Exhibit 4.1
EXECUTION COPY
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CREDIT AGREEMENT
Dated as of May 27, 2005
among
MANOR CARE, INC.,
as the Borrower,
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent, Swing Line Lender
and
L/C Issuer,
and
The Other Lenders Party Hereto
----------
BANK OF AMERICA, N.A.,
as Syndication Agent
SUNTRUST BANK, UBS SECURITIES LLC,
AND MERRILL LYNCH BANK USA,
as Documentation Agents
J.P. MORGAN SECURITIES INC.,
as
Sole Lead Arranger and Sole Book Manager
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TABLE OF CONTENTS
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ARTICLE I.
DEFINITIONS AND ACCOUNTING TERMS
1.01. Defined Terms..................................................... 1
1.02. Other Interpretive Provisions..................................... 22
1.03. Accounting Terms.................................................. 23
1.04. Rounding.......................................................... 24
1.05. References to Agreements and Laws................................. 24
1.06. Times of Day...................................................... 24
1.07. Letter of Credit Amounts.......................................... 24
1.08. Classification of Loans and Borrowings............................ 24
ARTICLE II.
THE COMMITMENTS AND CREDIT EXTENSIONS
2.01. Loans............................................................. 24
2.02. Borrowings of Revolving Loans..................................... 26
2.03. Letters of Credit................................................. 27
2.04. Swing Line Loans.................................................. 34
2.05. Prepayments....................................................... 37
2.06. Termination or Reduction of Commitments; Increase of
Commitments....................................................... 38
2.07. Repayment of Loans................................................ 39
2.08. Interest.......................................................... 40
2.09. Fees.............................................................. 40
2.10. Computation of Interest and Fees.................................. 41
2.11. Evidence of Debt.................................................. 41
2.12. Payments Generally................................................ 41
2.13. Sharing of Payments............................................... 43
2.14. Competitive Bid Procedure......................................... 44
2.15. Conversion and Continuation Options............................... 45
ARTICLE III.
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01. Taxes............................................................. 46
3.02. Illegality........................................................ 49
3.03. Inability to Determine Rates...................................... 49
3.04. Increased Cost and Reduced Return; Capital Adequacy............... 49
3.05. Funding Losses.................................................... 50
3.06. Matters Applicable to all Requests for Compensation............... 50
3.07. Survival.......................................................... 51
3.08. Competitive Loans................................................. 51
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TABLE OF CONTENTS
(CONTINUED)
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ARTICLE IV.
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
4.01. Conditions of Initial Credit Extension............................ 51
4.02. Conditions to all Credit Extensions............................... 53
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
5.01. Organization, Power, Authority, etc............................... 54
5.02. Authorization; No Contravention................................... 54
5.03. Governmental Approval; Regulation................................. 54
5.04. Validity, etc..................................................... 55
5.05. Audited Financial Statements...................................... 55
5.06. No Material Adverse Effect........................................ 55
5.07. Litigation........................................................ 55
5.08. Regulations U and X............................................... 56
5.09. Pension and Welfare Plans......................................... 56
5.10. Subsidiaries, etc................................................. 56
5.11. Taxes............................................................. 56
5.12. Absence of Default................................................ 57
5.13. Ownership of Property............................................. 57
5.14. Environmental Matters............................................. 57
5.15. Accuracy of Information........................................... 57
5.16. Health Care Regulatory Matters.................................... 57
5.17. Compliance with Laws.............................................. 58
ARTICLE VI.
AFFIRMATIVE COVENANTS
6.01. Financial Statements.............................................. 59
6.02. Maintenance of Existence, etc..................................... 60
6.03. Foreign Qualification............................................. 61
6.04. Payment of Taxes.................................................. 61
6.05. Insurance......................................................... 61
6.06. Notice of Default, Litigation, etc................................ 61
6.07. Performance of Obligations........................................ 62
6.08. Books and Records; Inspection Rights.............................. 62
6.09. Compliance with Laws.............................................. 63
6.10. Maintenance of Property........................................... 63
6.11. Additional Guarantors............................................. 63
6.12. Use of Proceeds................................................... 64
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TABLE OF CONTENTS
(CONTINUED)
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ARTICLE VII.
NEGATIVE COVENANTS
7.01. Business Activities............................................... 64
7.02. Indebtedness...................................................... 64
7.03. Liens............................................................. 65
7.04. Financial Condition............................................... 67
7.05. Restricted Payments............................................... 67
7.06. Consolidation, Merger, etc........................................ 67
7.07. Asset Dispositions, etc........................................... 68
7.08. Modification of Certain Instruments, Organization Documents,
etc............................................................... 68
7.09. Transactions with Affiliates...................................... 68
7.10. Acquisitions...................................................... 69
ARTICLE VIII.
EVENTS OF DEFAULT AND REMEDIES
8.01. Events of Default................................................. 69
8.02. Remedies Upon Event of Default.................................... 71
8.03. Application of Funds.............................................. 72
ARTICLE IX.
ADMINISTRATIVE AGENT
9.01. Appointment and Authorization of Administrative Agent............. 73
9.02. Delegation of Duties.............................................. 73
9.03. Liability of Administrative Agent................................. 74
9.04. Reliance by Administrative Agent.................................. 74
9.05. Notice of Default................................................. 74
9.06. Credit Decision; Disclosure of Information by Administrative
Agent............................................................. 75
9.07. Indemnification of Administrative Agent........................... 75
9.08. Administrative Agent in its Individual Capacity................... 76
9.09. Successor Administrative Agent.................................... 76
9.10. Administrative Agent May File Proofs of Claim..................... 77
9.11. Guaranty Matters.................................................. 78
9.12. Other Agents; Arrangers and Managers.............................. 78
ARTICLE X.
MISCELLANEOUS
10.01. Amendments, Etc................................................... 78
10.02. Notices and Other Communications; Facsimile Copies................ 80
10.03. No Waiver; Cumulative Remedies.................................... 81
10.04. Attorney Costs, Expenses and Taxes................................ 81
10.05. Indemnification by the Borrower................................... 81
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TABLE OF CONTENTS
(CONTINUED)
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10.06. Payments Set Aside................................................ 82
10.07. Successors and Assigns............................................ 82
10.08. Confidentiality................................................... 86
10.09. Set-off........................................................... 86
10.10. Interest Rate Limitation.......................................... 87
10.11. Counterparts; Effectiveness....................................... 87
10.12. Integration....................................................... 87
10.13. Survival of Representations and Warranties........................ 87
10.14. Severability...................................................... 88
10.15. Tax Forms......................................................... 88
10.16. Replacement of Lenders............................................ 89
10.17. Governing Law..................................................... 90
10.18. Waiver of Right to Trial by Jury.................................. 90
10.19. Entire Agreement.................................................. 91
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CREDIT AGREEMENT
This CREDIT AGREEMENT ("Agreement") is entered into as of May 27, 2005,
among MANOR CARE, INC., a Delaware corporation (the "Borrower"), each lender
from time to time party hereto (collectively, the "Lenders" and individually, a
"Lender"), JPMORGAN CHASE BANK, N.A., as Administrative Agent, Swing Line Lender
and L/C Issuer, BANK OF AMERICA, N.A., as L/C Issuer, HUNTINGTON NATIONAL BANK,
as L/C Issuer, BANK OF AMERICA, N.A., as Syndication Agent, SUNTRUST BANK, UBS
SECURITIES LLC, AND MERRILL LYNCH BANK USA, as Documentation Agents, and J.P.
Morgan Securities Inc., as Sole Lead Arranger and Sole Book Manager.
The Borrower has requested that the Lenders provide a revolving credit
facility, and the Lenders are willing to do so on the terms and conditions set
forth herein.
In consideration of the mutual covenants and agreements herein contained,
the parties hereto covenant and agree as follows:
ARTICLE I.
DEFINITIONS AND ACCOUNTING TERMS
1.01. DEFINED TERMS. As used in this Agreement, the following terms shall
have the meanings set forth below:
"Acquisition" means any transaction or series of related transactions for
the purpose of or resulting, directly or indirectly, in (a) the acquisition of
all or substantially all of the assets of a Person, or of any line or segment of
business or division of a Person, (b) the acquisition of in excess of 50% of the
Equity Interests of any Person, or otherwise causing any Person to become a
Subsidiary, or (c) a merger or consolidation or any other combination with
another Person (other than a Person that is a Subsidiary) provided that (i) the
Borrower or the Subsidiary is the surviving entity or (ii) after giving effect
to such merger or consolidation, such other Person has become a Subsidiary of
the Borrower.
"Additional Lender" is defined in Section 2.06(c).
"Additional Lender Supplement" means an Additional Lender Supplement,
substantially in the form of Exhibit I.
"Administrative Agent" means JPMorgan Chase Bank in its capacity as
administrative agent under any of the Loan Documents, or any successor
administrative agent.
"Administrative Agent's Office" means the Administrative Agent's address
and, as appropriate, account as set forth on Schedule 10.02, or such other
address or account as the Administrative Agent may from time to time notify the
Borrower and the Lenders.
"Administrative Questionnaire" means an administrative questionnaire, in
substantially the form supplied by the Administrative Agent to be completed by
each Lender.
"Affiliate" means, as to any Person, another Person that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by or
is under common Control with the Person specified. "Control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the ability
to exercise voting power, by contract or otherwise. "Controlling" and
"Controlled" have meanings correlative thereto; provided, however, that the
existence of a management contract by the Borrower or one of its Affiliates to
manage another entity shall not be deemed to be control.
"Agent-Related Persons" means the Administrative Agent (it being understood
that, in the case of JPMorgan Chase Bank, in its capacity as the Administrative
Agent, L/C Issuer and Swing Line Lender), and the officers, directors,
employees, agents, attorneys-in-fact and Affiliates of such Persons when acting
on behalf of or in the capacity of the Administrative Agent, L/C Issuer and
Swing Line Lender.
"Aggregate Commitments" means the Commitments of all the Lenders.
"Agreement" is defined in the introductory paragraph hereto.
"Applicable Law" means, as to any Person or matter, (a) any Law relating to
such Person or matter and, where applicable, any official interpretation thereof
by any Person having jurisdiction with respect thereto or charged with the
administration or interpretation thereof, and (b) all judgments, injunctions,
orders and decrees of all courts and arbitrators in proceedings or actions in
which such Person is a party or by which any of its assets or properties are
bound.
"Applicable Margin" means, with respect to all Loans, the following rates
per annum, based upon the Leverage Ratio as set forth in the most recent
Compliance Certificate received by the Administrative Agent pursuant to Section
6.01(a)(iii) or 6.01(b)(ii), as applicable:
Applicable Margin
Applicable Margin
Pricing Leverage Facility for Offshore Rate
Level Ratio Fee Loans and Letters of Credit
- ------- --------------------------------- -------- ---------------------------
I Less than 1.25:1.0 0.080% 0.320%
II Greater than or equal to 1.25:1.0 0.110% 0.515%
but less than 1.75:1.0
III Greater than or equal to 175:1.0 0.125% 0.625%
but less than 2.25:1.0
IV Greater than or equal to 2.25:1.0 0.175% 0.700%
but less than 2.75:1.0
V Greater than or equal to 2.75:1.0 0.200% 0.800%
From the Effective Date until the delivery of the first Compliance
Certificate, the Applicable Margin shall be based upon the Leverage Ratio
as set forth in the officer's certificate received by the Administrative
Agent pursuant to Section 4.01(a)(ix). Any increase or decrease in the
Applicable Margin resulting from a change in the Leverage Ratio shall
become effective as of the first Business Day immediately following the
date a Compliance Certificate is delivered pursuant to Section 6.01(a)(iii)
or 6.01(b)(ii), as applicable; provided, however, that if a Compliance
Certificate is not delivered when due in accordance with such Section, then
Pricing Level V shall apply as of the first Business
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Day after the date on which such Compliance Certificate was required to
have been delivered, and pricing Level V shall remain in effect to (and
including) the date the Administrative Agent receives such Compliance
Certificate.
"Arranger" means J.P. Morgan Securities Inc., in its capacity as sole lead
arranger and sole book manager.
"Assignment and Assumption" means an agreement of assignment and assumption
substantially in the form of Exhibit E.
"Attorney Costs" means and includes all reasonable fees, expenses and
disbursements of any law firm or other external counsel.
"Audited Financial Statements" means the audited consolidated balance sheet
of the Borrower and its Subsidiaries for the fiscal year ended December 31,
2004, and the related consolidated statements of income or operations,
shareholders' equity and cash flows for such fiscal year of the Borrower and its
Subsidiaries, including the notes thereto.
"Auto-Renewal Letter of Credit" is defined in Section 2.03(b)(iii).
"Availability Period" means the period from and including the Closing Date
to the earliest of (a) the Maturity Date, (b) the date of termination of the
Aggregate Commitments pursuant to Section 2.06, and (c) the date of termination
of the Aggregate Commitments pursuant to Section 8.02.
"Base Rate" means for any day a fluctuating rate per annum equal to the
higher of (a) the sum of Federal Funds Rate plus 1/2 of 1% and (b) the rate of
interest in effect for such day as publicly announced from time to time by
JPMorgan Chase Bank as its "prime rate." Any change in such rate announced by
JPMorgan Chase Bank shall take effect at the opening of business on the day
specified in the public announcement of such change.
"Base Rate Loan" means a Loan that bears interest at a rate based on the
Base Rate.
"Borrower" is defined in the introductory paragraph hereto.
"Borrowing" means (a) Revolving Loans of the same Type, made, converted or
continued on the same date and, in the case of Offshore Rate Loans, as to which
a single Interest Period is in effect, (b) a Competitive Loan or group of
Competitive Loans of the same Type made on the same date and as to which a
single Interest Period is in effect or (d) a Swing Line Loan.
"Business Day" means any day other than a Saturday, Sunday or other day on
which commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state where the Administrative Agent's Office is located and, if
such day relates to any Offshore Rate Loan, means any such day on which dealings
are conducted in the applicable offshore dollar interbank market.
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"Capitalized Lease Liabilities" means, as to any Person, all monetary
obligations of such Person under any leasing or similar arrangement which have
been (or, in accordance with GAAP, should be) classified as capitalized leases,
and for purposes of each Loan Document the amount of such obligations shall be
the capitalized amount thereof, determined in accordance with GAAP.
"Cash Collateralize" is defined in Section 2.03(g).
"Cash Equivalent Investment" means, at any time:
(a) any direct obligation of (or obligation unconditionally guaranteed by)
the United States or a State thereof (or any agency or political subdivision
thereof, to the extent such obligations are supported by the full faith and
credit of the United States or a State thereof) maturing not more than three
years after such time;
(b) commercial paper maturing not more than three years from the date of
issue, which is issued by (i) a corporation (other than an Affiliate of any
Obligor) organized under the laws of any State of the United States or of the
District of Columbia and rated A-i or higher by S&P or P-1 or higher by Moody's,
or (ii) any Lender (or its holding company);
(c) any certificate of deposit, time deposit (including Eurodollar time
deposits) or bankers acceptance, maturing not more than three years after its
date of issuance, which is issued by either (i) any bank organized under the
laws of the United States (or any State thereof) and which has (A) a credit
rating of A2 or higher from Moody's or A or higher from S&P and (B) a combined
capital and surplus greater than $100,000,000, or (ii) any Lender;
(d) any repurchase agreement having a term of three years or less entered
into with any Lender or any commercial banking institution satisfying the
criteria set forth in clause (c)(i) which (i) is secured by a fully perfected
security interest in any obligation of the type described in clause (a), and
(ii) has a market value at the time such repurchase agreement is entered into of
not less than 100% of the repurchase obligation of such commercial banking
institution thereunder;
(e) any bond or note maturing not more than three years after its date of
issuance, issued by any State of the United States (or any agency or political
subdivision thereof, to the extent such obligations are supported by the full
faith and credit of the United States or a State thereof), which has (i) a
long-term credit rating of A or higher from Moody's or A or higher from S&P or
(ii) a short-term credit rating of MIG1, SP-1, or the equivalent;
(f) any corporate fixed rate or floating rate medium-term notes maturing
not more than three years after its date of issuance, which has received a
credit rating of A or higher from Moody's or A or higher from S & P;
(g) asset backed paper maturing not more than three years after its date of
issuance, which has a credit rating of A-1/P-1 or higher from Moody's or AAA/Aaa
or higher from S & P;
(h) asset-backed securities, which have a credit rating of Aaa/AAA or
higher from S&P with average lives of 3 years or less.
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(i) asset-backed commercial paper, which has a credit rating of A-1/ P-1 or
higher from Moody's;
(j) any security issued by an agency of the United States (to the extent
such securities are supported by the full faith and credit of the United States
or a State thereof), including issuances of Federal National Mortgage
Association, Federal Home Loan Mortgage Corporation, Federal Home Loan Bank,
Federal Farm Credit Bank, Student Loan Marketing Association, Government
National Mortgage Association and other agencies or instrumentalities of the
United States maturing not more than three years after the date of its issuance
(it being understood that such securities include securities that may be
"called" by the issuer prior to the final maturity date);
(k) any investment in auction rate securities, which has (i) a credit
rating of A or higher from Moody's and (ii) a maximum maturity of one year after
its date of issuance, for which the reset date will be used to determine the
maturity date, all to the extent such investments are made in a manner
consistent with past practice; and
(l) investments in funds that invest solely in items described in clauses
(a) through (k).
Notwithstanding the foregoing, the maximum maturity of individual
securities shall be three years and one month or less at the time of
purchase by the Borrower (except with respect to asset backed securities
described in clauses (h), (i) and (j) above, which may have an average
maturity of three years or less. The maturity of variable rate demand notes
and auction rate debt/ preferred securities shall be measured by the time
to reset date. Auction rate debt and preferred stock and perpetual
preferred securities with a floating rate dividend that is paid and reset
every seven to 49 days through a bidding process shall have a credit rating
of AAA or higher from Moody's or S&P.
"Change of Control" means, as to any Person, an event or series of events
by which:
(a) at any time, any Person or group of Persons (as such terms are used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934) (other than
underwriters holding pending distribution) owns beneficially (as defined in
Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934) more than 50%
of the issued and outstanding shares of Equity Interests of the Borrower having
ordinary voting power for the election of directors of the Borrower; or
(b) at any time, a majority of the seats (other than vacant seats) on the
Borrower's board of directors shall be occupied by persons who were neither (i)
recommended by the Borrower's management in connection with an annual meeting of
the Borrower's stockholders, nor (ii) appointed by directors who were
recommended as described in clause (i); or
(c) the occurrence of any "Change of Control Trigger Event" (or other
similar term) under (and as defined in) any of the Notes Documents or any other
agreement, note or instrument evidencing capital markets Indebtedness issued or
otherwise incurred after the Effective Date and not otherwise prohibited
hereunder (the "New Indebtedness").
5
"Class", when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are Revolving Loans,
Competitive Loans or Swing Line Loans.
"Closing Date" means the first date all the conditions precedent in Section
4.01 are satisfied or waived in accordance with Section 4.01 (or, in the case of
Section 4.01(b), waived by the Person entitled to receive the applicable
payment).
"CMS" means the Centers for Medicare and Medicaid Services of HHS and any
Person succeeding to the functions thereof.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Commitment" means, as to each Lender, its obligation to (a) make Revolving
Loans to the Borrower pursuant to Section 2.01, (b) purchase participations in
L/C Obligations, and (c) purchase participations in Swing Line Loans, in an
aggregate principal amount at any one time outstanding not to exceed the amount
set forth opposite such Lender's name on Schedule 2.01 or in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto, as applicable,
as such amount may be adjusted from time to time in accordance with this
Agreement.
"Commitment Increase Notice" is defined in Section 2.06(b).
"Commitment Increase Supplement" means a Commitment Increase Supplement,
substantially in the form of Exhibit J.
"Compensation Period" is defined in Section 2.12(c)(ii).
"Competitive Bid" means an offer by a Lender to make a Competitive Loan in
accordance with Section 2.14.
"Competitive Bid Rate" means, with respect to any Competitive Bid, the
Margin or the Fixed Rate, as applicable, offered by the Lender making such
Competitive Bid.
"Competitive Bid Request" means a request by the Borrower for Competitive
Bids in accordance with Section 2.14.
"Competitive Loan" means a Loan made pursuant to Section 2.14.
"Compliance Certificate" means a certificate duly completed and executed by
the chief financial or accounting Responsible Officer of the Borrower,
substantially in the form of Exhibit D, together with such changes thereto as
the Administrative Agent may from time to time request for the purpose of
monitoring the Borrower's compliance with the financial covenants contained
herein.
"CON" means a certificate of need or other license or permit issued by a
state health facilities planning board or similar agency or body required for
the construction, expansion, or investment in a health facility.
6
"Consolidated" means, as to any financial term, the aggregate for each
Person and its Subsidiaries of the amounts signified by such terms for all such
Persons determined on a consolidated basis in accordance with GAAP including
principles of consolidation, and, in the case of the Borrower and Subsidiaries,
consistent with those applied in the preparation of the Audited Financial
Statements.
"Consolidated EBITDA" means, for any period, the Borrower's and
Subsidiaries' earnings before Consolidated Interest Expense, taxes,
depreciation, amortization, extraordinary items of gain and all Specified
Losses.
"Consolidated Interest Expense" means, for any period, for the Borrower and
Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP), all interest in respect of Indebtedness for Borrowed
Money accrued or capitalized during such period (whether or not actually paid
during such period), excluding amortization of fees related to the closing of
this Agreement and each of the Notes Documents.
"Contingent Liability" means any agreement, undertaking or arrangement by
which any Person (a) guarantees, endorses or otherwise becomes or is
contingently liable upon (by direct or indirect agreement, contingent or
otherwise, to provide funds for payment, to supply funds to, or otherwise to
invest in, a debtor, or otherwise to assure a creditor against loss) the debt,
obligation or other liability of any other Person (other than by endorsements of
instruments in the course of collection), (b) guarantees the payment of
dividends or other distributions upon the shares of any other Person, or (c)
undertakes or agrees (contingently or otherwise) (i) to purchase, repurchase, or
otherwise acquire any Indebtedness, obligation or liability of any other Person
or any security therefor, (ii) to provide funds for the payment or discharge
thereof (whether in the form of loans, advances, stock purchases, capital
contributions or otherwise), (iii) to maintain solvency, assets, level of
income, or other financial condition of any other Person, or (iv) to make
payment on behalf of any other Person other than for value received. The amount
of any Person's obligation under any Contingent Liability shall (subject to any
limitation set forth therein) be deemed to be the outstanding principal amount
(or maximum permitted principal amount, if larger) of the debt, obligation or
other liability guaranteed or supported thereby.
"Contractual Undertaking" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Control" is defined in the definition of "Affiliate."
"Convertible Notes" means, collectively, (i) the 2.125% senior unsecured
convertible notes issued by the Borrower pursuant to the terms of the Indenture,
dated as of April 15, 2003, between the Borrower, the subsidiary guarantors
party thereto and U.S. Bank National Association (successor to National City
Bank), as Trustee, (ii) the 2.125% senior unsecured convertible notes issued by
the Borrower pursuant to the terms of the Indenture, dated as of December 10,
2004, between the Borrower, the subsidiary guarantors party thereto and U.S.
Bank National Association, as Trustee, and (iii) all other notes accepted from
time to time in substitution or exchange for or renewal of any of the foregoing
in accordance with the applicable Indenture.
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"Credit Extension" means a Borrowing or an L/C Credit Extension.
"Debtor Relief Laws" means the Bankruptcy Code of the United States, and
all other liquidation, conservatorship, bankruptcy, assignment for the benefit
of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States or other
applicable jurisdictions from time to time in effect and affecting the rights of
creditors generally.
"Default" means any event or condition that constitutes an Event of Default
or that, with the giving of any notice, the passage of time, or both, would (if
not cured or otherwise remedied during such time in accordance with this
Agreement) constitute an Event of Default.
"Default Rate" means a rate per annum equal to, (a) in the case of overdue
principal on any Loan, the sum of the interest rate (including any Applicable
Margin) otherwise applicable from time to time to such Loan plus 2% per annum,
and (b) in the case of overdue interest, fees, and other monetary Obligations,
the sum of the interest rate otherwise applicable to Base Rate Loans plus 2% per
annum, in each case to the fullest extent permitted by Applicable Law.
"Defaulting Lender" means any Lender that (a) has failed to fund any
portion of the Loans, participations in L/C Obligations or participations in
Swing Line Loans required to be funded by it hereunder within one Business Day
of the date required to be funded by it hereunder, (b) has otherwise failed to
pay over to the Administrative Agent or any other Lender any other amount
required to be paid by it hereunder within one Business Day of the date when
due, unless the subject of a good faith dispute, or (c) has been deemed
insolvent or become the subject of a proceeding under any Debtor Relief Laws.
"Disclosure Schedule" means the Disclosure Schedule attached hereto as
Schedule I.
"Disposition" or "Dispose" means the sale, transfer, license or other
disposition (including any sale and leaseback transaction) of any property by
any Person, including any sale, assignment, transfer or other disposal, with or
without recourse, of any notes or accounts receivable or any rights and claims
associated therewith.
"Dollar" and "$" mean lawful money of the United States.
"Domestic Subsidiary" means any Subsidiary that is organized under the laws
of any State of the United States or the District of Columbia.
"Effective Date" means the date this Agreement becomes effective pursuant
to Section 10.11.
"Eligible Assignee" has the meaning set forth in Section 10.07(g).
"Environmental Claims" means all claims, however asserted, by any
Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law, or for release or injury
to the environment.
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"Environmental Laws" means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including those related to
hazardous substances or wastes, air emissions and discharges to waste or public
systems.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower or any Subsidiary directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"Equity Interest" means, as to any Person, all shares, interests,
participations or other equivalents (however designated, whether voting or
non-voting) of such Person's capital, whether now outstanding or issued after
the Effective Date.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"ERISA Affiliate" means any trade or business (whether or not incorporated)
under common control with the Borrower within the meaning of Section 414(b) or
(c) of the Code (and Sections 414(m) and (o) of the Code for purposes of
provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension Plan;
(b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan
subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is
in reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Sections 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the
imposition of any liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower
or any ERISA Affiliate.
"Eurodollar Reserve Percentage" means, for any day during any Interest
Period, the reserve percentage (expressed as a decimal, carried out to five
decimal places) in effect on such day, whether or not applicable to any Lender,
under regulations issued from time to time by the FRB for determining the
maximum reserve requirement (including any emergency, supplemental or other
marginal reserve requirement) with respect to Eurocurrency funding (currently
referred to as "Eurocurrency liabilities"). The Offshore Rate for each
outstanding Offshore Rate Loan
9
shall be adjusted automatically as of the effective date of any change in the
Eurodollar Reserve Percentage.
"Event of Default" is defined in Section 8.01.
"Existing Credit Agreement" means that certain Credit Agreement, dated as
of April 21, 2003, among the Borrower, Bank of America, N.A., as Administrative
Agent, JPMorgan Chase Bank, as Syndication Agent, The Bank of New York and
SunTrust Bank, as Documentation Agents, and the other lenders party thereto.
"Existing L/C Issuer" means Bank of America, N.A. with respect to Letters
of Credit issued thereby, and (b) Huntington National Bank with respect to
Letters of Credit issued thereby.
"Existing Letters of Credit" means the letters of credit issued under the
Existing Credit Agreement and described in Schedule A.
"Existing Senior Notes" means, collectively, the senior unsecured notes
issued by the Borrower pursuant to the terms of the Indenture, dated as of March
8, 2001, between the Borrower and U.S. Bank National Association (successor to
National City Bank), as Trustee, and all other notes accepted from time to time
in substitution or exchange therefor or renewal thereof in accordance with such
Indenture.
"Facility" means any nursing home or other health care facility (including
any facility operating an assisted living unit) operated by the Borrower or any
Subsidiary.
"Federal Funds Rate" means, for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank on the Business Day next
succeeding such day; provided, however, that (a) if such day is not a Business
Day, the Federal Funds Rate for such day shall be such rate on such transactions
on the next preceding Business Day as so published on the next succeeding
Business Day, and (b) if no such rate is so published on such next succeeding
Business Day, the Federal Funds Rate for such day shall be the average rate
(rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to
JPMorgan Chase Bank on such day on such transactions as determined by the
Administrative Agent.
"Fee Letter" means the letter agreement, dated April 26, 2005, among the
Borrower, the Administrative Agent and the Arranger.
"Fiscal Quarter" means a quarter ending on the last day of March, June,
September or December. Unless the context otherwise specifically requires, the
term "Fiscal Quarter" shall be a reference to a Fiscal Quarter of the Borrower.
"Fiscal Year" means any period of twelve consecutive calendar months ending
on December 31; references to a Fiscal Year with a number corresponding to any
calendar year (e.g., the "2004 Fiscal Year") refer to the Fiscal Year ending on
December 31 of such calendar
10
year. Unless the context otherwise specifically requires, the term "Fiscal Year"
shall be a reference to a Fiscal Year of the Borrower.
"Fixed Charge Coverage Ratio" means, as of the close of any Fiscal Quarter,
the ratio computed for the period consisting of such Fiscal Quarter and each of
the three immediately preceding Fiscal Quarters of:
(a) an amount equal to the sum of (i) Consolidated EBITDA for all such
Fiscal Quarters plus (ii) rental expense of the Borrower and its Subsidiaries
incurred during such Fiscal Quarters minus (iii) capital expenditures (excluding
capital expenditures associated with Acquisitions) made during such Fiscal
Quarters,
to
(b) the sum of (i) Consolidated Interest Expense plus (ii) scheduled
payments of principal (but excluding final maturities of the Senior Notes due
2006 and 2008 and any subsequent issuances of notes with bullet maturities)
actually made during such period on Consolidated Indebtedness for Borrowed Money
of the Borrower and Subsidiaries having a final maturity of at least one year
from the date of origin thereof (or which is renewable or extendible at the
option of the obligor for a period or periods more than one year from the date
of origin) other than Credit Extensions under this Agreement for the period of
determination plus (iii) rental expense of the Borrower and its Subsidiaries
incurred during such Fiscal Quarters.
