made
available to the Borrower if, on the date such Credit Extension is to be made,
such Credit Extension would result in a breach (without giving effect to any
grace period or cure rights with respect to such breach) of the Senior Unsecured
Indenture Documents.
ARTICLE III
YIELD PROTECTION; TAXES
3.1. Yield Protection. If, on or after the Closing Date, the adoption of
any law or any governmental or quasi-governmental rule, regulation, policy,
guideline or directive (whether or not having the force of law), or any change
in any such law, rule, regulation, policy, guideline or directive or in the
interpretation or administration thereof by any governmental or
quasi-governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender or
applicable Lending Installation or the LC Issuer with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency:
(i) imposes or increases or deems applicable any reserve, assessment,
insurance charge, special deposit or similar requirement against
assets of, deposits with or for the account of, or credit extended by,
any Lender or any applicable Lending Installation or the LC Issuer
(other than reserves and assessments taken into account in determining
the interest rate applicable to Eurodollar Advances), or
(ii) imposes any other condition the result of which is to increase the
cost to any Lender or any applicable Lending Installation of making,
funding or maintaining its Revolving Loan Commitment or Eurodollar
Loans or of issuing or participating in Facility LCs, or reduces any
amount receivable by any Lender or any applicable Lending Installation
or the LC Issuer in connection with its Revolving Loan Commitment or
Eurodollar Loans or Facility LCs (including participations therein),
or requires any Lender or any applicable Lending Installation or the
LC Issuer to make any payment calculated by reference to the amount of
Revolving Loan Commitment or Eurodollar Loans or Facility LCs
(including participations therein) held or interest or LC Fees
received by it, by an amount deemed material by such Lender or the LC
Issuer, as applicable.
and the result of any of the foregoing is to increase the cost to such Lender or
applicable Lending Installation or the LC Issuer of making or maintaining its
Eurodollar Loans or Revolving Loan
44
Commitment or of issuing or participating in Facility LCs, as applicable, or to
reduce the return received by such Lender or applicable Lending Installation or
LC Issuer in connection with such Eurodollar Loans or Revolving Loan Commitment,
or Facility LCs (including participations therein), then, within fifteen (15)
days of demand, accompanied by the written statement required by Section 3.6, by
such Lender or LC Issuer, the Borrower shall pay such Lender or LC Issuer such
additional amount or amounts as will compensate such Lender or LC Issuer for
such increased cost or reduction in amount received.
3.2. Changes in Capital Adequacy Regulations. If a Lender or LC Issuer
determines the amount of capital required or expected to be maintained by such
Lender or LC Issuer, any Lending Installation of such Lender or LC Issuer or any
corporation controlling such Lender or LC Issuer is increased as a result of a
Change (as defined below), then, within fifteen (15) days of demand, accompanied
by the written statement required by Section 3.6, by such Lender or LC Issuer,
the Borrower shall pay such Lender or LC Issuer the amount necessary to
compensate for any shortfall in the rate of return on the portion of such
increased capital which such Lender or LC Issuer determines is attributable to
this Agreement, its Outstanding Revolving Credit Exposure, its Term Loans, its
Term Loan Commitment to make Term Loans, its Revolving Loan Commitment to make
Revolving Loans and issue or participate in Facility LCs, as applicable,
hereunder (after taking into account such Lender's or LC Issuer's policies as to
capital adequacy). "Change" means (i) any change after the Closing Date in the
Risk-Based Capital Guidelines or (ii) any adoption of, or change in, or change
in the interpretation or administration of any other law, governmental or
quasi-governmental rule, regulation, policy, guideline, interpretation, or
directive (whether or not having the force of law) after the Closing Date which
affects the amount of capital required or expected to be maintained by any
Lender or LC Issuer or any Lending Installation or any corporation controlling
any Lender or LC Issuer. "Risk-Based Capital Guidelines" means (i) the
risk-based capital guidelines in effect in the United States on the Closing
Date, including transition rules, and (ii) the corresponding capital regulations
promulgated by regulatory authorities outside the United States implementing the
July 1988 report of the Basle Committee on Banking Regulation and Supervisory
Practices Entitled "International Convergence of Capital Measurements and
Capital Standards," including transition rules, and any amendments to such
regulations adopted prior to the Closing Date.
3.3. Availability of Types of Advances. If the Administrative Agent
determines that maintenance of its Eurodollar Loans at a suitable Lending
Installation would violate any applicable law, rule, regulation, or directive,
whether or not having the force of law, or no reasonable basis exists for
determining the Eurodollar Base Rate, then the Administrative Agent shall
suspend the availability of Eurodollar Advances and require any affected
Eurodollar Advances to be repaid or converted to Floating Rate Advances on the
respective last days of the then current Interest Periods with respect to such
Revolving Loans or within such earlier period as required by law, subject to the
payment of any funding indemnification amounts required by Section 3.4.
3.4. Funding Indemnification. If any payment of a Eurodollar Advance
occurs on a date which is not the last day of the applicable Interest Period,
whether because of acceleration, prepayment or otherwise, or a Eurodollar
Advance is not made or continued, or a Floating Rate Advance is not converted
into a Eurodollar Advance, on the date specified by the Borrower for any reason
other than default by the Lenders, or a Eurodollar Advance is not prepaid on the
date
45
specified by the Borrower for any reason, the Borrower will indemnify each
Lender for any loss or cost (excluding lost profit) incurred by it resulting
therefrom, including, without limitation, any loss or cost in liquidating or
employing deposits acquired to fund or maintain such Eurodollar Advance.
3.5. Taxes.
(i) All payments by the Borrower to or for the account of any Lender or
the LC Issuer or the Administrative Agent hereunder or under any Note
shall be made free and clear of and without deduction for any and all
Taxes. If the Borrower shall be required by law to deduct any Taxes
from or in respect of any sum payable hereunder to any Lender, LC
Issuer or the Administrative Agent, (a) the sum payable shall be
increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this
Section 3.5) such Lender, LC Issuer or the Administrative Agent (as
the case may be) receives an amount equal to the sum it would have
received had no such deductions been made, (b) the Borrower shall make
such deductions, (c) the Borrower shall pay the full amount deducted
to the relevant authority in accordance with applicable law and (d)
the Borrower shall furnish to the Administrative Agent the original
copy of a receipt evidencing payment thereof or, if a receipt cannot
be obtained with reasonable efforts, such other evidence of payment as
is reasonably acceptable to the Administrative Agent, in each case
within thirty (30) days after such payment is made.
(ii) In addition, the Borrower shall pay any present or future stamp or
documentary taxes and any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or under
any Note or Facility LC Application or from the execution or delivery
of, or otherwise with respect to, this Agreement or any Note or
Facility LC Application ("Other Taxes").
(iii) The Borrower shall indemnify the Administrative Agent, the LC Issuer
and each Lender for the full amount of Taxes or Other Taxes
(including, without limitation, any Taxes or Other Taxes imposed on
amounts payable under this Section 3.5) paid by the Administrative
Agent, the LC Issuer or such Lender as a result of its Revolving Loan
Commitment, any Credit Extensions made by it hereunder, any Facility
LC issued or participated in by it hereunder, or otherwise in
connection with its participation in this Agreement and any liability
(including penalties, interest and expenses) arising therefrom or with
respect thereto; provided, however, that the Borrower shall not be
obligated to reimburse the Administrative Agent, the LC Issuer or a
Lender in respect of penalties, interest or similar liabilities
attributable to such Taxes or Other Taxes if such penalties, interest
or similar liabilities are attributable to a failure or delay by the
Administrative Agent, the LC Issuer or a Lender to make a written
request therefore pursuant to Section 3.6; provided, further, that no
request delivered within the ninety (90) day period described in
Section 3.6 shall constitute a delayed request. Payments due under
this indemnification shall be made within thirty (30) days of the date
the
46
Administrative Agent, the LC Issuer or such Lender makes demand
therefor pursuant to Section 3.6.
(iv) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof (each a "Non-U.S. Lender") agrees
that it will, not more than ten (10) Business Days after the date on
which it becomes a party to this Agreement or changes its lending
office under this Agreement (but in any event before a payment is due
to it hereunder), (i) deliver to each of the Borrower and the
Administrative Agent two duly completed copies of United States
Internal Revenue Service Form W-8BEN or W-8ECI, certifying in either
case that such Lender is entitled to receive payments under this
Agreement without deduction or withholding of any United States
federal income taxes (including backup withholding taxes), or (ii) in
the case of a Non-U.S. Lender that is fiscally transparent, deliver to
the Administrative Agent a United States Internal Revenue Form W-8IMY
together with the applicable accompanying forms, W-8 or W-9, as the
case may be, and certify that it is entitled to an exemption from
United States Federal income tax (including backup withholding taxes).
Each Non-U.S. Lender further undertakes to deliver to each of the
Borrower and the Administrative Agent (x) renewals or additional
copies of such form (or any successor form) on or before the date that
such form expires or becomes obsolete, and (y) after the occurrence of
any event requiring a change in the most recent forms so delivered by
it, such additional forms or amendments thereto as may be reasonably
requested by the Borrower or the Administrative Agent. All forms or
amendments described in the preceding sentence shall certify that such
Lender is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes,
unless an event (including without limitation any change in treaty,
law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms
inapplicable or which would prevent such Lender from duly completing
and delivering any such form or amendment with respect to it and such
Lender advises the Borrower and the Administrative Agent that it is
not capable of receiving payments without any deduction or withholding
of United States federal income tax.
(v) For any period during which a Non-U.S. Lender has failed to provide
the Borrower with an appropriate form pursuant to clause (iv) above
(unless such failure is due to a change in treaty, law or regulation,
or any change in the interpretation or administration thereof by any
governmental authority, occurring subsequent to the date on which a
form originally was required to be provided), such Non-U.S. Lender
shall not be entitled to indemnification under this Section 3.5 with
respect to Taxes imposed by the United States; provided that, should a
Non-U.S. Lender which is otherwise exempt from or subject to a reduced
rate of withholding tax become subject to Taxes because of its failure
to deliver a form required under clause (iv) above, the Borrower shall
take such steps as such Non-U.S. Lender shall reasonably request to
assist such Non-U.S. Lender to recover such Taxes.
47
(vi) Any Lender that is entitled to an exemption from or reduction of
withholding tax with respect to payments under this Agreement or any
Note pursuant to the law of any relevant jurisdiction or any treaty
shall deliver to the Borrower (with a copy to the Administrative
Agent), at the time or times prescribed by applicable law, such
properly completed and executed documentation prescribed by applicable
law or reasonably requested by the Borrower as will permit such
payments to be made without withholding or at a reduced rate.
(vii) If the U.S. Internal Revenue Service or any other governmental
authority of the United States or any other country or any political
subdivision thereof asserts a claim that the Administrative Agent did
not properly withhold tax from amounts paid to or for the account of
any Lender (because the appropriate form was not delivered or properly
completed, because such Lender failed to notify the Administrative
Agent of a change in circumstances which rendered its exemption from
withholding ineffective, or for any other reason), such Lender shall
indemnify the Administrative Agent fully for all amounts paid,
directly or indirectly, by the Administrative Agent as tax,
withholding therefor, or otherwise, including penalties and interest,
and including taxes imposed by any jurisdiction on amounts payable to
the Administrative Agent under this subsection, together with all
costs and expenses related thereto (including attorneys fees and time
charges of attorneys for the Administrative Agent, which attorneys may
be employees of the Administrative Agent). The obligations of the
Lenders under this Section 3.5(vii) shall survive the payment of the
Obligations and termination of this Agreement.
(viii) The Administrative Agent, the LC Issuer and each Lender shall take
such steps as the Borrower reasonably requests to apply or otherwise
take advantage of any tax refund or offsetting tax credit or other
similar tax benefit arising out of or in conjunction with any amounts
for which they have been indemnified by the Borrower or with respect
to which the Borrower has paid additional amounts pursuant to this
Section 3.5. If the Administrative Agent, the LC Issuer or a Lender
determines that it has received a tax benefit arising out of or in
conjunction with any amounts as to which it has been indemnified by
the Borrower or with respect to which the Borrower has paid additional
amounts pursuant to this Section 3.5, it shall pay over such refund to
the Borrower (but only to the extent of indemnity payments made, or
additional amounts paid by the Borrower under this Section 3.5 with
respect to the amounts giving rise to such refund); provided, however,
that during the continuance of an Event of Default, any such refund
shall be applied in reduction of the Secured Obligations.
(ix) The Administrative Agent, the LC Issuer, and each Lender shall take
reasonable steps to avoid the need for the Borrower to pay any amounts
under this Section 3.5, but they shall not be required to take any
steps that would impose material costs or other detriments on them.
Any such cost incurred by the Administrative Agent, the LC Issuer or
any Lender shall constitute a Secured Obligation and the Borrower
shall reimburse such Person for such cost.
48
3.6. Lender Statements; Survival of Indemnity. Each Lender shall deliver a
written statement of such Lender to the Borrower (with a copy to the
Administrative Agent) as to the amount due, if any, under Section 3.1, 3.2, 3.4
or 3.5. Such written statement shall set forth in reasonable detail the
calculations upon which such Lender determined such amount and shall be final,
conclusive and binding on the Borrower in the absence of manifest error.
Determination of amounts payable under such Sections in connection with a
Eurodollar Loan shall be calculated as though each Lender funded its Eurodollar
Loan through the purchase of a deposit of the type, currency and maturity
corresponding to the deposit used as a reference in determining the Eurodollar
Rate applicable to such Loan, whether in fact that is the case or not. Unless
otherwise provided herein, the amount specified in the written statement of any
Lender shall be payable on demand after receipt by the Borrower of such written
statement. The obligations of the Borrower under Sections 3.1, 3.2, 3.4 and 3.5
shall survive payment of the Obligations and termination of this Agreement;
provided that the Borrower shall not be required to make any payments pursuant
to Section 3.1, 3.2, 3.4 or 3.5 to a Lender or LC Issuer for any increased costs
incurred or reductions suffered more than ninety (90) days prior to the date
that such Lender or LC Issuer, as the case may be, notifies the Borrower of the
circumstances giving rise to such increased costs or reductions and of such
Lender's or the LC Issuer's intention to claim compensation therefor (except
that, if the circumstances giving rise to such increased costs or reductions are
retroactive, then the ninety (90) day period referred to above shall be extended
to include the period of retroactive effect thereof).
3.7. Alternative Lending Installation. To the extent reasonably possible,
each Lender shall designate an alternate Lending Installation with respect to
its Eurodollar Loans to reduce any liability of the Borrower to such Lender
under Sections 3.1, 3.2 and 3.5 or to avoid the unavailability of Eurodollar
Advances under Section 3.3, so long as such designation is not, in the judgment
of such Lender, reasonably disadvantageous to such Lender. A Lender's
designation of an alternative Lending Installation shall not affect the
Borrower's rights under Section 2.19 to replace a Lender.
ARTICLE IV
CONDITIONS PRECEDENT
4.1. Initial Credit Extension. The Lenders shall not be required to make
the initial Credit Extension hereunder, which initial Credit Extension shall
occur no later than February 24, 2005, unless the following conditions precedent
are satisfied (or waived by the Administrative Agent) immediately prior to or
substantially concurrent with such initial Credit Extension:
4.1.1 Copies of the articles or certificate of incorporation (or the
equivalent thereof) of each Credit Party, in each case, together with all
amendments thereto, and a certificate of good standing, each certified by
the appropriate governmental officer in its jurisdiction of organization.
4.1.2 Copies, certified by the Secretary or Assistant Secretary (or
the equivalent thereof) of each Credit Party, in each case, of its by-laws
and of its Board of Directors' resolutions and of resolutions or actions of
any other body authorizing the execution of the Loan Documents to which
such Credit Party is a party.
49
4.1.3 An incumbency certificate, executed by the Secretary or
Assistant Secretary (or the equivalent thereof) of each Credit Party, in
each case, which shall identify by name and title and bear the signatures
of the Authorized Officers and any other officers of such Credit Party
authorized to sign the Loan Documents to which such Credit Party is party,
upon which certificate the Administrative Agent and the Lenders shall be
entitled to rely until informed of any change in writing by such Credit
Party.
4.1.4 A certificate signed by the chief financial officer of the
Borrower, stating that on the initial Credit Extension Date (i) no Event of
Default or Unmatured Event of Default has occurred and is continuing, (ii)
all of the representations and warranties in Article V shall be true and
correct in all material respects as of such date and (iii) other than as
disclosed in public filings with the Securities and Exchange Commission
prior to the initial Credit Extension Date, no material adverse change in
the business, condition (financial or otherwise), operations, performance
or Property of the Borrower and its Subsidiaries, taken as a whole, has
occurred since September 30, 2004. The chief financial officer or treasurer
of the Borrower shall also deliver to the Administrative Agent on the
Closing Date a fully completed compliance certificate substantially similar
to Exhibit B hereto that is dated as of the Closing Date and that
demonstrates the Borrower's compliance with, among other things, the
financial covenants set forth in Sections 6.20 through 6.24 as of December
31, 2004. The financial information used to prepare such certificate shall
be the Borrower's year-end financial information for 2004 that currently
appears in its draft annual financial statements being audited by the
Borrower's accountants. The financial information shall also give effect,
on a pro forma basis, to the repayment of any of the Borrower's
Indebtedness that is made after December 31, 2004 and prior to or
contemporaneously with the effectiveness of this Agreement, including,
without limitation, the Indebtedness referenced in Section 4.1.8.
4.1.5 (a) A written opinion of the Borrower's in-house counsel, in
form and substance reasonably satisfactory to the Collateral Agent, the
Administrative Agent and addressed to the Collateral Agent, the
Administrative Agent and the Lenders, in substantially the form of Exhibit
A-1 and (b) a written opinion of Cravath, Swaine & Moore LLP, special New
York counsel to the Borrower, in form and substance reasonably satisfactory
to the Collateral Agent, the Administrative Agent and addressed to the
Collateral Agent, the Administrative Agent and the Lenders, in
substantially the form of Exhibit A-2.
4.1.6 Any Notes requested by a Lender pursuant to Section 2.13 payable
to the order of each such requesting Lender; provided that any Notes
previously issued to such Lender are first returned to the Borrower.
4.1.7 Written money transfer instructions, in substantially the form
of Exhibit D, addressed to the Administrative Agent and signed by an
Authorized Officer, together with such other related money transfer
authorizations as the Administrative Agent may have reasonably requested.
4.1.8 The Administrative Agent shall have received written evidence
reasonably satisfactory to it that all of the obligations owing under the
Senior Secured Indenture
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Documents have been or are concurrently with the effectiveness of this
Agreement being discharged and the agreements, documents and instruments
delivered in connection therewith (other than security interest filings)
have been terminated except to the extent the provisions thereof expressly
survive the repayment of such obligations.
4.1.9 All legal matters shall be reasonably satisfactory to the
Administrative Agent.
4.1.10 The Administrative Agent shall have received evidence
reasonably satisfactory to it that the Collateral Agent, on behalf of the
Lenders, continues to hold a perfected first-priority Lien upon the
Collateral.
4.1.11 Such other documents as the Administrative Agent or its counsel
may have reasonably requested, including, without limitation, the
Collateral Documents and those other documents set forth in Exhibit G
hereto.
4.2. Each Credit Extension. The Lenders shall not (except as otherwise set
forth in Section 2.4.4 or Section 2.20.6 with respect to Revolving Loans
extended for the purpose of repaying Swing Line Loans or reimbursing draws under
Facility LCs, as the case may be) be required to make any Credit Extension
unless on the applicable Credit Extension Date:
4.2.1 There exists no Event of Default or Unmatured Event of Default.
4.2.2 The representations and warranties contained in Article V are
true and correct as of such Credit Extension Date in all material respects
except to the extent any such representation or warranty is stated to
relate solely to an earlier date, in which case such representation or
warranty shall have been true and correct in all material respects on and
as of such earlier date.
4.2.3 Such Credit Extension will not, on the date such Credit
Extension is to be made, result in a breach (without giving effect to any
grace period or cure rights with respect to such breach) of the Senior
Unsecured Indenture Documents.
