EXHIBIT 4.11
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U.S.$200,000,000
CREDIT AGREEMENT
dated as of
August 15, 1996
Among
ATRIA COMMUNITIES, INC.
as Borrower
THE LENDING INSTITUTIONS NAMED THEREIN
as Lenders
PNC BANK, NATIONAL ASSOCIATION
as Administrative Agent
PNC BANK, KENTUCKY, INC.
as Managing Agent
NATIONAL CITY BANK OF KENTUCKY
as Documentation Agent
PNC BANK, NATIONAL ASSOCIATION
NATIONAL CITY BANK OF KENTUCKY
THE TORONTO-DOMINION BANK, New York Agency
as Syndication Agents
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TABLE OF CONTENTS
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SECTION 1. AMOUNT AND TERMS OF CREDIT.................................................................... 1
1.1. Commitments................................................................................... 1
1.2. Minimum Borrowing Amounts, etc................................................................ 3
1.3. Notice of Borrowing........................................................................... 3
1.4. Disbursement of Funds......................................................................... 4
1.5. Notes......................................................................................... 4
1.6. Conversions................................................................................... 4
1.7. Pro Rata Borrowings........................................................................... 5
1.8. Interest...................................................................................... 5
1.9. Interest Periods.............................................................................. 7
1.10. Increased Costs, Illegality, etc.............................................................. 8
1.11. Compensation.................................................................................. 9
1.12. Change of Lending Office...................................................................... 10
SECTION 2. LETTERS OF CREDIT............................................................................. 10
2.1. Letters of Credit............................................................................. 10
2.2. Letter of Credit Requests: Notices of Issuance................................................ 10
2.3. Agreement to Repay Letter of Credit Drawings.................................................. 11
2.4. Letter of Credit Participations............................................................... 11
2.5. Increased Costs............................................................................... 13
2.6. Obligations Absolute.......................................................................... 13
2.7. Guaranty of Subsidiary Letter of Credit Obligations........................................... 14
SECTION 3. FEES; COMMITMENTS............................................................................. 16
3.1. Fees.......................................................................................... 16
3.2. Voluntary Reduction of Commitments............................................................ 16
3.3. Mandatory Adjustments of Commitments, etc..................................................... 16
3.4. Extension of Revolving Loan Maturity Date..................................................... 17
SECTION 4. PAYMENTS...................................................................................... 17
4.1. Voluntary Prepayments......................................................................... 17
4.2. Mandatory Prepayments......................................................................... 17
4.3. Method and Place of Payment................................................................... 18
4.4. Net Payments.................................................................................. 19
SECTION 5. CONDITIONS PRECEDENT.......................................................................... 20
5.1. Conditions Precedent at Closing Date.......................................................... 20
5.2. Conditions Precedent to All Credit Events..................................................... 26
SECTION 6. REPRESENTATIONS AND WARRANTIES................................................................ 26
6.1. Corporate Status, etc......................................................................... 26
6.2. Corporate Power and Authority, etc............................................................ 27
6.3. No Violation.................................................................................. 27
6.4. Litigation.................................................................................... 27
6.5. Use of Proceeds; Margin Regulations........................................................... 27
6.6. Governmental Approvals........................................................................ 27
6.7. True and Complete Disclosure.................................................................. 28
6.8. Financial Condition: Financial Statements..................................................... 28
6.9. Security Interests............................................................................ 29
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6.10. Representations and Warranties in Transaction Documents....................................... 29
6.11. Tax Returns and Payments...................................................................... 29
6.12. Compliance with ERISA......................................................................... 29
6.13. Subsidiaries.................................................................................. 30
6.14. Intellectual Property, etc.................................................................... 30
6.15. Environmental Matters......................................................................... 30
6.16. Properties.................................................................................... 31
6.17. Labor Relations: Collective Bargaining Agreements............................................. 31
6.18. Indebtedness.................................................................................. 31
6.19. Transaction................................................................................... 31
6.20. Certain Material Agreements................................................................... 31
6.21. Third-Party Rights............................................................................ 32
SECTION 7. AFFIRMATIVE COVENANTS......................................................................... 32
7.1. Reporting Requirements........................................................................ 32
7.2. Books, Records and Inspections................................................................ 34
7.3. Insurance..................................................................................... 34
7.4. Payment of Taxes.............................................................................. 35
7.5. Corporate Franchises.......................................................................... 35
7.6. Compliance with Statutes, etc................................................................. 35
7.7. Good Repair................................................................................... 35
7.8. Compliance with Environmental Laws............................................................ 35
7.9. Change of Fiscal Years, Fiscal Quarters....................................................... 36
7.10. Additional Security; Further Assurances....................................................... 36
7.11. Corporate Separateness........................................................................ 38
7.12. ERISA......................................................................................... 38
7.13. Senior Debt................................................................................... 39
SECTION 8. NEGATIVE COVENANTS............................................................................ 39
8.1. Changes in Business........................................................................... 39
8.2. Consolidation, Merger or Sale of Assets, etc.................................................. 39
8.3. Liens......................................................................................... 41
8.4. Indebtedness.................................................................................. 43
8.5. Advances, Investments and Loans............................................................... 44
8.6. Certain Leases................................................................................ 45
8.7. Prepayments and Refinancings of IRB Debt, Modifications of Agreements, etc.................... 46
8.8. Dividends, etc................................................................................ 46
8.9. Transactions with Affiliates.................................................................. 47
8.10. Consolidated Net Worth........................................................................ 47
8.11. Capitalization Ratio.......................................................................... 47
8.12. Leverage Ratio................................................................................ 47
8.13. Interest Coverage............................................................................. 48
8.14. Creation of Subsidiaries...................................................................... 48
8.15. Limitation on Certain Restrictions on Subsidiaries............................................ 48
8.16. Interest Rate Hedging......................................................................... 49
SECTION 9. EVENTS OF DEFAULT............................................................................. 49
9.1. Events of Default............................................................................. 49
9.2. Acceleration, etc............................................................................. 52
9.3. Application of Liquidation Proceeds........................................................... 52
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SECTION 10. DEFINITIONS................................................................................... 54
SECTION 11. THE ADMINISTRATIVE AGENT AND THE MANAGING AGENT............................................... 72
11.1. Appointment................................................................................... 72
11.2. Delegation of Duties.......................................................................... 72
11.3. Exculpatory Provisions........................................................................ 73
11.4. Reliance by Agents............................................................................ 73
11.5. Notice of Default............................................................................. 73
11.6. Non-Reliance.................................................................................. 74
11.7. Indemnification............................................................................... 74
11.8. The Agents in Their Individual Capacity....................................................... 74
11.9. Successor Agents.............................................................................. 75
11.10. Other Agents.................................................................................. 75
SECTION 12. MISCELLANEOUS..................................................................................75
12.1. Payment of Expenses etc....................................................................... 75
12.2. Right of Setoff............................................................................... 76
12.3. Notices....................................................................................... 76
12.4. Benefit of Agreement.......................................................................... 76
12.5. No Waiver: Remedies Cumulative................................................................ 78
12.6. Payments Pro Rata............................................................................. 78
12.7. Calculations: Computations.................................................................... 78
12.8. Governing Law; Submission to Jurisdiction; Venue; Waiver of Jury Trial........................ 79
12.9. Counterparts.................................................................................. 79
12.10. Effectiveness................................................................................. 79
12.11. Headings Descriptive.......................................................................... 80
12.12. Amendment or Waiver........................................................................... 80
12.13. Survival...................................................................................... 80
12.14. Domicile of Loans............................................................................. 80
12.15. Confidentiality............................................................................... 80
12.16. Lender Register............................................................................... 81
12.17. Limitations on Liability of the Letter of Credit Issuers...................................... 81
12.18. General Limitation of Liability............................................................... 81
12.19. No Duty....................................................................................... 81
12.20. Lenders and Agent Not Fiduciary to Credit Parties, etc........................................ 82
12.21. Survival of Representations and Warranties.................................................... 82
12.22. Limitation on Enforcement of Guaranties and Security Documents................................ 82
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ANNEX I - INFORMATION AS TO LENDERS
ANNEX II - INFORMATION AS TO SUBSIDIARIES
ANNEX III - DESCRIPTION OF REAL PROPERTIES
ANNEX IV - DESCRIPTION OF EXISTING INDEBTEDNESS
ANNEX V - DESCRIPTION OF EXISTING LIENS
ANNEX VI - DESCRIPTION OF EXISTING ADVANCES, LOANS AND INVESTMENTS
ANNEX VII - DESCRIPTION OF LETTERS OF CREDIT DEEMED ISSUED UNDER THE
CREDIT AGREEMENT
EXHIBIT A-1 - FORM OF NOTICE OF BORROWING
EXHIBIT A-2 - FORM OF LETTER OF CREDIT REQUEST
EXHIBIT B - FORM OF REVOLVING NOTE
EXHIBIT C-1 - FORM OF OPINION OF SPECIAL COUNSEL TO THE BORROWER
EXHIBIT C-2 - FORM OF OPINION OF GENERAL COUNSEL TO THE PARENT
EXHIBIT D - FORM OF OFFICER'S CERTIFICATE
EXHIBIT E - FORM OF PARENT GUARANTY
EXHIBIT F - FORM OF SUBSIDIARY GUARANTY
EXHIBIT G - FORM OF PLEDGE AGREEMENT
EXHIBIT H - FORM OF SECURITY AGREEMENT
EXHIBIT I - FORM OF ASSIGNMENT AGREEMENT
EXHIBIT J - FORM OF SOLVENCY CERTIFICATE
EXHIBIT K - FORM OF SECTION 4.4(b)(ii) CERTIFICATE
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CREDIT AGREEMENT, dated as of August 15, 1996, among the following:
(i) ATRIA COMMUNITIES, INC., a Delaware corporation (herein,
together with its successors and assigns, the "Borrower");
(ii) the lending institutions listed in Annex I hereto (each
a "Lender" and collectively, the "Lenders");
(iii) PNC BANK, NATIONAL ASSOCIATION, a national banking
association, as administrative agent (the "Administrative Agent");
(iv) PNC BANK, KENTUCKY, INC., a Kentucky banking
corporation, as managing agent (the "Managing Agent");
(v) NATIONAL CITY BANK of KENTUCKY, a national banking
association, as documentation agent (the "Documentation Agent"); and
(vi) PNC BANK, NATIONAL ASSOCIATION, a national banking
association, NATIONAL CITY BANK of KENTUCKY, a national banking
association, and THE TORONTO-DOMINION BANK, New York Agency, as
syndication agents (the "Syndication Agents"):
PRELIMINARY STATEMENTS:
(1) Unless otherwise defined herein, all capitalized terms used herein
and defined in section 10 are used herein as so defined.
(2) The Borrower has applied to the Lenders for credit facilities in
order to refinance certain indebtedness of the Borrower and in order to provide
working capital and funds for acquisitions and other lawful purposes.
(3) Subject to and upon the terms and conditions set forth herein, the
Lenders are willing to make available to the Borrower the credit facilities
provided for herein.
NOW, THEREFORE, it is agreed:
SECTION 1. AMOUNT AND TERMS OF CREDIT
1.1. Commitments. Subject to and upon the terms and
conditions herein set forth, each Lender severally agrees to make a loan or
loans (each a "Loan" and, collectively, the "Loans") to the Borrower, which
Loans shall be drawn and considered outstanding, to the extent such Lender has a
commitment hereunder, as set forth below:
(a) Loans may be made either as MPP Revolving Loans or DPP
Revolving Loans, as such terms are defined below. The term "Loans"
includes both MPP Revolving Loans and DPP Revolving Loans.
(b) Loans which are made with reference to the Mature
Property Pool (each an "MPP Revolving Loan" and, collectively, the
"MPP Revolving Loans"): (i) may be made at any time and from time to
time on and after the Closing Date and prior to the Revolving Loan
Maturity Date, provided that, after giving effect thereto, the sum of
the outstanding MPP Revolving Loans,
the Allocated MPP Letter of Credit Outstandings and the Allocated
Measured MPP Swap Credit Exposure do not exceed the MPP Revolving Loan
Sublimit, and provided, further, that, after giving effect thereto,
the sum of the outstanding Loans, the Letter of Credit Outstandings
and the Aggregate Measured Swap Credit Exposure do not exceed the
aggregate Commitments; (ii) except as hereinafter provided, may, at
the option of the Borrower, be incurred and maintained as, and/or
converted into, MPP Revolving Loans which are Base Rate Loans or
Eurodollar Loans, provided that all MPP Revolving Loans made as part
of the same Borrowing shall, unless otherwise specifically provided
herein, consist of MPP Revolving Loans of the same Type; (iii) may be
repaid and reborrowed in accordance with the provisions hereof; and
(iv) shall not for any Lender exceed the amount which remains after
subtracting from the Commitment of such Lender at such time the sum of
(A) the outstanding principal amount of all other Loans made by such
Lender, plus (B) the product at such time of (x) such Lender's
Percentage and (y) the sum of the Letter of Credit Outstandings and
the Aggregate Measured Swap Credit Exposure at such time.
(c) Loans which cannot be made as MPP Revolving Loans because
of the limitation contained in the first proviso to clause (i) of
section 1.1(b) above (each a "DPP Revolving Loan" and, collectively,
the "DPP Revolving Loans"): (i) may be made at any time and from time
to time on and after the Closing Date and prior to the DPP Loan
Maturity Date, provided that, after giving effect thereto, the sum of
the outstanding DPP Revolving Loans, the Allocated DPP Letter of
Credit Outstandings and the Allocated Measured DPP Swap Credit
Exposure do not exceed the DPP Revolving Loan Sublimit, and provided,
further, that, after giving effect thereto, the sum of the outstanding
Loans, the Letter of Credit Outstandings and the Aggregate Measured
Swap Credit Exposure do not exceed the aggregate Commitments; (ii)
except as hereinafter provided, may, at the option of the Borrower, be
incurred and maintained as, and/or converted into, DPP Revolving Loans
which are Base Rate Loans or Eurodollar Loans, provided that all DPP
Revolving Loans made as part of the same Borrowing shall, unless
otherwise specifically provided herein, consist of DPP Revolving Loans
of the same Type; (iii) may be repaid and reborrowed in accordance
with the provisions hereof; and (iv) shall not for any Lender exceed
the amount which remains after subtracting from the Commitment of such
Lender at such time the sum of (A) the outstanding principal amount of
all other Loans made by such Lender, plus (B) the product at such time
of (x) such Lender's Percentage and (y) the sum of the Letter of
Credit Outstandings and the Aggregate Measured Swap Credit Exposure at
such time.
(d) No DPP Revolving Loans shall be made at any time when the
Borrower could obtain an MPP Revolving Loan in any amount.
(e) In the event that, at any time while any DPP Revolving
Loans are outstanding, the Borrower would, by reason of any change in
the Mature Property Pool or otherwise, be entitled to make MPP
Revolving Loans, the Borrower may request that the Managing Agent
determine, or the Managing Agent on its own initiative may determine,
that a portion of the outstanding principal amount of DPP Revolving
Loans be
reclassified hereunder as MPP Revolving Loans, provided that the
principal amount so reclassified shall not exceed the principal amount
of the MPP Revolving Loans that the Borrower could obtain at such
time. The Managing Agent shall promptly notify the Borrower and the
Lenders of any such determination by the Managing Agent that any
principal amount of DPP Revolving Loans is being reclassified as MPP
Revolving Loans, specifying the principal amount so reclassified, the
particular Borrowing relating thereto and the effective date of such
reclassification (which shall not be earlier than the date of such
notice).
(f) The Borrower shall from time to time upon request from
the Managing Agent or the Administrative Agent advise the Managing
Agent and the Administrative Agent in writing of the amount of the
Allocated MPP Letter of Credit Outstandings, the amount of the
Allocated DPP Letter of Credit Outstandings, the amount of the
Allocated Measured MPP Swap Credit Exposure, the amount of the
Allocated Measured DPP Swap Credit Exposure, the amount of the MPP
Revolving Loan Sublimit, the amount of the DPP Revolving Loan
Sublimit, and shall identify which Loans are classified as MPP
Revolving Loans and which are classified as DPP Revolving
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Loans, providing such financial and other information and computations
as may be necessary to support the computation of any such amounts or
the classification of any such Loans. In so advising the Managing
Agent and the Administrative Agent as to the amount of the Allocated
Measured MPP Swap Credit Exposure and the Allocated Measured DPP Swap
Credit Exposure, the Borrower shall be entitled to rely upon such
financial methodology for determining the amount thereof as shall have
been furnished by the Managing Agent. Any such amounts or the
classification of any such Loans so advised by the Borrower will be
effective for all purposes hereunder and under the other Credit
Documents until further written advice from the Borrower is delivered
to the Managing Agent and the Administrative Agent with respect
thereto which changes any such amounts or classifications; provided,
that in the event that the Managing Agent (acting on instructions from
the Required Lenders) at any time disagrees with the Borrower's advice
as to any such amount or the classification of any such Loans, such
amount or the classification of such Loans shall instead be determined
by the Managing Agent, upon the basis of financial statements,
information and certifications provided by the Borrower, and such
other evidence as the Managing Agent considers appropriate, and in
such event the Managing Agent shall from time to time, or promptly
upon request, provide notice of such determinations to the Borrower,
the Administrative Agent and the Lenders. Any such determination by
the Managing Agent pursuant to this section 1.1 shall be conclusive
and binding, absent manifest error, and the Managing Agent shall incur
no liability hereunder or under any other Credit Document or in
connection herewith or therewith in the event of any error or other
mistake in any such determination in the absence of bad faith on the
part of the Managing Agent.
1.2. Minimum Borrowing Amounts, etc.1.2.Minimum Borrowing Amounts,
etc. The aggregate principal amount of each Borrowing shall not be less than the
Minimum Borrowing Amount for such Borrowing. More than one Borrowing may be
incurred on any day, provided that at no time shall there be outstanding more
than nine Borrowings of Eurodollar Loans.
1.3. Notice of Borrowing. (a) Whenever the Borrower desires to incur
Loans, it shall give the Administrative Agent at its Notice Office, (A) prior to
1:00 P.M. (local time at the Notice Office), at least three Business Days' prior
written notice (or telephonic notice promptly confirmed in writing) of each
Borrowing of Eurodollar Loans, and (B) prior to 12:00 noon (local time at the
Notice Office) on the proposed date thereof written notice (or telephonic notice
promptly confirmed in writing) of each Borrowing of Base Rate Loans to be made
hereunder. Each such notice (each such notice, a "Notice of Borrowing") (or the
written confirmation) shall be in the form of Exhibit A-1 and shall be
irrevocable and shall specify: (i) whether the respective Borrowing consists of
MPP Revolving Loans or DPP Revolving Loans; (ii) the aggregate principal amount
of the Loans to be made pursuant to such Borrowing; (iii) the date of Borrowing
(which shall be a Business Day); and (iv) whether the respective Borrowing shall
consist of Base Rate Loans or Eurodollar Loans and, if Eurodollar Loans, the
Interest Period to be initially applicable thereto. The Administrative Agent
shall promptly give each Lender written notice (or telephonic notice promptly
confirmed in writing) of each proposed Borrowing, of such Lender's proportionate
share thereof and of the other matters covered by the Notice of Borrowing.
(b) Without in any way limiting the obligation of the Borrower to
confirm in writing any telephonic notice permitted to be given hereunder, the
Administrative Agent may act prior to receipt of written confirmation without
liability upon the basis of such telephonic notice believed by the
Administrative Agent in good faith to be from an Authorized Officer of the
Borrower entitled to give telephonic notices under this Agreement on behalf of
the Borrower. In each such case, the Administrative Agent's record of the terms
of such telephonic notice shall be conclusive absent manifest error.
1.4. Disbursement of Funds. (a) No later than 1:00 P.M. (local time
at the Payment Office) on the date specified in each Notice of Borrowing
relating to Eurodollar Loans, and no later than 3:00 P.M. (local time at the
Payment Office) on the date specified in each Notice of Borrowing relating to
Base Rate Loans, each Lender will make available its pro rata share, if any, of
each Borrowing requested to be made on such date in the manner provided below.
All amounts shall be made available to the Administrative Agent in U.S. dollars
and immediately available funds at the Payment Office and the Administrative
Agent promptly will make available to the Borrower by depositing to its account
at the Payment Office the aggregate of the amounts so made available in the type
of funds received. Unless the Administrative Agent shall have been notified by
any Lender prior to the date of Borrowing
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that such Lender does not intend to make available to the Administrative Agent
its portion of the Borrowing or Borrowings to be made on such date, the
Administrative Agent may assume that such Lender has made such amount available
to the Administrative Agent on such date of Borrowing, and the Administrative
Agent, in reliance upon such assumption, may (in its sole discretion and 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 Administrative
Agent by such Lender and the Administrative Agent has made available same to the
Borrower, the Administrative Agent shall be entitled to recover such
corresponding amount from such Lender. If such Lender does not pay such
corresponding amount forthwith upon the Administrative Agent's demand therefor,
the Administrative Agent shall promptly notify the Borrower, and the Borrower
shall immediately pay such corresponding amount to the Administrative Agent. The
Administrative Agent shall also be entitled to recover from such 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
Administrative Agent to the Borrower to the date such corresponding amount is
recovered by the Administrative Agent, at a rate per annum equal to (x) if paid
by such Lender, the overnight Federal Funds Effective Rate or (y) if paid by the
Borrower, the then applicable rate of interest, calculated in accordance with
section 1.8, for the respective Loans.
(b) Nothing herein shall be deemed to relieve any Lender from its
obligation to fulfill its commitments hereunder or to prejudice any rights which
the Borrower may have against any Lender as a result of any default by such
Lender hereunder.
1.5. Notes. (a) The Borrower's obligation to pay the principal of,
and interest on, the Loans made to it by each Lender shall be evidenced by a
promissory note substantially in the form of Exhibit B with blanks appropriately
completed in conformity herewith (each a "Note" and, collectively, the "Notes").
(b) The Note issued to a Lender shall: (i) be executed by the
Borrower; (ii) be payable to the order of such Lender and be dated on or prior
to the Closing Date; (iii) be in a stated principal amount equal to the
Commitment of such Lender and be payable in the principal amount of Loans
evidenced thereby; (iv) mature, in the case of MPP Revolving Loans, on the
Revolving Loan Maturity Date, and in the case of DPP Revolving Loans, on the DPP
Loan Maturity Date; (v) bear interest as provided in the appropriate clause of
section 1.8 in respect of the Base Rate Loans and Eurodollar Loans, as the case
may be, evidenced thereby; (vi) be subject to mandatory prepayment as provided
in section 4.2: and (vii) be entitled to the benefits of this Agreement and the
other Credit Documents.
(c) Each Lender will note on its internal records the amount of each
Loan made by it and each payment in respect thereof and will, prior to any
transfer of its Note, endorse on the reverse side thereof the outstanding
principal amount of Loans evidenced thereby. Failure to make any such notation
or any error in any such notation shall not affect the Borrower's obligations in
respect of such Loans.
1.6. Conversions. The Borrower shall have the option to convert on
any Business Day all or a portion at least equal to the applicable Minimum
Borrowing Amount of the outstanding principal amount of the Loans into a
Borrowing or Borrowings of the other Type of Loan, provided that: (i) no
conversion of MPP Revolving Loans into DPP Revolving Loans, or vice versa, may
be made; (ii) no partial conversion of a Borrowing of Eurodollar Loans shall
reduce the outstanding principal amount of the Eurodollar Loans made pursuant to
such Borrowing to less than the Minimum Borrowing Amount applicable thereto;
(iii) Base Rate Loans may only be converted into Eurodollar Loans if no Default
under section 9.1(a) or Event of Default is in existence on the date of the
conversion unless the Required Lenders otherwise agree; and (iv) Borrowings of
Eurodollar Loans resulting from this section 1.6 shall be limited in numbers as
provided in section 1.2. Each such conversion shall be effected by the Borrower
giving the Administrative Agent at its Notice Office, prior to 1:00 P.M. (local
time at the Notice Office), at least three Business Days' (or prior to 12:00
noon (local time at the Notice Office) same Business Day's, in the case of a
conversion into Base Rate Loans) prior written notice (or telephonic notice
promptly confirmed in writing) (each a "Notice of Conversion") specifying the
Loans to be so converted, the Type of Loans to be converted into and, if to be
converted into a Borrowing of Eurodollar Loans, the Interest Period to be
initially applicable thereto. The Administrative Agent shall give each Lender
prompt notice of any such proposed conversion affecting any of its Loans.
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1.7. Pro Rata Borrowings. All Borrowings of Loans shall be made by
the Lenders pro rata on the basis of their Commitments. It is understood that no
Lender shall be responsible for any default by any other Lender in its
obligation to make Loans hereunder and that each Lender shall be obligated to
make the Loans provided to be made by it hereunder, regardless of the failure of
any other Lender to fulfill its commitments hereunder.
1.8. Interest. (a) The unpaid principal amount of each MPP Revolving
Loan which is a Base Rate Loan shall bear interest from the date of the
Borrowing thereof until maturity (whether by acceleration or otherwise) at a
rate per annum which shall at all times be the Applicable MPP Base Rate Margin
(as defined below) plus the Base Rate in effect from time to time. The unpaid
principal amount of each DPP Revolving Loan which is a Base Rate Loan shall bear
interest from the date of the Borrowing thereof until maturity (whether by
acceleration or otherwise) at a rate per annum which shall at all times be the
Applicable DPP Base Rate Margin plus the Base Rate in effect from time to time.
(b) The unpaid principal amount of each MPP Revolving Loan which is a
Eurodollar Loan shall bear interest from the date of the Borrowing thereof until
maturity (whether by acceleration or otherwise) at a rate per annum which shall
at all times be the Applicable MPP Eurodollar Margin (as defined below) plus the
relevant Eurodollar Rate. The unpaid principal amount of each DPP Revolving Loan
which is a Eurodollar Loan shall bear interest from the date of the Borrowing
thereof until maturity (whether by acceleration or otherwise) at a rate per
annum which shall at all times be the Applicable DPP Eurodollar Margin plus the
relevant Eurodollar Rate.
(c) Notwithstanding the above provisions, if a Default under section
9.1(a) or Event of Default is in existence, all outstanding amounts of principal
and, to the extent permitted by law, all overdue interest, in respect of each
Loan shall bear interest at a rate per annum equal to the Base Rate in effect
from time to time plus the sum of (i) 2% per annum and (ii) the Applicable MPP
Base Rate Margin then in effect for MPP Revolving Loans which are Base Rate
Loans.
(d) Interest shall accrue from and including the date of any Borrowing
to but excluding the date of any repayment thereof and shall be payable (i) in
respect of each Base Rate Loan, quarterly in arrears on the last Business Day of
March, June, September and December, (ii) in respect of each Eurodollar Loan, on
the last day of each Interest Period applicable thereto and, in the case of an
Interest Period in excess of three months, on the dates which are successively
three months after the commencement of such Interest Period, and (iii) in
respect of each Loan, on any prepayment or conversion (on the amount prepaid or
converted), at maturity (whether by acceleration or otherwise) and, after such
maturity, on demand.
(e) All computations of interest hereunder shall be made in accordance
with section 12.7(b).
(f) The Administrative Agent upon determining the interest rate for
any Borrowing shall promptly notify the Borrower and the Lenders thereof.
(g) As used herein, the term "Applicable MPP Base Rate Margin" means
0.00% per annum and the term "Applicable MPP Eurodollar Margin" means 1+1/8% per
annum; provided, that if a Default under section 9.1(a) or Event of Default
shall have occurred and be continuing, the Applicable MPP Base Rate Margin and
the Applicable MPP Eurodollar Rate Margin shall so long as such Default or Event
of Default shall be continuing be the highest percentage rates per annum
indicated in the Pricing Grid tables which appear below, based on the ratio
referred to in section 8.12(a) or (b), whichever is applicable, and provided,
further, that if subsequent to the fiscal quarter of the Borrower ended nearest
to September 30, 1996, no Default under section 9.1(a) or Event of Default shall
have occurred and be continuing, the Applicable MPP Base Rate Margin and the
Applicable MPP Eurodollar Margin will change to the percentage rate per annum
indicated in the Pricing Grid tables which appear below, based on the ratio
referred to in section 8.12(a) or (b), whichever is applicable. Changes in the
Applicable MPP Base Rate Margin and the Applicable MPP Eurodollar Margin based
upon changes in such ratio shall become effective on the first day of the month
following the delivery to the Administrative Agent pursuant to clause (a) or (b)
of section 7.1 of the financial statements of the Borrower, accompanied by the
certificate referred to in clause (e) of section 7.1, demonstrating the
computation of such ratio, based upon the ratio in effect at the end of the
applicable period covered by such financial statements. Any changes in the
Applicable MPP Base Rate Margin or Applicable MPP Eurodollar Margin shall be
determined by the Managing Agent and from time to time, or promptly upon
request, the Managing
5
Agent will provide notice of such determinations to the
Borrower, the Administrative Agent and the Lenders. Any such determination by
the Managing Agent pursuant to this section 1.8(g) shall be conclusive and
binding absent manifest error.
PRICING GRID
===================================================================================================================================
Ratio Provided Applicable MPP Base Applicable MPP
in 8.12(a) Rate Margin Eurodollar Margin
===================================================================================================================================
[greater than] 4.00 to 1.00 [less than or equal to] 4.75 to 1.00 3/4 of 1% 2+1/4%
-----------------------------------------------------------------------------------------------------------------------------------
[greater than] 3.25 to 1.00 [less than or equal to] 4.00 to 1.00 1/2 of 1% 2%
-----------------------------------------------------------------------------------------------------------------------------------
[greater than] 2.50 to 1.00 [less than or equal to] 3.25 to 1.00 1/8 of 1% 1+5/8%
-----------------------------------------------------------------------------------------------------------------------------------
[greater than] 1.50 to 1.00 [less than or equal to] 2.50 to 1.00 0% 1+3/8%
-----------------------------------------------------------------------------------------------------------------------------------
[less than or equal to] 1.50 to 1.00 0% 1+1/8%
===================================================================================================================================
===================================================================================================================================
Ratio Provided Applicable MPP Base Applicable MPP
in 8.12(a) Rate Margin Eurodollar Margin
===================================================================================================================================
[greater than] 3.25 to 1.00 1/2 of 1% 2%
-----------------------------------------------------------------------------------------------------------------------------------
[greater than] 2.50 to 1.00 [less than or equal to] 3.25 to 1.00 1/8 of 1% 1+5/8%
-----------------------------------------------------------------------------------------------------------------------------------
[greater than] 1.50 to 1.00 [less than or equal to] 2.50 to 1.00 0% 1+3/8%
-----------------------------------------------------------------------------------------------------------------------------------
[less than or equal to] 1.50 to 1.00 0% 1+1/8%
===================================================================================================================================
(h) As used herein, the term "Applicable DPP Base Rate Margin" means
0% per annum and the term "Applicable DPP Eurodollar Margin" means 7/8 of 1% per
annum; provided, that if a Default under section 9.1(a) or Event of Default
shall have occurred and be continuing, the Applicable DPP Base Rate Margin and
the Applicable DPP Eurodollar Rate Margin shall so long as such Default or Event
of Default shall be continuing be the highest percentage rates per annum
indicated in the Pricing Grid tables which appear below, based on the leverage
ratio referred to in section 14(b) of the Parent Guaranty, and provided,
further, that if subsequent to the fiscal quarter of the Parent ended nearest to
June 30, 1996, no Default under section 9.1(a) or Event of Default shall have
occurred and be continuing, the Applicable DPP Base Rate Margin and the
Applicable DPP Eurodollar Margin will change to the percentage rate per annum
indicated in the Pricing Grid table which appears below, based on the leverage
ratio referred to in section 14(b) of the Parent Guaranty. Changes in the
Applicable DPP Base Rate Margin and the Applicable DPP Eurodollar Margin based
upon changes in such ratio shall become effective on first day of the month
following the delivery to the Administrative Agent pursuant to subdivision (a)
or (b) of section 7 of the Parent Guaranty of the financial statements of the
Parent, accompanied by the certificate referred to in subdivision (c) of such
section, demonstrating the computation of such ratio, based upon the ratio in
effect at the end of the applicable period covered by such financial statements.
Any changes in the Applicable DPP Base Rate Margin or Applicable DPP Eurodollar
Margin shall be determined by the Managing Agent and from time to time, or
promptly upon request, the Managing Agent will provide notice of such
determinations to the Borrower, the Administrative Agent and the Lenders. Any
such determination by the Managing Agent pursuant to this section 1.8(h) shall
be conclusive and binding absent manifest error.
6
PRICING GRID
===================================================================================================================================
Applicable DPP Base Applicable DPP
Leverage Ratio Rate Margin Eurodollar Margin
===================================================================================================================================
[less than or equal to] 2.00 to 1.00 0% 3/4 of 1%
-------------------------------------------------------------------- ------------------------------ -------------------------------
[greater than] 2.00 to 1.00 [less than or equal to] 2.25 to 1.00 0% 7/8 of 1%
-------------------------------------------------------------------- ------------------------------ -------------------------------
[greater than] 2.25 to 1.00 [less than or equal to] 2.50 to 1.00 0% 1%
-------------------------------------------------------------------- ------------------------------ -------------------------------
[greater than] 2.50 to 1.00 [less than or equal to] 2.75 to 1.00 1/8 of 1% 1+1/8%
-------------------------------------------------------------------- ------------------------------ -------------------------------
[greater than] 2.75 to 1.00 [less than or equal to] 3.00 to 1.00 1/4 of 1% 1+1/4%
-------------------------------------------------------------------- ------------------------------ -------------------------------
[greater than] 3.00 to 1.00 1/2 of 1% 1+1/2%
==================================================================== ============================== ===============================
1.9. Interest Periods. (a) At the time the Borrower gives a Notice of
Borrowing or Notice of Conversion in respect of the making of, or conversion
into, a Borrowing of Eurodollar Loans (in the case of the initial Interest
Period applicable thereto) or prior to 1:00 P.M. (local time at the Notice
Office) on the third Business Day prior to the expiration of an Interest Period
applicable to a Borrowing of Eurodollar Loans, it shall have the right to elect
by giving the Administrative Agent written notice (or telephonic notice promptly
confirmed in writing) of the Interest Period applicable to such Borrowing, which
Interest Period shall, at the option of the Borrower, be a one, two, three or
six month period. Notwithstanding anything to the contrary contained above:
(i) the initial Interest Period for any Borrowing of
Eurodollar Loans shall commence on the date of such Borrowing
(including the date of any conversion from a Borrowing of Base Rate
Loans) and each Interest Period occurring thereafter in respect of
such Borrowing shall commence on the day on which the next preceding
Interest Period expires;
(ii) if any Interest Period begins on a day for which there
is no numerically corresponding day in the calendar month at the end
of such Interest Period, such Interest Period shall end on the last
Business Day of such calendar month;
(iii) if any Interest Period would otherwise expire on a day
which is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day, provided that if any Interest Period
would otherwise expire on a day which is not a Business Day but is a
day of the month after which no further Business Day occurs in such
month, such Interest Period shall expire on the next preceding
Business Day; and
(iv) no Interest Period may be elected at any time when a
Default under section 9.1(a) or an Event of Default is then in
existence unless the Required Lenders otherwise agree.
(b) If upon the expiration of any Interest Period the Borrower has
failed to (or may not) elect a new interest Period to be applicable to the
respective Borrowing of Eurodollar Loans as provided above, the Borrower shall
be deemed to have elected to convert such Borrowing to Base Rate Loans effective
as of the expiration date of such current Interest Period.
1.10. Increased Costs, Illegality, etc. (a) In the event that (x) in
the case of clause (i) below, the Administrative Agent or (y) in the case of
clauses (ii) and (iii) below, any Lender, shall have determined on a reasonable
basis (which determination shall, absent manifest error, be final and conclusive
and binding upon all parties hereto):
7
(i) on any date for determining the Eurodollar Rate for any
Interest Period that, by reason of any changes arising after the
Effective Date affecting the interbank Eurodollar market, adequate and
fair means do not exist for ascertaining the applicable interest rate
on the basis provided for in the definition of Eurodollar Rate; or
(ii) at any time, that such Lender shall incur increased
costs or reductions in the amounts received or receivable hereunder in
an amount which such Lender deems material with respect to any
Eurodollar Loans (other than any increased cost or reduction in the
amount received or receivable resulting from the imposition of or a
change in the rate of taxes or similar charges) because of (x) any
change since the Effective Date in any applicable law, governmental
rule, regulation, guideline, order or request (whether or not having
the force of law), or in the interpretation or administration thereof
and including the introduction of any new law or governmental rule,
regulation, guideline, order or request (such as, for example, but not
limited to, a change in official reserve requirements, but, in all
events, excluding reserves includable in the Eurodollar Rate pursuant
to the definition thereof) and/or (y) other circumstances adversely
affecting the interbank Eurodollar market or the position of such
Lender in such market; or
(iii) at any time, that the making or continuance of any
Eurodollar Loan has become unlawful by compliance by such Lender in
good faith with any change since the Effective Date in any law,
governmental rule, regulation, guideline or order, or the
interpretation or application thereof, or would conflict with any
thereof not having the force of law but with which such Lender
customarily complies or has become impracticable as a result of a
contingency occurring after the Effective Date which materially
adversely affects the interbank Eurodollar market;
then, and in any such event, such Lender (or the Administrative Agent in the
case of clause (i) above) shall (x) on such date and (y) within 10 Business Days
of the date on which such event no longer exists give notice (by telephone
confirmed in writing) to the Borrower and to the Administrative Agent of such
determination (which notice the Administrative Agent shall promptly transmit to
each of the other Lenders). Thereafter (x) in the case of clause (i) above,
Eurodollar Loans shall no longer be available until such time as the
Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice by the Administrative Agent no longer
exist, and any Notice of Borrowing or Notice of Conversion given by the Borrower
with respect to Eurodollar Loans which have not yet been incurred shall be
deemed rescinded by the Borrower or, in the case of a Notice of Borrowing,
shall, at the option of the Borrower, be deemed converted into a Notice of
Borrowing for Base Rate Loans to be made on the date of Borrowing contained in
such Notice of Borrowing, (y) in the case of clause (ii) above, the Borrower
shall pay to such Lender, upon written demand therefor, such additional amounts
(in the form of an increased rate of, or a different method of calculating,
interest or otherwise as such Lender shall determine) as shall be required to
compensate such Lender, for such increased costs or reductions in amounts
receivable hereunder (a written notice as to the additional amounts owed to such
Lender, showing the basis for the calculation thereof, which basis must be
reasonable, submitted to the Borrower by such Lender shall, absent manifest
error, be final and conclusive and binding upon all parties hereto) and (z) in
the case of clause (iii) above, the Borrower shall take one of the actions
specified in section 1.10(b) as promptly as possible and, in any event, within
the time period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in section 1.10(a)(ii) or (iii), the Borrower may (and
in the case of a Eurodollar Loan affected pursuant to section 1.10(a)(iii) the
Borrower shall) either (i) if the affected Eurodollar Loan is then being made
pursuant to a Borrowing, by giving the Administrative Agent telephonic notice
(confirmed promptly in writing) thereof on the same date that the Borrower was
notified by a Lender pursuant to section 1.10(a)(ii) or (iii), cancel said
Borrowing, convert the related Notice of Borrowing into one requesting a
Borrowing of Base Rate Loans or require the affected Lender to make its
requested Loan as a Base Rate Loan, or (ii) if the affected Eurodollar Loan is
then outstanding, upon at least one Business Day's notice to the Administrative
Agent, require the affected Lender to convert each such Eurodollar Loan into a
Base Rate Loan, provided that if more than one Lender is affected at any time,
then all affected Lenders must be treated the same pursuant to this section
1.10(b).
8
(c) If any Lender shall have determined that after the Effective Date,
the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged by law with the interpretation or administration thereof, 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, in each case made
subsequent to the Effective Date, has or would have the effect of reducing by an
amount reasonably deemed by such Lender to be material the rate of return on
such Lender's or its parent corporation's capital or assets as a consequence of
such Lender's 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
its parent corporation's policies with respect to capital adequacy), then from
time to time, within 15 days after demand by such Lender (with a copy to the
Administrative Agent), the Borrower shall pay to such Lender such additional
amount or amounts as will compensate such Lender or its parent corporation for
such reduction. Each Lender, upon determining in good faith that any additional
amounts will be payable pursuant to this section 1.10(c), will give prompt
written notice thereof to the Borrower, which notice shall set forth the basis
of the calculation of such additional amounts, which basis must be reasonable,
although the failure to give any such notice shall not release or diminish any
of the Borrower's obligations to pay additional amounts pursuant to this section
1.10(c) upon the subsequent receipt of such notice.
(d) Notwithstanding anything in this Agreement to the contrary, (i) no
Lender shall be entitled to compensation or payment or reimbursement of other
amounts under section 1.10, 2.5 or 4.4 for any amounts incurred or accruing more
than 90 days prior to the giving of notice to the Borrower of additional costs
or other amounts of the nature described in such sections, and (ii) no Lender
shall demand compensation for any reduction referred to in section 1.10(c) or
payment or reimbursement of other amounts under section 2.5 or 4.4 if it shall
not at the time be the general policy or practice of such Lender to demand such
compensation, payment or reimbursement in similar circumstances under comparable
provisions of other credit agreements.
1.11. Compensation. The Borrower shall compensate each Lender, upon
its written request (which request shall set forth the detailed basis for
requesting and the method of calculating such compensation), for all reasonable
losses, expenses and liabilities (including, without limitation, any loss,
expense or liability incurred by reason of the liquidation or reemployment of
deposits or other funds required by such Lender to fund its Eurodollar Loans)
which such Lender may sustain: (i) if for any reason (other than a default by
such Lender or the Administrative Agent) a Borrowing of Eurodollar Loans does
not occur on a date specified therefor in a Notice of Borrowing or Notice of
Conversion (whether or not withdrawn by the Borrower or deemed withdrawn
pursuant to section 1.10(a)); (ii) if any repayment, prepayment or conversion of
any of its Eurodollar Loans occurs on a date which is not the last day of an
Interest Period applicable thereto; (iii) if any prepayment of any of its
Eurodollar Loans is not made on any date specified in a notice of prepayment
given by the Borrower; or (iv) as a consequence of (x) any other default by the
Borrower to repay its Eurodollar Loans when required by the terms of this
Agreement or (y) an election made pursuant to section 1.10(b).
1.12. Change of Lending Office. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of section 1.10(a)(ii) or
(iii), 1.10(c), 2.5 or 4.4 with respect to such Lender, it will, if requested by
the Borrower, use reasonable efforts (subject to overall policy considerations
of such Lender) to designate another lending office for any Loans or Commitment
affected by such event, provided that such designation is made on such terms
that such Lender and its lending office suffer no economic, legal or regulatory
disadvantage, with the object of avoiding the consequence of the event giving
rise to the operation of any such section. Nothing in this section 1.12 shall
affect or postpone any of the obligations of the Borrower or the right of any
Lender provided in section 1.10, 2.5 or 4.4.
SECTION 2. LETTERS OF CREDIT
2.1. Letters of Credit. (a) Subject to and upon the terms and
conditions herein set forth, the Borrower may request a Letter of Credit Issuer
at any time and from time to time on or after the Closing Date and prior to the
date that is 30 days prior to the Revolving Loan Maturity Date to issue, for the
account of the Borrower or any of
9
its Subsidiaries and in support of (x) trade obligations, workmen's
compensation and other obligations of the Borrower or any such Subsidiary
incurred in the ordinary course of its business and/or (y) such other
obligations of the Borrower or any such Subsidiary to any other person that are
acceptable to the Administrative Agent and such Letter of Credit Issuer, and
subject to and upon the terms and conditions herein set forth such Letter of
Credit Issuer agrees to issue from time to time, irrevocable standby, direct pay
or documentary letters of credit in such form as may be approved by such Letter
of Credit Issuer and the Administrative Agent (each such letter of credit (and
each Existing Letter of Credit described in section 2.1(d)), a "Letter of
Credit" and collectively, the "Letters of Credit").
(b) Notwithstanding the foregoing, (i) no Letter of Credit shall be
issued the Stated Amount of which, when added to the Letter of Credit
Outstandings at such time, would exceed either (x) $70,000,000 or (y) when added
to the aggregate principal amount of all Loans then outstanding, an amount equal
to the Total Commitment at such time, and (ii) each Letter of Credit shall have
an expiry date (including any renewal periods) occurring not later than 5 days
prior to the Revolving Loan Maturity Date, on terms acceptable to the
Administrative Agent and the relevant Letter of Credit Issuer.
(c) Notwithstanding the foregoing, in the event a Lender Default
exists, no Letter of Credit Issuer shall be required to issue any Letter of
Credit unless such Letter of Credit Issuer has entered into arrangements
satisfactory to it and the Borrower to eliminate such Letter of Credit Issuer's
risk with respect to the participation in Letters of Credit of the Defaulting
Lender or Lenders, including by cash collateralizing such Defaulting Lender's or
Lenders' Percentage of the Letter of Credit Outstandings.
(d) Annex VII hereto contains a description of all letters of credit
outstanding on, and to continue in effect after, the Closing Date. Each such
letter of credit issued by a bank that is or becomes a Lender under this
Agreement on the Effective Date (each, an "Existing Letter of Credit") shall
constitute a "Letter of Credit" for all purposes of this Agreement, issued, for
purposes of section 2.4(a), on the Closing Date, and the Borrower, the
Administrative Agent and the Lenders hereby agree that, from and after such
date, the terms of this Agreement shall apply to such Letters of Credit,
superseding any other agreement theretofore applicable to them to the extent
inconsistent with the terms hereof.
2.2. Letter of Credit Requests: Notices of Issuance2.2. Letter of
Credit Requests: Notices of Issuance. (a) Whenever it desires that a Letter of
Credit be issued, the Borrower shall give the Administrative Agent and the
Letter of Credit Issuer written notice (including by way of telecopier) in the
form of Exhibit A-2 hereto prior to 1:00 P.M. (local time at the Notice Office)
at least five Business Days (or such shorter period as may be acceptable to the
relevant Letter of Credit Issuer) prior to the proposed date of issuance (which
shall be a Business Day) (each a "Letter of Credit Request"), which Letter of
Credit Request shall include such supporting documents that such Letter of
Credit Issuer customarily requires in connection therewith (including, in the
case of a Letter of Credit for an account party other than the Borrower, an
application for, and if applicable a reimbursement agreement with respect to,
such Letter of Credit). Any such documents executed in connection with the
issuance of a Letter of Credit, including the Letter of Credit itself, are
herein referred to as "Letter of Credit Documents". In the event of any
inconsistency between any of the terms or provisions of any Letter of Credit
Document and the terms and provisions of this Agreement respecting Letters of
Credit, the terms and provisions of this Agreement shall control. The
Administrative Agent shall promptly notify each Lender of each Letter of Credit
Request.
(b) Each Letter of Credit Issuer shall, on the date of each issuance
of a Letter of Credit by it, give the Administrative Agent, each Lender and the
Borrower written notice of the issuance of such Letter of Credit, accompanied by
a copy to the Administrative Agent of the Letter of Credit or Letters of Credit
issued by it. Each Letter of Credit Issuer shall provide to the Administrative
Agent a quarterly (or monthly if requested by any Lender) summary describing
each Letter of Credit issued by such Letter of Credit Issuer and then
outstanding.
2.3. Agreement to Repay Letter of Credit Drawings2.3. Agreement to
Repay Letter of Credit Drawings. (a) The Borrower hereby agrees to reimburse (or
cause any Subsidiary for whose account a Letter of Credit was issued to
reimburse) each Letter of Credit Issuer, by making payment directly to such
Letter of Credit Issuer in immediately available funds at the payment office of
such Letter of Credit Issuer, for any payment or disbursement made by such
Letter of Credit Issuer under any Letter of Credit (each such amount so paid or
disbursed until reimbursed, an "Unpaid Drawing") immediately after, and in any
event on the date on which, such Letter of Credit Issuer notifies the Borrower
(or any such Subsidiary for
10
whose account such Letter of Credit was issued) of such payment or disbursement
(which notice to the Borrower (or such Subsidiary) shall be delivered reasonably
promptly after any such payment or disbursement), with interest on the amount so
paid or disbursed by such Letter of Credit Issuer, to the extent not reimbursed
prior to 1:00 P.M. (local time at the payment office of the Letter of Credit
Issuer) on the date of such payment or disbursement, from and including the date
paid or disbursed to but not including the date such Letter of Credit Issuer is
reimbursed therefor at a rate per annum which shall be the rate then applicable
to MPP Revolving Loans which are Base Rate Loans (plus an additional 2% per
annum if not reimbursed by the third Business Day after the date of such payment
or disbursement), in the case of payments or disbursements related to Allocated
MPP Letter of Credit Outstandings, or the rate then applicable to DPP Revolving
Loans which are Base Rate Loans (plus an additional 2% per annum if not
reimbursed by the third Business Day after the date of such payment or
disbursement), in the case of payments or disbursements related to Allocated DPP
Letter of Credit Outstandings, any such interest also to be payable on demand.
