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CREDIT AGREEMENT
among
INTEGRATED LIVING COMMUNITIES
HOLDING, INC.
as Borrower
and
INTEGRATED LIVING COMMUNITIES, INC.
as Parent
and
CERTAIN SUBSIDIARIES OF
THE BORROWER AND THE PARENT
as Guarantors
and
THE LENDERS IDENTIFIED HEREIN
and
NATIONSBANK, N.A. (SOUTH)
as Agent
DATED AS OF APRIL 9, 1997
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TABLE OF CONTENTS
SECTION 1 DEFINITIONS AND ACCOUNTING TERMS................................... 1
1.1 Definitions...................................................... 1
1.2 Computation of Time Periods
and Other Definition
Provisions......................................................16
1.3 Accounting Terms.................................................16
SECTION 2 CREDIT FACILITY....................................................16
2.1 Revolving Loans..................................................16
2.2 Letter of Credit Subfacility.....................................18
SECTION 3 GENERAL PROVISIONS APPLICABLE TO
LOANS AND LETTERS OF
CREDIT............................................................22
3.1 Interest.........................................................22
3.2 Place and Manner of Payments.....................................22
3.3 Prepayments......................................................23
3.4 Fees.............................................................23
3.5 Payment in full at Maturity......................................24
3.6 Computations of Interest and Fees................................24
3.7 Pro Rata Treatment...............................................24
3.8 Sharing of Payments..............................................25
3.9 Capital Adequacy.................................................27
3.10 Inability To Determine Interest Rate............................27
3.11 Illegality......................................................27
3.12 Requirements of Law.............................................27
3.13 Taxes...........................................................28
3.14 Indemnity.......................................................30
SECTION 4 GUARANTY...........................................................30
4.1 Guaranty of Payment..............................................30
4.2 Obligations Unconditional........................................30
4.3 Modifications....................................................31
4.4 Waiver of Rights.................................................31
4.5 Reinstatement....................................................31
4.6 Remedies.........................................................32
4.7 Limitation of Guaranty...........................................32
SECTION 5 CONDITIONS PRECEDENT...............................................32
5.1 Closing Conditions...............................................32
5.2 Conditions to Revolving Loans
to Finance Acquisition of New
Properties......................................................36
5.3 Conditions to All Revolving Loans................................39
SECTION 6 REPRESENTATIONS AND WARRANTIES.....................................39
6.1 Financial Condition..............................................39
6.2 No Material Change...............................................39
6.3 Organization and Good Standing...................................40
6.4 Due Authorization................................................40
6.5 No Conflicts.....................................................40
6.6 Consents.........................................................40
6.7 Enforceable Obligations..........................................40
6.8 No Default.......................................................40
6.9 Ownership........................................................40
i
6.10 Indebtedness....................................................41
6.11 Litigation......................................................41
6.12 Taxes...........................................................41
6.13 Compliance with Law.............................................41
6.14 Compliance with ERISA...........................................41
6.15 Organization Structure..........................................42
6.16 Use of Proceeds; Margin Stock...................................42
6.17 Government Regulation...........................................43
6.18 Environmental Matters...........................................43
6.19 Solvency........................................................44
6.20 Investments.....................................................44
6.21 Location of Collateral..........................................44
6.22 Disclosure......................................................44
6.23 Licenses, etc...................................................44
6.24 No Burdensome Restrictions......................................44
6.25 Collateral Documents............................................45
6.26 Intellectual Property...........................................45
6.27 Management Agreements...........................................45
SECTION 7 AFFIRMATIVE COVENANTS..............................................45
7.1 Information Covenants............................................45
7.2 Financial Covenants..............................................48
7.3 Preservation of Existence and Franchises.........................49
7.4 Books and Records................................................49
7.5 Compliance with Law..............................................49
7.6 Payment of Taxes and Other Indebtedness..........................49
7.7 Insurance........................................................49
7.8 Maintenance of Property..........................................50
7.9 Performance of Obligations.......................................50
7.10 Use of Proceeds.................................................50
7.11 Audits/Inspections..............................................50
7.12 Additional Credit Parties.......................................50
7.13 Collateral......................................................51
7.14 Environmental Indemnity.........................................51
7.15 Abundance of Caution Properties.................................51
7.16 Environmental Assessment........................................51
7.17 Expansion of Units..............................................51
SECTION 8 NEGATIVE COVENANTS.................................................52
8.1 Indebtedness.....................................................52
8.2 Liens............................................................52
8.3 Nature of Business...............................................52
8.4 Consolidation and Merger.........................................53
8.5 Sale or Lease of Assets..........................................53
8.6 Advances, Investments and Loans..................................53
8.7 Restricted Payments..............................................53
8.8 Subordinated Debt................................................53
8.9 Transactions with Affiliates.....................................53
8.10 Fiscal Year; Organizational Documents...........................54
8.11 Limitations.....................................................54
8.12 Negative Pledges................................................54
8.13 Creation of Subsidiaries........................................54
8.14 Issuance and Sale of Subsidiary Stock...........................54
8.15 Sale Leasebacks.................................................54
ii
8.16 Ownership of Assets.............................................54
8.17 Serviceable Beds................................................55
8.18 Management Agreements...........................................55
SECTION 9 EVENTS OF DEFAULT..................................................55
9.1 Events of Default................................................55
9.2 Acceleration; Remedies...........................................57
9.3 Allocation of Payments After Event of Default....................58
SECTION 10 AGENCY PROVISIONS.................................................58
10.1 Appointment.....................................................58
10.2 Delegation of Duties............................................59
10.3 Exculpatory Provisions..........................................59
10.4 Reliance on Communications......................................59
10.5 Notice of Default...............................................60
10.6 Non-Reliance on Agent and Other Lenders.........................60
10.7 Indemnification.................................................60
10.8 Agent in Its Individual Capacity................................61
10.9 Successor Agent.................................................61
SECTION 11 MISCELLANEOUS.....................................................61
11.1 Notices.........................................................61
11.2 Right of Set-Off................................................61
11.3 Benefit of Agreement............................................62
11.4 No Waiver; Remedies Cumulative..................................63
11.5 Payment of Expenses; Indemnification............................64
11.6 Amendments, Waivers and Consents................................64
11.7 Counterparts....................................................65
11.8 Headings........................................................65
11.9 Defaulting Lender...............................................65
11.10 Survival of Indemnification
and Representations and
Warranties....................................................65
11.11 Governing Law; Jurisdiction....................................65
11.12 Waiver of Jury Trial...........................................66
11.13 Time...........................................................66
11.14 Severability...................................................66
11.15 Entirety.......................................................66
11.16 Binding Effect.................................................66
11.17 Confidentiality................................................67
SCHEDULES
Schedule 1.1(a) Collateral Pool Property
Schedule 1.1(b) Commitment Percentages
Schedule 1.1(c) Subordination and Intercreditor Agreement
Schedule 6.10 Indebtedness
Schedule 6.11 Litigation
Schedule 6.15 Organization Structure
Schedule 6.18 Environmental Matters
Schedule 6.21(a) Real Property Locations
Schedule 6.21(b) Personal Property Locations
Schedule 6.21(c) Chief Executive Offices
Schedule 6.26 Intellectual Property
Schedule 7.7(a) Insurance Coverage
iii
Schedule 8.2 Liens
Schedule 8.6 Investments
Schedule 11.1 Notices
EXHIBITS
Exhibit 2.1(b) Form of Notice of Borrowing
Exhibit 2.1(e) Form of Notice of Continuation/Conversion
Exhibit 2.1(g) Form of Revolving Loan Note
Exhibit 7.1(d) Form of Officer's Certificate
Exhibit 7.1(g) Form of Borrowing Base Certificate
Exhibit 7.12 Form of Joinder Agreement
Exhibit 11.3 Form of Assignment Agreement
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT (this "Credit Agreement") is entered into as of
April 9, 1997 among INTEGRATED LIVING COMMUNITIES HOLDING, INC., a Delaware
corporation ("Borrower"), INTEGRATED LIVING COMMUNITIES, INC., a Delaware
corporation (the "Parent") and the subsidiaries of the Borrower and the Parent
identified on the signature pages hereto (such subsidiaries, together with the
Parent, individually a "Guarantor" and collectively the "Guarantors"), the
Lenders (as defined herein) and NATIONSBANK, N.A. (SOUTH) ("NationsBank"), as
Agent for the Lenders.
RECITALS
WHEREAS, the Borrower desires to enter into a $50 million revolving
credit facility; and
WHEREAS, the Lenders party hereto have agreed to make the requested
revolving credit facility available to the Borrower on the terms and conditions
hereinafter set forth.
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS AND ACCOUNTING TERMS
1.1 DEFINITIIONS.
As used herein, the following terms shall have the meanings herein
specified unless the context otherwise requires. Defined terms herein shall
include in the singular number the plural and in the plural the singular:
"Abundance of Caution Property" shall have the meaning given
such term in Section 5.2.
"Additional Credit Party" means each Person that becomes a
Guarantor after the Closing Date, as provided in Section 7.12.
"Adjusted Eurodollar Rate" means, for the Interest Period for
each Eurodollar Loan comprising part of the same borrowing (including
conversions, extensions and renewals), a per annum interest rate determined
pursuant to the following formula:
Adjusted Eurodollar Rate = Eurodollar Rate
----------------------------------
1 - Eurodollar Reserve Percentage
"Agent" means NationsBank, N.A. (South) (or any successor
thereto) or any successor agent appointed pursuant to Section 10.9.
"Affiliate" means, with respect to any Person, any other
Person (i) directly or indirectly controlling or controlled by or under direct
or indirect common control with such Person or (ii) directly or indirectly
owning or holding five percent (5%) or more of the equity interest in such
Person. For purposes of this definition, "control" when used with respect to any
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Agency Services Address" means NationsBank, N.A.,
NC1-001-15-04, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, Attn.:
Agency Services, or such other address as may be identified by written notice
from the Agent to the Borrower.
"Applicable Percentage" means for any day, the rate per annum
set forth below opposite the applicable Leverage Ratio then in effect, it being
understood that the Applicable Percentage for Eurodollar Loans shall be the
percentage set forth under the column "Eurodollar Margin":
Pricing Leverage Eurodollar
Level Ratio Margin
I less than 4.0 2.25%
-
II greater than 4.0 but less than 5.0 2.63%
-
III greater than 5.0 but less than 6.0 3.00%
-
The Applicable Percentage shall be determined and adjusted monthly on the first
day of each calendar month (each a "Rate Determination Date"); provided that:
(i) the initial Applicable Percentage shall be based on the financial
statements and information provided to the Agent on the Closing Date and shall
remain in effect at such Pricing Level until the first Rate Determination Date
to occur after the Closing Date, and
(ii) if the Borrower fails to provide the annual or quarterly
compliance certificates and related financial statements and information
required by Sections 7.1(a), (b), (c) and (e), as appropriate, or fails to
deliver copies of such certificates to the Agency Services Address as required
by Section 7.1(d), the Applicable Percentage shall be based on Pricing Level III
until such time as an appropriate compliance certificate and related financial
statements and information are delivered, whereupon the applicable Pricing Level
shall be adjusted on the first day of the next calendar month and based on the
information contained in such compliance certificate and related financial
statements and information.
Each Applicable Percentage shall be effective from a Rate Determination Date
until the next such Rate Determination Date. The Agent shall determine the
appropriate Applicable Percentage in the pricing matrix promptly on each Rate
Determination Date and shall promptly notify the Borrower and the Lenders of any
change thereof. Such determinations by the Agent shall be conclusive absent
manifest error. Adjustments in the Applicable Percentage shall be effective as
to existing Loans as well as any new Loans made.
"Average Economic Occupancy Rate" means, for each Real
Property, for the most recently ending three month period, the ratio (expressed
as a percentage) equal to the sum of the Economic Occupancy Rate for each month
in such three month period divided by 3.
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the
United States Code, as amended, modified, succeeded or replaced from time to
time.
"Base Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest whole multiple of 1/100 of 1%) equal to
the greater of (a) the Federal Funds Rate in effect on such day plus 1/2 of 1%
or (b) the Prime Rate in effect on such day. If for any reason the Agent shall
have determined (which determination shall be conclusive absent manifest error)
that it is unable after due inquiry to ascertain the Federal Funds Rate for any
reason, including the inability or failure of the Agent to obtain sufficient
quotations in accordance with the terms hereof, the Base Rate shall be
determined without regard to clause (a) of the first sentence of this definition
until the circumstances giving rise to such inability no longer exist. Any
change in the Base Rate due to a change in the Prime Rate or the Federal Funds
Rate shall be effective on the effective date of such change in the Prime Rate
or the Federal Funds Rate, respectively.
"Base Rate Loan" means any Loan bearing interest at a rate
determined by reference to the Base Rate.
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"Borrower" means Integrated Living Communities Holding, Inc.,
a Delaware corporation, together with any successors and permitted assigns.
"Borrowing Base" means, at any date of determination, the sum
of the Borrowing Base Values for each parcel of Collateral Pool Property.
"Borrowing Base Value" means, at any date of determination
with respect to each Collateral Pool Property, an amount for such Collateral
Pool Property equal to the lesser of:
(a) 75% of the appraised value of such Collateral Pool
Property (as determined pursuant to a third party appraisal delivered
to and accepted by the Agent in the sole discretion of the Agent); and
(b) the NOI for such Collateral Pool Property for the fiscal
quarter most recently ended multiplied by twenty-four (24).
"Business Day" means any day other than a Saturday, a Sunday,
a legal holiday or a day on which banking institutions are authorized or
required by law or other governmental action to close in Charlotte, North
Carolina or Sarasota, Florida; provided that in the case of Eurodollar Loans,
such day is also a day on which dealings between banks are carried on in U.S.
dollar deposits in the London interbank market.
"Capital Expenditures" means all expenditures of the Credit
Parties and their Subsidiaries which, in accordance with GAAP, would be
classified as capital expenditures, including, without limitation, Capital
Leases.
"Capital Lease" means, as applied to any Person, any lease of
any property (whether real, personal or mixed) by that Person as lessee which,
in accordance with GAAP, is or should be accounted for as a capital lease on the
balance sheet of that Person.
"Cash Equivalents" means (a) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than twelve months from the date of acquisition, (b) U.S. dollar denominated
time and demand deposits and certificates of deposit of (i) any Lender, (ii) any
domestic commercial bank having capital and surplus in excess of $500,000,000 or
(iii) any bank whose short-term commercial paper rating from S&P is at least A-1
or the equivalent thereof or from Xxxxx'x is at least P-1 or the equivalent
thereof (any such bank being an "Approved Bank"), in each case with maturities
of not more than 270 days from the date of acquisition, (c) commercial paper and
variable or fixed rate notes issued by any Approved Bank (or by the parent
company thereof) or any variable rate notes issued by, or guaranteed by, any
domestic corporation rated A-1 (or the equivalent thereof) or better by S&P or
P-1 (or the equivalent thereof) or better by Moody's and maturing within six
months of the date of acquisition, (d) repurchase agreements with a bank or
trust company (including any of the Lenders) or securities dealer having capital
and surplus in excess of $500,000,000 for direct obligations issued by or fully
guaranteed by the United States of America in which a Credit Party shall have a
perfected first priority security interest (subject to no other Liens) and
having, on the date of purchase thereof, a fair market value of at least 100% of
the amount of the repurchase obligations and (e) Investments, classified in
accordance with GAAP as current assets, in money market investment programs
registered under the Investment Company Act of 1940, as amended, which are
administered by financial institutions having capital of at least $500,000,000
and the portfolios of which are limited to Investments of the character
described in the foregoing subdivisions (a) through (d).
"Change of Control" means the occurrence of any of the
following events: (i) (other than IHS) any Person or two or more Persons acting
in concert shall have acquired beneficial ownership, directly or indirectly, of,
or shall have acquired by contract or otherwise, or shall have entered into a
contract or arrangement that, upon consummation, will result in its or their
acquisition of, control over, Voting Stock of the Parent (or other securities
convertible into such Voting Stock) representing 25% or more of the combined
voting power of all Voting Stock of the Parent, (ii) IHS shall fail to own and
have the right to vote at least 25% of the outstanding Voting Stock of the
Parent, determined on a fully diluted basis after giving effect to the
conversion and exercise of all outstanding warrants, options
3
and other securities of the Parent that are convertible into or exercisable for
Voting Stock of the Parent (whether or not such securities are then currently
convertible or exercisable), (iii) during any period of up to 24 consecutive
months, commencing after the Closing Date, individuals who at the beginning of
such 24 month period were directors of the Parent (together with any new
director whose election by the Parent's Board of Directors or whose nomination
for election by the Parent's shareholders was approved by a vote of at least
two-thirds of the directors then still in office who either were directors at
the beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
directors of the Parent then in office or (iv) the Parent shall fail to own and
have the right to vote 100% of the outstanding Voting Stock of the Borrower,
determined on a fully diluted basis after giving effect to the conversion and
exercise of all outstanding warrants, options and other securities of the
Borrower that are convertible into or exercisable for Voting Stock of the
Borrower. As used herein, "beneficial ownership" shall have the meaning provided
in Rule 13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934.
"Churchland Facility" means that certain assisted living
facility located at 0000 X. Xxxxxxx Xxxx in Portsmouth, Virginia and identified
on Schedule 1.1(a) attached hereto.
"Closing Date" means the date hereof.
"Code" means the Internal Revenue Code of 1986, as amended,
and any successor statute thereto, as interpreted by the rules and regulations
issued thereunder, in each case as in effect from time to time. References to
sections of the Code shall be construed also to refer to any successor sections.
"Collateral" means all collateral referred to in and covered
by the Collateral Documents.
"Collateral Documents" means the Security Agreement, the
Pledge Agreement, the Mortgage Documents and such other documents executed and
delivered in connection with the attachment and perfection of the Agent's
security interests, for the benefit of the Lenders, in the Real Properties and
the personal property owned by the Credit Parties, including, without
limitation, the Mortgage Policies and UCC financing statements.
"Collateral Pool Adjusted NOI" means for the fiscal quarter
most recently ending, with respect to the Collateral Pool Property, the
aggregate NOI for all Collateral Pool Property multiplied by 4.
"Collateral Pool Eligibility Conditions" means the following
conditions:
(a) Average Economic Occupancy Rate. Each Real Property must
maintain an Average Economic Occupancy Rate of ninety percent (90%) at
all times; provided, however,
(i) any Newly Constructed Facility acquired subsequent
to the date hereof shall not be required to satisfy the
above-described 90% Average Economic Occupancy Rate
requirement during the first six months of ownership by the
Borrower or a Subsidiary of the Borrower;
(ii) the Terrace Gardens Facility need only maintain an
Average Economic Occupancy Rate of seventy five percent
(75%) during the first six (6) months following the Closing
Date and shall not be required to satisfy the
above-referenced ninety percent (90%) Average Economic
Occupancy Rate requirement until such six (6) month grace
period following the Closing Date has expired;
(iii) the West Palm Beach Facility need only maintain
an Average Economic Occupancy Rate of sixty percent (60%)
during the first six (6) months following the Closing Date
and shall not be required to satisfy the above-referenced
ninety percent (90%) Average Economic Occupancy Rate
requirement until such six (6) month grace period following
the Closing Date has expired;
4
(iv) the Ghent Arms Facility need only maintain an
Average Economic Occupancy Rate of eighty-five percent (85%)
during the first six (6) months following the Closing Date
and shall not be required to satisfy the above-referenced
ninety percent (90%) Average Economic Occupancy Rate
requirement until such six (6) month grace period following
the Closing Date has expired;
(v) the Xxxx'x Xxxxx Facility need only maintain an
Average Economic Occupancy Rate of seventy percent (70%)
during the six (6) months following the Closing Date and
shall not be required to satisfy the above-referenced ninety
percent (90%) Average Economic Occupancy Rate requirement
until such six (6) month grace period following the Closing
Date has expired; and
(vi) with respect to the Churchland Facility and the
Gloucester Facility, those Units which are part of the
current expansion projects at such Real Properties will not
be considered in the calculation of the Average Economic
Occupancy Rate for such Real Properties until the tenth full
calendar month following the completion of construction of
such Units.
(b) Debt Service Coverage Ratio. Each Real Property must
maintain at all times a Debt Service Coverage Ratio greater than or
equal to 1.3 to 1.0.
(c) Units/Serviceable Beds. Each Real Property must maintain
at all times at least 50 Units and 60 Serviceable Beds.
"Collateral Pool Property" means the Real Properties (other
than Abundance of Caution Property) that (i) satisfy each of the Collateral Pool
Eligibility Conditions as of the date of determination and (ii) are either (a)
identified on Schedule 1.1(a) or (b) acquired subsequent to the Closing Date by
a Subsidiary of the Borrower or the Borrower with the proceeds of Revolving
Loans and in satisfaction of each of the conditions contained in Section 5.2
hereof.
"Commitments" means the commitment of each Lender with respect
to the Revolving Committed Amount.
"Credit Documents" means this Credit Agreement, the Notes, any
Joinder Agreement, the Collateral Documents, the LOC Documents, the Fee Letter
and all other related agreements and documents issued or delivered hereunder or
thereunder or pursuant hereto or thereto.
"Credit Parties" means the Borrower and the Guarantors and
"Credit Party" means any one of them.
"Credit Party Obligations" means, without duplication, (a) all
of the obligations of the Credit Parties to the Lenders (including the Issuing
Lender) and the Agent, whenever arising, under this Credit Agreement, the Notes,
the Collateral Documents or any of the other Credit Documents to which the
Borrower or any other Credit Party is a party and (b) all liabilities and
obligations owing from such Credit Party to any Lender, or any Affiliate of a
Lender, arising under any interest rate protection agreements, commodity
purchase or option agreements or other interest or exchange rate or commodity
price hedging agreements related to the Loans and Letters of Credit
(collectively, "Hedging Agreements").
"Daily Economic Occupancy Rate" means, for each Real Property,
for each calendar day, the ratio (expressed as a percentage) equal to (i) the
number of Serviceable Beds at such Real Property minus the number of unoccupied
Serviceable Beds at such Real Property to (ii) the number of Serviceable Beds at
such Real Property.
"Debt Service Coverage Ratio" means, as of any date of
determination, (i) with respect to the applicable Newly Constructed Facility,
the ratio of (a) the NOI for such Newly Constructed Facility for the most recent
fiscal quarter multiplied by 4 to (b) the Borrowing Base Value of such Newly
Constructed Facility multiplied by 10.25, (ii) with respect to the applicable
Real Property (other than a Newly Constructed Facility), the ratio of (a) the
NOI for
5
such Real Property for the most recent six month period multiplied by 2 to (b)
the Borrowing Base Value of such Real Property multiplied by 10.25 and (iii)
with respect to the applicable Abundance of Caution Property, the ratio of (a)
the NOI for such Abundance Caution Property for the most recent fiscal quarter
multiplied by 4 to (b) seventy-five percent (75%) of the acquisition cost of
such Abundance of Caution Property multiplied by 10.25.
"Default" means any event, act or condition which with notice
or lapse of time, or both, would constitute an Event of Default.
"Defaulting Lender" means, at any time, any Lender that, (a)
has failed to make an Extension of Credit required pursuant to the terms of this
Credit Agreement (but only for so long as such Extension of Credit is not made),
(b) has failed to pay to the Agent or any Lender an amount owed by such Lender
pursuant to the terms of this Credit Agreement or any of the other Credit
Documents (but only for so long as such amount has not been repaid) or (c) has
been deemed insolvent or has become subject to a bankruptcy or insolvency
proceeding or to a receiver, trustee or similar official.
"Dollars" and "$" means dollars in lawful currency of the
United States of America.
"EBITDAR" means, for any period, with respect to the Parent
and its Subsidiaries on a consolidated basis, the sum of (a) Net Income for such
period plus (b) an amount which in the determination of Net Income for such
period has been deducted for (i) Interest Expense for such period, (ii) total
Federal, state or other domestic and foreign income taxes for such period and
(iii) all depreciation, amortization and other non-cash charges for such period
plus (c) rent expense for such period, all as determined in accordance with
GAAP.
"Economic Occupancy Rate" means, for each Real Property, for
each month, the ratio (expressed as a percentage) equal to the sum of the Daily
Economic Occupancy Rate for each calendar day in such month divided by the
number of calendar days in such month.
"Effective Date" means the date, as specified by the Agent, on
which the conditions set forth in Section ClosCond ~ shall have been fulfilled
(or waived in the sole discretion of the Lenders) and on which the initial Loans
shall have been made and/or the initial Letters of Credit shall have been
issued.
"Eligible Real Estate" means, as of any date of determination,
an assisted living facility property that satisfies the following criteria: (a)
the property must have at least 50 Units and 60 Serviceable Beds, (b) the
property must be located within the United States, (c) (i) with respect to any
Operating Facility, such property must have a minimum Economic Occupancy Rate of
at least 90% for the six-month period ending immediately prior to the date of
acquisition, or (ii) with respect to any Newly Constructed Facility, such
property must have a minimum Economic Occupancy Rate of at least 80% for the
month immediately prior to the date of acquisition, (d) (i) with respect to an
Operating Facility, such property must have a Debt Service Coverage Ratio
greater than or equal to 1.3 to 1.0, or (ii) with respect to a Newly Constructed
Facility, such property must have a Debt Service Coverage Ratio greater than or
equal to 1.1 to 1.0 and (e) such property (other than Abundance of Caution
Properties which must only be otherwise satisfactory to the Agent) shall
otherwise be satisfactory to the Lenders.
"Environmental Claim" means any investigation, written notice,
violation, written demand, written allegation, action, suit, injunction,
judgment, order, consent decree, penalty, fine, lien, proceeding, or written
claim whether administrative, or judicial in nature arising (a) pursuant to, or
in connection with, an actual or alleged violation of, any Environmental Law,
(b) in connection with any Hazardous Material, (c) from any assessment,
abatement, removal, remedial, corrective, or other response action in connection
with an Environmental Law or other order of a Governmental Authority or (d) from
any actual or alleged damage, injury, threat, or harm to health, safety, natural
resources, or the environment.
"Environmental Laws" means any and all lawful and applicable
Federal, state and local statutes, laws, regulations, ordinances, rules,
judgments, orders, decrees, permits or licenses relating to the environment or
to emissions, discharges, releases or threatened releases of pollutants,
contaminants, toxic or hazardous substances or wastes into the environment
including, without limitation, ambient air, surface water, ground water, or
land, or otherwise
6
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of pollutants, contaminants, toxic or hazardous
substances or wastes.
"Equity Issuance" means any issuance by the Parent to any
Person of (a) shares of its capital stock (common or preferred) or other equity
interests, (b) any shares of its capital stock (common or preferred) or other
equity interests pursuant to the exercise of options (other than stock issued to
employees and directors pursuant to employees or directors stock option plans)
or warrants or (c) any shares of its capital stock (common or preferred) or
other equity interests pursuant to the conversion of any debt securities to
equity.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute thereto, as interpreted by the rules
and regulations thereunder, all as the same may be in effect from time to time.
References to sections of ERISA shall be construed also to refer to any
successor sections.
"ERISA Affiliate" means an entity, whether or not
incorporated, which is under common control with a Credit Party or any of its
Subsidiaries within the meaning of Section 4001(a)(14) of ERISA, or is a member
of a group which includes a Credit Party and which is treated as a single
employer under Sections 414(b) or (c) of the Code.
"ERISA Event" means (i) with respect to any Plan, the
occurrence of a Reportable Event or the substantial cessation of operations
(within the meaning of Section 4062(e) of ERISA); (ii) the withdrawal of a
Credit Party, any Subsidiary of a Credit Party or any ERISA Affiliate from a
Multiple Employer Plan during a plan year in which it was a substantial employer
(as such term is defined in Section 4001(a)(2) of ERISA), or the termination of
a Multiple Employer Plan; (iii) the distribution of a notice of intent to
terminate or the actual termination of a Plan pursuant to Section 4041(a)(2) or
4041A of ERISA; (iv) the institution of proceedings to terminate or the actual
termination of a Plan by the PBGC under Section 4042 of ERISA; (v) any event or
condition which might constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan; (vi)
the complete or partial withdrawal of a Credit Party, any Subsidiary of a Credit
Party or any ERISA Affiliate from a Multiemployer Plan; (vii) the conditions for
imposition of a lien under Section 302(f) of ERISA exist with respect to any
Plan; or (viii) the adoption of an amendment to any Plan requiring the provision
of security to such Plan pursuant to Section 307 of ERISA.
