EXHIBIT 10.1
EXECUTION VERSION
================================================================================
$330,000,000
CREDIT AGREEMENT
AMONG
BROOKDALE SENIOR LIVING INC.,
AS BORROWER,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO,
LEHMAN BROTHERS INC.,
AS LEAD ARRANGER,
GOLDMAN SACHS CREDIT PARTNERS L.P.,
CITIGROUP GLOBAL MARKETS INC.,
AND
LASALLE BANK NATIONAL ASSOCIATION,
AS CO-ARRANGERS,
LASALLE BANK NATIONAL ASSOCIATION,
AS SYNDICATION AGENT,
GOLDMAN SACHS CREDIT PARTNERS L.P.
AND
CITICORP NORTH AMERICA, INC.,
AS CO-DOCUMENTATION AGENTS,
AND
LEHMAN COMMERCIAL PAPER INC.,
AS ADMINISTRATIVE AGENT
DATED AS OF FEBRUARY 10, 2006
================================================================================
TABLE OF CONTENTS
Page
----
SECTION 1. DEFINITIONS....................................................1
1.1 Defined Terms..........................................................1
1.2 Other Definitional Provisions.........................................28
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS...............................29
2.1 Term Loan Commitments.................................................29
2.2 Procedure for Term Loan Borrowing.....................................29
2.3 Revolving Credit Commitments..........................................29
2.4 Procedure for Revolving Credit Borrowing..............................30
2.5 Repayment of Loans; Evidence of Debt..................................30
2.6 Extension of the Initial Maturity Date................................31
2.7 Commitment Fees, etc..................................................32
2.8 Termination or Reduction of Commitments...............................32
2.9 Optional Prepayments..................................................33
2.10 Mandatory Prepayments and Commitment Reductions.......................33
2.11 Conversion and Continuation Options...................................34
2.12 Minimum Amounts and Maximum Number of Eurodollar Tranches.............35
2.13 Interest Rates and Payment Dates......................................35
2.14 Computation of Interest and Fees......................................35
2.15 Inability to Determine Interest Rate..................................36
2.16 Pro Rata Treatment and Payments.......................................36
2.17 Requirements of Law...................................................38
2.18 Taxes.................................................................39
2.19 Indemnity.............................................................41
2.20 Illegality............................................................41
2.21 Change of Lending Office..............................................42
SECTION 3. LETTERS OF CREDIT.............................................42
3.1 L/C Commitment........................................................42
3.2 Procedure for Issuance of Letter of Credit............................42
3.3 Fees and Other Charges................................................43
3.4 Reimbursement Obligation of the Borrower..............................43
3.5 Obligations Absolute..................................................43
3.6 Letter of Credit Payments.............................................44
3.7 Applications..........................................................44
SECTION 4. REPRESENTATIONS AND WARRANTIES................................44
4.1 Financial Condition...................................................44
4.2 No Change.............................................................45
4.3 Corporate Existence; Compliance with Law..............................46
-i-
Page
----
4.4 Corporate Power; Authorization; Enforceable Obligations...............46
4.5 No Legal Bar..........................................................46
4.6 No Material Litigation................................................46
4.7 No Default............................................................47
4.8 Ownership of Property; Liens..........................................47
4.9 Intellectual Property.................................................47
4.10 Taxes.................................................................47
4.11 Federal Regulations...................................................48
4.12 Labor Matters.........................................................48
4.13 ERISA.................................................................48
4.14 Investment Company Act; Other Regulations.............................48
4.15 Subsidiaries..........................................................48
4.16 Use of Proceeds.......................................................49
4.17 Environmental Matters.................................................49
4.18 Accuracy of Information, etc..........................................50
4.19 Security Documents....................................................50
4.20 Solvency..............................................................51
4.21 Licenses and Certifications...........................................51
4.22 Operating Agreements and Management Contracts.........................51
4.23 Hill-Burton Act.......................................................52
4.24 Medicare/Medicaid.....................................................52
4.25 Compliance............................................................52
4.26 Agreements with Residents; Residents' Records.........................52
4.27 HIPAA.................................................................52
4.28 Submissions...........................................................52
SECTION 5. CONDITIONS PRECEDENT..........................................53
5.1 Conditions to Initial Extension of Credit.............................53
5.2 Conditions to Each Extension of Credit................................55
SECTION 6. AFFIRMATIVE COVENANTS.........................................56
6.1 Financial Statements..................................................56
6.2 Certificates; Other Information.......................................56
6.3 Payment of Obligations................................................57
6.4 Maintenance of Existence; Compliance with Contractual Obligations.....58
6.5 Conduct of Business and Compliance with Law...........................58
6.6 Maintenance of Property; Insurance....................................59
6.7 Inspection of Property; Books and Records; Discussions................59
6.8 Notices...............................................................59
6.9 Deficiency Notices....................................................61
6.10 Environmental Laws....................................................61
6.11 Additional Collateral, etc............................................61
6.12 Further Assurances....................................................62
6.13 Resident Agreements...................................................62
6.14 Census Report and Surveys.............................................62
6.15 Post-Closing Covenants................................................62
-ii-
Page
----
SECTION 7. NEGATIVE COVENANTS............................................63
7.1 Financial Condition Covenants.........................................63
7.2 Limitation on Indebtedness............................................64
7.3 Limitation on Liens...................................................65
7.4 Limitation on Fundamental Changes.....................................66
7.5 Limitation on Disposition of Property.................................67
7.6 Limitation on Restricted Payments.....................................67
7.7 Limitation on Investments.............................................68
7.8 Limitation on Modifications of Certificate of Incorporation...........69
7.9 Limitation on Transactions with Affiliates............................69
7.10 Limitation on Sales and Leasebacks....................................69
7.11 Limitation on Changes in Fiscal Periods...............................69
7.12 Limitation on Negative Pledge Clauses.................................69
7.13 Limitation on Restrictions on Subsidiary Distributions................70
7.14 Limitation on Lines of Business.......................................70
7.15 Limitation on Hedge Agreements........................................70
7.16 Licenses..............................................................70
7.17 Limitation on Certain Agreements......................................70
7.18 Limitation on Foreign Subsidiaries....................................71
7.19 Subsidiary Dividends..................................................71
SECTION 8. EVENTS OF DEFAULT.............................................71
SECTION 9. THE AGENTS....................................................74
9.1 Appointment...........................................................74
9.2 Delegation of Duties..................................................74
9.3 Exculpatory Provisions................................................74
9.4 Reliance by Agents....................................................75
9.5 Notice of Default.....................................................75
9.6 Non-Reliance on Agents and Other Lenders..............................76
9.7 Indemnification.......................................................76
9.8 Agent in Its Individual Capacity......................................77
9.9 Successor Administrative Agent........................................77
9.10 Authorization to Release Liens and Guarantees.........................77
9.11 The Lead Arranger; the Co-Arrangers; the Syndication Agent; the
Co-.Documentation Agents..............................................78
SECTION 10. MISCELLANEOUS.................................................78
10.1 Amendments and Waivers................................................78
10.2 Notices...............................................................80
10.3 No Waiver; Cumulative Remedies........................................82
10.4 Survival of Representations and Warranties............................82
10.5 Payment of Expenses...................................................83
10.6 Successors and Assigns; Participations and Assignments................84
10.7 Adjustments; Set-off..................................................87
10.8 Counterparts..........................................................88
-iii-
Page
----
10.9 Severability..........................................................88
10.10 Integration...........................................................88
10.11 GOVERNING LAW.........................................................88
10.12 Submission To Jurisdiction; Waivers...................................88
10.13 Acknowledgments.......................................................89
10.14 Confidentiality.......................................................89
10.15 Release of Collateral and Guarantee Obligations.......................90
10.16 Accounting Changes....................................................91
10.17 Delivery of Lender Addenda............................................91
10.18 WAIVERS OF JURY TRIAL.................................................91
-iv-
SCHEDULES:
1.1A AEW Portfolio
1.1B Chambrel Portfolio
1.1C Existing Letters of Credit
4.2 Material Events
4.4 Consents, Authorizations, Filings and Notices
4.6 Material Litigation
4.8 Real Property
4.10 Unpaid Taxes
4.15 Subsidiaries
4.19 UCC Filing Jurisdictions
7.2(d) Existing Indebtedness
7.3(f) Existing Liens
7.7(e) Existing Investments
EXHIBITS:
A Form of Guarantee and Pledge Agreement
B Form of Compliance Certificate
C Form of Closing Certificate
D Form of Assignment and Acceptance
E-1 Form of Legal Opinion of Skadden, Arps, Slate, Meagher & Flom LLP
E-2 Form of Legal Opinion of Deborah Paskin, General Counsel of the Loan
Parties
F-1 Form of Term Note
F-2 Form of Revolving Credit Note
G Form of Exemption Certificate
H Form of Lender Addendum
I Form of Borrowing Notice
J-1 Form of Application
J-2 Form of Master Letter of Credit Agreement
K Form of Environmental Review
-v-
CREDIT AGREEMENT, dated as of February 10, 2006, among BROOKDALE
SENIOR LIVING INC., a Delaware corporation (the "Borrower"), the several banks
and other financial institutions or entities from time to time parties to this
Agreement (the "Lenders"), LEHMAN BROTHERS INC., as advisor, sole lead arranger
and sole bookrunner (in such capacity, the "Lead Arranger"), GOLDMAN SACHS
CREDIT PARTNERS L.P., CITIGROUP GLOBAL MARKETS INC. and LASALLE BANK NATIONAL
ASSOCIATION, as co-arrangers (in such capacity, the "Co-Arrangers"), LASALLE
BANK NATIONAL ASSOCIATION, as syndication agent (in such capacity, the
"Syndication Agent"), GOLDMAN SACHS CREDIT PARTNERS L.P. and CITICORP NORTH
AMERICA, INC., as co-documentation agents (in such capacity, the
"Co-Documentation Agents") and LEHMAN COMMERCIAL PAPER INC., as administrative
agent (in such capacity, the "Administrative Agent").
W I T N E S S E T H:
--------------------
WHEREAS, the Borrower has requested the Lenders make available
credit facilities in an aggregate amount equal to $330,000,000; and
WHEREAS, the Lenders are willing to make such credit facilities
available upon and subject to the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the agreements
hereinafter set forth, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms.
As used in this Agreement, the terms listed in this Section 1.1
shall have the respective meanings set forth in this Section 1.1.
"Acquisition": the acquisition by the Borrower or any of its
Subsidiaries of (a) title to or a leasehold estate in any Property located in
the United States, or (b) all the Capital Stock of a Person organized under the
laws of a State of the United States that owns title to or a leasehold interest
in one or more Properties.
"Administrative Agent": as defined in the preamble hereto.
"AEW Portfolio": the portfolio of Properties comprised of the real
properties identified on Schedule 1.1A attached hereto.
"Affiliate": as to any Person, any other Person that, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. For purposes of this definition, "control" of a Person means the
power, directly or indirectly, either to (a) vote 10% or more of the securities
having ordinary voting power for the election of directors (or persons
2
performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.
"Agency": the Centers for Medicare and Medicaid Services, the Drug
Enforcement Administration, the Environmental Protection Agency, any other
local, state or federal licensing or regulatory authority (including any
licensing or regulatory authority responsible for administering or dispensing
Medicaid or Medicare payments or any other third party payor billing or payment
policies, procedures, limitations or restrictions), or any other public or
private agency, including without limitation, any public or private
accreditation agency or organization.
"Agents": the collective reference to the Syndication Agent, the
Co-Documentation Agents and the Administrative Agent.
"Aggregate Exposure": with respect to any Lender at any time, an
amount equal to the sum of (a) the aggregate amount of such Lender's Commitments
then in effect, (b) if the Term Loan Commitments have been drawn or terminated,
the sum of the amount of such Lender's Available Term Loan Commitment plus the
amount of such Lender's Term Loans then outstanding, (c) if the Revolving Credit
Commitments have been terminated, the amount of such Lender's Revolving Credit
Loans then outstanding and (d) if the L/C Commitments have been fully drawn or
terminated, the amount of such Lender's Letters of Credit then outstanding.
"Aggregate Exposure Percentage": with respect to any Lender at any
time, the ratio (expressed as a percentage) of such Lender's Aggregate Exposure
at such time to the sum of the Aggregate Exposures of all Lenders at such time.
"Agreement": this Credit Agreement, as amended, supplemented or
otherwise modified from time to time.
"Applicable Margin": for (i) the L/C Facility, a rate per annum
equal to 1.50% and (ii) each Type of Loan under the Revolving Credit Facility
and the Term Loan Facility, the rate per annum set forth opposite such Facility
under the relevant column heading below:
Base Rate Eurodollar
Loans Loans
--------- ----------
Revolving Credit Facility.................0.50% 1.50%
Term Loan Facility........................0.50% 1.50%
"Application": an application requesting the Issuing Lender to
issue a Letter of Credit (including the Issuing Lender's form of Master
Letter of Credit Agreement), each substantially in the form of Exhibit J-1
and J-2, respectively.
"Asset Sale": any Disposition of Property or series of related
Dispositions of Property (excluding any such Disposition permitted by clause
(a), (b), (c), (d) or (e) of Section 7.5) which yields gross proceeds to the
Borrower or any of its Subsidiaries (valued at the initial principal amount
thereof in the case of non-cash proceeds consisting of notes or other debt
securities and valued at fair market value in the case of other non-cash
proceeds) in excess of $100,000.
3
"Assignment and Acceptance": as defined in Section 10.6(c).
"Assignee": as defined in Section 10.6(c).
"Assignor": as defined in Section 10.6(c).
"Available L/C Commitment": with respect to the Issuing Lender at
any time, an amount equal to the excess, if any, of (a) the L/C Commitment then
in effect over (b) the L/C Obligations then outstanding.
"Available Revolving Credit Commitment": with respect to any
Revolving Credit Lender at any time, an amount equal to the excess, if any, of
(a) such Lender's Revolving Credit Commitment then in effect over (b) such
Lender's Revolving Credit Loans then outstanding.
"Available Term Loan Commitment": with respect to any Term Loan
Lender at any time, an amount equal to the excess, if any, of (a) such Lender's
Term Loan Commitment then in effect over (b) the aggregate unpaid principal
amount of such Lender's Term Loans then outstanding.
"Base Rate": for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greater of (a) the Prime Rate in
effect on such day and (b) the Federal Funds Effective Rate in effect on such
day plus 1/2 of 1%. For purposes hereof: "Prime Rate" shall mean the prime
lending rate as set forth on the British Banking Association Telerate Page 5 (or
such other comparable publicly available page as may, in the reasonable opinion
of the Administrative Agent after written notice to the Borrower, replace such
page for the purpose of displaying such rate if such rate no longer appears on
the British Bankers Association Telerate page 5), as in effect from time to
time. The Prime Rate is a reference rate and does not necessarily represent the
lowest or best rate actually available. Any change in the Base Rate due to a
change in the Prime Rate or the Federal Funds Effective Rate shall be effective
as of the opening of business on the effective day of such change in the Prime
Rate or the Federal Funds Effective Rate, respectively.
"Base Rate Loans": Loans for which the applicable rate of interest
is based upon the Base Rate.
"Benefitted Lender": as defined in Section 10.7.
"Board": the Board of Governors of the Federal Reserve System of
the United States (or any successor).
"Borrower": as defined in the preamble hereto.
"Borrowing Date": any Business Day specified by the Borrower as
a date on which the Borrower requests the relevant Lenders to make Loans
hereunder.
"Borrowing Notice": with respect to any request for borrowing of
Loans hereunder, a notice from the Borrower, substantially in the form of,
and containing the information prescribed by, Exhibit I, delivered to the
Administrative Agent.
4
"Brookdale Facility Group": the collective reference to Brookdale
Living Communities, Inc., Alterra Healthcare Corporation, Fortress CCRC
Acquisition, LLC and FIT REN LLC.
"Business Day": (a) for all purposes other than as covered by clause
(b) below, a day other than a Saturday, Sunday or other day on which commercial
banks in New York City are authorized or required by law to close and (b) with
respect to all notices and determinations in connection with, and payments of
principal and interest on, Eurodollar Loans, any day which is a Business Day
described in clause (a) and which is also a day for trading by and between banks
in Dollar deposits in the interbank eurodollar market.
"Capital Expenditures": for any period, with respect to any Person,
the aggregate of all expenditures by such Person for the acquisition or leasing
(pursuant to a capital lease) of fixed or capital assets or additions to
equipment (including replacements, capitalized repairs and improvements during
such period) which are required to be capitalized under GAAP on a balance sheet
of such Person.
"Capital Expenditure Reserve": as at any date of determination, the
product of (a) $350 per senior living unit per annum, and (b) the number of
senior living units owned by the Borrower and its Subsidiaries during such
period measured at the end of the most recent calendar quarter ending prior to
such date of determination.
"Capital Lease Obligations": with respect to any Person, the
obligations of such Person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP;
and, for the purposes of this Agreement, the amount of such obligations at any
time shall be the capitalized amount thereof at such time determined in
accordance with GAAP.
"Capital Stock": any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants, rights or options to purchase any of the foregoing.
"Capitalized Loan Fees": with respect to the Borrower and its
Subsidiaries, and with respect to any period, (a) any up-front, closing or
similar fees paid by such Person in connection with the incurrence or
refinancing of Indebtedness during such period and (b) all other costs incurred
in connection with the incurrence or refinancing of Indebtedness during such
period, including, without limitation, appraisal fees paid to lenders, costs and
expenses incurred in connection with Hedge Agreements, engineering reports,
phase I environmental report and other report review fees paid to lenders and
legal fees, in each of the foregoing cases, that are capitalized on the balance
sheet of such Person in accordance with GAAP and amortized over the term of such
Indebtedness.
"Cash Equivalents": (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one
5
year from the date of acquisition; (b) certificates of deposit, time deposits,
eurodollar time deposits or overnight bank deposits having maturities of six
months or less from the date of acquisition issued by any Lender or by any
commercial bank organized under the laws of the United States of America or any
state thereof having combined capital and surplus of not less than $500,000,000;
(c) commercial paper of an issuer rated at least A-2 by Standard & Poor's
Ratings Services ("S&P") or P-2 by Moody's Investors Service, Inc. ("Moody's"),
or carrying an equivalent rating by a nationally recognized rating agency, if
both of the two named rating agencies cease publishing ratings of commercial
paper issuers generally, and maturing within six months from the date of
acquisition; (d) repurchase obligations of any Lender or of any commercial bank
satisfying the requirements of clause (b) of this definition, having a term of
not more than 30 days with respect to securities issued or fully guaranteed or
insured by the United States government; (e) securities with maturities of one
year or less from the date of acquisition issued or fully guaranteed by any
state, commonwealth or territory of the United States, by any political
subdivision or taxing authority of any such state, commonwealth or territory or
by any foreign government, the securities of which state, commonwealth,
territory, political subdivision, taxing authority or foreign government (as the
case may be) are rated at least A by S&P or A by Moody's; (f) securities with
maturities of six months or less from the date of acquisition backed by standby
letters of credit issued by any Lender or any commercial bank satisfying the
requirements of clause (b) of this definition; and (g) shares of money market
mutual or similar funds which invest in assets substantially all of which
satisfy the requirements of clauses (a) through (f) of this definition.
"Chambrel Portfolio": the portfolio of Properties comprised of
the real properties identified on Schedule 1.1B attached hereto.
"Change of Control": the occurrence of any of the following events:
(a) the Permitted Investors shall cease to have the power to vote or direct the
voting of securities having a majority of the ordinary voting power for the
election of directors of the Borrower (determined on a fully diluted basis); (b)
the Permitted Investors shall cease to own of record and beneficially an amount
of common stock of the Borrower equal to at least 51% of the amount of common
stock of the Borrower; (c) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")), excluding the Permitted Investors, shall become, or obtain
rights (whether by means or warrants, options or otherwise) to become, the
"beneficial owner" (as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange
Act) directly or indirectly, of more than 33?% of the outstanding common stock
of the Borrower; or (d) the board of directors of the Borrower shall cease to
consist of a majority of Continuing Directors.
"Closing Date": the date on which the conditions precedent set
forth in Section 5.1 shall have been satisfied.
"Co-Arrangers": as defined in the preamble hereto.
"Co-Documentation Agents": as defined in the preamble.
"Code": the Internal Revenue Code of 1986, as amended from time
to time.
6
"Collateral": all Property of the Loan Parties, now owned or
hereafter acquired, upon which a Lien is purported to be created by any Security
Document.
"Commitment": with respect to any Lender, each of the Term Loan
Commitment, the Revolving Credit Commitment and the L/C Commitment of such
Lender.
"Commonly Controlled Entity": an entity, whether or not
incorporated, that is under common control with the Borrower within the meaning
of Section 4001 of ERISA or is part of a group that includes the Borrower and
that is treated as a single employer under Section 414 of the Code.
"Compliance Certificate": a certificate duly executed by a
Responsible Officer, substantially in the form of Exhibit B.
"Consolidated Adjusted Debt": at any date, the sum of (a) Funded
Debt of the Borrower and its Subsidiaries on such date, determined on a
consolidated basis in accordance with GAAP plus (b) the product of Consolidated
Lease Expense for the period of four consecutive fiscal quarters most recently
ended on or prior to such date multiplied by eight.
"Consolidated Adjusted Leverage Ratio": as at the last day of any
period of four consecutive fiscal quarters of the Borrower, the ratio of (a)
Consolidated Adjusted Debt on such day to (b) Consolidated EBITDAR of the
Borrower and its Subsidiaries for such period provided;
(i) the Consolidated EBITDAR of any Person acquired by the Borrower
or its Subsidiaries during the last quarter of such four quarter period
shall be included on a pro forma basis (assuming the consummation of such
acquisition and the incurrence or assumption of any Indebtedness in
connection therewith occurred on the first day of such quarter) determined
on an annualized basis based on the most recent fiscal quarter of such
Person for which financial statements are available if the consolidated
balance sheet of such acquired Person and its consolidated Subsidiaries as
at the end of the period preceding the acquisition of such Person and the
related consolidated statements of income and stockholders' equity and of
cash flows for the period, in each case, to the extent available, in
respect of which Consolidated EBITDAR is to be calculated (x) have been
previously provided to the Administrative Agent and the Lenders and (y)
either (1) have been reported on without a qualification arising out of
the scope of the audit by independent certified public accountants of
nationally recognized standing or (2) have been found reasonably
acceptable by the Administrative Agent, provided that, the Consolidated
EBITDAR of any Person acquired by the Borrower and its Subsidiaries which
is included on a pro forma basis pursuant to this clause (i) shall be
calculated in such a manner to give effect to operating expense reductions
or increases or similar anticipated benefits or increases relating to
employee benefits, food and related supplies, insurance and general
administrative expenses, in each case, from such acquisition to the extent
(A)(1) directly attributable to such acquisition and (2) reasonably
expected by the Borrower to have a continuing impact on the Borrower and
its Subsidiaries and (B) that such adjustments and the basis therefor are
set forth in reasonable detail in a certificate of a Responsible Officer
of the Borrower reasonably satisfactory to the Administrative
7
Agent and dated the relevant date of determination which certifies that
the Borrower reasonably anticipates such expense reductions, increases or
other benefits will be realized, or all necessary steps for the
realization thereof taken, within twelve months following such date;
(ii) the Consolidated EBITDAR of any Person acquired during the
first, second or third quarters of such four quarter period shall be
deemed to be equal to Consolidated EBITDAR of such Person for the number
of full fiscal quarters elapsed since the date of acquisition multiplied
by 4/3, 2 and 4, respectively; and
(iii) the Consolidated EBITDAR of any Person Disposed of by the
Borrower or its Subsidiaries during such four quarter period shall be
excluded for such period (assuming the consummation of such Disposition
and the repayment of any Indebtedness in connection therewith occurred on
the first day of such period).
For the avoidance of doubt, the Consolidated EBITDAR of any Person acquired
during such period shall be included in Consolidated EBITDAR of the Borrower and
its Subsidiaries as determined pursuant to clauses (i) and (ii) of the proviso
in the immediately preceding sentence, without duplication, and shall not be
subject to the proviso in Section 7.1(b).
"Consolidated EBITDA": of any Person for any period, Consolidated
Net Income of such Person and its Subsidiaries for such period plus, without
duplication and to the extent reflected as a charge in the statement of such
Consolidated Net Income for such period, the sum of (a) income tax expense, (b)
interest expense of such Person and its Subsidiaries, amortization or write-off
of debt discount and debt issuance costs and commissions, discounts and other
fees and charges associated with Indebtedness whether paid, accrued or
capitalized and including, without limitation, the interest component of Capital
Lease Obligations, (c) depreciation and amortization expense, (d) net entrance
fees received, (e) non-cash compensation expense, (f) amortization of
intangibles (including, but not limited to, goodwill) and organization costs,
(g) any extraordinary, unusual or non-recurring expenses or losses (including,
whether or not otherwise includable as a separate item in the statement of such
Consolidated Net Income for such period, losses on sales of assets outside of
the ordinary course of business) and (h) any other non-cash charges, and minus,
to the extent included in the statement of such Consolidated Net Income for such
period, the sum of (a) interest income (except to the extent deducted in
determining such Consolidated Net Income), (b) any extraordinary, unusual or
non-recurring income or gains (including, whether or not otherwise includable as
a separate item in the statement of such Consolidated Net Income for such
period, gains on the sales of assets outside of the ordinary course of
business), (c) any other non-cash income and (d) any cash payments made during
such period in respect of items described in clause (e) above subsequent to the
fiscal quarter in which the relevant non-cash expenses or losses were reflected
as a charge in the statement of Consolidated Net Income, all as determined on a
consolidated basis.
"Consolidated EBITDAR": for any period, Consolidated EBITDA of the
Borrower and its Subsidiaries for such period plus Consolidated Lease Expense of
the Borrower and its Subsidiaries for such period.
8
"Consolidated Fixed Charge Coverage Ratio": for any period, the
ratio of (a) Consolidated EBITDAR of the Borrower and its Subsidiaries for such
period minus the Capital Expenditure Reserve as of the last day of such period
to (b) Consolidated Fixed Charges for such period plus Consolidated Lease
Expense for such period provided;
(i) the Consolidated EBITDA of any Person acquired by the Borrower
or its Subsidiaries during the last quarter of such four quarter period
shall be included on a pro forma basis (assuming the consummation of such
acquisition and the incurrence or assumption of any Indebtedness in
connection therewith occurred on the first day of such quarter) determined
on an annualized basis based on the most recent fiscal quarter of such
Person for which financial statements are available if the consolidated
balance sheet of such acquired Person and its consolidated Subsidiaries as
at the end of the period preceding the acquisition of such Person and the
related consolidated statements of income and stockholders' equity and of
cash flows for the period, in each case, to the extent available, in
respect of which Consolidated EBITDA is to be calculated (x) have been
previously provided to the Administrative Agent and the Lenders and (y)
either (1) have been reported on without a qualification arising out of
the scope of the audit by independent certified public accountants of
nationally recognized standing or (2) have been found reasonably
acceptable by the Administrative Agent, provided that, the Consolidated
EBITDA of any Person acquired by the Borrower and its Subsidiaries which
is included on a pro forma basis pursuant to this clause (i) shall be
calculated in such a manner to give effect to operating expense reductions
or increases or similar anticipated benefits or increases relating to
employee benefits, food and related supplies, insurance and general
administrative expenses, in each case, from such acquisition to the extent
(A)(1) directly attributable to such acquisition and (2) reasonably
expected by the Borrower to have a continuing impact on the Borrower and
its Subsidiaries and (B) that such adjustments and the basis therefor are
set forth in reasonable detail in a certificate of a Responsible Officer
of the Borrower reasonably satisfactory to the Administrative Agent and
dated the relevant date of determination which certifies that the Borrower
reasonably anticipates such expense reductions, increases or other
benefits will be realized, or all necessary steps for the realization
thereof taken, within twelve months following such date;
(ii) the Consolidated EBITDA of any Person acquired during the
first, second or third quarters of such four quarter period shall be
deemed to be equal to Consolidated EBITDA of such Person for the number of
full fiscal quarters elapsed since the date of acquisition multiplied by
4/3, 2 and 4, respectively; and
(iii) the Consolidated EBITDA of any Person Disposed of by the
Borrower or its Subsidiaries during such period shall be excluded for such
four quarter period (assuming the consummation of such Disposition and the
repayment of any Indebtedness in connection therewith occurred on the
first day of such period).
For the avoidance of doubt, the Consolidated EBITDA of any Person acquired
during such period shall be included in Consolidated EBITDA of the Borrower and
its Subsidiaries as determined pursuant to clauses (i) and (ii) of the proviso
in the immediately preceding sentence, without duplication and shall not be
subject to the proviso in Section 7.1(c).