"Fixed Rate" means, with respect to any Competitive Loan (other than a
Competitive Loan bearing interest at a rate based on the Offshore Rate), the
fixed rate of interest per annum specified by the Lender making such Competitive
Loan in its related Competitive Bid.
"Fixed Rate Loan" means a Competitive Loan bearing interest at a Fixed
Rate.
"Foreign Lender" is defined in Section 10.15(a)(i).
"Foreign Subsidiary" means any Subsidiary that is not a Domestic
Subsidiary.
"FRB" means the Board of Governors of the Federal Reserve System of the
United States.
"GAAP" means generally accepted accounting principles in the United States
set forth in the opinions and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, administrative tribunal, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
11
"Granting Lender" is defined in Section 10.07(h).
"Guarantors" means, collectively, each Domestic Subsidiary of the Borrower
that executes a counterpart of the Guaranty on the Closing Date or from time to
time thereafter pursuant to the terms of this Agreement, and is not otherwise
released from the Guaranty in accordance with the terms of a Loan Document.
"Guaranty" means the Guaranty made by each Domestic Subsidiary of the
Borrower in favor of the Administrative Agent on behalf of the Lenders,
substantially in the form of Exhibit F.
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos-containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Health Facility License" means a license or permit to provide skilled
and/or intermediate care nursing services, operate an assisted living unit or
otherwise operate a Facility, including any permit under Medicare Regulations,
Medicaid Regulations and/or other Applicable Law.
"HHS" means the United States Department of Health and Human Services and
any Person succeeding to the functions thereof.
"Hill-Burton Act" means, collectively, the Hill-Burton Act established by
Title VI and XVI of the Public Health Service Act, the Health Manpower Program
established by Title VII of the Public Health Service Act or other grant, loan,
subsidy or assistance program of a Governmental Authority.
"Honor Date" is defined in Section 2.03(c)(i).
"IBOR" means, with respect to any Offshore Rate Loan for any Interest
Period, the rate appearing on Page 3750 of the Telerate 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. In the event that such rate is not
available at such time for any reason, then "IBOR" means the rate of interest
per annum determined by the Administrative Agent to be the arithmetic mean
(rounded upward, if necessary, to the nearest 1/16th of 1%) of the rates of
interest per annum at which dollar deposits in the approximate amount of the
amount of the Loan to be made or continued as, or converted into, an Offshore
Rate Loan and having a maturity comparable to such Interest Period would be
offered by JPMorgan Chase Bank to major banks in the interbank market at their
request at approximately 11:00 a.m. two Business Days prior to the commencement
of such Interest Period.
"Impermissible Qualification" means, as to the opinion or certification of
any independent public accountant as to any financial statement of any Person,
any qualification or exception to such opinion or certification which:
(a) is of a "going concern" or similar nature;
12
(b) relates to the limited scope of examination of matters relevant to such
financial statement; or
(c) which relates to the treatment or classification of any item in such
financial statement and which, as a condition to its removal, would require an
adjustment to such item the effect of which would be to cause the Borrower to be
in Default under Section 7.04.
"Indebtedness" means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:
(a) all obligations of such Person for borrowed money (including all notes
payable and drafts accepted representing extensions of credit) and all
obligations evidenced by bonds, debentures, notes or other similar instruments;
(b) all obligations, contingent or otherwise, relative to the face amount
of all letters of credit, whether or not drawn, and banker's acceptances issued
for the account of such Person;
(c) all obligations as lessee under leases which have been or should be, in
accordance with GAAP, recorded as Capitalized Lease Liabilities; and
(d) whether or not so included as liabilities in accordance with GAAP:
(i) all obligations of such Person to pay the deferred purchase price
of property or services, and indebtedness (excluding prepaid interest
thereon) secured by a Lien on property owned or being purchased by such
Person (including indebtedness arising under conditional sales or other
title retention agreements), whether or not such indebtedness shall have
been assumed by such Person or is limited in recourse, and
(ii) all Contingent Liabilities of such Person (but not to exceed the
net worth of such Person) in respect of any Indebtedness of any Person.
"Indebtedness for Borrowed Money" means, as to any Person, without
duplication, any obligation of such Person for borrowed money, but in any event
shall include (a) any obligation incurred for all or any part of the purchase
price of property or other assets or for the cost of property or other assets
constructed or of improvements thereto, other than accounts payable included in
current liabilities and incurred in respect of property purchased in the
ordinary course of business, (b) the face amount of all letters of credit issued
for the account of such Person (other than documentary letters of credit
including commercial and trade letters of credit issued to secure payment
obligations in respect of goods and services in the ordinary course of business)
and all drafts drawn thereunder, (c) obligations of the type described in
clauses (a), (b), (d), or (e) (whether or not such Person has assumed or become
liable for the payment of such obligation) secured by Liens on assets of such
Person, (d) the amount of all Capitalized Lease Liabilities, and (e) all
Contingent Liabilities of such Person (but not to exceed the net worth of such
Person) with respect to Indebtedness for Borrowed Money described in the
foregoing clauses (a) through (d); provided, however, that Indebtedness for
Borrowed Money shall not include Indebtedness fully secured by the cash
surrender value of life insurance policies.
"Indemnified Liabilities" is defined in Section 10.05.
13
"Indemnitees" is defined in Section 10.05.
"Interest Payment Date" means, (a) as to any Loan other than a Base Rate
Loan or a Fixed Rate Loan, the last day of each Interest Period applicable to
such Loan and the Maturity Date; provided, however, that if any Interest Period
for a Offshore Rate Loan exceeds three months, the respective dates that fall
every three months after the beginning of such Interest Period shall also be
Interest Payment Dates; (b) as to any Base Rate Loan, the last Business Day of
each March, June, September and December and the Maturity Date and (c) with
respect to any Fixed Rate Loan, the last day of the Interest Period applicable
to the Borrowing of which such Loan is a part and, in the case of a Fixed Rate
Borrowing with an Interest Period of more than 90 days' duration (unless
otherwise specified in the applicable Competitive Bid Request), each day prior
to the last day of such Interest Period that occurs at intervals of 90 days'
duration after the first day of such Interest Period, and any other dates that
are specified in the applicable Competitive Bid Request as Interest Payment
Dates with respect to such Borrowing.
"Interest Period" means, (i) as to each Offshore Rate Loan, the period
commencing on the date such Offshore Rate Loan is disbursed or converted to or
continued as an Offshore Rate Loan and ending on the date one, two, three or six
months thereafter, as selected by the Borrower in its Revolving Loan Notice or
the applicable Competitive Bid Request and (ii) with respect to any Fixed Rate
Borrowing, the period (which shall not be less than seven days or more than 180
days) commencing on the date of such Borrowing and ending on the date specified
in the applicable Competitive Bid Request; provided, however, that:
(a) any Interest Period that would otherwise end on a day that is not a
Business Day shall be extended to the next succeeding Business Day unless such
Business Day falls in another calendar month, in which case such Interest Period
shall end on the next preceding Business Day;
(b) any Interest Period that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on the last
Business Day of the calendar month at the end of such Interest Period; and
(c) no Interest Period for any Loan shall extend beyond the Maturity Date.
"IRS" means the United States Internal Revenue Service.
"JPMorgan Chase Bank" means JPMorgan Chase Bank, N.A.
"Laws" means, collectively, all international, foreign, Federal, state and
local statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.
14
"L/C Advance" means, as to each Lender, such Lender's funding of its
participation in any L/C Borrowing in accordance with its Pro Rata Share.
"L/C Borrowing" means an extension of credit resulting from a drawing under
any Letter of Credit which has not been reimbursed on the date when made or
refinanced as a Borrowing.
"L/C Credit Extension" means, as to any Letter of Credit, the issuance
thereof or extension of the expiry date thereof, or the renewal or increase of
the amount thereof.
"L/C Issuer" means (a) in respect of Existing Letters of Credit only, the
applicable Existing L/C Issuer and (b) in respect of each Letter of Credit
issued hereunder on or after the Closing Date, JPMorgan Chase Bank or any
affiliate thereof. In the event any proposed beneficiary of a requested Letter
of Credit does not accept JPMorgan Chase Bank as the issuer or JPMorgan Chase
Bank otherwise declines to issue a Letter of Credit pursuant to the terms
hereof, the Borrower may, after notice to JPMorgan Chase Bank, request another
Lender to act as L/C Issuer with respect to such Letter of Credit.
"L/C Obligations" means, as at any date of determination, the aggregate
undrawn amount of all outstanding Letters of Credit plus the aggregate of all
Unreimbursed Amounts, including all L/C Borrowings. For purposes of computing
the amount available to be drawn under any Letter of Credit, the amount of such
Letter of Credit shall be determined in accordance with Section 1.07. For all
purposes of this Agreement, if on any date of determination a Letter of Credit
has expired by its terms but any amount may still be drawn thereunder by reason
of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed
to be "outstanding" in the amount so remaining available to be drawn.
"Lender" is defined in the introductory paragraph hereto. "Lender", as the
context requires, includes the L/C Issuers and the Swing Line Lender.
"Lending Office" means, as to any Lender, the office or offices of such
Lender described as such in such Lender's Administrative Questionnaire, or such
other office or offices as a Lender may from time to time notify the Borrower
and the Administrative Agent.
"Letter of Credit Application" means an application and agreement for the
issuance or amendment of a Letter of Credit in the form from time to time in use
by the relevant L/C Issuer.
"Letter of Credit Expiration Date" means the day that is seven days prior
to the Maturity Date then in effect (or, if such day is not a Business Day, the
next preceding Business Day).
"Letter of Credit Sublimit" means an amount equal to $125,000,000. The
Letter of Credit Sublimit is part of, and not in addition to, the Aggregate
Commitments.
"Letters of Credit" is defined in Section 2.03(a).
"Leverage Ratio" means, as of any date of determination, the ratio of (a)
Consolidated Indebtedness for Borrowed Money of the Borrower and Subsidiaries as
of such date to (b) Consolidated EBITDA for the period of the four fiscal
quarters most recently ended for
15
which the Borrower has or is required to have delivered financial statements
pursuant to Section 6.01(a) or 6.01(b).
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement of any kind or
nature whatsoever (including any conditional sale or other title retention
agreement, and any financing lease having substantially the same economic effect
as any of the foregoing).
"Loans" means the loans made by the Lenders to the Borrower pursuant to
this Agreement.
"Loan Documents" means, collectively, this Agreement, each Note, the Fee
Letter, the Guaranty, each Compliance Certificate, each Revolving Loan Notice,
each Swing Line Loan Notice, each Letter of Credit Application, each Competitive
Bid Request, each Additional Lender Supplement and each Commitment Increase
Supplement.
"LTACH Subsidiary" means a Subsidiary which (i) is engaged in the business
of being a long term acute care hospital, (ii) either (a) has minority
shareholders or other joint venturers or partners upon its formation or (b) is a
wholly owned Subsidiary of the Borrower or one of the Borrower's Subsidiaries
upon its formation, so long as within twelve (12) months of such Subsidiary
having a total asset value exceeding $1,000,000, minority shareholders or other
joint venturers or partners, in addition to the Borrower or one or more of the
Borrower's Subsidiaries, shall own Equity Interests in such Subsidiary, and
(iii) complies, together with all other such Subsidiaries, with the provisions
of clause (b)(ii) of the definition of "Non-Obligor" contained in this Section
1.01.
"Manor Care of America" means Manor Care of America, Inc., a Delaware
corporation and a wholly owned Subsidiary of the Borrower.
"Manor Care of America Notes" means, collectively, the unsecured notes
issued by Manor Care of America pursuant to the terms of the Indenture, dated as
of June 4, 1996, between Manor Care of America and Wilmington Trust Company, as
Trustee, and all other notes accepted from time to time in substitution or
exchange therefor or renewal thereof in accordance with such Indenture.
"Margin" means, with respect to any Competitive Loan bearing interest at a
rate based on the Offshore Rate, the marginal rate of interest, if any, to be
added to or subtracted from the Offshore Rate to determine the rate of interest
applicable to such Loan, as specified by the Lender making such Loan in its
related Competitive Bid.
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, liabilities
(actual or contingent), or condition (financial or otherwise) of the Borrower
and Subsidiaries taken as a whole; or (b) a material impairment of the ability
of the Borrower and the other Obligors taken as a whole to perform their payment
or other material Obligations under any Loan Document to which any of them is a
party.
16
"Material Group of Subsidiaries" means any Subsidiary or Subsidiaries
having 5% or more of the Consolidated assets of the Borrower and Subsidiaries.
"Maturity Date" means May 27, 2010.
"Maximum Rate" has the meaning set forth in Section 10.10.
"Moody's" means Moody's Investors Service, Inc., and any successor thereto.
"Medicaid Certification" means certification by a state agency that the
health facility is in substantial compliance with the requirements for
participation in the Medicaid program.
"Medicaid Provider Agreement" means an agreement entered into between a
state agency or other such entity administering the Medicaid program and a
health facility under which the agency agrees to pay for services provided by
the health facility to qualified Medicaid beneficiaries in accordance with the
terms of the agreement and Medicaid program as required by the Medicaid
Regulations.
"Medicaid Regulations" means, collectively, (a) all federal statutes
(whether set forth in Title XIX of the Social Security Act or elsewhere)
affecting the medical assistance program established by Title XIX of the Social
Security Act (42 U.S.C. Sections 1396, et seq.); (b) all applicable provisions
of all federal rules, regulations, manuals, orders and administrative,
reimbursement and other guidelines of all Governmental Authorities (whether or
not having the force of law) promulgated pursuant to or in connection with the
statutes described in clause (a); (c) all state statutes and plans for medical
assistance enacted in connection with the statutes and provisions described in
clauses (a) and (b); and (d) all applicable provisions of all rules,
regulations, manuals, orders and administrative, reimbursement and other
guidelines of all Governmental Authorities (whether or not having the force of
law) promulgated pursuant to or in connection with any of the foregoing.
"Medicare Certification" means certification by CMS or a state agency or
entity under contract with CMS that the health facility is in substantial
compliance with the requirements for participation in the Medicare program.
"Medicare Provider Agreement" means an agreement entered into between CMS
or other Person under contract with CMS and a health facility under which CMS
agrees to pay for services provided by the health facility to qualified Medicare
beneficiaries in accordance with the terms of the agreement and Medicare
Regulations.
"Medicare Regulations" means, collectively, all federal statutes (whether
set forth in Title XVIII of the Social Security Act or elsewhere) affecting the
health insurance program for the aged and disabled established by Title XVIII of
the Social Security Act (42 U.S.C. Sections 1395, et seq.), together with all
applicable provisions of all rules, regulations, manuals, orders and
administrative, reimbursement and other guidelines of all Governmental
Authorities including HHS, CMS, the Office of the Inspector General of HHS, or
any Person succeeding to the functions of any of the foregoing (whether or not
having the force of law).
17
"Multiemployer Plan" means any employee benefit plan of the type described
in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate
makes or is obligated to make contributions, or during the preceding five plan
years, has made or been obligated to make contributions.
"New Indebtedness" is defined in clause (c) of the definition of "Change of
Control."
"Non-Obligor" means (a)(i) any Subsidiary identified as a Non-Obligor on
Item 5.10(a) of the Disclosure Schedule; provided, however, that any Subsidiary
identified thereon as dormant shall cease to be a Non-Obligor at such time as it
ceases to be dormant, and a Subsidiary having minority shareholders or other
joint venturers or partners shall cease to be a Non-Obligor at such time as it
is wholly-owned by the Borrower or any of its Subsidiaries, and (ii) any Foreign
Subsidiary; and (b) any Subsidiary of any Obligor created or acquired after the
Effective Date that is designated as such by such Obligor by written notice to
the Administrative Agent within 30 days of its formation or Acquisition;
provided, however, that, without duplication, (i) in the case of any Subsidiary
which is not an LTACH Subsidiary, (w) such Subsidiary shall not at any time have
a total asset value exceeding $1,000,000, and (x) total combined asset value of
all such Subsidiaries, excluding those Non-Obligors described in clause (a) but
including those Non-Obligors described in clause (b)(ii), shall not exceed
$50,000,000 at any time, and (ii) in the case of any Subsidiary which is an
LTACH Subsidiary, (y) such Subsidiary shall not at any time have a total asset
value exceeding $15,000,000, it being understood and agreed that a lease by an
LTACH Subsidiary of property owned by a Subsidiary that is an Obligor shall not
be deemed to be an asset of such LTACH Subsidiary, and (z) the total combined
asset value of all such Subsidiaries, excluding those Non-Obligors described in
clause (a) but including those Non-Obligors described in clause (b)(i), shall
not exceed $50,000,000 at any time; provided, however, that, notwithstanding any
of the foregoing to the contrary, no Subsidiary which has otherwise guaranteed
any obligation of the Borrower or any other Subsidiary under any Notes Documents
shall be permitted to be a Non-Obligor under this Agreement so long as such
Subsidiary remains a guarantor under the terms of any such Notes Documents.
"Non-Renewal Notice Date" is defined in Section 2.03(b)(iii).
"Note" means a promissory note made by the Borrower in favor of a Lender
evidencing Revolving Loans made by such Lender, substantially in the form of
Exhibit C.
"Notes Documents" means, collectively, the loan agreements, indentures,
note purchase agreements, promissory notes and guarantees furnished pursuant to
or in connection the terms of each of the Existing Senior Notes, the Convertible
Notes, the Senior Notes and the Manor Care of America Notes.
"Obligations" means all advances to, and debts, liabilities and obligations
of, any Obligor arising under any Loan Document or otherwise with respect to any
Revolving Loan, Swing Line Loan, Competitive Loan or Letter of Credit, whether
direct or indirect (including those acquired by assignment or assumption),
absolute or contingent, due or to become due, now existing or hereafter arising
and including interest and fees that accrue after the commencement by or against
any Obligor or any Affiliate thereof of any proceeding under any Debtor Relief
Laws
18
naming such Person as the debtor in such proceeding, regardless of whether such
interest and fees are allowed claims in such proceeding.
"Obligors" means, collectively, the Borrower and each Guarantor.
"Offered Increase Amount" is defined in Section 2.06(b).
"Offshore Rate" means, for any Interest Period with respect to any Offshore
Rate Loan, a rate per annum determined by the Administrative Agent pursuant to
the following formula:
IBOR
Offshore Rate = ------------------------------------
1.00 - Eurodollar Reserve Percentage
"Offshore Rate Loan" means a Loan that bears interest at a rate based on
the Offshore Rate.
"Organization Documents" means, (a) as to any corporation, the certificate
or articles of incorporation and the bylaws (or equivalent or comparable
constitutive documents with respect to any non-U.S. jurisdiction); (b) as to any
limited liability company, the certificate or articles of formation or
organization and operating agreement; and (c) as to any partnership, joint
venture, trust or other form of business entity, the partnership, joint venture
or other applicable agreement of formation or organization and any agreement,
instrument, filing or notice with respect thereto filed in connection with its
formation or organization with the applicable Governmental Authority in the
jurisdiction of its formation or organization and, if applicable, any
certificate or articles of formation or organization of such entity.
"Other Taxes" is defined in Section 3.01(b).
"Outstanding Amount" means (a) as to Revolving Loans and Swing Line Loans
on any date, the aggregate outstanding principal amount thereof after giving
effect to any borrowings and prepayments or repayments of Revolving Loans and
Swing Line Loans, as the case may be, occurring on such date; and (b) as to any
L/C Obligations on any date, the amount of such L/C Obligations on such date
after giving effect to any L/C Credit Extension occurring on such date and any
other changes in the aggregate amount of the L/C Obligations as of such date,
including as a result of any reimbursements of outstanding unpaid drawings under
any Letters of Credit or any reductions in the maximum amount available for
drawing under Letters of Credit taking effect on such date.
"Participant" is defined in Section 10.07(d).
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plan" means any "employee pension benefit plan" (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by the Borrower or
any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes
or has an obligation to contribute, or in the case of a multiple employer or
other plan described in Section 4064(a) of ERISA, has made contributions at any
time during the immediately preceding five plan years.
19
"Person" means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
"Plan" means any "employee benefit plan" (as such term is defined in
Section 3(3) of ERISA) established by the Borrower or, with respect to any such
plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA
Affiliate.
"Pro Rata Share" means, as to each Lender at any time, a fraction
(expressed as a percentage, carried out to the ninth decimal place), the
numerator of which is the amount of the Commitment of such Lender at such time
and the denominator of which is the amount of the Aggregate Commitments at such
time; provided, however, that if the Aggregate Commitments have been terminated
pursuant to the terms hereof, then the Pro Rata Share of each Lender shall be
determined based on the Pro Rata Share of such Lender immediately prior to such
termination and after giving effect to any subsequent assignments made pursuant
to the terms hereof. The initial Pro Rata Share of each Lender is set forth
opposite the name of such Lender on Schedule 2.01 or in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto, as applicable.
"Register" is defined in Section 10.07(c).
"Reportable Event" means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period has been waived.
"Request for Credit Extension" means (a) as to a Borrowing, conversion or
continuation of Revolving Loans, a Revolving Loan Notice, (b) as to a Swing Line
Loan, a Swing Line Loan Notice, (c) as to an L/C Credit Extension, a Letter of
Credit Application and (d) as to a Competitive Loan, a Competitive Bid Request.
"Required Lenders" means, as of any date of determination, Lenders having
more than 50% of the Aggregate Commitments or, if the Aggregate Commitments have
been terminated pursuant to the terms hereof, Lenders holding in the aggregate
more than 50% of the Total Outstandings (with the aggregate amount of each
Lender's risk participation and funded participation in L/C Obligations, Swing
Line Loans and Competitive Loans being deemed "held" by such Lender for purposes
of this definition); provided, however, that the Commitment of, and the portion
of the Total Outstandings held or deemed held by, any Defaulting Lender shall be
excluded for purposes of making a determination of Required Lenders.
Notwithstanding the foregoing, for purposes of declaring the Loans to be due and
payable pursuant to Article VIII, and for all purposes after the Loans become
due and payable pursuant to Article VIII or the Commitments expire or terminate,
the outstanding Competitive Loans of the Lenders shall be included in their
respective Commitments in determining the Required Lenders.
"Responsible Officer" means the chief executive officer, president, chief
financial officer, treasurer or assistant treasurer of an Obligor. Any document
delivered hereunder that is signed by a Responsible Officer of an Obligor shall
be conclusively presumed to have been authorized by all necessary corporate,
partnership or other action on the part of such Obligor and such Responsible
Officer shall be conclusively presumed to have acted on behalf of such Obligor.
20
"Restricted Payment" means the declaration or payment of any dividend or
other distribution (whether in cash, securities or other property) with respect
to any Equity Interest of the Borrower, or any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any such Equity Interest or of any option, warrant or other right
to acquire any such Equity Interest.
"Revolving Credit Facility" means the Aggregate Commitments and the Total
Outstandings thereunder.
"Revolving Loan" is defined in Section 2.01.
"Revolving Loan Notice" means a notice of (a) a Revolving Borrowing, (b) a
conversion of Revolving Loans from one Type to the other, or (c) a continuation
of Revolving Offshore Rate Loans, pursuant to Section 2.02(a), which, if in
writing, shall be substantially in the form of Exhibit A.
"Revolving Termination Date" means the date on which all Obligations have
been performed and otherwise paid in full in cash, all Letters of Credit have
been terminated or expired (or Cash Collateralized), and the Aggregate
Commitments have terminated.
"S&P" means Standard & Poor's Ratings Services, a division of The
McGrawHill Companies, Inc., and any successor thereto.
"SEC" means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.
"Senior Notes" means, collectively, the 6.25% senior unsecured notes issued
by the Borrower pursuant to the terms of the Indenture, dated as of April 15,
2003, between the Borrower, the subsidiary guarantors party thereto and National
City Bank, as Trustee, and all other notes accepted from time to time in
substitution or exchange therefor or renewal thereof in accordance with such
Indenture.
"SPC" has the meaning set forth in Section 10.07(h).
"Specified Losses" means up to $25,000,000 of extraordinary losses of the
Borrower and Subsidiaries in each Fiscal Year.
"Subsidiary" of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise specified, all references herein to a
"Subsidiary" or to "Subsidiaries" shall refer to a Subsidiary or Subsidiaries of
the Borrower.
21
"Swing Line" means the revolving credit facility made available by the
Swing Line Lender pursuant to Section 2.04.
"Swing Line Borrowing" means a borrowing of a Swing Line Loan pursuant to
Section 2.04.
"Swing Line Lender" means JPMorgan Chase Bank in its capacity as provider
of Swing Line Loans, or any successor swing line lender hereunder.
"Swing Line Loan" is defined in Section 2.04(a).
"Swing Line Loan Notice" means a notice of a Swing Line Borrowing pursuant
to Section 2.04(b), which, if in writing, shall be substantially in the form of
Exhibit B.
"Swing Line Sublimit" means an amount equal to the lesser of (a)
$20,000,000 and (b) the Aggregate Commitments. The Swing Line Sublimit is part
and not in addition to, the Aggregate Commitments.
"Tax Transferee" is defined in Section 3.10(a).
"Taxes" is defined in Section 3.01(a).
"Total Outstandings" means the aggregate Outstanding Amount of all
Revolving Loans, Swing Line Loans and all L/C Obligations.
"Trigger Event" is defined in Section 3.06(c).
"Type" means, as to a Loan, its character as a Base Rate Loan or an
Offshore Rate Loan or, in the case of a Competitive Loan, an Offshore Rate Loan
or a Fixed Rate Loan.
"Unfunded Pension Liability" means the excess of (a) a Pension Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over (b) the current
value of that Pension Plan's assets, determined in accordance with the
assumptions used for funding the Pension Plan pursuant to Section 412 of the
Code for the applicable plan year.
"United States" and "U.S." mean the United States of America.
"Unreimbursed Amount" is defined in Section 2.03(c)(i).
1.02. OTHER INTERPRETIVE PROVISIONS. With reference to this Agreement and
each other Loan Document, unless otherwise specified herein or in such other
Loan Document:
(a) The meanings of defined terms are equally applicable to the singular
and plural forms of the defined terms.
(b) (i) The words "herein," "hereto," "hereof" and "hereunder" and words of
similar import when used in any Loan Document shall refer to such Loan Document
as a whole and not to any particular provision thereof.
22
(ii) Article, Section, Exhibit and Schedule references are to the Loan
Document in which such reference appears.
(iii) The term "documents" includes any and all instruments,
documents, agreements, certificates, notices, reports, financial statements
and other writings, however evidenced, whether in physical or electronic
form.
(iv) The term "including" is by way of example and not limitation.
(v) The term "or" is not exclusive.
(c) In the computation of periods of time from a specified date to a later
specified date, the word "from" means "from and including;" the words "to" and
"until" each mean "to but excluding;" and the word "through" means "to and
including."
(d) Section headings herein and in the other Loan Documents are included
for convenience of reference only and shall not affect the interpretation of
this Agreement or any other Loan Document.
(e) References in any Section to any clause or item refer to such clause or
item within such Section.
1.03. ACCOUNTING TERMS. (a) All accounting terms not specifically or
completely defined herein shall be construed in conformity with, and all
financial data (including financial ratios and other financial calculations)
required to be submitted pursuant to this Agreement shall be prepared in
conformity with, GAAP applied on a consistent basis, as in effect from time to
time, applied in a manner consistent with that used in preparing the Audited
Financial Statements, except as otherwise specifically prescribed herein.
(b) If at any time any change in GAAP would affect the computation of any
financial ratio or requirement set forth in any Loan Document, and either the
Borrower or the Required Lenders shall so request, the Administrative Agent, the
Lenders and the Borrower shall negotiate in good faith to amend such ratio or
requirement to preserve the original intent thereof in light of such change in
GAAP (subject to the approval of the Required Lenders); provided, however, that,
until so amended, (i) such ratio or requirement shall continue to be computed in
accordance with GAAP prior to such change therein and (ii) the Borrower shall
provide to the Administrative Agent and the Lenders financial statements and
other documents required under this Agreement or as reasonably requested
hereunder setting forth a reconciliation between calculations of such ratio or
requirement made before and after giving effect to such change in GAAP.
(c) For purposes of computing the the Fixed Charge Coverage Ratio and the
Leverage Ratio, such ratios (and any financial calculations or components
required to be made or included therein) shall be determined, for the relevant
period, after giving pro forma effect to each material Acquisition and
Disposition of a Person, business or asset consummated during such period,
together with all transactions relating thereto consummated during such period
(including any incurrence, assumption, refinancing or repayment of
Indebtedness), as if such material Acquisition, Disposition and related
transactions had been consummated on the first day
23
of such period, in each case based on historical actual results accounted for in
accordance with GAAP. For purposes of this clause, (i) a "material Acquisition"
means a transaction or a series of related transactions in which the Borrower or
any Subsidiary acquires assets, the value of which is at least 5% of the
Consolidated total assets of the Borrower and its Subsidiaries on the date of
(and immediately prior to) such Acquisition, and (ii) a "material Disposition"
means a transaction or series of related transactions in which the Borrower or
any Subsidiary Disposes of assets, the value of which is at least 5% of the
Consolidated total assets of the Borrower and its Subsidiaries on the date of
(and immediately prior to) such Disposition.