Each Borrowing Notice or Swing Line Borrowing Notice, as the case may be,
or request for issuance of a Facility LC, with respect to each such Credit
Extension shall constitute a representation and warranty by the Borrower that
the conditions contained in Sections 4.2.1, 4.2.2 and 4.2.3 have been satisfied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to each Lender and the Administrative
Agent as of each of (i) the date of the initial Credit Extension hereunder and
(ii) each date as required by Section 4.2:
5.1. Existence and Standing. Each of the Borrower and its Subsidiaries is
a corporation, partnership (in the case of Subsidiaries only) or limited
liability company duly
51
incorporated or organized, as the case may be, validly existing and (to the
extent such concept applies to such entity) in good standing under the laws of
its jurisdiction of incorporation or organization and has all requisite
authority to conduct its business in each jurisdiction in which its business is
conducted.
5.2. Authorization and Validity. The Borrower has the power and authority
and legal right to execute and deliver the Loan Documents to which it is a party
and to perform its obligations thereunder. The execution and delivery by the
Borrower of the Loan Documents to which it is a party and the performance of its
obligations thereunder have been duly authorized by proper proceedings, and the
Loan Documents to which the Borrower is a party constitute legal, valid and
binding obligations of the Borrower enforceable against the Borrower in
accordance with their terms, except as enforceability may be limited by (i)
bankruptcy, insolvency, fraudulent conveyances, reorganization or similar laws
relating to or affecting the enforcement of creditors' rights generally; (ii)
general equitable principles (whether considered in a proceeding in equity or at
law); and (iii) requirements of reasonableness, good faith and fair dealing.
5.3. No Conflict; Government Consent. Neither the execution and delivery
by the Borrower or its Subsidiaries, as applicable, of the Loan Documents to
which such Person is a party, nor the consummation of the transactions therein
contemplated, nor compliance with the provisions thereof will violate (i) any
law, rule, regulation, order, writ, judgment, injunction, decree or award
binding on the Borrower or any of its Subsidiaries except for violations which
individually or in the aggregate would not reasonably be expected to result in a
Material Adverse Effect, or (ii) the Borrower's or any Subsidiary's articles or
certificate of incorporation, partnership agreement, certificate of partnership,
articles or certificate of organization, by-laws, or operating agreement or
other management agreement, as the case may be, or (iii) the provisions of any
indenture, instrument or agreement to which the Borrower or any of its
Subsidiaries is a party or is subject, or by which it, or its Property, is
bound, or conflict with, or constitute a default thereunder, or result in, or
require, the creation or imposition of any Lien in, of or on the Property of the
Borrower or a Subsidiary pursuant to the terms of, any such indenture,
instrument or agreement, other than indentures, instruments or agreements which
will be terminated on the Closing Date in connection with the full repayment of
Indebtedness outstanding under such indentures, instruments or agreements, and
except for violations which individually or in the aggregate would not
reasonably be expected to result in a Material Adverse Effect. No material
order, consent, adjudication, approval, license, authorization, or validation
of, or filing, recording or registration with, or exemption by, or other
material action in respect of any governmental or public body or authority, or
any subdivision thereof, which has not been obtained by the Borrower or any of
its Subsidiaries, is required to be obtained by the Borrower or any of its
Subsidiaries in connection with the execution and delivery of the Loan
Documents, the borrowings under this Agreement, the payment and performance by
the Borrower of the Obligations or the legality, validity, binding effect or
enforceability of any of the Loan Documents, except filings necessary to perfect
Liens created under the Loan Documents.
5.4. Financial Statements. The December 31, 2003 audited consolidated
financial statements of the Borrower and its Subsidiaries heretofore delivered
to the Administrative Agent and the Lenders were prepared in accordance with
generally accepted accounting principles in effect on the date such statements
were prepared and fairly present in all material respects the
52
consolidated financial condition and operations of the Borrower and its
Subsidiaries at such date and the consolidated results of their operations for
the period then ended in accordance with generally accepted accounting
principles in effect on the date such statements were prepared.
5.5. Material Adverse Change. Other than as disclosed in public filings
with the Securities and Exchange Commission prior to the initial Credit
Extension Date, since September 30, 2004, there has been no change in the
business, condition (financial or otherwise), operations, performance or
Property of the Borrower and its Subsidiaries taken together, in each case which
could reasonably be expected to have a Material Adverse Effect.
5.6. Taxes. The Borrower and its Subsidiaries have filed all United States
federal tax returns and all other tax returns which are required to be filed and
have paid all taxes due pursuant to said returns or pursuant to any assessment
received by the Borrower or any of its Subsidiaries, except (i) in respect of
such taxes, if any, as are being contested in good faith and as to which
adequate reserves have been provided in accordance with Agreement Accounting
Principles or (ii) to the extent that the failure to do so would not reasonably
be expected to have a Material Adverse Effect. The United States federal income
tax returns of the Borrower and its Subsidiaries have been audited by the
Internal Revenue Service through the 2000 fiscal year, except with respect to
VITAS Healthcare, which has been audited through September 30, 2001. No Liens
have been filed and no claims are being asserted with respect to such taxes that
would reasonably be expected to have a Material Adverse Effect. The charges,
accruals and reserves on the books of the Borrower and its Subsidiaries in
respect of any taxes or other governmental charges are adequate.
5.7. Litigation and Contingent Obligations. There is no litigation,
arbitration, governmental investigation, proceeding or inquiry pending or, to
the knowledge of any of their officers, threatened against or affecting the
Borrower or any of its Subsidiaries which could reasonably be expected to have a
Material Adverse Effect or which seeks to prevent, enjoin or delay the making of
any Credit Extensions.
5.8. Subsidiaries. Schedule 5.8 contains an accurate list of all
Subsidiaries of the Borrower as of the date of this Agreement, setting forth
their respective jurisdictions of organization and the percentage of their
respective capital stock or other ownership interests owned by the Borrower or
other Subsidiaries. All of the issued and outstanding shares of capital stock or
other ownership interests of such Subsidiaries have been (to the extent such
concepts are relevant with respect to such ownership interests) duly authorized
and issued and are fully paid and non-assessable.
5.9. ERISA. The Unfunded Liabilities of all Single Employer Plans would
not reasonably be expected to have a Material Adverse Effect. Neither the
Borrower nor any other member of the Controlled Group has incurred, or
reasonably expects to incur, pursuant to Section 4201 of ERISA, any withdrawal
liability to Multiemployer Plans that in the aggregate would reasonably be
expected to have a Material Adverse Effect. Each Plan complies in all material
respects with all applicable requirements of law and regulations. No Reportable
Event has occurred with respect to any Plan that would reasonably be expected to
have a Material Adverse Effect. No steps have been taken to reorganize or
terminate, within the meaning of Title IV of ERISA, any Multiemployer Plan.
53
5.10. Accuracy of Information. The Loan Documents and other written
statements furnished by the Borrower and its Subsidiaries to the Administrative
Agent in connection with the negotiation of, and compliance with, the Loan
Documents (as modified or supplemented by information so furnished) taken as a
whole do not contain any material misstatement of fact or omit to state a
material fact necessary to make the statements contained therein, in light of
the circumstances under which they were made, not misleading; provided, however,
that with respect to projected financial information, the Borrower and its
Subsidiaries represent only that such information was prepared in good faith
based upon assumptions believed to be reasonable at the time.
5.11. Regulations T, U, and X. The Borrower will ensure that no use of
Advances or proceeds thereof will violate Regulation T, U or X.
5.12. Material Agreements; Restrictions on Dividends. As of the Closing
Date, neither the Borrower nor any Subsidiary is a party to any agreement or
instrument or subject to any charter or other corporate restriction which could
reasonably be expected to have a Material Adverse Effect. As of the Closing
Date, neither the Borrower nor any Subsidiary is in default in the performance,
observance or fulfillment of any of the obligations, covenants or conditions
contained in any agreement or instrument to which it is a party, which default
could reasonably be expected to have a Material Adverse Effect (other than any
agreement or instrument evidencing or governing Indebtedness).
5.13. Compliance With Laws. The Borrower and its Subsidiaries have
complied with all applicable statutes, rules, regulations, orders and
restrictions of any domestic or foreign government or any instrumentality or
agency thereof having jurisdiction over the conduct of their respective
businesses or the ownership of their respective Property, except such
non-compliances that would not, either individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. This Section 5.13 does
not relate to taxes which are the subject of Section 5.6, to employee benefits
or ERISA matters which are the subject of Section 5.9 and environmental matters
which are the subject of Section 5.16.
5.14. Ownership of Properties; Priority of Liens. The Borrower and its
Subsidiaries have good title, free of all Liens other than those permitted by
Section 6.15, to all of the material Property and assets reflected in the
Borrower's most recent consolidated financial statements provided to the
Administrative Agent, as owned by the Borrower and its Subsidiaries. To the
extent governed by Article 8 or Article 9 of the UCC, when financing statements
have been filed in the appropriate offices, the Collateral Agent has a perfected
first priority Lien upon all of the Collateral, subject to (i) Liens permitted
by Section 6.15, (ii) filings under any federal statute for patents, trademarks,
and copyrights, and (iii) Collateral in which security interests or liens can
only be perfected through compliance with the terms of the Federal Assignment of
Claims Act.
5.15. Plan Assets; Prohibited Transactions. The Borrower is not an entity
deemed to hold "plan assets" within the meaning of 29 C.F.R. Section 2510.3-101
of an employee benefit plan (as defined in Section 3(3) of ERISA) which is
subject to Title I of ERISA or any plan (within the meaning of Section 4975 of
the Code).
54
5.16. Environmental Matters. In the ordinary course of its business, the
officers of the Borrower consider the effect of Environmental Laws applicable to
the business of the Borrower and its Subsidiaries, in the course of which they
identify and evaluate potential risks and liabilities accruing to the Borrower
due to Environmental Laws. On the basis of this consideration, the Borrower has
concluded that the status of the Borrower's compliance with Environmental Laws
cannot reasonably be expected to have a Material Adverse Effect. Neither the
Borrower nor any Subsidiary has received any notice to the effect that its
operations are not in material compliance with any of the requirements of
applicable Environmental Laws or are the subject of any federal or state
investigation evaluating whether any remedial action is needed to respond to a
release of any toxic or hazardous waste or substance into the environment, which
non-compliance or remedial action could reasonably be expected to have a
Material Adverse Effect.
5.17. Investment Company Act. Neither the Borrower nor any Subsidiary is
required to register as an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
5.18. Public Utility Holding Company Act. Neither the Borrower nor any
Subsidiary is a "holding company" or a "subsidiary company" of a "holding
company" within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
5.19. Insurance. The Borrower maintains, and has caused each Subsidiary to
maintain, with financially sound and reputable insurance companies, or pursuant
to self-insurance arrangements, insurance on all their material Property in such
amounts, subject to such deductibles and self-insurance retentions and covering
such properties and risks as is reasonably consistent with sound business
practice.
5.20. No Event of Default or Unmatured Event of Default. No Event of
Default or Unmatured Event of Default has occurred and is continuing.
5.21. SDN List Designation. Neither the Borrower nor any of its
Subsidiaries or Affiliates is a country, individual or entity named on the
Specifically Designated National and Blocked Persons (SDN) list issued by the
Office of Foreign Asset Control of the Department of the Treasury of the United
States of America.
5.22. Solvency. Immediately prior to and after the consummation of the
transactions to occur as of the initial Credit Extension Date, prior to and
immediately following the making of each Credit Extension on the initial Credit
Extension Date, and prior to and after giving effect to the application of the
proceeds of such Credit Extensions: (i) the fair value of the assets of the
Borrower and its Subsidiaries on a consolidated basis, at fair valuation, will
exceed the debts and liabilities, subordinated, contingent, or otherwise, of the
Borrower and its Subsidiaries on a consolidated basis, (ii) the present fair
saleable value of the Property of the Borrower and its Subsidiaries on a
consolidated basis will be greater than the amount that will be required to pay
the probable liability of the Borrower and its Subsidiaries on a consolidated
basis on their debts and other liabilities, subordinated, contingent or
otherwise, as such debts and other liabilities become absolute and matured,
(iii) the Borrower and its Subsidiaries on a consolidated basis will be able to
pay their debts and liabilities, subordinated, contingent or otherwise, as such
debts and
55
liabilities become absolute and matured, and (iv) the Borrower and its
Subsidiaries on a consolidated basis will not have unreasonably small capital
with which to conduct the businesses in which they are engaged as such
businesses are now conducted and are proposed to be conducted after the Closing
Date and after the initial Credit Extension Date.
ARTICLE VI
COVENANTS
Until the Revolving Loan Commitments have expired or been terminated, the
LC Obligations have expired, been reimbursed or been cash collateralized (in
each case in accordance with the terms of this Agreement), and the other
Obligations have been paid in full (other than obligations to pay fees and
expenses with respect to which the Borrower has not received an invoice,
contingent indemnity obligations, other contingent obligations, and Rate
Management Obligations), unless the Required Lenders shall otherwise consent in
writing:
6.1. Financial Reporting. The Borrower will maintain, for itself and each
Subsidiary, a system of accounting established and administered in accordance
with generally accepted accounting principles, and furnish to the Lenders:
6.1.1 Within ninety (90) days after the close of each of its fiscal
years, financial statements prepared in accordance with Agreement
Accounting Principles on a consolidated and consolidating basis for itself
and its consolidated Subsidiaries, including balance sheets as of the end
of such period, statements of income and statements of cash flows,
accompanied by (a) an audit report, unqualified as to scope, of a
nationally recognized firm of independent public accountants or other
independent public accountants reasonably acceptable to the Required
Lenders (it being understood and agreed that consolidating financial
statements need not be certified by such accountants); (b) any management
letter prepared by said accountants and (c) a certificate of said
accountants (which certificate may be limited to the extent required by
generally accepted accounting principles, rules or guidelines) that, in the
course of their audit of the financial statements of the Borrower and its
consolidated Subsidiaries, which audit was conducted in accordance with
generally accepted accounting standards, they have obtained no knowledge of
any Event of Default or Unmatured Event of Default, or if, in the opinion
of such accountants, any Event of Default or Unmatured Event of Default
shall exist, stating the nature and status thereof.
6.1.2 Within forty-five (45) days after the close of the first three
quarterly periods of each of its fiscal years, for itself and its
consolidated Subsidiaries, consolidated and consolidating unaudited balance
sheets as at the close of each such period and consolidated and
consolidating statements of income and a statement of cash flows for the
period from the beginning of such fiscal year to the end of such quarter,
all certified as to fairness of presentation in all material respects in
accordance with Agreement Accounting Principles, compliance with Agreement
Accounting Principles, and consistency by its chief financial officer or
treasurer, except for normal year-end audit adjustments and the absence of
footnotes.
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6.1.3 Together with the financial statements required under Sections
6.1.1 and 6.1.2, a compliance certificate in substantially the form of
Exhibit B signed by its chief financial officer or treasurer showing the
calculations necessary to determine compliance with Sections 6.20 through
6.24, an officer's certificate in substantially the form of Exhibit F
stating that, to such officer's knowledge, no Event of Default or Unmatured
Event of Default exists, or if any Event of Default or Unmatured Event of
Default exists, stating the nature and status thereof.
6.1.4 As soon as possible and in any event within ten (10) days after
the Borrower knows that any material Reportable Event has occurred with
respect to any Plan, a statement, signed by the chief financial officer or
treasurer of the Borrower, describing said Reportable Event and the action
which the Borrower proposes to take with respect thereto.
6.1.5 As soon as possible and in any event within ten (10) days after
receipt by the Borrower, a copy of (a) any notice or claim to the effect
that the Borrower or any of its Subsidiaries is or may be liable to any
Person as a result of the release by the Borrower, any of its Subsidiaries,
or any other Person of any toxic or hazardous waste or substance into the
environment, and (b) any notice alleging any violation of any Environmental
Law by the Borrower or any of its Subsidiaries, which, in either case,
could reasonably be expected to have a Material Adverse Effect.
6.1.6 Promptly upon the filing thereof, copies of all registration
statements and copies of all filings on forms 10-K, 10-Q, or 8-K which the
Borrower or any of its Subsidiaries makes with the Securities and Exchange
Commission, including, without limitation, all certifications and other
filings required by Section 302 and Section 906 of the Sarbanes-Oxley Act
of 2002 and all rules and regulations related thereto.
6.1.7 As soon as practicable, and in any event within thirty (30) days
after the beginning of each fiscal year of the Borrower, a copy of the plan
and forecast (including a projected consolidated balance sheet, income
statement and funds flow statement) of the Borrower for such fiscal year.
6.1.8 As soon as possible, and in any event within three (3) Business
Days (in the case of the Borrower) and fifteen (15) days (in the case of
any Guarantor) after the occurrence thereof, a reasonably detailed
notification to the Administrative Agent and its counsel of any change in
the jurisdiction of organization of the Borrower or any Guarantor.
6.1.9 Such other information (including non-financial information) as
the Administrative Agent or any Lender may from time to time reasonably
request.
If any information which is required to be furnished to the Lenders under
this Section 6.1 is required by law or regulation to be filed by the Borrower
with a government body on an earlier date, then the information required
hereunder shall be furnished to the Lenders promptly following such earlier
date.
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6.2. Use of Proceeds. The Borrower will, and will cause each Subsidiary
to, use (i) the proceeds of the Term Loans in compliance with Section 2.1.2, to
refinance certain existing Indebtedness outstanding on the Closing Date and for
general corporate purposes, and (ii) the proceeds of the Revolving Loans to
refinance certain Indebtedness outstanding on the Closing Date and for general
corporate purposes, including, without limitation, for working capital,
commercial paper liquidity support, Permitted Acquisitions, and to pay fees and
expenses incurred in connection with this Agreement. The Borrower shall use the
proceeds of Credit Extensions in compliance with all applicable legal and
regulatory requirements and any such use shall not result in a violation of any
such requirements, including, without limitation, Regulation T, U and X, the
Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as
amended, and the regulations promulgated thereunder.
6.3. Notice of Event of Default. Within three (3) Business Days after an
Authorized Officer becomes aware thereof, the Borrower will give notice in
writing to the Lenders of the occurrence of any Event of Default or Unmatured
Event of Default.
6.4. Conduct of Business. The Borrower will, and will cause each
Subsidiary to, carry on and conduct its business in substantially the same
manner and in substantially the same fields of enterprise as it is presently
conducted, and do all things necessary to remain duly incorporated or organized,
validly existing and (to the extent such concept applies to such entity) in good
standing as a domestic corporation, partnership or limited liability company in
its jurisdiction of incorporation or organization, as the case may be, as in
effect on the Closing Date, and maintain all requisite authority to conduct its
business in each jurisdiction in which its business is conducted; provided,
however, that the foregoing shall not prohibit any merger, dissolution, or
consolidation permitted under Section 6.11.
6.5. Taxes. The Borrower will, and will cause each Subsidiary to, timely
file complete and correct United States federal and applicable foreign, state
and local tax returns required by law and pay all material taxes, assessments
and governmental charges and levies before the same shall become delinquent or
in default upon it or its income, profits or Property, except those which are
being contested in good faith by appropriate proceedings and with respect to
which adequate reserves have been set aside in accordance with Agreement
Accounting Principles.
6.6. Insurance. The Borrower will, and will cause each Subsidiary to,
maintain with financially sound and reputable insurance companies, or pursuant
to self-insurance arrangements, insurance on all their material Property in such
amounts, subject to such deductibles and self-insurance retentions, and covering
such risks as is consistent with sound business practice, and the Borrower will
furnish to any Lender upon request full information as to the insurance carried.
The Borrower shall deliver to the Collateral Agent and the Administrative Agent
endorsements in form and substance reasonably acceptable to the Collateral Agent
and the Administrative Agent (x) to all "All Risk" physical damage insurance
policies on all of the Borrower's and its Subsidiaries' tangible real and
personal property and assets and business interruption insurance policies naming
the Collateral Agent as loss payee and (y) to all general liability and other
liability policies naming the Collateral Agent as an additional insured. In the
event the Borrower or any of its Subsidiaries at any time or times hereafter
shall fail to obtain or maintain any of the policies or insurance required
herein or to pay any premium in whole or in part relating thereto, then the
Administrative Agent, without waiving or releasing any obligations or resulting
Event of
58
Default hereunder, may at any time or times thereafter (but shall be under no
obligation to do so) obtain and maintain such policies of insurance and pay such
premiums and take any other action with respect thereto which the Administrative
Agent deems advisable. All sums so disbursed by the Administrative Agent shall
constitute part of the Obligations, payable as provided in this Agreement.
