(SHORT TERM AGREEMENT)
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CREDIT AGREEMENT
dated as of October 9, 1997
by and among
THE MULTICARE COMPANIES, INC. and
ITS DIRECT AND INDIRECT SUBSIDIARIES, AS BORROWERS,
THE FINANCIAL INSTITUTIONS IDENTIFIED HEREIN, AS LENDERS,
MELLON BANK, N.A., AS ISSUER OF LETTERS OF CREDIT,
MELLON BANK, N.A., AS ADMINISTRATIVE AGENT,
CITICORP USA, INC., AS SYNDICATION AGENT,
NATIONSBANK, N.A., AS SYNDICATION AGENT, and
FIRST UNION NATIONAL BANK, AS DOCUMENTATION AGENT
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TABLE OF CONTENTS
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CREDIT AGREEMENT........................................................... 1
ARTICLEARTICLE 1 - CREDIT FACILITY......................................... 2
1.1 COMMITMENT TO LEND............................................ 2
1.2 JOINT AND SEVERAL OBLIGATIONS................................. 2
1.3 MANNER OF BORROWING.......................................... 2
1.4 REPAYMENT AND MANDATORY PREPAYMENTS.......................... 5
1.5 VOLUNTARY PREPAYMENTS........................................ 6
1.6 PAYMENTS BY THE BORROWERS IN GENERAL......................... 7
1.7 REDUCTIONS OF COMMITMENT..................................... 9
1.8 INTEREST..................................................... 9
1.9 FEES......................................................... 10
1.10 COMPUTATION OF INTEREST AND FEES.............................. 10
1.11 PROMISSORY NOTES; RECORDS OF ACCOUNT.......................... 10
1.12 PRO RATA TREATMENT............................................ 11
1.13 TAXES ON PAYMENTS............................................. 11
1.14 CHANGE OF LENDING OFFICE..................................... 12
ARTICLE 1A.-LETTERS OF CREDIT.............................................. 14
1A.1 ISSUANCE OF LETTERS OF CREDIT..................................14
ARTICLE 2 - CONDITIONS TO EFFECTIVENESS OF AGREEMENT
AND FUNDINGS................................................. 20
2.1 CONDITIONS TO EFFECTIVENESS OF AGREEMENT AND
INITIAL FUNDING.............................................. 20
2.2 CONDITIONS TO EACH LOAN....................................... 26
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES................................. 28
3.1 REPRESENTATIONS............................................... 28
3.2 REPRESENTATIONS AND WARRANTIES ABSOLUTE...................... 37
ARTICLE 4 - AFFIRMATIVE COVENANTS.......................................... 38
4.1 REPORTING REQUIREMENTS....................................... 38
4.2 MAINTENANCE OF EXISTENCE..................................... 43
4.3 CONDUCT OF BUSINESS AND MAINTENANCE OF LICENSES
AND OTHER PROPERTY........................................... 43
4.4 MAINTENANCE OF RECORDS; FISCAL YEAR.......................... 44
4.5 COMPLIANCE WITH LAWS......................................... 44
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4.6 ERISA........................................................ 45
4.7 RIGHT OF INSPECTION.......................................... 46
4.8 INSURANCE.................................................... 46
4.9 PAYMENT OF TAXES AND OTHER CHARGES........................... 46
4.10 SUBSIDIARIES TO BE BORROWERS................................. 46
4.11 PRESERVATION OF STATUS AS SENIOR INDEBTEDNESS................ 47
4.12 CORPORATE SEPARATENESS....................................... 47
4.13 TRANSACTIONS WITH AFFILIATES.................................. 48
4.14 MERGER........................................................ 48
4.15 USE OF PROCEEDS............................................... 48
4.16 CERTAIN DISPOSITIONS.......................................... 48
ARTICLE 5 - FINANCIAL COVENANTS............................................ 49
5.1 CERTAIN FINANCIAL COVENANTS................................... 49
ARTICLE 6 - NEGATIVE COVENANTS............................................. 52
6.1 INDEBTEDNESS................................................. 52
6.2 LIENS........................................................ 53
6.3 LOANS, ADVANCES AND INVESTMENTS.............................. 55
6.4 ACQUISITIONS, ETC............................................ 56
6.5 DISPOSITIONS................................................. 57
6.6 ISSUANCE OF SUBSIDIARY STOCK OR OTHER OWNERSHIP
INTERESTS.................................................... 58
6.7 LEASES........................................................ 58
6.8 DIVIDENDS AND RELATED DISTRIBUTIONS.......................... 59
6.9 CONSOLIDATED TAX RETURN...................................... 59
6.10 LIMITATION ON PAYMENTS, PREPAYMENTS,
DEFEASEMENT AND OTHER ACTION WITH RESPECT TO CERTAIN
DEBT OBLIGATIONS............................................. 60
6.11 LIMITATIONS ON MODIFICATION OF CERTAIN DOCUMENTS............. 60
6.12 LIMITATION ON CERTAIN RESTRICTIVE PROVISIONS................. 61
6.13 LIMITATIONS ON MERGERS, ETC.................................. 61
6.14 AVOIDANCE OF OTHER CONFLICTS................................. 61
6.15 CAPITAL EXPENDITURES......................................... 61
6.16 MANAGEMENT FEE................................................ 61
ARTICLE 7 - DEFAULTS....................................................... 63
7.1 EVENTS OF DEFAULT............................................ 63
7.2 CONSEQUENCES OF AN EVENT OF DEFAULT........................... 66
7.3 APPLICATION OF PROCEEDS...................................... 67
ARTICLE 8 - THE ADMINISTRATIVE AGENT....................................... 69
8.1 APPOINTMENT.................................................. 69
8.2 GENERAL NATURE OF ADMINISTRATIVE AGENT'S DUTIES.............. 69
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8.3 EXERCISE OF POWERS........................................... 70
8.4 GENERAL EXCULPATORY PROVISIONS............................... 70
8.5 ADMINISTRATION BY THE ADMINISTRATIVE AGENT................... 71
8.6 LENDER PARTIES NOT RELYING ON ADMINISTRATIVE
AGENT OR OTHER LENDERS....................................... 72
8.7 INDEMNIFICATION.............................................. 72
8.8 HOLDERS OF NOTES............................................. 73
8.9 SUCCESSOR ADMINISTRATIVE AGENT............................... 73
8.10 ADDITIONAL ADMINISTRATIVE AGENTS; COLLATERAL
AGENT........................................................ 74
8.11 CALCULATIONS................................................. 74
8.12 OTHER AGENTS................................................. 74
8.13 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY.............. 74
ARTICLE 8A- SPECIAL INTER-BORROWER PROVISIONS.............................. 76
8A.1 CERTAIN BORROWER ACKNOWLEDGEMENTS............................ 76
8A.2 CERTAIN INTER-BORROWER AGREEMENTS............................ 76
8A.3 RECORDS...................................................... 77
ARTICLE 9 - DEFINITIONS; CONSTRUCTION...................................... 78
9.1 CERTAIN DEFINITIONS........................................... 78
9.2 CONSTRUCTION................................................. 98
9.3 ACCOUNTING PRINCIPLES........................................ 99
ARTICLE 10- MISCELLANEOUS..................................................101
10.1 NOTICES......................................................101
10.2 PRIOR UNDERSTANDINGS; ENTIRE AGREEMENT.......................101
10.3 SEVERABILITY..................................................101
10.4 DESCRIPTIVE HEADINGS..........................................102
10.5 GOVERNING LAW.................................................102
10.6 NON-MERGER OF REMEDIES........................................102
10.7 NO IMPLIED WAIVER; CUMULATIVE REMEDIES.......................102
10.8 AMENDMENTS; WAIVERS...........................................103
10.9 SUCCESSORS AND ASSIGNS........................................104
10.10 COUNTERPARTS; PHOTOCOPIED OR TELECOPIED SIGNATURE
PAGES........................................................106
10.11 MAXIMUM LAWFUL INTEREST RATE..................................106
10.12 INDEMNIFICATION...............................................107
10.13 EXPENSES.....................................................108
10.14 MAXIMUM AMOUNT OF JOINT AND SEVERAL LIABILITY................109
10.15 AUTHORIZATION OF MULTICARE BY OTHER BORROWERS................109
10.17 CERTAIN WAIVERS BY BORROWERS..................................110
10.18 SET-OFF......................................................110
10.19 SHARING OF COLLECTIONS.......................................111
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10.20 CONSENT TO JURISDICTION, SERVICE AND VENUE;
WAIVER OF JURY TRIAL.........................................111
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of October 9, 1997, by and among THE
MULTICARE COMPANIES, INC., a Delaware corporation (together with its successors,
"Multicare"), the Subsidiaries of Multicare referred to on the signature pages
hereto and such other Subsidiaries of Multicare which may from time to time
become Borrowers hereunder in accordance with the provisions hereof
(collectively with Multicare, the "Borrowers"), the Lenders referred to on the
signature pages hereto and other lenders parties hereto from time to time
(together with their successors and assigns, the "Lenders"), MELLON BANK, N.A.,
a national banking association, as Administrative Agent for itself, and for the
Lenders hereunder (in such capacity, together with its successors and assigns in
such capacity, the "Administrative Agent"), MELLON BANK, N.A., a national
banking association, as Issuer of Letters of Credit hereunder (in such capacity,
together with its successors and assigns in such capacity, the "Issuer")
CITICORP USA, INC., a Delaware corporation as Syndication Agent for itself and
the Lenders hereunder, NATIONSBANK, N.A., a national banking association, as
Syndication Agent for itself and the Lenders hereunder and FIRST UNION NATIONAL
BANK, a national banking association as Documentation Agent. Certain terms used
herein are defined in Article 9 below.
W I T N E S S E T H T H A T
WHEREAS, Multicare has requested that the Lenders extend the Loans
to the Borrowers for the purposes described herein;
WHEREAS, the Lenders have agreed to extend the Loans to the
Borrowers on the terms and conditions described herein; and
WHEREAS, ALL OBLIGATIONS HEREUNDER AND UNDER EACH AGREEMENT AND
INSTRUMENT DELIVERED IN CONNECTION HEREWITH FROM TIME TO TIME ARE "SENIOR
INDEBTEDNESS" AND ARE HEREBY DESIGNATED BY MULTICARE AS "DESIGNATED SENIOR
INDEBTEDNESS" WITHIN THE MEANING OF THE 1997 SUBORDINATED NOTE INDENTURE.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained and intending to be legally bound hereby, the parties
hereto hereby agree as follows.
ARTICLE 1
CREDIT FACILITY
1.1 COMMITMENT TO LEND. Loans. Upon the terms and subject to the
conditions of this Agreement, each Lender agrees to make, from time to time
during the period from and including the Closing Date to and including the
Maturity Date, one or more Loans ("RC Loans") to the Borrowers in an aggregate
unpaid principal amount not exceeding at any time such Lender's Commitment at
such time as set forth on Schedule 1.1 hereto. The total amount of the
Commitment of all Lenders on the Agreement Date is $425,000,000.00.
1.2 JOINT AND SEVERAL OBLIGATIONS. WHETHER OR NOT EXPRESSLY STATED HEREIN
OR IN ANY OTHER LOAN DOCUMENT, ALL OBLIGATIONS OF THE BORROWERS (OR OF ANY
BORROWER) HEREUNDER AND UNDER EACH OTHER LOAN DOCUMENT (WHETHER IN CONNECTION
WITH LOANS, LETTERS OF CREDIT OR OTHER OBLIGATIONS) ARE JOINT AND SEVERAL
OBLIGATIONS OF ALL BORROWERS.
1.3 MANNER OF BORROWING.
(a) Notice of Borrowing.
(1) Revolving Credit Loans. Except for the Swing Loans (which
shall be governed by paragraph (e) below) Multicare (on behalf of the Borrowers)
shall give the Administrative Agent notice (which shall be irrevocable), no
later than 11:00 a.m. (Philadelphia, Pennsylvania time) one Business Day prior
to the requested date for the making of Loans. Each such notice shall be in the
form of Exhibit B hereto and shall specify (i) the requested date for the making
of such Loans which date shall be a Business Day, (ii) the amount of the
requested Loans, which amount shall be $5,000,000.00 or any integral multiple of
$1,000,000.00 in excess thereof (except that the amount of the requested Loans
may be less if the amount requested is equal to the total Available Commitment).
Upon receipt of any such notice, the Administrative Agent shall promptly notify
each applicable Lender of the contents thereof and of the amount of the Loans to
be made by such Lender on the requested date specified therein.
(2) Swing Loans. Upon the terms and subject to the conditions
of this Agreement, the Swing Loan Lender agrees to make, from time to time, from
and including the Closing Date to but excluding the Maturity Date, one or more
Swing Loans to the Borrowers, in an aggregate unpaid principal amount not
exceeding at any time $10,000,000.00, provided however that no Swing Loan shall
be made at any time in an amount in excess of the Available Commitment. Each
Swing Loan shall be in a principal
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amount equal to $500,000.00 or an integral multiple thereof and shall be made
and maintained as a Prime Rate Loan unless a fixed rate shall be agreed upon by
the Swing Loan Lender and Multicare (on behalf of the Borrowers). All Swing
Loans shall be disbursed by the Swing Loan Lender in Dollars in funds
immediately available to Multicare (on behalf of the Borrowers) by crediting an
account of Multicare at the Swing Loan Lender's Office, or in such other manner
as may have been specified in the applicable notice of borrowing and as shall be
acceptable to the Swing Loan Lender.
(b) Funding by Lenders. Not later than 12:00 noon (Philadelphia,
Pennsylvania time) on each requested date for the making of Loans (other than
Swing Loans) each Lender shall make available to the Administrative Agent, in
Dollars in funds immediately available to the Administrative Agent at the office
designated by the Administrative Agent, the Loans to be made by such Lender on
such date, provided however that if a Lender does not receive timely notice from
the Administrative Agent as set forth in paragraph (a) above, such Lender shall
fund the required amount promptly upon receipt of such notice. The obligations
of the Lenders hereunder are several; accordingly, any Lender's failure to make
any Loan to be made by it on the requested date therefor shall not relieve any
other Lender of its obligation to make any Loan to be made by it on such date,
but the latter shall not be liable for the former's failure.
(c) Permitted Assumption as to Funding. Unless the Administrative
Agent shall have received notice from a Lender prior to 11:00 a.m.
(Philadelphia, Pennsylvania time) on the requested date for the making of any
Loan (other than a Swing Loan) that such Lender will not make available to the
Administrative Agent the Loan requested to be made by it on such date, the
Administrative Agent may assume that such Lender has made such Loan available.
The Administrative Agent in its sole discretion and in reliance upon such
assumption, may make available to the Borrowers on the requested date a
corresponding amount on behalf of such Lender. If and to the extent such Lender
shall not have made available to the Administrative Agent the Loans requested to
be made by such Lender on such date and the Administrative Agent shall have so
made available to the Borrowers a corresponding amount on behalf of such Lender,
(i) such Lender shall, on demand, pay to the Administrative Agent such
corresponding amount together with interest thereon, for each day from the date
such amount shall have been so made available by the Administrative Agent to the
Borrowers until the date such amount shall have been paid in full to the
Administrative Agent, at the Federal Funds Rate until (and including) the third
Business Day after demand is made and thereafter at the Prime Rate, and (ii) the
Administrative Agent shall be entitled to all interest payable by Borrowers on
such amount for the period commencing on the date such amount was advanced by
the Administrative Agent to but not including the date on which such amount is
received by the Administrative Agent from such Lender. Moreover, any Lender that
shall have failed to make available the required amount shall not be entitled to
vote on such matters as Lenders or Required Lenders are otherwise entitled to
vote on or consent to or approve under this Agreement and the other Loan
Documents until such amount with interest is paid in full to the Administrative
Agent by such Lender. Without limiting any obligations of any Lender pursuant to
this paragraph
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(c), if such Lender does not pay such corresponding amount promptly upon the
Administrative Agent's demand therefor, the Administrative Agent shall notify
Multicare (on behalf of the Borrowers) and the Borrowers shall promptly repay
such corresponding amount to the Administrative Agent together with accrued
interest thereon at the applicable rate or rates on such Loans.
(d) Disbursements of Funds to Borrowers. All amounts made available
to the Administrative Agent in accordance with paragraph (b) above shall be
disbursed by the Administrative Agent promptly but in any event not later than
4:00 p.m. (Philadelphia, Pennsylvania time) on the requested date therefor in
Dollars, in funds immediately available to the Borrowers by crediting such
amount to an account of Multicare at the Administrative Agent's office or in
such other manner as may be agreed to by Multicare and the Administrative Agent.
(e) Special Provisions Respecting Swing Loans.
(i) Request for Borrowing. Multicare (on behalf of the
Borrowers) shall give the Swing Loan Lender notice (which shall be irrevocable)
of a request for a Swing Loan (with a copy to the Administrative Agent) no later
than 12:00 noon (Philadelphia, Pennsylvania time) on the day such Loan is
requested; if such notice is received later than 12:00 noon (Philadelphia,
Pennsylvania time), then the request shall be deemed to be a request for a Swing
Loan to be made on the next Business Day. The Swing Loan Lender shall provide
prompt notice to the Administrative Agent of the making of any Swing Loans to
the Borrowers.
(ii) Participation by Lenders. Upon demand made to all of the
Lenders by the Swing Loan Lender, which demand may be made before or after a
Default (including a Default arising under Section 7.1(m) (Bankruptcy, Etc.)),
and before or after the maturity date of the subject Swing Loans but subject to
the provisions of paragraph (iv) below, each Lender (other than the Swing Loan
Lender) shall promptly, irrevocably and unconditionally purchase from the Swing
Loan Lender, without recourse or warranty, an undivided interest and
participation in the Swing Loans then outstanding. Each Lender shall effect such
purchase by paying to the Swing Loan Lender, without reduction or deduction of
any kind, including reductions or deductions for set-off, recoupment or
counterclaim, in Dollars immediately available to the Swing Loan Lender at the
Swing Loan Lender's office, an amount equal to such Lender's pro rata share of
the principal amount of all Swing Loans then outstanding. Each Lender's pro rata
share of the Swing Loans shall be based on the amount of such Lender's pro rata
share of the total Commitment. Thereafter, the Lenders' respective interests in
such Swing Loans, and the remaining interest of the Swing Loan Lender in such
Swing Loans, shall in all respects be treated as Loans under this Agreement,
except that subject to Section 1.8(c) (Default Rate) such Swing Loans shall
continue to bear interest at the rate specified for such Swing Loans until such
Swing Loans are due and payable and such Swing Loans shall be due and payable by
the Borrowers on the dates referred to in Section 1.4(b). If any Lender does not
pay any amount which it is required to
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pay promptly upon the Swing Loan Lender's demand therefor, (i) the Swing Loan
Lender shall be entitled to recover such amount on demand from such Lender,
together with interest thereon, at the Federal Funds Rate for the first three
Business Days, and thereafter at the Prime Rate, for each day from the date of
such demand, if made prior to 2:00 p.m. (Philadelphia, Pennsylvania time) on any
Business Day, or, if made at any later time, from the next Business Day
following the date of such demand, until the date such amount is paid in full to
the Swing Loan Lender by such Lender and (ii) the Swing Loan Lender shall be
entitled to all interest payable by the Borrowers on such amount until the date
on which such amount is received by the Swing Loan Lender from such Lender.
Moreover, any Lender that shall fail to make available the required amount shall
not be entitled to vote on or consent to or approve any matter under this
Agreement and the other Loan Documents until such amount with interest is paid
in full to the Swing Loan Lender by such Lender. Without limiting any
obligations of any Lender pursuant to this paragraph (ii), if such Lender does
not pay such corresponding amount promptly upon the Swing Loan Lender's demand
therefor, the Swing Loan Lender shall notify Multicare (on behalf of the
Borrowers) and the Borrowers shall promptly repay such corresponding amount to
the Swing Loan Lender together with accrued interest thereon at the applicable
rate on such Swing Loans.
(iii) No Set-off, Etc. Subject only to the limitations set
forth in the following paragraph (iv), the obligations of each Lender to make
available to the Swing Loan Lender the amounts set forth in the preceding
paragraph (ii) shall be absolute, unconditional and irrevocable under any and
all circumstances without reduction for any set-off or counterclaim of any
nature whatsoever and may not be terminated, suspended or delayed for any reason
whatsoever, shall not be subject to qualification or exception and shall be made
in accordance with the terms of this Agreement.
(iv) Certain Limitations. No Lender shall be obligated to
purchase a participation in any Swing Loan if such Lender proves that (A) the
Swing Loan Lender did not in good faith believe that the conditions specified in
clauses (i), (iii), and (iv) of Section 2.2(a) were satisfied at the time such
Swing Loan was made (unless such condition was waived in accordance with the
terms of this Agreement) or (B) such Lender had actual knowledge that any such
condition had not been satisfied and notified the Swing Loan Lender in a writing
received by the Swing Loan Lender at least one Business Day prior to the time
that it made such Swing Loan that the Swing Loan Lender was not authorized to
make such Swing Loan and stating with specificity the reason therefor.
1.4 REPAYMENT AND MANDATORY PREPAYMENTS.
(a) RC Loans. The aggregate outstanding principal amount of the RC
Loans shall mature and become due and payable, and shall be repaid by the
Borrowers, on the earlier of (i) the date 120 days after the Closing Date or
(ii) the date on which the Merger becomes effective (the earlier of such dates
being the "Maturity Date").
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(b) Swing Loans. The Borrowers shall repay each Swing Loan no later
than 3:00 p.m. (Philadelphia, Pennsylvania time) on the date specified in the
notice of borrowing delivered under Section 1.3(e) (which shall be a date not
later than the earlier of (A) the fifth Business Day after the date on which
such Swing Loan is to be made and (B) the Maturity Date). The Swing Loan Lender
shall provide prompt notice to the Administrative Agent of any repayment of
Swing Loans by the Borrowers.
(c) Letters of Credit. The Borrowers shall reimburse the Issuer,
through the Administrative Agent, for each Drawing under a Letter of Credit on
the date determined with respect to such Drawing in the manner set forth in
Article 1A below. In addition, the Borrowers shall fund the cash collateral
account securing the Letter of Credit obligations in the manner set forth in
Article 1A below.
(d) Mandatory Prepayments. (i) In the event there occurs a
disposition of assets which would otherwise result in a mandatory prepayment
under the 1997 Subordinated Notes to the extent the Borrowers are not otherwise
required to make a mandatory prepayment hereunder, the Borrowers shall be
required to make a mandatory prepayment hereunder in an amount and at a time not
later than is necessary to avoid any prepayment under the 1997 Subordinated
Notes or the 1997 Subordinated Note Indenture.
(ii) At any time that the Commitment is reduced pursuant to
Section 1.7 (Reductions of Commitment) to an amount less than the amount of the
outstanding Loans, the Borrowers shall prepay the Loans in an amount equal to
such excess amount.
1.5 VOLUNTARY PREPAYMENTS.
(a) Optional Prepayments. The Borrowers may, at any time and from
time to time, prepay the Loans in whole or in part, without premium or penalty,
except that any optional partial prepayment (other than a prepayment of all
outstanding Loans) shall be in an aggregate principal amount of $5,000,000.00 or
any integral multiple of $1,000,000.00 in excess thereof except that a Swing
Loan (prior to the time that the Swing Loan Lender makes a demand under Section
1.3(e)(ii)) may be prepaid in an aggregate principal amount of $500,000.00 or
any integral multiple thereof. Amounts to be so prepaid shall irrevocably be due
and payable on the date specified in the applicable notice of prepayment
delivered pursuant to paragraph (b) of this Section 1.5 together with interest
thereon as provided in Section 1.8 (Interest).
(b) Application and Timing of Voluntary Prepayments.
(i) Notice. Subject to the provisions of the last sentence of
this paragraph (i), the Borrowers shall give the Administrative Agent notice of
each prepayment of Loans, no later than 11:00 a.m. (Philadelphia, Pennsylvania
time) three (3) Business Days before the date of such prepayment. Each such
notice of prepayment shall be in the form of Exhibit C hereto and shall specify
the date and amount of such prepayment. Upon receipt of
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any such notice, the Administrative Agent shall promptly notify each Lender of
the contents thereof. Notwithstanding the foregoing, if the Borrowers wish to
make a prepayment of Swing Loans only, they may prepay such Swing Loans by
giving the Swing Loan Lender and the Administrative Agent written notice no
later than 12:00 noon (Philadelphia time) one Business Day prior to the date of
such prepayment or as otherwise agreed to by Multicare (on behalf of the
Borrowers) and the Swing Loan Lender.
(ii) Timing and Application of Voluntary Prepayments. Any
voluntary prepayments pursuant to paragraph (a) of this Section 1.5 shall be
applied in the following order:
(1) First, prepayments shall be applied against the
principal of the Loans.
(2) Second, prepayments shall be applied to any other
amounts owing under, or in respect of, the Loan Documents or
deposited in the Letter of Credit cash collateral account if
required under Article 1A below and, if all such Loan
Obligations have been paid in full and the amount of
outstanding Letters of Credit is less than the sum of the
amount in the cash collateral account (as required) and the
Available Commitment, then any excess amount shall be returned
to Multicare (on behalf of the Borrowers) or as otherwise
required by applicable Law.
(c) Certain Provisions Respecting Prepayments Generally. Prepayments
shall be subject to the interest payment provisions, as applicable, set forth in
Section 1.8 below.
1.6 PAYMENTS BY THE BORROWERS IN GENERAL.
(a) Time, Place and Manner. All payments due to the Administrative
Agent under the Loan Documents shall be made to the Administrative Agent at the
office designated by the Administrative Agent on the signature pages hereto or
to such other Person or at such other address as the Administrative Agent may
designate by written notice to Multicare on behalf of the Borrowers. Except as
otherwise set forth in this Agreement, a payment shall not be deemed to have
been made on any day unless such payment has been received by the required
Person, at the required place of payment, in Dollars in funds immediately
available to such Person, no later than 1:00 p.m. (Philadelphia, Pennsylvania
time) on such day; provided, however, that the failure of the Borrowers to make
any such payment by such time shall not constitute a Default hereunder so long
as such payment is received no later than 3:00 p.m. (Philadelphia, Pennsylvania
time) on such day, but any such payment received later than 1:00 p.m.
(Philadelphia, Pennsylvania time) on such day shall be deemed to have been made
on the next Business Day for the purpose of calculating interest on the amount
paid, provided further, that any such payment made with the proceeds of
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Loans shall be deemed to have been made on the date of the making of such Loans,
so long as such proceeds are immediately so applied and are not otherwise
disbursed to the Borrowers.
(b) No Reductions. All payments due to the Administrative Agent or
any Lender under this Agreement and the other Loan Documents, shall be made by
the Borrowers without any reduction or deduction whatsoever, including any
reduction or deduction for any charge, set-off, holdback, recoupment or
counterclaim (whether sounding in tort, contract or otherwise).
(c) Authorization to Charge Accounts. The Borrowers hereby authorize
each Lender Party, and each participant and each Affiliate of each Lender Party,
if and to the extent any amount payable by the Borrowers under the Loan
Documents (whether payable to such Person or to any other Lender Party) is not
otherwise paid when due, to charge such amount against any or all of the demand
deposit or other accounts of any Borrower with such Person (whether maintained
at a branch or office located within or without the United States), with the
Borrowers remaining jointly and severally liable for any deficiency. The Person
so charging any such account shall give the relevant Borrower prompt notice
thereof, but any failure to give or delay in giving such notice shall not affect
such Person's right to effect such charge.
(d) Extension of Payment Dates if Not a Business Day. Whenever any
payment to the Administrative Agent or any Lender under the Loan Documents would
otherwise be due (except by reason of acceleration) on a day that is not a
Business Day, such payment shall instead be due on the next succeeding Business
Day. If the due date for any payment under the Loan Documents is extended
(whether by operation of any Loan Document, applicable Law or otherwise), such
payment shall bear interest for such extended time at the rate of interest
applicable hereunder.
(e) Disbursement of Payments to Lenders. The Administrative Agent
shall promptly distribute to each of the applicable Lender Parties its ratable
share of each payment received by the Administrative Agent under the Loan
Documents for the account of such Lender Party by crediting an account of such
Lender Party at the Administrative Agent's office or by wire transfer to an
account of such Lender Party at an office of any other commercial bank located
in the United States or at any Federal Reserve Bank designated by such Person.
Unless the Administrative Agent shall have received notice from Multicare (on
behalf of the Borrowers) prior to the date on which any payment is due to any
Lender Parties under the Loan Documents that the Borrowers will not make such
payment in full, the Administrative Agent may assume that the Borrowers have
made such payment in full to the Administrative Agent on such date and the
Administrative Agent in its sole discretion may, in reliance upon such
assumption, cause to be distributed to each applicable Lender Party on such due
date a corresponding amount with respect to the amount then due to such Person.
If and to the extent that the Borrowers shall not have so made such payment in
full to the Administrative Agent and the Administrative Agent shall have so
distributed to such Lender
-8-
Party or Lender Parties a corresponding amount, such Lender Party or Lender
Parties shall, on demand, repay to the Administrative Agent the amount so
distributed together with interest thereon, for each day from the date such
amount is distributed to such Lender Party until the date the such Person repays
such amount to the Administrative Agent, at the Federal Funds Rate until (and
including) the third Business Day after demand is made and thereafter at the
Prime Rate. Moreover, any Lender Party that shall have failed to make available
the required amount shall not be entitled to vote on such matters as the Lenders
or Required Lenders are otherwise entitled to vote on or consent to or approve
under this Agreement and the other Loan Documents until such amount with
interest is paid in full to the Administrative Agent by such Lender Party.
Nothing in this Section 1.6 shall relieve the Borrowers from any payment
obligations.
1.7 REDUCTIONS OF COMMITMENT.
(a) Optional Reductions. The Borrowers may reduce the Commitment by
giving the Administrative Agent notice (which shall be irrevocable) thereof no
later than 11:00 a.m. (Philadelphia, Pennsylvania, time) on the third Business
Day before the requested date of such reduction, provided, that each partial
reduction thereof shall be in an amount equal to $10,000,000.00 or any integral
multiple of $5,000,000.00 in excess thereof and, provided, further, that no
reduction shall reduce the Commitment to an amount less than the aggregate of
the principal amount of all Loans outstanding on such date (after giving effect
to any repayment or prepayment of Loans made on or prior to such date). Upon
receipt of any such notice, the Administrative Agent shall promptly notify each
Lender of the contents thereof and the amount (based on a pro rata reduction to
each Lender's Commitment) to which such Lender's Commitment is to be reduced.
(b) Automatic Mandatory Reductions. At the time of any mandatory
prepayment of Loans pursuant to Section 1.4, the Commitment shall be reduced to
the extent required by said Section 1.4, except that only the first $50,000,000
of the Net Cash Proceeds received in connection with the disposition of the
assets mentioned in Section 6.5(e) hereof shall reduce the Commitment.
(c) No Reinstatement of Commitment. All reductions of the Commitment
are permanent and the Commitment cannot be restored without the written consent
of all Lenders.
1.8 INTEREST.
(a) Interest Rate in General. Subject to the terms and conditions of
this Agreement, the Loans shall bear interest on the outstanding principal
amount thereof until paid in full at a rate per annum equal to 1.5 percentage
points in excess of the Prime Rate as
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in effect from time to time except that Swing Loans shall bear interest at the
prime Rate with no margins.
(b) Interest Payment Dates. Except for Swing Loans on which interest
is payable when each such Loan is due, interest shall be payable quarterly in
arrears on each Quarterly Payment Date, and (ii) when the Loans shall be due
(whether at maturity, by reason of notice of prepayment or acceleration or
otherwise), but only to the extent then accrued on the amount then so due.
Interest at the Default Rate shall be payable on demand.
(c) Default Rate. At any time that an Event of Default shall have
occurred and shall be continuing, any amount payable hereunder and under each
other Loan Document shall bear interest (whether before or after judgment),
payable on demand, at a rate per annum equal to the applicable Default Rate.
1.9 FEES.
(a) Commitment Fees. The Borrowers shall pay to the Administrative
Agent, for the account of each Lender, a commitment fee on the daily unused
amount of such Lender's Commitment for each day from and including the Agreement
Date to but excluding the Maturity Date at the rate of .50% per annum, payable
in arrears (i) on each Quarterly Payment Date, and (ii) on the Maturity Date.
(b) Letter of Credit Fees. The Borrowers shall pay to the
Administrative Agent, for the respective accounts of the RC Lenders, a letter of
credit commission on the daily aggregate amount of the Contingent Reimbursement
Obligations under each Letter of Credit at a rate per annum equal to the
Applicable Margin that would be applicable to RC Loans that are LIBO Rate Loans
at such time. In addition, the Borrowers shall pay to the Administrative Agent,
for the sole account of the Issuer, a Letter of Credit fronting fee on the daily
aggregate amount of the Contingent Reimbursement Obligations under each Letter
of Credit at a rate per annum equal to .10%. Such fees shall be payable in
arrears on successive Quarterly Payment Dates and at the expiration or other
termination of each Letter of Credit. In addition, the Borrowers shall pay to
the Administrative Agent, for the benefit of the Issuer, the Issuer's standard
posted charges for such matters as opening, negotiation and transfer.
(c) Other Fees. The Borrowers shall pay to the Administrative Agent
for the respective accounts of the Administrative Agent, the Lenders and/or the
other Agents, as the case may be, such other fees as have been or may be agreed
to by the Borrowers, by Genesis, or by Acquisition Corp. in connection with the
commitment to enter into this Agreement (including any facility fees referred to
in any commitment letters) and the transactions contemplated by this Agreement.
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1.10 COMPUTATION OF INTEREST AND FEES. Interest calculated on the basis of
the Federal Funds Rate shall be computed on the basis of a year of 360 days and
paid for the actual number of days elapsed. Commitment fees, letter of credit
fees and interest calculated on the basis of the Prime Rate shall be computed on
the basis of a year of 365 or 366 days, as applicable, and paid for the actual
number of days elapsed. Interest, commitment fees and letter of credit fees for
any period shall be calculated from and including the first day thereof to but
excluding the last day thereof.
1.11 PROMISSORY NOTES; RECORDS OF ACCOUNT. Each Lender's Loans and the
Borrowers' joint and several obligations to repay such Loans with interest in
accordance with the terms of this Agreement shall be evidenced by this
Agreement, the records of the Administrative Agent and such Lender and a single
Note payable to the order of such Lender except that the Swing Loans and the
Borrowers' joint and several obligations to repay such Loans shall be evidenced
by a single Swing Loan Note payable to the order of the Swing Loan Lender. Each
Lender's participation in Letters of Credit shall be evidenced by this
Agreement, the records of such Lender and the Issuer and the Letters of Credit.
The amount of each Lender's Commitment and the amount of outstanding Loan
Obligations shall at all times be ascertained from the records of the
Administrative Agent, which shall be conclusive absent manifest error and the
outstanding amount of any Swing Loans and the amount of unpaid interest thereon
shall at all times be ascertained from the records of the Swing Loan Lender,
which shall be conclusive absent manifest error.
1.12 PRO RATA TREATMENT. Except to the extent otherwise provided herein,
the Loans shall be made by, and principal, interest and fees in respect thereof
shall be paid or repaid to, the Lenders pro rata in accordance with their
respective Commitments. Each participation of obligations in respect to Letters
of Credit shall be allocated among, and each reimbursement for Drawings under
Letters of Credit or letter of credit commissions shall be made for the account
of, the Lenders pro rata in accordance with their respective amounts of
Commitments.
1.13 TAXES ON PAYMENTS.
(a) Taxes Payable by the Borrowers. If any Tax is required to be
withheld or deducted from, or is otherwise payable by the Borrowers in
connection with, any payment due to the Administrative Agent, the Issuer or any
Lender that is not a "United States Person" (as such term is defined in Section
7701(a)(30) of the Code), the Borrowers (i) shall, if required, withhold or
deduct the amount of such Tax from such payment and, in any case, pay such Tax
to the appropriate taxing authority in accordance with applicable Law and (ii)
except in the case of any Bank Tax, shall pay to the Issuer, such Lender or the
Administrative Agent such additional amounts as may be necessary so that the net
amount received by such Person with respect to such payment, after withholding
or deducting all Taxes required to be withheld or deducted, is equal to the full
amount payable hereunder. If any Tax is withheld or deducted from, or is
otherwise payable by the Borrowers in
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connection with, any payment due to the Issuer, any Lender or the Administrative
Agent hereunder, the Borrowers shall furnish to such Person the original or a
certified copy of a receipt (if any) for such Tax from the applicable taxing
authority or other evidence of payment thereof satisfactory to such Person
within 30 days after the date of such payment (or, if such receipt shall not
have been made available by such taxing authority within such time, the
Borrowers shall use reasonable efforts to promptly obtain and furnish such
receipt). If the Borrowers fail to pay any such Taxes when due to the
appropriate taxing authority or fail to remit to the Issuer any Lender or the
Administrative Agent the required receipts or other evidence of payment thereof
satisfactory to such Person, the Borrowers shall indemnify such person for any
Taxes, interest, penalties or additions to Tax that may become payable such
Person as a result of any such failure.
