THIRD AMENDED AND RESTATED CREDIT AGREEMENT
dated as of December 11, 1996
among
THE MULTICARE COMPANIES, INC.
AND CERTAIN OF ITS SUBSIDIARIES
THE BANKS SIGNATORY HERETO
and
NATIONSBANK, N.A.
as Administrative Agent
Table of Contents
ARTICLE 1. DEFINITIONS; ACCOUNTING TERMS. . . . . . . . . . .2
Section 1.01. Definitions. . . . . . . . . . . . . . . .2
Section 1.02. Accounting Terms . . . . . . . . . . . . 25
ARTICLE 2. THE CREDIT . . . . . . . . . . . . . . . . . . . 25
Section 2.01. Loans. . . . . . . . . . . . . . . . . . 25
Section 2.02. The Notes. . . . . . . . . . . . . . . . 26
Section 2.03. Purpose. . . . . . . . . . . . . . . . . 26
Section 2.04. Borrowing Procedures . . . . . . . . . . 26
Section 2.05. Prepayments and Conversions. . . . . . . 27
Section 2.06. Interest Periods; Renewals . . . . . . . 27
Section 2.07. Changes of Commitments . . . . . . . . . 27
Section 2.08. Certain Notices. . . . . . . . . . . . . 27
Section 2.09. Minimum Amounts. . . . . . . . . . . . . 28
Section 2.10. Interest . . . . . . . . . . . . . . . . 28
Section 2.11. Fees . . . . . . . . . . . . . . . . . . 29
Section 2.12. Payments Generally . . . . . . . . . . . 29
Section 2.13. Restatement. . . . . . . . . . . . . . . 30
Section 2.14. Optional Conversion of Revolving Credit
Commitments to Synthetic Lease
Commitments . . . . . . . . . . . . . . 30
ARTICLE 3. THE LETTERS OF CREDIT. . . . . . . . . . . . . . 31
Section 3.01. Letters of Credit. . . . . . . . . . . . 31
Section 3.02. Purposes . . . . . . . . . . . . . . . . 31
Section 3.03. Procedures for Issuance of
Letters of Credit . . . . . . . . . . . 31
Section 3.04. Participating Interests. . . . . . . . . 32
Section 3.05. Payments . . . . . . . . . . . . . . . . 32
Section 3.06. Further Assurances . . . . . . . . . . . 33
Section 3.07. Obligations Absolute . . . . . . . . . . 33
Section 3.08. Cash Collateral Account. . . . . . . . . 34
Section 3.09. Letter of Credit Fees. . . . . . . . . . 34
ARTICLE 4. YIELD PROTECTION; ILLEGALITY; ETC. . . . . . . . 35
Section 4.01. Additional Costs . . . . . . . . . . . . 35
Section 4.02. Limitation on Types of Loans . . . . . . 36
Section 4.03. Illegality . . . . . . . . . . . . . . . 37
Section 4.04. Certain Conversions pursuant to
Sections 4.01 and 4.03 . . . . . . . . . 37
Section 4.05. Certain Compensation . . . . . . . . . . 38
ARTICLE 5. CONDITIONS PRECEDENT.. . . . . . . . . . . . . . 39
Section 5.01. Documentary Conditions Precedent . . . . 39
Section 5.02. Additional Conditions Precedent. . . . . 42
Section 5.03. Deemed Representations . . . . . . . . . 42
ARTICLE 6. REPRESENTATIONS AND WARRANTIES.. . . . . . . . . 43
Section 6.01. Organization, Good Standing and
Due Qualification . . . . . . . . . . . 43
Section 6.02. Power and Authority; No Conflicts. . . . 43
Section 6.03. Legally Enforceable Agreements . . . . . 44
Section 6.04. Litigation . . . . . . . . . . . . . . . 44
Section 6.05. Financial Statements . . . . . . . . . . 44
Section 6.06. Ownership and Liens. . . . . . . . . . . 45
Section 6.07. Taxes. . . . . . . . . . . . . . . . . . 46
Section 6.08. ERISA. . . . . . . . . . . . . . . . . . 46
Section 6.09. Subsidiaries and Ownership of Stock. . . 46
Section 6.10. Credit Arrangements. . . . . . . . . . . 46