9
"Consolidated Fixed Charges": for any period, the sum (without
duplication) of (a) Consolidated Interest Expense of the Borrower and its
Subsidiaries for such period, (b) cash income taxes actually paid by the
Borrower or any of its Subsidiaries on a consolidated basis during such period,
(c) scheduled payments made during such period on account of principal of
Indebtedness of the Borrower or any of its Subsidiaries, (d) dividends accrued
(whether or not declared or payable) on the preferred stock of the Borrower and
its Subsidiaries during such period and (e) the Borrower's and its Subsidiaries'
pro rata share of all expenses and payments referred to in the preceding clauses
(a) and (b) of any unconsolidated Person in which they have an equity interest.
"Consolidated Interest Expense": of any Person for any period, total
cash interest expense (including that attributable to Capital Lease Obligations)
of such Person and its Subsidiaries for such period with respect to all
outstanding Indebtedness of such Person and its Subsidiaries (including, without
limitation, all commissions, discounts and other fees and charges owed by such
Person with respect to letters of credit and bankers' acceptance financing and
net costs of such Person under Hedge Agreements (but only to the extent included
in interest expense in such Person's financial statement and to the extent
actually paid) in respect of interest rates to the extent such net costs are
allocable to such period in accordance with GAAP).
"Consolidated Lease Expense": for any period, the aggregate amount
of fixed and contingent rentals payable by the Borrower and its Subsidiaries for
such period with respect to leases of real and personal property, determined on
a consolidated basis in accordance with GAAP, provided that payments in respect
of Capital Lease Obligations shall not constitute Consolidated Lease Expense.
"Consolidated Leverage Ratio": as at the last day of any period of
four consecutive fiscal quarters of the Borrower, the ratio of (a) Consolidated
Total Debt on such day to (b) Consolidated EBITDA of the Borrower and its
Subsidiaries for such period provided;
(i) the Consolidated EBITDA of any Person acquired by the Borrower
or its Subsidiaries during the last quarter of such four quarter period
shall be included on a pro forma basis (assuming the consummation of such
acquisition and the incurrence or assumption of any Indebtedness in
connection therewith occurred on the first day of such quarter) determined
on an annualized basis based on the most recent fiscal quarter of such
Person for which financial statements are available if the consolidated
balance sheet of such acquired Person and its consolidated Subsidiaries as
at the end of the period preceding the acquisition of such Person and the
related consolidated statements of income and stockholders' equity and of
cash flows for the period, in each case, to the extent available, in
respect of which Consolidated EBITDA is to be calculated (x) have been
previously provided to the Administrative Agent and the Lenders and (y)
either (1) have been reported on without a qualification arising out of
the scope of the audit by independent certified public accountants of
nationally recognized standing or (2) have been found reasonably
acceptable by the Administrative Agent, provided that, the Consolidated
EBITDA of any Person acquired by the Borrower and its Subsidiaries which
is included on a pro forma basis pursuant to this clause (i) shall be
calculated in such a manner to give effect to operating expense reductions
or increases or similar anticipated benefits or increases relating to
employee benefits, food and related supplies,
10
insurance and general administrative expenses, in each case, from such
acquisition to the extent (A)(1) directly attributable to such acquisition
and (2) reasonably expected by the Borrower to have a continuing impact on
the Borrower and its Subsidiaries and (B) that such adjustments and the
basis therefor are set forth in reasonable detail in a certificate of a
Responsible Officer of the Borrower reasonably satisfactory to the
Administrative Agent and dated the relevant date of determination which
certifies that the Borrower reasonably anticipates such expense
reductions, increases or other benefits will be realized, or all necessary
steps for the realization thereof taken, within twelve months following
such date;
(ii) the Consolidated EBITDA of any Person acquired during the
first, second or third quarters of such four quarter period shall be
deemed to be equal to Consolidated EBITDA of such Person for the number of
full fiscal quarters elapsed since the date of acquisition multiplied by
4/3, 2 and 4, respectively; and
(iii) the Consolidated EBITDA of any Person Disposed of by the
Borrower or its Subsidiaries during such four quarter period shall be
excluded for such period (assuming the consummation of such Disposition
and the repayment of any Indebtedness in connection therewith occurred on
the first day of such period).
For the avoidance of doubt, the Consolidated EBITDA of any Person acquired
during such period shall be included in Consolidated EBITDA of the Borrower and
its Subsidiaries as determined pursuant to clauses (i) and (ii) of the proviso
in the immediately preceding sentence, without duplication and shall not be
subject to the proviso in Section 7.1(a).
"Consolidated Net Income": of any Person for any period, the
consolidated net income (or loss) of such Person and its Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP; provided,
that in calculating Consolidated Net Income of the Borrower and its consolidated
Subsidiaries for any period, there shall be excluded (a) the income (or deficit)
of any Person accrued prior to the date it becomes a Subsidiary of the Borrower
or is merged into or consolidated with the Borrower or any of its Subsidiaries,
(b) the income (or deficit) of any Person (other than a Subsidiary of the
Borrower) in which the Borrower or any of its Subsidiaries has an ownership
interest, except to the extent that any such income is actually received by the
Borrower or such Subsidiary in the form of dividends or similar distributions
and (c) the undistributed earnings of any Subsidiary of the Borrower to the
extent that the declaration or payment of dividends or similar distributions by
such Subsidiary is not at the time permitted by the terms of any Contractual
Obligation (other than under any Loan Document) or Requirement of Law applicable
to such Subsidiary.
"Consolidated Revenue": the amount identified as revenue on the most
recent consolidated financial statements of the Borrower delivered to the
Administrative Agent pursuant to Section 5.1(b) or 6.1(a).
"Consolidated Total Debt": at any date, without duplication, the
aggregate principal amount of all Indebtedness of the Borrower and its
Subsidiaries at such date, determined on a consolidated basis in accordance with
GAAP.
11
"Continuing Directors": the directors of the Borrower on the Closing
Date, and each other director of the Borrower, if, in each case, such other
director's nomination for election to the board of directors of the Borrower is
recommended by at least 66?% of the then Continuing Directors or such other
director receives the vote of the Permitted Investors in his or her election by
the shareholders of the Borrower.
"Contractual Obligation": 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 Investment Affiliate": as to any Person, any other Person
that (a) directly or indirectly, is in control of, is controlled by, or is under
common control with, such Person and (b) is organized by such Person primarily
for the purpose of making equity or debt investments in one or more companies.
For purposes of this definition, "control" of a Person means the power, directly
or indirectly, to direct or cause the direction of the management and policies
of such Person, whether by contract or otherwise.
"Default": any of the events specified in Section 8, whether or not
any requirement for the giving of notice, the lapse of time, or both, has been
satisfied.
"Deficiency Notices": all notices and other written communications
from any Agency or Governmental Authority which licenses, regulates, certifies,
accredits or evaluates the Borrower and its Subsidiaries, the Living Facilities
or the operation of the Living Facilities by the Borrower and its Subsidiaries
alleging that the Borrower or any of its Subsidiaries, any of the Living
Facilities or the operation of the Living Facilities by the Borrower or any of
its Subsidiaries in whole or in part fails to comply or, if corrective action is
not taken, shall fail to comply with, any or all of the Agency's or Governmental
Authority's requirements for and conditions of licensing, regulation,
certification or accreditation by or participation in programs of the Agency or
Governmental Authority or otherwise relating to the continuous operation of all
or any portion of the Living Facilities or the programs of the Borrower and its
Subsidiaries or the eligibility or entitlement of the Borrower and its
Subsidiaries to receive reimbursement from any Agency or Governmental Authority.
"Depreciation and Amortization Expense": for any period, without
duplication, the sum for such period of (i) total depreciation and amortization
expense, whether paid or accrued, of the Borrower and its Subsidiaries during
such period, plus (ii) the Borrower's and its Subsidiaries' pro rata share of
depreciation and amortization expenses of Unconsolidated Joint Ventures for such
period. For purposes of this definition, the Borrower's and its Subsidiaries'
pro rata share of depreciation and amortization expense of any Unconsolidated
Joint Venture shall be deemed equal to the product of (i) the depreciation and
amortization expense of such Unconsolidated Joint Venture, multiplied by (ii)
the percentage of the total outstanding Capital Stock of such Unconsolidated
Joint Venture held by the Borrower or such Subsidiary, expressed as a decimal.
"Derivatives Counterparty": as defined in Section 7.6.
12
"Disposition": with respect to any Property, any sale, lease, sale
and leaseback, assignment, conveyance, transfer or other disposition thereof;
and the terms "Dispose" and "Disposed of" shall have correlative meanings.
"Disqualified Stock": any capital stock, warrants, options or other
rights to acquire capital stock (but excluding any debt security which is
convertible, or exchangeable, for capital stock), which, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable prior to the Revolving Credit Termination Date, pursuant to a sinking
fund obligation or otherwise, or is or may be redeemable at the option of the
holder thereof, in whole or in part, prior to the Revolving Credit Termination
Date.
"Dollars" and "$": dollars in lawful currency of the United States
of America.
"Domestic Subsidiary": any Subsidiary of the Borrower organized
under the laws of any jurisdiction within the United States of America.
"Environmental Laws": any and all laws, rules, orders, regulations,
statutes, ordinances, guidelines, codes, decrees, agreements or other legally
enforceable requirements (including, without limitation, common law) of any
international authority, foreign government, the United States, or any state,
local, municipal or other governmental authority, regulating, relating to or
imposing liability or standards of conduct concerning protection of the
environment or of human health, or employee health and safety, as has been, is
now, or may at any time hereafter be, in effect.
"Environmental Permits": any and all permits, licenses, approvals,
registrations, notifications, exemptions and other authorizations required under
any Environmental Law.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ESA": as defined in Section 6.15.
"Eurocurrency Reserve Requirements": for any day, the aggregate
(without duplication) of the maximum rates (expressed as a decimal fraction) of
reserve requirements in effect on such day (including, without limitation,
basic, supplemental, marginal and emergency reserves) under any regulations of
the Board or other Governmental Authority having jurisdiction with respect
thereto dealing with reserve requirements prescribed for eurocurrency funding
(currently referred to as "Eurocurrency Liabilities" in Regulation D of the
Board) maintained by a member bank of the Federal Reserve System.
"Eurodollar Base Rate": with respect to each day during each
Interest Period, the rate per annum determined on the basis of the rate for
deposits in Dollars for a period equal to such Interest Period commencing on the
first day of such Interest Period appearing on Page 3750 of the Telerate screen
as of 11:00 a.m., London time, two Business Days prior to the beginning of such
Interest Period. In the event that such rate does not appear on Page 3750 of the
Telerate screen (or otherwise on such screen), the "Eurodollar Base Rate" for
purposes of this definition shall be determined by reference to such other
comparable publicly available service for displaying eurodollar rates as may be
reasonably selected by the Administrative Agent.
13
"Eurodollar Loans": Loans for which the applicable rate of interest
is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each Interest
Period, a rate per annum determined for such day in accordance with the
following formula (rounded upward to the nearest 1/100th of 1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Tranche": the collective reference to Eurodollar Loans
under a particular Facility the then current Interest Periods with respect to
all of which begin on the same date and end on the same later date (whether or
not such Loans shall originally have been made on the same day).
"Event of Default": any of the events specified in Section 8,
provided that any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.
"Excluded Guarantee Subsidiary": any Subsidiary of the Borrower
which is prohibited from providing a guarantee of the Obligations pursuant to
(i) with respect to any Subsidiary existing as of the date hereof, documentation
evidencing Indebtedness permitted by Section 7.2(d) or any other agreement,
document or instrument to which such Subsidiary (or its Properties) is a party
or otherwise bound as of the date hereof and (ii) with respect to any Subsidiary
acquired or created to consummate any Acquisition permitted by Section 7.7(f)
after the date hereof, documentation evidencing Indebtedness assumed by such
Subsidiary in connection with such Acquisition or any other agreement, document
or instrument to which such Subsidiary (or its Properties) is a party or
otherwise bound assumed in connection with such Acquisition.
"Excluded Pledge Subsidiary": any Subsidiary of the Borrower the
Capital Stock of which is subject to an effective negative pledge prohibiting a
pledge of 49% or more of its Capital Stock pursuant to (i) with respect to any
Subsidiary existing as of the date hereof, documentation evidencing Indebtedness
permitted by Section 7.2(d) or any other agreement, document or instrument to
which such Subsidiary (or its Properties) is a party or otherwise bound as of
the date hereof and (ii) with respect to any Subsidiary acquired or created to
consummate any Acquisition permitted by Section 7.7(f) after the date hereof,
documentation evidencing Indebtedness assumed by such Subsidiary in connection
with such Acquisition or any other agreement, document or instrument to which
such Subsidiary (or its Properties) is a party or otherwise bound assumed in
connection with such Acquisition.
"Excluded Taxes": as defined in Section 2.18(a).
14
"Existing Credit Facility": the Loan Agreement, dated as of October
19, 2004, among Brookdale Living Communities, Inc., as borrower, and LaSalle
Bank National Association, as lender, as amended, supplemented or otherwise
modified prior to the date hereof.
"Existing Letters of Credit": the letters of credit described in
Schedule 1.1C.
"Extension of Credit": with respect to any Lender, a Loan made, or
issuance of a Letter of Credit, under the Commitments of such Lender.
"Facility": each of (a) the Term Loan Commitments and the Term Loans
made thereunder (the "Term Loan Facility"), (b) the Revolving Credit Commitments
and the Revolving Credit Loans made thereunder (the "Revolving Credit Facility")
and (c) the L/C Commitments and the Letters of Credit issued thereunder (the
"L/C Facility").
"Federal Funds Effective Rate": for any day, the weighted average of
the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for the day of such transactions received by the Administrative Agent
from three federal funds brokers of recognized standing selected by it.
"Foreign Subsidiary" any Subsidiary of the Borrower that is not a
Domestic Subsidiary.
"Fortress CCRC Portfolio": Fortress CCRC Acquisition LLC.
"FQ1", "FQ2", "FQ3", and "FQ4": when used with a numerical year
designation, means the first, second, third or fourth fiscal quarters,
respectively, of such fiscal year of the Borrower (e.g., FQ4 2006 means the
fourth fiscal quarter of the Borrower's 2006 fiscal year, which ends December
31, 2006).
"Funded Debt": with respect to any Person, all Indebtedness of such
Person of the types described in clauses (a) through (e) of the definition of
"Indebtedness" in this Section 1.1.
"Funding Office": the office specified from time to time by the
Administrative Agent as its funding office by written notice to the Borrower
and the Lenders.
"GAAP": generally accepted accounting principles in the United
States of America as in effect from time to time.
"Governmental Authority": any nation or government, any federal,
state, local or other political subdivisions thereof, any agency, authority,
instrumentality, intermediary, regulatory body, court, central bank or other
entity exercising executive, legislative, judicial, taxing, regulatory,
reimbursement or administrative functions of or pertaining to government, any
securities exchange and any self-regulatory organization (including the National
Association of Insurance Commissioners).
15
"Grand Court Subsidiary": any Subsidiary of the Borrower which is a
party to, or the subject of, the litigation listed on Schedule 4.6.
"Guarantee and Pledge Agreement": the Guarantee and Pledge Agreement
to be executed and delivered by the Borrower and each Subsidiary Guarantor,
substantially in the form of Exhibit A, as the same may be amended, supplemented
or otherwise modified from time to time.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation, including a reimbursement, counterindemnity or similar
obligation, of the guaranteeing person that guarantees or in effect guarantees,
or which is given to induce the creation of a separate obligation by another
Person (including any bank under any letter of credit) that guarantees or in
effect guarantees any Indebtedness, leases, dividends or other obligations (the
"primary obligations") of any other third Person (the "primary obligor") in any
manner, whether directly or indirectly, including, without limitation, any
obligation of the guaranteeing person, whether or not contingent, (i) to
purchase any such primary obligation or any Property constituting direct or
indirect security therefor, (ii) to advance or supply funds (1) for the purchase
or payment of any such primary obligation or (2) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase Property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the owner of any such
primary obligation against loss in respect thereof; provided, however, that the
term Guarantee Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of any
Guarantee Obligation of any guaranteeing person shall be deemed to be the lower
of (a) an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Guarantee Obligation is made and (b) the
maximum amount for which such guaranteeing person may be liable pursuant to the
terms of the instrument embodying such Guarantee Obligation, unless such primary
obligation and the maximum amount for which such guaranteeing person may be
liable are not stated or determinable, in which case the amount of such
Guarantee Obligation shall be such guaranteeing person's maximum reasonably
anticipated liability in respect thereof as determined by the Borrower in good
faith.
"Guarantors": the collective reference to the Subsidiary Guarantors.
"Hedge Agreements": all interest rate or currency swaps, caps or
collar agreements, foreign exchange agreements, commodity contracts or similar
arrangements entered into by the Borrower or its Subsidiaries providing for
protection against fluctuations in interest rates, currency exchange rates,
commodity prices or the exchange of nominal interest obligations, either
generally or under specific contingencies.
"HIPAA": the Heath Insurance Portability and Accountability Act of
1996, as amended, and the rules and regulations promulgated thereunder.
"Inactive Subsidiary": any Subsidiary of the Borrower which either
(i) in the reasonable judgment of the Borrower, has assets of deminimus value
and no independent
16
operations or (ii) has been created by the Borrower and its Subsidiaries solely
for the purpose of executing a letter of intent, purchase agreement or similar
agreement or otherwise for the purpose of any acquisition, provided that, such
Subsidiary shall cease to be an Inactive Subsidiary upon the consummation of
such acquisition except to the extent such Subsidiary qualifies as an Inactive
Subsidiary pursuant to subsection (i) of this definition.
"Indebtedness": of any Person at any date, without duplication, (a)
all indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of Property or services (other than trade
payables incurred in the ordinary course of such Person's business), (c) all
obligations of such Person evidenced by notes, bonds, debentures or other
similar instruments, (d) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to Property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such Property), (e) all Capital Lease Obligations of such Person, (f)
all obligations of such Person, contingent or otherwise, as an account party or
applicant under acceptance, letter of credit, surety bond or similar facilities,
(g) all obligations of such Person, contingent or otherwise, to purchase,
redeem, retire or otherwise acquire for value any Capital Stock of such Person,
(h) all Guarantee Obligations of such Person in respect of obligations of the
kind referred to in clauses (a) through (g) above, (i) all obligations of the
kind referred to in clauses (a) through (h) above secured by (or for which the
holder of such obligation has an existing right, contingent or otherwise, to be
secured by) any Lien on Property (including, without limitation, accounts and
contract rights) owned by such Person, whether or not such Person has assumed or
become liable for the payment of such obligation and (j) for the purposes of
Section 8(e) only, all obligations of such Person in respect of Hedge
Agreements. The Indebtedness of any Person shall include the Indebtedness of any
other entity (including any partnership in which such Person is a general
partner) to the extent such Person is liable therefor as a result of such
Person's ownership interest in or other relationship with such entity, except to
the extent the terms of such Indebtedness expressly provide that such Person is
not liable therefor. For the avoidance of doubt, "Indebtedness" shall not
include any guarantee by the Borrower or any of its Subsidiaries of an operating
lease.
"Indemnified Liabilities": as defined in Section 10.5.
"Indemnitee": as defined in Section 10.5.
"Initial Maturity Date": as defined in Section 2.6.
"Insolvency": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intangible Assets": assets that are considered intangible assets
under GAAP, including customer lists, goodwill, computer software, copyrights,
trade names, trademarks, patents and Capitalized Loan Fees.
"Intellectual Property": the collective reference to all rights,
priorities and privileges relating to intellectual property, whether arising
under United States, multinational or
17
foreign laws or otherwise, including, without limitation, copyrights, copyright
licenses, patents, patent licenses, trademarks, trademark licenses, technology,
know-how and processes, and all rights to sue at law or in equity for any
infringement or other impairment thereof, including the right to receive all
proceeds and damages therefrom.
"Interest Payment Date": (a) as to any Base Rate Loan, the last day
of each March, June, September and December to occur while such Loan is
outstanding and the final maturity date of such Loan, (b) as to any Eurodollar
Loan having an Interest Period of three months or shorter, the last day of such
Interest Period, (c) as to any Eurodollar Loan having an Interest Period longer
than three months, each day that is three months, or a whole multiple thereof,
after the first day of such Interest Period and the last day of such Interest
Period and (d) as to any Loan (other than any Revolving Credit Loan that is a
Base Rate Loan), the date of any repayment or prepayment made in respect
thereof.
"Interest Period": as to any Eurodollar Loan, (a) initially, the
period commencing on the borrowing or conversion date, as the case may be, with
respect to such Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower in its notice of borrowing or notice of
conversion, as the case may be, given with respect thereto; and (b) thereafter,
each period commencing on the last day of the next preceding Interest Period
applicable to such Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower by irrevocable notice to the
Administrative Agent not later than 1:00 p.m., New York City time, on the date
that is three Business Days prior to the last day of the then current Interest
Period with respect thereto; provided that, all of the foregoing provisions
relating to Interest Periods are subject to the following:
(1) if any Interest Period would otherwise end on a day that is not
a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month in which event such
Interest Period shall end on the immediately preceding Business Day;
(2) any Interest Period that would otherwise extend beyond the Term
Loan Maturity Date or beyond the date final payment is due on the Term
Loans shall end on the Term Loan Maturity Date or such due date, as
applicable; and
(3) 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.
"Investments": as defined in Section 7.7.
"Issuing Lender": LaSalle Bank National Association.
"Joint Venture": a joint venture, partnership, limited liability
company, business trust or similar arrangement, whether in corporate,
partnership, limited liability company or other legal form, in each case, which
is not directly or indirectly wholly-owned by the Borrower.
18
"L/C Collateral Account": as defined in Section 3.1.
"L/C Commitment": as to the Issuing Lender, the obligation of the
Issuing Lender to issue Letters of Credit in an aggregate face amount at any
time outstanding not to exceed the amount set forth under the heading "L/C
Commitment" opposite the Issuing Lender's name on Schedule 1 to the Lender
Addendum delivered by the Issuing Lender, as the same may be changed from time
to time pursuant to the terms hereof. The original aggregate amount of the L/C
Commitment is $60,000,000.
"L/C Commitment Period": the period from and including the Closing
Date to the L/C Termination Date.
"L/C Facility": as defined in the definition of "Facility" in this
Section 1.1.
"L/C Fee Payment Date": the last day of each March, June, September
and December and the last day of the Revolving Credit Commitment Period.
"L/C Obligations": at any time, an amount equal to the sum of (a)
the aggregate then undrawn and unexpired amount of the then outstanding Letters
of Credit and (b) the aggregate amount of drawings under Letters of Credit that
have not then been reimbursed pursuant to Section 3.4.
"L/C Percentage": with respect to the Issuing Lender, 100%.
"L/C Termination Date": February 10, 2007, or if such date is
extended pursuant to Section 2.6, August 10, 2007.
"Lead Arranger": as defined in the preamble hereto.
"Lehman Entity": any of Lehman Commercial Paper Inc. or any of
its affiliates (including Syndicated Loan Funding Trust).
"Lender Addendum": with respect to any initial Lender, a Lender
Addendum, substantially in the form of Exhibit H, to be executed and
delivered by such Lender on the Closing Date as provided in Section 10.17.
"Lenders": as defined in the preamble hereto.
"Letters of Credit": as defined in Section 3.1.
"Licenses": any and all certificates of need, licenses, operating
permits, provider agreements, franchises, and other licenses, authorizations,
certifications, permits, or approvals, other than construction permits, issued
or required by, or on behalf of, any Governmental Authority now existing or at
any time hereafter issued, with respect to the establishment, acquisition,
construction, renovation, expansion, leasing, ownership, use, occupancy and/or
operation of the Living Facilities, accreditation of the Living Facilities, any
and all operating licenses issued by any Governmental Authority, any and all
pharmaceutical licenses and other licenses related to the purchase, dispensing,
storage, prescription or use of drugs, medications,
19
and other "controlled substances," and any and all licenses relating to the
operation of food or beverage facilities or amenities, if any.
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement and any capital lease having
substantially the same economic effect as any of the foregoing).
"Living Facilities": collectively, the assisted living facilities,
independent living facilities, skilled nursing facilities and continuing care
retirement communities owned, leased or operated by the Borrower and its
Subsidiaries.
"Loan": any loan made by any Lender pursuant to this Agreement.
"Loan Documents": this Agreement, the Security Documents, the
Applications and the Notes.
"Loan Parties": the Borrower and each Subsidiary of the Borrower
that is a party to a Loan Document.
"Majority Facility Lenders": with respect to the Term Loan Facility
or the Revolving Credit Facility, the holders of more than 50% of the aggregate
unpaid principal amount of the Term Loans or the Revolving Credit Loans, as the
case may be, outstanding under such Facility (or, (a) in the case of the
Revolving Credit Facility, prior to any termination of the Revolving Credit
Commitments, the holders of more than 50% of the Total Revolving Credit
Commitments or (b) in the case of the Term Loan Facility, prior to the Term Loan
Commitments being drawn or the termination of the Term Loan Commitments, holders
of more than 50% of the sum of (x) the aggregate Available Term Loan Commitments
of all the Lenders plus (y) the aggregate principal amount of the Term Loans
then outstanding).
"Majority Revolving Credit Facility Lenders": the Majority Facility
Lenders in respect of the Revolving Credit Facility.
"Management Agreement": any management agreement effective as of the
date hereof or hereafter entered into by the Borrower or any of its Subsidiaries
concerning the management and operation of any Living Facility.
"Management Subsidiary": any Subsidiary of the Borrower (i) whose
operations are related exclusively to the management and/or operation (pursuant
to a management agreement) of facilities owned or leased by the Borrower, any
Subsidiary of the Borrower or any other Person, (ii) is the direct or indirect
parent of a Subsidiary described in (i) above, (iii) is required pursuant to
applicable Requirements of Law solely to permit the Borrower and its
Subsidiaries to conduct business and operations in the relevant state, (iv)
whose operations are related exclusively to serving as employer for certain
employees of Borrower or any Subsidiary of the Borrower and has de minimis
assets or (v) whose operations are related exclusively to real estate
development and sales and has de minimis assets.
20
"Material Adverse Effect": a material adverse effect on (a) the
business, assets, property, operations or condition (financial or otherwise) of
the Borrower and its Subsidiaries taken as a whole or (b) the validity or
enforceability of this Agreement or any of the other Loan Documents or the
rights or remedies of the Agents or the Lenders hereunder or thereunder.
"Material Environmental Amount": an amount or amounts payable by the
Borrower and/or any of its Subsidiaries, in the aggregate in excess of
$1,000,000, for: costs to comply with any Environmental Law; costs of any
investigation, and any remediation, of any Material of Environmental Concern;
and compensatory damages (including, without limitation damages to natural
resources), punitive damages, fines, and penalties pursuant to any Environmental
Law.
"Materials of Environmental Concern": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products (virgin or
unused), polychlorinated biphenyls, urea-formaldehyde insulation, asbestos,
pollutants, contaminants, radioactivity, and any other materials, substances or
forces of any kind, whether or not any such material, substance or force is
defined as hazardous or toxic under any Environmental Law, that is regulated
pursuant to or could reasonably be expected to give rise to liability under any
Environmental Law.
"Medicaid": Title XIX of the Social Security Act, which was enacted
in 1965 to provide a cooperative federal-state program for low income and
medically indigent persons, which is partially funded by the federal government
and administered by the states.
"Medicare": Title XVIII of the Social Security Act, which was
enacted in 1965 to provide a federally funded and administered health program
for the aged and certain disabled persons.
"Minority Interests": that portion of "minority interests" as set
forth in the Borrower's financial statements which is attributable to the
ownership interest in the Borrower of Persons other than the Permitted
Investors.
"Multiemployer Plan": a Plan that is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds": (a) in connection with any Asset Sale or any
Recovery Event, the proceeds thereof in the form of cash and Cash Equivalents
(including any such proceeds received by way of deferred payment of principal
pursuant to a note or installment receivable or purchase price adjustment
receivable or otherwise, but only as and when received) of such Asset Sale or
Recovery Event, net of attorneys' fees, accountants' fees, investment banking
fees, amounts required to be applied to the repayment of Indebtedness secured by
a Lien expressly permitted hereunder on any asset which is the subject of such
Asset Sale or Recovery Event (other than any Lien pursuant to a Security
Document) and other customary fees and expenses actually incurred in connection
therewith and net of taxes paid or reasonably estimated to be payable as a
result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements), (b) in connection with any
issuance or sale of equity securities or debt securities or instruments or the
incurrence of loans, the cash proceeds received
21
from such issuance or incurrence, net of attorneys' fees, investment banking
fees, accountants' fees, underwriting discounts and commissions and other
customary fees and expenses actually incurred in connection therewith and (c) in
connection with any Purchase Price Refund, the cash amount thereof, net of any
expenses incurred in the collection thereof.
"Non-Excluded Taxes": as defined in Section 2.18(a).
"Non-U.S. Lender": as defined in Section 2.18(d).
"Note": any promissory note evidencing any Loan.