1.04. ROUNDING. Any financial ratios required to be maintained by the
Borrower pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed herein and
rounding the result up or down to the nearest number (with a rounding-up if
there is no nearest number).
1.05. REFERENCES TO AGREEMENTS AND LAWS. Unless otherwise expressly
provided herein, (a) references to Organization Documents, agreements (including
the Loan Documents) and other contractual instruments shall be deemed to include
all subsequent amendments, restatements, extensions, supplements and other
modifications thereto, but only to the extent that such amendments,
restatements, extensions, supplements and other modifications are not prohibited
by any Loan Document; and (b) references to any Law shall include all statutory
and regulatory provisions consolidating, amending, replacing, supplementing or
interpreting such Law.
1.06. TIMES OF DAY. Unless otherwise specified, all references herein to
times of day shall be references to Eastern time (daylight or standard, as
applicable).
1.07. LETTER OF CREDIT AMOUNTS. Unless otherwise specified, all references
herein to the amount of a Letter of Credit at any time shall be deemed to mean
the maximum face amount of such Letter of Credit after giving effect to all
increases thereof contemplated by such Letter of Credit or the Letter of Credit
Application therefor, whether or not such maximum face amount is in effect at
such time.
1.08. CLASSIFICATION OF LOANS AND BORROWINGS. For purposes of this
Agreement, Loans may be classified and referred to by Class (e.g., a "Revolving
Loan") or by Type (e.g., a "Base Rate Loan") or by Class and Type (e.g., a
"Revolving Base Rate Loan"). Borrowings also may be classified and referred to
by Class (e.g., a "Revolving Borrowing") or by Type (e.g., a "Base Rate
Borrowing") or by Class and Type (e.g., a "Revolving Base Rate Borrowing").
ARTICLE II.
THE COMMITMENTS AND CREDIT EXTENSIONS
2.01. LOANS. Subject to the terms and conditions set forth herein, each
Lender severally agrees to make Loans (each such loan, a "Revolving Loan") to
the Borrower from time to time, on any Business Day during the Availability
Period, in an aggregate amount not to exceed at any time outstanding the amount
of such Lender's Commitment; provided, however, that after giving effect to any
Borrowing, (a) the Total Outstandings plus the aggregate principal
24
amount of Outstanding Competitive Loans shall not exceed the Aggregate
Commitments and (b) the aggregate Outstanding Amount of the Revolving Loans of
any Lender, plus such Lender's Pro Rata Share of the Outstanding Amount of all
L/C Obligations, plus such Lender's Pro Rata Share of the Outstanding Amount of
all Swing Line Loans shall not exceed such Lender's Commitment. Within the
limits of each Lender's Commitment, and subject to the other terms and
conditions hereof, the Borrower may borrow under this Section, prepay under
Section 2.05 and reborrow under this Section. Loans may be Base Rate Loans or
Offshore Rate Loans, or in the case of a Competitive Loan, an Offshore Rate Loan
or a Fixed Rate Loan, as further provided herein.
25
2.02. BORROWINGS OF REVOLVING LOANS.
(a) Each Revolving Borrowing shall be made upon the Borrower's irrevocable
notice to the Administrative Agent, which may be given by telephone. Each such
notice must be received by the Administrative Agent not later than 11:00 a.m.
(i) two Business Days prior to the requested date of any Revolving Borrowing of
Revolving Offshore Rate Loans and (ii) on the requested date of any Revolving
Borrowing of Revolving Base Rate Loans. Each telephonic notice by the Borrower
pursuant to this clause (a) must be confirmed promptly by delivery to the
Administrative Agent of a written Revolving Loan Notice, appropriately completed
and signed by a Responsible Officer of the Borrower. Each Revolving Borrowing of
Revolving Offshore Rate Loans shall be in a principal amount of $3,000,000 or a
whole multiple of $1,000,000 in excess thereof. Except as provided in Sections
2.03(c) and 2.04(c), each Revolving Borrowing of Base Rate Loans shall be in a
principal amount of $3,000,000 or a whole multiple of $1,000,000 in excess
thereof. Each Revolving Loan Notice (whether telephonic or written) shall
specify (i) whether the Borrower is requesting a Revolving Borrowing, a
conversion of Revolving Loans from one Type to the other, or a continuation of
Revolving Offshore Rate Loans (such conversion or continuation to be made in
accordance with Section 2.16), (ii) the requested date of the Revolving
Borrowing (which shall be a Business Day), (iii) the principal amount of
Revolving Loans to be borrowed, (iv) the Type of Revolving Loans to be borrowed
and (v) if applicable, the duration of the Interest Period with respect thereto.
If the Borrower fails to specify a Type of Loan in a Revolving Loan Notice, then
the applicable Revolving Loans shall be made as Revolving Base Rate Loans. If
the Borrower requests a Revolving Borrowing of Revolving Offshore Rate Loans in
any such Revolving Loan Notice, but fails to specify an Interest Period, it will
be deemed to have specified an Interest Period of one month.
(b) Following receipt of a Revolving Loan Notice, the Administrative Agent
shall promptly notify each Lender of the amount of its Pro Rata Share of the
applicable Revolving Loans. Each Lender shall make the amount of its Revolving
Loan available to the Administrative Agent in immediately available funds at the
Administrative Agent's Office not later than 1:00 p.m. on the Business Day
specified in the applicable Revolving Loan Notice. Upon satisfaction of the
applicable conditions set forth in Section 4.02 (and, if such Borrowing is the
initial Credit Extension, Section 4.01), the Administrative Agent shall make all
funds so received available to the Borrower in like funds as received by the
Administrative Agent either by (i) crediting the account of the Borrower on the
books of JPMorgan Chase Bank with the amount of such funds or (ii) wire transfer
of such funds, in each case in accordance with instructions provided to (and
reasonably acceptable to) the Administrative Agent by the Borrower; provided,
however, that if, on the date the Revolving Loan Notice with respect to such
Revolving Borrowing is given by the Borrower, there are Swing Line Loans or L/C
Borrowings outstanding, then the proceeds of such Borrowing shall be applied,
first, to the payment in full of any such L/C Borrowings, second, to the payment
in full of any such Swing Line Loans, and third, to the Borrower as provided
above.
(c) The Administrative Agent shall promptly notify the Borrower and the
Lenders in writing of the interest rate applicable to any Interest Period for
Revolving Offshore Rate Loans upon determination of such interest rate. The
determination of the Offshore Rate by the Administrative Agent shall be
conclusive in the absence of manifest error. At any time that Revolving Base
Rate Loans are outstanding, the Administrative Agent shall notify the Borrower
26
and the Lenders in writing of any change in JPMorgan Chase Bank's prime rate
used in determining the Base Rate promptly following the public announcement of
such change.
(d) After giving effect to all Revolving Borrowings, all conversions of
Revolving Loans from one Type to the other, and all continuations of Revolving
Loans as the same Type, there shall not be more than 30 Interest Periods in
effect with respect to Revolving Loans.
2.03. LETTERS OF CREDIT.
(a) The Letter of Credit Commitment.
(i) Prior to the date hereof, the Existing L/C Issuers have issued the
Existing Letters of Credit, which, from and after the date hereof, shall
constitute Letters of Credit hereunder. Subject to the terms and conditions
set forth herein, (A) each L/C Issuer agrees, in reliance upon the
agreements of the other Lenders set forth in this Section, (1) from time to
time on any Business Day during the period from the Closing Date until the
Letter of Credit Expiration Date, to issue letters of credit (the letters
of credit issued on and after the Closing Date pursuant to this Section
2.03, together with the Existing Letters of Credit, collectively, "Letters
of Credit") for the account of the Borrower or its Subsidiaries, and to
amend or renew Letters of Credit previously issued by it, in accordance
with clause (b), and (2) to honor drafts under the Letters of Credit; and
(B) the Lenders severally agree to participate in Letters of Credit issued
for the account of the Borrower or any Subsidiary; provided that no L/C
Issuer shall be obligated to make any L/C Credit Extension with respect to
any Letter of Credit, and no Lender shall be obligated to participate in
any Letter of Credit if, as of the date of such L/C Credit Extension, (x)
the Total Outstandings plus the aggregate principal amount of outstanding
Competitive Loans would exceed the Aggregate Commitments, (y) the aggregate
Outstanding Amount of the Revolving Loans of any Lender, plus such Lender's
Pro Rata Share of the Outstanding Amount of all L/C Obligations, plus such
Lender's Pro Rata Share of the Outstanding Amount of all Swing Line Loans
would exceed such Lender's Commitment, or (z) the Outstanding Amount of the
L/C Obligations would exceed the Letter of Credit Sublimit. Within the
foregoing limits, and subject to the terms and conditions hereof, the
Borrower's ability to obtain Letters of Credit shall be fully revolving,
and accordingly the Borrower may, during the foregoing period, obtain
Letters of Credit to replace Letters of Credit that have expired or that
have been drawn upon and reimbursed. All Existing Letters of Credit shall
be deemed to have been issued pursuant hereto, and from and after the
Closing Date shall be subject to and governed by the terms and conditions
hereof.
(ii) An L/C Issuer shall be under no obligation to issue any Letter of
Credit if:
(A) any order, judgment or decree of any Governmental Authority
or arbitrator shall by its terms purport to enjoin or restrain such
L/C Issuer from issuing such Letter of Credit, or any Law applicable
to such L/C Issuer or any request or directive (whether or not having
the force of law) from any Governmental Authority with jurisdiction
over such L/C Issuer shall prohibit, or request that such L/C Issuer
refrain from, the issuance of letters of credit generally
27
or such Letter of Credit in particular or shall impose upon such L/C
Issuer with respect to such Letter of Credit any restriction, reserve
or capital requirement (for which such L/C Issuer is not otherwise
compensated hereunder) not in effect on the Closing Date, or shall
impose upon such L/C Issuer any unreimbursed loss, cost or expense
which was not applicable on the Closing Date and which such L/C Issuer
in good faith deems material to it;
(B) subject to Section 2.03(b)(iii), the expiry date of such
requested Letter of Credit would occur more than twelve months after
the date of issuance or last renewal, unless the Required Lenders have
approved such expiry date;
(C) the expiry date of such requested Letter of Credit would
occur after the Letter of Credit Expiration Date, unless all the
Lenders have approved such expiry date;
(D) the issuance of such Letter of Credit would violate one or
more policies of such L/C Issuer; or
(E) such Letter of Credit is in an initial amount less than
$500,000 or is to be used for the purpose of supporting the issuance
of any letter of credit by any other Person or denominated in a
currency other than Dollars.
(iii) An L/C Issuer shall be under no obligation to amend any Letter
of Credit if (A) such L/C Issuer would have no obligation at such time to
issue such Letter of Credit in its amended form under the terms hereof, or
(B) the beneficiary of such Letter of Credit does not accept the proposed
amendment to such Letter of Credit.
(b) Procedures for Issuance and Amendment of Letters of Credit;
Auto-Renewal Letters of Credit.
(i) Each Letter of Credit shall be issued or amended, as the case may
be, upon the request of the Borrower delivered to an L/C Issuer (with a
copy to the Administrative Agent) in the form of a Letter of Credit
Application, appropriately completed and signed by a Responsible Officer of
the Borrower. Such Letter of Credit Application must be received by such
L/C Issuer and the Administrative Agent not later than 11:00 a.m. at least
two Business Days (or such later date and time as such L/C Issuer may agree
in a particular instance in its sole discretion) prior to the proposed
issuance date or date of amendment, as the case may be. In the case of a
request for an initial issuance of a Letter of Credit, such Letter of
Credit Application shall specify in form and detail satisfactory to such
L/C Issuer: (A) the proposed issuance date of the requested Letter of
Credit (which shall be a Business Day); (B) the amount thereof; (C) the
expiry date thereof; (D) the name and address of the beneficiary thereof;
(E) the documents to be presented by such beneficiary in case of any
drawing thereunder; (F) the full text of any certificate to be presented by
such beneficiary in case of any drawing thereunder; and (G) such other
matters as such L/C Issuer may require. In the case of a request for an
amendment of any outstanding Letter of Credit, such Letter of Credit
Application shall specify in form and detail satisfactory to such L/C
Issuer (A) the Letter of Credit to be amended; (B) the
28
proposed date of amendment thereof (which shall be a Business Day); (C) the
nature of the proposed amendment; and (D) such other matters as such L/C
Issuer may require.
(ii) Promptly after receipt of any Letter of Credit Application, the
applicable L/C Issuer will confirm with the Administrative Agent (by
telephone or in writing) that the Administrative Agent has received a copy
of such Letter of Credit Application from the Borrower and, if not, such
L/C Issuer will provide the Administrative Agent with a copy thereof. Upon
receipt by such L/C Issuer of confirmation from the Administrative Agent
that the requested issuance or amendment is permitted in accordance with
the terms hereof, then, subject to the terms and conditions hereof, such
L/C Issuer shall, on the requested date, issue a Letter of Credit for the
account of the Borrower or enter into the applicable amendment, as the case
may be, in each case in accordance with such L/C Issuer's usual and
customary business practices. Immediately upon the issuance of each Letter
of Credit, each Lender shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from such L/C Issuer a risk
participation, in such Letter of Credit in an amount equal to the product
of such Lender's Pro Rata Share times the amount of such Letter of Credit.
(iii) If the Borrower so requests in any applicable Letter of Credit
Application, the applicable L/C Issuer may, in its sole and absolute
discretion, agree to issue a Letter of Credit that has automatic renewal
provisions (each, an "Auto-Renewal Letter of Credit"); provided, however,
that any such Auto-Renewal Letter of Credit must permit such L/C Issuer to
prevent any such renewal at least once in each twelve-month period
(commencing with the date of issuance of such Letter of Credit) by giving
prior notice to the beneficiary thereof not later than a day prior to the
date of termination (the "Non-renewal Notice Date") in each such
twelve-month period to be agreed upon at the time such Letter of Credit is
issued. Unless otherwise directed by such L/C Issuer, the Borrower shall
not be required to make a specific request to such L/C Issuer for any such
renewal. Once an Auto-Renewal Letter of Credit has been issued, the Lenders
shall be deemed to have authorized (but may not require) such L/C Issuer to
permit the renewal of such Letter of Credit at any time to an expiry date
not later than the Letter of Credit Expiration Date; provided, however,
that such L/C Issuer shall not permit any such renewal if (A) such L/C
Issuer has determined that it would have no obligation at such time to
issue such Letter of Credit in its renewed form under the terms hereof (by
reason of the provisions of Section 2.03(a)(ii) or otherwise), or (B) it
has received notice (which may be by telephone or in writing) on or before
the day that is two Business Days before the Non-renewal Notice Date (1)
from the Administrative Agent that the Required Lenders have elected not to
permit such renewal or (2) from the Administrative Agent, any Lender or the
Borrower that one or more of the applicable conditions specified in Section
4.02 is not then satisfied.
(iv) Promptly after its delivery of any Letter of Credit or any
amendment to a Letter of Credit to an advising bank with respect thereto or
to the beneficiary thereof, the applicable L/C Issuer will also deliver to
the Borrower and the Administrative Agent a true and complete copy of such
Letter of Credit or amendment.
29
(c) Drawings and Reimbursements; Funding of Participations.
(i) Upon receipt from the beneficiary of any Letter of Credit of any
notice of a drawing under such Letter of Credit, the applicable L/C Issuer
shall notify the Borrower and the Administrative Agent thereof. Not later
than 11:00 am. on the date of any payment by such L/C Issuer under a Letter
of Credit (each such date, an "Honor Date"), the Borrower shall reimburse
such L/C Issuer through the Administrative Agent in an amount equal to the
amount of such drawing. If the Borrower fails to so reimburse such L/C
Issuer by such time, the Administrative Agent shall promptly notify each
Lender of the Honor Date, the amount of the unreimbursed drawing (the
"Unreimbursed Amount"), and the amount of such Lender's Pro Rata Share
thereof. In such event, the Borrower shall be deemed to have requested a
Borrowing of Base Rate Loans to be disbursed on the Honor Date in an amount
equal to the Unreimbursed Amount, without regard to the minimum and
multiples specified in Section 2.02 for the principal amount of Base Rate
Loans, but subject to the amount of the unutilized portion of the Aggregate
Commitments and the conditions set forth in Section 4.02 (other than the
delivery of a Revolving Loan Notice). Any notice given by an L/C Issuer or
the Administrative Agent pursuant to this clause (c)(i) may be given by
telephone if immediately confirmed in writing; provided, however, that the
lack of such an immediate confirmation shall not affect the conclusiveness
or binding effect of such notice.
(ii) Each Lender (including the Lender acting as L/C Issuer) shall
upon any notice pursuant to Section 2.03(c)(i) make funds available to the
Administrative Agent for the account of the applicable L/C Issuer at the
Administrative Agent's Office in an amount equal to its Pro Rata Share of
the Unreimbursed Amount not later than 1:00 p.m. on the Business Day
specified in such notice by the Administrative Agent, whereupon, subject to
the provisions of Section 2.03(c)(iii) each Lender that so makes funds
available shall be deemed to have made a Base Rate Loan to the Borrower in
such amount. The Administrative Agent shall remit the funds so received to
such L/C Issuer.
(iii) With respect to any Unreimbursed Amount that is not fully
refinanced by a Borrowing of Base Rate Loans because the conditions set
forth in Section 4.02 cannot be satisfied or for any other reason, the
Borrower shall be deemed to have incurred from the applicable L/C Issuer an
L/C Borrowing in the amount of the Unreimbursed Amount that is not so
refinanced, which L/C Borrowing shall be due and payable on demand
(together with interest) and shall bear interest at the Default Rate for
Base Rate Loans. In such event, each Lender's payment to the Administrative
Agent for the account of such L/C Issuer pursuant to Section 2.03(c)(ii)
shall be deemed payment in respect of its participation in such L/C
Borrowing and shall constitute an L/C Advance from such Lender in
satisfaction of its participation obligation under this Section.
(iv) Until each Lender funds its Loan or L/C Advance pursuant to this
clause (c) to reimburse an L/C Issuer for any amount drawn under any Letter
of Credit, interest in respect of such Lender's Pro Rata Share of such
amount shall be solely for the account of such L/C Issuer.
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(v) Each Lender's obligation to make Loans or L/C Advances to
reimburse an L/C Issuer for amounts drawn under Letters of Credit, as
contemplated by this clause (c), shall be absolute and unconditional and
shall not be affected by any circumstance, including (A) any set-off,
counterclaim, recoupment, defense or other right which such Lender may have
against an L/C Issuer, the Borrower or any other Person for any reason
whatsoever; (B) the occurrence or continuance of a Default; or (C) any
other occurrence, event or condition, whether or not similar to any of the
foregoing; provided, however, that each Lender's obligation to make Loans
pursuant to this clause (c) is subject to the conditions set forth in
Section 4.02 (other than delivery by the Borrower of a Revolving Loan
Notice). No such making of an L/C Advance shall relieve or otherwise impair
the obligation of the Borrower to reimburse an L/C Issuer for the amount of
any payment made by such L/C Issuer under any Letter of Credit, together
with interest as provided herein.
(vi) If any Lender fails to make available to the Administrative Agent
for the account of an L/C Issuer any amount required to be paid by such
Lender pursuant to the foregoing provisions of this clause (c) by the time
specified in Section 2.03(c)(ii), such L/C Issuer shall be entitled to
recover from such Lender (acting through the Administrative Agent), on
demand, such amount with interest thereon for the period from the date such
payment is required to the date on which such payment is immediately
available to such L/C Issuer at a rate per annum equal to the Federal Funds
Rate from time to time in effect. A certificate of such L/C Issuer
submitted to any Lender (through the Administrative Agent) with respect to
any amounts owing under this clause (vi) shall be conclusive absent
manifest error.
(d) Repayment of Participations.
(i) At any time after an L/C Issuer has made a payment under any
Letter of Credit and has received from any Lender such Lender's L/C Advance
in respect of such payment in accordance with Section 2.03(c), if the
Administrative Agent receives for the account of such L/C Issuer any
payment in respect of the related Unreimbursed Amount or interest thereon
(whether directly from the Borrower or otherwise, including proceeds of
Cash Collateral applied thereto by the Administrative Agent), the
Administrative Agent will distribute to such Lender its Pro Rata Share
thereof (appropriately adjusted, in the case of interest payments, to
reflect the period of time during which such Lender's L/C Advance was
outstanding) in the same funds as those received by the Administrative
Agent.
(ii) If any payment received by the Administrative Agent for the
account of an L/C Issuer pursuant to Section 2.03(c)(i) is required to be
returned under any of the circumstances described in Section 10.06
(including pursuant to any settlement entered into by such L/C Issuer in
its discretion), each Lender shall pay to the Administrative Agent for the
account of such L/C Issuer its Pro Rata Share thereof on demand of the
Administrative Agent, plus interest thereon from the date of such demand to
the date such amount is returned by such Lender, at a rate per annum equal
to the Federal Funds Rate from time to time in effect.
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(e) Obligations Absolute. The obligation of the Borrower to reimburse an
L/C Issuer for each drawing under each Letter of Credit and to repay each L/C
Borrowing shall be absolute, unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement under all circumstances,
including the following:
(i) any lack of validity or enforceability of such Letter of Credit,
this Agreement, or any other agreement or instrument relating thereto;
(ii) the existence of any claim, counterclaim, set-off, defense or
other right that the Borrower may have at any time against any beneficiary
or any transferee of such Letter of Credit (or any Person for whom any such
beneficiary or any such transferee may be acting), the applicable L/C
Issuer or any other Person, whether in connection with this Agreement, the
transactions contemplated hereby or by such Letter of Credit or any
agreement or instrument relating thereto, or any unrelated transaction;
(iii) any draft, demand, certificate or other document presented under
such Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; or any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under such
Letter of Credit;
(iv) any payment by the applicable L/C Issuer under such Letter of
Credit against presentation of a draft or certificate that does not
strictly comply with the terms of such Letter of Credit; or any payment
made by the applicable L/C Issuer under such Letter of Credit to any Person
purporting to be a trustee in bankruptcy, debtor-in-possession, assignee
for the benefit of creditors, liquidator, receiver or other representative
of or successor to any beneficiary or any transferee of such Letter of
Credit, including any arising in connection with any proceeding under any
Debtor Relief Law; or
(v) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including any other circumstance that
might otherwise constitute a defense available to, or a discharge of, the
Borrower.
The Borrower shall promptly examine a copy of each Letter of Credit and each
amendment thereto that is delivered to it and, in the event of any claim of
noncompliance with the Borrower's instructions or other irregularity, the
Borrower will immediately notify the applicable L/C Issuer. The Borrower shall
be conclusively deemed to have waived any such claim against an L/C Issuer and
its correspondents unless such notice is given as aforesaid.
(f) Role of L/C Issuer. Each Lender and the Borrower agree that, in paying
any drawing under a Letter of Credit, the applicable L/C Issuer shall not have
any responsibility to obtain any document (other than any sight draft,
certificates and documents expressly required by the Letter of Credit) or to
ascertain or inquire as to the validity or accuracy of any such document or the
authority of the Person executing or delivering any such document. None of any
L/C Issuer, any Agent-Related Person nor any of the respective correspondents,
participants or assignees of an L/C Issuer shall be liable to any Lender for (i)
any action taken or omitted in
32
connection herewith at the request or with the approval of the Lenders or the
Required Lenders, as applicable; (ii) any action taken or omitted in the absence
of gross negligence or willful misconduct; or (iii) the due execution,
effectiveness, validity or enforceability of any document or instrument related
to any Letter of Credit or Letter of Credit Application. The Borrower hereby
assumes all risks of the acts or omissions of any beneficiary or transferee with
respect to its use of any Letter of Credit; provided, however, that this
assumption is not intended to, and shall not, preclude the Borrower's pursuing
such rights and remedies as it may have against the beneficiary or transferee at
law or under any other agreement. None of any L/C Issuer, any Agent-Related
Person, nor any of the respective correspondents, participants or assignees of
an L/C Issuer, shall be liable or responsible for any of the matters described
in clauses (i) through (v) of Section 2.03(e); provided, however, that anything
in such clauses to the contrary notwithstanding, the Borrower may have a claim
against an L/C Issuer, and such L/C Issuer may be liable to the Borrower, to the
extent, but only to the extent, of any direct, as opposed to consequential or
exemplary, damages suffered by the Borrower which the Borrower proves were
caused by such L/C Issuer's willful misconduct or gross negligence or such L/C
Issuer's willful failure to pay under any Letter of Credit after the
presentation to it by the beneficiary of a sight draft and certificate(s)
strictly complying with the terms and conditions of a Letter of Credit. In
furtherance and not in limitation of the foregoing, an L/C Issuer may accept
documents that appear on their face to be in order, without responsibility for
further investigation, regardless of any notice or information to the contrary,
and an L/C Issuer shall not be responsible for the validity or sufficiency of
any instrument transferring or assigning or purporting to transfer or assign a
Letter of Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, which may prove to be invalid or ineffective for any reason.
(g) Cash Collateral. Upon the request of the Administrative Agent if an
Event of Default shall have occurred and be continuing, (i) if an L/C Issuer has
honored any full or partial drawing request under any Letter of Credit and such
drawing has resulted in an L/C Borrowing, or (ii) if, as of the Letter of Credit
Expiration Date, any Letter of Credit may for any reason remain outstanding and
partially or wholly undrawn, the Borrower shall immediately Cash Collateralize
the then Outstanding Amount of all L/C Obligations (in an amount equal to such
Outstanding Amount determined as of the date of such L/C Borrowing or the Letter
of Credit Expiration Date, as the case may be). For purposes hereof, "Cash
Collateralize" means to pledge and deposit with or deliver to the Administrative
Agent, for the benefit of the L/C Issuers and the Lenders, as collateral for the
L/C Obligations, cash or deposit account balances pursuant to documentation in
form and substance satisfactory to the Administrative Agent and the L/C Issuers
(which documents are hereby consented to by the Lenders). Derivatives of such
term have corresponding meanings. The Borrower shall, simultaneously with any
Cash Collateralization, grant to the Administrative Agent, for the benefit of
the L/C Issuers and the Lenders, a security interest in all such cash, deposit
accounts and all balances therein and all proceeds of the foregoing. Cash
collateral shall be maintained in blocked, non-interest bearing deposit accounts
at JPMorgan Chase Bank.
(h) Applicability of ISP98. Unless otherwise expressly agreed by the
applicable L/C Issuer and the Borrower when a Letter of Credit is issued
(including any such agreement applicable to an Existing Letter of Credit), the
rules of the "International Standby Practices 1998" published by the Institute
of International Banking Law & Practice (or such later version thereof as may be
in effect at the time of issuance) shall apply to each Letter of Credit.
33
(i) Letter of Credit Fees. The Borrower shall pay to the Administrative
Agent, for the account of each Lender in accordance with its Pro Rata Share, a
Letter of Credit fee for each Letter of Credit equal to the product of the
Applicable Margin times the daily maximum amount available to be drawn under
such Letter of Credit (after giving effect to all increases thereof contemplated
by such Letter of Credit or the Letter of Credit Application therefor, whether
or not such maximum amount is then in effect under such Letter of Credit). Such
letter of credit fees shall be computed on a quarterly basis in arrears. Such
letter of credit fees shall be due and payable on the last Business Day of each
March, June, September and December, commencing with the first such date to
occur after the issuance of such Letter of Credit, on the Letter of Credit
Expiration Date and thereafter on demand. If there is any change in the
Applicable Margin during any quarter, the daily maximum amount of each Letter of
Credit shall be computed and multiplied by the Applicable Margin separately for
each period during such quarter that such Applicable Margin was in effect.
(j) Fronting Fee and Documentary and Processing Charges Payable to L/C
Issuer. The Borrower shall pay directly to the applicable L/C Issuer for its own
account a fronting fee with respect to each Letter of Credit in an amount equal
to 0.125% per annum on the stated amount of each Letter of Credit (including to
the extent of any increase), payable quarterly in arrears on the last Business
Day of each March, June, September and December for the immediately preceding
quarter (or a portion thereof) following the issuance of such Letter of Credit
and (if earlier) on the date of any termination or expiration of all Letters of
Credit. In addition, the Borrower shall pay directly to such L/C Issuer for its
own account the customary issuance, presentation, amendment and other processing
fees, and other standard costs and charges, of such L/C Issuer relating to
letters of credit as from time to time in effect. Such customary fees and
standard costs and charges are due and payable on demand and are nonrefundable.
(k) Conflict with Letter of Credit Application. In the event of any
conflict between the terms hereof and the terms of any Letter of Credit
Application, the terms hereof shall control.
2.04. SWING LINE LOANS.
(a) The Swing Line. Subject to the terms and conditions set forth herein,
the Swing Line Lender agrees to make loans (each such loan, a "Swing Line Loan")
to the Borrower from time to time on any Business Day during the Availability
Period in an aggregate amount not to exceed at any time outstanding the amount
of the Swing Line Sublimit, notwithstanding the fact that such Swing Line Loans,
when aggregated with the Pro Rata Share of the Outstanding Amount of Revolving
Loans and L/C Obligations of the Lender acting as Swing Line Lender, may exceed
the amount of such Lender's Commitment; provided, however, that, after giving
effect to any Swing Line Loan, (i) the Total Outstandings plus the aggregate
principal amount of Outstanding Competitive Loans shall not exceed the Aggregate
Commitments, and (ii) the aggregate Outstanding Amount of the Revolving Loans of
any Lender, plus such Lender's Pro Rata Share of the Outstanding Amount of all
L/C Obligations, plus such Lender's Pro Rata Share of the Outstanding Amount of
all Swing Line Loans shall not exceed such Lender's Commitment, and provided,
however, further, that the Borrower shall not use the proceeds of any Swing Line
Loan to refinance any outstanding Swing Line Loan. Within
34
the foregoing limits, and subject to the other terms and conditions hereof, the
Borrower may borrow under this Section, prepay under Section 2.05, and borrow
under this Section. Each Swing Line Loan shall be a Base Rate Loan. Immediately
upon the making of a Swing Line Loan, each Lender shall be deemed to, and hereby
irrevocably and unconditionally agrees to, purchase from the Swing Line Lender a
risk participation in such Swing Line Loan in an amount equal to the product of
such Lender's Pro Rata Share times the amount of such Swing Line Loan.