(b) The Borrower's obligation under this section 2.3 to reimburse each
Letter of Credit Issuer with respect to Unpaid Drawings (including, in each
case, interest thereon) shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
which the Borrower may have or have had against such Letter of Credit Issuer,
the Administrative Agent, any other Letter of Credit Issuer or any Lender,
including, without limitation, any defense based upon the failure of any drawing
under a Letter of Credit to conform to the terms of the Letter of Credit or any
non-application or misapplication by the beneficiary of the proceeds of such
drawing, provided, however that the Borrower shall not be obligated to reimburse
a Letter of Credit Issuer for any wrongful payment made by such Letter of Credit
Issuer under a Letter of Credit as a result of acts or omissions constituting
willful misconduct or gross negligence on the part of such Letter of Credit
Issuer.
2.4. Letter of Credit Participations. (a) Immediately upon the
issuance by a Letter of Credit Issuer of any Letter of Credit, such Letter of
Credit Issuer shall be deemed to have sold and transferred to each Lender, and
each Lender (each a "Participant") shall be deemed irrevocably and
unconditionally to have purchased and received from such Letter of Credit
Issuer, without recourse or warranty, an undivided interest and participation,
to the extent of such Lender's Percentage, in such Letter of Credit, each
substitute letter of credit, each drawing made thereunder and the obligations of
the Borrower under this Agreement with respect thereto (although Letter of
Credit Fees shall be payable directly to the Administrative Agent for the
account of the Lenders as provided in section 3.1(b) and the Participants shall
have no right to receive any portion of any Facing Fees) and any security
therefor or guaranty pertaining thereto. Upon any change in the Commitments of
the Lenders pursuant to section 12.4(b), it is hereby agreed that, with respect
to all outstanding Letters of Credit and Unpaid Drawings, there shall be an
automatic adjustment to the participations pursuant to this section 2.4 to
reflect the new Percentages of the assigning and assignee Lender.
(b) In determining whether to pay under any Letter of Credit, a Letter
of Credit Issuer shall not have any obligation relative to the Participants
other than to determine that any documents required to be delivered under such
Letter of Credit have been delivered and that they appear to comply on their
face with the requirements of such Letter of Credit. Any action taken or omitted
to be taken by a Letter of Credit Issuer under or in connection with any Letter
of Credit if taken or omitted in the absence of gross negligence or willful
misconduct, shall not create for such Letter of Credit Issuer any resulting
liability.
(c) In the event that a Letter of Credit Issuer makes any payment
under any Letter of Credit and the Borrower shall not have reimbursed such
amount in full to such Letter of Credit Issuer pursuant to section 2.3(a), such
Letter of Credit Issuer shall promptly notify the Administrative Agent, and the
Administrative Agent shall promptly notify each Participant of such failure, and
each Participant shall promptly and unconditionally pay to the Administrative
Agent for the account of such Letter of Credit Issuer, the amount of such
Participant's Percentage of such payment in U.S. dollars and in same day funds,
provided, however, that no Participant shall be obligated to pay to the
Administrative Agent its Percentage of such unreimbursed amount for any wrongful
payment made by such Letter of Credit Issuer under a Letter of Credit as a
result of acts or omissions constituting willful misconduct or gross negligence
on the part of such Letter of Credit Issuer. If the Administrative Agent so
notifies any Participant required to fund a payment under a Letter of Credit
prior to 11:00 A.M. (local time at the Notice Office) on any Business Day, such
Participant shall make available to the Administrative Agent for the account of
the relevant Letter of Credit Issuer such Participant's Percentage of the amount
of such payment on such Business Day in same day
11
funds. If and to the extent such Participant shall not have so made its
Percentage of the amount of such payment available to the Administrative Agent
for the account of the relevant Letter of Credit Issuer, such Participant agrees
to pay to the Administrative Agent for the account of such Letter of Credit
Issuer, forthwith on demand such amount, together with interest thereon, for
each day from such date until the date such amount is paid to the Administrative
Agent for the account of such Letter of Credit Issuer at the Federal Funds
Effective Rate. The failure of any Participant to make available to the
Administrative Agent for the account of the relevant Letter of Credit Issuer its
Percentage of any payment under any Letter of Credit shall not relieve any other
Participant of its obligation hereunder to make available to the Administrative
Agent for the account of such Letter of Credit Issuer its Percentage of any
payment under any Letter of Credit on the date required, as specified above, but
no Participant shall be responsible for the failure of any other Participant to
make available to the Administrative Agent for the account of such Letter of
Credit Issuer such other Participant's Percentage of any such payment.
(d) Whenever a Letter of Credit Issuer receives a payment of a
reimbursement obligation as to which the Administrative Agent has received for
the account of such Letter of Credit Issuer any payments from the Participants
pursuant to section 2.4(c) above, such Letter of Credit Issuer shall pay to the
Administrative Agent and the Administrative Agent shall promptly pay to each
Participant which has paid its Percentage thereof, in U.S. dollars and in same
day funds, an amount equal to such Participant's Percentage of the principal
amount thereof and interest thereon accruing after the purchase of the
respective participations, as and to the extent so received.
(e) The obligations of the Participants to make payments to the
Administrative Agent for the account of each Letter of Credit Issuer with
respect to Letters of Credit shall be irrevocable and not subject to
counterclaim, set-off or other defense or any other qualification or exception
whatsoever and shall be made in accordance with the terms and conditions of this
Agreement under all circumstances, including, without limitation, any of the
following circumstances:
(i) any lack of validity or enforceability of this Agreement
or any of the other Credit Documents;
(ii) the existence of any claim, set-off defense or other
right which the Borrower may have at any time against a beneficiary
named in a Letter of Credit, any transferee of any Letter of Credit
(or any person for whom any such transferee may be acting), the
Administrative Agent, any Letter of Credit Issuer, any Lender, or
other person, whether in connection with this Agreement, any Letter of
Credit, the transactions contemplated herein or any unrelated
transactions (including any underlying transaction between the
Borrower and the beneficiary named in any such Letter of Credit),
other than any claim which the Borrower (or any Subsidiary which is
the account party with respect to a Letter of Credit) may have against
any applicable Letter of Credit Issuer for gross negligence or wilful
misconduct of such Letter of Credit Issuer in making payment under any
applicable Letter of Credit;
(iii) any draft, certificate or other document presented
under the Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue
or inaccurate in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit
Documents: or
(v) the occurrence of any Default or Event of Default.
2.5. Increased Costs. If after the Effective Date, the adoption of
any applicable law, rule or regulation, or any change therein, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Letter of Credit Issuer or any
Lender with any request or directive (whether or not having the force of law) by
any such authority, central bank or comparable agency (in each case made
subsequent to the Effective Date) shall either (i) impose, modify or make
applicable any reserve, deposit, capital adequacy or similar requirement against
Letters of Credit issued by such Letter of Credit Issuer or such Lender's
participation therein, or (ii) shall impose
12
on such Letter of Credit Issuer or any Lender any other conditions affecting
this Agreement, any Letter of Credit or such Lender's participation therein; and
the result of any of the foregoing is to increase the cost to such Letter of
Credit Issuer or such Lender of issuing, maintaining or participating in any
Letter of Credit, or to reduce the amount of any sum received or receivable by
such Letter of Credit Issuer or such Lender hereunder (other than any increased
cost or reduction in the amount received or receivable resulting from the
imposition of or a change in the rate of taxes or similar charges), then, upon
demand to the Borrower by such Letter of Credit Issuer or such Lender (a copy of
which notice shall be sent by such Letter of Credit Issuer or such Lender to the
Administrative Agent), the Borrower shall pay to such Letter of Credit Issuer or
such Lender such additional amount or amounts as will compensate any such Letter
of Credit Issuer or such Lender for such increased cost or reduction. A
certificate submitted to the Borrower by any Letter of Credit Issuer or any
Lender, as the case may be (a copy of which certificate shall be sent by such
Letter of Credit Issuer or such Lender to the Administrative Agent), setting
forth the basis for the determination of such additional amount or amounts
necessary to compensate any Letter of Credit Issuer or such Lender as aforesaid
shall be conclusive and binding on the Borrower absent manifest error, although
the failure to deliver any such certificate shall not release or diminish any of
the Borrower's obligations to pay additional amounts pursuant to this section
2.5. Reference is hereby made to the provisions of section 1.10(d) for certain
limitations upon the rights of a Letter of Credit Issuer or Lender under this
section.
2.6. Obligations Absolute. The obligations of the Borrower under this
Agreement in respect of any Letter of Credit and under any other agreement or
instrument relating to any Letter of Credit shall be unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement (as the same may be amended from time to time) and such other
agreement or instrument under all circumstances, including, without limitation,
to the extent permitted by law, the following circumstances:
(i) any lack of validity or enforceability of any agreement
or instrument the obligations under which are supported by a Letter of
Credit;
(ii) any change in the time, manner or place of payment of,
or in any other term of, all or any of the obligations of the Borrower
(or any Subsidiary) in respect of the Letters of Credit or any other
amendment or waiver of or any consent to departure from all or any of
the Letter of Credit Documents or any other Credit Document;
(iii) any exchange, release or non-perfection of any
collateral, or any release or amendment or waiver of or consent to
departure from any guaranty, for all or any of the obligations of the
Borrower (or any Subsidiary) in respect of the Letters of Credit;
(iv) the existence of any claim, set-off, defense or other
right that the Borrower (or any Subsidiary) may have at any time
against any beneficiary or any transferee of a Letter of Credit (or
any persons for whom any such beneficiary or any such transferee may
be acting), the Letter of Credit Issuer, or any other person, whether
in connection with the Credit Documents, the transactions contemplated
hereby or by the Letter of Credit Documents or any unrelated
transaction, other than any claim which the Borrower (or any
Subsidiary which is the account party with respect to a Letter of
Credit) may have against any applicable Letter of Credit Issuer for
gross negligence or wilful misconduct of such Letter of Credit Issuer
in making payment under any applicable Letter of Credit;
(v) any statement or any other document presented under or in
connection with any Letter of Credit or other Credit Document proving
to be forged, fraudulent, invalid or insufficient in any respect or
any statement therein being untrue or inaccurate in any respect,
provided that payment by a Letter of Credit Issuer under such Letter
of Credit against presentation of such statement or document shall not
have constituted gross negligence or willful misconduct;
(vi) payment by a Letter of Credit Issuer under a Letter of
Credit against presentation of a draft or certificate that does not
comply with the terms of the Letter or Credit, except any such payment
resulting solely from the gross negligence or willful misconduct of
the Letter of Credit Issuer; and
13
(vii) any other circumstance or happening whatsoever other
than the payment in full of all obligations hereunder in respect of
any Letter of Credit or any agreement or instrument relating to any
Letter of Credit, whether or not similar to any of the foregoing, that
might otherwise constitute a defense available to, or a discharge of,
the Borrower.
2.7. Guaranty of Subsidiary Letter of Credit Obligations. (a) The
Borrower hereby unconditionally guarantees, for the benefit of the
Administrative Agent and the Lenders, the full and punctual payment of the
Obligations of each Subsidiary under each Letter of Credit Document to which
such Subsidiary is now or hereafter becomes a party. Upon failure by any such
Subsidiary to pay punctually any such amount, the Borrower shall forthwith on
demand by the Administrative Agent pay the amount not so paid at the place and
in the currency and otherwise in the manner specified in this Agreement or any
applicable Letter of Credit Document.
(b) As a separate, additional and continuing obligation, the Borrower
unconditionally and irrevocably undertakes and agrees, for the benefit of the
Administrative Agent and the Lenders, that, should any amounts not be
recoverable from the Borrower under section 2.7(a) for any reason whatsoever
(including, without limitation, by reason of any provision of any Credit
Document or any other agreement or instrument executed in connection therewith
being or becoming void, unenforceable, or otherwise invalid under any applicable
law) then, notwithstanding any notice or knowledge thereof by any Lender, the
Administrative Agent, any of their respective Affiliates, or any other person,
at any time, the Borrower as sole, original and independent obligor, upon demand
by the Administrative Agent, will make payment to the Administrative Agent, for
the account of the Lenders and the Administrative Agent, of all such obligations
not so recoverable by way of full indemnity, in such currency and otherwise in
such manner as is provided in the Credit Documents.
(c) The obligations of the Borrower under this section shall be
unconditional and absolute and, without limiting the generality of the foregoing
shall not be released, discharged or otherwise affected by the occurrence, one
or more times, of any of the following:
(i) any extension, renewal, settlement, compromise, waiver or
release in respect to any obligation of any Subsidiary under any
Letter of Credit Document, by operation of law or otherwise:
(ii) any modification or amendment of or supplement to this
Agreement, any Note or any other Credit Document;
(iii) any release, non-perfection or invalidity of any direct
or indirect security for any obligation of the Borrower under this
Agreement, any Note or any other Credit Document or of any Subsidiary
under any Letter of Credit Document;
(iv) any change in the corporate existence, structure or
ownership of any Subsidiary or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting any Subsidiary or
its assets or any resulting release or discharge of any obligation of
any Subsidiary contained in any Letter of Credit Document;
(v) the existence of any claim, set-off or other rights which
the Borrower may have at any time against any Subsidiary, the
Administrative Agent, any Lender or any other person, whether in
connection herewith or any unrelated transactions, provided that
nothing herein shall prevent the assertion of any such claim by
separate suit or compulsory counterclaim;
(vi) any invalidity or unenforceability relating to or
against any Subsidiary for any reason of any Letter of Credit
Document, or any provision of applicable law or regulation purporting
to prohibit the payment by any Subsidiary of any Obligations in
respect of any Letter of Credit; or
(vii) any other act or omission to act or delay of any kind
by any Subsidiary, the Administrative Agent, any Lender or any other
person or any other circumstance whatsoever which
14
might, but for the provisions of this section, constitute a legal or
equitable discharge of the Borrower's obligations under this section.
(d) The Borrower's obligations under this section shall remain in full
force and effect until the Commitments shall have terminated and the principal
of and interest on the Notes and all other amounts payable by the Borrower and
each other Credit Party under the Credit Documents shall have been paid in full.
If at any time any payment of any of the Obligations of any Subsidiary in
respect of any Letter of Credit Documents is rescinded or must be otherwise
restored or returned upon the insolvency, bankruptcy or reorganization of such
Subsidiary, the Borrower's obligations under this section with respect to such
payment shall be reinstated at such time as though such payment had been due but
not made at such time.
(e) The Borrower irrevocably waives acceptance hereof, presentment,
demand, protest and any notice not provided for herein, as well as any
requirement that at any time any action be taken by any person against any
Subsidiary or any other person, or against any collateral or guaranty of any
other person.
(f) Until the indefeasible payment in full of all of the Obligations
and the termination of the Commitments of the Lenders hereunder, the Borrower
shall have no rights, by operation of law or otherwise, upon making any payment
under this section to be subrogated to the rights of the payee against any
Subsidiary with respect to such payment or otherwise to be reimbursed,
indemnified or exonerated by any Subsidiary in respect thereof.
(g) In the event that acceleration of the time for payment of any
amount payable by any Subsidiary under any Letter of Credit Document is stayed
upon insolvency, bankruptcy or reorganization of such Subsidiary, all such
amounts otherwise subject to acceleration under the terms of any applicable
Letter of Credit Document shall nonetheless by payable by the Borrower under
this section forthwith on demand by the Administrative Agent.
SECTION 3. FEES; COMMITMENTS.
3.1. Fees. (a) The Borrower agrees to pay to the Administrative Agent
a Commitment Commission ("Commitment Commission") for the account of each Non-
Defaulting Lender for the period from and including the Effective Date to but
not including the date the Total Commitment has been terminated, computed at a
rate equal to 3/8 of 1 % per annum on the average daily Unutilized Commitment of
such Lender. Such Commitment Commission shall be due and payable quarterly in
arrears on the last Business Day of each March, June, September and December of
each year, commencing September, 1996, and on the date upon which the Total
Commitment is terminated.
(b) The Borrower agrees to pay to the Administrative Agent, for the
account of each Non-Defaulting Lender, pro rata on the basis of its Percentage,
a fee in respect of each Letter of Credit (the "Letter of Credit Fee") computed
(i) in the case of Letters of Credit constituting a part of the Allocated MPP
Letter of Credit Outstandings, at the rate per annum equal to the Applicable MPP
Eurodollar Margin in effect from time to time, and (ii) in the case of Letters
of Credit constituting a part of the Allocated DPP Letter of Credit
Outstandings, at the rate per annum equal to the Applicable DPP Eurodollar
Margin in effect from time to time, in each case on the average daily Stated
Amount of such Letter of Credit. Accrued Letter of Credit Fees shall be due and
payable quarterly in arrears on the last Business Day of each March, June,
September and December of each year, commencing September, 1996, and on the date
upon which the Total Commitment is terminated.
(c) The Borrower agrees to pay directly to each Letter of Credit
Issuer a fee in respect of each Letter of Credit issued by it (the "Facing
Fee"), computed at such rate as may from time to time be agreed between such
Letter of Credit Issuer and the Borrower, on the average daily Stated Amount of
such Letter of Credit. Such Facing Fees shall be due and payable on such dates
as may be agreed in the case of any Letter of Credit by the Borrower and the
Letter of Credit Issuer which has issued such Letter of Credit.
(d) The Borrower agrees to pay directly to each Letter of Credit
Issuer upon each issuance of, drawing under, and/or amendment of, a Letter of
Credit issued by it such amount as shall at the time of such issuance, drawing
or amendment be the administrative charge which such Letter of Credit Issuer is
customarily charging for issuances of, drawings under or amendments of, letters
of credit issued by it.
15
(e) The Borrower shall pay to the Administrative Agent on the Closing
Date and thereafter for its own account and/or for distribution to the Lenders
such fees as heretofore agreed by the Borrower, the Administrative Agent and the
Documentation Agent.
(f) All computations of Fees shall be made in accordance with section
12.7(b).
3.2. Voluntary Reduction of Commitments. Upon at least three Business
Days' prior written notice (or telephonic notice confirmed in writing) to the
Administrative Agent at its Notice Office (which notice the Administrative Agent
shall promptly transmit to each of the Lenders), the Borrower shall have the
right, without premium or penalty, to terminate or partially reduce the
Unutilized Total Commitment, provided that (i) any such termination shall apply
to proportionately and permanently reduce the Commitment, if any, of each of the
Lenders, and (ii) any partial reduction pursuant to this section 3.2 shall be in
the amount of at least $10,000,000 (or, if greater, in integral multiples of
$1,000,000).
3.3. Mandatory Adjustments of Commitments, etc. (a) The Commitment of
each Lender shall terminate on the Expiration Date unless the Closing Date has
occurred on or before such date .
(b) On each date upon which a mandatory prepayment of Loans pursuant
to section 4.2(d) is required, the Total Commitment shall be permanently reduced
by an amount equivalent to the principal amount of the Loans so prepaid.
(c) The Total Commitment (and the Commitment of each Lender) shall
terminate on the earlier of (x) the Revolving Loan Maturity Date and (y) the
date on which a Change of Control occurs.
(d) Each partial reduction of the Total Commitment provided for in
this section 3.3 shall apply pro rata to the Commitment of each Lender.
3.4. Extension of Revolving Loan Maturity Date. At any time following
the second anniversary of the Closing Date and during the 30 day period
following delivery by the Borrower pursuant to section 7.1(a) of its
consolidated financial statements for its fiscal year then most recently ended,
and annually thereafter during the 30 day period following delivery by the
Borrower of its consolidated financial statements pursuant to section 7.1(a),
the Borrower may request the Administrative Agent to determine if all of the
Lenders are then willing to extend the Revolving Loan Maturity Date for a single
additional year. If the Borrower so requests, the Administrative Agent will so
advise the Lenders. If the Lenders in their sole discretion are all willing to
so extend the Revolving Loan Maturity Date, after taking into account such
considerations as any Lender may deem relevant (including, without limitation,
the financial condition of the Borrower and applicable termination provisions
applicable to the Parent Guaranty), the Borrower, the Administrative Agent and
all of the Lenders (including each Letter of Credit Issuer) shall execute and
deliver a definitive written instrument so extending the Revolving Loan Maturity
Date. No such extension of the Revolving Loan Maturity Date shall be valid or
effective for any purpose unless such definitive written instrument is so signed
and delivered within 60 days following the giving by the Administrative Agent of
notice to the Lenders that the Borrower has requested such an extension, and
only one such extension may be granted pursuant to this provision.
SECTION 4. PAYMENTS.
4.1. Voluntary Prepayments. The Borrower shall have the right to
prepay Loans, in whole or in part, without premium or penalty, from time to time
on the following terms and conditions: (i) no MPP Revolving Loans may be prepaid
at any time if after giving effect thereto any DPP Revolving Loans are
outstanding; (ii) the Borrower shall give the Administrative Agent at the
Payment Office written notice (or telephonic notice promptly confirmed in
writing) of its intent to prepay the Loans, whether such Loans are MPP Revolving
Loans or DPP Revolving Loans, the amount of such prepayment and (in the case of
Eurodollar Loans) the specific Borrowing(s) pursuant to which made, which notice
shall be received by the Administrative Agent by (x) 1:00 P.M. (local time at
the Notice Office) one Business Day prior to the date of such prepayment, in the
case of any prepayment of Eurodollar Loans, or (y) 12:00 noon (local time at the
Notice Office) on the date of such prepayment, in the case of any prepayment of
Base
16
Rate Loans, and which notice shall promptly be transmitted by the Administrative
Agent to each of the Lenders; (iii) each partial prepayment of any Borrowing
shall be in an aggregate principal of at least $500,000 or an integral multiple
of $100,000 in excess thereof, in the case of Base Rate Loans and at least
$2,500,000 or an integral multiple of $500,000 in excess thereof, in the case of
Eurodollar Loans, provided that no partial prepayment of Eurodollar Loans made
pursuant to a Borrowing shall reduce the aggregate principal amount of the Loans
outstanding pursuant to such Borrowing to an amount less than the Minimum
Borrowing Amount applicable thereto; (iv) each prepayment in respect of any
Loans made pursuant to a Borrowing shall be applied pro rata among such Loans;
and (v) each prepayment of Eurodollar Loans pursuant to this section 4.1 on any
date other than the last day of the Interest period applicable thereto shall be
accompanied by any amounts payable in respect thereof under section 1.11.
4.2. Mandatory Prepayments. (a) If on any date (after giving effect
to any other payments on such date) the sum of (i) the aggregate outstanding
principal amount of Loans plus (ii) the aggregate amount of Letter of Credit
Outstandings, exceeds the Total Commitment as then in effect, the Borrower shall
prepay on such date that principal amount of Loans and, after Loans have been
paid in full, Unpaid Drawings, in an aggregate amount equal to such excess. If,
after giving effect to the prepayment of Loans and Unpaid Drawings, the
aggregate amount of Letter of Credit Outstandings exceeds the Total Commitment
as then in effect, the Borrower shall pay to the Administrative Agent an amount
in cash and/or Cash Equivalents equal to such excess and the Administrative
Agent shall hold such payment as security for the obligations of the Borrower
hereunder pursuant to a cash collateral agreement to be entered into in form and
substance reasonably satisfactory to the Administrative Agent and the Borrower
(which shall permit certain investments in Cash Equivalents satisfactory to the
Administrative Agent and the Borrower until the proceeds are applied to the
secured obligations).
(b) If on any date (after giving effect to any other payments on such
date) the aggregate outstanding principal amount of MPP Revolving Loans plus the
Allocated MPP Letter of Credit Outstandings, exceeds the MPP Revolving Loan
Sublimit then in effect, the Borrower shall prepay on such date that principal
amount of MPP Revolving Loans in an aggregate amount equal to such excess. If on
any date (after giving effect to any other payments on such date) the aggregate
outstanding principal amount of DPP Revolving Loans plus the Allocated DPP
Letter of Credit Outstandings, exceeds the DPP Revolving Loan Sublimit then in
effect, the Borrower shall prepay on such date that principal amount of DPP
Revolving Loans in an aggregate amount equal to such excess.
(c) Promptly, and in any event not later than the third Business Day
following the date of receipt thereof by the Borrower and/or any of its
Subsidiaries of the Cash Proceeds from any Asset Sale, an amount equal to such
portion of the Net Cash Proceeds then received from such Asset Sale as is
required pursuant to the terms of section 8.2 to be applied as a prepayment of
Loans shall be so applied as a mandatory prepayment of principal of (x) first,
the then outstanding MPP Revolving Loans and (y) second, once no MPP Revolving
Loans remain outstanding, the then outstanding DPP Revolving Loans.
(d) On the date of which a Change of Control occurs the then
outstanding principal amount of all Loans, if any, shall become due and payable
and shall be prepaid in full, and the Borrower shall contemporaneously either
(i) cause all outstanding Letters of Credit to be surrendered for cancellation
(any such Letters of Credit to be replaced by letters of credit issued by other
financial institutions), or (ii) the Borrower shall pay to the Administrative
Agent an amount in cash and/or Cash Equivalents equal to 100% of the Letter of
Credit Outstandings and the Administrative Agent shall hold such payment as
security for the obligations of the Borrower hereunder pursuant to a cash
collateral agreement to be entered into in form and substance reasonably
satisfactory to the Administrative Agent and the Borrower (which shall permit
certain investments in Cash Equivalents satisfactory to the Administrative Agent
and the Borrower until the proceeds are applied to the secured obligations).
(e) With respect to each prepayment of Loans required by this section
4.2, the Borrower shall designate the Types of Loans which are to be prepaid,
whether such Loans are MPP Revolving Loans or DPP Revolving Loans and the
specific Borrowing(s) pursuant to which such prepayment is to be made, provided
that (i) the Borrower shall first so designate all Loans that are Base Rate
Loans and Eurodollar Loans with Interest Periods ending on the date of
prepayment prior to designating any other Eurodollar Loans for prepayment, (ii)
if the outstanding principal amount of Eurodollar Loans made pursuant to a
Borrowing is reduced below the applicable Minimum Borrowing Amount as a result
of any such prepayment, then all the Loans outstanding pursuant to such
Borrowing shall be converted into Base Rate Loans, and (iii) each prepayment of
any Loans made pursuant to a Borrowing shall be
17
applied pro rata among such Loans. In the absence of a designation by the
Borrower as described in the preceding sentence, the Administrative Agent shall,
subject to the above, make such designation in its sole discretion with a view,
but no obligation, to minimize breakage costs owing under section 1.11.
4.3. Method and Place of Payment. Except as otherwise specifically
provided herein, all payments under this Agreement shall be made to the
Administrative Agent for the ratable (based on its pro rata share) account of
the Lenders entitled thereto, not later than 1:00 P.M. (local time at the
Payment Office) on the date when due and shall be made in immediately available
funds and in lawful money of the United States of America at the Payment Office,
it being understood that written notice by the Borrower to the Administrative
Agent to make a payment from the funds in the Borrower's account at the Payment
Office shall constitute the making of such payment to the extent of such funds
held in such account. Any payments under this Agreement which are made later
than 1:00 P.M. (local time at the Payment Office) shall be deemed to have been
made on the next succeeding Business Day. Whenever any payment to be made
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 and, with
respect to payments of principal, interest shall be payable during such
extension at the applicable rate in effect immediately prior to such extension.
4.4. Net Payments. (a) All payments made by the Borrower hereunder,
under any Note or any other Credit Document, will be made without setoff,
counterclaim or other defense. Except as provided for in section 4.4(b), all
such payments will be made free and clear of, and without deduction or
withholding for, any present or future taxes, levies, imposts, duties, fees,
assessments or other charges of whatever nature now or hereafter imposed by any
jurisdiction or by any political subdivision or taxing authority thereof or
therein with respect to such payments (but excluding, except as provided in the
second succeeding sentence, any tax, imposed on or measured by the net income or
net profits of a Lender pursuant to the laws of the jurisdiction under which
such Lender is organized or the jurisdiction in which the principal office or
applicable lending office of such Lender is located or any subdivision thereof
or therein) and all interest, penalties or similar liabilities with respect to
such non excluded taxes, levies imposts, duties, fees, assessments or other
charges (all such nonexcluded taxes levies, imposts, duties, fees assessments or
other charges being referred to collectively as "Taxes"). If any Taxes are so
levied or imposed, the Borrower agrees to pay the full amount of such Taxes and
such additional amounts as may be necessary so that every payment of all amounts
due hereunder, under any Note or under any other Credit Document, after
withholding or deduction for or on account of any Taxes will not be less than
the amount provided for herein or in such Note or in such other Credit Document.
If any amounts are payable in respect of Taxes pursuant to the preceding
sentence, the Borrower agrees to reimburse each Lender, upon the written request
of such Lender for taxes imposed on or measured by the net income or profits of
such Lender pursuant to the laws of the jurisdiction in which such Lender is
organized or in which the principal office or applicable lending office of such
Lender is located or under the laws of any political subdivision or taxing
authority of any such jurisdiction in which the principal office or applicable
lending office of such Lender is located and for any withholding of income or
similar taxes imposed by the United States of America as such Lender shall
determine are payable by, or withheld from, such Lender in respect of such
amounts so paid to or on behalf of such Lender pursuant to the preceding
sentence and in respect of any amounts paid to or on behalf of such Lender
pursuant to this sentence. The Borrower will furnish to the Administrative Agent
within 45 days after the date the payment of any Taxes, or any withholding or
deduction on account thereof, is due pursuant to applicable law certified copies
of tax receipts, or other evidence satisfactory to the Lender, evidencing such
payment by the Borrower. The Borrower will indemnify and hold harmless the
Administrative Agent and each Lender, and reimburse the Administrative Agent or
such Lender upon its written request, for the amount of any Taxes so levied or
imposed and paid or withheld by such Lender.
(b) Each Lender that is not a United States person (as such term is
defined in section 7701(a)(30) of the Code) for Federal income tax purposes
agrees to provide to the Borrower and the Administrative Agent on or prior to
the Effective Date, or in the cases of a Lender that is an assignee or
transferee of an interest under this Agreement pursuant to section 12.4 (unless
the respective Lender was already a Lender hereunder immediately prior to such
assignment or transfer and such Lender is in compliance with the provisions of
this section 4.4(b)), on the date of such assignment or transfer to such Lender,
(i) two accurate and complete original signed copies of Internal Revenue Service
Form 4224 or 1001 (or successor forms) certifying to such Lender's entitlement
to a complete exemption from United States withholding tax with respect to
payments to be made under this Agreement, any Note or any other Credit Document,
or (ii) if the Lender is not a "bank" within the meaning of section 881(c)(3)(A)
of the Code and cannot deliver either Internal Revenue Service Form 1001 or 4224
pursuant to clause (i) above, (x) a
18
certificate substantially in the form of Exhibit K (any such certificate, a
"section 4.4(b)(ii) Certificate") and (y) two accurate and complete original
signed copies of Internal Revenue Service Form W-8 (or successor form)
certifying to such Lender's entitlement to a complete exemption from United
States withholding tax with respect to payments of interest to be made under
this Agreement, any Note or any other Credit Document. In addition, each Lender
agrees that from time to time after the Effective Date, when a lapse in time or
change in circumstances renders the previous certification obsolete or
inaccurate in any material respect, it will deliver to the Borrower and the
Administrative Agent two new accurate and complete original signed copies of
Internal Revenue Service Form 4224 or 1001, or Form W-8 and a section 4.4(b)(ii)
Certificate, as the case may be, and such other forms as may be required in
order to confirm or establish the entitlement of such Lender to a continued
exemption from or reduction in United States withholding tax with respect to
payments under this Agreement, any Note or any other Credit Document, or it
shall immediately notify the Borrower and the Administrative Agent of its
inability to deliver any such Form or Certificate, in which case such Lender
shall not be required to deliver any such Form or Certificate pursuant to this
section 4.4(b). Notwithstanding anything to the contrary contained in section
4.4(a), but subject to section 12.4(b) and the immediately succeeding sentence,
(x) the Borrower shall be entitled, to the extent it is required to do so by
law, to deduct or withhold income or other similar taxes imposed by the United
States (or any political subdivision or taxing authority thereof or therein)
from interest, fees or other amounts payable hereunder for the account of any
Lender which is not a United States person (as such term is defined in section
7701(a)(30) of the Code) for United States federal income tax purposes and which
has not provided to the Borrower such forms that establish a complete exemption
from such deduction or withholding and (y) the Borrower shall not be obligated
pursuant to section 4.4(a) hereof to gross-up payments to be made to a Lender in
respect of income or similar taxes imposed by the United States or any
additional amounts with respect thereto (I) if such Lender has not provided to
the Borrower the Internal Revenue Service forms required to be provided to the
Borrower pursuant to this section 4.4(b) or (II) in the case of a payment other
than interest, to a Lender described in clause (ii) above, to the extent that
such forms do not establish a complete exemption from withholding of such taxes.
Notwithstanding anything to the contrary contained in the preceding sentence or
elsewhere in this section 4.4 and except as specifically provided for in section
12.4(b), the Borrower agrees to pay additional amounts and indemnify each Lender
in the manner set forth in section 4.4(a) (without regard to the identity of the
jurisdiction requiring the deduction or withholding) in respect of any Taxes
deducted or withheld by it as described in the previous sentence as a result of
any changes after the Effective Date in any applicable law, treaty, governmental
rule, regulation, guideline or order, or in the interpretation thereof, relating
to the deducting or withholding of income or similar Taxes.
(c) Reference is hereby made to the provisions of section 1.10(d) for
certain limitations upon the rights of a Lender under this section.
SECTION 5. CONDITIONS PRECEDENT.
5.1. Conditions Precedent at Closing Date. The obligation of the
Lenders to make Loans, and of any Letter of Credit Issuer to issue Letters of
Credit, is subject to the satisfaction of each of the following conditions on
the Closing Date:
(a) Effectiveness; Notes. On or prior to the Closing Date,
(i) the Effective Date shall have occurred and (ii) there shall have
been delivered to the Administrative Agent for the account of each
Lender the appropriate Note executed by the Borrower, in each case, in
the amount, maturity and as otherwise provided herein.
(b) Opinions of Counsel. On the Closing Date, the
Administrative Agent shall have received opinions, addressed to the
Administrative Agent and each of the Lenders and dated the Closing
Date, from (i) Xxxxxxxxxx Xxxx & XxXxxxxx PLLC, special counsel to the
Borrower, substantially in the form of Exhibit C-1 hereto and covering
such other matters incident to the transactions contemplated hereby as
the Administrative Agent or the Documentation Agent may reasonably
request, and (ii) T. Xxxxxxx Xxxxx, Esq., Transactions Counsel of the
Parent, substantially in the form of Exhibit C-2 hereto and covering
such other matters incident to the transactions contemplated hereby as
the Administrative Agent or the Documentation Agent may reasonably
request, all such opinions to be in form and substance satisfactory to
the Administrative Agent and the Documentation Agent.
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(c) Corporate Proceedings. (i) On the Closing Date, the
Administrative Agent shall have received from (x) each Credit Party a
certificate, dated the Closing Date, signed by the President or any
Vice-President of such Credit Party in the form of Exhibit D hereto
with appropriate insertions and deletions, together with copies of the
articles of incorporation, partnership agreement, limited liability
company agreement, certificate of formation and the bylaws or other
organizational documents of such Credit Party and the resolutions, or
such other administrative approval of such Credit Party referred to in
such certificate and all of the foregoing shall be reasonably
satisfactory to the Administrative Agent, and (y) the Borrower a
certificate of its chief financial officer, dated the Closing Date, to
the effect that all of the applicable conditions set forth in sections
5.1(e), (h), (i), (j) and (k) and 5.2 exist as of such date.
(ii) On the Closing Date, all corporate and legal proceedings
and all instruments and agreements in connection with the transactions
contemplated by this Agreement and the other Transaction Documents
shall be reasonably satisfactory in form and substance to the
Administrative Agent and the Documentation Agent, and the
Administrative Agent and the Documentation Agent shall have received
all information and copies of all certificates, documents, and papers,
including good standing certificates and any other records of
corporate proceedings and governmental approvals, if any, which the
Administrative Agent or the Documentation Agent may have reasonably
requested in connection therewith such documents and papers where
appropriate, to be certified by proper corporate or governmental
authorities.
(d) Plans, etc. On or prior to the Closing Date, there shall
have been made available for review by the Administrative Agent and
the Documentation Agent true and correct copies of:
(i) any Plans, and for each Plan (x) that is a
Single-Employer plan the most recently completed actuarial
valuation prepared therefor by such Plan's regular enrolled
actuary and the Schedule B (Actuarial Information) to the
most recent annual report (Form 5500 Series) for each Plan
filed with the Internal Revenue Service and (y) that is a
Multiemployer Plan, each of the documents referred to in
clause (x) either in the possession of the Borrower or any of
its Subsidiaries or any ERISA Affiliate or reasonably
available thereto from the sponsor or trustees of such Plan:
(ii) any collective bargaining agreements or any other
similar agreement or arrangements covering the employees of
the Borrower or any of its Subsidiaries (collectively, the
"Collective Bargaining Agreements");
(iii) all agreements evidencing or relating to the
Existing Indebtedness (the "Existing Indebtedness
Agreements");
(iv) all agreements entered into by the Borrower
governing the terms and relative rights of its capital stock,
agreements entered into by shareholders of the Borrower with
and any respect to its capital stock (collectively, the
"Shareholders' Agreements");
(v) any agreement with respect to, the management of the
Borrower or any of its Subsidiaries (collectively, the
"Management Agreements");
(vi) any material employment agreements entered into by
the Borrower or any of its Subsidiaries (collectively, the
"Employment Agreements");
(vii) management contracts relating to assisted living
communities or similar facilities managed by the Borrower or
any of its Subsidiaries (collectively the "Management
Contracts") to the extent in existence on the
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Closing Date; and
(viii) any tax sharing, tax allocation and other similar
agreements entered into by the Borrower and/or any of its
Subsidiaries (collectively, the "Tax Sharing Agreements");
all of which Plans, Collective Bargaining Agreements, Existing
Indebtedness Agreements, Shareholders' Agreements, Management
Agreements, Employment Agreements, Management Contracts and Tax
Sharing Agreements shall be in form and substance satisfactory to the
Administrative Agent and the Documentation Agent.
(e) Adverse Change, etc. From December 31, 1995 to the
Closing Date, nothing shall have occurred (and neither the Lenders nor
the Administrative Agent or the Documentation Agent shall have become
aware of any facts or conditions not previously known) which the
Administrative Agent, the Documentation Agent or the Required Lenders
shall reasonably determine (i) has, or could reasonably be expected to
have, a material adverse effect on the Assets or the rights or
remedies of the Lenders or the Administrative Agent under this
Agreement or any other Credit Document, or on the ability of the
Borrower to perform its obligations to them, or (ii) has, or could
reasonably be expected to have, a Material Adverse Effect.
(f) Litigation. No actions, suits or proceedings shall be
pending or, to the knowledge of the Borrower, threatened against the
Parent or any of its Subsidiaries or any of their assets on the
Closing Date (i) with respect to this Agreement or any other Credit
Document or (ii) which the Administrative Agent, the Documentation
Agent or the Required Lenders shall determine has, or could reasonably
be expected to have, (x) a Material Adverse Effect or (y) a material
adverse effect on the Assets or the rights or remedies of the Lenders
or the Administrative Agent hereunder or under any other Credit
Document or on the ability of any Credit Party to perform its
respective obligations to the Lenders hereunder or under any other
Credit Document.
(g) Approvals. On the Closing Date, all material governmental
and third party approvals in connection with the transactions
contemplated by the Credit Documents and the other Transaction
Documents and otherwise referred to herein or therein shall have been
obtained and remain in effect, and all applicable waiting periods
shall have expired without any action being taken by any competent
authority (including any court having jurisdiction) which restrains or
prevents such transactions or imposes, in the judgment of the Required
Lenders, the Administrative Agent or the Documentation Agent,
materially adverse conditions upon the consummation of such
transactions.
(h) Reorganization. On or prior to the Closing Date, there
shall have been transferred to the Borrower assets and business
comprising the assisted and independent living divisions of the Parent
in exchange for, among other things, the issuance by the Borrower of
common stock of the Borrower, in accordance with the terms and
provisions of the Incorporation Agreement (collectively, the
"Reorganization"), and the Reorganization shall have been consummated
in compliance with all applicable laws and in a manner reasonably
satisfactory to the Administrative Agent and the Documentation Agent.
(i) Acquisition Documents, etc. On or prior to the Closing
Date, the Borrower shall have delivered to the Administrative Agent
all Acquisition Documents, certified as true and correct by an
Authorized Officer, all of which Acquisition Documents shall be in the
same form as they were in on August 15, 1996 or shall otherwise be
satisfactory to the Administrative Agent and the Documentation Agent
and each of the conditions precedent to the obligations of the
Borrower to consummate the Acquisition shall have been satisfied
(without any waiver thereto not consented to by the Administrative
Agent) to the satisfaction of the Administrative Agent.
21
(j) IPO Proceeds; Ownership by Parent Guarantor. On or prior
to the Closing Date, the Borrower shall have received in available
funds at least $50,000,000, consisting of (i) an incremental equity
contribution of $4,350,000 to the Borrower and/or one or more of its
Subsidiaries by the Parent and/or one or more of its Subsidiaries
(other than the Borrower and its Subsidiaries), above and beyond any
equity contribution otherwise provided for pursuant to the
Incorporation Agreement, and (ii) net cash proceeds of at least
$45,650,000 from the initial public issuance of its common stock (the
"IPO") effected as contemplated by the Registration Statement, but
without giving effect to the over-allotment option referred to in the
Registration Statement. After giving effect to the completion of the
IPO (but without regard to such over-allotment option), the Parent
Guarantor shall be the owner, beneficially and of record, of not less
than 55% of the outstanding shares of Common Stock of the Borrower on
a fully diluted basis, if the public offering price per share in the
IPO is $13.00 or greater (63%, if such offering price per share is
less than $13.00).
(k) Other Debt. On the Closing Date and after giving effect
to the consummation of the Transaction, neither the Borrower nor any
of its Subsidiaries shall have any outstanding Indebtedness other than
the Existing Indebtedness described in section 6.18 and no default or
event of default under and as defined in the documentation governing
any such Existing Indebtedness shall have occurred or be continuing
both before and after giving effect to the Transaction.
(l) Parent Guaranty. On the Closing Date, the Borrower, the
Parent and each Subsidiary of the Parent named therein shall have duly
authorized, executed and delivered a Guaranty in the form of Exhibit E
hereto (as modified, amended or supplemented from time to time in
accordance with the terms hereof and thereof, the "Parent Guaranty"),
and the Parent Guaranty shall be in full force and effect.
(m) Subsidiary Guaranty. On the Closing Date, each
Wholly-Owned Subsidiary shall have duly authorized, executed and
delivered a Guaranty in the form of Exhibit F hereto (as modified,
amended or supplemented from time to time in accordance with the terms
hereof and thereof, the "Subsidiary Guaranty"), and the Subsidiary
Guaranty shall be in full force and effect.
(n) Security Documents. (i) Pledge Agreement. On the Closing
Date, each Credit Party named therein shall have duly authorized,
executed and delivered a Pledge Agreement substantially in the form of
Exhibit G hereto (as modified, amended or supplemented from time to
time in accordance with the terms thereof and hereof, the "Pledge
Agreement"), and shall have delivered to the Collateral Agent, as
pledgee thereunder:
(A) all of the certificates and instruments representing
the Pledged Securities referred to therein, endorsed in blank
or accompanied by executed and undated stock or bond powers;
and
(B) executed copies of notices delivered to each
partnership entity or limited liability company entity which
is the issuer of partnership interests or membership
interests, as the case may be, pledged under the Pledge
Agreement and executed copies of acknowledgements executed by
each such entity, together with evidence that such other
actions have been taken as may be necessary or, in the
opinion of the Collateral Agent, desirable to perfect the
security interest purported to be created by the Pledge
Agreement (including, without limitation, evidence that each
such partnership entity or limited liability company entity
has duly recorded the security interest created by the Pledge
Agreement on the partnership or limited liability company
books and records of such entity);
and the Pledge Agreement shall be in full force and effect.
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(ii) Security Agreement. On the Closing Date, each Credit
Party named therein shall have duly authorized, executed and delivered
a Security Agreement substantially in the form of Exhibit H (as
modified, supplemented or amended from time to time in accordance with
the terms thereof and hereof, the "Security Agreement") covering all
of such Credit Party's present and future Security Agreement
Collateral, in each case together with:
(A) executed copies of Financing Statements (Form UCC-1)
in appropriate form for filing under the UCC of each
jurisdiction as may be necessary to perfect the security
interests purported to be created by the Security Agreement;
(B) certified copies of Requests for Information or
Copies (Form UCC-11), or equivalent reports, each of recent
date listing all effective financing statements that name
each Credit Party as debtor and that are filed in the
jurisdictions referred to in clause (A), together with copies
of such financing statements (none of which shall cover the
Collateral except (x) those with respect to which appropriate
termination statements executed by the secured lender
thereunder have been delivered to the Collateral Agent and
(y) to the extent evidencing Liens permitted pursuant to
section 8.3(d));
(C) evidence of the completion of all other recordings
and filings of, or with respect to, the Security Agreement
as may be necessary or, in the opinion of the Collateral
Agent, desirable to perfect the security interests intended
to be created by the Security Agreement; and
(D) evidence that all other actions necessary or, in the
reasonable opinion of the Collateral Agent, desirable to
perfect and protect the security interest purported to be
created by the Security Agreement have been taken;
and the Security Agreement shall be in full force and effect.
(iii) Mortgages. On the Closing Date, the Collateral Agent
shall have received:
(A) fully executed counterparts of mortgages, deeds of
trust or deeds to secure debt, in each case in form and
substance reasonably satisfactory to the Collateral Agent and
the Documentation Agent (each as modified, amended or
supplemented from time to time in accordance under the terms
hereof and thereof, a "Mortgage" and, collectively, the
"Mortgages"), which Mortgages shall cover such of the Real
Property owned or leased by any Credit Party as is designated
on Part I of Annex III as a mortgaged property (each
"Mortgaged Property" and, collectively, the "Mortgaged
Properties"), together with evidence that counterparts of the
Mortgages have been delivered to the title insurance company
insuring the Lien of the Mortgages for recording in all
places to the extent necessary or, in the reasonable opinion
of the Collateral Agent, desirable to effectively create a
valid and enforceable first priority mortgage lien on such
Credit Party's interest in each Mortgaged Property (subject
only to Permitted Encumbrances) in favor of the Collateral
Agent (or such other trustee as may be required or desired
under local law) for the benefit of the Lenders;
(B) executed copies of Financing Statements (Form UCC-1
or other applicable form) in appropriate form for filing
under the UCC of each jurisdiction as may be reasonably
necessary to perfect the security interests in fixtures,
equipment and personal property purported to be created by
the Mortgages;
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(C) executed copies of such consents of landlords,
non-disturbance and attornment agreements, and similar
documents, in form and substance reasonably satisfactory to
the Collateral Agent and the Documentation Agent, as the
Collateral Agent or the Documentation Agent may consider
necessary or desirable in connection with the creation of the
lien of any Mortgage on any Mortgaged Property or the
enforcement thereof;
(D) mortgagee title insurance policies (or marked
commitments to issue the same) for the Mortgaged Properties
issued by title insurers reasonably satisfactory to the
Collateral Agent (each a "Mortgage Policy" and, collectively,
the "Mortgage Policies") in amounts satisfactory to the
Collateral Agent assuring the Collateral Agent that the
Mortgages on such Mortgaged Properties are valid and
enforceable first priority mortgage liens on such Mortgaged
Properties, free and clear of all defects and encumbrances
except Permitted Encumbrances, and the Mortgage Policies
shall otherwise be in form and substance reasonably
satisfactory to the Collateral Agent and the Documentation
Agent; and
(E) surveys, in form and substance reasonably
satisfactory to the Collateral Agent and the Documentation
Agent, of the Mortgaged Properties specified by the
Administrative Agent or the Documentation Agent, certified in
a manner satisfactory to the Collateral Agent and the
Documentation Agent (which certification must include, among
other things, a certification whether the Mortgaged Property
is located in a special flood hazard area, and if it is so
located, as to the flood zone designation which appears in
the Flood Insurance Rate Map for the area in which the
Mortgaged Property is located, including the Community Panel
Number of the map used) by a licensed professional surveyor
reasonably satisfactory to the Collateral Agent and the
Documentation Agent.
(o) Solvency. On the Closing Date, the Administrative Agent
shall have received from the chief financial officer of the Borrower a
certificate in the form of Exhibit J hereto, expressing opinions of
value and other appropriate facts or information regarding the
solvency of the Borrower and its Subsidiaries taken as a whole.