6.7. Compliance with Laws. The Borrower will, and will cause each
Subsidiary to, comply with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject including,
without limitation, all Environmental Laws, ERISA and Section 302 and Section
906 of the Sarbanes-Oxley Act of 2002, except where the failure to do so
individually or in the aggregate would not reasonably be expected to result in a
Material Adverse Effect.
6.8. Maintenance of Properties. Subject to Section 6.12, the Borrower
will, and will cause each Subsidiary to, do all things necessary to maintain,
preserve, protect and keep its Property material to the operation of its
business in good repair, working order and condition (ordinary wear and tear
excepted), and make all necessary and proper repairs, renewals and replacements
to any such Property so that its business carried on in connection therewith may
be properly conducted at all times.
6.9. Inspection; Keeping of Books and Records.
(i) The Borrower will, and will cause each Subsidiary to, permit (x) the
Administrative Agent at any time and (y) the Lenders during the
continuance of an Event of Default, in each case by their respective
representatives and agents, to inspect any of the Property, including,
without limitation, the Collateral, books and financial records of the
Borrower and each Subsidiary, to examine and make copies of the books
of accounts and other financial records of the Borrower and each
Subsidiary, and to discuss the affairs, finances and accounts of the
Borrower and each Subsidiary with, and to be advised as to the same
by, their respective officers at such reasonable times and intervals
as the Administrative Agent or any Lender may designate (in each case
other than (x) records subject to attorney-client privilege and (y)
patent-related information the disclosure of which is prohibited by
applicable law or the rules and regulations of a Governmental
Authority). The Borrower shall keep and maintain, and cause each of
its Subsidiaries to keep and maintain, in all material respects,
proper books of record and account in which entries in conformity with
Agreement Accounting Principles shall be made of all dealings and
transactions in relation to their respective businesses and
activities.
(ii) Except to the extent the Administrative Agent may reasonably consent
to any change, the Borrower will, or will cause each Subsidiary to,
continue to account for PIP in the same manner as the Credit Parties
account for PIP as of the Closing Date which is as follows: (i) when
PIP is received by any Credit Parties, funds are initially allocated
(a) as a debit to cash on the Credit Parties' general ledger; and (B)
as a corresponding credit in a contra-account reserve established with
respect to the Credit Parties' accounts, with the funds in such
contra-account not
59
specifically allocated to identified accounts (the amount of funds in
such contra-account from time to time are referred to as "Unapplied
PIP"); (ii) at such time as the Borrower allocates any portion of PIP
to identified accounts, the contra-account for Unapplied PIP is
reduced by that amount and the identified account is extinguished by
that amount; and (iii) at such time as the Borrower determines any
portion of PIP represents an overpayment under applicable Medicare,
Medicaid, TRICARE, CHAMPVA or any other program of any Governmental
Authority, Borrower transfers such overpaid portion on its books from
the contra-account for Unapplied PIP to a liability entry on its
general ledger entitled "PIP Settlements".
6.10. Restricted Payments. The Borrower will not, nor will it permit any
Subsidiary to, make any Restricted Payment (other than dividends payable in its
own capital stock) except that,
6.10.1 Any Subsidiary may declare and pay dividends or make
distributions (i) payable solely in its capital stock to the direct or
indirect holders of its capital stock or (ii) payable in dividends and
distributions to the Borrower or to a Subsidiary that is a Guarantor (and
if such Subsidiary has shareholders other than the Borrower or a Subsidiary
that is a Guarantor, to its shareholders on a pro rata basis).
6.10.2 The Borrower may make dividends or distributions in respect of
capital stock subject to the Closing Date Stock Award Plan so long as the
aggregate amount of dividends or distributions made in cash in respect
thereof does not exceed $2,800,000 and the aggregate amount of dividends or
distributions made in capital stock in respect thereof does not exceed
$5,500,000.
6.10.3 The Borrower may declare and pay dividends with respect to its
capital stock payable solely in additional shares of its capital stock (or
warrants, options, or other rights to acquire additional shares of its
capital stock).
6.10.4 Repurchases of capital stock deemed to occur upon exercise of
stock options if such capital stock represents a portion of the exercise
price of such options, and repurchases of capital stock of Subsidiaries
consisting of directors' qualifying shares or repurchases of shares issued
to third parties to the extent necessary to satisfy any licensing
requirements under applicable law with respect to the Borrower's or any of
its Subsidiaries' businesses.
6.10.5 Cash payments in lieu of the issuance of fractional shares in
connection with the exercise of warrants, options or other securities
convertible into or exchangeable for capital stock of the Borrower;
provided, however, that any such cash payment shall not be for the purpose
of evading the limitations of this Section 6.10.
6.10.6 So long as no Event of Default or Unmatured Event of Default
exists at the time thereof, the Borrower may declare and pay cash dividends
on its capital stock so long as (x) the amount of any dividend for any
share of capital stock does not exceed $0.48, and (y) the aggregate amount
of dividends paid on such capital stock does not exceed $7,000,000 in any
fiscal year.
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6.10.7 Any purchase, repurchase, redemption, retirement or other
acquisition for value of shares of, or options to purchase shares of,
common stock of the Borrower or any of its Subsidiaries from employees,
former employees, directors or former directors of the Borrower or any of
its Subsidiaries (or permitted transferees of such employees, former
employees, directors or former directors), pursuant to the terms of
agreements (including employment agreements) or plans (or amendments
thereto) approved by the Board of Directors under which such individuals
purchase or sell or are granted the option to purchase or sell, shares of
such common stock; provided, however, that the aggregate amount of such
purchases, repurchases, redemptions, retirements and other acquisitions for
value will not exceed $2,000,000 in any calendar year.
6.10.8 Additional Restricted Payments to the extent not otherwise
permitted under this 6.10 so long as the aggregate amount of such
additional Restricted Payments does not exceed $1,000,000 at any time.
6.11. Merger or Dissolution. The Borrower will not, nor will it permit any
Subsidiary to, merge or consolidate into any other Person or dissolve, except
that:
6.11.1 A Guarantor may merge into (x) the Borrower or (y) a
Wholly-Owned Subsidiary that is a Guarantor or becomes a Guarantor promptly
upon the completion of the applicable merger or consolidation.
6.11.2 A Subsidiary that is not a Guarantor and not required to be a
Guarantor may merge or consolidate with or into any other Person; provided,
however, that if the equity interests of such Subsidiary have been pledged
to the Collateral Agent as Collateral, then such merger or consolidation
shall not be permitted unless such Subsidiary is the surviving entity of
such merger or consolidation or such merger or consolidation is approved in
writing by the Administrative Agent prior to the consummation thereof (such
approval not to be unreasonably withheld).
6.11.3 The Borrower or any Subsidiary may consummate any merger or
consolidation in connection with any Permitted Acquisition.
6.11.4 Any Person may merge into the Borrower, provided that the
Borrower shall be the continuing or surviving entity resulting from such
merger.
6.11.5 Any Subsidiary may liquidate or dissolve if the Borrower
determines in good faith that such liquidation or dissolution is in the
best interests of the Borrower and the Subsidiaries and is not materially
disadvantageous to the Lenders.
6.12. Sale of Assets. The Borrower will not, nor will it permit any
Subsidiary to, lease, sell or otherwise dispose of its Property (other than cash
or cash equivalents not constituting Cash Equivalent Investments) to any other
Person, except:
6.12.1 Sales or other dispositions of inventory in the ordinary course
of business.
6.12.2 A disposition or transfer of assets by a Subsidiary to the
Borrower or a Guarantor or by the Borrower to a Guarantor.
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6.12.3 A disposition of obsolete, excess, damaged or worn-out
Property, Property no longer used or useful in the business of the Borrower
or its Subsidiaries or other assets in the ordinary course of business of
the Borrower or any Subsidiary.
6.12.4 The VITAS Healthcare Stock Issuance so long as the form and
substance thereof is reasonably satisfactory to the Required Lenders.
6.12.5 Sales or liquidations of Cash Equivalent Investments.
6.12.6 Each of the Borrower and its Subsidiaries may grant licenses,
sublicenses, leases or subleases to other Persons not materially
interfering with the conduct of the business of the Borrower or any of its
Subsidiaries.
6.12.7 Restricted Payments permitted by Section 6.10.
6.12.8 Investments permitted by Section 6.13.
6.12.9 Liens permitted by Section 6.15.
6.12.10 Sale and Leaseback Transactions permitted by Section 6.27.
6.12.11 Sales of directors' qualifying shares or shares issued to
third parties to the extent necessary to satisfy any licensing requirements
under applicable law with respect to the Borrower's or any of its
Subsidiaries' businesses.
6.12.12 The Service America Asset Sale, so long as (i) Service America
Network, Inc. receives reasonably equivalent value (in the good faith
determination of its Board of Directors) for the assets and liabilities
subject thereto, (ii) such asset sale is consummated on or before December
31, 2005 and (iii) the agreements, documents and instruments evidencing
such asset sale are in form and substance reasonably satisfactory to the
Administrative Agent.
6.12.13 Leases, sales or other dispositions of its Property that,
together with all other Property of the Borrower and its Subsidiaries
previously leased, sold or disposed of (other than dispositions otherwise
permitted by this Section 6.12) as permitted by this Section during any
fiscal year of the Borrower do not exceed $1,000,000 in the aggregate.
6.13. Investments and Acquisitions. The Borrower will not, nor will it
permit any Subsidiary to, make or suffer to exist any Investments (including
without limitation, loans and advances to, and other Investments in,
Subsidiaries), or commitments therefor, or to create any Subsidiary or to become
or remain a partner in any partnership or joint venture, or to make any
Acquisition of any Person, except:
6.13.1 Cash Equivalent Investments.
6.13.2 Existing Investments in Subsidiaries and other Investments in
existence on the Closing Date and described in Schedule 6.13.
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6.13.3 Investments permitted by Section 6.14.5.
6.13.4 Investments (x) by a Credit Party in any newly formed
Subsidiary so long as the newly formed Subsidiary promptly becomes a Credit
Party thereafter and (y) by the Borrower or a Guarantor in equity interests
in their respective Subsidiaries; provided, however, all such Investments
subject to this clause (y) that constitute contributions to capital shall
not, when aggregated with Indebtedness owing by such Subsidiaries to the
Borrower or any Guarantors as permitted by Section 6.14.5, exceed
$2,500,000 at any time outstanding (such amount, the "Permitted Non-Credit
Party Amount"); provided, further, that not more than $400,000 of the
Permitted Non-Credit Party Amount shall at any time consist of Investments
other than Investments in Roto-Rooter of Canada, Ltd. as further described
in Schedule 6.13.
6.13.5 Investments permitted by Section 6.17.
6.13.6 Investments consisting of Contingent Obligations not prohibited
by Section 6.14.
6.13.7 Investments arising out of deposits and pledges permitted by
Section 6.15.
6.13.8 Investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes with,
customers and suppliers.
6.13.9 Investments resulting from transactions permitted by Section
6.11.
6.13.10 Investments resulting from transactions permitted by Section
6.12.
6.13.11 Investments in charitable foundations organized under Section
501(c) of the Code in an amount not to exceed $1,000,000 in the aggregate
in any fiscal year.
6.13.12 Loans and advances to employees, officers and directors of the
Borrower and its Subsidiaries not to exceed in the aggregate at any time
(x) $6,000,000 in respect of split-dollar policies and (y) $2,000,000 in
respect of other loans and advances.
6.13.13 Investments in VNF not exceeding $1,000,000 in the aggregate
in any fiscal year.
6.13.14 Payroll, travel and similar advances to cover matters that are
expected at the time of such advances ultimately to be treated as expenses
for accounting purposes and that are made in the ordinary course of
business.
6.13.15 Investments resulting from stock, obligations or securities
received in settlement of debts created in the ordinary course of business
and owing to the Borrower or any Subsidiary or in satisfaction of
judgments.
6.13.16 Investments in any Person consisting of the licensing of
intellectual property pursuant to joint ventures, strategic alliances or
joint marketing arrangements with such Person, in each case made in the
ordinary course of business.
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6.13.17 Investments in a vendor or supplier consisting of loans or
advances to such vendor or supplier in connection with any guarantees to
the Borrower or any Guarantor of supply by, or to fund the supply capacity
of, such vendor or supplier, in any case not to exceed $2,000,000 at any
time outstanding.
6.13.18 [Intentionally Omitted]
6.13.19 Investments consisting of loans or advances by the Borrower or
a Subsidiary thereof to independent contractors or subcontractors of the
Borrower or a Subsidiary thereof; provided, however, that (x) the proceeds
of such loans or advances are used for equipment purchases in the ordinary
course of business or for working capital expenditures in the ordinary
course of business, (y) the aggregate amount of loans and advances to any
individual independent contractor or subcontractor of the Borrower or a
Subsidiary thereof shall not exceed $350,000, and (z) the aggregate amount
of loans and advances to all independent contractors and subcontractors of
the Borrower and its Subsidiaries shall not exceed $6,000,000.
6.13.20 Additional Investments to the extent not otherwise permitted
under Sections 6.13.1 through 6.13.19 so long as the aggregate amount of
such additional Investments does not exceed $1,000,000 at any time.
6.13.21 Acquisitions meeting the following requirements or otherwise
approved by the Required Lenders (each such Acquisition constituting a
"Permitted Acquisition"):
(i) as of the date of the consummation of such Acquisition, no Event of
Default or Unmatured Event of Default shall have occurred and be
continuing or would result from such Acquisition, and the
representation and warranty contained in Section 5.11 shall be true
both before and after giving effect to such Acquisition;
(ii) such Acquisition is consummated on a non-hostile basis pursuant to a
negotiated acquisition agreement approved by the board of directors or
other applicable governing body of the seller or entity to be
acquired;
(iii) the business to be acquired in such Acquisition is similar or related
to one or more of the lines of business in which the Borrower and its
Subsidiaries are engaged on the Closing Date;
(iv) as of the date of the consummation of such Acquisition, all material
governmental and corporate approvals required in connection therewith
shall have been obtained;
(v) the Purchase Price for any such Acquisition shall not exceed
$50,000,000 and the aggregate purchase price for all such Acquisitions
during any calendar year shall not exceed $80,000,000;
(vi) within 45 days subsequent to the consummation of such Permitted
Acquisition, the Borrower shall have delivered to the Administrative
Agent a pro forma consolidated balance sheet, income statement and
cash flow statement of the
64
Borrower and its Subsidiaries (the "Acquisition Pro Forma"), based on
the Borrower's most recent financial statements delivered pursuant to
Section 6.1.1 and using historical financial statements for the
acquired entity provided by the seller(s) or which shall be complete
and shall fairly present, in all material respects, the financial
condition and results of operations and cash flows of the Borrower and
its Subsidiaries in accordance with Agreement Accounting Principles,
but taking into account such Permitted Acquisition and the funding of
all Credit Extensions in connection therewith, and such Acquisition
Pro Forma shall reflect that, on a pro forma basis, the Borrower would
have been in compliance with the financial covenants set forth in
Sections 6.20 through 6.24 for the period of four fiscal quarters
reflected in the compliance certificate most recently delivered to the
Administrative Agent pursuant to Section 6.1.3 prior to the
consummation of such Permitted Acquisition (giving effect to such
Permitted Acquisition and all Credit Extensions funded in connection
therewith as if made on the first day of such period); and
(vii) within 45 days subsequent to the date on which a Permitted
Acquisition is consummated, the Borrower shall deliver to the
Administrative Agent a documentation, information and certification
package in form and substance reasonably acceptable to the
Administrative Agent, including, without limitation:
(A) a final version (with no amendments to be made thereto that could
reasonably be expected to be materially adverse to the Lenders,
without the approval of the Administrative Agent) of the
acquisition agreement for such Acquisition together with drafts
of the material schedules thereto;
(B) a final version (with no amendments to be made thereto that could
reasonably be expected to be materially adverse to the Lenders,
without the approval of the Administrative Agent) of all
documents, instruments and agreements with respect to any
Indebtedness to be incurred or assumed in connection with such
Acquisition; and
(C) such other documents or information as shall be reasonably
requested by the Administrative Agent in connection with such
Acquisition.
(viii) within 45 days subsequent to the date on which a Permitted
Acquisition is consummated, the Borrower shall deliver (or shall cause
the delivery) to the Administrative Agent and the Collateral Agent all
of the Collateral Documents necessary for the perfection of a first
priority Lien (subject to Liens permitted by Section 6.15) in all of
the Property to be acquired (including, as applicable, equity
interests in the Person being acquired and such Person's
Subsidiaries), all in accordance with the requirements of Section
6.26, and in each case together with opinions of counsel in form and
substance reasonably acceptable to the Administrative Agent and the
Collateral Agent. The Borrower shall also deliver (or shall cause the
delivery) to the Administrative Agent, in accordance with Section
6.25, a supplement to the Guaranty Agreement if the Permitted
Acquisition is an Acquisition of equities and the Person being
acquired is not
65
being merged with the Borrower or any other Person required to be a
Guarantor under the terms of this Agreement, the Guaranty Agreement,
or the Collateral Documents.
6.14. Indebtedness. The Borrower will not, nor will it permit any
Subsidiary to, create, incur or suffer to exist any Indebtedness, except:
6.14.1 The Secured Obligations.
6.14.2 Indebtedness existing on the Closing Date and described in
Schedule 6.14 (and renewals, refinancings or extensions thereof on
non-pricing terms and conditions, taken as a whole, not materially less
favorable to the applicable obligor than such existing Indebtedness and in
a principal amount not in excess of that outstanding as of the date of such
renewal, refinancing or extension plus the amount of any interest, premium
or penalties required to be paid thereon plus fees and expenses associated
therewith).
6.14.3 Indebtedness arising under Rate Management Transactions
permitted under Section 6.17.
6.14.4 Secured or unsecured purchase money Indebtedness (including
Capitalized Leases) and Indebtedness in respect of Sale and Leaseback
Transactions permitted under Section 6.27 that is incurred by the Borrower
or any of its Subsidiaries after the Closing Date to finance the
acquisition of assets used in its business, if (1) the total of all such
Indebtedness for the Borrower and its Subsidiaries taken together incurred
on or after the Closing Date shall not exceed an aggregate principal amount
of $1,000,000 at any one time outstanding, (2) such Indebtedness when
incurred shall not exceed the purchase price of the asset(s) financed, (3)
no such Indebtedness shall be refinanced for a principal amount in excess
of the principal balance outstanding thereon at the time of such
refinancing plus the amount of any interest, premium or penalties required
to be paid thereon plus fees and expenses associated therewith, and (4) any
Lien securing such Indebtedness is permitted under Section 6.15 (such
Indebtedness being referred to herein as "Permitted Purchase Money
Indebtedness").
6.14.5 Indebtedness arising from intercompany loans and advances (i)
made by any Credit Party to any other Credit Party, (ii) made by any
Subsidiary that is not a Credit Party to any Credit Party; provided that
all such Indebtedness described in this clause (ii) shall be expressly
subordinated to the Secured Obligations pursuant to subordination
provisions reasonably acceptable to the Administrative Agent, or (iii) made
by any Credit Party to any Subsidiary that is not a Credit Party; provided
that the aggregate of all such Indebtedness described in this clause (iii)
shall not exceed $250,000 at any time.
6.14.6 Contingent Obligations of the Borrower of any Indebtedness of
any Subsidiary permitted under this Section 6.14.
6.14.7 Contingent Obligations of any Subsidiary of the Borrower that
is a Guarantor with respect to any Indebtedness of the Borrower or any
other Subsidiary permitted under this Section 6.14.
66
6.14.8 [Intentionally Omitted]
6.14.9 Indebtedness outstanding under the Senior Unsecured Indenture
Documents and any extensions, renewals, refinancings or replacements of
such Indebtedness plus interest, premiums, penalties, fees and expenses
paid in respect of refinancing, renewing, extending or refunding such
Indebtedness, so long as the Borrower and its Subsidiaries are in
compliance with Section 6.31.
6.14.10 Indebtedness of any Subsidiary of the Borrower at the time
such Subsidiary is merged or consolidated with or into the Borrower or any
Subsidiary and is not created in contemplation of such event.
6.14.11 [Intentionally Omitted]
6.14.12 Indebtedness arising from judgments or orders in circumstances
not constituting an Event of Default.
6.14.13 Indebtedness incurred under Financial Contracts entered into
in the ordinary course of financial management and not for speculative
purposes.