(b) Taxes Payable by the Issuer, any Lender or the Administrative
Agent. The Borrowers shall, promptly upon request by the Issuer, any Lender or
the Administrative Agent that is not a United States Person, pay to such Person
an amount equal to (i) all Taxes (other than Bank Taxes and without duplication
of amounts paid pursuant to the preceding paragraph (a)) payable by such Person
with respect to any payment due to such Person hereunder and (ii) all Taxes
(other than Bank Taxes) payable by such Person as a result of payments made by
the Borrowers (whether made to a taxing authority or to such Person pursuant to
the preceding paragraph (a) or this paragraph (b)).
(c) Credits and Deductions. If any Lender or the Administrative
Agent is, in its sole opinion, able to apply for any refund, offset, credit,
deduction or other reduction in Taxes by reason of any payment made by the
Borrowers under the preceding paragraph (a) or (b), such Lender or the
Administrative Agent, as the case may be, shall use reasonable efforts to obtain
such refund, offset, credit, deduction or other reduction and, upon receipt
thereof, will pay to the Borrowers such amount, not exceeding the increased
amount paid by the Borrowers, as is equal to the net after-tax value to such
Lender or the Administrative Agent, in its sole opinion, of such part of such
refund, offset, credit, deduction or other reduction as it considers to be
allocable to such payment by the Borrowers, having regard to all of such
Person's dealings giving rise to similar refunds, offsets, credits, deductions
or other reductions in relation to the same tax period and to the cost of
obtaining the same; provided, however, that if such Person has made a payment to
the Borrowers pursuant to this paragraph (c) and the applicable refund, offset,
credit, deduction or other reduction in Tax is subsequently disallowed, the
Borrowers shall, promptly upon request by the Issuer, the Administrative Agent
or such Lender refund to such Person that portion of such payment determined by
such Person, in its sole opinion, relating to such disallowance; and provided,
further that (i) the Administrative Agent or such Lender, as the case may be,
shall not be obligated to disclose to the Borrowers any information regarding
its Tax affairs or computations and (ii) nothing in this paragraph (c) shall
interfere with the right of such Person to arrange its Tax affairs as it deems
appropriate.
(d) Exemption from U.S. Withholding Taxes. Each Lender that is not a
United States Person shall submit to the Borrowers and the Administrative Agent,
on or
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before the fifth day prior to the first Quarterly Payment Date occurring after
the Closing Date (or, in the case of a Person that is not a United States Person
and that became a Lender by assignment, promptly upon such assignment), two duly
completed and signed copies of either (A) Form 1001 of the United States
Internal Revenue Service entitling such Lender to a complete exemption from
withholding on all amounts to be received by such Lender pursuant to this
Agreement and the Loans or (B) Form 4224 of the United States Internal Revenue
Service relating to all amounts to be received by such Lender pursuant to this
Agreement and the Loans or (C) in the case of a Lender Party that is claiming an
exemption from United States withholding tax under Section 871(h) or 881(c) of
the Internal Revenue Code with respect to payments of "portfolio interest" two
accurate and complete signed original Forms W-8 (or any successor form
prescribed by the Internal Revenue Service, certifying that such Lender Party is
exempt from or is entitled to a reduced rate of United States withholding tax on
payments under this Agreement or the Notes) and, if such Lender Party delivers
such Forms W-8 (or successor form), two signed certificates that such Lender
Party is not (1) a "bank" for purposes of Section 881(c) of the Internal Revenue
Code, (2) is not a 10% shareholder (within the meaning of Section 871(h)(3)(B)
of the Internal Revenue Code) of the Borrower and (3) is not a controlled
foreign corporation related to the Borrower (within the meaning of Section
864(d)(4) of the Internal Revenue Code), as appropriate. Each such Lender shall,
from time to time after submitting either such Form, submit to the Borrowers and
the Administrative Agent such additional duly completed and signed copies of one
or the other such Forms (or any successor forms as shall be adopted from time to
time by the relevant United States taxing authorities) as may be (A) requested
in writing by the Borrowers or the Administrative Agent and (B) appropriate
under the circumstances and under then current United States law or regulations
to avoid or reduce United States withholding taxes on payments in respect of all
amounts to be received by such Lender pursuant to this Agreement or the Loans.
Upon the request of the Borrowers or the Administrative Agent, each Lender that
is a United States Person shall submit to the Borrowers and the Administrative
Agent a certificate to the effect that it is a United States Person.
1.14 CAPITAL AND RESERVE REQUIREMENTS. If, in the determination of any
Lender, such Lender or any Affiliate thereof is required, under applicable Law
(including Regulation D), interpretations, directives, requests and governmental
or regulatory guidelines (whether or not having the force of law), to maintain
capital or deposit any reserve on account of any Loan or any commitment to make
any Loan, then, upon request by such Lender, the Borrowers shall pay to such
Lender such additional amounts as such Person determines will fully compensate
it for any reduction in the rate of return on the capital that such Lender or
such Affiliate is so required to maintain. Such additional amounts shall be
payable, in the case of those applicable to prior periods, within 15 Business
Days after request by such Lender for such payment accompanied by the
certificate described below and, in the case of those relating to future
periods, on the dates specified, or determined in accordance with the method
specified, by such Lender.
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In making the determinations contemplated by this Section 1.14, each
Lender and the Issuer shall make such estimates, assumptions, allocations and
the like that such Person is good faith determines to be appropriate, and such
Person's selection thereof in accordance with this Section 1.14, and the
determinations made by such Person on the basis thereof, shall be final, binding
and conclusive upon the Borrowers, except, the case of such determinations, for
manifest errors. Each Lender and the Issuer shall furnish to the Borrowers, at
the time of any request for compensation under Section 1.14, a certificate
outlining in reasonable detail the computation of any amounts claimed by it
under this Section 1.14 and the assumptions underlying such computations, which
shall include a statement of an officer of such Lender certifying that such
request for compensation is being made pursuant to a policy adopted by such
Lender to seek such compensation generally from customers similar to the
Borrowers and having similar provisions in agreements with such Lender.
1.15 CHANGE OF LENDING OFFICE. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of Section 1.13 (Taxes on
Payments) or Section 1.14 (Capital and Reserve Requirements), with respect to
such Lender, it will, if requested by the Borrowers, use reasonable efforts
(subject to overall policy considerations of such Lender) to designate another
lending office for any Loans affected by such event, provided that such
designation is made on such terms that the such Lender and its lending office
suffer no material economic, legal or regulatory disadvantage, with the object
of avoiding the consequence of the event giving rise to the operations of any
such Section. Nothing in this Section 1.15 shall affect or postpone any of the
obligations of the Borrowers or the right of any Lender provided in Section 1.13
(Taxes on Payments) or Section 1.14 (Capital and Reserve Requirements).
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ARTICLE 1A
LETTERS OF CREDIT
1A.1 ISSUANCE OF LETTERS OF CREDIT.
(a) In General. Upon the terms and subject to the conditions of this
Agreement, the Issuer shall, from time to time, from the Closing Date to the
date which is 90 days prior to the Maturity Date, issue one or more Letters of
Credit for the account of any Borrower, provided that (i) the sum of the
Contingent Reimbursement Obligations (after giving effect to the requested
Letter of Credit) plus the aggregate unpaid amount of all Drawings under Letters
of Credit shall not exceed $5,000,000.00 and provided, further, that the face
amount of the Letter of Credit so requested shall not exceed the Available
Commitment at such time. Each Letter of Credit shall be in a form and shall
contain such terms as shall be reasonably satisfactory to the Issuer. Letters of
Credit shall be issued only on a Business Day, and shall be used for the general
corporate purposes of the Borrowers or for such other purposes as shall be
acceptable to the Issuer in its sole discretion.
(b) Terms. Each Letter of Credit shall be denominated only in
Dollars and shall expire on or before the first anniversary of the issuance
thereof and in any event not later than the fifth Business Day preceding the
Maturity Date. No Letter of Credit shall have an expiration date which is
extendable under an "evergreen" or similar provision unless the Issuer expressly
agrees to the same in its sole discretion in any particular case. All other
extensions and renewals are also at the sole discretion of the Issuer. Any
extension of the expiry date of a Letter of Credit to a date beyond the first
anniversary of the issuance thereof shall constitute an "issuance" of such
Letter of Credit for all purposes hereof.
(c) Form of Request. The Borrowers shall request the issuance of a
Letter of Credit by furnishing to the Administrative Agent and the Issuer, at
least five Business Days before the requested date of such issuance (or at such
later time as shall be acceptable to the Issuer), such notice thereof as shall
be reasonably satisfactory to the Issuer to which shall be attached a
certificate of the chief financial officer or other Responsible Officer of
Multicare representing that Multicare is, and after giving effect to the
additional Indebtedness will be, in compliance with Section 4.03 of the 1997
Subordinated Note Indenture, that the obligations with respect to such Letter of
Credit constitute "Senior Indebtedness" and "Designated Senior Indebtedness" as
defined in the 1997 Subordinated Note Indenture, and as to such other matters as
required by Section 2.2 below.
(d) Participation by Lenders. Upon the date of issuance of a Letter
of Credit, the Issuer shall be deemed to have granted to each Lender (other than
the Issuer), and each Lender (other than the Issuer) shall be deemed to have
acquired from the Issuer without further action by any party hereto, a
participation in such Letter of Credit and any Drawings
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that may at any time be made thereunder, to the extent of such Lender's pro rata
share of the Commitment.
(e) Notice of Drawings. The Issuer shall promptly notify Multicare
(on behalf of the Borrowers) of its receipt of each Drawing request with respect
to a Letter of Credit, stating the date and amount of the Drawing requested
thereby and the date and amount of each Drawing disbursed pursuant to such
request. The failure of the Issuer to give, or delay in giving, any such notice
shall not release or diminish the obligations hereunder of the Borrowers in
respect of such Drawing.
(f) Reimbursement of Drawings by Borrowers. If at any time Multicare
(on the behalf of the Borrowers) receives notice of a Drawing, the Borrowers
shall reimburse such Drawing by paying to the Issuer in immediately available
funds the amount of the payment made by the Issuer with respect to such Drawing,
together with interest thereon at a rate per annum equal to the Prime Rate from
the day that the Drawing is made until the day such reimbursement is made if
such Drawing is not reimbursed on the day the Drawing is made. Such
reimbursement shall be made by the Borrowers to the Issuer no later than one (1)
Business Day following the date that Multicare (on behalf of Borrowers) receives
the relevant notice of Drawing if such notice is received on or prior to 10:00
a.m. (Philadelphia, Pennsylvania time) and no later than two (2) Business Days
following the date that Multicare receives the relevant notice of Drawing if
such notice is received after 10:00 a.m. (Philadelphia, Pennsylvania time). If
the Borrowers shall fail to make any payment required by this paragraph (f) at
the time specified, and if at such time, there shall be any Available RC
Commitment, the Administrative Agent may (but is not obligated to) assume that
the Borrowers intend to use the proceeds of RC Loans to make such payment. In
reliance on such assumption, the Administrative Agent may (but is not obligated
to) notify the Lenders (and Multicare (on behalf of the Borrowers)) that
notwithstanding the Borrowers' failure to provide notice pursuant to Section 1.3
above, such notice is deemed given pursuant to this paragraph (f) requesting an
RC Loan in an amount sufficient to make the payments required by this paragraph
(f). Such notice from the Administrative Agent shall be treated by the Lenders
in the same manner as a notice from the Borrowers under Section 1.3 above. The
Administrative Agent may, at the direction of the Issuer, apply the proceeds of
such Loans to satisfy the requirements of this paragraph (f).
(g) Obligations of Lenders to Issuer. In the event that the
Borrowers shall fail to make any payment when due pursuant to the preceding
paragraph (f) and for so long as such failure shall be continuing, the Issuer
may give notice of such failure to the Administrative Agent and each Lender,
which notice shall include, in the case of an Lender, the amount of such
Lender's interest in such Drawing, whereupon each such Lender (other than the
Issuer) shall promptly remit such amount to the Administrative Agent for the
account of the Issuer as provided in this paragraph (g). Each Lender (other than
the Issuer) shall, in the event it receives such notice from the Issuer at or
before 12:00 noon (Philadelphia, Pennsylvania time) on any Business Day, fund
its participation in any unreimbursed Drawing by remitting to the Administrative
Agent, no later than 2:00 p.m.
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(Philadelphia, Pennsylvania time) on such day, in immediately available funds
its share of the reimbursement obligations in respect of each Drawing. In the
event that the Administrative Agent receives such funds from an Lender at or
before 2:00 p.m. (Philadelphia, Pennsylvania time) on any day, the
Administrative Agent shall make available the amount thereof to the Issuer, in
immediately available funds no later than 4:00 p.m. (Philadelphia, Pennsylvania
time) on that same day. Any amount payable by an Lender to the Administrative
Agent for the account of the Issuer under this paragraph (g), and any amount
payable by the Administrative Agent to the Issuer under this paragraph (g),
shall bear interest for each day from the date due (and including such day if
paid after 2:00 p.m. (Philadelphia, Pennsylvania time) in the case of any such
payment by a Lender to the Administrative Agent, or 4:00 p.m. (Philadelphia,
Pennsylvania time), in the case of any such payment by the Administrative Agent
to the Issuer, on such day) until the date it is received by the Issuer at a
rate equal to the Federal Funds Rate until (and including) the third Business
Day after the date due and thereafter at the Prime Rate. Moreover, any Lender
that shall have failed to make available the required amount shall not be
entitled to vote on such matters as Lenders or Required Lenders are otherwise
entitled to vote on or consent to or approve under this Agreement and the other
Loan Documents until such amount with interest is paid in full to the
Administrative Agent by such Lender. Each Lender shall, upon the demand of the
Issuer, reimburse the Issuer, through the Administrative Agent to the extent
that the Issuer has not been reimbursed by the Borrowers after demand therefor,
for the reasonable costs and expenses (including reasonable legal fees) incurred
by it (other than as a result of its willful misconduct or gross negligence as
finally determined by a court of competent jurisdiction) in connection with the
collection of amounts due under, the administration of, and the preservation and
enforcement of any rights conferred by, the Letters of Credit or the performance
of the Issuer's obligations under this Agreement in respect thereof on a pro
rata basis relative to such Lender's pro rata share of the Commitment (as of the
time such costs and expenses are incurred). The Issuer shall refund through the
Administrative Agent any costs and expenses reimbursed by such Lender that are
subsequently recovered from the Borrowers in an amount equal to such Lender's
ratable share thereof.
(h) Cash Collateral. It is intended that at all times that the
Borrowers shall have contingent or other obligations (including obligations in
respect of fees) relating to Letters of Credit, there shall be sufficient
availability under the Commitment to reimburse the Issuer (and the Lenders) out
of proceeds of RC Loans. Accordingly, in the event that there shall, at any
time, be insufficient availability under the Commitment (after giving effect to
all outstanding Swing Loans and RC Loans) to do so (whether because the amount
of the Commitment is reduced pursuant to a mandatory reduction or is terminated
at maturity, upon acceleration or otherwise or because the amount of outstanding
RC Loans, Swing Loans and such Letter of Credit obligations exceeds the amount
of the Commitment for any other reason), the Borrowers shall forthwith pay to
the Administrative Agent an amount equal to the aggregate face value of all
outstanding Letters of Credit plus the aggregate amount of all unreimbursed
Drawings plus the amount of all fees or other obligations in respect of Letters
of Credit to the extent of such excess. Such amount shall be maintained by the
Administrative Agent in an interest-bearing cash collateral account in the name
of and for the
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benefit of the Issuer and the Lenders to secure such payment obligations of the
Borrowers until such time as all outstanding Letters of Credit have expired or
been cancelled and all amounts in respect thereof have been paid in full. Upon
receipt of a notice from the Issuer that there are unreimbursed Drawings or
other amounts due in respect of such Letters of Credit (which notice shall set
forth the amount of such unreimbursed Drawings or other obligations) the
Administrative Agent shall promptly disburse from the cash collateral account
the amount specified in the notice and shall pay such amount to the Issuer and
Lenders ratably in accordance with the respective amounts owing to each such
Person, first, for fees and indemnities until the same are paid in full and,
second, for unreimbursed Drawings. The Administrative Agent and the Issuer may
rely on their records as to any amounts so owing and shall be fully protected in
doing so. Such records shall be conclusive, absent manifest error. At any time
that the Commitment again becomes available for reimbursement of Drawings under
outstanding Letters of Credit such that (i) the sum of the Commitment at that
time and the amount in the cash collateral account exceeds (ii) the sum of all
outstanding RC Loans and Swing Loans, the face amount of all outstanding Letters
of Credit and the amount of all unreimbursed Drawings, then, upon written
request of Multicare (on behalf of the Borrowers) (which request shall (A)
represent that there exists no Default or Event of Default and (B) specify the
amount of such excess), the Administrative Agent shall release such excess
amount to the Borrowers from the cash collateral account. If all Loan
Obligations (other than Loan Obligations constituting contingent obligations
under indemnification provisions which survive indefinitely, so long as no
unsatisfied claim has been made under any such indemnification provision) have
been indefeasibly paid in full in cash, all Commitments have terminated and all
Letters of Credit have expired, promptly following demand by Multicare (on
behalf of the Borrowers) the Administrative Agent shall release to the Borrowers
all remaining funds in the Letter of Credit cash collateral account.
(i) Obligations Absolute. The obligation of each Borrower and each
Lender to make available to the Issuer the amounts set forth in this Article 1A
shall be absolute, unconditional and irrevocable under any and all circumstances
without reduction for any set-off or counterclaim of any nature whatsoever, and
may not be terminated, suspended or delayed for any reason whatsoever, shall not
be subject to any qualification or exception and shall be made in accordance
with the terms and conditions of this Agreement under all circumstances,
including any of the following circumstances:
(i) any lack of validity or enforceability of this Agreement or any
of the other Loan Documents;
(ii) the existence of any claim, setoff, defense or other right
which any 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, the
Issuer, any Lender or any other Person, whether in connection with this
Agreement, any Letter of Credit, the transactions contemplated herein or
any unrelated transactions (including any
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underlying transaction between such Borrower and the beneficiary named in
any such Letter of Credit);
(iii) any draft, certificate or any other document presented under
any 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 Loan Documents; or
(v) the occurrence of any Default or Event of Default.
(j) Limitations on Liability; Protection of Issuer, Administrative
Agent and Lenders.
(i) Limitation on Liability of Lender Parties. Without
affecting any rights any Lender Party may have under applicable Law, each of the
Borrowers agrees that none of the Lenders, the Issuer, the Administrative Agent
or their respective officers or directors shall be liable or responsible for,
and the obligations of the Borrowers to the Lenders, the Issuer and the
Administrative Agent hereunder shall not in any manner be affected by: (A) the
use that may be made of any Letter of Credit or the proceeds thereof by the
beneficiary thereof or any other Person or any acts or omissions of such
beneficiary or any other Person; (B) the validity, sufficiency or genuineness of
documents presented in connection with any Drawing, or of any endorsements
thereon, even if such documents should, in fact, prove to be in any or all
respects, invalid, insufficient, fraudulent or forged; or (C) any other
circumstances whatsoever in making or failing to make payment under any Letter
of Credit or any other action taken or omitted to be taken by any Person under
or in connection with any Letter of Credit, except that the Borrowers shall have
a claim against the Issuer and the Issuer shall be liable to the Borrowers, in
each case to the extent and only to the extent of any damages suffered by the
Borrowers that they prove are caused by the Issuer's willful misconduct or gross
negligence. In furtherance and not in limitation of the foregoing, in
determining whether to pay under any Letter of Credit, the Issuer shall not have
any obligation relative to the other Lenders other than to determine that any
documents required to be delivered under such Letter of Credit appear to have
been delivered and that they appear to comply on their face with the
requirements of such Letter of Credit, regardless of any notice or information
to the contrary. Any action taken or omitted to be taken by the Issuer under or
in connection with any Letter of Credit (if taken or omitted in the absence of
gross negligence or willful misconduct, as finally determined by a court of
competent jurisdiction) shall not create for the Issuer any resulting liability
to any Borrower or any Lender.
(ii) Indemnification and Expenses. In addition to any other
amounts payable under this Agreement, the Borrowers agree jointly and severally
to protect, indemnify, pay and hold the Issuer and each Lender harmless from and
against any and all
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claims, costs, charges and expenses (including reasonable attorneys' fees) which
the Issuer may incur or be subject to as a consequence, direct or indirect, of
(A) the issuance of, or payment of any drawing under, any Letter of Credit,
other than as a result of the gross negligence or willful misconduct of the
Issuer as finally determined by a court of competent jurisdiction or (B) the
failure of the Issuer to honor a Drawing under any Letter of Credit as a result
of any act or omission of any present or future government or Governmental
Authority.
(iii) Issuer Not Responsible. In furtherance of the foregoing
limitations on liability, the Issuer shall not be responsible for: (A) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the issuance of Letters of Credit; (B)
the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof in whole or in part; (C) errors, omissions,
interruptions, or delays in transmissions or delivery of any messages, by mail,
cable, telecopy, telex or otherwise, whether or not in cipher, except for
damages proven to be caused by the Issuer's gross negligence or willful
misconduct; (D) the misapplication by the beneficiary of any Letter of Credit or
the proceeds of any drawing under such Letter of Credit; or (E) any consequence
arising from causes beyond the control of the Issuer, including any governmental
acts.
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ARTICLE 2
CONDITIONS TO EFFECTIVENESS OF AGREEMENT
AND FUNDINGS
2.1 CONDITIONS TO EFFECTIVENESS OF AGREEMENT AND INITIAL FUNDING. The
effectiveness of this Agreement (other than this Article 2) and the obligation
of the Lenders to make the initial Loans hereunder and the obligation of the
Issuer to issue Letters of Credit hereunder are subject to the fulfillment of
the following conditions on or before October 15, 1997 (unless such date is
extended in writing by the Agents in their sole discretion), in each case to the
satisfaction of the Agents and, to the extent specified below, to the
satisfaction of each Lender (each Lender upon making its initial Loan hereunder
being deemed to have waived or found satisfactory all such conditions so
specified).
(a) Secretary's Certificates. The Borrowers shall have delivered, or
caused to be delivered, a certificate of the Secretary or an Assistant Secretary
(or general partner, as applicable) of each of the Borrowers, Acquisition Corp.
and Genesis ElderCare Corp., with specimen signatures of the authorized
signatories to the Loan Documents, and to which shall be attached copies of the
following, as applicable: articles or certificate of incorporation (each of
which shall be certified as of a recent date by the Secretary of State of the
state of such Borrower's, Acquisition Corp. and Genesis ElderCare Corp.),
certificates of formation (each of which shall be certified as of a recent date
by the Secretary of State of the state of such Person's formation), operating
agreements, management agreements, bylaws, partnership agreements, resolutions
and shareholder agreements.
(b) Good Standing Certificates. The Borrowers shall have delivered,
or caused to be delivered, a good standing or subsistence certificate, as the
case may be, issued as of a recent date with respect to each Borrower (and
corporate or limited liability company or limited partnership, general partners
of Borrowers that are partnerships), Acquisition Corp. and Genesis ElderCare
Corp., (i) issued by the Secretary of State or other appropriate official of the
jurisdiction of formation of such Person and (ii) issued by the Secretary of
State or other appropriate official of each jurisdiction where such Person is
required to qualify to do business and, if any such certificate is dated more
than seven (7) days prior to the Closing Date, a confirmation (which may be
provided by a reputable corporate service) of the information in such
certificate.
(c) The Notes. The Borrowers shall have delivered the Notes to the
Administrative Agent for distribution to the Lenders and the Swing Loan Note to
the Administrative Agent.
(d) Lien Searches. The Borrowers shall have delivered to the
Administrative Agent Uniform Commercial Code, tax, and judgment lien searches of
the Borrowers,
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Acquisition Corp. and Genesis ElderCare Corp. as of a recent date, in such form
and with such content as are acceptable to the Administrative Agent.
(e) Pledge Agreement. The Borrowers shall each have executed and
delivered Pledge Agreements whereby the Administrative Agent shall receive a
pledge and first priority security interest for the benefit of the Lender
Parties in all of the equity interests in each of the direct and indirect
Subsidiaries of Multicare and all inter-Borrower notes (collectively, as such
agreements are amended, modified, restated or supplemented from time to time in
accordance with the terms hereof and thereof, the "Pledge Agreement") in
substantially the form annexed to this Agreement as Exhibit D (together with the
stock certificates, assignment powers, Uniform Commercial Code financing
statements (in proper form for filing in the appropriate offices to perfect the
security interest of the Administrative Agent for the benefit of the Secured
Parties, in the Collateral granted under the Pledge Agreement) and other items
required thereunder to the extent that such items were not previously delivered
to the Administrative Agent).
(f) Multicare Management Agreement. Prior to or substantially
contemporaneously with the initial funding hereunder, GENESIS HEALTH VENTURES,
INC. ("Genesis") (and/or one or more of its Subsidiaries) shall have entered
into a Management Agreement with Genesis ElderCare Corp. (the "Multicare
Management Agreement") under which Genesis (and/or such Subsidiaries) will
provide management services to the Borrowers and its Subsidiaries. As a further
condition, Genesis and Multicare and the Agents shall enter into the Multicare
Management Subordination Agreement.
(g) Transaction Documents. The Borrowers shall have delivered to
each of the Agents and any Lender that so requests, each of the other
Transaction Documents certified by a Responsible Officer of Multicare as being a
true and correct copy of such Transaction Document as in full force and effect
on the Closing Date.
(h) Completion of Tender Offer. Simultaneously with the Closing
hereunder, the Tender Offer shall close with the purchase of at least a majority
of the common stock of Multicare having been purchased for $28 per share and the
other transactions contemplated by the Transaction Documents to have occurred on
or before the Closing Date shall take place in strict compliance with the terms
of said Transaction Documents, subject only to such modifications as are
acceptable to the Agents. There shall be no legal impediment to the merger of
Acquisition Corp. into Multicare under Section 253 or 251, as the case may be,
of the Delaware General Corporation Law on the terms set forth in the Merger
Agreement and the restrictions in Section 203 of the Delaware General
Corporation Law and any other impediment under Delaware law shall be
inapplicable to the acquisition of the shares of Multicare by Acquisition Corp.
and the proposed merger pursuant to the terms of the Merger Agreement.
(i) Multicare Board of Directors. Simultaneously with the Closing
hereunder, Acquisition Corp. shall have the unrestricted right, subject to
ss.14(f) of the
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Securities Exchange Act of 1934, to designate and cause to be elected a majority
of the board of directors of Multicare.
(j) Approval of Merger. The board of directors of Multicare, as
constituted before any change in its composition pursuant to the right described
in paragraph (i) of this Section 2.1, shall have approved the Merger.
(k) Certain Legal Matters. The restrictions of ss.203 of the
Delaware General Corporation Law and any other impediment under the Delaware
General Corporation Law shall be inapplicable to the acquisition of the
Multicare Shares pursuant to the Tender Offer; no legal impediment (under ss.251
or ss.253 of the Delaware General Corporation Law or otherwise) to the Merger
shall exist; and there shall not be pending or threatened any legal or
administrative proceeding seeking to restrain or prevent the consummation of the
Tender Offer, the Merger or any other of the transactions contemplated by this
Agreement or the Transaction Documents or questioning the legality or validity
thereof; and the Tender Offer and other related transactions shall be
consummated in accordance with all applicable Laws.
(l) Maximum Price. The total amount payable by Acquisition Corp. and
the Borrowers, in connection with the Tender Offer and the Merger, including
consulting, noncompetition, severance and other payments to employees of the
Borrowers, and including amounts provided (hereunder or otherwise) to refinance
Indebtedness of the Borrowers, plus the amount of existing Indebtedness of
Multicare not repaid in connection with the Tender Offer and the Merger, shall
not exceed $1,533,000,000.00.
(m) Opinions of Counsel. (i) The Borrowers shall have delivered
favorable opinions of counsel, dated as of the Closing Date, from:
(A) Blank, Rome, Xxxxxxx & XxXxxxxx, counsel to the Borrowers,
as to the absence of conflicts with other financing agreements and other
material agreements of the Borrowers, the status of the Loan Obligations as
"Senior Indebtedness" and "Designated Senior Indebtedness" within the meaning of
the 1997 Subordinated Note Indenture, and compliance with Regulations G, T, U
and X of the Board of Governors of the Federal Reserve System, compliance with
Laws applicable to the Tender Offer, the perfection of security interests under
the Pledge Agreement, issuance of capital stock of the Borrowers, the due
organization of the Borrowers, the due authorization of the transactions
referred to herein, the enforceability of the Loan Documents, certain health
care and licensing compliance issues and such other matters as the Agents may
reasonably request, in form and substance satisfactory to the Agents; and
(B) local counsel to the Borrowers in the States of
Massachusetts, West Virginia, New Jersey, Ohio, Pennsylvania, Wisconsin,
Connecticut, Illinois, Rhode Island, Vermont and Virginia as to certain health
care matters and such other matters as the Agents may reasonably request, in
form and substance satisfactory to the Agents.
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(ii) Drinker Xxxxxx & Xxxxx LLP, special counsel to the
Administrative Agent shall have delivered to the Administrative Agent a
favorable opinion of counsel, dated as of the Closing Date, as to such matters
as the Administrative Agent shall reasonably request.
(n) Solvency Opinion. The Borrowers shall have delivered letters
from their chief financial officers and from a nationally recognized appraisal
firm, valuation consultant or investment banking firm satisfactory to the Agents
in form and substance satisfactory to the Agents, attesting to the solvency of
the Borrowers, taken as a whole, after giving effect to the transactions
referred to herein (including the making of the initial Loans)
(o) Officers Certificate Regarding Senior Subordinated 12-1/2% Notes
and Convertible 7% Subordinated Debentures. Multicare, on behalf of Borrowers
shall have delivered a certificate dated the Closing Date signed by a
Responsible Officer detailing as of the Closing Date the amount of Multicare's
Convertible 7% Subordinated Debentures remaining outstanding and the maximum
amount necessary to redeem and retire all such Debentures by no later than March
16, 1998; and the amount of Multicare's Senior Subordinated 12-1/2% Notes
remaining outstanding and the maximum amount necessary to redeem and retire all
such Notes by no later than January 2, 1998.
(p) Consents and Approvals. All material corporate, governmental,
judicial and third party consents and approvals necessary in connection with
this Agreement and the other Loan Documents, the Tender Offer and the related
transactions (including without limitation consents and approvals required under
or referred to in the Merger Agreement) shall have been obtained and, as
applicable, become final orders (without imposition of any conditions that are
not acceptable to the Lenders) and shall remain in full force and effect and, to
the extent requested by any Agent, copies thereof shall have been delivered to
the Administrative Agent. Without limiting the generality of the foregoing, all
appropriate filings shall have been made under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended, and the applicable waiting periods
relating thereto shall have expired or been terminated without requests for
additional information from the reviewing agencies.
(q) Financial Statements; Projections.
(i) Financial Statements. The Borrowers shall have delivered,
or caused to be delivered, to the Administrative Agent and the
Lenders at least three (3) Business Days prior to the Closing Date
each of the following:
(x) a consolidated income statement of Multicare and its
consolidated Subsidiaries, for the twelve calendar month
period ending on June 30, 1997, adjusted, on a pro forma basis
to the beginning of the period (as required for the financial
covenants) to reflect the consummation of all of the
transactions set forth in the Transaction Documents and all
Acquisitions and dispositions which shall have
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occurred within said twelve month period as if such
transactions, Acquisitions and dispositions had occurred on
the first day of such period, which statement shall be
supplemented by information separating out and explaining all
pro forma adjustments made thereto; and
(y) a consolidated balance sheet of Multicare and its
consolidated Subsidiaries as of June 30, 1997, reflecting, on
a pro forma basis, the consummation of all transactions set
forth in the Transaction Documents including all borrowings in
connection therewith and all borrowings otherwise contemplated
hereunder, the application of all proceeds of such borrowings
and the amount of all outstanding Indebtedness after giving
effect to the foregoing, which balance sheet shall be
supplemented by information separating out and explaining all
pro forma adjustments made thereto;
each of which statements shall be (1) in form acceptable to the Agents, (2)
accompanied by explanatory notes acceptable to the Agents and (3) certified by
the chief financial officer of the Borrowers to fairly present on a pro forma
basis the financial condition and results of operations as at the date, or for
the period, indicated.
(ii) Projections. Multicare on behalf of the Borrowers shall
have delivered to each Lender projections respecting the
consolidated financial condition and results of operations of
Multicare and its Subsidiaries for the period commencing on January
1, 1997 and ending on December 31, 2002, which projections shall be
in reasonable detail, shall reflect the consummation of the
transactions contemplated hereby and the Transaction Documents
including the making of the initial Loans and shall be accompanied
by a written statement of the assumptions and estimates underlying
such projections.
(r) Officer's Compliance Certificate. Multicare on behalf of the
Borrowers shall have delivered an Officer's Compliance Certificate, dated as of
the Closing Date, as to the truth of the representations and warranties herein
and in the other Loan Documents and the absence of any Default (in each case,
both before and after giving effect to the initial Loans). The Officers
Compliance Certificate shall demonstrate that EBITDA of the Borrowers for the
twelve calendar month period ending June 30, 1997 (after making all adjustments
referred to in paragraph Q above) is no less than $118,000,000.00 and Total
Funded Indebtedness of the Borrowers is not more than $760,000,000.00. The
Officers Compliance Certificate delivered pursuant to this paragraph (r) shall
include a reconciliation of the financial information set forth thereon
respecting Multicare and its Restricted Subsidiaries and that set forth on the
financial statements for Multicare and its consolidated subsidiaries.
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(s) Repayment of Predecessor Indebtedness. The Borrowers shall have
delivered to the Administrative Agent evidence that, prior to or substantially
simultaneously with the making of the initial Loans, (a) all Indebtedness of the
Borrowers other than that expressly permitted under Section 6.1 (Indebtedness)
below will be repaid, (b) all commitments to lend in respect of the such
Indebtedness shall have been effectively terminated and (c) all collateral held
in connection therewith shall have been released (or undertakings to release
such collateral upon receipt of specified funds shall have been duly made) and
UCC-3 termination statements and all other documents necessary in the
determination of the Administrative Agent to effectively terminate of record all
security interests related to such Indebtedness shall have been duly executed by
the proper parties and shall have been delivered to the Administrative Agent (or
undertakings to do so upon receipt of specified funds shall have been furnished
to the Administrative Agent).
(t) Insurance. The Borrowers shall have delivered to the
Administrative Agent evidence of the insurance required by Section 4.8 below.
(u) Fees and Expenses. The Borrowers shall have paid the fees
required to be paid to the Agents and the Lenders on or before the Closing Date
and the fees and disbursements of counsel for the Agents in connection with the
negotiation, preparation, execution and delivery of the Loan Documents and the
making of the initial Loans.
(v) Concurrent Closing of Genesis and Acquisition Corp. Credit
Facilities. All conditions to the initial funding under (i) the Third Amended
and Restated Credit Agreement, dated as of the date hereof, among Genesis,
certain of its Subsidiaries, Mellon as administrative agent, and certain other
agents and lenders referred to therein (the "Genesis Credit Agreement") and (ii)
the Credit Agreement, dated as of the date hereof, among Acquisition Corp.,
Mellon as administrative agent, and certain other agents and lenders referred to
therein (the "Acquisition Corp. Credit Agreement") shall have been satisfied.
The closings under those credit facilities shall occur substantially
simultaneously with the closing under this Agreement.
(w) Investment in Genesis ElderCare Corp. and in Acquisition Corp.
Substantially contemporaneously with the initial funding hereunder, Genesis
shall have acquired approximately 44% of the common stock of Genesis ElderCare
Corp. for a cash purchase price of at least $325,000,000.00; Cypress, Nazem and
TPG, collectively, shall have paid at least $420,000,000.00 in cash for the
remainder of the common stock of Genesis ElderCare Corp.; substantially
contemporaneously with the initial funding hereunder, Genesis ElderCare Corp.
shall have contributed at least $745,000,000.00 to Acquisition Corp. in exchange
for common stock of the Acquisition Corp.; and the Acquisition Corp.
shall be wholly owned by Genesis ElderCare Corp.
(x) 1997 Subordinated Note Indenture. The 1997 Subordinated Note
Indenture with terms and conditions satisfactory to the Agents in their sole
discretion, shall have been executed by the parties thereto, and Acquisition
Corp. shall have received at least
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$250,000,000.00 in gross proceeds from the sale of the 1997 Subordinated Note
and the net proceeds from such issuance shall have been released to Acquisition
Corp. from the escrow in which they were deposited.