(b) Borrowing Procedures. Each Swing Line Borrowing shall be made upon the
Borrower's irrevocable notice to the Swing Line Lender and the Administrative
Agent, which may be given by telephone. Each such notice must be received by the
Swing Line Lender and the Administrative Agent not later than 1:00 p.m. on the
requested borrowing date, and shall specify (i) the amount to be borrowed, which
shall be a minimum of $100,000 and (ii) the requested borrowing date, which
shall be a Business Day. Each such telephonic notice must be confirmed promptly
by delivery to the Swing Line Lender and the Administrative Agent of a written
Swing Line Loan Notice, appropriately completed and signed by a Responsible
Officer of the Borrower. Promptly after receipt by the Swing Line Lender of any
telephonic Swing Line Loan Notice, the Swing Line Lender will confirm with the
Administrative Agent (by telephone or in writing) that the Administrative Agent
has also received such Swing Line Loan Notice and, if not, the Swing Line Lender
will notify the Administrative Agent (by telephone or in writing) of the
contents thereof. Unless the Swing Line Lender has received notice (by telephone
or in writing) from the Administrative Agent (including at the request of any
Lender) prior to 2:00 p.m. on the date of the proposed Swing Line Borrowing (A)
directing the Swing Line Lender not to make such Swing Line Loan as a result of
the limitations set forth in the proviso to the first sentence of Section
2.04(a), or (B) that one or more of the applicable conditions specified in
Article IV is not then satisfied, then, subject to the terms and conditions
hereof, the Swing Line Lender will, not later than 3:00 p.m. on the borrowing
date specified in such Swing Line Loan Notice, make the amount of its Swing Line
Loan available to the Borrower at its office by crediting the account of the
Borrower on the books of the Swing Line Lender in immediately available funds.
(c) Refinancing of Swing Line Loans.
(i) The Swing Line Lender at any time in its sole and absolute
discretion may request, on behalf of the Borrower (which hereby irrevocably
authorizes the Swing Line Lender to so request on its behalf), that each
Lender make a Base Rate Loan in an amount equal to such Lender's Pro Rata
Share of the amount of Swing Line Loans then outstanding. Such request
shall be made in writing (which written request shall be deemed to be a
Revolving Loan Notice for purposes hereof) and in accordance with the
requirements of Section 2.02, without regard to the minimum and multiples
specified therein for the principal amount of Revolving Base Rate Loans,
but subject to the unutilized portion of the Aggregate Commitments and the
conditions set forth in Section 4.02. The Swing Line Lender shall furnish
the Borrower with a copy of the applicable Revolving Loan Notice promptly
after delivering such notice to the Administrative Agent. Each Lender shall
make an amount equal to its Pro Rata Share of the amount specified in such
Swing Line Loan Notice available to the Administrative Agent in immediately
available funds for the account of the Swing Line Lender at the
Administrative Agent's Office not later than 1:00 p.m. on the day specified
in such
35
Revolving Loan Notice, whereupon, subject to Section 2.04(c)(ii), each
Lender that so makes funds available shall be deemed to have made a
Revolving Base Rate Loan to the Borrower in such amount. The Administrative
Agent shall remit the funds so received to the Swing Line Lender.
(ii) If for any reason any Swing Line Loan cannot be refinanced by
such a Borrowing in accordance with Section 2.04(c)(i), the request for
Base Rate Loans submitted by the Swing Line Lender as set forth herein
shall be deemed to be a request by the Swing Line Lender that each of the
Lenders fund its risk participation in the relevant Swing Line Loan and
each Lender's payment to the Administrative Agent for the account of the
Swing Line Lender pursuant to Section 2.04(c)(i) shall be deemed payment in
respect of such participation.
(iii) If any Lender fails to make available to the Administrative
Agent for the account of the Swing Line Lender any amount required to be
paid by such Lender pursuant to the foregoing provisions of this clause (c)
by the time specified in Section 2.04(c)(i), the Swing Line Lender shall be
entitled to recover from such Lender (acting through the Administrative
Agent), on demand, such amount with interest thereon for the period from
the date such payment is required to the date on which such payment is
immediately available to the Swing Line Lender at a rate per annum equal to
the Federal Funds Rate from time to time in effect. A certificate of the
Swing Line Lender submitted to any Lender (through the Administrative
Agent) with respect to any amounts owing under this clause (iii) shall be
conclusive absent manifest error.
(iv) Each Lender's obligation to make Loans or to purchase and fund
risk participations in Swing Line Loans pursuant to this clause (c) shall
be absolute and unconditional and shall not be affected by any
circumstance, including (A) any set-off, counterclaim, recoupment, defense
or other right which such Lender may have against the Swing Line Lender,
the Borrower or any other Person for any reason whatsoever, (B) the
occurrence or continuance of a Default, or (C) any other occurrence, event
or condition, whether or not similar to any of the foregoing; provided,
however, that each Lender's obligation to make Loans pursuant to this
clause (c) is subject to the conditions set forth in Section 4.02. No such
funding of risk participations shall relieve or otherwise impair the
obligation of the Borrower to repay Swing Line Loans, together with
interest as provided herein.
(d) Repayment of Participations.
(i) At any time after any Lender has purchased and funded a risk
participation in a Swing Line Loan, if the Swing Line Lender receives any
payment on account of such Swing Line Loan, the Swing Line Lender will
distribute to such Lender its Pro Rata Share of such payment (appropriately
adjusted, in the case of interest payments, to reflect the period of time
during which such Lender's risk participation was funded) in the same funds
as those received by the Swing Line Lender.
(ii) If any payment received by the Swing Line Lender in respect of
principal or interest on any Swing Line Loan is required to be returned by
the Swing Line Lender
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under any of the circumstances described in Section 10.06 (including
pursuant to any settlement entered into by the Swing Line Lender in its
discretion), each Lender shall pay to the Swing Line Lender its Pro Rata
Share thereof on demand of the Administrative Agent, plus interest thereon
from the date of such demand to the date such amount is returned, at a rate
per annum equal to the Federal Funds Rate. The Administrative Agent will
make such demand upon the request of the Swing Line Lender.
(e) Interest for Account of Swing Line Lender. The Swing Line Lender shall
be responsible for invoicing the Borrower for interest on the Swing Line Loans.
Until each Lender funds its Base Rate Loan or risk participation pursuant to
this Section to refinance such Lender's Pro Rata Share of any Swing Line Loan,
interest in respect of such Pro Rata Share shall be solely for the account of
the Swing Line Lender.
(f) Payments Directly to Swing Line Lender. The Borrower shall make all
payments of principal and interest in respect of the Swing Line Loans directly
to the Swing Line Lender.
2.05. PREPAYMENTS.
(a) The Borrower may, upon notice to the Administrative Agent, at any time
or from time to time on any Business Day voluntarily prepay Loans in whole or in
part; provided that the Borrower shall not have the right to prepay any
Competitive Loan without the prior consent of the Lender thereof; provided
further, that (i) such notice must be received by the Administrative Agent not
later than 11:00 a.m. (A) one Business Day prior to any date of prepayment of
Offshore Rate Loans and (B) on the date of prepayment of Base Rate Loans; and
(ii) any prepayment of Loans shall be in a principal amount of $3,000,000 or a
whole multiple of $1,000,000 in excess thereof or, if less, the entire principal
amount thereof then outstanding. Each such notice shall specify the date and
amount of such prepayment and the Type(s) of Loans to be prepaid. The
Administrative Agent will promptly notify each Lender of its receipt of each
such notice, and of the amount of such Lender's Pro Rata Share of such
prepayment. If such notice is given by the Borrower, the Borrower shall make
such prepayment and the payment amount specified in such notice shall be due and
payable on the date specified therein. Any prepayment of an Offshore Rate Loan
shall be accompanied by all accrued interest thereon.
(b) The Borrower may, upon notice to the Swing Line Lender (with a copy to
the Administrative Agent), at any time or from time to time, voluntarily prepay
Swing Line Loans in whole or in part; provided, however, that (i) such notice
must be received by the Swing Line Lender and the Administrative Agent not later
than 1:00 p.m. on the date of the prepayment, and (ii) any such prepayment shall
be in a minimum principal amount of $100,000 or, if less, the entire amount
outstanding thereunder. Each such notice shall specify the date and amount of
such prepayment. If such notice is given by the Borrower, the Borrower shall
make such prepayment and the payment amount specified in such notice shall be
due and payable on the date specified therein.
(c) If for any reason the Total Outstandings plus the aggregate principal
amount of Competitive Loans at any time exceed the Aggregate Commitments then in
effect, the Borrower shall immediately prepay Loans and/or Cash Collateralize
the L/C Obligations in an
37
aggregate amount equal to such excess; provided, however, that the Borrower
shall not be required to Cash Collateralize the L/C Obligations pursuant to this
clause unless after the prepayment in full of the Loans the Total Outstandings
exceed the Aggregate Commitments then in effect.
(d) Immediately upon any acceleration of the Maturity Date of any Loans
pursuant to Section 8.02, the Borrower shall repay all the Loans, unless,
pursuant to Section 8.02, only a portion of all the Loans is so accelerated (in
which case the portion so accelerated shall be so repaid).
Each such prepayment or repayment of the principal of any Revolving Loans made
pursuant to this Section shall be (x) made ratably among the Lenders in
accordance with their respective Commitments, as the case may be, (y) without
premium or penalty, except as may be required by Section 3.05, and (z) applied,
to the extent of such prepayment or repayment, and except as otherwise requested
by the Borrower pursuant to clause (a), first, to the principal amount thereof
being maintained as Base Rate Loans, and second, subject to the terms of Section
3.05, to the principal amount thereof being maintained as Offshore Rate Loans.
2.06. TERMINATION OR REDUCTION OF COMMITMENTS; INCREASE OF COMMITMENTS. (a)
The Borrower may, upon notice to the Administrative Agent, terminate the
Aggregate Commitments or from time to time permanently reduce the Aggregate
Commitments; provided, however, that (i) any such notice shall be received by
the Administrative Agent not later than 11:00 a.m. three Business Days prior to
the date of termination or reduction, (ii) any such partial reduction shall be
in an aggregate amount of $5,000,000 or any whole multiple of $1,000,000 in
excess thereof, (iii) the Borrower shall not terminate or reduce the Aggregate
Commitments if, after giving effect thereto and to any concurrent prepayments
hereunder, the Total Outstandings plus the aggregate principal amount of
outstanding Competitive Loans would exceed the Aggregate Commitments and (iv)
if, after giving effect to any reduction of the Aggregate Commitments, the
Letter of Credit Sublimit or the Swing Line Sublimit exceeds the amount of the
Aggregate Commitments, such Sublimit shall be automatically reduced by the
amount of such excess. The Administrative Agent will promptly notify the Lenders
of any such notice of termination or reduction of the Aggregate Commitments. Any
reduction of the Aggregate Commitments shall be applied ratably to the
Commitment of each Lender. All facility fees accrued until the effective date of
any termination or reduction of the Aggregate Commitments shall be paid on the
effective date of such termination or reduction.
(b) In the event that the Borrower wishes to increase the Commitments at
any time when no Default or Event of Default has occurred and is continuing, it
shall notify the Administrative Agent in writing of the amount (the "Offered
Increase Amount") of such proposed increase (such notice, a "Commitment Increase
Notice"); provided that the aggregate amount of any such increase in Commitments
shall be at least $25,000,000. The Borrower may, at its election, (i) offer one
or more of the Lenders the opportunity to participate in all or a portion of the
Offered Increase Amount pursuant to clause (d) below and/or (ii) with the
consent of the Administrative Agent and the L/C Issuers (which consents shall
not be unreasonably withheld), offer one or more additional banks, financial
institutions or other entities the opportunity to participate in all or a
portion of the Offered Increase Amount pursuant to clause (c) below. Each
Commitment Increase Notice shall specify which Lenders and/or banks,
38
financial institutions or other entities the Borrower desires to participate in
such Commitment increase. The Borrower or, if requested by the Borrower, the
Administrative Agent, will notify such Lenders and/or banks, financial
institutions or other entities of such offer.
(c) Any additional bank, financial institution or other entity which the
Borrower selects to offer participation in the increased Commitments and which
elects to become a party to this Agreement and provide a Commitment in an amount
so offered and accepted by it pursuant to Section 2.06(b)(ii) shall execute an
Additional Lender Supplement with the Borrower and the Administrative Agent,
substantially in the form of Exhibit I, whereupon such bank, financial
institution or other entity (herein called an "Additional Lender") shall become
a Lender for all purposes and to the same extent as if originally a party hereto
and shall be bound by and entitled to the benefits of this Agreement, and
Schedule 2.01 shall be deemed to be amended to add the name and Commitment of
such Additional Lender, provided that the Commitment of any such Additional
Lender shall be in an amount not less than $5,000,000.
(d) Any Lender which accepts an offer to it by the Borrower to increase its
Commitment pursuant to Section 2.06(b)(i) shall, in each case, execute a
Commitment Increase Supplement with the Borrower and the Administrative Agent,
substantially in the form of Exhibit C, whereupon such Lender shall be bound by
and entitled to the benefits of this Agreement with respect to the full amount
of its Commitment as so increased, and Schedule 2.01 shall be deemed to be
amended to so increase the Commitment of such Lender.
(e) Notwithstanding anything to the contrary in this Section 2.06, (i) in
no event shall (A) increases in Commitments made under this Section 2.06 exceed
$100,000,000 in the aggregate or (B) any transaction effected pursuant to this
Section 2.06 cause the Commitments hereunder to exceed $400,000,000, less the
amount of any permanent reductions in the Commitments under Section 2.06(a), and
(ii) no Lender shall have any obligation to increase its Commitment unless it
agrees to do so in its sole discretion.
(f) The Administrative Agent may establish reasonable procedures in
consultation with the Borrower to effect, within a reasonable period after any
date on which the Commitments are increased pursuant to this Section 2.06, a
ratable participation of the Lenders in the outstanding Revolving Loans of each
Type and subject to each current Interest Period and in the outstanding Letters
of Credit, and such procedures shall be binding on the parties hereto.
2.07. REPAYMENT OF LOANS.
(a) The Borrower shall repay to the Lenders on the Maturity Date the
aggregate principal amount of Revolving Loans outstanding on such date.
(b) The Borrower shall repay each Swing Line Loan on the earlier to occur
of (i) demand made by the Swing Line Lender and (ii) the Maturity Date.
(c) The Borrower shall repay each Competitive Loan on the last day of the
Interest Period applicable to such Loan; provided that on each date that a
Competitive Borrowing is made, if there are Swing Line Loans or L/C Borrowings
outstanding, then the proceeds of such Borrowing shall be applied, first, to the
payment in full of any such L/C Borrowings, second, to the payment in full of
any such Swing Line Loans, and third, to the Borrower.
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2.08. INTEREST.
(a) Subject to the provisions of clause (b), (i) the Loans comprising each
Offshore Rate Borrowing shall bear interest (A) in the case of an Offshore Rate
Loan (other than a Competitive Offshore Rate Loan), at the Offshore Rate for the
Interest Period in effect for such Borrowing plus the Applicable Margin, or (B)
in the case of Competitive Offshore Rate Loan, at the Offshore Rate for the
Interest Period in effect for such Borrowing plus (or minus, as applicable) the
Margin applicable to such Loan; (ii) each Base Rate Loan shall bear interest at
the Base Rate; (iii) each Fixed Rate Loan shall bear interest at the Fixed Rate
applicable to such Loan; and (iv) each Swing Line Loan shall bear interest at
the Base Rate.
(b) If any amount payable by the Borrower under any Loan Document is not
paid when due (without regard to any applicable grace periods), whether at
stated maturity, by acceleration or otherwise, such amount shall thereafter bear
interest at a fluctuating interest rate per annum at all times equal to the
relevant Default Rate to the fullest extent permitted by Applicable Law. Accrued
and unpaid interest on past due amounts (including interest on past due
interest) shall be due and payable upon demand.
(c) Interest on each Loan shall be due and payable in arrears on each
Interest Payment Date applicable thereto and at such other times as may be
specified herein. Interest hereunder shall be due and payable in accordance with
the terms hereof before and after judgment, and before and after the
commencement of any proceeding under any Debtor Relief Law.
2.09. FEES. In addition to certain fees described in clauses (i) and (j) of
Section 2.03:
(a) Revolving Credit Facility Fee. The Borrower shall pay to the
Administrative Agent for the account of each Lender in accordance with its Pro
Rata Share, a facility fee equal to the Applicable Margin set forth under the
heading "Facility Fee" times the actual daily amount of the Aggregate
Commitments (or, if the Aggregate Commitments have terminated, on the
Outstanding Amount of all Revolving Loans, Swing Line Loans and L/C
Obligations), regardless of usage. The facility fee shall accrue at all times
during the Availability Period (and thereafter so long as any Revolving Loans,
Swing Line Loans or L/C Obligations remain outstanding), including at any time
during which one or more of the conditions in Article IV is not met, and shall
be due and payable quarterly in arrears on the last Business Day of each March,
June, September and December, commencing with the first such date to occur after
the Effective Date, and on the Maturity Date (and, if applicable, thereafter on
demand). The facility fee shall be calculated quarterly in arrears, and if there
is any change in the Applicable Margin during any quarter, the actual daily
amount shall be computed and multiplied by the Applicable Margin separately for
each period during such quarter that such Applicable Margin was in effect.
(b) Other Fees. (i) The Borrower shall pay to the Arranger and the
Administrative Agent for their own respective accounts fees in the amounts and
at the times specified in the Fee Letter. Such fees shall be fully earned when
paid and shall not be refundable for any reason whatsoever.
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(c) The Borrower shall pay to the Lenders such fees as shall have been
separately agreed upon in writing in the amounts and at the times so specified.
Such fees shall be fully earned when paid and shall not be refundable for any
reason whatsoever.
2.10. COMPUTATION OF INTEREST AND FEES. All computations of interest for
Base Rate Loans when the Base Rate is determined by JPMorgan Chase Bank's "prime
rate" shall be made on the basis of a year of 365 or 366 days, as the case may
be, and actual days elapsed. All other computations of fees and interest shall
be made on the basis of a 360-day year and actual days elapsed (which results in
more fees or interest, as applicable, being paid than if computed on the basis
of a 365-day year). Interest shall accrue on each Loan for the day on which the
Loan is made, and shall not accrue on a Loan, or any portion thereof, for the
day on which the Loan or such portion is paid, provided that any Loan that is
repaid on the same day on which it is made shall, subject to Section 2.12(a),
bear interest for one day.
2.11. EVIDENCE OF DEBT.
(a) The Credit Extensions made by each Lender shall be evidenced by one or
more accounts or records maintained by such Lender and by the Administrative
Agent in the ordinary course of business. The accounts or records maintained by
the Administrative Agent and each Lender shall be conclusive absent manifest
error of the amount of the Credit Extensions made by the Lenders to the Borrower
and the interest and payments thereon. Any failure to so record or any error in
doing so shall not, however, limit or otherwise affect the obligation of the
Borrower hereunder to pay any amount owing with respect to the Obligations. In
the event of any conflict between the accounts and records maintained by any
Lender and the accounts and records of the Administrative Agent in respect of
such matters, the accounts and records of the Administrative Agent shall control
in the absence of manifest error. Upon the request of any Lender made through
the Administrative Agent, the Borrower shall execute and deliver to such Lender
(through the Administrative Agent) a Note, which shall evidence such Lender's
Revolving Loans in addition to such accounts or records. Each Lender may attach
schedules to its Note and endorse thereon the date, Type (if applicable), amount
and maturity of its Loans and payments with respect thereto.
(b) In addition to the accounts and records referred to in clause (a), each
Lender and the Administrative Agent shall maintain in accordance with its usual
practice accounts or records evidencing the purchases and sales by such Lender
of participations in Letters of Credit and Swing Line Loans. In the event of any
conflict between the accounts and records maintained by the Administrative Agent
and the accounts and records of any Lender in respect of such matters, the
accounts and records of the Administrative Agent shall control in the absence of
manifest error.
2.12. PAYMENTS GENERALLY.
(a) All payments to be made by the Borrower shall be made without condition
or deduction for any counterclaim, defense, recoupment or setoff. Except as
otherwise expressly provided herein, all payments by the Borrower hereunder
shall be made to the Administrative Agent, for the account of the respective
Lenders to which such payment is owed, at the Administrative Agent's Office in
Dollars and in immediately available funds not later than 2:00
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p.m. on the date specified herein. The Administrative Agent will promptly
distribute to each Lender its Pro Rata Share (or other applicable share as
provided herein) of such payment in like funds as received by wire transfer to
such Lender's Lending Office. All payments received by the Administrative Agent
after 2:00 p.m. shall be deemed received on the next succeeding Business Day and
any applicable interest or fee shall continue to accrue.
(b) If any payment to be made by the Borrower shall come due on a day other
than a Business Day, payment shall be made on the next following Business Day,
and such extension of time shall be reflected in computing interest or fees, as
the case may be.
(c) Unless the Borrower or any Lender has notified the Administrative
Agent, prior to the date any payment is required to be made by it to the
Administrative Agent hereunder, that the Borrower or such Lender, as the case
may be, will not make such payment, the Administrative Agent may assume that the
Borrower or such Lender, as the case may be, has timely made such payment and
may (but shall not be so required to), in reliance thereon, make available a
corresponding amount to the Person entitled thereto. If and to the extent that
such payment was not in fact made to the Administrative Agent in immediately
available funds, then:
(i) if the Borrower failed to make such payment, each Lender shall
forthwith on demand repay to the Administrative Agent the portion of such
assumed payment that was made available to such Lender in immediately
available funds, together with interest thereon in respect of each day from
and including the date such amount was made available by the Administrative
Agent to such Lender to the date such amount is repaid to the
Administrative Agent in immediately available funds at the Federal Funds
Rate from time to time in effect; and
(ii) if any Lender failed to make such payment, such Lender shall
forthwith on demand pay to the Administrative Agent the amount thereof in
immediately available funds, together with interest thereon for the period
from the date such amount was made available by the Administrative Agent to
the Borrower to the date such amount is recovered by the Administrative
Agent (the "Compensation Period") at a rate per annum equal to the Federal
Funds Rate from time to time in effect. If such Lender pays such amount to
the Administrative Agent, then such amount shall constitute such Lender's
Loan, included in the applicable Borrowing. If such Lender does not pay
such amount forthwith upon the Administrative Agent's demand therefor, the
Administrative Agent may make a demand therefor upon the Borrower, and the
Borrower shall pay such amount to the Administrative Agent, together with
interest thereon for the Compensation Period at a rate per annum equal to
the rate of interest applicable to the applicable Borrowing. Nothing herein
shall be deemed to relieve any Lender from its obligation to fulfill its
Commitment or to prejudice any rights which the Administrative Agent or the
Borrower may have against any Lender as a result of any default by such
Lender hereunder.
A notice of the Administrative Agent to any Lender or the Borrower with respect
to any amount owing under this clause (c) shall be conclusive, absent manifest
error.
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(d) If any Lender makes available to the Administrative Agent funds for any
Loan to be made by such Lender as provided in the foregoing provisions of this
Article II, and such funds are not made available to the Borrower by the
Administrative Agent because the conditions to the applicable Credit Extension
set forth in Article IV are not satisfied or waived in accordance with the terms
hereof, the Administrative Agent shall return such funds (in like funds as
received from such Lender) to such Lender, without interest.
(e) The obligations of the Lenders hereunder to make Loans and to fund
participations in Letters of Credit and Swing Line Loans are several and not
joint. The failure of any Lender to make any Loan or to fund any such
participation on any date required hereunder shall not relieve any other Lender
of its corresponding obligation to do so on such date, and no Lender shall be
responsible for the failure of any other Lender to so make its Loan or purchase
its participation.
(f) Nothing herein shall be deemed to obligate any Lender to obtain the
funds for any Loan in any particular place or manner or to constitute a
representation by any Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.
2.13. SHARING OF PAYMENTS. If, other than as expressly provided elsewhere
herein, any Lender shall obtain on account of the Loans made by it, or the
participations in L/C Obligations or in Swing Line Loans held by it, any payment
(whether voluntary, involuntary, through the exercise of any right of set-off,
or otherwise) in excess of its ratable share (or other share contemplated
hereunder) thereof, such Lender shall immediately (a) notify the Administrative
Agent of such fact, and (b) purchase from the other Lenders such participations
in the Loans made by them and/or such subparticipations in the participations in
L/C Obligations or Swing Line Loans held by them, as the case may be, as shall
be necessary to cause such purchasing Lender to share the excess payment in
respect of such Loans or such participations, as the case may be, pro rata with
each of them; provided, however, that if all or any portion of such excess
payment is thereafter recovered from the purchasing Lender under any of the
circumstances described in Section 10.06 (including pursuant to any settlement
entered into by the purchasing Lender in its discretion), such purchase shall to
that extent be rescinded and each other Lender shall repay to the purchasing
Lender the purchase price paid therefor, together with an amount equal to such
paying Lender's ratable share (according to the proportion of (i) the amount of
such paying Lender's required repayment to (ii) the total amount so recovered
from the purchasing Lender) of any interest or other amount paid or payable by
the purchasing Lender in respect of the total amount so recovered, without
further interest thereon. The Borrower agrees that any Lender so purchasing a
participation from another Lender may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off, but subject
to Section 10.09) with respect to such participation as fully as if such Lender
were the direct creditor of the Borrower in the amount of such participation.
The Administrative Agent will keep records (which shall be conclusive and
binding in the absence of manifest error) of participations purchased under this
Section and will in each case notify the Lenders following any such purchases or
repayments. Each Lender that purchases a participation pursuant to this Section
shall from and after such purchase have the right to give all notices, requests,
demands, directions and other communications under this Agreement with respect
to the portion of the Obligations purchased to the same extent as though the
purchasing Lender were the original owner of the Obligations purchased.
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2.14. COMPETITIVE BID PROCEDURE. (a) Subject to the terms and conditions
set forth herein, from time to time during the Availability Period the Borrower
may request Competitive Bids and may (but shall not have any obligation to)
accept Competitive Bids and borrow Competitive Loans; provided that the Total
Outstandings plus the aggregate principal amount of outstanding Competitive
Loans at any time shall not exceed the Aggregate Commitments. Each Competitive
Borrowing shall be comprised entirely of Offshore Rate Loans or Fixed Rate Loans
as the Borrower may request in accordance herewith. Each Competitive Borrowing
shall be in an aggregate amount that is an integral multiple of $1,000,000 and
not less than $5,000,000. To request Competitive Bids, the Borrower shall notify
the Administrative Agent of such request by telephone, in the case of an
Offshore Rate Borrowing, not later than 11:00 a.m. four Business Days before the
date of the proposed Borrowing and, in the case of a Fixed Rate Borrowing not
later than 10:00 a.m. one Business Day before the date of the proposed
Borrowing; provided that the Borrower may submit up to (but not more than) two
Competitive Bid Requests on the same day, but a Competitive Bid Request shall
not be made within five Business Days after the date of any previous Competitive
Bid Request, unless any and all such previous Competitive Bid Requests shall
have been withdrawn or all Competitive Bids received in response thereto
rejected. Each such telephonic Competitive Bid Request shall be confirmed
promptly by hand delivery or telecopy to the Administrative Agent of a written
Competitive Bid Request in the form of Exhibit H. Each such telephonic and
written Competitive Bid Request shall specify the following information:
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day;
(iii) whether such Borrowing is to be an Offshore Rate Borrowing or a
Fixed Rate Borrowing; and
(iv) the Interest Period to be applicable to such Borrowing, which
shall be a period contemplated by the definition of the term "Interest
Period".
Promptly following receipt of a Competitive Bid Request in accordance with this
Section, the Administrative Agent shall notify the Lenders of the details
thereof by telecopy, inviting the Lenders to submit Competitive Bids.
(b) Each Lender may (but shall not have any obligation to) make one or more
Competitive Bids to the Borrower in response to a Competitive Bid Request. Each
Competitive Bid by a Lender must be in a form approved by the Administrative
Agent and must be received by the Administrative Agent by telecopy, in the case
of an Offshore Rate Competitive Borrowing, not later than 9:30 a.m. three
Business Days before the proposed date of such Competitive Borrowing, and in the
case of a Fixed Rate Borrowing, not later than 9:30 a.m. on the proposed date of
such Competitive Borrowing. Competitive Bids that do not conform substantially
to the form approved by the Administrative Agent may be rejected by the
Administrative Agent, and the Administrative Agent shall notify the applicable
Lender as promptly as practicable. Each Competitive Bid shall specify (i) the
principal amount (which shall be a minimum of $5,000,000 and an integral
multiple of $1,000,000 and which may equal the entire principal amount of the
Competitive Borrowing requested by the Borrower) of the Competitive Loan or
Loans that the
44
Lender is willing to make, (ii) the Competitive Bid Rate or Rates at which the
Lender is prepared to make such Loan or Loans (expressed as a percentage rate
per annum in the form of a decimal to no more than four decimal places) and
(iii) the Interest Period applicable to each such Loan and the last day thereof.
(c) The Administrative Agent shall promptly notify the Borrower by telecopy
of the Competitive Bid Rate and the principal amount specified in each
Competitive Bid and the identity of the Lender that shall have made such
Competitive Bid.