(p) Fees, etc. On or prior to the Closing Date, the Borrower
shall have paid to (i) the Administrative Agent and the Lenders all
Fees and expenses agreed upon by such parties to be paid on or prior
to such date, and (ii) Xxxxx, Day, Xxxxxx & Xxxxx, special counsel to
the Documentation Agent, such fees and disbursements as shall have
been invoiced by such firm in connection with the transactions
contemplated hereby in accordance with the proposal letter of such
firm dated July 16, 1996.
(q) Insurance Policies. On the Closing Date, the Collateral
Agent shall have received evidence of insurance complying with the
requirements of section 7.3 for the business and properties of the
Borrower and its Subsidiaries, in form and substance satisfactory to
the Administrative Agent and with respect to all casualty insurance,
naming the Collateral Agent as an additional insured and loss payee.
(r) Environmental Reports. On or prior to the Closing Date,
the Administrative Agent and the Documentation Agent shall have
received Phase I environmental assessments from Dames & Xxxxx (or such
other firm satisfactory to the Administrative Agent and the
Documentation Agent and in form and substance satisfactory to the
Administrative Agent and the Documentation Agent, and covering each
Mortgaged Property.
(s) Appraisals. On or prior to the Closing Date, the
Administrative Agent and the Documentation Agent shall have received
copies of any appraisals obtained by the Borrower or any
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of its Affiliates with respect to any of the properties of the
Borrower or any of its Subsidiaries within the two year period prior
to the Closing Date.
5.2. Conditions Precedent to All Credit Events. The obligations of
the Lenders to make each Loan and/or of a Letter of Credit Issuer to issue each
Letter of Credit is subject, at the time thereof, to the satisfaction of the
following conditions:
(a) Notice of Borrowing, etc. The Administrative Agent shall
have received a Notice of Borrowing meeting the requirements of
section 1.3 with respect to the incurrence of Loans or a Letter of
Credit Request meeting the requirement of section 2.2 with respect to
the issuance of a Letter of Credit.
(b) No Default; Representations and Warranties. At the time
of each Credit Event and also after giving effect thereto, (i) there
shall exist no Default or Event of Default and (ii) all
representations and warranties contained herein or in the other Credit
Documents shall be true and correct in all material respects with the
same effect as though such representations and warranties had been
made on and as of the date of such Credit Event, except to the extent
that such representations and warranties expressly relate to an
earlier date.
(c) Sublimit Matters. The Administrative Agent shall have
received such certificates pursuant to section 7.1(e) and other
evidence as it may require to establish that such Credit Event
complies with the MPP Revolving Loan Sublimit or DPP Revolving Loan
Sublimit specified in section 1.1(b) or (c), as applicable.
The acceptance of the benefits of each Credit Event shall constitute a
representation and warranty by the Borrower to each of the Lenders that all of
the applicable conditions specified in section 5.1 and/or 5.2, as the case may
be, exist as of that time. All of the certificates, legal opinions and other
documents and papers referred to in this section 5, unless otherwise specified,
shall be delivered to the Administrative Agent for the account of each of the
Lenders and, except for the Notes, in sufficient counterparts for each of the
Lenders, and the Administrative Agent will promptly distribute to the Lenders
their respective Notes and the copies of such other certificates, legal opinions
and documents.
SECTION 6. REPRESENTATIONS AND WARRANTIES.
In order to induce the Lenders to enter into this Agreement and to
make the Loans, and/or to issue and/or to participate in the Letters of Credit
provided for herein, the Borrower makes the following representations and
warranties to, and agreements with, the Lenders, all of which shall survive the
execution and delivery of this Agreement and each Credit Event:
6.1. Corporate Status, etc. Each of the Borrower and its Subsidiaries
(i) is a duly organized or formed and validly existing corporation, partnership
or limited liability company, as the case may be, in good standing under the
laws of the jurisdiction of its formation and has the corporate, partnership or
limited liability company power and authority, as applicable, to own its
property and assets and to transact the business in which it is engaged and
presently proposes to engage and (ii) has duly qualified and is authorized to do
business in all jurisdictions where it is required to be so qualified except
where the failure to be so qualified would not have a Material Adverse Effect.
6.2. Corporate Power and Authority, etc. Each Credit Party has the
corporate or other organizational power and authority to execute, deliver and
carry out the terms and provisions of the Credit Documents to which it is party
and has taken all necessary corporate or other organizational action to
authorize the execution, delivery and performance of the Credit Documents to
which it is party. Each Credit Party has duly executed and delivered each Credit
Document to which it is party and each Credit Document to which it is party
constitutes the legal, valid and binding agreement or obligation of each Credit
Party enforceable in accordance with its terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or
25
other similar laws generally affecting creditors' rights and by equitable
principles (regardless of whether enforcement is sought in equity or at law).
6.3. No Violation. Neither the execution, delivery and performance by
any Credit Party of the Credit Documents to which it is party nor compliance
with the terms and provisions thereof, nor the consummation of the loan
transactions contemplated therein (i) will contravene any provision of any law,
statute, rule, regulation, order, writ, injunction or decree of any court or
governmental instrumentality applicable to such Credit Party or its properties
and assets, (ii) will conflict with or result in any breach of, any of the
terms, covenants, conditions or provisions of, or constitute a default under, or
(other than pursuant to the Security Documents) result in the creation or
imposition of (or the obligation to create or impose) any Lien upon any of the
property or assets of the Borrower or any of its Subsidiaries pursuant to the
terms of any indenture, mortgage, deed of trust, agreement or other instrument
to which the Borrower or any of its Subsidiaries is a party or by which it or
any of its property or assets are bound or to which it may be subject, or (iii)
will violate any provision of the partnership agreement, certificate of
formation, certificate or articles of incorporation or by-laws, as the case may
be, of such Credit Party.
6.4. Litigation. There are no actions, suits or proceedings pending
or, to, the knowledge of the Borrower, threatened with respect to the Borrower
or any of its Subsidiaries (i) that have, or could reasonably be expected likely
to have, a Material Adverse Effect, or (ii) that have, or could reasonably be
expected to have, a material adverse effect on the rights or remedies of the
Collateral Agent, the Administrative Agent or the Lenders or on the ability of
any Credit Party to perform its obligations to them hereunder and under the
other Credit Documents.
6.5. Use of Proceeds; Margin Regulations. (a) The proceeds of all
Loans shall be utilized (i) to finance Permitted Acquisitions, and (ii) for
general corporate purposes, other than to finance Permitted Acquisitions and/or
any other acquisition, not inconsistent with the requirements of this Agreement.
(b) No part of the proceeds of any Credit Event will be used directly
or indirectly to purchase or carry Margin Stock, or to extend credit to others
for the purpose of purchasing or carrying any Margin Stock. Neither any Credit
Event, nor the use of the proceeds thereof, will violate or be inconsistent with
the provisions of Regulation G, T, U or X of the Board of Governors of the
Federal Reserve System. The Borrower is not engaged in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock. At no time
would more than 25% of the value of the assets of the Borrower or of the
Borrower and its consolidated Subsidiaries that are subject to any "arrangement"
(as such term is used in section 221.2(g) of such Regulation U) hereunder be
represented by Margin Stock.
6.6. Governmental Approvals. No order, consent approval license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, any foreign or domestic governmental or public body or authority,
or any subdivision thereof, is required to authorize or is required in
connection with (i) the execution, delivery and performance of any Credit
Document or (ii) the legality, validity, binding effect or enforceability of any
Credit Document, other than filings and recordings necessary to establish and
perfect the security interests and Liens provided for in the Security Documents.
6.7. True and Complete Disclosure. All factual information (taken as a
whole) heretofore or contemporaneously furnished by or on behalf of the Borrower
or any of its Subsidiaries in writing to the Administrative Agent or any Lender
for purposes of or in connection with this Agreement or any transaction
contemplated herein is, and all other such factual information (taken as a
whole) hereafter furnished by or on behalf of such person in writing to any
Lender will be, true and accurate in all material respects on the date as of
which such information is dated or certified and not incomplete by omitting to
state any material fact necessary to make such information (taken as a whole)
not misleading at such time in light of the circumstances under which such
information was provided. The projections and pro forma financial information
prepared by the Borrower which are contained in such materials are based on good
faith estimates and assumptions believed by such persons to be reasonable at the
time made, it being recognized by the Lenders that such projections as to future
events are not to be viewed as facts and that actual results during the period
or periods covered by any such projections may differ materially from the
projected results. As of the Effective Date, there is no fact known to the
Borrower or any of its Subsidiaries which
26
has, or could reasonably be expected to have, a Material Adverse Effect which
has not theretofore been disclosed to the Lenders or to the Administrative Agent
on behalf of the Lenders.
6.8. Financial Condition: Financial Statements. (a) On and as of the
Closing Date on a pro forma basis after giving effect to the Transaction and to
all Indebtedness incurred and to be incurred, and Liens created, and to be
created, by the Borrower in connection therewith, (i) the sum of the assets, at
a fair valuation, of the Borrower will exceed its debts, (ii) the Borrower will
not have incurred or intended to, or believe that it will, incur debts beyond
its ability to pay such debts as such debts mature and (iii) the Borrower will
have sufficient capital with which to conduct its business. For purposes of this
section 6.8, "debt" means any liability on a claim, and "claim" means (x) right
to payment whether or not such a right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured or unsecured; or (y) right to an equitable remedy for
breach of performance if such breach gives rise to a payment, whether or not
such right to an equitable remedy is reduced to judgment, fixed, contingent,
matured, unmatured, disputed, undisputed, secured or unsecured.
(b) (i) The combined balance sheets of the Borrower (formerly the
assisted and independent living business of the Parent and certain of its
Affiliates) at December 31, 1994 and December 31, 1995, and the related combined
statements of income, investments by and advances from the Parent, and cash
flows for the fiscal periods ended as of said dates, which have been examined by
Ernst & Young LLP, independent certified public accountants, and (ii) the pro
forma (after giving effect to the Transaction and the related financings
thereof) consolidated balance sheet of the Borrower and its Subsidiaries as of
March 31, 1996, copies of each of which have heretofore been furnished to each
Lender, present fairly the financial position of the respective entities as of
the dates of said statements and the results for the periods covered thereby
(or, in the case of the balance sheet, presents a good faith estimate of the
consolidated financial condition of the Borrower and its Subsidiaries after
giving effect to the Transaction and the related financings thereof at the date
thereof). All such financial statements (other than the aforesaid pro forma
balance sheets) have been prepared in accordance with generally accepted
accounting principles and practices consistently applied except to the extent
provided in the notes to said financial statements. Nothing has occurred since
December 31, 1995 that has had a Material Adverse Effect.
(c) Except as fully reflected in the financial statements and the
notes thereto described in section 6.8(b), there were as of the Closing Date
(after giving effect to the Loans made on such date), no material Contingent
Obligations, contingent liability or liability for taxes, or any long-term lease
or unusual forward or long-term commitment, including, without limitation,
interest rate or foreign currency swap or exchange transaction with respect to
the Borrower or any of its Subsidiaries which, either individually or in
aggregate, would be material to the Borrower and its Subsidiaries taken as a
whole, except as incurred in the ordinary course of business consistent with
past practices subsequent to December 31, 1995.
(d) The Borrower has delivered to the Lenders prior to the execution
and delivery of this Agreement (i) a brochure dated July 1996 prepared by the
Administrative Agent and the Documentation Agent, which contains a general
description of the business and affairs of the Borrower and its Subsidiaries
(the "Information Memorandum"), and (ii) financial projections prepared by
management of the Borrower which are included in the Information Memorandum
under Tab VIII thereof for the Borrower for the fiscal years 1996-2000 (the
"Financial Projections"). The Financial Projections were prepared on behalf of
the Borrower in good faith after taking into account the existing and historical
levels of business activity of the Borrower, its Subsidiaries and their
predecessors in interest, known trends, including general economic trends, and
all other information, assumptions and estimates pertinent thereto. The
Financial Projections were considered by management of the Borrower, as of such
date of preparation, to be realistically achievable; provided, that no
representation or warranty is made as to the impact of future general economic
conditions or as to whether the Borrower's projected consolidated results as set
forth in the Financial Projections will actually be realized. No facts are known
to the Borrower at the date hereof which, if reflected in the Financial
Projections, would result in a material adverse change in the assets,
liabilities, results of operations or cash flows reflected therein.
6.9. Security Interests. Once executed and delivered, and until
terminated in accordance with the terms thereof, each of the Security Documents
creates, as security for the obligations purported to be secured thereby, a
valid and enforceable perfected security interest in and Lien on all of the
Collateral subject thereto from time to time,
27
superior to and prior to the rights of all third persons (subject in the case of
the Mortgages to Permitted Encumbrances and subject to no other Liens (except
that the Security Agreement Collateral and/or Mortgaged Properties may be
subject to Permitted Liens and (in the case of the Mortgaged Properties)
Permitted Encumbrances relating thereto)) in favor of the Collateral Agent for
the benefit of the Lenders. No filings or recordings are required in order to
perfect the security interests created under any Security Document except for
filings or recordings required in connection with any such Security Document
which shall have been made, or for which satisfactory arrangements have been
made, upon or prior to the execution and delivery thereof. All mortgage,
mortgage recording, stamp, intangible or other similar taxes required to be paid
by any person under applicable Legal Requirements or other laws applicable to
the Real Property encumbered by the Mortgages in connection with the execution,
delivery, recordation, filing, registration, perfection or enforcement of the
Mortgages have been paid.
6.10. Representations and Warranties in Transaction Documents. All
representations and warranties of the Parent and/or any of its Subsidiaries set
forth in any of the Transaction Documents were true and correct in all material
respects as of the time such representations and warranties were made and shall
be true and correct in all material respects as of the Closing Date as if such
representations and warranties were made on and as of such date, unless stated
to relate to a specific earlier date, in which case such representations and
warranties shall be true and correct in all material respects as of such earlier
date.
6.11. Tax Returns and Payments. Each of the Borrower and each of its
Subsidiaries has filed all federal income tax returns and all other material tax
returns, domestic and foreign, required to be filed by it and has paid all
material taxes and assessments payable by it which have become due, other than
those not yet delinquent and except for those contested in good faith. The
Borrower and each of its Subsidiaries have paid, or have provided adequate
reserves for the payment of, all federal, state and foreign income taxes
applicable for all prior fiscal years and for the current fiscal year to the
date hereof (giving effect to the Reorganization).
6.12. Compliance with ERISA. Each Plan (and each related trust,
insurance contract or fund) is in substantial compliance with its terms and with
all applicable laws, including without limitation ERISA and the Code; each Plan
(and each related trust, if any) which is intended to be qualified under section
401(a) of the Code has received a determination letter from the Internal Revenue
Service to the effect that it meets the requirements of sections 401(a) and
501(a) of the Code; no Reportable Event has occurred; no Plan which is a
multiemployer plan (as defined in section 4001(a)(3) of ERISA) is insolvent or
in reorganization; no Plan has an Unfunded Current Liability; no Plan which is
subject to section 412 of the Code or section 302 of ERISA has an accumulated
funding deficiency, within the meaning of such sections of the Code or ERISA, or
has applied for or received a waiver of an accumulated funding deficiency or an
extension of any amortization period, within the meaning of section 412 of the
Code or section 303 or 304 of ERISA; all contributions required to be made with
respect to a Plan have been timely made; neither the Borrower nor any Subsidiary
of the Borrower nor any ERISA Affiliate has incurred any material liability
(including any indirect, contingent or secondary liability) to or on account of
a Plan pursuant to section 409, 502(i), 502(i), 515, 4062, 4063, 4064, 4069,
4201, 4204 or 4212 of ERISA or section 401(a)(29), 4971 or 4975 of the Code or
expects to incur any such liability under any of the foregoing sections with
respect to any Plan; no condition exists which presents a material risk to the
Borrower or any Subsidiary of the Borrower or any ERISA Affiliate of incurring a
liability to or on account of a Plan pursuant to the foregoing provisions of
ERISA and the Code; no proceedings have been instituted to terminate or appoint
a trustee to administer any Plan which is subject to Title IV of ERISA; no
action, suit, proceeding, hearing, audit or investigation with respect to the
administration, operation or the investment of assets of any Plan (other than
routine claims for benefits) is pending, expected or threatened; using actuarial
assumptions and computation methods consistent with Part 1 of subtitle E of
Title IV of ERISA, the aggregate liabilities of the Borrower and its
Subsidiaries and its ERISA Affiliates to all Plans which are multiemployer plans
(as defined in section 4001(a)(3) of ERISA) in the event of a complete
withdrawal therefrom, as of the close of the most recent fiscal year of each
such Plan ended prior to the date hereof, would not exceed $100,000; each group
health plan (as defined in section 607(1) of ERISA or section 4980B(g)(2) of the
Code) which covers or has covered employees or former employees of the Borrower,
any Subsidiary of the Borrower, or any ERISA Affiliate has at all times been
operated in compliance with the provisions of Part 6 of subtitle B of Title I of
ERISA and section 4980B of the Code; no lien imposed under the Code or ERISA on
the assets of the Borrower or any Subsidiary of the Borrower or any ERISA
Affiliate exists or is likely to arise on account of any Plan; and the Borrower
and its Subsidiaries do not maintain or contribute to any employee welfare
benefit plan (as defined in section 3(1) of ERISA) which provides benefits to
retired employees or other former employees (other than as
28
required by section 601 of ERISA) or any Plan the obligations with respect to
which could reasonably be expected to have a material adverse effect on the
ability of any Credit Party to perform its obligations under this Agreement or
the other Credit Documents.
6.13. Subsidiaries. Annex II hereto lists each Subsidiary of the
Borrower (and the direct and indirect ownership interest of the Borrower
therein), in each case existing on the Closing Date but after giving effect to
the Transaction.
6.14. Intellectual Property, etc. The Borrower and each of its
Subsidiaries has obtained or has the right to use during the term of this
Agreement all material patents, trademarks, servicemarks, trade names,
copyrights, licenses and other rights, free from burdensome restrictions, that
are necessary for the operation of its business as presently conducted and as
proposed to be conducted.
6.15. Environmental Matters. (a) The Borrower and each of its
Subsidiaries is in compliance with all Environmental Laws governing its business
except to the extent that any such failure to comply (together with any
resulting penalties, fines or forfeitures) would not reasonably be expected to
have a Material Adverse Effect. All licenses, permits, registrations or
approvals required for the business of the Borrower and each of its
Subsidiaries, as conducted as of the Closing Date, under any Environmental Law
have been secured and the Borrower and each of its Subsidiaries is in
substantial compliance therewith, except for such licenses, permits,
registrations or approvals the failure to secure or to comply therewith is not
reasonably likely to have a Material Adverse Effect. Neither the Borrower nor
any of its Subsidiaries is in any respect in noncompliance with, breach of or
default under any applicable writ, order, judgment, injunction, or decree to
which the Borrower or such Subsidiary is a party or which would affect the
ability of the Borrower or such Subsidiary to operate any real property and no
event has occurred and is continuing which, with the passage of time or the
giving of notice or both, would constitute noncompliance, breach of or default
thereunder, except in each such case, such noncompliance, breaches or defaults
as would not reasonably be expected to, in the aggregate, have a Material
Adverse Effect. There are as of the Closing Date no Environmental Claims pending
or, to the best knowledge of the Borrower, threatened wherein an unfavorable
decision, ruling or finding would reasonably be expected to have a Material
Adverse Effect. There are no facts, circumstances, conditions or occurrences on
any Real Property now or at any time owned, leased or operated by the Borrower
or any of its Subsidiaries or, to the knowledge of the Borrower, on any property
adjacent to any such Real Property that could reasonably be expected (i) to form
the basis of an Environmental Claim against the Borrower or any of its
Subsidiaries or any Real Property of the Borrower or any of its Subsidiaries, or
(ii) to cause such Real Property to be subject to any restrictions on the
ownership, occupancy, use or transferability of such Real Property under any
Environmental Law, except in each such case, such Environmental Claims or
restrictions that individually or in the aggregate would not reasonably be
expected to have a Material Adverse Effect.
(b) Hazardous Materials have not at any time been (i) generated, used,
treated or stored on, or transported to or from, any Real Property of the
Borrower or any of its Subsidiaries or (ii) released on any such Real Property,
in each case where such occurrence or event is reasonably likely to have a
Material Adverse Effect.
(c) There are not now any underground storage tanks located on any
Real Property owned, leased or operated by the Borrower or any of its
Subsidiaries.
6.16. Properties. Annex III contains a true and complete list of each
Real Property owned or leased by the Borrower or any of its Subsidiaries on the
Closing Date (after giving effect to the Transaction) and the type of interest
therein held by the Borrower or the respective Subsidiary. The Borrower and each
of its Subsidiaries has good and indefeasible title in fee to each Real Property
owned by it and a valid and subsisting Leasehold in each Real Property leased by
it, in each case, after giving effect to the Transaction, free and clear of all
Liens and security interests other than the Liens created pursuant to the
Mortgages, Permitted Liens and Permitted Encumbrances. The Borrower and each of
its Subsidiaries has received all material assignments, waivers, consents and
other documents, and duly effected all material recordings, filings and other
material actions necessary to establish, protect and perfect its right, title
and interest in and to each Real Property owned or leased by it. All material
transfer taxes, deed stamps, intangible taxes or other amounts in the nature of
transfer taxes required to be paid by any person under applicable Legal
Requirements or other laws applicable to the Real Property in connection,with
the Transaction have been paid.
29
6.17. Labor Relations: Collective Bargaining Agreements. There is (i)
no significant unfair labor practice complaint pending against the Borrower or
any of its Subsidiaries or, to the knowledge of the Borrower, threatened against
any of them, before the National Labor Relations Board, and no significant
grievance or significant arbitration proceeding arising out of or under any
collective bargaining agreement is now pending against the Borrower or any of
its Subsidiaries or, to the knowledge of the Borrower, threatened against any of
them, (ii) no significant strike, labor dispute, slowdown or stoppage is pending
against the Borrower or any of its Subsidiaries or, to the best knowledge of the
Borrower, threatened against the Borrower or any of its Subsidiaries, and (iii)
to the knowledge of the Borrower, no union representation question exists with
respect to the employees of the Borrower or any of its Subsidiaries, except
(with respect to any matter specified in clause (i), (ii) or (iii) above, either
individually or in the aggregate) such as would not reasonably be expected to
have a Material Adverse Effect.
6.18. Indebtedness. Annex IV sets forth a true and complete list of
all Indebtedness of the Borrower and each of its Subsidiaries (after giving
effect to the Transaction) incurred prior to, but which is to remain outstanding
after, the Closing Date (collectively, the "Existing Indebtedness"), in each
case showing the aggregate principal amount, amortization and interest rate
thereof (and available commitments, if any, thereunder) and the name of the
respective borrower and any other entity which directly or indirectly guaranteed
such debt.
6.19. Transaction. On and as of the Closing Date, (i) all material
consents and approvals of, and filings and registrations with, and all other
actions in respect of, all governmental agencies, authorities or
instrumentalities required to be obtained, given, filed or taken by the Parent,
the Borrower or any other Credit Party in order to make or consummate each
component of the Transaction will have been obtained, given, filed or taken and
are or will be in full force and effect (or effective judicial relief with
respect thereto will have been obtained) except for filings, consents or notices
not required by federal or state securities laws to be made at such time, which
filings, consents or notices have been or will be made during the period in
which they are required to be made and (ii) each component of the Transaction
shall have been consummated in accordance, in all material respects, with the
applicable Transaction Documents and in compliance, in all material respects,
with all applicable laws.
6.20. Certain Material Agreements. After giving effect to the
Transaction, each Management Contract and each Existing Indebtedness Agreement
is in full force and effect in accordance with its respective terms, without any
material default existing thereunder.
6.21. Third-Party Rights. No person holds any right of first refusal,
option to purchase or lease, buy-out right, right of first offer or other
similar right or option with respect to any portion of the Collateral or any
partnership interest, joint venture interest or shareholder interest owned by
the Borrower in any of its Subsidiaries.
SECTION 7. AFFIRMATIVE COVENANTS.
The Borrower hereby covenants and agrees that so long as this
Agreement is in effect and until such time as the Total Commitment has been
terminated, no Notes are outstanding and the Loans, together with interest, Fees
and all other Obligations hereunder, have been paid in full:
7.1. Reporting Requirements. The Borrower will furnish to the
Administrative Agent, in sufficient quantities for the Lenders (and the
Administrative Agent will promptly transmit such copies to 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
Borrower, the consolidated and consolidating balance sheet of the
Borrower and its consolidated Subsidiaries as at the end of such
fiscal year and the related consolidated statements of income, of
stockholder's equity and of cash flows and consolidating statement of
income for such fiscal year, in each case setting forth comparative
figures for the preceding fiscal year and accompanied by the opinion
of independent certified public accountants of recognized national
standing as to such consolidated financial statements, which opinion
shall not be qualified as to the scope of audit or as to the status of
the Borrower or any of its Subsidiaries as a going concern, together
with a certificate of such accounting firm stating that in the course
of its regular audit of the business of the Borrower and its
Subsidiaries, which audit was conducted in accordance with generally
accepted auditing standards, nothing came to the
30
attention of such accounting firm which would lead it to believe that
any Default or Event of Default as they relate to accounting matters
has occurred and is continuing or if in the opinion of such accounting
firm such a Default or Event of Default has occurred and is
continuing, a statement as to the nature thereof.
(b) Quarterly Financial Statements. As soon as available and
in any event within 45 days after the close of each of the first three
quarterly accounting periods in each fiscal year of the Borrower, the
consolidated and consolidating balance sheet of the Borrower and its
consolidated Subsidiaries as at the end of such quarterly period and
the related consolidated statements of income and of cash flows and
the consolidating income statement for such quarterly period, and
setting forth, in the case of such consolidated statements of income
and of cash flows, comparative figures for the related periods in the
prior fiscal year, and which shall be certified on behalf of the
Borrower by the Chief Financial Officer or other Authorized Officer of
the Borrower, subject to changes resulting from normal year-end audit
adjustments.
(c) Monthly Property Specific Financial Statements. As soon
as available and in any event within 30 days after the close of each
month, financial statements for each separate Mature Property and
completed Development Property, showing Cash Flow from Operations
therefor for such period and for the elapsed portion of the fiscal
year ended with the last day of such period, together with such other
financial information with respect thereto as the Administrative Agent
may reasonably request, and which shall be certified on behalf of the
Borrower by the Chief Financial Officer or other Authorized Officer of
the Borrower, subject to changes resulting from normal year-end audit
adjustments.
(d) Budget. Not less than 10 days prior to the commencement
of each fiscal year of the Borrower, a preliminary consolidated budget
(to be followed no later than 30 days after the commencement of such
fiscal year by a final consolidated budget) of the Borrower and its
Subsidiaries in reasonable detail for each of the four fiscal quarters
of such fiscal year, and for any subsequent fiscal years, as
customarily prepared by management for its internal use, setting
forth, with appropriate discussion, the forecasted balance sheet,
income statement, operating cash flows and capital expenditures of the
Borrower and its Subsidiaries for the period covered thereby, and the
principal assumptions upon which forecasts and budget are based.
(e) Officer's Certificates. At the time of the delivery of
the financial statements provided for in sections 7.1(a), (b) and (c),
a certificate on behalf of the Borrower of the Chief Financial Officer
or other Authorized Officer of the Borrower to the effect that no
Default or Event of Default exists or, if any Default or Event of
Default does exist, specifying the nature and extent thereof, which
certificate shall set forth the calculations required to establish
compliance with the provisions of sections 8.10, 8.11, 8.12 and 8.13
of this Agreement, and (if the Parent Guarantor has notified the
Administrative Agent that it believes the conditions specified in
section 2.3 of the Parent Guaranty have been satisfied so as to
entitle the Parent Guarantor to an early termination of the Parent
Guaranty) sections 2.3(a) and (b) of the Parent Guaranty as at the end
of such fiscal year or quarter or month, as the case may be.
(f) Notice of Default or Litigation. Promptly, and in any
event within three Business Days after the Borrower or any of its
Subsidiaries obtains knowledge thereof, notice of (i) the occurrence
of any event which constitutes a Default or Event of Default, which
notice shall specify the nature thereof, the period of existence
thereof and what action the Borrower proposes to take with respect
thereto, and (ii) any litigation or governmental or regulatory
proceeding pending against the Borrower or any of its Subsidiaries
which is likely to have a Material Adverse Effect or a material
adverse effect on the Collateral or the ability of any Credit Party to
perform its obligations hereunder or under any other Credit Document.
(g) Auditors' Reports. Promptly upon receipt thereof, a copy
of each other report or management letter" submitted to the Borrower
or any of its Subsidiaries by their independent
31
accountants or independent actuaries in connection with any annual,
interim or special audit made by them of the books of the Borrower or
any of its Subsidiaries.
(h) ERISA. Promptly upon completion thereof, a complete copy
of the annual report (Form 5500) of each Plan (including, to the
extent required, the related financial and actuarial statements and
opinions and other supporting statements, certifications, schedules
and information) required to be filed with the Internal Revenue
Service. In addition to any certificates or notices delivered pursuant
to the first sentence hereof, copies of reports and any material
notices received by the Borrower, any Subsidiary of the Borrower or
any ERISA Affiliate with respect to any Plan shall be delivered to the
Administrative Agent (in sufficient quantities for the Lenders)
promptly after the Borrower is aware, and in any event no later than
30 days after the date such report has been filed with the Internal
Revenue Service or such notice has been received by the Borrower, such
Subsidiary or such ERISA Affiliate, as applicable.
(i) Environmental Matters. Promptly upon, and in any event
within 10 Business Days after, an officer of the Borrower or any of
its Subsidiaries obtains knowledge thereof, notice of one or more of
the following environmental matters: (i) any pending or threatened (in
writing) material Environmental Claim against the Borrower or any of
its Subsidiaries or any Real Property owned or operated by the
Borrower or any of its Subsidiaries; (ii) any condition or occurrence
on or arising from any Real Property owned or operated by the Borrower
or any of its Subsidiaries that (A) results in material noncompliance
by the Borrower or any of its Subsidiaries with any applicable
Environmental Law or (B) would reasonably be expected to form the
basis of a material Environmental Claim against the Borrower or any of
its Subsidiaries or any such Real Property; (iii) any condition or
occurrence on any Real Property owned, leased or operated by the
Borrower or any of its Subsidiaries that could reasonably be expected
to cause such Real Property to be subject to any material restrictions
on the ownership, occupancy, use or transferability by the Borrower or
any of its Subsidiaries of such Real Property under any Environmental
Law; and (iv) the taking of any material removal or remedial action in
response to the actual or alleged presence of any Hazardous Material
on any Real Property owned, leased or operated by the Borrower or any
of its Subsidiaries as required by any Environmental Law or any
governmental or other administrative agency. All such notices shall
describe in reasonable detail the nature of the Environmental Claim
and the Borrower's or such Subsidiary's response thereto.
(j) SEC Reports and Registration Statements. Promptly upon
transmission thereof or other filing with the SEC, copies of all
registration statements (other than the exhibits thereto and any
registration statement on Form S-8 or its equivalent) and annual,
quarterly or current reports that the Borrower or any of its
Subsidiaries files with the SEC.
(k) Other Information. With reasonable promptness, such other
information or documents (financial or otherwise) relating to the
Borrower or any of its Subsidiaries or any property included in the
Mature Property Pool or the Development Property Pool as the
Administrative Agent on its own behalf or on behalf of the Required
Lenders may reasonably request from time to time.
7.2. Books, Records and Inspections. The Borrower will, and will
cause each of its Subsidiaries to, permit, upon at least two Business Days'
notice to the Chief Financial Officer or any other Authorized Officer of the
Borrower, officers and designated representatives of the Administrative Agent or
any of the Lenders to visit and inspect any of the properties or assets of the
Borrower and any of its Subsidiaries in whomsoever's possession (but only to the
extent the Borrower or such Subsidiary has the right to do so to the extent in
the possession of another person), and to examine the books of account of the
Borrower and any of its Subsidiaries and discuss the affairs, finances and
accounts of the Borrower and of any of its Subsidiaries with, and be advised as
to the same by, its and their officers and independent accountants and
independent actuaries, if any, all at such reasonable times and intervals and to
such reasonable extent as the Administrative Agent or any of the Lenders may
request.
32
7.3. Insurance. (a) The Borrower will, and will cause each of its
Subsidiaries to, at all times maintain in full force and effect insurance with
reputable and solvent insurers in such amounts and covering such risks and
liabilities as are in accordance with normal industry practice, provided that
this covenant shall be satisfied in respect of any Mortgaged Property to the
extent the insurance covenants in the related Mortgage are satisfied. The
Borrower will, and will cause each of its Subsidiaries to, furnish annually, on
or prior to May 1, to the Administrative Agent a summary of the insurance
carried.
(b) The Borrower will, and will cause each of its Subsidiaries to, at
all times keep their respective property insured in favor of the Collateral
Agent, and all policies (including the Mortgage Policies) or certificates (or
certified copies thereof) with respect to such insurance (and any other
insurance maintained by the Borrower or any such Subsidiary) (i) shall be
endorsed to the Collateral Agent's satisfaction for the benefit of the
Collateral Agent (including, without limitation, by naming the Collateral Agent
as loss payee (with respect to Collateral) or, to the extent permitted by
applicable law, as an additional insured), (ii) shall state that such insurance
policies shall not be cancelled without 30 days' prior written notice thereof
(or 10 days' prior written notice in the case of cancellation for the
non-payment of premiums) by the respective insurer to the Collateral Agent,
(iii) shall provide that the respective insurers irrevocably waive any and all
rights of subrogation with respect to the Collateral Agent and the Lenders, and
(iv) shall be deposited with the Collateral Agent. In no event shall the
Borrower be required to deposit the actual insurance policies with the
Collateral Agent. The Administrative Agent shall deliver copies of any
certificates of insurance to a Lender upon such Lender's request.
(c) If the Borrower or any of its Subsidiaries shall fail to maintain
all insurance in accordance with this section 7.3, or if the Borrower or any of
its Subsidiaries shall fail to so endorse and deposit all policies or
certificates with respect thereto, the Administrative Agent and/or the
Collateral Agent shall have the right (but shall be under no obligation), upon
prior notice to the Borrower, to procure such insurance and the Borrower agrees
to reimburse the Administrative Agent or the Collateral Agent, as the case may
be for all costs and expenses of procuring such insurance.
7.4. Payment of Taxes. The Borrower will pay and discharge, and will
cause each of its Subsidiaries to pay and discharge, all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits, or
upon any properties belonging to it, prior to the date on which penalties attach
thereto, and all lawful claims (other than claims relating to the adjustment or
settling, in the ordinary course of business, of claims in respect of insurance
policies or reinsurance contracts) which, if unpaid, might become a Lien or
charge upon any properties of the Borrower or any of its Subsidiaries, provided
that neither the Borrower nor any of its Subsidiaries shall be required to pay
any such tax, assessment, charge, levy or claim which is being contested in good
faith and by proper proceedings if it has maintained adequate reserves with
respect thereto in accordance with GAAP.
7.5. Corporate Franchises. The Borrower will do, and will cause each
of its Subsidiaries to do, or cause to be done, all things necessary to preserve
and keep in full force and effect its corporate existence, rights and authority,
provided that any transaction permitted by section 8.2 will not constitute a
breach of this section 7.5.
7.6. Compliance with Statutes, etc. The Borrower will, and will cause
each of its Subsidiaries to, comply with all applicable statutes, regulations
and orders of, and all applicable restrictions imposed by, all governmental
bodies, domestic or foreign, in respect of the conduct of its business and the
ownership of its property other than those the noncompliance with which would
not have, and which would not be reasonably expected to have, a Material Adverse
Effect or a material adverse effect on the Collateral or the ability of any
Credit Party to perform its obligations under any Credit Document.
7.7. Good Repair. The Borrower will, and will cause each of its
Subsidiaries to, ensure that its material properties and equipment used or
useful in its business in whomsoever's possession they may be, are kept in good
repair, working order and condition, normal wear and tear excepted, and that
from time to time there are made in such properties and equipment all needful
and proper repairs, renewals, replacements, extensions, additions, betterments
and improvements, thereto, to the extent and in the manner customary for
companies in similar businesses.
33
7.8. Compliance with Environmental Laws. (a) The Borrower will comply,
and will cause each of its Subsidiaries to comply, in all material respects,
with all Environmental Laws applicable to the ownership, lease or use of all
Real Property now or hereafter owned, leased or operated by the Borrower or any
of its Subsidiaries, will promptly pay or cause to be paid all costs and
expenses incurred in connection with such compliance, and will keep or cause to
be kept all such Real Property free and clear of any Liens imposed pursuant to
such Environmental Laws. Neither the Borrower nor any of its Subsidiaries will
generate, use, treat, store, release or dispose of, or permit the generation,
use, treatment, storage, release or disposal of, Hazardous Materials on any Real
Property now or hereafter owned, leased or operated by the Borrower or any of
its Subsidiaries or transport or permit the transportation of Hazardous
Materials to or from any such Real Property other than in compliance with
applicable Environmental Laws and in the ordinary course of business. If
required to do so under any applicable directive or order of any governmental
agency, the Borrower will undertake, and cause each of its Subsidiaries to
undertake, any clean up, removal, remedial or other action necessary to remove
and clean up any Hazardous Materials from any Real Property owned, leased or
operated by the Borrower or any of its Subsidiaries in accordance with, in all
material respects, the requirements of all applicable Environmental Laws and in
accordance with, in all material respects, such orders and directives of all
governmental authorities, except to the extent that the Borrower or such
Subsidiary is contesting such order or directive in good faith and by
appropriate proceedings and for which adequate reserves have been established to
the extent required by GAAP.
(b) At the written request of the Administrative Agent or the Required
Lenders, which request shall specify in reasonable detail the basis therefor, at
any time and from time to time (i) while an Event of Default exists, or (ii)
after the Lenders receive notice under section 7.1(i) for any event for which
notice is required to be delivered for any Real Property, the Borrower will
provide, at its sole cost and expense, an environmental site assessment report
concerning any such Real Property now or hereafter owned, leased or operated by
the Borrower or any of its Subsidiaries, prepared by an environmental consulting
firm approved by the Administrative Agent, indicating the presence or absence of
Hazardous Materials and the potential cost of any removal or a remedial action
in connection with any Hazardous Materials on such Real Property. If the
Borrower fails to provide the same within 90 days after such request was made,
the Administrative Agent may order the same, and the Borrower shall grant and
hereby grants, to the Administrative Agent and the Lenders and their agents,
access to such Real Property and specifically grants the Administrative Agent
and the Lenders an irrevocable non-exclusive license, subject to the rights of
tenants, to undertake such an assessment, all at the Borrower's expense.
7.9. Change of Fiscal Years, Fiscal Quarters. In the event that the
Borrower, for financial reporting purposes, shall change its or any of its
Subsidiaries' fiscal years or fiscal quarters, the Borrower will promptly, and
in any event within 30 days following any such change, deliver a notice to the
Administrative Agent (in sufficient quantities for the Lenders) describing such
change and any material accounting entries made in connection therewith and
stating whether such change will have any impact upon any financial computations
to be made hereunder, and if any such impact is foreseen, describing in
reasonable detail the nature and extent of such impact.
7.10. Additional Security; Further Assurances. (a) Developed
Properties Acquired and Property Development Completed Following the Closing
Date. The Borrower will give the Collateral Agent not less than 10 days prior
written notice of the scheduled closing date for any Permitted Acquisition by
the Borrower or any of its Subsidiaries occurring after the Closing Date.
Subject to obtaining any consents from third parties (including third party
lessors and co-venturers) necessary to be obtained for the granting of a Lien on
the interests or assets acquired pursuant to any such Permitted Acquisition
(with the Borrower hereby agreeing to use its reasonable best efforts to obtain
such consents), the Borrower will, and will cause its Subsidiaries to, grant the
Collateral Agent for the benefit of the Lenders security interests and mortgages
(each an "Additional Security Document") in the interests or properties of the
Borrower or any Subsidiary (A) which are acquired after the Closing Date as
fully developed properties, or (B) the completion of the development of which
has occurred after the Closing Date, other than (i) any Real Property and
related personal property assets acquired by a joint venture (in which there are
minority interests held by persons who are not Affiliates of the Borrower) with
the proceeds of equity investments made by the Borrower or a Subsidiary to the
extent such equity investments are pledged to the Collateral Agent, and (ii) any
Real Property and related personal property assets acquired with the proceeds
of, and securing, or subject to assumed, Priority Debt and those constituting
expansions of existing facilities subject to mortgages in favor of other
persons), as additional security for the Obligations. Each Additional Security
Document shall be granted pursuant to documentation satisfactory in form and
substance to the Administrative Agent and the Documentation Agent, which
34
documentation shall be accompanied by such Phase I environmental assessments (in
the case of owned property), surveys and surveyor's certifications (in the case
of owned property) meeting the requirements contemplated by section
5.1(n)(iii)(E), mortgage policy of title insurance, consents of landlords and
other supporting documentation requested by and satisfactory in form and
substance to the Administrative Agent and the Documentation Agent, and shall
constitute a valid and enforceable perfected Lien upon the interests or
properties so acquired, superior to and prior to the rights of all third persons
and subject to no other Liens except those permitted by section 8.3 or otherwise
agreed by the Administrative Agent at the time of perfection thereof and such
other encumbrances as may be set forth in the mortgage policy, if any, relating
to such Additional Security Document which shall be delivered to the Collateral
Agent together with such Additional Security Document and which shall be
satisfactory in form and substance to the Collateral Agent. The Borrower, at its
sole cost and expense, will cause each Additional Security Document or
instruments related thereto to be duly recorded or filed in such manner and in
such places as are required by law to establish, perfect, preserve and protect
the Liens created thereby required to be granted pursuant to the Additional
Security Document, and will pay or cause to be paid in full all taxes, fees and
other charges payable in connection therewith.
(b) Further Assurances. The Borrower will, and will cause each of its
Subsidiaries to, at the expense of the Borrower, make, execute, endorse,
acknowledge, file and/or deliver to the Collateral Agent from time to time such
conveyances, financing statements, transfer endorsements, powers of attorney,
certificates, and other assurances or instruments and take such further steps
relating to the Collateral covered by any of the Security Documents as the
Collateral Agent may reasonably require. If at any time the Collateral Agent
determines, based on applicable law, that all applicable taxes (including,
without limitation, mortgage recording taxes or similar charges) were not paid
in connection with the recordation of any Mortgage, the Borrower shall promptly
pay the same upon demand. Furthermore, the Borrower shall cause to be delivered
to the Collateral Agent such opinions of local counsel, title insurance,
surveys, environmental assessments, consents of landlords, lien waivers from
landlords (if and to the extent that the aggregate value of the Borrower's and
its Subsidiaries' equipment located on leaseholds and not covered by effective
lien waivers from landlords exceeds $500,000) and other related documents as may
be reasonably requested by the Administrative Agent or the Collateral Agent in
connection therewith, all of which documents shall be in form and substance
satisfactory to the Administrative Agent and the Collateral Agent, except that
no title insurance or surveys shall be required for any leasehold properties
(unless the lessee has a nominal or bargain purchase option).
(c) Certain Appraisals. Recognizing that the Lenders, in making their
own respective credit analyses and determinations whether to enter into this
Agreement, (i) have relied primarily on the financial condition and results of
operations of the Borrower and its consolidated subsidiaries and, to the extent
relevant to the performance by the Borrower of its obligations under this
Agreement and the other Credit Documents to which it is or is to be a party, the
terms and provisions of the Parent Guaranty and the financial condition and
results of operations of the Parent and its consolidated subsidiaries, and (ii)
have determined that it is not necessary or appropriate, in light of their
respective credit analyses and determinations, to require the Borrower to
deliver to the Lenders at the Closing Date appraisals covering the Mortgaged
Properties, the Borrower will nevertheless (A) comply with all provisions of the
Credit Documents respecting the execution, delivery and performance of all
Mortgages, and any other provisions of this Agreement and the other Credit
Documents related thereto, and (B) if requested by any Lender at any time, in
order to meet any legal requirement applicable to such Lender, provide to
Administrative Agent, the Documentation Agent and the Lenders, at the sole cost
and expense of the Borrower, appraisals and other supporting documentation
relating to the Mortgage or Mortgages covering any or all of the Mortgaged
Properties, as specified by any Lender, meeting the appraisal and other
documentation requirements of the Real Estate Reform Amendments of the Financial
Institution Reform, Recovery and Enforcement Act of 1989, as amended, or any
other legal requirements applicable to any Lender, which in the case of any such
appraisal shall be prepared by one or more valuation firms of national standing,
acceptable to the Required Lenders, utilizing appraisal standards satisfying
such Amendments, Act or other legal requirements.
(d) Mortgage Taxes, etc. The Administrative Agent may, in the case of
any Mortgage to be recorded in any jurisdiction which imposes a significant
documentary stamp tax, intangible tax, or other tax or governmental charge
incident to the recording of a mortgage or deed of trust, include in such
Mortgage appropriate provisions limiting the amount of the obligations secured
thereby, or the amount of the maximum recovery upon foreclosure or other
exercise of remedies, to an amount which, in the reasonable opinion of the
Managing Agent, approximates
35
the maximum reasonably expected fair market value of the property subject
thereto during the period such Mortgage is expected to be effective, as
determined by the Managing Agent on the basis of a fixed price per unit, a
multiple of potential cash flow per unit, or other method which may be employed
by the Managing Agent. In the case of the two properties located in Florida
which are being subjected to Mortgages on the Closing Date, the Borrower and the
Managing Agent have agreed that provisions shall be included in those Mortgages
of the nature referred to above which reflect a valuation of approximately
$70,000 per unit for each such property. The Managing Agent has proposed, and
the Borrower has approved, a valuation methodology for any additional properties
as to which provisions of this nature may be included in the applicable
Mortgage. Such valuation methodology, which is subject to change by the Managing
Agent from time to time in light of perceived changes in market conditions,
values a property in accordance with the following formula: (RCP) x (CF) x (No.
Units) x (95% occupancy) x (CF per Unit) = Resulting Value, where RCP is the
reciprocal of an appropriate capitalization rate, such as 8.5 based on a 12%
capitalization rate, CF is a coefficient for inflation and potentially higher
market values, such as 1.3, representing a potential 30% combined increase in
value (after inflation) of the property over the expected life of the Mortgage,
No. Units is the number of individual assisted or independent living units
available for occupancy at the applicable property, 95% occupancy is an assumed
occupancy rate, CF per Unit is the reasonably expected annual Cash Flow from
Operations for each such unit (not expected to be less than $8,400 per unit),
and Resulting Value is the value of the property, based on such formula
valuation, which would be included in the applicable provisions of the Mortgage
relating thereto. The Managing Agent shall be free to use its own judgment in
directing the Administrative Agent to include any such provisions in any such
Mortgage, shall not be required to rely upon any appraisals or other supporting
evidence as to valuation in determining any such amounts, shall not be required
to obtain any consent or instructions from any Lenders in directing the
Administrative Agent to include any such provisions in any such Mortgage, and
such actions of the Managing Agent and the Administrative Agent's actions in
including any such provisions in any such Mortgage shall be entitled to the
benefit of the provisions of section 11.4 hereof.
(e) Lenders to be Provided with copies of Additional Security
Documents. The Borrower will provide the Administrative Agent with sufficient
copies of each Additional Security Document and any additional supporting
documents delivered in connection therewith for distribution of copies thereof
to the Lenders, and the Administrative Agent will promptly so distribute such
copies.
(f) Actions to be Completed. The Borrower agrees that each action
required above by this section 7.10 shall be completed as soon as possible, but
in no event later than 60 days after such action is requested to be taken by the
Administrative Agent, the Collateral Agent or the Required Lenders. In the case
of any property which is proposed to be added to the Mature Property Pool,
reference is made to the requirements of the definition of the term Mature
Property Pool for information concerning the conditions to be satisfied prior to
the addition of properties to the Mature Property Pool, including, without
limitation, the requirement that the Mortgage in respect thereof must have been
perfected for a period of at least 90 days prior to the date such property is
added to the Mature Property Pool.
7.11. Corporate Separateness. The Borrower will take, and will cause
each of its Subsidiaries to take, all such action as is necessary to keep the
operations of the Borrower and its Subsidiaries separate and apart from those of
each Subsidiary which has outstanding IRB Debt or Priority Debt, including,
without limitation, ensuring that all customary formalities regarding corporate
existence, including holding regular board of directors' meetings and
maintenance of corporate records, are followed. All financial statements of the
Borrower and its Subsidiaries provided to creditors will clearly evidence the
corporate separateness of the Borrower and its other Subsidiaries from each
Subsidiary which has IRB Debt or Priority Debt outstanding. Finally, neither the
Borrower nor any of its other Subsidiaries will take any action, or conduct its
affairs in a manner which is likely to result in the corporate existence of a
Subsidiary which has IRB Debt or Priority Debt outstanding, on the one hand, and
the Borrower and its other Subsidiaries, on the other hand, being ignored, or in
the assets and liabilities of the Borrower or any of its other Subsidiaries
being substantively consolidated with those of a Subsidiary which has IRB Debt
or Priority Debt outstanding in a bankruptcy, reorganization or other insolvency
proceeding. No action or indemnity, or provision of support in the form of a
letter of credit, expressly permitted by this Agreement will breach this
covenant.