"Obligations": the unpaid principal of and interest on (including,
without limitation, interest accruing after the maturity of the Loans and
Reimbursement Obligations and interest accruing after the filing of any petition
in bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to the Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) the Loans, the
Reimbursement Obligations and all other obligations and liabilities of the
Borrower to the Administrative Agent or to any Lender or any Qualified
Counterparty, whether direct or indirect, absolute or contingent, due or to
become due, or now existing or hereafter incurred, which may arise under, out
of, or in connection with, this Agreement, any other Loan Document, the Letters
of Credit, any Specified Hedge Agreement or any other document made, delivered
or given in connection herewith or therewith, whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses
(including, without limitation, all fees, charges and disbursements of counsel
to the Administrative Agent or to any Lender that are required to be paid by the
Borrower pursuant hereto) or otherwise; provided, that (i) obligations of the
Borrower or any Subsidiary under any Specified Hedge Agreement shall be secured
and guaranteed pursuant to the Security Documents only to the extent that, and
for so long as, the other Obligations are so secured and guaranteed and (ii) any
release of Collateral or Guarantors effected in the manner permitted by this
Agreement shall not require the consent of holders of obligations under
Specified Hedge Agreements.
"Operating Agreements and Management Contracts": any and all
contracts and agreements in effect as of the date hereof or at any time
hereafter entered into by the Borrower and its Subsidiaries with respect to the
establishment, acquisition, construction, renovation, expansion, ownership,
operation, maintenance, use or management of the Living Facilities or otherwise
concerning the operations and business of the Living Facilities, including,
without limitation, any Management Agreement, any and all provider agreements,
service and maintenance contracts, any employment contracts, any and all
management and operating agreements, any and all consulting agreements,
laboratory servicing agreements, pharmaceutical contracts, physician, other
clinician or other professional services or provider contracts, therapy service
contracts, food and beverage service contracts, and other contracts for the
operation and maintenance of, or provision of services to or by, the Living
Facilities.
"Other Taxes": any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement or any other Loan Document
(excluding, in each case, amounts imposed on an assignment, a grant of a
participation or other transfer of an interest in any Loan or Loan Document),
except pursuant to Section 2.21.
22
"Participant": as defined in Section 10.6(b).
"Payment Office": the office specified from time to time by the
Administrative Agent as its payment office by written notice to the Borrower and
the Lenders.
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA (or any successor).
"Permitted Investors": the collective reference to Fortress
Investment Holdings LLC and its Control Investment Affiliates, provided that,
the definition of "Permitted Investors" shall not include any Control Investment
Affiliate whose primary purpose is the operation of an on-going business
(excluding any business whose primary purpose is the investment of capital or
assets).
"Person": an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture, Governmental Authority or other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan that is
covered by ERISA and in respect of which the Borrower or a Commonly Controlled
Entity is (or, if such plan were terminated at such time, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Pledged Stock": as defined in the Guarantee and Pledge Agreement.
"Pro Forma Balance Sheet": as defined in Section 4.1(a).
"Pro Forma Compliance": on any date of determination, with respect
to any event, compliance by the Borrower and its Subsidiaries with the financial
covenants set forth in Section 7.1 assuming that such event had occurred on the
first day of the four consecutive quarter period for which financial statements
are available, provided that, in the case of any event occurring before March
31, 2006, such Pro Forma Compliance shall be determined based on the most
recently completed four consecutive quarter period of the Borrower for which
financial statements are available assuming that the financial covenants set
forth in Section 7.1 were in effect on December 31, 2005.
"Projections": as defined in Section 6.2(c).
"Property": any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible,
including, without limitation, Capital Stock.
"Prudential Portfolio": FIT REN LLC.
23
"Purchase Price Refund": any amount received by the Borrower or any
Subsidiary as a result of a purchase price adjustment or similar event in
connection with any acquisition of Property by the Borrower or any Subsidiary.
"Qualified Counterparty": with respect to any Specified Hedge
Agreement, any counterparty thereto that, at the time such Specified Hedge
Agreement was entered into, was a Lender or an affiliate of a Lender.
"Recourse Indebtedness": any Indebtedness, to the extent that
recourse of the applicable lender for non-payment is not limited to such
lender's Liens on a particular asset or group of assets (except to the extent
the Property on which such lender has a Lien and to which its recourse for
non-payment is limited constitutes cash or Cash Equivalents, to which extent
such Indebtedness shall be deemed to be Recourse Indebtedness); provided that,
personal recourse of any Person for any such Indebtedness for fraud,
misrepresentation, misapplication of cash, waste, environmental claims and
liabilities and other circumstances customarily excluded by institutional
lenders from exculpation provisions and/or included in separate indemnification
agreements in non-recourse financing of real estate shall not, by itself, cause
such Indebtedness to be characterized as Recourse Indebtedness.
"Recovery Event": the receipt of any settlement of or payment in
respect of any property or casualty insurance claim or any condemnation
proceeding relating to any asset of the Borrower or any of its Subsidiaries.
"Register": as defined in Section 10.6(d).
"Regulation U": Regulation U of the Board as in effect from time to
time.
"Reimbursement Obligation": the obligation of the Borrower to
reimburse the Issuing Lender pursuant to Section 3.4 for amounts drawn under
Letters of Credit issued by the Issuing Lender.
"Reinvestment Deferred Amount": with respect to any Reinvestment
Event, the aggregate Net Cash Proceeds received by the Borrower or any of its
Subsidiaries in connection therewith that are not applied on the date of receipt
thereof to prepay the Term Loans or the Revolving Credit Loans or reduce the
Term Loan Commitments pursuant to Section 2.10(b) as a result of the delivery of
a Reinvestment Notice.
"Reinvestment Event": any Asset Sale, Purchase Price Refund or
Recovery Event in respect of which the Borrower has delivered a Reinvestment
Notice.
"Reinvestment Notice": a written notice executed by a Responsible
Officer stating that no Default or Event of Default has occurred and is
continuing and that the Borrower (directly or indirectly through a Subsidiary)
intends and expects to use all or a specified portion of the Net Cash Proceeds
of an Asset Sale, Purchase Price Refund or Recovery Event to acquire or repair
assets useful in its business.
"Reinvestment Prepayment Amount": with respect to any Reinvestment
Event, the Reinvestment Deferred Amount relating thereto less any amount
expended prior to the
24
relevant Reinvestment Prepayment Date to acquire or repair assets useful in the
Borrower's business.
"Reinvestment Prepayment Date": with respect to any Reinvestment
Event, the earliest of (a) the date occurring six months after such Reinvestment
Event, provided that, such date shall be extended, if (x) following any Asset
Sale or Purchase Price Refund, the Borrower or any of its Subsidiaries shall
have entered into a definitive agreement to acquire assets useful in the
Borrower's or its Subsidiaries' business prior to, or within six months after,
such Asset Sale or Purchase Price Refund, to the date which is nine months after
such Reinvestment Event or (y) in the case of a Recovery Event, to the date
which is nine months after such Recovery Event, so long as the Administrative
Agent is reasonably satisfied that the Borrower is diligently pursuing such
repair and (b) the date on which the Borrower shall have determined not to, or
shall have otherwise ceased to, acquire or repair assets useful in the
Borrower's business with all or any portion of the relevant Reinvestment
Deferred Amount.
"Related Fund": with respect to any Lender, any fund that (x)
invests in commercial loans and (y) is managed or advised by the same investment
advisor as such Lender, by such Lender or an affiliate of such Lender.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"Reportable Event": any of the events set forth in
Section 4043(c) of ERISA, other than those events as to which the thirty day
notice period is waived under subsections .27, .28, .29, .30, .31, .32, .34
or .35 of PBGC Reg. ss. 4043.
"Required Lenders": at any time, the holders of more than 50% of (a)
until any of the Term Loan Commitments, the Revolving Credit Commitments or the
L/C Commitments have been terminated (or, in the case of the Term Loan
Commitments, drawn), the sum of (x) the Total Term Loan Commitments then in
effect, (y) the Revolving Credit Commitments then in effect and (z) the L/C
Commitment then in effect, and (b) thereafter, the sum of (i) the Total Term
Loan Commitment then in effect (or, if the Term Loan Commitments have been drawn
or terminated, the sum of (x) the aggregate Available Term Loan Commitments of
all the Lenders plus (y) the aggregate principal amount of Term Loans then
outstanding), (ii) the Revolving Credit Commitments then in effect (or, if the
Revolving Credit Commitments have been terminated, the aggregate principal
amount of all Revolving Credit Loans then outstanding), and (iii) the L/C
Commitment then in effect (or, if the L/C Commitment has been terminated, the
aggregate amount of the L/C Obligations at such time).
"Required Prepayment Lenders": the Majority Facility Lenders in
respect of each of the Term Loan Facility and the Revolving Credit Facility.
"Requirements of Law": (a) as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its Property or to which such Person or
any of its Property is subject and (b) as to any Living Facility, all federal,
state, county,
25
municipal and other governmental statutes, laws, rules, orders, regulations,
ordinances, judgments, decrees and injunctions or agreements, in each case,
pertaining to or concerned with the establishment, construction, ownership,
operation, use or occupancy of such Living Facility or any part thereof as a
skilled nursing facility, assisted living facility, independent living facility,
continuing care retirement community or other health care facility and all
permits, licenses and authorizations and regulations relating thereto, including
all rules, orders, regulations and decrees of and agreements with each
Governmental Authority as pertaining to such Living Facility.
"Resident Agreements": any and all contracts and agreements executed
by, or on behalf of any resident or other Person seeking residency or occupancy
in a Living Facility and related services from the Living Facility, and/or
Borrower and/or any of Borrower's Subsidiaries.
"Responsible Officer": the chief executive officer, president or
chief financial officer of the Borrower, but in any event, with respect to
financial matters, the chief financial officer of the Borrower.
"Restricted Payments": as defined in Section 7.6.
"Revolving Credit Commitment": as to any Lender, the obligation of
such Lender, if any, to make Revolving Credit Loans in an aggregate principal
amount at any time outstanding not to exceed the amount set forth under the
heading "Revolving Credit Commitment" opposite such Lender's name on Schedule 1
to the Lender Addendum delivered by such Lender, or, as the case may be, in the
Assignment and Acceptance pursuant to which such Lender became a party hereto,
as the same may be changed from time to time pursuant to the terms hereof. The
original aggregate amount of the Total Revolving Credit Commitments is
$20,000,000.
"Revolving Credit Commitment Period": the period from and
including the Closing Date to the Revolving Credit Termination Date.
"Revolving Credit Facility": as defined in the definition of
"Facility" in this Section 1.1.
"Revolving Credit Lender": each Lender that has a Revolving
Credit Commitment or that is the holder of Revolving Credit Loans.
"Revolving Credit Loans": as defined in Section 2.3.
"Revolving Credit Note": as defined in Section 2.5.
"Revolving Credit Percentage": as to any Revolving Credit Lender at
any time, the percentage which such Lender's Revolving Credit Commitment then
constitutes of the Total Revolving Credit Commitments (or, at any time after the
Revolving Credit Commitments shall have expired or terminated, the percentage
which the aggregate amount of such Lender's then outstanding Revolving Credit
Loans constitutes of the aggregate amount of the then outstanding Revolving
Credit Loans of all Lenders).
26
"Revolving Credit Termination Date": February 10, 2007, or if such
date is extended pursuant to Section 2.6, August 10, 2007.
"Revolving Loan Commitment Fee Rate": 0.25% per annum.
"SEC": the Securities and Exchange Commission (or successors
thereto or an analogous Governmental Authority).
"Secured Parties": as defined in the Guarantee and Pledge
Agreement.
"Security Documents": the collective reference to the Guarantee and
Pledge Agreement and all other security documents hereafter delivered to the
Administrative Agent granting a Lien on any Property of any Person to secure the
obligations and liabilities of any Loan Party under any Loan Document.
"Single Employer Plan": any Plan that is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
"Solvent": with respect to any Person, as of any date of
determination, (a) the amount of the "present fair saleable value" of the assets
of such Person will, as of such date, exceed the amount of all "liabilities of
such Person, contingent or otherwise", as of such date, as such quoted terms are
determined in accordance with applicable federal and state laws governing
determinations of the insolvency of debtors, (b) the present fair saleable value
of the assets of such Person will, as of such date, be greater than the amount
that will be required to pay the liability of such Person on its debts as such
debts become absolute and matured, and (c) such Person will be able to pay its
debts as they mature. For purposes of this definition, (i) "debt" means
liability on a "claim", and (ii) "claim" means any (x) right to payment, whether
or not such a right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured
or unsecured or (y) right to an equitable remedy for breach of performance if
such breach gives rise to a right to payment, whether or not such right to an
equitable remedy is reduced to judgment, fixed, contingent, matured or
unmatured, disputed, undisputed, secured or unsecured.
"Specified Hedge Agreement": any Hedge Agreement entered into by
the Borrower or any Subsidiary Guarantor and any Qualified Counterparty.
"Stockholders' Equity": as of any date of determination, the
consolidated Stockholders' Equity of the Borrower as at such date determined in
accordance with GAAP and shown in the financial consolidated statements of the
Borrower and its Subsidiaries, provided that, there shall be excluded from
Stockholders' Equity any amount attributable to Disqualified Stock.
"Subsidiary": as to any Person, a corporation, partnership, limited
liability company or other entity of which shares of stock or other ownership
interests having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more
27
intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Borrower.
"Subsidiary Guarantor": each Subsidiary of the Borrower that is
a party to the Guarantee and Pledge Agreement.
"Syndication Agent": as defined in the preamble hereto.
"Tangible Net Worth": at any date, (i) Stockholders' Equity plus
(ii) Minority Interests plus (iii) cumulative net additions of Depreciation and
Amortization Expense deducted in determining income for all fiscal quarters
ending after the date of Borrower's formation plus (iv) non-cash deferred gains
from sale-leaseback transactions, minus (v) Intangible Assets, in each case, for
the most recent fiscal quarter ending prior to such date for which financial
statements are available.
"Term Loan": as defined in Section 2.1.
"Term Loan Commitment": as to any Lender, the obligation of such
Lender, if any, to make a Term Loan to the Borrower hereunder in a principal
amount not to exceed the amount set forth under the heading "Term Loan
Commitment" opposite such Lender's name on Schedule 1 to the Lender Addendum
delivered by such Lender, or, as the case may be, in the Assignment and
Acceptance pursuant to which such Lender became a party hereto, as the same may
be changed from time to time pursuant to the terms hereof. The original
aggregate amount of the Total Term Loan Commitments is $250,000,000.
"Term Loan Commitment Fee Rate": (i) if $150,000,000 or more of the
Term Loan Commitments has been borrowed by the Borrower, 0.25% per annum and
(ii) if less than $150,000,000 of the Term Loan Commitments has been borrowed by
the Borrower, 0.125%.
"Term Loan Commitment Period": the period from and including the
Closing Date to the date that is nine months after the Closing Date.
"Term Loan Facility": as defined in the definition of "Facility"
in this Section 1.1.
"Term Loan Lender": each Lender that has a Term Loan Commitment
or is the holder of a Term Loan.
"Term Loan Maturity Date": February 10, 2007, or if such date is
extended pursuant to Section 2.6, August 10, 2007.
"Term Loan Percentage": as to any Term Loan Lender at any time, the
percentage which such Lender's Term Loan Commitment then constitutes of the
aggregate Term Loan Commitments (or, at any time after the Term Loan Commitments
shall have expired or terminated, the percentage which the aggregate principal
amount of such Lender's Term Loans then outstanding constitutes of the aggregate
unpaid principal amount of the Term Loans then outstanding).
28
"Term Note": as defined in Section 2.5(e).
"Total Revolving Credit Commitments": at any time, the aggregate
amount of the Revolving Credit Commitments then in effect.
"Total Term Loan Commitments": at any time, the aggregate amount
of the Term Loan Commitments then in effect.
"Transferee": as defined in Section 10.14.
"Type": as to any Loan, its nature as a Base Rate Loan or a
Eurodollar Loan.
"Unconsolidated Joint Venture": any Joint Venture of the Borrower or
any of its Subsidiaries in which the Borrower or such Subsidiary holds any
Capital Stock but which would not be combined with the Borrower in the
consolidated financial statements of the Borrower in accordance with GAAP.
"Wholly Owned Subsidiary": as to any Person, any other Person all of
the Capital Stock of which (other than directors' qualifying shares required by
law) is owned by such Person directly and/or through other Wholly Owned
Subsidiaries.
"Wholly Owned Subsidiary Guarantor": any Subsidiary Guarantor
that is a Wholly Owned Subsidiary of the Borrower.
1.2 Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in the other Loan Documents or any certificate or other document made
or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto,
accounting terms relating to the Borrower and its Subsidiaries not defined in
Section 1.1 and accounting terms partly defined in Section 1.1, to the extent
not defined, shall have the respective meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(e) All calculations of financial ratios set forth in Section 7.1
shall be calculated to the same number of decimal places as the relevant ratios
are expressed in and shall be rounded upward if the number in the decimal place
immediately following the last calculated decimal place is five or greater. For
example, if the relevant ratio is to be calculated to the hundredth decimal
place and the calculation of the ratio is 5.126, the ratio will be rounded up to
5.13.
29
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Term Loan Commitments.
(a) Subject to the terms and conditions hereof, the Term Loan
Lenders severally agree to make term loans ("Term Loan") to the Borrower from
time to time during the Term Loan Commitment Period in an aggregate principal
amount for each Term Loan Lender not to exceed the amount of the Term Loan
Commitment of such Lender. The Term Loans may from time to time be Eurodollar
Loans or Base Rate Loans, as determined by the Borrower and notified to the
Administrative Agent in accordance with Sections 2.2 and 2.11.
(b) The Borrower shall repay all outstanding Term Loans on the Term
Loan Maturity Date.
2.2 Procedure for Term Loan Borrowing.
The Borrower may borrow under the Term Loan Commitments on any
Business Day during the Term Loan Commitment Period, provided that the Borrower
shall deliver to the Administrative Agent a Borrowing Notice (which Borrowing
Notice must be received by the Administrative Agent prior to (a) 1:00 p.m., New
York City time, three Business Days prior to the requested Borrowing Date, in
the case of Eurodollar Loans, or (b) 11:00 a.m., New York City time, on the
requested Borrowing Date, in the case of Base Rate Loans). Any Term Loans made
on the Closing Date shall initially be Base Rate Loans. Each borrowing of Term
Loans under the Term Loan Commitments shall be in an amount equal to (x) in the
case of Base Rate Loans, $1,000,000 or a whole multiple in excess thereof (or,
if the then aggregate Available Term Loan Commitments are less than $1,000,000,
such lesser amount) and (y) in the case of Eurodollar Loans, $1,000,000 or a
whole multiple of $1,000,000 in excess thereof. Upon receipt of any such
Borrowing Notice the Administrative Agent shall promptly notify each Term Loan
Lender thereof. Each Term Loan Lender will make its Term Loan Percentage of the
amount of each borrowing of Term Loans available to the Administrative Agent for
the account of the Borrower at the Funding Office prior to 12:00 Noon, New York
City time, on the Borrowing Date requested by the Borrower in Dollars
immediately available to the Administrative Agent. Such borrowing will then be
made available to the Borrower by the Administrative Agent in like funds as
received by the Administrative Agent.
2.3 Revolving Credit Commitments. (a) Subject to the terms and
conditions hereof, the Revolving Credit Lenders severally agree to make
revolving credit loans ("Revolving Credit Loans") to the Borrower from time to
time during the Revolving Credit Commitment Period in an aggregate principal
amount at any one time outstanding for each Revolving Credit Lender which does
not exceed the amount of such Lender's Revolving Credit Commitment. During the
Revolving Credit Commitment Period the Borrower may use the Revolving Credit
Commitments by borrowing, prepaying the Revolving Credit Loans in whole or in
part, and reborrowing, all in accordance with the terms and conditions hereof.
The Revolving Credit Loans may from time to time be Eurodollar Loans or Base
Rate Loans, as determined by the Borrower and notified to the Administrative
Agent in accordance with Sections 2.4 and 2.11, provided that no Revolving
Credit Loan shall be made as a Eurodollar Loan after the day that is one month
prior to the Revolving Credit Termination Date.
30
(b) The Borrower shall repay all outstanding Revolving Credit Loans
on the Revolving Credit Termination Date.
2.4 Procedure for Revolving Credit Borrowing. The Borrower may
borrow under the Revolving Credit Commitments on any Business Day during the
Revolving Credit Commitment Period, provided that the Borrower shall deliver to
the Administrative Agent a Borrowing Notice (which Borrowing Notice must be
received by the Administrative Agent prior to (a) 1:00 p.m., New York City time,
three Business Days prior to the requested Borrowing Date, in the case of
Eurodollar Loans, or (b) 11:00 a.m., on the requested Borrowing Date, in the
case of Base Rate Loans). Any Revolving Credit Loans made on the Closing Date
shall initially be Base Rate Loans. Each borrowing of Revolving Credit Loans
under the Revolving Credit Commitments shall be in an amount equal to (x) in the
case of Base Rate Loans, $1,000,000 or a whole multiple in excess thereof (or,
if the then aggregate Available Revolving Credit Commitments are less than
$1,000,000, such lesser amount) and (y) in the case of Eurodollar Loans,
$1,000,000 or a whole multiple of $1,000,000 in excess thereof. Upon receipt of
any such Borrowing Notice from the Borrower, the Administrative Agent shall
promptly notify each Revolving Credit Lender thereof. Each Revolving Credit
Lender will make its Revolving Credit Percentage of the amount of each borrowing
of Revolving Credit Loans available to the Administrative Agent for the account
of the Borrower at the Funding Office prior to 12:00 Noon, New York City time,
on the Borrowing Date requested by the Borrower in funds immediately available
to the Administrative Agent. Such borrowing will then be made available to the
Borrower by the Administrative Agent in like funds as received by the
Administrative Agent.
2.5 Repayment of Loans; Evidence of Debt. (a) The Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of
the appropriate Revolving Credit Lender or Term Loan Lender, as the case may be,
(i) the then unpaid principal amount of each Revolving Credit Loan of such
Revolving Credit Lender on the Revolving Credit Termination Date (or on such
earlier date on which the Loans become due and payable pursuant to Section 8)
and (ii) the then unpaid principal amount of each Term Loan of such Term Loan
Lender on the Term Loan Maturity Date (or on such earlier date on which the
Loans become due and payable pursuant to Section 8). The Borrower hereby further
agrees to pay interest on the unpaid principal amount of the Loans from time to
time outstanding from the date hereof until payment in full thereof at the rates
per annum, and on the dates, set forth in Section 2.13.
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing indebtedness of the Borrower to such Lender
resulting from each Loan of such Lender from time to time, including the amounts
of principal and interest payable and paid to such Lender from time to time
under this Agreement.
(c) The Administrative Agent, on behalf of the Borrower, shall
maintain the Register pursuant to Section 10.6(d), and a subaccount therein for
each Lender, in which shall be recorded (i) the amount of each Loan made
hereunder and any Note evidencing such Loan, the Type of such Loan and each
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder and (iii) both the amount of any sum received by the Administrative
Agent hereunder from the Borrower and each Lender's share thereof.
31
(d) The entries made in the Register and the accounts of each Lender
maintained pursuant to Section 2.5(b) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Loans made to
the Borrower by such Lender in accordance with the terms of this Agreement,
except that an Assignment and Acceptance shall be effective only as a grant of a
participation until properly recorded in the Register as an Assignment and
Acceptance.
(e) The Borrower agrees that, upon the request to the Administrative
Agent by any Lender, the Borrower will promptly execute and deliver to such
Lender a promissory note of the Borrower evidencing any Term Loans or Revolving
Credit Loans, as the case may be, of such Lender, substantially in the forms of
Exhibit F-1 or F-2, respectively (a "Term Note" or "Revolving Credit Note",
respectively), with appropriate insertions as to date and principal amount;
provided, that delivery of Notes shall not be a condition precedent to the
occurrence of the Closing Date or the making of the Loans or issuance of Letters
of Credit.
2.6 Extension of the Initial Maturity Date. (a) During the period
commencing not more than 90 days prior to, and ending not less than 30 days
prior to, the first anniversary of the Closing Date (the "Initial Maturity
Date"), the Borrower may request a six-month extension of any or all of the
Revolving Credit Termination Date, the L/C Termination Date and/or the Term Loan
Maturity Date by delivering written notice of such request to the Administrative
Agent, which the Administrative Agent shall distribute promptly to the
applicable Lenders.
(b) The extension of each of the Revolving Credit Termination Date,
the L/C Termination Date or the Term Loan Maturity Date, as applicable, shall
become automatically effective on the first anniversary of the Closing Date
subject to the satisfaction of the following conditions precedent:
(i) in the case of an extension of the Revolving Credit Termination
Date, the Borrower shall pay to the Administrative Agent, for distribution
to each Revolving Credit Lender which holds a Revolving Credit Commitment
on the Initial Maturity Date, a one-time fee in an amount equal to 0.375%
of the Revolving Credit Commitment of such Lender on such date (or, if the
Revolving Credit Commitments have been terminated, the aggregate principal
amount of the Revolving Credit Loans then outstanding);
(ii) in the case of an extension of the Term Loan Maturity Date, the
Borrower shall pay to the Administrative Agent, for distribution to each
Term Loan Lender which holds a Term Loan Commitment on the Initial
Maturity Date, a one-time fee in an amount equal to 0.375% of the Term
Loan Commitment of such Lender on such date (or, if the Term Loan
Commitments have been terminated, the aggregate unpaid principal amount of
Term Loans then outstanding);
(iii) in the case of an extension of the L/C Termination Date, the
Borrower shall pay to the Administrative Agent, for distribution to the
Issuing Lender, a one-time fee in an amount equal to 0.375% of the L/C
Commitment on such date (or, if the L/C
32
Commitment has been terminated, the aggregate amount of L/C Obligations on
such date); and
(iv) no Default or Event of Default shall have occurred and be
continuing either on the date that the Borrower has delivered to the
Administrative Agent the request to extend the Revolving Credit
Termination Date, the L/C Termination Date and/or the Term Loan Maturity
Date, or on the Initial Maturity Date.
2.7 Commitment Fees, etc. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Revolving Credit Lender a
commitment fee for the period from and including the Closing Date to the last
day of the Revolving Credit Commitment Period, computed at the Revolving Loan
Commitment Fee Rate on the average daily amount of the Available Revolving
Credit Commitment of such Lender during the period for which payment is made,
payable quarterly in arrears on the last day of each March, June, September and
December and on the Revolving Credit Termination Date, commencing on the first
of such dates to occur after the date hereof.
(b) The Borrower agrees to pay to the Administrative Agent for the
account of each Term Loan Lender a commitment fee for the period from and
including the Closing Date to the last day of the Term Loan Commitment Period,
computed at the Term Loan Commitment Fee Rate on the average daily amount of the
Available Term Loan Commitment of such Lender during the period for which
payment is made, payable quarterly in arrears on the last day of each March,
June, September and December and on the Term Loan Maturity Date, commencing on
the first of such dates to occur after the date hereof.
(c) The Borrower agrees to pay to the Administrative Agent for the
account of the Issuing Lender a commitment fee for the period from and including
the Closing Date to the last day of the L/C Commitment Period, computed at the
Revolving Loan Commitment Fee Rate on the average daily amount of the Available
L/C Commitment of such Lender during the period for which payment is made,
payable quarterly in arrears on the last day of each March, June, September and
December and on the L/C Termination Date, commencing on the first of such dates
to occur after the date hereof.
(d) The Borrower agrees to pay to the Administrative Agent the fees
in the amounts and on the dates from time to time agreed to in writing by the
Borrower and the Administrative Agent.
2.8 Termination or Reduction of Commitments. The Borrower shall have
the right, upon not less than three Business Days' notice to the Administrative
Agent, to (i) terminate the Revolving Credit Commitments or, from time to time,
to reduce the aggregate amount of the Revolving Credit Commitments, provided
that, no such termination or reduction of Revolving Credit Commitments shall be
permitted if, after giving effect thereto and to any prepayments of the
Revolving Credit Loans made on the effective date thereof, the aggregate
principal amount of all Revolving Credit Loans then outstanding would exceed the
Total Revolving Credit Commitments, (ii) terminate the Term Loan Commitments or,
from to time, to reduce the aggregate amount of the Term Loan Commitments or
(iii) terminate the L/C Commitment or, from time to time, to reduce the amount
of the L/C Commitment, provided that, no such
33
termination or reduction of the L/C Commitment shall be permitted if, after
giving effect thereto and to any cancellation of Letters of Credit made on the
effective date thereof, the aggregate amount of the L/C Obligations then
outstanding would exceed the L/C Commitment. Any such reduction shall be in an
amount equal to $1,000,000, or a whole multiple thereof, and shall reduce
permanently the Revolving Credit Commitments, the Term Loan Commitments or the
L/C Commitments, as the case may be, then in effect. Any such termination shall
permanently terminate the Revolving Credit Commitments, the Term Loan
Commitments or the L/C Commitments, as the case may be, then in effect. The Term
Loan Commitments shall be permanently terminated automatically on the last day
of the Term Loan Commitment Period.