(d) Subject only to the provisions of this paragraph, the Borrower may
accept or reject any Competitive Bid. The Borrower shall notify the
Administrative Agent by telephone, confirmed by telecopy in a form approved by
the Administrative Agent, whether and to what extent it has decided to accept or
reject each Competitive Bid, in the case of an Offshore Rate Competitive
Borrowing, not later than 10:30 a.m. three Business Days before the date of the
proposed Competitive Borrowing, and in the case of a Fixed Rate Borrowing, not
later than 10:30 a.m. on the proposed date of the Competitive Borrowing;
provided that (i) the failure of the Borrower to give such notice shall be
deemed to be a rejection of each Competitive Bid, (ii) the Borrower shall not
accept a Competitive Bid made at a particular Competitive Bid Rate if the
Borrower rejects a Competitive Bid made at a lower Competitive Bid Rate, (iii)
the aggregate amount of the Competitive Bids accepted by the Borrower shall not
exceed the aggregate amount of the requested Competitive Borrowing specified in
the related Competitive Bid Request, (iv) to the extent necessary to comply with
clause (iii) above, the Borrower may accept Competitive Bids at the same
Competitive Bid Rate in part, which acceptance, in the case of multiple
Competitive Bids at such Competitive Bid Rate, shall be made pro rata in
accordance with the amount of each such Competitive Bid, and (v) except pursuant
to clause (iv) above, no Competitive Bid shall be accepted for a Competitive
Loan unless such Competitive Loan is in a minimum principal amount of $5,000,000
and an integral multiple of $1,000,000; provided further that if a Competitive
Loan must be in an amount less than $5,000,000 because of the provisions of
clause (iv) above, such Competitive Loan may be for a minimum of $1,000,000 or
any integral multiple thereof, and in calculating the pro rata allocation of
acceptances of portions of multiple Competitive Bids at a particular Competitive
Bid Rate pursuant to clause (iv) the amounts shall be rounded to integral
multiples of $1,000,000 in a manner determined by the Borrower. A notice given
by the Borrower pursuant to this paragraph shall be irrevocable.
(e) The Administrative Agent shall promptly notify each bidding Lender by
telecopy whether or not its Competitive Bid has been accepted (and, if so, the
amount and Competitive Bid Rate so accepted), and each successful bidder will
thereupon become bound, subject to the terms and conditions hereof, to make the
Competitive Loan in respect of which its Competitive Bid has been accepted.
(f) If the Administrative Agent shall elect to submit a Competitive Bid in
its capacity as a Lender, it shall submit such Competitive Bid directly to the
Borrower at least one quarter of an hour earlier than the time by which the
other Lenders are required to submit their Competitive Bids to the
Administrative Agent pursuant to paragraph (b) of this Section.
2.15. CONVERSION AND CONTINUATION OPTIONS. (a) The Borrower may elect from
time to time to convert Offshore Rate Loans to Base Rate Loans by giving the
Administrative Agent
45
at least one Business Day's prior irrevocable written (or telephonic promptly
confirmed in writing) notice of such election (but no later than 12:00 p.m. on
the Business Day immediately prior to such election), provided that any such
conversion of Offshore Rate Loans may only be made on the last day of an
Interest Period with respect thereto. The Borrower may elect from time to time
to convert Base Rate Loans to Offshore Rate Loans by giving the Administrative
Agent at least three Business Days' prior irrevocable written (or telephonic
promptly confirmed in writing) notice of such election by 12:00 p.m. (which
notice shall specify the length of the initial Interest Period therefor),
provided that no Base Rate Loan may be converted into an Offshore Rate Loan
during the existence of any Event of Default without the consent of the Required
Lenders. Each conversion to or continuation of Revolving Offshore Rate Loans
shall be in a principal amount of $3,000,000 or a whole multiple of $1,000,000
in excess thereof. Except as provided in Sections 2.03(c) and 2.04(c), each
conversion to Base Rate Loans shall be in a principal amount of $3,000,000 or a
whole multiple of $1,000,000 in excess thereof.
(b) Any Offshore Rate Loan may be continued as such upon the expiration of
the then current Interest Period with respect thereto by the Borrower giving
irrevocable notice to the Administrative Agent, in accordance with the
applicable provisions of the term "Interest Period" set forth in Section 1.01,
of the length of the next Interest Period to be applicable to such Loans,
provided (i) that no Offshore Rate Loan may be continued as such during the
existence of an Event of Default without the consent of the Required Lenders and
(ii) an Offshore Rate Loan may be continued or converted only on the last day of
an Interest Period for such Offshore Rate Loan, and provided further that if the
Borrower shall fail to give any required notice as described above in this
paragraph or if such continuation is not permitted pursuant to the preceding
proviso such Offshore Rate Loans shall be automatically converted to Base Rate
Loans on the last day of such then expiring Interest Period. Upon receipt of any
such notice the Administrative Agent shall promptly notify each relevant Lender
thereof.
ARTICLE III.
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01. TAXES.
(a) Any and all payments by the Borrower to or for the account of the
Administrative Agent, any Lender or any Tax Transferee under any Loan Document
shall be made free and clear of and without deduction for any and all present or
future taxes, duties, levies, imposts, deductions, assessments, fees,
withholdings or similar charges, and all liabilities with respect thereto,
excluding, however, (i) in the case of the Administrative Agent, each Lender,
and each Tax Transferee taxes (including income taxes and branch profits taxes)
imposed on or measured by its overall net income, and franchise taxes imposed on
it (in lieu of net income taxes), by the jurisdiction (or any political
subdivision thereof) under the Laws of which the Administrative Agent or such
Lender, as the case may be, is organized or maintains a lending office; (ii) in
the case of the Administrative Agent and each Lender, such taxes (including
income taxes and branch profits taxes) imposed on or measured by the
Administrative Agent's or each Lender's overall net income and franchise taxes
imposed as a result of a present or former connection between the Administrative
Agent or such Lender and the jurisdiction of the Governmental Authority imposing
such tax or any political subdivision thereof or taxing authority thereof or
therein (other than any such connection arising solely from the
46
Administrative Agent or such Lender having executed, delivered or performed its
obligations or received a payment under, or enforced, this Agreement or any
other Loan Document); (iii) in the case of the Administrative Agent and each
Lender, any taxes, levies, imposts, duties, charges, fees, deductions or
withholdings that are in effect and that would apply to a payment hereunder or
under any other Loan Document made to the Administrative Agent or such Lender as
of the Effective Date or the date such Lender becomes a party to this Agreement;
(iv) in the case of any other Lender which changes its lending office with
respect to the Loan to an office outside the United States, any taxes that are
in effect and would apply to a payment to such Lender as of the date of the
change of the lending office; and (v) if any Person acquires any interest in
this Agreement pursuant to the provisions hereof, including, without limitation,
a participation (whether or not by operation of law) (any such Person, a "Tax
Transferee"), any taxes, levies, imposts, duties, charges, fees, deductions or
withholdings in excess of amounts treated as Taxes pursuant to this clause in
the hands of the Person from whom such interest was acquired or prior to any
change in the office in which the Loan was made, accounted for or booked (all
such non-excluded taxes, duties, levies, imposts, deductions, assessments, fees,
withholdings or similar charges, and liabilities being hereinafter referred to
as "Taxes"). If the Borrower shall be required by any Laws to deduct any Taxes
from or in respect of any sum payable under any Loan Document to the
Administrative Agent, any Lender or any Tax Transferee, (i) the sum payable
shall be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section),
each of the Administrative Agent, such Lender and such Tax Transferee receives
an amount equal to the sum it would have received had no such deductions been
made, (ii) the Borrower shall make such deductions, (iii) the Borrower shall pay
the full amount deducted to the relevant taxation authority or other authority
in accordance with applicable Laws, and (iv) within 30 days after the date of
such payment, the Borrower shall furnish to the Administrative Agent (which
shall forward the same to such Lender) the original or a certified copy of a
receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any and all present or future
stamp, court or documentary taxes and any other excise or property taxes or
charges or similar levies which arise from any payment made under any Loan
Document or from the execution, delivery, performance, enforcement or
registration of, or otherwise with respect to, any Loan Document (hereinafter
referred to as "Other Taxes").
(c) If the Borrower shall be required to deduct or pay any Taxes or Other
Taxes from or in respect of any sum payable under any Loan Document to the
Administrative Agent any Lender or any Tax Transferee, the Borrower shall also
pay to the Administrative Agent, to such Lender or to such Tax Transferee, as
the case may be, at the time interest is paid, such additional amount that the
Administrative Agent, such Lender or such Tax Transferee specifies is necessary
to preserve the after-tax yield (after factoring in all taxes, including taxes
imposed on or measured by net income) that the Administrative Agent, such Lender
or Tax Transferee would have received if such Taxes or Other Taxes had not been
imposed.
(d) The Borrower agrees to indemnify the Administrative Agent, each Lender
and each Tax Transferee for (i) the full amount of Taxes and Other Taxes
(including any Taxes or Other Taxes imposed or asserted by any jurisdiction on
amounts payable under this Section) paid by the Administrative Agent, such
Lender and such Tax Transferee, (ii) amounts payable under Section 3.01(c) and
(iii) any liability (including additions to tax, penalties, interest and
47
reasonable expenses) arising therefrom or with respect thereto, in each case
whether or not such Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. Payment under this clause (d)
shall be made within 30 days after the date the Lender, the Tax Transferee or
the Administrative Agent makes a demand therefor; provided, however, that the
Borrower shall not be obligated to make payment to a Lender, Tax Transferee or
the Administrative Agent (as the case may be) pursuant to this clause in respect
of penalties, interest and other liabilities attributable to any Taxes or Other
Taxes, if such penalties, interest and other liabilities are attributable to the
gross negligence or willful misconduct of such Lender, such Tax Transferee or
the Administrative Agent or its Affiliates. After a Lender, a Tax Transferee or
an Administrative Agent (as the case may be) receives written notice of the
imposition of the Taxes or Other Taxes which are subject to this Section, such
Lender, such Tax Transferee or the Administrative Agent will act in good faith
to promptly notify the Borrower of its obligations hereunder.
(e) If the Borrower is required to pay additional amounts to or for the
account of any Lender, Tax Transferee, or the Administrative Agent pursuant to
this Section as a result of a change in Laws occurring after such Lender, Tax
Transferee, or the Administrative Agent first became a party to this Agreement,
then such Lender, Tax Transferee, or the Administrative Agent, as the case may
be, will, at the request of the Borrower, change the jurisdiction of its
applicable lending office if such change (i) will eliminate or reduce any such
additional payment which may thereafter accrue and (ii) is, in such Lender's,
Tax Transferee's or the Administrative Agent's sole, reasonable discretion,
determined not to be materially disadvantageous or cause unreasonable hardship
to such Lender, Tax Transferee, or the Administrative Agent, as the case may be,
provided that fees, charges, costs or expenses that are related to such change
shall be borne by the Borrower on behalf of a Lender, a Tax Transferee, or the
Administrative Agent, and the mere existence of such expenses, fees or costs
shall not be deemed to be materially disadvantageous or cause undue hardship to
the Lender, the Tax Transferee, or the Administrative Agent, as the case may be.
(f) If and to the extent that any Lender or Tax Transferee is able, in its
reasonable discretion, to apply or otherwise take advantage of any offsetting
tax credit or other similar tax benefit arising out of or in conjunction with
any deduction or withholding which gives rise to an obligation on the Borrower
to pay any Taxes or Other Taxes pursuant to this Section then such Lender or Tax
Transferee shall, to the extent that in its sole opinion it can do so without
prejudice to the retention of the amount of such credit or benefit and without
any other adverse tax consequences for such Lender or Tax Transferee, reimburse
(less any costs and expenses incurred in connection with or in prosecution of
such applications) to the Borrower at such time as such tax credit or benefit
shall have actually been received by such Lender or Tax Transferee such amount
as such Lender or Tax Transferee shall have determined to be attributable to the
relevant deduction or withholding and as will leave such Lender or Tax
Transferee in no better or worse position than it would have been in if the
payment of such Taxes or Other Taxes had not been required.
(g) Notwithstanding anything to the contrary contained in this Section, if
a Lender or Tax Transferee is a conduit entity participating in a conduit
financing arrangement (as defined in Section 7701(L) of the Code and Treasury
Regulations issued thereunder) with respect to any payments made by the Borrower
under this Agreement or under any Loan Document, the
48
Borrower shall not be obligated to pay additional amounts to such Lender or Tax
Transferee pursuant to this Section to the extent that the amount of Taxes
exceeds the amount that would have been otherwise payable had such Lender or Tax
Transferee not been a conduit entity participating in a conduit financing
arrangement.
3.02. ILLEGALITY. If any Lender determines that any Law has made it
unlawful, or that any Governmental Authority has asserted that it is unlawful,
for any Lender or its applicable Lending Office to make, maintain or fund
Offshore Rate Loans, or to determine or charge interest rates based upon the
Offshore Rate, then, on notice thereof by such Lender to the Borrower through
the Administrative Agent, any obligation of such Lender to make or continue
Offshore Rate Loans or to convert Base Rate Loans to Offshore Rate Loans shall
be suspended until such Lender notifies the Administrative Agent and the
Borrower that the circumstances giving rise to such determination no longer
exist. Upon receipt of such notice, the Borrower shall, upon demand from such
Lender (with a copy to the Administrative Agent), prepay or, if applicable,
convert all Offshore Rate Loans of such Lender to Base Rate Loans, either on the
last day of the Interest Period therefor, if such Lender may lawfully continue
to maintain such Offshore Rate Loans to such day, or immediately, if such Lender
may not lawfully continue to maintain such Offshore Rate Loans. Upon any such
prepayment or conversion, the Borrower shall also pay accrued interest on the
amount so prepaid or converted. Each Lender agrees to designate a different
Lending Office if such designation will avoid the need for such notice and will
not, in the good faith judgment of such Lender, otherwise be materially
disadvantageous to such Lender.
3.03. INABILITY TO DETERMINE RATES. If the Required Lenders determine that
for any reason adequate and reasonable means do not exist for determining the
Offshore Rate for any requested Interest Period with respect to a proposed
Offshore Rate Loan, or that the Offshore Rate for any requested Interest Period
with respect to a proposed Offshore Rate Loan does not adequately and fairly
reflect the cost to such Lenders of funding such Loan, the Administrative Agent
will promptly so notify the Borrower and each Lender. Thereafter, the obligation
of the Lenders to make or maintain Offshore Rate Loans shall be suspended until
the Administrative Agent (upon the instruction of the Required Lenders) revokes
such notice. Upon receipt of such notice, the Borrower may revoke any pending
request for a Borrowing of, conversion to or continuation of Offshore Rate Loans
or, failing that, will be deemed to have converted such request into a request
for a Borrowing of Base Rate Loans in the amount specified therein.
3.04. INCREASED COST AND REDUCED RETURN; CAPITAL ADEQUACY.
(a) If any Lender determines that as a result of the introduction of or any
change in or in the interpretation of any Law, in each case occurring after the
Effective Date or the date such Lender becomes a party to this Agreement, or
such Lender's compliance therewith, there shall be any increase which such
Lender reasonably determines to be material in the cost to such Lender of
agreeing to make or making, funding or maintaining Offshore Rate Loans or (as
the case may be) issuing or participating in Letters of Credit, or a reduction
in the amount received or receivable by such Lender in connection with any of
the foregoing (excluding, however, for purposes of this clause (A) any such
increased costs or reduction in amount resulting from (i) Taxes or Other Taxes
(as to which Section 3.01 shall govern), and (ii) changes in the basis of
taxation of overall net income or overall gross income by the United States or
any foreign
49
jurisdiction or any political subdivision of either thereof under the Laws of
which such Lender is organized or has its Lending Office, then from time to time
upon demand of such Lender (with a copy of such demand to the Administrative
Agent), the Borrower shall pay to such Lender such additional amounts as will
compensate such Lender for such increased cost or reduction.
(b) If any Lender determines that the introduction of any Law regarding
capital adequacy or any change therein or in the interpretation thereof, in each
case occurring after the Effective Date or the date such Lender becomes a party
to this Agreement, or compliance by such Lender (or its Lending Office)
therewith, has the effect of reducing the rate of return on the capital of such
Lender or any corporation controlling such Lender as a consequence of such
Lender's obligations hereunder (taking into consideration its policies with
respect to capital adequacy and such Lender's desired return on capital), then
from time to time upon demand of such Lender (with a copy of such demand to the
Administrative Agent), the Borrower shall pay to such Lender such additional
amounts as will compensate such Lender for such reduction.
3.05. FUNDING LOSSES. Upon demand of any Lender (with a copy to the
Administrative Agent) from time to time, the Borrower shall promptly compensate
such Lender for and hold such Lender harmless from any loss, cost or expense
incurred by it as a result of:
(a) any continuation, conversion, payment or prepayment of any Loan other
than a Base Rate Loan on a day other than the last day of the Interest Period
for such Loan (whether voluntary, mandatory, automatic, by reason of
acceleration, or otherwise);
(b) any failure by the Borrower (for a reason other than the failure of
such Lender to make a Loan) to prepay, borrow, continue or convert any Loan
other than a Base Rate Loan on the date or in the amount notified by the
Borrower; or
(c) any assignment of an Offshore Rate Loan on a day other than the last
day of the Interest Period therefor as a result of a request by the Borrower
pursuant to Section 10.16;
including any loss of anticipated profits and any loss or expense arising from
the liquidation or reemployment of funds obtained by it to maintain such Loan or
from fees payable to terminate the deposits from which such funds were obtained.
For purposes of calculating amounts payable by the Borrower to the Lenders under
this Section, each Lender shall be deemed to have funded each Offshore Rate Loan
made by it at the IBOR used in determining the Offshore Rate for such Loan by a
matching deposit or other borrowing in the interbank eurodollar market for a
comparable amount and for a comparable period, whether or not such Offshore Rate
Loan was in fact so funded.
3.06. MATTERS APPLICABLE TO ALL REQUESTS FOR COMPENSATION.
(a) A certificate of the Administrative Agent or any Lender claiming
compensation under this Article III and setting forth in reasonable detail the
additional amount or amounts to be paid to it hereunder shall be conclusive in
the absence of manifest error. In determining such amount, the Administrative
Agent or such Lender may use any reasonable averaging and attribution methods.
50
(b) Upon any Lender's making a claim for compensation under Section 3.01,
or 3.04, or in the event any Lender whose obligations to make Offshore Rate
Loans have been suspended under Section 3.02, the Borrower may replace such
Lender in accordance with Section 10.16.
(c) Each Lender will promptly notify the Borrower and the Administrative
Agent of any event of which it has knowledge, occurring after the Effective
Date, which will entitle such Lender to compensation pursuant to this Article
III (each, a "Trigger Event"). Notwithstanding any other provision of this
Article III, no Lender shall be entitled to any compensation pursuant to this
Article III in respect of any Trigger Event for any period of time in excess of
six months prior to such notice unless such Trigger Event is retroactive and
notice is given within six months of such retroactive Trigger Event.
3.07. SURVIVAL. All of the Borrower's obligations under this Article III
shall survive the Revolving Termination Date.
3.08. COMPETITIVE LOANS. Notwithstanding the foregoing provisions of this
Article III, a Lender shall not be entitled to compensation pursuant to this
Article in respect of any Competitive Loan if the Trigger Event that would
otherwise entitle it to such compensation shall have been publicly announced
prior to submission of the Competitive Bid pursuant to which such Loan was made.
ARTICLE IV.
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
4.01. CONDITIONS OF INITIAL CREDIT EXTENSION. The obligation of each Lender
to make its initial Credit Extension hereunder is subject to satisfaction of the
following conditions precedent:
(a) The Administrative Agent's receipt of the following, each of which
shall be originals or facsimiles (followed promptly by originals) unless
otherwise specified, each properly executed by a Responsible Officer of the
signing Obligor, each dated the Closing Date (or, in the case of certificates of
governmental officials, a recent date before the Closing Date) and each in form
and substance satisfactory to the Administrative Agent and its legal counsel:
(i) executed counterparts of this Agreement and the Guaranty,
sufficient in number for distribution to the Administrative Agent, each
Lender and the Borrower;
(ii) a Note executed by the Borrower in favor of each Lender
requesting a Note;
(iii) such certificates of resolutions or other action, incumbency
certificates and other certificates of Responsible Officers of each Obligor
as the Administrative Agent may require evidencing the identity, authority
and capacity of each Responsible Officer thereof authorized to act as a
Responsible Officer in connection with this Agreement and the other Loan
Documents to which such Obligor is a party;
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(iv) such documents and certifications as the Administrative Agent may
reasonably require to evidence that each of the Borrower, Manor Care of
America, ManorCare Health Services, Inc., HCRC Inc., Health Care and
Retirement Corporation of America, HCR Rehabilitation Corp., and Heartland
Rehabilitation Services, Inc. is duly organized or formed, is validly
existing and in good standing in its jurisdiction of organization;
(v) a favorable opinion of Latham & Watkins LLP, special counsel to
the Obligors, addressed to the Administrative Agent and each Lender, as to
certain of the matters set forth in Exhibit G and such other matters
concerning the Obligors and the Loan Documents as the Required Lenders may
reasonably request;
(vi) a favorable opinion of R. Jeffrey Bixler, the General Counsel of
the Borrower, addressed to the Administrative Agent and each Lender, as to
those matters set forth in Exhibit G not otherwise covered in the opinion
referenced in clause (v) and such other matters concerning the Obligors and
the Loan Documents as the Required Lenders may reasonably request;
(vii) a certificate of a Responsible Officer of each Obligor either
(A) attaching copies of all consents, licenses and approvals required in
connection with the execution, delivery and performance by such Obligor and
the validity against such Obligor of the Loan Documents to which it is a
party, and such consents, licenses and approvals shall be in full force and
effect, or (B) stating that no such consents, licenses or approvals are so
required;
(viii) a certificate of a Responsible Officer of the Borrower
certifying (A) that the conditions specified in Section 4.02 have been
satisfied, and (B) that there has been no event or circumstance since the
date of the Audited Financial Statements that has had or could be
reasonably expected to have, either individually or in the aggregate, a
Material Adverse Effect;
(ix) a compliance certificate, based substantially on the form of
Compliance Certificate in Exhibit D, certifying only as to the Leverage
Ratio as of the Closing Date, calculated using (A) then current
Consolidated Indebtedness for Borrowed Money as if the transactions
contemplated hereby had been consummated and the initial Credit Extensions
had been made and (B) Consolidated EBITDA for the four fiscal quarters
ended March 31, 2005;
(x) evidence that there exists no action, suit, investigation,
litigation or proceeding affecting any Obligor or any of its Subsidiaries
pending or threatened before any Governmental Authority that (A) could
reasonably be expected to have a Material Adverse Effect or (B) purports to
affect the legality, validity or enforceability of any Loan Document or the
consummation of any of the transactions contemplated by the Loan Documents;
(xi) evidence that all insurance required to be maintained pursuant to
the Loan Documents has been obtained and is in effect;
52
(xii) evidence that, prior to or concurrently with the Closing Date,
all amounts owing in respect of the Existing Credit Agreement have been
paid in full and all commitments thereunder have been terminated;
(xiii) such other assurances, certificates, documents, consents or
opinions as the Administrative Agent, the L/C Issuers, the Swing Line
Lender or the Required Lenders reasonably may require.
(b) Any fees and expenses required to be paid on or before the Closing Date
shall have been paid.
(c) Unless waived by the Administrative Agent, the Borrower shall have paid
all Attorney Costs of the Administrative Agent to the extent invoiced prior to
or on the Closing Date, plus such additional amounts of Attorney Costs as shall
constitute its reasonable estimate of Attorney Costs incurred or to be incurred
by it through the closing proceedings and syndication (provided that such
estimate shall not thereafter preclude a final settling of accounts between the
Borrower and the Administrative Agent).
(d) The Closing Date shall have occurred on or before May 27, 2005.
4.02. CONDITIONS TO ALL CREDIT EXTENSIONS. The obligation of each Lender to
honor any Request for Credit Extension (other than a Revolving Loan Notice
requesting only a conversion of Revolving Loans to another Type, or a
continuation of Offshore Rate Loans) is subject to the following conditions
precedent:
(a) The representations and warranties of the Borrower and each other
Obligor contained in Article V or any other Loan Document shall be true and
correct in all material respects on and as of the date of such Credit Extension,
except to the extent that such representations and warranties specifically refer
to an earlier date, in which case they shall be true and correct as of such
earlier date, and except that for purposes of this Section, the representations
and warranties contained in Section 5.05 shall be deemed to refer to the most
recent statements furnished pursuant to clauses (a) and (b), respectively, of
Section 6.01.
(b) No Default shall exist, or would result from such proposed Credit
Extension.
(c) The Administrative Agent and, if applicable, an L/C Issuer or the Swing
Line Lender, shall have received a Request for Credit Extension in accordance
with the requirements hereof.
Each Request for Credit Extension (other than a Revolving Loan Notice requesting
only a conversion of Revolving Loans to another Type or a continuation of
Offshore Rate Loans) submitted by the Borrower shall be deemed to be a
representation and warranty that the conditions specified in Section 4.02 have
been satisfied as of the date of such request, and on and as of the date of the
applicable Credit Extension.
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ARTICLE V.
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Administrative Agent and the
Lenders that:
5.01. ORGANIZATION, POWER, AUTHORITY, ETC. The Borrower is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware, is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction where the failure so to qualify would
be reasonably likely to have a Material Adverse Effect, and has full power and
authority and holds all requisite governmental licenses, permits and other
approvals to own its assets and hold under lease its property and to conduct its
business substantially as currently conducted by it where the failure to hold
such licenses, permits, and other approvals would be reasonably likely to have a
Material Adverse Effect. Each other Obligor is a corporation duly incorporated,
limited liability company duly formed or partnership duly formed, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or formation (to the extent applicable to partnerships or limited
liability companies in any such jurisdiction), is duly qualified to do business
and is in good standing as a foreign corporation, limited liability company or
partnership in each jurisdiction where the failure so to qualify would be
reasonably likely to have a Material Adverse Effect, and has full power and
authority and holds all requisite governmental licenses, permits and other
approvals to own its assets and hold under lease its property and to conduct its
business substantially as currently conducted by it where the failure to hold
such licenses, permits, and other approvals would be reasonably likely to have a
Material Adverse Effect. The Borrower and each other Obligor has full power and
authority to execute, deliver and perform its obligations under each Loan
Document to which it is or is to be a party, to obtain Credit Extensions
hereunder, and all other actions incidental thereto, as applicable.
5.02. AUTHORIZATION; NO CONTRAVENTION. The execution and delivery by the
Borrower and each other Obligor of each Loan Document executed or to be executed
by it, the performance by the Borrower and each other Obligor of its obligations
hereunder and thereunder, all Credit Extensions obtained hereunder by the
Borrower, the execution, delivery and performance by each other Obligor of each
Loan Document executed or to be executed by it, and all other actions incidental
to any thereof have been duly authorized by all necessary action, do not and
will not conflict with, result in any violation of, or constitute any default
under, any provision of any Organization Document or material Contractual
Undertaking of the Borrower or such Obligor (including under any of the Notes
Documents) or any Law or court decree or order (and, in the case of any such
material Contractual Undertaking or any such Law, decree or order, such
conflict, violation or default would not be reasonably likely to have a Material
Adverse Effect) and will not result in or require the creation or imposition of
any Lien on any of the Borrower's or such Obligor's properties having an
aggregate value in excess of $500,000 pursuant to the provisions of (i) any
Contractual Undertaking (other than under this Agreement) or (ii) any Applicable
Law.
5.03. GOVERNMENTAL APPROVAL; REGULATION. No authorization or approval or
other action by, and no notice to or filing with, any Governmental Authority is
required for the due execution, delivery or performance by the Borrower or any
other Obligor of this Agreement, the Notes or any other Loan Document to which
it is or is to be a party or the consummation of any
54
other transactions contemplated hereby or thereby, except for authorizations,
approvals, actions, notices or filings which have been duly obtained or made and
are in full force and effect. Neither the Borrower nor any other Obligor is (i)
an "investment company" within the meaning of the Investment Company Act of 1940
or (ii) a "holding company", or a "subsidiary company" of a "holding company",
or an "affiliate" of a "holding company" or of a "subsidiary company" of a
"holding company", within the meaning of the Public Utility Holding Company Act
of 1935.
5.04. VALIDITY, ETC. This Agreement has been duly executed and delivered by
the Borrower and constitutes the legal, valid and binding obligation of the
Borrower enforceable in accordance with its terms; and each Note and each other
Loan Document to which the Borrower or any other Obligor is or is to be a party
will, on the due execution and delivery thereof, constitute the legal, valid and
binding obligation of the Borrower or such Obligor, as the case may be,
enforceable in accordance with its terms; except, in each case, as enforcement
may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws relating to or limiting creditors' rights generally or by equitable
principles relating to enforceability.
5.05. AUDITED FINANCIAL STATEMENTS. The Audited Financial Statements,
audited by a recognized accounting firm reasonably acceptable to the
Administrative Agent, have been prepared in accordance with GAAP consistently
applied (except as disclosed therein) throughout the period involved, present
fairly the financial position of the Borrower and Subsidiaries as of the date
applicable and the results of their operations and cash flows for the period
then ended and show all material indebtedness and other liabilities, direct or
contingent, of the Borrower and Subsidiaries as of the date thereof including
liabilities for taxes, material commitments and Contingent Liabilities.
5.06. NO MATERIAL ADVERSE EFFECT. Since the date of the Audited Financial
Statements, there has been no event or circumstance, either individually or in
the aggregate, that has had or could reasonably be expected to have a Material
Adverse Effect.