"Eurodollar Loan" means a Loan bearing interest based at a
rate determined by reference to the Adjusted Eurodollar Rate.
"Eurodollar Rate" means, for any Eurodollar Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor page)
as the London interbank offered rate for deposits in Dollars at approximately
11:00 a.m. (London time) two Business Days prior to the first day of such
Interest Period for a term comparable to such Interest Period; provided,
however, if more than one rate is specified on Telerate Page 3750, the
applicable rate shall be the arithmetic mean of all such rates. If for any
reason such rate is not available, the term "Eurodollar Rate" shall mean, for
any Eurodollar Loan for any Interest Period therefor, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters
Screen LIBO Page as the London interbank offered rate for deposits in Dollars at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period for a term comparable to such Interest Period; provided,
however, if more than one rate is specified on Reuters Screen LIBO Page, the
applicable rate shall be the arithmetic mean of all such rates.
"Eurodollar Reserve Percentage" means, for any day, that
percentage (expressed as a decimal) which is in effect from time to time under
Regulation D of the Board of Governors of the Federal Reserve System (or any
successor), as such regulation may be amended from time to time, or any
successor regulation, as the maximum reserve requirement (including, without
limitation, any basic, supplemental, emergency, special, or marginal reserves)
applicable with respect to Eurocurrency liabilities as that term is defined in
Regulation D (or against any other category of liabilities that includes
deposits by reference to which the interest rate of Eurodollar Loans is
determined), whether or not any Lender has any Eurocurrency liabilities subject
to such reserve requirement at that time. Eurodollar Loans shall be deemed to
constitute Eurocurrency liabilities and as such shall be deemed subject to
reserve requirements without benefits of credits for proration, exceptions or
offsets that may be available from time to time to a Lender. The Adjusted
7
Eurodollar Rate shall be adjusted automatically on and as of the effective date
of any change in the Eurodollar Reserve Percentage.
"Event of Default" means any of the events or circumstances
described in Section 9.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, modified, succeeded or replaced from time to time, and the rules and
regulations promulgated thereunder.
"Existing Properties" has the meaning set forth in Section
5.1(f).
"Extension of Credit" means, as to any Lender, the making of,
or participation in, a Loan by such Lender or the issuance or extension of, or
participation in, a Letter of Credit.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upward, if necessary, to the nearest 1/100th of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day and (b) if no such rate is so published on such
next preceding Business Day, the Federal Funds Rate for such day shall be the
average rate quoted to the Agent on such day on such transactions as determined
by the Agent.
"Fee Letter" means that certain letter agreement, dated as of
the Closing Date, between the Agent and the Borrower, as amended, modified,
supplemented or replaced from time to time.
"Fixed Charge Coverage Ratio" means, as of the end of each
fiscal quarter of the Parent and its Subsidiaries on a consolidated basis, for
the fiscal quarter ending on such date, the ratio of (a) (i) EBITDAR for the
applicable period minus (ii) total Federal, state or other domestic and foreign
taxes paid for the applicable period to (b) the sum of (i) Interest Expense for
the applicable period plus (ii) rent expense for the applicable period.
"Funded Debt" means, with respect to any Person, without
duplication, the sum of (a) all Indebtedness of such Person for borrowed money,
(b) all purchase money Indebtedness of such Person, (c) the principal portion of
all obligations of such Person under Capital Leases, (d) all obligations,
contingent or otherwise, relative to the face amount of all letters of credit
(other than letters of credit supporting trade payables in the ordinary course
of business), whether or not drawn, and banker's acceptances issued for the
account of such Person (it being understood that, to the extent an undrawn
letter of credit supports another obligation consisting of Indebtedness, in
calculating aggregated Indebtedness only such other obligation shall be
included), (e) all Guaranty Obligations of such Person with respect to Funded
Debt of another Person, (f) all Funded Debt of another Person secured by a Lien
on any property of such Person whether or not such Funded Debt has been assumed
by such Person, (g) all Funded Debt of any partnership or unincorporated joint
venture to the extent such Person is legally obligated or has a reasonable
expectation of being liable with respect thereto, net of any assets of such
partnership or joint venture and (h) the principal balance outstanding under any
synthetic lease, tax retention operating lease, off-balance sheet loan or
similar off-balance sheet financing product to which such Person is a party,
where such transaction is considered borrowed money indebtedness for tax
purposes but is classified as an operating lease in accordance with GAAP. The
Funded Debt of any Person shall include the Funded Debt of any partnership or
joint venture in which such Person is a general partner or joint venturer, but
only to the extent to which there is recourse to such Person for the payment of
such Funded Debt.
"GAAP" means generally accepted accounting principles in the
United States applied on a consistent basis and subject to Section 1.3 hereof.
"Ghent Arms Facility" means, that certain assisted living
facility located at 000 Xxxxxxx Xxxxxx in Norfolk, Virginia and identified on
Schedule 1.1(a) attached hereto.
"Gloucester Facility" means, that certain assisted living
facility located at 0000 Xxxxxxxx Xxxxx in Gloucester, Virginia and identified
on Schedule 1.1(a) attached hereto.
8
"Governmental Authority" means any Federal, state, local or
provincial court or governmental agency, authority, instrumentality or
regulatory body.
"Guarantor" means each of the Parent, Sarasota, the
Subsidiaries of the Borrower identified on the signature pages hereto and each
Additional Credit Party which has executed a Joinder Agreement, together with
their successors and assigns.
"Guaranty Obligations" means, with respect to any Person,
without duplication, any obligations (other than endorsements in the ordinary
course of business of negotiable instruments for deposit or collection)
guaranteeing or intended to guarantee any Indebtedness of any other Person in
any manner, whether direct or indirect, and including without limitation any
obligation, whether or not contingent, (a) to purchase any such Indebtedness or
other obligation or any property constituting security therefor, (b) to advance
or provide funds or other support for the payment or purchase of such
indebtedness or obligation or to maintain working capital, solvency or other
balance sheet condition of such other Person (including, without limitation,
maintenance agreements, comfort letters, take or pay arrangements, put
agreements or similar agreements or arrangements) for the benefit of the holder
of Indebtedness of such other Person, (c) to lease or purchase property,
securities or services primarily for the purpose of assuring the owner of such
Indebtedness or (d) to otherwise assure or hold harmless the owner of such
Indebtedness or obligation against loss in respect thereof. The amount of any
Guaranty Obligation hereunder shall (subject to any limitations set forth
therein) be deemed to be an amount equal to the outstanding principal amount (or
maximum principal amount, if larger) of the Indebtedness in respect of which
such Guaranty Obligation is made.
"Hazardous Materials" means any substance, material or waste
defined or regulated in or under any Environmental Laws.
"Hedging Agreements" has the meaning set forth in the
definition of Credit Party Obligations.
"Indebtedness" of any Person means, without duplication, (a)
all obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, or upon
which interest payments are customarily made (c) all obligations of such Person
under conditional sale or other title retention agreements relating to property
purchased by such Person to the extent of the value of such property (other than
customary reservations or retentions of title under agreements with suppliers
entered into in the ordinary course of business), (d) all obligations, other
than intercompany items, of such Person issued or assumed as the deferred
purchase price of property or services purchased by such Person which would
appear as liabilities on a balance sheet of such Person, (e) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on, or payable out of
the proceeds of production from, property owned or acquired by such Person,
whether or not the obligations secured thereby have been assumed, (f) all
Guaranty Obligations of such Person, (g) the principal portion of all
obligations of such Person under (i) Capital Leases and (ii) any synthetic
lease, tax retention operating lease, off-balance sheet loan or similar
off-balance sheet financing product of such Person where such transaction is
considered borrowed money indebtedness for tax purposes but is classified as an
operating lease in accordance with GAAP, (h) all obligations of such Person in
respect of interest rate protection agreements, foreign currency exchange
agreements, or other interest or exchange rate or commodity price hedging
agreements, (i) the maximum amount of all performance and standby letters of
credit issued or bankers' acceptances facilities created for the account of such
Person and, without duplication, all drafts drawn thereunder (to the extent
unreimbursed), and (j) all preferred stock issued by such Person and required by
the terms thereof to be redeemed, or for which mandatory sinking fund payments
are due, by a fixed date. The Indebtedness of any Person shall include the
Indebtedness of any partnership or unincorporated joint venture in which such
Person is legally obligated or has a reasonable expectation of being liable with
respect thereto.
"Interest Expense" means, for any period with respect to any
Person, all interest expense, including the interest component under Capital
Leases, as determined in accordance with GAAP.
"Interest Payment Date" means for both the Base Rate Loans and
Eurodollar Loans, the day in each calendar month that is the last day of the
single Interest Period for Eurodollar Loans permitted pursuant to Section 2.1
9
hereof beginning with the first of such dates to occur after the Closing Date,
and the Revolving Loan Maturity Date; provided, however, with respect to Base
Rate Loans, the Interest Payment Date shall mean the last day of each month and
the Revolving Loan Maturity Date. If an Interest Payment Date falls on a date
which is not a Business Day, such Interest Payment Date shall be deemed to be
the next succeeding Business Day.
"Interest Period" means as to Eurodollar Loans, a period of
one month's duration, commencing on the date of borrowing; provided, however,
(a) if any Interest Period would end on a day which is not a Business Day, such
Interest Period shall be extended to the next succeeding Business Day, (b) no
Interest Period shall extend beyond the Revolving Loan Maturity Date and (c) if
the single Interest Period begins on a day for which there is no numerically
corresponding day in the calendar month in which the single Interest Period is
to end, such Interest Period shall end on the last Business Day of such calendar
month.
"Investment" in any Person means (a) the acquisition (whether
for cash, property, services, assumption of Indebtedness, securities or
otherwise) of assets, shares of capital stock, bonds, notes, debentures,
partnership, joint ventures or other ownership interests or other securities of
such other Person or (b) any deposit with, or advance, loan or other extension
of credit to, such Person (other than deposits made in connection with the
purchase of equipment or other assets in the ordinary course of business) or (c)
any other capital contribution to or investment in such Person, including,
without limitation, any Guaranty Obligation (including any support for a letter
of credit issued on behalf of such Person) incurred for the benefit of such
Person.
"IHS" means Integrated Health Services, Inc., a Delaware
corporation.
"Issuing Lender" means NationsBank.
"Issuing Lender Fees" shall have the meaning assigned to such
term in Section 3.4(b).
"Joinder Agreement" means a Joinder Agreement substantially in
the form of Exhibit 7.12.
"Xxxx'x Xxxxx Facility" means that certain assisted living
facility located at 000 X. Xxxxxxxxx Xxxx in Virginia Beach, Virginia and
identified on Schedule 1.1(a) attached hereto.
"Lender" means any of the Persons identified as a "Lender" on
the signature pages hereto, and any Person which may become a Lender by way of
assignment in accordance with the terms hereof, together with their successors
and permitted assigns.
"Letter of Credit" means any letter of credit issued by the
Issuing Lender for the account of the Borrower in accordance with the terms of
Section 2.2, as such Letter of Credit may be amended, modified, extended,
renewed or replaced.
"Letter of Credit Fee" shall have the meaning given such term
in Section 3.4(b).
"Leverage Ratio" means the ratio of (a) as of the first day of
any month, the sum of Revolving Loans outstanding on such date plus LOC
obligations outstanding on such date to (b) the Collateral Pool Adjusted NOI for
the fiscal quarter ending on such date, or if such date is not the last day of a
fiscal quarter, for the fiscal quarter most recently ended.
"Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, security interest, encumbrance, lien (statutory or
otherwise), preference, priority or charge of any kind, including, without
limitation, any agreement to give any of the foregoing, any conditional sale or
other title retention agreement, and any lease in the nature thereof.
"Loan" or "Loans" means the Revolving Loans (or a portion of
any Revolving Loan), individually or collectively, as appropriate.
"Loan" or "Loans" means the Revolving Loans (or a portion of
any Revolving Loan), individually or collectively, as appropriate.
10
"LOC Documents" means, with respect to any Letter of Credit,
such Letter of Credit, any amendments thereto, any documents delivered in
connection therewith, any application therefor, and any agreements, instruments,
guarantees or other documents (whether general in application or applicable only
to such Letter of Credit) governing or providing for (a) the rights and
obligations of the parties concerned or at risk or (b) any collateral security
for such obligations.
"LOC Obligations" means, at any time, the sum of (a) the
maximum amount which is, or at any time thereafter may become, available to be
drawn under Letters of Credit then outstanding, assuming compliance with all
requirements for drawings referred to in such Letters of Credit plus (b) the
aggregate amount of all drawings under Letters of Credit honored by the Issuing
Lender but not theretofore reimbursed.
"LOC Participants" means all Lenders whose Revolving Loan
Commitment Percentage is greater than zero.
"Material Adverse Effect" means a material adverse effect on
(a) the business, assets, operations, condition (financial or otherwise) or
prospects of the Parent and its Subsidiaries or the Borrower and its
Subsidiaries, (b) the ability of a Credit Party to perform its respective
obligations under this Credit Agreement or any of the other Credit Documents, or
(c) the validity or enforceability of this Credit Agreement, any of the other
Credit Documents, or the rights and remedies of the Lenders hereunder or
thereunder taken as a whole.
"Materials of Environmental Concern" shall mean any gasoline
or petroleum (including crude oil or any fraction thereof) or petroleum products
or any hazardous or toxic substances, materials or wastes, defined or regulated
as such in or under any Environmental Laws, including, without limitation,
asbestos, polychlorinated biphenyls and urea formaldehyde foam insulation.
"Moody's" means Xxxxx'x Investors Service, Inc., or any
successor or assignee of the business of such company in the business of rating
securities.
"Mortgage Documents" means the Mortgages, the Mortgage
Policies and such other documents and agreements executed or delivered in
connection with the Real Properties.
"Mortgage Policies" has the meaning set forth in Section
5.1(f).
"Mortgages" has the meaning set forth in Section 5.1(f).
"Multiemployer Plan" means a Plan which is a multiemployer
plan as defined in Sections 3(37) or 4001(a)(3) of ERISA.
"Multiple Employer Plan" means a Plan (other than a
Multiemployer Plan) which a Credit Party or any ERISA Affiliate and at least one
employer other than a Credit Party or any ERISA Affiliate are contributing
sponsors.
"NationsBank" means NationsBank, N.A. (South) and its
successors and/or assigns.
"Net Cash Proceeds" means the gross cash proceeds received
from an Equity Issuance net of transaction costs payable to third parties.
"Net Income" means, for any period with respect to any Person,
the net income after taxes for such period as determined in accordance with
GAAP.
"Net Worth" means, as of any date, the shareholders' equity or
net worth of any Person, as determined in accordance with GAAP.
11
"New Property" means any parcel of Eligible Real Estate
(specifically including any Newly Constructed Facility or Operating Facility)
that is being financed by the Borrower or any of its Subsidiaries with the
proceeds of Revolving Loans.
"Newly Constructed Facility" means any New Property containing
an assisted living facility property that has been in operation for a period not
exceeding nine (9) months.
"NOI" means, for any period with respect to an individual
assisted living facility or with respect to the Waterside Facility, (i) assuming
management fees for such period in an amount equal to the greater of (I) actual
management fees paid or incurred during such period with respect to such
facility or (II) five percent of gross revenues for such facility for such
period, the sum of (a) net income received and derived from the operation of
such facility for such period plus (b) total taxes with respect to such facility
for such period plus (c) all depreciation, amortization and other non-cash
charges with respect to such facility for such period minus (ii) an amount equal
to $250 per year for each Unit in such facility; provided, however, with respect
to the Churchland Facility and the Gloucester Facility, those Units which are
part of the current expansion projects at such Real Properties will not be
considered in the calculation of net income of such Real Properties until such
Units have been duly licensed in accordance with the laws of the Commonwealth of
Virginia.
"Non-Excluded Taxes" has the meaning set forth in Section
3.13.
"Note" or "Notes" means the Revolving Loan Notes, individually
or collectively, as appropriate.
"Notice of Borrowing" means a request by the Borrower for a
Revolving Loan, in the form of Exhibit 2.1(b).
"Notice of Continuation/Conversion" means a request by the
Borrower to continue an existing Eurodollar Loan to a new Interest Period or to
convert a Base Rate Loan to a Eurodollar Loan, in the form of Exhibit 2.1(e).
"Operating Facility" means any New Property containing an
assisted living facility property that has been in operation for a period in
excess of nine (9) months.
"Operating Lease" means, as applied to any Person, any lease
(including, without limitation, leases which may be terminated by the lessee at
any time) of any Property (whether real, personal or mixed) which is not a
Capital Lease other than any such lease in which that Person is the lessor.
"Parent" means Integrated Living Communities, Inc., a Delaware
corporation.
"Participation Interest" means (i) the Extension of Credit by
a Lender by way of a purchase of a participation in Letters of Credit or LOC
Obligations as provided in Section 2.2 or (ii) Revolving Loans advanced by a
Lender by way of a purchase of a participation in any Loans as provided in
Section 3.8.
"PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA and any successor
thereof.
"Permitted Investments" means Investments which are (a) cash
or Cash Equivalents, (b) accounts receivable created, acquired or made in the
ordinary course of business and payable or dischargeable in accordance with
customary trade terms, (c) Investments by one Credit Party in another Credit
Party; provided, however, this subclause (c) shall not permit Investments by the
Borrower and/or its Subsidiaries into the Parent in an amount exceeding
$5,000,000 in the aggregate, (d) the acquisition of New Properties in accordance
with the terms hereof, (e) xxxxxxx money and similar deposits in respect of real
property made in the ordinary course of business, and (f) the Investments
existing as of the Closing Date and set forth on Schedule 8.6.
12
"Permitted Liens" means (a) Liens securing Credit Party
Obligations, (b) Liens for taxes not yet due or Liens for taxes being contested
in good faith by appropriate proceedings for which adequate reserves determined
in accordance with GAAP have been established (and as to which the property
subject to any such Lien is not yet subject to foreclosure, sale or loss on
account thereof), (c) Liens in respect of property imposed by law arising in the
ordinary course of business such as materialmens', mechanics', warehousemens',
carriers', landlords' and other nonconsensual statutory Liens which are not yet
due and payable or which are being contested in good faith by appropriate
proceedings for which adequate reserves determined in accordance with GAAP have
been established (and as to which the property subject to any such Lien is not
yet subject to foreclosure, sale or loss on account thereof), (d) Liens arising
from good faith deposits in connection with or to secure performance of tenders,
bids, leases, government contracts, performance and return-of-money bonds and
other similar obligations incurred in the ordinary course of business (other
than obligations in respect of the payment of borrowed money), (e) Liens arising
from good faith deposits in connection with or to secure performance of
statutory obligations and surety and appeal bonds, (f) easements, rights-of-way,
restrictions (including zoning restrictions), matters of plat, minor defects or
irregularities in title and other similar charges or encumbrances not, in any
material respect, impairing the use of the encumbered property for its intended
purposes, (g) judgment Liens that would not constitute an Event of Default, (h)
Liens arising by virtue of any statutory or common law provision relating to
bankers' liens, rights of setoff or similar rights as to deposit accounts or
other funds maintained with a creditor depository institution, (i) Liens
existing on the date hereof and identified on Schedule 8.2; provided that no
such Lien shall extend to any property other than the property subject thereto
on the Closing Date and (j) Permitted Encumbrances (as defined in any Mortgage
Document).
"Person" means any individual, partnership, joint venture,
firm, corporation, limited liability company, association, trust or other
enterprise (whether or not incorporated), or any Governmental Authority.
"Plan" means any employee benefit plan (as defined in Section
3(3) of ERISA) which is covered by ERISA and with respect to which a Credit
Party or any ERISA Affiliate is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" within the
meaning of Section 3(5) of ERISA.
"Pledge Agreement" means that certain pledge agreement
executed and delivered by the Credit Parties in favor of the Agent, for the
benefit of the Lenders, to secure their obligations under the Credit Documents,
as amended, modified, extended, renewed or replaced from time to time.
"Prime Rate" means the per annum rate of interest established
from time to time by the Agent at its principal office in Atlanta, Georgia (or
such other principal office of the Agent as communicated in writing to the
Borrower and the Lenders) as its Prime Rate. Any change in the interest rate
resulting from a change in the Prime Rate shall become effective as of 12:01
a.m. of the Business Day on which each change in the Prime Rate is announced by
the Agent. The Prime Rate is a reference rate used by the Agent in determining
interest rates on certain loans and is not intended to be the lowest rate of
interest charged on any extension of credit to any debtor.
"Real Properties" means the Existing Properties and the New
Properties.
"Regulation D, G, T, U, or X" means Regulation D, G, T, U or
X, respectively, of the Board of Governors of the Federal Reserve System as from
time to time in effect and any successor to all or a portion thereof.
"Reportable Event" means any of the events set forth in
Section 4043(c) of ERISA, other than those events as to which the notice
requirement has been waived by regulation.
"Required Lenders" means the Lenders whose aggregate Credit
Exposure (as hereinafter defined) constitutes more than 50% of the Credit
Exposure of all Lenders at such time; provided, however, that if any Lender
shall be a Defaulting Lender at such time then there shall be excluded from the
determination of Required Lenders the aggregate principal amount of Credit
Exposure of such Lender at such time. For purposes of the preceding sentence,
the term "Credit Exposure" as applied to each Lender shall mean (a) at any time
prior to the termination of the Commitments, the sum of the Revolving Loan
Commitment Percentage of such Lender multiplied by the Revolving Committed
Amount and (b) at any time after the termination of the Commitments, the sum of
(i) the principal balance of
13
the outstanding Loans of such Lender plus (ii) such Lender's Participation
Interests in the face amount of the outstanding Letters of Credit.
"Requirement of Law" means, as to any Person, the articles or
certificate of incorporation and by-laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or final,
non-appealable determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or to which
any of its material property is subject.
"Restricted Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
now or hereafter outstanding, except a dividend payable solely in shares of that
class to the holders of that class and (ii) any redemption, retirement, sinking
fund or similar payment, purchase or other acquisition for value, direct or
indirect, of any shares of any class of stock now or hereafter outstanding, and
(iii) any payment made to retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire shares of any class of stock now or
hereafter outstanding.
"Revolving Committed Amount" means FIFTY MILLION DOLLARS
($50,000,000) or such lesser amount as the Revolving Committed Amount may be
reduced pursuant to Section 2.1(d) or Section 3.3(c).
"Revolving Loan Commitment Percentage" means, for each Lender,
the percentage identified as its Revolving Loan Commitment Percentage on
Schedule 1.1(b), as such percentage may be modified in connection with any
assignment made in accordance with the provisions of Section 11.3.
"Revolving Loan Maturity Date" means April 9, 1999.
"Revolving Loans" means the Revolving Loans made to the
Borrower pursuant to Section 2.1.
"Revolving Note" or "Revolving Notes" means the promissory
notes of the Borrower in favor of each of the Lenders evidencing the Revolving
Loans provided pursuant to Section 2.1, individually or collectively, as
appropriate, as such promissory notes may be amended, modified, supplemented,
extended, renewed or replaced from time to time and as evidenced in the form of
Exhibit 2.1(g).
"S&P" means Standard & Poor's Ratings Group, a division of
McGraw Hill, Inc., or any successor or assignee of the business of such division
in the business of rating securities.
"Sarasota" means Integrated Living Communities of Sarasota,
Inc., a Florida corporation.
"Securities Act" means the Securities Act of 1933, as amended,
modified, succeeded or replaced from time to time, and the rules and regulations
promulgated thereunder.
"Security Agreement" means that certain security agreement
executed and delivered by the Credit Parties in favor of the Agent, for the
benefit of the Lenders, to secure their obligations under the Credit Documents,
as the same may be amended, modified, extended, renewed, restated or replaced
from time to time.
"Senior Leverage Ratio" means, as of the last day of any
fiscal quarter of the Parent, with respect to the Parent and its Subsidiaries on
a consolidated basis, the ratio of (a) the sum of (i) Funded Debt on such date
plus (ii) rent expense for the fiscal quarter ending on such date multiplied by
32 to (b) EBITDAR for the fiscal quarter ending on such date multiplied by 4.
"Serviceable Beds" means, those beds located at an assisted
living facility which can be presently utilized by a patient or occupant of such
assisted living facility.
"Single Employer Plan" means any Plan which is covered by
Title IV of ERISA, but which is not a Multiemployer Plan or a Multiple Employer
Plan.
14
"Solvent" means, with respect to any Person as of a particular
date, that on such date (a) such Person is able to pay its debts and other
liabilities, contingent obligations and other commitments as they mature in the
normal course of business, (b) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person's ability to
pay as such debts and liabilities mature in their ordinary course, (c) such
Person is not engaged in a business or a transaction, and is not about to engage
in a business or a transaction, for which such Person's assets would constitute
unreasonably small capital after giving due consideration to the prevailing
practice in the industry in which such Person is engaged or is to engage, (d)
the fair value of the assets of such Person is greater than the total amount of
liabilities, including, without limitation, contingent liabilities, of such
Person and (e) the present fair salable value of the assets of such Person is
not less than the amount that will be required to pay the probable liability of
such Person on its debts as they become absolute and matured. In computing the
amount of contingent liabilities at any time, it is intended that such
liabilities will be computed at the amount which, in light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability.
"Subordinated Debt" means the obligations of the Parent to IHS
pursuant to that certain Unsecured Credit Note dated November 20, 1996.
"Subordination and Intercreditor Agreement" means that certain
Subordination and Intercreditor Agreement dated as of the date hereof among the
Borrower, the Agent (on behalf of the Lenders) and IHS, in the form attached
hereto as Schedule 1.1(c).
"Subsidiary" means, as to any Person, (a) any corporation more
than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time, any class or classes of such
corporation shall have or might have voting power by reason of the happening of
any contingency) is at the time owned by such Person directly or indirectly
through Subsidiaries, and (b) any partnership, association, joint venture or
other entity in which such Person directly or indirectly through Subsidiaries
has more than a 50% equity interest at any time.
"Termination Event" means (a) with respect to any Single
Employer Plan, the occurrence of a Reportable Event or the substantial cessation
of operations (within the meaning of Section 4062(e) of ERISA); (b) the
withdrawal of any Credit Party or any of its Subsidiaries or any ERISA Affiliate
from a Multiple Employer Plan during a plan year in which it was a substantial
employer (as such term is defined in Section 4001(a)(2) of ERISA), or the
termination of a Multiple Employer Plan; (c) the distribution of a notice of
intent to terminate or the actual termination of a Plan pursuant to Section
4041(a)(2) or 4041A of ERISA; (d) the institution of proceedings to terminate or
the actual termination of a Plan by the PBGC under Section 4042 of ERISA; (e)
any event or condition which might reasonably constitute grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan; or (f) the complete or partial withdrawal of any Credit
Party or any of its Subsidiaries or any ERISA Affiliate from a Multiemployer
Plan.
"Terrace Gardens Facility" means, that certain assisted living
facility located at 0000 X. Xxxx Xxxxxx in Wichita, Kansas and identified on
Schedule 1.1(a) attached hereto.
"Unit" means any room in an assisted living facility or
continuing care retirement community, as applicable, used for residential
purposes by an inhabitant or inhabitants of such assisted living facility or
continuing care retirement community.
"Unused Commitment" means, for any period, the amount by which
(a) the then applicable aggregate Revolving Committed Amount exceeds (b) the
daily average sum for such period of the outstanding aggregate principal amount
of all Revolving Loans plus the aggregate amount of LOC Obligations outstanding.
"Unused Fees" means the fees payable to the Lenders pursuant
to Section Fees ~ComFees ~.
"Voting Stock" means, with respect to any Person, capital
stock issued by such Person the holders of which are ordinarily, in the absence
of contingencies, entitled to vote for the election of directors (or persons
performing
15
similar functions) of such Person, even though the right so to vote has been
suspended by the happening of such a contingency.
"Waterside Facility" means, that certain continuing care
retirement community located at 0000 Xxx Xxxxx Xxxx in Sarasota, Florida and
identified on Schedule 1.1(a) attached hereto.
"West Palm Beach Facility" means, that certain assisted living
facility located at 0000 X. Xxxxxxxxx Xxxx in West Palm Beach, Florida and
identified on Schedule 1.1(a) attached hereto.
1.2 Computation of Time Periods and Other Definition Provisions.
For purposes of computation of periods of time hereunder, the word
"from" means "from and including" and the words "to" and "until" each mean "to
but excluding." References in this Credit Agreement to "Articles", "Sections",
"Schedules" or "Exhibits" shall be to Articles, Sections, Schedules or Exhibits
of or to this Credit Agreement unless otherwise specifically provided.