2.9 Optional Prepayments. The Borrower may at any time and from time
to time prepay the Loans, in whole or in part, without premium or penalty
(except as otherwise provided in this Section 2.9), upon irrevocable notice
delivered to the Administrative Agent no later than (a) 1:00 p.m., New York City
time, three Business Days prior thereto in the case of Eurodollar Loans and (b)
11:00 a.m., New York City time, on the date of such prepayment in the case of
Base Rate Loans, which notice shall specify the date and amount of such
prepayment, whether such prepayment is of Term Loans or Revolving Credit Loans,
and whether such prepayment is of Eurodollar Loans or Base Rate Loans; provided,
that if a Eurodollar Loan is prepaid on any day other than the last day of the
Interest Period applicable thereto, the Borrower shall also pay any amounts
owing pursuant to Section 2.19. Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant Lender thereof. If any
such notice is given, the amount specified in such notice shall be due and
payable on the date specified therein, together with (except in the case of
Revolving Credit Loans that are Base Rate Loans) accrued interest to such date
on the amount prepaid. Partial prepayments of Term Loans and Revolving Credit
Loans shall be in an aggregate principal amount of $1,000,000 or a whole
multiple thereof.
2.10 Mandatory Prepayments and Commitment Reductions. (a) Unless the
Required Prepayment Lenders shall otherwise agree, if any Capital Stock shall be
issued, or Indebtedness incurred, by the Borrower or any of its Subsidiaries
(excluding any Indebtedness permitted to be incurred after the Closing Date in
accordance with Section 7.2 as set forth in this Agreement on the Closing Date
(other than Section 7.2(f)), then on the date of such issuance or incurrence,
the Term Loan Commitments shall be reduced and the Term Loans and Revolving
Credit Loans shall be prepaid, by an aggregate amount equal to the amount of the
Net Cash Proceeds of such issuance or incurrence, as set forth in Section
2.10(c). The provisions of this Section do not constitute a consent to the
issuance of any equity securities by any entity whose equity securities are
pledged pursuant to the Guarantee and Pledge Agreement, or a consent to the
incurrence of any Indebtedness by the Borrower or any of its Subsidiaries.
(b) Unless the Required Prepayment Lenders shall otherwise agree, if
on any date the Borrower or any of its Subsidiaries shall receive Net Cash
Proceeds from any Asset Sale, Purchase Price Refund or Recovery Event then,
unless a Reinvestment Notice shall be delivered in respect thereof and no
Default or Event of Default has occurred and is continuing, on the date of
receipt by the Borrower or such Subsidiary of such Net Cash Proceeds, the Term
Loan Commitments shall be reduced and the Term Loans and Revolving Credit Loans
shall be prepaid, by an aggregate amount equal to the amount of such Net Cash
Proceeds, as set forth in Section 2.10(c); provided, that, notwithstanding the
foregoing, (i) the aggregate Net Cash
34
Proceeds of Asset Sales, Purchase Price Refunds and Recovery Events that may be
excluded from the foregoing requirement pursuant to Reinvestment Notices shall
not exceed $25,000,000 in any fiscal year of the Borrower and (ii) on each
Reinvestment Prepayment Date the Term Loan Commitments shall be reduced and the
Term Loans and Revolving Credit Loans shall be prepaid by an amount equal to the
Reinvestment Prepayment Amount with respect to the relevant Reinvestment Event,
as set forth in Section 2.10(c). The provisions of this Section do not
constitute a consent to the consummation of any Disposition not permitted by
Section 7.5.
(c) Amounts to be applied in connection with prepayments and
Commitment reductions made pursuant to this Section shall be applied, first,
unless the Term Loan Commitments have been terminated in full or been fully
drawn, to reduce permanently the Available Term Loan Commitments then in effect
(without a corresponding prepayment of the Term Loans), second, to the
prepayment of the Term Loans, and third, to the prepayment of the Revolving
Credit Loans (without a corresponding reduction of the Revolving Credit
Commitments).
2.11 Conversion and Continuation Options. (a) The Borrower may elect
from time to time to convert Eurodollar Loans to Base Rate Loans by giving the
Administrative Agent at least two Business Days' prior irrevocable notice of
such election, provided that any such conversion of Eurodollar Loans may be made
only 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 Eurodollar Loans by
giving the Administrative Agent at least three Business Days' prior irrevocable
notice of such election (which notice shall specify the length of the initial
Interest Period therefor), provided that no Base Rate Loan under a particular
Facility may be converted into a Eurodollar Loan (i) when any Event of Default
has occurred and is continuing and the Administrative Agent has, or the Majority
Facility Lenders in respect of such Facility have, determined in its or their
sole discretion not to permit such conversions or (ii) after the date that is
one month prior to the final scheduled termination or maturity date of such
Facility. Upon receipt of any such notice the Administrative Agent shall
promptly notify each relevant Lender thereof.
(b) The Borrower may elect to continue any Eurodollar Loan as such
upon the expiration of the then current Interest Period with respect thereto by
giving irrevocable notice to the Administrative Agent, in accordance with the
applicable provisions of the term "Interest Period" set forth in Section 1.1, of
the length of the next Interest Period to be applicable to such Loan, provided
that no Eurodollar Loan under a particular Facility may be continued as such (i)
when any Event of Default has occurred and is continuing and the Administrative
Agent has, or the Majority Facility Lenders in respect of such Facility have,
determined in its or their sole discretion not to permit such continuations or
(ii) after the date that is one month prior to the final scheduled termination
or maturity date of such Facility, 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
Loans shall be converted automatically 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.
35
2.12 Minimum Amounts and Maximum Number of Eurodollar Tranches.
Notwithstanding anything to the contrary in this Agreement, all borrowings,
conversions, continuations and optional prepayments of Eurodollar Loans and all
selections of Interest Periods shall be in such amounts and be made pursuant to
such elections so that, (a) after giving effect thereto, the aggregate principal
amount of the Eurodollar Loans comprising each Eurodollar Tranche shall be equal
to $1,000,000 or a whole multiple of $1,000,000 in excess thereof and (b) no
more than eight Eurodollar Tranches shall be outstanding at any one time.
2.13 Interest Rates and Payment Dates. (a) Each Eurodollar Loan
shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such day
plus the Applicable Margin in effect for such day.
(b) Each Base Rate Loan shall bear interest for each day on which it
is outstanding at a rate per annum equal to the Base Rate in effect for such day
plus the Applicable Margin in effect for such day.
(c) (i) If all or a portion of the principal amount of any Loan or
Reimbursement Obligation shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), all outstanding Loans and Reimbursement
Obligations (whether or not overdue) (to the extent legally permitted) shall
bear interest at a rate per annum that is equal to (x) in the case of the Loans,
the rate that would otherwise be applicable thereto pursuant to the foregoing
provisions of this Section plus 2% or (y) in the case of Reimbursement
Obligations, the rate applicable to Base Rate Loans under the Revolving Credit
Facility plus 2%, and (ii) if all or a portion of any interest payable on any
Loan or Reimbursement Obligation or any commitment fee or other amount payable
hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest at a rate
per annum equal to the rate then applicable to Base Rate Loans under the
relevant Facility plus 2% (or, in the case of any such other amounts that do not
relate to a particular Facility, the rate then applicable to Base Rate Loans
under the Revolving Credit Facility plus 2%), in each case, with respect to
clauses (i) and (ii) above, from the date of such non-payment until such amount
is paid in full (after as well as before judgment).
(d) Interest shall be payable in arrears on each Interest Payment
Date, provided that interest accruing pursuant to paragraph (c) of this Section
shall be payable from time to time on demand.
2.14 Computation of Interest and Fees.
(a) Interest payable pursuant hereto shall be calculated on the
basis of a 360-day year for the actual days elapsed, except that, with respect
to Base Rate Loans on which interest is calculated on the basis of the Prime
Rate, the interest thereon shall be calculated on the basis of a 365- (or 366-,
as the case may be) day year for the actual days elapsed. Fees and commissions
payable pursuant hereto shall be calculated on the basis of a 365- (or 366-, as
the case may be) day year for the actual days elapsed. The Administrative Agent
shall as soon as practicable notify the Borrower and the relevant Lenders of
each determination of a Eurodollar Rate. Any change in the interest rate on a
Loan resulting from a change in the Base Rate or the Eurocurrency Reserve
Requirements shall become effective as of the opening of business on the
36
day on which such change becomes effective. The Administrative Agent shall as
soon as practicable notify the Borrower and the relevant Lenders of the
effective date and the amount of each such change in interest rate.
(b) Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive and
binding on the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the quotations used by the Administrative Agent in
determining any interest rate pursuant to Section 2.13(a).
2.15 Inability to Determine Interest Rate.
If prior to the first day of any Interest Period:
(a) the Administrative Agent shall have determined in good faith
(which determination shall be conclusive and binding upon the Borrower)
that, by reason of circumstances affecting the relevant market, adequate
and reasonable means do not exist for ascertaining the Eurodollar Rate for
such Interest Period, or
(b) the Administrative Agent shall have received notice from the
Majority Facility Lenders in respect of the relevant Facility that the
Eurodollar Rate determined or to be determined for such Interest Period
will not adequately and fairly reflect the cost to such Lenders (as
conclusively certified by such Lenders) of making or maintaining their
affected Loans during such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the relevant Lenders as soon as practicable thereafter. If such
notice is given (x) any Eurodollar Loans under the relevant Facility requested
to be made on the first day of such Interest Period shall be made as Base Rate
Loans, (y) any Loans under the relevant Facility that were to have been
converted on the first day of such Interest Period to Eurodollar Loans shall be
continued as Base Rate Loans and (z) any outstanding Eurodollar Loans under the
relevant Facility shall be converted, on the last day of the then current
Interest Period with respect thereto, to Base Rate Loans. Until such notice has
been withdrawn by the Administrative Agent, no further Eurodollar Loans under
the relevant Facility shall be made or continued as such, nor shall the Borrower
have the right to convert Loans under the relevant Facility to Eurodollar Loans.
2.16 Pro Rata Treatment and Payments.
(a) Each borrowing by the Borrower from the Lenders hereunder, each
payment by the Borrower on account of any commitment fee or Letter of Credit
fee, and any reduction of the Commitments of the Lenders, shall be made pro rata
according to the respective L/C Percentage, Term Loan Percentages, Revolving
Credit Percentages, as the case may be, of the relevant Lenders. Each payment of
interest in respect of the Loans and each payment in respect of fees payable
hereunder shall be applied to the amounts of such obligations owing to the
Lenders pro rata according to the respective amounts then due and owing to the
Lenders.
(b) Each payment (including each prepayment) by the Borrower on
account of principal of the Term Loans shall be made pro rata according to the
respective outstanding
37
principal amounts of the Term Loans then held by the Term Loan Lenders. Amounts
prepaid on account of the Term Loans may not be reborrowed.
(c) Each payment (including each prepayment) by the Borrower on
account of principal of the Revolving Credit Loans shall be made pro rata
according to the respective outstanding principal amounts of the Revolving
Credit Loans then held by the Revolving Credit Lenders. Each payment in respect
of Reimbursement Obligations in respect of any Letter of Credit shall be made to
the Issuing Lender.
(d) The application of any payment of Loans under any Facility
(including optional and mandatory prepayments) shall be made, first, to Base
Rate Loans under such Facility and, second, to Eurodollar Loans under such
Facility. Each payment of the Loans (except in the case of Revolving Credit
Loans that are Base Rate Loans) shall be accompanied by accrued interest to the
date of such payment on the amount paid.
(e) All payments (including prepayments) to be made by the Borrower
hereunder, whether on account of principal, interest, fees or otherwise, shall
be made without setoff or counterclaim and shall be made prior to 12:00 Noon,
New York City time, on the due date thereof to the Administrative Agent, for the
account of the relevant Lenders, at the Payment Office, in Dollars and in
immediately available funds. Any payment made by the Borrower after 12:00 Noon,
New York City time, on any Business Day shall be deemed to have been on the next
following Business Day. If any payment hereunder (other than payments on the
Eurodollar Loans) becomes due and payable on a day other than a Business Day,
such payment shall be extended to the next succeeding Business Day. If any
payment on a Eurodollar Loan becomes due and payable on a day other than a
Business Day, the maturity thereof shall be extended to the next succeeding
Business Day unless the result of such extension would be to extend such payment
into another calendar month, in which event such payment shall be made on the
immediately preceding Business Day. In the case of any extension of any payment
of principal pursuant to the preceding two sentences, interest thereon shall be
payable at the then applicable rate during such extension.
(f) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If such amount is not made available to the Administrative
Agent by the required time on the Borrowing Date therefor, such Lender shall pay
to the Administrative Agent, on demand, such amount with interest thereon at a
rate equal to the greater of (i) the Federal Funds Effective Rate and (ii) a
rate determined by the Administrative Agent in accordance with banking industry
rules on interbank compensation, for the period until such Lender makes such
amount immediately available to the Administrative Agent. A certificate of the
Administrative Agent submitted to any Lender with respect to any amounts owing
under this paragraph shall be conclusive in the absence of manifest error. If
such Lender's share of such borrowing is not made available to the
Administrative Agent by such Lender within three Business Days after such
Borrowing Date, the Administrative Agent shall also be entitled to
38
recover such amount with interest thereon at the rate per annum applicable to
Base Rate Loans under the relevant Facility, on demand, from the Borrower.
(g) Unless the Administrative Agent shall have been notified in
writing by the Borrower prior to the date of any payment due to be made by the
Borrower hereunder that the Borrower will not make such payment to the
Administrative Agent, the Administrative Agent may assume that the Borrower is
making such payment, and the Administrative Agent may, but shall not be required
to, in reliance upon such assumption, make available to the Lenders their
respective pro rata shares of a corresponding amount. If such payment is not
made to the Administrative Agent by the Borrower within three Business Days
after such due date, the Administrative Agent shall be entitled to recover, on
demand, from each Lender to which any amount which was made available pursuant
to the preceding sentence, such amount with interest thereon at the rate per
annum equal to the daily average Federal Funds Effective Rate. Nothing herein
shall be deemed to limit the rights of the Administrative Agent or any Lender
against the Borrower.
(h) Upon receipt by the Administrative Agent of payments on behalf
of Lenders, the Administrative Agent shall promptly distribute such payments to
the Lender or Lenders entitled thereto, in like funds as received by the
Administrative Agent.
2.17 Requirements of Law.
(a) If the adoption of or any change in any Requirement of Law or in
the interpretation or application thereof or compliance by any Lender with any
request or directive (whether or not having the force of law) from any central
bank or other Governmental Authority made subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever with
respect to this Agreement, any Letter of Credit, any Application or any
Eurodollar Loan made by it, or change the basis of taxation of payments to
such Lender in respect thereof (except for Excluded Taxes and Non-Excluded
Taxes covered by Section 2.18);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by, any
office of such Lender that is not otherwise included in the determination
of the Eurodollar Rate hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit, or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower shall promptly pay such Lender,
upon its demand, any additional amounts necessary to compensate such Lender for
such increased cost or reduced amount receivable. If any Lender becomes entitled
to claim any additional amounts pursuant to this Section, it shall promptly
notify the Borrower (with a copy to the Administrative Agent) of the event by
reason of which it has become so entitled.
39
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder or under or in respect of any Letter of
Credit to a level below that which such Lender or such corporation could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender's or such corporation's policies with respect to capital adequacy)
by an amount deemed by such Lender to be material, then from time to time, after
submission by such Lender to the Borrower (with a copy to the Administrative
Agent) of a written request therefor, the Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender or such corporation
for such reduction.
(c) A certificate as to any additional amounts payable pursuant to
this Section submitted by any Lender to the Borrower (with a copy to the
Administrative Agent) shall be conclusive in the absence of manifest error. The
obligations of the Borrower pursuant to this Section shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
2.18 Taxes.
(a) Except as required by applicable law, all payments made by the
Borrower under this Agreement shall be made free and clear of, and without
deduction or withholding for or on account of, any present or future income,
stamp or other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or assessed
by any Governmental Authority, excluding net income taxes or net profit,
franchise taxes (imposed in lieu of net income taxes) and branch taxes imposed
on any Agent or any Lender as a result of a present or former connection between
such Agent or such Lender and the jurisdiction of the Governmental Authority
imposing such tax or any political subdivision or taxing authority thereof or
therein (other than any such connection arising solely from such Agent's or such
Lender's having executed, delivered or performed its obligations or received a
payment under, or enforced, this Agreement or any other Loan Document). If any
such non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("Non-Excluded Taxes") or any Other Taxes are required to be
withheld from any amounts payable to any Agent or any Lender hereunder, the
amounts so payable to such Agent or such Lender shall be increased to the extent
necessary to yield to such Agent or such Lender (after payment of all
Non-Excluded Taxes and Other Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Agreement; provided,
however, that the Borrower shall not be required to increase any such amounts
payable to any Lender with respect to any Non-Excluded Taxes that are (i)
attributable to such Lender's or any Agent's failure to comply with the
requirements of paragraph (d) or (e) of this Section, (ii) United States
withholding taxes imposed on amounts payable to such Lender at the time such
Lender becomes a party to this Agreement, except to the extent that such
Lender's assignor (if any) was entitled, at the time of assignment, to receive
additional amounts from the Borrower with respect to such Non-Excluded Taxes
pursuant to this paragraph (a) or (iii) backup withholding taxes, imposed under
40
Section 3406 of the Code (collectively, and together with the taxes excluded by
the first sentence of this Section 2.18(a), "Excluded Taxes").
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are payable by
the Borrower, as promptly as possible thereafter the Borrower shall send to the
Administrative Agent for the account of the relevant Agent or Lender, as the
case may be, a certified copy of an original official receipt received by the
Borrower showing payment thereof. If the Borrower fails to pay any Non-Excluded
Taxes or Other Taxes when due to the appropriate taxing authority or fails to
remit to the Administrative Agent the required receipts or other required
documentary evidence, the Borrower shall indemnify the Agents and the Lenders
for any incremental taxes, interest or penalties that may become payable by any
Agent or any Lender as a result of any such failure. The agreements in this
Section shall survive the termination of this Agreement and the payment of the
Loans and all other amounts payable hereunder.
(d) Each Agent and each Lender (or Transferee) that is not a "U.S.
Person" as defined in Section 7701(a)(30) of the Code (a "Non-U.S. Lender")
shall deliver to the Borrower and the Administrative Agent (and, in the case of
a Participant, to the Lender from which the related participation shall have
been purchased) two copies of either U.S. Internal Revenue Service Form W-8BEN,
Form W-8ECI and/or Form W-8 IMY, or, in the case of a Non-U.S. Lender claiming
exemption from U.S. federal withholding tax under Section 871(h) or 881(c) of
the Code with respect to payments of "portfolio interest" a statement
substantially in the form of Exhibit G and a Form W-8BEN, and/or any subsequent
versions thereof or successors thereto properly completed and duly executed by
such Non-U.S. Lender claiming complete exemption from, or a reduced rate of,
U.S. federal withholding tax on all payments by the Borrower under this
Agreement and the other Loan Documents. Such forms shall be delivered by each
Non-U.S. Lender on or before the date it becomes a party to this Agreement (or,
in the case of any Participant, on or before the date such Participant purchases
the related participation). In addition, each Non-U.S. Lender shall deliver such
forms promptly upon the obsolescence or invalidity of any form previously
delivered by such Non-U.S. Lender. Each Non-U.S. Lender shall promptly notify
the Borrower at any time it determines that it is no longer in a position to
provide any previously delivered certificate to the Borrower (or any other form
of certification adopted by the U.S. taxing authorities for such purpose). Each
Lender and Agent that is a "United States person" as defined in Section
7701(a)(30) shall deliver a properly completed Internal Revenue Service Form W-9
to the Borrower and the Administrative Agent (and grantor of a participation, as
applicable) at the time(s) and in the manner(s) described above with respect to
the other forms referenced in this clause (d) above certifying that such person
is exempt from United States backup withholding tax on payments made hereunder
under the Loan Documents; provided, however, that a Lender or Agent that is an
"exempt recipient" within the meaning of Treasury Regulations section
1.6049-4(c) shall not be required to provide a Form W-9 except to the extent
required under Treasury Regulations section 1.1441-1. Notwithstanding any other
provision of this paragraph, no Lender or Agent shall be required to deliver any
form pursuant to this paragraph that it is not legally able to deliver.
41
(e) A Lender that is entitled to an exemption from or reduction of
non-U.S. withholding tax under the law of the jurisdiction in which the Borrower
is located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by the Borrower, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate, provided that such Lender is
legally entitled to complete, execute and deliver such documentation and in such
Lender's reasonable judgment such completion, execution or submission would not
materially prejudice the legal position of such Lender.
2.19 Indemnity.
The Borrower agrees to indemnify each Lender for, and to hold each
Lender harmless from, any loss or expense that such Lender may sustain or incur
as a consequence of (a) default by the Borrower in making a borrowing of,
conversion into or continuation of Eurodollar Loans after the Borrower has given
a notice requesting the same in accordance with the provisions of this
Agreement, (b) default by the Borrower in making any prepayment after the
Borrower has given a notice thereof in accordance with the provisions of this
Agreement or (c) the making of a prepayment or conversion of Eurodollar Loans on
a day that is not the last day of an Interest Period with respect thereto. Such
indemnification may include an amount equal to the excess, if any, of (i) the
amount of interest that would have accrued on the amount so prepaid, or not so
borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
such Interest Period (or, in the case of a failure to borrow, convert or
continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Loans provided
for herein (excluding, however, the Applicable Margin included therein, if any)
over (ii) the amount of interest (as reasonably determined by such Lender) that
would have accrued to such Lender on such amount by placing such amount on
deposit for a comparable period with leading banks in the interbank Eurodollar
market. A certificate as to any amounts payable pursuant to this Section
submitted to the Borrower by any Lender shall be conclusive in the absence of
manifest error. This covenant shall survive the termination of this Agreement
and the payment of the Loans and all other amounts payable hereunder.
2.20 Illegality.
Notwithstanding any other provision herein, if the adoption of or
any change in any Requirement of Law or in the interpretation or application
thereof shall make it unlawful for any Lender to make or maintain Eurodollar
Loans as contemplated by this Agreement, (a) the commitment of such Lender
hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
convert Base Rate Loans to Eurodollar Loans shall forthwith be canceled and (b)
such Lender's Loans then outstanding as Eurodollar Loans, if any, shall be
converted automatically to Base Rate Loans on the respective last days of the
then current Interest Periods with respect to such Loans or within such earlier
period as required by law. If any such conversion of a Eurodollar Loan occurs on
a day which is not the last day of the then current Interest Period with respect
thereto, the Borrower shall pay to such Lender such amounts, if any, as may be
required pursuant to Section 2.19.
42
2.21 Change of Lending Office.
Each Lender agrees that, upon the occurrence of any event giving
rise to the operation of Section 2.17, 2.18(a) or 2.20 with respect to such
Lender, it will, if requested by the Borrower, use reasonable efforts (subject
to overall policy considerations of such Lender) to designate another lending
office for any Loans affected by such event with the object of avoiding the
consequences of such event; provided, that such designation is made on terms
that, in the sole judgment of such Lender, cause such Lender and its lending
office(s) to suffer no economic, legal or regulatory disadvantage, and provided,
further, that nothing in this Section shall affect or postpone any of the
obligations of any Borrower or the rights of any Lender pursuant to Section
2.17, 2.18(a) or 2.20.
SECTION 3. LETTERS OF CREDIT
3.1 L/C Commitment.
Prior to the Closing Date, the Issuing Lender has issued the
Existing Letters of Credit which, from and after the Closing Date, shall
constitute Letters of Credit hereunder. Subject to the terms and conditions
hereof, the Issuing Lender agrees to issue letters of credit (the letters of
credit issued on and after the Closing Date pursuant to this Section 3, together
with the Existing Letters of Credit, collectively, the "Letters of Credit") for
the account of the Borrower on any Business Day during the L/C Commitment
Period, for the purpose of securing the payment obligations of the Borrower
which could properly be paid from the proceeds of Loans under the terms of
Section 4.16, in such form as may be approved from time to time by the Borrower
and shall be reasonably acceptable to the Issuing Lender; provided that the
Issuing Lender shall not have any obligation to issue any Letter of Credit if,
after giving effect to such issuance, the L/C Obligations would exceed the L/C
Commitment. Each Letter of Credit shall (i) be denominated in Dollars and (ii)
expire no later than the earlier of (x) the first anniversary of its date of
issuance and (y) the L/C Termination Date; provided that, (A) any Letter of
Credit with a one-year term may provide for the renewal thereof for additional
one-year periods (which shall in no event extend beyond the outside expiration
date contemplated by this Section 3.1) and (B) the Borrower may request that
(and the Issuing Lender shall be required to so permit) any Letter of Credit
remain outstanding for up to one year after the L/C Termination Date so long as,
on or before the L/C Termination Date, the Borrower shall pay to the
Administrative Agent, on behalf of the Issuing Lender, in same day funds at the
Administrative Agent's office designated in such demand, for deposit in a
special interest bearing cash collateral account (the "L/C Collateral Account")
to be maintained in the name of the Administrative Agent (on behalf of the
Issuing Lender) and under its sole dominion and control at such place as shall
be designated by the Administrative Agent, an amount equal to the amount of all
outstanding obligations with respect to any such Letters of Credit which will
remain outstanding. Interest shall accrue on amounts in any L/C Collateral
Account at a rate equal to the Prime Rate. Any Letter of Credit outstanding
after the L/C Termination Date which is cash collateralized for the benefit of
the Issuing Lender shall be the sole responsibility of the Issuing Lender.
3.2 Procedure for Issuance of Letter of Credit.
43
The Borrower may from time to time request that the Issuing Lender
issue a Letter of Credit by delivering to the Issuing Lender at its address for
notices specified herein a completed Application therefore and any other
certificates, documents and other papers and information required pursuant to
the Application. Each such notice may be revoked telephonically by the Borrower
to the Issuing Lender and the Administrative Agent any time prior to the
issuance of the Letter of Credit, provided that such revocation is confirmed in
writing by the Borrower to the Issuing Lender and the Administrative Agent
within one Business Day by facsimile. Concurrently with the delivery of an
Application to the Issuing Lender, the Borrower shall deliver a copy thereof to
the Administrative Agent. Upon receipt of any Application, the Issuing Lender
will process such Application and the certificates, documents and other papers
and information delivered to it in connection therewith in accordance with its
customary procedures and shall promptly issue the Letter of Credit requested
thereby by issuing the original of such Letter of Credit to the beneficiary
thereof or as otherwise may be agreed to by the Issuing Lender and the Borrower
(but in no event shall the Issuing Lender fail to issue any Letter of Credit
within three Business Days after its receipt of the Application therefor and all
such other certificates, documents and other papers and information relating
thereto). Promptly after issuance by the Issuing Lender of a Letter of Credit,
the Issuing Lender shall furnish a copy of such Letter of Credit to the
Borrower. The Issuing Lender shall promptly give notice to the Administrative
Agent of the issuance of each Letter of Credit issued by the Issuing Lender
(including the face amount thereof), and shall provide a copy of such Letter of
Credit to the Administrative Agent as soon as possible after the date of
issuance.
3.3 Fees and Other Charges.
The Borrower will pay, to the Issuing Lender for its own account, a
fee on the aggregate drawable amount of all outstanding Letters of Credit at a
per annum rate equal to the Applicable Margin then in effect with respect to the
L/C Facility and payable quarterly in arrears on each L/C Fee Payment Date after
the issuance date. In addition, the Borrower shall pay to the Issuing Lender for
its own account a fronting fee on the aggregate drawable amount of all
outstanding Letters of Credit issued by it at a rate equal to 0.125% per annum,
payable quarterly in arrears on each L/C Fee Payment Date after the issuance
date.
3.4 Reimbursement Obligation of the Borrower.
The Borrower agrees to reimburse the Issuing Lender, on each date on
which the Issuing Lender notifies the Borrower of the date and amount of a draft
presented under any Letter of Credit and paid by the Issuing Lender, for the
amount of (a) such draft so paid and (b) any taxes, fees, charges or other costs
or expenses incurred by the Issuing Lender in connection with such payment (the
amounts described in the foregoing clauses (a) and (b) in respect of any
drawing, collectively, the "Payment Amount"). Each such payment shall be made to
the Issuing Lender at its address for notices specified herein in lawful money
of the United States of America and in immediately available funds. Interest
shall be payable on each Payment Amount from the date of the applicable drawing
until payment in full at the rate set forth in (i) until the second Business Day
following the date of the applicable drawing, Section 2.13(b) and (ii)
thereafter, Section 2.13(c).