(y) Tax Sharing Agreement. The Borrowers shall have delivered a copy
of the Tax Sharing Agreement duly executed by the Borrowers and Genesis
ElderCare Corp. and the Excluded Subsidiaries (the "Tax Sharing Agreement"),
limiting, as between the parties thereto, the tax liabilities of the Borrowers
in connection with a consolidated tax filing (which may include as part of the
consolidated group for tax purposes the Borrowers and the Excluded
Subsidiaries), to the amount of tax liabilities that the Borrowers would have
incurred had they filed separately. The Tax Sharing Agreement shall be certified
as such by a Responsible Officer of Multicare.
(z) Subordination of Management Fees. The Borrowers, the
Administrative Agent and Genesis shall have entered into a subordination
agreement as of the date hereof, whereby Genesis shall agree to subordinate its
rights to a portion of its fees under the Multicare Management Agreement (those
fees in excess of the greater of $23,900,000.00 per annum and 4% of consolidated
net revenue) to the rights of the Lender Parties hereunder (the "Management Fee
Subordination Agreement").
2.2 CONDITIONS TO EACH LOAN.
(a) Conditions. The obligation of the Lenders to make any Loans,
including the initial Loans and the obligation of the Issuer to issue any
Letters of Credit, are subject to fulfillment of each of the following
conditions, in each case, unless otherwise specified, to the satisfaction of the
Administrative Agent:
(i) Absence of Default. There shall not, either prior to or
after giving effect to each such Loan, exist an Event of Default or a Default.
(ii) Borrowing Notice/L.C. Request Notice. In connection with
any request for Loans (other than Swing Loans), the Administrative Agent shall
have received a borrowing notice as required by Section 1.3(a)(1) above; in
connection with any request for the issuance of a Letter of Credit, the Issuer
and the Administrative Agent shall have received a Letter of Credit request as
required by Section 1A.1(c) above; and in connection with any request for any
Swing Loans, the Swing Loan Lender and the Administrative Agent shall have
received a Swing Loan request as required by Section 1.3(e).
(iii) Truth of Representations. The representations and
warranties of the Borrowers and each other Loan Party made in this Agreement and
each other Loan Document shall be true and correct in all material respects as
of the date each such Loan is made or Letter of Credit issued (both immediately
prior to and after giving effect to said Loan or Letter of Credit) as if made on
and as of such date.
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(iv) No Violations of Law. Neither the making of, nor use of
the proceeds of, any Loans nor the issuance of, or use of the proceeds of, any
Letters of Credit shall conflict with, or cause any Borrower to violate any Law.
(v) Compliance with Indenture Covenants. Neither the making of
such Loans nor the issuance of any Letters of Credit shall not violate the terms
of the 1997 Subordinated Note Indenture and Multicare shall deliver a
certificate of its chief financial officer or controller representing that, both
before and after giving effect to such additional Indebtedness, (A) Multicare is
in compliance with the financial covenants set forth in Section 4.03 of the 1997
Subordinated Note Indenture and (B) that the Loans or Letters of Credit as the
case may be constitute "Senior Indebtedness" and "Designated Senior
Indebtedness" as defined in the 1997 Subordinated Note Indenture.
(vi) Additional Information. The Lenders shall have received
such additional information and documentation as the Lenders may reasonably
request.
(vii) Business Activities. In the case of any Loan made before
the effective date of the Merger, Acquisition Corp. shall not be engaged in any
business activity except in connection with the Tender Offer.
(b) Deemed Representation and Warranty. The request for, and
acceptance of, any Loan (including any Swing Loan) by any Borrowers shall be
deemed a representation and warranty by the Borrowers that the conditions
specified in clauses (i), (iii), (iv), (v), and (vii) of the preceding paragraph
(a) have been satisfied.
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS. The Borrowers hereby jointly and severally represent
and warrant to each Lender Party as follows:
(a) Status of Borrowers. Each Borrower is duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization. Each Borrower has the power and authority to own its property and
to transact the business in which it is engaged or presently proposes to engage.
Each Borrower is duly qualified to do business as a foreign corporation or
foreign partnership and is in good standing in all jurisdictions in which the
ownership of its properties or the nature of its activities or both makes such
qualification necessary or advisable, except for any failures to maintain such
qualifications which, individually or in the aggregate, could not have a
Material Adverse Effect. Schedule 3.1(a) hereto sets forth for each Borrower, as
of the Closing Date, (i) whether it is a corporation, limited partnership or
general partnership, (ii) the jurisdiction of its organization, and (iii) the
jurisdictions in which it is qualified to do business as a foreign corporation
or a foreign partnership, as the case may be, except where the failure to
maintain such qualification could not, individually or in the aggregate, have a
Material Adverse Effect. Each direct and indirect Subsidiary of Multicare (other
than the Excluded Subsidiaries) is a Borrower hereunder and is designated as
such on the signature pages hereto (or, after the Closing Date, on signature
pages of a Joinder Supplement hereto). The states in which any Borrowers operate
Health Care Businesses are Massachusetts West Virginia, New Jersey, Ohio,
Pennsylvania, Wisconsin, Connecticut, Illinois, Rhode Island, Vermont and
Virginia.
(b) Capitalization of Borrowers. Schedule 3.1(b) hereto sets forth
(i) for each corporate Borrower, (A) the authorized capitalization, (B) the
names of the owners (indicating whether they are Borrowers) of the outstanding
capital stock, (C) the number and class of shares issued to each such owner and
(D) the percentage of outstanding shares of each class of capital stock owned by
each such owner, and (ii) for each Borrower which is a partnership, (A) the
names of the owners (indicating whether they are Borrowers) of the outstanding
equity thereof and (B) the percentage ownership interest of, and type of equity
issued to, each such owner. The outstanding equity of each Borrower has been
duly authorized and validly issued. All capital stock is fully paid and
nonassessable. Each Borrower owns beneficially and of record and has good title
to all equity indicated as being owned by it on said Schedule 3.1(b), free and
clear of any Lien, except for Liens in favor of the Administrative Agent, as
agent for the benefit of the Secured Parties, as contemplated by the Loan
Documents and other Permitted Liens. There are no options, warrants, calls, or
similar rights relating to equity of the Borrowers. No Excluded Subsidiary has
any equity interest in any Borrower.
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(c) Authorization, Execution and Binding Effect of Loan Documents.
Each Borrower has the power and authority to execute, deliver, perform, and take
all actions contemplated by, each Loan Document to which it is a party, and all
such action has been duly and validly authorized by all necessary corporate or
partnership (as the case may be) proceedings on its part. This Agreement and
each other Loan Document has been duly and validly executed and delivered by
each Loan Party listed on the signature pages hereto or thereto, as the case may
be. This Agreement and each other Loan Document constitutes the legal, valid and
binding obligation of each Loan Party purporting to be a party hereto or
thereto, as the case may be, enforceable against such Person in accordance with
its terms, except as the enforceability hereof of thereof may be limited by
bankruptcy, insolvency or other similar laws of general application affecting
the enforcement of creditors' rights or by general principles of equity limiting
the availability of equitable remedies.
(d) Security. The Pledge Agreement creates in favor of the
Administrative Agent for the benefit of the Secured Parties a legal, valid and
enforceable Lien on all right, title and interest of each Borrower in the
Collateral described therein, and the Administrative Agent has (or, upon the
filing of the UCC-1 financing statements delivered by the Borrowers on the
Closing Date, will have), for the benefit of the Secured Parties, a fully
perfected and continuing first priority Lien on all of the right, title and
interest of each Borrower in the Collateral described in the Pledge Agreement,
subject to no Liens other than Permitted Liens.
(e) Governmental Approvals and Filings; Absence of Conflicts. No
approval, order, consent, authorization, exemption or other action by, or
filing, recording or registration with, or notice to, any Governmental Authority
or other Person is necessary in connection with, the execution and delivery of
any Loan Document by any Loan Party, or in connection with the performance of
the terms hereof or thereof by such Person, other than the filing of Uniform
Commercial Code financing and continuation statements as referred to in the
Pledge Agreement. No Loan Party is subject to any Law which purports to restrict
or regulate its ability to borrow money, obtain credit or provide a guarantee or
other form of credit support as a consequence of the nature of the business
conducted by such Loan Party. Neither the execution and delivery of this
Agreement or any other Loan Document by any Loan Party, nor the performance of
or compliance with the terms and conditions hereof or thereof (including the
execution, delivery and performance of the Transaction Documents) by any Loan
Party does or will
(i) violate or conflict with any Law or any judgment, decree,
or order of a court or Governmental Authority or any settlement
agreement,
(ii) violate, conflict with or result in a breach of any term
or condition of, or constitute a default under, or cause an
acceleration of, or result in the creation or imposition of any Lien
upon any of property of any Loan Party (except for any Lien in favor
of the Administrative Agent pursuant to the Pledge Agreement) under
or in connection with,
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(x) its articles or certificate of incorporation or
bylaws, partnership agreement or operating agreement (or other
constituent documents),
(y) any agreement or instrument creating, evidencing or
securing any Indebtedness in the aggregate amount of
$250,000.00 or more to which any Loan Party is a party or by
which it or any of its properties (now owned or hereafter
acquired) may be subject or bound, or
(z) any other agreement or instrument or arrangement to
which it is a party or by which it or any of its properties
(now owned or hereafter acquired) may be subject or bound,
except, in the case of the foregoing clause (z), for matters that,
individually or in the aggregate, could not have a Material Adverse
Effect, or
(iii) result in a Limitation on any Licenses applicable to the
operations or properties of any Borrower, or adversely affect the
ability of any Borrower to participate in any Third Party Payor
Arrangement.
(iv) except to the extent that the failure to obtain the same
could not have a Material Adverse Effect, no approval, order,
consent of, authorization, exemption or other action by, or filing,
recording or registration with, or notice to, any Governmental
Authority or other Person is necessary in connection with the Tender
Offer and merger of Acquisition Corp. into Multicare except such
consents as are listed on Schedule 3.1(e) hereto all of which have
been obtained and are in full force and effect.
(f) Financial Statements. Multicare has heretofore furnished to the
Administrative Agent and each Lender consolidated balance sheets of Multicare
and its consolidated Subsidiaries as of December 31, 1996 and December 31, 1995
and the related consolidated statements of income, cash flows and changes in
stockholders' equity for the fiscal years then ended, as examined and reported
on by KPMG Peat Marwick, independent certified public accountants for Multicare,
who delivered an unqualified opinion in respect thereof. Such financial
statements (including the notes thereto) present fairly the financial condition
of Multicare and its consolidated Subsidiaries as of the end of each such fiscal
year and the results of their operations and their cash flows for the fiscal
years then ended, all in conformity with GAAP. Multicare has heretofore
furnished to the Administrative Agent, the Issuer and each Lender interim
consolidated balance sheets of Multicare and its consolidated Subsidiaries as of
the first two fiscal quarters of the fiscal year beginning January 1, 1997,
together with the related consolidated statements of income, cash flows and
changes in stockholders' equity for the applicable fiscal periods ending on each
such date. Such financial statements (including the notes thereto), as well as
those financial statements
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delivered pursuant to paragraph (q) of Section 2.1 above, present fairly the
financial condition of Multicare and its consolidated Subsidiaries (or Persons
referred to therein) as of the date specified and the results of their
operations and their cash flows for the fiscal periods specified, all in
conformity with GAAP, subject to normal and recurring year-end audit
adjustments, except that such financial statements do not contain all of the
footnote disclosures required by GAAP. There are no material liabilities of the
Borrowers except as disclosed on such financial statements. Schedule 6.1 hereto
sets forth, as of the Closing Date, all Indebtedness (and commitments for
Indebtedness) of the Borrowers.
(g) Projections. The projections delivered pursuant to Section
2.1(q) above and the assumptions and estimates referred to therein are as of the
Closing Date reasonable, are made in good faith, are consistent with the Loan
Documents and represent the Borrowers' best judgment as to such matters. Nothing
has come to the attention of any Borrower which would lead such Borrower to
believe that such projections will not be attained or exceeded provided,
however, that nothing contained in this paragraph (g) shall constitute a
representation or warranty that such future financial performance or results of
operations will in fact be achieved.
(h) Absence of Material Adverse Change. Since December 31, 1996,
there has been no material adverse change in the business, operations, condition
(financial or otherwise), properties or prospects of the Borrowers taken as a
whole or the industry served by the Borrowers.
(i) Title to Property. Each Borrower has good and marketable title
to all property owned or purported to be owned by it, including but not limited
to all property reflected in the most recent balance sheets delivered to the
Lenders pursuant to this Agreement (except such property as was sold or
otherwise disposed of in accordance with Section 6.5 (Dispositions) below)
subject to no Liens except Permitted Liens. Schedule 6.2 hereto sets forth, as
of the Closing Date, all Liens on property of the Borrowers.
(j) Solvency. The present fair saleable value of the assets of the
Borrowers, taken as a whole, after giving effect to all the transactions
contemplated by the Loan Documents and the funding of the Loans and the issuance
of the Letters of Credit hereunder exceeds the amount that will be required to
be paid on or in respect of the existing debts and other liabilities (including
contingent liabilities) of such Borrowers, taken as a whole, as they mature.
Multicare does not intend to, nor does Multicare believe that it will, incur
debts beyond its ability to pay such debts as they mature (taking into account
the timing and amounts of cash to be received by Multicare, and of amounts to be
payable on or in respect of debt of Multicare). The property of each Borrower
does not constitute unreasonably small capital for such Borrower to carry out
its business as now conducted and as proposed to be conducted including the
capital needs of such Borrower. The cash available to each Borrower after taking
into account all other anticipated uses of the cash of such Borrower, is
anticipated to be sufficient to pay all such amounts on or in respect of debt of
such Borrower when such amounts are required to be paid.
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(k) Accurate and Complete Disclosure. The information heretofore,
contemporaneously or hereafter provided in writing by or on behalf of any
Borrower to any Lender Party pursuant to or in connection with this Agreement or
any other Loan Document is or will be (as the case may be) true and accurate in
all material respects on the date as of which such information is dated (or, if
not dated, when received by such Lender Party) and does not or will not (as the
case may be) omit to state any material fact necessary to make such information
not misleading at such time in light of the circumstances in which it was
provided.
(l) Legal and Administrative Proceedings. There is no action, suit,
litigation or proceeding pending, or to the knowledge of the Borrowers,
threatened nor, to the knowledge of the Borrowers, is there any investigation
pending or threatened, in any court or before any arbitrator or Governmental
Authority or any payor appeals bodies respecting or relating to any Borrowers
(or any officer or director thereof) or any property of any Borrowers that,
individually or in the aggregate, (i) could have a material adverse effect on
the business, condition (financial or otherwise), operations, properties or
prospects of the Borrowers taken as a whole or (ii) could materially adversely
affect the Lenders' rights and remedies hereunder or under the other Loan
Documents, this Agreement or other Loan Documents or the ability of the
Borrowers to perform their obligations hereunder or thereunder.
(m) Absence of Violations and Conflicts. No Borrower is in violation
of, in default under, or is subject to any contingent liability on account of
any violation of or conflict with: (i) any Law; (ii) its articles or certificate
of incorporation, bylaws, partnership agreement, operating agreement (or other
constituent documents); or (iii) any financing agreement or other instrument or
arrangement to which it is party or by which it or any of its properties (now
owned or hereafter acquired) may be subject or bound, except, with respect to
clauses (i) or (iii) above for matters that, individually or in the aggregate,
could not have a Material Adverse Effect.
(n) Operation of Health Care Facilities.
(i) Except where the failure to possess the same, either
individually or in the aggregate, could not have a Material Adverse Effect, each
Borrower possesses all Licenses and Reimbursement Approvals necessary to operate
its Health Care Business substantially as now operated and as presently proposed
to be operated. No Borrower is in material violation of the terms of its
Licenses and Reimbursement Approvals.
(ii) Except for Limitations which, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect,
there is no threatened or pending Limitation of any material License or
Reimbursement Approval relating to the operation of any of Borrowers' Health
Care Businesses.
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(iii) Except where the failure to file same, either
individually or in the aggregate, could not have a Material Adverse Effect, each
of the Borrowers has caused there to be accurately prepared and filed (or
obtained extensions for) all applicable cost reports with respect to any and all
Third Party Payor Arrangements that are material to conduct its Health Care
Businesses substantially as now conducted.
(iv) No Borrower is subject to any claim (including any claim
for overpayment), litigation, proceeding or other action or, to any Borrower's
knowledge, investigation relating to a claim or action by any Governmental
Authority, except matters that, if adversely decided, individually or in the
aggregate, could not have a Material Adverse Effect.
(v) Each of the Borrowers participates in an internal
comprehensive compliance program respecting compliance with all Laws affecting
the types of business carried on by Borrowers (including health care Laws) and
has made such program available for review by any Lender, upon request.
(vi) Each of the foregoing statements in this paragraph (n)
are also true as applied to Persons managed by any Borrower to the extent that
the failure of any such statement to be true (as applied to any Person managed
by a Borrower) could have a Material Adverse Effect.
(o) Management Agreements. Schedule 3.1(o) sets forth as of the
Closing Date, a complete and correct list of all Management Agreements relating
to (i) the operation and management by a Person that is not a Borrower of each
health care facility owned by a Borrower and (ii) the operation and management
by a Borrower of each health care facility owned by a Person that is not a
Borrower. As of the Closing Date, each such Management Agreement is in full
force and effect subject to no material default.
(p) Health Care Business. Schedule 3.1(p) sets forth, as of the
Closing Date, a complete and correct list of all Health Care Businesses owned or
operated by the Borrowers and the locations thereof indicating which such Health
Care Businesses are operated but not owned.
(q) Leased Properties. Schedule 3.1(q) identifies all properties
leased by any Borrower as of the Closing Date. As of the Closing Date, all
leases relating to such leased properties are in full force and effect subject
to no material default. Such leases comply with the provisions of Section 6.7
below.
(r) Intellectual Property. Each Borrower owns, or is licensed or
otherwise has the right to use, all the patents, trademarks, service marks,
names (trade, service, fictitious or otherwise), copyrights, technology
(including computer programs and software), processes, data bases and other
rights (collectively, "intellectual property"), free from burdensome
restrictions, necessary to own and operate its properties and to carry on its
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business as presently conducted and presently planned to be conducted without
conflict with the rights of others. No Borrower is in material violation of the
rights of others with respect to any intellectual property.
(s) Employee Benefits/ERISA.
(i) The Borrowers and the members of their Controlled Groups
maintain only those Defined Benefit Pension Plans, Defined Contribution Plans
and other Plans listed on Schedule 3.1(s) attached hereto and contribute to only
those Multiemployer Plans listed on Schedule 3.1(s).
(ii) Each Defined Benefit Plan and Defined Contribution Plan,
as most recently amended, including amendments to any trust agreement, group
annuity, or insurance contracts, or other governing instrument, is the subject
of a favorable determination letter by the Internal Revenue Service with respect
to its qualification under ss.401(a) of the Code.
(iii) All Plans comply, both in form and in operation, with
the requirements of the Code and ERISA.
(iv) There is not now, and has not been, any material
violation of the Code or ERISA with respect to the filing of applicable reports,
documents, and notices regarding any Plan with the Secretary of Labor, the
Secretary of the Treasury, the PBGC or any other governmental entity or the
furnishing of such documents to the participants or beneficiaries of any Plan.
Borrowers have furnished to the Lenders copies of the most recent annual report,
audited financial statements, and other reports filed with the Secretary of
Labor, the Secretary of the Treasury, the PBGC or any other governmental entity
with respect to each Plan.
(v) All Pension Plans, as of the date hereof, meet the minimum
funding standards of ss.412 of the Code and ss.302 of ERISA without regard to
any funding waiver. Borrowers and the members of their Controlled Group have, as
of the date hereof, made all contributions or payments to or under Pension Plans
required by the terms of any such Plan or any contract or agreement.
(vi) No Material liability to the PBGC has been, or is
expected by any Borrower or any member of its Controlled Group to be, incurred
by the Borrower or any member of its Controlled Group.
(vii) No Defined Benefit Pension Plan has any Amount of
Unfunded Benefit Liabilities except as listed on Schedule 5.1(s) which, in the
aggregate, do not exceed $500,000.00.
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(viii) No trust was established in connection with any Defined
Benefit Pension Plan pursuant to ss.4049 of ERISA (as in effect on December 17,
1987) and no liabilities (whether or not such liability is being litigated) have
been asserted against any Borrower or any member of its Controlled Group in
connection with any such Defined Benefit Pension Plan by the PBGC or by a
trustee appointed pursuant to ss.4042(b) or (c) of ERISA, and no lien has been
attached and no person has threatened to attach a lien on any property of any
Borrower or any member of its Controlled Group as a result of any failure to
comply with the Code or ERISA.
(ix) No Prohibited Transaction has occurred with respect to
any Plan.
(x) No Reportable Event has occurred with respect to any
Defined Benefit Plan.
(xi) No Borrower or any member of its Controlled Group has any
unfunded liabilities of unfunded and uninsured "employee welfare benefit plans"
(as defined in ss.3(1) of ERISA).
(xii) There is not now, and has not been, any COBRA Violation
with respect to any Plan to which such continuation coverage requirements apply
which has a material adverse effect, directly or indirectly, on the financial
condition of any of the Borrowers.
(xiii) Borrowers and the members of their Controlled Group
have established only those irrevocable trusts the assets of which remain
subject to the general creditors of Borrowers and/or members of their Controlled
Group (sometimes referred to as "rabbi trusts") listed on Schedule 3.1(s)
attached hereto and have furnished to the Lenders copies of each such "rabbi
trust."
(xiv) If any Borrower or any member of its Controlled Group
were obligated to pay the entire potential Withdrawal Liabilities for which any
of them would be liable if each of them were to withdraw from the Multiemployer
Plans to which any of them makes contributions, such obligations would not be in
excess of $500,000.00.
(xv) Borrowers and the members of their Controlled Group have
complied with the requirements of ss.515 of ERISA with respect to Multiemployer
Plans.
(t) Environmental Matters.
(i) Each Borrower and each of its respective Environmental
Affiliates is and has been, in full compliance with all applicable
Environmental Laws, except for matters which, individually or in the
aggregate, could not have a Material Adverse Effect. There are no
circumstances that may prevent or interfere with such full
compliance now or in the future.
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(ii) Each Borrower and each of its respective Environmental
Affiliates have all Environmental Approvals necessary or desirable
for the ownership and operation of their respective properties,
facilities and businesses as presently owned and operated and as
presently proposed to be owned and operated, in the future, except
for matters which, individually or in the aggregate, could not have
a Material Adverse Effect.
(iii) There is no Environmental Claim pending or, to the
knowledge of any Borrower after due inquiry, threatened, and there
are no past or present acts, omissions, events or circumstances
(including but not limited to any dumping, leaching, deposition,
removal, abandonment, escape, emission, discharge or release of any
Environmental Concern Material at, on or under any facility or
property now or previously owned, operated or leased by any Borrower
or any Environmental Affiliates of Borrowers) that could form the
basis of any Environmental Claim against any Borrower or any such
Environmental Affiliates, except for matters which, if adversely
decided, individually or in the aggregate, could not have a Material
Adverse Effect.
(iv) No facility or property now or previously owned, operated
or leased by any Borrower or any of their respective Environmental
Affiliates is an Environmental Cleanup Site. No Borrower and none of
their respective Environmental Affiliates has directly transported
or disposed of or arranged for the transportation or disposal of any
Environmental Concern Materials to any Environmental Cleanup Site.
No Lien exists, and, to the Borrowers' knowledge after due inquiry,
no condition exists which could result in the filing of a Lien,
against any property of any Borrower or any Subsidiary of any
Borrower or any of their respective Environmental Affiliates, under
any Environmental Law.
(u) Margin Regulations. No proceeds of any Loan hereunder will be
used for the purpose of purchasing or carrying any "margin stock," as such term
is used in Regulations G and U of the Board of Governors of the Federal Reserve
System, as amended from time to time, or to extend credit to others for the
purpose of purchasing or carrying any "margin stock". Neither the making of any
Loan or issuance of any Letter of Credit nor any use of proceeds of the Loans
will violate or conflict with the provisions of Regulation G, T, U or X of the
Board of Governors of the Federal Reserve System, as amended from time to time.
(v) Regulation O. No director, executive officer or principal
shareholder of any Borrower is a "director," "executive officer" or "principal
shareholder" of any Lender, as such terms are used in Regulation O of the Board
of Governors of the Federal Reserve System, as amended.
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(w) 1997 Subordinated Notes. Multicare hereby confirms that the Loan
Obligations are "Senior Indebtedness" and hereby designates the Loan Obligations
as "Designated Senior Indebtedness" under the 1997 Subordinated Note Indenture.
All of the Loan Obligations constitute and will constitute "Senior Indebtedness"
and "Designated Senior Indebtedness" within the meaning ascribed to such terms
in such indenture. The subordination provisions therein are enforceable against
the respective issuers thereunder and the holders, from time to time, of the
1997 Subordinated Notes. The respective issuers are not in default under any
such indenture.
(x) Certain Documents and Transactions. Each of the Transaction
Documents (including the Multicare Management Agreement), and the Tax Sharing
Agreement are in full force and effect and no amendments, modifications or
supplements have been made to any such documents as the same were delivered to
the Agents pursuant to Article 2 above, except such amendments, modifications or
supplements to Transaction Documents as could not reasonably be expected to have
an adverse effect on any Borrower (including the condition, financial or
otherwise, properties or prospects of such Borrower), the Loan Documents or any
Lender Parties and supplements or amendments to the Tax Sharing Agreement
necessary to join any other Subsidiaries of Multicare which may hereafter be
consolidated with Multicare for tax purposes. There exists no default under any
such agreements except for immaterial breaches.
(y) Labor Matters. There are no existing, or, to the best of
Borrowers' knowledge, threatened or contemplated, strikes, slowdowns, picketing
or work stoppages by any employees against any Borrower, any lockouts by any
Borrower of any of its employees or any labor trouble or other occurrence, event
or condition of a similar character which individually or in the aggregate,
could have a Material Adverse Effect.
3.2 REPRESENTATIONS AND WARRANTIES ABSOLUTE. The
representations and warranties of the Borrowers set forth in this Article 3 are
unaffected by any prior or subsequent investigation by, or knowledge of, any
Agent or any Lender.
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ARTICLE 4
AFFIRMATIVE COVENANTS
So long as any Loan Obligation shall remain unpaid or any Lender
shall have any Commitment under this Agreement, each of the Borrowers shall
comply with the following covenants.
4.1 REPORTING REQUIREMENTS.
(a) Annual Financial Statements. As soon as practicable, and in any
event within 90 days after the close of each fiscal year of Multicare, Multicare
(on behalf of the Borrowers) shall furnish to the Administrative Agent and each
Lender, audited (i) consolidated statements of income, cash flows and changes in
stockholders' equity of Multicare and its consolidated Subsidiaries (the
"Multicare Group") for such fiscal year and a consolidated balance sheet of such
Persons as of the close of such fiscal year. If at any time the Cash Flow of the
Excluded Subsidiaries in the aggregate exceeds 3.0% of the Cash Flow of
Multicare and its consolidated Subsidiaries, Multicare on behalf of the
Borrowers shall furnish statements of income, cash flows and changes in
stockholders equity of the Borrowers, on a consolidated basis, for such fiscal
year and a balance sheet of such Persons, on a consolidated basis, as of the
close of such fiscal year, in lieu of the requirements of the preceding
sentence; and (ii) statements of income, cash flows and changes in stockholders
equity of Genesis and its Subsidiaries (including the Multicare Group), on a
consolidated basis, for such fiscal year and a balance sheet of Genesis and its
Subsidiaries, on a consolidated basis, as of the close of such fiscal year, and
with respect to all of the foregoing financial statements referred to above
setting forth the appropriate footnotes, all in reasonable detail, setting forth
in comparative form the corresponding figures for the preceding fiscal year.
Such financial statements shall be accompanied by an unqualified opinion in form
and substance satisfactory to the Administrative Agent of independent certified
public accountants of recognized national standing selected by the Borrowers and
satisfactory to the Administrative Agent.
(b) Quarterly Financial Statements. As soon as practicable, and in
any event within 45 days after the close of each fiscal quarter of each fiscal
year of Multicare, Multicare, on behalf of the Borrowers, shall furnish to the
Administrative Agent, the Issuer and each Lender, the following unaudited
financial statements:
(i) consolidated statements of income, cash flows, and
changes in stockholders' equity of the Multicare Group for such fiscal quarter
and the applicable year to date period, and a consolidated balance sheet of such
Persons as of the close of such fiscal quarter. If at any time the Cash Flow of
the Excluded Subsidiaries in the aggregate exceeds 3.0% of the Cash Flow of
Multicare and its Subsidiaries, Multicare, on behalf of the Borrowers, shall
furnish statements of income, cash flows and changes in stockholders equity
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of the Borrowers, on a consolidated basis, for such fiscal quarter and
applicable year-to-date period, in lieu of the requirements of the preceding
sentence; and
(ii) statements of income, cash flows and changes in
stockholders' equity for Genesis and its Subsidiaries (including the Multicare
Group), on a consolidated basis, for such fiscal quarter, together with the
applicable year to date period and a balance sheet of such Persons on a
consolidated basis as of the end of such fiscal quarter, all in reasonable
detail, setting forth in comparative form the corresponding figures for the same
periods or as of the same date during the preceding fiscal year (except for the
balance sheets, which shall set forth in comparative form the corresponding
balance sheets as of the prior fiscal year end), together with a consolidating
schedule showing the financial information respecting Multicare and its
Subsidiaries, the financial information respecting Genesis and its Subsidiaries
and any adjustments made to reconcile the financial information of Multicare and
its Subsidiaries and Genesis and its Subsidiaries, on a consolidated basis. Such
financial statements shall be certified by the chief financial officer or other
Responsible Officer of Multicare as presenting fairly the financial position of
the subject entities as of the end of such fiscal quarter and year-to-date
period, and the results of their operations and their cash flows and changes in
stockholders' equity for such fiscal quarter and year-to-date period, in
conformity with GAAP, subject to normal and recurring year-end audit
adjustments.
(c) Quarterly Compliance Certificates. Multicare, on behalf of the
Borrowers, shall deliver to the Administrative Agent, the Issuer and each
Lender, an Officer's Compliance Certificate concurrently with the delivery of
the financial statements referred to in paragraph (a) of this Section 4.1 (with
respect to the fiscal year, and paragraph (b) of this Section 4.1 (with respect
to the first three fiscal quarters). Each such Officer's Compliance Certificate
shall include among other things referred to therein the calculations necessary
to demonstrate the Borrowers' compliance with the covenants set forth in Article
5 hereof. In addition, the Officers' Compliance Certificate shall show the
calculations necessary to confirm compliance with the financial covenants set
forth in Section 4.03 of the 1997 Subordinated Note Indenture. The Officer's
Compliance Certificate delivered pursuant to this paragraph (c) shall include a
reconciliation of the financial information set forth thereon respecting
Multicare and its Restricted Subsidiaries and that set forth on the financial
statements for Multicare and its consolidated Subsidiaries.
(d) Other Information To Be Delivered Annually. Multicare, on behalf
of the Borrowers, shall deliver to the Administrative Agent, the Issuer and each
Lender, the following: (i) annually, within one hundred twenty (120) days of the
end of the Borrowers' fiscal year, an accountants' management letter provided by
independent certified public accountants satisfactory to the Administrative
Agent, and (ii) annually, no later than ninety (90) days prior to the
commencement of each fiscal year of the Borrowers, an annual budget, setting
forth in reasonable detail, expected sources and uses of funds, for the fiscal
year then beginning in form and substance satisfactory to the Administrative
Agent.
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(e) SEC Filings and Other Disclosure. Promptly upon their becoming
available to any Borrower but no later than ten Business Days after the same are
filed with the Securities Exchange Commission or any securities exchange,
Multicare, on behalf of the Borrowers, shall deliver to the Administrative
Agent, the Issuer and each Lender, a copy of (i) all regular or special reports,
registration statements and amendments to the foregoing which any Borrower or
any of its Affiliates shall file with the Securities and Exchange Commission or
any securities exchange, (ii) all reports, proxy statements, financial
statements and other information distributed by any Borrower or any of its
Affiliates to its stockholders, bondholders or the financial community
generally, (iii) all accountants' management letters (not otherwise delivered
pursuant to the preceding paragraph (d)) and all other reports submitted by
accountants in connection with any audit of any Borrower, and (iv) copies of all
compliance certificates and notices delivered to or from the trustees under the
1997 Subordinated Note Indenture.
(f) Notice of Certain Events. Promptly upon any Borrower becoming
aware of any of the following, such Borrower or Multicare, on behalf of the
Borrowers, shall give the Administrative Agent notice thereof, together with a
written statement setting forth the details thereof and any action with respect
thereto taken or proposed to be taken by any Borrower:
(i) Loss of Licenses or Reimbursement Approvals. Any actual
Limitation (other than in the ordinary course of business) or any
threatened Limitation (to the extent that it individually or in the
aggregate with all other actual or threatened Limitations is
material) of any License or Reimbursement Approval relating to the
operation of a Health Care Business or, if the same individually or
in the aggregate could have a Material Adverse Effect, any
Limitation of any License or Reimbursement Approval of any Person
managed by any Borrower;
(ii) Default. Any Event of Default or Default;
(iii) Material Adverse Change. Any material adverse change in
the business, operations, or condition (financial or otherwise), or
prospects of any Borrower;
(iv) Material Litigation. Any pending or threatened action,
suit, proceeding or investigation by or before any Governmental
Authority against or affecting any Borrower (or any officer or
director thereof) or any property of any Borrower, except for
matters that if adversely decided, individually or in the aggregate,
could not have a Material Adverse Effect;
(v) Breach or Termination of Certain Agreements. Any breach,
claimed breach, termination, or purported or threatened termination
(including a copy of any notice of termination) of (A) the Multicare
Management
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Agreement, (B) any other Transaction Document (except a termination
in accordance with its terms), (C) any other Management Agreement
except in the ordinary course of business, (D) the 1997 Subordinated
Note Indenture (including a copy of any notice of default delivered
thereunder), or (E) any other agreement or instrument material to
the business, operations, condition (financial or otherwise) or
prospects of Multicare and its Restricted Subsidiaries taken as a
whole.
(vi) ERISA.
(A) Any taxes, penalties, interest charges and other
financial obligations in excess of $250,000.00
that have been assessed or otherwise imposed or
which any Borrower has reason to believe may be
assessed or otherwise imposed in excess of
$250,000.00, against any Borrower or any member of
its Controlled Group by the Internal Revenue
Service, the PBGC, the Department of Labor or any
other governmental entity with respect to any Plan
or Multiemployer Plan;
(B) Any application for a waiver by a Borrower or any
member of its Controlled Group of the minimum
funding standard under ss.412 of the Code with
respect to a Pension Plan;
(C) The adoption of any Plan, including but not
limited to a Defined Benefit Pension Plan, or any
obligation to contribute to any Multiemployer Plan
by a Borrower or any member of its Controlled
Group;
(D) Any Prohibited Transaction with respect to a Plan.
(E) (1) that any Reportable Event has or will occur
with respect to any Defined Benefit Pension Plan
maintained by any Borrower or any member of its
Controlled Group, (2) that any Defined Benefit
Pension Plan maintained by any Borrower or any
member of its Controlled Group is to be terminated
in "distress termination" (within the meaning
ofss.4041(c) of ERISA), (3) that the PBGC has
instituted or will institute proceedings under
Title IV of ERISA to terminate any Defined Benefit
Pension Plan maintained by any Borrower or any
member of its Controlled Group, (4) that any
Borrower has incurred Withdrawal Liability
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from a Multiemployer Plan maintained by it or any
member of its Controlled Group, (5) that any
Multiemployer Plan to which any Borrower or any
member of its Controlled Group has made
contributions is or will be in Reorganization, or
(6) that any other condition exists with respect
to a Defined Benefit Pension Plan or Multiemployer
Plan which presents a material risk of termination
of any such Plan, Borrowers will furnish a
statement to the Lenders setting forth the details
of such Reportable Event, distress termination,
termination proceedings, Withdrawal Liability,
Reorganization or condition, and the action that
Borrowers propose to take with respect thereto,
together with a copy of any notice of such
Reportable Event or distress termination given to
the PBGC, or a copy of any notice of termination
proceedings, Withdrawal Liability or
Reorganization received by such Borrower or any
member of its Controlled Group.
(F) any default by any Borrower or any member of its
Controlled Group (as defined in ss.4219(c)(5) of
ERISA) with respect to payments to a Multiemployer
Plan required by reason of its withdrawal (as
defined in ss.4203 or ss.4205 of ERISA).
(G) any action brought against any Borrower or any
member of its Controlled Group under ss.502 of
ERISA with respect to its failure to comply with
ss.519 of ERISA.
(vii) Environmental. Any Environmental Claim pending or
threatened against any Borrower or any of its Environmental
Affiliates, or any past or present acts, omissions, events or
circumstances (including but not limited to any dumping, leaching,
deposition, removal, abandonment, escape, emission, discharge or
release of any Environmental Concern Material at, on or under any
facility or property now or previously owned, operated or leased by
any Borrower or any of its Environmental Affiliates) that could form
the basis of such Environmental Claim, which Environmental Claim, if
adversely resolved, individually or in the aggregate, could have a
Material Adverse Effect.