6.14.14 Indebtedness in respect of performance bonds, bankers'
acceptances and surety or appeal bonds provided by the Borrower and its
Subsidiaries in the ordinary course of their business.
6.14.15 Indebtedness arising from the agreements of the Borrower or a
Subsidiary providing for indemnification, adjustment of purchase price or
similar obligations, in each case incurred in connection with the
disposition of any business, assets or a Subsidiary of the Borrower in
accordance with the terms of this Agreement other than guarantees of
Indebtedness incurred by any Person acquiring all or any portion of such
business, assets or Subsidiary for the purpose of financing such
acquisition.
6.14.16 Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument drawn against
insufficient funds in the ordinary course of business, provided that such
Indebtedness is extinguished within five Business Days of its incurrence.
6.14.17 Obligations arising from or representing deferred compensation
to employees of the Borrower or its Subsidiaries that constitute or are
deemed to be Indebtedness under Agreement Accounting Principles and that
are incurred in the ordinary course of business.
6.14.18 Indebtedness incurred by a Guarantor, to the extent that the
proceeds of such Indebtedness are used to repay Indebtedness under this
Agreement.
6.14.19 Indebtedness arising under or in connection with Letters of
Credit in an aggregate amount not to exceed $35,000,000 at any time so long
as such Letters of Credit are issued in connection with worker's
compensation claims or laws, unemployment
67
insurance, old age pensions, or other social security or retirement
benefits, or similar legislation.
6.14.20 Additional unsecured Indebtedness of the Borrower or any
Subsidiary, to the extent not otherwise permitted under this Section 6.14;
provided, however, that the aggregate principal amount of such Indebtedness
shall not exceed $5,000,000 at any time outstanding.
6.15. Liens. The Borrower will not, nor will it permit any Subsidiary to,
create, incur, or suffer to exist any Lien in, of or on the Property of the
Borrower or any of its Subsidiaries, except:
6.15.1 Liens securing Secured Obligations.
6.15.2 Liens for taxes, assessments or governmental charges or levies
on its Property if the same shall not at the time be delinquent or
thereafter can be paid without penalty, or are being contested in good
faith and by appropriate proceedings and for which reserves, if any,
required in accordance with Agreement Accounting Principles shall have been
set aside on its books.
6.15.3 Liens imposed by law, such as landlords', wage earners',
carriers', warehousemen's and mechanics' liens and other similar liens
arising in the ordinary course of business which secure payment of
obligations not more than forty-five (45) days past due or which are being
contested in good faith by appropriate proceedings and for which reserves,
if any, required in accordance with Agreement Accounting Principles shall
have been set aside on its books.
6.15.4 Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions, or other
social security or retirement benefits, or similar legislation.
6.15.5 Liens existing on the Closing Date and described in Schedule
6.15.
6.15.6 Deposits securing liability to insurance carriers under
insurance or self-insurance arrangements.
6.15.7 Deposits to secure the performance of bids, contracts (other
than for borrowed money), leases, public or statutory obligations, surety
and appeal bonds, contested taxes, the payment of rent, performance bonds
and other obligations of a like nature incurred in the ordinary course of
business.
6.15.8 Easements, reservations, rights-of-way, zoning, building and
other restrictions, survey exceptions and other similar encumbrances as to
real property of the Borrower and its Subsidiaries which customarily exist
on properties of corporations engaged in similar activities and similarly
situated and which do not materially interfere with the conduct of the
business of the Borrower or such Subsidiary conducted at the property
subject thereto.
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6.15.9 Purchase money Liens securing Permitted Purchase Money
Indebtedness (as defined in Section 6.14); provided, that such Liens shall
not apply to any property of the Borrower or its Subsidiaries other than
that purchased with the proceeds of such Permitted Purchase Money
Indebtedness.
6.15.10 Liens existing on any asset of any Subsidiary of the Borrower
at the time such Subsidiary becomes a Subsidiary and not created in
contemplation of such event.
6.15.11 Liens on any asset securing Indebtedness incurred or assumed
for the purpose of financing or refinancing 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 eighteen (18) months after the
acquisition or completion or construction thereof.
6.15.12 Liens existing on any asset of any Subsidiary of the Borrower
at the time such Subsidiary is merged or consolidated with or into the
Borrower or any Subsidiary and not created in contemplation of such event.
6.15.13 Liens existing on any asset prior to the acquisition thereof
by the Borrower or any Subsidiary and not created in contemplation thereof;
provided that such Liens do not encumber any other property or assets.
6.15.14 Liens arising out of the refinancing, extension, renewal or
refunding of any Indebtedness secured by any Lien permitted under this
Section 6.15; provided that (a) such Indebtedness is not secured by any
additional assets, and (b) the principal amount of such Indebtedness
secured by any such Lien is not increased, except to the extent such
increase includes interest, premiums, penalties, fees and expenses paid in
respect of refinancing, extending, renewing or refunding such Indebtedness.
6.15.15 Bankers' liens and rights of set off with respect to customary
depositary arrangements entered into in the ordinary course of business.
6.15.16 Liens on assets of any Subsidiary of any Credit Party in favor
of any Credit Party securing borrowings from such Credit Party.
6.15.17 [Intentionally Omitted]
6.15.18 Liens in favor of customs and revenue authorities which secure
payment of customs duties in connection with the importation of goods.
6.15.19 Liens arising out of Capitalized Leases or Operating Leases.
6.15.20 Licenses, sublicenses, leases or subleases granted to others
in the ordinary course of business that do not interfere in any material
respect with the business of the Borrower and its Subsidiaries.
6.15.21 Liens arising from judgments, awards, orders or attachments in
circumstances not constituting an Event of Default.
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6.15.22 Liens affecting the interest of the landlord of any ground
lease.
6.15.23 Liens securing Indebtedness permitted by Section 6.14.14.
6.15.24 Liens issued in favor of surety bonds in existence on the
Closing Date and identified on Schedule 6.15.
6.15.25 Liens of any landlord arising under a real property lease to
the extent such Liens arise in the ordinary course of business and secure
obligations not more than forty-five (45) days past due or which are being
contested in good faith by appropriate proceedings and for which reserves,
if any, required in accordance with Agreement Accounting Principles shall
have been set aside on its books.
6.15.26 Liens in favor of any Holder of Secured Obligations securing
Rate Management Obligations permitted under Section 6.17.
6.15.27 Liens deemed to exist in connection with Cash Equivalent
Investments of the type described in clause (v) of the definition thereof.
6.15.28 Rights of recoupment and any other Liens, rights and benefits
of any governmental Third Party Payor with respect to Governmental
Receivables.
6.15.29 Liens upon cash collateral securing obligations owing under or
in connection with those Letters of Credit described in Section 6.14.19.
6.15.30 Additional Liens to the extent not otherwise permitted under
this Section 6.15 so long as the aggregate amount of Indebtedness secured
thereby does not exceed $1,000,000 at any time and the aggregate value of
the Property subject thereto does not exceed $1,000,000 at any time.
In addition, neither the Borrower nor any of its Subsidiaries shall become
a party to any agreement, note, indenture or other instrument, or take any other
action, which would prohibit the creation of a Lien on any of its Properties or
other assets in favor of the Collateral Agent or the Administrative Agent for
the benefit of the Holders of Secured Obligations; provided, that (i) any
agreement, note, indenture or other instrument in connection with (A) purchase
money Indebtedness (including Capitalized Leases) and Indebtedness in respect of
Sale and Leaseback Transactions for which the related Liens are permitted
hereunder may prohibit the creation of a Lien in favor of the Collateral Agent
or the Administrative Agent for the benefit of the Holders of Secured
Obligations, with respect to the assets or Property obtained with the proceeds
of such Indebtedness, and (B) the Senior Unsecured Notes and other agreements
with respect to unsecured Indebtedness governed by indentures or credit
agreements or note purchase agreements with institutional investors permitted by
this Agreement may contain terms that are not materially more restrictive (as
reasonably determined by the Administrative Agent), taken as a whole, than those
contained in the Senior Unsecured Notes Documents, (ii) this paragraph shall not
prohibit (A) customary restrictions contained in purchase and sale agreements
limiting the transfer of the subject assets pending closing, (B) customary
non-assignment provisions in leases and other contracts entered into in the
ordinary course of business, (C) agreements in effect as of the Closing Date and
not entered into in contemplation of the transactions effected in connection
70
with the VITAS Healthcare Acquisition, (D) any restriction existing under
agreements relating to assets acquired by the Borrower or a Subsidiary in a
transaction permitted hereby, and (E) any restriction or condition as required
by applicable law; provided that such agreements existed at the time of such
acquisition, were not put into place in anticipation of such acquisition and are
not applicable to any assets other than assets so acquired and (iii) any
restriction existing under any agreement of a Person acquired as a Subsidiary
pursuant to a transaction permitted hereby; provided that any such agreement
existed at the time of such acquisition, was not put into place in anticipation
of such acquisition and was not applicable to any Person or assets other than
the Person or assets so acquired.
6.16. Transactions with Affiliates. The Borrower will not, and will not
permit any Subsidiary to, enter into any transaction (including, without
limitation, the purchase or sale of any Property or service) with, or make any
payment or transfer to, any Affiliate (other than the Borrower and its
Subsidiaries) except (i) pursuant to the reasonable requirements of the
Borrower's or such Subsidiary's business and upon terms no less favorable to the
Borrower or such Subsidiary than the Borrower or such Subsidiary would obtain in
a comparable arm's-length transaction, (ii) transactions between or among the
Credit Parties not involving any other Affiliate, (iii) transactions between or
among Subsidiaries that are not Guarantors not involving any other Affiliate,
(iv) the Borrower and its Subsidiaries may make loans and advances to directors,
officers, and employees of the Borrower and its Subsidiaries in the ordinary
course of business, (v) the Borrower and its Subsidiaries may make payments in
respect of transactions required to be made pursuant to agreements or
arrangements in effect on the Closing Date and set forth on Schedule 6.16, (vi)
the Borrower and its Subsidiaries may enter into, make payments under, or issue
securities, stock options or similar rights pursuant to employment arrangements,
employee benefit plans, equity option plans, indemnification provisions and
other compensatory arrangements with directors, officers, and employees of the
Borrower and its Subsidiaries in the ordinary course of business, so long as
such payments and issuances otherwise comply with the terms of this Agreement,
(vii) the Borrower and its Subsidiaries may make Restricted Payments permitted
by Section 6.10, (viii) the Borrower and its Subsidiaries may enter into
transactions permitted by Section 6.11, 6.12, 6.13 or 6.14, (ix) the
Transactions and (x) the making of severance payments to directors, officers or
employees of VITAS Healthcare that are required pursuant to arrangements in
effect prior to the date that the Borrower acquired VITAS Healthcare.
6.17. Financial Contracts. The Borrower will not, nor will it permit any
Subsidiary to, enter into or remain liable upon any Rate Management Transactions
except for those entered into in the ordinary course of business for bona fide
hedging purposes and not for speculative purposes.
6.18. Subsidiary Covenants. The Borrower will not, and will not permit any
Subsidiary to, create or otherwise cause to become effective any consensual
encumbrance or restriction of any kind on the ability of any Subsidiary (i) to
pay dividends or make any other distribution on its stock, (ii) to pay any
Indebtedness or other obligation owed to the Borrower or any other Subsidiary,
(iii) to make loans or advances or other Investments in the Borrower or any
other Subsidiary, or (iv) to sell, transfer or otherwise convey any of its
property to the Borrower or any other Subsidiary, except (A) any restriction
existing under (1) the Loan Documents, (2) agreements disclosed in Schedule
6.18, (3) the Senior Unsecured Notes Documents and
71
agreements with respect to Indebtedness permitted by this Agreement containing
provisions described in clauses (i), (ii) and (iii) above that are not
materially more restrictive (as reasonably determined by the Administrative
Agent), taken as a whole, than those of the Senior Unsecured Notes Documents,
(B) customary non-assignment, subletting or transfer provisions in leases,
licenses and other contracts entered into in the ordinary course of business,
(C) customary restrictions contained in purchase and sale agreements limiting
the transfer of the subject assets pending closing, (D) any restriction or
condition as required by applicable law, (E) any restriction existing under
agreements relating to assets acquired by the Borrower or a Subsidiary in a
transaction permitted hereby; provided that such agreements existed at the time
of such acquisition, were not put into place in anticipation of such acquisition
and are not applicable to any assets other than assets so acquired, (F) any
restriction existing under any agreement of a Person acquired as a Subsidiary in
a transaction permitted hereby; provided any such agreement existed at the time
of such acquisition, was not put into place in anticipation of such acquisition
and was not applicable to any Person or assets other than the Person or assets
so acquired, (G) agreements with respect to Indebtedness secured by Liens
permitted by Section 6.15 that restrict the ability to transfer the assets
securing such Indebtedness and (H) any encumbrance or restriction pursuant to an
agreement effecting a refinancing of Indebtedness incurred pursuant to an
agreement referred to in clause (A)(2)(E) or (F) of this covenant or this clause
(H) or contained in any amendment to an agreement referred to in clause
(A)(2)(E) or (F) of this covenant or this clause (H); provided, however, that
the encumbrances and restrictions contained in any such refinancing agreement or
amendment, taken as a whole, are not materially more restrictive than the
encumbrances and restrictions contained in such predecessor agreements (as
reasonably determined by the Administrative Agent).
6.19. Contingent Obligations. The Borrower will not, nor will it permit
any Subsidiary to, make or suffer to exist any Contingent Obligation in respect
of Indebtedness of another Person (including, without limitation, any Contingent
Obligation with respect to the obligations of a Subsidiary), except (i) by
endorsement of instruments for deposit or collection in the ordinary course of
business, (ii) the Reimbursement Obligations (iii) any Contingent Obligation in
respect of the Secured Obligations, (iv) any Indebtedness permitted by Section
6.14, and (v) any Contingent Obligation in respect of any Indebtedness permitted
by Section 6.14.
6.20. Leverage Ratio; Senior Leverage Ratio.
6.20.1 Leverage Ratio. The Borrower will not permit the ratio (the
"Leverage Ratio"), determined as of the end of each of its fiscal quarters
set forth below, of (i) Consolidated Funded Indebtedness of the Borrower to
(ii) Consolidated EBITDA for the then most-recently ended four fiscal
quarters (subject to the remainder of this Section 6.20.1) to be greater
than the applicable "Maximum Leverage Ratio" set forth below:
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Fiscal Quarter Ending Maximum Leverage Ratio
--------------------- ----------------------
December 31, 2004 5.50 to 1.00
As of the Closing Date and each of 4.00 to 1.00
March 31, 2005, June 30, 2005,
September 30, 2005,
December 31, 2005, March 31, 2006,
June 30, 2006, September 30, 2006 and
December 31, 2006
Each of March 31, 2007, June 30, 3.75 to 1.00
2007, September 30, 2007, December
31, 2007, March 31, 2008, June 30,
2008, September 30, 2008 and
December 31, 2008
Each fiscal quarter thereafter 3.50 to 1.00
Notwithstanding the foregoing, for the purposes of the calculation of
covenant compliance for the quarter ended December 31, 2004, the Borrower
shall use such calculation methodology as was set forth in the Prior Credit
Agreement, giving effect to and including the repayment of the Senior
Secured Notes.
6.20.2 Senior Leverage Ratio. The Borrower will not permit the ratio
(the "Senior Leverage Ratio"), determined as of the end of each of its
fiscal quarters set forth below, of (i) Consolidated Senior Funded Debt of
the Borrower to (ii) Consolidated EBITDA for the then most recently ended
four fiscal quarters (subject to the remainder of this Section 6.20.2) to
be greater than the applicable "Maximum Senior Leverage Ratio" set forth
below:
73
Fiscal Quarter Ending Maximum Senior Leverage Ratio
--------------------- -----------------------------
December 31, 2004 3.375 to 1.00
As of the Closing Date and each of 3.00 to 1.00
March 31, 2005, June 30, 2005,
September 30, 2005 and
December 31, 2005
Each fiscal quarter thereafter 2.75 to 1.00
Notwithstanding the foregoing, for the purposes of the calculation of
covenant compliance for the quarter ended December 31, 2004, the Borrower
shall use such calculation methodology as was set forth in the Prior Credit
Agreement, giving effect to and including the repayment of the Senior
Secured Notes.
6.21. Fixed Charge Coverage Ratio. The Borrower will not permit the ratio
(the "Fixed Charge Coverage Ratio"), determined as of the end of each of its
fiscal quarters for the then most-recently ended four fiscal quarters of (i)
Consolidated EBITDA minus Consolidated Capital Expenditures to (ii) Consolidated
Interest Expense plus Consolidated Current Maturities during such period
(including, without limitation, Capitalized Lease Obligations) plus cash
dividends paid on the equity interests of the Borrower during such period plus
expenses for taxes paid or taxes accrued during such period, all calculated for
the Borrower and its Subsidiaries on a consolidated basis, to be less than the
applicable "Minimum Fixed Charge Coverage Ratio" below:
74
Fiscal Quarter Ending Minimum Fixed Charge Coverage Ratio
--------------------- -----------------------------------
December 31, 2004 1.15 to 1.00
As of the Closing Date and each of 1.25 to 1.00
March 31, 2005, June 30, 2005,
September 30, 2005 and
December 31, 2005
Each of March 31, 2006, June 30, 1.375 to 1.00
2006, September 30, 2006, and
December 31, 2006
Each fiscal quarter thereafter 1.50 to 1.00
Notwithstanding the foregoing, for the purposes of the calculation of
covenant compliance for the quarter ended December 31, 2004, the Borrower shall
use such calculation methodology as was set forth in the Prior Credit Agreement,
giving effect to and including the repayment of the Senior Secured Notes.
6.22. Minimum Consolidated Net Worth. The Borrower will at all times
maintain Consolidated Net Worth of not less than (i) 85% of Consolidated Net
Worth at December 31, 2004 plus (ii) 50% of Consolidated Net Income (if
positive) earned in each fiscal quarter beginning with the fiscal quarter ending
March 31, 2005 plus (iii) the amount of all Net Cash Proceeds resulting from
issuances of the Borrower's or any Subsidiary's capital stock or other equity
interests to a Person other than the Borrower or any Subsidiary.
6.23. Capital Expenditures. The Borrower will not, nor will it permit any
Subsidiary to, expend, or be committed to expend, in excess of $30,000,000 (the
"Base Amount") for Capital Expenditures of the Borrower and its Subsidiaries
during any fiscal year of the Borrower; provided, however, that if the aggregate
amount of Capital Expenditures actually expended during any such fiscal year is
less than the Base Amount (the difference being the "Unused CapEx Amount"),
then, the permitted amount of Capital Expenditures during the immediately
succeeding fiscal year (and no other succeeding fiscal year) shall be an amount
equal to the Base Amount plus the Unused CapEx Amount, with the Unused Cap Ex
Amount being deemed utilized first with any excess Base Amount available to use
in the immediately succeeding fiscal year in accordance herewith.
6.24. Operating Leases. The Borrower will not, nor will it permit any
Subsidiary to, enter into or remain liable upon any Operating Lease, synthetic
lease or tax ownership operating lease, except for Operating Leases for which
the Borrower's and its Subsidiaries' annual aggregate payment obligations in
respect of fixed lease payments do not exceed $30,000,000.
75
6.25. Guarantors. The Borrower shall cause each of its Domestic
Subsidiaries to guarantee pursuant to the Guaranty Agreement or supplement
thereto the Secured Obligations. In furtherance of the above, the Borrower shall
promptly (and in any event within forty-five (45) days thereof) (i) provide
written notice to the Administrative Agent upon any Person becoming a Domestic
Subsidiary, setting forth information in reasonable detail describing all of the
assets of such Person, (ii) cause such Person to execute a supplement to the
Guaranty Agreement and such other Collateral Documents as are necessary for the
Borrower and its Subsidiaries to comply with Section 6.26, (iii) cause the
Applicable Pledge Percentage of the issued and outstanding equity interests of
such Person to be delivered to the Collateral Agent (together with undated stock
powers signed in blank, if applicable) and pledged to the Collateral Agent
pursuant to an appropriate pledge agreement(s) in substantially the form of the
Pledge and Security Agreement (or joinder or other supplement thereto) and
otherwise in form reasonably acceptable to the Collateral Agent and (iv) deliver
such other documentation as the Collateral Agent may reasonably request in
connection with the foregoing, including, without limitation, certified
resolutions and other authority documents of such Person and, to the extent
requested by the Collateral Agent, favorable opinions of counsel to such Person
(which shall cover, among other things, the legality, validity, binding effect
and enforceability of the documentation referred to above), all in form, content
and scope reasonably satisfactory to the Collateral Agent; provided, however,
that in respect of subclause (iii), no Credit Party shall be required to pledge
(w) the equity interests of Roto-Rooter of Canada, Ltd. or VNF, (x) more than
40% of the equity interests of RR Plumbing Services Corporation, (y) more than
49% of the equity interests of Complete Plumbing Services Inc., or (z) more than
80% of the equity interests of Nurotoco of New Jersey, Inc.; provided, further,
that, except to the extent necessary to satisfy any licensing requirement under
applicable law with respect to the Borrower's or any Subsidiary's business, the
Borrower will not permit, nor will it permit any other Credit Party to, grant a
security interest in, pledge or deliver to any non-Credit Party those equity
interests that are not pledged or delivered to the Collateral Agent pursuant to
this Section 6.25.