3.5 Obligations Absolute.
44
The Borrower's obligations under this Section 3 shall be absolute
and unconditional under any and all circumstances and irrespective of any
setoff, counterclaim or defense to payment that the Borrower may have or have
had against the Issuing Lender, any beneficiary of a Letter of Credit or any
other Person. The Borrower also agrees with the Issuing Lender that the Issuing
Lender shall not be responsible for, and the Borrower's Reimbursement
Obligations under Section 3.4 shall not be affected by, among other things, the
validity or genuineness of documents or of any endorsements thereon, even though
such documents shall in fact prove to be invalid, fraudulent or forged, or any
dispute between or among the Borrower and any beneficiary of any Letter of
Credit or any other party to which such Letter of Credit may be transferred or
any claims whatsoever of the Borrower against any beneficiary of such Letter of
Credit or any such transferee, except for errors or omissions found by a final
and nonappealable decision of a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of the Issuing Lender. The
Issuing Lender shall not be liable for any error, omission, interruption or
delay in transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
the Issuing Lender. The Borrower agrees that any action taken or omitted by the
Issuing Lender under or in connection with any Letter of Credit issued by it or
the related drafts or documents, if done in the absence of gross negligence or
willful misconduct and in accordance with the standards of care specified in the
Uniform Commercial Code of the State of New York, shall be binding on the
Borrower and shall not result in any liability of the Issuing Lender to the
Borrower.
3.6 Letter of Credit Payments.
If any draft shall be presented for payment under any Letter of
Credit, the Issuing Lender shall promptly notify the Borrower and the
Administrative Agent of the date and amount thereof. The responsibility of the
Issuing Lender to the Borrower in connection with any draft presented for
payment under any Letter of Credit, in addition to any payment obligation
expressly provided for in such Letter of Credit issued by the Issuing Lender,
shall be limited to determining that the documents (including each draft)
delivered under such Letter of Credit in connection with such presentment appear
on their face to be in conformity with such Letter of Credit.
3.7 Applications.
To the extent that any provision of any Application related to any
Letter of Credit is inconsistent with the provisions of this Section 3, the
provisions of this Section 3 shall apply.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Agents and the Lenders to enter into this Agreement
and to make the Loans and issue the Letters of Credit, the Borrower hereby
represents and warrants to each Agent and each Lender, that:
4.1 Financial Condition.
45
(a) The unaudited pro forma consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as at September 30, 2005 (including
the notes thereto) (the "Pro Forma Balance Sheet"), a copy of which has
heretofore been furnished to the Administrative Agent for delivery to each
Lender, has been prepared giving effect (as if such events had occurred on such
date) to (i) the Loans actually funded on the Closing Date and the use of
proceeds thereof and (ii) the payment of fees and expenses in connection with
the foregoing. The Pro Forma Balance Sheet has been prepared based on the
information available to the Borrower as of the date of delivery thereof, and
presents fairly in all material respects on a pro forma basis the estimated
financial position of the Borrower and its consolidated Subsidiaries as at
September 30, 2005, assuming that the events specified in the preceding sentence
had actually occurred at such date.
(b) The audited consolidated balance sheet of the Borrower as at
July 1, 2005, reported on by and accompanied by an unqualified report from Ernst
& Young LLP, a copy of which has heretofore been furnished to the Administrative
Agent for distribution to each Lender, present fairly in all material respects
the consolidated financial condition of Borrower as at such date. The unaudited
consolidated balance sheet of the Borrower as at September 30, 2005, a copy of
which has heretofore been furnished to the Administrative Agent for distribution
to each Lender, present fairly in all material respects the consolidated
financial condition of the Borrower as at such date. All such financial
statements, including the related schedules and notes thereto, have been
prepared in accordance with GAAP applied consistently throughout the periods
involved (except as approved by the aforementioned firm of accountants and
disclosed therein). The Borrower and its Subsidiaries do not have any material
Guarantee Obligations, contingent liabilities and liabilities for taxes, or any
long-term leases or unusual forward or long-term commitments, including, without
limitation, any interest rate or foreign currency swap or exchange transaction
or other obligation in respect of derivatives, that are not reflected or
disclosed in the most recent financial statements referred to in this paragraph.
During the period from July 1, 2005 to and including the date hereof there has
been no Disposition by the Borrower of any material part of its business or
Property.
(c) The audited combined balance sheets of the Brookdale Facility
Group as at December 31, 2003 and December 31, 2004, and the related combined
statements of operations, owners' equity and cash flows for the fiscal years
ended on December 31, 2003, December 31, 2004 and December 31, 2005, reported on
by and accompanied by an unqualified report from Ernst & Young LLP, a copy of
which has heretofore been furnished to the Administrative Agent for distribution
to each Lender, present fairly in all material respects the combined financial
condition of the Brookdale Facility Group as at such date, and the combined
results of its operations and combined cash flows for the respective fiscal
years then ended. All such financial statements, including the related schedules
and notes thereto, have been prepared in accordance with GAAP applied
consistently throughout the periods involved (except as approved by the
aforementioned firm of accountants and disclosed therein).
4.2 No Change.
Except as set forth on Schedule 4.2, since December 31, 2004 there
has been no development or event that has had or could reasonably be expected to
have a Material Adverse Effect.
46
4.3 Corporate Existence; Compliance with Law.
Each of the Borrower and its Subsidiaries (a) is duly organized,
validly existing and in good standing (or the equivalent) under the laws of the
jurisdiction of its organization, (b) has the power and authority to own and
operate its Property, to lease the Property it leases as lessee and to conduct
the business in which it is currently engaged, (c) is duly qualified as a
foreign corporation or other organization and in good standing under the laws of
each jurisdiction where its ownership, lease or operation of Property or the
conduct of its business requires such qualification and (d) subject to Section
4.25, is in compliance with all Requirements of Law, except, in the case of
clauses (c) and (d) above, to the extent that the failure to comply therewith or
so qualify could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect.
4.4 Corporate Power; Authorization; Enforceable Obligations.
Each Loan Party has the requisite power and authority to make,
deliver and perform the Loan Documents to which it is a party and, in the case
of the Borrower, to borrow hereunder. Each Loan Party has taken all necessary
action to authorize the execution, delivery and performance of the Loan
Documents to which it is a party and, in the case of the Borrower, to authorize
the borrowings on the terms and conditions of this Agreement. No material
consent or authorization of, filing with, notice to or other material act by or
in respect of, any Governmental Authority or any other Person is required in
connection with the borrowings hereunder or the execution, delivery,
performance, validity or enforceability of this Agreement or any of the other
Loan Documents. Each Loan Document has been duly executed and delivered on
behalf of each Loan Party that is a party thereto. This Agreement constitutes,
and each other Loan Document upon execution will constitute, a legal, valid and
binding obligation of each Loan Party that is a party thereto, enforceable
against each such Loan Party in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
4.5 No Legal Bar.
The execution, delivery and performance of this Agreement and the
other Loan Documents, the issuance of Letters of Credit, the borrowings
hereunder and the use of the proceeds thereof will not violate any material
Requirement of Law or any Contractual Obligation of the Borrower or any of its
Subsidiaries and will not result in, or require, the creation or imposition of
any Lien on any of their respective properties or revenues pursuant to any
material Requirement of Law or any such Contractual Obligation (other than the
Liens created by the Security Documents). No Requirement of Law or Contractual
Obligation applicable to the Borrower or any of its Subsidiaries could
reasonably be expected to have a Material Adverse Effect.
4.6 No Material Litigation.
47
Except as set forth on Schedule 4.6, no litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of the Borrower, threatened by or against the Borrower or any
of its Subsidiaries or against any of their respective properties, operations or
revenues (a) with respect to any of the Loan Documents or any of the
transactions contemplated hereby or thereby, or (b) that could reasonably be
expected to have a Material Adverse Effect.
4.7 No Default.
Neither the Borrower nor any of its Subsidiaries is in default under
or with respect to any of its Contractual Obligations in any respect that could
reasonably be expected to have a Material Adverse Effect. No Default or Event of
Default has occurred and is continuing.
4.8 Ownership of Property; Liens.
Each of the Borrower and its Subsidiaries has title in fee simple
to, or a valid leasehold interest in, all its real property, and good title to,
or a valid leasehold interest in, all its other Property, and none of such
Property is subject to any Lien except as permitted by Section 7.3. Schedule 4.8
lists, as of the Closing Date, (i) each parcel of owned real property and each
leasehold interest in real property owned in the United States and held by the
Borrower and any of its Subsidiaries and (ii) for each Living Facility owned or
operated by the Borrower and its Subsidiaries, (w) the street address for such
Living Facility, (x) the type of such facility, (y) whether such Living Facility
is subject to any operating or management agreement and (z) the owner/operator
of such Living Facility.
4.9 Intellectual Property.
The Borrower and each of its Subsidiaries owns, or is licensed to
use, all material Intellectual Property necessary for the conduct of its
business as currently conducted. No material claim has been asserted and is
pending by any Person challenging or questioning the use of any Intellectual
Property or the validity or effectiveness of any Intellectual Property, nor does
the Borrower know of any valid basis for any such claim. The use of Intellectual
Property by the Borrower and its Subsidiaries does not infringe on the rights of
any Person in any material respect.
4.10 Taxes.
Except as set forth on Schedule 4.10 attached hereto, each of the
Borrower and each of its Subsidiaries has filed or caused to be filed all
Federal, state and other material tax returns that are required to be filed and
has paid all taxes shown to be due and payable on said returns or on any
assessments made against it or any of its Property and all other material taxes,
fees or other charges imposed on it or any of its Property by any Governmental
Authority (other than any the amount or validity of which are currently being
contested in good faith by appropriate proceedings and with respect to which
reserves in conformity with GAAP have been provided on the books of the Borrower
or its Subsidiaries, as the case may be); and no tax Lien has been filed, except
as permitted by Section 7.3, and, to the knowledge of the Borrower, no claim has
been asserted, with respect to any such tax, fee or other charge.
48
4.11 Federal Regulations.
No part of the proceeds of any Loans, and no other Extensions of
Credit hereunder, will be used for "purchasing" or "carrying" any "margin stock"
within the respective meanings of each of the quoted terms under Regulation U as
now and from time to time hereafter in effect or for any purpose that violates
the provisions of the Regulations of the Board. If requested by any Lender or
the Administrative Agent, the Borrower will furnish to the Administrative Agent
and each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form G-3 or FR Form U-1 referred to in Regulation U.
4.12 Labor Matters.
There are no strikes or other labor disputes against the Borrower or
any of its Subsidiaries pending or, to the knowledge of the Borrower, threatened
that (individually or in the aggregate) could reasonably be expected to have a
Material Adverse Effect. All payments due from the Borrower or any of its
Subsidiaries on account of employee health and welfare insurance that
(individually or in the aggregate) could reasonably be expected to have a
Material Adverse Effect if not paid have been paid or accrued as a liability on
the books of the Borrower or the relevant Subsidiary.
4.13 ERISA.
Neither a Reportable Event nor an "accumulated funding deficiency"
(within the meaning of Section 412 of the Code or Section 302 of ERISA) has
occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and each Plan is
in compliance in all material respects with the applicable provisions of ERISA
and the Code. No termination of a Single Employer Plan has occurred, and no Lien
in favor of the PBGC or a Plan has arisen, during such five-year period. The
present value of all accrued benefits under each Single Employer Plan (based on
those assumptions used to fund such Plans) did not, as of the last annual
valuation date prior to the date on which this representation is made or deemed
made, exceed the value of the assets of such Plan allocable to such accrued
benefits by a material amount. Neither the Borrower nor any Commonly Controlled
Entity has had a complete or partial withdrawal from any Multiemployer Plan that
has resulted or could reasonably be expected to result in a material liability
under ERISA, and neither the Borrower nor any Commonly Controlled Entity would
become subject to any material liability under ERISA if the Borrower or any such
Commonly Controlled Entity were to withdraw completely from all Multiemployer
Plans as of the valuation date most closely preceding the date on which this
representation is made or deemed made. No such Multiemployer Plan is in
Reorganization or, to the Borrower's knowledge, Insolvent.
4.14 Investment Company Act; Other Regulations.
No Loan Party is an "investment company", or a company "controlled"
by an "investment company", within the meaning of the Investment Company Act of
1940, as amended. No Loan Party is subject to regulation under any Requirement
of Law (other than Regulation X of the Board) that limits its ability to borrow
money.
4.15 Subsidiaries.
49
(a) The Subsidiaries listed on Schedule 4.15 constitute all the
Subsidiaries of the Borrower at the date hereof. Schedule 4.15 sets forth as of
the Closing Date the name and jurisdiction of incorporation of each Subsidiary
and, as to each Subsidiary, the percentage of each class of Capital Stock owned
by each Loan Party and indicates whether each such Subsidiary is an Excluded
Pledge Subsidiary, an Excluded Guarantee Subsidiary, a Management Subsidiary, an
Inactive Subsidiary and/or a Grand Court Subsidiary.
(a) There are no outstanding subscriptions, options, warrants,
calls, rights or other agreements or commitments (other than stock options
granted to employees or directors and directors' qualifying shares) of any
nature relating to any Capital Stock of the Borrower or any Subsidiary.
4.16 Use of Proceeds.
The proceeds of the Loans shall be used (i) to finance a portion of
acquisitions of fee-simple and leasehold ownership interests in senior housing
real estate and to pay related fees and expenses and (ii) for general corporate
purposes.
4.17 Environmental Matters.
Other than exceptions to any of the following that could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect:
(a) The Borrower and its Subsidiaries: (i) are, and within the
period of all applicable statutes of limitation have been, in compliance
with all applicable Environmental Laws; (ii) hold all Environmental
Permits (each of which is in full force and effect) required for any of
their current or intended operations or for any property owned, leased, or
otherwise operated by any of them; (iii) are, and within the period of all
applicable statutes of limitation have been, in compliance with all of
their Environmental Permits; and (iv) to the extent within the Borrower's
and its Subsidiaries' control or ability: each of their Environmental
Permits will be timely renewed and complied with, without material
expense; any additional Environmental Permits that may be required of any
of them will be timely obtained and complied with, without material
expense; and compliance with any Environmental Law that is or is expected
to become applicable to any of them will be timely attained and
maintained, without material expense.
(b) Materials of Environmental Concern are not present at, on,
under, in, or about any real property now or formerly owned, leased or
operated by the Borrower or any of its Subsidiaries, or at any other
location (including, without limitation, any location to which Materials
of Environmental Concern have been sent for re-use or recycling or for
treatment, storage, or disposal) which could reasonably be expected to (i)
give rise to liability of the Borrower or any of its Subsidiaries under
any applicable Environmental Law or otherwise result in costs to the
Borrower or any of its Subsidiaries, or (ii) interfere with the Borrower's
or any of its Subsidiaries' continued operations, or (iii) impair the fair
saleable value of any real property owned or leased by the Borrower or any
of its Subsidiaries.
50
(c) There is no judicial, administrative, or arbitral proceeding
(including any notice of violation or alleged violation) under or relating
to any Environmental Law to which the Borrower or any of its Subsidiaries
is, or to the knowledge of the Borrower or any of its Subsidiaries will
be, named as a party that is pending or, to the knowledge of the Borrower
or any of its Subsidiaries, threatened.
(d) Neither the Borrower nor any of its Subsidiaries has received
any written request for information, or been notified that it is a
potentially responsible party under or relating to the federal
Comprehensive Environmental Response, Compensation, and Liability Act or
any similar Environmental Law, or with respect to any Materials of
Environmental Concern.
(e) Neither the Borrower nor any of its Subsidiaries has entered
into or agreed to any consent decree, order, or settlement or other
agreement, or is subject to any judgment, decree, or order or other
agreement, in any judicial, administrative, arbitral, or other forum for
dispute resolution, relating to compliance with or liability under any
Environmental Law.
(f) Neither the Borrower nor any of its Subsidiaries has assumed or
retained, by contract or operation of law, any liabilities of any kind,
fixed or contingent, known or unknown, under any Environmental Law or with
respect to any Materials of Environmental Concern.
4.18 Accuracy of Information, etc.
No statement or information contained in this Agreement, any other
Loan Document or any other document, certificate or statement furnished to the
Administrative Agent or the Lenders or any of them, by or on behalf of any Loan
Party for use in connection with the transactions contemplated by this Agreement
or the other Loan Documents, contained as of the date such statement,
information, document or certificate was so furnished, any untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements contained herein or therein not misleading. The projections and pro
forma financial information contained in the materials referenced above are
based upon good faith estimates and assumptions believed by management of the
Borrower to be reasonable at the time made, it being recognized by the Lenders
that such financial information as it relates to future events is not to be
viewed as fact and that actual results during the period or periods covered by
such financial information may differ from the projected results set forth
therein by a material amount. There is no fact known to any Loan Party that
could reasonably be expected to have a Material Adverse Effect that has not been
disclosed herein, in the other Loan Documents or in any other documents,
certificates and statements furnished to the Administrative Agent, for
distribution to the Lenders, for use in connection with the transactions
contemplated hereby and by the other Loan Documents.
4.19 Security Documents.
The Guarantee and Pledge Agreement is effective to create in favor
of the Administrative Agent, for the benefit of the Secured Parties, a legal,
valid and enforceable security interest in the Collateral described therein and
proceeds thereof. In the case of the
51
Pledged Stock described in the Guarantee and Pledge Agreement, (i) with respect
to any Pledged Stock which are in certificated form, when any stock certificates
representing such Pledged Stock are delivered to the Administrative Agent, and
(ii) in the case of any other Pledged Stock, when financing statements in
appropriate form are filed in the offices specified on Schedule 4.19 (which
financing statements have been duly completed and delivered to the
Administrative Agent), the Guarantee and Pledge Agreement shall constitute a
fully perfected Lien on, and security interest in, all right, title and interest
of the Loan Parties in such Collateral and the proceeds thereof, as security for
the Obligations (as defined in the Guarantee and Pledge Agreement), in each case
prior and superior in right to any other Person.
4.20 Solvency.
Each Loan Party is, and after giving effect to the incurrence of all
Indebtedness and obligations being incurred pursuant to the Loan Documents will
be and will continue to be, Solvent.
4.21 Licenses and Certifications. Without implying any limitation to
the other representations and warranties contained in this Agreement or any of
the other Loan Documents, the Borrower and its Subsidiaries have obtained all
Licenses necessary or desirable under all Requirements of Law for the operation
of the Living Facilities as they are currently being operated, except to the
extent such failure to obtain such Licenses could not reasonably be expected to
have a Material Adverse Effect. With respect to each License the Borrower and
its Subsidiaries possess, (i) no default has occurred or is continuing under the
terms thereof, and no event has occurred which, with the giving of notice or the
lapse of time, or both, would constitute a breach of any condition to the
issuance, maintenance, renewal and/or continuance thereof, (ii) the Borrower and
its Subsidiaries have paid all fees, charges and other expenses to the extent
due and payable with respect to, and have provided all information and otherwise
complied with all material conditions precedent to, the issuance, maintenance,
renewal, and continuance of such License, (iii) none of such Licenses are
conditional, provisional, probationary or restricted in any way, (iv) the
Borrower and its Subsidiaries have not received any notice from any Governmental
Authority relating to any actual or pending suspension, revocation, restriction,
or imposition of any probationary use of such License, nor has any such License
been materially amended, supplemented, rescinded, terminated, or otherwise
modified except as otherwise disclosed in writing to, and approved by, the
Administrative Agent, (v) each License has been issued for a period of at least
12 months from the date of issuance or for such lesser time to the extent the
issuance for less than 12 months is not the consequence of any sanctions imposed
by any Governmental Authority and (vi) each License is and will continue to be
held free from restrictions or known conflicts that would materially impair the
use or operation of the applicable Living Facility as intended, except, in each
case, to the extent the failure to comply with any of the above could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
4.22 Operating Agreements and Management Contracts. The Borrower has
delivered to the Administrative Agent a true and correct copy of all material
Operating Agreements and Management Contracts, and all amendments, supplements
and modifications thereto. With respect to each such material Operating
Agreement and Management Contract, none of the Borrower or any Subsidiary is,
nor to the knowledge of the Borrower is any other
52
party to any such agreement, in default thereunder, which default or defaults
could reasonably be expected to have a Material Adverse Effect.
4.23 Hill-Burton Act. The Borrower and its Subsidiaries have not,
nor to the Borrower's knowledge, has any prior owner of any Living Facility
during the 20-year period immediately preceding the date hereof, received any
funds to finance the construction and/or acquisition of any Living Facility
pursuant to Title VI of the Public Health Service Act (commonly referred to as
the Hill-Burton Act) or Title XVI of the Public Health Service Act.
4.24 Medicare/Medicaid. The aggregate amount of Medicaid and
Medicare payments or reimbursements received by the Borrower and its
Subsidiaries during any fiscal year of the Borrower does not exceed 10% of the
Consolidated Revenue of the Borrower and its Subsidiaries during any such fiscal
year.
4.25 Compliance. The Borrower and each of its Subsidiaries are in
compliance with all Requirements of Law relating to the ownership, use,
occupancy or operation of the Living Facilities, including, without limitation,
(i) staffing requirements, (ii) health and fire safety codes including quality
and safety standards, (iii) accepted professional standards and principles that
apply to the provision of services at each Living Facility, (iv) federal, state
or local laws, rules, regulations or published interpretations or policies
relating to the prevention of fraud and abuse, (v) insurance, reimbursement and
cost reporting requirements, government payment program requirements and
disclosure of ownership and related information requirements, (vi) requirements
of applicable Governmental Authorities or Agencies, including those relating to
each Living Facility's physical structure and environment, licensing, quality
and adequacy of nursing facility care, distributions of pharmaceuticals, rate
setting, equipment, personnel, operating policies, and additions of Living
Facilities and services, and (vii) any other applicable laws, regulations or
agreements for reimbursement for the type of care or services provided by the
Borrower with respect to each Living Facility, except, in each case, to the
extent such noncompliance could not reasonably be expected to have a Material
Adverse Effect.
4.26 Agreements with Residents; Residents' Records. There are no
material agreements with residents of any Living Facility that conflict in any
material adverse respect with any statutory or regulatory requirements. To the
Borrower's knowledge, all resident records at each Living Facility, including
patient and/or resident accounts records, are true, complete, and correct in all
material respects.
4.27 HIPAA. The Borrower is in compliance with HIPAA, except to the
extent such noncompliance could not reasonably be expected to have a Material
Adverse Effect.
4.28 Submissions. All Medicare, Medicaid, and private insurance cost
reports and financial reports submitted to any Agency or Governmental Authority
by or on behalf of each Living Facility are and will continue to be true and
accurate in all material respects and have not been and will not be misleading
in any material respect. There are (i) no current, pending or outstanding
Medicare, Medicaid or third-party payor programs reimbursement audits
53
or appeals pending at any of the Living Facilities, (ii) no cost report years
that are subject to audits, no cost reports remain "open" or unsettled, and
(iii) no current or pending Medicare, Medicaid or third-party payor programs
recoupment efforts at any Living Facility, in each case, except to the extent
the same could not reasonably be expected to have a Material Adverse Effect.
SECTION 5. CONDITIONS PRECEDENT
5.1 Conditions to Initial Extension of Credit.
The agreement of each Lender to make the initial Extension of Credit
requested to be made by it hereunder is subject to the satisfaction, prior to or
concurrently with the making of such Extension of Credit on the Closing Date, of
the following conditions precedent:
(a) Loan Documents. The Administrative Agent shall have received (i)
this Agreement, executed and delivered by a duly authorized officer of the
Borrower, (ii) the Guarantee and Pledge Agreement, executed and delivered
by a duly authorized officer of (x) the Borrower, (y) each Subsidiary of
the Borrower unless each Subsidiary of such Subsidiary is an Excluded
Pledge Subsidiary and (z) each Subsidiary which is not an Excluded
Guarantee Subsidiary and (iii) a Lender Addendum executed and delivered by
each Lender and accepted by the Borrower.
(b) Pro Forma Balance Sheet; Financial Statements. The Lenders shall
have received (i) the Pro Forma Balance Sheet, (ii) the audited
consolidated balance sheet of the Borrower as at July 1, 2005, (iii) the
unaudited consolidated balance sheet of the Borrower as at September 30,
2005, (iv) the audited combined financial statements of the Brookdale
Facility Group as at December 31, 2003 and December 31, 2004, (v) the
audited combined financial statements of the properties comprising the
Fortress CCRC Portfolio as at December 31, 2003 and December 31, 2004, and
(vi) the audited combined financial statements of the properties
comprising the Prudential Portfolio as at December 31, 2003 and December
31, 2004.
(c) Approvals. All material governmental and third party approvals
(including landlords' and other consents) necessary in connection with the
transactions contemplated hereby shall have been obtained and be in full
force and effect.
(d) Existing Indebtedness Agreements. The Borrower shall have
delivered, or made available, to the Administrative Agent, true and
correct copies of any debt instrument, security agreement or other
material contract in effect as of the date hereof to which the Borrower
and its Subsidiaries may be a party.
(e) Termination of Existing Credit Facilities. The Administrative
Agent shall have received evidence satisfactory to the Administrative
Agent that the Existing Credit Facility shall be simultaneously terminated
and that all amounts thereunder shall be simultaneously paid in full.
54
(f) Fees. The Lenders and the Administrative Agent shall have
received all fees required to be paid by the Borrower hereunder, and all
expenses required to be paid by the Borrower hereunder for which invoices
have been presented (including reasonable fees, disbursements and other
charges of counsel to the Agents), on or before the Closing Date. All such
amounts will be paid with proceeds of Loans made on the Closing Date to
the extent that invoices in reasonable detail have been presented in
sufficient time for the Borrower to process the same prior to the Closing
Date and will be reflected in the funding instructions given by the
Borrower to the Administrative Agent on or before the Closing Date.
(g) Business Plan. The Lenders shall have received a satisfactory
business plan for fiscal years 2006 through 2007.
(h) Solvency Certificate. The Borrower shall have executed a
solvency certificate in form reasonably acceptable to the Administrative
Agent.
(i) Lien Searches. The Administrative Agent shall have received the
results of a recent lien search in each of the jurisdictions in which
Uniform Commercial Code financing statement or other filings or
recordations should be made to evidence or perfect security interests in
the Collateral, and such search shall reveal no liens on any of the
Collateral, except for Liens permitted by Section 7.3.
(j) Environmental Matters. The Administrative Agent shall have
received, to the extent available, the existing ESAs for the real property
owned or leased by the Borrower and its Subsidiaries on the Closing Date.
(k) Closing Certificate. The Administrative Agent shall have
received a certificate of each Loan Party, dated the Closing Date,
substantially in the form of Exhibit C, with appropriate insertions and
attachments.
(l) Legal Opinions. The Administrative Agent shall have received the
following executed legal opinions:
(i) the legal opinion of Skadden, Arps, Slate, Meagher & Flom
LLP, counsel to the Borrower and its Subsidiaries, substantially in
the form of Exhibit E-1; and
(ii) the legal opinion of Deborah Paskin, general counsel of
the Borrower and its Subsidiaries, substantially in the form of
Exhibit E-2.
Each such legal opinion shall cover such other matters incident to
the transactions contemplated by this Agreement as the Administrative
Agent may reasonably require and shall be addressed to the Administrative
Agent and the Lenders.
(m) Pledged Stock; Stock Powers; Acknowledgment and Consent; Pledged
Notes. The Administrative Agent shall have received (i) the certificates
representing the shares of Capital Stock pledged pursuant to the Guarantee
and Pledge Agreement, together with an undated stock power for each such
certificate executed in blank by a
55
duly authorized officer of the pledgor thereof, and (ii) an Acknowledgment
and Consent, substantially in the form of Annex II to the Guarantee and
Pledge Agreement, duly executed by any issuer of Capital Stock pledged
pursuant to the Guarantee and Pledge Agreement that is not itself a party
to the Guarantee and Pledge Agreement.
(n) Filings, Registrations and Recordings. Each document (including,
without limitation, any Uniform Commercial Code financing statement)
required by the Security Documents, by applicable law or as reasonably
requested by the Administrative Agent to be filed, registered or recorded
in order to create in favor of the Administrative Agent, for the benefit
of the Secured Parties, a perfected Lien on the Collateral described
therein, prior and superior in right to any other Person (other than with
respect to Liens expressly permitted by Section 7.3), shall have been
filed, registered or recorded or shall have been delivered to the
Administrative Agent in proper form for filing, registration or
recordation.
(o) PATRIOT Act. The Lenders shall have received, sufficiently in
advance of the Closing Date, all documentation and other information
required by bank regulatory authorities under applicable "know your
customer" and anti-money laundering rules and regulations, including
without limitation the United States PATRIOT Act.
(p) No Change. Except as set forth on Schedule 4.2, since December
31, 2004 there shall have been no development or event that has had or
could reasonably be expected to have a Material Adverse Effect.
5.2 Conditions to Each Extension of Credit.
The agreement of each Lender to make any Extension of Credit
requested to be made by it hereunder on any date (including, without limitation,
its initial Extension of Credit) is subject to the satisfaction of the following
conditions precedent:
(a) Representations and Warranties. Each of the representations and
warranties made by any Loan Party in or pursuant to the Loan Documents
shall be true and correct on and as of such date as if made on and as of
such date, except to the extent that any such representation and warranty
is made with respect to a specified date.