7.12. ERISA. As soon as possible and, in any event, within 10 days
after the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate knows
or has reason to know of the occurrence of any of the following, the Borrower
will deliver to each of the Lenders a certificate of the chief financial officer
of the Borrower setting forth
36
the full details as to such occurrence and the action, if any, that the
Borrower, such Subsidiary or such ERISA Affiliate is required or proposes to
take, together with any notices required or proposed to be given to or filed
with or by the Borrower, the Subsidiary, the ERISA Affiliate, the PBGC, a Plan
participant or the Plan administrator with respect thereto: that a Reportable
Event has occurred; that an accumulated funding deficiency, within the meaning
of section 412 of the Code or section 302 of ERISA, has been incurred or an
application may be or has been made for a waiver or modification of the minimum
funding standard (including any required installment payments) or an extension
of any amortization period under section 412 of the Code or section 303 or 304
of ERISA with respect to a Plan; that any contribution required to be made with
respect to a Plan has not been timely made; that a Plan has been or may be
terminated, reorganized, partitioned or declared insolvent under Title IV of
ERISA; that a Plan has an Unfunded Current Liability; that proceedings may be or
have been instituted to terminate or appoint a trustee to administer a Plan
which is subject to Title IV of ERISA; that a proceeding has been instituted
pursuant to section 515 of ERISA to collect a delinquent contribution to a Plan;
that the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate will or
may incur any liability (including any indirect, contingent, or secondary'
liability) to or on account of the termination of or withdrawal from a Plan
under section 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or with
respect to a Plan under section 401(a)(29), 4971, 4975 or 4980 of the Code or
section 409 or 502(i) or 502(l) of ERISA or with respect to a group health plan
(as defined in section 607(1) of ERISA or section 4980B(g)(2) of the Code) under
section 4980B of the Code; or that the Borrower or any Subsidiary of the
Borrower may incur any material liability pursuant to any employee welfare
benefit plan (as defined in section 3(1) of ERISA) that provides benefits to
retired employees or other former employees (other than as required by section
601 of ERISA) or any Plan.
7.13. Senior Debt. The Borrower will at all times ensure that (a) the
claims of the Lenders in respect of the Obligations of the Borrower will not be
subordinate to, and will in all respects at least rank pari passu with, the
claims of every other senior unsecured creditor of the Borrower, and (b) any
Indebtedness subordinated in any manner to the claims of any other senior
unsecured creditor of the Borrower will be subordinated in like manner to such
claims of the Lenders.
SECTION 8. NEGATIVE COVENANTS.
The Borrower hereby covenants and agrees that on the Effective Date
and thereafter for so long as this Agreement is in effect and until such time as
the Total Commitment has been terminated, no Notes remain outstanding and the
Loans, together with interest, Fees and all other Obligations incurred hereunder
are paid in full:
8.1. Changes in Business. The Borrower will not permit the business
activities of itself and its Subsidiaries taken as a whole to be substantively
altered from the business activities conducted by the Borrower and its
Subsidiaries (after giving effect to the Transaction) on the Closing Date, and
business activities incidental or directly related thereto, such as those
related to home health care.
8.2. Consolidation, Merger or Sale of Assets, etc. The Borrower will
not, and will not permit any Subsidiary to, wind up, liquidate or dissolve its
affairs, or enter into any transaction of merger or consolidation or sell or
otherwise dispose of any of its property or assets (but excluding any sale or
disposition of obsolete or excess furniture, fixtures or equipment or excess
land in the ordinary course of business), or purchase, lease or otherwise
acquire (in one transaction or a series of related transactions) all or any part
of the property or assets of any person (excluding any purchases, leases or
other acquisitions of property or assets in, and for use in, the ordinary course
of business) or agree to do any of the foregoing at any future time, except that
the following shall be permitted:
(a) capital expenditures by the Borrower and its
Subsidiaries;
(b) the investments permitted pursuant to section 8.5;
(c) if no Default or Event of Default shall have occurred and
be continuing or would result therefrom, (i) the merger or
consolidation of any Subsidiary Guarantor with or into the Borrower or
another Subsidiary Guarantor or the liquidation or dissolution of any
Subsidiary (contemporaneously with the retirement or other discharge
of all IRB Debt and Priority Debt of
37
such Subsidiary, if any) or (ii) the transfer or other disposition of
any property by the Borrower to any Subsidiary Guarantor or by any
Subsidiary Guarantor to the Borrower or any other Subsidiary
Guarantor, provided that all Liens granted pursuant to the Security
Documents on any property or assets involved in any of the foregoing
transactions shall remain in full force and effect (with the same
priority as they would have if such transfer pursuant to this clause
(ii) had not occurred), either as a result of any such transfer being
made subject to such Liens or as a result of the surviving or
transferee entity executing and delivering new Security Documents, in
each case to the satisfaction of the Administrative Agent;
(d) if no Default or Event of Default shall have occurred and
be continuing or would result therefrom, the Borrower or any
Subsidiary may make Permitted Acquisitions, provided that at least 10
days prior to the date of such acquisition, the Borrower shall have
delivered to the Administrative Agent an officer's certificate
executed on behalf of the Borrower by an Authorized Officer of the
Borrower, which certificate shall (i) contain the date such Permitted
Acquisition is scheduled to be consummated, (ii) contain the estimated
purchase price of such Permitted Acquisition, (iii) contain a
description of the property and/or assets acquired in connection with
such Permitted Acquisition, (iv) demonstrate that at the time of
making any such Permitted Acquisition the covenants contained in
sections 8.10, 8.11, 8.12 and 8.13 shall be complied with on a pro
forma basis as if the properties and/or assets so acquired had been
owned by the Borrower, and the Indebtedness assumed and/or incurred to
acquire and/or finance same has been outstanding, for the 12 month
period immediately preceding such acquisition (without giving effect
to any credit for unobtained or unrealized gains in connection with
such Permitted Acquisition, but taking into account such adjustments
to the overhead of such properties and assets as may reasonably
determined and specified by the Borrower to reflect the overhead
generally applicable to similar properties and assets owned by the
Borrower and its Subsidiaries, including provision for a management
fee of 5%, as and to the extent the Administrative Agent determines
such adjustments to be reasonable and appropriate under the particular
circumstances), (v) to the extent applicable, confirms that the
Borrower has obtained an environmental assessment which demonstrate
that the representations and warranties of the Borrower contained in
this Agreement (including those set forth in section 6.15) shall be
true and correct after giving effect to such Permitted Acquisition,
(vi) confirms that the property acquired pursuant to such Permitted
Acquisition (or owned by the partnership or other entity in which
interests have been acquired or to which loans and/or advances have
been made pursuant to such Permitted Acquisition) is to be managed by
the Borrower or any Subsidiary Guarantor, and (vii) attach thereto a
true and correct copy of the then proposed purchase agreement or
similar agreement, partnership agreement and/or management contract
entered into in connection with such Permitted Acquisition;
(e) if no Default or Event of Default shall have occurred and
be continuing or would result therefrom, the Borrower or any of its
Subsidiaries may (i) sell any property, land or building (including
any related receivables or other intangible assets), or (ii) sell the
entire capital stock (or other equity interests) and Indebtedness of
any Subsidiary owned by the Borrower or any other Subsidiary, or (iii)
permit any Subsidiary to be merged or consolidated with a person which
is not an Affiliate, or (iv) consummate any other Asset Sale; provided
that (A) the consideration for such transaction represents fair value
(as determined by the Board of Directors of the Borrower), (B) such
consideration consists of at least 90% cash or Cash Equivalents, or in
the case of an exchange of properties the property acquired represents
reasonably equivalent value (or to the extent that such value is less
than the value of the property transferred, the difference is payable
in cash or Cash Equivalents), (C) at least 15 days prior to the date
of any such transaction, the Borrower shall have delivered to the
Administrative Agent an officer's certificate executed on behalf of
the Borrower by an Authorized Officer of the Borrower, which
certificate shall contain a description of the proposed transaction,
the date such transaction is scheduled to be consummated, the
estimated purchase price or other consideration for such transaction,
and which shall include a certified copy of the draft or definitive
documentation pertaining thereto, (D) any such assets, capital stock
(or other equity interests) and Indebtedness or Subsidiary shall not
represent more than 5% of the Consolidated Net Worth of the Borrower
as at the end of its most recently completed
38
fiscal quarter for which financial statements have been delivered
pursuant to section 7.1(a) or (b), and shall not have contributed more
than 5% of EBITDA of the Borrower for the four consecutive fiscal
quarters ended most recently prior thereto for which financial
statements have been delivered pursuant to section 7.1(a) or (b), (E)
all such assets, capital stock (or other equity interests) and
Indebtedness or Subsidiary so disposed of after the Closing Date shall
not represent more than 15% of the Consolidated Net Worth of the
Borrower as at the end of its most recently completed fiscal quarter
prior to the last such transaction for which financial statements have
been delivered pursuant to section 7.1(a) or (b);
(f) the Borrower may complete any transaction otherwise
permitted by the preceding clause (e), notwithstanding the limitations
contained in clauses (D) and (E) thereof, if (A) as to any such
transaction where the Net Cash Proceeds are not in excess of
$5,000,000, within six months following any such transaction the
Borrower purchases or enters into a binding commitment to purchase
property, land or buildings of at least equivalent value, and if any
such property, land or buildings of at least equivalent value are not
so purchased within six months, the Borrower will take such actions in
respect thereof as are contemplated by clauses (C) or (D) below, or
(B) contemporaneously with the consummation of such transaction, the
Borrower purchases property, land or buildings of at least equivalent
value which are subjected to the Lien of Additional Security Documents
in accordance with the provisions hereof, or (C) the Borrower prepays
the Loans in an aggregate amount (1) equal to the Net Cash Proceeds of
such transaction, in the case of any such property which is part of
the Development Property Pool, or (2) in the case of any property
which is part of the Mature Property Pool, the amount determined for
such property on the basis of the multiple (i.e. 5, 4.75 or 4)
reflected in the maximum ratio contained in section 8.12(a) applicable
at the time (even if section 8.12(a) shall no longer be in effect,
having been superseded by section 8.12(b), times the Cash Flow from
Operations for such property, or (D) the Borrower pays to the
Administrative Agent an amount in cash and/or Cash Equivalents equal
to such amount and the Administrative Agent shall hold such payment as
security for the obligations of the Borrower hereunder pursuant to a
cash collateral agreement to be entered into in form and substance
reasonably satisfactory to the Administrative Agent and the Borrower
(which shall permit certain investments in Cash Equivalents
satisfactory to the Administrative Agent and the Borrower until the
proceeds are applied to the secured obligations or earlier released by
the Administrative Agent to the Borrower from time to time in amounts
equal to the aggregate MPP Revolving Loans which the Borrower could
obtain at any such time, based upon the receipt by the Administrative
Agent of such certificates pursuant to section 7.1(e) and other
evidence as it may require to establish the amount of MPP Revolving
Loans which could be obtained at any such time in compliance with the
MPP Revolving Loan Sublimit and other applicable provisions of this
Agreement);
(g) the Reorganization; and
(h) the Borrower or any of its Subsidiaries may enter into
leases of property or assets not constituting Permitted Acquisitions
in the ordinary course of business not otherwise in violation of this
Agreement and to the extent not prohibited by section 8.6.
To the extent the Required Lenders (or all of the Lenders as shall be required
by section 12.12) waive the provisions of this section 8.2 with respect to the
sale, transfer or other disposition of any Collateral, or any Collateral is
sold, transferred or disposed of as permitted by a this section 8.2, (i) such
Collateral shall be sold, transferred or disposed of free and clear of the Liens
created by the respective Security Document; (ii) if such Collateral includes
all of the capital stock of a Subsidiary Guarantor, such capital stock shall be
released from the Pledge Agreement and such Subsidiary shall be released from
the Subsidiary Guaranty; and (iii) the Administrative Agent and the Collateral
Agent shall be authorized to take actions deemed appropriate by them in order to
effectuate the foregoing.
8.3. Liens. The Borrower will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets of any kind (real or personal, tangible or
intangible) of the Borrower or any such Subsidiary whether now owned or
hereafter acquired, or sell any such property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such property
39
or assets (including sales of accounts receivable or notes with recourse to the
Borrower or any of its Subsidiaries, other than for purposes of collection in
the ordinary course of business) or assign any right to receive income, or file
or permit the filing of any financing statement under the UCC or any other
similar notice of Lien under any similar recording or notice statute, except:
(a) Liens for taxes not yet delinquent or Liens for taxes
being contested in good faith and by appropriate proceedings for which
adequate reserves (in the good faith judgment of the management of the
Borrower) have been established;
(b) Liens in respect of property or assets imposed by law
which were incurred in the ordinary course of business, such as
carriers', warehousemen's, materialmen's and mechanics' Liens and
other similar Liens arising in the ordinary course of business, which
do not in the aggregate materially detract from the value of such
property or assets or materially impair the use thereof in the
operation of the business of the Borrower or any Subsidiary;
(c) Liens created by this Agreement or the other Credit
Documents;
(d) Liens (i) in existence on the Closing Date which are
listed, and the Indebtedness secured thereby and the property subject
thereto on the Closing Date described, in Annex V, (ii) arising out of
the refinancing, extension, renewal or refunding of any Indebtedness
secured by any such Liens, provided that the principal amount of such
Indebtedness is not increased and such Indebtedness is not secured by
any additional assets;
(e) Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default under section
9.1(h);
(f) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of
social security, or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government
contracts, performance and return-of-money bonds and other similar
obligations incurred in the ordinary course of business (exclusive of
obligations in respect of the payment for borrowed money);
(g) Leases or subleases granted to others not interfering in
any material respect with the business of the Borrower or any of its
Subsidiaries and any interest or title of a lessor under any lease not
in violation of this Agreement;
(h) easements, rights-of-way, restrictions, minor defects or
irregularities in title and other similar charges or encumbrances not
interfering in any material, respect with the ordinary conduct of the
business of the Borrower or any of its Subsidiaries;
(i) Liens arising from financing statements regarding leases
not in violation of this Agreement;
(j) Liens securing Priority Debt to the extent such Liens do
not attach to any property or assets other than the property or asset
financed or refinanced by any such Debt;
(k) Liens created by virtue of Capitalized Lease Obligations,
provided that such Liens are only in respect of the property or assets
subject to, and secure only, the respective Capital Lease;
(l) Liens (i) placed upon equipment or machinery used in the
ordinary course of business of the Borrower or any Subsidiary at the
time of (or within 180 days after) the acquisition thereof by the
Borrower or any such Subsidiary to secure Indebtedness incurred to pay
all or a portion of the purchase price thereof, provided that the Lien
encumbering the equipment or
40
machinery so acquired does not encumber any other asset of the
Borrower or any such Subsidiary; or (ii) existing on specific tangible
assets at the time acquired by the Borrower or any Subsidiary or on
assets of a person at the time such person first becomes a Subsidiary
of the Borrower, provided that (A) any such Liens were not created at
the time of or in contemplation of the acquisition of such assets or
person by the Borrower or any of its Subsidiaries, (B) in the case of
any such acquisition of a person, any such Lien attaches only to
specific tangible assets of such person and not assets of such person
generally, (C) the Indebtedness secured by any such Lien does not
exceed 100% of the fair market value of the asset to which such lien
attaches, determined at the time of the acquisition of such asset or
the time at which such person becomes a Subsidiary of the Borrower
(except in the circumstances described in clause (ii) above to the
extent such Liens constituted customary purchase money Liens at the
time of incurrence entered into in the ordinary course of business),
and (D) the Indebtedness secured thereby is permitted by section
8.4(b); and
(m) Permitted Encumbrances.
8.4. Indebtedness. The Borrower will not, and will not permit any of
its Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement and the
other Credit Documents;
(b) Indebtedness of the Borrower or any Subsidiary subject to
Liens permitted by section 8.3(l), provided that the aggregate
principal amount of such Indebtedness shall not exceed $3,000,000 at
any time outstanding; and Indebtedness of the Borrower or any
Subsidiary in respect of Capital Leases, provided that the aggregate
amount of such Capitalized Lease Obligations under all Capital Leases
entered into after the Closing Date shall not exceed $10,000,000 at
any time outstanding;
(c) Existing Indebtedness, and any refinancing, extension,
renewal or refunding of any such Existing Indebtedness, provided that
(i) the aggregate principal amount of any such Indebtedness in respect
of Residential Mortgage Bond programs of the Borrower and its
Subsidiaries (as described in the Registration Statement) currently in
existence is not increased above $50,000,000, and (ii) the principal
amount of any other such Existing Indebtedness is not increased;
(d) Indebtedness of the Borrower under the Interest Rate
Agreements entered into pursuant to section 8.16;
(e) Indebtedness of (i) the Borrower to any Subsidiary
Guarantor; or (ii) any Subsidiary Guarantor to the Borrower or any
other Subsidiary Guarantor; or (iii) any Subsidiary (other than a
Subsidiary Guarantor) to the Borrower or to a Subsidiary Guarantor, in
an aggregate principal amount not in excess of $10,000,000 at any time
outstanding for all Indebtedness of all Subsidiaries which are not
Subsidiary Guarantors to the Borrower and the Subsidiary Guarantors;
provided that such Indebtedness referred to in this clause (e) shall
be evidenced by a promissory note which shall be pledged to the
Collateral Agent pursuant to the Pledge Agreement;
(f) Contingent Obligations of (i) the Borrower or any
Subsidiary in respect of (A) leases of real property entered into by
the Borrower or any Subsidiary and (B) obligations of any Subsidiary
Guarantor permitted under this Agreement and (ii) the Borrower or any
Subsidiary in respect of any other person (other than in respect of
indebtedness for borrowed money) arising as a matter of applicable law
because the Borrower or such Subsidiary is or is deemed to be a
general partner of such other person;
(g) any Subsidiary may incur indebtedness ("Priority Debt")
to finance or refinance a property owned at the Closing Date and not
then subject to any IRB Debt or acquired pursuant
41
to a Permitted Acquisition, provided that (i) Priority Debt of any
Subsidiary which is not a Subsidiary Guarantor shall not be guaranteed
(or otherwise supported) directly or indirectly by the Borrower, any
Subsidiary Guarantor or any other Subsidiary (other than the
Subsidiary incurring same) (except that the documentation governing
any Priority Debt may contain provisions relating to customary
indemnities from the Borrower or a Subsidiary Guarantor for fraud, use
of proceeds and environmental matters or as are otherwise reasonably
acceptable to the Administrative Agent), (ii) the principal amount of
any issue of Priority Debt shall not exceed 115% of the fair market
value of the property securing such Debt, determined at the time of
the acquisition of such property by the Borrower (and evidenced by a
certificate on behalf of the Borrower by an Authorized Officer of the
Borrower, if requested by the Administrative Agent), and (iii) the
aggregate principal amount of Priority Debt incurred by all
Subsidiaries at any time outstanding shall not exceed an amount equal
to 25% of Consolidated Net Worth, determined as of the most recently
completed fiscal quarter prior to the date of the most recent such
incurrence for which financial statements have been delivered pursuant
to section 7.1(a) or (b); and
(h) the Borrower or any Subsidiary Guarantor may incur
additional Indebtedness other than any guaranty or other Contingent
Obligation created in respect of Priority Debt (except for the
indemnities specifically referred to in clause (g)) in an aggregate
principal amount not to exceed $5,000,000 at any time outstanding.
8.5. Advances, Investments and Loans. The Borrower will not, and will
not permit any of its Subsidiaries to, lend money or credit or make advances to
any person, or purchase or acquire any stock, obligations or securities of, or
any other interest in, or make any capital contribution to, any person, except:
(a) the Borrower or any of its Subsidiaries may invest in
cash and Cash Equivalents;
(b) the Borrower and its Subsidiaries may acquire and hold
receivables owing to them in the ordinary course of business and
payable or dischargeable in accordance with customary trade terms;
(c) loans and advances (i) to employees for business-related
travel expenses, moving expenses and other similar expenses, in each
case incurred in the ordinary course of business, and (ii) to
employees in an aggregate principal amount not to exceed $500,000 at
any time outstanding, shall be permitted;
(d) to the extent allowed by section 8.2(c), (d) or (h), and
the creation of Subsidiaries in compliance with section 8.14 shall be
permitted;
(e) investments acquired by the Borrower or any of its
Subsidiaries (i) in exchange for any other investment held by the
Borrower or any such Subsidiary in connection with or as a result of a
bankruptcy, workout, reorganization or recapitalization of the issuer
of such other investment, or (ii) as a result of a foreclosure by the
Borrower or any of its Subsidiaries with respect to any secured
investment or other transfer of title with respect to any secured
investment in default;
(f) investments of the Borrower in Interest Rate Agreements
entered into pursuant to section 8.16;
(g) Loans and advances permitted by section 8.4(e);
(h) the investments outstanding on the Closing Date which are
listed on Annex VI hereto (without any increase thereto); and
(i) loans, advances and investments not otherwise permitted
pursuant to the preceding clauses, made in cash or Cash Equivalents
after the Closing Date and taking into account any
42
repayment of any such loans or advances or the return or other
realization in cash or Cash Equivalents of the amount of such
investments, in compliance with the following requirements: (A) at the
time of making any such loan, advance or investment and after giving
effect thereto, no Default or Event of Default shall have occurred and
be continuing; (B) the person (including a joint venture) to which
such loan or advance is made, or in which such investment is made,
shall own or be committed to acquire one or more assisted living
properties located in the United States; (C) the Borrower or a
Subsidiary Guarantor shall have been retained (or shall have a
commitment to be retained upon completion of any proposed development)
to manage such property or properties, subject to any termination of
any existing management contracts pertaining thereto; (D) at least 10
days prior to the date of any such loan, advance or investment
involving $3,000,000 or more (including any commitments in respect of
future loans, advances or investments), the Borrower shall have
delivered to the Administrative Agent an officer's certificate
executed on behalf of the Borrower by an Authorized Officer of the
Borrower, which certificate shall (1) contain the date such loan,
advance or investment is scheduled to be consummated, (2) specify the
known or estimated amount thereof, (3) contain a description, to the
extent then known, of the property and/or assets owned or proposed to
be acquired by such person, (4) demonstrate that at the time of making
any such loan, advance or investment the covenants contained in
sections 8.10, 8.11, 8.12 and 8.13 shall be complied with on a pro
forma basis as if the loan, advance or investment so made had been
made by the Borrower, and the Indebtedness assumed and/or incurred to
acquire and/or finance same has been outstanding, for the 12 month
period immediately preceding such loan, advance or investment (without
giving effect to any credit for unobtained or unrealized gains in
connection therewith), (5) confirms that the property acquired or to
be acquired by such person with the proceeds of such loan, advance or
investment is to be (or is to be following completion of development
thereof) managed by the Borrower or a Subsidiary Guarantor, and (6)
attach thereto a true and correct copy of the then proposed loan
agreement, purchase agreement or similar agreement, partnership
agreement and/or management contract entered into in connection with
such loan, advance or investment; and (E) the aggregate amount of all
such loans, advances and investments made after the Closing Date, when
taken together with the aggregate principal amount of all loans and
advances at the time outstanding made by the Borrower and the
Subsidiary Guarantors to all Subsidiaries which are not Subsidiary
Guarantors, shall not exceed $20,000,000; provided that there shall be
excluded from the foregoing amount the amount of any such loans,
advances and investments made pursuant to this clause (i) as to which
the person to whom or in whom any such loan, advance or investment is
made has executed and delivered to the Administrative Agent (I) a
guaranty agreement, substantially in the form of the Subsidiary
Guaranty, guaranteeing the Obligations, subject to the effect of any
limitations on the enforceability of such guaranty arising under any
fraudulent transfer laws and has provided to the Administrative Agent
such evidence as the Administrative Agent may reasonably request to
establish the financial condition and solvency of such person, and
(II) a mortgage and security agreement, satisfactory in form and
substance to the Administrative Agent, pursuant to which such person
has granted a first priority Lien on and security interest in all of
its assets and properties, subject to no encumbrances which are not
acceptable to the Administrative Agent, accompanied by such supporting
documentation as is contemplated by section 7.10(a).
8.6. Certain Leases. The Borrower will not permit the aggregate
payments (including, without limitation, any property taxes paid by the Borrower
and its Subsidiaries as additional rent or lease payments) by the Borrower and
its Subsidiaries on a consolidated basis under agreements in effect as of the
Closing Date and/or entered into after the Closing Date (including any such
agreement that is an extension, replacement, substitution, or renewal of any
agreement entered into prior to such date) to rent or lease any real or personal
property (exclusive of (i) Capitalized Lease Obligations and (ii) "true leases",
that is leases which for Federal income tax purposes the Borrower or any
Subsidiary is not considered the owner of the property involved) to exceed
$1,000,000 in any fiscal year of the Borrower.
8.7. Prepayments and Refinancings of IRB Debt, Modifications of
Agreements, etc. The Borrower will not, and will not permit any of its
Subsidiaries to:
43
(a) make (or give any notice in respect thereof) any
voluntary or optional payment or prepayment or redemption or
acquisition for value of (including, without limitation, by way of
depositing with the trustee with respect thereto money or securities
before due for the purpose of paying when due) or exchange of, or
refinance or refund, any Existing Indebtedness which is IRB Debt;
provided that the Borrower or any Subsidiary may refinance or refund
any such IRB Debt if the aggregate principal amount thereof is not
increased and the weighted average life to maturity thereof (computed
in accordance with standard financial practice) is not reduced by more
than 10%, or if such aggregate principal amount is so increased (in
compliance with any limitations contained in section 8.4) or weighted
average life to maturity is so decreased, the Borrower shall have, or
shall have caused the applicable Subsidiary to have, granted to the
Administrative Agent, as security for the Obligations, a Mortgage
covering the property financed by such IRB Debt, together with such
supporting documentation as is contemplated by section 7.10(a), which
Mortgage shall be (i) a first priority Mortgage, if such IRB Debt is
supported, directly or indirectly by a Letter of Credit issued (or
deemed issued) hereunder, securing only the Obligations (and such IRB
Debt), or (ii) a second priority Mortgage, securing the Obligations,
which is junior to any mortgage securing such IRB Debt (and any
letters of credit issued in support thereof), in the case of any such
IRB Debt not supported, directly or indirectly by a Letter of Credit
issued (or deemed issued) hereunder;
(b) amend or modify (or permit the amendment or modification
of) any of the terms or provisions of or terminate (other than any
scheduled termination in accordance with the terms thereof) (i) in any
manner adverse to the interests of the Lenders any documents or
agreement governing any Existing Indebtedness, or (ii) in any manner
that has, or which would reasonably be expected to have, a Material
Adverse Effect, any Acquisition Document: and/or
(c) amend, modify or change in any manner materially adverse
to the interests of the Lenders the certificate of incorporation
(including, without limitation, and in any event, by the filing of any
certificate of designation), partnership agreement, certificate of
formation or by-laws of any Credit Party, or enter into any new
agreement with respect to the capital stock or equity interests, as
the case may be, of any Credit Party (to the extent adverse to the
interests of the Lenders).
8.8. Dividends, etc. The Borrower will not, and will not permit any
Subsidiary to declare or pay any dividends (other than, in the case of the
Borrower, dividends payable solely in common stock of the Borrower) or return
any capital to, its stockholders, equity holders or partners or authorize or
make any other distribution, payment or delivery of property or cash to its
stockholders, equity holders or partners, as such, or redeem, retire, purchase
or otherwise acquire, directly or indirectly, for any consideration, any shares
of any class of its capital stock or equity or partnership interests now or
hereafter outstanding (or any warrants for or options or stock appreciation
rights in respect of any of such shares), or set aside any funds for any of the
foregoing purposes, or permit any Subsidiary to purchase or otherwise acquire
for consideration, any shares of any class of the capital stock or equity or
partnership interests of the Borrower or any such Subsidiary, as the case may
be, now or hereafter outstanding (or any options or warrants or stock
appreciation rights issued with respect to such capital stock or limited
liability company or partnership interests) (all of the foregoing "Dividends"),
except that (i) any Wholly-Owned Subsidiary of the Borrower may pay Dividends to
the Borrower or to any Subsidiary Guarantor, and (ii) any other Subsidiary of
the Borrower may pay Dividends to the holders of its equity interests in
accordance with such contractual arrangements as may exist from time to time
among the holders of its equity interests.
8.9. Transactions with Affiliates. The Borrower will not, and will not
permit any Subsidiary to, enter into any transaction or series of transactions
with any Affiliate (other than, in the case of a Subsidiary, the Borrower or a
Subsidiary Guarantor) other than in the ordinary course of business and on terms
and conditions substantially as favorable to the Borrower or such Subsidiary as
would be obtainable, in the Borrower's reasonable judgment, by the Borrower or
such Subsidiary at the time in a comparable arm's-length transaction with a
person other than an Affiliate except (i) Management Contracts, (ii) investments
permitted by section 8.5 and (iii) payments made pursuant to section 8.8.
44
8.10. Consolidated Net Worth. The Borrower will not permit
Consolidated Net Worth at any time to be less than $69,928,000 (plus the net
proceeds of the exercise of the over-allotment option referred to in the
Registration Statement, if such option is exercised), except that (i) effective
as of the end of the Borrower's fiscal quarter ended December 31, 1996, and as
of the end of each fiscal quarter thereafter, the foregoing amount (as it may
from time to time be increased as herein provided), shall be increased by 50% of
Consolidated Net Income for the fiscal quarter ended on such date, if any (there
being no reduction in the case of any such Consolidated Net Income which
reflects a deficit), and (ii) the foregoing amount (as it may from time to time
be increased as herein provided), shall be increased by an amount equal to 100%
of the cash proceeds (net of underwriting discounts and commissions and other
customary fees and costs associated therewith) from any sale or issuance of
equity by the Borrower after the Closing Date (other than (i) the over-allotment
option related to the IPO and (ii) any sale or issuance to management or
employees).
8.11. Capitalization Ratio. The Borrower will not at any time permit
the ratio of (i) Total Indebtedness to (ii) Total Capitalization, expressed as a
percentage, to exceed (A) 75.00%, at any time prior to the termination of the
Parent Guaranty in accordance with its terms, or (B) 60.00% at any time
thereafter.
8.12. Leverage Ratio. (a) The Borrower will not, at any time prior to
the termination of the Parent Guaranty in accordance with its terms, permit the
ratio of (i) Net Debt on the Mature Property Pool to (ii) Cash Flow from
Operations for the Mature Property Pool for any Test Period of 12 consecutive
months, to exceed the ratio applicable at such time as follows:
==================================================== ===============================================================
Time Ratio
==================================================== ===============================================================
Prior to June 30, 1997 4.75 to 1.00
---------------------------------------------------- ---------------------------------------------------------------
June 30, 1997 through June 29, 1998 4.75 to 1.00
---------------------------------------------------- ---------------------------------------------------------------
June 30, 1998 through June 29, 1999 4.50 to 1.00
---------------------------------------------------- ---------------------------------------------------------------
Thereafter 4.25 to 1.00
==================================================== ===============================================================
As used herein, the term "Net Debt on the Mature Property Pool" means (i) all
Indebtedness of the Borrower and its Subsidiaries, on a consolidated basis, but
without duplication in respect of Letters of Credit supporting any Indebtedness
otherwise included, less the sum of (ii) cash and Cash Equivalents of the
Borrower and the Subsidiary Guarantors, to the extent that the same exceeds
$10,000,000, (iii) any such Indebtedness guaranteed pursuant to the Parent
Guaranty, (iv) the existing $14,000,000 Indebtedness owed to HPL, incurred
pursuant to the Incorporation Agreement, (v) any such Indebtedness associated
with the existing Resident Mortgage Bonds programs referred to in the
Registration Statement (without giving effect to any refinancing thereof which
increases the aggregate principal amount thereof above $50,000,000), and (v) any
such Indebtedness which constitutes Priority Debt of a Subsidiary; and the term
"Cash Flow from Operations" means, for any particular property or group of
properties, the sum of, after elimination of minority interests not owned by the
Borrower or a Subsidiary Guarantor, of net income, depreciation, amortization
and other non-cash charges to net income, interest expense and provision for
income taxes, minus non-cash credits to net income, all as determined under GAAP
with respect to the property or group of properties, and after allocation of a
management fee of 5% with respect to such property or group of properties. In
determining Cash Flow from Operations with respect to properties in the Mature
Property Pool, there shall be excluded from such Cash Flow from Operations the
Cash Flow from Operations in respect of (A) any such properties which are leased
(other than Hearthstone #7165), to the extent that the Cash Flow from Operations
of all such properties for any Test Period exceeds $1,000,000, (B) any such
properties which are managed but not owned or leased, to the extent that the
Cash Flow from Operations of all such properties for any Test Period exceeds
$200,000.
(b) The Borrower will not, at any time following the termination of
the Parent Guaranty in accordance with its terms, permit the ratio of (i) Total
Indebtedness to (ii) EBITDA for any Test Period, to exceed 3.50 to 1.00.
45
8.13. Interest Coverage. The Borrower will not permit the Interest
Coverage Ratio for any Test Period to be less than 2.00 to 1.00.
8.14. Creation of Subsidiaries. The Borrower will not, and will not
permit any Subsidiary to, create or acquire any Subsidiary other than (i) a
Subsidiary that executes a counterpart of the Subsidiary Guaranty, the Pledge
Agreement and the Security Agreement, and (ii) a Subsidiary (other than a
Wholly-Owned Subsidiary, unless such Wholly-Owned Subsidiary has outstanding
Priority Debt), to the extent, in each case, that 100% of the capital stock or
other equity interests of such entity which is owned by the Borrower or any
other Subsidiary is pledged to the Collateral Agent pursuant to the Pledge
Agreement. Upon an entity ceasing to be a Subsidiary to which reference is made
in the preceding clause (ii), such entity, unless liquidated, shall become a
Subsidiary Guarantor and execute all documents required by the preceding and
following sentences. In addition, each new Subsidiary Guarantor created pursuant
to this section 8.14 shall execute and deliver, or cause to be executed, all
other relevant documentation of the type described in section 5 as such new
Subsidiary Guarantor would have had to deliver if such new Subsidiary were a
Credit Party on the Closing Date.
8.15. Limitation on Certain Restrictions on Subsidiaries. The Borrower
will not, and will not permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
encumbrance or restriction in the ability of any such Subsidiary to (a) pay
dividends or make any other distributions on its capital stock or any other
interest or participation in its profits owned by the Borrower or any Subsidiary
of the Borrower, or pay any Indebtedness owed to the Borrower or a Subsidiary of
the Borrower, (b) make loans or advances to the Borrower or any of the
Borrower's other Subsidiaries, or transfer any of its property or assets to the
Borrower or any of the Borrower's other Subsidiaries, except for such
encumbrances or restrictions existing under or by reason of (i) applicable law,
(ii) this Agreement and the other Credit Documents, (iii) customary provisions
restricting subletting or assignment of any lease governing a leasehold interest
of a Subsidiary of the Borrower, (iv) customary provisions restricting
assignment of any licensing agreement entered into by any Subsidiary of the
Borrower in the ordinary course of business, (v) customary provisions
restricting the transfer of assets subject to Liens permitted under section
8.3(j) and (l), (vi) customary restrictions governing any of the Indebtedness of
a Subsidiary permitted pursuant to 8.4(d) or (g), (vii) restrictions contained
in the reimbursement and other agreements relating to existing letters of credit
issued to support outstanding industrial revenue bonds the proceeds of which
were used to finance the Valley Gardens Health Care Center located in Stockton,
California, and the Meridian House retirement housing facility located in
Lantan, Florida, insofar as the provisions thereof in effect on the Closing Date
prohibit distributions to partners of the partnerships which own such facilities
unless certain cash flow tests have been satisfied, (viii) any document relating
to Indebtedness secured by a Lien permitted by section 8.3, insofar as the
provisions thereof limit grants of junior liens on the assets securing such
Indebtedness, (ix) any agreement relating to industrial revenue bonds permitted
by section 8.4(c) insofar as the provisions thereof limit grants to other
persons of Liens on the related facility or on any of such industrial revenue
bonds held by the remarketing agent with respect thereto (or, in the case where
the obligor thereon is a partnership, on any other assets of such partnership),
and (x) any operating lease or Capital Lease, insofar as the provisions thereof
limit grants of a security interest in, or other assignments of, the related
leasehold interest to any other person.
8.16. Interest Rate Hedging. The Borrower will not, and will not
permit any Subsidiary to, enter into any Interest Rate Agreement unless (i) such
Interest Rate Agreement is intended to fix or establish a maximum interest rate
in respect of Indebtedness with a notional amount not in excess of the Total
Commitment and is embodied in a standard ISDA form of agreement which is
acceptable to the Documentation Agent with respect to any intercreditor issues,
(ii) the counterparty is a Lender or another financial institution acceptable to
the Managing Agent and the Documentation Agent, and (iii) the Borrower promptly
provides a true and complete copy of such Interest Rate Agreement to the
Documentation Agent, the Managing Agent and the Administrative Agent. At or
following the effective date of any such Interest Rate Agreement, the Managing
Agent may, upon written notification to the Borrower, the Administrative Agent,
the Lenders and such counterparty, designate (which designation shall be made
only upon the instructions or with the consent of the Required Lenders in the
event the counterparty is not a Lender or an Affiliate of a Lender) the credit
exposure of such counterparty under such Interest Rate Agreement as an
obligation entitled to share, pari passu with the Obligations, in respect of the
benefits provided by the Collateral under the Security Documents, in accordance
with the applicable provisions of the Security Documents, and/or in the benefits
provided by the Parent Guaranty (in respect of any credit exposure which
constitutes a Required Payment
46
(as defined in the Parent Guaranty)), and if the Managing Agent so designates
such credit exposure, the applicable Interest Rate Agreement of such
counterparty shall be considered a "Designated Interest Rate Agreement".
SECTION 9. EVENTS OF DEFAULT.
9.1. Events of Default. Upon the occurrence of any of the following
specified events (each an "Event of Default"):
(a) Payments: the Borrower shall (i) default in the payment
when due of any principal of the Loans or any reimbursement obligation
in respect of any Unpaid Drawing or (ii) default, and such default
shall continue for three or more days, in the payment when due of any
interest on the Loans or any Fees or any other amounts owing hereunder
or under any other Credit Document; or
(b) Representations, etc.: any representation, warranty or
statement made by any Credit Party herein or in any other Credit
Document or in any statement or certificate delivered or required to
be delivered pursuant hereto or thereto shall prove to be untrue in
any material respect on the date as of which made or deemed made; or
(c) Covenants: the Parent or the Borrower shall (i) default
in the due performance or observance by it of any term, covenant or
agreement contained in section 11, 12, 13(f), 14, 15, 16 or 17 of the
Parent Guaranty or section 7.10, 7.11 or 8 of this Agreement, or (ii)
default in the due performance or observance by it of any term,
covenant or agreement (other than those referred to in clause (a) or
(b) above or the preceding clause (i) of this clause (c)) contained in
the Parent Guaranty or this Agreement or any other Credit Document and
such default shall continue unremedied for a period of at least 30
days after notice by the Administrative Agent or the Required Lenders;
or
(d) Default Under Other Agreements: (i) Borrower and
Subsidiaries: the Borrower or any of its Subsidiaries shall (A)
default in any payment with respect to any Indebtedness (other than
the Obligations and/or any non-recourse Indebtedness), and such
default shall continue after the applicable grace period, if any,
specified in the agreement or instrument relating to such
Indebtedness, or (B) default in the observance or performance of any
agreement or condition relating to any such Indebtedness or contained
in any instrument or agreement evidencing, securing or relating
thereto (and all grace periods applicable to such observance,
performance or condition shall have expired), or any other event shall
occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder or holders of such
Indebtedness (or a trustee or agent on behalf of such holder or
holders) to cause any such Indebtedness to become due prior to its
stated maturity; or any such Indebtedness of the Borrower or any of
its Subsidiaries shall be declared to be due and payable, or shall be
required to be prepaid (other than by a regularly scheduled required
prepayment or redemption, prior to the stated maturity thereof),
provided that it shall not constitute an Event of Default pursuant to
this clause (d)(i) unless the aggregate amount of all Indebtedness
referred to in this clause (d)(i) above exceeds $2,000,000 at any one
time; or
(ii) Parent and Certain of its Subsidiaries: unless the
Parent Guaranty shall have been terminated in accordance with its
terms, (A) any event or condition shall occur that constitutes an
Event of Default under and as defined in the 1995 Credit Agreement (as
defined in the Parent Guaranty), after giving effect to any waivers,
consents or amendments with respect thereto; or (B) any event or
condition shall occur that (1) results in the acceleration of the
maturity of any Indebtedness of the Parent or any of its Subsidiaries
(other than the Borrower and its Subsidiaries), other than any such
Indebtedness outstanding under the 1995 Credit Agreement, or (2)
enables the holder or holders of such Indebtedness or any person
acting on behalf of such holder or holders to accelerate the maturity
thereof, and the aggregate amount that would be payable by the Parent
47
and such Subsidiaries upon the acceleration of all Indebtedness
referred to in this clause (B) equals or exceeds $25,000,000; or
(e) Bankruptcy, etc.: (i) Borrower and Subsidiaries: the
Borrower or any of its Material Subsidiaries shall commence a
voluntary case concerning itself under Title 11 of the United States
Code entitled "Bankruptcy," as now or hereafter in effect, or any
successor thereto (the "Bankruptcy Code"); or an involuntary case is
commenced against the Borrower or any of its Material Subsidiaries and
the petition is not controverted within 10 days, or is not dismissed
within 60 days, after commencement of the case; or a custodian (as
defined in the Bankruptcy Code) is appointed for, or takes charge of,
all or substantially all of the property of the Borrower or any of its
Material Subsidiaries; or the Borrower or any of its Material
Subsidiaries commences (including by way of applying for or consenting
to the appointment of, or the taking of possession by, a
rehabilitator, receiver, custodian, trustee, conservator or liquidator
(collectively, a "conservator") of itself or all or any substantial
portion of its property) any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency, liquidation, rehabilitation, conservatorship
or similar law of any jurisdiction whether now or hereafter in effect
relating to the Borrower or any of its Material Subsidiaries; or any
such proceeding is commenced against the Borrower or any of its
Material Subsidiaries to the extent such proceeding is consented by
such person or remains undismissed for a period of 60 days; or the
Borrower or any of its Material Subsidiaries is adjudicated insolvent
or bankrupt; or any order of relief or other order approving any such
case or proceeding is entered; or the Borrower or any of its Material
Subsidiaries suffers any appointment of any conservator or the like
for it or any substantial part of its property which continues
undischarged or unstayed for a period of 60 days; or the Borrower or
any of its Material Subsidiaries makes a general assignment for the
benefit of creditors; or any corporate (or similar organizational)
action is taken by the Borrower or any of its Material Subsidiaries
for the purpose of effecting any of the foregoing; or
(ii) Parent and Certain of its Subsidiaries: unless the
Parent Guaranty shall have been terminated in accordance with its
terms, an involuntary case or other proceeding shall be commenced
against the Parent or any of its Material Subsidiaries (other than the
Borrower and its Subsidiaries) seeking liquidation, reorganization or
other relief with respect to it or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking
the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, and
such involuntary case or other proceeding shall remain undismissed and
unstayed for a period of 60 days; or an order for relief shall be
entered against the Parent or any of its Material Subsidiaries (other
than the Borrower and its Subsidiaries) under the Bankruptcy Code; or
(f) ERISA: (i) any Plan shall fail to satisfy the minimum
funding standard required for any plan year or part thereof under
section 412 of the Code or section 302 of ERISA or a waiver of such
standard or extension of any amortization period is sought or granted
under section 412 of the Code or section 303 or 304 of ERISA, a
Reportable Event shall have occurred, any Plan which is subject to
Title IV of ERISA shall have had or is likely to have a trustee
appointed to administer such Plan, any Plan which is subject to Title
IV of ERISA is, shall have been or is likely to be terminated or to be
the subject of termination proceedings under ERISA, any Plan shall
have an Unfunded Current Liability, a contribution required to be made
with respect to a Plan has not been timely made, the Borrower, or any
Subsidiary of the Borrower or any ERISA Affiliate has incurred or is
likely to incur any liability to or on account of a Plan under section
409, 502(i), 502(1), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212
of ERISA or section 401(a)(29), 4971 or 4975 of the Code or on account
of a group health plan (as defined in section 607(1) of ERISA or
section 4980B(g)(2) of the Code) under section 4980B of the Code, or
the Borrower, or any Subsidiary of the Borrower has incurred or is
likely to incur liabilities pursuant to one or more employee welfare
benefit plans (as defined in section 3(1) of ERISA) that provide
benefits to retired employees or other former employees (other than as
required by section 601 of ERISA) or Plans; or (ii) there shall result
from any such event or events the imposition of a lien, the granting
of a
48
security interest, or a liability or a material risk of incurring a
liability; and (iii) any such event or events or any such lien,
security interest or liability, individually, and/or in the aggregate,
in the opinion of the Required Lenders, has had, or could reasonably
be expected to have, a Material Adverse Effect; or
(g) Security Documents: any Security Document shall cease to
be in full force and effect (other than upon termination thereof in
accordance with its terms), or shall cease to give the Collateral
Agent the Liens purported to be created thereby in favor of the
Collateral Agent, or any Credit Party shall default in the due
performance or observance of any material term, covenant or agreement
on its part to be performed or observed pursuant to any Security
Document and such default shall continue beyond any cure or grace
period specifically provided for in such Security Document; or
(h) Judgments: (i) Borrower and Subsidiaries: one or more
judgments or decrees shall be entered against the Borrower and/or any
of its Subsidiaries involving a liability (not paid or fully covered
by insurance) of $2,000,000 or more in the aggregate for all such
judgments and decrees for the Borrower and its Subsidiaries) and any
such judgments or decrees shall not have been vacated, discharged or
stayed or bonded pending appeal within 30 days from the entry thereof;
or
(ii) Parent and Certain of its Subsidiaries: unless the
Parent Guaranty shall have been terminated in accordance with its
terms, any one or more Enforceable Judgments for the payment of money
aggregating in excess of $20,000,000 shall be rendered against one or
more of the Parent or any of its Subsidiaries (other than the Borrower
and its Subsidiaries), net of any portion thereof covered by insurance
as to which the insurance carrier has acknowledged its responsibility;
or
(i) Guaranty: any Guaranty or any provision thereof shall
cease to be in full force or effect at any time prior to the
termination thereof in accordance with its terms, or any Guarantor 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
material term, covenant, or agreement on its part to be performed or
observed pursuant to the relevant Guaranty.
9.2. Acceleration, etc. Upon the occurrence of any Event of Default,
and at any time thereafter, if any Event of Default shall then be continuing,
the Administrative Agent shall, upon the written request of the Required
Lenders, by written notice to the Borrower, take any or all of the following
actions, without prejudice to the rights of the Administrative Agent or any
Lender to enforce its claims against the Borrower, except as otherwise
specifically provided for in this Agreement (provided that, if an Event of
Default specified in section 9.1(e) shall occur with respect to the Borrower,
the result which would occur upon the giving of written notice by the
Administrative Agent as specified in clauses (i) and (ii) below shall occur
automatically without the giving of any such notice): (i) declare the Total
Commitment terminated, whereupon the Commitment of each Lender shall forthwith
terminate immediately and any Commitment Commission shall forthwith become due
and payable without any other notice of any kind; (ii) declare the principal of
and any accrued interest in respect of all Loans, all Unpaid Drawings and all
obligations owing hereunder and thereunder to be, whereupon the same shall
become, forthwith due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Borrower; (iii)
enforce, as Administrative Agent (or direct the Collateral Agent to enforce),
any or all of the Liens and security interests created pursuant to the Security
Documents; (iv) terminate any Letter of Credit which may be terminated in
accordance with its terms; and (v) direct the Borrower to pay (and the Borrower
hereby agrees that on receipt of such notice or upon the occurrence of an Event
of Default with respect to the Borrower under section 9.1(e), it will pay) to
the Collateral Agent an amount of cash equal to the aggregate Stated Amount of
all Letters of Credit then outstanding (such amount to be held as security after
the Borrower's reimbursement obligations in respect thereof).