6.26. Collateral. The Borrower will cause, and will cause each other
Credit Party to cause, all of its owned Property (other than real property) to
be subject at all times to first priority, perfected Liens in favor of the
Collateral Agent for the benefit of the creditors of the Borrower that are party
to the Intercreditor Agreement, including, without limitation, the Holders of
Secured Obligations, to secure the Secured Obligations and the other
Indebtedness subject to the Intercreditor Agreement in accordance with the terms
and conditions of the Collateral Documents, subject in any case to Liens
permitted by Section 6.15 hereof; provided, however, that the Borrower and the
other Credit Parties shall not be required to comply with the terms of the
Federal Assignment of Claims Act in connection with their pledge of any
Collateral to the Collateral Agent. Without limiting the generality of the
foregoing, the Borrower will cause the Applicable Pledge Percentage of the
issued and outstanding equity interests of each Pledge Subsidiary directly owned
by the Borrower or any other Credit Party to be subject at all times to a first
priority, perfected Lien in favor of the Collateral Agent in accordance with the
terms and conditions of this Agreement and the Collateral Documents or such
other security documents as the Collateral Agent shall reasonably request, in
each case to the extent, and within such time period as is, reasonably required
by the Collateral Agent, subject in any case to Liens permitted by Section 6.15.
Notwithstanding the foregoing, (i) no Credit Party shall be required to pledge
(A) the equity interests of Roto-Rooter of Canada, Ltd. or VNF, (B) more than
40% of the equity interests of RR Plumbing Services Corporation, (C) more than
49% of the equity interests of
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Complete Plumbing Services Inc., or (D) more than 80% of the equity interests of
Nurotoco of New Jersey, Inc.; provided, however, that, except to the extent
necessary to satisfy any licensing requirement under applicable law with respect
to the Borrower's or any Subsidiary's business, the Borrower will not permit,
nor will it permit any other Credit Party to, grant a security interest in,
pledge or deliver to any non-Credit Party those equity interests that are not
pledged or delivered to the Collateral Agent pursuant to this Section 6.26; and
(ii) no pledge agreement in respect of the equity interests of a Foreign
Subsidiary shall be required hereunder to the extent such pledge thereunder is
prohibited by applicable law or its counsel reasonably determines that such
pledge would not provide material credit support for the benefit of the
creditors of the Borrower that are party to the Intercreditor Agreement pursuant
to legally valid, binding and enforceable pledge agreements.
6.27. Sale and Leaseback Transactions. The Borrower shall not, nor shall
it permit any Subsidiary to, enter into any Sale and Leaseback Transaction,
other than Sale and Leaseback Transactions in respect of which the net cash
proceeds received in connection therewith does not exceed $250,000 in the
aggregate during any fiscal year of the Borrower, determined on a consolidated
basis for the Borrower and its Subsidiaries.
6.28. Intentionally Omitted.
6.29. Intentionally Omitted.
6.30. Prepayment of Indebtedness. The Borrower will not, and will not
permit any Subsidiary, to voluntarily prepay any Indebtedness other than (i) the
Obligations and Indebtedness permitted by Section 6.14.4, 6.14.5, and 6.14.9,
(ii) any other Indebtedness so long as such other Indebtedness is voluntarily
prepaid with cash proceeds resulting from the sale to non-Affiliates of equity
interests in the Borrower or any Subsidiary thereof, (iii) pursuant to renewals,
refinancings and extensions of Indebtedness permitted by Section 6.14, and (iv)
payments of Indebtedness that would become due or would be required to be
redeemed or repurchased as a result of the voluntary sale or transfer of
Property that is being sold or transferred.
6.31. Amendments to Senior Unsecured Indenture Documents. The Borrower
will not, and will not permit any Subsidiary to, amend the Senior Unsecured
Notes, the other Senior Unsecured Indenture Documents or any document, agreement
or instrument evidencing any Indebtedness incurred pursuant to the Senior
Unsecured Indenture Documents (or any replacements, substitutions, extensions or
renewals thereof) or pursuant to which such Indebtedness is issued to the extent
such amendment, modification or supplement provides for the following or which
has any of the following effects: (i) results in the Indebtedness outstanding
under the Senior Unsecured Indenture Documents being secured by the Borrower's
or any Subsidiary's Property; (ii) prohibits the Borrower or any Subsidiary from
securing the Secured Obligations (iii) shortens the final maturity date of the
Indebtedness outstanding under the Senior Unsecured Indenture Documents or
otherwise accelerates the amortization schedule for Indebtedness outstanding
under the Senior Unsecured Indenture Documents; (iv) increases the overall
principal amount of the Indebtedness outstanding under the Senior Unsecured
Indenture Documents or increases the amount of any single scheduled installment
of principal or interest other than in connection with issuances of additional
Senior Unsecured Notes permitted
77
by Section 6.14.9; (v) shortens or accelerates the date upon which any
installment of principal or interest becomes due or adds any additional
mandatory prepayment or redemption provisions not set forth in the Senior
Unsecured Indenture Documents on the Closing Date; or (vi) adds to or otherwise
includes in any Senior Unsecured Indenture Document a default or event of
default provision, including, without limitation, a cross-default, that is
triggered by the occurrence of an Event of Default or Unmatured Event of Default
under the Loan Documents unless such Event of Default hereunder results from the
non-payment of the Obligations upon the maturity thereof or the acceleration of
the Obligations.
ARTICLE VII
EVENTS OF DEFAULT
The occurrence of any one or more of the following events shall constitute
an Event of Default:
7.1 Any representation or warranty made or deemed made by or on behalf of
the Borrower or any of its Subsidiaries to the Lenders or the Administrative
Agent under or in connection with this Agreement, any Credit Extension, or any
certificate or information delivered in connection with this Agreement or any
other Loan Document shall be false in any material respect on the date as of
which made or deemed made.
7.2 Nonpayment of (i) principal of any Loan when due, (ii) any
Reimbursement Obligation within one Business Day after the same becomes due, or
(iii) interest upon any Loan or any Commitment Fee, LC Fee or other Obligations
under any of the Loan Documents within five (5) Business Days after such
interest, fee or other Obligation becomes due.
7.3 The breach by the Borrower of any of the terms or provisions of Section
6.2, 6.10, 6.11, 6.12, 6.13, 6.14, 6.15, 6.16, 6.17, 6.18, 6.19, 6.20, 6.21,
6.22, 6.23, 6.24, 6.25, 6.26, 6.27, 6.30, and 6.31.
7.4 The breach by the Borrower (other than a breach which constitutes an
Event of Default under another Section of this Article VII) of any of the terms
or provisions of (i) this Agreement or (ii) any other Loan Document (beyond the
applicable grace period with respect thereto, if any), in each case which is not
remedied within thirty (30) days after the earlier to occur of (x) written
notice thereof from the Administrative Agent or any Lender to the Borrower or
(y) an Authorized Officer otherwise becomes aware of any such breach.
7.5 Failure of the Borrower or any of its Subsidiaries to pay when due any
Material Indebtedness (subject to any applicable grace period with respect
thereto, if any, set forth in the Material Indebtedness Agreement evidencing
such Material Indebtedness) which failure has not been (i) timely cured or (ii)
waived in writing by the requisite holders of such Material Indebtedness; or the
default by the Borrower or any of its Subsidiaries in the performance (beyond
the applicable grace period with respect thereto, if any) of any term, provision
or condition contained in any Material Indebtedness Agreement and such default
has not been (x) timely cured or (y) waived in writing by the requisite holders
of the Material Indebtedness in respect thereof, or any other event shall occur
or condition exist, the effect of which default,
78
event or condition is to cause, or to permit the holder(s) of such Material
Indebtedness or the lender(s) under any Material Indebtedness Agreement to
cause, such Material Indebtedness to become due prior to its stated maturity or
any commitment to lend under any Material Indebtedness Agreement to be
terminated prior to its stated expiration date; or any Material Indebtedness of
the Borrower or any of its Subsidiaries shall be declared to be due and payable
or required to be prepaid or repurchased (other than by a regularly scheduled
payment) prior to the stated maturity thereof, in each case other than secured
Indebtedness that becomes due as a result of the voluntary sale or transfer of
the Property securing such Indebtedness; or the Borrower or any of its
Subsidiaries shall not pay, or admit in writing its inability to pay, its debts
generally as they become due.
7.6 The Borrower or any of its Subsidiaries shall (i) have an order for
relief entered with respect to it under the Federal bankruptcy laws as now or
hereafter in effect, (ii) make an assignment for the benefit of creditors, (iii)
apply for, seek, consent to, or acquiesce in, the appointment of a receiver,
custodian, trustee, examiner, liquidator or similar official for it or any
Substantial Portion of its Property, (iv) institute any proceeding seeking an
order for relief under the Federal bankruptcy laws as now or hereafter in effect
or seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution,
winding up, liquidation, reorganization, arrangement, adjustment or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors or fail to file an answer or other pleading
denying the material allegations of any such proceeding filed against it, or (v)
take any corporate or partnership action to authorize or effect any of the
foregoing actions set forth in this Section 7.6.
7.7 Without the application, approval or consent of the Borrower or any of
its Subsidiaries, a receiver, trustee, examiner, liquidator or similar official
shall be appointed for the Borrower or any of its Subsidiaries or any
Substantial Portion of its Property, or a proceeding described in Section
7.6(iv) shall be instituted against the Borrower or any of its Subsidiaries and
such appointment continues undischarged or such proceeding continues undismissed
or unstayed for a period of sixty (60) consecutive days.
7.8 The Borrower or any of its Subsidiaries shall fail within thirty (30)
days to pay, bond or otherwise discharge one or more judgments or orders for the
payment of money in excess of $10,000,000 (or the equivalent thereof in
currencies other than Dollars) in the aggregate, which judgment(s), in any such
case, is/are not stayed on appeal or otherwise being appropriately contested in
good faith.
7.9 The Unfunded Liabilities of all Single Employer Plans shall exceed
$5,000,000 in the aggregate, or any Reportable Event shall occur in connection
with any Plan and such Reportable Event would reasonably be expected to have a
Material Adverse Effect.
7.10 Any Change of Control shall occur.
7.11 The Borrower or any other member of the Controlled Group shall have
been notified by the sponsor of a Multiemployer Plan that it has incurred,
pursuant to Section 4201 of ERISA, withdrawal liability to such Multiemployer
Plan in an amount which, when aggregated with all other amounts required to be
paid to Multiemployer Plans by the Borrower or any other
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member of the Controlled Group as withdrawal liability (determined as of the
date of such notification), exceeds $5,000,000 or requires payments exceeding
$5,000,000 per annum.
7.12 The Borrower or any other member of the Controlled Group shall have
been notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or is being terminated, within the meaning of Title IV
of ERISA, if as a result of such reorganization or termination the aggregate
annual contributions of the Borrower and the other members of the Controlled
Group (taken as a whole) to all Multiemployer Plans which are then in
reorganization or being terminated have been or will be increased, in the
aggregate, over the annual amounts contributed to such Multiemployer Plans for
the respective plan years of such Multiemployer Plans immediately preceding the
plan year in which the reorganization or termination occurs by an amount
exceeding $5,000,000.
7.13 Other than with respect to environmental proceedings, investigations,
violations, or liabilities disclosed by the Borrower to the Administrative Agent
and the Lenders prior to the Closing Date, the Borrower or any of its
Subsidiaries shall (i) be the subject of any proceeding or investigation
pertaining to the release by the Borrower, any of its Subsidiaries or any other
Person of any toxic or hazardous waste or substance into the environment, or
(ii) violate any Environmental Law, which, in the case of an event described in
clause (i) or clause (ii), has resulted in liability to the Borrower or any of
its Subsidiaries in an amount equal to $5,000,000 or more, which liability is
not paid, bonded or otherwise discharged within forty-five (45) days or which is
not stayed on appeal and being appropriately contested in good faith.
7.14 Any Loan Document shall fail to remain in full force or effect or any
action shall be taken by the Borrower to assert the invalidity or
unenforceability of, or which results in the invalidity or unenforceability of,
any Loan Document or any Lien in favor of the Collateral Agent or the
Administrative Agent under the Loan Documents as to assets that are material to
the Borrower and its Subsidiaries taken as a whole, or such Lien shall not have
the priority contemplated by the Loan Documents, except (i) as a result of the
sale or other disposition of the applicable Collateral in a transaction
permitted under the Loan Documents or (ii) as a result of the Collateral Agent's
failure to maintain possession of any stock certificates, promissory notes or
other instruments delivered to it under any Loan Document or as a result of the
negligent or willful failure of the Collateral Agent to take such action as is
necessary to continue such Liens.
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1. Acceleration.
(i) If any Event of Default described in Section 7.6 or 7.7 occurs with
respect to the Borrower, the obligations of the Lenders to make Loans
hereunder and the obligation and power of the LC Issuer to issue
Facility LCs shall automatically terminate and the Secured Obligations
shall immediately become due and payable without any election or
action on the part of the Administrative Agent, the LC Issuer or any
Lender, and the Borrower will be and become thereby unconditionally
obligated, without any further notice, act or demand, to pay the
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Administrative Agent an amount in immediately available funds, which
funds shall be held in the Facility LC Collateral Account, equal to
the difference of (x) the amount of LC Obligations at such time less
(y) the amount or deposit in the Facility LC Collateral Account at
such time which is free and clear of all rights and claims of third
parties and has not been applied against the Secured Obligations (the
"Collateral Shortfall Amount"). If any other Event of Default occurs,
the Required Lenders (or the Administrative Agent with the consent of
the Required Lenders) may (a) terminate or suspend the obligations of
the Lenders to make Loans hereunder and the obligation and power of
the LC Issuer to issue Facility LCs, or declare the Secured
Obligations to be due and payable, or both, whereupon the Secured
Obligations shall become immediately due and payable, without
presentment, demand, protest or notice of any kind, all of which the
Borrower hereby expressly waives and (b) upon notice to the Borrower
and in addition to the continuing right to demand payment of all
amounts payable under this Agreement, make demand on the Borrower to
pay, and the Borrower will forthwith upon such demand and without any
further notice or act pay to the Administrative Agent the Collateral
Shortfall Amount which funds shall be deposited in the Facility LC
Collateral Account.
(ii) If at any time while any Event of Default is continuing, the
Administrative Agent determines that the Collateral Shortfall Amount
at such time is greater than zero, the Administrative Agent may make
demand on the Borrower to pay, and the Borrower will, forthwith upon
such demand and without any further notice or act, pay to the
Administrative Agent the Collateral Shortfall Amount, which funds
shall be deposited in the Facility LC Collateral Account.
(iii) While an Event of Default is continuing, the Administrative Agent may
at any time or from time to time after funds are deposited in the
Facility LC Collateral Account, apply such funds to the payment of the
Secured Obligations in respect of Facility LCs and any other amounts
as shall from time to time have become due and payable by the Borrower
to the Lenders or the LC Issuer under the Loan Documents.
(iv) At any time while any Event of Default is continuing, neither the
Borrower nor any Person claiming on behalf of or through the Borrower
shall have any right to withdraw any of the funds held in the Facility
LC Collateral Account. After all of the Secured Obligations have been
indefeasibly paid in full and the Aggregate Revolving Loan Commitment
and Aggregate Term Loan Commitment have been terminated, any funds
remaining in the Facility LC Collateral Account shall be paid to the
Collateral Agent or paid to whomever may be legally entitled thereto
at such time.
(v) If, after acceleration of the maturity of the Obligations or
termination of the obligations of the Lenders to make Loans and the
obligation and power of the LC Issuer to issue Facility LCs hereunder
as a result of any Event of Default (other than any Event of Default
as described in Section 7.6 or 7.7 with respect to the Borrower) and
before any judgment or decree for the payment of the Obligations
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due shall have been obtained or entered, the Required Lenders (in
their sole discretion) shall so direct, the Administrative Agent
shall, by notice to the Borrower, rescind and annul such acceleration
and/or termination.
8.2. Amendments. Subject to the provisions of this Section 8.2 and the
Intercreditor Agreement, the Required Lenders (or the Administrative Agent with
the consent in writing of the Required Lenders) and the Borrower may enter into
agreements supplemental hereto for the purpose of adding or modifying any
provisions to the Loan Documents or changing in any manner the rights of the
Lenders or the Borrower hereunder or thereunder or waiving any Event of Default
hereunder or thereunder; provided, however, that no such supplemental agreement
shall, without the consent of each Lender directly affected thereby:
8.2.1 Extend the Revolving Loan Termination Date, extend the final
maturity of any Revolving Loan or extend the expiry date of any Facility LC
to a date after the Revolving Loan Termination Date (except as expressly
permitted in Section 2.20.1), extend the final maturity date of any Term
Loan to a date after the Term Loan Maturity Date, or postpone any regularly
scheduled payment of principal of any Loan or forgive all or any portion of
the principal amount thereof, or any Reimbursement Obligation related
thereto, or reduce the rate or extend the time of payment of interest or
fees thereon or Reimbursement Obligations related thereto (other than (x) a
waiver of the application of the default rate of interest pursuant to
Section 2.11 hereof and (y) any reduction of the amount of or any
modification of the payment date for the mandatory payments required under
Section 2.2, in each case which shall only require the approval of the
Required Lenders).
8.2.2 Reduce the percentage specified in the definition of Required
Lenders or any other percentage of Lenders specified to be the applicable
percentage in this Agreement to act on specified matters or amend the
definition of "Pro Rata Share", "Revolving Loan Pro Rata Share" or "Term
Loan Pro Rata Share".
8.2.3 Increase the amount of the Revolving Loan Commitment or Term
Loan Commitment of any Lender hereunder, or permit the Borrower to assign
its rights or obligations under this Agreement.
8.2.4 Amend this Section 8.2.
8.2.5 Other than in connection with a transaction permitted under this
Agreement, release all or substantially all of the Collateral.
8.2.6 Other than in connection with a transaction permitted under this
Agreement, release all or substantially all of the Guarantors from their
obligations under the Guaranty Agreement or any other agreement pursuant to
which such Guarantors guarantee the repayment of the Secured Obligations.
Notwithstanding the foregoing, no Lender's consent shall be required for any
amendment, modification or waiver if (i) by the terms of such amendment,
modification or waiver the Revolving Loan Commitment and the Term Loan
Commitment, as applicable, of such Lender shall terminate upon the effectiveness
of such amendment, modification or waiver and (ii) at the
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time such amendment, modification or waiver becomes effective, such Lender
receives payment in full of all of the Obligations (other than obligations to
pay fees and expenses with respect to which the Borrower has not received an
invoice, Rate Management Obligations, contingent indemnity obligations and other
contingent obligations) owing to it under the Loan Documents. No amendment of
any provision of this Agreement relating to the Administrative Agent shall be
effective without the written consent of the Administrative Agent. The
Administrative Agent may waive payment of the fee required under Section 12.3.3
without obtaining the consent of any other party to this Agreement. No amendment
of any provision of this Agreement relating to the Swing Line Lender or any
Swing Line Loan shall be effective without the written consent of the Swing Line
Lender. No amendment of any provision of this Agreement relating to the LC
Issuer shall be effective without the written consent of the LC Issuer.