Section 6.11. Operation of Business. . . . . . . . . . 47
Section 6.12. Operating Agreements and Leases. . . . . 48
Section 6.13. Health Care Facilities . . . . . . . . . 48
Section 6.14. Hazardous Materials. . . . . . . . . . . 48
Section 6.15. No Default on Outstanding Judgments
or Orders . . . . . . . . . . . . . . . 48
Section 6.16. No Defaults on Other Agreements. . . . . 48
Section 6.17. Labor Disputes and Acts of God . . . . . 49
Section 6.18. Governmental Regulation. . . . . . . . . 49
Section 6.19. No Forfeiture. . . . . . . . . . . . . . 49
Section 6.20. Solvency . . . . . . . . . . . . . . . . 49
Section 6.21. Security Documents . . . . . . . . . . . 49
Section 6.22. Senior Indebtedness. . . . . . . . . . . 50
Section 6.23. Representations and Warranties in the
ADS Acquisition Documents. . . . . . . . 50
Section 6.24. Representations and Warranties in the
ADS Synthetic Lease Documents. . . . . . 50
ARTICLE 7. AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . 51
Section 7.01. Maintenance of Existence . . . . . . . . 51
Section 7.02. Conduct of Business. . . . . . . . . . . 51
Section 7.03. Maintenance of Properties. . . . . . . . 51
Section 7.04. Maintenance of Records . . . . . . . . . 52
Section 7.05. Maintenance of Insurance . . . . . . . . 52
Section 7.06. Compliance with Laws . . . . . . . . . . 52
Section 7.07. Right of Inspection. . . . . . . . . . . 52
Section 7.08. Reporting Requirements . . . . . . . . . 52
Section 7.09. Additional Subsidiary Guarantors . . . . 56
ARTICLE 8. NEGATIVE COVENANTS.. . . . . . . . . . . . . . . 56
Section 8.01. Debt . . . . . . . . . . . . . . . . . . 56
Section 8.02. Guaranties, Etc. . . . . . . . . . . . . 58
Section 8.03. Liens. . . . . . . . . . . . . . . . . . 58
Section 8.04. Leases . . . . . . . . . . . . . . . . . 60
Section 8.05. Investments. . . . . . . . . . . . . . . 60
Section 8.06. Dividends. . . . . . . . . . . . . . . . 61
Section 8.07. Sale of Assets . . . . . . . . . . . . . 62
Section 8.08. Stock of Subsidiaries, Etc . . . . . . . 63
Section 8.09. Transactions with Affiliates . . . . . . 63
Section 8.10. Mergers, Etc . . . . . . . . . . . . . . 63
Section 8.11. Acquisitions . . . . . . . . . . . . . . 63
Section 8.12. No Activities Leading to Forfeiture. . . 63
Section 8.13. Capital Expenditures . . . . . . . . . . 63
Section 8.14. Amendments or Waivers of Certain
Documents . . . . . . . . . . . . . . .. 64
Section 8.15. Rights under Other Agreements. . . . . . 64
Section 8.16. Restrictions . . . . . . . . . . . . . . 64
ARTICLE 9. FINANCIAL COVENANTS. . . . . . . . . . . . . . . 65
Section 9.01. Fixed Charge Coverage Ratio. . . . . . . 65
Section 9.02. Modified Senior Leverage Ratio . . . . . 65
Section 9.03. Modified Leverage Ratio. . . . . . . . . 65
Section 9.04. Interest Coverage Ratio. . . . . . . . . 65
Section 9.05. Minimum Net Worth. . . . . . . . . . . . 65
ARTICLE 10. EVENTS OF DEFAULT.. . . . . . . . . . . . . . . 65
Section 10.01. Events of Default . . . . . . . . . . . 65
ARTICLE 11. THE ADMINISTRATIVE AGENT. . . . . . . . . . . . 69
Section 11.01. Appointment, Powers and Immunities of
Administrative Agent . . . . . . . . . 69
Section 11.02. Reliance by Administrative Agent. . . . 69
Section 11.03. Defaults. . . . . . . . . . . . . . . . 70