9.3. Application of Liquidation Proceeds9.3. Application of
Liquidation Proceeds. All monies received by the Administrative Agent, the
Collateral Agent or any Lender from the exercise of remedies hereunder or under
the Security Documents, the other
49
Credit Documents or under any other documents relating to this Agreement shall,
unless otherwise required by the terms of the Security Documents, the other
Credit Documents or by applicable law, be applied as follows:
(a) Proceeds of Parent Guaranty. All monies received from the
exercise of remedies under the Parent Guaranty shall be applied:
(i) first, to the payment of all expenses (to the extent
not paid by the Parent) incurred by the Administrative Agent,
the Collateral Agent and the Lenders in connection with the
exercise of such remedies, including, without limitation, all
costs and expenses of collection, attorneys' fees, court
costs and foreclosure expenses;
(ii) second, to the payment pro rata of interest then
accrued on the outstanding DPP Revolving Loans;
(iii) third, to the payment pro rata of any fees then
accrued and payable to the Administrative Agent, any Letter
of Credit Issuer or any Lender under this Agreement in
respect of the DPP Revolving Loans or the Allocated DPP
Letter of Credit Outstandings;
(iv) fourth, to the payment pro rata of (A) the principal
balance then owing on the outstanding DPP Revolving Loans,
(B) the Stated Amount of the Allocated DPP Letter of Credit
Outstandings (to be held and applied by the Collateral Agent
as security for the reimbursement obligations in respect
thereof), and (C) the amounts owing in respect of the
Designated Interest Rate Agreements which constitute Required
Payments (as defined in the Parent Guaranty);
(v) fifth, to the payment to the Lenders of any amounts
then accrued and unpaid under sections 1.07, 1.11, 1.14 and
8.08(d) hereof and which constitute Required Payments (as
defined in the Parent Guaranty), and if such proceeds are
insufficient to pay such amounts in full, to the payment of
such amounts pro rata;
(vi) sixth, to the payment pro rata of all other amounts
owed by the Borrower or any other Credit Party to the
Administrative Agent, to any Letter of Credit Issuer or any
Lender under this Agreement, any Security Document, or any
other Credit Document, which constitute Required Payments (as
defined in the Parent Guaranty), and if such proceeds are
insufficient to pay such amounts in full, to the payment of
such amounts pro rata; and
(vii) finally, any remaining surplus after all of the
Required Payments (as defined in the Parent Guaranty) have
been paid in full, to the Parent, the Borrower or to
whomsoever shall be entitled thereto.
(b) Other Proceeds. All monies received from the exercise of
remedies under any Credit Document (other than the Parent Guaranty)
shall be applied:
(i) first, to the payment of all expenses (to the extent
not paid by the Parent) incurred by the Administrative Agent,
the Collateral Agent and the Lenders in connection with the
exercise of such remedies, including, without limitation, all
costs and expenses of collection, attorneys' fees, court
costs and foreclosure expenses;
(ii) second, to the payment pro rata of interest then
accrued on the outstanding MPP Revolving Loans;
50
(iii) third, to the payment pro rata of any fees then
accrued and payable to the Administrative Agent, any Letter
of Credit Issuer or any Lender under this Agreement in
respect of the MPP Revolving Loans or the Allocated MPP
Letter of Credit Outstandings;
(iv) fourth, to the payment pro rata of (A) the
principal balance then owing on the outstanding MPP Revolving
Loans, (B) the Stated Amount of the Allocated MPP Letter of
Credit Outstandings (to be held and applied by the Collateral
Agent as security for the reimbursement obligations in
respect thereof), and (C) the amounts owing in respect of the
Designated Interest Rate Agreements which do not constitute
Required Payments (as defined in the Parent Guaranty);
(v) fifth, to the payment to the Lenders of any
amounts then accrued and unpaid under sections 1.07, 1.11,
1.14 and 8.08(d) hereof and which do not constitute Required
Payments (as defined in the Parent Guaranty), and if such
proceeds are insufficient to pay such amounts in full, to the
payment of such amounts pro rata;
(vi) sixth, to the payment pro rata of all other
amounts owed by the Borrower or any other Credit Party to the
Administrative Agent, to any Letter of Credit Issuer or any
Lender under this Agreement, any Security Document, or any
other Credit Document, which do not constitute Required
Payments (as defined in the Parent Guaranty), and if such
proceeds are insufficient to pay such amounts in full, to the
payment of such amounts pro rata;
(vii) seventh, any remaining surplus after all
Obligations (other than Obligations which constitute Required
Payments, as defined in the Parent Guaranty) have been paid
in full, as provided and in the order of priority specified
in clause (a) above; and
(viii) finally, any remaining surplus after all of the
Obligations have been paid in full, to the Parent, the
Borrower or to whomsoever shall be entitled thereto.
SECTION 10. DEFINITIONS.
As used herein, the following terms shall have the meanings herein
specified unless the context otherwise requires. Defined terms in this Agreement
shall include in the singular number the plural and in the plural the singular:
"Acquisition" shall mean the acquisition by the Borrower of the Assets
as provided in the Acquisition Documents.
"Acquisition Documents" shall mean the Incorporation Agreement and the
transfer documents referred to therein, in each case in the form delivered to
the Administrative Agent pursuant to section 5.1(i) and without giving effect to
any amendment or modification thereof not consented to by the Required Lenders.
"Additional Security Documents" shall have the meaning provided in
section 7.10.
"Administrative Agent" shall have the meaning provided in the first
paragraph of this Agreement and shall include any successor to the
Administrative Agent appointed pursuant to section 11.9.
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"Administrative Services Agreement" shall mean the Administrative
Services Agreement, between the Borrower and the Parent, in the form delivered
to the Administrative Agent pursuant to section 5.1(d) and without giving effect
to any amendment or modification thereof not consented to by the Required
Lenders.
"Affiliate" shall mean, with respect to any person, any other person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with such person. A person shall be deemed to control a second
person if such first person possesses, directly or indirectly, the power (i) to
vote 10% or more of the securities having ordinary voting power for the election
of directors or managers of such second person or (ii) to direct or cause the
direction of the management and policies of such second person, whether through
the ownership of voting securities, by contract or otherwise.
"Aggregate Measured Swap Credit Exposure" shall mean the sum of the
Allocated Measured MPP Swap Credit Exposure and the Allocated Measured DPP Swap
Credit Exposure.
"Agreement" shall mean this Credit Agreement, as the same may be from
time to time further modified, amended and/or supplemented.
"Allocated DPP Letter of Credit Outstandings" shall mean the portion,
expressed as a percentage of the Letter of Credit Outstandings, which the
Administrative Agent determines from time to time has been a deemed utilization
of the Commitments in respect of DPP Revolving Loans. The sum of the Allocated
MPP Letter of Credit Outstandings and the Allocated DPP Letter of Credit
Outstandings shall always equal 100%.
"Allocated Measured DPP Swap Credit Exposure" shall mean, at any time
or times, an amount which is equal to (i) a fraction the numerator of which is
the largest amount of DPP Revolving Loans which the Borrower could have
outstanding under this Agreement at such time and the denominator of which is
the Total Commitment at such time, times (ii) the aggregate credit exposure of
the Borrower to the counterparties to the Designated Interest Rate Agreements,
calculated in accordance with standard financial practices, including
appropriate assumptions, employed by financial institutions in evaluating such
credit exposure.
"Allocated MPP Letter of Credit Outstandings" shall mean the portion,
expressed as a percentage of the Letter of Credit Outstandings, which the
Administrative Agent determines from time to time has been a deemed utilization
of the Commitments in respect of MPP Revolving Loans. The sum of the Allocated
DPP Letter of Credit Outstandings and the Allocated MPP Letter of Credit
Outstandings shall always equal 100%.
"Allocated Measured MPP Swap Credit Exposure" shall mean, at any time
or times, an amount which is equal to the aggregate credit exposure of the
Borrower to the counterparties to the Designated Interest Rate Agreements,
calculated in accordance with standard financial practices, including
appropriate assumptions, employed by financial institutions in evaluating such
credit exposure, reduced by the amount, if any, of the Allocated Measured DPP
Swap Credit Exposure.
"Assets" shall mean the assets acquired by the Borrower pursuant to,
and as more fully described in, the Acquisition Documents.
"Asset Sale" shall mean the sale, transfer or other disposition
(including by liquidations of a partnership of the interests therein of the
Borrower or any Subsidiary) by the Borrower or any Subsidiary to any person
other than the Borrower or any Subsidiary Guarantor of any of their respective
asset (other than sales, transfers or other dispositions of obsolete or excess
furniture, fixtures or equipment in the ordinary course of business).
"Assignment Agreement" shall mean an Assignment Agreement
substantially in the form of Exhibit I hereto.
"Authorized Officer" shall mean any officer or employee of a Credit
Party designated as such in writing to the Administrative Agent by such Credit
Party.
"Bankruptcy Code" shall have the meaning provided in section 9.1(e).
52
"Base Rate" shall mean, for any period, a fluctuating interest rate
per annum as shall be in effect from time to time which rate per annum shall at
all times be equal to the greater of (i) the rate of interest established by PNC
Bank in Pittsburgh, Pennsylvania, from time to time, as its prime rate, whether
or not publicly announced, which interest rate may or may not be the lowest rate
charged by it for commercial loans or other extensions of credit; and (ii) the
Federal Funds Effective Rate in effect from time to time plus 1/2 of 1% per
annum.
"Base Rate Loan" shall mean each Loan bearing interest at the rates
provided in section 1.8(a).
"Borrower" shall have the meaning provided in the first paragraph of
this Agreement.
"Borrowing" shall mean the incurrence of MPP Revolving Loans or DPP
Revolving Loans, as the case may be, consisting of one Type of Loan, by the
Borrower from all of the Lenders having Commitments on a pro rata basis on a
given date (or resulting from conversions on a given date), having in the case
of Eurodollar Loans the same Interest Period.
"Business Day" shall mean (i) for all purposes other than as covered
by clause (ii) below, any day excluding Saturday, Sunday and any day which shall
be in Pittsburgh, Pennsylvania or Louisville, Kentucky a legal holiday or a day
on which banking institutions are authorized by law or other governmental
actions to close and (ii) with respect to all notices and determinations in
connection with, and payments of principal and interest on, Eurodollar Loans,
any day which is a Business Day described in clause (i) and which is also a day
for trading by and between banks in U.S. dollar deposits in the interbank
Eurodollar market.
"Capital Lease" as applied to any person shall mean any lease of any
property (whether real, personal or mixed) by that person as lessee which, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that person.
"Capitalized Lease Obligations" shall mean all obligations under
Capital Leases of the Borrower or any of its Subsidiaries in each case taken at
the amount thereof accounted for as liabilities in accordance with GAAP.
"Cash Equivalents" shall mean (i) 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 one year from the date of acquisition, (ii) U.S. dollar denominated time
deposits, certificates of deposit and bankers' acceptances of (x) any Lender or
(y) 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, an "Approved Lender"), in each case with maturities of
not more than one year from the date of acquisition, (iii) commercial paper
issued by any Lender or Approved Lender or by the parent company of any Lender
or Approved Lender and commercial paper issued by, or guaranteed by, any
industrial or financial company with a short- term commercial paper rating of at
least A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent
thereof by Moody's, or guaranteed by any industrial company with a long term
unsecured debt rating of at least A or A2, or the equivalent of each thereof,
from S&P or Moody's, as the case may be, and in each case maturing within one
year after the date of acquisition and (iv) investments in money market funds
substantially all the assets of which are comprised of securities of the types
described in clauses (i) through (iii) above.
"Cash Flow from Operations" shall have the meaning provided in section
8.12(a).
"Cash Proceeds" shall mean, with respect to any Asset Sale, the
aggregate cash payments (including any cash received by way of deferred payment
pursuant to a note receivable issued in connection with such Asset Sale, other
than the portion of such deferred payment constituting interest, but only as and
when so received) received by the Borrower and/or any Subsidiary from such Asset
Sale.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as the same may be amended from time to
time, 42 U.S.C. (S) 9601 et seq.
53
"Change of Control" shall mean and include (i) any person or group (as
such term is defined in section 13(d)(3) of the 1934 Act), other than the
Parent, shall acquire, directly or indirectly, beneficial ownership (within the
meaning of Rule 13d-3 and 13d-5 of the 0000 Xxx) of more than 50%, on a fully
diluted basis, of the economic or voting interest in the Borrower's capital
stock, (ii) the Parent shall cease, for any reason, to have, directly or
indirectly, beneficial ownership (within the meaning of Rule 13d-3 and 13d-5 of
the 0000 Xxx) of at least 30%, on a fully diluted basis, of the economic or
voting interest in the Borrower's capital stock, and/or (iii) unless the Parent
Guaranty shall have been terminated in accordance with its terms, any person or
group (as such term is defined in section 13(d)(3) of the 1934 Act), shall
acquire, directly or indirectly, beneficial ownership (within the meaning of
Rule 13d-3 and 13d-5 of the 0000 Xxx) of more than 35%, on a fully diluted
basis, of the economic or voting interest in the Parent's capital stock.
"Closing Date" shall mean the date, on or after the Effective Date,
upon which the conditions specified in section 5.1 are satisfied.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and the rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the Effective
Date and any subsequent provisions of the Code, amendatory thereof, supplemental
thereto or substituted therefor.
"Collateral" shall mean all of the Collateral as defined in each of
the Security Documents.
"Collateral Agent" shall mean the Administrative Agent acting as
collateral agent for the Lenders pursuant to the Security Documents.
"Collective Bargaining Agreement" shall have the meaning provided in
section 5.1(d).
"Commitment" shall mean, with respect to each Lender, the amount set
forth opposite such Lender's name in Annex I as its "Commitment" as the same may
be reduced from time to time pursuant to section 3.2, 3.3 and/or 9 or adjusted
from time to time as a result of assignments to or from such Lender pursuant to
section 12.4.
"Commitment Commission" shall have the meaning provided in section
3.1(a).
"Consolidated Net Income" shall mean for any period, the net income
(or loss), without deduction for minority interests, of the Borrower and its
Subsidiaries on a consolidated basis for such period taken as a single
accounting period determined in conformity with GAAP, provided that there shall
be excluded (i) the income (or loss) of any entity (other than a Subsidiary) in
which any other person (other than the Borrower or any of its Subsidiaries) has
a joint interest, except to the extent of the amount of dividends or other
distributions actually paid to the Borrower or any of its Subsidiaries by any
such entity during such period, (ii) the income, (or loss) of any entity accrued
prior to the date it becomes a Subsidiary or is merged into or consolidated with
the Borrower or any of its Subsidiaries or on which its assets are acquired by
the Borrower or any of its Subsidiaries and (iii) the income of any Subsidiary
to the extent that the declaration or payment of dividends or similar
distributions by that Subsidiary of that income is not at the time permitted by
operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Subsidiary.
"Consolidated Net Worth" shall mean at any time for the determination
thereof all amounts which, in conformity with GAAP, would be included under the
caption "total stockholders' equity" (or any like caption) on a consolidated
balance sheet of the Borrower as at such date.
"Contingent Obligations" shall mean as to any person any obligation of
such person guaranteeing any Indebtedness, leases, dividends or other
obligations ("primary obligations") of any other person (the "primary obligor")
in any manner, whether directly or indirectly, including, without limitation,
any obligation of such person, whether or not contingent, (a) to purchase any
such primary obligation or any property constituting direct or indirect security
therefor, (b) to advance or supply funds (i) for the purchase or payment of any
such primary obligation or (ii) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (c) to purchase property, securities or services primarily for
the purpose of assuring
54
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation, or (d) otherwise to assure or hold
harmless the owner of such primary obligation against loss in respect thereof,
provided, however, that the term Contingent Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Contingent Obligation shall be deemed to be an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Contingent Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such person is required to perform thereunder) as determined by such
person in good faith.
"Credit Documents" shall mean this Agreement, the Notes, the Security
Documents, the Parent Guaranty, the Subsidiary Guaranty and any Letter of Credit
Document.
"Credit Event" shall mean the making of any Loans and/or the issuance
of any Letter of Credit.
"Credit Party" shall mean the Parent, each Affiliate of the Parent
which is a party to the Parent Guaranty, the Borrower and each Subsidiary
Guarantor.
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulting Lender" shall mean any Lender with, respect to which a
Lender Default is in effect.
"Designated Interest Rate Agreement" shall have the meaning provided
in section 8.16.
"Development Property Pool" shall mean any and all properties owned,
leased or managed by the Borrower or any of its Subsidiaries which at the time
are not part of the Mature Property Pool.
"Dividends" shall have the meaning provided in section 8.9.
"DPP Loan Maturity Date" shall mean the date the Parent Guaranty
terminates in accordance with its terms.
"DPP Revolving Loan" shall have the meaning provided in section 1.1.
"DPP Revolving Loan Sublimit" shall mean (i) during the period
commencing on the Closing Date and ending 120 days thereafter, or such earlier
time as there shall be no possibility that any properties included in the Mature
Property Pool pursuant to clause (i) of the definition of the term Mature
Property Pool will be excluded therefrom because of failure to satisfy
conditions applicable thereto as provided in clause (i) of such definition,
$34,000,000, and (ii) at any time thereafter, the Maximum Guaranteed Amount, as
defined in the Parent Guaranty, which at any time of determination will be
applicable (without any reduction) for at least 30 days thereafter (it being
understood that if any reduction in the Maximum Guaranteed Amount is to become
effective within 30 days, then such reduced Maximum Guaranteed Amount shall be
applicable for purposes of this clause (ii)).
"EBIT" shall mean, for any period, (A) the sum of the amounts for such
period of (i) Consolidated Net Income, (ii) provisions for taxes based on
income, (iii) Total Interest Expense, (iv) amortization or write-off of deferred
financing costs to the extent deducted in determining Consolidated Net Income
and (v) losses on sales of assets (excluding sales in the ordinary course of
business) and other extraordinary losses and other onetime non-cash charges,
less (B) gains on sales of assets (excluding sales in the ordinary course of
business) and other extraordinary gains and other one-time non-cash gains, all
as determined for the Borrower and its Subsidiaries on a consolidated basis in
accordance with GAAP.
"EBITDA"' shall mean, for any period, the sum of the amounts for such
period of (i) EBIT, (ii) depreciation expense, (iii) amortization expense and
(iv) any other non-cash charges, all as determined for the Borrower and its
Subsidiaries on a consolidated basis in accordance with GAAP.
"Effective Date" shall have the meaning provided in section 12.10.
55
"Eligible Transferee" shall mean and include a commercial bank,
financial institution or other "accredited investor" (as defined in SEC
Regulation D), in each case which (i) so long as no Event of Default shall have
occurred and be continuing, and so long as the financial covenants and the
borrowing base limitations contained in this Agreement have not been waived or
modified following a deterioration in the financial condition or results of
operations of the Borrower, is not disapproved in writing by the Borrower in a
notice given to a requesting Lender and the Administrative Agent, specifying the
reasons for such disapproval, within five Business Days following the giving of
notice to the Borrower of the identity of any proposed transferee (any such
disapproval by the Borrower must be reasonable), and (ii) is not a direct
competitor of the Borrower or engaged in the same or similar business as the
Borrower, or any of its respective Subsidiaries or is not an Affiliate of any
such competitors of the Borrower or any of its respective Subsidiaries.
"Employment Agreements" shall have the meaning provided in section
5.1(d).
"Enforceable Judgment" shall mean a judgment or order of a court or
arbitral or regulatory authority as to which the period, if any, during which
the enforcement of such judgment or order is stayed shall have expired. A
judgment or order which is under appeal or as to which the time in which to
perfect an appeal has not expired shall not be deemed an Enforceable Judgment so
long as enforcement thereof is effectively stayed pending the outcome of such
appeal or the expiration of such period, as the case may be.
"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of non-compliance or violation, investigations or proceedings relating
in any way to any Environmental Law or any permit issued under any such law
(hereafter "Claims"), including, without limitation, (a) any and all Claims by
governmental or regulatory authorities for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any applicable
Environmental Law, and (b) any and all Claims by any third party seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Materials or arising from alleged
injury or threat of injury to health, safety or the environment.
"Environmental Law" shall mean any applicable Federal, state, foreign
or local statute, law, rule, regulation, ordinance, code, binding and
enforceable guideline, binding and enforceable written policy and rule of common
law now or hereafter in effect and in each case as amended, and any binding and
enforceable judicial or administrative interpretation thereof, including any
judicial or administrative order, consent, decree or judgment issued to or
rendered against the Borrower or any of its Subsidiaries relating to the
environment, employee health and safety or Hazardous Materials, including,
without limitation, CERCLA; RCRA; the Federal Water Pollution Control Act, 33
U.S.C. (S) 2601 et seq.; the Clean Air Act, 42 U.S.C. (S) 7401 et seq.; the Safe
Drinking Water Act, 42 U.S.C. (S) 3803 et seq.; the Oil Pollution Act of 1990,
33 U.S.C. (S) 2701 et seq.; the Emergency Planning and the Community
Right-to-Know Act of 1986, 42 U.S.C. (S) 11001 et seq., the Hazardous Material
Transportation Act, 49 U.S.C. (S) 1801 et seq. and the Occupational Safety and
Health Act, 29 U.S.C. (S) 651 et seq. (to the extent it regulates occupational
exposure to Hazardous Materials); and any state and local or foreign
counterparts or equivalents, in each case as amended from time to time.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder. Section references to ERISA are to ERISA, as in effect at the
Effective Date and any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in section 3(9)
of ERISA) which together with the Borrower or a Subsidiary of the Borrower would
be deemed to be a "single employer" (i) within the meaning of section
414(b),(c), (m) or (o) of the Code or (ii) as a result of the Borrower or a
Subsidiary of the Borrower being or having been a general partner of such
person.
"Eurodollar Loans" shall mean each Loan bearing interest at the rates
provided in section 1.8(b).
"Eurodollar Rate" shall mean with respect to each Interest Period for
a Eurodollar Loan, (A) (i) the rate for deposits in U.S. Dollars for a period
equal to such Interest Period which appears on the Telerate Page 3750 as
56
of 11:00 A.M. London time, on, the day that is two Business Days prior to the
commencement of such Interest Period or (ii) in the event that the Eurodollar
Rate can not be determined pursuant to the preceding clause (i), the offered
quotation to first-class banks in the interbank Eurodollar market by the
Administrative Agent for dollar deposits of amounts in same day funds comparable
to the outstanding principal amount of the Eurodollar Loan of the Administrative
Agent for which an interest rate is then being determined with maturities
comparable to the Interest Period to be applicable to such Eurodollar Loan,
determined as of 11:00 A.M. (London time) on the date which is two Business Days
prior to the commencement of such Interest Period, in each case divided (and
rounded to the nearest 1/100th of 1%) by (B) a percentage equal to 100% minus
the then stated maximum rate of all reserve requirements (including, without
limitation, any marginal, emergency, supplemental, special or other reserves)
applicable to any member bank of the Federal Reserve System in respect of
Eurocurrency liabilities as defined in Regulation D (or any successor category
of liabilities under Regulation D).
"Event of Default" shall have the meaning provided in section 9.1.
"Existing Indebtedness" shall have the meaning provided in section
6.18.
"Existing Indebtedness Agreements" shall have the meaning provided in
section 5.1(d).
"Existing Letter of Credit" shall have the meaning provided in section
2.1(d).
"Expiration Date" shall mean September 15, 1996.
"Facing Fee" shall have the meaning provided in section 3.1(c)
"Federal Funds Effective Rate" shall mean, for any period, a
fluctuating interest rate equal for each day during such period to the weighted
average of the rates on overnight Federal Funds transactions with members of the
Federal Reserve System arranged by Federal Funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by the Administrative Agent from three Federal
Funds brokers of recognized standing selected by the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to, or referred to in,
section 3.1.
"Financial Projections" shall have the meaning provided in section
6.8(d).
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time; it being understood and
agreed that determinations in accordance with GAAP for purposes of section 8,
including defined terms as used therein, are subject (to the extent provided
therein) to section 12.7(a).
"Governmental Authority" shall mean any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guaranties" shall mean the Parent Guaranty and the Subsidiary
Guaranty.
"Guarantor" shall mean the Parent and each Subsidiary Guarantor.
"Hazardous Materials" shall mean (a) any petrochemical or petroleum
products, radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, transformers or other equipment that
contain dielectric fluid containing levels of polychlorinated biphenyls, and
radon gas; and (b) any chemicals, materials or substances defined as or included
in the definition of "hazardous substances," "hazardous wastes," "hazardous
materials,' "restricted hazardous materials," "extremely hazardous wastes, a
"restrictive hazardous wastes," "toxic substances," "toxic pollutants,"
"contaminants" or "pollutants," or words of similar meaning and regulatory
effect under any applicable Environmental Law.
57
"HPL" shall mean Hillhaven Properties, Ltd., an Oregon corporation,
and its successors and assigns, a Wholly-Owned Subsidiary of the Borrower.
"Incorporation Agreement" shall mean the Incorporation Agreement, by
and among the Borrower, the Parent, and certain Affiliates of the Parent, in the
form delivered to the Administrative Agent pursuant to section 5.1(i) and
without giving effect to any amendment or modification thereof not consented to
by the Required Lenders.
"Indebtedness" of any person shall mean without duplication (i) all
indebtedness of such person for borrowed money, (ii) all bonds, notes,
debentures and similar debt securities of such person, (iii) the deferred
purchase price of assets or services which in accordance with GAAP would be
shown on the liability side of the balance sheet of such person, (iv) the face
amount of all letters of credit issued for the account of such person and,
without duplication, all drafts drawn thereunder, (v) all Indebtedness of a
second person secured by any Lien on any property owned by such first person,
whether or not such indebtedness has been assumed, (vi) all Capitalized Lease
Obligations of such person, (vii) all obligations of such person to pay a
specified purchase price for goods or services whether or not delivered or
accepted, i.e., take-or-pay and similar obligations, (viii) all net obligations
of such person under Interest Rate Agreements and (ix) all Contingent
Obligations of such person, provided that neither trade payables and accrued
expenses, in each case arising in the ordinary course of business, nor
obligations in respect of insurance policies or performance or surety bonds
which themselves are not guarantees of Indebtedness (nor drafts, acceptances or
similar instruments evidencing the same nor obligations in respect of letters of
credit supporting the payment of the same), shall constitute Indebtedness.
"Information Memorandum" shall have the meaning provided in section
6.8(d).
"Interest Coverage Ratio" shall mean, for any Test Period, the ratio
of (x) EBITDA to (y) Total Interest Expense, in each case for such Test Period.
"Interest Period" with respect to any Eurodollar Loan shall mean the
interest period applicable thereto, as determined pursuant to section 1.9.
"Interest Rate Agreement" shall mean any interest rate swap agreement,
any interest rate cap agreement, any interest rate collar agreement or other
similar agreement or arrangement designed to protect against fluctuations in
interest rates.
"IPO" shall have the meaning provided in section 5.1(j).
"IRB Debt" shall mean the industrial revenue bonds or similar
instruments comprising a part of the Existing Indebtedness as identified in
Annex IV hereto, and any industrial revenue bonds or similar instruments issued
in connection with a refinancing or refunding of any thereof.
"Leaseholds" of any person means all the right, title and interest of
such person as lessee or licensee in, to and under leases or licenses of land,
improvements and/or fixtures.
"Legal Requirements" shall mean all applicable laws, rules, orders and
regulations made by any legislature or government or any governmental body or
regulatory authority having jurisdiction over the Borrower or a Subsidiary.
"Lender" shall have the meaning provided in the first paragraph of
this Agreement.
"Lender Default" shall mean (i) the refusal (which has not been
retracted) in violation of the terms of this Agreement of a Lender to make
available its portion of any incurrence of Loans or to fund its portion of any
unreimbursed payment under section 2.4(c) or (ii) a Lender having notified the
Administrative Agent and/or the Borrower that it does not intend to comply with
the obligations under section 1.1 and/or section 2.4(c), in the case of either
(i) or (ii) as a result of the appointment of a receiver or conservator with
respect to such Lender at the direction or request of any regulatory agency or
authority.
58
"Letter of Credit" shall have the meaning provided in section 2.1(a).
"Letter of Credit Documents" shall have the meaning specified in
section 2.2(a).
"Letter of Credit Fee" shall have the meaning provided in section
3.1(b).
"Letter of Credit Issuer" shall mean (i) PNC Bank, (ii) in respect of
each Existing Letter of Credit, the Lender that has issued same as of the
Effective Date and/or (iii) such other Lender that is requested, and agrees, to
so act by the Borrower.
"Letter of Credit Outstandings" shall mean, at anytime, the sum,
without duplication, of (i) the aggregate Stated Amount of all outstanding
Letters of Credit and (ii) the aggregate amount of all Unpaid Drawings.
"Letter of Credit Request" shall have the meaning provided in section
2.2(a).
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any agreement to give any of
the foregoing, any conditional sale or other title retention agreement or any
lease in the nature thereof).
"Loan" shall have the meaning provided in section 1.1.
"Management Agreements" shall have the meaning provided in section
5.1(d).
"Management Contracts" shall have the meaning provided in section
5.1(d).
"Managing Agent" shall have the meaning provided in the first
paragraph of this Agreement and shall include any successor to the Managing
Agent appointed pursuant to section 11.9.
"Margin Stock" shall have the meaning provided in Regulation U.
"Material Adverse Effect" shall mean a material adverse effect on the
business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of, when used with reference to the Parent, the Parent
and its Subsidiaries, taken as a whole, or when used with reference to the
Borrower, the Borrower and its Subsidiaries, taken as a whole, as the case may
be, in each case after giving effect to the Transaction.
"Material Subsidiary" shall mean, at any time, with reference to any
person, any Subsidiary of such person that (x) has assets at such time
comprising 5% or more of the consolidated assets of such person and its
Subsidiaries or (y) had net income in the most recently ended fiscal year of
such person comprising 5% or more of the consolidated net income of such person
and its Subsidiaries for such fiscal year.
"Mature Property Pool" shall mean:
(i) all properties owned, leased or managed by the Borrower
or any of its Subsidiaries on the Closing Date (after giving effect to
consummation of the Transaction), other than the Valley Manor property
located in Tucson, Arizona, as to which the following conditions are
satisfied:
(1) in the case of any property described in Part I
or Part II of Annex III, the Borrower shall have provided to
the Managing Agent a Phase I environmental audit report,
addressed to the Managing Agent and the Administrative Agent,
or accompanied by an appropriate letter authorizing such
reliance, with respect to such property, prepared by an
environmental consulting firm acceptable to the Managing
Agent, which report shall be satisfactory in form and
substance to the Managing Agent, and the Borrower shall have,
or shall have caused its applicable Subsidiary to, complete,
to the satisfaction of the Managing Agent, any remedial work
and establish any additional environmental compliance
activities as are recommended in such environmental report;
provided, that with respect to any such property as to which
such
59
requirement was not satisfied on the Closing Date, such
property shall be excluded from the Mature Property Pool and
become part of the Development Property Pool if either (i)
such condition is not satisfied within 90 days following the
Closing Date, or (ii) the Managing Agent determines at any
time thereafter that any such remedial work or establishment
of environmental compliance activities has not been completed
to its satisfaction;
(2) in the case of any property described in Part I of
Annex III which is owned by the Borrower or a Subsidiary, the
Borrower shall have provided to the Managing Agent, with
respect to such property, a survey, in form and substance
reasonably satisfactory to the Collateral Agent and the
Managing Agent, of such property, certified in a manner
satisfactory to the Collateral Agent and the Managing Agent
by a licensed professional surveyor reasonably satisfactory
to the Collateral Agent and the Managing Agent, and an
endorsement to the Mortgage Policy covering such property
which eliminates the "survey" exception, or if such "survey"
exception is so eliminated by endorsement without the
necessity of an updated survey, such endorsement shall have
been so delivered, whether or not an updated survey is so
delivered; provided, that with respect to any such property
as to which such requirement was not satisfied on the Closing
Date, such property shall be excluded from the Mature
Property Pool and become part of the Development Property
Pool if such condition is not satisfied within 90 days
following the Closing Date;
(3) in the case of any property described in Part II of
Annex III as to which there is outstanding any IRB Debt
supported directly or indirectly by a Letter of Credit issued
(or deemed issued) hereunder and which is owned or leased by
the Borrower or a Subsidiary, such property shall be excluded
from the Mature Property Pool and become part of the
Development Property Pool if within 120 days following the
Closing Date any of the following conditions are not
satisfied with respect to such property:
(A) in connection with the original issuance or
refunding of such IRB Debt prior to the Closing Date, the
Borrower or the applicable Subsidiary shall have
mortgaged such property or entered into a deed of trust
with respect to such property, as security for such IRB
Debt and/or such Letter of Credit (or another letter of
credit supported by such Letter of Credit, under
circumstances where a drawing under such Letter of Credit
shall entitle the applicable Letter of Credit Issuer to
succeed to the rights of the issuer of such other letter
of credit as a beneficiary of such mortgage or deed
of trust), which mortgage or deed of trust shall be
first priority and subject to no Liens which are not
acceptable to the Managing Agent;
(B) any Subsidiary which is the owner of any direct
or indirect interest therein shall have become (if it is
not already) a party to the Subsidiary Guaranty, the
Pledge Agreement and the Security Agreement; and
(C) there shall have been delivered in connection
with such mortgage or deed of trust such related UCC
financing statements, consents of landlords,
non-disturbance and attornment agreements and similar
documents, and such other documents as are customarily
delivered in connection with similar transactions, and
copies thereof shall have been delivered to the Managing
Agent and the Collateral Agent, with respect to such
property;
(4) in the case of any property described in Part II of
Annex III as to which there is outstanding any IRB Debt
supported directly or indirectly by a Letter of Credit issued
(or deemed issued) hereunder and which is owned or leased by
the Borrower, and as to which the conditions specified in the
foregoing clause (3) are not satisfied as provided therein,
such property shall be excluded from the Mature Property Pool
and become part of the Development Property Pool if within
120 days following the Closing Date any of the following
conditions are not satisfied with respect to such property:
60
(A) either (i) the Collateral Agent shall have been
granted a Mortgage covering such property (or the
interest of the Borrower or its Subsidiary therein, in
the case of a leasehold), which Mortgage shall, if a
first priority mortgage as to such property (or
leasehold) has been granted to secure existing IRB Debt
related thereto, or letters of credit issued to support
such IRB Debt, constitute a second priority Lien thereon,
subject to such Permitted Encumbrances as may be
acceptable to the Managing Agent, or (ii) the Lenders
shall have acquired a 100% risk participation in all
such letters of credit on terms and conditions
satisfactory to all of the Lenders in their sole
discretion, in which event such letters of credit shall
be deemed Letters of Credit issued hereunder, and the
Collateral Agent shall have been granted or assigned a
first priority Mortgage on such property (or leasehold),
or a second priority Mortgage on such property (or
leasehold) in the event a trustee for any industrial
revenue bonds shall hold a first mortgage thereon;
(B) any Subsidiary which is the owner of any direct
or indirect interest therein shall have become (if it is
not already) a party to the Subsidiary Guaranty, the
Pledge Agreement and the Security Agreement; and
(C) the Managing Agent and the Collateral Agent shall
have received related UCC financing statements, consents
of landlords, non-disturbance and attornment agreements
and similar documents, a Mortgage Policy, a survey and
such other documents as are contemplated by section
5.1(n) and this definition, all in form and substance
satisfactory to the Managing Agent and the Collateral
Agent, with respect to such property;
(5) in the case of any other property described in Part
III of Annex III which is leased by the Borrower or a
Subsidiary, such property shall be excluded from the Mature
Property Pool and become part of the Development Property
Pool if within 120 days following the Closing Date any of the
following conditions are not satisfied with respect to such
property:
(A) the Collateral Agent shall have been granted a
Mortgage covering such leasehold interest in such
property, which Mortgage shall be first priority and
subject to no Permitted Encumbrances which are not
acceptable to the Managing Agent;
(B) any Subsidiary which is the owner of any direct
or indirect interest therein shall have become (if it is
not already) a party to the Subsidiary Guaranty, the
Pledge Agreement and the Security Agreement; and
(C) the Managing Agent and the Collateral Agent shall
have received related UCC financing statements, consents
of landlords, non-disturbance and attornment agreements
and similar documents, and such other documents (not
including a Mortgage Policy or a survey) as are
contemplated by section 5.1(n) and this definition, all
in form and substance satisfactory to the Managing Agent
and the Collateral Agent, with respect to such property;
(6) in the case of the San Marcos Facility, such Facility
shall be excluded from the Mature Property Pool and become
part of the Development Property Pool if any of the following
conditions are not satisfied with respect to such Facility on
the Closing Date:
(A) the Borrower shall have pledged to the Collateral
Agent all equity interests in HPL held by the Borrower,
pursuant to the Pledge Agreement;
(B) HPL shall have pledged to the Collateral Agent
all promissory notes of San Marcos Courtyard, Ltd.
("SMCL") issued to it pursuant to the Restructuring
Agreement, dated as of December 1, 1994, between HPL and
SMCL, or otherwise held by HPL, pursuant to the Pledge
Agreement;
61
(C) HPL shall have assigned to the Collateral Agent,
pursuant to a collateral assignment in form and substance
satisfactory to the Collateral Agent and the
Documentation Agent, as security for the Obligations, all
right, title and interest of HPL under the deed of trust,
granted as of December 1, 1994 by SMCL only for the
benefit of HPL, First Healthcare Corporation and
Hillhaven Corporation, to secure SMCL's share of
obligations under the Restructuring Agreement and the
Tenants in Common Agreement, each dated as of December 1,
1994, and a Working Capital Note related thereto, and all
recordings and filings necessary to give effect to such
collateral assignment shall have been duly made;
(D) HPL shall have collaterally assigned to the
Collateral Agent all contractual rights under all
contracts pertaining to the San Marcos Facility
(including, without limitation, the Tenants in Common
Agreement and the Restructuring Agreement), pursuant to
the Security Agreement; and
(E) HPL shall have entered into the Subsidiary
Guaranty; and
(7) in the case of any such property managed by a
Subsidiary of the Borrower, such Subsidiary shall have become
(if it is not already) a party to the Subsidiary Guaranty,
the Pledge Agreement and the Security Agreement; and
(ii) all properties owned, leased or managed by the Borrower
or any Subsidiary which are added to the Mature Property Pool (whether
by reason of transfer from the Development Property Pool or upon
acquisition thereof in a Permitted Acquisition) upon satisfaction of
the following conditions:
(1) in the case of the Valley Manor property (which is
covered by a Mortgage delivered on the Closing Date) only,
the Borrower shall have, or shall have caused its applicable
Subsidiary to, complete, to the satisfaction of the Managing
Agent, any further investigative work or remedial work with
respect to fill pipes, as identified in the environmental
report with respect thereto, as the same may be supplemented
after the Closing Date; provided, that with respect to any
such property as to which such requirement was not satisfied
on the date such property was added to the Mature Property
Pool, such property shall be excluded from the Mature
Property Pool and become part of the Development Property
Pool if the Managing Agent determines at any time thereafter
that any such remedial work has not been completed to its
satisfaction;
(2) any such property (other than the Valley Manor
property referred to in clause (1) above) which is owned or
leased by the Borrower or any Subsidiary must have achieved
an annualized Cash Flow from Operations per unit of $8,400
for three consecutive months (determined as provided below),
and the Borrower shall have provided to the Managing Agent
such certificates, information and other evidence as the
Managing Agent may reasonably require to demonstrate
satisfaction of this condition;
(3) any such property (other than the Valley Manor
property referred to in clause (1) above) must have achieved
at least 85% occupancy for each month during such three
consecutive month period, and the Borrower shall have
provided to the Managing Agent such certificates, information
and other evidence as the Managing Agent may reasonably
require to demonstrate satisfaction of this condition;
(4) if any such property (other than the Valley Manor
property referred to in clause (1) above, as to which this
condition has already been satisfied) is owned, leased or
managed by a Subsidiary of the Borrower, such Subsidiary
shall have become (if it is not already) a party to the
Subsidiary Guaranty, the Pledge Agreement and the Security
Agreement;
(5) if any such property (other than the Valley Manor
property referred to in clause (1) above) is owned or leased
by the Borrower or any Subsidiary, the Borrower shall have
provided
62
to the Managing Agent a Phase I environmental audit report,
addressed to the Managing Agent and the Administrative Agent,
or accompanied by an appropriate letter authorizing such
reliance, with respect to such property, prepared by an
environmental consulting firm acceptable to the Managing
Agent, which report shall be satisfactory in form and
substance to the Managing Agent, and the Borrower shall have,
or shall have caused its applicable Subsidiary to, complete,
to the satisfaction of the Managing Agent, any remedial work
and establish any additional environmental compliance
activities as are recommended in such environmental report;
provided, that with respect to any such property as to which
such requirement was not satisfied on the date such property
was added to the Mature Property Pool, such property shall be
excluded from the Mature Property Pool and become part of the
Development Property Pool if the Managing Agent determines at
any time thereafter that any such remedial work or
establishment of environmental compliance activities has not
been completed to its satisfaction;
(6) if any such property (other than the Valley Manor
property referred to in clause (1) above, as to which the
following conditions have been satisfied) is owned or leased
by the Borrower or any Subsidiary, all of the following
conditions are satisfied with respect to such property:
(A) the Collateral Agent shall have been granted a
Mortgage covering the ownership interest or leasehold
interest of the Borrower or such Subsidiary in such
property, which Mortgage shall be first priority and
subject to no Permitted Encumbrances which are not
acceptable to the Managing Agent, and such Mortgage shall
have been duly recorded and effective to establish such
Lien for a period of at least 90 days; and
(B) the Managing Agent and the Collateral Agent shall
have received related UCC financing statements, consents
of landlords, non-disturbance and attornment agreements
and similar documents, a Mortgage Policy, a survey and
such other documents as are contemplated by section
5.1(n) and this definition, all in form and substance
satisfactory to the Managing Agent and the Collateral
Agent, with respect to such property; and
(7) in the case of any such property (other than the
Valley Manor property referred to in clause (1) above, as to
which this condition has already been satisfied) managed by a
Subsidiary of the Borrower, such Subsidiary shall have become
(if it is not already) a party to the Subsidiary Guaranty,
the Pledge Agreement and the Security Agreement; and
(8) in the case of any property as to which any of the
applicable conditions specified above has not been satisfied,
the Borrower may propose in writing to the Managing Agent
that such property nevertheless be included in the Mature
Property Pool upon compliance with such conditions, and
subject to such adjustments, if any, the Cash Flow from
Operations with respect to such property, as the Borrower may
determine to be appropriate and generally consistent with the
overall intent of this Agreement, with any such proposal to
be accompanied by such supporting materials as the Borrower
considers appropriate to a full and fair consideration of
such proposal by the Lenders, in which event the Managing
Agent shall advise the Lenders of such proposal and provide
the Lenders with copies of all materials submitted by the
Borrower in connection with such proposal; the Managing Agent
shall use reasonable efforts to communicate with the Lenders
and the Borrower as to any objections any Lender may have as
to such inclusion as proposed by the Borrower; if within
three weeks following the submission by the Managing Agent of
any such proposal to the Lenders the Managing Agent shall not
have received written indications of consent or approval to
such proposal (as it may be modified in any manner acceptable
to the Borrower and all of the Lenders) from all of the
Lenders, such proposal shall not become effective to add such
property to the Mature Property Pool; otherwise, if such
proposal (as it may be modified in any manner acceptable to
the Borrower and all of the Lenders) is approved as evidenced
by written consents or approvals from all of the Lenders,
such proposal (including any such modifications) shall become
effective to add such property to the Mature Property Pool;
63
other than, in any such case referred to in clause (i) or (ii) of this
definition, any such properties owned, leased or managed by a Subsidiary which
has Priority Debt outstanding, and any such property which is encumbered by any
Lien securing or otherwise relating to any Residential Mortgage Bond Programs of
the Borrower and its Subsidiaries or with reference to which any such
Residential Mortgage Bond Program is in effect. The Managing Agent shall
determine from time to time which properties are included in the Mature Property
Pool. The Managing Agent shall notify the Borrower, the Administrative Agent and
the Lenders promptly after making any such determinations and from time to time,
in response to a request from any Lender, the Administrative Agent or the
Borrower, shall notify the Administrative Agent, the Lenders and the Borrower of
the properties included in the Mature Property Pool and the reasons why any
particular property has been excluded from the Mature Property Pool. Any
properties not in the Mature Property Pool shall be considered part of the
Development Property Pool. Any such determination by the Managing Agent shall be
conclusive and binding absent manifest error.
"Minimum Borrowing Amount" shall mean (i) for Base Rate Loans,
$500,000, with minimum increments thereafter of $100,000 and (ii) for Eurodollar
Loans, $2,500,000, with minimum increments thereafter of $500,000.
"Moody's" shall mean Xxxxx'x Investors Service, Inc. and its
successors.
"Mortgage" shall have the meaning provided in section 5.1(n)(iii) and,
after the execution and delivery thereof, shall include each mortgage
constituting an Additional Security Document.
"Mortgage Policies" shall have the meaning provided in section
5.1(n)(iii).
"Mortgaged Property" shall have the meaning provided in section
5.1(n)(iii) and, after the execution and delivery of any mortgage or deed of
trust constituting an Additional Security Document, shall include the respective
property subject thereto but shall not include after the date of such release
any real property theretofore a Mortgaged Property that has been released from
the Liens of the Security Documents in accordance with the terms thereof or of
this Agreement.
"MPP Revolving Loan" shall have the meaning provided in section 1.1.
"MPP Revolving Loan Sublimit" shall mean an amount, as determined from
time to time by the Managing Agent and notified to the Borrower and the Lenders,
equal to the sum of (i) the amount that the Managing Agent determines would not
result in, or contribute to, a violation by the Borrower of the covenants
contained in section 8.12(a), whether or not the covenants contained in section
8.12(a) shall have been superseded by the covenants contained in section
8.12(b), plus (ii) if the Borrower has cash and Cash Equivalents which are
unencumbered by any Lien (including any cash collateral agreement in favor of
the Administrative Agent) in excess of $10,000,000, the amount of cash and Cash
Equivalents of the Borrower in excess of such amount which has been deposited by
the Borrower with the Administrative Agent pursuant to a cash collateral
agreement to be entered into in form and substance reasonably satisfactory to
the Administrative Agent and the Borrower (which shall permit certain
investments in Cash Equivalents satisfactory to the Administrative Agent and the
Borrower until the proceeds are applied to the secured obligations or earlier
released by the Administrative Agent to the Borrower from time to time). Any
such determination by the Managing Agent shall be conclusive and binding absent
manifest error.
"Net Cash Proceeds" shall mean, with respect to any Asset Sale, the
Cash Proceeds resulting therefrom net of (i) reasonable and customary expenses
of sale incurred in connection with such Asset Sale, and other reasonable and
customary fees and expenses incurred, and all state, and local taxes paid or
reasonably estimated to be payable by such person, as a consequence of such
Asset Sale and the payment of principal, premium and interest of Indebtedness
secured by the asset which is the subject of the Asset Sale and required to be,
and which is, repaid under the terms thereof as a result of such Asset Sale,
(ii) amounts of any distributions payable to holders of minority interests in
the relevant person or in the relevant property or assets and (iii) incremental
income taxes paid or payable as a result thereof.
"1934 Act" shall mean the Securities Exchange Act of 1934, as amended.
"Non-Defaulting Lender" shall mean each Lender other than a Defaulting
Lender.
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"Note" shall have the meaning provided in section 1.5(a).
"Notice of Borrowing" shall have the meaning provided in section
1.3(a).
"Notice of Conversion" shall have the meaning provided in section 1.6.
"Notice Office" shall mean the office of the Administrative Agent at
One PNC Plaza, Fourth Floor Annex, Xxxxx Xxxxxx xxx Xxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxxxxxx 00000, Attention: Xxxxxx Xxxxx, Vice President, Multi-Bank Loan
Administration (telephone: (000) 000-0000; facsimile: (000) 000-0000), or such
other office as the Administrative Agent may designate to the Borrower from time
to time.
"Obligations" shall mean all amounts, direct or indirect, contingent
or absolute, of every type or description, and at any time existing, owing to
the Administrative Agent or any Lender pursuant to the terms of this Agreement
or any other Credit Document.
"Parent" shall mean Vencor, Inc., a Delaware corporation, and its
successors and assigns.
"Parent Guaranty" shall have the meaning provided in section 5.1(l).
"Participant" shall have the meaning provided in section 2.4(a).
"Payment Office" shall mean the office of the Administrative Agent's
Affiliate, PNC Kentucky, at 000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx
00000, Attention: Xxxx Xxxxxx, Vice President, Mail Stop: K1-KHDQ-08-03
(telephone: (000) 000-0000; facsimile: (000) 000-0000), or such other office as
the Administrative Agent may designate to the Borrower from time to time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
"Percentage" shall mean, at any time for each Lender with a
Commitment, the percentage obtained by dividing such Lender's Commitment by the
Total Commitment, provided that if the Total Commitment has been terminated, the
Percentage of each Lender shall be determined by dividing such Lender's
Commitment immediately prior to such termination by the Total Commitment
immediately prior to such termination.