1.3 Accounting Terms.
Except as otherwise expressly provided herein, all accounting terms
used herein shall be interpreted, and all financial statements and certificates
and reports as to financial matters required to be delivered to the Lenders
hereunder shall be prepared, in accordance with GAAP applied on a consistent
basis. All financial statements delivered to the Lenders hereunder shall be
accompanied by a statement from the Borrower that GAAP has not changed since the
most recent financial statements delivered by the Borrower to the Lenders or if
GAAP has changed describing such changes in detail and explaining how such
changes affect the financial statements. All calculations made for the purposes
of determining compliance with this Credit Agreement shall (except as otherwise
expressly provided herein) be made by application of GAAP applied on a basis
consistent with the most recent annual or quarterly financial statements
delivered pursuant to Section 7.1 (or, prior to the delivery of the first
financial statements pursuant to Section 7.1, consistent with the financial
statements described in Section 5.1(d)); provided, however, if (a) the Borrower
shall object to determining such compliance on such basis at the time of
delivery of such financial statements due to any change in GAAP or the rules
promulgated with respect thereto or (b) either Agent or the Required Lenders
shall so object in writing within 60 days after delivery of such financial
statements (or after the Lenders have been informed of the change in GAAP
affecting such financial statements, if later), then such calculations shall be
made on a basis consistent with the most recent financial statements delivered
by the Borrower to the Lenders as to which no such objection shall have been
made.
SECTION 2
CREDIT FACILITY
2.1 Revolving Loans.
(a) Revolving Loan Commitment. Subject to the terms
and conditions set forth herein, each Lender severally agrees to make
revolving loans (each a "Revolving Loan" and collectively the
"Revolving Loans") to the Borrower, in Dollars, at any time and from
time to time, during the period from and including the Effective Date
to but not including the Revolving Loan Maturity Date or such earlier
date if the Revolving Committed Amount has been terminated as provided
herein; provided, however, that (i) the sum of the aggregate principal
amount of Revolving Loans outstanding plus the aggregate amount of LOC
Obligations outstanding shall not exceed the lesser of (x) the
Revolving Committed Amount and (y) the Borrowing Base, and (ii) with
respect to each individual Lender, the Lender's pro rata share of
outstanding Revolving Loans plus such Lender's pro rata share of
outstanding LOC Obligations shall not exceed such Lender's Revolving
Loan Commitment Percentage of the Revolving Committed Amount. Subject
to the terms of this Credit Agreement (including Section 3.3), the
Borrower may borrow, repay and reborrow Revolving Loans. The
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Agent shall keep a record of the purpose for which each of the Loans
was advanced (and of repayments applied thereto), which record shall be
conclusive absent prima facie error.
(b) Method of Borrowing for Revolving Loans. The
Borrower may borrow Revolving Loans on any Business Day, provided that
the Borrower shall give the Agent irrevocable notice (which must be
received by the Agent (A) prior to 11:00 a.m., three Business Days
prior to the date of the requested borrowing of Revolving Loans that
will be Eurodollar Loans, or (B) prior to 11:00 a.m. two Business Days
prior to the date of the requested borrowing of Revolving Loans that
will be Base Rate Loans specifying (1) the amount to be borrowed, (2)
the date of the requested borrowing of Revolving Loans, (3) the purpose
for which the requested Revolving Loans will be used by the Borrower
and (4) whether such Revolving Loans shall be Base Rate Loans or
Eurodollar Loans; provided, however, that (x) there shall be only one
Interest Period applicable for all amounts outstanding hereunder
bearing interest based on the Eurodollar Rate, (y) the initial Interest
Period for Eurodollar Loans shall commence on the date that the first
Eurodollar Loan hereunder is extended and (z) any amounts thereafter
borrowed or converted hereunder which are to bear interest based on the
Eurodollar Rate may only be borrowed or converted on the first day of
the Interest Period applicable to Eurodollar Loans.
(c) Funding of Revolving Loans. Upon receipt of a
Notice of Borrowing, the Agent shall promptly inform the Lenders as to
the terms thereof. Each Lender shall make its Revolving Loan Commitment
Percentage of the requested Revolving Loans available to the Agent by
2:00 p.m. on the date specified in the Notice of Borrowing by deposit,
in Dollars, of immediately available funds at the offices of the Agent
in Charlotte, North Carolina or at such other address as the Agent may
designate in writing. The amount of the requested Revolving Loans will
then be made available to the Borrower by the Agent by crediting the
account of the Borrower on the books of such office of the Agent, to
the extent the amount of such Revolving Loans are made available to the
Agent.
No Lender shall be responsible for the failure or
delay by any other Lender in its obligation to make Revolving Loans
hereunder; provided, however, that the failure of any Lender to fulfill
its obligations hereunder shall not relieve any other Lender of its
obligations hereunder. Unless the Agent shall have been notified by any
Lender prior to 5:00 p.m. on the date preceding the date of any such
Revolving Loan that such Lender does not intend to make available to
the Agent its portion of the Revolving Loans to be made on such date,
the Agent may assume that such Lender has made such amount available to
the Agent on the date of such Revolving Loans, and the Agent in
reliance upon such assumption, may (in its sole discretion but without
any obligation to do so) make available to the Borrower a corresponding
amount. If such corresponding amount is not in fact made available to
the Agent, the Agent shall be able to recover such corresponding amount
from such Lender. If such Lender does not pay such corresponding amount
forthwith upon the Agent's demand therefor, the Agent will promptly
notify the Borrower, and the Borrower shall immediately pay such
corresponding amount to the Agent. The Agent shall also be entitled to
recover from the Lender or the Borrower, as the case may be, interest
on such corresponding amount in respect of each day from the date such
corresponding amount was made available by the Agent to the Borrower to
the date such corresponding amount is recovered by the Agent at a per
annum rate equal to (i) from the Borrower at the applicable rate for
such Revolving Loan pursuant to the Notice of Borrowing and (ii) from a
Lender at the Federal Funds Rate.
(d) Reduction or Termination of Revolving Committed
Amount. Upon at least three Business Days' notice, the Borrower shall
have the right to permanently terminate or reduce the aggregate unused
amount of the Revolving Committed Amount at any time or from time to
time; provided that (i) each partial reduction shall be in an aggregate
amount at least equal to $10,000,000 and in integral multiples of
$1,000,000 above such amount and (ii) no reduction shall be made which
would reduce the Revolving Committed Amount to an amount less than (a)
the aggregate amount of outstanding Revolving Loans plus the aggregate
amount of outstanding LOC Obligations and (b) $30,000,000. Any
reduction in (or termination of) the Revolving Committed Amount shall
be permanent and may not be reinstated.
(e) Continuations and Conversions. Subject to the
terms of Section 5.3, the Borrower shall have the option to continue
existing Eurodollar Loans upon the expiration of the current Interest
Period
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with respect thereto for a subsequent Interest Period, to convert Base
Rate Loans into Eurodollar Loans or to convert Eurodollar Loans into
Base Rate Loans; provided, however, that (i) each such continuation or
conversion must be requested by the Borrower pursuant to a written
Notice of Continuation/Conversion, in the form of Exhibit 2.1(e), in
compliance with the terms set forth below, (ii) except as provided in
Section 3.11, Eurodollar Loans may only be continued or converted into
Base Rate Loans on the last day of the single Interest Period for
Eurodollar Loans permitted pursuant to Section 2.1(b) hereof, (iii)
Base Rate Loans may only be converted into Eurodollar Loans on the
first day of the single Interest Period for Eurodollar Loans permitted
pursuant to Section 2.1(b) hereof, (iv) Eurodollar Loans may not be
continued nor may Base Rate Loans be converted into Eurodollar Loans
during the existence and continuation of a Default or Event of Default
and (v) any request to continue a Eurodollar Loan that fails to comply
with the terms hereof or any failure to request a continuation of a
Eurodollar Loan at the end of the existing Interest Period shall result
in a conversion of such Eurodollar Loan to a Base Rate Loan on the last
day of the existing Interest Period. Each continuation or conversion
must be requested by the Borrower no later than 11:00 a.m. (A) two
Business Days prior to the date for a requested conversion of a
Eurodollar Loan to a Base Rate Loan or (B) three Business Days prior to
the date for a requested continuation of a Eurodollar Loan or
conversion of a Base Rate Loan to a Eurodollar Loan, in each case
pursuant to a written Notice of Continuation/Conversion submitted to
the Agent which shall set forth whether the Borrower wishes to continue
or convert such Loans; provided, however, if the Borrower shall fail to
give any required Notice of Continuation/Conversion as described above,
or if such continuation or conversion is not permitted pursuant to the
terms above, the Loans shall automatically be converted to Base Rate
Loans on the last day of the then expiring Interest Period.
(f) Minimum Amounts. Each request for a borrowing,
conversion or continuation shall be subject to the requirements that
(i) each Loan shall be in a minimum amount of $500,000 and in integral
multiples of $100,000 in excess thereof or the remaining amount
available under the Revolving Committed Amount. All Eurodollar Loans,
because they have same Interest Period, shall be considered as one
Eurodollar Loan.
(g) Notes. The Revolving Loans made by each Lender
shall be evidenced by a duly executed promissory note of the Borrower
to each Lender in the face amount of its Revolving Loan Commitment
Percentage of the Revolving Committed Amount in substantially the form
of Exhibit 2.1(g).
2.2 Letter of Credit Subfacility.
(a) Issuance. Subject to the terms and conditions hereof and
of the LOC Documents, if any, and any other terms and conditions which
the Issuing Lender may reasonably require (so long as such terms and
conditions do not impose any financial obligation on or require any
Lien (not otherwise contemplated by this Credit Agreement) to be given
by any Credit Party or conflict with any obligation of, or detract from
any action which may be taken by, any Credit Party or their
Subsidiaries under this Credit Agreement), the Issuing Lender shall
from time to time upon request issue, in Dollars, and the LOC
Participants shall participate in, letters of credit (the "Letters of
Credit") for the account of the Borrower, from the Effective Date until
the Revolving Loan Maturity Date, in a form customarily used by and
otherwise reasonably acceptable to the Issuing Lender; provided,
however, that (i) the aggregate amount of LOC Obligations shall not at
any time exceed TWO MILLION DOLLARS ($2,000,000), (ii) the sum of the
aggregate amount of LOC Obligations outstanding plus Revolving Loans
outstanding shall not exceed the lesser of (x) the Revolving Committed
Amount and (y) the Borrowing Base and (iii) with respect to each
individual LOC Participant, the LOC Participant's pro rata share of
outstanding Revolving Loans plus its pro rata share of outstanding LOC
Obligations shall not exceed such LOC Participant's Revolving Loan
Commitment Percentage of the Revolving Committed Amount. The issuance
and expiry date of each Letter of Credit shall be a Business Day.
Except as otherwise expressly agreed upon by all the LOC Participants,
no Letter of Credit shall have an original expiry date more than one
year from the date of issuance, or as extended, shall have an expiry
date extending beyond the Revolving Loan Maturity Date. Each Letter of
Credit shall be either (x) a standby letter of credit issued to support
the obligations (including pension or insurance obligations),
contingent or otherwise, of the Borrower, or (y) a commercial letter of
credit in
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respect of the purchase of goods or services by the Borrower in the
ordinary course of business. Each Letter of Credit shall comply with
the related LOC Documents.
(b) Notice and Reports. The request for the issuance of a
Letter of Credit shall be submitted to the Issuing Lender at least
three Business Days prior to the requested date of issuance. The
Issuing Lender will, at least quarterly and more frequently upon
request, provide to the Agent for dissemination to the Lenders a
detailed report specifying the Letters of Credit which are then issued
and outstanding and any activity with respect thereto which may have
occurred since the date of the prior report, and including therein,
among other things, the account party, the beneficiary, the face
amount, and the expiry date as well as any payments or expirations
which may have occurred. The Issuing Lender will further provide to the
Agent, promptly upon request, copies of the Letters of Credit.
(c) Participations. Each LOC Participant, upon issuance of a
Letter of Credit, shall be deemed to have purchased without recourse a
risk participation from the Issuing Lender in such Letter of Credit and
the obligations arising thereunder and any collateral relating thereto,
in each case in an amount equal to its Revolving Loan Commitment
Percentage of the obligations under such Letter of Credit, and shall
absolutely, unconditionally and irrevocably assume, as primary obligor
and not as surety, and be obligated to pay to the Issuing Lender
therefor and discharge when due, its Revolving Loan Commitment
Percentage of the obligations arising under such Letter of Credit.
Without limiting the scope and nature of each LOC Participant's
participation in any Letter of Credit, to the extent that the Issuing
Lender has not been reimbursed as required hereunder or under any such
Letter of Credit, each such LOC Participant shall pay to the Issuing
Lender its Revolving Loan Commitment Percentage of such unreimbursed
drawing in same day funds on the day of notification by the Issuing
Lender of an unreimbursed drawing pursuant to the provisions of
subsection (d) hereof. The obligation of each LOC Participant to so
reimburse the Issuing Lender shall be absolute and unconditional and
shall not be affected by the occurrence of a Default, an Event of
Default or any other occurrence or event. Any such reimbursement shall
not relieve or otherwise impair the obligation of the Borrower or any
other Credit Party to reimburse the Issuing Lender under any Letter of
Credit, together with interest as hereinafter provided.
(d) Reimbursement. In the event of any drawing under any
Letter of Credit, the Issuing Lender will promptly notify the Borrower.
Unless the Borrower shall immediately notify the Issuing Lender of its
intent to otherwise reimburse the Issuing Lender, the Borrower shall be
deemed to have requested a Revolving Loan at the Base Rate in the
amount of the drawing as provided in subsection (e) hereof, the
proceeds of which will be used to satisfy the reimbursement
obligations. The Borrower shall reimburse the Issuing Lender on the day
of drawing under any Letter of Credit either with the proceeds of a
Revolving Loan obtained hereunder or otherwise in same day funds as
provided herein or in the LOC Documents. If the Borrower shall fail to
reimburse the Issuing Lender as provided hereinabove, the unreimbursed
amount of such drawing shall bear interest at a per annum rate equal to
the Base Rate plus two percent (2%). The Borrower's reimbursement
obligations hereunder shall be absolute and unconditional under all
circumstances irrespective of (but without waiver of) any rights of
set-off, counterclaim or defense to payment the applicable account
party or the Borrower may claim or have against the Issuing Lender, the
Agent, the Lenders, the beneficiary of the Letter of Credit drawn upon
or any other Person, including without limitation, any defense based on
any failure of the applicable account party, the Borrower or any other
Credit Party to receive consideration or the legality, validity,
regularity or unenforceability of the Letter of Credit. The Issuing
Lender will promptly notify the LOC Participants of the amount of any
unreimbursed drawing and each LOC Participant shall promptly pay to the
Agent for the account of the Issuing Lender, in Dollars and in
immediately available funds, the amount of such LOC Participant's
Revolving Loan Commitment Percentage of such unreimbursed drawing. Such
payment shall be made on the day such notice is received by such Lender
from the Issuing Lender if such notice is received at or before 2:00
p.m., otherwise such payment shall be made at or before 12:00 Noon on
the Business Day next succeeding the day such notice is received. If
such LOC Participant does not pay such amount to the Issuing Lender in
full upon such request, such LOC Participant shall, on demand, pay to
the Agent for the account of the Issuing Lender interest on the unpaid
amount during the period from the date the LOC Participant received the
notice regarding the unreimbursed drawing until such LOC Participant
pays such
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amount to the Issuing Lender in full at a rate per annum equal to, if
paid within two Business Days of the date of drawing, the Federal Funds
Rate and thereafter at a rate equal to the Base Rate. Each LOC
Participant's obligation to make such payment to the Issuing Lender,
and the right of the Issuing Lender to receive the same, shall be
absolute and unconditional, shall not be affected by any circumstance
whatsoever and without regard to the termination of this Credit
Agreement or the Commitments hereunder, the existence of a Default or
Event of Default or the acceleration of the obligations hereunder and
shall be made without any offset, abatement, withholding or reduction
whatsoever. Simultaneously with the making of each such payment by a
LOC Participant to the Issuing Lender, such LOC Participant shall,
automatically and without any further action on the part of the Issuing
Lender or such LOC Participant, acquire a participation in an amount
equal to such payment (excluding the portion of such payment
constituting interest owing to the Issuing Lender) in the related
unreimbursed drawing portion of the LOC Obligation and in the interest
thereon and in the related LOC Documents, and shall have a claim
against the Borrower and the other Credit Parties with respect thereto.
(e) Repayment with Revolving Loans. On any day on which the
Borrower shall have requested, or been deemed to have requested, a
Revolving Loan borrowing to reimburse a drawing under a Letter of
Credit, the Agent shall give notice to the applicable Lenders that a
Revolving Loan has been requested or deemed requested in connection
with a drawing under a Letter of Credit, in which case a Revolving Loan
borrowing comprised solely of Base Rate Loans (each such borrowing, a
"Mandatory Borrowing") shall be immediately made from all applicable
Lenders (without giving effect to any termination of the Commitments
pursuant to Section 9.2) pro rata based on each Lender's respective
Revolving Loan Commitment Percentage and the proceeds thereof shall be
paid directly to the Issuing Lender for application to the respective
LOC Obligations. Each such Lender hereby irrevocably agrees to make
such Revolving Loans immediately upon any such request or deemed
request on account of each such Mandatory Borrowing in the amount and
in the manner specified in the preceding sentence and on the same such
date notwithstanding (i) the amount of Mandatory Borrowing may not
comply with the minimum amount for borrowings of Revolving Loans
otherwise required hereunder, (ii) whether any conditions specified in
Section 5 are then satisfied, (iii) whether a Default or Event of
Default then exists, (iv) failure of any such request or deemed request
for Revolving Loans to be made by the time otherwise required
hereunder, (v) the date of such Mandatory Borrowing, or (vi) any
reduction in the Revolving Committed Amount or any termination of the
Commitments. In the event that any Mandatory Borrowing cannot for any
reason be made on the date otherwise required above (including, without
limitation, as a result of the commencement of a proceeding under the
Bankruptcy Code with respect to the Borrower or any other Credit
Party), then each such Lender hereby agrees that it shall forthwith
fund (as of the date the Mandatory Borrowing would otherwise have
occurred, but adjusted for any payments received from the Borrower on
or after such date and prior to such purchase) its Participation
Interest in the outstanding LOC Obligations; provided, further, that in
the event any Lender shall fail to fund its Participation Interest on
the day the Mandatory Borrowing would otherwise have occurred, then the
amount of such Lender's unfunded Participation Interest therein shall
bear interest payable to the Issuing Lender upon demand, at the rate
equal to, if paid within two Business Days of such date, the Federal
Funds Rate, and thereafter at a rate equal to the Base Rate.
(f) Designation of Subsidiaries as Account Parties.
Notwithstanding anything to the contrary set forth in this Credit
Agreement, a Letter of Credit issued hereunder may contain a statement
to the effect that such Letter of Credit is issued for the account of a
Subsidiary of the Borrower; provided that notwithstanding such
statement, the Borrower shall be the actual account party for all
purposes of this Credit Agreement for such Letter of Credit and such
statement shall not affect the Borrower's reimbursement obligations
hereunder with respect to such Letter of Credit.
(g) Modification and Extension. The issuance of any
supplement, modification, amendment, renewal, or extensions to any
Letter of Credit shall, for purposes hereof, be treated in all respects
the same as the issuance of a new Letter of Credit hereunder.
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(h) Uniform Customs and Practices. The Issuing Lender may have
the Letters of Credit be subject to The Uniform Customs and Practice
for Documentary Credits, as published as of the date of issue by the
International Chamber of Commerce (Publication No. 500 or the most
recent publication, the "UCP"), in which case the UCP may be
incorporated therein and deemed in all respects to be a part thereof.
(i) Responsibility of Issuing Lender. It is expressly
understood and agreed that the obligations of the Issuing Lender
hereunder to the LOC Participants are only those expressly set forth in
this Credit Agreement and that the Issuing Lender shall be entitled to
assume that the conditions precedent set forth in Section 5 have been
satisfied unless it shall have acquired actual knowledge that any such
condition precedent has not been satisfied; provided, however, that
nothing set forth in this Section 2.2 shall be deemed to prejudice the
right of any LOC Participant to recover from the Issuing Lender any
amounts made available by such LOC Participant to the Issuing Lender
pursuant to this Section 2.2 in the event that it is determined by a
court of competent jurisdiction that the payment with respect to a
Letter of Credit constituted gross negligence or willful misconduct on
the part of the Issuing Lender.
(j) Conflict with LOC Documents. In the event of any conflict
between this Credit Agreement and any LOC Document, this Credit
Agreement shall govern.
(k) Indemnification of Issuing Lender.
(i) In addition to its other obligations under this
Credit Agreement, the Borrower hereby agrees to protect,
indemnify, pay and save the Issuing Lender harmless from and
against any and all claims, demands, liabilities, damages,
losses, costs, charges and expenses (including reasonable
attorneys' fees) that the Issuing Lender may incur or be
subject to as a consequence, direct or indirect, of (A) the
issuance of any Letter of Credit or (B) the failure of the
Issuing Lender to honor a drawing under a Letter of Credit as
a result of any act or omission, whether rightful or wrongful,
of any present or future de jure or de facto government or
governmental authority (all such acts or omissions, herein
called "Government Acts").
(ii) As between the Borrower and the Issuing Lender,
the Borrower shall assume all risks of the acts, omissions or
misuse of any Letter of Credit by the beneficiary thereof. The
Issuing Lender shall not be responsible for: (A) the form,
validity, sufficiency, accuracy, genuineness or legal effect
of any document submitted by any party in connection with the
application for and issuance of any Letter of Credit, even if
it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (B) the
validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign any Letter of
Credit or the rights or benefits thereunder or proceeds
thereof, in whole or in part, that may prove to be invalid or
ineffective for any reason; (C) failure of the beneficiary of
a Letter of Credit to comply fully with conditions required in
order to draw upon a Letter of Credit; (D) errors, omissions,
interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise,
whether or not they be in cipher; (E) errors in interpretation
of technical terms; (F) any loss or delay in the transmission
or otherwise of any document required in order to make a
drawing under a Letter of Credit or of the proceeds thereof;
and (G) any consequences arising from causes beyond the
control of the Issuing Lender, including, without limitation,
any Government Acts. None of the above shall affect, impair,
or prevent the vesting of the Issuing Lender's rights or
powers hereunder.
(iii) In furtherance and extension and not in
limitation of the specific provisions hereinabove set forth,
any action taken or omitted by the Issuing Lender, under or in
connection with any Letter of Credit or the related
certificates, if taken or omitted in good faith, shall not put
the Issuing Lender under any resulting liability to the
Borrower or any other Credit Party. It is the intention of the
parties that this Credit Agreement shall be construed and
applied to protect and indemnify the Issuing Lender against
any and all risks involved in the issuance of the Letters of
Credit, all of which risks are hereby assumed by the Borrower,
including, without limitation, any
21
and all risks of the acts or omissions, whether rightful or
wrongful, of any present or future Government Acts. The
Issuing Lender shall not, in any way, be liable for any
failure by the Issuing Lender or anyone else to pay any
drawing under any Letter of Credit as a result of any
Government Acts or any other cause beyond the control of the
Issuing Lender.
(iv) Nothing in this subsection (k) is intended to
limit the reimbursement obligation of the Borrower contained
in this Section 2.2. The obligations of the Borrower under
this subsection (k) shall survive the termination of this
Credit Agreement. No act or omission of any current or prior
beneficiary of a Letter of Credit shall in any way affect or
impair the rights of the Issuing Lender to enforce any right,
power or benefit under this Credit Agreement.
(v) Notwithstanding anything to the contrary
contained in this subsection (k), the Borrower shall have no
obligation to indemnify the Issuing Lender in respect of any
liability incurred by the Issuing Lender arising solely out of
the gross negligence or willful misconduct of the Issuing
Lender, as determined by a court of competent jurisdiction.
Nothing in this Credit Agreement shall relieve the Issuing
Lender of any liability to the Borrower in respect of any
action taken by the Issuing Lender which action constitutes
gross negligence or willful misconduct of the Issuing Lender
or a violation of the UCP or Uniform Commercial Code (as
applicable), as determined by a court of competent
jurisdiction.
SECTION 3
GENERAL PROVISIONS APPLICABLE TO LOANS
AND LETTERS OF CREDIT
3.1 Interest.
(a) Interest Rate. All Base Rate Loans shall accrue interest
at the Base Rate per annum and all Eurodollar Loans shall accrue
interest at a per annum rate equal to the Adjusted Eurodollar Rate plus
the Applicable Percentage.
(b) Default Rate of Interest. Upon the occurrence, and during
the continuance, of an Event of Default, the principal of and, to the
extent permitted by law, interest on the Loans and any other amounts
owing hereunder or under the other Credit Documents (including without
limitation fees and expenses) shall bear interest, payable on demand,
at a per annum rate equal to 2% plus the rate which would otherwise be
applicable (or if no rate is applicable, then the rate for Revolving
Loans that are Base Rate Loans plus two percent (2%) per annum).
(c) Interest Payments. Interest on Loans shall be due and
payable in arrears on each Interest Payment Date. If an Interest
Payment Date falls on a date which is not a Business Day, such Interest
Payment Date shall be deemed to be the next succeeding Business Day,
except that in the case of Eurodollar Loans where the next succeeding
Business Day falls in the next succeeding calendar month, then on the
next preceding Business Day.
3.2 Place and Manner of Payments.
All payments of principal, interest, fees, expenses and other amounts
to be made by a Credit Party under this Credit Agreement shall be received not
later than 2:00 p.m. on the date when due, in Dollars and in immediately
available funds, by the Agent for the benefit of the Lenders at its offices in
Charlotte, North Carolina. Payments received after such time shall be deemed to
have been received on the next Business Day. The Borrower shall, at the time it
makes any payment under this Credit Agreement, specify to the Agent, the Loans,
Letters of Credit, fees or other amounts payable by the Borrower hereunder to
which such payment is to be applied (and in the event that it fails to specify,
or if such application would be inconsistent with the terms hereof, the Agent
shall, subject to Section 3.7,
22
distribute such payment to the Lenders in such manner as the Agent may deem
appropriate). The Agent will distribute any such payment to the Lenders on the
day received if such payment is received prior to 2:00 p.m.; otherwise the Agent
will distribute such payment to the Lenders on the next succeeding Business Day.
If the Agent fails to distribute such payment on the next succeeding Business
Day, then the amount of such payment shall bear interest payable to the Lenders,
at the rate equal to, if paid within one Business Day of such date, the Federal
Funds Rate, and thereafter at a rate equal to the Base Rate plus two percent
(2%). Whenever any payment hereunder shall be stated to be due on a day which is
not a Business Day, the due date thereof shall be extended to the next
succeeding Business Day (subject to accrual of interest and fees for the period
of such extension), except that in the case of Eurodollar Loans, if the
extension would cause the payment to be made in the next following calendar
month, then such payment shall instead be made on the next preceding Business
Day.
3.3 Prepayments.
(a) Voluntary Prepayments. The Borrower shall have the right
to prepay Loans in whole or in part from time to time without premium
or penalty; provided, however, that (i)Eurodollar Loans may only be
prepaid on three Business Days' prior written notice to the Agent and
any prepayment of Eurodollar Loans will be subject to Section 3.14,
(ii) Base Rate Loans may only be prepaid after written notice
(confirmed by a telephone call from the Borrower) to the Agent not
later than 11:00 a.m. on the Business Day of the applicable prepayment
and (iii) each such partial prepayment of Loans shall be in the minimum
principal amount of $500,000 and integral multiples of $100,000 in
excess thereof.
(b) Mandatory Prepayments. If at any time the sum of the
aggregate amount of Revolving Loans outstanding plus LOC Obligations
outstanding exceeds the lesser of (x) the Revolving Committed Amount
and (y) the Borrowing Base, the Borrower shall immediately (without
need of notice or demand therefor) make a principal payment to the
Agent in the manner and in an amount necessary to be in compliance with
Section 2.1 (to be applied as set forth in Section 3.3(c) below).
(c) Application of Prepayments. All amounts required to be
paid pursuant to Section 3.3(b) shall be applied first to Revolving
Loans and second to a cash collateral account in respect of LOC
Obligations. Within the parameters of the application set forth above,
prepayments shall be applied first to Base Rate Loans and then to
Eurodollar Loans. All prepayments hereunder shall be subject to Section
3.14.