(b) No Default. No Default or Event of Default shall have occurred
and be continuing on such date or after giving effect to the Extensions of
Credit requested to be made on such date.
Each borrowing by and issuance of a Letter of Credit on behalf of
the Borrower hereunder shall constitute a representation and warranty by the
Borrower as of the date of such Extension of Credit that the conditions
contained in this Section 5.2 have been satisfied.
56
SECTION 6. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain
in effect, any Letter of Credit remains outstanding or any Loan or other amount
is owing to any Lender or any Agent hereunder, the Borrower shall and shall
cause each of its Subsidiaries to:
6.1 Financial Statements.
Furnish to the Administrative Agent for distribution to each Lender:
(a) as soon as available, but in any event within 90 days after the
end of each fiscal year of the Borrower, a copy of the audited
consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of such year and the related audited
consolidated statements of income and of cash flows for such year, setting
forth in each case in comparative form the figures as of the end of and
for the previous year, reported on without a "going concern" or like
qualification or exception, or qualification arising out of the scope of
the audit, by Ernst & Young LLP or other independent certified public
accountants of nationally recognized standing; and
(b) as soon as available, but in any event not later than 45 days
after the end of each of the first three quarterly periods of each fiscal
year of the Borrower, the unaudited consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as at the end of such quarter
and the related unaudited consolidated statements of income and of cash
flows for such quarter and the portion of the fiscal year through the end
of such quarter, setting forth in each case in comparative form the
figures as of the end of and for the corresponding period in the previous
year, certified by a Responsible Officer as being fairly stated in all
material respects (subject to normal year-end audit adjustments);
all such financial statements to be complete and correct in all material
respects and to be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
6.2 Certificates; Other Information.
Furnish to the Administrative Agent for distribution to each Lender,
or, in the case of clause (f), to the relevant Lender:
(a) commencing with consolidated financial statements dated as of
and for the year ended December 31, 2006, concurrently with the delivery
of the financial statements referred to in Section 6.1(a), a certificate
of the independent certified public accountants reporting on such
financial statements stating that in making the examination necessary
therefor no knowledge was obtained of any Default or Event of Default,
except as specified in such certificate (it being understood that such
certificate shall be limited to the items that independent certified
public accountants are permitted to cover in such certificates pursuant to
their professional standards and customs of the profession);
57
(b) concurrently with the delivery of any financial statements
pursuant to Section 6.1, (i) a certificate of a Responsible Officer
stating that, to the best of such Responsible Officer's knowledge, each
Loan Party during such period has observed or performed all of its
covenants and other agreements, and satisfied every condition, contained
in this Agreement and the other Loan Documents to which it is a party to
be observed, performed or satisfied by it, and that such Responsible
Officer has obtained no knowledge of any Default or Event of Default
except as specified in such certificate and (ii) in the case of quarterly
or annual financial statements, (x) a Compliance Certificate containing
all information and calculations necessary for determining compliance by
the Borrower and its Subsidiaries with the provisions of this Agreement
referred to therein as of the last day of the fiscal quarter or fiscal
year of the Borrower, as the case may be and (y) any UCC financing
statements or other filings specified in such Compliance Certificate as
being required to be delivered therewith;
(c) as soon as available, and in any event no later than 45 days
after the end of each fiscal year of the Borrower, a detailed consolidated
budget for the following fiscal year (including a projected consolidated
balance sheet of the Borrower and its Subsidiaries as of the end of the
following fiscal year, and the related consolidated statements of
projected cash flow, projected changes in financial position and projected
income and a description of the underlying assumptions applicable
thereto), and, as soon as available, significant revisions, if any, of
such budget and projections with respect to such fiscal year
(collectively, the "Projections"), which Projections shall in each case be
accompanied by a certificate of a Responsible Officer stating that such
Projections are good faith estimates and assumptions believed by
management of the Borrower to be reasonable at the time made and that such
Responsible Officer has no reason to believe that such Projections are
incorrect or misleading in any material respect;
(d) within 45 days after the end of each fiscal quarter of the
Borrower, a narrative discussion and analysis of the financial condition
and results of operations of the Borrower and its Subsidiaries for such
fiscal quarter and for the period from the beginning of the then current
fiscal year to the end of such fiscal quarter, as compared to the portion
of the Projections covering such periods and to the comparable periods of
the previous year, provided that, it is understood and agreed that
information required to be delivered pursuant to this Section 6.2(d) shall
be satisfied by the filing of the Borrower's quarterly report on form 10-Q
with the SEC on or prior to such date;
(e) within five days after the same are sent, copies of all
financial statements and reports that the Borrower sends to the holders of
any class of its debt securities or public equity securities to the extent
not otherwise filed with the SEC; and
(f) promptly, such additional financial and other information as any
Lender may from time to time reasonably request.
6.3 Payment of Obligations.
Pay, discharge or otherwise satisfy at or before maturity or before
they become delinquent, as the case may be, all its material obligations of
whatever nature, except where the
58
amount or validity thereof is currently being contested in good faith by
appropriate proceedings and reserves in conformity with GAAP with respect
thereto have been provided on the books of the Borrower or its Subsidiaries, as
the case may be.
6.4 Maintenance of Existence; Compliance with Contractual
Obligations.
(a)(i) Preserve, renew and keep in full force and effect its organizational
existence and (ii) take all reasonable action to maintain all rights, privileges
and franchises necessary or desirable in the normal conduct of its business,
except, in each case, as otherwise permitted by Section 7.4 and except, in the
case of clause (ii) above, to the extent that failure to do so could not
reasonably be expected to have a Material Adverse Effect; and (b) comply with
all Contractual Obligations, except to the extent that failure to comply
therewith could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
6.5 Conduct of Business and Compliance with Law. (a) Comply with all
material Requirements of Law, including, without limitation, the Occupational
Safety and Health Act of 1970, regulations issued under the Omnibus Budget
Reconciliation Act of 1987, any Governmental Requirement relating to "informed
consents" and rights of residents, qualifications of staff, staffing
requirements and delivery of services in a manner sufficient to protect the
health and safety of residents, (b) maintain in full force and effect all
material Licenses necessary to the ownership and/or operation of the Living
Facilities, (c) maintain or cause to be maintained in all material respects a
standard of care with respect to the Living Facilities at a level consistent
with industry standard, (d) maintain or cause to be maintained in all material
respects a standard of care in the storage, use, transportation and disposal of
all medical equipment, medical supplies, medical products and medical waste, of
any kind and in any form, that is in accordance with, at least, a level
consistent with industry standard and in conformity with all Requirements of
Law, (e) operate, or cause to be operated, each Living Facility at a level
consistent with industry standard and in compliance with all material
Requirements of Law relating thereto and cause all material Licenses, permits,
and any other agreements necessary for the use and operation of each Living
Facility to remain in effect, (f) correct or cause to be corrected any material
deficiency set forth in any Agency statement of deficiencies, the curing of
which is a condition of continued licensure or for accreditation of the Living
Facilities, (g) maintain or cause to be maintained in all material respects
sufficient inventory and equipment of types and quantities at each Living
Facility to enable the Borrower and its Subsidiaries to operate each Living
Facility adequately and in a manner which will enable the Borrower and its
Subsidiaries to comply with the provisions of the Loan Documents, and (h)
maintain or cause to be maintained all deposits, including, without limitation,
deposits relating to residents or Resident Agreements in accordance with all
material Requirements of Law, except, in each case, to the extent the same could
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Affect; provided that, with respect to item (f) above, the Borrower and
its Subsidiaries may in good faith, by appropriate proceedings, contest the
validity or applicability of any deficiency set forth in any Agency statement of
deficiencies and pending such contest the Borrower and its Subsidiaries shall
not be deemed in default hereunder if (1) such contest does not endanger the
validity of any material License in any manner that reasonably may inhibit the
use of the applicable Living Facility in its current use, (2) such contest does
not result in potential life safety issues for the residents of the applicable
59
Living Facility (in the Administrative Agent's reasonable discretion), and (3)
the Borrower keeps the Administrative Agent reasonably informed as to the status
of such contest.
6.6 Maintenance of Property; Insurance.
(a) Maintain, preserve, protect, and keep, or cause to be kept, in
all material respects all the Living Facilities in good condition and working
order, ordinary wear and tear excepted, and in compliance with all applicable
material Requirements of Law, and (b) maintain with financially sound and
reputable insurance companies insurance on all its Property in at least such
amounts and against at least such risks (but including in any event public
liability, professional liability and business interruption) as are customarily
insured against in the same general area by companies engaged in the same or a
similar business.
6.7 Inspection of Property; Books and Records; Discussions.
(a) Keep proper books of records and account in which full, true and
correct entries in conformity with GAAP and all Requirements of Law shall be
made of all dealings and transactions in relation to its business and activities
and (b) permit representatives of any Lender to visit and inspect any of its
properties (including, without limitation, any Living Facility) and examine and
make abstracts from any of its books and records upon reasonable notice at any
reasonable time and as often as may reasonably be desired and to discuss the
business, operations, properties and financial and other condition of the
Borrower and its Subsidiaries with officers and employees of the Borrower and
its Subsidiaries and with its independent certified public accountants. Any such
inspection shall be at the Lender's sole cost and expense unless an Event of
Default has occurred and is continuing at the time of such inspection, in which
event the Borrower shall reimburse such Lender for its reasonable, actual
out-of-pocket costs and expenses. Notwithstanding the foregoing, none of the
Borrower or any Subsidiary shall be required to make available any information,
the disclosure of which could result in a violation of, or expose the Borrower
or any Subsidiary, to any material liability under any applicable law
(including, without limitation, pursuant to HIPAA) or any agreement with any
unaffiliated third party which is binding on the Borrower and/or any Subsidiary.
6.8 Notices.
Promptly give notice to the Administrative Agent for distribution to
each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) the following events: any (i) default or event of default under
any Contractual Obligation of the Borrower or any of its Subsidiaries or
(ii) litigation, investigation or proceeding which may exist at any time
between the Borrower or any of its Subsidiaries and any Governmental
Authority, that in either case, if not cured or if adversely determined,
as the case may be, could reasonably be expected to have a Material
Adverse Effect;
(c) any litigation or proceeding affecting the Borrower or any of
its Subsidiaries (i) in which injunctive or similar relief is sought with
respect to any material operation of the Borrower or its Subsidiaries,
(ii) which relates to any Loan Document or (iii) in which the Borrower or
any Subsidiary is a party if an adverse decision therein is reasonably
60
likely which would require the Borrower or any Subsidiary to pay more than
$1,000,000 with respect to any single claim (or deliver assets the value
of which exceeds such sum (whether or not the claim is considered to be
covered by insurance)) or $10,000,000 in the aggregate;
(d) the following events, as soon as possible and in any event
within 30 days after the Borrower knows or reasonably should have notice
of same: (i) the occurrence of any Reportable Event with respect to any
Plan, a failure to make any required contribution to a Plan, the creation
of any Lien in favor of the PBGC or a Plan or any withdrawal from, or the
termination, Reorganization or Insolvency of, any Multiemployer Plan or
(ii) the institution of proceedings or the taking of any other action by
the PBGC or the Borrower or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the
termination, Reorganization or Insolvency of, any Plan;
(e) as soon as possible and in any event within 30 days of obtaining
knowledge thereof: (i) any development, event, or condition that,
individually or in the aggregate with other developments, events or
conditions, could reasonably be expected to result in the payment by the
Borrower and its Subsidiaries, in the aggregate, of a Material
Environmental Amount; and (ii) any written notice that any governmental
authority may deny any application for an Environmental Permit sought by,
or revoke or refuse to renew any Environmental Permit held by, the
Borrower;
(f) the actual, pending or, to the extent the Borrower or its
Subsidiaries has actual knowledge, threatened (i) revocation, suspension,
probation, restriction, limitation, forfeiture or refusal to renew of any
material License, or (ii) the issuance or pending issuance of any material
License for a period of less than 12 months, as a consequence of sanctions
imposed by any Governmental Authority, or (iii) the assessment or
threatened or pending assessment, of any civil or criminal penalties by
any Governmental Authority or agent, or any accreditation organization in
an aggregate amount exceeding $1,000,000;
(g) any action, including, but not limited to the amendment of any
material License, or the issuance of any new material License or
certification for a Living Facility, under which the Borrower and its
Subsidiaries propose to (i) develop a new facility or service, (ii) change
any existing facility or service, or (iii) eliminate any existing or
proposed service, which action requires the Borrower or any of its
Subsidiaries to seek either a certificate of need approval or exemption
from certificate of need review or which requires amendment of any
material License or the issuance of any new material License or
certificate for a Living Facility; and
(h) any development or event that has had or could reasonably be
expected to have a Material Adverse Effect.
Each notice pursuant to this Section shall be accompanied by a
statement of a Responsible Officer setting forth details of the occurrence
referred to therein and stating what action the Borrower or the relevant
Subsidiary proposes to take with respect thereto.
61
6.9 Deficiency Notices. Without implying any limitation on any other
provisions of this Agreement or any of the other Loan Documents, furnish or
cause to be furnished to the Administrative Agent immediately after receipt
thereof copies of all (i) material Deficiency Notices, (ii) material Agency
inspection reports, audits, surveys, investigations, reviews or evaluations,
(iii) notices and written communications from any state or any Agency relating
to material adjustments in reimbursement amounts or to rate reviews,
modifications of rates, inflation adjustments, rate agreements or the like, and
(iv) responses by, or on behalf of, the Borrower and its Subsidiaries with
respect to any of the foregoing. The Borrower shall or shall cause the relevant
Subsidiaries to commence promptly and diligently pursue the correction of the
subject of each such material Deficiency Notice, and shall correct the subject
of such Deficiency Notice promptly, but in any event on or prior to the date of
expiration of any period allowed by the Agency for correction. The Borrower
shall, at the Administrative Agent's reasonable request, promptly provide from
time to time such cost estimates, reports and other information regarding any
such correction by the Borrower and its Subsidiaries.
6.10 Environmental Laws.
(a) Comply in all material respects with, and ensure compliance in
all material respects by all tenants and subtenants, if any, with, all
applicable Environmental Laws, and obtain and comply and maintain in all
material respects with, and ensure that all tenants and subtenants obtain and
comply and maintain in all material respects with, any and all licenses,
approvals, notifications, registrations or permits required by applicable
Environmental Laws.
(b) Conduct and complete in all material respects all
investigations, studies, sampling and testing, and all remedial, removal and
other actions required under Environmental Laws and promptly comply in all
material respects with all lawful orders and directives of all Governmental
Authorities regarding Environmental Laws.
6.11 Additional Collateral, etc. With respect to any new Subsidiary
(other than a Foreign Subsidiary) created or acquired after the Closing Date
(which, for purposes of this paragraph, shall include any existing Subsidiary
that ceases to be a Foreign Subsidiary, a Management Subsidiary, an Inactive
Subsidiary or an Excluded Pledge Subsidiary) by the Borrower or any of its
Subsidiaries, promptly (i) execute and deliver to the Administrative Agent such
amendments to the Guarantee and Pledge Agreement as the Administrative Agent
deems necessary or advisable to grant to the Administrative Agent, for the
benefit of the Secured Parties, a perfected first priority security interest in
all of the Capital Stock of such new Subsidiary that is owned by the Borrower or
any of its Subsidiaries, to the extent not otherwise prohibited pursuant to any
Contractual Obligation, (ii) deliver to the Administrative Agent the
certificates representing such Capital Stock, if any, together with, if
applicable, undated stock powers, in blank, executed and delivered by a duly
authorized officer of the Borrower or such Subsidiary, as the case may be, and
(iii) cause such new Subsidiary (A) (other than an Excluded Guarantee
Subsidiary) to become guarantor under the Guarantee and Pledge Agreement and (B)
to take such actions reasonably necessary or advisable to grant to the
Administrative Agent for the benefit of the Secured Parties a perfected first
priority security interest in the Collateral described in the Guarantee and
Pledge Agreement with respect to such new Subsidiary (other than the Capital
Stock of any Excluded Pledge Subsidiary), including, without limitation, the
filing of Uniform Commercial Code financing statements in such jurisdictions as
may be
62
required by the Guarantee and Pledge Agreement or by applicable law or as
may be reasonably requested by the Administrative Agent.
6.12 Further Assurances.
From time to time execute and deliver, or cause to be executed and
delivered, such additional instruments, certificates or documents, and take such
actions, as the Administrative Agent may reasonably request for the purposes of
implementing or effectuating the provisions of this Agreement and the other Loan
Documents, or of more fully perfecting or renewing the rights of the
Administrative Agent and the Lenders with respect to the Collateral (or with
respect to any additions thereto or replacements or proceeds thereof or with
respect to any other property or assets hereafter acquired by the Borrower or
any Subsidiary which may be deemed to be part of the Collateral) pursuant hereto
or thereto. Upon the exercise by the Administrative Agent or any Lender of any
power, right, privilege or remedy pursuant to this Agreement or the other Loan
Documents which requires any consent, approval, recording, qualification or
authorization of any Governmental Authority, the Borrower will execute and
deliver, or will cause the execution and delivery of, all applications,
certifications, instruments and other documents and papers that the
Administrative Agent or such Lender may be reasonably required to obtain from
the Borrower or any of its Subsidiaries for such governmental consent, approval,
recording, qualification or authorization.
6.13 Resident Agreements. Deliver, or cause to be delivered, to the
Administrative Agent when reasonably requested by the Administrative Agent, all
information reasonably requested by the Administrative Agent with respect to all
Resident Agreements, excluding, however any medical or other private resident
information.
6.14 Census Report and Surveys. Deliver to the Administrative Agent,
promptly following the reasonable request of the Administrative Agent, reports
prepared on a consolidated basis of the periodic resident census of the Living
Facilities, including summaries of (i) the source of payment, (ii) licensure
survey results and (iii) accreditation survey results and such other information
relating to the operation of each Living Facility as may reasonably be requested
by the Administrative Agent from time to time, in each case, on a consolidated
basis.
6.15 Post-Closing Covenants.
(a) Deliver to the Administrative Agent, on a rolling basis prior to
the date that is the six month anniversary of the Closing Date, an American
Society for Testing & Materials ("ASTM") compliant Environmental Site Assessment
("ESA") dated no earlier than the date that is twelve months prior to the
Closing Date for each parcel of real property owned or leased by the Borrower
and its Subsidiaries; provided, that, for any ESA dated on or after January 1,
1997 delivered to the Administrative Agent on or prior to the Closing Date, the
Borrower shall only be required to deliver to the Administrative Agent an update
to such existing ESA. Any ESA, update or review delivered to the Administrative
Agent pursuant to this Section 6.15(a) (x) shall be addressed to Administrative
Agent for the benefit of the Lenders by an environmental consultant selected by
the Administrative Agent or otherwise acceptable to the Administrative Agent and
shall contain such information, results, and certifications as the
Administrative Agent may reasonably require, (y) must be reasonably satisfactory
to the Administrative Agent and
63
(z) if not addressed to Administrative Agent for the benefit of the Lenders, the
Borrower will cause a reliance letter, in form and substance satisfactory to the
Administrative Agent, to be provided to the Administrative Agent.
(b) Deliver to the Administrative Agent, concurrently with the
delivery of any ESA or updated ESA pursuant to Section 6.15(a), a summary of
such ESA or updated ESA prepared by a third-party environmental consultant
acceptable to the Administrative Agent in the form of Exhibit K.
(c) If any ESA or update delivered pursuant to Section 6.15(a)
identifies a Recognized Environmental Condition ("REC"), as defined under ASTM
guidelines, Borrower shall, within six months of the delivery of such ESA or
update to the Administrative Agent, conduct such follow up testing and take such
other actions as may be required or approved by the applicable Governmental
Authorities to mitigate such REC, and provide such reports as may be required by
the applicable Governmental Authorities to the Administrative Agent to mitigate
such REC.
SECTION 7. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain
in effect, any Letter of Credit remains outstanding or any Loan or other amount
is owing to any Lender or any Agent hereunder, the Borrower shall not, and shall
not permit any of its Subsidiaries to, directly or indirectly:
7.1 Financial Condition Covenants.
(a) Consolidated Leverage Ratio. Permit the Consolidated Leverage
Ratio as at the last day of any period of four consecutive fiscal quarters
of the Borrower (or, if less, the number of full fiscal quarters
subsequent to the Closing Date) to exceed 10.00 to 1.00; provided, that
for the purposes of determining the ratio described above for the fiscal
quarters of the Borrower ending March 31, 2006, June 30, 2006 and
September 30, 2006, Consolidated EBITDA for the relevant period shall be
deemed to equal Consolidated EBITDA for such fiscal quarter (and, in the
case of the latter two such determinations, each previous fiscal quarter
commencing after the Closing Date) multiplied by 4, 2 and 4/3,
respectively.
(b) Consolidated Adjusted Leverage Ratio. Permit the Consolidated
Adjusted Leverage Ratio as at the last day of any period of four
consecutive fiscal quarters of the Borrower (or, if less, the number of
full fiscal quarters subsequent to the Closing Date) to exceed 9.00 to
1.00; provided, that for the purposes of determining the ratio described
above for the fiscal quarters of the Borrower ending March 31, 2006, June
30, 2006 and September 30, 2006, Consolidated EBITDAR for the relevant
period shall be deemed to equal Consolidated EBITDAR for such fiscal
quarter (and, in the case of the later two such determinations, each
previous fiscal quarter commencing after the Closing Date) multiplied by
4, 2 and 4/3, respectively.
64
(c) Consolidated Fixed Charge Coverage Ratio. Permit the
Consolidated Fixed Charge Coverage Ratio for any period of four
consecutive fiscal quarters of the Borrower (or, if less, the number of
full fiscal quarters subsequent to the Closing Date) to be less than 1.10
to 1.00; provided, that for the purposes of determining the ratio
described above for the fiscal quarters of the Borrower ending March 31,
2006, June 30, 2006 and September 30, 2006, Consolidated EBITDAR and
Consolidated Fixed Charges for the relevant period shall be deemed to
equal Consolidated EBITDAR and Consolidated Fixed Charges for such fiscal
quarter (and, in the case of the later two such determinations, each
previous fiscal quarter commencing after the Closing Date) multiplied by
4, 2 and 4/3, respectively.
(d) Maintenance of Tangible Net Worth. Permit Tangible Net Worth at
any time after the Closing Date to be less than $525,000,000.
7.2 Limitation on Indebtedness.
Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party pursuant to any Loan Document;
(b) Indebtedness of (i) the Borrower to any Subsidiary, (ii) any
Wholly Owned Subsidiary Guarantor to the Borrower or any other Subsidiary,
and (iii) to the extent the same does not exceed $25,000,000 in the
aggregate at any one time outstanding, any Subsidiary to the Borrower or
any other Subsidiary;
(c) Indebtedness (including, without limitation, Capital Lease
Obligations) secured by Liens permitted by Section 7.3(g) in an aggregate
principal amount not to exceed $5,000,000 at any one time outstanding;
(d) Indebtedness outstanding on the date hereof and listed on
Schedule 7.2(d) and any refinancings, refundings, renewals or extensions
thereof (without any increase in the principal amount thereof or any
shortening of the maturity of any principal amount thereof);
(e) Guarantee Obligations made in the ordinary course of business by
the Borrower or any of its Subsidiaries of (i) obligations of the Borrower
or any Subsidiary Guarantor and (ii) any guarantee of obligations under
any operating lease;
(f) Indebtedness (excluding any Recourse Indebtedness) in respect of
the Borrower and its Subsidiaries secured by fee-owned or leasehold real
property of the Borrower and its Subsidiaries, provided that, with respect
to any such Indebtedness (x) such Indebtedness shall not mature prior to
February 10, 2008, (y) neither the Borrower nor any of its Subsidiaries
provides credit support of any kind (including any undertaking, agreement
or instrument that would constitute Indebtedness) or is directly or
indirectly liable (as guarantor or otherwise), other than as primary
obligor or, in the case of the Borrower or any Subsidiary, as guarantor,
for personal recourse against such party for any such Indebtedness for
fraud, misrepresentation, misapplication of cash, waste, environmental
claims and liabilities and other circumstances customarily excluded by
65
institutional lenders from exculpation provisions and/or included in
separate indemnification agreements in non-recourse financing of real
estate, and (z) as to which the lenders thereunder will not have any
recourse to the Capital Stock or assets of the Borrower and any of its
Subsidiaries other than the asset financed by such Indebtedness,
additions, accessions and improvements thereto and proceeds thereof and,
in the case of the Borrower or any Subsidiary, personal recourse against
such party for any such Indebtedness for fraud, misrepresentation,
misapplication of cash, waste, environmental claims and liabilities and
other circumstances customarily excluded by institutional lenders from
exculpation provisions and/or included in separate indemnification
agreements in non-recourse financing of real estate; and provided,
further, that the Borrower shall deliver to the Administrative Agent a pro
forma Compliance Certificate (i) certifying that, after giving effect to
such additional Indebtedness, no Event of Default shall exist and (ii)
containing all information and calculations necessary, and taking into
consideration such additional Indebtedness, for determining Pro Forma
Compliance with the provisions of Section 7.1 hereof;
(g) Indebtedness (excluding any Recourse Indebtedness except to the
extent such Recourse Indebtedness does not exceed $50,000,000 in the
aggregate outstanding at any one time) assumed by the Borrower or any
Subsidiary in connection with any Acquisition; provided that, such
Indebtedness existed at the time of such Acquisition and was not created
in connection therewith or in contemplation thereof; and provided,
further, that the Borrower shall deliver to the Administrative Agent a pro
forma Compliance Certificate (i) certifying that, after giving effect to
such additional Indebtedness, no Event of Default shall exist and (ii)
containing all information and calculations necessary, and taking into
consideration such additional Indebtedness, for determining Pro Forma
Compliance with the provisions of Section 7.1 hereof;
(h) Indebtedness refinancing Indebtedness secured by Liens on the
Chambrel Portfolio permitted by Section 7.3(f);
(i) letters of credit outstanding on the Closing Date issued by US
Bank and Bank Leumi with an aggregate face amount not exceeding
$6,568,268.00 and $3,505,485.82, respectively, provided that, such letters
of credit have been terminated on or prior to February 17, 2006; and
(j) additional unsecured Indebtedness of the Borrower or any of its
Subsidiaries in an aggregate principal amount (for the Borrower and all
Subsidiaries) not to exceed $15,000,000 at any one time outstanding.
7.3 Limitation on Liens.
Create, incur, assume or suffer to exist any Lien upon any of its
Property, whether now owned or hereafter acquired, except for:
(a) Liens for taxes not yet due or that are being contested in good
faith by appropriate proceedings, provided that adequate reserves with
respect thereto are
66
maintained on the books of the Borrower or its Subsidiaries, as the case
may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business
that are not overdue for a period of more than 30 days or that are being
contested in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation;
(d) deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances that, in the aggregate, do not in any case materially detract
from the value of the Property subject thereto or materially interfere
with the ordinary conduct of the business of the Borrower or any of its
Subsidiaries;
(f) Liens in existence on the date hereof listed on Schedule 7.3(f),
securing Indebtedness permitted by Sections 7.2(d) and (h), provided that
no such Lien is spread to cover any additional Property after the Closing
Date and that the amount of Indebtedness secured thereby is not increased;
(g) Liens securing Indebtedness of the Borrower or any other
Subsidiary incurred pursuant to Section 7.2(c) to finance the acquisition
of fixed or capital assets, provided that (i) such Liens shall be created
substantially simultaneously with the acquisition of such fixed or capital
assets, (ii) such Liens do not at any time encumber any Property other
than the Property financed by such Indebtedness, (iii) the amount of
Indebtedness secured thereby is not increased and (iv) the amount of
Indebtedness initially secured thereby is not more than 100% of the
purchase price of such fixed or capital asset;
(h) Liens on fee-owned property or ground leases (and any personal
property located on such Property) of the Borrower and its Subsidiaries
which Liens secure Indebtedness permitted by Sections 7.2(f) and (g),
provided that, in each case, (i) such Liens shall be created substantially
simultaneously with the incurrence of such Indebtedness and (ii) such
Liens do not at any time encumber any Property other than the Property
financed by such Indebtedness;
(i) Liens created pursuant to the Security Documents; and
(j) any interest or title of a lessor under any lease entered into
by the Borrower or any other Subsidiary in the ordinary course of its
business and covering only the assets so leased.
7.4 Limitation on Fundamental Changes.
67
Enter into any merger, consolidation or amalgamation, or liquidate,
wind up or dissolve itself (or suffer any liquidation or dissolution), or
Dispose of all or substantially all of its Property or business, except that:
(a) any Person (including, without limitation, any Subsidiary) may
be merged or consolidated (i) with or into the Borrower (provided that the
Borrower shall be the continuing or surviving corporation), (ii) with or
into any Subsidiary Guarantor (provided that (x) the Subsidiary Guarantor
shall be the continuing or surviving corporation or (y) simultaneously
with such transaction, the continuing or surviving corporation shall
become a Subsidiary Guarantor and the Borrower shall comply with Section
6.11 in connection therewith) or (iii) with or into any Subsidiary of the
Borrower (other than a Subsidiary Guarantor) (provided that such
Subsidiary shall be the continuing or surviving corporation); and
(b) any Subsidiary of the Borrower may Dispose of any or all of its
assets (upon voluntary liquidation or otherwise) to the Borrower or any
Subsidiary Guarantor.