5.07. LITIGATION. There is no pending or, to the best knowledge of the
Borrower, threatened litigation, action, suit, proceeding, order, investigation,
dispute or claim, at law or in equity or before or by any governmental
department, commission, board, bureau, agency or instrumentality affecting the
Borrower or any of the other Obligors, or any of their respective properties,
assets or revenues which
(a) purports to affect or pertains to any Loan Document, or any of the
transactions contemplated hereby or thereby; or
(b) individually or in the aggregate would reasonably be expected to result
in or constitute a Material Adverse Effect, except as disclosed in Item 5.07
(Litigation) of the Disclosure Schedule;
and none of the Obligors is subject, to the best knowledge of the Borrower, to
any arbitration proceedings under collective bargaining agreements or otherwise
or any governmental investigations or inquiries which individually or in the
aggregate have resulted or would reasonably be expected to result in or
constitute a Material Adverse Effect.
55
5.08. REGULATIONS U AND X. The Borrower is not engaged, nor will it be
engaged, principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying margin stock, and
less than 25% of the assets of the Borrower, individually and on a consolidated
basis with Subsidiaries, consists of margin stock. The proceeds of any Loans
made hereunder will not be used for a purpose which violates, or would be
inconsistent with, FRB Regulations U or X. Terms for which meanings are provided
in FRB Regulations U or X have such meanings when such terms are used in this
Section.
5.09. PENSION AND WELFARE PLANS. Except as disclosed in Item 5.09 (Pension
and Welfare Plans) of the Disclosure Schedule:
(a) Each Plan is in compliance in all material respects with the applicable
provisions of ERISA, the Code and other Laws. Each Plan which is intended to
qualify under Section 401(a) of the Code has received a favorable determination
letter from the IRS and to the best knowledge of the Borrower, nothing has
occurred which would prevent, or cause the loss of, such qualification. The
Borrower and each ERISA Affiliate have made all required contributions to any
Plan subject to Section 412 of the Code, and no application for a funding waiver
or an extension of any amortization period pursuant to Section 412 of the Code
has been made with respect to any Plan.
(b) There are no pending or, to the best knowledge of the Borrower,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan which has resulted or could reasonably be expected to
result in a Material Adverse Effect. There has been no prohibited transaction or
violation of the fiduciary responsibility rules with respect to any Plan which
has resulted or could reasonably be expected to result in a Material Adverse
Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected to occur;
(ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither the
Borrower nor any ERISA Affiliate has incurred, or reasonably expects to incur,
any liability under Title IV of ERISA with respect to any Pension Plan (other
than premiums due and not delinquent under Section 4007 of ERISA); (iv) neither
the Borrower nor any ERISA Affiliate has incurred, or reasonably expects to
incur, any liability (and no event has occurred which, with the giving of notice
under Section 4219 of ERISA, would result in such liability) under Section 4201
or 4243 of ERISA with respect to a Multiemployer Plan; and (v) neither the
Borrower nor any ERISA Affiliate has engaged in a transaction that could be
subject to Section 4069 or 4212(c) of ERISA.
5.10. SUBSIDIARIES, ETC. The Borrower has (a) no Subsidiaries, except those
listed on Item 5.10(a) (Subsidiaries) of the Disclosure Schedule and those
Subsidiaries which have been acquired or created after the Effective Date
without violation of the terms hereof, and (b) as of the Effective Date, no
equity investments in any other Person except (i) those listed on Item 5.10(b)
(Other Investments) of the Disclosure Schedule, and (ii) other equity
investments in other Persons, the aggregate value of which investments on the
Effective Date is not in excess of $100,000.
5.11. TAXES. The Borrower and each other Obligor has filed all Federal and
all other material tax returns and reports required by Law to have been filed by
it; all such tax returns are
56
complete and accurate in all material respects; and the Borrower and each other
Obligor has paid or properly accrued for or withheld (as applicable) all taxes,
assessments, fees and other governmental charges thereby shown to be owing or
required to be withheld, except any such taxes or charges which are being
diligently contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with GAAP shall have been set aside on its
books. There is no known proposed tax assessment against the Borrower or any
Subsidiary that would, if made, have a Material Adverse Effect.
5.12. ABSENCE OF DEFAULT. Neither the Borrower nor any other Obligor is in
default under or with respect to any Applicable Law or any Contractual
Undertaking where such default would be reasonably likely, either individually
or in the aggregate, to have a Material Adverse Effect.
5.13. OWNERSHIP OF PROPERTY. Each Obligor has good record and marketable
title to, or a valid leasehold interest in, all of its properties and assets,
real and personal, of any nature whatsoever, free and clear of all Liens, except
as permitted pursuant to Section 7.03, and except for defects to title which
have not had and would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
5.14. ENVIRONMENTAL MATTERS. The Borrower conducts in the ordinary course
of business a review of the effect of existing Environmental Laws and existing
Environmental Claims alleging potential liability or responsibility for
violation of any Environmental Law on its business, operations and properties,
and as a result thereof the Borrower has reasonably concluded that such
Environmental Laws and Environmental Claims could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
5.15. ACCURACY OF INFORMATION. The Borrower has disclosed to the
Administrative Agent and the Lenders (either directly or in public filings and
releases) all agreements, instruments and corporate or other restrictions to
which it or any Subsidiary is subject, and all other matters known to it, that
the breach of, or other non-compliance with, which, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect.
No report, financial statement, certificate or other information furnished
(whether in writing or orally) by or on behalf of any Obligor to the
Administrative Agent or any Lender in connection with the transactions
contemplated hereby and the negotiation of this Agreement or delivered hereunder
(as modified or supplemented by other information so furnished) when taken as a
whole with the other information furnished to or made available to the
Administrative Agent and the Lenders contains any material misstatement of fact
or omits to state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided, however, that, with respect to projected financial information, the
Borrower represents only that such information was prepared in good faith based
upon assumptions believed to be reasonable at the time.
5.16. HEALTH CARE REGULATORY MATTERS.
(a) Except as disclosed in Item 5.16 (Regulatory Matters) of the Disclosure
Schedule and except to the extent that the failure to obtain or maintain any of
the items in clauses
57
(i) through (iv) below would not be material to the conduct of the Borrower's
business, each Facility or the appropriate Subsidiary, as the case may be, has:
(i) where required by Applicable Law, obtained all required CONs for
the construction or expansion of or investment in such Facility;
(ii) obtained and maintains all Health Facility Licenses necessary to
operate such Facility as a long-term care facility, whether skilled
nursing, intermediate nursing, assisted living, Alzheimer units or other
services;
(iii) obtained and maintains Medicaid Certification and Medicare
Certification with respect to such Facility to the extent such Facility
participates in the Medicaid or Medicare program, as the case may be;
(iv) entered into and maintains its Medicaid Provider Agreement and
its Medicare Provider Agreement with respect to such Facility; and
(v) not received, to the knowledge of the Borrower, any Hill-Burton
Act funds nor has any obligations with respect to Hill-Burton Act charity
care.
(b) Except as disclosed in Item 5.16 of the Disclosure Schedule, all
necessary steps have been or are being taken to secure the renewal of any Health
Facility License, Medicaid Provider Agreement or Medicare Provider Agreement
issued with respect to any Facility that is to expire within 60 days after the
Effective Date and that is material to the conduct of the Borrower's business,
and there is no reasonable basis known to the Borrower or its Subsidiaries that
any such renewal will not be obtained.
(c) Except as disclosed in Item 5.16 (Regulatory Matters) of the Disclosure
Schedule, together with those items described in Sections 5.16(a) and (b), there
are no proceedings pending, or, to the best of the Borrower's knowledge,
threatened by any Governmental Authority against the Borrower, any Subsidiary or
any Affiliate, and/or seeking to modify, revoke or suspend any Health Facility
License, Medicaid Provider Agreement, Medicare Provider Agreement, Medicare
Certification or Medicaid Certification with respect to any Facility, which
would be reasonably likely to have a Material Adverse Effect. Since the date of
the most recent Medicare Certification and Medicaid Certification with respect
to each Facility, none of the Borrower or any Subsidiary has taken any action
that would materially adversely affect such certification or the Medicare
Provider Agreement or Medicaid Provider Agreement with respect to such Facility
that would be material to the conduct of the Borrower's business.
5.17. COMPLIANCE WITH LAWS. Each of the Borrower and each Subsidiary is in
compliance with the requirements of all Applicable Laws, except in such
instances in which (a) such requirement of Applicable Law is being contested in
good faith by appropriate proceedings diligently conducted or (b) the failure to
comply therewith, either individually or in the aggregate, could not reasonably
be expected to have a Material Adverse Effect.
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ARTICLE VI.
AFFIRMATIVE COVENANTS
The Borrower agrees with the Administrative Agent and each Lender that,
until the Revolving Termination Date has occurred, the Borrower will, and will
cause each Subsidiary to, perform the obligations applicable to such party set
forth in this Article VI.
6.01. FINANCIAL STATEMENTS. The Borrower will furnish, or will cause to be
furnished, to each Lender and to the Administrative Agent copies of the
following financial statements, reports and information:
(a) promptly when available and in any event within 10 days after the date
such information is required to be delivered to the SEC
(i) a consolidated balance sheet at the close of each Fiscal Year, and
related consolidated statements of income or operations, partners' or
stockholders' equity and cash flow for such Fiscal Year, of the Borrower
and its Subsidiaries, in each case (with comparable information at the
close of and for the prior Fiscal Year), prepared in accordance with GAAP
consistently applied and audited without Impermissible Qualification by a
firm of independent, nationally recognized certified public accountants,
(ii) a letter report of such firm of independent certified public
accountants at the close of such Fiscal Year to the effect that nothing has
come to their attention that has caused them to believe that the Borrower
is not in compliance with any of the terms, covenants, provisions or
conditions of Sections 7.04, 7.05 or 7.09 insofar as such terms, covenants,
provisions or conditions relate to accounting matters, and
(iii) a Compliance Certificate, including computation of the financial
covenants contained in Section 7.04, calculated as of the close of such
Fiscal Year;
(b) promptly when available and in any event within 5 days after the date
such information is required to be delivered to the SEC, beginning with the
Fiscal Quarter ending June 30, 2005,
(i) a consolidated balance sheet at the close of each Fiscal Quarter,
and consolidated statements of income or operations, and partners' or
stockholders' equity for such Fiscal Quarter, and consolidated statements
of earnings, partners' or stockholders' equity and cash flow for the period
commencing at the close of the previous Fiscal Year and ending with the
close of such Fiscal Quarter, of the Borrower and Subsidiaries, in each
case (with comparable information at the close of and for the corresponding
Fiscal Quarter of the prior Fiscal Year and for the corresponding portion
of such prior Fiscal Year) prepared in accordance with GAAP consistently
applied, certified by the principal accounting or financial officer who is
a Responsible Officer of the Borrower, and
(ii) a Compliance Certificate, including computation of the financial
covenants contained in Section 7.04, calculated as of the close of such
Fiscal Quarter;
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(c) promptly upon any filing thereof by the Borrower or any Subsidiary with
the SEC or with any securities exchange on which any of their respective
securities are then listed, any annual, periodic or special report or
registration statement that is then generally available to the public and not
otherwise required to be delivered to the Administrative Agent pursuant hereto
and promptly after the same are available, copies of each annual report, proxy
or financial statement or other report or material communication sent to the
stockholders of the Borrower; and
(d) such other information with respect to the financial condition,
business, financial or corporate affairs of the Borrower or any Subsidiary, or
compliance with the terms of the Loan Documents, as the Administrative Agent or
any Lender may from time to time reasonably request.
Each of the financial statements referred to in Sections 6.01(a) and 6.01(b)
will fairly present the financial position of the Borrower and its Subsidiaries
as of the dates and for the periods stated therein, subject, in the case of
unaudited financial statements, only to changes resulting from normal year-end
audit adjustments (none of which would, alone or in the aggregate, have a
Material Adverse Effect) and the absence of footnotes.
Documents required to be delivered pursuant to Sections 6.01(a), 6.01(b) or, to
the extent any such documents are included in materials otherwise filed with the
SEC, 6.01(c) may be delivered electronically and if so delivered, shall be
deemed to have been delivered on the date (i) on which the Borrower posts such
documents, or provides a link thereto on the Borrower's website on the Internet
at the website address listed on Schedule 10.02; or (ii) on which such documents
are posted on the Borrower's behalf on IntraLinks/IntraAgency or another
relevant website, if any, to which each Lender and the Administrative Agent have
access (whether a commercial, third-party website or whether sponsored by the
Administrative Agent); provided, however, that: (x) the Borrower shall deliver
paper copies of such documents to the Administrative Agent or any Lender that
requests the Borrower to deliver such paper copies until a written request to
cease delivering paper copies is given by the Administrative Agent or such
Lender and (y) the Borrower shall notify (which may be by facsimile or
electronic mail) the Administrative Agent and each Lender of the posting of any
such documents and provide to the Administrative Agent by electronic mail
electronic versions (i.e., soft copies) of such documents. Notwithstanding
anything contained herein, in every instance the Borrower shall be required to
provide paper copies of the Compliance Certificates to the Administrative Agent
and each of the Lenders. Except for such Compliance Certificates, the
Administrative Agent shall have no obligation to request the delivery or to
maintain copies of the documents referred to above, and in any event shall have
no responsibility to monitor compliance by the Borrower with any such request
for delivery, and each Lender shall be solely responsible for requesting
delivery to it or maintaining its copies of such documents.
6.02. MAINTENANCE OF EXISTENCE, ETC. Except as expressly otherwise
permitted by Section 8.06 or 8.07 the Borrower will:
(a) cause to be done at all times all things necessary to maintain and
preserve the existences, rights (statutory and other) and franchises (including
licenses, authorizations and permits necessary to the operation of its
businesses) of the Borrower and Subsidiaries, in the case
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of the Borrower, as a corporation and in the case of each Subsidiary, as a
partnership or corporation or other business entity, as the case may be, unless
the failure so to do in any case could not reasonably be expected to have a
Material Adverse Effect;
(b) as of the Effective Date and thereafter, continue to own and hold,
directly or indirectly, free and clear of all Liens (except for the Liens
permitted by Section 7.03(c)), all of the outstanding shares of Equity Interests
(excluding directors' qualifying shares, if any) of each wholly owned
Subsidiary, except for any Disposition permitted by Section 7.07 or Section
7.10; and
(c) preserve or renew all of its registered patents, trademarks, trade
names and service marks, the non-preservation of which could reasonably be
expected to have a Material Adverse Effect.
6.03. FOREIGN QUALIFICATION. The Borrower will, and will cause each
Subsidiary to, cause to be done at all times all things necessary to be duly
qualified to do business and be in good standing as a foreign corporation or
partnership (to the extent applicable to partnerships in any such jurisdiction)
in each jurisdiction where the failure so to qualify would individually or in
the aggregate reasonably be expected to have a Material Adverse Effect.
6.04. PAYMENT OF TAXES. The Borrower will, and will cause each Subsidiary
to, pay and discharge, as the same may become due and payable, all material
Federal, state, local and foreign taxes, assessments, fees and other
governmental charges or levies against it or on any of its property or assets or
the income or profits therefrom; provided, however, that the foregoing shall not
require the Borrower or any Subsidiary to pay or discharge any such tax,
assessment, fee, charge or levy so long as it shall be diligently contesting the
validity thereof in good faith by appropriate proceedings and shall have set
aside on its books adequate reserves in accordance with GAAP with respect
thereto.
6.05. INSURANCE. The Borrower will, and will cause each Subsidiary to,
maintain, with reputable, financially sound insurance companies, insurance with
respect to its properties and business against such loss, damage or casualties
and contingencies and of such types and in such amounts as is customary in
accordance with prudent business practice in the case of similar businesses in
similar locations and will from time to time, upon the reasonable request of the
Administrative Agent, furnish a certificate of a Responsible Officer of the
Borrower setting forth the nature and extent of all insurance maintained by the
Borrower and its Subsidiaries in accordance with this Section.
6.06. NOTICE OF DEFAULT, LITIGATION, ETC. The Borrower will give prompt
notice (but in no event later than ten days after any Responsible Officer of the
Borrower has or should reasonably have obtained knowledge thereof) (with a
description in reasonable detail of the nature and period of existence thereof
and of the actions which the Borrower has taken and proposes to take with
respect thereto) to the Administrative Agent and each Lender of:
(a) the occurrence of any Default;
(b) any litigation, arbitration or governmental investigation, suspension
or proceeding not previously disclosed by the Borrower to the Lenders which has
been instituted or,
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to the knowledge of the Borrower, is threatened against, the Borrower or any of
its Subsidiaries or to which any of its properties, assets or revenues is
subject which
(i) would be reasonably likely to have a Material Adverse Effect, or
(ii) relates to any Loan Document;
(c) the occurrence of any other circumstance of which any of the officers
of the Borrower has knowledge and which has a reasonable likelihood of resulting
in a Material Adverse Effect;
(d) any material adverse development which shall occur in any material
litigation, arbitration or governmental investigation or proceeding previously
disclosed by the Borrower to the Lenders; and
(e) of the occurrence of any of the following events affecting the Borrower
or any ERISA Affiliate:
(i) an ERISA Event;
(ii) a material increase in the Unfunded Pension Liability of any
Pension Plan;
(iii) the adoption of, or the commencement of contributions to, any
Plan subject to Section 412 of the Code by the Borrower or any ERISA
Affiliate; or
(iv) the adoption of any amendment to a Plan subject to section 412 of
the Code, if such amendment results in a material increase in contributions
or Unfunded Pension Liability.
6.07. PERFORMANCE OF OBLIGATIONS. The Borrower will, and will cause each
Subsidiary to, (a) perform promptly all of its obligations under each Loan
Document executed by it and (b) comply with the provisions of all contracts or
agreements to which it is a party or by which it is bound, whether oral or
written, express or implied, and pay all obligations which it has incurred or
may incur pursuant to any such contract or agreement as such obligations become
due, where the failure so to comply or make such payment would, individually or
in the aggregate with all such other failures, have a Material Adverse Effect.
6.08. BOOKS AND RECORDS; INSPECTION RIGHTS. The Borrower will, and will
cause each Subsidiary to, (a) keep proper books, accounts and records reflecting
all of its business and financial affairs and transactions so that its
consolidated financial statements are in accordance with GAAP and maintain such
books, accounts and records in material conformity with all applicable
requirements of any Governmental Authority having regulatory jurisdiction over
the Borrower or such Subsidiary, as the case may be, and (b) permit
representatives and independent contractors of the Administrative Agent and the
Lenders, on reasonable notice and at reasonable times during ordinary business
hours and as often as may be reasonably desired, to visit all of its offices and
properties, discuss its financial matters with officers of any Subsidiary and
its independent public accountants, and examine and make copies or abstracts
from any of its books or other corporate records. The Borrower shall pay any
reasonable fees of such independent
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public accountants incurred in connection with the exercise by the
Administrative Agent and the Lenders of their rights pursuant to this Section.
6.09. COMPLIANCE WITH LAWS. The Borrower will, and will cause each
Subsidiary to, comply with the requirements of all Applicable Laws (including
Environmental Laws, including with respect to the handling and disposal of
Hazardous Materials), the noncompliance with which would reasonably be expected
to have a Material Adverse Effect.
6.10. MAINTENANCE OF PROPERTY. The Borrower will, and will cause each
Subsidiary to, at their joint and several expense, maintain and keep its
properties and equipment which are material to its business in good repair,
working order and condition (except for ordinary wear and tear).
6.11. ADDITIONAL GUARANTORS.
(a) As soon as practicable (and in any event within 30 days) following the
Acquisition or creation of any Subsidiary by the Borrower or any Subsidiary
after the Effective Date which is not already a Guarantor and which is not a
Non-Obligor, the Borrower shall notify the Administrative Agent and thereafter
cause such Subsidiary to become a Guarantor by executing an Assumption Agreement
in the form of Exhibit 1 to the Guaranty to the extent permissible under
Applicable Law.
(b) If any Non-Obligor or Non-Obligors, as applicable, of the type referred
to in (i) clause (a)(i) of the definition of "Non-Obligor" ceases to be dormant
and/or becomes a wholly owned Subsidiary, as applicable, at any time, (ii)
clause (b)(i)(w) of the definition of "Non-Obligor" has a total asset value of
greater than $1,000,000 at any Fiscal Quarter end, (iii) clause (b)(ii)(y) of
the definition of "Non-Obligor" has a total asset value greater than $15,000,000
at any Fiscal Quarter end, or (iv) clause (b)(i)(x) or clause (b)(ii)(z) of the
definition of "Non-Obligor" has a combined total asset value greater than
$50,000,000 in the aggregate at any Fiscal Quarter end, then, in any case, the
Borrower shall notify the Administrative Agent thereof within 30 days thereof
and thereafter cause such Subsidiary or Subsidiaries, as the case may be, to
become a Guarantor by executing an Assumption Agreement in the form of Exhibit 1
to the Guaranty to the extent permissible under Applicable Law, it being
understood in the case of clause (iv) that only such Subsidiary or Subsidiaries
as selected by the Borrower as may be necessary to cause combined total asset
value to not exceed $50,000,000 shall be required to become Guarantors.
In addition, in each of the foregoing cases, the Borrower shall cause such
Subsidiary to provide the Administrative Agent with such additional instruments
or documents, including opinions of counsel (which shall cover, among other
things, the legality, validity, binding effect and enforceability of the
Assumption Agreement), certified resolutions, incumbency certificates, third
party consents and other evidences of authority, with respect to such
Subsidiary's ratification of, and assumption of all obligations under, the
Guaranty, as the Administrative Agent shall reasonably request and all in form,
content and scope reasonably satisfactory to the Administrative Agent.
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6.12. USE OF PROCEEDS. The Borrower shall use the proceeds of the Credit
Extensions (a) to refinance amounts owing in respect of, and to replace, the
Existing Credit Agreement and (b) for general corporate purposes (including
working capital, capital expenditures and Acquisitions not prohibited hereunder)
of the Borrower and Subsidiaries, not in contravention of any Law.
ARTICLE VII.
NEGATIVE COVENANTS
The Borrower agrees with the Administrative Agent and each Lender that,
until the Revolving Termination Date has occurred, the Borrower will, and will
cause each Subsidiary to, perform the Obligations set forth in this Article VII.
7.01. BUSINESS ACTIVITIES. The Borrower will not, nor will it permit any
Subsidiary to, engage in any business activity other than the businesses carried
on by such Persons on the Effective Date and such other businesses as may be
incidental or related thereto and other businesses relating to health care
services.
7.02. INDEBTEDNESS. The Borrower will not permit any Subsidiary to create,
incur, assume or suffer to exist or otherwise become or be liable in respect of
any Indebtedness other than (without duplication):
(a) Indebtedness in respect of the Loans, the Letters of Credit and other
Obligations;
(b) Indebtedness in respect of taxes, assessments or governmental charges
to the extent that payment thereof shall not at the time be required to be made
in accordance with the provisions of Section 6.04 or which is being contested in
good faith, by diligent proceedings, for which adequate reserves in accordance
with GAAP shall have been set aside and with respect to which no Lien has
attached;
(c) Indebtedness in respect of judgments or awards not constituting an
Event of Default under Section 8.01(h);
(d) Indebtedness for Borrowed Money secured by Liens permitted by Section
7.03(b), provided, however, that the aggregate outstanding principal amount of
Indebtedness incurred pursuant to this clause (d) shall at no time exceed
$75,000,000;
(e) refinancings, renewals, replacements or extensions of Indebtedness
permitted by clause (d), (f), (g) or (k), in an amount not greater than the
amount required to repay the Indebtedness so refinanced, including reasonable
fees and premiums actually paid in connection therewith, and otherwise
conforming to the terms of such clauses;
(f) Indebtedness secured by Liens permitted by Section 7.03(l);
(g) Indebtedness of Subsidiaries acquired after the Effective Date existing
at the time of such Acquisition or attaching to assets purchased as part of the
purchase of all or substantially all the assets of a Person or any distinct
business segment of a Person and not
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created in anticipation of such acquisition, so long as after giving effect to
such Indebtedness no Default shall exist hereunder;
(h) Contingent Liabilities in respect of any obligation of the Borrower or
any Subsidiary not prohibited by this Agreement;
(i) Indebtedness in respect of interest rate risk management agreements;
(j) Indebtedness owing to the Borrower or any other Subsidiary; provided,
however, that the principal amount of Indebtedness owing to the Borrower or any
Subsidiary for the LTACH Subsidiaries shall not exceed $20,000,000 in the
aggregate at any time;;
(k) existing Indebtedness listed on Item 7.02(k) (Existing Indebtedness) of
the Disclosure Schedule;
(l) Capitalized Lease Liabilities of the Guarantors that together with all
Indebtedness outstanding under clause (n) and all Capitalized Lease Liabilities
outstanding (other than Capitalized Lease Liabilities under clauses (h) and (l))
do not exceed $75,000,000 in the aggregate outstanding at any one time, so long
as after giving effect to the incurrence of such Capitalized Lease Liabilities
no Default shall exist hereunder;
(m) Indebtedness represented by notes or letters of credit issued in
connection with insurance policies and in a form substantially similar to the
notes or letters of credit set forth in Item 7.02(m) (Insurance Indebtedness) of
the Disclosure Schedule and issued in connection with existing insurance
policies of any Subsidiary; and
(n) other Indebtedness that together with all Capitalized Lease Liabilities
outstanding under clause (l) (other than Capitalized Lease Liabilities under
clauses (h) and (l)) does not exceed $75,000,000 in the aggregate outstanding at
any one time, so long as after giving effect to the incurrence of such
Indebtedness no Default shall exist hereunder.
7.03. LIENS. The Borrower will not, nor will it permit any Subsidiary to,
create, incur, assume or suffer to exist any Lien upon any of its property,
revenues or assets, whether now owned or hereafter acquired, except (without
duplication):
(a) Liens encumbering the assets of the Borrower or any of its Subsidiaries
which were granted and in effect prior to the Effective Date to secure
Indebtedness of the Borrower and Indebtedness permitted pursuant to Section
7.02(k) as listed in Item 7.03(a) (Existing Liens) of the Disclosure Schedule;
(b) Liens (excluding, however, precautionary filings and Liens in respect
of Capitalized Lease Liabilities) in respect of property acquired or constructed
or improved by any Subsidiary for the account of such Subsidiary or in
connection with CON's held by any Subsidiary, to secure Indebtedness for
Borrowed Money assumed or incurred to finance all or any part of the purchase
price or cost of construction or improvement of such property, but any such Lien
shall cover only the property so acquired or constructed and any improvements
thereto (and any real property on which such property is located, if such
property is a building, improvement or fixture);
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(c) Liens for taxes, assessments or other governmental charges or levies
not at the time delinquent or thereafter payable without penalty or being
contested in good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP shall have been set aside on its books;
(d) Liens of carriers, warehousemen, mechanics, materialmen, repairmen,
landlords or other Liens of a like nature incurred in the ordinary course of
business for sums not overdue or being contested in good faith by appropriate
proceedings and for which adequate reserves shall have been set aside on its
books;
(e) Liens incurred in the ordinary course of business in connection with
workmen's compensation, unemployment insurance or other social security
legislation (other than any Lien imposed by ERISA), or to secure performance of
bids, tenders, trade contracts (other than for Indebtedness), statutory
obligations, leases and contracts (other than for borrowed money) entered into
in the ordinary course of business or to secure obligations on surety or appeal
bonds or performance bonds;
(f) judgment Liens not constituting an Event of Default under Section
8.01(h);
(g) easements, restrictions and other minor defects of title affecting real
property which are not, in the aggregate, material and which do not,
individually or in the aggregate, have a Material Adverse Effect;
(h) extensions, renewals or replacements of any Liens permitted under
clauses (a) and (b), but only if the principal amount of the Indebtedness
secured by such Lien immediately prior to such extension, renewal or replacement
is not increased, and the Lien is not extended to other property;
(i) Liens securing Indebtedness of the type permitted by Section 7.02(l)
and Indebtedness of the Borrower constituting Capitalized Lease Liabilities;
(j) Liens in respect of Capitalized Lease Liabilities of Subsidiaries
acquired after the Effective Date existing at the time of the Acquisition and
not created in anticipation of such Acquisition;
(k) leases or subleases granted to others not interfering in any material
respect with the business of the Borrower or any Subsidiary, and any interest or
title of a lessor under any lease permitted by this Agreement;
(l) purchase money Liens securing payables arising from the purchase by any
Subsidiary of any equipment or goods in the ordinary course of business,
provided that such payables do not constitute Indebtedness for Borrowed Money;
(m) rights of set off incidental to Indebtedness permitted hereunder,
(n) Liens securing Indebtedness permitted under Section 7.02(g) attaching
only to the property so acquired and not created in anticipation of such
acquisition; and
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(o) other Liens securing Indebtedness or other obligations otherwise not
prohibited under this Agreement in an aggregate amount not to exceed
$25,000,000.
7.04. FINANCIAL CONDITION. The Borrower will not permit any of the events
set forth below to occur.
(a) Fixed Charge Coverage Ratio. The Borrower will not, as of the last day
of any Fiscal Quarter, permit the Fixed Charge Coverage Ratio to be less than
2.50:1.00.
(b) Leverage Ratio. The Borrower will not, as of the last day of any Fiscal
Quarter, permit the Leverage Ratio to be greater than 3.00:1.00.