"Permitted Acquisitions" shall mean and include, exclusive of
expenditures (including the purchase of adjacent land) to expand then existing
assisted living facilities located in the United States to the extent owned by
the Borrower or any Subsidiary Guarantor on the Closing Date or acquired
pursuant to a Permitted Acquisition, and exclusive of any loans, advances or
investments permitted pursuant to section 8.5(i): (i) advances or credit
extensions to, or other investments in, any person owning an assisted living
property located in the United States made in connection with the Borrower or
any Subsidiary Guarantor obtaining a management contract for such assisted
living property, in an aggregate amount not to exceed $500,000 for all advances,
credit extensions and investments pursuant to this clause (i); and (ii)
acquisitions (whether by purchase, lease or otherwise, and including
expenditures for start-up activities and operations and renovations) of assisted
living properties (or interests in such properties) located in the United States
and/or interests in (or the making of advances or credit extensions to or
investments in) partnerships or joint ventures owning assisted living properties
located in the United States, provided that the only Indebtedness that may be
incurred by the Borrower and its Subsidiaries to effect a Permitted Acquisition
shall be MPP Revolving Loans (if such Permitted Acquisition qualifies for
addition to the Mature Property Pool), DPP Revolving Loans and Priority Debt;
provided, that, unless the Required Lenders otherwise consent, with respect to
any transaction referred to in the foregoing clauses (i) and (ii), no such
transaction shall be considered a Permitted Acquisition if (A) the value of the
consideration paid or agreed to be paid (including any Priority Debt) exceeds
$15,000,000 on an individual facility basis, or $25,000,000 on a per transaction
basis, or (B) the cumulative consideration paid or agreed to be paid (including
Priority Debt) for all such transactions would exceed $50,000,000 in any fiscal
year, or (C) such transaction is not "friendly", or the validity or
effectiveness of the transaction itself is contested in any manner by the
seller, any holders of equity interests in the seller, or any governmental
agency, or (D) as a result thereof the Borrower or any Subsidiary acquires any
equity interest in any person and either (1) such person does not by virtue
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of such transaction become a Subsidiary of the Borrower, or (2) if such person
does not become a Subsidiary of the Borrower, all equity interests in such
person owned by the Borrower or any Subsidiary are not pledged pursuant to the
Pledge Agreement. For purposes of the preceding proviso, consideration paid in
the form of common stock of the Borrower shall be valued at 50% of the last
reported sales price of such stock on a national securities exchange or on
NASDAQ, as applicable, prior to the issuance thereof as payment in such
transaction.
"Permitted Encumbrances" shall mean, with respect to a Real Property
constituting part of the Collateral, (i) the liens, encumbrances and other
matters disclosed in the Mortgage Policy relating to the Mortgage on such Real
Property or "insured over" or "insured around" to the satisfaction of the
Collateral Agent in such Mortgage Policy, (ii) such other title and survey
exceptions as the Collateral Agent may approve in writing in its sole
discretion, and (iii) the Permitted Liens, if any, described in section 8.3(h)
affecting such Real Property.
"Permitted Liens" shall mean Liens described in section 8.3.
"person" shall mean any individual, partnership, joint venture, firm
corporation, association, trust or other enterprise or any government or
political subdivision or any agency, department or instrumentality thereof.
"Plan" shall mean any multiemployer or single-employer plan as defined
in section 4001 of ERISA, which is maintained or contributed to by (or to which
there is an obligation to contribute of) the Borrower or a Subsidiary of the
Borrower or an ERISA Affiliate, and each such plan for the five year period
immediately following the latest date on which the Borrower, or a Subsidiary of
the Borrower or an ERISA Affiliate maintained, contributed to or had an
obligation to contribute to such plan.
"Pledge Agreement" shall have the meaning provided in section
5.1(n)(i).
"Pledged Securities" shall mean all the Pledged Securities as defined
in the Pledge Agreement.
"PNC Bank" shall mean PNC Bank, National Association, and its
successors and assigns.
"PNC Kentucky" shall mean PNC Bank, Kentucky, Inc., and its successors
and assigns.
"Priority Debt" shall have the meaning provided in section 8.4(g).
"Prohibited Transaction" shall mean a transaction with respect to a
Plan that is prohibited under section 4975 of the Code or section 406 of ERISA
and not exempt under section 4975 of the Code or section 408 of ERISA.
"RCRA" shall mean the Resource Conservation and Recovery Act, as the
same may be amended from time to time, 42 U.S.C. (S) 6901 et seq.
"Real Property" of any person shall mean all of the right, title and
interest of such person in and to land, improvements and fixtures, including
Leaseholds.
"Registration Rights Agreement" shall mean the Registration Rights
Agreement, between the Borrower and the Parent, in the form delivered to the
Administrative Agent pursuant to section 5.1(d) and without giving effect to any
amendment or modification thereof not consented to by the Required Lenders.
"Registration Statement" shall mean the Registration Statement on Form
S-1, Registration Number 333-06907 filed by the Borrower with the SEC on June
26, 1996, as amended by Amendment No. 1 thereto filed by the Borrower with the
SEC on July 10, 1996, as amended by Amendment No. 2 thereto filed by the
Borrower with the SEC on July 29, 1996, together with any subsequent amendment
thereto satisfactory to the Administrative Agent.
"Regulation D" shall mean Regulation D 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 establishing reserve requirements.
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"Regulation U" shall mean Regulation U 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 establishing margin requirements.
"Reorganization" shall have the meaning provided in section 5.1(h).
"Reportable Event" shall mean an event described in section 4043(c) of
ERISA with respect to a Plan other than those events as to which the 30-day
notice period is waived under subsection .13, .14, .16, .18, .19 or .20 of PBGC
Regulation section 2615.
"Required Lenders" shall mean Non-Defaulting Lenders whose outstanding
Loans and Unutilized Commitments constitute at least a majority of the sum of
the total outstanding Loans and Unutilized Commitments of Non-Defaulting
Lenders.
"Revolving Loan Maturity Date" shall mean the fourth anniversary of
the Closing Date, unless extended as provided in section 3.4.
"S&P" shall mean Standard & Poor's Ratings Group, a division of McGraw
Hill, Inc., and its successors.
"San Marcos Facility" shall mean the 212 unit independent and assisted
living facility known as San Marcos Retirement Village, located in San Marcos,
California, owned as tenants in common by HPL, a Wholly-Owned Subsidiary of the
Borrower, as to a 65% interest, and San Marcos Courtyard, Ltd., a California
limited partnership, as to a 35% interest, pursuant to a Tenants in Common
Agreement, dated as of December 1, 1994, pursuant to which, among other things,
HPL manages the facility, the facility has been leased to HPL and HPL has
certain rights to acquire the facility commencing September 15, 1999, or
pursuant to a right of first refusal. "SEC" shall mean the United States
Securities and Exchange Commission.
"SEC Regulation D" shall mean Regulation D as promulgated under the
Securities Act of 1933, as amended, as the same may be in effect from time to
time.
"section 4.4(b)(ii) Certificate" shall have the meaning provided in
section 4.4(b)(ii).
"Security Agreement" shall have the meaning provided in section
5.1(n)(ii).
"Security Agreement Collateral" shall mean all "Collateral" as defined
in the Security Agreement.
"Security Documents" shall mean the Pledge Agreement, the Security
Agreement, each Mortgage, each other Additional Security Document and each
security document entered into pursuant to section 8.2(c).
"Shareholders' Agreements" shall have the meaning provided in section
5.1(d).
"Stated Amount" of each Letter of Credit shall mean the maximum
available to be drawn thereunder (regardless of whether any conditions or other
requirements for drawing could then be met).
"Subsidiary" of any person shall mean and include (i) 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 stock of 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 (ii) 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 the time. Unless otherwise
expressly provided, all references herein to "Subsidiary" shall mean a
Subsidiary of the Borrower.
"Subsidiary Guarantor" shall mean each Wholly-Owned Subsidiary that is
party to the Subsidiary Guaranty.
"Subsidiary Guaranty" shall have the meaning provided in section
5.1(m).
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"Tax Sharing Agreements" shall have the meaning provided in section
5.1(d).
"Taxes" shall have the meaning provided in section 4.4.
"Testing Period" shall mean (i) for any determination made prior to
June 30, 1997, the consecutive fiscal quarters of the Borrower then last ended
plus any period of historical results prior to consummation of the Transaction
necessary to make such period consist of four consecutive fiscal quarters, and
(ii) for any determination made thereafter, the four consecutive fiscal quarters
of the Borrower then last ended.
"Total Capitalization" shall mean the sum of Total Indebtedness and
Consolidated Net Worth.
"Total Commitment" shall mean the sum of the Commitments of the
Lenders.
"Total Indebtedness" shall mean all Indebtedness for borrowed money,
and all bonds, notes, debentures and similar debt securities, and all
Capitalized Lease Obligations, of or guaranteed by the Borrower and/or any of
its Subsidiaries all as determined on a consolidated basis.
"Total Interest Expense" shall mean, for any period, total interest
expense (including that which is capitalized and that which is attributable to
Capital Leases, in accordance with GAAP) of the Borrower and its Subsidiaries on
a consolidated basis with respect to all outstanding Indebtedness of the
Borrower and its Subsidiaries including, without limitation, all commissions,
discounts and other fees and charges owed with respect to letters of credit and
net costs under Interest Rate Agreements, but excluding, however, any
amortization of deferred financing costs, all as determined in accordance with
GAAP.
"Transaction" shall include (i) the Reorganization, (ii) the IPO, and
(iii) if consummated on the Closing Date, any Permitted Acquisition.
"Transaction Documents" shall mean and include the Acquisition
Documents, the Registration Rights Agreement, the Administrative Services
Agreement, the Tax Sharing Agreement, the Registration Statement, all agreements
and documents governing the Transaction and the Credit Documents.
"Type" shall mean any type of Loan determined with respect to the
interest option applicable thereto, i.e., a Base Rate Loan or Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code.
"Unfunded Current Liability" of any Plan shall mean the amount, if
any, by which the actuarial present value of the accumulated plan benefits under
the Plan as of the close of its most recent plan year exceeds the fair market
value of the assets allocable thereto, each determined in accordance with
Statement of Financial Accounting Standards No. 87, based upon the actuarial
assumptions used by the Plan's actuary in the most recent annual valuation of
the Plan.
"Unpaid Drawing" shall have the meaning provided in section 2.3(a).
"Unutilized Commitment" for any Lender at any time shall mean the
excess of (i) such Lender's Commitment at such time over (ii) the sum of the
principal amount of Loans made by such Lender and outstanding at such time and
(y) such Lender's Percentage of Letter of Credit Outstandings at such time.
"Unutilized Total Commitment" shall mean, at any time, the excess of
(i) the Total Commitment at such time over (ii) the sum of (x) the aggregate
principal amount of all Loans then outstanding plus (y) the aggregate Letter of
Credit Outstandings at such time.
"Wholly-Owned Subsidiary" shall mean each Subsidiary of the Borrower
all of whose capital stock, equity interests and partnership interests are owned
directly or indirectly by the Borrower, its officers, stockholders and
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affiliates but excluding any Subsidiary primarily engaged in the business of
issuing insurance and/or insurance policies.
"Written" or "in writing" shall mean any form of written communication
or a communication by means of telex, facsimile transmission, telegraph or
cable.
SECTION 11. THE ADMINISTRATIVE AGENT
AND THE MANAGING AGENT.
11.1. Appointment. Each Lender hereby irrevocably designates and
appoints PNC Bank as Administrative Agent (such term to include, for the
purposes of this section 11, PNC Bank acting as Collateral Agent) and PNC
Kentucky as Managing Agent, in each case to act as specified herein and in the
other Credit Documents, and each such Lender hereby irrevocably authorizes PNC
Bank as the Administrative Agent for such Lender and PNC Kentucky as the
Managing Agent for such Lender, to take such action on its behalf under the
provisions of this Agreement and the other Credit Documents and to exercise such
powers and perform such duties as are expressly delegated to the Administrative
Agent or the Managing Agent, as the case may be, by the terms of this Agreement
and the other Credit Documents, together with such other powers as are
reasonably incidental thereto. The Administrative Agent and the Managing Agent
each agrees to act as such upon the express conditions contained in this section
11. Notwithstanding any provision to the contrary elsewhere in this Agreement,
neither the Administrative Agent nor the Managing Agent shall have any duties or
responsibilities, except those expressly set forth herein or in the other Credit
Documents, nor any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or otherwise exist against the Administrative Agent
or the Managing Agent. The provisions of this section 11 are solely for the
benefit of the Administrative Agent and the Managing Agent, and the Lenders, and
no Credit Party shall have any rights as a third party beneficiary of any of the
provisions hereof. In performing its functions and duties under this Agreement,
the Administrative Agent and the Managing Agent shall each act solely as agent
of the Lenders and do not assume and shall not be deemed to have assumed any
obligation or relationship of agency or trust with or for any Credit Party.
11.2. Delegation of Duties. The Administrative Agent and the Managing
Agent may each execute any of its duties under this Agreement or any other
Credit Document by or through agents or attorneys-in-fact and each shall be
entitled to advice of counsel concerning all matters pertaining to such duties.
Neither the Administrative Agent nor the Managing Agent shall be responsible for
the negligence or misconduct of the other or for any agents or attorneys-in-fact
selected by it with reasonable care except to the extent otherwise required by
section 11.3.
11.3. Exculpatory Provisions. Neither the Administrative Agent nor the
Managing Agent, nor any of their respective officers, directors, employees,
agents, attorneys-in-fact or affiliates shall be (i) liable for any action
lawfully taken or omitted to be taken by it or such person under or in
connection with this Agreement (except for its or such person's own gross
negligence or willful misconduct) or (ii) responsible in any manner to any of
the Lenders for any recitals, statements, representations or warranties made by
the Borrower or any other Credit Party or any of their respective officers
contained in this Agreement, any other Credit Document or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Administrative Agent or the Managing Agent under or in connection with,
this Agreement or any other Credit Document or for any failure of the Borrower
or any other Credit Party or any of their respective officers to perform its
obligations hereunder or thereunder. Neither the Administrative Agent nor the
Managing Agent shall be under any obligation to any Lender to ascertain or to
inquire as to the observance or performance of any of the agreements contained
in, or conditions of, this Agreement, or to inspect the properties, books or
records of the Borrower or any other Credit Party. Neither the Administrative
Agent nor the Managing Agent shall be responsible to any Lender for the
effectiveness, genuineness, validity, enforceability, collectibility or
sufficiency of this Agreement or any Credit Document or for any representations,
warranties, recitals or statements made herein or therein or made 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 Administrative Agent or the Managing Agent to the
Lenders or by or on behalf of the Borrower or any other Credit Party to the
Administrative Agent, the Managing Agent or any Lender or be required to
ascertain or inquire as to the performance or observance of any of the terms,
conditions,
69
provisions, covenants or agreements contained herein or therein or as to the use
of the proceeds of the Loans or of the existence or possible existence of any
Default or Event of Default.
11.4. Reliance by Agents. The Administrative Agent and the Managing
Agent shall each be entitled to rely, and shall be fully protected in relying,
upon any note, writing, resolution, notice, consent, certificate, affidavit,
letter, cablegram, telegram, facsimile transmission, telex or teletype message,
statement, order or other document or conversation believed by it, in good
faith, to be genuine and correct and to have been signed, sent or made by the
proper person or persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Borrower or any other Credit
Party), independent accountants and other experts selected by the Administrative
Agent or the Managing Agent, as the case may be. The Administrative Agent and
the Managing Agent shall each be fully justified in failing or refusing to take
any action under this Agreement or any other Credit Document 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 which may be incurred by it by reason
of taking or continuing to take any such action. The Administrative Agent and
the Managing Agent shall each in all cases be fully protected in acting, or in
refraining from acting, under this Agreement and the other Credit Documents in
accordance with a request of the Required Lenders, and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Lenders.
11.5. Notice of Default. Neither the Administrative Agent nor the
Managing Agent shall be deemed to have knowledge or notice of the occurrence of
any Default or Event of Default hereunder unless the Administrative Agent or the
Managing Agent, as the case may be, has received notice from a Lender or the
Borrower or any other Credit Party referring to this Agreement, describing such
Default or Event of Default and stating that such notice is a "notice of
default." In the event that the Administrative Agent or the managing Agent
receives such a notice, the Administrative Agent or the Managing Agent, as the
case may be, shall give prompt notice thereof to the Lenders. The Administrative
Agent or the Managing Agent, as the case may be, shall take such action with
respect to such Default or Event of Default as shall be reasonably directed by
the Required Lenders, provided that unless and until the Administrative Agent or
the Managing Agent, as the case may be, shall have received such directions, the
Administrative Agent or the Managing Agent, as the case may be, may (but shall
not be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as shall be both (x) consistent with
the terms and provisions of the Credit Documents (including, without limitation,
the terms and provisions of section 12.12 hereof governing changes, waivers,
discharges and terminations) and (y) deemed advisable by it as being in the best
interests of the Lenders.
11.6. Non-Reliance. Each Lender expressly acknowledges that neither
the Administrative Agent nor the Managing Agent, nor any of their respective
officers, directors, employees, agents, attorneys-in-fact or Affiliates have
made any representations or warranties to it and that no act by the
Administrative Agent or the Managing Agent, as the case may be, hereinafter
taken, including any review of the affairs of the Borrower or other Credit
Party, shall be deemed to constitute any representation or warranty by the
Administrative Agent or the Managing Agent to any Lender. Each Lender represents
to the Administrative Agent and the Managing Agent that it has, independently
and without reliance upon the Administrative Agent or the Managing Agent, or any
other Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
assets, operations, property, financial and other conditions, prospects and
creditworthiness of the Borrower and the other Credit Parties and made its own
decision to make its Loans hereunder and enter into this Agreement. Each Lender
also represents that it will, independently and without reliance upon the
Administrative Agent or the Managing Agent, or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement, and 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
Borrower and the other Credit Parties. Neither the Administrative Agent nor the
Managing Agent shall have any duty or responsibility to provide any Lender with
any credit or other information concerning the business, operations, assets,
property, financial and other conditions, prospects or creditworthiness of the
Borrower or any other Credit Party which may come into the possession of the
Administrative Agent or the Managing Agent, as the case may be, or any of its
respective officers, directors, employees, agents, attorneys-in-fact or
Affiliates, other than the copies of certificates, financial statements and
documents provided by or on behalf of the Parent or the Borrower pursuant to the
provisions of the Credit Documents which are intended for the Lenders generally
and as to which the Administrative Agent or the Managing Agent, as the case may
be, is specifically required to provide copies thereof to the Lenders, and in
any such case the Administrative Agent or
70
the Managing Agent, as the case may be, shall promptly so provide the Lenders
with such copies.
11.7. Indemnification. The Lenders agree to indemnify the
Administrative Agent and the Managing Agent in their respective capacities as
such ratably according to their respective Loans and unutilized Commitments,
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, reasonable expenses or
disbursements of any kind whatsoever which may at any time (including, without
limitation, at any time following the payment of the Obligations) be imposed on,
incurred by or asserted against the Administrative Agent or the Managing Agent
in its capacity as such in any way relating to or arising out of this Agreement
or any other Credit Document, or any documents contemplated by or referred to
herein or the transactions contemplated hereby or any action taken or omitted to
be taken by the Administrative Agent or the Managing Agent, as the case may be,
under or in connection with any of the foregoing, but only to the extent that
any of the foregoing is not paid by the Borrower or another Credit Party,
provided that no Lender shall be liable to the Administrative Agent or the
Managing Agent for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements to the extent resulting solely from the Administrative Agent's or
the Managing Agent's, as the case may be, gross negligence or willful
misconduct. If any indemnity furnished to the Administrative Agent or the
Managing Agent for any purpose shall, in the opinion of the Administrative Agent
or the Managing Agent, as the case may be, be insufficient or become impaired,
the Administrative Agent or the Managing Agent, as the case may be, 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 11.7 shall survive the payment of all Obligations.
11.8. The Agents in Their Individual Capacity. The Administrative
Agent and the Managing Agent and their respective Affiliates may make loans to,
accept deposits from and generally engage in any kind of business with the
Borrower, the other Credit Parties and their Affiliates as though not acting as
Administrative Agent or Managing Agent, as the case may be, hereunder. With
respect to the Loans made by it and all Obligations owing to it, the
Administrative Agent and the Managing Agent shall each have the same rights and
powers under this Agreement as any Lender and may exercise the same as though it
were not the Administrative Agent or the Managing Agent, as the case may be, and
the terms "Lender" and "Lenders" shall include the Administrative Agent and the
Managing Agent in their respective individual capacities.
11.9. Successor Agents. The Administrative Agent and the Managing
Agent may each resign as the Administrative Agent or the Managing Agent, as the
case may be, upon 20 days' notice to the Lenders and the Borrower. The Required
Lenders shall appoint from among the Lenders a successor Administrative Agent or
Managing Agent, as the case may be, for the Lenders subject to prior approval by
the Borrower (such approval not to be unreasonably withheld or delayed),
whereupon such successor agent shall succeed to the rights, powers and duties of
the Administrative Agent or the Managing Agent, as the case may be, and the term
"Administrative Agent" or "Managing Agent", as the case may be, shall include
such successor agent effective upon its appointment, and the resigning
Administrative Agent's or Managing Agent's, as the case may be, rights, powers
and duties as the Administrative Agent or the Managing Agent, as the case may
be, shall be terminated, without any other or further act or deed on the part of
such former Administrative Agent or Managing Agent, as the case may be, or any
of the parties to this Agreement. After the retiring Administrative Agent's or
Managing Agent's, as the case may be, resignation hereunder as the
Administrative Agent or as the Managing Agent, as the case may be, the
provisions of this section 11 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Administrative Agent or the Managing
Agent, as the case may be, under this Agreement.
11.10. Other Agents. The above provisions of this section 11 shall
inure to the benefit of the Documentation Agent as fully as if the Documentation
Agent were the Administrative Agent hereunder. Any Lender identified herein as a
Co-Agent, Syndication Agent or any other corresponding title, other than
"Administrative Agent", "Managing Agent", "Collateral Agent" or "Documentation
Agent", shall have no right, power, obligation, liability, responsibility or
duty under this Agreement or any other Credit Document except those applicable
to all Lenders as such. Each Lender acknowledges that it has not relied, and
will not rely, on any Lender so identified in deciding to enter into this
Agreement or in taking or not taking any action hereunder.
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SECTION 12. MISCELLANEOUS.
12.1. Payment of Expenses etc. The Borrower agrees to: (i) whether or
not the transactions herein contemplated are consummated, pay all reasonable
out-of-pocket costs and expenses of the Administrative Agent, the Managing Agent
and the Documentation Agent in connection with the negotiation, preparation,
execution and delivery of the Credit Documents and the documents and instruments
referred to therein and any amendment, waiver or consent relating thereto
(including, without limitation, the reasonable fees and disbursements of Xxxxx,
Day, Xxxxxx & Xxxxx, in accordance with the proposal letter dated July 16, 1996
of such firm) and of the Administrative Agent and each of the Lenders in
connection with the enforcement of the Credit Documents and the documents and
instruments referred to therein (including, without limitation, the reasonable
fees and disbursements of counsel for the Administrative Agent and for each of
the Lenders); (ii) in the event (x) that any of the Mortgages are foreclosed in
whole or in part or that any of the Mortgages are put into the hands of an
attorney for collection, suit, action or foreclosure, (y) of the foreclosure of
any mortgage prior to or subsequent to any of the Mortgages in which proceeding
the Collateral Agent is made a party, or (z) of the bankruptcy, insolvency,
rehabilitation or other similar proceeding in respect of the Borrower or any of
its Subsidiaries, pay all costs of collection and defense, including reasonable
attorneys' fees in connection therewith and in connection with any appellate
proceeding or post-judgment action involved therein, which shall be due and
payable together with all required service or use taxes; (iii) pay and hold each
of the Lenders harmless from and against any and all present and future stamp
and other similar taxes with respect to the foregoing matters and save each of
the Lenders harmless from and against any and all liabilities with respect to or
resulting from any delay or omission (other than to the extent attributable to
such Lender) to pay such taxes; and (iv) indemnify each Lender, its officers,
directors, employees, representatives and agents (collectively, the
"Indemnitees") 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 (a) any interest in
any Real Property (other than as permitted hereunder and/or under the other
Credit Documents) is claimed by any other person, (b) any investigation,
litigation or other proceeding (whether or not any Lender is a party thereto)
related to the entering into and/or performance of any Credit Document or the
use of the proceeds of any Loans hereunder or the Transaction or the
consummation of any transactions contemplated in any Credit Document, or (c) the
actual or alleged presence of Hazardous Materials in the air, surface water or
groundwater or on the surface or subsurface of any Real Property owned, leased
or at any time operated by the Borrower or any of its Subsidiaries, the release,
generation, storage, transportation, handling or disposal of Hazardous Materials
at any location, whether or not owned or operated by the Borrower or any of its
Subsidiaries, the non-compliance of any Real Property with foreign, federal,
state and local laws, regulations and ordinances (including applicable permits
thereunder) applicable to any Real Property, or any Environmental Claim asserted
against the Borrower or any of its Subsidiaries or any Real Property owned,
leased or at any time operated by the Borrower or any of its Subsidiaries,
including, in each case, 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 the gross
negligence or willful misconduct of the person to be indemnified or of any other
Indemnitee who is such person or an Affiliate of such person). To the extent
that the undertaking to indemnify, pay or hold harmless any person set forth in
the preceding sentence may be unenforceable because it is violative of any law
or public policy, the Borrower shall make the maximum contribution to the
payment and satisfaction of each of the indemnified liabilities which is
permissible under applicable law.
12.2. Right of Setoff. 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 hereby
authorized at any time or from time to time, without presentment, demand,
protest or other notice of any kind to the Borrower or to any other person, any
such notice 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, by
branches and agencies of such Lender wherever located) to or for the credit or
the account of the Borrower against and on account of the Obligations and
liabilities of the Borrower to such Lender under this Agreement or under any of
the other Credit Documents, including, without limitation, all interests in
Obligations the Borrower purchased by such Lender pursuant to section 12.4(b),
and all other claims of any nature or description arising out of or connected
with this Agreement or any other Credit Document, irrespective of whether or not
such Lender shall have made any demand hereunder and although said Obligations,
liabilities or claims, or any of them, shall be contingent or unmatured.
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12.3. Notices. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, facsimile transmission or cable communication)
and mailed, telegraphed, telexed, transmitted, cabled or delivered, if to the
Borrower, at 3300 Providian, 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000,
attention: Chief Financial Officer (facsimile: (000) 000-0000); if to any Lender
at its address specified for such Lender on Annex I hereto; if to the
Administrative Agent, at its Notice Address; if to the Managing Agent, to PNC
Bank, Kentucky, Inc. at 000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000,
Attention: Xxxx Xxxxxx, Vice President, Mail Stop: K1-KHDQ-08-03 (telephone:
(000) 000-0000; facsimile: (000) 000-0000); or at such other address as shall be
designated by any party in a written notice to the other parties hereto. All
such notices and communications shall be mailed, telegraphed, telexed,
telecopied, or cabled or sent by overnight courier, and shall be effective when
received.
12.4. Benefit of Agreement. (a) This 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 no Credit Party may assign or
transfer any of its rights or obligations hereunder without the prior written
consent of all the Lenders. Each Lender may at any time grant participations in
any of its rights hereunder or under any of the Notes to another financial
institution, provided that in the case of any such participation, (i) the
participant shall not have any rights under this Agreement or any of the other
Credit Documents, including rights of consent, approval or waiver (the
participant's rights against such Lender in respect of such participation to be
those set forth in the agreement executed by such Lender in favor of the
participant relating thereto), (ii) such Lender's obligations under this
Agreement (including, without limitation, its Commitment hereunder) shall remain
unchanged, (iii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iv) such Lender shall
remain the holder of any Note for all purposes of this Agreement and (v) the
Borrower, the Administrative Agent, and the other Lenders shall continue to deal
solely and directly with the selling Lender in connection with such Lender's
rights and obligations under this Agreement, and all amounts payable by the
Borrower hereunder shall be determined as if such Lender had not sold such
participation, except that the participant shall be entitled to the benefits of
sections 1.10, 1.11 and 4.4 of this Agreement to the extent that such Lender
would be entitled to such benefits if the participation had not been entered
into or sold, and, provided further, that no Lender shall transfer, grant or
sell any participation under which the participant shall have rights to approve
any amendment to or waiver of this Agreement or any other Credit Document except
to the extent such amendment or waiver would (x) extend the final scheduled
maturity of the Loans in which such participant is participating (it being
understood that any waiver of the making of, or the application of any
amortization payment or other prepayment or the method of any application of any
prepayment to the amortization of the Loans shall not constitute an extension of
the final maturity date thereof), or reduce the rate or extend the time of
payment of interest or Fees thereon (except in connection with a waiver of the
applicability of any post-default increase in interest rates), or reduce the
principal amount thereof, or increase such participant's participating interest
in any Commitment over the amount thereof then in effect (it being understood
that a waiver of any Default or Event of Default or of any mandatory prepayment
or a mandatory reduction in the Total Commitment, or a mandatory prepayment,
shall not constitute a change in the terms of any Commitment), (y) release all
or substantially all of the Collateral (in each case except as expressly
provided in the Credit Documents) or (z) consent to the assignment or transfer
by the Parent and/or the Borrower of any of its rights and obligations under
this the Parent Guaranty and this Agreement.
(b) Notwithstanding the foregoing, (x) any Lender may assign all or a
portion of its Loans and/or Commitment, and its rights and obligations hereunder
to another Lender that is not a Defaulting Lender or to an Affiliate of such
Lender which is a commercial bank, financial institution or other "accredited
investor" (as defined in SEC Regulation D), and (y) any Lender may assign all,
or if less than all, a portion equal to at least $5,000,000 in the aggregate for
the assigning Lender or assigning Lenders, of its Loans and/or Commitment and
its rights and obligations hereunder, to one or more Eligible Transferees, each
of which assignees shall become a party to this Agreement as a Lender by
execution of an Assignment Agreement, provided that, (i) at such time Annex I
shall be deemed modified to reflect the Commitment of such new Lender and of the
existing Lenders, (ii) upon surrender of the old Notes, new Notes will be
issued, at the Borrower's expense, to such new Lender and to the assigning
Lender, such new Notes to be in conformity with the requirements of section 1.5
(with appropriate modifications) to the extent needed to reflect the revised
Commitments, (iii) in the case of clause (y) only, the consent of the
Administrative Agent and each Letter of Credit Issuer shall be required in
connection with any such assignment (which consent shall not be unreasonably
withheld or delayed), and (iv) the Administrative Agent shall receive at the
time of each such assignment, from the assigning or assignee Lender, the payment
of a non-refundable assignment fee of $2,000 and,
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provided further, that such transfer or assignment will not be effective until
recorded by the Administrative Agent on a register maintained by it. To the
extent of any assignment pursuant to this section 12.4(b) the assigning Lender
shall be relieved of its obligations hereunder with respect to its assigned
Commitments. At the time of each assignment pursuant to this section 12.4(b) to
a person which is not already a Lender hereunder and which is not a United
States person (as such term is defined in section 7701(a)(30) of the Code) for
Federal income tax purposes, the respective assignee Lender shall provide to the
Borrower and the Administrative Agent the appropriate Internal Revenue Service
Forms (and, if applicable a section 4.4(b)(ii) Certificate) described in section
4.4(b). To the extent that an assignment of all or any portion of a Lender's
Commitment and related outstanding Obligations pursuant to this section 12.4(b)
would, at the time of such assignment, result in increased costs under section
1.10 from those being charged by the respective assigning bank prior to such
assignment, then the Borrower shall not be obligated to pay such increased costs
(although the Borrower shall be obligated to any other increased costs of the
type described above resulting from changes after the date of the respective
assignment). Nothing in this section 12.4(b) shall prevent or prohibit any
Lender from pledging its Notes or Loans to a Federal Reserve Bank in support of
borrowings made by such Lender from such Federal Reserve Bank.
(c) Notwithstanding any other provisions of this section 12.4, no
transfer or assignment of the interests or obligations of any Lender hereunder
or any grant of participation therein shall be permitted if such transfer,
assignment or grant would require the Borrower to file a registration statement
with the SEC or to qualify the Loans under the "Blue Sky" laws of any State.
(d) Each Lender initially party to this Agreement hereby represents,
and each person that became a Lender pursuant to an assignment permitted by this
section 12.4 will, upon its becoming party to this Agreement, represent that it
is a commercial lender, other financial institution or other "accredited"
investor (as defined in SEC Regulation D) which makes or acquires loans in the
ordinary course of its business and that it will make or acquire Loans for its
own account in the ordinary course of such business, provided that subject to
the preceding sections 12.4(a) and (b), the disposition of any promissory notes
or other evidences of or interests in Indebtedness held by such Lender shall at
all times be within its exclusive control.
(e) The Administrative Agent shall maintain at its Notice Office a
copy of each Assignment Agreement delivered to and accepted by it and a register
for the recordation of the names and addresses of the Lenders and the Commitment
of, and principal amount of the Loans owing to, each Lender from time to time
(the "Register"). The entries in the Register shall be conclusive and binding
for all purposes, absent manifest error, and the Borrower, the Administrative
Agent and the Lenders may treat each person whose name is recorded in the
Register as a Lender hereunder for all purposes of this Agreement. The Register
shall be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
12.5. No Waiver: Remedies Cumulative. No failure or delay on the part
of the Administrative 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 and the Administrative Agent or any Lender shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, power
or privilege 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 herein expressly provided are
cumulative and not exclusive of any rights or remedies which the Administrative
Agent or any Lender would otherwise have. No notice to or demand on the Borrower
in any case shall entitle the Borrower to any other or further notice or demand
in similar or other circumstances or constitute a waiver of the rights of the
Administrative Agent or the Lenders to any other or further action in any
circumstances without notice or demand.
12.6. Payments Pro Rata. (a) The Administrative Agent agrees that
promptly after its receipt of each payment from or on behalf of the Borrower in
respect of any Obligations, it shall distribute such payment to the Lenders
(other than any Lender that has expressly waived in writing its right to receive
its pro rata share thereof) pro rata based upon their respective shares, if any,
of the Obligations with respect to which such payment was received. As to any
such payment received by the Administrative Agent prior to 1:00 P.M. (local time
at the Payment Office) in funds which are immediately available on such day, the
Administrative Agent will use all reasonable efforts to distribute such payment
in immediately available funds on the same day to the Lenders as aforesaid.
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(b) Each of the Lenders agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise) which is applicable to the payment of the principal of, or interest
on, the Loans or Fees, of a sum which with respect to the related sum or sums
received by other Lenders is in a greater proportion than the total of such
Obligation then owed and due to such Lender bears to the total of such
Obligation then owed and due to all of the Lenders immediately prior to such
receipt, then such Lender receiving such excess payment shall purchase for cash
without recourse or warranty from the other Lenders an interest in the
Obligations to such Lenders in such amount as shall result in a proportional
participation by all of the Lenders in such amount, provided that if all or any
portion of such excess amount is thereafter recovered from such Lender, such
purchase shall be rescinded and the purchase price restored to the extent of
such recovery, but without interest.
12.7. Calculations: Computations. (a) The financial statements to be
furnished to the Lenders pursuant hereto shall be made and prepared in
accordance with GAAP consistently applied throughout the periods involved
(except as set forth in the notes thereto or as otherwise disclosed in writing
by the Borrower to the Lenders); provided, that except as otherwise specifically
provided herein, all computations determining compliance with sections 4.2 and
8, including definitions used therein, shall utilize accounting principles and
policies in effect at the time of the preparation of, and in conformity with
those used to prepare, the December 31, 1995 financial statements delivered to
the Lenders pursuant to section 6.8(b), but shall not give effect to purchase
accounting adjustments required or permitted by APB 16 (including non-cash
write-ups and non-cash charges relating to inventory and fixed assets, in each
case arising in connection with the Transaction) and APB 17 (including non-cash
charges relating to intangibles and goodwill arising in connection with the
Transactions).
(b) All computations of interest on Base Rate Loans hereunder and all
computations of Commitment Commission hereunder shall be made on the actual
number of days elapsed over a year of 365 or 366 days, as applicable, and all
computations of interest on Eurodollar Loans, Letter of Credit Fees and other
Fees (other than Commitment Commission) hereunder shall be made on the actual
number of days elapsed over a year of 360 days.
12.8. Governing Law; Submission to Jurisdiction; Venue; Waiver of Jury
Trial. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE COMMONWEALTH OF KENTUCKY,
EXCEPT THAT THE PROVISIONS FOR THE CREATION, PERFECTION, AND ENFORCEMENT OF THE
LIENS CREATED PURSUANT TO THE MORTGAGES SHALL BE GOVERNED BY AND CONSTRUED
ACCORDING TO THE LAW OF THE STATE IN WHICH THE APPLICABLE REAL PROPERTY IS
LOCATED, IT BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF
SUCH STATE, THE LAW OF THE COMMONWEALTH OF KENTUCKY SHALL GOVERN THE VALIDITY
AND ENFORCEABILITY OF ALL CREDIT DOCUMENTS, INCLUDING ALL MORTGAGES, AND ALL OF
THE OBLIGATIONS ARISING HEREUNDER OR THEREUNDER. TO THE FULLEST EXTENT PERMITTED
BY LAW, THE BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO
ASSERT THAT THE LAW OF ANY JURISDICTION OTHER THAN THE COMMONWEALTH OF KENTUCKY
GOVERNS THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS, EXCEPT TO THE
EXTENT AFORESAID WITH RESPECT TO THE LIENS CREATED BY THE MORTGAGES. Any legal
action or proceeding with respect to this Agreement or any other Credit Document
may be brought in the Jefferson Circuit Court, Louisville, Kentucky, or of the
United States for the Western District of Kentucky, and, by execution and
delivery of this Agreement, the Borrower hereby irrevocably accepts for itself
and in respect of its property, generally and unconditionally, the jurisdiction
of the aforesaid courts. The Borrower hereby 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 the Borrower at its address for notices pursuant to section
12.3, such service to become effective 30 days after such mailing or at such
earlier time as may be provided under applicable law. Nothing herein shall
affect the right of the Administrative Agent or any Lender to serve process in
any other manner permitted by law or to commence legal proceedings or otherwise
proceed against the Borrower in any other jurisdiction.
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(b) The Borrower 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 Agreement or any other
Credit Document brought in the courts referred to in section 12.8(a) above 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.
(c) Each of the parties to this Agreement hereby irrevocably waives
all right to a trial by jury in any action, proceeding or counterclaim arising
out of or relating to this Agreement, the other Credit Documents or the
transactions contemplated hereby or thereby.
12.9. Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same agreement. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Administrative Agent.
12.10. Effectiveness. This Agreement shall become effective on the
date (the "Effective Date") on which the Borrower and each of the Lenders shall
have signed a copy hereof (whether the same or different copies) and shall have
delivered the same to the Administrative Agent at the Notice Office of the
Administrative Agent or, in the case of the Lenders, shall have given to the
Administrative Agent telephonic (confirmed in writing), written telex or
facsimile transmission notice (actually received) at such office that the same
has been signed and mailed to it.
12.11. Headings Descriptive. The headings of the several sections and
other portions of this Agreement are inserted for convenience only and shall not
in any way affect the meaning or construction of any provision of this
Agreement.
12.12. Amendment or Waiver. Neither this Agreement nor any terms
hereof or thereof may be changed, waived, discharged or terminated unless such
change, waiver, discharge or termination is in writing signed by the Borrower
and the Required Lenders, provided that no such change, waiver, discharge or
termination shall, without the consent of each Lender (other than a Defaulting
Lender) affected thereby, (i) extend the final maturity date applicable to a
Loan or a Commitment (it being understood that any waiver of the making of, or
application of any prepayment of or the method of application of any
amortization payment or other prepayment to, the amortization of, the Loans
shall not constitute an extension of such final maturity thereof), reduce the
rate 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) or
Fees thereon, or reduce the principal amount thereof, or increase the Commitment
of any Lender over the amount thereof then in effect (it being understood that a
waiver of any Default or Event of Default or of any mandatory prepayment or a
mandatory reduction in the Total Commitment shall not constitute a change in the
terms of any Commitment of any Lender), (ii) release all or substantially all of
the Collateral (in each case except as expressly provided in the Credit
Documents), (iii) release any Guarantor from its Guaranty, except in strict
compliance with the provisions thereof, (iv) change the definition of the term
"Change of Control", (v) amend, modify or waive any provision of this section
12.12, or section 11.7, 12.1, 12.4, 12.6 or 12.7(b), (vi) reduce the percentage
specified in, or otherwise modify, the definition of Required Lenders, or (vii)
consent to the assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement. No provision of section 2 or 11 may be amended
without the consent of (x) any Letter of Credit Issuer adversely affected
thereby or (y) the Administrative Agent, respectively.
12.13. Survival. All indemnities set forth herein including, without
limitation, in section 1.10, 1.11, 2.5, 4.4, 11.7 or 12.1 shall survive the
execution and delivery of this Agreement and the making and repayment of Loans.
12.14. Domicile of Loans. Each Lender may transfer and carry its Loans
at, to or for the account of any branch office, subsidiary or affiliate of such
Lender, provided that the Borrower shall not be responsible for costs arising
under section 1.10 or 4.4 resulting from any such transfer (other than a
transfer pursuant to section 1.12) to the extent not otherwise applicable to
such Lender prior to such transfer.
12.15. Confidentiality. Subject to section 12.4, the Lenders shall
hold all non-public information obtained pursuant to the requirements of this
Agreement which has been identified as such by the Borrower in accordance with
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its customary procedure for handling confidential information of this nature and
in accordance with safe and sound banking practices and in any event may make
disclosure reasonably required by any bona fide transferee or participant in
connection with the contemplated transfer of any Loans or Commitment or
participation therein (provided that each such prospective transferee and/or
participant shall execute an agreement for the benefit of the Borrower with such
prospective transferor Lender containing provisions substantially identical to
those contained in this section 12.15), to its auditors, attorneys or as
required or requested by any governmental agency or representative thereof or
pursuant to legal process, provided that, unless specifically prohibited by
applicable law or court order, each Lender shall notify the Borrower of any
request by any governmental agency or representative thereof (other than any
such request in connection with an examination of the financial condition of
such Lender by such governmental agency) for disclosure of any such non-public
information prior to disclosure of such information, and provided further that
in no event shall any Lender be obligated or required to return any materials
furnished by or on behalf of the Borrower or any other Credit Party. The
Borrower hereby agrees that the failure of a Lender to comply with the
provisions of this section 12.15 shall not relieve the Borrower of any of the
obligations to such Lender under this Agreement and the other Credit Documents.
12.16. Lender Register. The Borrower hereby designates the
Administrative Agent to serve as its agent, solely for purposes of this section
12.16, to maintain a register (the "Lender Register") on which it will record
the Commitments from time to time of each of the Lenders, the Loans made by each
of the Lenders and each repayment in respect of the principal amount of the
Loans of each Lender. Failure to make any such recordation, or any error in such
recordation, shall not affect the Borrower's obligations in respect of such
Loans. With respect to any Lender, the transfer of the Commitments of such
Lender and the rights to the principal of, and interest on, any Loan made
pursuant to such Commitments shall not be effective until such transfer is
recorded on the Lender Register maintained by the Administrative Agent with
respect to ownership of such Commitments and Loans and prior to such recordation
all amounts owing to the transferor with respect to such Commitments and Loans
shall remain owing to the transferor. The registration of assignment or transfer
of all or part of any Commitments and Loans shall be recorded by the
Administrative Agent on the Lender Register only upon the acceptance by the
Administrative Agent of a properly executed and delivered Assignment and
Assumption Agreement pursuant to section 12.4(b). The Borrower agrees to
indemnify the Administrative Agent from and against any and all losses, claims,
damages and liabilities of whatsoever nature which may be imposed on, asserted
against or incurred by the Administrative Agent in performing its duties under
this section 12.16.
12.17. Limitations on Liability of the Letter of Credit Issuers. The
Borrower assumes all risks of the acts or omissions of any beneficiary or
transferee of any Letter of Credit with respect to its use of such Letters of
Credit. Neither any Letter of Credit Issuer nor any of its officers or directors
shall be liable or responsible for: (a) the use which may be made of any Letter
of Credit or any acts or omissions of any beneficiary or transferee in
connection therewith; (b) the validity, sufficiency or genuineness of documents,
or of any endorsement thereon, even if such documents should prove to be in any
or all respects invalid, insufficient, fraudulent or forged; (c) payment by a
Letter of Credit Issuer against presentation of documents that do not comply
with the terms of a Letter of Credit, including failure of any documents to bear
any reference or adequate reference to such Letter of Credit; or (d) any other
circumstances whatsoever in making or failing to make payment under any Letter
of Credit, except that such Borrower shall have a claim against a Letter of
Credit Issuer, and a Letter of Credit Issuer shall be liable to the Borrower, to
the extent of any direct, but not consequential, damages suffered by the
Borrower which the Borrower proves were caused by (i) such Letter of Credit
Issuer's willful misconduct or gross negligence in determining whether documents
presented under a Letter of Credit comply with the terms of such Letter of
Credit or (ii) such Letter of Credit Issuer's willful failure to make lawful
payment under any Letter of Credit after the presentation to it of documentation
strictly complying with the terms and conditions of such Letter of Credit. In
furtherance and not in limitation of the foregoing, a Letter of Credit Issuer
may accept documents that appear on their face to be in order, without
responsibility for further investigation.
12.18. General Limitation of Liability. No claim may be made by the
Borrower, any Lender, the Administrative Agent, the Documentation Agent, any
Letter of Credit Issuer or any other person against the Administrative Agent,
the Documentation Agent, any Letter of Credit Issuer, or any other Lender or the
Affiliates, directors, officers, employees, attorneys or agents of any of them
for any special, consequential or punitive damages in respect of any claim for
breach of contract or any other theory of liability arising out of or related to
the transactions contemplated by this Agreement or any of the other Credit
Documents, or any act, omission or event
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occurring in connection therewith; and each of the Borrower, each Lender, the
Administrative Agent and each Letter of Credit Issuer hereby waives, releases
and agrees not to xxx or counterclaim upon any such claim for any such damages,
whether or not accrued and whether or not known or suspected to exist in its
favor.
12.19. No Duty. All attorneys, accountants, appraisers, consultants
and other professional persons (including the firms or other entities on behalf
of which any such person may act) retained by the Administrative Agent, the
Documentation Agent or any Lender with respect to the transactions contemplated
by the Credit Documents shall have the right to act exclusively in the interest
of the Administrative Agent, the Documentation Agent or such Lender, as the case
may be, and shall have no duty of disclosure, duty of loyalty, duty of care, or
other duty or obligation of any type or nature whatsoever to the Borrower, to
any of the other Credit Parties, to any of their Subsidiaries, or to any other
person, with respect to any matters within the scope of such representation or
related to their activities in connection with such representation.
12.20. Lenders and Agent Not Fiduciary to Credit Parties, etc. The
relationship among the Credit Parties and their Subsidiaries, on the one hand,
and the Administrative Agent, the Documentation Agent, each Letter of Credit
Issuer and the Lenders, on the other hand, is solely that of debtor and
creditor, and the Administrative Agent, the Documentation Agent, each Letter of
Credit Issuer and the Lenders have no fiduciary or other special relationship
with the Credit Parties and their Subsidiaries, and no term or provision of any
Credit Document, no course of dealing, no written or oral communication, or
other action, shall be construed so as to deem such relationship to be other
than that of debtor and creditor.
12.21. Survival of Representations and Warranties. All representations
and warranties herein shall survive the making of Loans and the issuance of
Letters of Credit hereunder, the execution and delivery of this Agreement, the
Notes and the other documents the forms of which are attached as Exhibits
hereto, the issue and delivery of the Notes, any disposition thereof by any
holder thereof, and any investigation made by the Administrative Agent or any
Lender or any other holder of any of the Notes or on its behalf. All statements
contained in any certificate or other document delivered to the Administrative
Agent or any Lender or any holder of any Notes by or on behalf of the Borrower
or any other Credit Party pursuant hereto or otherwise specifically for use in
connection with the transactions contemplated hereby shall constitute
representations and warranties by the Borrower hereunder, made as of the
respective dates specified therein or, if no date is specified, as of the
respective dates furnished to the Administrative Agent or any Lender.
12.22. Limitation on Enforcement of Guaranties and Security Documents.
The Lenders agree that the Parent Guaranty, the Subsidiary Guaranty and the
Security Documents may be enforced by the action of the Administrative Agent or
the Collateral Agent, in each case acting upon the instructions of the Required
Lenders and that no Lender shall have any right individually to seek to enforce
or to enforce the Parent Guaranty, the Subsidiary Guaranty or any Security
Document or to realize upon the security to be granted by any Security Document,
it being understood and agreed that such rights and remedies may be exercised by
the Administrative Agent or the Collateral Agent for the benefit of the Lenders
(and any Interest Rate Creditors, as such term is respectively defined in the
Parent Guaranty, the Subsidiary Guaranty and the Security Documents) upon the
terms of this Agreement, the Parent Guaranty, the Subsidiary Guaranty and any
Security Document.