3.4 Fees.
(a) Unused Fees. In consideration of the Revolving Committed
Amount being made available by the Lenders hereunder, the Borrower
agrees to pay to the Agent, for the pro rata benefit of each Lender
(based on each Lender's Revolving Loan Commitment Percentage of the
Revolving Committed Amount), a fee equal to one-quarter of one percent
(.25%) per annum on the Unused Commitment (the "Unused Fees"). The
accrued Unused Fees shall commence to accrue on the Effective Date and
shall be due and payable in arrears on the last Business Day of each
fiscal quarter of the Borrower (as well as on the Revolving Loan
Maturity Date and on any date that the Revolving Committed Amount is
reduced) for the immediately preceding fiscal quarter (or portion
thereof), beginning with the first of such dates to occur after the
Effective Date.
(b) Letter of Credit Fees.
(i) Letter of Credit Fee. In consideration of the
issuance of Letters of Credit hereunder, the Borrower agrees
to pay to the Issuing Lender for the pro rata benefit of the
Lenders (based on each Lender's Revolving Loan Commitment
Percentage of the Revolving Committed Amount), a fee (the
"Letter of Credit Fee") equal to two percent (2.0%) per annum
on the average daily maximum amount available to be drawn
under each such Letter of Credit from the date of issuance to
the date of expiration. The Letter of Credit Fee will be
payable upon the issuance of each applicable Letter of Credit.
23
(ii) Issuing Lender Fees. In addition to the Letter
of Credit Fee, the Borrower shall pay to the Issuing Lender
for its own account, without sharing by the other Lenders, (A)
such fronting and negotiation fees as may be mutually agreed
upon by the Issuing Lender and the Borrower from time to time
and (B) the customary charges from time to time to the Issuing
Lender for its services in connection with the issuance,
amendment, payment, transfer, administration, cancellation and
conversion of, and drawings under, such Letters of Credit
(collectively, the "Issuing Lender Fees").
(c) Administrative Fees. The Borrower agrees to pay to the
Agent, for its own account, an annual fee as agreed to between the
Borrower and the Agent in the Fee Letter.
3.5 Payment in full at Maturity.
On the Revolving Loan Maturity Date, the entire outstanding principal
balance of all Revolving Loans, together with accrued but unpaid interest and
all other sums owing with respect thereto, shall be due and payable in full,
unless accelerated sooner pursuant to Section 9.
3.6 Computations of Interest and Fees.
(a) All computations of interest and fees hereunder shall be
made on the basis of the actual number of days elapsed over a year of
360 days. Interest shall accrue from and include the date of borrowing
(or continuation or conversion) but exclude the date of payment.
(b) It is the intent of the Lenders and the Credit Parties to
conform to and contract in strict compliance with applicable usury law
from time to time in effect. All agreements between the Lenders and the
Borrower are hereby limited by the provisions of this paragraph which
shall override and control all such agreements, whether now existing or
hereafter arising and whether written or oral. In no way, nor in any
event or contingency (including but not limited to prepayment or
acceleration of the maturity of any obligation), shall the interest
taken, reserved, contracted for, charged, or received under this Credit
Agreement, under the Notes or otherwise, exceed the maximum nonusurious
amount permissible under applicable law. If, from any possible
construction of any of the Credit Documents or any other document,
interest would otherwise be payable in excess of the maximum
nonusurious amount, any such construction shall be subject to the
provisions of this paragraph and such interest shall be automatically
reduced to the maximum nonusurious amount permitted under applicable
law, without the necessity of execution of any amendment or new
document. If any Lender shall ever receive anything of value which is
characterized as interest on the Loans under applicable law and which
would, apart from this provision, be in excess of the maximum lawful
amount, an amount equal to the amount which would have been excessive
interest shall, without penalty, be applied to the reduction of the
principal amount owing on the Loans and not to the payment of interest,
or refunded to the Borrower or the other payor thereof if and to the
extent such amount which would have been excessive exceeds such unpaid
principal amount of the Loans. The right to demand payment of the Loans
or any other indebtedness evidenced by any of the Credit Documents does
not include the right to receive any interest which has not otherwise
accrued on the date of such demand, and the Lenders do not intend to
charge or receive any unearned interest in the event of such demand.
All interest paid or agreed to be paid to the Lenders with respect to
the Loans shall, to the extent permitted by applicable law, be
amortized, prorated, allocated, and spread throughout the full stated
term (including any renewal or extension) of the Loans so that the
amount of interest on account of such indebtedness does not exceed the
maximum nonusurious amount permitted by applicable law.
3.7 Pro Rata Treatment.
Except to the extent otherwise provided herein:
(a) Each Revolving Loan borrowing (including, without
limitation, each Mandatory Borrowing), each payment or prepayment of
principal of any Loan, each payment of fees (other than the Issuing
Lender fees retained by the Issuing Lender for its own account and the
Administrative Fees retained by the Agent for its own account), each
reduction of the Revolving Committed Amount, and each conversion or
24
continuation of any Loan, shall (except as otherwise provided in
Section 3.3(c)) be allocated pro rata among the Lenders in accordance
with the respective Revolving Loan Commitment Percentages of such
Lenders (or, if the Commitments of such Lenders have expired or been
terminated, in accordance with the respective principal amounts of the
outstanding Loans and Participation Interests of such Lenders);
provided that, if any Lender shall have failed to pay its applicable
pro rata share of any Revolving Loan, then any amount to which such
Lender would otherwise be entitled pursuant to this Section 3.7 shall
instead be payable to the Agent until the share of such Loan not funded
by such Lender has been repaid; provided further, that in the event any
amount paid to any Lender pursuant to this Section 3.7 is rescinded or
must otherwise be returned by the Agent, each Lender shall, upon the
request of the Agent, repay to the Agent the amount so paid to such
Lender, with interest for the period commencing on the date such
payment is returned by the Agent until the date the Agent receives such
repayment at a rate per annum equal to, during the period to but
excluding the date two Business Days after such request, the Federal
Funds Rate, and thereafter, at the Base Rate plus two percent (2%) per
annum; and
(b) Letters of Credit. Each payment of unreimbursed drawings
in respect of LOC Obligations shall be allocated to each LOC
Participant pro rata in accordance with its Revolving Loan Commitment
Percentage; provided that, if any LOC Participant shall have failed to
pay its applicable pro rata share of any drawing under any Letter of
Credit, then any amount to which such LOC Participant would otherwise
be entitled pursuant to this subsection (b) shall instead be payable to
the Issuing Lender; provided further, that in the event any amount paid
to any LOC Participant pursuant to this subsection (b) is rescinded or
must otherwise be returned by the Issuing Lender, each LOC Participant
shall, upon the request of the Issuing Lender, repay to the Agent for
the account of the Issuing Lender the amount so paid to such LOC
Participant, with interest for the period commencing on the date such
payment is returned by the Issuing Lender until the date the Issuing
Lender receives such repayment at a rate per annum equal to, during the
period to but excluding the date two Business Days after such request,
the Federal Funds Rate, and thereafter, the Base Rate plus two percent
(2.0%) per annum.
3.8 Sharing of Payments.
The Lenders agree among themselves that, except to the extent otherwise
provided herein, in the event that any Lender shall obtain payment in respect of
any Loan, unreimbursed drawing with respect to any LOC Obligations or any other
obligation owing to such Lender under this Credit Agreement through the exercise
of a right of setoff, banker's lien or counterclaim, or pursuant to a secured
claim under Section 506 of the Bankruptcy Code or other security or interest
arising from, or in lieu of, such secured claim, received by such Lender under
any applicable bankruptcy, insolvency or other similar law or otherwise, or by
any other means, in excess of its pro rata share of such payment as provided for
in this Credit Agreement, such Lender shall promptly pay in cash or purchase
from the other Lenders a participation in such Loans, LOC Obligations, and other
obligations in such amounts, and make such other adjustments from time to time,
as shall be equitable to the end that all Lenders share such payment in
accordance with their respective ratable shares as provided for in this Credit
Agreement. The Lenders further agree among themselves that if payment to a
Lender obtained by such Lender through the exercise of a right of setoff,
banker's lien, counterclaim or other event as aforesaid shall be rescinded or
must otherwise be restored, each Lender which shall have shared the benefit of
such payment shall, by payment in cash or a repurchase of a participation
theretofore sold, return its share of that benefit (together with its share of
any accrued interest payable with respect thereto) to each Lender whose payment
shall have been rescinded or otherwise restored. The Borrower agrees that any
Lender so purchasing such a participation may, to the fullest extent permitted
by law, exercise all rights of payment, including setoff, banker's lien or
counterclaim, with respect to such participation as fully as if such Lender were
a holder of such Loan, LOC Obligation or other obligation in the amount of such
participation. Except as otherwise expressly provided in this Credit Agreement,
if any Lender or the Agent shall fail to remit to the Agent or any other Lender
an amount payable by such Lender or the Agent to the Agent or such other Lender
pursuant to this Credit Agreement on the date when such amount is due, such
payments shall be made together with interest thereon for each date from the
date such amount is due until the date such amount is paid to the Agent or such
other Lender at a rate per annum equal to the Federal Funds Rate. If under any
applicable bankruptcy, insolvency or other similar law, any Lender receives a
secured claim in lieu of a setoff to which this Section 3.8 applies, such Lender
shall, to the extent practicable, exercise its rights in respect of such
25
secured claim in a manner consistent with the rights of the Lenders under this
Section 3.8 to share in the benefits of any recovery on such secured claim.
26
3.9 Capital Adequacy.
If, after the date hereof, any Lender has determined that the adoption
or the becoming effective of, or any change in, or any change by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof in the interpretation or administration
of, any applicable law, rule or regulation regarding capital adequacy, or
compliance by such Lender, or its parent corporation, with any request or
directive regarding capital adequacy (whether or not having the force of law) of
any such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on such Lender's (or parent corporation's)
capital or assets as a consequence of its commitments or obligations hereunder
to a level below that which such Lender, or its parent corporation, could have
achieved but for such adoption, effectiveness, change or compliance (taking into
consideration such Lender's (or parent corporation's) policies with respect to
capital adequacy), then, upon notice from such Lender to the Borrower, the
Borrower shall be obligated to pay to such Lender such additional amount or
amounts as will compensate such Lender on an after-tax basis (after taking into
account applicable deductions and credits in respect of the amount indemnified)
for such reduction. Each determination by any such Lender of amounts owing under
this Section shall, absent manifest error, be conclusive and binding on the
parties hereto. This covenant shall survive the termination of this Credit
Agreement and the payment of the Loans and all other amounts payable hereunder.
3.10 Inability To Determine Interest Rate.
If prior to the first day of any Interest Period, the 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 Adjusted
Eurodollar Rate for such Interest Period, the Agent shall give telecopy or
telephonic notice thereof to the Borrower and the Lenders as soon as practicable
thereafter, and will also give prompt written notice to the Borrower when such
conditions no longer exist. If such notice is given (a) any Eurodollar Loans
requested to be made on the first day of such Interest Period shall be made as
Base Rate Loans, (b) any Loans that were to have been converted on the first day
of such Interest Period to or continued as Eurodollar Loans shall be converted
to or continued as Base Rate Loans and (c) any outstanding Eurodollar Loans
shall be converted, on the first day of such Interest Period to Base Rate Loans.
Until such notice has been withdrawn by the Agent, no further Eurodollar Loans
shall be made or continued as such, nor shall the Borrower have the right to
convert Base Rate Loans to Eurodollar Loans.
3.11 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
occurring after the Closing Date shall make it unlawful for any Lender to make
or maintain Eurodollar Loans as contemplated by this Credit Agreement, (a) such
Lender shall promptly give written notice of such circumstances to the Borrower
and the Agent (which notice shall be withdrawn whenever such circumstances no
longer exist), (b) the commitment of such Lender hereunder to make Eurodollar
Loans, continue Eurodollar Loans as such and convert a Base Rate Loan to
Eurodollar Loans shall forthwith be canceled and, until such time as it shall no
longer be unlawful for such Lender to make or maintain Eurodollar Loans, such
Lender shall then have a commitment only to make a Base Rate Loan when a
Eurodollar Loan is requested and (c) 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 Period 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 3.14.
3.12 Requirements of Law.
If the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof applicable to any Lender, 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, in each case made
subsequent to the Closing Date (or, if later, the date on which such Lender
becomes a Lender):
27
(a) shall subject such Lender to any tax of any kind
whatsoever with respect to any Letter of Credit, any Eurodollar Loans
made by it or its obligation to make Eurodollar Loans, or change the
basis of taxation of payments to such Lender in respect thereof (except
for Non-Excluded Taxes covered by Section 3.13 (including Non-Excluded
Taxes imposed solely by reason of any failure of such Lender to comply
with its obligations under Section 3.13(b)) and changes in taxes
measured by or imposed upon the overall net income, or franchise tax
(imposed in lieu of such net income tax), of such Lender or its
applicable lending office, branch, or any affiliate thereof);
(b) 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 which is not
otherwise included in the determination of the Adjusted Eurodollar Rate
hereunder; or
(c) shall impose on such Lender any other condition (excluding
any tax of any kind whatsoever);
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, upon notice to the Borrower from such Lender,
through the Agent, in accordance herewith, the Borrower shall be obligated to
promptly pay such Lender, upon its demand, any additional amounts necessary to
compensate such Lender on an after-tax basis (after taking into account
applicable deductions and credits in respect of the amount indemnified) for such
increased cost or reduced amount receivable, provided that, in any such case,
the Borrower may elect to convert the Eurodollar Loans made by such Lender
hereunder to Base Rate Loans by giving the Agent at least one Business Day's
notice of such election, in which case the Borrower shall promptly pay to such
Lender, upon demand, without duplication, such amounts, if any, as may be
required pursuant to Section 3.14. If any Lender becomes entitled to claim any
additional amounts pursuant to this Section 3.12, it shall provide prompt notice
thereof to the Borrower, through the Agent, certifying (x) that one of the
events described in this Section 3.12 has occurred and describing in reasonable
detail the nature of such event, (y) as to the increased cost or reduced amount
resulting from such event and (z) as to the additional amount demanded by such
Lender and a reasonably detailed explanation of the calculation thereof. Such a
certificate as to any additional amounts payable pursuant to this Section 3.12
submitted by such Lender, through the Agent, to the Borrower shall be conclusive
and binding on the parties hereto in the absence of manifest error. This
covenant shall survive the termination of this Credit Agreement and the payment
of the Loans and all other amounts payable hereunder.
3.13 Taxes.
(a) Except as provided below in this Section 3.13, all
payments made by the Borrower under this Credit Agreement and any Notes
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 court, or governmental body, agency or other official,
excluding taxes measured by or imposed upon the overall net income of
any Lender or its applicable lending office, or any branch or affiliate
thereof, and all franchise taxes, branch taxes, taxes on doing business
or taxes on the overall capital or net worth of any Lender or its
applicable lending office, or any branch or affiliate thereof, in each
case imposed in lieu of net income taxes: (i) by the jurisdiction under
the laws of which such Lender, applicable lending office, branch or
affiliate is organized or is located, or in which its principal
executive office is located, or any nation within which such
jurisdiction is located or any political subdivision thereof; or (ii)
by reason of any connection between the jurisdiction imposing such tax
and such Lender, applicable lending office, branch or affiliate other
than a connection arising solely from such Lender having executed,
delivered or performed its obligations, or received payment under or
enforced, this Credit Agreement or any Notes. If any such non-excluded
taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("Non-Excluded Taxes") are required to be withheld from
any amounts payable to the Agent or any Lender hereunder or under any
Notes, (A) the amounts so payable to the Agent or such Lender shall be
increased to the extent necessary to yield to the Agent or such Lender
(after
28
payment of all Non-Excluded Taxes) interest on any such other amounts
payable hereunder at the rates or in the amounts specified in this
Credit Agreement and any Notes, provided, however, that the Borrower
shall be entitled to deduct and withhold any Non-Excluded Taxes and
shall not be required to increase any such amounts payable to any
Lender that is not organized under the laws of the United States of
America or a state thereof if such Lender fails to comply with the
requirements of paragraph (b) of this Section 3.13 whenever any
Non-Excluded Taxes are payable by the Borrower, and (B) as promptly as
possible after requested the Borrower shall send to the Agent for its
own account or for the account of such 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 when due to the appropriate taxing authority or fails to remit to
the Agent the required receipts or other required documentary evidence,
the Borrower shall indemnify the Agent and any Lender for any
incremental taxes, interest or penalties that may become payable by the
Agent or any Lender as a result of any such failure. The agreements in
this subsection shall survive the termination of this Credit Agreement
and the payment of the Loans and all other amounts payable hereunder.
(b) Each Lender that is not incorporated under the laws of the
United States of America or a state thereof shall:
(i) (A) on or before the date of any payment by the
Borrower under this Credit Agreement or Notes to such Lender,
deliver to the Borrower and the Agent (x) two duly completed
copies of United States Internal Revenue Service Form 1001 or
4224, or successor applicable form, as the case may be,
certifying that it is entitled to receive payments under this
Credit Agreement and any Notes without deduction or
withholding of any United States federal income taxes and (y)
an Internal Revenue Service Form W-8 or W-9, or successor
applicable form, as the case may be, certifying that it is
entitled to an exemption from United States backup withholding
tax;
(B) deliver to the Borrower and the Agent
two further copies of any such form or certification on or
before the date that any such form or certification expires or
becomes obsolete and after the occurrence of any event
requiring a change in the most recent form previously
delivered by it to the Borrower; and
(C) obtain such extensions of time for
filing and complete such forms or certifications as may
reasonably be requested by the Borrower or the Agent; or
(ii) in the case of any such Lender that is not a
"bank" within the meaning of Section 881(c)(3)(A) of the
Internal Revenue Code, (A) represent to the Borrower (for the
benefit of the Borrower and the Agent) that it is not a bank
within the meaning of Section 881(c)(3)(A) of the Internal
Revenue Code, (B) agree to furnish to the Borrower, on or
before the date of any payment by the Borrower, with a copy to
the Agent, two accurate and complete original signed copies of
Internal Revenue Service Form W-8, or successor applicable
form certifying to such Lender's legal entitlement at the date
of such certificate to an exemption from U.S. withholding tax
under the provisions of Section 881(c) of the Internal Revenue
Code with respect to payments to be made under this Credit
Agreement and any Notes (and to deliver to the Borrower and
the Agent two further copies of such form on or before the
date it expires or becomes obsolete and after the occurrence
of any event requiring a change in the most recently provided
form and, if necessary, obtain any extensions of time
reasonably requested by the Borrower or the Agent for filing
and completing such forms), and (C) agree, to the extent
legally entitled to do so, upon reasonable request by the
Borrower, to provide to the Borrower (for the benefit of the
Borrower and the Agent) such other forms as may be reasonably
required in order to establish the legal entitlement of such
Lender to an exemption from withholding with respect to
payments under this Credit Agreement and any Notes.
Notwithstanding the above, if any change in treaty, law or regulation
has occurred after the date such Person becomes a Lender hereunder
which renders all such forms inapplicable or which would prevent such
Lender from duly completing and delivering any such form with respect
to it and such Lender so advises the Borrower and the Agent then such
Lender shall be exempt from such requirements. Each Person that shall
become a
29
Lender or a participant of a Lender pursuant to Section 11.3 shall,
upon the effectiveness of the related transfer, be required to provide
all of the forms, certifications and statements required pursuant to
this subsection (b); provided that in the case of a participant of a
Lender, the obligations of such participant of a Lender pursuant to
this subsection (b) shall be determined as if the participant of a
Lender were a Lender except that such participant of a Lender shall
furnish all such required forms, certifications and statements to the
Lender from which the related participation shall have been purchased.
3.14 Idemnity.
The Borrower promises to indemnify each Lender and to hold each Lender
harmless from any loss or expense which 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 Credit Agreement,
(b) default by the Borrower in making any prepayment of a Eurodollar Loan after
the Borrower has given a notice thereof in accordance with the provisions of
this Credit Agreement and (c) the making of a prepayment of Eurodollar Loans on
a day which is not the last day of an Interest Period with respect thereto. Such
indemnification may include an amount equal to (i) the amount of interest which
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 the applicable 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 Eurodollar Loans provided for herein
(excluding, however, the Applicable Percentage included therein, if any) minus
(ii) the amount of interest (as reasonably determined by such Lender) which
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. The agreements in this Section shall survive the termination of this
Credit Agreement and the payment of the Loans and all other amounts payable
hereunder.
SECTION 4
GUARANTY
4.1 Guaranty of Payment.
Subject to Section 4.7 below, each of the Guarantors hereby, jointly
and severally, unconditionally guarantees to each Lender and the Agent the
prompt payment of the Credit Party Obligations in full when due (whether at
stated maturity, as a mandatory prepayment, by acceleration or otherwise). The
Guarantors additionally, jointly and severally, unconditionally guarantee to
each Lender and the Agent the timely performance of all other obligations under
the Credit Documents. This Guaranty is a guaranty of payment and not of
collection and is a continuing guaranty and shall apply to all Credit Party
Obligations whenever arising.
4.2 Obligations Unconditional.
The obligations of the Guarantors hereunder are absolute and
unconditional, irrespective of the value, genuineness, validity, regularity or
enforceability of any of the Credit Documents, or any other agreement or
instrument referred to therein, to the fullest extent permitted by applicable
law, irrespective of any other circumstance whatsoever which might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor.
Each Guarantor agrees that this Guaranty may be enforced by the Lenders without
the necessity at any time of resorting to or exhausting any other security or
collateral and without the necessity at any time of having recourse to the Notes
or any other of the Credit Documents or any collateral, if any, hereafter
securing the Credit Party Obligations or otherwise and each Guarantor hereby
waives the right to require the Lenders to proceed against the Borrower or any
other Person (including a co-guarantor) or to require the Lenders to pursue any
other remedy or enforce any other right. Each Guarantor further agrees that it
shall have no right of subrogation, indemnity, reimbursement or contribution
against the Borrower or any other Guarantor of the Credit Party Obligations for
amounts paid under this Guaranty until such time as the Lenders have been paid
in full, all Commitments under the Credit Agreement have been terminated and no
Person or Governmental Authority shall have any right to request any return or
reimbursement of funds from the Lenders in
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connection with monies received under the Credit Documents. Each Guarantor
further agrees that nothing contained herein shall prevent the Lenders from
suing on the Notes or any of the other Credit Documents or foreclosing its
security interest in or Lien on any collateral, if any, securing the Credit
Party Obligations or from exercising any other rights available to it under this
Credit Agreement, the Notes, any other of the Credit Documents, or any other
instrument of security, if any, and the exercise of any of the aforesaid rights
and the completion of any foreclosure proceedings shall not constitute a
discharge of any of any Guarantor's obligations hereunder; it being the purpose
and intent of each Guarantor that its obligations hereunder shall be absolute,
independent and unconditional under any and all circumstances. Neither any
Guarantor's obligations under this Guaranty nor any remedy for the enforcement
thereof shall be impaired, modified, changed or released in any manner
whatsoever by an impairment, modification, change, release or limitation of the
liability of the Borrower or by reason of the bankruptcy or insolvency of the
Borrower. Each Guarantor waives any and all notice of the creation, renewal,
extension or accrual of any of the Credit Party Obligations and notice of or
proof of reliance of by the Agent or any Lender upon this Guarantee or
acceptance of this Guarantee. The Credit Party Obligations, and any of them,
shall conclusively be deemed to have been created, contracted or incurred, or
renewed, extended, amended or waived, in reliance upon this Guarantee. All
dealings between the Borrower and any of the Guarantors, on the one hand, and
the Agent and the Lenders, on the other hand, likewise shall be conclusively
presumed to have been had or consummated in reliance upon this Guarantee.
4.3 Modifications.
Each Guarantor agrees that (a) all or any part of the security now or
hereafter held for the Credit Party Obligations, if any, may be exchanged,
compromised or surrendered from time to time; (b) the Lenders shall not have any
obligation to protect, perfect, secure or insure any such security interests,
liens or encumbrances now or hereafter held, if any, for the Credit Party
Obligations or the properties subject thereto; (c) the time or place of payment
of the Credit Party Obligations may be changed or extended, in whole or in part,
to a time certain or otherwise, and may be renewed or accelerated, in whole or
in part; (d) the Borrower and any other party liable for payment under the
Credit Documents may be granted indulgences generally; (e) any of the provisions
of the Notes or any of the other Credit Documents may be modified, amended or
waived; (f) any party (including any co-guarantor) liable for the payment
thereof may be granted indulgences or be released; and (g) any deposit balance
for the credit of the Borrower or any other party liable for the payment of the
Credit Party Obligations or liable upon any security therefor may be released,
in whole or in part, at, before or after the stated, extended or accelerated
maturity of the Credit Party Obligations, all without notice to or further
assent by such Guarantor, which shall remain bound thereon, notwithstanding any
such exchange, compromise, surrender, extension, renewal, acceleration,
modification, indulgence or release.
4.4 Waiver of Rights.
Each Guarantor expressly waives to the fullest extent permitted by
applicable law: (a) notice of acceptance of this Guaranty by the Lenders and of
all extensions of credit to the Borrower by the Lenders; (b) presentment and
demand for payment or performance of any of the Credit Party Obligations; (c)
protest and notice of dishonor or of default (except as specifically required in
the Credit Agreement) with respect to the Credit Party Obligations or with
respect to any security therefor; (d) notice of the Lenders obtaining, amending,
substituting for, releasing, waiving or modifying any security interest, lien or
encumbrance, if any, hereafter securing the Credit Party Obligations, or the
Lenders' subordinating, compromising, discharging or releasing such security
interests, liens or encumbrances, if any; (e) all other notices to which such
Guarantor might otherwise be entitled; and (f) demand for payment under this
Guaranty.
4.5 Reinstatement.
The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Credit Party Obligations is
rescinded or must be otherwise restored by any holder of any of the Credit Party
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Agent and each Lender on demand for all reasonable costs and expenses
(including, without limitation, reasonable fees of counsel) incurred by the
Agent or such Lender in connection with such rescission or restoration,
including any such costs and expenses incurred in defending against any claim
alleging that such payment constituted a preference, fraudulent transfer or
similar payment under any bankruptcy, insolvency or similar law.
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4.6 Remedies.
The Guarantors agree that, as between the Guarantors, on the one hand,
and the Agent and the Lenders, on the other hand, the Credit Party Obligations
may be declared to be forthwith due and payable as provided in Section 9 (and
shall be deemed to have become automatically due and payable in the
circumstances provided in Section 9) notwithstanding any stay, injunction or
other prohibition preventing such declaration (or preventing such Credit Party
Obligations from becoming automatically due and payable) as against any other
Person and that, in the event of such declaration (or such Credit Party
Obligations being deemed to have become automatically due and payable), such
Credit Party Obligations (whether or not due and payable by any other Person)
shall forthwith become due and payable by the Guarantors. The Guarantors
acknowledge and agree that their obligations hereunder are secured in accordance
with the terms of the Mortgage Documents and the other Collateral Documents and
that the Lenders may exercise their remedies thereunder in accordance with the
terms thereof.
4.7 Limitations.
Notwithstanding any provision to the contrary contained herein or in
any of the other Credit Documents, to the extent the obligations of any
Guarantor shall be adjudicated to be invalid or unenforceable for any reason
(including, without limitation, because of any applicable state or federal law
relating to fraudulent conveyances or transfers) then the obligations of such
Guarantor hereunder shall be limited to the maximum amount that is permissible
under applicable law (whether federal or state and including, without
limitation, the Bankruptcy Code).
SECTION 5
CONDITIONS PRECEDENT
5.1 Closing Conditions.
The obligation of the Lenders to enter into this Credit Agreement and
make the initial Revolving Loans is subject to satisfaction of the following
conditions:
(a) Executed Credit Documents. Receipt by the Agent of duly
executed copies of: (i) this Credit Agreement; (ii) the Notes; (iii)
the Collateral Documents and (iv) all other Credit Documents, each in
form and substance acceptable to the Lenders in their sole discretion.
(b) Corporate Documents. Receipt by the Agent of the
following:
(i) Charter Documents. Copies of the articles or
certificates of incorporation or other charter documents of
each Credit Party certified to be true and complete as of a
recent date by the appropriate Governmental Authority of the
state or other jurisdiction of its incorporation and certified
by a secretary or assistant secretary of such Credit Party to
be true and correct as of the Effective Date.