7.05. RESTRICTED PAYMENTS. The Borrower shall not declare or make, directly
or indirectly, any Restricted Payment, except that the Borrower may:
(a) declare and make dividend payments or other distributions payable
solely in its common stock or make cash payments for the redemption of
fractional shares;
(b) purchase, redeem or otherwise acquire shares of its common stock or
warrants or options to acquire any such shares with the proceeds received from
the substantially concurrent issue of new shares of its common stock;
(c) subdivide its outstanding shares of common stock into a larger number
of shares of common stock, including, without limitation, by means of a stock
split;
(d) purchase, redeem or otherwise acquire shares of its common stock in
connection with the administration of the Borrower's employee benefits and stock
option program; and
(e) declare or pay cash dividends to its stockholders and purchase, redeem
or otherwise acquire shares of its capital stock or warrants, rights or options
to acquire any such shares for cash;
provided, however, that with respect to clause (e) above, the cumulative amount
of such Restricted Payments shall not exceed $300,000,000 in the aggregate in
each Fiscal Year (in each Fiscal Year, a "Restricted Payment Cap") (it being
understood that the Restricted Payment Cap for any Fiscal Year shall be
increased by an amount equal to the excess, if any, of the Restricted Payment
Cap for the previous Fiscal Year (as adjusted in accordance with this clause)
over the actual amount of Restricted Payments pursuant to clause (e) above for
such previous Fiscal Year); and provided further that, in no event may any such
Restricted Payment be made if, immediately after giving effect thereto and to
any borrowings in connection therewith, (i) any Default or Event of Default
would exist or (ii) the Borrower would not to be in pro forma compliance with
Section 7.04. The provisions of this Section shall not be breached by the
payment of any dividend within 60 days after the declaration thereof if, at such
date of declaration, the making of such payment would not have been in violation
of this Section.
7.06. CONSOLIDATION, MERGER, ETC. The Borrower will not, and will not
permit any other Obligor to, liquidate or dissolve, consolidate with, or merge
into or with, any other Person,
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except (i) that any other Obligor may liquidate or dissolve into, or merge with
and into, the Borrower (so long as the Borrower is the surviving Person) or
another Obligor and (ii) in connection with any merger permitted by Section 7.07
or 7.10.
7.07. ASSET DISPOSITIONS, ETC. The Borrower will not, nor will it permit
any Subsidiary to, Dispose of, or grant options, warrants or other rights with
respect to, any of its assets (including accounts receivable and Equity
Interests of Subsidiaries but excluding, however, Borrower's Equity Interests)
to any Person, except for:
(a) Dispositions of Cash Equivalent Investments;
(b) sales of nutritional products, pharmaceuticals, and other health
care-related products in the ordinary course of business;
(c) Dispositions to the Borrower or any Subsidiary; provided, however, that
if the acquiring Subsidiary is, immediately prior to the Disposition, a
Non-Obligor and, as a result of such Disposition, such acquiring Subsidiary
would be required pursuant to the terms hereof to become a Guarantor, then,
prior to or simultaneously with such Disposition, the Borrower shall cause such
Subsidiary to become a Guarantor by executing an Assumption Agreement in the
form of Exhibit 1 to the Guaranty to the extent permissible under Applicable
Law;
(d) sales by the Borrower or its Subsidiaries of recently constructed
development facilities in accordance with historical practices; and
(e) other Dispositions not in excess of (i) in any Fiscal Year, 15% of the
Consolidated total assets of the Borrower and its Subsidiaries as of the
Effective Date or (ii) over the term of this Agreement, 50% of the Consolidated
total assets of the Borrower and its Subsidiaries as of the Effective Date, so
long as, in each case after giving effect to any such Disposition, no Default
shall have occurred and be continuing.
In connection with any proposed Disposition permitted under this Section of a
Subsidiary that is an Obligor to a Person that is not another Subsidiary, the
Administrative Agent shall, upon request of the Borrower and so long as no
Default shall have occurred and be continuing, provide a release of the Guaranty
with respect to such Subsidiary, such release to be effective upon such
permitted Disposition of such Subsidiary.
7.08. MODIFICATION OF CERTAIN INSTRUMENTS, ORGANIZATION DOCUMENTS, ETC. The
Borrower will not, and will not permit any Subsidiary to, consent to any
amendment, supplement or other modification of any of the terms or provisions
contained in the Borrower's or any such Subsidiaries' Organization Documents
which would have a Material Adverse Effect.
7.09. TRANSACTIONS WITH AFFILIATES. The Borrower will not, and will not
permit any Subsidiary to, enter into, or cause, suffer or permit to exist, any
arrangement or contract with any of its other Affiliates, whether or not in the
ordinary course of business, unless such arrangement is fair and equitable to
the Borrower or such Subsidiary and is not of a sort which would not be entered
into by a prudent Person in the position of the Borrower or such Subsidiary
with, or which is on terms which are less favorable than are obtainable from,
any Person which is not one of its Affiliates; provided, however, that nothing
in this Section shall restrict (i) compensation,
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advances or loans payable to directors or officers of the Obligors in the
ordinary course of business consistent with prior practices and otherwise in
compliance with the United States Sarbanes-Oxley Act of 2002 or (ii)
transactions approved by a majority of the disinterested members of the Board of
Directors of Borrower or of the applicable Subsidiary.
7.10. ACQUISITIONS. The Borrower will not, nor will it permit any
Subsidiary to, make any Acquisition unless
(a) immediately before and after giving effect to the consummation of each
Acquisition, no Default has occurred and is continuing or will exist;
(b) for each such Acquisition involving the purchase of a majority of the
Equity Interests of another party, the prior, effective written consent or
approval to such Acquisition of the board of directors or equivalent governing
body of the other party or parties has been obtained; and
(c) immediately before and after giving effect to the consummation of such
Acquisition and any borrowings in connection therewith, the Borrower is in pro
forma compliance with Section 7.04;
provided, however, that notwithstanding the foregoing, any Subsidiary of the
Borrower may be merged or consolidated with or into (i) the Borrower if the
Borrower shall be the continuing or surviving corporation or (ii) any other
Subsidiary of the Borrower (so long as such other Subsidiary, if it is an
Obligor, shall be the continuing or surviving corporation).
ARTICLE VIII.
EVENTS OF DEFAULT AND REMEDIES
8.01. EVENTS OF DEFAULT. The term "Event of Default" shall mean any of the
events set forth in this Section.
(a) Non-Payment. The Borrower or any other Obligor shall default in the
payment or prepayment when due (whether at stated maturity or by acceleration,
mandatory prepayment or otherwise) of any principal of, or any interest in
respect of, any Loan or any other amount due under any Loan Document, and, in
the case of interest or any other amount due, continuance of such default for 3
Business Days or more; or
(b) Non-Performance of Specific Covenants. The Borrower shall default in
the due performance or observance of any of its obligations under Sections
6.01(a) or (b), 6.06, 6.08(b), 6.12, 7.02 through 7.10 and (if such default can
be remedied within the grace period provided in this clause (b) by the Borrower)
such default shall continue unremedied for a period of 5 days after the earlier
of (x) notice thereof having been given to the Borrower by the Administrative
Agent or any Lender or (y) the date on which a Responsible Officer of the
Borrower had actual knowledge of such default; or
(c) Non-Performance of Other Covenants. Any Obligor shall default in the
due performance and observance of any other agreement contained herein or in any
other Loan Document executed by it, and (if such default does not otherwise
constitute an Event of Default
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under this Article VIII and can be remedied within the grace period provided in
this clause (c) by such Obligor) such default shall continue unremedied for a
period of 30 days after the earlier of (x) notice thereof having been given to
the Borrower by the Administrative Agent or any Lender or (y) the date on which
a Responsible Officer of the applicable Obligor had actual knowledge of such
default.
(d) Bankruptcy, Insolvency, etc. The Borrower or a Material Group of
Subsidiaries shall:
(i) become insolvent or generally fail to pay, or admit in writing its
inability to pay, debts as they become due;
(ii) apply for, consent to, or acquiesce in, the appointment of a
trustee, receiver, sequestrator or other custodian for the Borrower or any
Material Group of Subsidiaries or any property of any thereof, or make a
general assignment for the benefit of creditors;
(iii) in the absence of such application, consent or acquiescence,
permit or suffer to exist the appointment of a trustee, receiver,
sequestrator, conservator, liquidator, rehabilitator or other custodian for
the Borrower or any Material Group of Subsidiaries or for a substantial
part of the property of any thereof, and such trustee, receiver,
sequestrator, conservator, liquidator, rehabilitator or other custodian
shall not be discharged or stayed within 60 days;
(iv) permit or suffer to exist the commencement of any case or
proceeding under any Debtor Relief Law, or any dissolution, winding up or
liquidation proceeding, in respect of the Borrower or any Material Group of
Subsidiaries and, if such case or proceeding is not commenced by the
Borrower or any Material Group of Subsidiaries, such case or proceeding
shall be consented to or acquiesced in by the Borrower or any Material
Group of Subsidiaries or shall result in the entry of an order for relief
or shall remain for 60 days undismissed or unstayed; or
(v) take any corporate action authorizing, or in furtherance of, any
of the foregoing.
(e) Representations and Warranties. Any representation, warranty or
certification made by or on behalf of the Borrower hereunder or of the Borrower
or any other Obligor in any other Loan Document or any other writing furnished
by or on behalf of the Borrower or any other Obligor to the Administrative Agent
or any Lender for the purposes of or in connection with this Agreement or any
such Loan Document is or shall be incorrect or misleading when made or deemed
made in any material respect.
(f) Cross-Default. The Borrower or any Obligor (i) fails to make any
payment in respect of any Indebtedness for Borrowed Money having an aggregate
principal amount (including undrawn committed or available amounts and including
amounts owing to all creditors under any combined or syndicated credit
arrangement) of more than $25,000,000 when due (whether by scheduled maturity,
required prepayment, acceleration, demand, or otherwise) and such failure
continues after the applicable grace or notice period, if any, specified in the
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relevant document on the date of such failure; or (ii) fails to perform or
observe any other condition or covenant, or any other event shall occur or
condition exist, under any agreement or instrument relating to any such
Indebtedness, and such failure continues after the applicable grace or notice
period, if any, specified in the relevant document on the date of such failure
if the effect of such failure, event or condition is to cause, or to permit the
holder or holders of such Indebtedness or beneficiary or beneficiaries of such
Indebtedness (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause such Indebtedness to be declared to be
due and payable prior to its stated maturity.
(g) ERISA. (i) An ERISA Event shall occur with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of the Borrower under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of $25,000,000;
(ii) the aggregate amount of Unfunded Pension Liability among all Pension Plans
at any time exceeds $25,000,000; or (iii) the Borrower or any ERISA Affiliate
shall fail to pay when due, after the expiration of any applicable grace period,
any installment payment with respect to its withdrawal liability under Section
4201 of ERISA under a Multiemployer Plan in an aggregate amount in excess of
$25,000,000.
(h) Judgments. Any undischarged, unstayed, unbonded final judgments or
orders for the payment of money in an aggregate amount in excess of 1% of
Consolidated total assets (in each case, after giving effect to insurance, if
any, available with respect thereto) shall be rendered against the Borrower or
any Obligor which shall remain in effect for more than 60 days.
(i) Change of Control. Any Change of Control shall occur.
(j) Loss of Licenses. Any Governmental Authority revokes or fails to renew
any material license, permit or franchise of the Borrower or any Subsidiary, or
the Borrower or any Subsidiary for any reason loses any material license, permit
or franchise, or the Borrower or any Subsidiary suffers the imposition of any
restraining order, escrow, suspension or impound of funds in connection with any
proceeding (judicial or administrative) with respect to any material license,
permit or franchise, in each case which would be reasonably likely to have a
Material Adverse Effect.
(k) Invalidity of Loan Documents. Any Loan Document, at any time after its
execution and delivery and for any reason other than as expressly permitted
hereunder or satisfaction in full of all the Obligations, ceases to be in full
force and effect; or any Obligor or any other Person contests in any manner the
validity or enforceability of any Loan Document; or any Obligor denies that it
has any or further liability or obligation under any Loan Document, or purports
to revoke, terminate or rescind any Loan Document.
8.02. REMEDIES UPON EVENT OF DEFAULT. If any Event of Default occurs and is
continuing, the Administrative Agent shall, at the request of, or may, with the
consent of, the Required Lenders, take any or all of the following actions:
(a) declare the commitment of each Lender to make Loans and any obligation
of each L/C Issuer to make L/C Credit Extensions to be terminated, whereupon
such commitments and obligation shall be terminated;
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(b) declare the unpaid principal amount of all outstanding Loans, all
interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Borrower;
(c) require that the Borrower Cash Collateralize the L/C Obligations (in an
amount equal to the then Outstanding Amount thereof); and
(d) exercise on behalf of itself and the Lenders all rights and remedies
available to it and the Lenders under the Loan Documents or applicable law;
provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to the Borrower under the Bankruptcy Code of the
United States, the obligation of each Lender to make Loans and any obligation of
each L/C Issuer to make L/C Credit Extensions shall automatically terminate, the
unpaid principal amount of all outstanding Loans and all interest and other
amounts as aforesaid shall automatically become due and payable, and the
obligation of the Borrower to Cash Collateralize the L/C Obligations as
aforesaid shall automatically become effective, in each case without further act
of the Administrative Agent or any Lender.
8.03. APPLICATION OF FUNDS. After the exercise of remedies provided for in
Section 8.02 (or after the Loans have automatically become immediately due and
payable and the L/C Obligations have automatically been required to be Cash
Collateralized as set forth in the proviso to Section 8.02), any amounts
received on account of the Obligations shall be applied by the Administrative
Agent in the following order:
First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including Attorney Costs and amounts
payable under Article III) payable to the Administrative Agent in its capacity
as such;
Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal and interest) payable to the
Lenders (including Attorney Costs and amounts payable under Article III),
ratably among them in proportion to the amounts described in this clause Second
payable to them;
Third, to payment of that portion of the Obligations constituting accrued
and unpaid interest on the Loans and L/C Borrowings, ratably among the Lenders
in proportion to the respective amounts described in this clause Third payable
to them;
Fourth, to payment of that portion of the Obligations constituting unpaid
principal of the Loans and L/C Borrowings, ratably among the Lenders in
proportion to the respective amounts described in this clause Fourth held by
them;
Fifth, to the Administrative Agent for the account of the applicable L/C
Issuer, to Cash Collateralize that portion of L/C Obligations comprised of the
aggregate undrawn amount of Letters of Credit; and
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Last, the balance, if any, after all of the Obligations have been
indefeasibly paid in full, to the Borrower or as otherwise required by Law.
Subject to Section 2.03(c), amounts used to Cash Collateralize the
aggregate undrawn amount of Letters of Credit pursuant to clause Fifth above
shall be applied to satisfy drawings under such Letters of Credit as they occur.
If any amount remains on deposit as Cash Collateral after all Letters of Credit
have either been fully drawn or expired, such remaining amount shall be applied
to the other Obligations, if any, in the order set forth above.
ARTICLE IX.
ADMINISTRATIVE AGENT
9.01. APPOINTMENT AND AUTHORIZATION OF ADMINISTRATIVE AGENT.
(a) Each Lender hereby irrevocably appoints, designates and authorizes the
Administrative Agent to take such action on its behalf under the provisions of
this Agreement and each other Loan Document and to exercise such powers and
perform such duties as are expressly delegated to it by the terms of this
Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere herein or in any other Loan Document, the Administrative
Agent shall not have any duties or responsibilities, except those expressly set
forth herein, nor shall the Administrative Agent have or be deemed to have any
fiduciary relationship with any Lender or participant, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against the
Administrative Agent. Without limiting the generality of the foregoing sentence,
the use of the term "agent" herein and in the other Loan Documents with
reference to the Administrative Agent is not intended to connote any fiduciary
or other implied (or express) obligations arising under agency doctrine of any
applicable Law. Instead, such term is used merely as a matter of market custom,
and is intended to create or reflect only an administrative relationship between
independent contracting parties.
(b) Each L/C Issuer shall act on behalf of the Lenders with respect to any
Letters of Credit issued by it and the documents associated therewith, and each
L/C Issuer shall have all of the benefits and immunities (i) provided to the
Administrative Agent in this Article IX with respect to any acts taken or
omissions suffered by such L/C Issuer in connection with Letters of Credit
issued by it or proposed to be issued by it and the applications and agreements
for letters of credit pertaining to such Letters of Credit as fully as if the
term "Administrative Agent" as used in this Article IX and in the definition of
"Agent-Related Person" included such L/C Issuer with respect to such acts or
omissions, and (ii) as additionally provided herein with respect to such L/C
Issuer.
9.02. DELEGATION OF DUTIES. The Administrative Agent may execute any of its
duties under this Agreement or any other Loan Document by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel and
other consultants or experts concerning all matters pertaining to such duties.
The Administrative Agent shall not be responsible for the negligence or
misconduct of any agent or attorney-in-fact that it selects in the absence of
gross negligence or willful misconduct.
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9.03. LIABILITY OF ADMINISTRATIVE AGENT. No Agent-Related Person shall (a)
be liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct
in connection with its duties expressly set forth herein), or (b) be responsible
in any manner to any Lender or participant for any recital, statement,
representation or warranty made by any Obligor or any officer thereof, contained
herein or in any other Loan Document, or in any certificate, report, statement
or other document referred to or provided for in, or received by the
Administrative Agent under or in connection with, this Agreement or any other
Loan Document, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or for any failure of
any Obligor or any other party to any Loan Document to perform its obligations
hereunder or thereunder. No Agent-Related Person shall be under any obligation
to any Lender or participant to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of any Obligor or any Affiliate thereof.
9.04. RELIANCE BY ADMINISTRATIVE AGENT.
(a) The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, communication, signature, resolution,
representation, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex or telephone message, electronic mail message, statement or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons, and upon advice
and statements of legal counsel (including counsel to any Obligor), independent
accountants and other experts selected by the Administrative Agent. The
Administrative Agent shall be fully justified in failing or refusing to take any
action under any Loan Document unless it shall first receive such advice or
concurrence of the Required Lenders as it deems appropriate and, if it so
requests, it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement or any other Loan Document in accordance with a request or
consent of the Required Lenders (or such greater number of Lenders as may be
expressly required hereby in any instance) and such request and any action taken
or failure to act pursuant thereto shall be binding upon all the Lenders.
(b) For purposes of determining compliance with the conditions specified in
Section 4.01, each Lender that has signed this Agreement shall be deemed to have
consented to, approved or accepted or to be satisfied with, each document or
other matter required thereunder to be consented to or approved by or acceptable
or satisfactory to a Lender unless the Administrative Agent shall have received
notice from such Lender prior to the proposed Closing Date specifying its
objection thereto.
9.05. NOTICE OF DEFAULT. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default, except with respect
to defaults in the payment of principal, interest and fees required to be paid
to the Administrative Agent for the account of the Lenders, unless the
Administrative Agent shall have received written notice from a Lender or the
Borrower referring to this Agreement, describing such Default and stating that
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such notice is a "notice of default." The Administrative Agent will notify the
Lenders of its receipt of any such notice. The Administrative Agent shall take
such action with respect to such Default as may be directed by the Required
Lenders in accordance with Article VIII; provided, however, that unless and
until the Administrative Agent has received any such direction, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default as it shall deem
advisable or in the best interest of the Lenders.
9.06. CREDIT DECISION; DISCLOSURE OF INFORMATION BY ADMINISTRATIVE AGENT.
Each Lender acknowledges that no Agent-Related Person has made any
representation or warranty to it, and that no act by the Administrative Agent
hereafter taken, including any consent to and acceptance of any assignment or
review of the affairs of any Obligor or any Affiliate thereof, shall be deemed
to constitute any representation or warranty by any Agent-Related Person to any
Lender as to any matter, including whether Agent-Related Persons have disclosed
material information in their possession. Each Lender represents to the
Administrative Agent that it has, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Obligors and their respective Subsidiaries, and all
applicable bank or other regulatory Laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Agreement and
to extend credit to the Borrower and the other Obligors hereunder. Each Lender
also represents that it will, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigations as it deems necessary
to inform itself as to the business, prospects, operations, property, financial
and other condition and creditworthiness of the Borrower and the other Obligors.
Except for notices, reports and other documents expressly required to be
furnished to the Lenders by the Administrative Agent herein, the Administrative
Agent shall not have any duty or responsibility to provide any Lender with any
credit or other information concerning the business, prospects, operations,
property, financial and other condition or creditworthiness of any of the
Obligors or any of their respective Affiliates which may come into the
possession of any Agent-Related Person.
9.07. INDEMNIFICATION OF ADMINISTRATIVE AGENT. Whether or not the
transactions contemplated hereby are consummated, the Lenders shall indemnify
upon demand each Agent-Related Person (to the extent not reimbursed by or on
behalf of any Obligor and without limiting the obligation of any Obligor to do
so), pro rata, and hold harmless each Agent-Related Person from and against any
and all Indemnified Liabilities incurred by it; provided, however, that no
Lender shall be liable for the payment to any Agent-Related Person of any
portion of such Indemnified Liabilities to the extent determined in a final,
nonappealable judgment by a court of competent jurisdiction to have resulted
from such Agent-Related Person's own gross negligence or willful misconduct;
provided, however, that no action taken in accordance with the directions of the
Required Lenders shall be deemed to constitute gross negligence or willful
misconduct for purposes of this Section. In the case of any investigation,
litigation or proceeding giving rise to any Indemnified Liabilities, this
Section applies whether any such investigation, litigation or proceeding is
brought by any Lender or any other Person. Without limitation of the foregoing,
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each Lender shall reimburse the Administrative Agent upon demand for its ratable
share of any costs or out-of-pocket expenses (including Attorney Costs) incurred
by the Administrative Agent in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement, any other Loan
Document, or any document contemplated by or referred to herein, to the extent
that the Administrative Agent is not reimbursed for such expenses by or on
behalf of the Borrower. The undertaking in this Section shall survive the
occurrence of the Revolving Termination Date and the resignation of the
Administrative Agent. The Administrative Agent shall not be required to take any
action under any Loan Document, or to prosecute or defend any suit in respect of
any Loan Document, unless it is indemnified hereunder to its satisfaction. If
any indemnity in favor of the Administrative Agent shall be or become, in the
Administrative Agent's determination, inadequate, the Administrative Agent may
call for additional indemnification from the Lenders and cease to do the acts
indemnified against hereunder until such additional indemnity is given.
9.08. ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. JPMorgan Chase Bank
and its Affiliates may make loans to, issue letters of credit for the account
of, accept deposits from, acquire equity interests in and generally engage in
any kind of banking, trust, financial advisory, underwriting or other business
with each of the Obligors and their respective Affiliates as though JPMorgan
Chase Bank were not the Administrative Agent or an L/C Issuer hereunder and
without notice to or consent of the Lenders. The Lenders acknowledge that,
pursuant to such activities, JPMorgan Chase Bank or its Affiliates may receive
information regarding any Obligor or its Affiliates (including information that
may be subject to confidentiality obligations in favor of such Obligor or such
Affiliate) and acknowledge that the Administrative Agent shall be under no
obligation to provide such information to them. With respect to its Loans,
JPMorgan Chase Bank shall have the same rights and powers under this Agreement
as any other Lender and may exercise such rights and powers as though it were
not the Administrative Agent or an L/C Issuer, and the terms "Lender" and
"Lenders" include JPMorgan Chase Bank in its individual capacity.
9.09. SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may, and at
the request of Required Lenders shall, resign as Administrative Agent upon 30
days' notice to the Lenders; provided that any such resignation by JPMorgan
Chase Bank shall also constitute its resignation as an L/C Issuer and Swing Line
Lender. If the Administrative Agent resigns under this Agreement, the Required
Lenders shall appoint from among the Lenders a successor administrative agent
for the Lenders, which successor administrative agent shall be consented to by
the Borrower at all times other than during the existence of an Event of Default
(which consent of the Borrower shall not be unreasonably withheld or delayed).
If no successor administrative agent is appointed prior to the effective date of
the resignation of the Administrative Agent, the Administrative Agent may
appoint, after consulting with the Lenders and the Borrower, a successor
administrative agent from among the Lenders. Upon the acceptance of its
appointment as successor administrative agent hereunder, the Person acting as
such successor administrative agent shall succeed to all the rights, powers and
duties of the retiring Administrative Agent, L/C Issuer and Swing Line Lender
and the respective terms "Administrative Agent," "L/C Issuer" and "Swing Line
Lender" shall mean such successor administrative agent, Letter of Credit issuer
and swing line lender, and the retiring Administrative Agent's appointment,
powers and duties as Administrative Agent shall be terminated and the retiring
L/C Issuer's and Swing Line Lender's rights, powers and duties as
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such shall be terminated, without any other or further act or deed on the part
of such retiring L/C Issuer or Swing Line Lender or any other Lender, other than
the obligation of the successor L/C Issuer to issue letters of credit in
substitution for the Letters of Credit, if any, outstanding at the time of such
succession or to make other arrangements satisfactory to the retiring L/C Issuer
to effectively assume the obligations of the retiring L/C Issuer with respect to
such Letters of Credit. After any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the provisions of this Article IX and
Sections 10.04 and 10.05 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Administrative Agent under this
Agreement. If no successor administrative agent has accepted appointment as
Administrative Agent by the date which is 30 days following a retiring
Administrative Agent's notice of resignation, the retiring Administrative
Agent's resignation shall nevertheless thereupon become effective and the
Lenders shall perform all of the duties of the Administrative Agent hereunder
until such time, if any, as the Required Lenders appoint a successor agent as
provided for above.
9.10. ADMINISTRATIVE AGENT MAY FILE PROOFS OF CLAIM. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to any Obligor, the Administrative Agent (irrespective of
whether the principal of any Loan or L/C Obligation shall then be due and
payable as herein expressed or by declaration or otherwise and irrespective of
whether the Administrative Agent shall have made any demand on the Borrower)
shall be entitled and empowered, by intervention in such proceeding or otherwise
(a) to file and prove a claim for the whole amount of the principal and
interest owing and unpaid in respect of the Loans, L/C Obligations and all other
Obligations that are owing and unpaid and to file such other documents as may be
necessary or advisable in order to have the claims of the Lenders and the
Administrative Agent (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Lenders and the Administrative Agent
and their respective agents and counsel and all other amounts due the Lenders
and the Administrative Agent under Sections 2.03(i) and (j), 2.09 and 10.04)
allowed in such judicial proceeding; and
(b) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Sections 2.09 and 10.04.
Nothing contained herein shall be deemed to authorize the Administrative
Agent to authorize or consent to or accept or adopt on behalf of any Lender any
plan of reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lender or to authorize the Administrative Agent
to vote in respect of the claim of any Lender in any such proceeding.
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9.11. GUARANTY MATTERS. The Lenders irrevocably authorize the
Administrative Agent, at its option and in its discretion, to release any
Guarantor from its obligations under the Guaranty if such Person ceases to be a
Subsidiary as a result of a transaction not prohibited hereunder or becomes or
is designated a "Non-Obligor". Upon request by the Administrative Agent at any
time, the Required Lenders will confirm in writing the Administrative Agent's
authority to release any Guarantor from its obligations under the Guaranty
pursuant to this Section.
9.12. OTHER AGENTS; ARRANGERS AND MANAGERS. None of the Lenders or other
Persons identified on the facing page or signature pages of this Agreement as a
"syndication agent," "documentation agent," "co-agent," "book manager," "lead
manager," "arranger," "lead arranger", "co-arranger" or "senior managing agent"
shall have any right, power, obligation, liability, responsibility or duty under
this Agreement other than, in the case of such Lenders, those applicable to all
Lenders as such. Without limiting the foregoing, none of the Lenders or other
Persons so identified shall have or be deemed to have any fiduciary relationship
with any Lender. Each Lender acknowledges that it has not relied, and will not
rely, on any of the Lenders or other Persons so identified in deciding to enter
into this Agreement or in taking or not taking action hereunder.
ARTICLE X.
MISCELLANEOUS
10.01. AMENDMENTS, ETC. No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent to any departure by the
Borrower or any other Obligor therefrom, shall be effective unless in writing
signed by the Required Lenders and the Borrower or the applicable Obligor, as
the case may be, and acknowledged by the Administrative Agent, and each such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no such amendment,
waiver or consent shall:
(a) waive any condition set forth in Section 4.01(a) without the written
consent of each Lender;
(b) extend or increase the Commitment of any Lender (or reinstate any
Commitment terminated pursuant to Section 8.02) without the written consent of
such Lender;
(c) postpone or delay any date fixed by this Agreement or any other Loan
Document for any payment of principal, interest or fees due to the Lenders (or
any of them) or any scheduled reduction of the Aggregate Commitments hereunder
or under any other Loan Document without the written consent of each Lender
directly affected thereby;
(d) reduce the principal of, or the rate of interest specified herein on,
any Loan or L/C Borrowing, or (subject to clause (iv) of the second proviso to
this Section) any fees payable hereunder or under any other Loan Document
without the written consent of each Lender directly affected thereby; provided,
however, that only the consent of the Required Lenders shall be necessary (i) to
amend the definition of "Default Rate" or to waive any obligation of the
Borrower to pay interest at the Default Rate or (ii) to amend any financial
covenant hereunder (or
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any defined term used therein) even if the effect of such amendment would be to
reduce the rate of interest on any Loan or L/C Borrowing or to reduce any fee
payable hereunder;
(e) change Section 2.13 or Section 8.03 in a manner that would alter the
pro rata sharing of payments required thereby without the written consent of
each Lender;
(f) change any provision of this Section or the definition of "Required
Lenders" or any other provision hereof specifying the number or percentage of
Lenders required to amend, waive or otherwise modify any rights hereunder or
make any determination or grant any consent hereunder, without the written
consent of each Lender; or
(g) except as provided in Sections 7.07 and 9.11 or in accordance with the
terms of the Guaranty, terminate the Guaranty or release a Material Group of
Subsidiaries from the Guaranty without the written consent of each Lender;
and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the applicable L/C Issuer in addition to the Lenders
required above, affect the rights or duties of such L/C Issuer under this
Agreement or any Letter of Credit Application relating to any Letter of Credit
issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless
in writing and signed by the Swing Line Lender in addition to the Lenders
required above, affect the rights or duties of the Swing Line Lender under this
Agreement; (iii) no amendment, waiver or consent shall, unless in writing and
signed by the Administrative Agent in addition to the Lenders required above,
affect the rights or duties of the Administrative Agent under this Agreement or
any other Loan Document; and (iv) the Fee Letter may be amended, or rights or
privileges thereunder waived, in a writing executed only by the parties thereto.