8.3. Preservation of Rights. No delay or omission of the Lenders, the LC
Issuer or the Administrative Agent to exercise any right under the Loan
Documents shall impair such right or be construed to be a waiver of any Event of
Default or an acquiescence therein, and the making of a Credit Extension
notwithstanding the existence of an Event of Default or Unmatured Event of
Default or the inability of the Borrower to satisfy the conditions precedent to
such Credit Extension shall not constitute any waiver or acquiescence. Any
single or partial exercise of any such right shall not preclude other or further
exercise thereof or the exercise of any other right, and no waiver, amendment or
other variation of the terms, conditions or provisions of the Loan Documents
whatsoever shall be valid unless in writing signed by, or by the Administrative
Agent with the consent of, the requisite number of Lenders required pursuant to
Section 8.2, and then only to the extent in such writing specifically set forth.
All remedies contained in the Loan Documents or by law afforded shall be
cumulative and all shall be available to the Administrative Agent, the LC Issuer
and the Lenders until all of the Secured Obligations have been paid in full.
ARTICLE IX
GENERAL PROVISIONS
9.1. Survival of Representations. All representations and warranties of
the Borrower contained in this Agreement shall survive the making of the Credit
Extensions herein contemplated.
9.2. Governmental Regulation. Anything contained in this Agreement to the
contrary notwithstanding, neither the LC Issuer nor any Lender shall be
obligated to extend credit to the Borrower in violation of any limitation or
prohibition provided by any applicable statute or regulation.
9.3. Headings. Section headings in the Loan Documents are for convenience
of reference only, and shall not govern the interpretation of any of the
provisions of the Loan Documents.
9.4. Entire Agreement. The Loan Documents embody the entire agreement and
understanding among the Borrower, the Administrative Agent, the Collateral
Agent, the LC Issuer and the Lenders and supersede all prior agreements and
understandings among the
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Borrower, the Administrative Agent, the Collateral Agent, the LC Issuer and the
Lenders relating to the subject matter thereof other than those contained in the
fee letter described in Section 10.13 which shall survive and remain in full
force and effect during the term of this Agreement.
9.5. Several Obligations; Benefits of this Agreement. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other (except to the extent to which the
Administrative Agent is authorized to act as such). The failure of any Lender to
perform any of its obligations hereunder shall not relieve any other Lender from
any of its obligations hereunder. This Agreement shall not be construed so as to
confer any right or benefit upon any Person other than the parties to this
Agreement and their respective successors and assigns, provided, however, that
the parties hereto expressly agree that the Arranger shall enjoy the benefits of
the provisions of Sections 9.6, 9.10 and 10.11 to the extent specifically set
forth therein and shall have the right to enforce such provisions on its own
behalf and in its own name to the same extent as if it were a party to this
Agreement.
9.6. Expenses; Indemnification. (i) The Borrower shall reimburse the
Administrative Agent and the Arranger for any reasonable out-of-pocket costs and
expenses (including reasonable out-of-pocket attorneys' fees and out-of-pocket
expenses of and fees for other advisors and professionals engaged by the
Administrative Agent or the Arranger) paid or incurred by the Administrative
Agent or the Arranger in connection with the investigation, preparation,
negotiation, documentation, execution, delivery, syndication, distribution
(including, without limitation, via the internet), review, amendment,
modification and administration of the Loan Documents. The Borrower also agrees
to reimburse the Administrative Agent, the Arranger, the LC Issuer and the
Lenders for any reasonable out-of-pocket costs and expenses (including
reasonable out-of-pocket attorneys' fees and expenses) paid or incurred by the
Administrative Agent, the Arranger, the LC Issuer or any Lender in connection
with the collection and enforcement of the Loan Documents. Expenses being
reimbursed by the Borrower under this Section include, without limitation, costs
and expenses incurred in connection with the Reports described in the following
sentence. The Borrower acknowledges that from time to time JPMorgan Chase may
prepare and may distribute to the Lenders (but shall have no obligation or duty
to prepare or to distribute to the Lenders) certain audit reports (the
"Reports") pertaining to the Borrower's assets for internal use by JPMorgan
Chase from information furnished to it by or on behalf of the Borrower, after
JPMorgan Chase has exercised its rights of inspection pursuant to this
Agreement.
(ii) The Borrower hereby further agrees to indemnify the
Administrative Agent, the Arranger, the LC Issuer, each Lender, their respective
affiliates, and each of their directors, officers and employees against all
losses, claims, damages, penalties, judgments, liabilities and related
reasonable out-of-pocket expenses (including, without limitation, all reasonable
out-of-pocket expenses of litigation or preparation therefor whether or not the
Administrative Agent, the Arranger, the LC Issuer, any Lender or any affiliate
is a party thereto, and all reasonable out-of-pocket attorneys' fees and
expenses) which any of them may pay or incur arising out of or relating to this
Agreement, the other Loan Documents, the transactions contemplated hereby or the
direct or indirect application or proposed application of the proceeds of any
Credit Extension hereunder except to the extent that they are determined in a
final non-appealable judgment by a court of competent jurisdiction to have
resulted from the gross
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negligence or willful misconduct of the party seeking indemnification. The
obligations of the Borrower under this Section 9.6 shall survive the termination
of this Agreement.
(iii) The Collateral Agent shall receive the benefits of the
provisions of this Section 9.6 with respect to all losses, claims, damages,
penalties, judgments, liabilities and expenses resulting under or in connection
with the Collateral Documents.
9.7. Numbers of Documents. All statements, notices, closing documents, and
requests hereunder shall be furnished to the Administrative Agent with
sufficient counterparts so that the Administrative Agent may furnish one to each
of the Lenders, to the extent that the Administrative Agent deems appropriate.
9.8. Accounting. Except as provided to the contrary herein, all accounting
terms used in the calculation of any financial covenant or test shall be
interpreted and all accounting determinations hereunder in the calculation of
any financial covenant or test shall be made in accordance with Agreement
Accounting Principles. If any changes in generally accepted accounting
principles are hereafter required or permitted and are adopted by the Borrower
or any of its Subsidiaries with the agreement of its independent certified
public accountants and such changes result in a change in the method of
calculation of any of the financial covenants, tests, restrictions or standards
herein or in the related definitions or terms used therein ("Accounting
Changes"), the parties hereto agree, at the Borrower's request, to enter into
negotiations, in good faith, in order to amend such provisions in a credit
neutral manner so as to reflect equitably such changes with the desired result
that the criteria for evaluating the Borrower's and its Subsidiaries' financial
condition shall be the same after such changes as if such changes had not been
made; provided, however, until such provisions are amended in a manner
reasonably satisfactory to the Administrative Agent and the Required Lenders, no
Accounting Change shall be given effect in such calculations. In the event such
amendment is entered into, all references in this Agreement to Agreement
Accounting Principles shall mean generally accepted accounting principles as of
the date of such amendment. Notwithstanding the foregoing, all financial
statements to be delivered by the Borrower pursuant to Section 6.1 shall be
prepared in accordance with generally accepted accounting principles in effect
at such time.
9.9. Severability of Provisions. Any provision in any Loan Document that
is held to be inoperative, unenforceable, or invalid in any jurisdiction shall,
as to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and to
this end the provisions of all Loan Documents are declared to be severable.
9.10. Nonliability of Lenders. The relationship between the Borrower on
the one hand and the Lenders, the LC Issuer and the Administrative Agent on the
other hand shall be solely that of borrower and lender. Neither the
Administrative Agent, the Arranger, the LC Issuer nor any Lender shall have any
fiduciary responsibilities to the Borrower. Neither the Administrative Agent,
the Arranger, the LC Issuer nor any Lender undertakes any responsibility to the
Borrower to review or inform the Borrower of any matter in connection with any
phase of the Borrower's business or operations. The Borrower agrees that neither
the Administrative Agent, the Arranger, the LC Issuer nor any Lender shall have
liability to the Borrower (whether sounding in tort, contract or otherwise) for
losses suffered by the Borrower in connection with, arising out of,
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or in any way related to, the transactions contemplated and the relationship
established by the Loan Documents, or any act, omission or event occurring in
connection therewith, unless it is determined in a final non-appealable judgment
by a court of competent jurisdiction that such losses resulted from the gross
negligence or willful misconduct of the party from which recovery is sought.
Neither the Administrative Agent, the Arranger, the LC Issuer nor any Lender
shall have any liability to the Borrower with respect to, and the Borrower
hereby waives, releases and agrees not to sue for, any special, indirect,
consequential or punitive damages suffered by the Borrower in connection with,
arising out of, or in any way related to the Loan Documents or the transactions
contemplated thereby.
9.11. Confidentiality. The Administrative Agent and each Lender agrees to
hold the "Information" (as defined below) which it may receive from the Borrower
in connection with this Agreement in confidence, except for disclosure (i) on a
confidential basis to its Affiliates and to any other party to this Agreement,
(ii) on a confidential basis to legal counsel, accountants, and other
professional advisors to such Lender, (iii) to regulatory officials as
requested, (iv) to any Person as required by law, regulation, or legal process,
(v) to any Person as required in connection with any legal proceeding to which
it is a party, (vi) subject to an agreement containing provisions substantially
the same as those of this Section, on a confidential basis to its direct or
indirect contractual counterparties in swap agreements or to legal counsel,
accountants and other professional advisors to such counterparties, and (vii)
permitted by Section 12.4. Without limiting Section 9.4, the Borrower agrees
that the terms of this Section 9.11 shall set forth the entire agreement between
the Borrower and each Lender (including the Administrative Agent) with respect
to any confidential information previously or hereafter received by such Lender
in connection with this Agreement, and this Section 9.11 shall supersede any and
all prior confidentiality agreements entered into by such Lender with respect to
such confidential information. For the purposes of this Section, "Information"
means all information received from the Borrower or any of its Subsidiaries
relating to the Borrower or any of its Subsidiaries or their respective
businesses, as the case may be, other than any such information that is
available to the Administrative Agent, the Collateral Agent, the LC Issuer or
any Lender on a nonconfidential basis.
9.12. Lenders Not Utilizing Plan Assets. Each Lender represents and
warrants that none of the consideration used by such Lender to make its Credit
Extensions constitutes for any purpose of ERISA or Section 4975 of the Code
assets of any "plan" as defined in Section 3(3) of ERISA or Section 4975 of the
Code and the rights and interests of such Lender in and under the Loan Documents
shall not constitute such "plan assets" under ERISA.
9.13. Nonreliance. Each Lender hereby represents that it is not relying on
or looking to any margin stock (as defined in Regulation U) as collateral in the
extension or maintenance of the credit provided for herein.
9.14. Disclosure. The Borrower and each Lender, including the LC Issuer,
hereby acknowledge and agree that each Lender and/or its Affiliates from time to
time may hold investments in, make other loans to or have other relationships
with the Borrower and its Affiliates.
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9.15. Performance of Obligations. Subject to the terms of the
Intercreditor Agreement, the Borrower agrees that the Collateral Agent or the
Administrative Agent may, but shall have no obligation to (i) after the
occurrence and during the continuance of an Event of Default, pay or discharge
taxes, liens, security interests or other encumbrances levied or placed on or
threatened against any Collateral and (ii) after the occurrence and during the
continuance of an Event of Default make any other payment or perform any act
required of the Borrower under any Loan Document or take any other action which
the Collateral Agent or the Administrative Agent in its discretion deems
necessary or desirable to protect or preserve the Collateral, including, without
limitation, any action to (x) effect any repairs or obtain any insurance called
for by the terms of any of the Loan Documents and to pay all or any part of the
premiums therefor and the costs thereof and (y) pay any rents payable by the
Borrower which are more than thirty (30) days past due, or as to which the
landlord has given notice of termination, under any lease. The Administrative
Agent shall use its best efforts to give or cause the Collateral Agent to give
the Borrower notice of any action taken under this Section 9.15 prior to the
taking of such action or promptly thereafter provided the failure to give such
notice shall not affect the Borrower's obligations in respect thereof. The
Borrower agrees to pay the Administrative Agent, upon demand, the principal
amount of all funds advanced by the Administrative Agent under this Section 9.15
together with interest thereon at the rate from time to time applicable to
Floating Rate Loans from the date of such advance until the outstanding
principal balance thereof is paid in full. If the Borrower fails to make payment
in respect of any such advance under this Section 9.15 within one (1) Business
Day after the date the Borrower receives written demand therefor from the
Administrative Agent, the Administrative Agent shall promptly notify each Lender
and each Lender agrees that it shall thereupon make available to the
Administrative Agent, in Dollars in immediately available funds, the amount
equal to such Lender's Pro Rata Share of such advance. If such funds are not
made available to the Administrative Agent by such Lender within one (1)
Business Day after the Administrative Agent's demand therefor, the
Administrative Agent will be entitled to recover any such amount from such
Lender together with interest thereon at the Federal Funds Effective Rate for
each day during the period commencing on the date of such demand and ending on
the date such amount is received. The failure of any Lender to make available to
the Administrative Agent its Pro Rata Share of any such unreimbursed advance
under this Section 9.15 shall neither relieve any other Lender of its obligation
hereunder to make available to the Administrative Agent such other Lender's Pro
Rata Share of such advance on the date such payment is to be made nor increase
the obligation of any other Lender to make such payment to the Administrative
Agent. All outstanding principal of, and interest on, advances made under this
Section 9.15 shall constitute Obligations secured by the Collateral until paid
in full by the Borrower.
9.16. USA Patriot Act Notification. The following notification is provided
to the Borrower pursuant to Section 326 of the USA Patriot Act of 2001, 31
U.S.C. Section 5318:
IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT. To help
the government of the United States of America fight the funding of terrorism
and money laundering activities, Federal law requires all financial institutions
to obtain, verify, and record information that identifies each Person that opens
an account, including any deposit account, treasury management account, loan,
other extension of credit, or other financial services product. Accordingly,
when the Borrower opens an account, the Administrative Agent and the Lenders
will ask for the Borrower's name, tax identification
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number, business address, and other information that will allow the
Administrative Agent and the Lenders to identify the Borrower. The
Administrative Agent and the Lenders may also ask to see the Borrower's legal
organizational documents or other identifying documents.
9.17. Subordination of Intercompany Indebtedness. The Borrower agrees that
any and all claims of the Borrower against any Guarantor with respect to any
"Intercompany Indebtedness" (as hereinafter defined) shall be subordinate and
subject in right of payment to the prior payment, in full and in cash, of all
Secured Obligations; provided that, and not in contravention of the foregoing,
unless an Event of Default has occurred and is continuing and the Borrower
receives from the Administrative Agent a payment blockage notice pursuant to
this Section 9.17 that has not been withdrawn, the Borrower may make loans to
and receive payments in the ordinary course with respect to such Intercompany
Indebtedness from the Guarantors, to the extent permitted by the terms of this
Agreement and the other Loan Documents. Notwithstanding any right of the
Borrower to ask, demand, sue for, take or receive any payment from the
Guarantors, all rights, liens and security interests of the Borrower, whether
now or hereafter arising and howsoever existing, in any assets of any such
guarantor shall be and are subordinated to the rights of the Holders of Secured
Obligations in those assets. The Borrower shall not have any right to possession
of any such asset or to foreclose upon any such asset, whether by judicial
action or otherwise, unless and until all of the Secured Obligations (other than
obligations to pay fees and expenses with respect to which the Borrower has not
received an invoice, Rate Management Obligations, contingent indemnity
obligations, and other contingent obligations) shall have been fully paid and
satisfied (in cash). If all or any part of the assets of any such guarantor, or
the proceeds thereof, are subject to any distribution, division or application
to the creditors of such guarantor, whether partial or complete, voluntary or
involuntary, and whether by reason of liquidation, bankruptcy, arrangement,
receivership, assignment for the benefit of creditors or any other similar
action or proceeding, then, and in any such event (such events being herein
referred to as an "Insolvency Event"), any payment or distribution of any kind
or character, either in cash, securities or other property, which shall be
payable or deliverable upon or with respect to any Indebtedness of any
Guarantor, to the Borrower ("Intercompany Indebtedness") shall be paid or
delivered directly to the Administrative Agent, who shall remit it to the
Collateral Agent if required under the Intercreditor Agreement for application
in accordance with the Intercreditor Agreement, or, if not required under the
Intercreditor Agreement, for application to any of the Secured Obligations, due
or to become due, until such Secured Obligations (other than obligations to pay
fees and expenses with respect to which the Borrower has not received an
invoice, Rate Management Obligations, contingent indemnity obligations, and
other contingent obligations) shall have first been fully paid and satisfied (in
cash). Should any payment, distribution, security or instrument or proceeds
thereof be received by the Borrower upon or with respect to the Intercompany
Indebtedness after an Insolvency Event prior to the satisfaction of all of the
Secured Obligations (other than obligations to pay fees and expenses with
respect to which the Borrower has not received an invoice, Rate Management
Obligations, contingent indemnity obligations and other contingent obligations),
the Borrower shall receive and hold the same in trust, as trustee, for the
benefit of the Holders of Secured Obligations and shall forthwith deliver the
same to the Administrative Agent, who shall remit it to the Collateral Agent if
required under the Intercreditor Agreement for application in accordance with
the Intercreditor Agreement or, if not required under the Intercreditor
Agreement, for application to any of the Secured Obligations, in precisely the
form received (except for the endorsement or assignment of the Borrower where
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necessary), and, until so delivered, the same shall be held in trust by the
Borrower as the property of the Administrative Agent or the Collateral Agent, as
applicable. If the Borrower fails to make any such endorsement or assignment to
the Collateral Agent or the Administrative Agent, the Collateral Agent or the
Administrative Agent or any of its officers or employees are irrevocably
authorized to make the same. The Borrower agrees that until the Secured
Obligations (other than obligations to pay fees and expenses with respect to
which the Borrower has not received an invoice, Rate Management Obligations,
contingent indemnity obligations, and other contingent obligations) have been
paid in full (in cash) and satisfied, the Borrower will not assign or transfer
to any Person (other than the Agent) any claim the Borrower has or may have
against any Guarantor except as otherwise permitted by the Loan Documents.
ARTICLE X
THE ADMINISTRATIVE AGENT
10.1. Appointment; Nature of Relationship. JPMorgan Chase is hereby
appointed by each of the Lenders as its contractual representative (herein
referred to as the "Administrative Agent") hereunder and under each other Loan
Document, and each of the Lenders irrevocably authorizes the Administrative
Agent to act as the contractual representative of such Lender with the rights
and duties expressly set forth herein and in the other Loan Documents. The
Administrative Agent agrees to act as such contractual representative upon the
express conditions contained in this Article X. Notwithstanding the use of the
defined term "Administrative Agent," it is expressly understood and agreed that
the Administrative Agent shall not have any fiduciary responsibilities to any of
the Holders of Secured Obligations by reason of this Agreement or any other Loan
Document and that the Administrative Agent is merely acting as the contractual
representative of the Lenders with only those duties as are expressly set forth
in this Agreement and the other Loan Documents. In its capacity as the Lenders'
contractual representative, the Administrative Agent (i) does not hereby assume
any fiduciary duties to any of the Holders of Secured Obligations, (ii) is a
"representative" of the Holders of Secured Obligations within the meaning of the
term "secured party" as defined in the New York Uniform Commercial Code and
(iii) is acting as an independent contractor, the rights and duties of which are
limited to those expressly set forth in this Agreement and the other Loan
Documents. Each of the Lenders, for itself and on behalf of its Affiliates as
Holders of Secured Obligations, hereby agrees to assert no claim against the
Administrative Agent on any agency theory or any other theory of liability for
breach of fiduciary duty, all of which claims each Holder of Secured Obligations
hereby waives.
10.2. Powers. The Administrative Agent shall have and may exercise such
powers under the Loan Documents as are specifically delegated to the
Administrative Agent by the terms of each thereof, together with such powers as
are reasonably incidental thereto. The Administrative Agent shall have no
implied duties or fiduciary duties to the Lenders, or any obligation to the
Lenders to take any action thereunder except any action specifically provided by
the Loan Documents to be taken by the Administrative Agent.
10.3. General Immunity. Neither the Administrative Agent nor any of its
directors, officers, agents or employees shall be liable to the Borrower, or any
Lender or Holder of Secured Obligations for any action taken or omitted to be
taken by it or them hereunder or under any
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other Loan Document or in connection herewith or therewith except to the extent
such action or inaction is determined in a final, non-appealable judgment by a
court of competent jurisdiction to have arisen from the gross negligence or
willful misconduct of such Person.