[The balance of this page is intentionally blank.]
78
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Agreement to be duly executed and delivered as of the date
first above written.
ATRIA COMMUNITIES, INC.
By: /s/ J. Xxxxxxx Xxxxxx
----------------------------
Chief Financial Officer and
Vice President of Development
PNC BANK, NATIONAL ASSOCIATION,
individually as a Letter of Credit
Issuer and as Administrative Agent
By: /s/ Xxxxxx X. Xxxxxx
----------------------------
Vice President
NATIONAL CITY BANK OF KENTUCKY,
individually and as
Documentation Agent
By: /s/ Xxxxx Xxxxx
----------------------------
Vice President
PNC BANK, KENTUCKY, INC.,
individually and as Managing Agent
By: /s/ Xxxx X. Xxxxxx
----------------------------
Vice President
THE TORONTO-DOMINION BANK,
New York Agency
By: /s/ Xxxxxx Xxxxxx
----------------------------
Vice President
79
BANK ONE, KENTUCKY, NA
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------
Vice President
NATIONSBANK, N.A.
By: /s/ S. Xxxxxx Xxxxxxx
----------------------------
Vice President
FLEET NATIONAL BANK
By: /s/ Xxxxxx Xxxxxxxxxxxxx
----------------------------
Vice President
THE BANK OF NEW YORK
By: /s/ Xxxxxxx Xxxx
----------------------------
Vice President
THE CHASE MANHATTAN BANK
By: /s/ Xxxx Xxx-Xxx
----------------------------
Vice President
80
XXXXXX GUARANTY TRUST COMPANY OF NEW YORK
By: /s/ Xxxxx X. Xxxxx
----------------------------
Vice President
AMSOUTH BANK OF ALABAMA
By: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------
Vice President
U. S. BANK OF WASHINGTON,
NATIONAL ASSOCIATION
By: /s/ Xxxxxx X. Xxxxxx
----------------------------
Vice President
FIRST AMERICAN NATIONAL BANK
By: /s/ Xxxxxxx Xxxxxx III
----------------------------
Vice President
81
ANNEX I
INFORMATION AS TO LENDERS
====================================================================================================================
--------------------------------------------------------------------------------------------------------------------
Name of Lender Commitment Domestic Lending Office Eurodollar Lending Office
PNC Bank, National No Commitment; PNC Bank, National Association PNC Bank, National Association
Association Letter of Credit One PNC Plaza One PNC Plaza
Issuer and Fifth Avenue and Wood Street Fifth Avenue and Wood Street
Administrative Xxxxxxxxxx, Xxxxxxxxxxxx 00000 Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Agent only
Contacts/Notification Methods:
C. Xxxxx Xxxx
Senior Vice President
PNC Bank, National Association
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Mail Stop: P1-XXXX-06-3
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Xxxxxx X. Xxxxxx
Assistant Vice President
PNC Bank, National Association
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Mail Stop: P1-XXXX-05-3
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Contact to Arrange all Borrowings
from the Lenders and Prepayments
to the Lenders:
Xxxxxx Xxxxx
Vice President
4th Floor Annex
PNC Bank, National Association
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Letter of Credit Notification:
Xxxx Xxx XxXxxxxx
Letter of Credit Officer
PNC Bank, National Association
One PNC Xxxxx
Xxxxx Xxxxxx xxx Xxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Telephone: (000) 000-0000
Payment Instructions
for Payments to the
Administrative Agent:
PNC Bank, Louisville
ABA # 083 000 108
Credit: Commercial Loan Operations
Ref.: Atria Communities, Inc.
====================================================================================================================
--------------------------------------------------------------------------------------------------------------------
Name of Lender Commitment Domestic Lending Office Eurodollar Lending Office
National City Bank $25,000,000 National City Bank of Kentucky National City Bank of Kentucky
of Kentucky 000 Xxxxx Xxxxx Xxxxxx 000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxx Regional Division--8th Floor Louisville Regional
Xxxxxxxxxx, Xxxxxxxx 00000 Xxxxxxxx--0xx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Contacts/ Notification Methods:
Xxxxx Xxxxx
Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Xxxxx Xxxxxx
Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Contact for Borrowings, Payments, etc.:
Xxxxx Xxxxxx
Commercial Loan Operations
14th Floor
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Letter of Credit Notification:
Xxxx Xxxxxx
International Division
7th Floor
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Wiring Information:
ABA # 0000-0000-0
Commercial Loan Operations:
Account No. 151-804
Letter of Credit Division:
Account No.: GL # 29930
re: Atria Communities, Inc.
2
====================================================================================================================
Name of Lender Commitment Domestic Lending Office Eurodollar Lending Office
--------------------------------------------------------------------------------------------------------------------
PNC Bank, Kentucky, $25,000,000 PNC Bank, Kentucky, Inc. PNC Bank, Kentucky, Inc.
Inc. 000 Xxxx Xxxxxxxxx Xxxxxx 000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000 Xxxxxxxxxx, Xxxxxxxx 00000
Notices/Primary Contacts:
Xxxxxxx Xxxxxx
Senior Vice President
Mail Stop: K1-KHDQ-08-03
Direct Dial: (000) 000-0000
Facsimile: (000) 000-0000
Xxxx Xxxxxx
Vice President
Mail Stop: K1-KHDQ-08-03
Direct Dial: (000) 000-0000
Facsimile: (000) 000-0000
Contact for Borrowings, Payments, etc.:
Xxxx Xxxxxx
Vice President
Mail Stop: K1-KHDQ-08-03
Direct Dial: (000) 000-0000
Facsimile: (000) 000-0000
0r the Commercial Loan Operations
Department
Wiring Information:
ABA # 000-000-000
Ref.: Atria Communities, Inc.
--------------------------------------------------------------------------------------------------------------------
3
====================================================================================================================
--------------------------------------------------------------------------------------------------------------------
Name of Lender Commitment Domestic Lending Office Eurodollar Lending Office
The Toronto-Dominion $25,000,000 The Toronto-Dominion Bank, New York The Toronto-Dominion Bank, New
Bank, New York Agency Agency York Agency
00 Xxxx 00xx Xxxxxx 00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000 Xxx Xxxx, Xxx Xxxx 00000-0000
Notices:
Toronto Dominion (Texas), Inc.
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attn.: Xxxxx Xxxxxx
Assistant Manager, Credit
Administration
Direct Dial: (000) 000-0000
Facsimile: (000) 000-0000
Main Tel. No.: (000) 000-0000
Swift Address: XXXXXX0X
with a copy to:
The Toronto-Dominion Bank, New York
Agency
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxx X. Xxxxxx,
Director Health Care Finance
Facsimile: (000) 000-0000
Primary Contacts:
Credit Contact:
Xxxx X. Xxxxxx,
Director Health Care Finance
The Toronto-Dominion Bank, New York
Agency
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Operations Contact:
Toronto Dominion (Texas), Inc.
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attn.: Xxxxx Xxxxxx
Assistant Manager, Credit
Administration
Direct Dial: (000) 000-0000
Facsimile: (000) 000-0000
Main Tel. No.: (000) 000-0000
Swift Address: XXXXXX0X
Contact for Borrowings, Payments, etc.:
[see Operations Contact above]
Wiring Information:
Toronto-Dominion Bank-New York
ABA # 000000000
Credit: Acct. #2159251
Favor: TD Houston
Re: Atria Communities, Inc.
4
====================================================================================================================
Name of Lender Commitment Domestic Lending Office Eurodollar Lending Office
--------------------------------------------------------------------------------------------------------------------
Bank One, Kentucky, Bank One, Kentucky, NA Bank One, Kentucky, NA
NA $25,000,000 000 Xxxx Xxxxxxxxx Xxxxxx 000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000 Xxxxxxxxxx, Xxxxxxxx 00000
Notices:
Bank One, Kentucky, NA
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxxxx
Senior Vice President
Primary Contact:
Xxxxxx Xxxxxxxx
Senior Vice Xxxxxxxxx
Xxxx Xxx, Xxxxxxxx, XX
0xx Xxxxx
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Secondary Contact:
Xxxxx X. Xxxxxx
Associate Relationship Manager
Bank One, Kentucky, NA
2nd Floor
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Contact for Borrowings, Payments, etc.:
Xxxxx X. Xxxxxx
Corporate Banking Xxxxxxxxxxxxxx
Xxxx Xxx, Xxxxxxxx, XX
0xx Xxxxx
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Wiring Information:
ABA # 000-000-000
GL #151010 Center 2000
Ref.: Commercial Loan Operations
Account of Atria Communities, Inc.
--------------------------------------------------------------------------------------------------------------------
5
====================================================================================================================
Name of Lender Commitment Domestic Lending Office Eurodollar Lending Office
--------------------------------------------------------------------------------------------------------------------
NationsBank, N.A. $20,000,000 NationsBank, N.A. NationsBank, N.A.
000 Xxxxx Xxxxx Xxxxxx 000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000 Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Notices:
NationsBank
Xxx XxxxxxxXxxx Xxxxx
Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000-0000
Attention:
S. Xxxxxx Xxxxxxx
Senior Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to the Secondary Contact
indicated below
Primary Contact:
S. Xxxxxx Xxxxxxx
Senior Vice President
NationsBank
Xxx XxxxxxxXxxx Xxxxx
Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Secondary Contact:
Xxxx X. Xxxxxxx
Senior Vice President
NationsBank, N.A.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Contact for Borrowings, Payments, etc.:
Xxxxxxxxx Xxxxx
NationsBank, N.A.
000 Xxxxx Xxxxx Xxxxxx
XX 1-001-15-05
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Wiring Information:
NationsBank, N.A.
ABA # 000 000 000
Corporate Credit Services
A/C No.: 136621-22506
Ref.: Atria Communities, Inc.
--------------------------------------------------------------------------------------------------------------------
6
====================================================================================================================
Name of Lender Commitment Domestic Lending Office Eurodollar Lending Office
--------------------------------------------------------------------------------------------------------------------
Fleet National Bank $20,000,000 Fleet National Bank Fleet National Bank
Fleet Center Fleet Center
00 Xxxxx Xxxxxx 00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-0000 Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Notices:
Fleet National Bank
Fleet Center
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention:
Xxxxxx Xxxxxxxxxxxxx
Vice President
Mail Stop: MA BO FO4A
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Primary Contact:
Xxxxxx Xxxxxxxxxxxxx
Vice President
Mail Stop: MA BO FO4A
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Secondary Contact:
Xxxxxxx Xxxxxxx
Mail Stop: MA BO FO4A
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Contact for Borrowings, Payments, etc.:
Xxxxxx Xxxxxx
Mail Stop: MA BO FO4A
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Wiring Information:
ABA # 000-000-000
Incoming Wire
Account No. 151035103145
Ref.: Atria Communities, Inc.
--------------------------------------------------------------------------------------------------------------------
7
====================================================================================================================
Name of Lender Commitment Domestic Lending Office Eurodollar Lending Office
--------------------------------------------------------------------------------------------------------------------
The Bank of The Bank of New York The Bank of New York
New York $10,000,000 Xxx Xxxx Xxxxxx Xxx Xxxx Xxxxxx
22nd Floor 22nd Floor
New York, New York 10286 Xxx Xxxx, Xxx Xxxx 00000
Notices:
The Bank of New York
One Wall Street
Midwest Division, 22nd Floor
New York, New York 10286
Attention:Xxxx Xxxx
Assistant Treasurer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Primary Contact:
Xxxx Xxxx
Assistant Treasurer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Secondary Contact:
Xxxxxxx Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Contact for Borrowings, Payments, etc.:
Xxxxxx Xxxxx
The Bank of New York
One Wall Street
Corporate Administration, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Wiring Information:
The Bank of New York
ABA # 000000000
Account Name: Commercial Loans
A/C No.: GLA 111556
Attn.: Xxxxx Xxxxxxx
Ref.: Atria Communities, Inc.
--------------------------------------------------------------------------------------------------------------------
8
====================================================================================================================
Name of Lender Commitment Domestic Lending Office Eurodollar Lending Office
--------------------------------------------------------------------------------------------------------------------
The Chase Manhattan The Chase Manhattan Bank The Chase Manhattan Bank
Bank $10,000,000 000 Xxxx Xxxxxx 000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
Notices:
The Chase Manhattan Bank
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.: Xxxxx Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Primary Contact:
Xxxxx Xxxx
The Chase Manhattan Bank
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Secondary Contact:
Xxxx Xxx-Xxx
The Chase Manhattan Bank
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Contact for Borrowings, Payments, etc.:
Xxxxx Xxxxxx Xxxxx
The Chase Manhattan Bank
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Wiring Information:
ABA # 000000000
Attn.: Loan Dep't./Xxxx Xxxxx
Ref.: Atria Communities, Inc.
--------------------------------------------------------------------------------------------------------------------
9
====================================================================================================================
Name of Lender Commitment Domestic Lending Office Eurodollar Lending Office
--------------------------------------------------------------------------------------------------------------------
Xxxxxx Guaranty Xxxxxx Guaranty Trust Company of New Xxxxxx Guaranty Trust Company
Trust Company of New $10,000,000 York of New York
York 00 Xxxx Xxxxxx 00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000 Xxx Xxxx, Xxx Xxxx 00000-0000
Notices:
Xxxxxx Guaranty Trust Company of New
York
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx X. Xxxxx
Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Primary Contact:
Xxxxx X. Xxxxx
Vice President
Xxxxxx Guaranty Trust Company of New
York
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Secondary Contact:
Xxxxxx X. Xxxxxxx
Vice President
Xxxxxx Guaranty Trust Company of New
York
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Contact for Borrowings, Payments, etc.:
Xxxxxxx Xxxxxxx
Associate
X. X. Xxxxxx Services, Inc.
000 Xxxxxxx Xxxxxxxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Wiring Information:
Xxxxxx Guaranty Trust Company of New
York
ABA # 021 000 238
Attn.: Loan Dep't.
A/C No.: 000-00-000
---------------------------------------------------------------------------------------------------------------------
Ref.: Atria Communities, Inc.
10
Name of Lender Commitment Domestic Lending Office Eurodollar Lending Office
--------------------------------------------------------------------------------------------------------------------
AmSouth Bank of $10,000,000 AmSouth Bank of Alabama AmSouth Bank of Alabama
Alabama 0000 Xxxxx Xxxxxx Xxxxx 0000 Xxxxx Xxxxxx Xxxxx
Sonat 0xx Xxxxx Xxxxx 0xx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000 Xxxxxxxxxx, Xxxxxxx 00000
Notices:
AmSouth Bank of Alabama
0000 Xxxxx Xxxxxx Xxxxx
Sonat 0xx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attn.: Xxxxxxx X. Xxxxxxxx
Commercial Banking Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Primary Contact:
Xxxxxxx X. Xxxxxxxx
Commercial Banking Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Secondary Contact:
L. Xxxx Xxxxxx
Relationship Representative
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Contact for Borrowings, Payments, etc.:
Xxxxx X. Xxxxxxx
Commercial Banking Officer/ParaLender
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Wiring Information:
ABA # 062 000 019
A/C Name: Corporate Clearing
A/C No.: 0011 0245 0400 100
Attn.: Healthcare Banking
---------------------------------------------------------------------------------------------------------------------
Ref.: Atria Communities, Inc.
11
====================================================================================================================
Name of Lender Commitment Domestic Lending Office Eurodollar Lending Office
--------------------------------------------------------------------------------------------------------------------
U.S. Bank of $10,000,000 U.S. Bank of Washington, National U.S. Bank of Washington,
Washington, National Association National Association
Association 0000 Xxxxx Xxxxxx 0000 Xxxxx Xxxxxx
National Corporate Banking, 11th Floor Loan Servicing Department, 7th
Xxxxxxx, Xxxxxxxxxx 00000 Floor
Xxxxxxx, Xxxxxxxxxx 00000
Notices:
U.S. Bank of Washington, National
Association
National Corporate Banking, 11th Floor
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attn.: Xxxxxx X. Xxxxxx
Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Primary Contact:
Xxxxxx X. Xxxxxx
Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Secondary Contact:
Xxxx Xxxxx
ARM (Analyst)
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Contact for Borrowings, Payments, etc.:
Xxxxxx Xxxxx
Commercial Note Specialist
Loan Servicing Department--Notes, 7th
Floor
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Wiring Information:
ABA # 125 000 105
C/O Commercial Loan Department
Account # 4703-0000000
Attn.: Xxxxxx Xxxxx
Ref.: Atria Communities, Inc.
---------------------------------------------------------------------------------------------------------------------
12
====================================================================================================================
Name of Lender Commitment Domestic Lending Office Eurodollar Lending Office
--------------------------------------------------------------------------------------------------------------------
First American $10,000,000 First American National Bank First American National Bank
National Bank First American Center First American Center
Xxxxxxxxx, Xxxxxxxxx 00000 Xxxxxxxxx, Xxxxxxxxx 00000
Notices:
First American National Bank
First American Center
Xxxxxxxxx, Xxxxxxxxx 00000
Attn.: Xxxxxxx Xxxxxx III
Senior Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Primary Contact:
Xxxxxxx Xxxxxx III
Senior Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Secondary Contact:
Xxxx Xxxx
Banking Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Contact for Borrowings, Payments, etc.:
Xxxx Xxxxxxxx
Commercial Banking Representative
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Wiring Information:
ABA # 064 0000 17
Wire Transfer Clearing Account
A/C 0901256
Attn.: Frenisa Joy
--------------------------------------------------------------------------------------------------------------------
Ref.: Atria Communities, Inc.
TOTAL
====================================================================================================================
$200,000,000
13
ANNEX II
INFORMATION AS TO SUBSIDIARIES
====================================================================================================================
Name of Jurisdiction Percentage of Names and Jurisdictions Jurisdictions
Subsidiary Where Outstanding Stock Addresses Where Where
and Organized or other Equity of Minority Qualified as Substantial
Type of Interests Owned Holders, a foreign Assets
Organization (Indicating whether if Any corporation Located
owned by the or
Borrower or a other entity
specified Subsidiary)
--------------------------------------------------------------------------------------------------------------------
Lantana Partners, Florida 100%, owned as follows: None Florida
Ltd., a limited
partnership 98% limited partnership
interest owned by the
Borrower
1% general partnership
interest owned by
Twenty-Nine Hundred
Associates Limited
Partnership
1% general partnership
interest owned by
Hillhaven Properties,
Ltd.
--------------------------------------------------------------------------------------------------------------------
Phillippe Indiana 100% of Common Stock, Florida
Enterprises, represented by 2,000
Inc., a shares, owned by the
corporation Borrower
--------------------------------------------------------------------------------------------------------------------
Hillhaven Oregon 100% of Common Stock, Florida;
Properties, Ltd., represented by 1,000 Washington;
a corporation shares, owned by the Arizona;
Borrower California;
Colorado;
Kansas; Utah
--------------------------------------------------------------------------------------------------------------------
=====================================================================================================================
Name of Jurisdicition Percentage of Names and Jurisdictions Jurisdictions
Subsidiary Where Outstanding Stock Addresses Where Where
and Organized or other Equity of Minority Qualified as Substantial
Type of Interests Owed Holders, a foreign Assets
Organization (Indicating whether If Any corporation Located
owned by the or
Borrower or a other entity
specified Subsidiary)
--------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxxx Xxxxxxxx 000%, owned as follows: Colorado
Retirement
Center, a general 98% general partnership
partnership interest, owned by the
Borrower
2% general partnership
interest owned by
Hillhaven Properties,
Ltd.
--------------------------------------------------------------------------------------------------------------------
Hillcrest Oregon 100%, owned as follows: Idaho
Retirement
Center, Ltd., a 68.6% limited
limited partnership interest,
partnership owned by the Borrower
29.4% balance of LP and
2% GP interests held by
Fairview Living
Centers, Inc., a wholly
owned subsidiary of
Hillhaven Properties,
Ltd.
--------------------------------------------------------------------------------------------------------------------
Sandy Retirement Oregon 100%, owned as follows: Utah
Center Limited
Partnership, a 98% limited partnership
limited interest, owned by the
partnership Borrower
2% general partnership
interest owned by
Hillhaven Properties,
Ltd.
====================================================================================================================
2
====================================================================================================================
Name of Jurisdiction Percentage of Names and Jurisdictions Jurisdictions
Subsidiary Where Outstanding Stock Addresses Where Where
and Organized or other Equity of Minority Qualified as Substantial
Type of Interest Owned Holders, a foreign Assets
Organization (Indicating whether if Any corporation Located
owned by the or
Borrower or a other entity
specified Subsidiary)
--------------------------------------------------------------------------------------------------------------------
Topeka Retirement Missouri 100%, owned as follows: Kansas
Center, Ltd., a
limited 10% limited partnership
partnership interest, owned by the
Borrower
90% general partner
interest owned by
Hillhaven Properties,
Ltd.
--------------------------------------------------------------------------------------------------------------------
Evergreen Xxxxx, Florida 100%, owned as follows: Florida
Ltd., a limited
partnership 98% limited partner
interest, and 1%
general partner
interest owned by the
Borrower
Hillhaven Properties,
Ltd. owns a 1% limited
partnership interest
--------------------------------------------------------------------------------------------------------------------
Fairview Living Oregon 100% of capital stock, Idaho
Centers, Inc., a represented by 10
corporation shares, owned by
Hillhaven Properties,
Ltd.
--------------------------------------------------------------------------------------------------------------------
Twenty-Nine Florida 100%, owned as follows: Florida
Hundred
Associates, Ltd., 99% limited partner
a limited interest owned by the
partnership Borrower
1% general partner
interest owned by
Twenty-Nine Hundred
Corporation
====================================================================================================================
3
====================================================================================================================
Name of Jurisdiction Percentage of Names and Jurisdictions Jurisdictions
Subsidiary Where Outstanding Stock Addresses Where Where
and Organized or other Equity of Minority Qualified as Substantial
Type of Interest Owned Holders, a foreign Assets
Organization (Indicating whether if Any corporation Located
owned by the or
Borrower or a other entity
specified Subsidiary)
--------------------------------------------------------------------------------------------------------------------
Twenty-Nine Florida 100% of capital stock, Florida
Hundred represented by
---
Corporation, a shares, owned by
corporation Hillhaven Properties,
Ltd.
--------------------------------------------------------------------------------------------------------------------
Woodhaven Florida 100%, owned as follows: Florida
Partners, Ltd., a
limited Hillhaven Properties,
partnership Ltd. owns a 51% GP
interest
The Borrower owns a 49%
LP interest
--------------------------------------------------------------------------------------------------------------------
Tucson Retirement Arizona 100%, owned as follows: Arizona
Center Limited
Partnership, a Hillhaven Properties,
limited Ltd. owns an 80% GP
partnership interest
The Borrower owns a 20%
LP interest
====================================================================================================================
4
ANNEX III
DESCRIPTION OF REAL PROPERTIES
Definitions:
FHC = First Healthcare Corporation, a DE corporation
HPL = Hillhaven Properties Ltd., an OR corporation
Nationwide = Nationwide Care, Inc., an IN corporation
PEI = Phillippe Enterprises, Inc., an IN corporation
PART I. PROPERTIES MORTGAGED ON THE CLOSING DATE
====================================================================================================================
LOCATION COMMUNITY SITE NO. UNITS COMMENTS
--------------------------------------------------------------------------------------------------------------------
Pima County, Tucson,
Arizona Valley Manor 437 69 Atria will own fee simple interest by
transfer from FHC. Mortgage to be
granted by Atria.
--------------------------------------------------------------------------------------------------------------------
Pima County, Tucson,
Arizona Villa Xxxxxxx 852 141 HPL will own fee simple interest by
transfer from FHC. Mortgage to be
granted by HPL.
--------------------------------------------------------------------------------------------------------------------
Hernando County,
Springhill, Florida Evergreen Xxxxx 7132 216 Fee simple interest held by Evergreen
Xxxxx, Ltd., a FL limited partnership.
Subdivision required: nursing home will
be transferred by EWL to Nationwide
(not part of deal); assisted living
facility stays in name of EWL; 1% GP
and 98% LP interest in EWL to be
assigned to Atria by Nationwide and 1%
LP interest to be transferred from FHC
to its wholly owned sub HPL; Atria will
acquire 100% of the stock of HPL from
FHC. Mortgage to be granted by EWL.
--------------------------------------------------------------------------------------------------------------------
Hernando County,
Brooksville, Florida Heritage at Hernando 7135 57 Fee held by PEI; Atria will acquire
100% of the stock of PEI from Vencor.
Mortgage to be granted by PEI.
====================================================================================================================
====================================================================================================================
LOCATION COMMUNITY SITE NO. UNITS COMMENTS
--------------------------------------------------------------------------------------------------------------------
Ada County,
Boise, Idaho Hillcrest 7160 115 Fee simple interest held by Hillcrest
Retirement Center, Ltd., an OR limited
partnership; Atria will hold 68.6% LP
interest by transfer from FHC; 29.4% LP
interest and 2% GP interest held by
Fairview Living Centers, Inc. of which
HPL owns 100% of the stock; Atria will
acquire 100% of the stock of HPL from
FHC. Mortgage to be granted by HRCL.
--------------------------------------------------------------------------------------------------------------------
Xxxxxx County,
Indianapolis, Indiana Heritage at Wildwood 616 72 Atria will own fee simple interest by
transfer from Nationwide. Mortgage to
be granted by Atria.
--------------------------------------------------------------------------------------------------------------------
Xxxxxxx County,
Kansas City, Missouri Villa Ventura 821 172 Atria will own fee simple interest by
transfer from FHC. Mortgage to be
granted by Atria.
--------------------------------------------------------------------------------------------------------------------
Xxxxxx County,
Tacoma, Washington Narrows
Xxxx/Laurel 7195 142/57 Fee held by HPL; Atria will acquire
House 100% of the stock of HPL from FHC.
Mortgage to be granted by HPL
====================================================================================================================
2
PART II. OTHER PROPERTIES WHICH HAVE OUTSTANDING IRB DEBT
OR MAY BE SUBSEQUENTLY MORTGAGED
====================================================================================================================
LOCATION COMMUNITY SITE NO. UNITS COMMENTS
--------------------------------------------------------------------------------------------------------------------
Pima County, Fee held by Tucson Retirement Center
Tucson, Arizona Xxxxxxx Del Rio 7100 214 Limited Partnership, an AZ limited
partnership; HPL is the 80% GP; Atria
will acquire 100% of the stock of HPL from
FHC; Atria owns 20% LP interest already
--------------------------------------------------------------------------------------------------------------------
Yavapai County, Fee held by HPL; Atria will acquire
Sedona, Arizona Kachina Point 7105 102 100% of the stock of HPL from FHC
--------------------------------------------------------------------------------------------------------------------
San Diego County, Courtyard at San
San Marcos, California Marcos 7112 212 Fee held as joint tenants per Joint
Tenant Agreement with 65% interest held
by HPL; Atria will acquire 100% of the
stock of HPL from FHC (35% interest
held by San Marcos Courtyard Ltd., a CA
limited partnership, an unrelated
entity). Leased to HPL w/ option to
purchase - CHECK
--------------------------------------------------------------------------------------------------------------------
Xxxxx County, Courtcastle Gardens Fee held by Xxxxxx Xxxxxxx Xxxxxxxxxx
Xxxxxx, Xxxxxxxx 0000 99 Center, a CO general partnership; Atria
will acquire 98% GP interest in CGRCLP
from FHC and 2% GP interest
held by HPL will be acquired by Atria
pursuant to acquisition of stock of HPL
from FHC
--------------------------------------------------------------------------------------------------------------------
Pasco County, Woodhaven at Windsor 7137 180 Fee simple interest held by Woodhaven
Hudson, Florida Xxxxx Partners, Ltd., a FL limited
partnership; HPL is a 51% GP; Atria will
acquire 100% of stock of HPL from FHC;
Atria holds 49% LP interest
====================================================================================================================
3
====================================================================================================================
LOCATION COMMUNITY SITE NO. UNITS COMMENTS
--------------------------------------------------------------------------------------------------------------------
Palm Beach County, Meridian House 7138 173 Fee simple interest held by Lantana
Lantana, Florida Lantana Partners, Ltd., a FL limited
partnership; HPL is a 1% general partner;
and Twenty-Nine Hundred Associates, Ltd, a
FL limited partnership is also a 1%
general partner; Atria will acquire 100%
of stock of HPL from FHC; Vencor holds 98%
LP interest in Lantana Partners, Ltd. and
will transfer that interest to the
Borrower; FHC holds 99% LP interest in
Twenty-Nine Hundred Associates, Ltd. and
will transfer that interest to Atria; HPL
owns all of the stock of Twenty-Nine
Hundred Corporation which, in turn, owns a
1% GP interest in Twenty-Nine Hundred
Associates, Ltd.
--------------------------------------------------------------------------------------------------------------------
Shawnee County, Hearthstone 7165 155 Fee held by The City of Topeka;
Topeka, Kansas leasehold interest held by Topeka
Retirement Center, Ltd., a MO limited
partnership; 10% LP interest in TRCL held
by FHC (to be assigned to Atria) and 90%
GP interest held by HPL; Atria will
acquire 100% of the stock of HPL from FHC.
--------------------------------------------------------------------------------------------------------------------
Salt Lake County, Crosslands 7185 120 Fee held by Sandy Retirement Center
Sandy, Utah Limited Partnership, an OR limited
partnership, (also an assumed business
name of HPL in UT); FHC is the 98% limited
partner of SRCLP; and HPL is the 2%
general partner; Atria will acquire 98% LP
interest in TSCL from FHC by assignment of
partners interest and 2% GP interest by
acquisition of stock of HPL from FHC
====================================================================================================================
4
PART III. LEASED PROPERTIES
--------------------------------------------------------------------------------------------------------------------
LOCATION COMMUNITY SITE NO. UNITS COMMENTS
--------------------------------------------------------------------------------------------------------------------
Newark, Ohio XxXxxxxx Center 238 80 Leasehold Mortgage may be given after
the Closing Date
--------------------------------------------------------------------------------------------------------------------
PART IV. MANAGED PROPERTIES-NO LIEN
--------------------------------------------------------------------------------------------------------------------
LOCATION COMMUNITY SITE NO. UNITS COMMENTS
--------------------------------------------------------------------------------------------------------------------
Marion, Indiana Colonial Oaks 618 63
--------------------------------------------------------------------------------------------------------------------
Westwood, Massachusetts Foxhill Village 7174 356
--------------------------------------------------------------------------------------------------------------------
PART VI. "NO LIEN" PROPERTIES
--------------------------------------------------------------------------------------------------------------------
LOCATION COMMUNITY SITE NO. UNITS COMMENTS
--------------------------------------------------------------------------------------------------------------------
Walpole, Massachusetts New Pond Village 7176 199 99 year rent free lease with option to
buy; zoning problem
--------------------------------------------------------------------------------------------------------------------
Hanover, New Hampshire The Greens 589 28 Residential Mortgage Bonds
--------------------------------------------------------------------------------------------------------------------
5
PART VII. DEVELOPMENT PROPERTIES
--------------------------------------------------------------------------------------------------------------------
LOCATION COMMUNITY SITE NO. UNITS COMMENTS
--------------------------------------------------------------------------------------------------------------------
Sedona, Arizona 853/7101 60 Zoned/May 1997 (includes 20 units for
the memory impaired)
--------------------------------------------------------------------------------------------------------------------
Tucson, Arizona N/A 40 Zoned/Needs Special Use
Permit/September 1997
--------------------------------------------------------------------------------------------------------------------
Redding, California 167 60 Under Construction/April
1997/Subdivision Required/leased from
Vencor under 99-year lease under which
Atria will acquire the property upon
obtaining certain approvals
--------------------------------------------------------------------------------------------------------------------
Northglenn, Colorado [adjacent to 40 Zoned/October 1997 (all units for
existing communities] memory impaired)
--------------------------------------------------------------------------------------------------------------------
Dennis, Massachusetts 573 40 Land Acquired/June 1998
--------------------------------------------------------------------------------------------------------------------
Xxxxxxxxx, Xxxxx Xxxxxxxx Xxxxx X/X 90 Zoned/December 1997
Carolina
--------------------------------------------------------------------------------------------------------------------
Sandy, Utah N/A 63 Under Construction/February 1997
--------------------------------------------------------------------------------------------------------------------
Virginia Beach, N/A 90 Land Acquired/November 1997
Virginia
--------------------------------------------------------------------------------------------------------------------
Tacoma, Washington 7195 40 Zoned/September 1997
--------------------------------------------------------------------------------------------------------------------
Kenosha, Wisconsin 775-776 40 Land Acquired/December 1997
--------------------------------------------------------------------------------------------------------------------
Lantana, Florida [adjacent to 7138 60 Zoned/July 1997/adjacent to existing
Meridian House] Atria communities
--------------------------------------------------------------------------------------------------------------------
Topeka, Kansas [adjacent to 7165 60 Xxxxx/Xxxxxx 0000/xxxxxxxx to existing
Hearthstone] Atria communities
--------------------------------------------------------------------------------------------------------------------
Tulsa, Oklahoma Mayfair Regal 157
--------------------------------------------------------------------------------------------------------------------
6
ANNEX IV
DESCRIPTION OF EXISTING INDEBTEDNESS
====================================================================================================================
Name Principal
Facility of @ Interest
No. Borrower 6/30/96 Maturity Rate Amort.
--------------------------------------------------------------------------------------------------------------------
7137 Woodhaven Partners, Ltd. 9,500,000 1/2009 3.4% floating none
--------------------------------------------------------------------------------------------------------------------
7165 Topeka Retirement Center, 8,440,000 1/2009 3.4% floating none
Ltd.
--------------------------------------------------------------------------------------------------------------------
7112 San Marcos Retirement 11,500,000 12/2010 3.5% floating $500,000/yr.
Village Ptnshp.
--------------------------------------------------------------------------------------------------------------------
7100 Tucson Retirement Center 10,750,000 1/2009 3.3% floating none
Ptnshp.
--------------------------------------------------------------------------------------------------------------------
7105 Hillhaven Properties, Ltd. 5,300,000 1/2009 3.3% floating none
--------------------------------------------------------------------------------------------------------------------
0000 Xxxxxx Xxxxxxx Partnership 5,000,000 1/2009 3.3% floating none
--------------------------------------------------------------------------------------------------------------------
7185 Xxxxx Retirement Center LP. 5,900,000 1/2009 3.3% floating none
--------------------------------------------------------------------------------------------------------------------
7138 Lantana Partners, Ltd. 5,725,000 5/2010 4.0 % floating $325,000/yr
--------------------------------------------------------------------------------------------------------------------
7160 First Healthcare Corp./1/ 3,586,000
--------------------------------------------------------------------------------------------------------------------
616 Nationwide Care, Inc./2/ 2,505,000
--------------------------------------------------------------------------------------------------------------------
7132 Nationwide Care, Inc./3/ 3,045,000
--------------------------------------------------------------------------------------------------------------------
Hillhaven Properties, Ltd. 14,000,000/4/ 1 year Prime + 1% none
--------------------------------------------------------------------------------------------------------------------
7176 New Pond Village Associates 31,147,000 1/2040 0.0% none
--------------------------------------------------------------------------------------------------------------------
589 Atria Communities, Inc. 2,032,000 None stated 0.0% none
--------------------------------------------------------------------------------------------------------------------
118,430,000
====================================================================================================================
LETTERS OF CREDIT
------------------------------
/1/ This debt is currently under the VC Revolver and will be replaced with
Atria debt after the closing of the Atria credit facility.
/2/ Same as above footnote.
/3/ Same as above footnote.
/4/ This subordinated note was not outstanding at 6/30/96 but will be
outstanding as of IPO date.
====================================================================================================================
LC At
L/C # Issuer Back Benef. For A/C Request Facility Amount Expiry
Stop of of #
--------------------------------------------------------------------------------------------------------------------
I-147751 Bank of Cal Y State St. Lantana FHC 7138 7,018,938 11/29/96
Bank & Trust Partners, (original
Ltd. request)
PNC Bank of Cal,
A-305498 N.A. 7,018,938 12/30/96
--------------------------------------------------------------------------------------------------------------------
0000 XxxxxxxXxxx X 0xx Xxxxxxxx Xxxxxx XXX 0000 8,805,734 12/1/96
Nat'l Bank Retirement (original
PNC Bank Center, request)
A-305576 KredeitBank Ltd. 1/1/97
N.V. 8,805,734
--------------------------------------------------------------------------------------------------------------------
0000 XxxxxxxXxxx X 0xx Xxxxxxxx Xxxxxxxxx XXX 0000 9,975,000 1/10/97
Nat'l Bank Partners, (original
PNC Bank Ltd. request)
A-305639 KredeitBank 9,975,000 2/10/97
N.V.
--------------------------------------------------------------------------------------------------------------------
S-867642 XX Xxxxxx Bankers Trust Castle Vencor 7125 5,166,667 8/1/97
Company Gardens GP (original
request)
--------------------------------------------------------------------------------------------------------------------
S-867639 XX Xxxxxx Bankers Trust Tucson Vencor 7100 11,108,333 8/1/97
Company Retirement (original
Center LP request)
--------------------------------------------------------------------------------------------------------------------
S-867640 XX Xxxxxx Bankers Trust Hillhaven Vencor 7105 5,476,667 8/1/97
Company Properties, (original
ltd. request)
--------------------------------------------------------------------------------------------------------------------
S-867641 XX Xxxxxx Bankers Trust Xxxxx Xxxxxx 7185 6,096,667 8/1/97
Company Retirement (original
Center, LP request)
--------------------------------------------------------------------------------------------------------------------
ASB 222769 B of A State Street First 7512 11,681,164 9/15/99
Bank & Trust Healthcare
Corp.
====================================================================================================================
2
ANNEX V
DESCRIPTION OF EXISTING LIENS
1. The liens on the projects financed by the IRB Debt, granted to secure
the IRB Debt or letters of credit issued in support thereof.
2. The liens on community known as The Greens, Hanover, New Hampshire,
related to the Residential Mortgage Bond Program for such community.
[End of Annex V]
ANNEX VI
DESCRIPTION OF EXISTING ADVANCES, LOANS AND INVESTMENTS
1. Working Capital Promissory Note dated December 1, 1994, in the
principal amount of $4,526,516.22 plus Advances, made by Hillhaven
Properties, Ltd., acting in its capacity as a 65% tenant in common, and
San Marcos Courtyard Limited, acting in its capacity as a 35% tenant in
common, payable to the order of Hillhaven Properties, Ltd., which Note
is to be pledged pursuant to the Pledge Agreement.
[End of Annex VI]
ANNEX VII
DESCRIPTION OF LETTERS OF CREDIT DEEMED ISSUED UNDER
THE CREDIT AGREEMENT
--------------------------------------------------------------------------------------------------------------------
LETTER OF ORIGINAL DATE AND NO./ EXPIRATION
CREDIT ISSUER APPLICANT BENEFICIARY AMOUNT DATE
--------------------------------------------------------------------------------------------------------------------
PNC Bank, National Topeka Retirement No.: A-305576 $8,805,734 January 1, 1997
Association Center, Ltd. dated January 28, 1994
Attn.: Xxxxxx X. and amended August 10,
Letter of Credit Xxxxxxxxx, Treasurer 1994 and August 30, 1995
Department 0000 Xxxxxxxx Xxxxx
0xx Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxx 00000 KredeitBank N.V.
000 Xxxxx Xxxxxx 000 Xxxxx Xxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx
Pennsylvania 15222 90071
Attn.: Xxxxxxx Xxxxx,
Xx. Rep.
--------------------------------------------------------------------------------------------------------------------
PNC Bank, National First Healthcare No.: A-305639 $9,975,000 February 10, 1997
Association Corporation dated February 24, 1994
Attn.: Xxxxxx X. and amended August 17,
Letter of Credit Xxxxxxxxx, Treasurer 1994 and September 14,
Department 0000 Xxxxxxxx Xxxxx 0000
0xx Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxx 00000
000 Xxxxx Xxxxxx KredeitBank N.V.
Pittsburgh, 000 Xxxxx Xxxx Xxxxxx
Xxxxxxxxxxxx 00000 Xxx Xxxxxxx, Xxxxxxxxxx
00000
Attn.: Xxxxxxx Xxxxx,
Xx. Rep.
--------------------------------------------------------------------------------------------------------------------
PNC Bank, National First Healthcare No.: A-305498 $7,018,938.42 December 30, 1996
Association Corporation dated December 29, 1993
Attn.: Xxxxxx X. and amended July 22,
Letter of Credit Xxxxxxxxx, Treasurer 1994 and August 30, 1995
Department 0000 Xxxxxxxx Xxxxx
0xx Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxx 00000 The Bank of California,
000 Xxxxx Xxxxxx N.A.
Pittsburgh, 000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxxxx 00000 0xx Xxxxx
Xxx Xxxxxxxxx,
Xxxxxxxxxx 00000
Attn.: Manager Letter
of Credit
--------------------------------------------------------------------------------------------------------------------
Xxxxxx Guaranty Trust Xxxxx Retirement Center No.: S-867641 $6,096,666.67 August 1, 1997
Company of New York Limited Partnership dated July 2, 1996
c/o X.X. Xxxxxx c/o Hillhaven
Services, Inc. Properties, Ltd. Bankers Trust Company
X.X. Xxx 0000 0000 Xxxxxxxxx Xxxxxx 0 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 000 Xxxx Xxxxxx Xx. 0xx Xxxxx
19714-9857 Louisville, Kentucky Xxx Xxxx, Xxx Xxxx 00000
40202
Attention: re: $5,900,000 The
International Trade Attn.: Chief Financial Housing Authority of
Services Officer the County of Salt Lake
Elderly Housing Revenue
Refunding Bonds (Sandy
Retirement Center
Project) Series 1988
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
LETTER OF ORIGINAL DATE AND NO./ EXPIRATION
CREDIT ISSUER APPLICANT BENEFICIARY AMOUNT DATE
--------------------------------------------------------------------------------------------------------------------
Xxxxxx Guaranty Trust Castle Gardens No.: S-867642 $5,166,666.67 August 1, 1997
Company of New York Retirement Center dated July 2, 1996
c/o X.X. Xxxxxx c/o Hillhaven
Services, Inc. Properties, Ltd. Bankers Trust Company
X.X. Xxx 0000 0000 Xxxxxxxxx Xxxxxx 0 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 000 Xxxx Xxxxxx Xx. 0xx Xxxxx
19714-9857 Louisville, Kentucky Xxx Xxxx, Xxx Xxxx 00000
40202
Attention: re: $5,000,000 The City
International Trade Attn.: Chief Financial of Northglen, Colorado,
Services Officer Industrial Development
Revenue Refunding Bonds
(Castle Gardens
Retirement Center
Project) Series 1988
--------------------------------------------------------------------------------------------------------------------
Xxxxxx Guaranty Trust Tucson Retirement No.: S-867639 $11,108,333.33 August 1, 1997
Company of New York Center Limited dated July 2, 1996
c/o X.X. Xxxxxx Partnership
Services, Inc. x/x Xxxxxxxxx Xxxxxxx Xxxxx Xxxxxxx
X.X. Xxx 0000 Properties, Ltd. 0 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 0000 Providian Center 4th Floor
19714-9857 000 Xxxx Xxxxxx Xx. Xxx Xxxx, Xxx Xxxx 00000
Louisville, Kentucky
Attention: 40202 re: $10,750,000 The
International Trade Industrial Development
Services Attn.: Chief Financial Authority of the County
Officer of Pima Industrial
Development Revenue
Refunding Bonds (Tucson
Retirement Center
Project) Series 1988
--------------------------------------------------------------------------------------------------------------------
Xxxxxx Guaranty Trust Hillhaven Properties No.: S-867640 $5,476,666.67 August 1, 1997
Company of New York Ltd. dated July 2, 1996
c/o X.X. Xxxxxx 3300 Providian Center
Services, Inc. 000 Xxxx Xxxxxx Xx. Bankers Trust Company
X.X. Xxx 0000 Xxxxxxxxxx, Xxxxxxxx 0 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000 4th Floor
19714-9857 Xxx Xxxx, Xxx Xxxx 00000
Attn.: Chief Financial
Attention: Officer re: $6,200,000 The
International Trade Industrial Development
Services Authority of the County
of Yavapai Industrial
Development Revenue
Refunding Bonds
(Kachina Pointe Project)
Series 1988
--------------------------------------------------------------------------------------------------------------------
2
EXHIBIT A-1
NOTICE OF BORROWING
[Date]
PNC Bank, National Association,
as Administrative Agent for the Lenders party
to the Credit Agreement referred to below
One PNC Plaza
Fifth Avenue and Wood Street
Pittsburgh, Pennsylvania 15265
Attention: Commercial Loan Operations
--------------------------
Ladies and Gentlemen:
The undersigned, Atria Communities, Inc. (the "Borrower"), refers to
the Credit Agreement, dated as of August 15, 1996 (as amended from time to time,
the "Credit Agreement", the terms defined therein being used herein as therein
defined), among the Borrower, the financial institutions from time to time party
thereto (the "Lenders"), and you, as Administrative Agent for such Lenders, and
hereby gives you notice, irrevocably, pursuant to section 1.3(a) of the Credit
Agreement, that the undersigned hereby requests one or more Borrowings under the
Credit Agreement, and in that connection sets forth in the schedule attached
hereto the information relating to each such Borrowing (collectively the
"Proposed Borrowing") as required by section 1.3(a) of the Credit Agreement.
The undersigned hereby specifies that the Proposed Borrowing will
consist of [MPP Revolving Loans] [DPP Revolving Loans].
The undersigned hereby certifies that at the date of the Proposed
Borrowing the MPP Revolving Loan Sublimit is $ and the DPP Revolving
----------
Loan Sublimit is $ . The undersigned hereby further certifies that
----------
after giving effect to the Proposed Borrowing:
(i) $ principal amount of Loans classified as MPP
---------
Revolving Loans will be outstanding;
(ii) $ principal amount of Loans classified as DPP
---------
Revolving Loans will be outstanding;
(iii) the Allocated MPP Letter of Credit Outstandings will be
$ ;
-----------
(iv) the Allocated DPP Letter of Credit Outstandings will be
$ ;
-----------
(v) the Allocated Measured MPP Swap Credit Exposure will be
$ ; and
-----------
(vi) the Allocated Measured DPP Swap Credit Exposure will be
$ ;
-----------
The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the date of the Proposed Borrowing:
(A) the representations and warranties contained in the Credit
Agreement and the other Credit Documents are and will be true and
correct in all material respects, before and after giving effect to the
Proposed Borrowing and to the application of the proceeds thereof, as
though made on such date, except to the extent that such
representations and warranties expressly relate to an earlier date; and
(B) no Default or Event of Default has occurred and is
continuing, or would result from such Proposed Borrowing or from the
application of the proceeds thereof.
Very truly yours,
ATRIA COMMUNITIES, INC.
By:
------------------------------------
Title:
2
BORROWING SCHEDULE
Proposed Borrowing #1:
--------------------------------------------------------------------------------------------------------------------
Business Day Interest Period
of Aggregate Amount if Loans are
Proposed Borrowing Type of Loans of Loans Eurodollar Loans
--------------------------------------------------------------------------------------------------------------------
Base Rate Loans One Month
-----------------,
19 Eurodollar Loans $ Two Months
---- --------------------
[Circle One of Three Months
Above]
Six Months
[Circle one of
above]
--------------------------------------------------------------------------------------------------------------------
Proposed Borrowing #2:
--------------------------------------------------------------------------------------------------------------------
Business Day Interest Period
of Aggregate Amount if Loans are
Proposed Borrowing Type of Loans of Loans Eurodollar Loans
--------------------------------------------------------------------------------------------------------------------
Base Rate Loans One Month
-----------------,
19 Eurodollar Loans $ Two Months
---- --------------------
[Circle One of Three Months
Above]
Six Months
[Circle one of
above]
--------------------------------------------------------------------------------------------------------------------
Proposed Borrowing #3:
--------------------------------------------------------------------------------------------------------------------
Business Day Interest Period
of Aggregate Amount if Loans are
Proposed Borrowing Type of Loans of Loans Eurodollar Loans
--------------------------------------------------------------------------------------------------------------------
Base Rate Loans One Month
-----------------,
19 Eurodollar Loans $ Two Months
---- --------------------
[Circle One of Three Months
Above]
Six Months
[Circle one of
above]
--------------------------------------------------------------------------------------------------------------------
EXHIBIT A-2
LETTER OF CREDIT REQUEST
No. /5/
--------------
Dated /6/
-----------
PNC Bank, National Association,
as Administrative Agent for the Lenders party
to the Credit Agreement referred to below
One PNC Plaza
Fifth Avenue and Wood Street
Pittsburgh, Pennsylvania 15265
Attention: Commercial Loan Operations
--------------------------
Ladies and Gentlemen:
The undersigned, Atria Communities, Inc. (the "Borrower"), refers to
the Credit Agreement, dated as of August 15, 1996 (as amended, modified or
supplemented from time to time, the "Credit Agreement", the capitalized terms
defined therein being used herein as therein defined), among the Borrower, the
financial institutions from time to time party thereto (the "Lenders"), and you,
as Administrative Agent for such Lenders.