Notwithstanding anything to the contrary herein, no Defaulting Lender shall have
any right to approve or disapprove any amendment, waiver or consent hereunder,
except that the Commitment of such Lender may not be increased or extended
without the consent of such Lender.
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10.02. NOTICES AND OTHER COMMUNICATIONS; FACSIMILE COPIES.
(a) General. Unless otherwise expressly provided herein, all notices and
other communications provided for hereunder shall be in writing (including by
facsimile transmission). All such written notices shall be mailed, faxed or
delivered to the applicable address, facsimile number or (subject to clause (c)
below) electronic mail address, and all notices and other communications
expressly permitted hereunder to be given by telephone shall be made to the
applicable telephone number, as follows:
(i) if to the Borrower, the Administrative Agent, an L/C Issuer or the
Swing Line Lender, to the address, facsimile number, electronic mail
address or telephone number specified for such Person on Schedule 10.02 or
to such other address, facsimile number, electronic mail address or
telephone number as shall be designated by such party in a notice to the
other parties; and
(ii) if to any other Lender, to the address, facsimile number,
electronic mail address or telephone number specified in its Administrative
Questionnaire or to such other address, facsimile number, electronic mail
address or telephone number as shall be designated by such party in a
notice to the Borrower, the Administrative Agent, each L/C Issuer and the
Swing Line Lender.
All such notices and other communications shall be deemed to be given or made
upon the earlier to occur of (i) actual receipt by the relevant party hereto and
(ii) (A) if delivered by hand or by courier, when signed for by or on behalf of
the relevant party hereto; (B) if delivered by mail, four Business Days after
deposit in the mails, postage prepaid; (C) if delivered by facsimile, when sent
and receipt has been confirmed by telephone; and (D) if delivered by electronic
mail (which form of delivery is subject to the provisions of clause (c)), when
delivered; provided, however, that notices and other communications to the
Administrative Agent, an L/C Issuer and the Swing Line Lender pursuant to
Article II shall not be effective until actually received by such Person. In no
event shall a voicemail message be effective as a notice, communication or
confirmation hereunder.
(b) Effectiveness of Facsimile Documents and Signatures. Loan Documents may
be transmitted and/or signed by facsimile. The effectiveness of any such
documents and signatures shall, subject to applicable Law, have the same force
and effect as manually-signed originals and shall be binding on all Obligors,
the Administrative Agent and the Lenders. The Administrative Agent may also
require that any such documents and signatures be confirmed by a manually-signed
original thereof; provided, however, that the failure to request or deliver the
same shall not limit the effectiveness of any facsimile document or signature.
(c) Limited Use of Electronic Mail. Electronic mail and Internet and
intranet websites may be used only to distribute routine communications, such as
financial statements and other information as provided in Section 6.01, and to
distribute Loan Documents for execution by the parties thereto, and may not be
used for any other purpose.
(d) Reliance by Administrative Agent and Lenders. The Administrative Agent
and the Lenders shall be entitled to rely and act upon any notices (including
telephonic
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Revolving Loan Notices, Competitive Bid Requests and Swing Line Loan Notices)
purportedly given by or on behalf of the Borrower even if (i) such notices were
not made in a manner specified herein, were incomplete or were not preceded or
followed by any other form of notice specified herein, or (ii) the terms
thereof, as understood by the recipient, varied from any confirmation thereof.
The Borrower shall indemnify each Agent-Related Person and each Lender from all
losses, costs, expenses and liabilities resulting from the reliance by such
Person on each notice purportedly given by or on behalf of the Borrower. All
telephonic notices to and other communications with the Administrative Agent may
be recorded by the Administrative Agent, and each of the parties hereto hereby
consents to such recording.
10.03. NO WAIVER; CUMULATIVE REMEDIES. No failure by any Lender or the
Administrative Agent to exercise, and no delay by any such Person in exercising,
any right, remedy, power or privilege hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
10.04. ATTORNEY COSTS, EXPENSES AND TAXES. The Borrower agrees (a) to pay
or reimburse the Administrative Agent for all costs and expenses incurred in
connection with the development, preparation, negotiation and execution of this
Agreement and the other Loan Documents and any amendment, waiver, consent or
other modification of the provisions hereof and thereof (whether or not the
transactions contemplated hereby or thereby are consummated), and the
consummation and administration of the transactions contemplated hereby and
thereby, including all Attorney Costs, and (b) to pay or reimburse the
Administrative Agent and each Lender for all costs and expenses incurred in
connection with the enforcement, attempted enforcement, or preservation of any
rights or remedies under this Agreement or the other Loan Documents (including
all such costs and expenses incurred during any "workout" or restructuring in
respect of the Obligations and during any legal proceeding, including any
proceeding under any Debtor Relief Law), including all Attorney Costs. The
foregoing costs and expenses shall include all out-of-pocket expenses incurred
by the Administrative Agent and the cost of independent public accountants and
other outside experts retained by the Administrative Agent or any Lender. All
amounts due under this Section shall be payable within ten Business Days after
demand therefor. The agreements in this Section shall survive the occurrence of
the Revolving Termination Date.
10.05. INDEMNIFICATION BY THE BORROWER. Whether or not the transactions
contemplated hereby are consummated, the Borrower shall indemnify and hold
harmless each Agent-Related Person, each Lender and their respective Affiliates,
directors, officers, employees, counsel, agents and attorneys-in-fact
(collectively the "Indemnitees") from and against any and all liabilities,
obligations, losses, damages, penalties, claims, demands, actions, judgments,
suits, costs, expenses and disbursements (including Attorney Costs) of any kind
or nature whatsoever which may at any time be imposed on, incurred by or
asserted against any such Indemnitee in any way relating to or arising out of or
in connection with (a) the execution, delivery, enforcement, performance or
administration of any Loan Document or any other agreement, letter or instrument
delivered in connection with the transactions contemplated thereby or the
consummation of the transactions contemplated thereby, (b) any Commitment, Loan
or Letter of
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Credit or the use or proposed use of the proceeds therefrom (including any
refusal by an L/C Issuer to honor a demand for payment under a Letter of Credit
if the documents presented in connection with such demand do not strictly comply
with the terms of such Letter of Credit), (c) any actual or alleged presence or
release of Hazardous Materials on or from any property currently or formerly
owned or operated by the Borrower or any Subsidiary, or any Environmental
Liability related in any way to the Borrower or any Subsidiary, or (d) any
actual or prospective claim, litigation, investigation or proceeding relating to
any of the foregoing, whether based on contract, tort or any other theory
(including any investigation of, preparation for, or defense of any pending or
threatened claim, investigation, litigation or proceeding), regardless of
whether such claim, investigation, litigation or proceeding is brought by the
Borrower, any Subsidiary, an Indemnitee or a third party, and regardless of
whether any Indemnitee is a party thereto (all the foregoing, collectively, the
"Indemnified Liabilities"), in all cases, whether or not caused by or arising,
in whole or in part, out of the negligence of the Indemnitee; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
liabilities, obligations, losses, damages, penalties, claims, demands, actions,
judgments, suits, costs, expenses or disbursements are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence or willful misconduct of such Indemnitee. No Indemnitee
shall be liable for any damages arising from the use by others of any
information or other materials obtained through IntraLinks or other similar
information transmission systems in connection with this Agreement, nor shall
any Indemnitee have any liability for any indirect or consequential damages
relating to this Agreement or any other Loan Document or arising out of its
activities in connection herewith or therewith (whether before or after the
Closing Date). All amounts due under this Section shall be payable within ten
Business Days after demand therefor. The agreements in this Section shall
survive the resignation of the Administrative Agent, the replacement of any
Lender, the termination of the Aggregate Commitments and the repayment,
satisfaction or discharge of all the other Obligations.
10.06. PAYMENTS SET ASIDE. To the extent that any payment by or on behalf
of the Borrower is made to the Administrative Agent or any Lender, or the
Administrative Agent or any Lender exercises its right of set-off, and such
payment or the proceeds of such set-off or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by the Administrative Agent
or such Lender in its discretion) to be repaid to a trustee, receiver or any
other party, in connection with any proceeding under any Debtor Relief Law or
otherwise, then (a) to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such set-off had
not occurred, and (b) each Lender severally agrees to pay to the Administrative
Agent upon demand its applicable share of any amount so recovered from or repaid
by the Administrative Agent, plus interest thereon from the date of such demand
to the date such payment is made at a rate per annum equal to the Federal Funds
Rate from time to time in effect.
10.07. SUCCESSORS AND ASSIGNS.
(a) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder
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without the prior written consent of each Lender and no Lender may assign or
otherwise transfer any of its rights or obligations hereunder except (i) to an
Eligible Assignee in accordance with the provisions of clause (b), (ii) by way
of participation in accordance with the provisions of clause (d), or (iii) by
way of pledge or assignment of a security interest subject to the restrictions
of clause (f) (and any other attempted assignment or transfer by any party
hereto shall be null and void). Nothing in this Agreement, expressed or implied,
shall be construed to confer upon any Person (other than the parties hereto,
their respective successors and assigns permitted hereby, Participants to the
extent provided in clause (d) and, to the extent expressly contemplated hereby,
the Indemnitees) any legal or equitable right, remedy or claim under or by
reason of this Agreement.
(b) Any Lender may at any time assign to one or more Eligible Assignees all
or a portion of its rights and obligations under this Agreement (including all
or a portion of its Commitment and the Loans (including for purposes of this
clause (b), participations in L/C Obligations) at the time owing to it);
provided that (i) except in the case of an assignment of the entire remaining
amount of the assigning Lender's Commitment and the Loans at the time owing to
it or in the case of an assignment to a Lender or an Affiliate of a Lender with
respect to a Lender, the aggregate amount of the Commitment (which for this
purpose includes Loans outstanding thereunder), subject to each such assignment,
determined as of the date the Assignment and Assumption with respect to such
assignment is delivered to the Administrative Agent or, if "Trade Date" is
specified in the Assignment and Assumption, as of the Trade Date, shall not be
less than $5,000,000 unless each of the Administrative Agent and, so long as no
Event of Default has occurred and is continuing, the Borrower otherwise consents
(each such consent not to be unreasonably withheld or delayed); (ii) each
partial assignment shall be made as an assignment of a proportionate part of all
the assigning Lender's rights and obligations under this Agreement with respect
to the Loans or the Commitment assigned, except that this clause (ii) shall not
apply to rights in respect of Swing Line Loans; (iii) any assignment of a
Commitment must be approved by the Administrative Agent, the L/C Issuers and the
Swing Line Lender unless the Person that is the proposed assignee is itself a
Lender with a Commitment immediately prior to giving effect to such assignment
(whether or not the proposed assignee would otherwise qualify as an Eligible
Assignee); and (iv) the parties to each assignment shall execute and deliver to
the Administrative Agent an Assignment and Assumption, together with a
processing and recordation fee of $3,500. Subject to acceptance and recording
thereof by the Administrative Agent pursuant to clause (c), from and after the
effective date specified in each Assignment and Assumption, the Eligible
Assignee thereunder shall be a party to this Agreement and, to the extent of the
interest assigned by such Assignment and Assumption, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections 3.01,
3.04, 3.05, 10.04 and 10.05 with respect to facts and circumstances occurring
prior to the effective date of such assignment). Upon request, the Borrower (at
its expense) shall execute and deliver a Note to the assignee Lender. Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this clause shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with clause (d).
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(c) The Administrative Agent, acting solely for this purpose as an agent of
the Borrower, shall maintain at the Administrative Agent's Office a copy of each
Assignment and Assumption delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the Commitments of and principal
amounts of the Loans and L/C Obligations owing to, each Lender pursuant to the
terms hereof from time to time (the "Register"). The entries in the Register
shall be conclusive, and the Borrower, the Administrative Agent and the Lenders
may treat each Person whose name is recorded in the Register pursuant to the
terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrower and any Lender, at any reasonable time and from time
to time upon reasonable prior notice.
(d) Any Lender may at any time, without the consent of, or notice to, the
Borrower or the Administrative Agent, sell participations to any Person (other
than a natural person or the Borrower or any of the Borrower's Affiliates or
Subsidiaries) (each, a "Participant") in all or a portion of such Lender's
rights and/or obligations under this Agreement (including all or a portion of
its Commitment and/or the Loans (including such Lender's participations in L/C
Obligations, Competitive Loans and/or Swing Line Loans) owing to it); provided
that (i) such Lender's obligations under this Agreement shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations and (iii) the Borrower, the Administrative
Agent and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement. Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, waiver or other modification described in the first proviso to
Section 10.01 that directly affects such Participant. Subject to clause (e), the
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 3.01, 3.04 and 3.05 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to clause (b). To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 10.09 as though it were a Lender, provided such Participant agrees to be
subject to Section 2.13 as though it were a Lender.
(e) A Participant shall not be entitled to receive any greater payment
under Section 3.01 or 3.04 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the Borrower's
prior written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 3.01 unless the Borrower
is notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with Section 10.15 as though
it were a Lender.
(f) Any Lender may at any time pledge or assign a security interest in all
or any portion of its rights under this Agreement (including under its Note, if
any) to secure obligations of such Lender, including any pledge or assignment to
secure obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.
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(g) As used herein, the following terms have the following meanings:
"Eligible Assignee" means (a) a Lender; (b) an Affiliate of a
Lender; and (c) any other Person (other than a natural person)
approved by (i) the Administrative Agent, the L/C Issuers and the
Swing Line Lender, and (ii) unless an Event of Default has occurred
and is continuing, the Borrower (each such approval not to be
unreasonably withheld or delayed); provided that notwithstanding the
foregoing, "Eligible Assignee" shall not include the Borrower or any
of the Borrower's Affiliates or Subsidiaries.
(h) Notwithstanding anything to the contrary contained herein, any Lender
(a "Granting Lender") may grant to a special purpose funding vehicle identified
as such in writing from time to time by the Granting Lender to the
Administrative Agent and the Borrower (an "SPC") the option to provide all or
any part of any Loan that such Granting Lender would otherwise be obligated to
make pursuant to this Agreement; provided that (i) nothing herein shall
constitute a commitment by any SPC to fund any Loan, and (ii) if an SPC elects
not to exercise such option or otherwise fails to make all or any part of such
Loan, the Granting Lender shall be obligated to make such Loan pursuant to the
terms hereof. Each party hereto hereby agrees that (i) neither the grant to any
SPC nor the exercise by any SPC of such option shall increase the costs or
expenses or otherwise increase or change the obligations of the Borrower under
this Agreement (including its obligations under Section 3.04), (ii) no SPC shall
be liable for any indemnity or similar payment obligation under this Agreement
for which a Lender would be liable, and (iii) the Granting Lender shall for all
purposes, including the approval of any amendment, waiver or other modification
of any provision of any Loan Document, remain the lender of record hereunder.
The making of a Loan by an SPC hereunder shall utilize the Commitment of the
Granting Lender to the same extent, and as if, such Loan were made by such
Granting Lender. In furtherance of the foregoing, each party hereto hereby
agrees (which agreement shall survive the Revolving Termination Date) that,
prior to the date that is one year and one day after the payment in full of all
outstanding commercial paper or other senior debt of any SPC, it will not
institute against, or join any other Person in instituting against, such SPC any
proceeding under any Debtor Relief Laws. Notwithstanding anything to the
contrary contained herein, any SPC may (i) with notice to, but without prior
consent of the Borrower and the Administrative Agent and with the payment of a
processing fee of $3,500, assign all or any portion of its right to receive
payment with respect to any Loan to the Granting Lender and (ii) disclose on a
confidential basis any non-public information relating to its funding of Loans
to any rating agency, commercial paper dealer or provider of any surety or
guarantee or credit or liquidity enhancement to such SPC.
(i) Notwithstanding anything to the contrary contained herein, if at any
time JPMorgan Chase Bank assigns all of its Commitment and Loans pursuant to
clause (b), JPMorgan Chase Bank may, (i) upon 30 days' notice to the Borrower
and the Lenders, resign as an L/C Issuer and/or (ii) upon 30 days' notice to the
Borrower, resign as Swing Line Lender. In the event of any such resignation as
an L/C Issuer or Swing Line Lender, the Borrower shall be entitled to appoint
from among the Lenders a successor L/C Issuer or Swing Line Lender hereunder;
provided, however, that no failure by the Borrower to appoint any such successor
shall affect the resignation of JPMorgan Chase Bank as an L/C Issuer or Swing
Line Lender, as the case may be. If JPMorgan Chase Bank resigns as an L/C
Issuer, it shall retain all the rights
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and obligations of an L/C Issuer hereunder with respect to all Letters of Credit
outstanding as of the effective date of its resignation as an L/C Issuer and all
L/C Obligations with respect thereto (including the right to require the Lenders
to make Base Rate Loans or fund risk participations in Unreimbursed Amounts
pursuant to Section 2.03(c)). If JPMorgan Chase Bank resigns as Swing Line
Lender, it shall retain all the rights of the Swing Line Lender provided for
hereunder with respect to Swing Line Loans made by it and outstanding as of the
effective date of such resignation, including the right to require the Lenders
to make Base Rate Loans or fund risk participations in outstanding Swing Line
Loans pursuant to Section 2.04(c).
10.08. CONFIDENTIALITY. Each of the Administrative Agent and the Lenders
agrees to maintain the confidentiality of the Information (as defined below),
except that Information may be disclosed (a) to its and its Affiliates'
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential), (b) to the extent requested
by any regulatory authority (including any self-regulatory authority, such as
the National Association of Insurance Commissioners), (c) to the extent required
by applicable laws or regulations or by any subpoena or similar legal process,
(d) to any other party hereto, (e) in connection with the exercise of any
remedies hereunder or under any other Loan Document or any action or proceeding
relating to this Agreement or any other Loan Document or the enforcement of
rights hereunder or thereunder, (f) subject to an agreement containing
provisions substantially the same as those of this Section, to (i) any assignee
of or Participant in, or any prospective assignee of or Participant in, any of
its rights or obligations under this Agreement or (ii) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to
the Borrower and its obligations, (g) with the consent of the Borrower or (h) to
the extent such Information (x) becomes publicly available other than as a
result of a breach of this Section or (y) becomes available to the
Administrative Agent or any Lender on a nonconfidential basis from a source
other than the Borrower. For purposes of this Section, "Information" means all
information received from any Obligor relating to any Obligor or any of their
respective businesses, other than any such information that is available to the
Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by any Obligor, provided that, in the case of information received
from a Obligor after the Effective Date, such information is clearly identified
at the time of delivery as confidential. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.
10.09. SET-OFF. In addition to any rights and remedies of the Lenders
provided by law, upon the occurrence and during the continuance of any Event of
Default, each Lender is authorized at any time and from time to time, without
prior notice to the Borrower or any other Obligor, any such notice being waived
by the Borrower (on its own behalf and on behalf of each Obligor) to the fullest
extent permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held by, and other
indebtedness at any time owing by, such Lender to or for the credit or the
account of the respective Obligors against any and all Obligations owing to such
Lender hereunder or under any other Loan Document, now or hereafter existing,
irrespective of whether or not the Administrative Agent or such Lender shall
have made demand under this Agreement or any other Loan Document and
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although such Obligations may be contingent or unmatured or denominated in a
currency different from that of the applicable deposit or indebtedness. Each
Lender agrees promptly to notify the Borrower and the Administrative Agent after
any such set-off and application made by such Lender, provided, however, that
the failure to give such notice shall not affect the validity of such set-off
and application.
10.10. INTEREST RATE LIMITATION. Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under the
Loan Documents shall not exceed the maximum rate of non-usurious interest
permitted by applicable Law (the "Maximum Rate"). If the Administrative Agent or
any Lender shall receive interest in an amount that exceeds the Maximum Rate,
the excess interest shall be applied to the principal of the Loans or, if it
exceeds such unpaid principal, refunded to the Borrower. In determining whether
the interest contracted for, charged, or received by the Administrative Agent or
a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by
applicable Law, (a) characterize any payment that is not principal as an
expense, fee, or premium rather than interest, (b) exclude voluntary prepayments
and the effects thereof, and (c) amortize, prorate, allocate, and spread in
equal or unequal parts the total amount of interest throughout the contemplated
term of the Obligations hereunder.
10.11. COUNTERPARTS; EFFECTIVENESS. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. This Agreement
shall become effective when counterparts hereof executed on behalf of the
Borrower, the Administrative Agent and each Lender (or notice thereof
satisfactory to the Administrative Agent) shall have been received by the
Administrative Agent.
10.12. INTEGRATION. This Agreement, together with the other Loan Documents,
comprises the complete and integrated agreement of the parties on the subject
matter hereof and thereof and supersedes all prior agreements, written or oral,
on such subject matter. In the event of any conflict between the provisions of
this Agreement and those of any other Loan Document, the provisions of this
Agreement shall control; provided that the inclusion of supplemental rights or
remedies in favor of the Administrative Agent or the Lenders in any other Loan
Document shall not be deemed a conflict with this Agreement. Each Loan Document
was drafted with the joint participation of the respective parties thereto and
shall be construed neither against nor in favor of any party, but rather in
accordance with the fair meaning thereof.
10.13. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default at the time of any Credit Extension, and shall continue in full
force and effect as long as any Loan or any other Obligation hereunder shall
remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.
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10.14. SEVERABILITY. If any provision of this Agreement or the other Loan
Documents is held to be illegal, invalid or unenforceable, (a) the legality,
validity and enforceability of the remaining provisions of this Agreement and
the other Loan Documents shall not be affected or impaired thereby and (b) the
parties shall endeavor in good faith negotiations to replace the illegal,
invalid or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
10.15. TAX FORMS. (a) (i) Each Lender that is not a "United States person"
within the meaning of Section 7701(a)(30) of the Code (a "Foreign Lender") shall
deliver to the Administrative Agent, prior to receipt of any payment subject to
withholding under the Code (or upon accepting an assignment of an interest
herein), two duly signed completed copies of either IRS Form W-8BEN or any
successor thereto (relating to such Foreign Lender and entitling it to an
exemption from, or reduction of, withholding tax on all payments to be made to
such Foreign Lender by the Borrower pursuant to this Agreement) or IRS Form
W-8ECI or any successor thereto (relating to all payments to be made to such
Foreign Lender by the Borrower pursuant to this Agreement) or such other
evidence satisfactory to the Borrower and the Administrative Agent that such
Foreign Lender is entitled to an exemption from, or reduction of, U.S.
withholding tax, including any exemption pursuant to Section 881(c) of the Code.
Thereafter and from time to time, each such Foreign Lender shall (A) promptly
submit to the Administrative Agent such additional duly completed and signed
copies of one of such forms (or such successor forms as shall be adopted from
time to time by the relevant United States taxing authorities) as may then be
available under then current United States laws and regulations to avoid, or
such evidence as is satisfactory to the Borrower and the Administrative Agent of
any available exemption from or reduction of, United States withholding taxes in
respect of all payments to be made to such Foreign Lender by the Borrower
pursuant to this Agreement, (B) promptly notify the Administrative Agent of any
change in circumstances which would modify or render invalid any claimed
exemption or reduction, and (C) take such steps as shall not be materially
disadvantageous to it, in the reasonable judgment of such Lender, and as may be
reasonably necessary (including the re-designation of its Lending Office) to
avoid any requirement of applicable Laws that the Borrower make any deduction or
withholding for taxes from amounts payable to such Foreign Lender.
(ii) Each Foreign Lender, to the extent it does not act or ceases to
act for its own account with respect to any portion of any sums paid or
payable to such Lender under any of the Loan Documents (for example, in the
case of a typical participation by such Lender), shall deliver to the
Administrative Agent on the date when such Foreign Lender ceases to act for
its own account with respect to any portion of any such sums paid or
payable, and at such other times as may be necessary in the determination
of the Administrative Agent (in the reasonable exercise of its discretion),
(A) two duly signed completed copies of the forms or statements required to
be provided by such Lender as set forth above, to establish the portion of
any such sums paid or payable with respect to which such Lender acts for
its own account that is not subject to U.S. withholding tax, and (B) two
duly signed completed copies of IRS Form W-8IMY (or any successor thereto),
together with any information such Lender chooses to transmit with such
form, and any other certificate or statement of exemption required under
the Code, to establish
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that such Lender is not acting for its own account with respect to a
portion of any such sums payable to such Lender.
(iii) The Borrower shall not be required to pay any additional amount
to any Foreign Lender under Section 3.01 (A) with respect to any Taxes
required to be deducted or withheld on the basis of the information,
certificates or statements of exemption such Lender transmits with an IRS
Form W-8IMY pursuant to this clause (a) or (B) if such Lender shall have
failed to satisfy the foregoing provisions of this clause (a); provided
that if such Lender shall have satisfied the requirement of this clause (a)
on the date such Lender became a Lender or ceased to act for its own
account with respect to any payment under any of the Loan Documents,
nothing in this clause (a) shall relieve the Borrower of its obligation to
pay any amounts pursuant to Section 3.01 in the event that, as a result of
any change in any applicable law, treaty or governmental rule, regulation
or order, or any change in the interpretation, administration or
application thereof, such Lender is no longer properly entitled to deliver
forms, certificates or other evidence at a subsequent date establishing the
fact that such Lender or other Person for the account of which such Lender
receives any sums payable under any of the Loan Documents is not subject to
withholding or is subject to withholding at a reduced rate.
(iv) The Administrative Agent may, without reduction, withhold any
Taxes required to be deducted and withheld from any payment under any of
the Loan Documents with respect to which the Borrower is not required to
pay additional amounts under this clause (a).
(b) Upon the request of the Administrative Agent, each Lender that is a
"United States person" within the meaning of Section 7701(a)(30) of the Code
shall deliver to the Administrative Agent two duly signed completed copies of
IRS Form W-9. If such Lender fails to deliver such forms, then the
Administrative Agent may withhold from any interest payment to such Lender an
amount equivalent to the applicable back-up withholding tax imposed by the Code,
without reduction.
(c) If any Governmental Authority asserts that the Administrative Agent did
not properly withhold or backup withhold, as the case may be, any tax or other
amount from payments made to or for the account of any Lender, such Lender shall
indemnify the Administrative Agent therefor, including all penalties and
interest, any taxes imposed by any jurisdiction on the amounts payable to the
Administrative Agent under this Section, and costs and expenses (including
Attorney Costs) of the Administrative Agent. The obligation of the Lenders under
this Section shall survive the termination of the Aggregate Commitments,
repayment of all other Obligations hereunder and the resignation of the
Administrative Agent.
10.16. REPLACEMENT OF LENDERS. Under any circumstances set forth herein
providing that the Borrower shall have the right to replace a Lender as a party
to this Agreement, the Borrower may, upon notice to such Lender and the
Administrative Agent, replace such Lender by causing such Lender to assign its
Commitment (with the assignment fee to be paid by the Borrower in such
instance), pursuant to Section 10.07(b) to one or more other Lenders or Eligible
Assignees procured by the Borrower; provided, however, that if the Borrower
elects to exercise such right with respect to any Lender pursuant to Section
3.06(b), it shall be obligated to
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replace all Lenders that have made similar requests for compensation pursuant to
Section 3.01 or 3.04. The Borrower shall (x) pay in full all principal,
interest, fees and other amounts owing to such Lender through the date of
replacement (including any amounts payable pursuant to Section 3.05), (y)
provide appropriate assurances and indemnities (which may include letters of
credit) to each L/C Issuer and the Swing Line Lender as each may reasonably
require with respect to any continuing obligation to fund participation
interests in any L/C Obligations or any Swing Line Loans then outstanding, and
(z) release such Lender from its obligations under the Loan Documents. Any
Lender being replaced shall execute and deliver an Assignment and Assumption
with respect to such Lender's Commitment and outstanding Loans and
participations in L/C Obligations and Swing Line Loans.
10.17. GOVERNING LAW.
(A) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE ADMINISTRATIVE AGENT AND
EACH LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(B) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK
SITTING IN NEW YORK COUNTY OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF
SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER, THE
ADMINISTRATIVE AGENT AND EACH LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE BORROWER, THE
ADMINISTRATIVE AGENT AND EACH LENDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING
ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER
DOCUMENT RELATED THERETO. THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER
WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE
MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE.
10.18. WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY TO THIS AGREEMENT
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM
WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH
CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT
OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT
90
TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
10.19. ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
MANOR CARE, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
JPMORGAN CHASE BANK, N.A., as a Lender,
L/C Issuer and Swing Line Lender
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
BANK OF AMERICA, N.A., as Syndication
Agent, L/C Issuer and a Lender
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
SUNTRUST BANK, as a Lender and
Documentation Agent
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
UBS SECURITIES LLC, as Documentation
Agent
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
UBS LOAN FINANCE LLC, as a Lender
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
MERRILL LYNCH BANK USA, as a Lender and
Documentation Agent
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
HUNTINGTON NATIONAL BANK, as a
Lender and L/C Issuer
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
WACHOVIA BANK, NATIONAL ASSOCIATION,
as a Lender
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
NATIONAL CITY BANK, as a Lender
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
US BANK, as a Lender
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------