(ii) Bylaws. A copy of the bylaws of each Credit
Party certified by a secretary or assistant secretary of such
Credit Party to be true and correct as of the Effective Date.
(iii) Resolutions. Copies of resolutions of the Board
of Directors of each Credit Party approving and adopting the
Credit Documents to which it is a party, the transactions
contemplated therein and authorizing execution and delivery
thereof, certified by a secretary or assistant secretary of
such Credit Party to be true and correct and in force and
effect as of the Effective Date.
(iv) Good Standing. Copies of (A) certificates of
good standing, existence or its equivalent with respect to
each Credit Party certified as of a recent date by the
appropriate
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Governmental Authorities of the state or other jurisdiction of
incorporation and each other jurisdiction in which the failure
to so qualify and be in good standing would have a Material
Adverse Effect on the business or operations of a Credit Party
in such jurisdiction and (B) to the extent available, a
certificate indicating payment of all corporate franchise
taxes certified as of a recent date by the appropriate
governmental taxing authorities.
(v) Incumbency. An incumbency certificate of each
Credit Party certified by a secretary or assistant secretary
to be true and correct as of the Effective Date.
(c) Financial Statements. Receipt and approval by the Agent
of: (i) the consolidated financial statements of the Parent and its
Subsidiaries for each of the fiscal years ending December 31, 1994 and
1995, including balance sheets and income and cash flow statements,
audited by nationally recognized independent public accountants and
containing an unqualified opinion of such firm that such statements
present fairly, in all material respects, the consolidated financial
position and results of operations of the Parent and its Subsidiaries,
and are prepared in conformity with GAAP and (ii) unaudited
consolidated financial statements of the Parent and its Subsidiaries
for the twelve months ending December 31, 1996, including balance
sheets and income and cash flow statements, accompanied by a
certificate of the chief financial officer of the Parent to the effect
that such unaudited financial statements fairly present in all material
respects the financial condition of the Parent and its Subsidiaries and
have been prepared in accordance with GAAP, subject to changes
resulting from audit and normal year-end audit adjustments.
(d) Opinions of Counsel. Receipt by the Agent of opinions
(which shall cover, among other things, authority, legality, validity,
binding effect and enforceability), satisfactory to the Agent,
addressed to the Agent on behalf of the Lenders and dated as of the
Effective Date, from legal counsel to the Credit Parties.
(e) Personal Property Collateral. The Agent shall have
received, in form and substance satisfactory to the Agent:
(i) searches of Uniform Commercial Code ("UCC")
filings in the jurisdiction of the chief executive office of
each Credit Party and each jurisdiction where any Collateral
is located or where a filing would need to be made in order to
perfect the Agent's, for the benefit of the Lenders, security
interest in the Collateral, copies of the financing statements
on file in such jurisdictions and evidence that no Liens exist
other than Permitted Liens;
(ii) duly executed UCC financing statements for each
appropriate jurisdiction as is necessary, in the Agent's sole
discretion, to perfect the Agent's, for the benefit of the
Lenders, security interest in the Collateral;
(iii) all stock certificates evidencing the stock
pledged to the Agent, for the benefit of the Lenders, pursuant
to the Pledge Agreement, together with duly executed in blank
undated stock powers attached thereto; and
(iv) all instruments and chattel paper in the
possession of a Credit Party, as required by the Security
Agreement, together with allonges or assignments as may be
necessary or appropriate to perfect the Agent's, for the
benefit of the Lenders, security interest in the Collateral.
(f) Real Property Collateral. The Agent shall have received,
in form and substance satisfactory to the Agent:
(i) Mortgages. Fully executed and notarized
mortgages, deeds of trust or deeds to secure debt (each a
"Mortgage" and collectively the "Mortgages") encumbering the
fee interest of the Credit Parties in each real property asset
owned by a Credit Party set forth on Schedule 1.1(a) (each an
"Existing Property" and collectively the "Existing
Properties"), together with such UCC-1 financing statements as
the Agent shall deem appropriate with respect to each such
Existing Property.
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(ii) Legal Opinions. An opinion of counsel in the
state in which each Existing Property is located with respect
to the enforceability of the form of Mortgage and sufficiency
of the form of UCC-1 financing statements to be recorded or
filed in such state and such other matters as the Agent may
request, in form and substance satisfactory to the Agent.
(iii) Title Policies. ALTA or other appropriate form
mortgagee title insurance policies (the "Mortgage Policies")
issued by a title insurer reasonably satisfactory to the Agent
(the "Title Insurance Company"), in an amount satisfactory to
the Agent with respect to each Existing Property, assuring the
Agent that the applicable Mortgages create valid and
enforceable first priority mortgage liens on the respective
Existing Properties, free and clear of all defects and
encumbrances except Permitted Liens, which Mortgage Policies
shall contain such coverage and endorsements as shall be
satisfactory to the Agent and for any other matters that the
Agent may request and provide affirmative insurance and such
reinsurance as the Agent may request, all of the foregoing in
form and substance satisfactory to the Agent.
(iv) Surveys. Maps or plats of an as-built survey of
the sites of the Existing Properties certified to the Agent
and the Title Insurance Company in a manner satisfactory to
them, dated a date satisfactory to the Agent and the Title
Insurance Company by an independent professional licensed land
surveyor reasonably satisfactory to the Agent and the Title
Insurance Company, which maps or plats and the surveys on
which they are based shall be sufficient to delete any
standard printed survey exception contained in the applicable
Mortgage Policy and be made in accordance with the Minimum
Standard Detail Requirements for Land Title Surveys jointly
established and adopted by the American Land Title Association
and the American Congress on Surveying and Mapping in 1992 (or
such alternative standards as are satisfactory to the Agent
and the Title Insurance Company), and, without limiting the
generality of the foregoing, there shall be surveyed and shown
on such maps, plats or surveys the following: (A) the
locations on such sites of all the buildings, structures and
other improvements and the established building setback lines;
(B) the lines of streets abutting the sites and width thereof;
(C) all access and other easements appurtenant to the sites
necessary to use the sites; (D) all roadways, paths,
driveways, easements, encroachments and overhanging
projections and similar encumbrances affecting the site,
whether recorded, apparent from a physical inspection of the
sites or otherwise known to the surveyor; (E) any
encroachments on any adjoining property by the building
structures and improvements on the sites; and (F) if the site
is described as being on a filed map, a legend relating the
survey to said map.
(v) Flood Certificates. A current certification from
a registered engineer or land surveyor or other evidence
acceptable to the Agent with respect to each Existing Property
as to whether any of the improvements on such Existing
Property are located within any area designated by the
Director of the Federal Emergency Management Agency as a
"special flood hazard" area and if any improvements on the
Existing Properties are located within a "special flood
hazard" area, evidence of a flood insurance policy from a
company and in an amount satisfactory to the Agent for the
applicable portion of the premises, naming the Agent, for the
benefit of the Lenders, as mortgagee.
(vi) Appraisals. A current appraisal of each Existing
Property prepared for the benefit of the Agent by a qualified
appraiser satisfactory to the Agent and dated a date
satisfactory to the Agent, which shall indicate a fair market
value for each Existing Property acceptable to the Agent and
which shall otherwise be in form and substance satisfactory to
the Agent.
(vii) Environmental Reports. A current report of an
environmental assessment of each Existing Property of such
scope (including but not limited to the taking of soil borings
and air and groundwater samples and other above and below
ground testing) as the Agent may request, which report shall
(A) be certified to the Agent by a consulting firm acceptable
to the Agent, (B) dated a date satisfactory to the Agent, (C)
conform to the current minimum standards for the
34
American Society of Testing and Materials (ASTM), and (D)
otherwise be in form and substance satisfactory to the Agent.
(viii) Zoning Evidence. Evidence satisfactory to the
Agent that each Existing Property, and the uses of each
Existing Property, are in compliance in all material respects
with all applicable laws, regulations and ordinances including
without limitation health and environmental protection laws,
erosion control ordinances, storm drainage control laws, doing
business and/or licensing laws, zoning laws (the evidence
submitted as to zoning should include the zoning designation
made for each Existing Property, the permitted uses of each
Existing Property under such zoning designation and zoning
requirements as to parking, lot size, ingress, egress and
building setbacks) and laws regarding access and facilities
for disabled persons including, but not limited to, the
federal Architectural Barriers Act, the Fair Housing
Amendments Act of 1988, the Rehabilitation Act of 1973 and the
Americans with Disabilities Act of 1990.
(ix) Engineering Report. A current engineering report
with respect to each Existing Property prepared by an engineer
satisfactory to the Agent in form and substance satisfactory
to the Agent.
(x) Management Agreements. Receipt by the Agent of a
subordination and assignment agreement satisfactory in form
and substance to the Agent with respect to the management
agreement, if any, entered into by the applicable Credit Party
with respect to each of the Existing Properties.
(g) Evidence of Insurance. Receipt by the Agent of copies of
insurance policies or certificates of insurance of the Parent and its
Subsidiaries evidencing liability and casualty insurance meeting the
requirements set forth in the Credit Documents, including, but not
limited to, naming the Agent as mortgagee and sole loss payee on behalf
of the Lenders.
(h) Material Adverse Effect. There shall not have occurred a
change since September 30, 1996 that has had or could reasonably be
expected to have a Material Adverse Effect.
(i) Litigation. There shall not exist any pending or
threatened action, suit, investigation or proceeding against a Credit
Party or any of their Subsidiaries that would have or would reasonably
be expected to have a Material Adverse Effect.
(j) Officer's Certificates. The Agent shall have received a
certificate on behalf of the Parent as of the Effective Date stating
that (i) the Parent and each of the its Subsidiaries are in compliance
with all existing financial obligations, (ii) all governmental,
shareholder and third party consents and approvals, if any, with
respect to the Credit Documents and the transactions contemplated
thereby have been obtained, (iii) no action, suit, investigation or
proceeding is pending or threatened in any court or before any
arbitrator or governmental instrumentality that purports to effect a
Credit Party or any transaction contemplated by the Credit Documents,
or could have or could be reasonably expected to have a Material
Adverse Effect, and (iv) immediately after giving effect to this Credit
Agreement, the other Credit Documents and all the transactions
contemplated therein to occur on such date, (A) each of the Credit
Parties is Solvent, (B) no Default or Event of Default exists, (C) all
representations and warranties contained herein and in the other Credit
Documents are true and correct in all material respects, and (D) the
Credit Parties are in compliance with each of the financial covenants
set forth in Section 7.2.
(k) Fees and Expenses. Payment by the Borrower of all fees and
expenses owed by it to the Lenders and the Agent, including, without
limitation, payment to the Agent of the fees set forth herein and in
the Fee Letter.
(l) Borrowing Base Certificate. Receipt by the Agent of a
Borrowing Base Certificate, in the form of Exhibit 7.1(g), dated as of
the Closing Date.
35
(m) Consents and Approvals. All governmental, shareholder and
third-party consents and approvals necessary or, in the opinion of the
Agent, desirable in connection with the Loans and the transactions
contemplated under the Credit Documents shall have been duly obtained
and shall be in full force and effect, and a copy of each such consent
or approval shall have been delivered to the Agent.
(n) Due Diligence. Completion by the Lenders of all due
diligence with respect to the Credit Parties and their Subsidiaries and
each Existing Property.
(o) Financial Commitments. Receipt and review by the Agent of
the terms and conditions of all financing commitments available to the
Credit Parties and their Subsidiaries from real estate investment
trusts and any other lending institutions, specifically including IHS.
(p) Subordinated Debt Documents. Receipt by the Agent of a
certified copy of all documents evidencing the Subordinated Debt and
execution of an acceptable Subordination and Intercreditor Agreement
with respect thereto, together with an opinion of counsel (which shall
cover among things, authority, validity, binding effect and
enforceability) satisfactory to the Agent.
(q) Other. Receipt by the Lenders of such other documents,
instruments, agreements or information as reasonably requested by any
Lender, including, but not limited to, information regarding
litigation, tax, accounting, labor, insurance, pension liabilities
(actual or contingent), real estate leases, material contracts, debt
agreements, property ownership and contingent liabilities of the Credit
Parties and their Subsidiaries.
(r) Lenders'Consent. (i) The Agent shall have provided each of
the Lenders with all of the items identified in this Section 5.1 (other
than the Fee Letter), and (ii) each of the Lenders shall have approved
the form and substance of each of the items identified in this Section
5.1 (other than the Fee Letter).
5.2 Conditions to Revovling Loans to Finance Acquisition of New
Properties.
The obligation of the Lenders to advance Revolving Loans to finance the
acquisition of a New Property is subject to satisfaction of the following
conditions:
(a) Eligible Real Estate, Etc.. The New Property shall (i)
conform with the definition of Eligible Real Estate, (ii) be acquired
by a Subsidiary of the Borrower or the Borrower and is otherwise
acceptable to the Agent in its sole discretion and (iii) after such
financing, be free from all Liens other than Permitted Liens.
(b) Information. The Agent and the Lenders shall have received
information regarding the New Property in form and substance
satisfactory to the Lenders at least fifteen Business Days prior to the
date on which the Revolving Loans are requested. The Agent shall have
received telephonic notice of the Borrower's intent to deliver such
information at least five Business Days prior to the delivery thereof.
(c) Advance Amount. The Revolving Loans advanced by the
Lenders shall not exceed the acquisition cost of the New Property. The
Borrower shall provide information satisfactory in form and substance
to the Agent and the Lenders to evidence such acquisition cost.
(d) Real Property Collateral. The Agent shall have received,
in form and substance satisfactory to the Agent:
(i) Mortgage. Fully executed and notarized Mortgages
encumbering the fee interest of the Borrower or another Credit
Party in the New Property, together with such UCC-1 financing
statements as the Agent shall deem appropriate with respect to
the New Property.
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(ii) Legal Opinion. An opinion of counsel in the
state in which the New Property is located with respect to the
enforceability of the form of Mortgage and sufficiency of the
form of UCC-1 financing statements to be recorded or filed in
such state and such other matters as the Agent may request, in
form and substance satisfactory to the Agent.
(iii) Title Policies. A Mortgage Policy issued by the
Title Insurance Company in an amount satisfactory to the Agent
with respect to the New Property, assuring the Agent that the
applicable Mortgage creates a valid and enforceable first
priority mortgage lien on the New Property, free and clear of
all defects and encumbrances except Permitted Liens, which
Mortgage Policy shall contain such coverage and endorsements
as shall be satisfactory to the Agent and for any other
matters that the Agent may request and provide affirmative
insurance and such reinsurance as the Agent may request, all
of the foregoing in form and substance satisfactory to the
Agent.
(iv) Surveys. Maps or plats of an as-built survey of
the site of the New Property certified to the Agent and the
Title Insurance Company in a manner satisfactory to them,
dated a date satisfactory to the Agent and the Title Insurance
Company by an independent professional licensed land surveyor
reasonably satisfactory to the Agent and the Title Insurance
Company, which maps or plats and the surveys on which they are
based shall be sufficient to delete any standard printed
survey exception contained in the applicable Mortgage Policy
and be made in accordance with the Minimum Standard Detail
Requirements for Land Title Surveys jointly established and
adopted by the American Land Title Association and the
American Congress on Surveying and Mapping in 1992 (or such
alternative standards as are satisfactory to the Agent and the
Title Insurance Company), and, without limiting the generality
of the foregoing, there shall be surveyed and shown on such
maps, plats or surveys the following: (A) the locations on
such sites of all the buildings, structures and other
improvements and the established building setback lines; (B)
the lines of streets abutting the sites and width thereof; (C)
all access and other easements appurtenant to the sites
necessary to use the sites; (D) all roadways, paths,
driveways, easements, encroachments and overhanging
projections and similar encumbrances affecting the site,
whether recorded, apparent from a physical inspection of the
sites or otherwise known to the surveyor; (E) any
encroachments on any adjoining property by the building
structures and improvements on the sites; and (F) if the site
is described as being on a filed map, a legend relating the
survey to said map.
(v) Flood Certificates. A current certification from
a registered engineer or land surveyor or other evidence
acceptable to the Agent as to whether any of the improvements
on the New Property are located within any area designated by
the Director of the Federal Emergency Management Agency as a
"special flood hazard" area and if any improvements on such
parcel are located within a "special flood hazard" area,
evidence of a flood insurance policy from a company and in an
amount satisfactory to the Agent for the applicable portion of
the premises, naming the Agent, for the benefit of the
Lenders, as mortgagee.
(vi) Appraisals. A current appraisal of the New
Property prepared for the benefit of the Agent by a qualified
appraiser satisfactory to the Agent and dated a date
satisfactory to the Agent, which shall indicate a fair market
value for the New Property acceptable to the Agent and which
shall otherwise be in form and substance satisfactory to the
Agent.
(vii) Environmental Reports. A current report of an
environmental assessment of the New Property of such scope
(including, but not limited to, the taking of soil borings and
air and groundwater samples and other above and below ground
testing) as the Agent may request, which report shall (A) be
certified to the Agent by a consulting firm acceptable to the
Agent, (B) be dated a date satisfactory to the Agent, (C)
conform to the current minimum standards for the American
Society of Testing and Materials (ASTM), and (D) otherwise be
in form and substance satisfactory to the Agent.
37
(viii) Zoning Evidence. Evidence satisfactory to the
Agent that the New Property, and the use of the New Property,
are in compliance in all material respects with all applicable
laws, regulations and ordinances including without limitation
health and environmental protection laws, erosion control
ordinances, storm drainage control laws, doing business and/or
licensing laws, zoning laws (the evidence submitted as to
zoning should include the zoning designation made for the New
Property, the permitted uses of such New Property under such
zoning designation and zoning requirements as to parking, lot
size, ingress, egress and building setbacks) and laws
regarding access and facilities for disabled persons
including, but not limited to, the federal Architectural
Barriers Act, the Fair Housing Amendments Act of 1988, the
Rehabilitation Act of 1973 and the Americans with Disabilities
Act of 1990.
(ix) Engineering Report. A current engineering report
with respect to the New Property prepared by an engineer
satisfactory to the Agent in form and substance satisfactory
to the Agent.
(x) Management Agreements. Receipt by the Agent of a
subordination and management agreement in form and substance
satisfactory to the Agent with respect to the management
agreements, if any, related to the New Property.
(xi) Taxes. Evidence satisfactory to the Agent that
all note and mortgage taxes or other taxes, where applicable,
associated with the acquisition of the New Property will be or
have been paid in full by the Borrower.
(e) Timing. The funding of the Revolving Loans advanced for
the financing of the New Property must occur within forty-five (45)
days after the Agent has notified the Borrower that the Lenders have
completed their review of the New Property and consented to the
acquisition.
(f) Financing of New Properties by a New Entity. All of the
conditions set forth in Section 7.12 must be satisfied.
(g) Additional Stock Pledge. The Agent shall have received
from the Borrower, for the benefit of the Lenders, a pledge in form and
substance satisfactory to the Agent of all of the issued and
outstanding shares of capital stock of the Subsidiary of the Borrower
intending to acquire the New Property, together with the certificates
(or other agreements or instruments) representing such shares, and all
options, contractual or otherwise, with respect thereto.
(h) Lenders' Consent. (i) The Agent shall have provided each
of the Lenders with all of items identified in this Section 5.2, and
(ii) each of the Lenders shall have approved the acquisition of such
New Property within ten (10) days of the Lenders' receipt of all of the
items identified in this Section 5.2. A Lender's failure to notify the
Agent of its objection to the acquisition of such New Property within
ten (10) days of its receipt of all of the items identified in this
Section 5.2 shall be deemed to constitute such Lender's consent to the
acquisition of such New Property.
Notwithstanding the foregoing provisions of this Section 5.2, in the
event the Borrowing Base exceeds the Revolving Committed Amount at the time the
Borrower desires to finance the acquisition of a New Property, the obligation of
the Lenders to advance Revolving Loans to finance such acquisition is subject
only to (i) the consent of the Agent and (ii) the satisfaction of the conditions
identified in Section 5.2(a), (c), (d)(i), (d)(ii), (d)(iii), (d)(iv), (d)(v),
(f) and (g) hereof. Any New Property acquired by any of the Credit Parties
pursuant to the terms of this paragraph shall not be considered a Collateral
Pool Property (meaning under no circumstances may its value be included in the
calculation of the Borrowing Base) but rather will be referred to herein as an
"Abundance of Caution Property;" provided, however, upon the occurrence of a
Default or Event of Default, the Credit Parties agree to provide the Agent, for
the benefit of the Lenders, with any and all additional due diligence items with
respect to the Abundance of Caution Properties as reasonably requested by the
Agent or any of the Lenders.
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5.3 conditions to All Revolving Loans.
In addition to the conditions precedent stated elsewhere herein, the
Lenders shall not be obligated to make new Revolving Loans nor shall an Issuing
Lender be required to issue or extend a Letter of Credit unless:
(a) Delivery of Notice and Borrowing Base Certificate. The
Borrower shall have delivered (i) in the case of any new Revolving
Loan, (a) a Notice of Borrowing, duly executed and completed, by the
time specified in Section 2.1 and (b) a Borrowing Base Certificate in
the form of Exhibit 7.1(e) (which shall include the Borrowing Base
Value of the New Property to be financed, if applicable) and (ii) in
the case of any Letter of Credit, the Issuing Lender shall have
received an appropriate request for issuance in accordance with the
provisions of Section 2.2;
(b) Representations and Warranties. The representations and
warranties made by the Credit Parties in any Credit Document are true
and correct in all material respects at and as if made as of such date
except to the extent they expressly relate to an earlier date;
(c) No Default. No Default or Event of Default shall exist or
be continuing either prior to or after giving effect thereto;
(d) No Material Adverse Effect. There shall not have occurred
any Material Adverse Effect;
(e) Availability. Immediately after giving effect to the
making of a Revolving Loan (and the application of the proceeds
thereof) or the issuance of a Letter of Credit, as the case may be, (i)
the sum of the Revolving Loans outstanding plus LOC Obligations shall
not exceed the lesser of (x) the Revolving Committed Amount and (y) the
Borrowing Base.
The delivery of each Notice of Borrowing and each request for a Letter of Credit
shall constitute a representation and warranty by the Borrower of the
correctness of the matters specified in subsections (b), (c), (d) and (e).
SECTION 6
REPRESENTATIONS AND WARRANTIES
The Credit Parties hereby represent to the Agent and each Lender that:
6.1 Financial Conditions.
The financial statements delivered to the Lenders pursuant to Section
5.1(c) and Section 7.1(a) and (b): (a) have been prepared in accordance with
GAAP and (b) present fairly the consolidated financial condition, results of
operations and cash flows of the Credit Parties and their Subsidiaries as of
such date and for such periods. Since September 30, 1996, there has been no
sale, transfer or other disposition by any Credit Party or any of their
Subsidiaries of any material part of the business or property of the Credit
Parties, taken as a whole, and no purchase or other acquisition by any of them
of any business or property (including any capital stock of any other Person)
material in relation to the consolidated financial condition of the Credit
Parties, taken as a whole, in each case, which, is not (i) reflected in the most
recent financial statements delivered to the Lenders pursuant to Section 5.1(c)
and Section 7.1 or in the notes thereto or (ii) otherwise permitted by the terms
of this Credit Agreement and communicated to the Agent.
6.2 No Material Change.
Since December 31, 1995, (a) there has been no development or event
relating to or affecting a Credit Party or any of its Subsidiaries which has had
or would be reasonably expected to have a Material Adverse Effect, and (b) no
Restricted Payments have been made or declared or are contemplated by any Credit
Party or any of its Subsidiaries.
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6.3 Organization and Good Standing.
Each Credit Party (a) is a corporation duly organized, validly existing
and in good standing under the laws of the State (or other jurisdiction) of its
organization, (b) is duly qualified and in good standing as a foreign
corporation and authorized to do business in every other jurisdiction unless the
failure to be so qualified, in good standing or authorized would not have a
Material Adverse Effect and (c) has the power and authority to own its
properties and to carry on its business as now conducted and as proposed to be
conducted.
6.4 Due Authorization.
Each Credit Party (a) has the power and authority to execute, deliver
and perform this Credit Agreement and the other Credit Documents to which it is
a party and to incur the obligations herein and therein provided for and (b) is
duly authorized to, and has been authorized by all necessary action, to execute,
deliver and perform this Credit Agreement and the other Credit Documents to
which it is a party.
6.5 No Conflicts.
Neither the execution and delivery of the Credit Documents, nor the
consummation of the transactions contemplated therein, nor the performance of or
compliance with the terms and provisions thereof by such Credit Party will (a)
violate or conflict with any provision of its organizational documents, (b)
violate, contravene or materially conflict with any Requirement of Law or any
other law, regulation (including, without limitation, Regulation U or Regulation
X), order, writ, judgment, injunction, decree or permit applicable to it, (c)
violate, contravene or conflict with contractual provisions of, or cause an
event of default under, any indenture, loan agreement, mortgage, deed of trust,
contract or other agreement or instrument to which it is a party or by which it
may be bound, the violation of which could have or might be reasonably expected
to have a Material Adverse Effect, or (d) result in or require the creation of
any Lien (other than those contemplated in or created in connection with the
Credit Documents) upon or with respect to its properties.
6.6 Consents.
Except for consents, approvals and authorizations which have been
obtained, no consent, approval, authorization or order of, or filing,
registration or qualification with, any court or Governmental Authority or third
party in respect of any Credit Party is required in connection with the
execution, delivery or performance of this Credit Agreement or any of the other
Credit Documents by such Credit Party.
6.7 Enforcable Obligations.
This Credit Agreement and the other Credit Documents have been duly
executed and delivered and constitute legal, valid and binding obligations of
each Credit Party enforceable against such Credit Party in accordance with their
respective terms, except as may be limited by bankruptcy or insolvency laws or
similar laws affecting creditors' rights generally or by general equitable
principles.
6.8 No Default.
No Credit Party, nor any of its Subsidiaries, is in default in any
respect under any contract, lease, loan agreement, indenture, mortgage, security
agreement or other agreement or obligation to which it is a party or by which
any of its properties is bound which default would have or would be reasonably
expected to have a Material Adverse Effect. No Default or Event of Default has
occurred or exists except as previously disclosed in writing to the Lenders.
6.9 Ownership.
Each Credit Party, is the owner of, and has good and marketable title
to, all of its respective assets and none of such assets is subject to any Lien
other than Permitted Liens.
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6.10 Indebtedness.
The Credit Parties have no Indebtedness except (a) as disclosed in the
financial statements referenced in Section 6.1, (b) as set forth on Schedule
6.10 and (c) as otherwise permitted by this Credit Agreement.
6.11 Litigation.
There are no actions, suits or legal, equitable, arbitration or
administrative proceedings, pending or, to the knowledge of any Credit Party,
threatened against, a Credit Party or any of its Subsidiaries which could have
or might be reasonably expected to have a Material Adverse Effect. Set forth on
Schedule 6.11 is a summary of all claims, litigation, investigations and
proceedings pending or, to the best knowledge of the Credit Parties, threatened
by or against the Credit Parties or any of their Subsidiaries or against any of
their respective properties or revenues, and none of such actions, individually
or in the aggregate, is reasonably expected to have a Material Adverse Effect.
6.12 Taxes.
Each Credit Party, and each of its Subsidiaries, has filed, or caused
to be filed, all tax returns (federal, state, local and foreign) required to be
filed and has paid (a) all amounts of taxes shown thereon to be due (including
interest and penalties) and (b) all other taxes, fees, assessments and other
governmental charges (including mortgage recording taxes, documentary stamp
taxes and intangibles taxes) owing by it, except for such taxes (i) which are
not yet delinquent or (ii) that are being contested in good faith and by proper
proceedings, and against which adequate reserves are being maintained in
accordance with GAAP. No Credit Party is aware of any proposed tax assessments
against it or any of its Subsidiaries.
6.13 Compliance with Law.
Each Credit Party, and each of its Subsidiaries, is in compliance with
all Requirements of Law and all other laws, rules, regulations, orders and
decrees (including without limitation Environmental Laws) applicable to it, or
to its properties, unless such failure to comply would not have or would not be
reasonably expected to have a Material Adverse Effect. No Requirement of Law
would be reasonably expected to cause a Material Adverse Effect.