10.4. No Responsibility for Loans, Recitals, etc. Neither the
Administrative Agent nor any of its directors, officers, agents or employees
shall be responsible for or have any duty to ascertain, inquire into, or verify
(a) any statement, warranty or representation made in connection with any Loan
Document or any borrowing hereunder; (b) the performance or observance of any of
the covenants or agreements of any obligor under any Loan Document, including,
without limitation, any agreement by an obligor to furnish information directly
to each Lender; (c) the satisfaction of any condition specified in Article IV,
except receipt of items required to be delivered solely to the Administrative
Agent; (d) the existence or possible existence of any Event of Default or
Unmatured Event of Default; (e) the validity, enforceability, effectiveness,
sufficiency or genuineness of any Loan Document or any other instrument or
writing furnished in connection therewith; (f) the value, sufficiency, creation,
perfection or priority of any Lien in any Collateral; or (g) the financial
condition of the Borrower or any guarantor of any of the Obligations or of any
of the Borrower's or any such guarantor's respective Subsidiaries. The
Administrative Agent shall have no duty to disclose to the Lenders information
that is not required to be furnished by the Borrower to the Administrative Agent
at such time, but is voluntarily furnished by the Borrower to the Administrative
Agent (either in its capacity as Administrative Agent or in its individual
capacity). Except as expressly set forth herein, the Administrative Agent shall
not have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to the Borrower or any of its Subsidiaries
that is communicated to or obtained by the Administrative Agent in such capacity
or any Affiliate thereof in any capacity.
10.5. Action on Instructions of Lenders. The Administrative Agent shall in
all cases be fully protected in acting, or in refraining from acting, hereunder
and under any other Loan Document in accordance with written instructions signed
by the Required Lenders (or all of the Lenders in the event that and to the
extent that this Agreement expressly requires such), and such instructions and
any action taken or failure to act pursuant thereto shall be binding on all of
the Lenders. The Lenders hereby acknowledge that the Administrative Agent shall
be under no duty to take any discretionary action permitted to be taken by it
pursuant to the provisions of this Agreement or any other Loan Document unless
it shall be requested in writing to do so by the Required Lenders (or all of the
Lenders in the event that and to the extent that this Agreement expressly
requires such). The Administrative Agent shall be fully justified in failing or
refusing to take any action hereunder and under any other Loan Document unless
it shall first be indemnified to its satisfaction by the Lenders pro rata
against any and all liability, cost and expense that it may incur by reason of
taking or continuing to take any such action.
10.6. Employment of Agents and Counsel. The Administrative Agent may
execute any of its duties as Administrative Agent hereunder and under any other
Loan Document by or through employees, agents, and attorneys-in-fact and shall
not be answerable to the Lenders, except as to money or securities received by
it or its authorized agents, for the default or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. The Administrative Agent
shall be entitled to advice of counsel concerning the contractual
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arrangement between the Administrative Agent and the Lenders and all matters
pertaining to the Administrative Agent's duties hereunder and under any other
Loan Document.
10.7. Reliance on Documents; Counsel. The Administrative Agent shall be
entitled to rely upon any Note, notice, consent, certificate, affidavit, letter,
telegram, facsimile, telex, electronic mail message, statement, paper or
document believed by it to be genuine and correct and to have been signed or
sent by the proper person or persons, and, in respect to legal matters, upon the
opinion of counsel selected by the Administrative Agent, which counsel may be
employees of the Administrative Agent. For purposes of determining compliance
with the conditions specified in Sections 4.1 and 4.2, each Lender that has
signed this Agreement shall be deemed to have consented to, approved or accepted
or to be satisfied with, each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to a Lender unless the
Administrative Agent shall have received notice from such Lender prior to the
applicable date specifying its objection thereto.
10.8. Administrative Agent's Reimbursement and Indemnification. The
Lenders agree to reimburse and indemnify the Administrative Agent ratably in
proportion to the Lenders' Pro Rata Shares (i) for any amounts not reimbursed by
the Borrower for which the Administrative Agent is entitled to reimbursement by
the Borrower under the Loan Documents, (ii) for any other expenses incurred by
the Administrative Agent on behalf of the Lenders, in connection with the
preparation, execution, delivery, administration and enforcement of the Loan
Documents (including, without limitation, for any expenses incurred by the
Administrative Agent in connection with any dispute between the Administrative
Agent and any Lender or between two or more of the Lenders) and (iii) for any
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind and nature whatsoever which may be
imposed on, incurred by or asserted against the Administrative Agent in any way
relating to or arising out of the Loan Documents or any other document delivered
in connection therewith or the transactions contemplated thereby (including,
without limitation, for any such amounts incurred by or asserted against the
Administrative Agent in connection with any dispute between the Administrative
Agent and any Lender or between two or more of the Lenders), or the enforcement
of any of the terms of the Loan Documents or of any such other documents,
provided that (i) no Lender shall be liable for any of the foregoing to the
extent any of the foregoing is found in a final, non-appealable judgment by a
court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of the Administrative Agent and (ii) any indemnification
required pursuant to Section 3.5(vii) shall, notwithstanding the provisions of
this Section 10.8, be paid by the relevant Lender in accordance with the
provisions thereof. The obligations of the Lenders under this Section 10.8 shall
survive payment of the Secured Obligations and termination of this Agreement.
10.9. Notice of Event of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Event of Default or
Unmatured Event of Default hereunder unless the Administrative Agent has
received written notice from a Lender or the Borrower referring to this
Agreement describing such Event of Default or Unmatured Event of Default and
stating that such notice is a "notice of default". In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall give
prompt notice thereof to the Lenders.
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10.10. Rights as a Lender. In the event the Administrative Agent is a
Lender, the Administrative Agent shall have the same rights and powers hereunder
and under any other Loan Document with respect to its Revolving Loan Commitment
and its Credit Extensions as any Lender and may exercise the same as though it
were not the Administrative Agent, and the term "Lender" or "Lenders" shall, at
any time when the Administrative Agent is a Lender, unless the context otherwise
indicates, include the Administrative Agent in its individual capacity. The
Administrative Agent and its Affiliates may accept deposits from, lend money to,
and generally engage in any kind of trust, debt, equity or other transaction, in
addition to those contemplated by this Agreement or any other Loan Document,
with the Borrower or any of its Subsidiaries in which the Borrower or such
Subsidiary is not restricted hereby from engaging with any other Person. The
Administrative Agent, in its individual capacity, is not obligated to remain a
Lender.
10.11. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent, the Arranger
or any other Lender and based on the financial statements prepared by the
Borrower and such other documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement and the
other Loan Documents. Each Lender also acknowledges that it will, independently
and without reliance upon the Administrative Agent, the Arranger or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement and the other Loan Documents.
10.12. Successor Administrative Agent. The Administrative Agent may resign
at any time by giving written notice thereof to the Lenders and the Borrower,
such resignation to be effective upon the appointment of a successor
Administrative Agent or, if no successor Administrative Agent has been
appointed, forty-five (45) days after the retiring Administrative Agent gives
notice of its intention to resign. The Administrative Agent may not be removed
at any time without its prior written consent. Upon any resignation, the
Required Lenders shall have the right to appoint, on behalf of the Borrower and
the Lenders, a successor Administrative Agent reasonably acceptable to the
Borrower. If no successor Administrative Agent shall have been so appointed by
the Required Lenders within thirty (30) days after the resigning Administrative
Agent's giving notice of its intention to resign, then the resigning
Administrative Agent may appoint, on behalf of the Borrower and the Lenders, a
successor Administrative Agent reasonably acceptable to the Borrower.
Notwithstanding the previous sentence, the Administrative Agent may at any time
without the consent of the Borrower or any Lender, appoint any of its Affiliates
which is a commercial bank as a successor Administrative Agent hereunder. If the
Administrative Agent has resigned or been removed and no successor
Administrative Agent has been appointed, the Lenders may perform all the duties
of the Administrative Agent hereunder and the Borrower shall make all payments
in respect of the Obligations to the applicable Lender and for all other
purposes shall deal directly with the Lenders. No successor Administrative Agent
shall be deemed to be appointed hereunder until such successor Administrative
Agent has accepted the appointment. Any such successor Administrative Agent
shall be a commercial bank having capital and retained earnings of at least
$100,000,000. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the resigning or removed
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Administrative Agent. Upon the effectiveness of the resignation or removal of
the Administrative Agent, the resigning or removed Administrative Agent shall be
discharged from its duties and obligations hereunder and under the Loan
Documents. After the effectiveness of the resignation or removal of an
Administrative Agent, the provisions of this Article X shall continue in effect
for the benefit of such Administrative Agent in respect of any actions taken or
omitted to be taken by it while it was acting as the Administrative Agent
hereunder and under the other Loan Documents. In the event that there is a
successor to the Administrative Agent by merger, or the Administrative Agent
assigns its duties and obligations to an Affiliate pursuant to this Section
10.12, then the term "Prime Rate" as used in this Agreement shall mean the prime
rate, base rate or other analogous rate of the new Administrative Agent.
10.13. Administrative Agent and Arranger Fees. The Borrower agrees to pay
to the Administrative Agent and the Arranger, for their respective accounts, the
fees agreed to by the Borrower, the Administrative Agent and the Arranger
pursuant to that certain letter agreement dated January 6, 2005, or as otherwise
agreed from time to time.
10.14. Delegation to Affiliates. The Borrower and the Lenders agree that
the Administrative Agent may delegate any of its duties under this Agreement to
any of its Affiliates. Any such Affiliate (and such Affiliate's directors,
officers, agents and employees) which performs duties in connection with this
Agreement shall be entitled to the same benefits of the indemnification, waiver
and other protective provisions to which the Administrative Agent is entitled
under Articles IX and X.
10.15. Intentionally Omitted
10.16. Collateral Documents. (a) Each Lender authorizes the Administrative
Agent and the Collateral Agent to enter into, on behalf of each such Lender,
each of the Collateral Documents to which it is a party, to remain subject to
the Intercreditor Agreement and the Collateral Documents in effect on the
Closing Date, and to take all action contemplated by each of such documents.
Each Lender agrees that no Holder of Secured Obligations (other than the
Administrative Agent) shall have the right individually to seek to realize upon
the security granted by any Collateral Document, it being understood and agreed
that such rights and remedies may be exercised solely by the Administrative
Agent for the benefit of the Holders of Secured Obligations or the Collateral
Agent for the benefit of the Holders of Secured Obligations and the Borrower's
other creditors subject to the Intercreditor Agreement and upon the terms of the
Collateral Documents.
(b) In the event that any Collateral is hereafter pledged by any
Person as collateral security for the Secured Obligations, the Administrative
Agent is hereby authorized to execute and deliver on behalf of the Holders of
Secured Obligations any Loan Documents necessary or appropriate to grant and
perfect a Lien on such Collateral in favor of the Collateral Agent.
(c) Subject to the Intercreditor Agreement, the Lenders hereby
authorize the Administrative Agent, at its option and in its discretion, to
direct the Collateral Agent to release any Lien granted to or held by the
Collateral Agent upon any Collateral (i) upon termination of the Revolving Loan
Commitments, Term Loan Commitments and payment and satisfaction of all
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of the Obligations (other than obligations to pay fees and expenses with respect
to which the Borrower has not received an invoice, contingent indemnity
obligations, and Rate Management Obligations) at any time arising under or in
respect of this Agreement or the Loan Documents or the transactions contemplated
hereby or thereby; (ii) as permitted by, but only in accordance with, the terms
of the applicable Loan Document; or (iii) if approved, authorized or ratified in
writing by the Required Lenders, unless such release is required to be approved
by all of the Lenders hereunder. Upon request by the Administrative Agent at any
time, the Lenders will confirm in writing the Administrative Agent's authority
to direct the Collateral Agent to release particular types or items of
Collateral pursuant to this Section 10.16. The Lenders confirm that the
Collateral Agent may take actions described in this Section 10.16(c) so long as
such actions are permitted under and comply with the terms of the Intercreditor
Agreement.
(d) Subject to the terms of the Intercreditor Agreement, upon any sale
or transfer of assets constituting Collateral which is permitted pursuant to the
terms of any Loan Document, including, without limitation, the Service America
Asset Sale, or consented to in writing by the Required Lenders or all of the
Lenders, as applicable, the security interest in such Collateral shall be
automatically released. In connection with any such release, the Administrative
Agent shall (and is hereby irrevocably authorized by the Lenders to) direct the
Collateral Agent to execute such documents as may be necessary to evidence the
release of the Liens granted to the Collateral Agent for the benefit of the
Holders of Secured Obligations herein or pursuant hereto upon the Collateral
that was sold or transferred; provided, however, that (i) the Administrative
Agent shall not be required to direct the Collateral Agent to execute any such
document on terms which, in the Administrative Agent's opinion, would expose the
Administrative Agent to liability or create any obligation or entail any
consequence other than the release of such Liens without recourse or warranty,
and (ii) such release shall not in any manner discharge, affect or impair the
Secured Obligations or any Liens upon (or obligations of the Borrower or any
Subsidiary in respect of) all interests retained by the Borrower or any
Subsidiary, including (without limitation) the proceeds of the sale, all of
which shall continue to constitute part of the Collateral.
ARTICLE XI
SETOFF; RATABLE PAYMENTS
11.1. Setoff. In addition to, and without limitation of, any rights of the
Lenders under applicable law, if the Borrower becomes insolvent, however
evidenced, or any other Event of Default occurs, any and all deposits (including
all account balances, whether provisional or final and whether or not collected
or available) and any other Indebtedness at any time held or owing by any Lender
or any Affiliate of any Lender to or for the credit or account of the Borrower
may be offset and applied toward the payment of the Secured Obligations owing to
such Lender, whether or not the Secured Obligations, or any part thereof, shall
then be due.
11.2. Ratable Payments. If any Lender, whether by setoff or otherwise, has
payment made to it upon its Outstanding Revolving Credit Exposure or its Term
Loans (other than payments received pursuant to Section 3.1, 3.2, 3.4 or 3.5) in
a greater proportion than that received by any other Lender, such Lender agrees,
promptly upon demand, to purchase a participation in the Aggregate Outstanding
Revolving Credit Exposure and Term Loans held by the other Lenders so that after
such purchase each Lender will hold its Pro Rata Share, Revolving
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Loan Pro Rata Share and Term Loan Pro Rata Share. If any Lender, whether in
connection with setoff or amounts which might be subject to setoff or otherwise,
receives collateral or other protection for its Obligations or such amounts
which may be subject to setoff, such Lender agrees, promptly upon demand, to
take such action necessary such that all Lenders share in the benefits of such
collateral ratably in proportion to their respective Pro Rata Shares. In case
any such payment is disturbed by legal process, or otherwise, appropriate
further adjustments shall be made.
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1. Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower, the
Administrative Agent and the Lenders and their respective successors and assigns
permitted hereby, except that (i) the Borrower shall not have the right to
assign its rights or obligations under the Loan Documents without the prior
written consent of each Lender, (ii) any assignment by any Lender must be made
in compliance with Section 12.3, and (iii) any transfer by Participation must be
made in compliance with Section 12.2. Any attempted assignment or transfer by
any party not made in compliance with this Section 12.1 shall be null and void,
unless such attempted assignment or transfer is treated as a participation in
accordance with Section 12.3.2. The parties to this Agreement acknowledge that
clause (ii) of this Section 12.1 relates only to absolute assignments and this
Section 12.1 does not prohibit assignments creating security interests,
including, without limitation, (x) any pledge or assignment by any Lender of all
or any portion of its rights under this Agreement and any Note to a Federal
Reserve Bank, (y) in the case of a Lender which is a Fund, any pledge or
assignment of all or any portion of its rights under this Agreement and any Note
to its trustee in support of its obligations to its trustee or (z) any pledge or
assignment by any Lender of all or any portion of its rights under this
Agreement and any Note to direct or indirect contractual counterparties in swap
agreements relating to the Loans; provided, however, that (i) no such pledge or
assignment creating a security interest shall release the transferor Lender from
its obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto, (ii) the Lender making such pledge or assignment shall
retain the sole right to approve, without consent of any pledgee or assignee,
any amendment, modification or waiver of any provisions of the Loan Documents,
and (iii) the Borrower shall continue to deal solely and directly with such
Lenders in connection such Lenders' rights and obligations under the Loan
Documents unless and until the parties thereto have complied with the provisions
of Section 12.3. The Administrative Agent may treat the Person which made any
Loan or which holds any Note as the owner thereof for all purposes hereof unless
and until such Person complies with Section 12.3; provided, however, that the
Administrative Agent may in its discretion (but shall not be required to) follow
instructions from the Person which made any Loan or which holds any Note to
direct payments relating to such Loan or Note to another Person. Any assignee of
the rights to any Loan or any Note agrees by acceptance of such assignment to be
bound by all the terms and provisions of the Loan Documents. Any request,
authority or consent of any Person, who at the time of making such request or
giving such authority or consent is the owner of the rights to any Loan (whether
or not a Note has been issued in evidence thereof), shall be conclusive and
binding on any subsequent holder or assignee of the rights to such Loan.
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12.2. Participations.
12.2.1 Permitted Participants; Effect. Any Lender may at any time
sell to one or more banks or other entities ("Participants") participating
interests in any Outstanding Revolving Credit Exposure of such Lender, any
Term Loans of such Lender, any Note held by such Lender, any Revolving Loan
Commitment of such Lender or any other interest of such Lender under the
Loan Documents. In the event of any such sale by a Lender of participating
interests to a Participant, such Lender's obligations under the Loan
Documents shall remain unchanged, such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, such Lender shall remain the owner of its Outstanding
Revolving Credit Exposure and Term Loans and the holder of any Note issued
to it in evidence thereof for all purposes under the Loan Documents, all
amounts payable by the Borrower under this Agreement shall be determined as
if such Lender had not sold such participating interests, and the Borrower
and the Administrative Agent shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations
under the Loan Documents.
12.2.2 Voting Rights. Each Lender shall retain the sole right to
approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents other than
any amendment, modification or waiver with respect to any Credit Extension
or Revolving Loan Commitment in which such Participant has an interest
which would require consent of all of the Lenders pursuant to the terms of
Section 8.2.
12.2.3 Benefit of Certain Provisions. To the extent permitted by law,
the Borrower agrees that each Participant shall be deemed to have the right
of setoff provided in Section 11.1 in respect of its participating interest
in amounts owing under the Loan Documents to the same extent as if the
amount of its participating interest were owing directly to it as a Lender
under the Loan Documents, provided that each Lender shall retain the right
of setoff provided in Section 11.1 with respect to the amount of
participating interests sold to each Participant. The Lenders agree to
share with each Participant, and each Participant, by exercising the right
of setoff provided in Section 11.1, agrees to share with each Lender, any
amount received pursuant to the exercise of its right of setoff, such
amounts to be shared in accordance with Section 11.2 as if each Participant
were a Lender. The Borrower further agrees that each Participant shall be
entitled to the benefits of Sections 3.1, 3.2, 3.4 and 3.5 to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to Section 12.3, provided that (i) a Participant shall not be
entitled to receive any greater payment under Section 3.1, 3.2 or 3.5 than
the Lender who sold the participating interest to such Participant would
have received had it retained such interest for its own account, unless the
sale of such interest to such Participant is made with the prior written
consent of the Borrower, and (ii) any Participant not incorporated under
the laws of the United States of America or any State thereof agrees to
comply with the provisions of Section 3.5 to the same extent as if it were
a Lender.
12.3. Assignments.
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12.3.1 Permitted Assignments. Any Lender may at any time assign to
one or more banks or other entities ("Purchasers") all or any part of its
rights and obligations under the Loan Documents. Such assignment shall be
evidenced by an agreement substantially in the form of Exhibit C or in such
other form as may be agreed to by the parties thereto (each such agreement,
an "Assignment Agreement"). Each such assignment with respect to a
Purchaser which is not a Lender or an Affiliate of a Lender or an Approved
Fund shall either be in an amount equal to the entire applicable Revolving
Loan Commitment, Term Loan Commitment and Outstanding Revolving Credit
Exposure and/or Term Loans, as applicable, of the assigning Lender or
(unless each of the Borrower and the Administrative Agent otherwise
consents) be in an aggregate amount not less than (x) $5,000,000 with
respect to Revolving Loan Commitments and Outstanding Revolving Credit
Exposure and (y) $1,000,000 with respect to Term Loans. The amount of the
assignment shall be based on the Revolving Loan Commitment, Term Loan
Commitment, Outstanding Revolving Credit Exposure (if the Revolving Loan
Commitment has been terminated) and/or outstanding Term Loans (if the Term
Loan Commitment has been terminated), as applicable, subject to the
assignment, determined as of the date of such assignment or as of the
"Trade Date," if the "Trade Date" is specified in the Assignment Agreement.