7.5 Limitation on Disposition of Property.
Dispose of any of its Property (including, without limitation,
receivables and leasehold interests), whether now owned or hereafter acquired,
or, in the case of any Subsidiary, issue or sell any shares of such Subsidiary's
Capital Stock to any Person, except:
(a) the Disposition of obsolete or worn out property in the ordinary
course of business;
(b) the sale of inventory in the ordinary course of business;
(c) Dispositions permitted by Section 7.4(b);
(d) the sale or issuance of any Subsidiary's Capital Stock to the
Borrower or any Subsidiary Guarantor;
(e) the sale or disposition of the AEW Portfolio to a joint venture
in which the Borrower or its Subsidiaries has an equity interest;
(f) the Disposition of other assets the net proceeds of which shall
not exceed $25,000,000 in the aggregate for any fiscal year of the
Borrower; and
(g) any Recovery Event, provided, that the requirements of Section
2.10(b) are complied with in connection therewith.
7.6 Limitation on Restricted Payments.
Declare or pay any dividend on, or make any payment on account of,
or set apart assets for a sinking or other analogous fund for, the purchase,
redemption, defeasance, retirement or other acquisition of, any Capital Stock of
the Borrower or any Subsidiary, whether now or hereafter outstanding, or make
any other distribution in respect thereof, either directly or
68
indirectly, whether in cash or property or in obligations of the Borrower or any
Subsidiary, or enter into any derivatives or other transaction with any
financial institution, commodities or stock exchange or clearinghouse (a
"Derivatives Counterparty") obligating the Borrower or any Subsidiary to make
payments to such Derivatives Counterparty as a result of any change in market
value of any such Capital Stock (collectively, "Restricted Payments"), except
that:
(a) any Subsidiary may make Restricted Payments to the Borrower or
any Subsidiary Guarantor;
(b) the Borrower may make Restricted Payments in the form of common
stock of the Borrower;
(c) the Borrower may pay dividends to the holders of its Capital
Stock, provided that, at the time of such Restricted Payment, a
certificate of a Responsible Officer shall have been delivered to the
Administrative Agent, which shall include (i) a computation demonstrating
Pro Forma Compliance with the financial covenants contained in Section 7.1
after giving effect to such Restricted Payment and (ii) a certification
that no Default or Event of Default shall have occurred and be continuing
at such time or after giving effect to such Restricted Payment; and
(d) the Borrower may purchase the Borrower's common stock or common
stock options from present or former officers or employers of the Borrower
or any Subsidiary upon the death, disability or termination of employment
of such officer or employee, provided, that the aggregate amount of
payments under this paragraph subsequent to the date hereof (net of any
proceeds received by the Borrower subsequent to the date hereof in
connection with resales of any common stock or common stock options so
purchased) shall not exceed $5,000,000.
7.7 Limitation on Investments.
Make any advance, loan, extension of credit (by way of guaranty or
otherwise) or capital contribution to, or purchase any Capital Stock, bonds,
notes, debentures or other debt securities of, or any assets constituting an
ongoing business from, or make any other investment in, any other Person (all of
the foregoing, "Investments"), except:
(a) extensions of trade credit in the ordinary course of business;
(b) Investments in Cash Equivalents;
(c) Investments arising in connection with the incurrence of
Indebtedness permitted by Section 7.2(b) and (e);
(d) loans and advances to employees of the Borrower or any
Subsidiaries of the Borrower in the ordinary course of business
(including, without limitation, for travel, entertainment and relocation
expenses) in an aggregate amount for the Borrower and Subsidiaries of the
Borrower not to exceed $100,000 at any one time outstanding;
69
(e) Investments outstanding on the date hereof and described on
Schedule 7.7(e);
(f) Acquisitions that are consistent with, and otherwise in
connection with, those businesses in which the Borrower and its
Subsidiaries are engaged on the date hereof and that are reasonably
related thereto, provided that, at the time of such Investment, a
certificate of a Responsible Officer shall have been delivered to the
Administrative Agent, which shall include (A) a computation demonstrating
Pro Forma Compliance with the financial covenants contained in Section 7.1
after giving effect to such Investment and (B) a certification that no
Default or Event of Default shall have occurred and be continuing at such
time or after giving effect to such Investment; and
(g) Investments (other than those relating to the incurrence of
Indebtedness permitted by Section 7.7(c)) by the Borrower or any of its
Subsidiaries in the Borrower or any Person that, prior to such Investment,
is a Subsidiary Guarantor.
7.8 Limitation on Modifications of Certificate of Incorporation.
Amend its certificate of incorporation in any manner determined by
the Administrative Agent to be adverse to the Lenders.
7.9 Limitation on Transactions with Affiliates.
Enter into any transaction, including, without limitation, any
purchase, sale, lease or exchange of Property, the rendering of any service or
the payment of any management, advisory or similar fees, with any Affiliate
(other than the Borrower or any Subsidiary Guarantor) unless such transaction is
(a) otherwise permitted under this Agreement, (b) in the ordinary course of
business of the Borrower or such Subsidiary, as the case may be, and (c) upon
fair and reasonable terms no less favorable to the Borrower or such Subsidiary,
as the case may be, than it would obtain in a comparable arm's length
transaction with a Person that is not an Affiliate.
7.10 Limitation on Sales and Leasebacks.
Enter into any arrangement with any Person providing for the leasing
by the Borrower or any Subsidiary of real or personal property which has been or
is to be sold or transferred by the Borrower or such Subsidiary to such Person
or to any other Person to whom funds have been or are to be advanced by such
Person on the security of such property or rental obligations of the Borrower or
such Subsidiary, unless such Net Cash Proceeds of such arrangement are applied
in accordance with Section 2.10.
7.11 Limitation on Changes in Fiscal Periods.
Permit the fiscal year of the Borrower to end on a day other than
December 31 or change the Borrower's method of determining fiscal quarters.
7.12 Limitation on Negative Pledge Clauses.
70
Enter into or suffer to exist or become effective any agreement that
prohibits or limits the ability of the Borrower or any of its Subsidiaries to
create, incur, assume or suffer to exist any Lien upon any of the Collateral or
revenues, whether now owned or hereafter acquired, to secure the Obligations or,
in the case of any guarantor, its obligations under the Guarantee and Pledge
Agreement, other than this Agreement and the other Loan Documents and except to
the extent that any such agreement exists as of the date hereof or is assumed by
the Borrower or any of its Subsidiaries in connection with any Acquisition
permitted in Section 7.7(f).
7.13 Limitation on Restrictions on Subsidiary Distributions.
Enter into or suffer to exist or become effective any consensual
encumbrance or restriction on the ability of any Subsidiary to (a) make
Restricted Payments in respect of any Capital Stock of such Subsidiary held by,
or pay any Indebtedness owed to, the Borrower or any other Subsidiary, (b) make
Investments in the Borrower or any other Subsidiary or (c) transfer any of its
assets to the Borrower or any other Subsidiary, except for such encumbrances or
restrictions existing under or by reason of (i) any restrictions existing under
the Loan Documents, (ii) any restrictions with respect to a Subsidiary imposed
pursuant to an agreement that has been entered into in connection with the
Disposition of all or substantially all of the Capital Stock or assets of such
Subsidiary and (iii) any encumbrance or restriction contained in any agreement
governing Indebtedness permitted by Sections 7.2(d), (f) and (g) or any other
agreement existing on the date hereof or assumed in connection with any
Acquisition permitted by Section 7.7(f).
7.14 Limitation on Lines of Business.
Enter into any business, either directly or through any Subsidiary,
except for those businesses in which the Borrower and its Subsidiaries are
engaged on the date of this Agreement or that are reasonably related thereto.
7.15 Limitation on Hedge Agreements.
Enter into any Hedge Agreement other than Hedge Agreements entered
into in the ordinary course of business, and not for speculative purposes, to
protect against changes in interest rates or foreign exchange rates.
7.16 Licenses.
Permit any breach, withdrawal, rating reduction, restriction,
suspension, probation, failure to renew, cancellation, rescission, termination,
lapse or forfeiture of any License, permit, right, franchise or privilege
necessary for the ownership or operation of any Living Facility for the purposes
for which such Living Facility is currently being operated except, in each case,
to the extent the same could, individually or in the aggregate, not reasonably
be expected to have a Material Adverse Effect.
7.17 Limitation on Certain Agreements.
Permit any breach, withdrawal, restriction, suspension, probation,
failure to renew, cancellation, rescission, termination, lapse, alteration,
forfeiture or modification of any Operating Agreement and Management Contract
except, in each case, to the extent the same could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
71
7.18 Limitation on Foreign Subsidiaries.
Create or acquire (i) any Foreign Subsidiary, or (ii) any Subsidiary
whose only assets are entities not organized under the laws of any jurisdiction
within the United States of America.
7.19 Subsidiary Dividends.
Fail to cause each indirect Subsidiary of the Borrower to pay
dividends or make distributions or to transfer to its parent, or fail to cause
each direct Subsidiary of the Borrower to pay dividends or make distributions or
to transfer to the Borrower, an amount not less than such Subsidiary's excess
cash flow in the ordinary course of business but in any event not less than once
each quarter.
SECTION 8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) the Borrower shall fail to pay any principal of any Loan or
Reimbursement Obligation when due in accordance with the terms hereof; or
the Borrower shall fail to pay any interest on any Loan or Reimbursement
Obligation, or any other amount payable hereunder or under any other Loan
Document, within five days after any such interest or other amount becomes
due in accordance with the terms hereof or thereof; or
(b) any representation or warranty made or deemed made by any Loan
Party herein or in any other Loan Document or that is contained in any
certificate, document or financial or other statement furnished by it at
any time under or in connection with this Agreement or any such other Loan
Document shall prove to have been inaccurate in any material respect on or
as of the date made or deemed made or furnished; or
(c) any Loan Party shall default in the observance or performance of
any agreement contained in clause (i) or (ii) of Section 6.4(a) (with
respect to the Borrower only), Section 6.8(a), Section 6.15 or Section 7,
or in Section 5 of the Guarantee and Pledge Agreement; or
(d) any Loan Party shall default in the observance or performance of
any other agreement contained in this Agreement or any other Loan Document
(other than as provided in paragraphs (a) through (c) of this Section),
and such default shall continue unremedied for a period of 30 days after
the earlier of (i) the date on which a Responsible Officer should have
known or has reason to know of such default and (ii) the date on which the
Borrower has received written notice of such failure from the
Administrative Agent, or if such default is of a nature that it cannot
with reasonable effort be completely remedied within said period of 30
days such additional period of time as may be reasonably necessary to cure
same, provided the applicable Loan Party commences such cure with such 30
day period and diligently prosecutes same, until completion, but in no
event shall such extended period exceed 60 days; or
(e) the Borrower or any of its Subsidiaries shall (i) default in
making any payment of any principal of any Indebtedness (including,
without limitation, any Guarantee Obligation, but excluding the Loans and
Reimbursement Obligations) on the scheduled or original due date with
respect thereto; or (ii) default in making any payment
72
of any interest on any such Indebtedness beyond the period of grace, if
any, provided in the instrument or agreement under which such Indebtedness
was created; or (iii) default in the observance or performance of any
other agreement or condition relating to any such Indebtedness or
contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event shall occur or condition exist, the effect of
which default or other event or condition is to cause, or to permit the
holder or beneficiary of such Indebtedness (or a trustee or agent on
behalf of such holder or beneficiary) to cause, with the giving of notice
if required, such Indebtedness to become due prior to its stated maturity
or to become subject to a mandatory offer to purchase by the obligor
thereunder or (in the case of any such Indebtedness constituting a
Guarantee Obligation) to become payable; provided, that a default, event
or condition described in clause (i), (ii) or (iii) of this paragraph (e)
shall not at any time constitute an Event of Default unless, at such time,
one or more defaults, events or conditions of the type described in
clauses (i), (ii) and (iii) of this paragraph (e) shall have occurred and
be continuing with respect to Indebtedness the outstanding principal
amount of which exceeds in the aggregate $10,000,000; or
(f) (i) the Borrower or any of its Subsidiaries shall commence any
case, proceeding or other action (A) under any existing or future law of
any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it
or its debts, or (B) seeking appointment of a receiver, trustee,
custodian, conservator or other similar official for it or for all or any
substantial part of its assets, or the Borrower or any of its Subsidiaries
shall make a general assignment for the benefit of its creditors; or (ii)
there shall be commenced against the Borrower or any of its Subsidiaries
any case, proceeding or other action of a nature referred to in clause (i)
above that (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days; or (iii) there shall be commenced
against the Borrower or any of its Subsidiaries any case, proceeding or
other action seeking issuance of a warrant of attachment, execution,
distraint or similar process against all or any substantial part of its
assets that results in the entry of an order for any such relief that
shall not have been vacated, discharged, or stayed or bonded pending
appeal within 60 days from the entry thereof; or (iv) the Borrower or any
of its Subsidiaries shall take any action in furtherance of, or indicating
its consent to, approval of, or acquiescence in, any of the acts set forth
in clause (i), (ii), or (iii) above; or (v) the Borrower or any of its
Subsidiaries shall generally not, or shall be unable to, or shall admit in
writing its inability to, pay its debts as they become due; or
(g) (i) any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan, or
any Lien in favor of the PBGC or a Plan shall arise on the assets of the
Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall
occur with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to terminate,
any Single Employer Plan, which Reportable Event or commencement of
proceedings or
73
appointment of a trustee is, in the reasonable opinion of the Required
Lenders, likely to result in the termination of such Plan for purposes of
Title IV of ERISA, (iv) any Single Employer Plan shall terminate for
purposes of Title IV of ERISA, (v) the Borrower or any Commonly Controlled
Entity shall incur any liability in connection with a withdrawal from, or
the Insolvency or Reorganization of, a Multiemployer Plan or (vi) any
other event or condition shall occur or exist with respect to a Plan; and
in each case in clauses (i) through (vi) above, such event or condition,
together with all other such events or conditions, if any, could, in the
sole judgment of the Required Lenders, reasonably be expected to have a
Material Adverse Effect; or
(h) one or more judgments or decrees shall be entered against the
Borrower or any of its Subsidiaries by a court of competent jurisdiction,
or the Borrower or any of its Subsidiaries enters into a settlement
agreement with any Governmental Authority or Agency, in each case,
involving for the Borrower and its Subsidiaries taken as a whole a
liability (not paid or fully covered by insurance as to which the relevant
insurance company has acknowledged coverage) of $10,000,000 or more, and
all such judgments or decrees shall not have been vacated, discharged,
stayed or bonded pending appeal within 30 days from the entry thereof; or
(i) any of the Security Documents shall cease, for any reason (other
than by reason of the express release thereof pursuant to Section 10.15),
to be in full force and effect, or any Loan Party or any Affiliate of any
Loan Party shall so assert, or any Lien created by any of the Security
Documents shall cease to be enforceable and of the same effect and
priority purported to be created thereby; or
(j) the guarantee contained in Section 2 of the Guarantee and Pledge
Agreement shall cease, for any reason (other than by reason of the express
release thereof pursuant to Section 10.15), to be in full force and effect
or any Loan Party or any Affiliate of any Loan Party shall so assert; or
(k) any Change of Control shall occur;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents (including, without limitation, all
amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) shall immediately become due and payable, and (B) if such event is
any other Event of Default, either or both of the following actions may be
taken: (i) with the consent of the Majority Revolving Credit Facility Lenders,
the Administrative Agent may, or upon the request of the Majority Revolving
Credit Facility Lenders, the Administrative Agent shall, by notice to the
Borrower declare the Revolving Credit Commitments to be terminated forthwith,
whereupon the Revolving Credit Commitments shall immediately terminate; and (ii)
with the consent of the Required Lenders, the Administrative Agent may, or upon
the request of the Required Lenders, the Administrative Agent shall, by notice
to the Borrower, declare the Loans hereunder (with accrued interest thereon) and
all other amounts owing under this Agreement and the other Loan
74
Documents (including, without limitation, all amounts of L/C Obligations,
whether or not the beneficiaries of the then outstanding Letters of Credit shall
have presented the documents required thereunder) to be due and payable
forthwith, whereupon the same shall immediately become due and payable. In the
case of all Letters of Credit with respect to which presentment for honor shall
not have occurred at the time of an acceleration pursuant to this paragraph, the
Borrower shall at such time deposit in a L/C Collateral Account opened by the
Administrative Agent an amount equal to the aggregate then undrawn and unexpired
face amount of such Letters of Credit. Amounts held in such cash collateral
account shall be applied by the Administrative Agent to the payment of drafts
drawn under such Letters of Credit, and the unused portion thereof after all
such Letters of Credit shall have expired or been fully drawn upon, if any,
shall be applied to repay other obligations of the Borrower hereunder and under
the other Loan Documents. After all such Letters of Credit shall have expired or
been fully drawn upon, all Reimbursement Obligations shall have been satisfied
and all other obligations of the Borrower hereunder and under the other Loan
Documents shall have been paid in full, the balance, if any, in such cash
collateral account shall be returned to the Borrower (or such other Person as
may be lawfully entitled thereto).
SECTION 9. THE AGENTS
9.1 Appointment.
Each Lender hereby irrevocably designates and appoints the Agents as
the agents of such Lender under this Agreement and the other Loan Documents, and
each Lender irrevocably authorizes each Agent, in such capacity, to take such
action on its behalf under the provisions of this Agreement and the other Loan
Documents and to exercise such powers and perform such duties as are expressly
delegated to such Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, no
Agent shall have any duties or responsibilities, except those expressly set
forth herein, or any fiduciary relationship with any Lender, 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 any Agent.
9.2 Delegation of Duties.
Each Agent may execute any of its duties under this Agreement and
the other Loan Documents by or through agents or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such duties;
provided, that, any person receiving and paying amounts from the Borrower to the
Lenders must be a "U.S. person" and a "financial institution," as such terms are
defined in Treasury Regulations section 1.1441-1. No Agent shall be responsible
for the negligence or misconduct of any agents or attorneys-in-fact selected by
it with reasonable care.
9.3 Exculpatory Provisions.
Neither any Agent nor any of its officers, directors, employees,
agents, attorneys-in-fact or affiliates shall be (i) liable for any action
lawfully taken or omitted to be
75
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except to the extent that any of the foregoing are found by
a final and nonappealable decision of a court of competent jurisdiction to have
resulted from its or such Person's own gross negligence or willful misconduct)
or (ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by any Loan Party or any officer
thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agents under or in connection with, this Agreement or any
other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
for any failure of any Loan Party to perform its obligations hereunder or
thereunder. The Agents shall not be under any obligation to any Lender 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 Loan Party.
9.4 Reliance by Agents.
Each Agent shall be entitled to rely, and shall be fully protected
in relying, upon any instrument, writing, resolution, notice, consent,
certificate, affidavit, letter, telecopy, telex or teletype message, statement,
order 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, without limitation, counsel
to the Loan Parties), independent accountants and other experts selected by such
Agent. The Agents shall deem and treat the payee of any Note as the owner
thereof for all purposes unless such Note shall have been transferred in
accordance with Section 10.6 and all actions required by such Section in
connection with such transfer shall have been taken. Each Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Loan Document unless it shall first receive such advice or concurrence of
the Required Lenders (or, if so specified by this Agreement, all Lenders or any
other instructing group of Lenders specified by this Agreement) as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense that may be incurred by it by reason
of taking or continuing to take any such action. Each Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this Agreement
and the other Loan Documents in accordance with a request of the Required
Lenders (or, if so specified by this Agreement, all Lenders or any other
instructing group of Lenders specified by this Agreement), and such request and
any action taken or failure to act pursuant thereto shall be binding upon all
the Lenders and all future holders of the Loans.
9.5 Notice of Default.
No Agent shall be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default hereunder unless such Agent shall
have received notice from a Lender or the Borrower referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a
"notice of default". In the event that the Administrative Agent shall receive
such a notice, the Administrative Agent shall give notice thereof to the
Lenders. The Administrative Agent shall take such action with respect to such
Default or Event of Default as shall be reasonably directed by the Required
Lenders (or, if so specified by this Agreement, all
76
Lenders or any other instructing group of Lenders specified by this Agreement);
provided that unless and until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interests of the
Lenders.
9.6 Non-Reliance on Agents and Other Lenders.
Each Lender expressly acknowledges that neither any of the Agents
nor any of their respective officers, directors, employees, agents,
attorneys-in-fact or affiliates have made any representations or warranties to
it and that no act by any Agent hereafter taken, including any review of the
affairs of a Loan Party or any affiliate of a Loan Party, shall be deemed to
constitute any representation or warranty by any Agent to any Lender. Each
Lender represents to the Agents that it has, independently and without reliance
upon any Agent or any other Lender, and based on such documents and information
as it has deemed appropriate, made its own appraisal of and investigation into
the business, operations, property, financial and other condition and
creditworthiness of the Loan Parties and their affiliates and made its own
decision to make its Loans hereunder and enter into this Agreement. Each Lender
also represents that it will, independently and without reliance upon any Agent
or any other Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigation as it deems necessary
to inform itself as to the business, operations, property, financial and other
condition and creditworthiness of the Loan Parties and their affiliates. Except
for notices, reports and other documents expressly required to be furnished to
the Lenders by the Administrative Agent hereunder, no Agent shall have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of any Loan Party or any affiliate of
a Loan Party that may come into the possession of such Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates.
9.7 Indemnification.
The Lenders agree to indemnify each Agent in its capacity as such
(to the extent not reimbursed by the Borrower and without limiting the
obligation of the Borrower to do so), ratably according to their respective
Aggregate Exposure Percentages in effect on the date on which indemnification is
sought under this Section (or, if indemnification is sought after the date upon
which the Commitments shall have terminated and the Loans shall have been paid
in full, ratably in accordance with such Aggregate Exposure Percentages
immediately prior to such date), for, and to save each Agent harmless from and
against, any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever that may at any time (including, without limitation, at any time
following the payment of the Loans) be imposed on, incurred by or asserted
against such Agent in any way relating to or arising out of, the Commitments,
this Agreement, any of the other Loan Documents or any documents contemplated by
or referred to herein or therein or the transactions contemplated hereby or
thereby or any action taken or omitted by such Agent under or in connection with
any of the foregoing; provided that no Lender shall be liable for the payment of
77
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements that are found by a
final and nonappealable decision of a court of competent jurisdiction to have
resulted from such Agent's gross negligence or willful misconduct. The
agreements in this Section shall survive the payment of the Loans and all other
amounts payable hereunder.
9.8 Agent in Its Individual Capacity.
Each Agent and its affiliates may make loans to, accept deposits
from and generally engage in any kind of business with any Loan Party as though
such Agent were not an Agent. With respect to its Loans made or renewed by it
and with respect to any Letter of Credit issued or participated in by it, each
Agent shall have the same rights and powers under this Agreement and the other
Loan Documents as any Lender and may exercise the same as though it were not an
Agent, and the terms "Lender" and "Lenders" shall include each Agent in its
individual capacity.
9.9 Successor Administrative Agent.
The Administrative Agent may resign as Administrative Agent upon 10
days' notice to the Lenders and the Borrower. If the Administrative Agent shall
resign as Administrative Agent under this Agreement and the other Loan
Documents, then the Required Lenders shall appoint from among the Lenders a
successor agent for the Lenders, which successor agent shall (unless an Event of
Default under Section 8(a) or Section 8(f) with respect to the Borrower shall
have occurred and be continuing) be subject to approval by the Borrower (which
approval shall not be unreasonably withheld or delayed), whereupon such
successor agent shall succeed to the rights, powers and duties of the
Administrative Agent, and the term "Administrative Agent" shall mean such
successor agent effective upon such appointment and approval, and the former
Administrative Agent's rights, powers and duties as Administrative Agent shall
be terminated, without any other or further act or deed on the part of such
former Administrative Agent or any of the parties to this Agreement or any
holders of the Loans. If no successor agent has accepted appointment as
Administrative Agent by the date that is 10 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 assume and 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. The Syndication Agent may, at any time, by notice
to the Lenders and the Administrative Agent, resign as Syndication Agent
hereunder, whereupon the duties, rights, obligations and responsibilities of the
Syndication Agent hereunder shall automatically be assumed by, and inure to the
benefit of, the Administrative Agent, without any further act by the Syndication
Agent, the Administrative Agent or any Lender. After any retiring Agent's
resignation as Agent, the provisions of this Section 9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement and the other Loan Documents.
9.10 Authorization to Release Liens and Guarantees.
The Administrative Agent is hereby irrevocably authorized by each of
the Lenders to effect any release of Liens or guarantee obligations contemplated
by Section 10.15.
78
9.11 The Lead Arranger; the Co-Arrangers; the Syndication Agent; the
Co-.Documentation Agents
Neither the Lead Arranger, the Co-Arrangers, the Syndication Agent
nor the C0-Documentation Agents, in their respective capacities as such, shall
have any duties or responsibilities, nor shall any such Person incur any
liability, under this Agreement and the other Loan Documents.
SECTION 10. MISCELLANEOUS
10.1 Amendments and Waivers.
Neither this Agreement or any other Loan Document, nor any terms
hereof or thereof may be amended, supplemented or modified except in accordance
with the provisions of this Section 10.1. The Required Lenders, the Borrower and
each other Loan Party party to the relevant Loan Document may, or (with the
written consent of the Required Lenders) the Administrative Agent, the Borrower
and each other Loan Party party to the relevant Loan Document may, from time to
time, (a) enter into written amendments, supplements or modifications hereto and
to the other Loan Documents (including amendments and restatements hereof or
thereof) for the purpose of adding any provisions to this Agreement or the other
Loan Documents or changing in any manner the rights of the Lenders or of the
Loan Parties hereunder or thereunder or (b) waive, on such terms and conditions
as may be specified in the instrument of waiver, any of the requirements of this
Agreement or the other Loan Documents or any Default or Event of Default and its
consequences; provided, however, that no such waiver and no such amendment,
supplement or modification shall:
(i) forgive the principal amount or extend the final scheduled date
of maturity of any Loan or Reimbursement Obligation, extend the scheduled
date of any amortization payment in respect of any Term Loan, reduce the
stated rate of any interest or fee payable under this Agreement (except
(x) in connection with the waiver of applicability of any post-default
increase in interest rates (which waiver shall be effective with the
consent of the Majority Facility Lenders of each adversely affected
Facility or, in the case of the L/C Facility, the Issuing Lender) and (y)
that any amendment or modification of defined terms used in the financial
covenants in this Agreement shall not constitute a reduction in the rate
of interest or fees for purposes of this clause (i)) or extend the
scheduled date of any payment thereof, or increase the amount or extend
the expiration date of any Commitment of any Lender, in each case without
the consent of each Lender directly affected thereby;
(ii) amend, modify or waive any provision of this Section or reduce
any percentage specified in the definition of Required Lenders or Required
Prepayment Lenders, consent to the assignment or transfer by the Borrower
of any of its rights and obligations under this Agreement and the other
Loan Documents, release all or substantially all of the Collateral or
release all or substantially all of the Subsidiary Guarantors from their
guarantee obligations under the Guarantee and Pledge Agreement, in each
case without the consent of all the Lenders;
79
(iii) amend, modify or waive any condition precedent to any
Extension of Credit under the Revolving Credit Facility set forth in
Section 5.2 (including, without limitation, the waiver of an existing
Default or Event of Default required to be waived in order for such
Extension of Credit to be made) without the consent of the Majority
Revolving Credit Facility Lenders;
(iv) amend, modify or waive any condition precedent to any Extension
of Credit under the Term Loan Facility set forth in Section 5.2
(including, without limitation, the waiver of an existing Default or Event
of Default required to be waived in order for such Extension of Credit to
be made) without the consent of the Majority Facility Lenders in respect
of the Term Loan Facility;
(v) amend, modify or waive any condition precedent to any Extension
of Credit under the L/C Facility set forth in Section 5.2 (including,
without limitation, the waiver of an existing Default or Event of Default
required to be waived in order for such Extension of Credit to be made)
without the consent of the Issuing Lender;
(vi) reduce the percentage specified in the definition of Majority
Facility Lenders with respect to any Facility without the consent of all
of the Lenders under such Facility;
(vii) amend, modify or waive any provision of Section 9, or any
other provision affecting the rights, duties or obligations of any Agent,
without the consent of any Agent directly affected thereby;
(viii) amend, modify or waive any provision of Section 2.16 without
the consent of each Lender directly affected thereby;
(ix) amend, modify or waive any provision of Section 3 without the
consent of the Issuing Lender; or
(x) impose restrictions on assignments and participations that are
more restrictive than, or additional to, those set forth in Section 10.6
without the consent of each Lender directly affected thereby.