(g) Other ERISA Information. The Borrowers shall deliver to the
Administrative Agent copies of the following:
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(A) Promptly after the filing thereof with the Secretary of
Labor, the Secretary of the Treasury, the PBGC or any
other governmental entity, copies of each annual report,
each audited financial statement and any other report so
filed with respect to each Plan.
(B) As soon as possible (and in any event within five days)
after the receipt by any Borrower or any member of its
Controlled Group of a demand letter from the PBGC
notifying any Borrower or any member of its Controlled
Group of the final decision finding liability and the
date by which such liability must be paid, Borrowers
will furnish to the Lenders a copy of such letter
together with a statement to the Lenders setting forth
the action which Borrowers propose to take with respect
thereto.
(C) Borrowers will furnish to the Lenders as soon as
possible after receipt thereof a copy of any notice that
any Borrower or any member of its Controlled Group
receives from the PBGC, the Internal Revenue Service,
the Department of Labor or any other governmental entity
or the sponsor of any Multiemployer Plan that sets forth
or proposes any action to be taken or determination made
by the PBGC, the Internal Revenue Service, the
Department of Labor or any other governmental entity or
the sponsor of any Multiemployer Plan with respect to
any Plan.
(h) Amendments to Transaction Documents. Multicare (on behalf of the
Borrowers) shall furnish the Administrative Agent copies or drafts of all
proposed amendments, modifications or waivers to any Transaction Documents (1)
in the case of any amendments, modifications or waivers requiring the consent of
the Required Lenders at least 20 Business Days prior to the effective date
thereof and (2) in all other cases, at least 5 Business Days prior to the
effective date thereof.
(i) Non-Renewal of Management Agreement. Multicare, on behalf of the
Borrowers shall give the Administrative Agent written notice promptly upon
receipt of delivery of any notice of non-renewal or termination delivered under
or relating to the Multicare Management Agreement. The Administrative Agent
shall give each Lender a copy of any notice delivered pursuant to this paragraph
(i).
(j) Notices under Indenture. Multicare, on behalf of the Borrowers
shall furnish to the Administrative Agent copies of all notices, reports,
certificates or other material delivered to or by the trustee or any other party
under the 1997 Subordinated Note Indenture, promptly upon receipt thereof.
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(k) Other Information. In addition, the Borrowers will promptly
furnish to the Administrative Agent such other information as any Lender Party,
through the Administrative Agent, may reasonably request including information
submitted by the Borrowers or the Surety to any Governmental Authority and the
Administrative Agent will furnish such information to the requesting Lender
Party.
4.2 MAINTENANCE OF EXISTENCE. Each Borrower shall preserve and
maintain, its corporate or partnership existence, as the case may be, and good
standing in the jurisdiction of its organization, provided, however, upon giving
written notice to the Administrative Agent, the Borrowers may dissolve any
Subsidiary if (a) such Subsidiary is not (either individually or in the
aggregate with all other entities dissolved pursuant to this proviso) a material
Borrower (or material Borrowers) and (b) Multicare determines that it is in the
best interest of the Borrowers, taken as a whole, that such Subsidiary be
dissolved. Multicare and (to the extent that any failure to qualify or remain
qualified could have a Material Adverse Effect) each Restricted Subsidiary,
shall qualify and remain qualified as a foreign corporation or partnership in
each jurisdiction in which such qualification is required, provided, however
nothing in this Section 4.2 shall prohibit any sales or other dispositions
permitted under Section 6.5.
4.3 CONDUCT OF BUSINESS AND MAINTENANCE OF LICENSES AND OTHER PROPERTY.
(a) Type of Business. Each Borrower shall continue to engage in the business of
the same general type as conducted by the Borrowers on the Closing Date and not
engage in any other type of business without the consent of the Required
Lenders.
(b) Healthcare and Regulatory Rights. Except where the failure
to take any of the following actions, individually or in the aggregate, could
not have a Material Adverse Effect, each Borrower shall (i) maintain in effect
all Licenses and Reimbursement Approvals necessary or appropriate to own and
operate all Health Care Businesses which it owns or operates and (ii) obtain all
Licenses and Reimbursement Approvals necessary or appropriate to own and operate
all Health Care Businesses which it acquires and (iii) continue its
participation in any and all Third Party Payor Arrangements. Except where such
failure to so comply (together with all other failures from time to time by the
same or other Borrowers) could not reasonably be expected to have a Material
Adverse Effect, each Borrower shall comply with any and all rules, regulations,
standard procedures and decrees necessary to maintain its participation in any
such Third Party Payor Arrangements and prepare and file, all applicable cost
reports with respect to all Third Party Payor Arrangements to the extent
required thereby. Each Borrower shall use its best efforts to cause each Person
managed by it to obtain and maintain its Licenses and Reimbursement Approvals
necessary for the conduct of its business and to continue its participation in
Third Party Payor Arrangements and comply with all rules, regulations, standard
procedures and decrees relating thereto to the extent that the failure to do so
could have a Material Adverse Effect.
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(c) Maintenance of Property. Each Borrower shall maintain,
keep and preserve all of its property necessary or useful in the proper conduct
of its business in good working order and condition, ordinary wear and tear
excepted (except for sales and other dispositions of property permitted under
Section 6.5 below (Dispositions)). Without limiting the generality of the
foregoing, each Borrower shall maintain in full force and effect each lease,
Management Agreement and other material agreement used or useful in its
business, subject to no material default except where the loss of, or default
under, such lease, Management Agreement or other agreement (i) could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect or (ii) is not otherwise prohibited by the terms of this
Agreement.
4.4 MAINTENANCE OF RECORDS; FISCAL YEAR. Each Borrower shall keep adequate
records and books of account, in which complete entries will be made in
accordance with historical practice and GAAP, reflecting all financial
transactions of the Borrowers. Each Borrower shall maintain, and shall cause the
Surety to maintain, a fiscal year end of December 31.
4.5 COMPLIANCE WITH LAWS. Each Borrower shall comply (and maintain
procedures to assure compliance) in all material respects with all applicable
Laws (including environmental and health care Laws) and all judgments, decrees
or orders of any court or Governmental Authority and all settlement agreements.
Without limiting the generality of the foregoing, each of the Borrowers shall
maintain in full force and effect an internal compliance program respecting
compliance with all Laws affecting the types of businesses carried on by the
Borrowers (including healthcare Laws) and make such program available for review
by any Lender, upon request.
4.6 ERISA.
(a) Each Borrower will, and will cause each member of its Controlled
Group, to comply in all material respects with the provisions of ERISA and the
Code with respect to any Plan both in form and in operation.
(b) Each Borrower will cause to be made all contributions required
to avoid any Accumulated Funding Deficiency, whether or not waived, with respect
to any Pension Plan.
(c) No Borrower will adopt or permit the adoption by any member of
its Controlled Group of any Defined Benefit Pension Plan which would result in
any Amount of Unfunded Benefit Liabilities in excess of $500,000.00.
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(d) No Borrower will acquire, or permit the acquisition by any
member of its Controlled Group of, any trade or business which has incurred
either directly or indirectly any Amount of Unfunded Benefit Liabilities under
any Defined Benefit Pension Plan in excess of $500,000.00.
(e) The Borrowers will not permit with respect to any Plan, any
Prohibited Transaction or Prohibited Transactions under ERISA or the Code
resulting in liability of any Borrower or any member of its Controlled Group
which together with any other liabilities subject to this paragraph (e) would in
the aggregate be in excess of $500,000.00, unless such Borrower or any member of
its Controlled Group will be contesting in good faith and by appropriate
proceedings any such matter and measures are available and are being taken which
have the effect of preventing the seizure of property of such Borrower or any
member of its Controlled Group pending the outcome of such contest.
(f) No Borrower will withdraw, or permit any member of its
Controlled Group to withdraw, from any Multiemployer Plan to which any of them
may hereafter contribute if the Withdrawal Liability which would thereupon be
incurred would have a material adverse effect, directly or indirectly, on the
financial condition of any of the Borrowers.
(g) No Borrower will permit any unfunded liabilities of unfunded and
uninsured "employee welfare benefit plans" (as defined in ss.3(1) of ERISA) of
any Borrower and of any member of its Controlled Group in excess of $500,000.00
in the aggregate with all other liabilities subject to this paragraph (g).
(h) No Borrower will, or will permit any member of its Controlled
Group to, cause or suffer to exist a COBRA Violation with respect to any Plan to
which such continuation coverage requirements apply if the violation(s) could
result in a liability in excess of $500,000.00 in the aggregate.
4.7 RIGHT OF INSPECTION. Each Borrower shall, at any reasonable time and
from time to time, and upon reasonable advance notice (but no advance notice
shall be required if a Default or an Event of Default shall then exist), permit
the Administrative Agent or any Lender or any agent or representative thereof,
to examine and make copies and abstracts from the records and books of account
of, and visit and inspect the properties of, any Borrower, and to discuss the
affairs, finances and accounts of such Borrower with any of its officers,
directors and independent accountants.
4.8 INSURANCE. Each Borrower shall maintain with financially sound and
reputable insurers insurance with respect to its properties and business and
against such liabilities, casualties and contingencies and of such types and in
such amounts as are customary in the case of Persons engaged in the same or
similar businesses or having similar
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properties similarly situated, including insurance covering its respective
properties, buildings, machinery, equipment, tools, furniture, fixtures and
operations, and medical malpractice, professional liability and public
liability, as well as business interruption. The Borrowers shall have the
Administrative Agent named to receive certificates evidencing such insurance
annually at least thirty days prior to the anniversary date of such insurance
policies and any other time requested by the Administrative Agent.
4.9 PAYMENT OF TAXES AND OTHER CHARGES. Each Borrower shall
(a) on or prior to the date on which penalties attach thereto, pay
all taxes, assessments and other governmental charges imposed upon it or any of
its properties; and
(b) on or prior to the date when due, pay all lawful claims of
materialmen, mechanics, carriers, warehousemen, landlords and other like Persons
and all other lawful claims which, in each case if unpaid, might result in the
creation of a Lien upon any of its properties, provided that unless and until
foreclosure, distraint, levy, sale or similar proceedings shall have been
commenced, such Borrower need not pay or discharge any such tax, assessment,
charge or claim so long as (x) the validity thereof is being contested in good
faith and by appropriate proceedings diligently conducted and (y) such reserves
or other appropriate provisions as may be required by GAAP shall have been made
therefor.
4.10 SUBSIDIARIES TO BE BORROWERS. (a) Each Borrower shall cause all of
its Subsidiaries, other than Excluded Subsidiaries, at all times to be Borrowers
hereunder (by signing Joinder Supplements hereto, each a "Joinder Supplement"),
executing Notes or allonges thereto and taking such other action as the
Administrative Agent may reasonably request) and cause all the capital stock or
other equity interests in such Subsidiaries, other than Excluded Subsidiaries,
and all notes or other rights to receive payment from another Borrower to be
pledged to the Administrative Agent for the benefit of the Secured Parties
pursuant to the Pledge Agreement.
Without limiting the generality of the foregoing, when the Borrowers are
required, in connection with an Acquisition or otherwise, to cause one or more
(direct or indirect) Subsidiaries of Multicare (each, a "Joining Subsidiary") to
become Borrowers hereunder, then the Borrowers and each such Joining Subsidiary
shall take the actions set forth on Schedule 4.10, in the case of the formation
of a new Subsidiary, promptly upon such formation, and in the case of the
acquisition of an entity which shall become a Subsidiary, no later than the date
of the consummation of the relevant Acquisition.
(b) With the prior written consent of the Administrative Agent,
Multicare (on behalf of the Borrowers) may from time to time redesignate one or
more Subsidiaries which are designated as Excluded Subsidiaries on Schedule 11.1
to be Borrowers and Restricted Subsidiaries hereunder, Pledgors under the Pledge
Agreement and comparable
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parties under the other Loan Documents (and not Excluded Subsidiaries).
Thereupon and upon satisfaction of the requirements set forth in paragraph (a)
above for Joining Subsidiaries, such redesignated Subsidiaries shall be
Borrowers hereunder, Pledgors under the Pledge Agreement and comparable parties
to the other Loan Documents. The Administrative Agent shall give the Lenders
notice of any such redesignation.
4.11 PRESERVATION OF STATUS AS SENIOR INDEBTEDNESS. The
Borrowers shall comply with the terms of the 1997 Subordinated Note Indenture.
Each Borrower shall promptly take or cause Genesis to take, as appropriate, all
action necessary or requested by the Administrative Agent at any time to
protect, preserve and give effect to the status of the Loan Obligations as
"Senior Indebtedness" and "Designated Senior Indebtedness" within the meaning of
the 1995 Subordinated Note Indenture and the 1996 Subordinated Note Indenture
(if and when applicable to Multicare or the other Borrowers) and the 1997
Subordinated Note Indenture.
4.12 CORPORATE SEPARATENESS. Each Borrower shall observe all
requirements necessary to cause it to be treated as a separate legal entity for
all purposes under applicable corporate law. Without limiting the foregoing
requirement, each Borrower specifically shall (i) maintain and cause each
Excluded Subsidiary to maintain separate corporate and financial records and to
observe all corporate formalities; (ii) maintain, and cause each Excluded
Subsidiary to maintain, capitalization adequate to meet its business needs;
(iii) cause all reports, filings and public information to refer to such
Borrower or Excluded Subsidiary, as the case may be, as a separate company (and
not a division of each other); and (iv) otherwise conduct and cause each
Excluded Subsidiary to conduct its dealings with third parties in its own name
and as a separate and independent entity. Without limiting the generality of the
foregoing, except as expressly permitted or required elsewhere by this Agreement
or unless specifically agreed to by the Required Lenders, no Borrower may enter
into any merger or other combination with or transfer assets to Genesis or any
of its Subsidiaries, make any loan to, advance to, or other investment in
Genesis or any of its Subsidiaries, guarantee any Indebtedness or otherwise be
liable for obligations of Genesis or any of its Subsidiaries or any Excluded
Subsidiaries, provided, nothing in this Section 4.12 shall prohibit the
execution and delivery of the MultiCare Management Agreement or the Tax Sharing
Agreement or the transactions contemplated thereby. Notwithstanding the
foregoing, the Borrowers may make such Investments in, borrow money from, and
carry on other transactions with, Excluded Subsidiaries on an arm's length basis
to the extent that this Agreement permits the Borrowers to carry on such
activities with unrelated third parties.
4.13 TRANSACTIONS WITH AFFILIATES. Each Borrower shall effect all
transactions with Affiliates (excluding transactions with other Borrowers) on a
basis at least as favorable to such Borrower as would at the time be obtainable
for a comparable transaction on an arm's length dealing with an unrelated third
party, except that this Section 4.13 shall not apply to (a) the Tax Sharing
Agreement or (b) the Transaction Documents or
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(c) transaction fees and expenses payable to Genesis, Cypress and TPG within
seven days of the Closing Date, to the extent such are permitted by the 1997
Subordinated Note Indenture.
4.14 MERGER. The Borrowers and Acquisition Corp. shall use their best
efforts to cause the Merger to occur as soon after the Closing Date as
practicable in accordance with the terms of the Merger Agreement.
4.15 USE OF PROCEEDS. The Borrowers will apply the proceeds of the Loans
only (i) to refinance all of the existing Indebtedness of Multicare and its
Subsidiaries (including without limitation Indebtedness acquired by Multicare as
a result of its merger with Acquisition Corp.) except Indebtedness identified on
Schedule 6.1 hereto, (ii) to fund working capital and Capital Expenditure needs,
subject to the other limitations set forth in this Agreement, (iii) to fund
interest and principal payments on the Loans and other permitted Indebtedness,
(iv) to pay fees, expenses or any other amounts owing hereunder or under any
other Loan Document, and (v) for general corporate purposes.
4.16 CERTAIN DISPOSITIONS. On or before December 31, 1997, the
Borrowers shall sell to Genesis and/or one or more of its Subsidiaries (other
than the Surety or Multicare or any Subsidiary of either of them) their contract
therapy business for a cash purchase price of approximately $24,000,000.00 and
their institutional pharmacy business for a cash purchase price of approximately
$50,000,000.00, each on terms and conditions satisfactory to the Agents.
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ARTICLE 5
FINANCIAL COVENANTS
5.1 CERTAIN FINANCIAL COVENANTS. So long as any Loan Obligations shall
remain unpaid or any Lender has any Commitment under this Agreement, the
Borrowers shall comply with the following financial covenants.
(a) Fixed Charge Coverage. The Fixed Charge Coverage Ratio shall be
at least equal to the ratios set forth below during the periods indicated below:
Period Ratio
------ -----
9/30/97 through 6/30/99 1.20
7/1/99 through 9/30/01 1.25
10/1/01 through 9/30/02 1.30
10/1/02 and thereafter 1.35
(b) Consolidated Net Worth. The total amount of stockholders' equity
of Multicare and the Restricted Subsidiaries, on a consolidated basis, at any
date of determination after the Agreement Date shall be not less than the sum of
(i) Six Hundred Eighty Five Million Dollars ($685,000,000.00)
plus
(ii) an amount equal to the sum of:
(A) an amount equal to the net proceeds of all
equity offerings of the Genesis ElderCare Corp. on a
cumulative basis commencing on the Agreement Date
through such date of determination, plus
(B) 75% of the cumulative amount of Net Income
(which shall not be reduced by the amount of any net
loss for any fiscal quarter) of Multicare and its
Restricted Subsidiaries, on a consolidated basis, for
the period commencing on the first day of the fiscal
quarter in which the Agreement Date occurs through the
last day of the fiscal quarter ending on, or most
recently prior to, such date of determination, plus
(C) any reduction in the amount of debt of
Multicare and its Restricted Subsidiaries as a result of
the conversion of convertible debt securities into
equity (excluding Multicare's Convertible Subordinated
7% Debentures).
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(c) Adjusted Total Debt/Cash Flow. The Adjusted Total Debt/Cash Flow
Ratio shall be not greater than the ratios set forth below during the periods
indicated below:
Period Ratio
------ -----
9/30/97 through 9/30/98 6.50
10/1/98 through 9/30/99 5.75
10/1/99 through 9/30/00 5.25
10/1/00 and thereafter 4.50
(d) Adjusted Senior Debt/Cash Flow. The Adjusted Senior Debt/Cash
Flow Ratio shall be not greater than the ratios set forth below during the
periods indicated below:
Period Ratio
------ -----
9/30/97 through 9/30/98 4.50
10/1/98 through 9/30/99 4.00
10/1/99 and thereafter 3.50
5.2 CALCULATION OF FINANCIAL COVENANTS. The financial covenants
set forth in this Article 5 shall be maintained continuously and shall be tested
at the end of each fiscal quarter and at such other times as may be required by
the terms of this Agreement. Following the effective date of any Acquisition
that is effected by Multicare or any of its Restricted Subsidiaries and that is
permitted under Section 6.4 hereof (Acquisitions Etc.), the financial covenants
set forth in this Article 5 shall be computed on a pro forma basis as if the
effective date of such Acquisition had been the first day of the earliest of the
four fiscal quarters ended on, or most recently prior to, such actual date of
the Acquisition. For purposes of such computation, the Borrowers may elect to
make pro forma income statement adjustments at the time of the effective date of
such Acquisition under the following circumstances: (i) adjustments to reflect
the elimination of that portion of salary and employee benefit expenses that
will no longer be incurred after the Acquisition, to the extent demonstrated by
Multicare to the satisfaction of the Administrative Agent, and (ii) adjustments
to reflect any other savings in expenses which will be realized by such Person
so acquired as a consequence of such Acquisition, to the extent demonstrated by
Multicare to the satisfaction of the Administrative Agent. Following the
effective date of any disposition that is effected by Multicare or any of its
Restricted Subsidiaries and that is permitted under Section 6.5 hereof
(Dispositions), the financial covenants set forth in this Article 5 shall be
computed on a pro forma basis as if the effective date of such disposition had
been the first day of the earliest of the four fiscal quarters ended on, or most
recently prior to, such actual date of disposition. Following the Closing Date,
the financial covenants set forth in this Article 5 shall be computed on a pro
forma basis as if all transactions in connection with the Transaction Documents
had been consummated, including as if the Multicare Management Agreement had
been in effect since the first day of the earliest of the four fiscal quarters
ended on, or most recently prior to, the Closing Date. Unless otherwise agreed
to by the Required Lenders, the financial condition and results of operations of
the Excluded
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Subsidiaries shall not be combined with those of the Borrowers for purposes of
calculating the financial covenants set forth in this Article 5.
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ARTICLE 6
NEGATIVE COVENANTS
So long as any Loan Obligations shall remain unpaid or any Lender shall
have any Commitment under this Agreement, each of the Borrowers shall comply
with the following covenants.
6.1 INDEBTEDNESS. No Borrower shall, at any time, create, incur, assume or
suffer to exist any Indebtedness (including any Guaranties, Capitalized Leases
or Assumed Indebtedness), except:
(a) Indebtedness to the Lender Parties pursuant to this Agreement
and the other Loan Documents;
(b) Indebtedness constituting inter-Borrower loans and advances
evidenced by promissory notes duly pledged to the Administrative Agent for the
benefit of the Secured Parties pursuant to the terms of the Pledge Agreement;
(c) A guaranty of the obligations of Acquisition Corp. of its
obligations under the Acquisition Corp. Credit Agreement and a subordinated
guaranty of Acquisition Corp.'s obligations under the 1997 Subordinated Notes;
(d) Indebtedness (including the indebtedness under the 1997
Subordinated Notes) existing on the Closing Date acceptable to the Agents and
described on Schedule 6.1 hereto, which sets forth certain Indebtedness in a
principal amount not exceeding $300,000,000; and any extensions, renewals,
refinancings of the same so long as such extensions, renewals and refinancings
(i) are in a principal amount no greater than the amount the Indebtedness so
extended, renewed or refinanced, (ii) have maturity dates (and amortization
schedules) no earlier than the debt being refinanced, (iii) are incurred
pursuant to agreements or instruments which do not prohibit the Indebtedness or
Liens created pursuant to the Loan Documents or otherwise conflict with the
terms of the Loan Documents, and (iv) are not made at a time that a Default or
an Event of Default has occurred and is continuing or would be caused thereby.
(e) With respect to the Borrowers other Indebtedness incurred from
time to time, in an aggregate outstanding principal amount not to exceed Five
Million Dollars ($5,000,000.00) at any time so long as such Indebtedness is
incurred pursuant to agreements or instruments which do not cause a Default or
Event of Default hereunder, which contain terms and conditions no more onerous
than the terms and conditions hereof and which do not mature, or have principal
amortization prior to, the Maturity Date;
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(f) With respect to the Borrowers, Indebtedness in an aggregate
amount not to exceed $20,000,000 incurred to finance the construction of the of
the assisted living facilities identified on Schedule 6.1(f) attached hereto
provided that the Borrowers' obligations with respect to such Indebtedness shall
be terminated in connection with the disposition of such facilities as
contemplated in Section 6.5 (Dispositions) hereto;
(g) Provided that the terms of this Agreement and the consummation
of the transactions contemplated hereby and by the Transaction Documents are
consistent with, and do not cause a default under, Multicare's Convertible
Subordinated 7% Debentures or the Indenture under which they were issued,
Indebtedness evidenced by Multicare's Convertible Subordinated 7% Debentures in
the original principal amount of $86,250,000.00 of which no more than
$39,424,000 in principal amount shall remain outstanding as of the Closing Date,
provided that the Borrowers shall cause all such Indebtedness to be redeemed or
converted, by no later than March 16, 1998, at an aggregate cost to the
Borrowers (including amounts expended prior to, on and after the Closing Date)
not to exceed $122,000,000.00 plus interest through the redemption date;
(h) Provided that the terms of this Agreement and the consummation
of the transactions contemplated hereby and by the Transaction Documents are
consistent with, and do not cause a default under, Multicare's Senior
Subordinated 12-1/2% Notes on the Indenture under which they were issued,
Indebtedness evidenced by Multicare's Senior Subordinated 12-1/2% Notes in the
original principal amount of $100,000,000.00 of which no more than $75,000.00 in
principal amount shall remain outstanding as of the Closing Date provided that
the Borrowers shall cause all such Indebtedness to be redeemed by no later than
January 2, 1998, at an aggregate cost to the Borrowers (including amounts
expended prior to, on and after the Closing Date) not to exceed $26,000,000.00
plus interest through the redemption date.
provided, however, that all Indebtedness incurred pursuant to paragraph (e)
above shall be subject to the following: (i) it shall be incurred on terms which
do not prohibit the Indebtedness created pursuant to the Loan Documents, or
otherwise conflict with the terms hereof or the other Loan Documents; (ii) at
the time such Indebtedness is incurred, no Default or Event of Default shall
have occurred and be continuing or shall be caused or created thereby; (iii)
prior to the incurrence of such Indebtedness, Multicare (on behalf of the
Borrowers) shall deliver to the Administrative Agent a certificate of a
Responsible Officer of Multicare (A) stating the amount of such Indebtedness,
(B) containing a representation that such Indebtedness was incurred in
compliance with the provisions of this Section 6.1 and showing calculations
thereof, and (C) containing a representation that such Indebtedness was incurred
in compliance with the financial covenants set forth herein, in Section 5.9 of
the 1995 Subordinated Note Indenture and in Section 5.9 of the 1996 Subordinated
Note Indenture, if and when applicable to Multicare as set forth in Section
5.1(w), and the 1997 Subordinated Note Indenture and showing calculations
thereof; (iv) the terms of the instruments and agreements respecting such
Indebtedness shall be no more restrictive than the terms of this Agreement; and
(v) the instruments and agreements respecting such
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Indebtedness shall not contain provisions that would violate the terms of
Section 6.12 (Limitation on Certain Restrictive Provisions) below.
6.2 LIENS. No Borrower shall, at any time, create, incur, assume or suffer
to exist any Lien on any of its assets (now owned or hereafter acquired), except
for the following ("Permitted Liens"):
(a) Liens granted pursuant to the Loan Documents;
(b) Liens acceptable to the Agents and existing on the Closing Date
securing obligations existing on the Closing Date which Liens and obligations
are listed on Schedule 6.2 hereto (and any extension, renewal and replacement
Liens upon the same property theretofore subject to a listed Lien, provided that
(i) the amount secured by each Lien constituting such an extension, renewal or
replacement Lien shall not exceed the amount secured by the corresponding Lien
theretofore existing) and (ii) such replacement Liens are incurred pursuant to
agreements or instruments which do not prohibit the Liens or Indebtedness
created pursuant to the Loan Documents or otherwise conflict with the terms of
the Loan Documents);
(c) Liens arising from taxes, assessments, charges or claims
described in Section 4.9 hereof to the extent permitted by said Section 4.9,
provided that the aggregate amount secured by all Liens described in this clause
(c) shall not at any time exceed $500,000.00;
(d) Other Liens (other than on Collateral) securing Indebtedness
incurred pursuant to paragraph (f) of Section 6.1 above in an amount not to
exceed $20,000,000 in the aggregate;
(e) Liens in respect of property or assets of the Borrowers imposed
by law which were incurred in the ordinary course of business, such as
carriers', warehousemen's and mechanics' Liens, statutory landlord's Liens, and
other similar Liens arising in the ordinary course of business, and (i) 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 Borrowers taken as a whole or (ii) which are being contested in good faith
by appropriate proceedings, which proceedings have the effect of preventing the
forfeiture or sale of the property or asset subject to such lien and that
adequate reserves have been set aside on the Borrower's books to protect against
an adverse result;
(f) Liens arising from judgments, decrees or attachments and Liens
securing appeal bonds arising from judgments, in each case in circumstances not
constituting an Event of Default under Section 7.1(g);
(g) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business in connection with workers'
compensation,
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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); and
(h) easements, rights-of-way, restrictions, minor defects or
irregularities in title to real property and other similar charges or
encumbrances on real property not interfering in any material respect with the
ordinary conduct of the business of the Borrowers taken as a whole or the value
or salability of the assets so encumbered or affecting their use for their
intended purposes;
(i) Liens existing on real estate and equipment acquired by any
Borrower in an Acquisition permitted under Section 6.4 hereof so long as any
such Lien secures only the corresponding Assumed Indebtedness permitted under
clause (e) of Section 6.1, above;
(j) With respect to the Borrowers other (i) purchase money Liens
encumbering only the property purchased with the proceeds from the corresponding
Indebtedness, and (ii) Capitalized Leases, in each case securing Indebtedness
permitted under clause (e) of Section 6.1 above;
provided, however, that no Lien permitted under clauses (d), (i) and (j) above
shall be created at any time, if there shall exist, either before or after
giving effect to such transaction, a Default or an Event of Default. "Permitted
Lien" shall in no event include any Lien imposed by, or required to be granted
pursuant to, ERISA or any Environmental Law.
6.3 LOANS, ADVANCES AND INVESTMENTS. No Borrower shall, at any time (i)
make or suffer to exist any loan or advance to, or (ii) purchase, acquire or own
(beneficially or of record) any stock, bonds, notes or securities of, or any
partnership interest (whether general or limited) in, or any other interest in,
or (iii) make any capital contribution to, or other investment in (collectively,
"Investments") any other Person, except:
(a) Receivables owing to such Borrower arising from provision of
services or sales of inventory under usual and customary terms in the ordinary
course of business; and loans and advances extended by a Borrower to
subcontractors or suppliers under usual and customary terms in the ordinary
course of business;
(b) Loans from Multicare to a wholly-owned Restricted Subsidiary of
Multicare or loans from a wholly-owned Restricted Subsidiary of Multicare to
Multicare or another wholly-owned Restricted Subsidiary of Multicare, provided,
however, all such loans and advances shall be evidenced by promissory notes duly
pledged to the Administrative Agreement for the benefit of the Secured Parties
pursuant to the Pledge Agreement;
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(c) The capital stock or other ownership interests in other
Borrowers duly pledged to the Administrative Agent, for the benefit of the
Secured Parties;
(d) Cash Equivalent Investments; and
(e) Investments existing on the Closing Date in an amount not
greater than $20,050,000.00 which are listed on Schedule 6.3 hereto.
(f) Acquisitions permitted under Section 6.4 (Acquisitions) below;
(g) The capital stock or other ownership interests in the Excluded
Subsidiaries existing on the Closing Date and set forth on Schedule 9.1 hereto;
(h) With respect to the Borrowers other Investments not covered by
clauses (a) through (h) of this Section 6.3 provided, that
(i) at the time that any Investment is made, the aggregate
amount (which shall include all existing amounts and all new
commitments therefor) of all Investments pursuant to this paragraph
(i) shall not exceed $5,000,000.00; and
(ii) no Default or Event of Default shall then exist either
before or after giving effect to such transaction.
Investments referred to in paragraph (e) which are existing on the Closing Date
and the amount of each such Investment are listed on Schedule 6.3 hereto. On or
before (if practicable) but in any event within 5 days after any Investment is
made pursuant to the preceding paragraph (h), Multicare (on behalf of the
Borrowers) shall deliver to the Administrative Agent a supplement to Schedule
6.3 showing the proposed Investment, together with a certificate of a
Responsible Officer of Multicare stating that such Investment was made in
compliance with this Section 6.3 and in compliance with the provisions of the
1997 Subordinated Note Indenture. The "amount" of any Investment referred to in
this Section 6.3 shall mean the sum of the following (without duplication): the
amount of cash paid for or contributed to such Investment; the fair market value
of any equity or assets constituting consideration for or contributed to such
Investment; and any commitment to pay, contribute, incur, or become liable for
any of the foregoing.
6.4 ACQUISITIONS, ETC. No Borrower shall engage in any Acquisition (other
than an acquisition of assets in the ordinary course of business) except:
(a) A Borrower may merge with or into or consolidate with Multicare
or any direct or indirect wholly-owned Restricted Subsidiary of Multicare,
provided that (i) if Multicare is a party to the merger, Multicare is the
surviving entity and (ii) if Multicare is not a party to the merger, a
wholly-owned Restricted Subsidiary of
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Multicare is the surviving entity and provided, further, that no Event of
Default or Default shall occur and be continuing before or after giving
effect to such transaction; and
(b) So long as no Default or Event of Default has occurred or would
exist after giving effect to such Acquisition, any Borrower may make an
Acquisition not covered by clause (a) of this Section 6.4, provided,
however, that (i) the Acquisition Cost of all Acquisitions made pursuant
to this paragraph (b) does not exceed $5,000,000.00 in any fiscal year,
and (ii) the "Acquisition Conditions" set forth on Schedule 6.4 hereto
shall have been satisfied.
6.5 DISPOSITIONS. No Borrower shall sell, convey, assign, lease as lessor,
transfer, abandon or otherwise dispose of (collectively, for purposes of this
Section 6.5, "transfer"), voluntarily or involuntarily, any of its assets,
except:
(a) A Borrower may sell inventory in the ordinary course of
business;
(b) A Borrower may dispose of equipment which is obsolete or no
longer useful in its business;
(c) A Borrower may transfer its properties to Multicare or a
wholly-owned Restricted Subsidiary of Multicare so long as no Event of
Default or Default shall exist either before or after giving effect to
such transfer;
(d) Subject to the mandatory prepayment provisions set forth above,
the Borrowers may transfer at any time the facilities identified on
Schedule 6.5(d) located in the states of Ohio, Wisconsin or Illinois (i)
for a cash price, or (ii) in connection with a swap of assets of the same
type and generating cash flow at approximately the same level, or greater,
than the facilities identified in Schedule 6.5(d) being transferred, as
certified by a Responsible Officer of Multicare, on behalf of the
Borrowers, in writing prior to such transfer with such detail and
supporting financing information as the Administrative Agent may require;
provided that in the case of either (i) or (ii) above, the Board of
Directors of Multicare determines that the fair market value in either
case is equal to the fair market value in an arm's length transaction with
an unrelated third party and such transfer is on such terms as are (A)
reflective of market conditions at the time of sale, (B) consistent with
the terms of this Agreement, and (C) satisfactory to the Administrative
Agent.
(e) Subject to the mandatory prepayment provisions set forth above,
the Borrowers shall sell to Genesis (i) their contract therapy business
for a cash purchase price of approximately $24,000,000.00 and (ii) their
institutional pharmacy business for a cash price of approximately
$50,000,000.00.
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(f) Subject to the mandatory prepayment provisions set forth above,
the Borrowers may transfer the assisted living facilities described in
Schedule 6.5(f) attached hereto to a Person who is not a Borrower for a
sales price at least sufficient to repay any Indebtedness associated
therewith provided that the Cash Flow for the immediately preceding four
fiscal quarters such facilities (and if such facilities have not been in
operation for four fiscal quarters, then such Cash Flow for the period
since operations commenced on an annualized basis) does not exceed 15% of
the associated Indebtedness.
(g) The Borrowers may grant Liens permitted under Section 6.2
(Liens).
(h) So long as no Default or Event of Default has occurred or would
exist after giving effect to such transfer, a Borrower may transfer other
assets (including ownership interests of a Restricted Subsidiary),
provided, however, that (i) the "Disposition Conditions" set forth on
Schedule 6.5(h) hereto shall have been satisfied and (ii) both of the
following financial tests shall be satisfied: The sum of the aggregate
fair market value of the property subject to such proposed transfer plus
the aggregate fair market value of all property previously transferred
pursuant to this paragraph (h) at any time after the Closing Date (in each
case determined as of the date of transfer or proposed transfer, as the
case may be) is less than (A) an amount equal to 5% of the total assets of
Multicare and its Restricted Subsidiaries on a consolidated basis,
determined as of the fiscal year ending on, or most recently prior to, the
date of the proposed transfer and (B) $5,000,000.00.
(i) Subject to the mandatory prepayment provisions set forth above,
so long as no Default or Event of Default has occurred or would exist
after giving effect to such transfer, any Borrower may transfer its
interest in Excluded Subsidiaries.
6.6 ISSUANCE OF SUBSIDIARY STOCK OR OTHER OWNERSHIP INTERESTS. The
Borrowers shall not create, acquire, dispose of, or change any interest in any
Restricted Subsidiary except as follows:
(a) Restricted Subsidiaries of Borrower(s) (or any interest therein)
may be created or acquired in connection with an Acquisition to the extent
permitted under Section 6.4 above (Acquisitions, Etc.);
(b) Restricted Subsidiaries of Borrowers (or any interest therein)
may be created or acquired in connection with an Investment to the extent
permitted under Section 6.3 above (Loans, Advances and Investments);
(c) Restricted Subsidiaries of Borrowers may be created as
wholly-owned direct or indirect Subsidiaries of Multicare for other
purposes consistent with the terms of this Agreement; and
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(d) Restricted Subsidiaries (or any interest therein) may be
disposed of pursuant to the provisions of Section 6.5 above
(Dispositions);
provided, however, that with respect to Subsidiaries created or acquired in
accordance with paragraphs (a), (b) or (c) above, they shall become "Borrowers"
hereunder and corresponding parties to the other Loan Documents, their equity
shall be pledged to the Administrative Agent, for the benefit of the Secured
Parties, pursuant to the Pledge Agreement and they shall become parties to the
Tax Sharing Agreement.