Section 11.04. Rights of Administrative Agent as a Bank70
Section 11.05. Indemnification of Administrative Agent 71
Section 11.06. Documents . . . . . . . . . . . . . . . 71
Section 11.07. Non-Reliance on Administrative Agent
and Other Banks. . . . . . . . . . . . .71
Section 11.08. Failure of Administrative Agent to Act. 72
Section 11.09. Resignation or Removal of
Administrative Agent . . . . . . . . . 72
Section 11.10. Amendments Concerning Agency Function . 72
Section 11.11. Liability of Administrative Agent . . . 73
Section 11.12. Transfer of Agency Function . . . . . . 73
Section 11.13. Non-Receipt of Funds by the
Administrative Agent . . . . . . . . . 73
Section 11.14. Withholding Taxes . . . . . . . . . . . 73
Section 11.15. Several Obligations and Rights of Banks 74
Section 11.16. Pro Rata Treatment of Loans, Etc. . . . 74
Section 11.17. Sharing of Payments Among Banks . . . . 74
Section 11.18. Co-Agents . . . . . . . . . . . . . . . 75
ARTICLE 12. MISCELLANEOUS.. . . . . . . . . . . . . . . . . 75
Section 12.01. Amendments and Waivers. . . . . . . . . 75
Section 12.02. Usury . . . . . . . . . . . . . . . . . 76
Section 12.03. Expenses. . . . . . . . . . . . . . . . 76
Section 12.04. Survival. . . . . . . . . . . . . . . . 77
Section 12.05. Assignment; Participations. . . . . . . 77
Section 12.06. Notices . . . . . . . . . . . . . . . . 78
Section 12.07. Setoff. . . . . . . . . . . . . . . . . 78
Section 12.08. JURISDICTION; IMMUNITIES. . . . . . . . 78
Section 12.09. Table of Contents; Headings . . . . . . 79
Section 12.10. Severability. . . . . . . . . . . . . . 79
Section 12.11. Counterparts. . . . . . . . . . . . . . 79
Section 12.12. Integration . . . . . . . . . . . . . . 80
Section 12.13. GOVERNING LAW . . . . . . . . . . . . . 80
Section 12.14. Confidentiality . . . . . . . . . . . . 80
Section 12.15. Treatment of Certain Information. . . . 80
Section 12.16. Certain Subsidiary Co-Borrower Waivers
and Releases . . . . . . . . . .. . . 80
EXHIBITS
Exhibit A Revolving Credit Note
Exhibit B Term Note
Exhibit C Multicare Guaranty
Exhibit D Compliance Certificate
Exhibit E Opinion of Outside Counsel to the
Consolidated Entities
Exhibit F Opinion of Local Counsel to the
Consolidated Entities
Exhibit G Intercreditor and Collateral Agency Agreement
Exhibit H Second Amended and Restated Security Agreement
Exhibit I Second Amended and Restated Pledge Agreement
Exhibit J Form of Second Amended and Restated Mortgage
Exhibit K Form of Assumption Agreement
SCHEDULES
Schedule I Commitments
Schedule II Litigation
Schedule III Subsidiaries and Affiliates
Schedule IV Credit Arrangements
Schedule V Licenses
Schedule VI Operating Agreements and Leases
Schedule VII Facilities
Schedule VIII Affiliate Transactions
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
THIRD AMENDED AND RESTATED CREDIT AGREEMENT dated as of December 11,
1996 among THE MULTICARE COMPANIES, INC., a corporation organized under the
laws of Delaware (the "Borrower"); BREYUT CONVALESCENT CENTER, INC., a
corporation organized under the laws of New Jersey, ENCARE OF MENDHAM, INC.,
a corporation organized under the laws of New Jersey, HEALTH RESOURCES OF
CEDAR GROVE, INC., a corporation organized under the laws of New Jersey,