6.14 Compliance with ERISA.
Except as would not result in a Material Adverse Effect:
(a) During the five-year period prior to the date on which
this representation is made or deemed made: (i) no ERISA Event has
occurred, and, to the best of each Credit Party's, each Subsidiary of a
Credit Party's and each ERISA Affiliate's knowledge, no event or
condition has occurred or exists as a result of which any ERISA Event
could reasonably be expected to occur, with respect to any Plan; (ii)
no "accumulated funding deficiency," as such term is defined in Section
302 of ERISA and Section 412 of the Code, whether or not waived, has
occurred with respect to any Plan; (iii) each Plan has been maintained,
operated, and funded in compliance with its own terms and in material
compliance with the provisions of ERISA, the Code, and any other
applicable federal or state laws; and (iv) no Lien in favor or the PBGC
or a Plan has arisen or is reasonably likely to arise on account of any
Plan.
(b) The actuarial present value of all "benefit liabilities"
(as defined in Section 4001(a)(16) of ERISA), whether or not vested,
under each Single Employer Plan, as of the last annual valuation date
prior to the date on which this representation is made or deemed made
(determined, in each case, in accordance with Financial Accounting
Standards Board Statement 87, utilizing the actuarial assumptions used
in such Plan's most recent actuarial valuation report), did not exceed
as of such valuation date the fair market value of the assets of such
Plan.
(c) No Credit Party, Subsidiary of a Credit Party or ERISA
Affiliate has incurred, or, to the best of each such party's knowledge,
is reasonably expected to incur, any withdrawal liability under ERISA
to any
41
Multiemployer Plan or Multiple Employer Plan. No Credit Party,
Subsidiary of a Credit Party or ERISA Affiliate would become subject to
any withdrawal liability under ERISA if any such party were to withdraw
completely from all Multiemployer Plans and Multiple Employer Plans as
of the valuation date most closely preceding the date on which this
representation is made or deemed made. No Credit Party, Subsidiary of a
Credit Party or ERISA Affiliate has received any notification that any
Multiemployer Plan is in reorganization (within the meaning of Section
4241 of ERISA), is insolvent (within the meaning of Section 4245 of
ERISA), or has been terminated (within the meaning of Title IV of
ERISA), and no Multiemployer Plan is, to the best of each such party's
knowledge, reasonably expected to be in reorganization, insolvent, or
terminated.
(d) No prohibited transaction (within the meaning of Section
406 of ERISA or Section 4975 of the Code) or breach of fiduciary
responsibility has occurred with respect to a Plan which has subjected
or may subject any Credit Party, any Subsidiary of a Credit Party or
any ERISA Affiliate to any liability under Sections 406, 409, 502(i),
or 502(l) of ERISA or Section 4975 of the Code, or under any agreement
or other instrument pursuant to which any Credit Party, any Subsidiary
of a Credit Party or any ERISA Affiliate has agreed or is required to
indemnify any person against any such liability.
(e) Except as set forth in the Financial Statements, no Credit
Party, Subsidiary of a Credit Party nor any of their ERISA Affiliates
has material liability with respect to "expected post-retirement
benefit obligations" within the meaning of the Financial Accounting
Standards Board Statement 106. Each Plan which is a welfare plan (as
defined in Section 3(1) of ERISA) to which Sections 601-609 of ERISA
and Section 4980B of the Code apply has been administered in compliance
in all material respects with such sections.
6.15 Organization Structure.
(a) Set forth on Schedule 6.15 is a complete and accurate list of all
Subsidiaries of the Borrower. Information on Schedule 6.15 includes jurisdiction
of incorporation, the number of shares of each class of capital stock or other
equity interests outstanding, the number and percentage of outstanding shares of
each class owned (directly or indirectly) by the Borrower; and the number and
effect, if exercised, of all outstanding options, warrants, rights of conversion
or purchase and all other similar rights with respect thereto. The outstanding
capital stock and other equity interests of all such Subsidiaries is validly
issued, fully paid and non-assessable and is owned by the Borrower, directly or
indirectly, free and clear of all Liens. Other than as set forth in Schedule
6.15 no Subsidiary of the Borrower has outstanding any securities convertible
into or exchangeable for its capital stock nor does any such Person have
outstanding any rights to subscribe for or to purchase or any options for the
purchase of, or any agreements providing for the issuance (contingent or
otherwise) of, or any calls, commitments or claims of any character relating to
its capital stock. Sarasota does not have any Subsidiaries.
(b) Also identified on Schedule 6.15 is the jurisdiction of
incorporation of the Borrower and Sarasota, the number and percentage of
outstanding shares of capital stock or other equity interests outstanding in the
Borrower and Sarasota; and the number and effect, if exercised, of all
outstanding options, warrants, rights of conversion or purchase and all similar
rights with respect to shares of Borrower and Sarasota. The outstanding capital
stock and other equity interests of the Borrower and Sarasota is validly issued,
fully paid and non-assessable and is owned by the Parent, directly or
indirectly, free and clear of all Liens. Other than as set forth in Schedule
6.15 neither the Borrower nor Sarasota have outstanding any securities
convertible into or exchangeable for its capital stock nor does any such Person
have outstanding any rights to subscribe for or to purchase or any options for
the purchase of, or any agreements providing for the issuance (contingent or
otherwise) of, or any calls, commitments or claims of any character relating to
its capital stock.
6.16 Use of Proceeds; Margin Stock
The proceeds of the Loans hereunder will be used solely for the
purposes specified in Section 7.10. None of the proceeds of the Loans will be
used for the purpose of purchasing or carrying any "margin stock" as defined in
Regulation U, Regulation X or Regulation G, or for the purpose of reducing or
retiring any Indebtedness which was originally incurred to purchase or carry
"margin stock" or any "margin security" or for any other purpose which might
42
constitute this transaction a "purpose credit" within the meaning of Regulation
U, Regulation X, Regulation G or Regulation T. None of the Credit Parties owns
any "margin stock."
6.17 Government Regulation.
No Credit Party nor any of its Subsidiaries is subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Investment Company Act of 1940 or the Interstate Commerce Act, each as amended.
In addition, no Credit Party nor any of its Subsidiaries is (a) an "investment
company" registered or required to be registered under the Investment Company
Act of 1940, as amended, or controlled by such a company, or (b) a "holding
company," or a "Subsidiary company" of a "holding company," or an "affiliate" of
a "holding company" or of a "Subsidiary" or a "holding company," within the
meaning of the Public Utility Holding Company Act of 1935, as amended. No
director, executive officer or principal shareholder of a Credit Party or any of
its Subsidiaries is a director, executive officer or principal shareholder of
any Lender. For the purposes hereof the terms "director," "executive officer"
and "principal shareholder" (when used with reference to any Lender) have the
respective meanings assigned thereto in Regulation O issued by the Board of
Governors of the Federal Reserve System.
6.18 Environmental Matters.
(a) Except as set forth on Schedule 6.18:
(i) Each of the Real Properties and all operations at
the Real Properties are in material compliance with all
applicable Environmental Laws, and there is no violation of
any Environmental Law with respect to the Real Properties or
the businesses operated by a Credit Party or any of its
Subsidiaries (the "Businesses"), and there are no conditions
relating to the Businesses or Real Properties that would be
reasonably expected to give rise to liability under any
applicable Environmental Laws.
(ii) No Credit Party nor any of its Subsidiaries has
received any written notice of, or inquiry from any
Governmental Authority regarding, any violation, alleged
violation, non-compliance, liability or potential liability
regarding Hazardous Materials or compliance with Environmental
Laws with regard to any of the Real Properties or the
Businesses, nor does any Credit Party or any of its
Subsidiaries have knowledge that any such notice is being
threatened.
(iii) Hazardous Materials have not been transported
or disposed of from the Real Properties, or generated,
treated, stored or disposed of at, on or under any of the Real
Properties or any other location, in each case by, or on
behalf or with the permission of, any Credit Party or any of
its Subsidiaries in a manner that would reasonably be expected
to give rise to liability under any applicable Environmental
Law.
(iv) No judicial proceeding or governmental or
administrative action is pending or, to the knowledge of any
Credit Party or any of its Subsidiaries, threatened, under any
Environmental Law to which any Credit Party or any of its
Subsidiaries is or will be named as a party, nor are there any
consent decrees or other decrees, consent orders,
administrative orders or other orders, or other administrative
or judicial requirements outstanding under any Environmental
Law with respect to any Credit Party or any of its
Subsidiaries, the Real Properties or the Businesses, in any
amount reportable under the federal Comprehensive
Environmental Response, Compensation and Liability Act or any
analogous state law, except releases in compliance with any
Environmental Laws.
(v) There has been no release or threat of release of
Hazardous Materials at or from the Real Properties, or arising
from or related to the operations (including, without
limitation, disposal) of a Credit Party or any of its
Subsidiaries in connection with the Real Properties or
otherwise in connection with the Businesses.
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(vi) None of the Real Properties contains, or to the
best of our knowledge has previously contained, any Hazardous
Materials at, on or under the Real Properties in amounts or
concentrations that, if released, constitute or constituted a
violation of, or could give rise to liability under,
Environmental Laws.
(vii) No Credit Party has assumed any liability of
any Person (other than another Credit Party) under any
Environmental Law.
(b) Each Credit Party and each of its Subsidiaries has adopted
procedures that are designed to (i) ensure that each such party, any of
its operations and each of the properties owned or leased by such party
remains in compliance with applicable Environmental Laws and (ii)
minimize any liabilities or potential liabilities that each such party,
any of its operations and each of the properties owned or leased by
each such party may have under applicable Environmental Laws.
6.19 Solvency.
Each Credit Party, is and, after consummation of the transactions
contemplated by this Credit Agreement, will be Solvent.
6.20 Investments.
All Investments of the Credit Parties are either Permitted Investments
or otherwise permitted by the terms of this Credit Agreement.
6.21 Location of Collateral
Set forth on Schedule 6.21(a) is a list of all Real Properties (with
street address, county and state where located). Set forth on Schedule 6.21(b)
is a list of all locations where any personal property of Sarasota, the Borrower
or any of the Borrower's Subsidiaries are located, including county and state
where located. Set forth on Schedule 6.21(c) is the chief executive office and
principal place of business of the Credit Parties. Schedules 6.21(a), 6.21(b)
and 6.21(c) may be updated from time to time by the Borrower by giving written
notice thereof to the Agent.
6.22 Disclosure.
Neither this Credit Agreement nor any financial statements delivered to
the Lenders nor any other document, certificate or statement furnished to the
Lenders by or on behalf of any Credit Party in connection with the transactions
contemplated hereby contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained
therein or herein not misleading.
6.23 Licenses, etc.
The Credit Parties and their Subsidiaries have obtained, and hold in
full force and effect, all franchises, licenses, permits, certificates,
authorizations, qualifications, accreditations, easements, rights of way and
other rights, consents and approvals which are necessary for the operation of
their respective businesses as presently conducted, except where the failure to
obtain the same would not have a Material Adverse Effect.
6.24 No Burdensome Restrictions.
No Credit Party nor any of its Subsidiaries is a party to any agreement
or instrument or subject to any other obligation or any charter or corporate
restriction or any provision of any applicable law, rule or regulation which,
individually or in the aggregate, would have or be reasonably expected to have a
Material Adverse Effect.
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6.25 Collateral Documents.
The Collateral Documents create valid first priority security interests
in, and first mortgage Liens on, the Collateral purported to be covered thereby,
which security interests and mortgage Liens are and will remain perfected
security interests and mortgage Liens, prior to all other Liens other than
Permitted Liens. Each of the representations and warranties made by the Credit
Parties in the Collateral Documents is true and correct in all material
respects.
6.26 Intellectual Property.
Each of the Parent, Sarasota, the Borrower and the Borrower's
Subsidiaries owns, or has the legal right to use, all trademarks, tradenames,
copyrights, technology, know-how and processes, if any, necessary for each of
them to conduct its business as currently conducted (the "Intellectual
Property") except for those the failure to own or have such legal right to use
would not be reasonably expected to have a Material Adverse Effect. Except as
provided on Schedule 6.26, no claim has been asserted and is pending by any
Person challenging or questioning the use of any such Intellectual Property or
the validity or effectiveness of any such Intellectual Property, nor does any
Credit Party know of any such claim, and the use of such Intellectual Property
by the Parent, Sarasota, the Borrower or any of the Borrower's Subsidiaries does
not infringe on the rights of any Person, except for such claims and
infringements that in the aggregate, would not be reasonably expected to have a
Material Adverse Effect.
6.27 Management Agreements.
The Borrower, Sarasota and/or any of the Borrower's Subsidiaries are
not party to any management agreement with respect to the Real Properties.
SECTION 7
AFFIRMATIVE COVENANTS
Each Credit Party hereby covenants and agrees that so long as this
Credit Agreement is in effect and until the Loans and LOC Obligations, together
with interest and fees and other obligations hereunder, have been paid in full
and the Commitments and Letters of Credit hereunder shall have terminated:
7.1 Information Covenants.
The Borrower will furnish, or cause to be furnished, to the Agent and
each of the Lenders:
(a) Annual Financial Statements. As soon as available, and in
any event within 90 days after the close of each fiscal year of the
Credit Parties, a consolidated balance sheet and income statement of
the Parent and its Subsidiaries as of the end of such fiscal year,
together with related consolidated statements of operations and
retained earnings and of cash flows for such fiscal year, setting forth
in comparative form consolidated figures for the preceding fiscal year,
all such financial information described above to be in reasonable form
and detail and (i) audited by independent certified public accountants
of recognized national standing reasonably acceptable to the Agent and
whose opinion shall be to the effect that such financial statements
have been prepared in accordance with GAAP (except for changes with
which such accountants concur) and shall not be limited as to the scope
of the audit or qualified in any manner and (ii) accompanied by a
certificate of the chief financial officer of the Parent to the effect
that such annual financial statements fairly present in all material
respects the financial condition of the Parent and its Subsidiaries and
have been prepared in accordance with GAAP, subject to changes
resulting from audit adjustments. Furthermore, the Parent shall cause
its Subsidiaries to furnish to the Lenders all audited financial
statements that are prepared on behalf of any such entities.
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(b) Quarterly Financial Statements. As soon as available, and
in any event within 45 days after the close of each fiscal quarter of
the Parent, a consolidated balance sheet and income statement of the
Parent and its Subsidiaries as of the end of such fiscal quarter,
together with related consolidated statements of operations and
retained earnings and of cash flows for such fiscal quarter in each
case setting forth in comparative form consolidated figures for (i) the
corresponding period of the preceding fiscal year and (ii) management's
proposed budget for such period, all such financial information
described above to be in reasonable form and detail and reasonably
acceptable to the Agent, and accompanied by a certificate of the chief
financial officer of the Parent to the effect that such quarterly
financial statements fairly present in all material respects the
financial condition of the Parent and its Subsidiaries and have been
prepared in accordance with GAAP, subject to changes resulting from
audit and normal year-end audit adjustments.
(c) Quarterly Operating Statements. As soon as available, and
in any event within 15 days after the close of each fiscal quarter of
the Credit Parties, an operating statement for each Collateral Pool
Property and each Abundance of Caution Property as of the end of such
fiscal quarter, together with the Average Economic Occupancy Rate for
the applicable Collateral Pool Property and the applicable Abundance of
Caution Property as of the end of such fiscal quarter, setting forth in
detail the earnings and expenses of each Collateral Pool Property and
each Abundance of Caution Property for such fiscal quarter, together
with comparative form figures for the preceding fiscal quarter, all
such information to be in reasonable form and detail and reasonably
acceptable to the Agent accompanied by a certificate of the chief
financial officer of the Borrower that such quarterly operating
statements fairly present in all material respects the financial
condition of the applicable Collateral Pool Property and the applicable
Abundance of Caution Property.
(d) Monthly Operating Statements. As soon as available, and in
any event within 15 days after the close of each calendar month, an
operating statement for each Collateral Pool Property and each
Abundance of Caution Property as of the end of each calendar month,
together with the Economic Occupancy Rate for the applicable Collateral
Pool Property and applicable Abundance of Caution Property as of the
end of such calendar month, setting forth in detail the earnings and
expenses of each Collateral Pool Property and each Abundance of Caution
Property for such calendar month, together with comparative form
figures for the preceding calendar month, all such information to be in
reasonable form and detail and reasonably acceptable to the Agent
accompanied by a certificate of the chief financial officer of the
Borrower that such monthly operating statements fairly present in all
material respects the financial condition of the applicable Collateral
Pool Property and the applicable Abundance of Caution Property.
(e) Officer's Certificate. At the time of delivery of the
financial statements and other statements provided for in Sections
7.1(a), 7.1(b) and 7(c) above, a certificate of the chief financial
officer of the Borrower, substantially in the form of Exhibit 7.1(d),
(i) demonstrating compliance with the financial covenants contained in
Section 7.2 by calculation thereof as of the end of each such fiscal
period and (ii) stating that no Default or Event of Default exists, or
if any Default or Event of Default does exist, specifying the nature
and extent thereof and what action the Borrower proposes to take with
respect thereto. The Borrower shall also deliver a copy of such
certificate to the Agency Services Address.
(f) Accountant's Certificate and Reports. Concurrently with
the delivery of the financial statements referred to in subsection
7.1(a) above, 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.
(g) Borrowing Base Certificate. Within 15 days after the end
of each fiscal quarter, a Borrowing Base Certificate as of the end of
the immediately preceding quarter, substantially in the form of Exhibit
7.1(g) and certified by the chief financial officer of the Borrower to
be true and correct as of such date.
(h) Reports. Promptly upon transmission or receipt thereof,
(i) copies of any filings and registrations with, and reports to or
from, the Securities and Exchange Commission, or any successor agency,
and copies of all financial statements, proxy statements, notices and
reports as any Credit Party or any of its Subsidiaries shall send to
its shareholders generally, (ii) copies of any and all notices
(regardless of form) or
46
other reports or other information provided to or from any licensing
and/or certifying agency or other Governmental Authority with respect
to a Collateral Pool Property or Abundance of Caution Property, and
(iii) upon the written request of the Agent, all reports and written
information to and from the United States Environmental Protection
Agency, or any state or local agency responsible for environmental
matters, the United States Occupational Health and Safety
Administration, or any state or local agency responsible for health and
safety matters, or any successor agencies or authorities concerning
environmental, health or safety matters.
(i) Notices. Upon a Credit Party obtaining knowledge thereof,
such Credit Party will give written notice to the Agent immediately of
(i) the occurrence of an event or condition consisting of a Default or
Event of Default, specifying the nature and existence thereof and what
action the Borrower proposes to take with respect thereto, and (ii) the
occurrence of any of the following with respect to any Credit Party or
any of its Subsidiaries (A) the pendency or commencement of any
litigation, arbitral or governmental proceeding against any Credit
Party or any of its Subsidiaries which if adversely determined would
have or would be reasonably expected to have a Material Adverse Effect,
or (B) the institution of any proceedings against any Credit Party or
any of its Subsidiaries with respect to, or the receipt of notice by
such Person of potential liability or responsibility for violation, or
alleged violation of any federal, state or local law, rule or
regulation, including but not limited to, Environmental Laws, the
violation of which would have or would be reasonably expected to have a
Material Adverse Effect.
(j) ERISA. Upon a Credit Party or any ERISA Affiliate
obtaining knowledge thereof, the Borrower will give written notice to
the Agent promptly (and in any event within five Business Days) of: (i)
any event or condition, including, but not limited to, any Reportable
Event, that constitutes, or might reasonably lead to, a ERISA Event;
(ii) with respect to any Multiemployer Plan, the receipt of notice as
prescribed in ERISA or otherwise of any withdrawal liability assessed
against a Credit Party or any ERISA Affiliate, or of a determination
that any Multiemployer Plan is in reorganization or insolvent (both
within the meaning of Title IV of ERISA); (iii) the failure to make
full payment on or before the due date (including extensions) thereof
of all amounts which a Credit Party or any ERISA Affiliate is required
to contribute to each Plan pursuant to its terms and as required to
meet the minimum funding standard set forth in ERISA and the Code with
respect thereto; or (iv) any change in the funding status of any Plan
that could have a Material Adverse Effect; together, with a description
of any such event or condition or a copy of any such notice and a
statement by the chief financial officer of a Credit Party briefly
setting forth the details regarding such event, condition, or notice,
and the action, if any, which has been or is being taken or is proposed
to be taken by a Credit Party or any ERISA Affiliate with respect
thereto. Promptly upon request, the Borrower shall furnish the Agent
and the Lenders with such additional information concerning any Plan as
may be reasonably requested, including, but not limited to, copies of
each annual report/return (Form 5500 series), as well as all schedules
and attachments thereto required to filed with the Department of Labor
and/or the Internal Revenue Service pursuant to ERISA and the Code,
respectively, for each "plan year" (within the meaning of Section 3(39)
of ERISA).
(k) Environmental.
(i) Subsequent to a notice from any Governmental
Authority that would reasonably cause concern or during the
existence of an Event of Default, and upon the written request
of the Agent, the Borrower will furnish or cause to be
furnished to the Agent, at the Borrower's expense, an updated
report of an environmental assessment of reasonable scope,
form and depth, including, where appropriate, invasive soil or
groundwater sampling, by a consultant reasonably acceptable to
the Agent as to the nature and extent of the presence of any
Hazardous Materials on any property owned, leased or operated
by Credit Party and as to the compliance by the Credit Parties
with Environmental Laws. If the Borrower fails to deliver such
an environmental report within seventy-five (75) days after
receipt of such written request then the Agent may arrange for
same, and the Borrower hereby grants to the Agent and its
representatives access to the Real Properties and a license of
a scope reasonably necessary to undertake such an assessment
(including, where appropriate, invasive soil or groundwater
sampling). The reasonable cost of any assessment arranged for
by the Agent pursuant to
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this provision will be payable by the Borrower on demand and
added to the obligations secured by the Collateral Documents.
(ii) Each Credit Party will conduct and complete all
investigations, studies, sampling, and testing and all
remedial, removal, and other actions necessary to address all
Hazardous Materials on, from, or affecting any real property
owned or leased by a Credit Party to the extent necessary to
be in compliance with all Environmental Laws and all other
applicable federal, state, and local laws, regulations, rules
and policies and with the orders and directives of all
Governmental Authorities exercising jurisdiction over such
real property to the extent any failure would have or be
reasonably expected to have a Material Adverse Effect.
(l) Capital Expenditure Report. As soon as available, and in
any event within 15 days after the close of each fiscal quarter of the
Borrower, a Capital Expenditure budget for each of the Collateral Pool
Properties and each of the Abundance of Caution Properties detailing
the Capital Expenditures planned by the Borrower or its Subsidiaries
with respect to each of the Collateral Pool Properties and each of the
Abundance of Caution Properties for the succeeding fiscal quarter.
(m) Other Information. With reasonable promptness upon any
such request, such other information regarding the business, properties
or financial condition of the Credit Parties as the Agent or any Lender
may reasonably request.
7.2 Financial Covenants.
(a) Liquidity. The Parent, the Borrower and the other Credit
Parties on a consolidated basis shall at all times maintain (i) prior
to May 1, 1997 cash and Cash Equivalents in the aggregate in excess of
$5,000,000, (ii) from May 1, 1997 through June 30, 1997 cash and Cash
Equivalents in the aggregate in excess of $6,000,000 and (iii) from
July 1, 1997 and thereafter cash and Cash Equivalents in the aggregate
in excess of $7,000,000.
(b) Fixed Charge Coverage Ratio. The Parent and its
Subsidiaries on a consolidated basis shall maintain as of the end of
each fiscal quarter shown below, a Fixed Charge Coverage Ratio of at
least:
March 31, 1997 0.75:1.0
June 30, 1997 0.75:1.0
September 30, 1997 0.75:1.0
December 31, 1997 0.75:1.0
March 31, 1998 1.25:1.0
June 30, 1998 1.25:1.0
September 30, 1998 and each fiscal quarter ending
thereafter 1.30:1.0
(c) Senior Leverage Ratio. The Parent and its Subsidiaries on
a consolidated basis shall maintain, as of the end of each fiscal
quarter shown below, a Senior Leverage Ratio of at least:
March 31, 1998 6.50:1.00
June 30, 1998 6.25:1.00
September 30, 1998 6.15:1.00
December 31, 1998 and each fiscal quarter ending
thereafter
6.10:1.00
(d) Net Worth. At all times the Net Worth of the Parent and
its Subsidiaries on a consolidated basis shall be no less than the sum
of (i) Fifty Five Million ($55,000,000) plus (ii) an amount equal to
ninety percent (90%) of the Net Cash Proceeds from any Equity Issuance
occurring subsequent to the Closing Date.
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7.3 Preservation of Existence and Franchises.
Each of the Credit Parties will do all things necessary to preserve and
keep in full force and effect its existence, rights, franchises and authority
except as permitted by Section 8.4 or except (with respect to rights, franchises
and authority) where the failure to do so would not have or be reasonably
expected to have a Material Adverse Effect.
7.4 Books and Records.
Each of the Credit Parties will, and will cause its Subsidiaries to,
keep complete and accurate books and records of its transactions in accordance
with good accounting practices on the basis of GAAP (including the establishment
and maintenance of appropriate reserves).
7.5 Compliance with Law.
Each of the Credit Parties will, and will cause its Subsidiaries to,
comply with all laws, rules, regulations, orders, covenants and restrictions of
record, and all applicable material restrictions imposed by all Governmental
Authorities, applicable to it and its property (including, without limitation,
Environmental Laws and ERISA) if noncompliance with any such law, rule,
regulation, order, covenant or restriction would have or reasonably be expected
to have a Material Adverse Effect.
7.6 Payment of Taxes and Other Indebtedness.
Each of the Credit Parties will, and will cause its Subsidiaries to,
pay, settle or discharge (a) all taxes, assessments and governmental charges or
levies imposed upon it, or upon its income or profits, or upon any of its
properties, before they shall become delinquent, (b) all lawful claims
(including claims for labor, materials and supplies) which, if unpaid, might
give rise to a Lien upon any of its properties, and (c) except as prohibited
hereunder, all of its other Indebtedness as it shall become due; provided,
however, that a Credit Party or its Subsidiary shall not be required to pay any
such tax, assessment, charge, levy, claim or Indebtedness which is being
contested in good faith by appropriate proceedings and as to which adequate
reserves therefor have been established in accordance with GAAP, unless the
failure to make any such payment (i) would give rise to an immediate right to
foreclose on a Lien securing such amounts or (ii) would have a Material Adverse
Effect.
7.7 Insurance.
Each of the Credit Parties will, and will cause its Subsidiaries to, at
all times maintain in full force and effect insurance (including worker's
compensation insurance, liability insurance, casualty insurance and business
interruption insurance) in such amounts, covering such risks and liabilities and
with such deductibles or self-insurance retentions as are in accordance with
normal industry practice. All liability policies of the Credit Parties (other
than the Parent) shall have the Agent, on behalf of the Lenders, as an
additional insured and all casualty policies shall have the Agent, on behalf of
the Lenders, as mortgagee and loss payee with respect to the Collateral.
In the event there occurs any material loss, damage to or destruction of the
Collateral or any part thereof, the Credit Party that owns such item of
Collateral shall promptly give written notice thereof to the Agent generally
describing the nature and extent of such damage or destruction. Subsequent to
any loss, damage to or destruction of the Collateral of any Credit Party or any
part thereof, such Credit Party, whether or not the insurance proceeds, if any,
received on account of such damage or destruction shall be sufficient for that
purpose, at such Credit Party's cost and expense, will promptly repair or
replace the Collateral of such Credit Party so lost, damaged or destroyed. In
the event such Credit Party shall receive any insurance proceeds, as a result of
any loss, damage or destruction with respect to the Collateral, such Credit
Party will immediately pay over such proceeds to the Agent as cash collateral
for the Credit Party Obligations. The Agent agrees to release such insurance
proceeds to such Credit Party for replacement or restoration of the portion of
the Collateral lost, damaged or destroyed if (A) the value of the Collateral
Pool Property (not including the value of any Collateral Pool Property that was
a part of the Collateral that was lost, damaged or destroyed) exceeds the
Revolving Committed Amount, (B) within 15 days from the date the Agent receives
such insurance proceeds, the Agent
49
has received written application for such release from such Credit Party,
together with evidence reasonably satisfactory to it that the Collateral lost,
damaged or destroyed has been or will be replaced or restored to its condition
immediately prior to the loss, destruction or other event giving rise to the
payment of such insurance proceeds and (C) on the date of such release no
Default or Event of Default exists. If the conditions in the preceding sentence
are not met, the Agent shall, on the first Business Day subsequent to the date
30 days after it received such insurance proceeds, apply such insurance proceeds
as a mandatory prepayment of the Credit Party Obligations for application in
accordance with the terms of Section 3.3(c). All insurance proceeds shall be
subject to the security interest of the Agent, for the benefit of the Lenders,
under the Collateral Documents.