The undersigned hereby requests that , as a Letter of Credit Issuer,
issue a Letter of Credit on , 199 (the "Date of Issuance") in the aggregate
amount of $ , for the account of .
--------------------
The beneficiary of the requested Letter of Credit will be ,/7/
-------
and such Letter of Credit will be in support of /8/ and will have a
-------
stated termination date of ./9/
-------
The undersigned hereby certifies that at the Date of Issuance the MPP
Revolving Loan Sublimit will be $ and the DPP Revolving Loan Sublimit
----------
will be $ . The undersigned hereby further certifies that after giving
----------
effect to the requested issuance of the Letter of Credit:
(i) $ principal amount of Loans classified
---------
as MPP Revolving Loans will be outstanding;
----------------------------------
/5/ Letter of Request Number
/6/ Date of Letter of Request (at least five Business Days prior to the Date
of Issuance or such lesser number as may be agreed by the relevant Letter
of Credit Issuer.
/7/ Insert name and address of beneficiary.
/8/ Insert description of the important obligations, name of agreement and/or
the commercial transaction to which this Letter of Credit Request
relates.
/9/ Insert last date upon which drafts may be presented (which may not be
beyond the 5th day next prededing the Revolving Loan Maturity Date).
(ii) $ principal amount of Loans classified
---------
as DPP Revolving Loans will be outstanding;
(iii) the Allocated MPP Letter of Credit Outstandings will
be $ ;
-----------
(iv) the Allocated DPP Letter of Credit Outstandings will
be $ ;
-----------
(v) the Allocated Measured MPP Swap Credit Exposure will
be $ ; and
-----------
(vi) the Allocated Measured DPP Swap Credit Exposure will
be $ .
-----------
The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the Date of Issuance:
(A) the representations and warranties contained in the Credit
Agreement and the other Credit Documents are and will be true and
correct in all material respects, before and after giving effect to the
issuance of the Letter of Credit requested hereby, as though made on
the Date of Issuance, except to the extent that such representations
and warranties expressly relate to an earlier date; and
(B) no Default or Event of Default has occurred and is
continuing, or would result after giving effect to the issuance of the
Letter of Credit requested hereby.
Copies of all documentation with respect to the supported transaction
are attached hereto.
Very truly yours,
ATRIA COMMUNITIES, INC.
By: ____________________________________
Title:
2
EXHIBIT B
REVOLVING NOTE
$ Louisville, Kentucky
---------------
, 1996
------------
FOR VALUE RECEIVED, the undersigned ATRIA COMMUNITIES, INC., a Delaware
corporation (herein, together with its successors and assigns, the "Borrower"),
hereby promises to pay to the order of (the "Lender"),
-------------------------
in lawful money of the United States of America in immediately available funds,
at the Payment Office (as defined in the Agreement referred to below) of PNC
Bank, National Association (the "Administrative Agent"), on the Revolving Loan
Maturity Date (as defined in the Agreement referred to below), in the case of
any such Loans which are MPP Revolving Loans, or on the DPP Loan Maturity Date,
in the case of any such Loans which are DPP Revolving Loans (as such terms are
defined in the Agreement), the principal sum of DOLLARS ($ )
---------------- ---
or, if less, the then unpaid principal amount of all Loans (as defined in the
Agreement) made by the Lender pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount of each Loan made by the Lender in like money at said office from the
date hereof until paid at the rates and at the times provided in section 1.8 of
the Agreement.
This Note is one of the Notes referred to in the Credit Agreement,
dated as of August 15, 1996, among the Borrower, the financial institutions from
time to time party thereto (including the Lender), and PNC Bank, National
Association, as Administrative Agent (as from time to time in effect, the
"Agreement"), and is entitled to the benefits thereof and of the other Credit
Documents (as defined in the Agreement). As provided in the Agreement, this Note
is subject to mandatory prepayment prior to the Revolving Loan Maturity Date, in
whole or in part.
In case an Event of Default (as defined in the Agreement) shall occur
and be continuing, the principal of and accrued interest on this Note may be
declared to be due and payable in the manner and with the effect provided in the
Agreement.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE COMMONWEALTH OF KENTUCKY.
ATRIA COMMUNITIES, INC.
By:
------------------------------------
Chief Financial Officer and
Vice President of Development
LOANS AND PAYMENTS OF PRINCIPAL
--------------------------------------------------------------------------------------------------------------------
Amount
of
Date Amount MPP Type Principal Unpaid
of of or of Interest Paid or Principal Made
Notation Loan DPP Loan Period Prepaid Balance By
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
EXHIBIT C-1
FORM OF OPINION OF SPECIAL COUNSEL TO THE BORROWER
, 1996
--------- --
PNC Bank, National Association,
as Administrative Agent for the Lenders party
to the Credit Agreement referred to below
One PNC Plaza
Fifth Avenue and Wood Street
Pittsburgh, Pennsylvania 15265
Attention: Commercial Loan Operations
--------------------------
--and--
the Documentation Agent, the Collateral Agent
and each of the Lenders party to the
Credit Agreement referred to below
Re: U.S. $200,000,000 Credit Agreement
with Atria Communities, Inc.
----------------------------------
Ladies and Gentlemen:
We have acted as special counsel to Atria Communities, Inc., a Delaware
corporation (the "Borrower"), in connection with (i) the execution and delivery
of the Credit Agreement, dated as of August 15, 1996 (the "Credit Agreement"),
among the Borrower, the financial institutions party thereto (the "Lenders") and
PNC Bank, National Association, as Administrative Agent, and (ii) the
transactions contemplated thereby. As used herein, the term "Credit Party"
refers only to the Borrower and such of its Subsidiaries as are party to any
Credit Document. Unless otherwise indicated, capitalized terms used herein but
not otherwise defined herein shall have the respective meanings set forth in the
Credit Agreement.
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of such documents as we
have deemed necessary or appropriate as a basis for the opinions set forth
herein, including without limitation (a) the Credit Documents, (b) the other
Transaction Documents and (c) such other public and corporate documents and
records as we deem necessary or appropriate in connection with this opinion.
In our examination we have assumed the genuineness of all signatures
(other than as to the Borrower and the other Credit Parties), the authenticity
of all documents submitted to us as originals, the conformity to original
documents of all documents submitted to us as certified or photostatic copies
and the authenticity of the originals of such copies. As to questions of fact
not independently verified by us we have relied, to the extent we deemed
appropriate, upon representations and certificates of officers of the Borrower,
the other Credit Parties, public officials and other appropriate persons.
Based upon the foregoing, we are of the opinion that:
1. Each of the Borrower and its Subsidiaries (i) is a validly existing
corporation or partnership, as the case may be, under the laws of the
jurisdiction of its formation and has the corporate or other organizational
power
and authority, as applicable, to own its property and assets and to
transact the business in which it is engaged and presently proposed to engage
and (ii) to our knowledge, is duly qualified and is authorized to do business
and is in good standing in each jurisdiction where it is required to be so
qualified except where the failure to be so qualified would not have a Material
Adverse Effect.
2. Each Credit Party has the corporate or other organizational power
and authority to execute, deliver and carry out the terms and provisions of each
of the Credit Documents to which it is a party and has taken all necessary
corporate or other organizational action to authorize the execution, delivery
and performance of the Credit Documents to which it is a party. Each Credit
Party has duly executed and delivered each Credit Document to which it is a
party and each Credit Document to which it is a party constitutes the legal,
valid and binding agreement or obligation of each Credit Party enforceable in
accordance with its terms.
3. Neither the execution, delivery or performance by any Credit Party
of the Credit Documents to which it is a party nor compliance with the terms and
provisions thereof nor the consummation of the loan transactions contemplated
therein, (i) will contravene any provision of any law, statute, rule, regulation
(including, without limitation, Regulations G, T, U and X of the Board of
Governors of the Federal Reserve System), or, to our knowledge, any order, writ,
injunction or decree of any court or governmental instrumentality applicable to
such Credit Party or its properties and assets, (ii) will conflict or result in
any breach of, any of the terms, covenants, conditions or provisions of, or
constitute a default under, or (other than pursuant to the Security Documents)
result in the creation or imposition of (or the obligation to create or impose)
any Lien upon any of the property or assets of the Borrower or any of its
Subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust,
agreement or other instrument of which we have knowledge to which the Borrower
or any of its Subsidiaries is a party or by which it or any of its property or
assets are bound or to which it may be subject or (iii) will violate any
provision of the partnership agreement, certificate of formation, the
certificate of incorporation or by-laws, as the case may be, of such Credit
Party.
4. To our knowledge, there are no actions, suits or proceedings pending
or, to our knowledge, threatened with respect to the Borrower or any of its
Subsidiaries (i) that have, or could reasonably be likely to have, a Material
Adverse Effect or (ii) that have, or could reasonably be expected to have a
Material Adverse Effect on the rights or remedies of the Lenders or the
Administrative Agent or on the ability of any Credit Party to perform its
obligations to them under the Credit Documents.
5. No order, consent, approval, license, authorization, or validation
of, or filing, recording or registration with, or exemption by, any foreign or
domestic governmental or public body or authority, or any subdivision thereof,
is required to authorize or is required in connection with (i) the execution,
delivery and performance of any Credit Document or (ii) the legality, validity,
binding effect or enforceability of Credit Documents, other than filings and
recordings necessary to establish and perfect the security interests and Liens
provided for in the Security Documents.
6. All material consents and approvals of, and filings and
registrations with, and all other actions in respect of, all governmental
agencies, authorities or instrumentalities required to be obtained, given, filed
or taken by the Borrower or any other Credit Party in order to make or
consummate each component of the Transaction have been obtained, given, filed or
taken and are in full force and effect. Each component of the Transaction has
been consummated in accordance, in all material respect, with the applicable
Transaction Documents and in compliance, in all material respects, with all
applicable laws.
7. The Registration Statement is effective under the Securities Act of
1933, as amended, and, to the best of our knowledge after due inquiry, no stop
order suspending the effectiveness of such Registration Statement has been
issued under the Securities Act of 1933, as amended, or proceedings therefor
initiated or threatened by the SEC.
8. On the Closing Date and after giving effect to the Transaction, the
authorized capital stock of the Borrower consists solely of 50,000,000 shares of
Common Stock, par value $0.10 per share, and 5,000,000 shares of Preferred
Stock, par value $1.00 per share, of which 15,095,000 shares of Common Stock are
issued and outstanding and no shares of Preferred Stock are issued and
outstanding. All of such outstanding shares have been
2
duly and validly issued, are fully paid and nonassessable and are free of
preemptive rights. On the Closing Date and after giving effect to the
Transaction, the Parent is the legal and beneficial owner of
------------
shares of Common Stock of the Borrower.
9. To our knowledge, Annex II to the Credit Agreement correctly sets
forth each Subsidiary of the Borrower and the direct and indirect ownership
interest of the Borrower therein.
10. To our knowledge, each Management Contract and each Existing
Indebtedness Agreement is in full force and effect in accordance with its
respective terms, without any material default existing thereunder.
11. To our knowledge, each Credit Party is the record owner of all of
the Stock and Notes (as each such term is defined in the Pledge Agreement)
listed under its name on Annex B and C, respectively, of the Pledge Agreement.
After giving effect to the delivery to the Collateral Agent of the Pledged Stock
and Pledged Notes (as each such term is defined in the Pledge Agreement), and
assuming the continued possession by the Collateral Agent of such Pledged Stock
and Pledged Notes in the Commonwealth of Pennsylvania, the security interest
created in favor of the Collateral Agent under the Pledge Agreement constitutes
a valid and enforceable first perfected security interest in such Pledged
Securities subject to no other security interest. No filings or recordings are
required in order to perfect the security interest created under the Pledge
Agreement with respect to the Pledged Stock and the Pledged Notes.
12. To our knowledge, each Credit Party is the legal and beneficial
owner of the Partnership Interests (as defined in the Pledge Agreement) listed
under its name on Annex D to the Pledge Agreement. We have examined the
financing statements (the "Financing Statements") to be filed in the filing
offices listed for such Credit Party on Schedule A attached hereto (the "Filing
Offices"), and (i) upon the filing of such Financing Statements in the Filing
Offices, assuming that the representations made by each Credit Party in the
Security Agreement with respect to the location of its chief executive office
and registered office are and remain true and correct and (ii) upon the delivery
of the Partnership Notice (as defined in the Pledge Agreement) to the relevant
partnership and the registration of the pledge on the partnership books of such
partnership, all filings, registrations, recordings and other actions necessary
or appropriate to create, maintain, preserve, protect and perfect the security
interests granted by such Credit Party to the Pledgee under the Pledge Agreement
in respect of Partnership Interests pledged thereunder will have been
accomplished and the security interests granted to the Pledgee pursuant to the
Pledge Agreement in and to such Partnership Interests will constitute perfected
security interests therein.
13. We have examined the Financing Statements to be filed in the Filing
Offices, and upon the filing of such Financing Statements in the Filing Offices,
assuming that the representations made by the relevant Credit Party in the
Security Agreement with respect to the location of its Collateral (as defined in
the Security Agreement) and its registered office are and remain true and
correct, all actions, filings, registrations and recordings necessary or
appropriate to create, maintain, preserve subject to continuation, protect and
perfect the security interests granted by such Credit Party to the Collateral
thereunder will have been accomplished and the security interests granted to the
Collateral Agent pursuant to the Security Agreement in and to such Collateral
will constitute a perfected security interest therein to the extent that the
Collateral consists of the type of property in which a security interest may be
perfected by filing a financing statement under the Uniform Commercial Code (the
"UCC").
14. Assuming that the representation made by the relevant Credit Party
in section 2.4 of the Security Agreement with respect to the location of its
chief executive office and of its registered office is and remains true and
correct, the law of the respective jurisdiction in which a Credit Party's chief
executive office or registered office is located governs the perfection and
priority of the security interests granted by such Credit Party in its
Receivables, Contracts, Contract Rights and General Intangibles (as each such
term is defined in the Security Agreement) to the extent that said Receivables,
Contracts, Contract Rights and General Intangibles consist of "accounts" and
"general intangibles" as described in the UCC of such jurisdiction. Upon the
filing of the Financing Statements in the Filing Offices, assuming that the
representations made by such Credit Party in the Security Agreement with respect
to the location of its chief executive office and registered office is and
remains true and correct, all actions, filings, registrations or recordings
necessary or appropriate to create, maintain, preserve, protect and perfect the
security interest granted by such Credit Party to the Collateral Agent under the
Security Agreement in respect of all Receivables, Contracts, Contract Rights and
General Intangibles thereunder will have been accomplished and the
3
security interest granted to the Collateral Agent pursuant to the Security
Agreement in and to such Collateral will constitute a perfected security
interest therein.
15. The recordation of the Security Agreement in the United States
Patent and Trademark Office will be effective, under all applicable law, to
perfect the security interest granted to the Collateral Agent in trademarks the
covered by Security Agreement, and the filing of the Security Agreement with the
United States Copyright Office will be effective under applicable law to perfect
the security interest granted to the Collateral Agent in the copyrights covered
by the Security Agreement.
The foregoing opinions are subject to the following qualifications and
limitations:
A. To the extent that the obligations of any party under the Credit
documents and all other documents and instruments as to which any opinion is
rendered herein may be dependent upon such matters, we assume for purposes of
this opinion that all parties other than the Credit Parties (the "Other
Parties") have obtained all necessary authorizations and approvals to execute
and deliver such documents and instruments and to perform the obligations of the
Other Parties under them and that such instruments and documents constitute
legal, valid, binding and enforceable obligations on their part.
B. Whenever our opinion herein with respect to the existence or
non-existence of facts is qualified by the phrase "to our knowledge," "to our
knowledge" "we know," "known to us," "in the course of our review" or any
similar phrase implying a limitation on the basis of knowledge, it is intended
to indicate that, during the course of our representation in connection with the
transactions referenced in this letter, no information has come to our attention
that would give us actual knowledge of the existence or non-existence of facts
contrary to the opinions expressed herein and so qualified. We have not
undertaken, however, any special investigation to determine the existence or
absence of such facts, and no inference as to our knowledge or information
concerning the existence or absence of such facts should be drawn from our
representation. Such phrases shall not be deemed to include matters that may be
contained in our files relating to previous unrelated transactions involving any
of the entities represented by us in connection with these transactions.
C. The opinions expressed herein are limited to matters governed by the
laws of the United States of America, the Commonwealth of Kentucky and the
corporate laws of the State of Delaware as reflected solely in its statutes and
without review of case law decided under or in regard to such corporate laws.
D. The opinions expressed hereinabove are qualified to the extent that
the validity or enforceability of any of the provisions of the Credit documents
may be subject to or affected by (i) laws related to bankruptcy, insolvency,
reorganization, fraudulent conveyance, preferences, arrangements or moratorium
or by other similar laws affecting the rights of creditors generally, (ii)
equitable principles affecting the enforcement of obligations and contractual
rights generally, regardless of whether enforcement is considered in a
proceeding in equity or at law, including without limitation concepts of
materiality, adequacy of security, reasonableness, good faith sand fair dealing,
and procedures such as the marshalling of assets, and (ii) judicial discretion
and statutory limitations with respect to the availability of equitable remedies
and defenses, the calculation of damages and the entitlement of a party to
attorney's fees and other costs.
E. You should be aware that under the UCC, a financing statement is
effective only for a period of five (5) years from the date of its original
filing and unless an appropriate continuation statement is filed as provided in
the UCC within the six (6) months prior to the expiration of said five-year
period, and each successive five-year period thereafter, the financing statement
will lapse and the security interest evidenced thereby will no longer be
perfected.
F. In the event that any Credit Party changes its registered office in
Kentucky, its chief executive office or its principal place of business in any
other jurisdiction or changes the location of any of the Collateral to another
jurisdiction, and the Collateral Agent has notice of the same, we believe that
it would risk the perfected status of its security interest if it failed to file
appropriate financing statements in such other jurisdictions.
4
G. The Credit Documents include proceeds within the description of the
Collateral. If proceeds are actually received by a Credit Party, preservation of
the security interest in such proceeds, as against third parties, may be subject
to the limitation on the perfection of continuing security interests in
commingled cash proceeds set forth in KRS 355.9-306.
H. We call your attention to the fact that where under traditional
Kentucky common law, the parties' choice of law will be upheld, so long as it is
deemed to be reasonable, this may no longer hold true. Recent Kentucky cases
have imposed a "most significant relationship" test, which is a question of
fact; Breeding v. Massachusetts Indemnity and Life Insurance Company, Ky., 633
--------------------------------------------------------------
S.W.2d 717 (1982). At least one federal court has indicated that Kentucky courts
will apply Kentucky law unless there are overwhelming interests to the contrary;
Xxxxxx Corp. v. Comair, Inc., 712 F.2d 1069 (6th Cir., 1983). Most recently in
Xxxxx v. La Quinta Motor Inns, Inc., 736 S.W.2d 355 (1987), the court
-----------------------------------
specifically approved of the Xxxxxx rule that Kentucky could apply to its own
laws when there are "significant contacts and no overwhelming interests to the
contrary, even if the parties have voluntarily agreed to apply the law of a
different state."
I. No opinion is expressed with respect to the Credit Documents as to
the enforceability of (i) self-help provisions; (ii) waivers of constitutional
and statutory rights; (iii) provisions related to the waiver of remedies (or
delay in or omission of enforcement thereof), disclaimers, exculpation clauses,
liability limitations with respect to third parties, release of legal or
equitable rights, discharges of defenses or the creation of remedies not
available under Kentucky laws; (iv) provisions purporting to waive any
requirements of diligent performance or care on the part of the Lenders with
respect to the recognition and preservations of the Credit Parties' rights to or
interest in any property subject to the liens or security interests created
under the Credit Documents; (v) covenants to the extent that they can be
construed as independent clauses (although a violation of the terms of such
covenants would constitute an act or event of default if the Credit Documents so
provided); (vi) provisions purporting to shift evidentiary burdens of proof;
(vii) provisions purporting to appoint the Lenders, or any of them, as
attorney-in-fact or agent for any of the Credit Parties or any other Person;
(viii) provisions purporting to modify the rights to notice and to service of
process in accordance with the requirements of Kentucky law of the laws of any
other jurisdiction; (ix) any provision purporting to preclude the modification
of any of the Credit Documents through conduct, custom, or course of
performance, action or dealing; or (x) any provision purporting to require the
payment or reimbursement of fees, costs, expenses or other amounts which are
unreasonable in nature or amount or purporting to provide indemnification
against liability for actions taken under the Credit Documents, but the
inclusion of any such provisions discussed herein (or all of them) does not
affect the validity of any of the Credit Documents, taken as a whole, and each
of the Credit Documents, taken as a whole, together with applicable law,
contains adequate provisions for the practical realization of the benefits of
the security created thereby.
J. The opinions expressed herein are rendered as of the date hereof. We
assume no obligation to update or supplement these opinions to reflect any fact
or other matter which may hereafter come to our attention or any change in
applicable law which may hereafter occur.
The foregoing conclusions are limited to the matters expressly stated
herein, and no other conclusions are implied or may be inferred beyond such
matters. This opinion is rendered solely for your benefit and may not be relied
upon in any manner by any other person without our written consent.
Very truly yours,
5
EXHIBIT C-2
FORM OF OPINION OF TRANSACTIONS COUNSEL TO THE PARENT
, 1996
-------- --
PNC Bank, National Association,
as Administrative Agent for the Lenders party
to the Credit Agreement referred to below
One PNC Plaza
Fifth Avenue and Wood Street
Pittsburgh, Pennsylvania 15265
Attention: Commercial Loan Operations
--------------------------
--and--
the Documentation Agent, the Collateral Agent
and each of the Lenders party to the
Credit Agreement referred to below
Re: U.S. $200,000,000 Credit Agreement
with Atria Communities, Inc.
----------------------------------
Ladies and Gentlemen:
I am Transactions Counsel of Vencor, Inc., a Delaware corporation (the
"Parent"), and have acted as counsel to the Parent in connection with (i) the
execution and delivery of the Guaranty, dated as of August 15, 1996 (the "Parent
Guaranty"), by the Parent and the Supporting Guarantors named therein (the
Parent and all such Supporting Guarantors, each a "Guarantor" and collectively,
the "Guarantors"), in favor of, among others, the Lenders party to the Credit
Agreement referred to therein and PNC Bank, National Association, as
Administrative Agent (the "Administrative Agent") for the Lenders under the
Credit Agreement, and (ii) the transactions contemplated thereby. Unless
otherwise indicated, capitalized terms used herein but not otherwise defined
herein shall have the respective meanings set forth in the Parent Guaranty or
the Credit Agreement referred to in the Parent Guaranty.
In connection with this opinion, I have examined originals or copies,
certified or otherwise identified to my satisfaction, of such documents as I
have deemed necessary or appropriate as a basis for the opinions set forth
herein, including without limitation (a) the Parent Guaranty, (b) the other
Credit Documents, (c) the other Transaction Documents and (d) such other public
and corporate documents and records as I deem necessary or appropriate in
connection with this opinion.
In my examination I have assumed the genuineness of all signatures
(other than as to the Guarantors), the authenticity of all documents submitted
to me as originals, the conformity to original documents of all documents
submitted to me as certified or photostatic copies and the authenticity of the
originals of such copies. As to questions of fact not independently verified by
me I have relied, to the extent I deemed appropriate, upon representations and
certificates of officers of the Parent, the other Guarantors, public officials
and other appropriate persons.
Based upon the foregoing, I am of the opinion that:
1. The Parent (i) is a duly organized and validly existing corporation
in good standing under the laws of the State of Delaware and has the corporate
power and authority to own its property and assets and to transact the business
in which it is engaged and presently proposed to engage and (ii) is qualified
and is authorized to do business and is in good standing in each jurisdiction
where it is required to be so qualified except where the failure to be so
qualified would not have a Material Adverse Effect.
2. Each Supporting Guarantor (i) is a corporation organized and
existing and in good standing under the laws of the jurisdiction of its
formation and has the corporate power and authority to own its property and
assets and to transact the business in which it is engaged and presently
proposed to engage and (ii) is qualified and is authorized to do business and is
in good standing in each jurisdiction where it is required to be so qualified
except where the failure to be so qualified would not have a Material Adverse
Effect.
3. Each Guarantor has the corporate power and authority to execute,
deliver and carry out the terms and provisions of the Parent Guaranty and has
taken all necessary corporate or other organizational action to authorize the
execution, delivery and performance of the Parent Guaranty. Each Guarantor has
duly executed and delivered the Parent Guaranty and the Parent Guaranty
constitutes the legal, valid and binding agreement or obligation of each
Guarantor enforceable in accordance with its terms.
4. Neither the execution, delivery or performance by any Guarantor of
the Parent Guaranty nor compliance with the terms and provisions thereof (i)
will contravene any provision of any law, statute, rule, regulation (including,
without limitation, Regulations G, T, U and X of the Board of Governors of the
Federal Reserve System), order, writ, injunction or decree of any court or
governmental instrumentality applicable to any such Guarantor or its properties
and assets, (ii) will conflict or result in any breach of, any of the terms,
covenants, conditions or provisions of, or constitute a default under, or (other
than pursuant to the Security Documents) result in the creation or imposition of
(or the obligation to create or impose) any Lien upon any of the property or
assets of any such Guarantor or any of its Subsidiaries pursuant to the terms of
any indenture, mortgage, deed of trust, agreement or other instrument to which
any such Guarantor or any of its Subsidiaries is a party or by which it or any
of its property or assets are bound or to which it may be subject or (iii) will
violate any provision of the certificate of incorporation or by-laws of such
Guarantor.
5. There are no actions, suits or proceedings pending, or to the best
of my knowledge after due inquiry, threatened with respect to any Guarantor or
any of its Subsidiaries that have, or could be reasonably likely to have, a
Material Adverse Effect.
6. No order, consent, approval, license, authorization, or validation
of, or filing, recording or registration with, or exemption by, any foreign or
domestic governmental or public body or authority, or any subdivision thereof,
is required to authorize or is required in connection with (i) the execution,
delivery and performance of the Parent Guaranty or (ii) the legality, validity,
binding effect or enforceability of the Parent Guaranty.
7. All material consents and approvals of, and filings and
registrations with, and all other actions in respect of, all governmental
agencies, authorities or instrumentalities required to be obtained, given, filed
or taken by the Parent in order to make or consummate each component of the
Transaction have been obtained, given, filed or taken and are in full force and
effect. Each component of the Transaction has been consummated in accordance, in
all material respects, with the applicable Transaction Documents and in
compliance, in all material respects, with all applicable laws.
The opinions expressed herein are subject to the following limitations
and exceptions:
A. The enforceability of the Parent Guaranty and the obligations of the
Guarantors thereunder and the availability of certain rights and remedial
provisions provided for in the Parent Guaranty, may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, liquidation, conservatorship,
reorganization, moratorium, or other federal or state laws (including, but not
limited to the Constitution of the United States of America and the Commonwealth
of Kentucky) affecting the enforceability of rights of creditors generally and
by equitable principles.
2
B. No opinion is expressed as to the enforceability of (i) self-help
provisions; (ii) waivers of constitutional rights; (iii) provisions related to
the waiver of remedies (or delay in or omission of enforcement thereof),
disclaimers, exculpation clauses, liability limitations with respect to third
parties, releases of legal or equitable rights, discharges of defenses,
liquidated damages or the creation of remedies not available under Kentucky law;
(iv) any purported assignment of any approval, license, permit, agreement of
rights for which the specific written consent of any other party or person
affected thereby has not been obtained; (v) covenants to the extent that they
can be construed as independent clauses as distinguished from clauses which
trigger events of default; (vi) any provisions which purport to shift
evidentiary burdens of proof; (vii) any provisions purported to appoint a Lender
as attorney-in-fact or agent for a Guarantor; (viii) any provisions regarding
payment of attorneys' fees except to the extent permitted by KID 411.195;; (ix)
provisions relating to lender indemnification; and (x) any provisions purporting
to modify the rights of notice of service of process requirements of the laws of
the Commonwealth of Kentucky.
C. The opinions contained in this letter are rendered only as
of the date hereof, and I undertake no obligation to update my opinions after
the date hereof.
I am a member of the Bar of the Commonwealth of Kentucky and, except as
described in the following sentence, I do not hold myself out as being
conversant with, and express no opinion as to, the laws of any other
jurisdiction. My examination of matters of law in connection with the opinions
expressed herein has been limited to the laws of the Commonwealth of Kentucky,
the federal laws of the United States, and the General Corporation Law of the
State of Delaware.
This opinion is being furnished only to the addresses and is solely for
their benefit and the benefit of their participants and assigns in connection
with the above transaction. This opinion may not be relied upon for any other
purpose, or relied upon by any other person, firm or corporation for any
purpose, without a prior written consent.
Very truly yours,
T. Xxxxxxx Xxxxx
Transactions Counsel
Vencor, Inc.
3
EXHIBIT D
OFFICER'S CERTIFICATE
I, the undersigned, [President/Vice President] of [NAME OF CREDIT
PARTY], [a corporation organized and existing under the laws of the State of
] [limited liability company organized and existing under the laws of
---------
the State of ] (the "Company") [which corporation constitutes the general
-------
partner of , a limited partnership (the "Partnership")],
------------ ---------
do hereby certify on behalf of the Company [as the general partner of the
Partnership] that:
1. This Certificate is furnished pursuant to the Credit Agreement,
dated as of August 15, 1996, among Atria Communities, Inc., the financial
institutions from time to time party thereto, and PNC Bank, National
Association, as Administrative Agent (such Credit Agreement, as in effect on the
date of this Certificate, being herein called the "Credit Agreement"). Unless
otherwise defined herein, capitalized terms used in this Certificate shall have
the meanings set forth in the Credit Agreement.
2. The individuals named on Annex A hereto /10/ are elected or
appointed officers of the Company and each holds the office of the Company set
forth opposite his name. The signature written opposite the name and title of
each such officer is his genuine signature.
3. Attached hereto as Exhibit A is a certified copy of the [Certificate
of Incorporation of the Company] [Certificate of Formation and Limited Liability
Company Agreement] [Partnership Agreement of the Partnership], [as filed in the
Office of the Secretary of State of the State of on , 19 ],
---------- -------- --
together with all amendments thereto adopted through the date hereof.
4. Attached hereto as Exhibit B is a true and correct copy of the
By-Laws of the Company which were duly adopted, are in full force and effect on
the date hereof, and have been in effect since , 19 .
---------- -- --
5. Attached hereto as Exhibit C is a true and correct copy of
resolutions which were duly adopted on , 1996 [by unanimous written
---------
consent of the Board of Directors of the Company] [by a meeting of the Board of
Directors of the Company at which a quorum was present and acting throughout],
and said resolutions have not been rescinded, amended or modified. Except as
attached hereto as Exhibit C, no resolutions have been adopted by the Board of
Directors of the Company which deal with the execution, delivery or performance
of any of the Documents to which the Company [as the general manager partner of
the Partnership] is party.
6. Attached hereto as Exhibit D is a true and complete list of all
Plans, true and correct copies of which have been made available to the
Administrative Agent.
7. Attached hereto as Exhibit E is a true and complete list of all
Collective Bargaining Agreements, true and correct copies of which have been
made available to the Administrative Agent.
8. Attached hereto as Exhibit F is a true and complete list of all
Existing Indebtedness Agreements, true and correct copies of which have been
made available to the Administrative Agent.
9. Attached hereto as Exhibit G is a true and complete list of all
Shareholders' Agreements, true and correct copies of which have been made
available to the Administrative Agent.
-----------------------------
/10/ Include name, office and signature of each officer who will sign any
Credit Document, including the officers signing this certificate.
10. Attached hereto as Exhibit H is a true and complete list of all
Management Agreements, true and correct copies of which have been made available
to the Administrative Agent.
11. Attached hereto as Exhibit I is a true and complete list of all
Employment Agreements, true and correct copies of which have been made available
to the Administrative Agent.
12. Attached hereto as Exhibit J is a true and complete list of all
Management Contracts, true and correct copies of which have been made available
to the Administrative Agent.
13. Attached hereto as Exhibit K is a true and complete list of all Tax
Sharing Agreements, true and correct copies of which have been made available to
the Administrative Agent.
14. Attached hereto as Exhibit L is a true and complete list of all
Acquisition Documents, true and correct copies of which have been delivered to
the Administrative Agent.
15. On the date hereof, all of the conditions set forth in sections
5.1(e), (h), (i), (j) and (k), and section 5.2 have been duly satisfied./11/
[6][16]. On the date hereof, the representations and warranties
contained in the Credit Agreement and in the other Credit Documents are true and
correct in all material respects with the same effect as those such
representations and warranties have been made on the date hereof, after giving
effect to the incurrence of Loans on the date hereof and the application of the
proceeds thereof, unless stated to relate to a specific earlier date, in which
case such representation and warranties were true and correct in all material
respects as of such earlier date.
[7][17]. On the date hereof, no Default or Event of Default has
occurred and is continuing or would result from the Borrowing to occur on the
date hereof or from the application of the proceeds thereof.
[8][18]. There is not proceeding dissolution or liquidation of the
Company or threatening its existence.
IN WITNESS WHEREOF, I have hereunto set my hand this day of
----
1996.
----------
[NAME OF CREDIT PARTY]
By:
---------------------------
Name:
Title:
-----------------------------
/11/ Insert items 6 through 15 only in the Certificate for the Borrower.
2
I, the undersigned, [Secretary/Assistant Secretary] of the Company, do
hereby certify [on behalf of the Company] [on behalf of the Company as general
partner of the Partnership] that:
1. [Name of person making above certifications] is the duly elected
and qualified [President/Vice President] of the Company and the signature above
is his genuine signature.
2. The certifications made by [name of person making above
certifications] in Items 2, 3, 4, 5 and [8][20] above are true and correct.
IN WITNESS WHEREOF, I have hereunto set my hand this day of
----
August, 1996.
[NAME OF CREDIT PARTY]
By:
---------------------------
Name:
Title:
3
ANNEX A
Name Office Signature
------------ ------------ ----------------------
----------------
----------------
----------------
----------------
EXHIBIT E
----------------------------
FORM OF
PARENT GUARANTY
----------------------------
EXHIBIT F
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FORM OF
SUBSIDIARY GUARANTY
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EXHIBIT G
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FORM OF
PLEDGE AGREEMENT
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EXHIBIT H
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FORM OF
SECURITY AGREEMENT
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EXHIBIT I
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FORM OF
ASSIGNMENT AGREEMENT
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ASSIGNMENT AGREEMENT
DATE:
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Reference is made to the Credit Agreement described in Item 2 of Annex
I annexed hereto (as such Credit Agreement may hereafter be amended, modified or
supplemented from time to time, the "Credit Agreement"). Unless defined in Annex
I attached hereto, terms defined in the Credit Agreement are used herein as
therein defined.
(the "Assignor") and (the "Assignee")
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hereby agree as follows:
1. The Assignor hereby sells and assigns to the Assignee without
recourse and without representation or warranty (other than as expressly
provided herein), and the Assignee hereby purchases and assumes from the
Assignor, that interest in and to all of the Assignor's rights and obligations
under the Credit Agreement as of the date hereof which represents the percentage
interest specified in Item 4 of Annex I (the "Assigned Share") of all of
Assignor's outstanding rights and obligations under the Credit Agreement
indicated in Item 4 of Annex I, including, without limitation, all rights and
obligations with respect to the Assigned Share of the Assignor's Commitment and
of the Loans, Unpaid Drawings and the Notes held by the Assignor. After giving
effect to such sale and assignment, the Assignee's Commitment will be as set
forth in Item 4 of Annex I.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any liens or security interests; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or the other Credit Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or the other Credit Documents or any other instrument or document
furnished pursuant thereto; and (iii) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or any other Credit Party or the performance or observance by the
Borrower or any other Credit Party of any of its obligations under the Credit
Agreement or the other Credit Documents or any other instrument or document
furnished pursuant thereto.
3. The Assignee (i) represents and warrants that it is duly authorized
to enter into and perform the terms of this Assignment Agreement; (ii) confirms
that it has received a copy of the Credit Agreement and the other Credit
Documents, together with copies of the financial statements referred to therein
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Assignment Agreement;
(iii) agrees that it will, independently and without reliance upon the
Administrative Agent, the Managing Agent, the Assignor 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 the Credit Agreement; (iv) appoints and authorizes each of the
Administrative Agent and the Managing Agent to take such action as agent on its
behalf and to exercise such powers under the Credit Agreement and the other
Credit Documents as are delegated to the Administrative Agent or the Managing
Agent, as the case may be, by the terms thereof, together with such powers as
are reasonably incidental thereto; [and] (v) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Lender[; and (vi) to
the extent legally entitled to do so, attaches the forms described in section
4.4(b)(ii) of the Credit Agreement /12/.
4. Following the execution of this Assignment Agreement by the Assignor
and the Assignee, an executed original hereof (together with all attachments)
will be delivered to the Administrative Agent. The effective date of this
Assignment Agreement shall be the date of execution hereof by the Assignor, the
Assignee and the
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/12/ If the assignee is organized under the laws of a jurisdiction outside
the United States.
consent hereof by the Administrative Agent and the receipt by the Administrative
Agent of the administrative fee referred to in section 12.4(b) of the Credit
Agreement, unless otherwise specified in Item 5 of Annex I hereto (the
"Settlement Date").
5. Upon the delivery of a fully executed original hereof to the
Administrative Agent, as of the Settlement Date, (i) the Assignee shall be a
party to the Credit Agreement and, to the extent provided in this Assignment
Agreement, have the rights and obligations of a Lender thereunder and under the
other Credit Documents and (ii) the Assignor shall, to the extent provided in
this Assignment Agreement, relinquish its rights and be released from its
obligations under the Credit Agreement and the other Credit Documents.
6. It is agreed that upon the effectiveness hereof, the Assignee shall
be entitled to (x) all interest on the Assigned Share of the Loans at the rates
specified in Item 6 of Annex I, (y) all Commitment Commission (if applicable) on
the Assigned Share of the Commitment at the rate specified in Item 7 of Annex I,
and (z) all Letter of Credit Fees (if applicable) on the Assignee's
participation in all Letters of Credit at the rate specified in Item 8 of Annex
I hereto, which, in each case, accrue on and after the Settlement Date, such
interest and, if applicable, Commitment Commission and Letter of Credit Fees, to
be paid by the Administrative Agent, upon receipt thereof from the Borrower,
directly to the Assignee. It is further agreed that all payments of principal
made by the Borrower on the Assigned Share of the Loans which occur on and after
the Settlement Date will be paid directly by the Agent to the Assignee. Upon the
Settlement Date, the Assignee shall pay to the Assignor an amount specified by
the Assignor in writing which represents the Assigned Share of the principal
amount of the respective Loans made by the Assignor pursuant to the Credit
Agreement which are outstanding on the Settlement Date, net of any closing
costs, and which are being assigned hereunder. The Assignor and the Assignee
shall make all appropriate adjustments in payments under the Credit Agreement
for periods prior to the Settlement Date directly between themselves on the
Settlement Date.
7. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF KENTUCKY.
* * *
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
[NAME OF ASSIGNOR],
as Assignor
By
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Title:
[NAME OF ASSIGNEE],
as Assignee
By
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Title:
2
Acknowledged and Agreed:
PNC BANK, NATIONAL ASSOCIATION,
as Administrative Agent
By:
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Title:
3
ANNEX 1
ANNEX FOR ASSIGNMENT AND ASSUMPTION AGREEMENT
ANNEX I
1. The Borrower: ATRIA COMMUNITIES, INC.
2. Name and Date of Credit Agreement:
Credit Agreement, dated as of August 15, 1996, among Atria Communities,
Inc., the Lenders from time to time party thereto, and PNC Bank, National
Association, as Administrative Agent.
3. Date of Assignment Agreement:
199
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4. Amounts (as of date of item #3 above):
Commitments Loans
a. Aggregate Amount
for all Lenders $ $
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b. Assigned Share %
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c. Amount of Assigned
Share $ $
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5. Settlement Date:
199
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6. Rate of Interest
to the Assignee: As set forth in section 1.8 of the Credit
Agreement (unless otherwise agreed
to by the Assignor and the Assignee). /13/
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/13/ The Borrower and the Administrative Agent shall direct the entire amount
of the interest to the Assignee at the rate set forth in section 1.8 of
the Credit Agreement, with the Assignor and Assignee effecting any
agreed upon sharing of interest through payments by the Assignee to the
Assignor.
7. Commitment
Commission: As set forth in section 3.1(a) of the Credit
Agreement (unless otherwise agreed to by the
Assignor and the Assignee)14.
8. Letter of
Credit Fees: As set forth in section 3.1(b) of the Credit
Agreement (unless otherwise agreed to by the
Assignor and the Assignee)15.
9. Notices:
ASSIGNOR:
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Attention:
Telephone No.:
Facsimile No.:
ASSIGNEE:
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Attention:
Telephone No.:
Facsimile No.:
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/14/ The Borrower and the Administrative Agent shall direct the entire
amount of the rate set forth in section 3.1(a) of the Credit
Agreement, with the Assignor and the Assignee affecting any
agreed upon sharing of Commitment Commission through payment by the
Assignee to the Assignor.
/15/ The Borrower and the Adiminstrative Agent shall direct the entire
amount of the Letter of Credit Fees to the Assignee at the rate set
forth in section 3.1(b) of the Credit Agreement, with the Assignor and
the Assignee effecting any agreed upon sharing of the Letter of
Credit Fee through payment by the Assignee to the Assignor.
2
10. Payment Instructions:
ASSIGNOR:
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ABA No.:
Account No.:
Reference:
Attention:
ASSIGNEE:
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ABA No.:
Account No.:
Reference:
Attention:
3
EXHIBIT J
SOLVENCY CERTIFICATE
I, the undersigned, the Chief Financial Officer of Atria Communities,
Inc., a corporation organized and existing under the laws of the State of
Delaware (the "Borrower"), do hereby certify on behalf of the Borrower that:
1. This Certificate is furnished pursuant to section 5.1(o) of the
Credit Agreement, dated as of August 15, 1996, among the Borrower, the financial
institutions from time to time party thereto (the "Lenders"), and PNC Bank,
National Association, as Administrative Agent (such Credit Agreement, as in
effect on the date of this Certificate, being herein called the "Credit
Agreement"). Unless otherwise defined herein, capitalized terms used in this
Certificate shall have the meanings set forth in the Credit Agreement.
2. For purposes of this Certificate, the terms below shall have the
following definitions:
(a) "Fair Value"
The amount at which the assets, in their entirety, of
the Borrower would change hands between a willing buyer and a
willing seller, within a commercially reasonable period of
time, each having reasonable knowledge of the relevant facts,
with neither being under any compulsion to act
(b) "Present Fair Salable Value"
The amount that could be obtained by an independent
willing seller from an independent willing buyer if the assets
of the Borrower are sold with reasonable promptness under
normal selling conditions for the sale of comparable business
enterprises in a current market.
(c) "New Financing"
The Indebtedness incurred or to be incurred by the
Borrower under the Credit Documents (assuming the full
utilization by the Borrower of the Commitments under the
Credit Agreement) and the other Transaction Documents and all
other financings contemplated by the Transaction Documents
(including, without limitation, the IPO), in each case after
giving effect to the Transaction.
(d) "Stated Liabilities"
The recorded liabilities (including contingent
liabilities that would be recorded in accordance with
generally accepted accounting principles ("GAAP")) of the
Borrower as of [insert Closing Date] after giving effect to
the consummation of the Transaction, determined in accordance
with GAAP consistently applied, together with the amount of
all Obligations.
(e) "Identified Contingent Liabilities"
The maximum estimated amount of liabilities
reasonably likely to result from pending litigation, asserted
claims and assessments, guaranties, uninsured risks and other
contingent liabilities of the Borrower after giving effect to
the Transaction (including all fees and expenses related
thereto but exclusive of such contingent liabilities to the
extent reflected in Stated Liabilities), as identified and
explained in terms of their nature and estimated magnitude by
responsible officers of the Borrower.
(f) "Will be able to pay its Stated Liabilities,
including Identified Contingent Liabilities, as they mature"
For the period from the date hereof through the
Revolving Loan Maturity Date, the Borrower will have
sufficient assets and cash flow to pay its Stated Liabilities
and Identified Contingent Liabilities as those liabilities
mature or otherwise become payable.
(g) "Does not have Unreasonably Small Capital"
For the period from the date hereof through the
Revolving Loan Maturity Date, the Borrower, after consummation
of the Transaction and all New Financing (including the Loans)
being incurred or assumed and Liens created by the Borrower in
connection therewith, is a going concern and has sufficient
capital to ensure that it will continue to be a going concern
for such period and to remain a going concern.
3. For purposes of this Certificate, I, or officers of the Borrower
under my direction and supervision, have performed the following procedures as
of and for the periods set forth below.
(a) I have reviewed the financial statements of the
Borrower referred to in section 6.8(b) of the Credit
Agreement.
(b) I have reviewed the unaudited pro forma consolidated
balance sheet of the Borrower referred to in section 6.8(b) of
the Credit Agreement.
(c) I have made inquiries of certain officials of the
Borrower who have responsibility for financial and accounting
matters regarding the existence and amount of Identified
Contingent Liabilities associated with the business of the
Borrower.
(d) I have knowledge of and have reviewed to my satis-
faction the Credit Documents and the other Transaction
Documents, and the respective Annexes, Schedules and Exhibits
thereto.
(e) With respect to Identified Contingent Liabilities, I:
1. inquired of certain officials of the Borrower who
have responsibility for legal, financial and accounting
matters as to the existence and estimated liability with
respect to all contingent liabilities associated with the
business of the Borrower; and
2. confirmed with officers of the Borrower, to the
best of such officers' knowledge, that (i) all appropriate
items were included in Stated Liabilities or Identified
Contingent Liabilities and that (ii) the amounts relating
thereto were the maximum estimated amount of liabilities
reasonably likely to result therefrom as of the date hereof.
3. hereby certify that, to the best of my knowledge,
all material Identified Contingent Liabilities that may arise
from any pending litigation, asserted claims and assessments,
guarantees, uninsured risks and other Identified Contingent
Liabilities of the Borrower, (exclusive of such Identified
Contingent Liabilities to the extent reflected in Stated
Liabilities) have been considered in making the certification
set forth in paragraph 4 below, and with respect to each such
Identified Contingent Liability the estimable maximum amount
of liability with respect thereto was used in making such
certification.
(f) I have made inquiries of certain officers of the Borrower
who have responsibility for financial reporting and accounting
matters regarding whether they were aware of any events or
conditions that, as of the date hereof, would cause the
Borrower after giving effect to the consummation of the
Transaction and the New Financing (including the making of
Loans under the Credit Agreement), to (i) have assets with a
Fair Value or Present Fair Salable Value that are less than
Stated Liabilities and Identified Contingent Liabilities; (ii)
have Unreasonably Small Capital; or (iii) not be able to pay
its Stated Liabilities and Identified Contingent Liabilities
as they mature or otherwise become payable.
2
(g) I have made inquiries of certain officers of the Borrower,
who have responsibility for financial reporting and accounting
matters regarding whether they were aware of any events or
conditions that, as of the date hereof, would cause the
Borrower, after giving effect to the consummation of the
Transaction and the related financing transactions (including
the incurrence of the New Financing), to (i) have assets with
a Fair Value or Present Fair Salable Value that are less than
its or their Stated Liabilities and Identified Contingent
Liabilities; (ii) have Unreasonable Small Capital; or (iii)
not be able to pay its or their Stated Liabilities and
Identified Contingent Liabilities as they mature or otherwise
become payable.
4. Based on and subject to the foregoing, I hereby certify on behalf of
the Borrower that, after giving effect to the consummation of the Transaction
and the New Financing (including the making of Loans under the Credit
Agreement), it is my opinion that (i) the Fair Value and Present Fair Salable
Value of the assets of the Borrower exceed its Stated Liabilities and Identified
Contingent Liabilities; (ii) the Borrower does not have Unreasonably Small
Capital; and (iii) the Borrower will be able to pay its Stated Liabilities and
Identified Contingent Liabilities as they mature or otherwise become payable.
IN WITNESS WHEREOF, I have hereto set my hand this day of
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1996.
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ATRIA COMMUNITIES, INC.
By
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Name:
Title:
3
EXHIBIT K
SECTION 4.4(b)(ii) CERTIFICATE
Reference is hereby made to the Credit Agreement, dated as of August
15, 1996, among Atria Communities, Inc., the financial institutions party
thereto from time to time and PNC Bank, National Association, as Administrative
Agent (the "Credit Agreement"). Pursuant to the provisions of section 4.4(b)(ii)
of the Credit Agreement, the undersigned hereby certifies that it is not a
"bank" as such term is used in section 881(c)(3)(A) of the Internal Revenue Code
of 1986, as amended.
[NAME OF BANK]
By:
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Title:
Dated:
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