6.7 LEASES. The Borrowers shall not at any time, enter into or suffer to
remain in effect any lease, as lessee, of any property, except:
(a) Leases (including subleases) by Multicare or a wholly-owned
Subsidiary of Multicare as lessor (or sublessor) to Multicare or another
wholly-owned Subsidiary of Multicare as lessee (or sublessee);
(b) Capitalized Leases permitted under Section 6.1 above; and
(c) Other leases which are not Capitalized Leases or Synthetic
Leases but only to the extent that the aggregate Rental Expense of the
Borrowers with respect to all such other leases does not exceed (i) during
the fiscal year ending December 31, 1997, $15,000,000.00 and (ii) during
each fiscal year thereafter, an amount equal to the amount permitted in
the preceding year plus an additional $2,000,000.00 (e.g., $17,000,000.00
in the fiscal year ending December 31, 1998).
6.8 DIVIDENDS AND RELATED DISTRIBUTIONS. Except for dividends from
Multicare to Acquisition Corp. and from Acquisition Corp. to Genesis ElderCare
Corp. in an amount necessary to permit Acquisition Corp. and Genesis ElderCare
Corp. to pay their respective taxes and general corporate operating expenses of
the type typically incurred by a corporation whose only assets are the stock of
operating companies with no other business activity, Multicare shall not, and
the Borrowers shall not permit Acquisition Corp. to (a) declare or pay any
dividends, (b) purchase, redeem, retire or otherwise acquire for value any of
its capital stock now or hereafter outstanding, or (c) make any distribution of
assets to its stockholders as such whether in cash, assets or obligations of
Multicare, (d) allocate or otherwise set apart any sum for the payment of any
dividend or distribution on, or for the purchase, redemption or retirement of,
any shares of its capital stock, (e) or make any other distribution by return of
capital or otherwise in respect of any shares of its capital stock except that
Multicare may declare and pay dividends and make distributions payable solely in
its common stock, or options, warrants or other rights to purchase common stock
provided that such stock, warrants, options or other rights are pledged to the
Administrative Agent for the benefit of the Secured Parties pursuant to the
Pledge Agreement.
6.9 CONSOLIDATED TAX RETURN. No Borrower shall file or consent to the
filing of any consolidated income tax return with any Person other than other
Borrowers or
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other Persons party to the Tax Sharing Agreement or become party to any tax
sharing or tax allocation agreement with any other Person other than the other
Borrowers, except as contemplated in the Tax Sharing Agreement. From and after
the effective date of the Tax Sharing Agreement (which shall be on or about the
Closing Date), each of the Borrowers shall cause the Tax Sharing Agreement to
remain in full force and effect, subject to no amendments or modifications other
than (a) joinder of additional Subsidiaries of Multicare, from time to time,
such that at all times all Subsidiaries of Multicare shall be parties thereto,
and (b) such amendments or modifications which, individually or in the
aggregate, could not reasonably be expected to have an adverse effect on the
Borrowers taken as a whole (including the business, operations, condition,
financial or otherwise, properties or prospects of the Borrowers), the Loan
Documents or any Lender Party.
6.10 LIMITATION ON PAYMENTS, PREPAYMENTS, DEFEASEMENT AND OTHER ACTION
WITH RESPECT TO CERTAIN DEBT OBLIGATIONS.
(a) No Borrower shall, or shall permit any of its Subsidiaries,
directly or indirectly, pay, prepay, purchase, defease, redeem, retire,
acquire, or otherwise make any payment (on account of principal, interest,
premium or otherwise) in respect of any obligation under, or evidenced by
the 1997 Subordinated Note Indenture (or cause or allow any event or
condition to exist which would require any payment, prepayment, purchase,
defeasance, redemption, retirement, acquisition or other payment of any
such obligation), except that a Borrower may make cash interest payments
on the aforesaid Indebtedness, as and when required to do so by the
mandatory terms thereof, all to the extent consistent with the
subordination provisions applicable thereto. Multicare shall not amend,
modify or supplement the terms or provisions contained in the
aforementioned debt agreements or any agreement or instrument evidencing
or applicable thereto. Multicare shall not take or omit to take any action
under or in connection with, any such agreement or instrument, which would
violate or impair the subordination provisions thereof. No Loan Party
shall designate any of its Indebtedness as "Designated Senior
Indebtedness" for purposes of the 1997 Subordinated Note Indenture except
Indebtedness incurred pursuant to this Agreement.
(b) No Borrower will make or give any notice that it shall make any
voluntary or optional payment or prepayment or redemption or acquisition
for value of, or will refund, refinance or exchange any Indebtedness
(excluding Loan Obligations) if at such time any Default or Event of
Default has occurred and is continuing or would be directly or indirectly
caused as a result thereof.
No Loan Party shall designate any of its Indebtedness as "Designated
Senior Indebtedness" for purposes of the 1997 Subordinated Note Indenture except
Indebtedness incurred pursuant to this Agreement, the other Loan Documents, or
Qualifying Interest Rate Hedging Agreements.
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6.11 LIMITATIONS ON MODIFICATION OF CERTAIN DOCUMENTS.
(a) Constituent Documents. No Borrower shall, amend, modify or
supplement its articles or certificate of incorporation, bylaws,
partnership agreement or similar constituent documents (i) if a Material
Adverse Effect could result from such amendment, modification or
supplement or (ii) if such amendment, modification or waiver could
reasonably be expected to materially adversely affect the rights or
interests of the Agents or the Lenders.
(b) Transaction Documents. No Borrower shall amend, modify or
supplement the other Transaction Documents, except for such amendments,
modifications or supplements which could not reasonably be expected to
have an adverse effect on the Borrowers, taken as a whole (including the
condition (financial or otherwise), properties or prospects of the
Borrowers, the Loan Documents or any Lender Party.
6.12 LIMITATION ON CERTAIN RESTRICTIVE PROVISIONS. No
Borrower shall enter into, or remain a party to, any agreement or instrument
which would impose any restriction (a) on the right of such Person from time to
time to declare and pay dividends or take similar actions with respect to
capital stock owned by such Person or pay any Indebtedness, obligations or
liabilities from time to time owed to a another Borrower; or (b) that would
prohibit the grant of any Lien upon any of its properties (now owned or
hereafter acquired) to secure any senior Indebtedness except for restrictions in
agreements respecting Permitted Liens to the extent that the prohibition applies
only to property subject to the Permitted Lien; or (c) that would prohibit, or
require the consent of any Person to, any amendment, modification or supplement
to any of the Loan Documents except (i) restrictions set forth in the Loan
Documents; (ii) legal restrictions of general applicability; and (iii)
restrictions in the 1997 Subordinated Note Indenture.
6.13 LIMITATIONS ON MERGERS, ETC. No Borrower shall merge or consolidate
with or into any Person, except (a) mergers of any Borrower with Multicare where
Multicare is the survivor, (b) mergers of any Restricted Subsidiary of Multicare
with any wholly-owned Restricted Subsidiary of Multicare where such wholly-owned
Restricted Subsidiary is the survivor, or (c) any merger pursuant to an
Acquisition permitted under Section 6.4 above (Acquisitions, Etc.) or (d) any
merger pursuant to a transfer permitted under Section 6.5 (Dispositions) above.
6.14 AVOIDANCE OF OTHER CONFLICTS. No Borrower shall violate or conflict
with, be in default under, or be or remain subject to any liability (contingent
or otherwise) on account of any violation or conflict with (a) its articles or
certificate of incorporation, bylaws or partnership agreement (or other
constituent documents), or (b) any agreement or instrument to which it is party
or by which any of its properties (now owned or hereafter acquired) may be
subject or bound, except, with respect to clause (b), for matters that could
not, individually or in the aggregate, have a Material Adverse Effect.
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6.15 CAPITAL EXPENDITURES. No Borrower shall make or commit to make any
Capital Expenditure if, after giving effect to such Capital Expenditure, the
aggregate amount of all Capital Expenditures of the Borrowers incurred (i)
during the fiscal year ending December 31, 1997, would exceed $45,000,000.00,
and (ii) during any fiscal year thereafter, would exceed $35,000,000.00
6.16 MANAGEMENT FEE. The Borrowers shall not pay management fees under the
Multicare Management Agreement in any fiscal year in an amount less than
$23,900,000.00, or in excess of 6% of the consolidated net revenue of the
Borrowers. All such management fees shall be subordinated to the obligations of
the Borrowers hereunder in accordance with the terms contained in the Management
Fee Subordination Agreement as in effect on the Agreement Date. Such management
fees may be accrued but not paid except that such fees may be paid to the extent
they do not exceed in any fiscal year the greater of (a) 4% of the consolidated
net revenue of the Borrowers, and (b) $23,900,000.00. To the extent such
management fees in any fiscal year (including the payment in such year of
accrued management fees) would exceed the amount specified in the preceding
sentence, such excess amount shall be payable only to the extent that, both
before and after giving effect to such payment, (i) there exists no Event of
Default or Default, (ii) Borrower's Fixed Charge Coverage Ratio shall be not
less than 1.4 for the two most recent completed fiscal quarters of the
Borrowers, and (iii) the Adjusted Total Debt/Cash Flow Ratio for the two most
recently completed fiscal quarters of the Borrowers shall be less than 4.00. No
Borrower shall agree with any Person (other than the Lender Parties) to
withhold, defer or change the amount or timing of payments under the Multicare
Management Agreement.
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ARTICLE 7
DEFAULTS
7.1 "EVENTS OF DEFAULT" An Event of Default means any one of the following
events (whatever the reason for such Event of Default, whether it shall be
voluntary or involuntary and whether it shall be by action or inaction, by
operation of law, pursuant to a court order or any rule or regulation of any
Governmental Authority or otherwise):
(a) Failure to Pay Principal. The Borrowers shall fail to make any
payment of the principal of any Loan on the date when the same shall become due
and payable, whether at stated maturity or at a date fixed for any installment
or prepayment thereof or otherwise; or the Borrowers shall fail to make any
reimbursement of any Drawing under a Letter of Credit or shall fail to deposit
any amount into the cash collateral account, in either case, at the times and in
the amounts specified in Article 1A above.
(b) Failure to Pay Interest, Fees and Other Amounts. The Borrowers
shall fail to make any payment of interest on any Loan or shall fail to pay any
fees or any other amounts owing hereunder or under any other Loan Documents
(other than as specified in paragraph (a) above) on the dates when such
interest, fees or other amounts shall become due and payable and such failure
continues for more than three (3) Business Days.
(c) Covenant Defaults. (i) There shall occur a default in the due
performance or observance of any term, covenant or agreement to be performed or
observed pursuant to any of Sections 4.1(f)(ii), 4.2, 4.3, 4.7, 4.10, 4.11, 4.13
or 4.15 or Article 5 or Article 6.
(ii) There shall occur any default in the due performance or
observance of any term, covenant or agreement to be performed or observed
pursuant to the provisions of this Agreement (other than as provided in
paragraph (a) or paragraph (b) above or subparagraph (i) of this paragraph (c))
and, if capable of being remedied, such default shall continue unremedied for
thirty (30) days after any Borrower becomes aware, or should in the exercise of
reasonable diligence have become aware, of such default.
(d) Misrepresentation. Any representation or warranty made or deemed
made by any Loan Party in or pursuant to or in connection with any Loan Document
shall prove to have been false or misleading in any material respect as of the
time when made or deemed made.
(e) Subordinated Debentures. Any "Event of Default" (or similar
term) as defined in the 1997 Subordinated Note Indenture and any other
subordinated indentures to which any Borrower may from time to time be a party
shall have occurred and be
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continuing; or, any term or provision of the subordination provisions contained
in any such indenture shall cease to be in full force and effect in accordance
with its respective terms, or any Loan Party or any holder of any 1997
Subordinated Note or other subordinated note or other subordinated obligations
(or any trustee or agent on behalf of such holder) shall terminate, repudiate,
declare voidable or void or otherwise contest any term or provision of such
subordination provisions; or Multicare shall make, or shall be required to make
or to offer to make, any defeasance, redemption or purchase of 1997 Subordinated
Notes under the 1997 Subordinated Note Indenture, or Multicare shall make, or be
required to make, or offer to make, any defeasance, redemption or purchase of
subordinated notes under any similar provision, if any, under any such other
subordinated indentures or other subordinated note or other subordinated
obligations.
(f) Other Cross-Defaults. (i) Any Loan Party shall fail to pay, in
accordance with its terms and when due and payable, any Indebtedness (other than
Indebtedness referred in paragraph (a) or (e) above) under, or arising out of an
agreement or instrument (or group or series of related agreements or
instruments) which evidences outstanding Indebtedness in excess of
$5,000,000.00; (ii) the maturity of any such Indebtedness shall, in whole or in
part, have been accelerated, or any such Indebtedness shall, in whole or in
part, have been required to be prepaid or purchased prior to the stated maturity
thereof; (iii) any event shall have occurred and be continuing that permits any
holder or holders of such Indebtedness, any trustee or agent acting on behalf of
such holder or holders or any other Person to accelerate the maturity thereof or
require any prepayment or repurchase thereof; (iv) a default by any Loan Party
shall be continuing under any other instrument or agreement (whether or not
relating to Indebtedness) binding upon such Person, except a default that,
together with all other such defaults under this clause (iv), could not have a
Material Adverse Effect; or (v) there shall have occurred and be continuing any
"Event of Default" as such term is defined in the Acquisition Corp. Credit
Agreement.
(g) Judgments and Executions. One or more judgments for the payment
of money shall have been entered against any Loan Party or Loan Parties which
judgment or judgments, to the extent not paid or fully covered by insurance,
exceed $1,000,000.00 in the aggregate, and such judgment or judgments shall have
remained undischarged and unstayed for a period of 30 consecutive days; or one
or more writs or warrants of attachment, garnishment, execution, distraint or
similar process or any attachment (prejudgment or otherwise) of assets exceeding
in value the aggregate amount of $1,000,000.00 shall have been issued against
any Loan Party or Loan Parties or any of its or their respective properties.
(h) Invalidity or Noncompliance With Loan Documents. Any of the Loan
Parties shall fail to perform any of its obligations under any of the Loan
Documents (after taking into account any applicable cure period set forth in
such agreements), or the validity of this Agreement or any of the other Loan
Documents, or the subordination provisions of any other instrument or document
intended by the parties hereto to benefit the Lender Parties, shall have been
challenged or disaffirmed by or on behalf of any of the Loan
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Parties, or any of the Loan Documents shall cease to be in full force and effect
(other than pursuant to its terms) or, other than as a direct result of any
action or inaction of a Lender Party, any Liens created or intended to be
created by any of the Loan Documents shall at any time cease to be valid and
perfected subject to no equal or prior Liens except Permitted Liens.
(i) Material Adverse Effect. The Required Lenders shall have
determined in good faith that an event or condition has occurred which could
have a Material Adverse Effect.
(j) Environmental. Any one or more of the events or conditions set
forth in the following clauses (i) or (ii) shall have occurred with respect to
any Borrower or any Loan Party or any of their respective Environmental
Affiliates, and the Required Lenders shall determine in good faith (which
determination shall be conclusive) that such events or conditions, individually
or in the aggregate, could have a Material Adverse Effect: (i) any past or
present violation of any Environmental Law by such Person which has not been
cured to the satisfaction of the Required Lenders, or (ii) the existence of any
pending or threatened Environmental Claim against any such Person, or the
existence of any past or present acts, omissions, events or circumstances that
could form the basis of any Environmental Claim against any such Person.
(k) Change of Control. A Change of Control shall have occurred; or a
"Change in Control" (as defined in the 1997 Subordinated Note Indenture) shall
have occurred.
(l) Subsidiaries as Loan Parties. Any direct or indirect Subsidiary
of Multicare, other than Excluded Subsidiaries, shall fail to be, or shall cease
to be, or fail to become, a Borrower hereunder; or the equity of any such Person
owned by any Borrower or of Multicare shall cease to be, or fail to be, pledged
under the Pledge Agreement.
(m) Insolvency, Bankruptcy, Etc. Any Loan Party shall make an
assignment for the benefit of creditors or a composition with creditors, shall
generally not be paying its debts as they mature, shall admit its inability to
pay its debts as they mature, shall file a petition in bankruptcy, shall be
adjudicated insolvent or bankrupt, shall petition or apply to any tribunal for
the appointment of any receiver, custodian, liquidator or trustee of or for it
or any substantial part of its property or assets, shall commence any proceeding
relating to it under any bankruptcy, reorganization, arrangement, readjustment
of debt, receivership, dissolution or liquidation law or statute of any
jurisdiction, whether now or hereafter in effect; or there shall be commenced
against such Loan Party, any such proceeding and the same shall not be dismissed
within thirty (30) days or an order, judgment or decree approving the petition
in any such proceeding shall be entered against such Loan Party; or any Loan
Party, Acquisition Corp., or Genesis ElderCare Corp. shall by any act or failure
to act indicate its consent to, approval of or acquiescence in, any such
proceeding or any appointment of any receiver, custodian, liquidator or trustee
of or for it or for any
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substantial part of its property or assets, or shall suffer the appointment of
any receiver, liquidator or trustee, or shall take any corporate action for the
purpose of effecting any of the foregoing; or any court of competent
jurisdiction shall assume jurisdiction with respect to any such proceeding and
the same shall not be dismissed within thirty (30) days or a receiver or a
trustee or other officer or representative of a court or of creditors, or any
court, governmental office or agency, shall, under color of legal authority,
take and hold possession of any substantial part of the property or assets of
such Person and shall not have relinquished possession within thirty (30) days,
or such Loan Party, Acquisition Corp., or Genesis ElderCare Corp. shall have
concealed, removed, or permitted to be concealed or removed, any part of its
property, with intent to hinder, delay or defraud its creditors, or any of them,
or any Loan Party shall have suffered or permitted, while insolvent, any
creditor to obtain a Lien upon any of its property through legal proceedings or
distraint.
(n) Termination of Multicare Management Agreement or other
Transaction Documents. Except as permitted by the Required Lenders, (i) the
Multicare Management Agreement shall cease to be in full force and effect or
there shall be any breach by any party thereto or a default thereunder, or an
amendment, modification or supplement thereto not permitted by the terms of this
Agreement or any notice a non-renewal or termination thereunder shall have been
delivered by any party thereto, or (ii) any other Transaction Document shall
cease to be in full force and effect (other than by its terms) or there shall be
any material breach by any party thereto or a default thereunder or any such
document shall be amended, restated, modified or supplemented in a manner not
expressly permitted by the terms of this Agreement or (iii) any other Management
Agreement of any Borrower shall be terminated or cease to be renewed or extended
or shall be amended, restated, modified or supplemented if such termination,
failure to renew or extend or amendment, restatement, modification or supplement
(either singly or collectively with all other such events relating to other
Management Agreements) could have a Material Adverse Effect.
(o) Loss of Licenses, Reimbursement Approvals, Etc. There shall be a
Limitation of one or more Licenses or Reimbursement Approvals of any Borrower or
Borrowers or Persons managed by a Borrower or Borrowers and the Required Lenders
shall determine in good faith that such Limitation, and individually or
collectively all such Limitations could reasonably be expected to have a
Material Adverse Effect.
7.2 CONSEQUENCES OF AN EVENT OF DEFAULT
(a) Events of Default in General. If an Event of Default
(other than one specified in paragraph (m) of Section 7.1 (Insolvency,
Bankruptcy, Etc.) hereof) shall occur and be continuing or shall exist, then, in
addition to all other rights and remedies which the Administrative Agent or any
other Lender Party may have hereunder or under any other Loan Document, at law,
in equity or otherwise, the Lenders shall be under no further obligation to make
Loans, the Issuer shall be under no further obligation to issue Letters of
Credit hereunder, and the Administrative Agent may, (and upon the written
request of the
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Required Lenders, shall), by notice to Multicare (on behalf of the Borrowers),
from time to time do any or all of the following:
(i) Declare the Commitments terminated, whereupon the
Commitments will terminate and any fees hereunder shall be
immediately due and payable without presentment, demand, protest or
further notice of any kind, all of which are hereby waived, and an
action therefor shall immediately accrue.
(ii) Declare the unpaid principal amount of the Loans,
interest accrued thereon and all other Loan Obligations to be
immediately due and payable without presentment, demand, protest or
further notice of any kind, all of which are hereby waived, and an
action therefor shall immediately accrue.
(iii) Direct the Borrowers to pay (and the Borrowers jointly
and severally agree that upon receipt of notice they will pay) to
the Administrative Agent cash for deposit to the credit of the
Letter of Credit collateral account in accordance with Article 1A
hereof.
(iv) Take any and all actions permitted under the Pledge
Agreement or other Loan Documents.
(v) Exercise such other remedies as may be available to the
Lender Parties under applicable Law.
(b) Automatic Acceleration; Certain Bankruptcy-Related Events.
If an Event of Default specified in paragraph (m) of Section 7.1 (Insolvency,
Bankruptcy, Etc.) hereof shall occur or exist, then, in addition to all other
rights and remedies which any Lender Party may have hereunder or under any other
Loan Document, at law, in equity or otherwise, the Commitments shall
automatically terminate and the Lenders shall be under no further obligation to
make Loans and the Issuer shall be under no further obligation to issue Letters
of Credit hereunder and the unpaid principal amount of the Loans, interest
accrued thereon and all other Loan Obligations including those referred to in
clause (iii) of the preceding paragraph (a), shall become immediately due and
payable without presentment, demand, protest or notice of any kind, all of which
are hereby waived, and an action therefor shall immediately accrue, and in
addition, the Administrative Agent may, (and upon the written request of the
Required Lenders), shall, by notice to Multicare (on behalf of the Borrowers),
do one or more of the following: (i) take any and all actions permitted under
the Pledge Agreement or any other Loan Document or (ii) exercise such other
remedies as may be available to the Lender Parties under applicable Law.
(c) Equitable Remedies. It is agreed that, in addition to all
other rights hereunder or under Law, the Administrative Agent shall have the
right to institute proceedings in equity or other appropriate proceedings for
the specific performance of any
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covenant or agreement made in any of the Loan Documents or for an injunction
against the violation of any of the terms of any of the Loan Documents or in aid
of the exercise of any power granted in any of the Loan Documents or by Law or
otherwise.
7.3 APPLICATION OF PROCEEDS. After the occurrence of an Event of Default
and acceleration of the Loans, any amounts received on account of Loan
Obligations shall be applied by the Administrative Agent in the following order:
First, to payment of that portion of the Loan Obligations
constituting fees, indemnities, expenses and other amounts due to the
Administrative Agent in its capacity as such;
Second, to payment of that portion of the Loan Obligations
constituting fees, indemnities (other than those paid pursuant to the
preceding clause First) due to the Lender Parties, ratably among them in
proportion to the amounts described in this clause Second due to them;
Third, to payment of that portion of the Loan Obligations
constituting accrued and unpaid interest on Loans and accrued and unpaid
interest on Drawings, ratably among the Lender Parties in proportion to
the respective amounts described in this clause Third due to them;
Fourth, to payment of that portion of the Loan Obligations
constituting unpaid principal of the Loans or unreimbursed Drawings
ratably among the Lender Parties in proportion to the respective amounts
described in this clause Fourth due to them;
Fifth, to be deposited in such cash collateral account, if any, as
may be required under Article 1A above.
Sixth, to payment of all other Loan Obligations, ratably among the
Lender Parties in proportion to the respective amounts described in this
clause Sixth due to them; and
Finally, the balance, if any, after all of the Loan Obligations have
been indefeasibly paid in full and all of the Letters of Credit shall have
terminated (or funds equal to the amount of any contingent liabilities in
respect thereof shall have been deposited in the Letter of Credit cash
collateral account), to Multicare (on behalf of the Borrowers) or as
otherwise required by Law.
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ARTICLE 8 - THE ADMINISTRATIVE AGENT
8.1 APPOINTMENT. Each Lender Party hereby irrevocably appoints Mellon to
act as Administrative Agent for such Lender Party under this Agreement and the
other Loan Documents. Each Lender Party hereby irrevocably authorizes the
Administrative Agent to take such action on behalf of such Lender Party under
the provisions of this Agreement and the other Loan Documents, and to exercise
such powers and to perform such duties, as are expressly delegated to or
required of the Administrative Agent by the terms hereof or thereof, together
with such powers as are reasonably incidental thereto. Mellon hereby agrees to
act as Administrative Agent on behalf of the Lender Parties on the terms and
conditions set forth in this Agreement and the other Loan Documents, subject to
its right to resign as provided in Section 8.9 hereof. Each Lender Party hereby
irrevocably authorizes the Administrative Agent to execute and deliver each of
the Loan Documents and to accept delivery of such of the other Loan Documents as
may not require execution by the Administrative Agent. Each Lender Party agrees
that the rights and remedies granted to the Administrative Agent under the Loan
Documents shall be exercised exclusively by the Administrative Agent (or a
Person designated by the Administrative Agent), and that no Lender shall have
any right individually to exercise any such right or remedy, except to the
extent, if any, expressly provided herein or therein.
8.2 GENERAL NATURE OF ADMINISTRATIVE AGENT'S DUTIES.
Notwithstanding anything to the contrary elsewhere in this Agreement or in any
other Loan Document:
(a) The Administrative Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement and
the other Loan Documents, and no implied duties or responsibilities on the
part of the Administrative Agent shall be read into this Agreement or any
other Loan Document or shall otherwise exist.
(b) The duties and responsibilities of the Administrative Agent
under this Agreement and the other Loan Documents shall be mechanical and
administrative in nature, and the Administrative Agent shall not have a
fiduciary relationship with respect to any Lender Party.
(c) The Administrative Agent's relationship with and to the Lender
Parties is governed exclusively by the terms of this Agreement and the
other Loan Documents. The Administrative Agent does not assume, and shall
not at any time be deemed to have, any relationship of agency or trust
with or for, any Lender Party or any other Person or (except only as
expressly provided in this Agreement and the other Loan Documents) any
other duty or responsibility to such Lender Party or other Person.
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(d) The Administrative Agent shall be under no obligation to take
any action hereunder or under any other Loan Document if the
Administrative Agent believes in good faith that taking such action may
conflict with any Law or any provision of this Agreement or any other Loan
Document, or may require the Administrative Agent to qualify to do
business in any jurisdiction where it is not then so qualified.
(e) The authority of the Administrative Agent to request information
from the Borrowers or take any other voluntary action hereunder shall
impose no duty of any kind on the Administrative Agent to make such
request or take any such action.
8.3 EXERCISE OF POWERS. The Administrative Agent shall take any action of
the type specified in this Agreement or any other Loan Document as being within
the Administrative Agent's rights, powers or discretion in accordance with
directions from the Required Lenders (or as otherwise provided in the Loan
Documents). In the absence of such direction, the Administrative Agent shall
have the authority (but under no circumstances shall be obligated), in its sole
discretion, to take any such action, except to the extent that this Agreement or
such other Loan Document expressly requires the direction or consent of the
Required Lenders (or all of the Lenders, or some other Person or group of
Persons), in which case the Administrative Agent shall not take such action
absent such direction or consent. Any action or inaction pursuant to such
direction, discretion or consent shall be binding on each Lender Party (whether
or not it so consented). The Administrative Agent shall not have any liability
to any Person as a result of any action or inaction in conformity with this
Section 8.3.
8.4 GENERAL EXCULPATORY PROVISIONS. Notwithstanding anything to the
contrary elsewhere in this Agreement or any other Loan Document:
(a) The Administrative Agent shall not be liable for any action
taken or omitted to be taken by it under or in connection with this Agreement or
any other Loan Document, except only for direct (as opposed to consequential or
other) damages suffered by a Person and only to the extent that such Person
proves that such damages were caused by the Administrative Agent's own gross
negligence or willful misconduct.
(b) The Administrative Agent shall not be responsible for (i) the
execution, delivery, effectiveness, enforceability, genuineness, validity or
adequacy of any Loan Document, (ii) any recital, representation, warranty,
document, certificate, report or statement in, provided for in, or received
under or in connection with, any Loan Document, (iii) any failure of any Loan
Party or any Lender to perform any of their respective obligations under any
Loan Document, (iv) the existence, validity, enforceability, perfection,
recordation, priority, adequacy or value, now or hereafter, of any Lien or other
direct or indirect security afforded or purported to be afforded by any Loan
Document or otherwise from time to time, or (v) caring for, protecting,
insuring, or paying any taxes, charges or assessments with respect to any
Collateral or (vi) the enforceability of any subordination.
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(c) The Administrative Agent shall not be under any obligation to
ascertain, inquire or give any notice relating to (i) the performance or
observance of any of the terms or conditions of this Agreement or any other Loan
Document on the part of any Loan Party, (ii) the business, operations, condition
(financial or otherwise) or prospects of any Loan Party or any other Person
(even if the Administrative Agent knows or should know that some event or
condition exists or fails to exist), or (iii) except to the extent set forth in
Section 8.5(f) below, the existence of any Event of Default or Default.
(d) The Administrative Agent shall not be under any obligation,
either initially or on a continuing basis, to provide any Lender Party with any
notices, reports or information of any nature, whether in its possession
presently or hereafter, whether obtained under or in connection with this
Agreement or otherwise, except for such notices, reports and other information
expressly required by this Agreement or any other Loan Document to be furnished
by the Administrative Agent to such Lender Party.
8.5 ADMINISTRATION BY THE ADMINISTRATIVE AGENT.
(a) The Administrative Agent may rely upon any notice or other
communication of any nature (written or oral, including but not limited to
telephone conversations, whether or not such notice or other communication is
made in a manner permitted or required by this Agreement or any other Loan
Document) purportedly made by or on behalf of the proper party or parties, and
the Administrative Agent shall not have any duty to verify the identity or
authority of any Person giving such notice or other communication.
(b) The Administrative Agent may consult with legal counsel
(including in-house counsel for the Administrative Agent or in-house or other
counsel for any Loan Party), independent public accountants and any other
experts selected by it from time to time, and the Administrative Agent shall not
be liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts.
(c) The Administrative Agent may conclusively rely upon the truth of
the statements and the correctness of the opinions expressed in any certificates
or opinions furnished to the Administrative Agent in accordance with the
requirements of this Agreement or any other Loan Document. Whenever the
Administrative Agent shall deem it necessary or desirable that a matter be
proved or established with respect to any Loan Party or Lender Party, such
matter may be established by a certificate of such Loan Party or Lender Party,
as the case may be, and the Administrative Agent may conclusively rely upon such
certificate (unless other evidence with respect to such matter is specifically
prescribed in this Agreement or another Loan Document).
(d) The Administrative Agent may fail or refuse to take any action
unless it shall be directed by the Required Lenders (or all of the Lenders, or
some other Person or
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group of Persons, if this Agreement or another Loan Document so expressly
requires) to take such action and it shall be indemnified to its satisfaction
from time to time against any and all amounts, liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature which may be imposed on, incurred by or asserted against
the Administrative Agent by reason of taking or continuing to take any such
action.
(e) The Administrative Agent may perform any of its duties under
this Agreement or any other Loan Document by or through agents or
attorneys-in-fact. The Administrative Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.
(f) The Administrative Agent shall not be deemed to have any
knowledge or notice of the occurrence of any Event of Default or Default unless
the Administrative Agent has received notice from a Lender Party or a Borrower
referring to this Agreement, describing such Event of Default or Default, and
stating that such notice is a "notice of default." If the Administrative Agent
receives such a notice, the Administrative Agent shall give prompt notice
thereof to each Lender Party.
8.6 LENDER PARTIES NOT RELYING ON ADMINISTRATIVE AGENT OR OTHER LENDERS.
Each Lender Party acknowledges as follows: (a) neither the Administrative Agent
nor any other Lender Party has made any representations or warranties to it, and
no act taken hereafter by the Administrative Agent or any other Lender Party
shall be deemed to constitute any representation or warranty by the
Administrative Agent or such other Lender Party to it; (b) it has, independently
and without reliance upon the Administrative Agent or any other Lender Party,
and based upon such documents and information as it has deemed appropriate, made
its own credit and legal analysis and decision to enter into this Agreement and
the other Loan Documents; and (c) it will, independently and without reliance
upon the Administrative Agent or any other Lender Party, and based upon such
documents and information as it shall deem appropriate at the time, make its own
decisions to take or not take action under or in connection with this Agreement
and the other Loan Documents.
8.7 INDEMNIFICATION. Each Lender agrees to reimburse and indemnify each
Agent and its directors, officers, employees and agents (to the extent not
reimbursed by a Loan Party and without limitation of the obligations of the Loan
Parties to do so), in proportion to the Lenders' respective pro rata share of
(without duplication) the Commitment and the Loans, from and against any and all
amounts, losses, liabilities, claims, damages, expenses, obligations, penalties,
actions, judgments, suits, costs or disbursements of any kind or nature
(including the fees and disbursements of counsel for such Agent or such other
Person in connection with any investigative, administrative or judicial
proceeding commenced or threatened, whether or not such Agent or such other
Person shall be designated a party thereto) that may at any time be imposed on,
incurred by or asserted against such Agent or such other Person as a result of,
or arising out of, or in any way related to or by reason of,
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this Agreement, any other Loan Document, any Acquisition or any other
transaction from time to time contemplated hereby or thereby, or any transaction
actually or proposed to be financed in whole or in part, directly or indirectly,
with the proceeds of any Loan, provided that no Lender shall be liable for any
portion of such amounts, losses, liabilities, claims, damages, expenses,
obligations, penalties, actions, judgments, suits, costs or disbursements that
such Lender Party proves were the result of the gross negligence or willful
misconduct of such Agent or such other Person. Payments under this Section 8.7
shall be due and payable on demand.
8.8 HOLDERS OF NOTES. The Administrative Agent may deem and treat the
Lender which is payee of a Note as the owner and holder of such Note for all
purposes hereof unless and until a an Assignment and Acceptance with respect to
the assignment or transfer thereof shall have been filed with the Administrative
Agent in accordance with Section 10.9 hereof.
8.9 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may
resign at any time by giving 30 days' prior written notice thereof to the other
Lender Parties and Multicare on behalf of the Borrowers. The Administrative
Agent may be removed by the Required Lenders at any time for cause by such
Required Lenders giving 30 days' prior written notice thereof to the
Administrative Agent, the other Lender Parties and Multicare on behalf of the
Borrowers. Upon any such resignation or removal, the Required Lenders shall have
the right to appoint a successor Administrative Agent with (so long as no
Default or Event of Default shall have occurred and then be continuing) the
consent of Multicare on behalf of the Borrowers whose consent shall not be
unreasonably withheld. If no successor Administrative Agent shall have been so
appointed and consented to, and shall have accepted such appointment, within 30
days after such notice of resignation or removal, then the retiring
Administrative Agent may (but shall not be required to) appoint a successor
Administrative Agent. Each successor Administrative Agent shall be a Lender if
any Lender shall at the time be willing to become the successor Administrative
Agent, and if no Lender shall then be so willing, then such successor
Administrative Agent shall be an Eligible Institution. Upon the acceptance by a
successor Administrative Agent of its appointment as Administrative Agent
hereunder, such successor Administrative Agent shall thereupon succeed to and
become vested with all the properties, rights, powers, privileges and duties of
the former Administrative Agent in its capacity as such, without further act,
deed or conveyance. Upon the effective date of resignation or removal of a
retiring Administrative Agent, such Administrative Agent shall be discharged
from its duties under this Agreement and the other Loan Documents, but the
provisions of this Agreement shall inure to its benefit as to any actions taken
or omitted by it while it was Administrative Agent under this Agreement. If and
so long as no successor Administrative Agent shall have been appointed, then any
notice or other communication required or permitted to be given by the
Administrative Agent shall be sufficiently given if given by the Required
Lenders, all notices or other communications required or permitted to be given
to the Administrative Agent shall be given to each Lender, and all payments to
be made to the Administrative Agent shall be made directly to the Loan Party or
Lender Party for whose account such payment is made.
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8.10 ADDITIONAL ADMINISTRATIVE AGENTS; COLLATERAL AGENT.
If the Administrative Agent shall from time to time deem it necessary or
advisable, for its own protection in the performance of its duties hereunder or
in the interest of the Lender Parties, the Administrative Agent and the
Borrowers shall (and the Borrowers shall cause the other Loan Parties to)
execute and deliver a supplemental agreement and all other instruments and
agreements necessary or advisable, in the opinion of the Administrative Agent,
to constitute one or more other Persons designated by the Administrative Agent,
to act as co-Administrative Agent or agent with respect to any part of the
Collateral, with such powers of the Administrative Agent as may be provided in
such supplemental agreement, and to vest in such other Person as such co-Agent
or separate agent, as the case may be, any properties, rights, powers,
privileges and duties of the Administrative Agent under this Agreement or any
other Loan Document.