The present insurance coverage of the Credit Parties (other than the Parent) is
outlined as to carrier, policy number, expiration date, type and amount on
Schedule 7.7(a), as Schedule 7.7(a) may be amended from time to time by written
notice to the Agent.
7.8 Maintenance of Property
Each of the Credit Parties will maintain and preserve its properties
and equipment in good repair, working order and condition, normal wear and tear
excepted and casualty and condemnation excepted, and will make, or cause to be
made, in such properties and equipment from time to time all repairs, renewals,
replacements, extensions, additions, betterments and improvements thereto as may
be needed or proper, to the extent and in the manner customary for companies in
similar businesses.
7.9 Performance of Obligations.
Each of the Credit Parties will perform in all material respects all of
its obligations under the terms of all material agreements, indentures,
mortgages, security agreements or other debt instruments to which it is a party
or by which it is bound.
7.10 Use of Proceeds.
The Borrower will use the proceeds of the Loans solely (a) to repay all
loans and obligations owing to the Agent pursuant to that certain promissory
note dated January 24, 1997, (b) to finance the acquisition of New Properties,
and (c) for other general corporate purposes of the Borrower and its
Subsidiaries; provided, however, that (i) the sum of the aggregate principal
amount of outstanding Revolving Loans made and Letters of Credit issued for
general corporate purposes of the Borrower and its Subsidiaries shall not exceed
$5,000,000.
7.11 Audits/Inspections.
Upon reasonable notice and during normal business hours, each Credit
Party will, and will cause its Subsidiaries to, permit representatives appointed
by the Agent or any Lender, including, without limitation, independent
accountants, agents, attorneys and appraisers to visit and inspect such Credit
Party's or such Subsidiary's property, including, without limitation, the Real
Properties, including its books and records, its accounts receivable and
inventory, its facilities and its other business assets, and to make photocopies
or photographs thereof and to write down and record any information such
representative obtains and shall permit the Agent or any Lender or their
respective representatives to investigate and verify the accuracy of information
provided to the Lenders and to discuss all such matters with the officers,
employees and representatives of the Credit Parties and their Subsidiaries.
7.12 Additional Credit Parties.
At the time any Subsidiary of the Borrower (not already a Credit Party
hereunder) desires to purchase a New Property, the Borrower shall so notify the
Agent and immediately shall cause such Subsidiary to (a) execute a Joinder
Agreement in substantially the same form as Exhibit 7.12, (b) execute any and
all necessary mortgages, deeds of trust, deeds to secure debt or other
appropriate real estate collateral documentation in a form substantially similar
to the Mortgages, with appropriate covenants as necessary and (c) deliver such
other documentation as the Agent may reasonably request in connection with the
foregoing, including, without limitation, appropriate UCC-1 financing
50
statements, real estate title insurance policies, environmental reports,
certified resolutions and other organizational and authorizing documents of such
Subsidiary and favorable opinions of counsel to such Subsidiary (which shall
cover, among other things, the legality, validity, binding effect and
enforceability of the documentation referred to above), all in form, content and
scope reasonably satisfactory to the Agent.
7.13 Collateral.
If subsequent to the Closing Date, any of the Credit Parties (other
than the Parent) (a) acquires or leases any real property or (b) acquires any
personal property required to be delivered by the Collateral Documents or
located in a new jurisdiction not set forth on Schedule 6.21(b), the Borrower
shall promptly notify the Agent of same. The Credit Parties shall take such
action as requested by the Agent, at the Borrower's expense, to ensure the
Agent, for the benefit of the Lenders, has a first priority Lien in all assets
of the Credit Parties (other than the Parent), subject only to Permitted Liens.
7.14 Environmental Indemnity.
The Credit Parties agree that they will reimburse the Lenders for and
hereby hold the Lenders harmless from all fines or penalties made or levied
against any of the Lenders by any Governmental Authority as a result of or in
connection with (i) the use of Materials of Environmental Concern at the Real
Properties, (ii) the use of Materials of Environmental Concern at the facilities
thereon, or (iii) the use, generation, storage, transportation, discharge,
release or handling of any Materials of Environmental Concern at the Real
Properties, or as a result of any release of any Materials of Environmental
Concern onto the ground or into the water or air from or upon the Real
Properties at any time. The Credit Parties also agree that they will reimburse
the Lenders for and indemnify and hold the Lenders harmless from any and all
costs, expenses (including reasonably attorneys' fees) and for all civil
judgments or penalties incurred entered, assessed, or levied against any of the
Lenders as a result of any of the Credit Parties' use of Materials of
Environmental Concern at the Real Properties or as a result of any release of
any Materials of Environmental Concern on the ground or into the water or air by
any of the Credit Parties from or upon the Real Properties. Such reimbursement
or indemnification shall include but not be limited to any and all judgments or
penalties to recover the costs of cleanup of any such release by any of the
Credit Parties from or upon Real Properties and all reasonable expenses incurred
by the Lenders as a result of such a civil action, including but not limited to
reasonable attorneys' fees. The Credit Parties' obligations under this section
shall survive the repayment of the Loans and any deed in lieu of foreclosure or
any foreclosure of the Mortgage Documents. The environmental indemnities set
forth in this paragraph shall not be extended to any claim or liability of any
of the Lenders arising from the gross negligence or willful misconduct of any of
the Lenders occurring during any of the Lender's (i) actual possession of the
Real Properties prior to foreclosure or exercise of a power of sale or (ii)
ownership of the Real Properties after a foreclosure or exercise of such power
of sale.
7.15 Abundance of Caution Properties.
The Credit Parties agree that each of the Abundance of Caution
Properties shall satisfy at all times all of the Collateral Pool Eligibility
Conditions.
7. 16 Environmental Assessment.
The Credit Parties hereby agree that the Agent shall have the right (at
the cost and expense of the Credit Parties) to order a current environmental
assessment of any of the Collateral Pool Properties upon the reasonable request
of the Required Lenders.
7.17 Expansion of Units.
The Credit Parties hereby agree that upon the completion of the
construction of the expansion Units at the (i) Churchland Facility and (ii) the
Gloucester Facility, the Credit Parties (a) shall provide the Agent with copies
of all lien affidavits and other documentation requested by the Agent in its
sole discretion with respect to each such
51
facility and (b) agree to cause the Title Company to issue an endorsement to the
applicable Mortgage Policies satisfactory in form and substance to the Agent
upon the request of the Agent in its sole discretion.
SECTION 8
NEGATIVE COVENANTS
Each Credit Party hereby covenants and agrees that so long as this
Credit Agreement is in effect and until the Loans and LOC Obligations, together
with interest, fees and other obligations hereunder, have been paid in full and
the Commitments hereunder shall have terminated:
8.1 Indebtedness.
No Credit Party (other than the Parent) will, nor will the Borrower
permit any of its Subsidiaries to, contract, create, incur, assume or permit to
exist any Indebtedness, except:
(a) Indebtedness arising under this Credit Agreement and the
other Credit Documents;
(b) Indebtedness existing as of the Closing Date as referenced
in Section 6.10 (and renewals, refinancings or extensions thereof on
terms and conditions no less favorable to such Credit Party than such
existing Indebtedness);
(c) the refinancing of Loans incurred by the Borrower to
finance the acquisition of an Abundance of Caution Property provided
that (i) the Loans used by the Borrower to originally finance such
Abundance of Caution Property are repaid in full to the Lenders with
the proceeds of such refinancing, (ii) no Default or Event of Default
exists, (iii) after the refinancing of such Abundance of Caution
Property has taken effect (including giving effect to the releases
referred to in the following paragraph), none of the Credit Parties
shall be the fee holder of such refinanced Abundance of Caution
Property and (iv) such indebtedness shall be non-recourse to all of the
Credit Parties.
In connection with a refinancing of an Abundance of Caution
Property in accordance with the conditions identified in the preceding
paragraph, the Agent agrees that it shall (and the Lenders authorize
the Agent to), at the Borrower's request and expense, deliver to the
Borrower such documentation as is reasonably necessary to evidence the
release (i) of the Agent's security interest in such Abundance of
Caution Property and (ii) in the event the Credit Party which formerly
held fee simple title to such Abundance of Caution Property no longer
owns or operates an assisted living facility on one of the Real
Properties, provide documentation as is reasonably necessary to
evidence the release of such Credit Party from all of its liabilities
and obligations under this Credit Agreement.
8.2 Liens.
No Credit Party (other than the Parent) will, nor will the Borrower
permit any of its Subsidiaries to, contract, create, incur, assume or permit to
exist any Lien with respect to any of its property or assets of any kind
(whether real or personal, tangible or intangible), whether now owned or after
acquired, except for Permitted Liens.
8.3 Nature of Business.
The Credit Parties will not, nor will they permit any of their
Subsidiaries to, alter the character of its business from that conducted as of
the Closing Date or engage in any business other than the business conducted as
of the Closing Date.
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8.4 Consolidation and Merger.
The Credit Parties will not, nor will the Borrower permit any of its
Subsidiaries to, enter into any transaction of merger or consolidation or
liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution); provided that notwithstanding the foregoing provisions of this
Section 8.4, any Subsidiary of the Borrower may be merged or consolidated with
or into the Borrower if (a) the Borrower is the continuing or surviving
corporation; (b) the Agent is given prior written notice of such action, and the
Borrower and such Subsidiary execute and deliver such documents, instruments and
certificates as the Agent may request in order to maintain the perfection and
priority of the Liens on the assets of the Credit Parties; and (c) after giving
effect thereto no Default or Event of Default exists.
8.5 Sale or Lease of Assets.
Neither the Credit Parties, nor any of the Borrower's Subsidiaries,
will (other than in the ordinary course of business for fair consideration)
convey, sell, lease, transfer or otherwise dispose of, in one transaction or a
series of transactions, all or any part of its business or assets whether now
owned or hereafter acquired.
Notwithstanding the foregoing paragraph, a Credit Party may sell any of
the Collateral Pool Properties and obtain the release of the Agent's security
interest with respect to such Collateral Pool Property provided (i) no Default
or Event of Default exists at the time of such sale and release, (ii) the
Borrowing Base shall continue to exceed the Revolving Committed Amount after
giving effect to such sale and release and (iii) after giving effect to such
sale and release, the Collateral Pool continues to consist of at least six (6)
Real Properties. Upon the sale of assets permitted by this Section 8.5, the
Agent shall deliver to the Borrower (and the Lenders hereby authorize the Agent
to), upon the Borrower's request and at the Borrower's expense, such
documentation as is reasonably necessary to evidence the release of the Agent's
security interest in such assets, including, without limitation, amendments or
terminations of UCC financing statements.
8.6 Advances, Investments and Loans.
Neither the Credit Parties, nor any of their Subsidiaries, will make
any Investments except for Permitted Investments.
8.7 Restricted Payments.
The Credit Parties will not, nor will they permit any of their
Subsidiaries to, directly or indirectly, make or permit any Restricted Payments;
provided, however, notwithstanding the above, the Borrower or any of its
Subsidiaries may pay dividends to the Parent provided no Default or Event of
Default exists or will occur as a result of such payment of dividends to the
Parent.
8.8 Subordinated Debt.
No Credit Party will (a) make or offer to make any principal payments
with respect to the Subordinated Debt other than those payments permitted
pursuant to the Subordination and Intercreditor Agreement; (b) redeem or offer
to redeem any of the Subordinated Debt; or (c) deposit any funds intended to
discharge or defease any or all of the Subordinated Debt. The Subordinated Debt
may not be amended or modified in any manner without the prior written consent
of the Required Lenders.
8.9 Transactions with Affiliates.
No Credit Party will, nor will they permit any of their Subsidiaries
to, enter into or permit to exist any transaction or series of transactions,
whether or not in the ordinary course of business, with any officer, director,
shareholder, Subsidiary or Affiliate other than on terms and conditions
substantially as favorable as would be obtainable in a comparable arm's-length
transaction with a Person other than an officer, director, shareholder,
Subsidiary or Affiliate.
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8.10 Fiscal Year; Organizational Documents.
No Credit Party will (a) change its fiscal year or (b) change its
articles or certificate of incorporation or its bylaws if such change would have
or be reasonably expected to have a Material Adverse Effect.
8.11 Limitations.
None of the Credit Parties (other than the Parent) will, nor will they
permit any of their Subsidiaries to, directly or indirectly, create or otherwise
cause, incur, assume, suffer or permit to exist or become effective any
consensual encumbrance or restriction of any kind on the ability of any such
Person to (a) pay dividends or make any other distribution on any of such
Person's capital stock, (b) pay any Indebtedness owed to the Borrower or any
other Credit Party, (c) make loans or advances to any other Credit Party or (d)
transfer any of its property to any other Credit Party, except for encumbrances
and restrictions existing under or by reason of (i) this Credit Agreement and
the other Credit Documents, (ii) the Subordinated Debt and (iii) Requirements of
Law.
8.12 Negative Pledges.
None of the Credit Parties (other than the Parent) will, nor will they
permit any of their Subsidiaries to, enter into, assume or become subject to any
agreement prohibiting or otherwise restricting the creation or assumption of any
Lien upon its properties or assets, whether now owned or hereafter acquired, or
requiring the grant of any security for such obligation if security is given for
some other obligation.
8.13 Creation of Subsidiaries.
The Credit Parties (other than the Parent) shall not form or organize
any additional subsidiary corporations other than those subsidiary corporations
of the Borrower which will acquire New Properties and become Credit Parties
hereunder.
8.14 Issuance and Sale of Subsidiary Stock.
The Borrower will not, nor will it permit any of its Subsidiaries to,
except to qualify directors where required by applicable law, sell, transfer or
otherwise dispose of, any shares of capital stock of any of its Subsidiaries or
permit any of its Subsidiaries to issue, sell or otherwise dispose of, any
shares of capital stock of any of its Subsidiaries. Furthermore, the Parent will
not, nor will it permit Sarasota to, except to qualify directors where required
by applicable law, sell, transfer or otherwise dispose of, any shares of capital
stock of Sarasota or permit Sarasota to issue, sell or otherwise dispose of, any
shares of capital stock of Sarasota.
8.15 Sale Leasebacks.
The Credit Parties (other than the Parent) will not, nor will the
Borrower permit any of its Subsidiaries to, directly or indirectly, become or
remain liable as lessee or as guarantor or other surety with respect to any
lease, whether an Operating Lease or a Capital Lease, of any Property (whether
real or personal or mixed), whether now owned or hereafter acquired, (a) which
such Person has sold or transferred or is to sell or transfer to any other
Person other than a Credit Party or (b) which such Person intends to use for
substantially the same purpose as any other Property which has been sold or is
to be sold or transferred by such Person to any other Person in connection with
such lease.
8.16 Ownership of Assets.
None of the Credit Parties (other than the Parent) will, nor will the
Borrower permit any of its Subsidiaries to, (i) own any assets other than the
Collateral Pool Properties and the Abundance of Caution Properties and those
items of furniture, equipment, supplies and other assets customarily associated
with the ownership of assisted living facilities and (ii) engage in any business
activities other than the operation of the Collateral Pool Properties or
Abundance of Caution Properties, as applicable.
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8.17 Serviceable Beds.
None of the Credit Parties will, nor will they permit any of their
Subsidiaries to, reduce the number of Serviceable Beds located at any of the
Collateral Pool Properties or any of the Abundance of Caution Properties without
first having received the prior written consent of the Lenders.
8.18 Management Agreements.
None of the Credit Parties will, nor will they permit any of their
Subsidiaries to, enter into a management agreement with respect to any of the
Collateral Pool Properties or any of the Abundance of Caution Properties without
first having (i) received the prior written consent of the Lenders and (ii)
provided the Agent, for the benefit of the Lenders, with an assignment and
subordination of such management agreement satisfactory in form and substance to
the Lenders, in their sole discretion.
SECTION 9
EVENTS OF DEFAULT
9.1 Events of Default.
An Event of Default shall exist upon the occurrence of any of the
following specified events (each an "Event of Default"):
(a) Payment. Any Credit Party shall (i) default in the payment
when due of any principal of any of the Loans, or of any reimbursement
obligations arising from drawings under Letters of Credit or (ii)
default, and such default shall continue for five or more Business
Days, in the payment when due of any interest on the Loans, or on any
reimbursement obligations arising from drawings under Letters of Credit
or of any fees or other amounts owing hereunder, under any of the other
Credit Documents or in connection herewith.
(b) Representations. Any representation, warranty or statement
made or deemed to be made by any Credit Party herein, in any of the
other Credit Documents, or in any statement or certificate delivered or
required to be delivered pursuant hereto or thereto shall prove untrue
in any material respect on the date as of which it was made or deemed
to have been made.
(c) Covenants. Any Credit Party shall:
(i) default in the due performance or observance of
any term, covenant or agreement contained in Sections 7.2,
7.3, 7.5, 7.6, 7.7, 7.10, 7.11, 7.12, 7.13, 7.14 or 8.1
through 8.18 inclusive; or
(ii) default in the due performance or observance by
it of any term, covenant or agreement (other than those
referred to in subsections (a), (b) or (c)(i) of this Section
9.1) contained in this Credit Agreement and such default shall
continue unremedied for a period of at least 30 days after the
earlier of an officer of a Credit Party becoming aware of such
default or notice thereof given by the Agent.
(d) Other Credit Documents. (i) Any Credit Party shall default
in the due performance or observance of any term, covenant or agreement
in any of the other Credit Documents (subject to applicable grace or
cure periods, if any), or (ii) any Credit Document shall fail to be in
full force and effect or to give the Agent and/or the Lenders the
security interests, liens, rights, powers and privileges purported to
be created thereby.
(e) Guaranties. The guaranty given by any of the Credit
Parties hereunder or by any Additional Credit Party hereafter or any
provision thereof shall cease to be in full force and effect, or any
Guarantor
55
hereunder or any Person acting by or on behalf of such Guarantor shall
deny or disaffirm such Guarantor's obligations under such guaranty or
any Guarantor shall default in the due performance or observance of any
term, covenant or agreement on its part to be performed or observed
pursuant to such guaranty.
(f) Bankruptcy, etc. The occurrence of any of the following
with respect to any Credit Party or any of its Subsidiaries (i) a court
or governmental agency having jurisdiction in the premises shall enter
a decree or order for relief in respect of any Credit Party or any of
its Subsidiaries in an involuntary case under any applicable
bankruptcy, insolvency, receivership, liquidation, administrative
supervision or other similar law now or hereafter in effect, or appoint
a receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official of any Credit Party or any of its Subsidiaries or for
any substantial part of its property or ordering the winding up or
liquidation of its affairs; or (ii) an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter
in effect is commenced against any Credit Party or any of its
Subsidiaries and such petition remains unstayed and in effect for a
period of 60 consecutive days; or (iii) any Credit Party or any of its
Subsidiaries shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect,
or consent to the entry of an order for relief in an involuntary case
under any such law, or consent to the appointment or taking possession
by a receiver, liquidator, assignee, custodian, trustee, sequestrator
or similar official of such Person or any substantial part of its
property or make any general assignment for the benefit of creditors;
or (iv) any Credit Party or any of its Subsidiaries shall admit in
writing its inability to pay its debts generally as they become due or
any action shall be taken by such Person in furtherance of any of the
aforesaid purposes.
(g) Defaults under Other Agreements.
(i) Any Credit Party or any of its
Subsidiaries shall default in the performance or observance
(beyond the applicable grace period with respect thereto, if
any) of any material obligation or condition of any contract
or lease material to such Credit Party and its Subsidiaries,
taken as a whole; or
(ii) With respect to any Indebtedness (other
than Indebtedness outstanding under this Credit Agreement) of
any Credit Party or any of its Subsidiaries in an aggregate
principal amount in excess of $500,000, (A) a Credit Party or
any of its Subsidiaries shall (1) default in any payment
(beyond the applicable grace period with respect thereto, if
any) with respect to any such Indebtedness, or (2) default
(after giving effect to any applicable grace period) in the
observance or performance of any term, covenant or agreement
relating to such Indebtedness or contained in any instrument
or agreement evidencing, securing or relating thereto, or any
other event or condition shall occur or condition exist, the
effect of which default or other event or condition is to
cause, or permit, the holder or holders of such Indebtedness
(or trustee or agent on behalf of such holders) to cause
(determined without regard to whether any notice or lapse of
time is required) any such Indebtedness to become due prior to
its stated maturity; or (3) any such Indebtedness shall be
declared due and payable, or required to be prepaid other than
by a regularly scheduled required prepayment prior to the
stated maturity thereof; or (4) any such Indebtedness shall
mature and remain unpaid.
(h) Judgments. One or more judgments, orders, or decrees shall
be entered against any one or more of the Credit Parties or any of
their Subsidiaries involving a liability of $1,000,000 or more, in the
aggregate (to the extent not paid or covered by insurance provided by a
carrier who has acknowledged coverage), and such judgments, orders or
decrees shall not have been vacated, discharged or stayed or bonded
pending appeal within 30 days from the entry thereof.
(i) ERISA Events. The occurrence of any of the following
events or conditions, unless such event or occurrence would not have or
be reasonably expected to have a Material Adverse Effect: (1) any
"accumulated funding deficiency," as such term is defined in Section
302 of ERISA and Section 412 of the Code, whether or not waived, shall
exist with respect to any Plan, or any lien shall arise on the assets
of a Credit Party or any ERISA Affiliate in favor of the PBGC or a
Plan; (2) an ERISA Event shall occur with respect to a Single Employer
Plan, which is, in the reasonable opinion of the Agent, likely to
result in the
56
termination of such Plan for purposes of Title IV of ERISA; (3) an
ERISA Event shall occur with respect to a Multiemployer Plan or
Multiple Employer Plan, which is, in the reasonable opinion of the
Agent, likely to result in (i) the termination of such Plan for
purposes of Title IV of ERISA, or (ii) a Credit Party or any ERISA
Affiliate incurring any liability in connection with a withdrawal from,
reorganization of (within the meaning of Section 4241 of ERISA), or
insolvency (within the meaning of Section 4245 of ERISA) of such Plan;
or (4) any prohibited transaction (within the meaning of Section 406 of
ERISA or Section 4975 of the Code) or breach of fiduciary
responsibility shall occur which may subject a Credit Party or any
ERISA Affiliate to any liability under Sections 406, 409, 502(i), or
502(l) of ERISA or Section 4975 of the Code, or under any agreement or
other instrument pursuant to which a Credit Party or any ERISA
Affiliate has agreed or is required to indemnify any person against any
such liability.
(j) Ownership. There shall occur a Change of Control.
9.2 Acceleration; Remedies.
Upon the occurrence of an Event of Default, and at any time thereafter
unless and until such Event of Default has been waived in writing by the
Required Lenders (or the Lenders as may be required hereunder), the Agent shall,
upon the request and direction of the Required Lenders, by written notice to the
Borrower, take any of the following actions:
(a) Termination of Commitments. Declare the Commitments
terminated whereupon the Commitments shall be immediately terminated.
(b) Acceleration of Loans. Declare the unpaid principal of and
any accrued interest in respect of all Loans, any reimbursement
obligations arising from drawings under Letters of Credit and any and
all other indebtedness or obligations of any and every kind owing by a
Credit Party to any of the Lenders hereunder to be due whereupon the
same shall be immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by
the Credit Parties.
(c) Cash Collateral. Direct the Borrower to pay (and the
Borrower agrees that upon receipt of such notice, or upon the
occurrence of an Event of Default under Section 9.1(f), they will
immediately pay) to the Agent additional cash, to be held by the Agent,
for the benefit of the Lenders, in a cash collateral account as
additional security for the LOC Obligations in respect of subsequent
drawings under all then outstanding Letters of Credit in an amount
equal to the maximum aggregate amount which may be drawn under all
Letters of Credit then outstanding.
(d) Enforcement of Rights. Enforce any and all rights and
interests created and existing under the Credit Documents, including,
without limitation, all rights and remedies existing under the
Collateral Documents, all rights and remedies against a Guarantor and
all rights of set-off.
Notwithstanding the foregoing, if an Event of Default specified in Section
9.1(f) shall occur, then the Commitments shall automatically terminate and all
Loans, all reimbursement obligations under Letters of Credit, all accrued
interest in respect thereof, all accrued and unpaid fees and other indebtedness
or obligations owing to the Lenders hereunder shall immediately become due and
payable without the giving of any notice or other action by the Agent or the
Lenders, which notice or other action is expressly waived by the Credit Parties.
Notwithstanding the fact that enforcement powers reside primarily with the
Agent, each Lender has, to the extent permitted by law, a separate right of
payment and shall be considered a separate "creditor" holding a separate "claim"
within the meaning of Section 101(5) of the Bankruptcy Code or any other
insolvency statute.
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9.3 Allocation of Payments After Event of Default.
Notwithstanding any other provisions of this Credit Agreement, after
the occurrence and during the continuance of an Event of Default, all amounts
collected or received by the Agent or any Lender on account of amounts
outstanding under any of the Credit Documents or in respect of the Collateral
shall be paid over or delivered as follows:
FIRST, to the payment of all reasonable out-of-pocket costs
and expenses (including without limitation reasonable attorneys' fees)
of the Agent in connection with enforcing the rights of the Lenders
under the Credit Documents and any protective advances made by the
Agent with respect to the Collateral under or pursuant to the terms of
the Collateral Documents;
SECOND, to payment of any fees owed to the Agent, for the
benefit of the Lenders, or the Issuing Lender;
THIRD, to the payment of all reasonable out-of-pocket costs
and expenses, (including, without limitation, reasonable attorneys'
fees) of each of the Lenders in connection with enforcing its rights
under the Credit Documents;
FOURTH, to the payment of the administrative fee owed to the
Agent and all accrued fees and interest payable to the Lenders
hereunder;
FIFTH, to the payment of the outstanding principal amount of
the Loans, to the payment or cash collateralization of the outstanding
LOC Obligations and to any principal amounts outstanding under Hedging
Agreements, pro rata, as set forth below;
SIXTH, to all other obligations which shall have become due
and payable under the Credit Documents and not repaid pursuant to
clauses "FIRST" through "FIFTH" above; and
SEVENTH, to the payment of the surplus, if any, to whoever may
be lawfully entitled to receive such surplus.
In carrying out the foregoing, (a) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; and (b) each of the Lenders shall receive an amount equal
to its pro rata share (based on the proportion that the then outstanding Loans
held by such Lender bears to the aggregate then outstanding Loans, LOC
Obligations and obligations under Hedging Agreements) of amounts available to be
applied pursuant to clauses "THIRD", "FOURTH," "FIFTH," and "SIXTH" above; and
(c) to the extent that any amounts available for distribution pursuant to clause
"FIFTH" above are attributable to the issued but undrawn amount of outstanding
Letters of Credit, such amounts shall be held by the Agent in a cash collateral
account and applied (x) first, to reimburse the Issuing Lender from time to time
for any drawings under such Letters of Credit and (y) then, following the
expiration of all Letters of Credit, to all other obligations of the type
described in clauses "FIFTH" and "SIXTH" above in the manner provided in this
Section 9.3.
SECTION 10
AGENCY PROVISIONS
10.1 Appointment.
Each Lender hereby designates and appoints NationsBank, N.A. (South) as
Agent of such Lender to act as specified herein and the other Credit Documents,
and each such Lender hereby authorizes the Agent, as the agent for such Lender,
to take such action on its behalf under the provisions of this Credit Agreement
and the other Credit Documents and to exercise such powers and perform such
duties as are expressly delegated by the terms hereof and of the other Credit
Documents, together with such other powers as are reasonably incidental thereto.
Without limiting the
58
generality of the foregoing, the Agent is authorized to execute the
Subordination and Intercreditor Agreement and releases referenced in Section
8.5. Notwithstanding any provision to the contrary elsewhere herein and in the
other Credit Documents, the Agent shall not have any duties or responsibilities,
except those expressly set forth herein and therein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Credit Agreement or any of the other Credit Documents, or shall otherwise exist
against the Agent. The provisions of this Section are solely for the benefit of
the Agent and the Lenders and none of the Credit Parties shall have any rights
as a third party beneficiary of the provisions hereof. In performing its
functions and duties under this Credit Agreement and the other Credit Documents,
the Agent shall act solely as an agent of the Lenders and does not assume and
shall not be deemed to have assumed any obligation or relationship of agency or
trust with or for any Credit Party. The Agent agrees that it shall administer
the Loans and the Credit Documents in a manner consistent with that ordinarily
employed by the Agent in the administration of similar loans for its own
account.