Any such waiver and any such amendment, supplement or modification shall apply
equally to each of the Lenders and shall be binding upon the Loan Parties, the
Lenders, the Agents and all future holders of the Loans. In the case of any
waiver, the Loan Parties, the Lenders and the Agents shall be restored to their
former position and rights hereunder and under the other Loan Documents, and any
Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon. Any such waiver,
amendment, supplement or modification shall be effected by a written instrument
signed by the parties required to sign pursuant to the foregoing provisions of
this Section; provided, that delivery of an executed signature page of any such
instrument by facsimile transmission shall be effective as delivery of a
manually executed counterpart thereof.
80
For the avoidance of doubt, this Agreement and any other Loan
Document may be amended (or amended and restated) with the written consent of
the Required Lenders, the Administrative Agent, the Borrower and each other Loan
Party to each relevant Loan Document (x) to add one or more additional credit
facilities to this Agreement and to permit the extensions of credit from time to
time outstanding thereunder and the accrued interest and fees in respect thereof
(collectively, the "Additional Extensions of Credit") to share ratably in the
benefits of this Agreement and the other Loan Documents with the Term Loans, the
Revolving Credit Loans and the Letters of Credit and the accrued interest and
fees in respect thereof and (y) to include appropriately the Lenders holding
such credit facilities in any determination of the Required Lenders, Required
Prepayment Lenders and Majority Revolving Credit Facility Lenders; provided,
however, that no such amendment shall permit the Additional Extensions of Credit
to share ratably with or with preference to the Loans in the application of
mandatory prepayments without the consent of the Required Prepayment Lenders.
10.2 Notices.
All notices, requests and demands to or upon the respective parties
hereto to be effective shall be in writing (including by telecopy), and, unless
otherwise expressly provided herein, shall be deemed to have been duly given or
made when delivered, or three Business Days after being deposited in the mail,
postage prepaid, or, in the case of telecopy notice, when received, addressed
(a) in the case of the Borrower and the Agents, as follows and (b) in the case
of the Lenders, as set forth in an administrative questionnaire delivered to the
Administrative Agent or on Schedule I to the Lender Addendum to which such
Lender is a party, or, in the case of a Lender which becomes a party to this
Agreement pursuant to an Assignment and Acceptance, in such Assignment and
Acceptance or (c) in the case of any party, to such other address as such party
may hereafter notify to the other parties hereto:
The Borrower:
Brookdale Senior Living Inc.
330 North Wabash, Suite 1400
Chicago, IL 60611
Attention: R. Stanley Young, Executive Vice President and
Chief Financial Officer
Telecopy: (312) 977-3699
Telephone: (312) 977-3720
and:
Attention: Deborah Paskin
Telecopy: (866) 309-2654
Telephone: (312) 977-3763
81
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036
Attention: Martha Feltenstein, Esq.
Telecopy: (212) 735-2272
Telephone: (917) 777-2272
The Syndication Agent:
LaSalle Bank National Association
135 South LaSalle Street
Chicago, IL 60603
Attention: Bluma Broner
Telecopy: (312) 904-4364
Telephone: (312) 904-1997
The Co-Documentation Agents:
Goldman Sachs Credit Partners L.P.
1 New York Plaza
12th Floor
New York, New York 10004
Attention: Elizabeth Fischer
Telecopy: (212) 357-0926
Telephone: (212) 902-1021
and
Citicorp North America, Inc.
390 Greenwich Street
New York, New York 10013
Attention: Emegene Mahabir
Telecopy: (212) 994-0894
Telephone: (302) 894-6028
with a copy to:
Attention: Rob Ziemer
Telecopy: (646) 291-1655
Telephone: (212) 723-6734
82
The Administrative Agent:
Lehman Commercial Paper Inc.
745 Seventh Avenue, 5th Floor
New York, New York 10019
Attention: Carmen Pi-Santana
Telecopy: (212) 526-6643
Telephone: (212) 526-6590
with a copy to:
Trimont Real Estate Advisors
Attention: John Schwartz
Telecopy: (404) 582-8918
Telephone: (404) 420-5509
Issuing Lender:
As notified by the Issuing Lender to the Administrative
Agent and the Borrower
provided that any notice, request or demand to or upon any Agent, the Issuing
Lender or any Lender shall not be effective until received.
Notices and other communications to the Lenders hereunder may be
delivered or furnished by electronic communications pursuant to procedures
approved by the Administrative Agent; provided that the foregoing shall not
apply to notices pursuant to Section 2 unless otherwise agreed by the
Administrative Agent and the applicable Lender. The Administrative Agent or the
Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be
limited to particular notices or communications.
10.3 No Waiver; Cumulative Remedies.
No failure to exercise and no delay in exercising, on the part of
any Agent or any Lender, any right, remedy, power or privilege hereunder or
under the other Loan Documents 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.
10.4 Survival of Representations and Warranties.
All representations and warranties made herein, in the other Loan
Documents and in any document, certificate or statement delivered pursuant
hereto or in connection herewith shall survive the execution and delivery of
this Agreement and the making of the Loans and other Extensions of Credit
hereunder.
83
10.5 Payment of Expenses.
The Borrower agrees (a) to pay or reimburse the Agents for all their
reasonable out-of-pocket costs and expenses incurred in connection with the
syndication of the Facilities (other than fees payable to syndicate members) and
the development, preparation and execution of, and any amendment, supplement or
modification to, this Agreement and the other Loan Documents and any other
documents prepared in connection herewith or therewith, and the consummation and
administration of the transactions contemplated hereby and thereby, including,
without limitation, the reasonable fees and disbursements and other charges of
counsel to the Administrative Agent and the charges of Intralinks, (b) to pay or
reimburse each Lender and the Agents for all their costs and expenses incurred
in connection with the enforcement or preservation of any rights under this
Agreement, the other Loan Documents and any other documents prepared in
connection herewith or therewith, including, without limitation, the fees and
disbursements of counsel (including the allocated fees and disbursements and
other charges of in-house counsel) to each Lender and of counsel to the Agents,
(c) to pay, indemnify, or reimburse each Lender and the Agents for, and hold
each Lender and the Agents harmless from, any and all recording and filing fees
and any and all liabilities with respect to, or resulting from any delay in
paying, stamp, excise and other taxes, if any, which may be payable or
determined to be payable in connection with the execution and delivery of, or
consummation or administration of any of the transactions contemplated by, or
any amendment, supplement or modification of, or any waiver or consent under or
in respect of, this Agreement, the other Loan Documents and any such other
documents, and (d) to pay, indemnify or reimburse each Lender, each Agent, their
respective affiliates, and their respective officers, directors, trustees,
employees, advisors, agents and controlling persons (each, an "Indemnitee") for,
and hold each Indemnitee harmless from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever incurred by an
Indemnitee or asserted against any Indemnitee by any third party or by the
Borrower or any other Loan Party arising out of, in connection with, or as a
result of (i) the execution or delivery of this Agreement, any other Loan
Document or any agreement or instrument contemplated hereby or thereby, the
performance by the parties hereto or thereto of their respective obligations
hereunder or thereunder or the consummation of the transactions contemplated
hereby or thereby, (ii) any Loan or Letter of Credit or the use or proposed use
of the proceeds thereof (including any refusal by the Issuing Lender 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), (iii) any actual or alleged presence or release of Materials of
Environmental Concern on or from any property owned, occupied or operated by the
Borrower or any of its Subsidiaries, or any environmental liability related in
any way to the Borrower or any of its Subsidiaries or any or their respective
properties, or (iv) any actual or prospective claim, litigation, investigation
or proceeding relating to any of the foregoing, whether based on contract, tort
or any other theory, whether brought by any third party or by the Borrower or
any other Loan Party, and regardless of whether any Indemnitee is a party
thereto (all the foregoing in this clause (d), collectively, the "Indemnified
Liabilities"), but excluding, in each case, taxes which shall be governed solely
by Sections 2.17 and 2.18, provided, that the Borrower shall have no obligation
hereunder to any Indemnitee with respect to Indemnified Liabilities to the
extent such Indemnified Liabilities are found by a final and nonappealable
decision of a court of competent jurisdiction to have resulted from the gross
negligence or willful misconduct of such Indemnitee. No Indemnitee shall be
liable for any
84
damages arising from the use by unauthorized persons of information or other
materials sent through electronic, telecommunications or other information
transmission systems that are intercepted by such persons or for any special,
indirect, consequential or punitive damages in connection with the Facilities.
Without limiting the foregoing, and to the extent permitted by applicable law,
the Borrower agrees not to assert and to cause its Subsidiaries not to assert,
and hereby waives and agrees to cause its Subsidiaries so to waive, all rights
for contribution or any other rights of recovery with respect to all claims,
demands, penalties, fines, liabilities, settlements, damages, costs and expenses
of whatever kind or nature, under or related to Environmental Laws, that any of
them might have by statute or otherwise against any Indemnitee. All amounts due
under this Section shall be payable not later than 30 days after written demand
therefor. Statements payable by the Borrower pursuant to this Section shall be
submitted to Deborah Paskin, General Counsel (Telephone No. (312) 977-3763) (Fax
No. (866) 309-2654), at the address of the Borrower set forth in Section 10.2,
or to such other Person or address as may be hereafter designated by the
Borrower in a written notice to the Administrative Agent. The agreements in this
Section shall survive repayment of the Loans and all other amounts payable
hereunder.
10.6 Successors and Assigns; Participations and Assignments.
(a) This Agreement shall be binding upon and inure to the benefit of
the Borrower, the Lenders, the Agents, all future holders of the Loans and their
respective successors and assigns, except that the Borrower may not assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of the Agents and each Lender.
(b) Any Lender may, without the consent of the Borrower, in
accordance with applicable law, at any time sell to one or more banks, financial
institutions or other entities (each, a "Participant") participating interests
in any Loan owing to such Lender, any Commitment of such Lender or any other
interest of such Lender hereunder and under the other Loan Documents. In the
event of any such sale by a Lender of a participating interest to a Participant,
such Lender's obligations under this Agreement to the other parties to this
Agreement shall remain unchanged, such Lender shall remain solely responsible
for the performance thereof, such Lender shall remain the holder of any such
Loan for all purposes under this Agreement and the other Loan Documents, and the
Borrower and the Agents shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement and the other Loan Documents. In no event shall any Participant under
any such participation have any right to approve any amendment or waiver of any
provision of any Loan Document, or any consent to any departure by any Loan
Party therefrom, except to the extent that such amendment, waiver or consent
would require the consent of all Lenders pursuant to Section 10.1. The Borrower
agrees that if amounts outstanding under this Agreement and the Loans are due or
unpaid, or shall have been declared or shall have become due and payable upon
the occurrence of an Event of Default, each Participant shall, to the maximum
extent permitted by applicable law, be deemed to have the right of setoff in
respect of its participating interest in amounts owing under this Agreement to
the same extent as if the amount of its participating interest were owing
directly to it as a Lender under this Agreement, provided that, in purchasing
such participating interest, such Participant shall be deemed to have agreed to
share with the Lenders the proceeds thereof as provided in Section 10.7(a) as
fully as if such Participant were a Lender hereunder. The Borrower also agrees
that each Participant shall be entitled to the
85
benefits of Sections 2.17, 2.18 or 2.19 with respect to its participation in the
Commitments and the Loans outstanding from time to time as if such Participant
were a Lender; provided that, in the case of Section 2.18, such Participant
shall have complied with the requirements of said Section, and provided,
further, that no Participant shall be entitled to receive any greater amount
pursuant to any such Section than the transferor Lender would have been entitled
to receive in respect of the amount of the participation transferred by such
transferor Lender to such Participant had no such transfer occurred.
(c) Any Lender (an "Assignor") may, in accordance with applicable
law and upon written notice to the Administrative Agent, at any time and from
time to time assign to any Lender or any affiliate, Related Fund or Control
Investment Affiliate thereof or, with the consent of the Borrower and the
Administrative Agent (which, in each case, shall not be unreasonably withheld or
delayed) (provided (x) that no such consent need be obtained by any Agent and
(y) the consent of the Borrower need not be obtained with respect to any
assignment of Term Loans after the termination or expiration of the Term Loan
Commitments), to an additional bank, financial institution or other entity (an
"Assignee") all or any part of its rights and obligations under this Agreement
pursuant to an Assignment and Acceptance, substantially in the form of Exhibit D
(an "Assignment and Acceptance"), executed by such Assignee and such Assignor
(and, where the consent of the Borrower or the Administrative Agent is required
pursuant to the foregoing provisions, by the Borrower and such other Persons)
and delivered to the Administrative Agent for its acceptance and recording in
the Register; provided that no such assignment to an Assignee (other than any
Lender or any affiliate thereof) shall be in an aggregate principal amount of
less than $1,000,000 (in the case of assignments in respect of the Term Loan
Facility) or $3,000,000 (in the case of assignments in respect of the Revolving
Credit Facility) (other than, in each case, in the case of an assignment of all
of a Lender's interests under this Agreement) and, after giving effect thereto,
the assigning Lender (if it shall retain any Commitments or Loans) shall have
Commitments and Loans aggregating at least $1,000,000 (in the case of
assignments in respect of the Term Loan Facility) or $3,000,000 (in the case of
assignments in respect of the Revolving Credit Facility), in each case, unless
otherwise agreed by the Borrower and the Administrative Agent. Any such
assignment need not be ratable as among the Facilities. Upon such execution,
delivery, acceptance and recording, from and after the effective date determined
pursuant to such Assignment and Acceptance, (x) the Assignee thereunder shall be
a party hereto and, to the extent provided in such Assignment and Acceptance,
have the rights and obligations of a Lender hereunder with Commitments and/or
Loans as set forth therein, and (y) the Assignor thereunder shall, to the extent
provided in such Assignment and Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all of an Assignor's rights and obligations under this Agreement, such Assignor
shall cease to be a party hereto, except as to Section 2.17, 2.18 and 10.5 in
respect of the period prior to such effective date). Notwithstanding any
provision of this Section, the consent of the Borrower shall not be required for
any assignment that occurs at any time when any Event of Default shall have
occurred and be continuing. For purposes of the minimum assignment amounts set
forth in this paragraph, multiple assignments by two or more Related Funds shall
be aggregated.
(d) The Administrative Agent shall, on behalf of the Borrower,
maintain at its address referred to in Section 10.2 a copy of each Assignment
and Acceptance delivered to it and a register (the "Register") for the
recordation of the names and addresses of the Lenders and the
86
Commitment of, and principal amount of the Loans owing to, each Lender from time
to time. The entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrower, each Agent and the Lenders shall treat each
Person whose name is recorded in the Register as the owner of the Loans and any
Notes evidencing such Loans recorded therein for all purposes of this Agreement.
Any assignment of any Loan, whether or not evidenced by a Note, shall be
effective only upon appropriate entries with respect thereto being made in the
Register (and each Note shall expressly so provide). Any assignment or transfer
of all or part of a Loan evidenced by a Note shall be registered on the Register
only upon surrender for registration of assignment or transfer of the Note
evidencing such Loan, accompanied by a duly executed Assignment and Acceptance;
thereupon one or more new Notes in the same aggregate principal amount shall be
issued to the designated Assignee, and the old Notes shall be returned by the
Administrative Agent to the Borrower marked "canceled". The Register shall be
available for inspection by the Borrower or any Lender (with respect to any
entry relating to such Lender's Loans) at any reasonable time and from time to
time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
Assignor and an Assignee (and, in any case where the consent of any other Person
is required by clause (c), by each such other Person) together with payment to
the Administrative Agent of a registration and processing fee of $3,500
(treating multiple, simultaneous assignments by or to two or more Related Funds
as a single assignment) (except that no such registration and processing fee
shall be payable (y) in connection with an assignment by or to a Lehman Entity
or (z) in the case of an Assignee which is already a Lender or is an affiliate
or Related Fund of a Lender or a Person under common management with a Lender),
the Administrative Agent shall (i) promptly accept such Assignment and
Acceptance and (ii) on the effective date determined pursuant thereto record the
information contained therein in the Register and give notice of such acceptance
and recordation to the Borrower. On or prior to such effective date, the
Borrower, at its own expense, upon request, shall execute and deliver to the
Administrative Agent (in exchange for the Revolving Credit Note and/or
applicable Term Notes, as the case may be, of the assigning Lender) a new
Revolving Credit Note and/or applicable Term Notes, as the case may be, to the
order of such Assignee in an amount equal to the Revolving Credit Commitment
and/or applicable Term Loans, as the case may be, assumed or acquired by it
pursuant to such Assignment and Acceptance and, if the Assignor has retained a
Revolving Credit Commitment and/or Term Loans, as the case may be, upon request,
a new Revolving Credit Note and/or Term Notes, as the case may be, to the order
of the Assignor in an amount equal to the Revolving Credit Commitment and/or
applicable Term Loans, as the case may be, retained by it hereunder. Such new
Note or Notes shall be dated the Closing Date and shall otherwise be in the form
of the Note or Notes replaced thereby.
(f) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this Section concerning assignments of Loans
and Notes relate only to absolute assignments and participations, and that such
provisions do not prohibit assignments creating only security interests in Loans
and Notes, including, without limitation, any pledge or assignment by a Lender
of any Loan or Note to any Federal Reserve Bank in accordance with applicable
law.
(g) Notwithstanding anything to the contrary contained herein, any
Lender (a "Granting Lender") may grant to a special purpose funding vehicle (an
"SPC"), identified as
87
such in writing from time to time by the Granting Lender to the Administrative
Agent and the Borrower, the option to provide to the Borrower all or any part of
any Loan that such Granting Lender would otherwise be obligated to make to the
Borrower pursuant to this Agreement; provided that (i) nothing herein shall
constitute a commitment by any SPC to make any Loan and (ii) if an SPC elects
not to exercise such option or otherwise fails to provide all or any part of
such Loan, the Granting Lender shall be obligated to make such Loan pursuant to
the terms hereof. 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. Each party hereto hereby agrees that no SPC shall
be liable for any indemnity or similar payment obligation under this Agreement
(all liability for which shall remain with the Granting Lender). In furtherance
of the foregoing, each party hereto hereby agrees (which agreement shall survive
the termination of this Agreement) that, prior to the date that is one year and
one day after the payment in full of all outstanding commercial paper or other
indebtedness of any SPC, it will not institute against, or join any other person
in instituting against, such SPC any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings under the laws of the United States or any
state thereof. In addition, notwithstanding anything to the contrary in this
Section 10.6(g), any SPC may (A) with notice to, but without the prior written
consent of, the Borrower and the Administrative Agent and without paying any
processing fee therefor, assign all or a portion of its interests in any Loans
to the Granting Lender, or with the prior written consent of the Borrower and
the Administrative Agent (which consent shall not be unreasonably withheld) to
any financial institutions providing liquidity and/or credit support to or for
the account of such SPC to support the funding or maintenance of Loans, and (B)
disclose on a confidential basis any non-public information relating to its
Loans to any rating agency, commercial paper dealer or provider of any surety,
guarantee or credit or liquidity enhancement to such SPC; provided that
non-public information with respect to the Borrower may be disclosed only with
the Borrower's consent which will not be unreasonably withheld. This paragraph
(g) may not be amended without the written consent of any SPC with Loans
outstanding at the time of such proposed amendment.
10.7 Adjustments; Set-off.
(a) Except to the extent that this Agreement provides for payments
to be allocated to a particular Lender or to the Lenders under a particular
Facility, if any Lender (a "Benefitted Lender") shall at any time receive any
payment of all or part of the Obligations owing to it, or receive any collateral
in respect thereof (whether voluntarily or involuntarily, by set-off, pursuant
to events or proceedings of the nature referred to in Section 8(f), or
otherwise), in a greater proportion than any such payment to or collateral
received by any other Lender, if any, in respect of such other Lender's
Obligations, such Benefitted Lender shall purchase for cash from the other
Lenders a participating interest in such portion of each such other Lender's
Obligations, or shall provide such other Lenders with the benefits of any such
collateral, as shall be necessary to cause such Benefitted Lender to share the
excess payment or benefits of such collateral ratably with each of the Lenders;
provided, however, that if all or any portion of such excess payment or benefits
is thereafter recovered from such Benefitted Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest.
88
(b) In addition to any rights and remedies of the Lenders provided
by applicable law, each Lender shall have the right, without prior notice to the
Borrower, any such notice being expressly waived by the Borrower to the extent
permitted by applicable law, upon any amount becoming due and payable by the
Borrower hereunder (whether at the stated maturity, by acceleration or
otherwise), to set off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any affiliate, branch or
agency thereof to or for the credit or the account of the Borrower. Each Lender
agrees promptly to notify the Borrower and the Administrative Agent after any
such setoff and application made by such Lender, provided that the failure to
give such notice shall not affect the validity of such setoff and application.
10.8 Counterparts.
This Agreement may be executed by one or more of the parties to this
Agreement on any number of separate counterparts, and all of said counterparts
taken together shall be deemed to constitute one and the same instrument.
Delivery of an executed signature page of this Agreement by facsimile
transmission shall be effective as delivery of a manually executed counterpart
hereof. A set of the copies of this Agreement signed by all the parties shall be
lodged with the Borrower and the Administrative Agent.
10.9 Severability.
Any provision of this Agreement that is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
10.10 Integration.
This Agreement and the other Loan Documents represent the entire
agreement of the Borrower, the Agents, the Lead Arranger, each Co-Arranger and
the Lenders with respect to the subject matter hereof and thereof, and there are
no promises, undertakings, representations or warranties by the Lead Arranger,
each Co-Arranger, any Agent or any Lender relative to subject matter hereof not
expressly set forth or referred to herein or in the other Loan Documents.
10.11 GOVERNING LAW.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.
10.12 Submission To Jurisdiction; Waivers.
The Borrower hereby irrevocably and unconditionally:
89
(a) submits for itself and its Property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the courts
of the State of New York, the courts of the United States of America for
the Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not
to plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to the
Borrower at its address set forth in Section 10.2 or at such other address
of which the Administrative Agent shall have been notified pursuant
thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by applicable law or
shall limit the right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right
it may have to claim or recover in any legal action or proceeding referred
to in this Section any special, exemplary, punitive or consequential
damages.
10.13 Acknowledgments.
The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) neither the Lead Arranger, any Co-Arranger, any Agent nor any
Lender has any fiduciary relationship with or duty to the Borrower arising
out of or in connection with this Agreement or any of the other Loan
Documents, and the relationship between the Lead Arranger, the
Co-Arrangers, the Agents and the Lenders, on one hand, and the Borrower,
on the other hand, in connection herewith or therewith is solely that of
debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Lead Arranger, the Co-Arrangers, the Agents and the
Lenders or among, the Borrower and the Lenders.
10.14 Confidentiality.
Each of the Agents and the Lenders agrees to keep confidential all
non-public information provided to it by any Loan Party pursuant to this
Agreement that is designated by
90
such Loan Party as confidential; provided that nothing herein shall prevent any
Agent or any Lender from disclosing any such information (a) to the Lead
Arranger, any Co-Arranger, any Agent, any other Lender or any affiliate of any
thereof, (b) to any Participant or Assignee (each, a "Transferee") or
prospective Transferee that agrees to comply with the provisions of this Section
or substantially equivalent provisions, (c) to any of its employees, directors,
agents, attorneys, accountants and other professional advisors, (d) to any
financial institution that is a direct or indirect contractual counterparty in
swap agreements or such contractual counterparty's professional advisor (so long
as such contractual counterparty or professional advisor to such contractual
counterparty agrees to be bound by the provisions of this Section), (e) upon the
request or demand of any Governmental Authority having jurisdiction over it, (f)
to the extent required in response to any order of any court or other
Governmental Authority or to the extent otherwise required pursuant to any
Requirement of Law, (g) in connection with any litigation or similar proceeding,
(h) that has been publicly disclosed other than in breach of this Section, (i)
to the National Association of Insurance Commissioners or any similar
organization or any nationally recognized rating agency that requires access to
information about a Lender's investment portfolio in connection with ratings
issued with respect to such Lender or (j) in connection with the exercise of any
remedy hereunder or under any other Loan Document; provided that, in the event a
Lender receives a summons or subpoena to disclose confidential information to
any party, such Lender shall, if legally permitted, endeavor to notify the
Borrower thereof as soon as possible after receipt of such request, summons or
subpoena and to afford the Loan Parties an opportunity to seek protective
orders, or such other confidential treatment of such disclosed information, as
the Loan Parties may deem reasonable.
10.15 Release of Collateral and Guarantee Obligations.
(a) Notwithstanding anything to the contrary contained herein or in
any other Loan Document, upon request of the Borrower in connection with any
Disposition of Property permitted by the Loan Documents, the Administrative
Agent shall (without notice to, or vote or consent of, any Lender, or any
affiliate of any Lender that is a party to any Specified Hedge Agreement) take
such actions as shall be required to release its security interest in any
Collateral being Disposed of in such Disposition, and to release any guarantee
obligations under any Loan Document of any Person being Disposed of in such
Disposition, to the extent necessary to permit consummation of such Disposition
in accordance with the Loan Documents.
(a) Notwithstanding anything to the contrary contained herein or any
other Loan Document, when all Obligations (other than obligations in respect of
any Specified Hedge Agreement) have been paid in full, all Commitments have
terminated or expired and no Letter of Credit shall be outstanding, upon request
of the Borrower, the Administrative Agent shall (without notice to, or vote or
consent of, any Lender, or any affiliate of any Lender that is a party to any
Specified Hedge Agreement) take such actions as shall be required to release its
security interest in all Collateral, and to release all guarantee obligations
under any Loan Document, whether or not on the date of such release there may be
outstanding Obligations in respect of Specified Hedge Agreements. Any such
release of guarantee obligations shall be deemed subject to the provision that
such guarantee obligations shall be reinstated if after such release any portion
of any payment in respect of the Obligations guaranteed thereby shall be
rescinded or must otherwise be restored or returned upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Borrower or any
Guarantor, or upon or as a result of the appointment of
91
a receiver, intervenor or conservator of, or trustee or similar officer for, the
Borrower or any Guarantor or any substantial part of its property, or otherwise,
all as though such payment had not been made.
10.16 Accounting Changes.
In the event that any "Accounting Change" (as defined below) shall
occur and such change results in a change in the method of calculation of
financial covenants, standards or terms in this Agreement, then the Borrower and
the Administrative Agent agree to enter into negotiations in order to amend such
provisions of this Agreement so as to equitably reflect such Accounting Change
with the desired result that the criteria for evaluating the Borrower's
financial condition shall be the same after such Accounting Change as if such
Accounting Change had not been made. Until such time as such an amendment shall
have been executed and delivered by the Borrower, the Administrative Agent and
the Required Lenders, all financial covenants, standards and terms in this
Agreement shall continue to be calculated or construed as if such Accounting
Change had not occurred. "Accounting Change" refers to any change in accounting
principles required by the promulgation of any rule, regulation, pronouncement
or opinion by the Financial Accounting Standards Board of the American Institute
of Certified Public Accountants, any other generally accepted accounting
authority which provides regulation standards or, if applicable, the SEC.
10.17 Delivery of Lender Addenda.
Each initial Lender shall become a party to this Agreement by
delivering to the Administrative Agent a Lender Addendum duly executed by such
Lender, the Borrower and the Administrative Agent.
10.18 WAIVERS OF JURY TRIAL.
THE BORROWER, THE AGENTS AND THE LENDERS HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
92
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
BROOKDALE SENIOR LIVING INC.
By: /s/ R. Stanley Young
------------------------------------
Name: R. Stanley Young
Title: Vice President
LEHMAN BROTHERS INC., as Lead Arranger
By: /s/ Francis X. Gilhool
------------------------------------
Name: Francis X. Gilhool
Title: Authorized Signatory
LEHMAN COMMERCIAL PAPER INC., as
Administrative Agent
By: /s/ Francis X. Gilhool
------------------------------------
Name: Francis X. Gilhool
Title: Authorized Signatory
LASALLE BANK NATIONAL ASSOCIATION, as
Co-Arranger
By: /s/ Bluma Broner
--------------------------------------
Name: Bluma Broner
Title: Vice President
LASALLE BANK NATIONAL ASSOCIATION, as
Syndication Agent
By: /s/ Bluma Broner
--------------------------------------
Name: Bluma Broner
Title: Vice President
GOLDMAN SACHS CREDIT PARTNERS L.P., as
Co-Arranger
By: /s/ William W. Archer
------------------------------------
Name: William W. Archer
Title: Managing Director
GOLDMAN SACHS CREDIT PARTNERS L.P., as
Co-Documentation Agent
By: /s/ William W. Archer
------------------------------------
Name: William W. Archer
Title: Managing Director
CITIGROUP GLOBAL MARKETS INC.,
as Co-Arranger
By: /s/ Asghar Ali
------------------------------------
Name: Asghar Ali
Title: Director
CITICORP NORTH AMERICA, INC.,
as Co-Documentation Agent
By: /s/ Asghar Ali
------------------------------------
Name: Asghar Ali
Title: Vice President