12.3.2 Consents. The consent of the Borrower shall be required prior
to an assignment becoming effective unless the Purchaser is a Lender, an
Affiliate of a Lender or an Approved Fund; provided that the consent of the
Borrower shall not be required if (i) an Event of Default or an Unmatured
Event of Default has occurred and is continuing or (ii) if such assignment
is in connection with the physical settlement of any Lender's obligations
to direct or indirect contractual counterparties in swap agreements
relating to the Loans. The consent of the Administrative Agent shall be
required prior to an assignment becoming effective unless such assignment
is an assignment of all or a portion of the Term Loans, in which case the
Administrative Agent's consent shall not be required if the Purchaser of
such Term Loans (or any portion thereof) is a Lender, an Affiliate of a
Lender or an Approved Fund. Any consent required under this Section 12.3.2
shall not be unreasonably withheld or delayed.
12.3.3 Effect; Effective Date. Upon (i) delivery to the
Administrative Agent of an Assignment Agreement, together with any consents
required by Sections 12.3.1 and 12.3.2, and (ii) payment of a $3,500 fee to
the Administrative Agent for processing such assignment (unless such fee is
waived by the Administrative Agent), such assignment shall become effective
on the effective date specified in such assignment. The Assignment
Agreement shall contain a representation by the Purchaser to the effect
that none of the consideration used to make the purchase of the Revolving
Loan Commitment and Outstanding Revolving Credit Exposure and/or Term
Loans, as applicable, under the applicable Assignment Agreement constitutes
"plan assets" as defined under ERISA or Section 4975 of the Code and that
the rights and interests of the Purchaser in and under the Loan Documents
will not be "plan assets" under ERISA or Section 4975 of the Code. On and
after the effective date of such assignment, such Purchaser shall for all
purposes be a Lender party to this Agreement and any other Loan Document
executed by or on behalf of the Lenders and shall have all the rights and
obligations of a Lender under the Loan Documents, to the same extent as if
it were an original party thereto, and the
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transferor Lender shall be released with respect to the Revolving Loan
Commitment and Outstanding Revolving Credit Exposure and/or Term Loans, as
applicable, assigned to such Purchaser without any further consent or
action by the Borrower, the Lenders or the Administrative Agent. In the
case of an assignment covering all of the assigning Lender's rights and
obligations under this Agreement, such Lender shall cease to be a Lender
hereunder but shall continue to be entitled to the benefits of, and subject
to, those provisions of this Agreement and the other Loan Documents which
survive payment of the Obligations and termination of the applicable
agreement. Any assignment or transfer by a Lender of rights or obligations
under this Agreement that does not comply with this Section 12.3 shall be
treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with Section
12.2. Upon the consummation of any assignment to a Purchaser pursuant to
this Section 12.3.3, the transferor Lender, the Administrative Agent and
the Borrower shall, if the transferor Lender or the Purchaser desires that
its Loans be evidenced by Notes, make appropriate arrangements so that new
Notes or, as appropriate, replacement Notes are issued to such transferor
Lender, if applicable, and new Notes or, as appropriate, replacement Notes,
are issued to such Purchaser, in each case in principal amounts reflecting
their respective Revolving Loan Commitments (or, if the Revolving Loan
Termination Date has occurred, their respective Outstanding Revolving
Credit Exposure) or Term Loan Commitments (or, if the Term Loan Commitments
have been terminated, outstanding Term Loans), as applicable, as adjusted
pursuant to such assignment.
12.3.4 Register. The Administrative Agent, acting solely for this
purpose as an agent of the Borrower, shall maintain at one of its offices
in Chicago, Illinois a copy of each Assignment Agreement delivered to it
and a register for the recordation of the names and addresses of the
Lenders, and the Revolving Loan Commitments of, and principal amounts of
the Credit Extensions owing to, each Lender pursuant to the terms hereof
from time to time (the "Register"). The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent and the Lenders may
treat each Person whose name is recorded in the Register pursuant to the
terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrower at any reasonable time and from time to time
upon reasonable prior notice.
12.4. Dissemination of Information. The Borrower authorizes each Lender to
disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "Transferee") and any
prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of the Borrower and its Subsidiaries, including
without limitation any information contained in any Reports; provided that each
Transferee and prospective Transferee agrees to be bound by Section 9.11 of this
Agreement.
12.5. Tax Treatment. If any interest in any Loan Document is transferred
to any Transferee which is not incorporated under the laws of the United States
or any State thereof, the transferor Lender shall cause such Transferee,
concurrently with the effectiveness of such transfer, to comply with the
provisions of Section 3.5(iv).
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ARTICLE XIII
NOTICES
13.1. Notices; Effectiveness; Electronic Communication
13.1.1 Notices Generally. Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in Section 13.1.2 below), all notices and other communications
provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent
by telecopier as follows:
(i) if to the Borrower, at its address or telecopier number set forth
on the signature page hereof;
(ii) if to the Administrative Agent, at its address or telecopier
number set forth on the signature page hereof;
(iii) if to the LC Issuer, at its address or telecopier number set
forth on the signature page hereof;
(iv) if to a Lender, to it at its address (or telecopier number) set
forth in its Administrative Questionnaire.
Notices sent by hand or overnight courier service, or mailed by certified
or registered mail, shall be deemed to have been given when received;
notices sent by telecopier shall be deemed to have been given when sent
(except that, if not given during normal business hours for the recipient,
shall be deemed to have been given at the opening of business on the next
Business Day for the recipient). Notices delivered through electronic
communications to the extent provided in Section 13.1.2 below, shall be
effective as provided in said Section 13.1.2.
13.1.2 Electronic Communications. Notices and other communications to
the Lenders and the LC Issuer hereunder may be delivered or furnished by
electronic communication (including e-mail and internet or intranet
websites) pursuant to procedures approved by the Administrative Agent or as
otherwise determined by the Administrative Agent; provided that the
foregoing shall not apply to notices to any Lender or the LC Issuer
pursuant to Article II if such Lender or the LC Issuer, as applicable, has
notified the Administrative Agent that it is incapable of receiving notices
under such Article by electronic communication. The Administrative Agent or
the Borrower may, in its respective discretion, agree to accept notices and
other communications to it hereunder by electronic communications pursuant
to procedures approved by it or as it otherwise determines, provided that
such determination or approval may be limited to particular notices or
communications. Unless the Administrative Agent otherwise prescribes, (i)
notices and other communications sent to an e-mail address shall be deemed
received upon the sender's receipt of an acknowledgement from the intended
recipient (such as by the "return receipt requested" function, as
available, return e-mail or other written acknowledgement), provided that
if
99
such notice or other communication is not given during the normal business
hours of the recipient, such notice or communication shall be deemed to
have been given at the opening of business on the next Business Day for the
recipient, and (ii) notices or communications posted to an Internet or
intranet website shall be deemed received upon the deemed receipt by the
intended recipient at its e-mail address as described in the foregoing
clause (i) of notification that such notice or communication is available
and identifying the website address therefor.
13.2. Change of Address, Etc. Any party hereto may change its address or
telecopier number for notices and other communications hereunder by notice to
the other parties hereto.
ARTICLE XIV
COUNTERPARTS; INTEGRATION; EFFECTIVENESS; ELECTRONIC EXECUTION
14.1. Counterparts; Effectiveness. This Agreement may be executed in
counterparts (and by different parties hereto in different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract. Except as provided in Article IV, this
Agreement shall become effective when it shall have been executed by the
Borrower, the Administrative Agent, the LC Issuer and the Lenders and when the
Administrative Agent shall have received counterparts hereof which, when taken
together, bear the signatures of each of such parties hereto, and thereafter
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns. Delivery of an executed counterpart of a
signature page of this Agreement by telecopy shall be effective as delivery of a
manually executed counterpart of this Agreement.
14.2. Electronic Execution of Assignments. The words "execution,"
"signed," "signature," and words of like import in any Assignment Agreement
shall be deemed to include electronic signatures or the keeping of records in
electronic form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any applicable law, including the Federal Electronic Signatures in Global and
National Commerce Act, or any other state laws based on the Uniform Electronic
Transactions Act.
ARTICLE XV
CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
15.1. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS (INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW BUT
OTHERWISE WITHOUT REGARD TO CONFLICTS OF LAW PROVISIONS OR PRINCIPLES) OF THE
STATE OF NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL
BANKS.
100
15.2. CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY SUBMITS TO
THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK STATE
COURT SITTING IN THE BOROUGH OF MANHATTAN IN NEW YORK, NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER
HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES
ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM. ANY JUDICIAL PROCEEDING BY THE BORROWER AGAINST THE
ADMINISTRATIVE AGENT, THE LC ISSUER, ANY LENDER OR ANY HOLDER OF SECURED
OBLIGATIONS OR ANY AFFILIATE OF THE ADMINISTRATIVE AGENT, THE LC ISSUER, ANY
LENDER OR ANY HOLDER OF SECURED OBLIGATIONS INVOLVING, DIRECTLY OR INDIRECTLY,
ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN
DOCUMENT MAY BE BROUGHT IN A COURT IN THE BOROUGH OF MANHATTAN IN NEW YORK, NEW
YORK. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE ADMINISTRATIVE AGENT, THE LC
ISSUER, ANY LENDER OR ANY HOLDER OF SECURED OBLIGATIONS TO BRING PROCEEDINGS
AGAINST THE BORROWER OR LIMIT THE RIGHTS OF THE BORROWER TO BRING PROCEEDINGS
AGAINST SUCH OTHER PARTY IN THE COURTS OF ANY OTHER JURISDICTION.
15.3. WAIVER OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT, THE LC
ISSUER, EACH LENDER, AND EACH OTHER HOLDER OF SECURED OBLIGATIONS HEREBY WAIVE
TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT
OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP
ESTABLISHED THEREUNDER.
ARTICLE XVI
PRIOR CREDIT AGREEMENT
The Borrower, certain of the Lenders, and the Administrative Agent are
parties to the Prior Credit Agreement. The Borrower, the Lenders, and the
Administrative Agent agree that upon (i) the execution and delivery of this
Agreement by each of the parties hereto and (ii) satisfaction (or waiver by the
aforementioned parties) of the conditions precedent set forth in Section 4.1,
the terms and conditions of the Prior Credit Agreement shall be and hereby are
amended, superseded, and restated in their entirety by the terms and provisions
of this Agreement. All amounts outstanding or otherwise due and payable under
the Prior Credit Agreement prior to the Closing Date shall, on and after the
Closing Date, be outstanding and due and payable under this Agreement.
Notwithstanding the foregoing, the Borrower affirms its
101
rights, duties and obligations under the Collateral Documents to which it is a
party, including without limitation, the grant of security thereunder, and the
other Loan Documents, and agrees and acknowledges that this Agreement
constitutes the "Credit Agreement" referenced therein.
The remainder of this page is intentionally blank.
102
IN WITNESS WHEREOF, the Borrower, the Leaders, the LC Issuer and the
Administrative Agent have executed this Agreement as of the date first above
written.
CHEMED CORPORATION,
as the Borrower
By: /s/ David P. Williams
---------------------------------------
Name: David P. Williams
Title: Chief Financial Officer
Address:
2600 Chemed Center
255 East Fifth Street
Cincinnati, Ohio 45202
Attention: David Williams
Phone: 513-762-6901
Fax: 513-762-6919
JPMORGAN CHASE BANK, N.A.,
as the Administrative Agent,
as Swing Line Lender, as
LC Issuer and as a Lender
By: /s/ Thomas J. Reingold
---------------------------------------
Name: Thomas J. Reingold
Title: Vice President
Administrative Agent and Swing Line Lender:
JP Morgan
Mail Code IL1-0010
131 South Dearborn
Chicago, Illinois 60603
Attention: Leonida Mischke
Phone: 312-385-7055
Fax: 312-385-7103
LC Issuer:
JP Morgan
Mail Code IL1-0236
131 South Dearborn
Chicago, Illinois 60603
Attention: Floro Alcantara
Phone: 312-954-1910
Fax: 312-954-0203
GENERAL ELECTRIC CAPITAL CORPORATION,
as Lender
By: /s/ Roger Tauchman
---------------------------------------
Name: Roger Tauchman
Title: Duly Authorized Signatory
Address:
500 W. Monroe St., 12th Floor
Chicago, IL 60661
Attention: Jennifer Pricco
Phone: 312-463-2343
Fax: 312-463-3840
BANK OF AMERICA, N.A.,
as Lender
By: /s/ Alexander L. Rody
---------------------------------------
Name: Alexander L. Rody
Title: Senior Vice President
Address:
FL6-812--08-05
401 East Las Olas Boulevard, 8th floor
Ft. Lauderdale, FL 33301
Attention: Alexander L. Rody
Phone: 954/765-2579
Fax: 954/765-2123
CITICORP USA, INC.,
as a Lender
By: /s/ Allen Fisher
---------------------------------------
Name: Allen Fisher
Title: Vice-President
Address:
388 Greenwich Street, 23rd Floor
New York, NY 10013
Attention: Allen Fisher
Phone: 212-816-5254
Fax: 212-816-5715
LASALLE BANK NATIONAL ASSOCIATION,
as a Lender
By: /s/ Warren F. Weber
---------------------------------------
Name: Warren F. Weber
Title: Senior Vice President
Address:
312 Walnut Street, Suite 2450
Cincinnati, OH 45202
Attention: Warren Weber, Commercial Banking
Phone: 513-929-3423
Fax: 513-929-0923
HARRIS TRUST AND SAVINGS BANK,
as a Lender
By: /s/ Gloria Compean-Endicott
---------------------------------------
Name: Gloria Compean-Endicott
Title: Managing Director
Address:
111 W. Monroe Street
Suite 20E
Chicago, IL 60603
Attention: Gloria Compean-Endicott
Phone: 312-461-2324
Fax: 312-293-4355
FIFTH THIRD BANK,
as a Lender
By: /s/ Christine L. Wagner
---------------------------------------
Name: Christine L. Wagner
Title: Vice President
Address:
38 Fountain Square, MD 109046
Cincinnati, Ohio 45203
Attention: Christine L. Wagner
Phone: (513) 534-7348
Fax: (513) 534-5947
RE: CHEMED CORPORATION
ALLIED IRISH BANKS PLC
as a Lender
By: /s/ Vikas Mavinkurve
---------------------------------------
Name: Vikas Mavinkurve
Title: Vice President
Address:
405 Park Avenue, 4th Floor
New York, NY 10022
Phone: 212 339 8053
Fax : 212 339 8325
By: /s/ Margaret Brennan
---------------------------------------
Name: Margaret Brennan
Title: Vice President
Address:
405 Park Avenue, 4th Floor
New York, NY 10022
Phone: 212 515 6761
Fax : 212 339 8325
THE PROVIDENT BANK,
as a Lender
By: /s/ Steven J. Bloemer
---------------------------------------
Name: Steven J. Bloemer
Title: Vice President
Address:
One East Fourth Street, MD 211A
Cincinnati, Ohio 45202
Attention: Steven J. Bloemer
Phone: (513) 763-8722
Fax: (513) 579-2201
HUNTINGTON CAPITAL,
as a Lender
By: /s/ Christopher Henn
------------------------------
Name: Christopher Henn
Title: Senior Vice President
105 East Fourth Street
Suite 200A
Cincinnati, OH 45202
Attention: Lance Rollins
Phone: (5 l3)762-5186
Fax: (5 l3)762- 1873
COMMITMENT SCHEDULE
REVOLVING LOAN COMMITMENTS
Amount of Revolving % of Aggregate Revolving
Lender Loan Commitment Loan Commitment
- ------ ------------------- ------------------------
JPMorgan Chase Bank, N.A. $ 45,000,000 25.7142857142%
General Electric Capital Corporation $ 30,000,000 17.1428571428%
Bank of America, N.A. $ 17,500,000 10.0000000000%
Citicorp USA, Inc. $ 17,500,000 10.0000000000%
LaSalle Bank National Association $ 14,000,000 8.0000000000%
Harris Trust and Savings Bank $ 12,000,000 6.8571428571%
Fifth Third Bank $ 11,000,000 6.2857142857%
Allied Irish Banks PLC $ 10,000,000 5.7142857142%
The Provident Bank $ 10,000,000 5.7142857142%
Huntington Capital $ 8,000,000 4.5714285714%
TOTAL $175,000,000.00 100%
TERM LOAN COMMITMENTS ON FOLLOWING PAGE
TERM LOAN COMMITMENTS
Amount of Term Loan % of Aggregate Term Loan
Lender Commitment Commitment
- ------ ------------------- ------------------------
JPMorgan Chase Bank, N.A. $ 59,000,000 69.4117647059%
General Electric Capital Corporation $ 10,000,000 11.7647058824%
The Provident Bank $ 4,500,000 5.2941176471%
LaSalle Bank National Association $ 4,000,000 4.7058823529%
Bank of America, N.A. $ 3,500,000 4.1176470588%
Huntington Capital $ 2,000,000 2.3529411765%
Harris Trust and Savings Bank $ 1,000,000 1.1764705882%
Fifth Third Bank $ 1,000,000 1.1764705882%
TOTAL $85,000,000.00 100%
PRICING SCHEDULE
APPLICABLE LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V
MARGIN STATUS STATUS STATUS STATUS STATUS
- ------------------- ------- -------- --------- -------- -------
Eurodollar Rate for 3.00% 2.75% 2.50% 2.00% 1.75%
Revolving Loans
Applicable Margin 2.00% 2.00% 2.00% 2.00% 2.00%
for Term Loans
(whether Floating
Rate or Eurodollar
Rate)
Floating Rate for 1.75% 1.50% 1.25% 0.75% 0.75%
Revolving Loans
APPLICABLE FEE LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V
RATE STATUS STATUS STATUS STATUS STATUS
- ------------------- ------- -------- --------- -------- -------
Commitment Fee 0.50% 0.50% 0.375% 0.375% 0.375%
For the purposes of this Schedule, the following terms have the following
meanings, subject to the final paragraph of this Schedule:
"Financials" means the annual or quarterly financial statements of the
Borrower delivered pursuant to Section 6.1.
"Level I Status" exists at any date if, as of the last day of the fiscal
quarter of the Borrower referred to in the most recent Financials, the Leverage
Ratio is equal to or greater than 3.50 to 1.00.
"Level II Status" exists at any date if, as of the last day of the fiscal
quarter of the Borrower referred to in the most recent Financials, the Leverage
Ratio is equal to or greater than 3.00 to 1.00 but less than 3.50 to 1.00.
"Level III Status" exists at any date if, as of the last day of the fiscal
quarter of the Borrower referred to in the most recent Financials, the Leverage
Ratio is equal to or greater than 2.50 to 1.00 but less than 3.00 to 1.00.
2
"Level IV Status" exists at any date if, as of the last day of the fiscal
quarter of the Borrower referred to in the most recent Financials, the Leverage
Ratio is greater than 2.00 to 1.00 but less than 2.50 to 1.00.
"Level V Status" exists at any date, if, as of the last day of the fiscal
quarter of the Borrower referred to in the most recent Financials, the Leverage
Ratio is less than or equal to 2.00 to 1.00
"Status" means either Level I Status, Level II Status, Level III Status,
Level IV Status, or Level V Status.
The Applicable Margin and Applicable Fee Rate shall be determined in
accordance with foregoing table based on the Borrower's Status as reflected in
the then most recent Financials. Adjustments, if any, to the Applicable Margin
or Applicable Fee Rate shall be effective five Business Days after the
Administrative Agent has received the applicable Financials. If the Borrower
fails to deliver the Financials to the Administrative Agent at the time required
pursuant to Section 6.1, then the Applicable Margin and Applicable Fee Rate
shall be the highest Applicable Margin and Applicable Fee Rate set forth in the
foregoing table until five days after such Financials are so delivered.
Notwithstanding the foregoing, Level III Status shall be in effect until
the Administrative Agent receives the Financials for the Borrower's fiscal
quarter ending on March 31, 2005 and adjustments to the Applicable Margin and
Applicable Fee Rate shall thereafter be effected in accordance with the
preceding paragraph.
3