10.2 Delegation of Duties.
The Agent may execute any of its duties hereunder or under the other
Credit Documents by or through agents or attorneys-in-fact and shall be entitled
to advice of counsel concerning all matters pertaining to such duties. The Agent
shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care; provided, however, the
Agent shall take such action with respect to such negligent agents or
attorneys-in-fact as reasonably directed by the Required Lenders.
10.3 Exculpatory Provisions.
Neither the Agent nor any of its officers, directors, employees,
agents, attorneys-in-fact or affiliates shall be (a) liable for any action
lawfully taken or omitted to be taken by it or such Person under or in
connection herewith or in connection with any of the other Credit Documents
(except for its or such Person's own gross negligence or willful misconduct) or
(b) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by any of the Credit Parties
contained herein or in any of the other Credit Documents or in any certificate,
report, document, financial statement or other written or oral statement
referred to or provided for in, or received by the Agent under or in connection
herewith or in connection with the other Credit Documents, or enforceability or
sufficiency therefor of any of the other Credit Documents, or for any failure of
the Borrower to perform its obligations hereunder or thereunder. The Agent shall
not be responsible to any Lender for the effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Credit Agreement, or any
of the other Credit Documents or for any representations, warranties, recitals
or statements made herein or therein or made by the Borrower or any Credit Party
in any written or oral statement or in any financial or other statements,
instruments, reports, certificates or any other documents in connection herewith
or therewith furnished or made by the Agent to the Lenders or by or on behalf of
the Credit Parties to the Agent or any Lender or be required to ascertain or
inquire as to the performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained herein or therein or as to the use
of the proceeds of the Loans or use of the Letters of Credit or of the existence
or possible existence of any Default or Event of Default or to inspect the
properties, books or records of the Credit Parties. The Agent is not a trustee
for the Lenders and owes no fiduciary duty to the Lenders.
10.4 Reliance on Communications.
The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, 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 any of the Credit Parties, independent accountants and
other experts selected by the Agent with reasonable care). The Agent may deem
and treat each Lender as the owner of its interests hereunder for all purposes
unless a written notice of assignment, negotiation or transfer thereof shall
have been filed with the Agent in accordance with Section 11.3(b). The Agent
shall be fully justified in failing or refusing to take any action under this
Credit Agreement or under any of the other Credit Documents unless it shall
first receive such advice or concurrence of the Required Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense
59
which may be incurred by it by reason of taking or continuing to take any such
action. The Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder or under any of the other Credit Documents in
accordance with a request of the Required Lenders (or to the extent specifically
provided in Section 11.6, all the Lenders) and such request and any action taken
or failure to act pursuant thereto shall be binding upon all the Lenders
(including their successors and assigns).
10.5 Notice of Default.
The Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default hereunder unless the Agent has
received notice from a Lender or a Credit Party referring to the Credit
Document, describing such Default or Event of Default and stating that such
notice is a "notice of default." In the event that the Agent receives such a
notice, the Agent shall give prompt notice thereof to the Lenders. Furthermore,
the Agent shall endeavor but not be required to notify the Lenders of any other
Default or Event of Default which it gains actual knowledge of. The Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders.
10.6 Non-Reliance on Agent and Other Lenders.
Each Lender expressly acknowledges that neither the Agent, NationsBanc
Capital Markets, Inc. ("NCMI") nor any of their officers, directors, employees,
agents, attorneys-in-fact or affiliates has made any representations or
warranties to it other than as set forth in this Credit Agreement and that no
act by the Agent, NCMI or any affiliate thereof hereinafter taken, including any
review of the affairs of any Credit Party, shall be deemed to constitute any
representation or warranty by the Agent or NCMI to any Lender. Each Lender
represents to the Agent and NCMI that it has, independently and without reliance
upon the Agent or NCMI 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, assets, operations, property, financial and
other conditions, prospects and creditworthiness of the Credit Parties and made
its own decision to make its Loans hereunder and enter into this Credit
Agreement. Each Lender also represents that it will, independently and without
reliance upon the Agent, NCMI 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 Credit Agreement, and to make such investigation as it deems
necessary to inform itself as to the business, assets, operations, property,
financial and other conditions, prospects and creditworthiness of the Credit
Parties. Except for notices, reports and other documents expressly required to
be furnished to the Lenders by the Agent hereunder, the Agent and NCMI shall not
have any duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, assets, property, financial or
other conditions, prospects or creditworthiness of the Credit Parties which may
come into the possession of the Agent, NCMI or any of their officers, directors,
employees, agents, attorneys-in-fact or affiliates; provided, however, the Agent
shall provide the Lenders with copies of the Credit Documents, the conditions
precedent identified in Sections 5.1 and 5.2 and such other information
reasonably requested by a Lender; provided, further however, the Agent shall not
be required to provide the Lenders with a copy of the Fee Letter and shall not
be required to generate any additional information not supplied to the Agent by
the Borrower or any other Credit Party.
10.7 Indemnification.
The Lenders agree to indemnify the 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 Commitments (or if
the Commitments have expired or been terminated, in accordance with the
respective principal amounts of outstanding Loans and Participation Interest of
the Lenders), from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever which may at any time (including without limitation at
any time following payment in full of the Credit Party Obligations) be imposed
on, incurred by or asserted against the Agent in its capacity as such in any way
relating to or arising out of this Credit Agreement or the other Credit
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 the Agent under or in connection with any of the foregoing; provided that no
Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the gross
60
negligence or willful misconduct of the Agent. If any indemnity furnished to the
Agent for any purpose shall, in the opinion of the Agent, be insufficient or
become impaired, the Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished. The agreements in this Section shall survive the payment of the
Credit Party Obligations and all other amounts payable hereunder and under the
other Credit Documents.
10.8 Agent in Its Individual Capacity.
The Agent and its affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower or any other
Credit Party as though the Agent were not the Agent hereunder. With respect to
the Loans made and Letters of Credit issued and all obligations owing to it, the
Agent shall have the same rights and powers under this Credit Agreement as any
Lender and may exercise the same as though it were not the Agent, and the terms
"Lender" and "Lenders" shall include the Agent in its individual capacity.
10.9 Successor Agent.
The Agent may, at any time, resign upon 20 days written notice to the
Lenders. Upon any such resignation, the Required Lenders shall have the right to
appoint a successor Agent. If no successor Agent shall have been so appointed by
the Required Lenders, and shall have accepted such appointment, within 45 days
after the notice of resignation, then the retiring Agent shall select a
successor Agent provided such successor is a Lender hereunder or a commercial
bank organized under the laws of the United States of America or of any State
thereof and has a combined capital and surplus of at least $400,000,000. Upon
the acceptance of any appointment as the Agent hereunder by a successor, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations as the Agent, as
appropriate, under this Credit Agreement and the other Credit Documents and the
provisions of this Section 10.9 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was the Agent under this Credit
Agreement.
SECTION 11
MISCELLANEOUS
11.1 Notices.
Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (a) when
delivered, (b) when transmitted via telecopy (or other facsimile device) to the
number set out below, (c) the Business Day following the day on which the same
has been delivered prepaid to a reputable national overnight air courier
service, or (d) the third Business Day following the day on which the same is
sent by certified or registered mail, postage prepaid, in each case to the
respective parties at the address or telecopy numbers set forth on Schedule
11.1, or at such other address as such party may specify by written notice to
the other parties hereto.
11.2 Right of Set-Off
In addition to any rights now or hereafter granted under applicable law
or otherwise, and not by way of limitation of any such rights, upon the
occurrence of an Event of Default, each Lender is authorized at any time and
from time to time, without presentment, demand, protest or other notice of any
kind (all of which rights being hereby expressly waived), to set-off and to
appropriate and apply any and all deposits (general or special) and any other
indebtedness at any time held or owing by such Lender (including, without
limitation, branches, agencies or Affiliates of such Lender wherever located) to
or for the credit or the account of any Credit Party against obligations and
liabilities of such Credit Party to the Lenders hereunder, under the Notes, the
other Credit Documents or otherwise, irrespective of whether such Lender shall
have made any demand hereunder and although such obligations, liabilities or
claims, or any of them, may be contingent or unmatured, and any such set-off
shall be deemed to have been made immediately upon
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the occurrence of an Event of Default even though such charge is made or entered
on the books of such Lender subsequent thereto. Any Person purchasing a
participation in the Loans and Commitments hereunder pursuant to Section 11.3(c)
or 3.8 may exercise all rights of set-off with respect to its participation
interest as fully as if such Person were a Lender hereunder.
11.3 Benefit of Agreement.
(a) Generally. This Credit Agreement shall be binding upon and
inure to the benefit of and be enforceable by the respective successors
and assigns of the parties hereto; provided that none of the Credit
Parties may assign and transfer any of its interests without the prior
written consent of the Lenders; and provided further that the rights of
each Lender to transfer, assign or grant participations in its rights
and/or obligations hereunder shall be limited as set forth below in
subsections (b) and (c) of this Section 11.3. Notwithstanding the above
(including anything set forth in subsections (b) and (c) of this
Section 11.3), nothing herein shall restrict, prevent or prohibit any
Lender from (A) pledging its Loans hereunder to a Federal Reserve Bank
in support of borrowings made by such Lender from such Federal Reserve
Bank, or (B) granting assignments or participations in such Lender's
Loans and/or Commitments hereunder to its parent company and/or to any
Affiliate of such Lender.
(b) Assignments. In addition to the assignments permitted by
Section 11.3(a), each Lender may assign all or a portion of its rights
and obligations hereunder, pursuant to an assignment agreement
substantially in the form of Exhibit 11.3, to (i) any Lender or any
Affiliate or Subsidiary of a Lender, or (ii) any other commercial bank,
financial institution or "accredited investor" (as defined in
Regulation D of the Securities and Exchange Commission) reasonably
acceptable to the Agent and, so long as no Default or Event of Default
has occurred and is continuing, the Borrower; provided that (i) any
such assignment shall be in a minimum aggregate amount of $5,000,000
(or, if less, the remaining amount of the Commitment being assigned by
such Lender) of the Commitments and in integral multiples of $1,000,000
above such amount and (ii) each such assignment shall be of a constant,
not varying, percentage of all of the assigning Lender's rights and
obligations under the Credit Agreement. Any assignment hereunder shall
be effective upon delivery to the Agent of a duly executed assignment
agreement together with a transfer fee of $3,500 payable to the Agent
for its own account from and after the later of (i) the effective date
specified in the applicable assignment agreement and (ii) the date of
recording of such assignment in the Register pursuant to the terms of
Subsection (d) below. The assigning Lender will give prompt notice to
the Agent and the Borrower of any such assignment. Upon the
effectiveness of any such assignment (and after notice to, and (to the
extent required pursuant to the terms hereof), with the consent of, the
Borrower as provided herein), the assignee shall become a "Lender" for
all purposes of this Credit Agreement and the other Credit Documents
and, to the extent of such assignment, the assigning Lender shall be
relieved of its obligations hereunder to the extent of the Loans and
Commitment components being assigned. The Borrower agrees that upon
notice of any such assignment and surrender of the appropriate Note or
Notes, it will promptly provide to the assigning Lender and to the
assignee separate promissory notes in the amount of their respective
interests substantially in the form of the original Note or Notes (but
with notation thereon that it is given in substitution for and
replacement of the original Note or Notes or any replacement notes
thereof). Notwithstanding the foregoing, the Agent agrees that it shall
maintain a Commitment of at least $10,000,000 for its own account so
long as it is the Agent.
By executing and delivering an assignment agreement in
accordance with this Section 11.3(b), the assigning Lender thereunder
and the assignee thereunder shall be deemed to confirm to and agree
with each other and the other parties hereto as follows: (i) such
assigning Lender warrants that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse
claim; (ii) except as set forth in clause (i) above, such assigning
Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Credit Agreement,
any of the other Credit Documents or any other instrument or document
furnished pursuant hereto or thereto, or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this
Credit Agreement, any of the other Credit Documents or any other
instrument or document furnished pursuant hereto or thereto or the
financial condition of any Credit Party or the performance or
observance by any Credit Party of any of its obligations under this
Credit Agreement, any of the other Credit Documents or any other
62
instrument or document furnished pursuant hereto or thereto; (iii) such
assignee represents and warrants that it is legally authorized to enter
into such assignment agreement; (iv) such assignee confirms that it has
received a copy of this Credit Agreement, the other Credit Documents
and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into such
assignment agreement; (v) such assignee will independently and without
reliance upon the Agent, such assigning Lender or any other Lender, and
based on such documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in taking or not
taking action under this Credit Agreement and the other Credit
Documents; (vi) such assignee appoints and authorizes the Agent to take
such action on its behalf and to exercise such powers under this Credit
Agreement or any other Credit Document as are delegated to the Agent by
the terms hereof or thereof, together with such powers as are
reasonably incidental thereto; and (vii) such assignee agrees that it
will perform in accordance with their terms all the obligations which
by the terms of this Credit Agreement and the other Credit Documents
are required to be performed by it as a Lender.
The Agent hereby agrees that it shall notify each of the
Lenders of any assignment hereunder.
(c) Participations. Each Lender may sell, transfer, grant or
assign participations in all or any part of such Lender's interests and
obligations hereunder; provided that (i) such selling Lender shall
remain a "Lender" for all purposes under this Credit Agreement (such
selling Lender's obligations under the Credit Documents remaining
unchanged) and the participant shall not constitute a Lender hereunder,
(ii) no such participant shall have, or be granted, rights to approve
any amendment or waiver relating to this Credit Agreement or the other
Credit Documents except to the extent any such amendment or waiver
would (A) reduce the principal of or rate of interest on or fees in
respect of any Loans in which the participant is participating or
increase any Commitments with respect thereto, (B) postpone the date
fixed for any payment of principal (including the extension of the
final maturity of any Loan or the date of any mandatory prepayment),
interest or fees in which the participant is participating, or (C)
release all or substantially all of the collateral or guaranties
(except as expressly provided in the Credit Documents) supporting any
of the Loans or Commitments in which the participant is participating,
(iii) sub-participations by the participant (except to an Affiliate,
parent company or Affiliate of a parent company of the participant)
shall be prohibited and (iv) any such participations shall be in a
minimum aggregate amount of $5,000,000 of the Commitments and in
integral multiples of $1,000,000 in excess thereof. In the case of any
such participation, the participant shall not have any rights under
this Credit Agreement or the other Credit Documents (the participant's
rights against the selling Lender in respect of such participation to
be those set forth in the participation agreement with such Lender
creating such participation) and all amounts payable by the Borrower
hereunder shall be determined as if such Lender had not sold such
participation; provided, however, that such participant shall be
entitled to receive additional amounts under Sections 3.9, 3.12, 3.13
and 3.14 to the same extent that the Lender from which such participant
acquired its participation would be entitled to the benefit of such
cost protection provisions.
(d) Maintenance of Register. The Agent shall maintain at one
of its offices in Charlotte, North Carolina a copy of each Lender
assignment agreement delivered to it in accordance with the terms of
subsection (b) above and a register for the recordation of the identity
of the principal amount and type of each Loan outstanding hereunder,
the names, addresses and the Commitments of the Lenders pursuant to the
terms hereof from time to time (the "Register"). The Agent will make
reasonable efforts to maintain the accuracy of the Register and to
promptly update the Register from time to time, as necessary. The
entries in the Register shall be conclusive in the absence of manifest
error and the Borrower, the Agent and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as
a Lender hereunder for all purposes of this Credit Agreement. The
Register shall be available for inspection by the Borrower and each
Lender, at any reasonable time and from time to time upon reasonable
prior notice.
11.4 No Waiver; Remedies Cumulative.
No failure or delay on the part of the Agent or any Lender in
exercising any right, power or privilege hereunder or under any other Credit
Document and no course of dealing between the Borrower or any Credit Party and
the Agent or any Lender shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, power or privilege
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hereunder or under any other Credit Document preclude any other or further
exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. The rights and remedies provided herein are cumulative
and not exclusive of any rights or remedies which the Agent or any Lender would
otherwise have. No notice to or demand on any Credit Party in any case shall
entitle any Credit Party to any other or further notice or demand in similar or
other circumstances or constitute a waiver of the rights of the Agent or the
Lenders to any other or further action in any circumstances without notice or
demand.
11.5 Payment of Expenses; Indemnification.
The Credit Parties agree to: (a) pay all reasonable out-of-pocket costs
and expenses of (i) the Agent, the Lenders involved in the initial syndication
of the Commitments and NationsBanc Capital Markets, Inc. ("NCMI") in connection
with (A) the negotiation, preparation, execution and delivery, syndication and
administration of this Credit Agreement and the other Credit Documents and the
documents and instruments referred to therein (including, without limitation,
the reasonable fees and expenses of Xxxxx & Xxx Xxxxx, PLLC, special counsel to
the Agent and the fees and expenses of counsel for the Agent in connection with
collateral issues), and (B) any amendment, waiver or consent relating hereto and
thereto including, but not limited to, any such amendments, waivers or consents
resulting from or related to any work-out, renegotiation or restructure relating
to the performance by the Credit Parties under this Credit Agreement, (ii) the
Agent and the Lenders in connection with (A) enforcement of the Credit Documents
and the documents and instruments referred to therein, including, without
limitation, in connection with any such enforcement, the reasonable fees and
disbursements of counsel for the Agent and each of the Lenders, and (B) any
bankruptcy or insolvency proceeding of a Credit Party of any of its
Subsidiaries, and (iii) the Agent in connection with the making of any Loans for
the financing of New Properties, including, without limitation, travel costs and
costs to third parties (e.g., for appraisals, environmental reports, engineering
reports, etc.), and (b) indemnify the Agent, NCMI and each Lender, its officers,
directors, employees, representatives and Agent from and hold each of them
harmless against any and all losses, liabilities, claims, damages or expenses
incurred by any of them as a result of, or arising out of, or in any way related
to, or by reason of, any investigation, litigation or other proceeding (whether
or not the Agent, NCMI or Lender is a party thereto) related to (i) the entering
into and/or performance of any Credit Document or the use of proceeds of any
Loans (including other extensions of credit) hereunder or the consummation of
any other transactions contemplated in any Credit Document, including, without
limitation, the reasonable fees and disbursements of counsel incurred in
connection with any such investigation, litigation or other proceeding (but
excluding any such losses, liabilities, claims, damages or expenses to the
extent incurred by reason of gross negligence or willful misconduct on the part
of the Person to be indemnified), (ii) any Environmental Claim and (iii) any
claims for Non-Excluded Taxes.
11.6 Amendments, Waivers and Consents.
Neither this Credit Agreement nor any other Credit Document nor any of
the terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is in
writing and signed by the Required Lenders and the then Credit Parties; provided
that no such amendment, change, waiver, discharge or termination shall without
the consent of each Lender affected thereby:
(a) extend the final maturity of any Loan or the time of
payment of any reimbursement obligation or any portion thereof arising
from drawings under Letters of Credit or extend or waive any scheduled
amortization payment of any Loan or any portion thereof;
(b) reduce the rate, waive or extend the time of payment of
interest (other than as a result of waiving the applicability of any
post-default increase in interest rates) thereon or fees hereunder;
(c) reduce or waive the principal amount of any Loan or of any
reimbursement obligation, or any portion thereof, arising from drawings
under Letters of Credit;
(d) increase the Commitment of the Lenders over the amount
thereof in effect (it being understood and agreed that a waiver of any
Default or Event of Default or a waiver of any mandatory reduction in
the Commitments shall not constitute a change in the terms of any
Commitment of any Lender);
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(e) release all or substantially all of the Collateral
securing the Credit Party Obligations hereunder (provided that the
Agent may, without consent from any other Lender, release any
Collateral that is sold or transferred by a Credit Party in conformance
with Section 8.5);
(f) release the Borrower or any other Credit Party from its or
their obligations under the Credit Documents;
(g) amend, modify or waive any provision of this Section or
Section 3.4(a), 3.4(b), 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14, 4,
5, 9.1(a), 9.2, 9.3, 10, 11.2, 11.3 or 11.5;
(h) reduce any percentage specified in, or otherwise modify,
the definition of Required Lenders;
(i) consent to the assignment or transfer by the Borrower (or
another Credit Party) of any of its rights and obligations under (or in
respect of) the Credit Documents;
(j) no provision of Section 2.2 may be amended without the
consent of the Issuing Lender and no provision of Section 10 may be
amended without the consent of the Agent.
11.7 Counterparts.
This Credit Agreement may be executed in any number of counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall constitute one and the same instrument. It shall not be necessary in
making proof of this Credit Agreement to produce or account for more than one
such counterpart.
11.8 Headings.
The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Credit Agreement.
11.9 Defaulting Lender.
Each Lender understands and agrees that if such Lender is a Defaulting
Lender then notwithstanding the provisions of Section 11.6 it shall not be
entitled to vote on any matter requiring the consent of the Required Lenders or
to object to any matter requiring the consent of all the Lenders; provided,
however, that all other benefits and obligations under the Credit Documents
shall apply to such Defaulting Lender.
11.10 Survival of Indemnification and Representations and Warranties.
All indemnities set forth herein and all representations and warranties
made herein shall survive the execution and delivery of this Credit Agreement,
the making of the Loans, the issuance of the Letters of Credit and the repayment
of the Loans, the LOC Obligations and other obligations and the termination of
the Commitments hereunder.
11.11 Governing Law; Jurisdiction.
(a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS (OTHER THAN
THE MORTGAGES) AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
AND THEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA. Any legal action or
proceeding with respect to this Agreement or any other Credit Document
may be brought in the courts of the State of Florida, or of the United
States located in the State of Florida and, by execution and delivery
of this Credit Agreement, each Credit Party hereby irrevocably accepts
for itself and in respect of its property, generally and
unconditionally, the jurisdiction of such courts. Each Credit Party
further irrevocably consents to the service of process out of any of
the aforementioned courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage
prepaid, to it at the address for notices pursuant to Section 11.1,
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such service to become effective 15 days after such mailing. Nothing
herein shall affect the right of a Lender to serve process in any other
manner permitted by law or to commence legal proceedings or to
otherwise proceed against a Credit Party in any other jurisdiction.
Each Credit Party agrees that a final judgment in any action or
proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided
by law; provided that nothing in this Section 11.11(a) is intended to
impair a Credit Party's right under applicable law to appeal or seek a
stay of any judgment.
(b) Each Credit Party hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with
this Credit Agreement or any other Credit Document brought in the
courts referred to in subsection (a) hereof and hereby further
irrevocably waives and agrees not to plead or claim in any such court
that any such action or proceeding brought in any such court has been
brought in an inconvenient forum.
11.12 Waiver of Jury Trial.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF
OR RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
11.13 Time.
All references to time herein shall be references to Eastern Standard
Time or Eastern Daylight Time, as the case may be, unless specified otherwise.
11.14 Severability.
If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
11.15 Entirety.
(a) This Credit Agreement together with the other Credit
Documents represent the entire agreement of the parties hereto and
thereto, and supersede all prior agreements and understandings, oral or
written, if any, including any commitment letters or correspondence
relating to the Credit Documents or the transactions contemplated
herein and therein.
(b) With respect to the Mortgage governed by Kansas law, this
Credit Agreement together with the other Credit Documents are the final
expression of the agreement of the parties and represent the entire
agreement of the parties hereto and thereto and supersede any
contemporaneous oral agreement and all prior agreements and
understandings, oral or written, if any, including any commitment
letters or correspondence relating to the Credit Documents or the
transactions related herein and therein; provided, however, the parties
hereto agree that (i) the Credit Documents may be amended or modified
subsequent to the date hereof and (ii) other additional Credit
Documents may be entered into from time to time.
11.16 Binding Effect.
This Credit Agreement shall become effective at such time when all of
the conditions set forth in Section 5.1 have been satisfied or waived by the
Lenders and it shall have been executed by the Borrower, the Guarantors and the
Agent, and the Agent shall have received copies hereof (telefaxed or otherwise)
which, when taken together, bear the signatures of each Lender, and thereafter
this Credit Agreement shall be binding upon and inure to the benefit of the
Borrower, the Guarantors, the Agent and each Lender and their respective
successors and assigns.
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11.17 Confidentiality.
Each Lender agrees that it will use its reasonable best efforts to keep
confidential and to cause any representative designated under Section 7.11 to
keep confidential any non-public information from time to time supplied to it
under any Credit Document; provided, however, that nothing herein shall prevent
the disclosure of any such information to (a) the extent a Lender in good faith
believes such disclosure is required by Requirement of Law, (b) counsel for a
Lender or to its accountants, (c) bank examiners or auditors or comparable
Persons, (d) any affiliate of a Lender, (e) any other Lender, or any assignee,
transferee or participant, or any potential assignee, transferee or participant,
of all or any portion of any Lender's rights under this Credit Agreement who is
notified of the confidential nature of the information or (f) any other Person
in connection with any litigation to which any one or more of the Lenders is a
party; and provided further that no Lender shall have any obligation under this
Section 11.17 to the extent any such information becomes available on a
non-confidential basis from a source other than a Credit Party or that any
information becomes publicly available other than by a breach of this Section
11.17.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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Each of the parties hereto has caused a counterpart of this Credit
Agreement to be duly executed and delivered as of the date first above written.
BORROWER:
INTEGRATED LIVING COMMUNITIES
HOLDING, INC., a Delaware corporation
By:__________________________________
Name:________________________________
Title:_______________________________
GUARANTORS: INTEGRATED LIVING COMMUNITIES,
INC., a Delaware corporation
By:__________________________________
Name:________________________________
Title:_______________________________
INTEGRATED LIVING COMMUNITIES OF
VIRGINIA BEACH, INC., a Delaware corporation
By:__________________________________
Name:________________________________
Title:_______________________________
INTEGRATED LIVING COMMUNITIES OF
REDGATE, INC., a Delaware corporation
By:__________________________________
Name:________________________________
Title:_______________________________
(Signatures Continue)
68
Signature Page to Integrated
Living Communities Credit Agreement
INTEGRATED LIVING COMMUNITIES OF
PORTSMOUTH, INC., a Delaware corporation
By:__________________________________
Name:________________________________
Title:_______________________________
INTEGRATED LIVING COMMUNITIES OF
GLOUCESTER, INC., a Delaware corporation
By:__________________________________
Name:________________________________
Title:_______________________________
INTEGRATED LIVING COMMUNITIES OF
SARASOTA, INC., a Florida corporation
By:__________________________________
Name:________________________________
Title:_______________________________
INTEGRATED MANAGEMENT-
XXXXXXXXXX POINTE, INC.,
a Delaware corporation
By:__________________________________
Name:________________________________
Title:_______________________________
(Signatures Continue)
69
Signature Page to Integrated
Living Communities Credit Agreement
INTEGRATED LIVING COMMUNITIES OF
WEST PALM BEACH, INC.,
a Delaware corporation
By:__________________________________
Name:________________________________
Title:_______________________________
INTEGRATED LIVING COMMUNITIES AT
TERRACE GARDENS, INC.,
a Delaware corporation
By:__________________________________
Name:________________________________
Title:_______________________________
(Signatures Continue)
70
Signature Page to Integrated
Living Communities Credit Agreement
LENDERS: NATIONSBANK , N.A. (SOUTH),
individually in its capacity as a Lender and
in its capacity as Agent
By:__________________________________
Name:________________________________
Title:_______________________________
SOUTHTRUST BANK OF ALABAMA,
NATIONAL ASSOCIATION
By:__________________________________
Name:________________________________
Title:_______________________________
SUNTRUST BANK, CENTRAL FLORIDA, N.A.
By:__________________________________
Name:________________________________
Title:_______________________________
00
XXXXX XX XXXXXXX
XXXXXX XX XXXXXX
Xx the ___ day of April, 1997 personally appeared ___________________,
as the _________ PRESIDENT of SunTrust Bank, Central Florida, National
Association, and before me executed the attached CREDIT AGREEMENT dated as of
April __, 1997 between Integrated Living Communities Holding, Inc. as Borrower;
Integrated Living Communities, Inc. as Parent and Certain Subsidiaries of the
Borrower and Parent; Nationsbank, N.A. (South) as Agent and the lenders
identified therein (including SunTrust Bank, Central Florida, N.A. as Lender).
IN WITNESS WHEREOF, I have hereunto set my hand and official seal, in
the state and county aforesaid.
____________________________________________
Signature of Notary Public, State of________
(Print, Type of Stamp Commissioned Name of
Notary Public) Personally known ________; OR
Produced identification Type of
identification produced:____________________
____________________________________________
(Notary Seal)