8.11 CALCULATIONS. The Administrative Agent shall not be liable for any
calculation, apportionment or distribution of payments made by it in good faith
and without gross negligence or willful misconduct. If such calculation,
apportionment or distribution is subsequently determined to have been made in
error, the sole recourse of any Lender Party to whom payment was due but not
made shall be to recover from the other Lender Parties any payment in excess of
the amount to which they are determined to be entitled or, if the amount due was
not paid by the appropriate Loan Party, to recover such amount from the
appropriate Loan Party.
8.12 OTHER AGENTS.
(a) In General. The title "Syndication Agent" given to Citicorp USA, Inc.
and NationsBank, in this Agreement and the title "Documentation Agent" given to
First Union National Bank in this Agreement are solely for identification
purposes and imply no rights in favor of such Person and no responsibility by
such Person except such rights or obligations of "Agents" (including the right
to make certain determinations) as are expressly stated herein. No such Agent
shall be liable for any act or failure to act on its part except for that which
the claimant proves constitutes the gross negligence or willful misconduct of
such Agent.
(b) Successor Agents. Any Syndication Agent and the Documentation Agent
may resign at any time and such Agents may be removed at any time for cause by
the other Agents and Multicare in which event, Multicare (on behalf of the
Borrowers) if no Default or Event of Default shall then exist, and the
Administrative Agent may (in their sole discretion) appoint a successor Agent.
8.13 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. With respect to its
Commitment hereunder and the Loan Obligations owing to it, the Administrative
Agent shall have the same rights and powers under this Agreement and each
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other Loan Document as any other Lender and may exercise the same as though it
were not the Administrative Agent, and the terms "Lender", "Holder of Notes" and
like terms shall include the Administrative Agent in its individual capacity as
such. The Administrative Agent and its Affiliates may, without liability to
account, make loans to, accept deposits from, acquire debt or equity interests
in, act as trustee under indentures of, enter into Interest Rate Hedging
Agreements with, serve as "Administrative Agent" for other financing vehicles,
issue letters of credit on behalf of, and engage in any other business with (a)
any Loan Party, or any stockholder, Subsidiary of Affiliate of any Loan Party,
or (b) any other Person, whether such other Person may be engaged in any
conflict or dispute with any Loan Party or any Lender Party or otherwise, as
though the Administrative Agent were not the Administrative Agent hereunder.
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ARTICLE 8A
SPECIAL INTER-BORROWER PROVISIONS
8A.1 CERTAIN BORROWER ACKNOWLEDGEMENTS.
(a) Each Borrower acknowledges that it will enjoy significant
benefits from the business conducted by the other Borrowers because of, inter
alia, their combined ability to bargain with other Persons including without
limitation their ability to receive the credit facilities on favorable terms
granted by this Agreement and other Loan Documents which would not have been
available to an individual Borrower acting alone. Each Borrower has determined
that it is in its best interest to procure credit facilities which each Borrower
may utilize directly and which receive the credit support of the other Borrowers
as contemplated by this Agreement and the other Loan Documents.
(b) The Lenders have advised the Borrowers that they are unwilling
to enter into this Agreement and the other Loan Documents and make available the
credit facilities extended hereby to any Borrower unless each Borrower agrees,
among other things, to be jointly and severally liable for the due and proper
payment of the obligations of each other Borrower under this Agreement and other
Loan Documents. Each Borrower has determined that it is in its best interest and
in pursuit of its purposes that it so induce the Lenders to extend credit
pursuant to this Agreement and the other documents executed in connection
herewith (i) because of the desirability to each Borrower of the credit
facilities, the interest rates and the modes of borrowing available hereunder,
(ii) because each Borrower may engage in transactions jointly with other
Borrowers and (iii) because each Borrower may require, from time to time, access
to funds under this Agreement for the purposes herein set forth.
(c) Each Borrower has determined that it has and, after giving
effect to the transactions contemplated by this Agreement and the other Loan
Documents (including, without limitation, the inter-Borrower arrangement set
forth in this Article 8A) will have assets having a fair saleable value in
excess of the amount required to pay its probable liability on its existing
debts as they fall due for payment and that the sum of its debts is not and will
not then be greater than all of its property at a fair valuation, that such
Borrower has, and will have, access to adequate capital for the conduct of its
business and the ability to pay its debts from time to time incurred in
connection therewith as such debts mature and that the value of the benefits to
be derived by such Borrower from the access to funds under this Agreement
(including, without limitation, the inter-Borrower arrangement set forth in this
Section 8A) is reasonably equivalent to the obligations undertaken pursuant
hereto.
8A.2 CERTAIN INTER-BORROWER AGREEMENTS.
(a) Subject to paragraph (b) below, each Borrower as indemnitor
shall indemnify the other Borrowers as indemnitees for all Loan Obligations
incurred by the indemnitee Borrowers for Loans advanced to, or Letters of Credit
issued for the account of, the indemnitor Borrower.
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(b) The rights and obligations of the Borrowers pursuant to
paragraph (a) above shall be subordinated in all respects to the rights of the
Administrative Agent and the other Lender Parties with respect to the Loan
Obligations and, accordingly, each Borrower agrees that it shall not make any
payment or receive any payment pursuant to the preceding paragraph (a) at any
time a Default has occurred and is continuing or would be caused thereby. Each
Borrower agrees that in the event it receives any payment described by this
paragraph (a), it shall accept such payment as agent of the Administrative
Agent, for the benefit of the Lender Parties, and hold the same in trust on
behalf of and for the benefit of the Administrative Agent, for the benefit of
the Lender Parties.
8A.3 RECORDS. Multicare (on behalf of each Borrower) shall maintain
records specifying (a) all Loan Obligations incurred by each Borrower, (b) the
date of such incurrence, (c) the date and amount of any payments made in respect
of such Loan Obligations and (d) all inter-Borrower obligations pursuant to
paragraph 8A.2 above. Multicare shall make copies of such records available to
the Administrative Agent, upon request.
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ARTICLE 9
DEFINITIONS; CONSTRUCTION
9.1 CERTAIN DEFINITIONS. As used in this Agreement, the following
terms have the following meanings, (terms defined in the singular to have a
correlative meaning when used in the plural) unless the context hereof otherwise
clearly requires:
"Accumulated Funding Deficiency" has the meaning given to such term
in ss.4001(a)(18) of ERISA.
"Acquisition" means any acquisition by one or more of the Borrowers,
directly or indirectly, whether in one transaction or in a series of related
transactions (and whether by merger, consolidation, acquisition of assets or
otherwise) of all or any substantial portion of the ownership interests in or
assets of any separate business enterprise.
"Acquisition Corp." means Genesis ElderCare Acquisition Corp., a
Delaware corporation.
"Acquisition Corp. Credit Agreement" has the meaning ascribed to
such term in Section 2.1(v).
"Acquisition Cost" means, with respect to any Acquisition, the value
in Dollars of the total consideration paid or payable (whether immediate or
deferred and whether in cash, equity or other assets) by any of the Borrowers
(such consideration including the amount of any Assumed Indebtedness) for or in
respect of the ownership interests or assets being acquired in such Acquisition.
"Adjusted Senior Debt/Cash Flow Ratio" means as of any date of
determination:
(a) Adjusted Senior Debt as of such date of determination
divided by
(b) Cash Flow of Multicare and its Restricted Subsidiaries, on
a consolidated basis, for the four fiscal quarters ending on,
or most recently prior to, such date of determination.
"Adjusted Senior Debt" means, as of any date of determination, the
result of:
(a) Adjusted Total Indebtedness, as of such date of
determination
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less
(b) the sum of (i) Indebtedness which is evidenced by the 1997
Subordinated Notes, and (ii) any other Indebtedness which is
both permitted under the terms of this Agreement and expressly
subordinated in right of payment to all Loan Obligations under
terms satisfactory to the Administrative Agent.
"Adjusted Total Debt/Cash Flow Ratio" means, as of any date of
determination, the ratio of:
(a) Adjusted Total Indebtedness as of such date of
determination
divided by
(b) Cash Flow of Multicare and its Restricted Subsidiaries, on
a consolidated basis, for the four fiscal quarters ended on,
or most recently prior to, such date of determination.
"Adjusted Total Indebtedness" means, as at any date of
determination, the sum of:
(a) Total Funded Indebtedness as of such date of
determination
plus
(b) the product of (i) the amount of Rental Expense of
Multicare and its Restricted Subsidiaries, on a consolidated
basis, for the four fiscal quarters ended on, or most recently
prior to, such date of determination multiplied by (ii) eight
(8).
"Administrative Agent" has the meaning ascribed to such term in the
preamble of this Agreement.
"Affiliate" of a Person means (a) any other Person which directly or
indirectly controls, or is controlled by, or is under common control with, such
Person, (b) any director or officer (or, in the case of a Person which is not a
corporation, any individual having analogous powers) of such Person or of a
Person who is an Affiliate of such Person, and (c) any individual related to
such Person or Affiliate by consanguinity or adoption within the third degree.
For purposes of the preceding sentence, "control" of a Person means (a) the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by contract or otherwise and (b) in any case
shall include direct or indirect ownership (beneficially or of record) of, or
direct or indirect power to vote, 5% or more of the outstanding shares of any
class of capital stock of such Person (or in the case of a Person
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that is not a corporation, 5% or more of any class of equity interest). Excluded
Subsidiaries may be "Affiliates" of Multicare.
"Agents" means collectively the Administrative Agent, Citicorp USA,
Inc., and NationsBank, N.A., each as a Syndication Agent, and First Union
National Bank, as Documentation Agent.
"Agreement" means this Credit Agreement as the same may be amended,
modified, restated or supplemented from time to time in accordance with its
terms.
"Agreement Date" means the date first-above written.
"Amount of Unfunded Benefit Liabilities" has the meaning given to
such term in ss.4001(a)(18) of ERISA.
"Assignment and Acceptance" shall have the meaning ascribed to such
term in Section 10.9.
"Assumed Indebtedness" means Indebtedness incurred by a Person which
is not a Borrower and which (a) is existing at the time such Person (or assets
of such Person) is acquired by a Borrower and (b) is assumed by a Borrower in
connection with such Acquisition, other than Indebtedness incurred by the
original obligor in connection with, or in contemplation of, such Acquisition.
"Available Commitment" means, as of any date, the difference between
(a) and (b) where (a) is the amount of the RC Commitment on such date and (b) is
the sum of (i) the aggregate outstanding principal amount of all Loans on such
date, (ii) the face amount of all outstanding Letters of Credit on such date,
(iii) the aggregate unpaid amount of all Drawings under Letters of Credit as of
such date, (iv) the aggregate outstanding principal amount of all Swing Loans on
such date, (v) the maximum amount necessary to redeem by March 16, 1998, all
shares of stock issuable on conversion of Multicare's Convertible Subordinated
7% Debentures outstanding on the date of determination of "Available
Commitment," and (v) the maximum amount (including principal, interest, premiums
and fees, if any) necessary to repay by January 2, 1998, all of Multicare's
Senior Subordinated 12-1/2% Notes outstanding on the date of determination of
"Available Commitment." For purposes of clauses (iv) and (v) the phrase
"outstanding on the date of determination of "Available Commitment" shall
initially be determined with reference to the Officers Certificate delivered by
Multicare pursuant to Section 2.1(r) hereof and thereafter shall be determined
with reference to updated Officer's Certificates (in the form and with the same
level of detail as the Officer's Certificate delivered pursuant to Section
4.1(c) above) which Multicare may deliver to the Administrative Agent from time
to time, provided that Multicare shall deliver not more than four (4) such
updated Officer's Certificates hereunder.
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"Bank Taxes" means (i) any Tax based on or measured by net income of
a Lender Party, any franchise Tax and any doing business Tax imposed upon any
Lender Party by any jurisdiction (or any political subdivision thereof) in which
such Lender Party or any lending office of a Lender Party is located and (ii)
for the purposes of Section 1.13, any other Tax imposed by a jurisdiction other
than the United States or a political subdivision thereof that would not have
been imposed but for a present or former connection between such Lender Party or
lending office (as the case may be) and such jurisdiction.
"Borrowers" has the meaning ascribed to such term in the preamble
hereto. It is the intent of the parties (and a covenant of the Borrowers herein)
that each Person which is now or hereafter becomes a direct or indirect
Subsidiary of Multicare other than Excluded Subsidiaries shall at all times
after becoming a Subsidiary of Multicare be a "Borrower" pursuant to the terms
of this Agreement.
"Business Day" means any day other than a Saturday, Sunday, public
holiday under the laws of the Commonwealth of Pennsylvania and the State of New
York, or other day on which banking institutions are authorized or obligated to
close in the city in which the Administrative Agent's domestic lending office is
located.
"Capital Expenditures", with respect to any Person, means, for any
period, all expenditures (whether paid in cash or accrued as liabilities) of
such Person during such period which are, or should be, classified as capital
expenditures in accordance with GAAP.
"Capitalized Lease" means at any time any lease which is, or should
be, capitalized on the balance sheet of the lessee at such time in accordance
with GAAP.
"Capitalized Lease Obligation" of any Person at any time means the
aggregate amount which is, or should be, reported as a liability on the balance
sheet of such Person at such time as lessee under a Capitalized Lease in
accordance with GAAP.
"Cash Equivalent Investments" means any of the following: (i) full
faith and credit obligations of the United States of America, or fully
guaranteed as to interest and principal by the full faith and credit of the
United States of America, maturing in not more than one year from the date such
investment is made; (ii) time deposits and certificates of deposit having a
final maturity of not more than one year after the date of issuance thereof of
any commercial bank incorporated under the laws of the United States of America
or any state thereof or the District of Columbia, which bank is a member of the
Federal Reserve System and has a combined capital and surplus of not less than
$1,000,000,000.00 and with a senior unsecured debt credit rating of at least "A"
by Xxxxx'x Investors Service, Inc. or "A" by Standard & Poor's Ratings Group;
(iii) commercial paper of companies, banks, trust companies or national banking
associations (in each case excluding Multicare and its Affiliates) incorporated
or doing business under the laws of the United States or one of the States
thereof, in each case having a remaining term until maturity of not more than
180 days from the date such investment is made and rated at least P-1 by Xxxxx'x
Investors Service,
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Inc. or at least A-1 by Standard & Poor's Ratings Group; and (iv) repurchase
agreements with any financial institution having combined capital and surplus of
not less than $1,000,000,000.00 with a term of not more than seven days for
underlying securities of the type referred to in clause (i) above.
"Cash Flow", with respect to any Person, for any period, means (a)
Net Income of such Person plus (b) each of the following to the extent deducted
in determining Net Income: (i) Interest Expense, (ii) Rental Expense, (iii)
depreciation expense, (iv) amortization expense and, (v) income taxes, all as
adjusted for changes in accrued management fees under the Multicare Management
Agreement, in each case for such period.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, and any successor statute of similar
import, and regulations thereunder, in each case as in effect from time to time.
"CERCLIS" means the Comprehensive Environmental Response,
Compensation and Liability Information System List, as the same may be amended
from time to time.
"Change of Control" means the occurrence of any of the following
events:
(a) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended) other than a Permitted Holder (as hereinafter defined), in
a single transaction or through a series of related transactions, is
or becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Securities Exchange Act of 1934, as amended, except that a
Person shall be deemed a "beneficial owner" of all securities that
such Person has a right to acquire, whether such right is
exercisable immediately or only after the passage of time, upon the
happening of an event or otherwise), directly or indirectly, of more
than, on a fully diluted basis, 35% of the total Voting Stock of the
Genesis ElderCare Corp. (and all rights and options to purchase such
Voting Stock) if such beneficial ownership is greater than the
amount of voting power of the Voting Stock (and all rights and
options to purchase such Voting Stock) of Genesis ElderCare Corp.
held by Genesis and its Affiliates on such date;
(b) if TPG, Cypress, Nazem and Genesis, collectively, shall
cease to own beneficially and of record at least 51% of the shares
of each class of capital stock of Genesis ElderCare Corp. (and all
rights and options to purchase such shares of capital stock) subject
to no Liens;
(c) if Genesis ElderCare Corp. at any time fails to own
beneficially and of record 100% of the capital stock of Acquisition
Corp (and all rights and options to purchase such capital stock);
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(d) if Acquisition Corp. at any time fails to own beneficially
and of record at least 51% of the capital stock of Multicare (and
all rights and options to purchase such capital stock);
(e) if Multicare at any time fails to own beneficially and of
record 100% of the capital stock (and all rights and options to
purchase such capital stock) of all the Borrowers (subject to any
permitted disposition pursuant to Section 6.5 hereof);
(f) if Genesis, Genesis ElderCare Corp., Acquisition Corp.,
Multicare or any other Loan Party consolidates or merges with or
into another corporation or conveys, transfers or leases all or
substantially all of its assets to any Person, or any corporation
consolidates or merges with or into Genesis, Genesis ElderCare
Corp., Acquisition Corp., Multicare or any other Loan Party, in any
such event pursuant to a transaction in which the outstanding Voting
Stock of Genesis, Genesis ElderCare Corp., Acquisition Corp.,
Multicare or any other Loan Party is changed into or exchanged for
cash, securities or other property, other than the Merger and other
than any such transaction where (i) the outstanding Voting Stock of
Genesis, Genesis ElderCare Corp., Acquisition Corp., Multicare or
any other Loan Party is changed into or exchanged for (x) Voting
Stock of the surviving corporation which is not Redeemable Capital
Stock (as hereinafter defined) or (y) cash, securities or other
property in an amount which such party would not be prohibited,
under the 1997 Subordinated Note Indenture if then in effect from
paying as a "restricted payment" (as defined in such indentures),
and (ii) the holders of the Voting Stock of Genesis, Genesis
ElderCare Corp., Acquisition Corp., Multicare or any other Loan
Party, as the case may be, immediately prior to such transaction
own, directly or indirectly, not less than 50% of the Voting Stock
of the surviving corporation immediately after such transaction;
(g) if during any period of two consecutive years, individuals
who at the beginning of such period constituted the Board of
Directors of Genesis, Genesis ElderCare Corp., Acquisition Corp.,
Multicare or any other Loan Party (together with any new directors
whose election by any such Board of Directors or whose nomination
for election by the stockholders of such company was approved by a
vote of at least 66-2/3% of the directors then still in office who
were either directors at the beginning of such period or whose
election or nomination for election was previously so approved)
cease for any reason to constitute a majority of such Board of
Directors then in office; except in the case of a change in the
composition of the Board of Directors of Acquisition Corp. or
Genesis ElderCare Corp., approved by Genesis in connection with its
acquisition of the common stock of Genesis ElderCare Corp. held by
Nazem, Cypress and TPG; or
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(h) if Genesis, Genesis ElderCare Corp., Acquisition Corp.,
Multicare or any other Loan Party is liquidated or dissolved or
adopts a plan of liquidation.
For purposes of this definition of "Change of Control," (A) "Voting Stock" shall
mean stock of the class or classes pursuant to which the holders thereof have
the general voting power under ordinary circumstances to elect at least a
majority of the board of directors, managers or trustees of a corporation
(irrespective of whether or not at the time stock of any other class or classes
shall have or might have voting power by reason of the happening of any
contingency); (B) "Redeemable Capital Stock" of a Person shall mean any capital
stock or equity interests that, either by its terms, by the terms of any
security into which it is convertible or exchangeable or otherwise, is, or upon
the happening of an event or passage of time would be, required to be redeemed
prior to any stated maturity of the principal of the
1997 Subordinated Notes or is redeemable at the option of the holder thereof at
any time prior to any such stated maturity, or is convertible into or
exchangeable for debt securities at any time prior to any such stated maturity
at the option of the holder thereof; (C) "Board of Directors" of a company shall
mean the board of directors of such company or the executive committee of such
company; and (D) "Permitted Holder" shall mean (i) Genesis, Cypress and TPG, in
the case of Genesis ElderCare Corp., (ii) Genesis ElderCare Corp. in the case of
Acquisition Corp., (iii) Genesis ElderCare Corp. or Acquisition Corp. in the
case of Multicare, and (iv) Multicare in the case of its Subsidiaries.
"Closing Date" means the date that the initial Loans are made
hereunder.
"COBRA Violation" means any violation of the "continuation coverage
requirements" of "group health plans" of former ss.162(k) of the Code (as in
effect for tax years beginning on or before December 31, 1988) and of ss.4980B
of the Code (as in effect for tax years beginning on or after January 1, 1989)
and Part 6 of Subtitle B of Title I of ERISA.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
any successor statute of similar import, and regulations thereunder, in each
case as in effect from time to time, and the Treasury regulations thereunder.
"Collateral" means (a) the cash collateral account, if any, in
respect of Letters of Credit from time to time and (b) the collateral subject
to, or purported to be subject to, the Liens of the Pledge Agreement, from time
to time.
"Commitment" means, (1) with respect to any Lender, (i) the amount
set forth opposite such Lender's name under the heading "Commitment" on Schedule
1.1 hereto or, in the case of a Lender that becomes a Lender pursuant to an
assignment, the amount of the assignor's Commitment assigned to such Lender, in
either case as the same may be reduced from time to time pursuant to Section 1.7
or increased or reduced from time to time pursuant to assignments in accordance
with Section 10.9 or (ii) as the context may require,
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the obligation of such Lender to make Loans in an aggregate unpaid principal
amount not exceeding such amount pursuant to this Agreement, and with respect to
the Issuer, to issue Letters of Credit; and (2) with respect to all Lenders, the
sum of each Lender's Commitment.
"Contingent Reimbursement Obligation" means the contingent
obligation of the Borrowers to reimburse the Issuer for any Drawings that may be
made under an outstanding Letter of Credit, whenever issued. Without limiting
the generality of the foregoing, the amount of all Contingent Reimbursement
Obligations at any time shall be the aggregate amount available to be drawn
under outstanding Letters of Credit at such time.
"Controlled Group" means a group of employers, of which any Borrower
is a member and which group constitutes:
(a) A controlled group of corporations (as defined inss.414(b)
of the Code);
(b) Trades or businesses (whether or not incorporated) which
are under common control (as defined in ss.414(c) of the Code);
(c) Trades or businesses (whether or not incorporated) which
constitute an affiliated service group (as defined in ss.414(m) of the Code); or
(d) Any other entity required to be aggregated with any
Borrower pursuant to ss.414(o) of the Code.
"Cypress" shall mean The Cypress Group L.L.C., a Delaware limited
liability company together with (a) any Subsidiary thereof and (b) any other
Affiliate thereof reasonably acceptable to the Administrative Agent. Without
limiting the generality of the foregoing, "Cypress" shall include Cypress
Associates L.P., Cypress Offshore Partners L.P., Cypress Merchant Banking
Partners L.P. and Cypress Advisors Inc.
"Default" means any event or condition which with notice, passage of
time or both, would constitute an Event of Default.
"Default Rate" means, with respect to any amounts payable hereunder
or under the other Loan Documents, a rate equal to the sum of (a) two percent
(2%) per annum plus (b) the interest rate otherwise in effect with respect to
such amounts.
"Defined Benefit Pension Plan" means a defined benefit plan (other
than a Multiemployer Plan) as defined in ss.3(35) of ERISA which is maintained
by any Borrower or any member of its Controlled Group.
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"Defined Contribution Plan" means an individual account plan (other
than a Multiemployer Plan) as defined in ss.3(34) of ERISA which is maintained
by any Borrower or any member of its Controlled Group.
"Dollar," "Dollars" and the symbol "$" means lawful money of the
United States of America.
"Drawing" means (a) any amount disbursed by the Issuer pursuant to
the terms of a Letter of Credit or (b) as the context may require, the
obligation of the Borrowers to reimburse the Issuer for such disbursement.
"EBITDA" means Net Income before Interest Expense, provision for
income taxes, depreciation and amortization, as adjusted on a pro forma basis
for the transactions contemplated by the Multicare Management Agreement.
"Eligible Institution" means (i) a Lender; (ii) an Affiliate of a
Lender; (iii) a commercial bank organized under the laws of the United States,
or any State thereof, and having a combined capital surplus of at least
$1,000,000,000.00; (iv) a savings and loan association or savings bank organized
under the laws of the United States, or any State thereof, and having a combined
capital surplus of at least $1,000,000,000.00; (v) a commercial bank organized
under the laws of any other country that is a member of the Organization for
Economic Cooperation and Development or has concluded special lending
arrangements with the International Monetary Fund associated with its General
Arrangements to Borrower or under the laws of a political subdivision of any
such country, and having a combined capital and surplus of at least
$1,000,000,000.00, so long as such bank is acting through a branch or agency
located in the United States; and (vi) a finance company, insurance company or
other financial institution or fund (whether a corporation, partnership, trust
or other entity) that is engaged in making, purchasing or otherwise investing in
commercial loans in the ordinary course of its business and having a combined
capital and surplus or total assets of at least $500,000,000.00 and (vii) with
respect to any Lender that is a fund, any other fund with assets in excess of
$100,000,000.00 that invests in bank loans and is managed by the same investment
advisor as such Lender; provided, however, that neither any Loan Party nor any
Affiliate of a Loan Party shall qualify as an Eligible Institution under this
definition.
"Environmental Affiliate" means, with respect to any Person, any
other Person whose liability (contingent or otherwise) for any Environmental
Claim such Person has retained, assumed or otherwise is liable for (by Law,
agreement or otherwise).
"Environmental Approvals" means any approval, order, consent,
authorization, certificate, license, permit or validation of, or exemption or
other action by, or filing, recording or registration with, any Governmental
Authority pursuant to or required under any Environmental Law.
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"Environmental Claim" means, with respect to any Person, any action,
suit, proceeding, investigation, notice, claim, complaint, demand, request for
information or other communication (written or oral) by any other Person
(including but not limited to any Governmental Authority, citizens' group or
present or former employee of such Person) alleging, asserting or claiming any
actual or potential (a) violation of any Environmental Law, (b) liability under
any Environmental Law or (c) liability for investigatory costs, cleanup costs,
governmental response costs, natural resources damages, property damages,
personal injuries, fines or penalties arising out of, based on or resulting from
the presence, or release into the environment, of any Environmental Concern
Materials at any location, whether or not owned by such Person.
"Environmental Cleanup Site" means any location which is listed or
proposed for listing on the National Priorities List (as established under
CERCLA), on CERCLIS or on any similar state list of sites requiring
investigation or cleanup, or which is the subject of any pending or threatened
action, suit, proceeding or investigation related to or arising from any alleged
violation of any Environmental Law.
"Environmental Concern Materials" means (a) any flammable substance,
explosive, radioactive material, hazardous material, hazardous waste, toxic
substance, solid waste, pollutant, contaminant or any related material, raw
material, substance, product or by-product of any substance specified in or
regulated or otherwise affected by any Environmental Law (including but not
limited to any "hazardous substance" as defined in CERCLA or any similar state
Law), (b) any toxic chemical or other substance from or related to industrial,
commercial or institutional activities, and (c) asbestos, gasoline, diesel fuel,
motor oil, waste and used oil, heating oil and other petroleum products or
compounds, polychlorinated biphenyls, radon and urea formaldehyde.
"Environmental Law" means any Law, whether now existing or
subsequently enacted or amended, relating to (a) pollution or protection of the
environment, including natural resources, (b) exposure of Persons, including but
not limited to employees, to Environmental Concern Materials, (c) protection of
the public health or welfare from the effects of products, by-products, wastes,
emissions, discharges or releases of Environmental Concern Materials or (d)
regulation of the manufacture, use or introduction into commerce of
Environmental Concern Materials including their manufacture, formulation,
packaging, labeling, distribution, transportation, handling, storage or
disposal. "Environmental Law" shall also include any Environmental Approval and
the terms and conditions thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations thereunder.
"Event of Default" means any of the Events of Default described in
Section 7.1 hereof.
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"Excluded Subsidiaries" means the entities listed on Schedule 9.1
attached hereto and, after the Closing Date, each Subsidiary of any Excluded
Subsidiary.
"Federal Funds Rate" for any day means the rate per annum determined
by the Administrative Agent (which determination shall be conclusive) to be the
rate per annum announced by the Federal Reserve Bank of New York on such day as
being the weighted average of the rates on overnight Federal funds transactions
arranged by federal funds brokers on the previous trading day, or, if such
Federal Reserve Bank does not announce such rate on any day, the rate for the
last day on which such rate was announced.
"Fixed Charge Coverage Ratio" means, as of any date of
determination, the result of:
(a) Cash Flow of Multicare and its Restricted Subsidiaries, on
a consolidated basis, for the four fiscal quarters ending on,
or most recently prior to, such date of determination
divided by
(b) the sum of (i) Interest Expense, income taxes and Rental
Expense of Multicare and its Restricted Subsidiaries, on a
consolidated basis, for the four fiscal quarters ending on, or
most recently prior to such date of determination and (ii)
principal payments scheduled or required to be made on Total
Funded Indebtedness for the four fiscal quarters ending on, or
most recently prior to, such date of determination.
"GAAP" has the meaning set forth in Section 9.3(a) hereof.
"Genesis" has the meaning ascribed to such term in Section 2.1(f)
hereof.
"Genesis Credit Agreement" has the meaning ascribed to such term in
Section 2.1 hereof.
"Genesis ElderCare Corp." means the Delaware corporation of that
name, formerly named Waltz Corp.
"Genesis Group" means Genesis and those of its Subsidiaries which
filed tax returns on a consolidated basis with Genesis prior to the acquisition
of capital stock of Multicare by Acquisition Corp. under the Tender Offer.
"Governmental Authority" means any government or political
subdivision or any agency, authority, bureau, central bank, commission,
department or instrumentality of
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either, or any court, tribunal, grand jury or arbitrator, in each case whether
foreign or domestic.
"Guaranty" means, with respect to any Person (a "Guarantor"), any
contractual or other obligation, contingent or otherwise, of such Person to pay
any Indebtedness or other obligation of any other Person or to otherwise protect
the holder of any such Indebtedness or other obligation against loss (whether
such obligation arises by agreement to pay, to keep well, to purchase assets,
goods, securities or services or otherwise) provided, however, that the term
"Guaranty" shall not include an endorsement for collection or deposit in the
ordinary course of business. The term, "Guaranty," when used as a verb has the
correlative meaning.
"Health Care Business" means any healthcare related business
including a facility, unit, operation, or business supplying health care
services, supplies or products, including long-term care, rehabilitation
therapy, specialized health care, health care management and pharmacies.
"Indebtedness" of any Person means (without duplication):
(a) all obligations on account of money borrowed by, or credit
extended to or on behalf of, or for or on account of deposits with or advances
to, such Person;
(b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments;
(c) all obligations of such Person for the deferred purchase
price of property or services;
(d) all obligations secured by a Lien on property owned by
such Person (whether or not assumed) provided, however, for purposes of
determining the amount of such Indebtedness under this clause (d), the amount of
any such non-recourse Indebtedness shall be limited to the lesser of (i) the
fair market value of the asset subject to such Lien and (ii) the amount of such
Indebtedness;
(e) all obligations of such Person under Capitalized Leases
(without regard to any limitation of the rights and remedies of the holder of
such Lien or the lessor under such Capitalized Lease to repossession or sale of
such property);
(f) the face amount of all letters of credit issued for the
account of such Person and, without duplication, the unreimbursed amount of all
drafts drawn thereunder, and all other obligations of such Person associated
with such letters of credit or draws thereon;
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(g) all obligations of such Person with respect to acceptances
or similar obligations issued for the account of such Person;
(h) all obligations of such Person under a product financing
or similar arrangement described in paragraph 8 of FASB Statement of Accounting
Standards No. 49 or any similar requirement of GAAP;
(i) all obligations of such Person under any Interest Rate
Hedging Agreement or any currency protection agreement, currency future, option
or swap or other currency hedge agreement;
(j) all Guaranties of such Person; and
(k) all obligations of such Person under, or in respect of,
any Synthetic Leases.
Indebtedness shall not include accounts payable to trade creditors arising out
of purchases of goods or services in the ordinary course of business, provided
that (i) such accounts payable are payable on usual and customary trade terms,
and (ii) such accounts payable are not overdue by more than 60 days according to
the original terms of sale except (if no foreclosure, distraint, levy, sale or
similar proceeding shall have been commenced) where such payments are being
contested in good faith by appropriate proceedings diligently conducted and
subject to such reserves or other appropriate provisions as may be required by
GAAP.
"Indemnified Parties" means collectively, the Lender Parties and
their respective Affiliates and (without duplication) the directors, officers,
employees, attorneys and agents of each of the foregoing.
"Indemnitees" has the meaning set forth in Section 10.12 hereof.
"Interest Expense" means, for any Person, for any period, the sum
(without duplication) of (a) all interest accrued (or accreted) on Indebtedness
of such Person during such period whether or not actually paid excluding any
obligations under any Synthetic Leases) plus (b) the net amount accrued under
any Interest Rate Hedging Agreements (or less the net amount receivable
thereunder) during such period.
"Interest Rate Hedging Agreement" means any rate swap, cap or collar
agreement to which any or all of the Borrowers are party and which is on terms
and conditions satisfactory to the Administrative Agent.
"Investments" has the meaning set forth in Section 6.3 hereof.
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"JCAHO" means Joint Commission on Accreditation of Healthcare
Organizations.
"Joinder Effective Date" means the date that any Joining Subsidiary
becomes a Borrower hereunder.
"Joinder Supplement" has the meaning ascribed to such term in
Section 4.10 hereof.
"Joining Subsidiary" has the meaning set forth in Section 4.10
hereof.
"Law" means any law (including common law), constitution, statute,
treaty, convention, regulation, rule, ordinance, order, injunction, writ, decree
or award of any Governmental Authority.
"Lender" has the meaning ascribed to such term in the preamble
hereto and shall include the Swing Loan Lender.
"Lender Parties" means collectively the Lenders and the Agents.
"Letter of Credit" means any letter of credit issued by the Issuer
pursuant to Article 1A hereof.
"Letter of Credit Participation" means, with respect to any Lender,
the participation interest of such Lender in any Letter of Credit acquired
pursuant to Article 1A above. The amount of the Letter of Credit Participation
of a Lender in any Letter of Credit shall be deemed to be the amount equal to
such Lender's pro rata share (determined on the basis of the Commitment at such
time) of the sum of (a) the aggregate unpaid amount of all Drawings thereunder
at such time and (b) the amount of any Contingent Reimbursement Obligations with
respect thereto at such time.
"Licenses" means any and all licenses, including provisional
licenses, certificates of need, JCAHO and/or other accreditations, permits,
franchises, rights to conduct business, approvals by a Governmental Authority or
otherwise, consents, qualifications, operating authority, and/or any other
authorizations.
"Lien" means any mortgage, deed of trust, pledge, lien, security
interest, charge or other encumbrance or security arrangement of any nature
whatsoever, including but not limited to any conditional sale or title retention
arrangement, and any assignment, deposit arrangement or lease intended as, or
having the effect of, security.
"Limitation" means a revocation, suspension, termination,
impairment, probation, limitation, non-renewal, forfeiture, declaration of
ineligibility, loss of status as a participating provider in a Third Party Payor
Arrangement and/or loss of any other rights.
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"Loans" means RC Loans or Swing Loans or either or both as the
context indicates.
"Loan Documents" means this Agreement, the Notes, Letters of Credit,
the Pledge Agreement, each Joinder Supplement and all other agreements and
instruments executed in connection herewith or therewith, in each case as the
same may be amended, modified or supplemented from time to time.
"Loan Obligations" means all obligations, from time to time, of any
Loan Party to any Lender Party or other Indemnified Party under, or arising out
of, this Agreement or any Loan Document whether such obligations are direct or
indirect, absolute or contingent, due or to become due, now or hereafter arising
(specifically including obligations arising or accruing after the commencement
of any bankruptcy, insolvency, or similar proceeding with respect to any Loan
Party, or which would have accrued but for the commencement of such proceeding
even if the claim is not allowed in such proceeding under applicable law).
"Loan Parties" means the Borrowers and any other Person who from
time to time grants or purports to grant to the Administrative Agent a Lien on
any property pursuant to the Pledge Agreement or is a Guarantor of any Loan
Obligations.
"Management Agreement" means any agreement pursuant to which a
Person (or group of Persons) manages the business of another Person (or group of
Persons).
"Management Fee Subordination Agreement" has the meaning given to
such term in Section 2.1 (z) hereof.
"Material Adverse Effect" means (a) a material adverse effect on the
business, operations, condition (financial or otherwise), properties or
prospects of Multicare or of the Borrowers, taken as a whole, or (b) an adverse
effect on the legality, validity, binding effect or enforceability of any Loan
Document, or the ability of the Administrative Agent or any Lender Party to
enforce any rights or remedies under or in connection with any Loan Document.
Without limiting the generality of the foregoing, as used in connection with any
provisions respecting the ownership or operation of any Health Care Business,
Material Adverse Effect may include, among other things, any loss or suspension
of a License or Reimbursement Approval for any material nursing home or other
material Health Care Business or material group of nursing homes or other
material group of Health Care Businesses of the Borrowers, or any event,
occurrence or matter or series thereof giving rise to a reasonable probability
of any of the foregoing consequences.
"Maturity Date" has the meaning ascribed to such term in Section 1.4
hereof.
"Mellon" means Mellon Bank, N.A., a national banking association,
and any successor or assign thereof.
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"Merger" means the merger of Acquisition Corp., into Multicare on
the terms stated in the Merger Agreement without any change therein or waiver of
any provision thereof not approved the Required Lenders.
"Merger Agreement" means the Agreement and Plan of Merger dated as
of June 16, 1997, among Multicare, Genesis ElderCare Corp. and Acquisition Corp.
"Multicare" has the meaning ascribed to such term in the preamble of
this Agreement.
"Multicare Group" has the meaning ascribed to such term in Section
4.1 hereof.
"Multicare Management Agreement" has the meaning ascribed to such
term in Section 2.1(f).
"Multicare Management Subordination Agreement" means the
Subordination Agreement among Genesis, Multicare and the Agents dated of even
date herewith whereby Genesis has agreed to subordinate its rights to payments
under the Multicare Management Agreement to the extent and on the terms and
conditions as set forth in the Multicare Management Subordination Agreement,
which such terms and conditions are subject to the Agents' approval.
"Multicare Shares" means shares of Multicare common stock, par value
$0.01 per share.
"Multiemployer Plan" means such term in ss.4001(a)(3) of ERISA.
"Nazem" means Nazem, Inc., a Delaware corporation and (a) any
Subsidiary thereof and (b) any other Affiliate thereof reasonably acceptable to
the Administrative Agent. Without limiting the generality of the foregoing,
"Nazem" shall include Genesis ElderCare Portfolio K, L.P.
"Net Cash Proceeds" means, with respect to any transaction involving
a Borrower, the gross proceeds thereof in the form of cash or cash equivalents,
net of the sum of the following (without duplication): (a) payments made to
retire obligations (other than to a Borrower) that are attributable to or
secured by the properties that are the subject of a sale, assignment or other
disposition which is part of the transaction, (b) reasonable brokerage
commissions and other reasonable fees and expenses (including reasonable fees
and expenses of legal counsel and investment bankers) related to such
transaction, and (c) all taxes actually paid or estimated in good faith to be or
become payable as a result of such transaction.
"Net Cash Provided by Operations" means for any period, the Net
Income of the Borrowers on a consolidated basis for such period plus
amortization and depreciation
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expense of the Borrowers for such period plus cash extraordinary gains less
Capital Expenditures of the Borrowers for such period (to the extent permitted
by this Agreement), all as adjusted for changes in working capital (as
determined in accordance with GAAP) of the Borrowers during such period less
increases in working capital (or plus decreases in working capital).
"Net Income" means, with respect to any Person, for any period the
net earnings (or loss) after taxes of such Person for such period less non-cash
interest income, less extraordinary gains, plus extraordinary non-cash losses.
"1997 Subordinated Note Indenture" means the Indenture, dated as of
August 11, 1997 between Acquisition Corp., PNC Bank, National Association as
trustee, and Banque Internationale a Luxembourg, S.A., as paying agent, relating
to the 1997 Subordinated Notes, as such Indenture may be amended, restated,
modified or supplemented from time to time in accordance with the terms of this
Agreement.
"1997 Subordinated Notes" means Acquisition Corp.'s 9% Senior
Subordinated Note issued pursuant to the 1997 Subordinated Note Indenture, in
the original principal amount of $250,000,000.00.
"Note" means each promissory note of the Borrowers issued to Lender
relating to such Lender's RC Loans and Commitments substantially in the form of
Exhibit A-1 hereto, together with any allonges thereto, from time to time, and
any promissory note issued in substitution therefor pursuant to the terms
hereof, together with all extensions, renewals, refinancings or refundings
thereof in whole or part, in each case as the same may be amended, modified or
supplemented from time to time.
"Officer's Compliance Certificate" means a certificate, as of a
specified date, of the chief financial officer or controller of Multicare in
substantially the form of Exhibit E hereto as to each of the following: (a) the
absence of any Event of Default or Default on such date, (b) the truth of the
representations and warranties herein and in the other Loan Documents as of such
date, and (c) compliance (or if required by the terms of this Agreement
respecting the delivery of any such Officer's Compliance Certificate, pro forma
compliance after taking account of such acquisitions, dispositions, indebtedness
or other events as this Agreement shall direct for such pro forma compliance
statement) with the financial covenants set forth in Article 5 and the financial
limitations set forth in Sections 6.1(e), 6.2(i), 6.4(b), and 6.7(c).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Pension Plan" means a pension plan (as defined in ss.3(2) of ERISA)
which is subject to Part 3 of Subtitle B of Title I of ERISA or subject to
ss.412 of the Code and maintained by any Borrower or any member of its
Controlled Group.
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"Permitted Liens" has the meaning set forth in Section 6.2 hereof.
"Person" means an individual, corporation, partnership, trust,
unincorporated association, joint venture, joint-stock company, Governmental
Authority or any other entity.
"Plan" means an employee benefit plan (other than a Multiemployer
Plan) as defined in ss.3(3) of ERISA which is either (1) maintained by any
Borrower or any member of its Controlled Group, or (2) maintained pursuant to a
collective bargaining agreement or any other arrangement under which more than
one employer makes contributions and to which any Borrower or any member of its
Controlled Group is then making or accruing an obligation to make contributions
or has ever been obligated to make contributions.
"Pledge Agreement" has the meaning ascribed to such term in Section
2.1(e) hereof.
"Premises" has the meaning set forth in Section 10.12 hereof.
"Prime Rate" means the interest rate per annum announced from time
to time by the Administrative Agent as its prime rate. The Prime Rate may be
greater or less than other interest rates charged by the Administrative Agent to
other borrowers.
"Prohibited Transaction" has the meaning given to such term in
ss.406 of ERISA or ss.4975(c) of the Code.
"Quarterly Payment Date" means the last Business Day of each
December, March, June and September.
"RC Loans" has the meaning ascribed to such term in Section 1.1
hereof.
"Regulatory Action" has the meaning set forth in Section 10.12
hereof.
"Regulatory Change" means any applicable law, interpretation,
directive, request or guideline (whether or not having the force of law), or any
change therein or in the administration or enforcement thereof, that becomes
effective or is implemented or first required or expected to be complied with
after the Agreement Date (including any applicable law that shall have become
such as the result of any act of omission of the Borrowers or any of their
Affiliates, without regard to when such applicable law shall have been enacted
or implemented), whether the same is (i) the result of an enactment by a
government or any agency or political subdivision thereof, a determination of a
court or regulatory authority or otherwise or (ii) enacted, adopted, issued or
proposed before or after the Agreement Date, including any such that imposes,
increases or modifies any Tax, reserve requirement, insurance charge, special
deposit requirement, assessment or capital adequacy requirement, but excluding
any such that imposes, increases or modifies any Bank Tax.
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"Reimbursement Approvals" means, with respect to all Third Party
Payor Arrangements, any and all certifications, provider numbers, provider
agreements, participation agreements, accreditations (including JCAHO
accreditation) and/or any other agreements with or approvals by organizations
and Governmental Authorities.
"Rental Expense" means, with respect to any Person for any period,
the aggregate rental obligations of such Person, payable in respect of any
leases (including Synthetic Leases but excluding Capitalized Leases) during such
period, but in any case including obligations for taxes, insurance, maintenance
and similar costs which the lessee is obligated to pay under the terms of such
leases and which are attributable to the leases for such period (whether such
amounts are accrued or paid during such period).
"Required Lenders" means, as of any date, Lenders (otherwise
eligible to vote pursuant to the terms of this Agreement) holding, in the
aggregate, at least 51% of the aggregate outstanding Loans, participations in
Letters of Credit and available Commitments held by Lenders so eligible to vote.
"Reserved Commitment" has the meaning ascribed to such term in
Section 1.1. hereof.
"Responsible Officer" of a Person means the President, the
Secretary, the Chief Executive Officer, any Vice President, the Controller, the
Treasurer or the Chief Financial Officer of such Person.
"Restricted Subsidiaries" means all direct and indirect Subsidiaries
of Multicare at any time, other than Excluded Subsidiaries.
"Secured Parties" has the meaning ascribed to such term in the
Pledge Agreement.
"Subsidiary" of a Person at any time means:
(a) any corporation of which a majority (by number of shares
or number of votes) of any class of outstanding capital stock
normally entitled to vote for the election of one or more directors
(regardless of any contingency which does or may suspend or dilute
the voting rights of such class) is at such time owned directly or
indirectly, beneficially or of record, by such Person or one or more
Subsidiaries of such Person;
(b) any trust of which a majority of the beneficial interest
is at such time owned directly or indirectly, beneficially or of
record, by such Person or one or more Subsidiaries of such Person;
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(c) any partnership, limited liability company, joint venture
or other entity of which ownership interests having ordinary voting
power to elect a majority of the board of directors or other Persons
performing similar functions are at such time owned directly or
indirectly, beneficially or of record, by, or which is otherwise
controlled directly, indirectly or through one or more
intermediaries by, such Person or one or more Subsidiaries of such
Person; or
(d) any entity which is consolidated with such Person for
financial reporting purposes.
"Swing Loan" means an amount advanced by the Swing Loan Lender
pursuant to Section 1.3 hereof.
"Swing Loan Lender" means Mellon, in its capacity as such.
"Swing Loan Note" means the promissory note of the Borrowers issued
to the Swing Loan Lender in substantially the form of Exhibit A-2 hereto,
together with any allonges thereto from time to time and any promissory note
issued in substitution therefor pursuant to the terms hereof, together with all
extensions, renewals, refinancings or refundings thereof in whole or in part, in
each case as the same may be amended, modified, restated or supplemented from
time to time.
"Syndication Agents" has the meaning ascribed to such term in the
preamble of this Agreement.
"Synthetic Lease" means any lease (other than a Capitalized Lease)
wherein the lessee is treated (or purported to be treated) as the owner of the
leased property for income tax purposes.
"Tax" means any federal, state, local or foreign tax assessment or
other governmental charge or levy (including any withholding tax) upon a Person
or upon its assets, revenues, income or profits.
"Tax Sharing Agreement" has the meaning ascribed to such term in
Section 2.1(y) hereof.
"Tender Offer" means Acquisition Corp.'s offer to purchase the
outstanding common shares of Multicare as contained in its "Offer to Purchase
for Cash All Outstanding Shares of Common Stock of Multicare Companies" dated
June 20, 1997, as extended from time to time.
"Third Party Claims" has the meaning set forth in Section 10.12
hereof.
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"Third Party Payor Arrangements" means any and all arrangements with
Medicare, Medicaid, CHAMPUS, and any other Governmental Authority, or
quasi-public agency, Blue Cross, Blue Shield, any and all managed care plans and
organizations, including but not limited to HMOs and preferred provider
organizations, private commercial insurance companies, employee assistance
programs and/or any other third party arrangements, plans or programs for
payment or reimbursement in connection with health care services, products or
supplies.
"Total Funded Indebtedness" means the aggregate amount of
consolidated Indebtedness (including the current portion thereof), of Multicare
and its Restricted Subsidiaries (including without limitation all Indebtedness
consisting of Capitalized Lease Obligations, Synthetic Leases, Guaranties and
letter of credit reimbursement obligations).
"TPG" means TPG Partners II L.P., a Delaware limited partnership and
(a) any Subsidiary thereof and (b) any other Affiliate thereof reasonably
acceptable to the Administrative Agent. Without limitation to the generality of
the foregoing, "TPG" shall include TPG Parallel II, L.P., TPG Investors II, L.P.
and TPG MC Coinvestment, L.P.
"Transaction Documents" means each of the material documents as may
exist on the date that the Tender Offer is consummated with such changes thereto
as are permitted by the terms of this Agreement respecting (i) the Tender Offer,
(ii) the proposed merger between the Acquisition Corp. and Multicare, (iii) the
relationship between Genesis, Cypress, Nazem and TPG and the rights and
obligations relating thereto and (iv) related matters including the Put/Call
Agreement and the Stockholders Agreement respecting Genesis ElderCare Corp., the
Merger Agreement and the Multicare Management Agreement.
"United States Person" has the meaning ascribed to such term in
Section 1.13 hereof.
"Withdrawal Liability" has the meaning given to such term in ss.4201
of ERISA.
9.2 CONSTRUCTION. In this Agreement and each other Loan Document, unless
the context otherwise clearly requires,
(a) references to the plural include the singular, the singular the
plural and the part the whole;
(b) "or" has the inclusive meaning represented by the phrase
"and/or;"
(c) the terms "property" and "assets" each include all properties
and assets of any kind or nature, tangible or intangible, real, personal or
mixed, now existing or hereafter acquired;
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(d) the words "hereof," "herein" and "hereunder" (and similar terms)
in this Agreement or any other Loan Document refer to this Agreement or such
other Loan Document, as the case may be, as a whole and not to any particular
provision of this Agreement or such other Loan Document;
(e) the words "includes" and "including" (and similar terms) in this
Agreement or any other Loan Document mean "includes, without limitation" and
"including, without limitation," respectively whether or not stated; and
(f) references to "determination" (and similar terms) by any Lender
Party include good faith estimates by such Lender Party (in the case of
quantitative determinations) and good faith beliefs by such Lender Party (in the
case of qualitative determinations).
No doctrine of construction of ambiguities in agreements or instruments against
the interests of the party controlling the drafting thereof shall apply to this
Agreement or any other Loan Document. The section and other headings contained
in this Agreement and in each other Loan Document, and any tables of contents
contained herein or therein, are for reference purposes only and shall not
affect the construction or interpretation of this Agreement or such other Loan
Document in any respect. Whenever this Agreement requires the delivery of
financial projections, it is understood that the projections shall be made in
good faith, consistent with the Loan Documents and based on Multicare's
reasonable judgment as to the anticipated financial performance and results of
operations. However, any such financial projections shall not constitute a
representation or warranty that such future financial performance or results of
operations will in fact be achieved.
9.3 ACCOUNTING PRINCIPLES.
(a) As used herein, "GAAP" shall mean generally accepted accounting
principles (other than as set forth herein as to consolidation) in the United
States, applied on a basis consistent with the principles used in preparing the
financial statements of Multicare and its consolidated Subsidiaries as of
December 31, 1996 and for the fiscal year then ended. When the word
"consolidated" is used in this Agreement, it shall be used in a manner
consistent with generally accepted accounting principles in the United States
except that such principals relating to what entities shall be consolidated
shall be superseded by any terms of this Agreement which designate what entities
shall be consolidated for purposes relating hereto.
(b) Except as otherwise provided in this Agreement, all computations
and determinations as to accounting or financial matters shall be made, and all
financial statements to be delivered pursuant to this Agreement shall be
prepared, in accordance with GAAP and all accounting or financial terms shall
have the meanings ascribed to such terms by GAAP.
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ARTICLE 10 - MISCELLANEOUS
10.1 NOTICES. Unless otherwise expressly provided under this Agreement all
notices, requests, demands, directions and other communications (collectively
"notices") given to or made upon any party under the provisions of this
Agreement (and unless otherwise specified, in each other Loan Document) shall be
by telephone (immediately confirmed in writing) or in writing (including
facsimile communication) and if in writing shall be delivered by hand,
nationally recognized overnight courier or U.S. mail or sent by facsimile to the
respective parties at the addresses and numbers set forth under their respective
names on the signature pages of this Agreement or in accordance with any
subsequent unrevoked written direction from any party to the others. All notices
shall, except as otherwise expressly provided in this Agreement, be effective
(a) in the case of facsimile, when received, (b) in the case of hand-delivered
notice, when hand delivered, (c) in the case of telephone, when telephoned,
provided, however, that in order to be effective unless otherwise expressly
provided, telephonic notices must be confirmed in writing no later than the next
day by letter or facsimile, (d) if given by U.S. mail, the day after such
communication is deposited in the mails with overnight first class postage
prepaid, return receipt requested, and (e) if given by any other means
(including by air courier), when delivered; provided, further, that notices to
the Administrative Agent shall not be effective until received. Any Lender
giving any notice to the Borrowers shall simultaneously send a copy of such
notice to the Administrative Agent, and the Administrative Agent shall promptly
notify the other Lenders of the receipt by it of any such notice. Except as
otherwise provided in this Agreement, in the event of a discrepancy between any
telephonic or written notice, the written notice shall control.
10.2 PRIOR UNDERSTANDINGS; ENTIRE AGREEMENT. This Agreement and the other
Loan Documents supersede all prior and contemporaneous understandings and
agreements, whether written or oral, among the parties hereto relating to the
transactions provided for herein and therein except as expressly provided
otherwise (e.g., certain fee agreements and fee arrangements set forth in the
commitment letter relating hereto). This Agreement and the other Loan Documents
represent the entire agreement between the parties to this Agreement with
respect to the transactions contemplated hereby or thereby and, except as
expressly provided herein or in the other Loan Documents, shall not be affected
by reference to any other documents.
10.3 SEVERABILITY. Every provision of this Agreement and each of the other
Loan Documents is intended to be severable, and if any term or provision of this
Agreement or any of the other Loan Documents shall be invalid, illegal or
unenforceable for any reason, the validity, legality and enforceability of the
remaining provisions shall not be affected or impaired thereby, and any
invalidity, illegality or unenforceability in any jurisdiction shall not affect
the validity, legality or enforceability of any such term or provision in any
other jurisdiction. If any provision of this Agreement shall be held invalid or
unenforceable in whole or in part in any jurisdiction, this Agreement shall, as
to such jurisdiction, be deemed
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amended to modify or delete, as necessary, the offending provision or provisions
and to alter the bounds thereof in order to render it or them valid and
enforceable to the maximum extent permitted by applicable Law, without in any
manner affecting the validity or enforceability of such provision or provisions
in any other jurisdiction or the remaining provisions hereof in any
jurisdiction.
10.4 DESCRIPTIVE HEADINGS. The descriptive headings of the several
sections of this Agreement are inserted for convenience only and shall not
affect the meaning or construction of any of the provisions of this Agreement.
10.5 GOVERNING LAW. This Agreement and the rights and obligations of the
parties under this Agreement and under the other Loan Documents shall be
construed in accordance with and shall be governed by the laws of the
Commonwealth of Pennsylvania.
10.6 NON-MERGER OF REMEDIES. The covenants and obligations of the
Borrowers and the rights and remedies of the Administrative Agent and other
Lender Parties hereunder and under the other Loan Documents shall not merge with
or be extinguished by the entry of a judgment hereunder or thereunder, and such
covenants, obligations, rights and remedies shall survive any entry of a
judgment until payment in full of the Loan Obligations and termination of the
Commitment. All obligations under the Loan Documents shall continue to apply
with respect to and during the collection of amounts due under the Loan
Documents or the proof and allowability of any claim arising under this
Agreement or any other Loan Document, whether in bankruptcy or receivership
proceedings or otherwise, and in any workout, restructuring or in connection
with the protection, preservation, exercise or enforcement of any of the terms
of this Agreement or of any rights under this Agreement or under any other Loan
Document or in connection with any foreclosure, collection or bankruptcy
proceedings. Without limiting the generality of the foregoing, post-judgment
interest rate shall be the interest rate provided in paragraph (c) of Section
1.8 (Default Rate) above.
10.7 NO IMPLIED WAIVER; CUMULATIVE REMEDIES. No course of
dealing and no delay or failure of the Administrative Agent or any other Lender
Party in exercising any right, power or privilege under this Agreement or any
other Loan Document shall affect any other or future exercise thereof or
exercise of any other right, power or privilege; nor shall any single or partial
exercise of any such right, power or privilege or any abandonment or
discontinuance of steps to enforce such a right, power or privilege preclude any
further exercise thereof or of any other right, power or privilege. The rights
and remedies of the Administrative Agent and the other Lender Parties under this
Agreement and any other Loan Document are cumulative and not exclusive of any
rights or remedies which the Administrative Agent or any other Lender Party
would otherwise have hereunder or thereunder, at law, in equity or otherwise.
Any waiver of a specific default made in accordance with Section 10.8 below
shall be effective only as to such specific default and shall not apply to any
subsequent default.
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10.8 AMENDMENTS; WAIVERS. Any term, covenant, agreement or condition of
any Loan Document to which the Lenders (or the Administrative Agent) are party
may be amended, and any right under the Loan Documents may be waived, if, but
only if, such amendment or waiver is in writing and is signed by the Required
Lenders (or by the Administrative Agent at the direction of the Required
Lenders); provided, however, if the rights and duties of the Administrative
Agent are affected thereby, such amendment or waiver must be executed by the
Administrative Agent; and provided, further, that any amendment or waiver of the
terms of Article 1A hereof or any other amendment or waiver that relates to
Letters of Credit or rights or obligations relating thereto or the rights or
obligations of the Issuer must also be executed by the Issuer; and provided,
further, that no such amendment or waiver shall be effective unless in writing
and signed by each Lender referred to below, if it would
(a) increase such Lender's Commitment or the outstanding
amount of such Lender's Loans or Letters of Credit Participation, or
(b) extend the maturity of any Loan held by such Lender or the
time of any scheduled principal payment of any Loan of such Lender, or
(c) decrease the rate of interest or amount of fees due to
such Lender, or decrease the principal amount in respect of any Loan held
by such Lender or extend the time of payment of interest or fees due to
such Lender, provided that the written consent of the Required Lenders,
rather than the consent of all Lenders, shall be sufficient to waive
imposition of the Default Rate, or
(d) reduce or waive any payment owing to such Lender in
respect to any unreimbursed Drawings; or
(e) change the number of Lenders which are required to consent
to any proposed action under this Agreement before such action may be
taken under this Agreement if such change could cause such Lender to lose
its right to participate in such consent;
and provided, further, that no such amendment or waiver shall be effective
unless in writing and signed by all the Lenders if it would
(i) amend the definition of "Required Lenders" or
(ii) release any Borrower of its Obligations or release
any guaranty or collateral security granted pursuant to the Loan
Documents; provided, however, the Administrative Agent may, without
the consent of any Person, release any Borrower, guarantor or
collateral security granted pursuant to the Loan Documents, (A) as a
court of competent jurisdiction may direct, or (B) in connection
with a disposition permitted under Section 6.5 above (other
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than a disposition to another Borrower) or as may be otherwise
provided under the Loan Documents and provided, further, that for
purposes of determining whether "all Lenders", "the Required
Lenders" or "any Lender" has consented to any amendment or waiver,
no effect shall be given to the determination of any Lender who has
lost its right to vote pursuant to Sections 1.3(c), 1.3(e)(iii), or
1.6(e). Without limiting the generality of the foregoing, the
Administrative Agent is authorized and directed to take such action
as it deems necessary or desirable (including, without limitation,
the execution and filing of UCC-3 termination statements or the
giving of direction to another Person to do the same) to release any
security interest referred to in the proviso to this clause (ii).
Further, the Administrative Agent and the Lenders may amend or modify the
provisions of Article 8 hereof (except for Section 8.9 (Successor Administrative
Agent) and Section 8.12(b) (Successor Agent)) without the need for any consent
or approval from the Borrowers, it being acknowledged that the Borrowers are not
third party beneficiaries of the provisions of said Article 8 (except for
Section 8.9 (Successor Administrative Agent) and Section 8.12(b) (Successor
Agent)) and (y) without the consent of any Lenders, the Administrative Agent may
enter into amendments and modifications to this Agreement and the other Loan
Documents as necessary or desirable to cure any ambiguities herein or therein or
to add additional borrowers or add additional Collateral.
10.9 SUCCESSORS AND ASSIGNS
(a) Assignments by the Borrowers. Without the prior written consent
of all of the Lenders, no Borrower may assign any of its rights or delegate any
of its duties or obligations under this Agreement or any other Loan Document.
(b) Participations. Any Lender may sell participations to one or
more Eligible Institutions of all or a portion of its rights and obligations
under this Agreement (including, without limitation, all or a portion of its
Commitment); provided, however, that, with respect to any Lender, (i) such
Lender's obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties to this Agreement
for the performance of such obligations, (iii) all amounts payable by the
Borrowers under this Agreement shall be determined as if such transferor Lender
had not sold such participation and no participant shall be entitled to receive
any greater amount pursuant to this Agreement than the transferor Lender would
have been entitled to receive in respect of the amount of the participation
transferred by such transferor Lender to such participant had no such transfer
occurred, (iv) such participant shall agree to be bound by the provisions of
this Agreement and the other Loan Documents, and (v) with respect to any sale of
a participation hereunder, such Lender shall contemporaneously sell to the same
participant a proportionately equal amount of its interest in the Acquisition
Corp. Credit Agreement, the Borrowers, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such transferor Lender
in connection with such Lender's rights
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and obligations under this Agreement, and such Lender shall retain the sole
rights and responsibility vis-a-vis the Borrowers to enforce the obligations of
the Borrowers relating to the Loans and Letters of Credit including the right to
approve any amendment, modification or waiver of any provision of this Agreement
(except that such Lender may give its participants the right to direct such
Lender to approve or disapprove any amendment, modification or waiver which
would require such Lender's consent under clause (a), (c), (i) or (ii) of the
preceding Section 10.8).
(c) Assignments by Lenders. Each Lender may assign to one or more
Eligible Institutions all or a portion of its interest, rights and obligations
under this Agreement (including all or a portion of its Commitment) and the
other Loan Documents; provided, however, that with respect to any assignment,
(i) unless the assignee is (prior to the effective time of the assignment) an
existing Lender or an Affiliate of an existing Lender, the Administrative Agent
and, if no Event of Default has occurred and is continuing, Multicare (on behalf
of the Borrowers) must give their prior written consent to such assignment
(which consents shall not be unreasonably withheld), (ii) the parties to each
such assignment shall execute and deliver to the Administrative Agent and,
unless an Event of Default has occurred and is continuing Multicare (on behalf
of the Borrowers), for their acceptance, an Assignment and Acceptance Agreement
in substantially the form of Exhibit F hereto (the "Assignment and Acceptance"),
together with (A) any Note subject to such assignment, and (B) a processing and
recordation fee of $3,500.00 or such lesser amount as is required for the
Administrative Agent to receive an aggregate amount equal to $3,500.00 under
this Agreement and the Acquisition Corp. Credit Agreement in respect of such
transfer, (iii) with respect to any assignment of or interest hereunder, such
Lender shall contemporaneously assign to the same assignee a proportionately
equal amount of its interest in the Acquisition Corp. Credit Agreement, (iv) no
Lender may make a partial assignment if the amount of its portion of the
Commitment and (without duplication) the outstanding Loans, together with the
amount of its interest under the Acquisition Corp. Credit Agreement assigned in
accordance with clause (vi) below is, or after giving effect to the proposed
assignment would be, less than Ten Million Dollars ($10,000,000.00), (v) unless
the assignee is (prior to the effective time of the assignment) a Lender
hereunder, the aggregate amount of any interest so sold to any assignee pursuant
to any partial assignment hereunder, together with the aggregate amount so sold
to such assignee in accordance with clause (vi) below may not be less than Ten
Million Dollars ($10,000,000.00), and (vi) with respect to any assignment of an
interest hereunder, the assigner shall contemporaneously assign to the same
assignee a proportionately equal amount of its interest under the Acquisition
Corp. Credit Agreement. "Partial assignment" as used in clauses (iv) and (v)
above means any assignment of a Lender's rights and obligations hereunder except
an assignment of all of such Lender's rights and obligations such that after the
assignment such Lender shall have no Commitment and no interest in any Loans or
Letters of Credit hereunder. Upon compliance with clauses (i) through (vi)
above, from and after the effective date specified in the relevant Assignment
and Acceptance, (x) the assignee shall be a party to this Agreement and the
other Loan Documents to which the assignor was a party, and to the extent
provided in such Assignment and Acceptance, have the rights and obligations of a
Lender under this Agreement and under
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the other Loan Documents and (y) the assigning Lender shall, to the extent
provided in such Assignment and Acceptance, be released from its obligations
under this Agreement and the other Loan Documents.
(d) Procedures Respecting Assignment. Upon their receipt of an
Assignment and Acceptance executed by the assignor and the assignee, subject to
the conditions set forth in the preceding paragraph (c), the Administrative
Agent and (unless an Event of Default shall have occurred and be continuing)
Multicare (on behalf of the Borrowers) shall accept such Assignment and
Acceptance. Within thirty (30) Business Days after such Assignment and
Acceptance is signed and accepted by all parties, the Borrowers, at their own
expense, shall execute and deliver to the Administrative Agent new Notes in
exchange for the surrendered Notes, each to the order of such assignee in an
amount equal to its portion of the Commitment and Loans assigned to it pursuant
to such Assignment and Acceptance and new Notes to the order of the assigning
Lender in an amount equal to the Commitment and Loans retained by it. Such Notes
shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered Notes, shall be dated the date of such surrendered
Notes (each assignee shall confirm in the Assignment and Acceptance that,
notwithstanding the date of the new Notes made in favor of such assignee, such
assignee shall have no right to, or interest in, any fees or interest which
shall have accrued on the Loans prior to the effective date of the Assignment
and Acceptance). Cancelled or replaced Notes shall be returned to the Borrowers
upon the execution of such new Notes.
(e) Assignments to Federal Reserve Bank. Notwithstanding any of the
terms of this Section 10.9, without consent of Administrative Agent or Borrower
any Lender may assign all or any portion of its rights to payments in connection
with this Agreement to a Federal Reserve Bank as collateral in accordance with
Regulation A of the Board of Governors of the Federal Reserve System. Such
assignment shall not affect any other rights or any obligations of the assigning
Lender.
10.10 COUNTERPARTS; PHOTOCOPIED OR TELECOPIED SIGNATURE
PAGES. Any Loan Document may be executed in one or more counterparts, each of
which shall constitute an original, but all of which together shall constitute
one and the same instrument. Delivery of a photocopy or telecopy of an executed
counterpart of a signature page to any Loan Document shall be as effective as
delivery of a manually executed counterpart of such Loan Document.
10.11 MAXIMUM LAWFUL INTEREST RATE. Notwithstanding any provision
contained in this Agreement or the Notes or any other Loan Document, the total
liability of the Borrowers for payment of interest pursuant to this Agreement
and the Notes shall not exceed the maximum amount of such interest permitted by
Law to be charged, collected, or received from the Borrowers, and if any payment
by the Borrowers includes interest in excess of such a maximum amount, each
Lender shall apply such excess to the reduction of the unpaid principal amount
due pursuant to this Agreement and the Notes, or if none is due,
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to the other Loan Obligations, if any, and then such excess shall be refunded to
Multicare (on behalf of the Borrowers).
10.12 INDEMNIFICATION.
(a) Whether or not any fundings are made under this Agreement, the
Borrowers jointly and severally shall unconditionally upon demand, pay or
reimburse the Administrative Agent and other Lender Parties for, and indemnify
and save the Administrative Agent, the other Lender Parties and their respective
Affiliates, officers, directors, employees, agents, attorneys, shareholders and
consultants (collectively, "Indemnitees") harmless from and against, any and all
losses, liabilities, claims, damages, expenses, obligations, penalties, actions,
judgments, suits, costs or disbursements of any kind or nature whatsoever
(including the fees and disbursements of counsel for such Indemnitee in
connection with any investigative, administrative or judicial proceeding
commenced or threatened, whether or not such Indemnitee shall be designated a
party thereto) that may at any time be imposed on, asserted against or incurred
by such Indemnitee as a result of, or arising out of, or in any way related to
or by reason of, this Agreement or any other Loan Document, any Acquisition or
transaction from time to time contemplated hereby or by any other Loan Document,
the Tender Offer, the Merger, or any transaction actually or proposed to be
financed in whole or in part or directly or indirectly with the proceeds of any
Loan pr Letter of Credit, any transaction contemplated by the Transaction
Documents but excluding any such losses, liabilities, claims, damages, expenses,
obligations, penalties, actions, judgments, suits, costs or disbursements that
the Borrower proves were the result solely of the gross negligence or willful
misconduct of such Indemnitee, as finally determined by a court of competent
jurisdiction. If and to the extent that the foregoing obligations of the
Borrowers under this paragraph (a), or any other indemnification obligation of
the Borrowers hereunder or under any other Loan Document are unenforceable for
any reason, the Borrowers hereby agree, jointly and severally, to make the
maximum contribution to the payment and satisfaction of such obligations which
is permissible under applicable Law.
(b) Without limiting the generality of the foregoing, the Borrowers
jointly and severally hereby indemnify and agree to defend and hold harmless
each Indemnitee, from and against any and all claims, actions, causes of action,
liabilities, penalties, fines, damages, judgments, losses, suits, expenses,
legal or administrative proceedings, interest, costs and expenses (including
court costs and attorneys', consultants' and experts' fees) arising out of or in
any way relating to: (i) the use, handling, management, production, treatment,
processing, storage, transfer, transportation, disposal, release or threat of
release of any Environmental Concern Material by or on behalf of, any Borrower
or any of its Environmental Affiliates; (ii) the presence of Environmental
Concern Materials on, about, beneath or arising from any premises owned or
occupied by any Borrower or any of its Environmental Affiliates (herein
collectively, the "Premises"); (iii) the failure of any Borrower or
Environmental Affiliate of a Borrower or any occupant of any Premises to comply
with the Environmental Laws; (iv) any Borrower's breach of any of the
representations, warranties and covenants contained herein or in any Loan
Documents; (v)
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Regulatory Actions (as hereinafter defined) and Third Party Claims (as
hereinafter defined); or (vi) the imposition or recording of a Lien against any
Premises in connection with any release at, on or from any Premises or any
activities undertaken on or occurring at any Premises, or arising from such
Premises or pursuant to any Environmental Law. The Borrowers' indemnity and
defense obligations under this section shall include, whether foreseeable or
unforeseeable, any and all costs related to any remedial action. "Regulatory
Action" means any notice of violation, citation, complaint, request for
information, order, directive, compliance schedule, notice of claim, consent
decree, action, litigation or proceeding brought or instituted by any
governmental authority under or in connection with any Environmental Law
involving any Borrower or any occupant of any of the Premises or involving any
of the Premises or any activities undertaken on or occurring at any Premises.
"Third Party Claims" means claims by a party (other than a party to this
Agreement and other than Regulatory Actions) based on negligence, trespass,
strict liability, nuisance, toxic tort or detriment to human health or welfare
due to Environmental Concern Materials on, about, beneath or arising from any
Premises or in any way related to any alleged violation of any Environmental
Laws or any activities undertaken on or occurring at any Premises.
(c) The indemnities contained herein shall survive repayment of the
Loan Obligations, termination of the Commitment and satisfaction, release, and
discharge of the Loan Documents, whether through full payment of the Loans,
foreclosure, deed in lieu of foreclosure or otherwise.
(d) The foregoing amounts are in addition to any other amounts which
may be due and payable to the Administrative Agent and/or the Lenders under this
Agreement. A certification by the Administrative Agent or a Lender hereunder of
the amount of liabilities, losses, costs, expenses, claims and/or charges shall
be conclusive, absent manifest error.
10.13 EXPENSES
(a) Whether or not there shall be any funding hereunder, the
Borrowers agree, jointly and severally, to pay promptly or cause to be paid
promptly and to hold harmless:
(i) with respect to matters relating to clause (A) of this
paragraph (i), the Agents, and with respect to matters relating to (B) and (C)
of this paragraph (i), the Administrative Agent (and after an Event of Default
and for the period in which the same shall continue, each Lender Party) against
liability for the payment of all reasonable out-of-pocket costs and expenses
(including but not limited to reasonable fees and expenses of counsel, including
local counsel, auditors, consulting engineers, appraisers, and all other
professional, accounting, evaluation and consulting costs) incurred by it from
time to time arising from or relating to (A) the negotiation, preparation,
execution and delivery of this Agreement and the other Loan Documents (B) the
administration and performance of this Agreement and the other Loan Documents,
and (C) any requested amendments,
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modifications, supplements, waivers or consents (whether or not ultimately
entered into or granted) to this Agreement or any other Loan Documents;
(ii) the Administrative Agent (and, with respect to clause (D)
below, after an Event of Default and for the period in which the same shall
continue, each Lender Party), against liability for the payment of all
reasonable out-of-pocket costs and expenses (including but not limited to
reasonable fees and expenses of counsel, including local counsel, auditors,
consulting engineers, appraisers, and all other professional, accounting,
evaluation and consulting costs) incurred by it from time to time arising from
or relating to the enforcement or preservation of rights under, or
administration of, this Agreement or any other Loan Document (including but not
limited to any such costs or expenses arising from or relating to (A) the
creation, perfection or protection of any Lien on any Collateral, (B) the
protection, collection, lease, sale, taking possession of, preservation of, or
realization on, any Collateral, including advances for storage, insurance
premiums, transportation charges, taxes, filing fees and the like, (C)
collection or enforcement of an outstanding Loan Obligation, and (D) any
litigation, proceeding, dispute, work-out, restructuring or rescheduling related
in any way to this Agreement or the other Loan Documents); and
(iii) each Lender Party against liability for all stamp,
document, transfer, recording, filing, registration, search, sales and excise
fees and taxes and all similar impositions now or hereafter determined by any
Lender Party to be payable in connection with this Agreement or any other Loan
Documents.
10.14 MAXIMUM AMOUNT OF JOINT AND SEVERAL LIABILITY. To the
extent that applicable Law otherwise would render the full amount of the joint
and several obligations of any Subsidiary of Multicare hereunder and under the
other Loan Documents invalid or unenforceable, such Borrower's obligations
hereunder and under the other Loan Documents shall be limited to the maximum
amount which does not result in such invalidity or unenforceability, provided,
however, that each Borrower's obligations hereunder and under the other Loan
Documents shall be presumptively valid and enforceable to their fullest extent
in accordance with the terms hereof or thereof, as if this Section 10.14 were
not a part of this Agreement.
10.15 AUTHORIZATION OF MULTICARE BY OTHER BORROWERS. (a) Each of the
Borrowers hereby irrevocably authorizes Multicare to give notices, make
requests, make payments, receive payments and notices, give receipts and execute
agreements, make agreements or take any other action whatever on behalf of such
Borrower under and with respect to any Loan Document and each Borrower shall be
bound thereby. This authorization is coupled with an interest and shall be
irrevocable, and the Administrative Agent and each Lender Party may rely on any
notice, request, information supplied by Multicare and every document executed
by Multicare, agreement made by Multicare or other action taken by Multicare in
respect of the Borrowers or any thereof as if the same were supplied, made or
taken by any or all Borrowers. Without limiting the generality of the foregoing,
the failure of one or more Borrowers to join in the execution of any writing in
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connection herewith shall not, unless the context clearly requires, relieve any
such Borrower from obligations in respect of such writing.
The Borrowers acknowledge that the credit provided hereunder is on terms
more favorable than any Borrower acting alone would receive and that each
Borrower benefits indirectly from all Loans and Letters of Credit hereunder.
Multicare and, subject only to the terms of the preceding paragraph (a), each of
the other Borrowers, shall be jointly and severally liable for all Loan
Obligations, regardless of, inter alia, which Borrower requested (or received
the proceeds of) a particular Loan.
10.16 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. With respect
to its Commitment hereunder and the Loan Obligations owing to it, the
Administrative Agent shall have the same rights and powers under this Agreement
and each other Loan Document as any other Lender and may exercise the same as
though it were not the Administrative Agent, and the terms "Lender," "Holders of
Notes" and like terms shall include the Administrative Agent in its individual
capacity as such. The Administrative Agent and its Affiliates may, without
liability to account, make loans to, accept deposits from, acquire debt or
equity interests in, act as trustee under indentures of, serve as
"Administrative Agent" for other financing vehicles, issue letters of credit on
behalf of, and engage in any other business with, (a) any Loan Party or any
stockholder, Subsidiary or Affiliate of any Loan Party or (b) any other Person,
whether such other Person may be engaged in any conflict or dispute with any
Loan Party or any Lender Party or otherwise, as though the Administrative Agent
were not the Administrative Agent hereunder.
10.17 CERTAIN WAIVERS BY BORROWERS. Each Borrower hereby waives
promptness, diligence, notice of acceptance and any other notice with respect to
any of the Loan Obligations and any requirement that any Lender Party protect,
secure, perfect or insure any Lien or any property subject thereto or exhaust
any right or take any action against any other Borrower or any other Person or
any collateral or other direct or indirect security for any of the Loan
Obligations. Without limiting the generality of the foregoing, each Borrower
acknowledges and agrees that the Administrative Agent or other Lender Party may
commence an action against such Borrower whether or not any action is brought
against any other Borrower or against any collateral and it shall be no defense
to any action brought against any Borrower that the Lender Parties have failed
to bring an action against any other Loan Party or any Collateral.
10.18 SET-OFF. The Borrowers hereby agree that, to the fullest extent
permitted by Law, if any Loan Obligation shall be due and payable (by
acceleration or otherwise), each Lender Party shall have the right, without
notice to any Borrower, to set-off against and to appropriate and apply to such
Loan Obligation any indebtedness, liability or obligation of any nature owing to
any Borrower by such Lender Party, including but not limited to all deposits now
or hereafter maintained by any Borrower with such Lender Party. Such right shall
exist whether or not such Lender Party or any other Person shall have given
notice or made any demand to any Borrower or any other Person. The Borrowers
hereby agree that, to the
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fullest extent permitted by Law, any participant and any Affiliate of any Lender
Party or any participant shall have the same rights of set-off as a Lender Party
as provided in this Section 10.18. The rights provided by this Section 10.18 are
in addition to all other rights of set-off and banker's lien and all other
rights and remedies which any Lender Party (or any such participant, or
Affiliate) may otherwise have under this Agreement, any other Loan Document, at
law or in equity, or otherwise.
10.19 SHARING OF COLLECTIONS. The Lender Parties hereby agree among
themselves that if any Lender Party shall receive (by voluntary payment,
realization upon security, set-off or from any other source) any amount on
account of the Loan Obligations in greater proportion than any such amount
received by any other Lender Party (based on the relative amount of each such
Lender Party's interest in the Loan Obligations), then the Lender Party
receiving such proportionately greater payment shall notify each other Lender
Party and the Administrative Agent of such receipt, and equitable adjustment
will be made in the manner stated in this Section 10.19 so that, in effect, all
such excess amounts will be shared ratably among all of the Lender Parties. The
Lender Party receiving such excess amount shall purchase (which it shall be
deemed to have done simultaneously upon the receipt of such excess amount) for
cash from the other Lender Parties a participation in the applicable Loan
Obligations owed to such other Lender Parties in such amount as shall result in
a ratable sharing by all Lender Parties of such excess amount (and to such
extent the receiving Lender Party shall be a participant). If all or any portion
of such excess amount is thereafter recovered from the Lender Party making such
purchase, such purchase shall be rescinded and the purchase price restored to
the extent of such recovery, together with interest or other amounts, if any,
required by Law to be paid by the Lender Party making such purchase. The
Borrowers hereby consent to and confirm the foregoing arrangements. Each
participant shall be bound by this Section 10.19 as fully as if it were a Lender
hereunder.
10.20 CONSENT TO JURISDICTION, SERVICE AND VENUE; WAIVER OF
JURY TRIAL.
(a) Consent to Jurisdiction. For the purpose of enforcing payment
and performance of the Loan Documents, including, any payment under the Notes
and performance of other obligations under the Loan Documents, or in any other
matter relating to, or arising out of, the Loan Documents, each of the Borrowers
hereby consents to the jurisdiction and venue of the courts of the Commonwealth
of Pennsylvania or of any federal court located in such state, waive personal
service of any and all process upon it and consents that all such service of
process be made by certified or registered mail directed to Multicare (on behalf
of the applicable Borrowers) at the address provided for in Section 10.1 and
service so made shall be deemed to be completed upon actual receipt or execution
of a receipt by any Person at such address. Each of the Borrowers hereby waives
the right to contest the jurisdiction and venue of the courts located in the
Commonwealth of Pennsylvania on the ground of inconvenience or otherwise and,
further, waives any right to bring any action or proceeding against (a) the
Administrative Agent in any court outside the
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Commonwealth of Pennsylvania, or (b) any other Lender other than in a state
within the United States designated by such Lender. The provisions of this
Section 10.20 shall not limit or otherwise affect the right of the
Administrative Agent or any other Lender Party to institute and conduct an
action in any other appropriate manner, jurisdiction or court.
(b) WAIVER OF JURY TRIAL; DAMAGES. NEITHER ANY LENDER PARTY NOR ANY
LOAN PARTY, NOR ANY ASSIGNEE, SUCCESSOR, HEIR OR PERSONAL REPRESENTATIVE OF THE
FOREGOING SHALL SEEK A JURY TRIAL IN ANY PROCEEDING BASED UPON OR ARISING OUT OF
THIS AGREEMENT, OR ANY OTHER LOAN DOCUMENT, OR INVOLVING ANY COLLATERAL OR ANY
GUARANTY RELATING TO THE INDEBTEDNESS HEREUNDER OR THE RELATIONSHIP BETWEEN OR
AMONG SUCH PERSONS OR ANY OF THEM. NO SUCH PERSON WILL SEEK TO CONSOLIDATE ANY
SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT
BEEN WAIVED. EXCEPT AS PROHIBITED BY LAW, EACH PARTY TO THIS AGREEMENT WAIVES
ANY RIGHTS IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION REFERRED TO IN THIS
SECTION 10.20 ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY
DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. EACH PARTY TO THIS
AGREEMENT (i) CERTIFIES THAT NEITHER THE ADMINISTRATIVE AGENT NOR ANY LENDER
PARTY NOR ANY REPRESENTATIVE, OR ATTORNEY OF THE ADMINISTRATIVE AGENT OR ANY
LENDER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE ADMINISTRATIVE
AGENT OR SUCH LENDER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVERS AND (ii) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO
ENTER INTO THIS AGREEMENT AND EACH OTHER LOAN DOCUMENT BY, AMONG OTHER THINGS,
THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS PARAGRAPH (b) OF SECTION 10.20.
THE PROVISIONS OF THIS SECTION 10.20 HAVE BEEN FULLY DISCLOSED TO THE PARTIES
AND THE PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS. NO PARTY HAS IN ANY WAY
AGREED WITH OR REPRESENTED TO ANY OTHER PARTY THAT THE PROVISIONS OF THIS
SECTION 10.20 WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.
IN WITNESS WHEREOF, the parties hereto, by their officers thereunto
duly authorized, have executed and delivered this Agreement as of the date first
above written.
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Agents and Lenders:
MELLON BANK, N.A., as a Lender
and as Administrative Agent
By
----------------------------------
Name:
Title:
Address for notices:
street address:
AIM 199-5220
Mellon Independence Center
000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
mailing address:
AIM 199-5220
X.X. Xxx 0000
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Xxxxx Xxxxxx,
Loan Administration
Telephone: 000-000-0000
Facsimile: 000-000-0000
With a copy to
Plymouth Meeting Executive Campus
000 X. Xxxxxxxxxx Xxxx, Xxxxx 000
Plymouth Meeting, Pennsylvania 19462
Attention: Xxxxxxx X. Xxxxxxxx
Vice President
Telephone: 000-000-0000
Facsimile: 000-000-0000
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Domestic Lending Office:
CITICORP, USA, INC., as a Lender and as
Syndication Agent
By
---------------------------------------
Name:
Title:
Address for notices:
000 Xxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
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FIRST UNION NATIONAL BANK, as a
Lender and as Documentation Agent
By
---------------------------------------
Name:
Title:
Address for notices:
Xxx Xxxxx Xxxxx Xxxxxx XX-0
Xxxxxxxxx, XX 00000-0000
Attention: Xx. Xxxxxx X. Xxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
NATIONSBANK, N.A., as a Lender and as a
Syndication Agent
By
---------------------------------------
Name:
Title:
Address for notices:
0 Xxxxxxxxxxx Xxxxx
0xx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxx Xxxx
Telephone:
Facsimile: 000-000-0000
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BORROWERS:
THE MULTICARE COMPANIES, INC., a
Delaware corporation
By____________________________
Name: Xxxxx X. XxXxxx
Title: Vice President, Controller
and Assistant Secretary
Address for notices:
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx Xxxxxx, XX 00000
Attention: Xxx X. Xxxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
ADS APPLE VALLEY LIMITED PARTNERSHIP, a Massachusetts limited partnership, by:
ADS Apple Valley, Inc. its General Partner
ADS DARTMOUTH GENERAL PARTNERSHIP, a Massachusetts general partnership, by ADS
Dartmouth ALF, Inc. and ADS Senior Housing, Inc., its General Partners
ADS HINGHAM LIMITED PARTNERSHIP, a Massachusetts limited partnership, by ADS
Hingham Nursing Facility, Inc., its General Partner
ADS RECUPERATIVE CENTER LIMITED PARTNERSHIP, a Massachusetts limited
partnership, by ADS Recuperative Center, Inc., its General Partner
CARE 4, L.P., a Delaware limited partnership, by Institutional Health Care
Services, Inc., its General Partner
CARE HAVEN ASSOCIATES LIMITED PARTNERSHIP, a West Virginia limited partnership,
by Glenmark Associates, Inc. and GMA Partnership Holding Company, Inc., its
General Partners
---------------------
Initials of Xxxxxx
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CUMBERLAND ASSOCIATES OF RHODE ISLAND, L.P., a Delaware limited partnership, by
Health Resources of Cumberland, Inc., its General Partner
GLENMARK PROPERTIES I, LIMITED PARTNERSHIP, a West Virginia limited partnership,
by Glenmark Associates, Inc. and GMA Partnership Holding Company, Inc., its
General Partners
GROTON ASSOCIATES OF CONNECTICUT, L.P., a Delaware limited partnership, by
Health Resources of Groton, Inc., its General Partner
MIDDLETOWN (RI) ASSOCIATES OF RHODE ISLAND, L.P., a Delaware limited
partnership, by Health Resources of Middletown (R.I.), Inc., its General Partner
POINT PLEASANT HAVEN LIMITED PARTNERSHIP, a West Virginia limited partnership,
by Glenmark Associates, Inc., its General Partner
RALEIGH MANOR LIMITED PARTNERSHIP, a West Virginia limited partnership, by
Glenmark Associates, Inc., its General Partner
ROMNEY HEALTH CARE CENTER LIMITED PARTNERSHIP, a West Virginia limited
partnership, by Glenmark Associates, Inc., its General Partner
SISTERVILLE HAVEN LIMITED PARTNERSHIP, a West Virginia limited partnership, by
Glenmark Associates, Inc., its General Partner
TEAYS VALLEY HAVEN LIMITED PARTNERSHIP, a West Virginia limited partnership, by
Glenmark Associates, Inc., its General Partner
THE XXXXXX GROUP - XXXXXXX HOUSE, L.P., a New Jersey limited partnership, by
Encare of Wyncote, Inc., its General Partner
THE XXXXXX GROUP - QUAKERTOWN MANOR, L.P., a New Jersey limited partnership, by
Encare of Quakertown, Inc., its General Partner
WALLINGFORD ASSOCIATES OF CONNECTICUT, L.P., a Delaware limited partnership, by
Health Resources of Wallingford, Inc., its General Partner
WARWICK ASSOCIATES OF RHODE ISLAND, L.P., a Delaware limited partnership, by
Health Resources of Warwick, Inc., its General Partner
Address for notices:
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx Xxxxxx, XX 00000
Attention: Xxx X. Xxxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
By:__________________________
On behalf of each of the foregoing
as Vice President, Controller
and Assistant Secretary of the General
Partner
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XXXXX XXXXX ASSOCIATES OF NEW JERSEY, L.P., a Delaware limited partnership, by
Encare of Mendham, L.L.C., its General Partner, by Century Care Management,
Inc., its authorized manager
MERCERVILLE ASSOCIATES OF NEW JERSEY, L.P., a Delaware limited partnership, by
Breyut Convalescent Center, L.L.C., its General Partner, by Century Care
Management, Inc., its authorized manager
POMPTON ASSOCIATES, L.P., a New Jersey limited partnership, by Pompton Corp.,
L.L.C., its General Partner, by Century Care Management, Inc., its authorized
manager
THE XXXXXX GROUP - OLD BRIDGE, L.P., a New Jersey limited partnership, by Health
Resources of Xxxxx, L.L.C., its General Partner, by Century Care Management,
Inc., its authorized manager
THE XXXXXX GROUP - RIDGEWOOD, L.P., a New Jersey limited partnership, by Health
Resources of Ridgewood, L.L.C., its General Partner, by Century Care Management,
Inc., its authorized manager
By:__________________________
On behalf of each of the foregoing
as Vice President, Controller
and Assistant Secretary of the manager
Address for notices:
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx Xxxxxx, XX 00000
Attention: Xxx X. Xxxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
-119-
ACADEMY NURSING HOME, INC., a
Massachusetts corporation
ADS APPLE VALLEY, INC., a
Massachusetts corporation
ADS CONSULTING, INC., a
Massachusetts corporation
ADS DANVERS ALF, INC., a Delaware
corporation
ADS DARTMOUTH ALF, INC., a
Delaware corporation
ADS HINGHAM ALF, INC., a Delaware
Corporation
ADS HINGHAM NURSING FACILITY,
INC., a Massachusetts corporation
ADS HOME HEALTH, INC., a Delaware
corporation
ADS MANAGEMENT, INC., a
Massachusetts corporation
ADS/MULTICARE, INC., a Delaware
corporation
ADS RECUPERATIVE CENTER, INC.,
a Massachusetts corporation
ADS SENIOR HOUSING, INC., a
Massachusetts corporation
ADS VILLAGE MANOR, INC., a
Massachusetts corporation
ANR, INC., a Delaware corporation
APPLEWOOD HEALTH RESOURCES,
INC., a Delaware corporation
AUTOMATED PROFESSIONAL
ACCOUNTS, INC., a West Virginia
corporation
BERKS NURSING HOMES, INC., a
Pennsylvania corporation
BETHEL HEALTH RESOURCES, INC.,
a Delaware corporation
BRIGHTWOOD PROPERTY, INC., a
West Virginia corporation
CENTURY CARE CONSTRUCTION,
INC., a New Jersey corporation
CENTURY CARE MANAGEMENT,
INC., a Delaware corporation
CHATEAU VILLAGE HEALTH
RESOURCES, INC., a Delaware
corporation
CHG INVESTMENT CORP., INC., a
Delaware corporation
CHNR-1, INC., a Delaware corporation
COLONIAL HALL HEALTH
RESOURCES, INC., a Delaware
corporation
COLONIAL HOUSE HEALTH
RESOURCES, INC., a Delaware
corporation
COMPASS HEALTH SERVICES, INC.,
a West Virginia corporation
CONCORD HEALTH GROUP, INC., a
Delaware corporation
--------------------
Initials of Xxxxxx
-120-
CONCORD HOME HEALTH, INC., a
Pennsylvania corporation
CONCORD PHARMACY SERVICES,
INC., a Pennsylvania corporation
CONCORD REHAB, INC., a
Pennsylvania corporation
CONCORD SERVICE CORPORATION,
a Pennsylvania corporation
CVNR, INC., a Delaware corporation
DELM NURSING, INC., a Pennsylvania
corporation
ELMWOOD HEALTH RESOURCES,
INC., a Delaware corporation
ENCARE OF MASSACHUSETTS, INC.,
a Delaware corporation
ENCARE OF PENNYPACK, INC., a
Pennsylvania corporation
ENCARE OF QUAKERTOWN, INC., a
Pennsylvania corporation
ENCARE OF WYNCOTE, INC., a
Pennsylvania corporation
ENR, INC., a Delaware corporation
GLENMARK ASSOCIATES, INC., a
West Virginia corporation
GMA - BRIGHTWOOD, INC., a West
Virginia corporation
GMA CONSTRUCTION, INC., a West
Virginia corporation
GMA - MADISON, INC., a West
Virginia corporation
GMA PARTNERSHIP HOLDING
COMPANY, INC., a West Virginia
corporation
GMA - UNIONTOWN, INC., a
Pennsylvania corporation
HEALTH RESOURCES OF
BROADMAN, INC., a Delaware
corporation
HEALTH RESOURCES OF CEDAR
GROVE, INC., a New Jersey corporation
HEALTH RESOURCES OF
COLCHESTER, INC., a Connecticut
corporation
HEALTH RESOURCES OF
COLUMBUS, INC., a Delaware
corporation
HEALTH RESOURCES OF
CUMBERLAND, INC., a Delaware
corporation
HEALTH RESOURCES OF
EATONTOWN, INC., a New Jersey
corporation
HEALTH RESOURCES OF
FARMINGTON, INC., a Delaware
corporation
HEALTH RESOURCES OF XXXXXXX,
INC., a Delaware corporation
--------------------
Initials of Xxxxxx
-121-
HEALTH RESOURCES OF
GLASTONBURY, INC., a Connecticut
corporation
HEALTH RESOURCES OF GROTON,
INC., a Delaware corporation
HEALTH RESOURCES OF LAKEVIEW,
INC., a New Jersey corporation
HEALTH RESOURCES OF LEMONT,
INC., a Delaware corporation
HEALTH RESOURCES OF XXXX,
INC., a New Jersey corporation
HEALTH RESOURCES OF KARMENTA
AND MADISON, INC., a Delaware
corporation
HEALTH RESOURCES OF
XXXXXXXX, INC., a Delaware
corporation
HEALTH RESOURCES OF
MIDDLETOWN (R.I.), INC., a Delaware
corporation
HEALTH RESOURCES OF
MORRISTOWN, INC., a New Jersey
corporation
HEALTH RESOURCES OF NORFOLK,
INC., a Delaware corporation
HEALTH RESOURCES OF NORWALK,
INC., a Connecticut corporation
HEALTH RESOURCES OF
PENNINGTON, INC., a New Jersey
corporation
HEALTH RESOURCES OF
ROCKVILLE, INC., a Delaware
corporation
HEALTH RESOURCES OF SOUTH
BRUNSWICK, INC., a New Jersey
corporation
HEALTH RESOURCES OF XXXX
HILLS, INC., a New Jersey corporation
HEALTH RESOURCES OF
WALLINGFORD, INC., a Delaware
corporation
HEALTH RESOURCES OF WARWICK,
INC., a Delaware corporation
HEALTHCARE REHAB SYSTEMS,
INC., a Pennsylvania corporation
HORIZON ASSOCIATES, INC., a West
Virginia corporation
HORIZON MEDICAL EQUIPMENT
AND SUPPLY, INC., a West Virginia
corporation
HORIZON MOBILE, INC., a West
Virginia corporation
HORIZON REHABILITATION, INC., a
West Virginia corporation
HR OF CHARLESTON, INC., a West
Virginia corporation
HRWV Huntington, Inc., a West Virginia
corporation
--------------------
Initials of Xxxxxx
-122-
INSTITUTIONAL HEALTH CARE
SERVICES, INC., a New Jersey
corporation
LAKEWOOD HEALTH RESOURCES,
INC., a Delaware corporation
LAUREL HEALTH RESOURCES, INC.,
a Delaware corporation
LEHIGH NURSING HOMES, INC., a
Pennsylvania corporation
LWNR, INC., a Delaware corporation
MABRI CONVALESCENT CENTER,
INC., a Connecticut corporation
MARKGLEN, INC., a West Virginia
corporation
MARSHFIELD HEALTH RESOURCES,
INC., a Delaware corporation
XXXXXXXXXX NURSING HOMES,
INC., a Pennsylvania corporation
MULTICARE AMC, INC., a Delaware
Corporation
MULTICARE HOME HEALTH OF
ILLINOIS, INC., a Delaware corporation
NATIONAL PHARMACY SERVICE,
INC., a Pennsylvania corporation
NURSING AND RETIREMENT
CENTER OF THE ANDOVERS, INC., a
Massachusetts corporation
PHC OPERATING CORP., a Delaware
corporation
POCAHONTAS CONTINUOUS CARE
CENTER, INC., a West Virginia
corporation
PRESCOTT NURSING HOME, INC., a
Massachusetts corporation
PROGRESSIVE REHABILITATION
CENTERS, INC., a Delaware corporation
PROVIDENCE HEALTH CARE, INC., a
Delaware corporation
REST HAVEN NURSING HOME, INC,
a West Virginia corporation
RIDGELAND HEALTH RESOURCES,
INC., a Delaware corporation
RIVER PINES HEALTH RESOURCES,
INC., a Delaware corporation
RIVERSHORES HEALTH RESOURCES,
INC., a Delaware corporation
RLNR, INC., a Delaware corporation
ROSE HEALTHCARE, INC.,
a New Jersey corporation
ROSE VIEW MANOR, INC., a
Pennsylvania corporation
RSNR, INC., a Delaware corporation
RVNR, INC., a Delaware corporation
SENIOR LIVING VENTURES, INC., a
Pennsylvania corporation
------------------
Initials of Xxxxxx
-123-
SCHUYLKILL NURSING HOMES,
INC., a Pennsylvania corporation
SCHUYLKILL PARTNERSHIP
ACQUISITION CORP., a Pennsylvania
corporation
SENIOR SOURCE, INC., a Massachusetts
corporation
SNOW VALLEY HEALTH
RESOURCES, INC., a Delaware
corporation
SOLOMONT FAMILY FALL RIVER
VENTURE, INC., a Massachusetts
corporation
SOLOMONT FAMILY MEDFORD
VENTURE, INC., a Massachusetts
corporation
XXXXXXXX CONVALESCENT
CENTER, INC., a Delaware corporation
S.T.B. INVESTORS, LTD., a New York
corporation
SVNR, INC., a Delaware corporation
THE ADS GROUP, INC., a
Massachusetts corporation
TRI-STATE MOBILE MEDICAL
SERVICES, INC., a West Virginia
corporation
WESTFORD NURSING AND
RETIREMENT CENTER, INC., a
Massachusetts corporation
WILLOW MANOR NURSING HOME,
INC., a Massachusetts corporation
By:_______________________
On behalf of each of the foregoing as Vice
President, Controller and Assistant
Secretary
Address for notices:
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx Xxxxxx, XX 00000
Attention: Xxx X. Xxxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
-124-
BREYUT CONVALESCENT CENTER, L.L.C., a New Jersey limited liability company, by
Century Care Management, Inc., its authorized manager
ENCARE OF MENDHAM, L.L.C., a New Jersey limited liability company, by Century
Care Management, Inc., its authorized manager
HEALTH RESOURCES OF BRIDGETON, L.L.C., a New Jersey limited liability company,
by Century Care Management, Inc., its authorized manager
HEALTH RESOURCES OF CINNAMINSON, L.L.C., a New Jersey limited liability company,
by Century Care Management, Inc., its authorized manager
HEALTH RESOURCES OF CRANBURY, L.L.C., a New Jersey limited liability company, by
Century Care Management, Inc., its authorized manager
HEALTH RESOURCES OF XXXXX, L.L.C., a New Jersey limited liability company, by
Century Care Management, Inc., its authorized manager
HEALTH RESOURCES OF ENGLEWOOD, L.L.C., a New Jersey limited liability company,
by Century Care Management, Inc., its authorized manager
HEALTH RESOURCES OF EWING, L.L.C., a New Jersey limited liability company. by
Century Care Management, Inc., its authorized manager
HEALTH RESOURCES OF FAIR LAWN, L.L.C., a New Jersey limited liability company,
by Century Care Management, Inc., its authorized manager
HEALTH RESOURCES OF XXXXXXX, L.L.C., a New Jersey limited liability company, by
Century Care Management, Inc., its authorized manager
HEALTH RESOURCES OF RIDGEWOOD, L.L.C., a New Jersey limited liability company,
by Century Care Management, Inc., its authorized manager
HEALTH RESOURCES OF WEST ORANGE, L.L.C., a New Jersey limited liability company,
by Century Care Management, Inc., its authorized manager
POMPTON CARE, L.L.C., a New Jersey limited liability company, by Century Care
Management, Inc., its authorized manager
ROEPHEL CONVALESCENT CENTER, L.L.C., a New Jersey limited liability company, by
Century Care Management, Inc., its authorized manager
------------------
Initials of Xxxxxx
-125-
TOTAL REHABILITATION CENTER, L.L.C., a New
Jersey limited liability corporation, by
Century Care Management, Inc., its authorized
manager
By:_______________________
On behalf of each of the foregoing
Vice President, Controller
and Assistant Secretary of the manager
Address for notices:
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx Xxxxxx, XX 00000
Attention: Xxx X. Xxxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
-126-
The Surety hereby joins this Credit Agreement for the purposes of (1)
acknowledging the terms and conditions and receipt of a true, correct and
complete copy hereof, (2) representing and warranting to the Lender Parties that
the representations and warranties contained herein are true and correct, and
(3) agreeing with the Lender Parties to comply with the affirmative, financial
and negative covenants contained herein to the extent they apply, by their
terms, to the Surety.
GENESIS ELDERCARE CORP.
By
----------------------------------
Title:
-127-
LIST OF SCHEDULES
1.1 Lenders' Commitments
3.1(a) Corporate/Partnership Status of Borrowers
3.1(b) Capitalization of Borrowers
3.1(o) Management Agreements
3.1(p) Health Care Businesses
3.1(q) Leases of Borrowers
3.1(s) Employee Benefits/ERISA Matters
4.10 Adding Borrowers
6.1 Existing Indebtedness
6.2 Permitted Liens
6.3 Investments
6.4 Acquisition Conditions
6.5(d) Ohio, Illinois and Wisconsin Operations
6.5(f) Assisted Living Facilities
6.5(h) Disposition Conditions
9.1 Excluded Subsidiaries
-128-
LIST OF EXHIBITS
A-1 Form of Note
A-2 Form of Swing Loan Note
B Form of Advance Request
C Form of Prepayment Notice
D Form of Pledge Agreement
E Form of Officer's Compliance Certificate
F Form of Assignment and Acceptance Agreement
-129-
SCHEDULE 1.1
Allocations
Multicare Short Term Facility
$425,000,000.00
Bank
----
Mellon $106,250,000.00
Citibank $106,250,000.00
NationsBank $106,250,000.00
First Union $106,250,000.00
-130-
SCHEDULE 4.10
JOINDER OF BORROWERS
1. Joinder Supplement. Multicare (on behalf of itself and the other
Borrowers) and each Joining Subsidiary shall execute and deliver to the
Administrative Agent, with an executed counterpart for each Lender Party, a
"Joinder Supplement" as defined in Section 4.10 to this Agreement as to becoming
a party hereto and to the relevant Loan Documents.
2. Notes. Each Joining Subsidiary and each existing Borrower shall
execute and deliver to the Administrative Agent a replacement Note or Allonge
for each Lender, as necessary.
3. Collateral. Each applicable Borrower and each applicable Joining
Subsidiary shall deliver to the Administrative Agent (1) certificates and
instruments representing the stock certificates and other instruments to be
pledged pursuant to the Pledge Agreement accompanied by duly executed
instruments of transfer or assignments in blank to the extent required by the
Pledge Agreement and (2) evidence of the completion of all recordings and
filings (including Uniform Commercial Code financing statements) as may be
necessary or, in the opinion of the Administrative Agent or the Collateral
Agent, desirable to create or perfect the Liens granted and created or purported
to be granted and created by each Joining Subsidiary (or by each existing
Borrower in the collateral comprised of equity of any Joining Subsidiaries)
under and pursuant to the Pledge Agreement.
4. Lien Searches. For each Joining Subsidiary which is acquired by a
Borrower pursuant to an Acquisition, each Joining Subsidiary shall deliver to
the Administrative Agent such evidence of recent searches of Uniform Commercial
Code, tax, judgment records and other appropriate registers as the
Administrative Agent shall request.
5. Corporate or Partnership Proceedings. Each Joining Subsidiary
shall deliver to the Administrative Agent, with an executed counterpart for each
Lender Party, certificates by the Secretary or Assistant Secretary of each
Joining Subsidiary (or general partner thereof), dated as of the Joinder
Effective Date (as defined below) as to the incumbency and signatures of the
respective officers of such Joining Subsidiary who are authorized to sign Loan
Documents, together with (i) true copies of the articles of incorporation and
bylaws or partnership agreement (or other constituent documents) of such Joining
Subsidiary in effect on such date, (ii) true copies of all corporate or
partnership action taken by such Joining Subsidiary relative to this Agreement,
the Joinder Supplement and the other Loan Documents. Each Joining Subsidiary
shall also deliver certificates from the appropriate Secretaries of State or
other applicable Governmental Authorities dated not more than 30 days before the
relevant Joinder Effective Date showing the good standing of
-131-
such Joining Subsidiary in its state of incorporation or organization and each
state in which such Joining Subsidiary does business.
6. Legal Opinions of Counsel. The Borrowers and each Joining
Subsidiary collectively shall cause to be delivered to the Administrative Agent,
with an executed counterpart for each Lender, an opinion or opinions addressed
to each Lender, dated the relevant Joinder Effective Date, of counsel to such
Joining Subsidiary, Genesis and each of the other Borrowers as to such matters
as may be requested by the Administrative Agent, all in form and substance
satisfactory to the Administrative Agent.
7. Fees, Expenses, Etc. The Borrowers and each Joining Subsidiary
shall pay or cause to be paid all fees and other compensation required to be
paid to the Lender pursuant hereto or pursuant to any other written agreement on
or prior to the Joinder Effective Date.
8. Additional Matters. The Borrowers and each Joining Subsidiary
shall deliver, or cause to be delivered, to the Administrative Agent such other
revised schedules, certificates, opinions, instruments and other documents
(including those relating to licensing) as may be requested by the
Administrative Agent. All such schedules, certificates, opinions, instruments
and other documents shall be satisfactory in form and substance to the
Administrative Agent.
-132-
SCHEDULE 6.4
ACQUISITION CONDITIONS
1. Notice. Not later than 15 Business Days before the consummation
of a proposed Acquisition, Multicare (on behalf of the Borrowers) shall have
delivered to each Lender a notice of the proposed Acquisition, together with the
following:
(1) copies of audited financial statements of the entity to be
acquired (the "Target") for its last three fiscal years (to the extent
that such audited statements are available, or, to the extent such audited
statements are not so available, unaudited statements for as much of such
period as is available);
(2) copies of the interim financial statements of the Target
for the latest fiscal quarter;
(3) a pro forma projected balance sheet of Multicare and its
Restricted Subsidiaries as of the date of, and after giving effect to, the
proposed Acquisition and a pro forma income statement of Multicare and its
Restricted Subsidiaries for the four fiscal quarters ended on, or most
recently prior to, the date of such proposed Acquisition after giving
effect thereto;
(4) an Officer's Compliance Certificate showing pro forma
compliance with the covenants referred to therein after giving effect to
the proposed Acquisition (which certificate may be delivered after the
other items referred to in this paragraph (1) but no later than five (5)
Business Days prior to the date of the proposed Acquisition); and
(5) revisions to the most recent financial projections
delivered to the Lender Parties by Multicare, which revisions shall take
into account the projected financial condition and results of operations
of the Target for the period covered by such projections.
2. Other Information. In addition, Multicare (on behalf of the
Borrowers) shall have delivered to the Administrative Agent (and with respect to
the information referred to in paragraph (2) below, the requesting Lender) the
following:
(1) copies of any agreements entered into or proposed to be
entered into by such Borrower in connection with such Acquisition; and
(2) such other information about the Target or such
Acquisition as any Lender may reasonably request.
-133-
3. Board Approval. The board of directors (or equivalent governing
body) of the Target shall have approved such Acquisition.
4. Line of Business. Not less than 75% of the Target's revenues
during its most recently completed fiscal year shall have been derived from
lines of business which are, at the time of the Acquisition, among the principal
lines of business of any of the Borrowers.
5. No Default. No Event of Default or Default shall have occurred
and be continuing before, or after giving effect to, the consummation of the
Acquisition.
6. Limitations on Mergers and Consolidations. If any merger is
effected in connection with the Acquisition, a Borrower (including an entity
that becomes a Borrower consistent with the provisions of this Agreement) shall
be the surviving entity in the merger. No consolidation shall be permitted in
connection with any Acquisition.
7. Joinder to Loan Documents. The Borrowers shall cause any new
(direct or indirect) Subsidiary of Genesis which is created or acquired as a
direct or indirect result of, or in connection with, such Acquisition, to become
a Borrower hereunder pursuant to and in accordance with the terms of Section
4.10 of this Agreement and shall cause the ownership interests therein to be
pledged under the Pledge Agreement.
8. Arm's Length. The Acquisition shall be made in good faith in an
arm's-length transaction to a Person which is not an Affiliate of any Borrower,
except as otherwise agreed to by the Lenders. Without limiting the generality of
the foregoing, the total consideration paid for the Acquisition shall be no
greater than the fair market value of the subject assets (including intangible
assets).
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SCHEDULE 6.5(h)
DISPOSITION CONDITIONS
1. Notice. Multicare (on behalf of the Borrowers) shall have given
each Lender Party at least 5 days prior written notice of any transfer (as
defined in Section 6.5 of this Agreement), together with an Officer's Compliance
Certificate showing pro forma compliance with the financial covenants referred
to therein (including the financial tests set forth in paragraph (h) of Section
6.5) after giving effect to such transfer.
2. Arm's Length. The transfer shall be made in good faith in an
arm's-length transaction to a Person which is not an Affiliate of any Borrower,
except as otherwise agreed to by the Required Lenders. Without limiting the
generality of the foregoing, the total consideration for the transfer shall be
at least equal to the fair market value of the subject assets (including
intangible assets).
3. Transfer of Equity of a Borrower. In the event that any shares of
capital stock, partnership interests or other ownership interests of a Borrower
are to be disposed of or otherwise transferred in such transaction each of the
following additional conditions shall be met:
(a) All Loans made to such Borrower and all intercompany
obligations of such Borrower shall have been repaid in full and such
Borrower shall sign an acknowledgement that all obligations of the Lender
to it are terminated; and
(b) The Administrative Agent shall have received such
replacement Notes, certificates, opinions, documents and/or instruments it
shall reasonably request.
4. 1997 Subordinated Debt Indenture. The disposition shall not be
prohibited by or result in a default or breach under, or trigger a mandatory
prepayment requirement under the terms of the 1997 Subordinated Debt Indenture.
-135-