HEALTH RESOURCES OF CINNAMINSON, INC., a corporation organized under the laws
of New Jersey, HEALTH RESOURCES OF XXXXX, INC., a corporation organized under
the laws of Delaware, HEALTH RESOURCES OF XXXXX, INC., a corporation
organized under the laws of New Jersey, HEALTH RESOURCES OF FAIR LAWN, INC.,
a corporation organized under the laws of Delaware, HEALTH RESOURCES OF
MORRISTOWN, INC., a corporation organized under the laws of New Jersey,
HEALTH RESOURCES OF RIDGEWOOD, INC., a corporation organized under the laws
of New Jersey, HEALTH RESOURCES OF WEST ORANGE, INC., a corporation organized
under the laws of Delaware, XXXXX XXXXX ASSOCIATES OF NEW JERSEY, L.P., a
limited partnership organized under the laws of Delaware, MERCERVILLE
ASSOCIATES OF NEW JERSEY, L.P., a limited partnership organized under the
laws of Delaware, POMPTON ASSOCIATES L.P., a limited partnership organized
under the laws of New Jersey, POMPTON CARE, INC., a corporation organized
under the laws of New Jersey, ROEPHEL CONVALESCENT CENTER, INC., a
corporation organized under the laws of New Jersey, THE XXXXXX GROUP-OLD
BRIDGE, L.P., a limited partnership organized under the laws of New Jersey,
and THE XXXXXX GROUP-RIDGEWOOD, L.P., a limited partnership organized under
the laws of New Jersey (individually a "Subsidiary Co-Borrower" and
collectively the "Subsidiary Co-Borrowers" and, together with the Borrower,
the "Primary Obligors"); each of the banks which is a signatory hereto or
which shall become a party hereto from time to time (individually a "Bank"
and collectively the "Banks"); and NATIONSBANK, N.A., a national banking
association organized under the laws of the United States of America, as
Administrative Agent for the Banks (in such capacity, together with its
successors in such capacity, the "Administrative Agent").
WHEREAS, the Borrower, the Subsidiary Co-Borrowers, certain of the
Subsidiary Guarantors, certain of the Banks and The Chase Manhattan Bank,
N.A., as Agent have entered into that certain Second Amended and Restated
Credit Agreement dated as of May 22, 1996 (the "Existing Credit Agreement")
pursuant to which the Banks have extended credit to the Obligors evidenced by
certain Promissory Notes (the "Existing Notes") issued by the Borrower and
the respective Subsidiary Co-Borrowers and guarantied by the Subsidiary
Guarantors; and
WHEREAS, the Primary Obligors, the Banks and the Administrative Agent
are entering into this Agreement to provide for, among other things, the
entering into of the ADS Synthetic Lease, the issuance of Letters of Credit
and modifications of certain covenants and definitions contained in the
Existing Credit Agreement.
NOW THEREFORE, the parties hereto agree as follows:
ARTICLE 1. DEFINITIONS; ACCOUNTING TERMS.
Section 1.01. 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 and vice versa):
"Acceleration Event" means, at any time, the occurrence of (a) an
acceleration of all amounts due in respect of the Notes or (b) the exercise
of remedies under Section 16.2 of the ADS Synthetic Lease.
"Acceptable Acquisition" means any Acquisition which meets all of the
following conditions: (a) (i) the aggregate consideration paid for such
Acquisition does not exceed $30,000,000 (excluding consideration consisting
of (x) capital stock of the Borrower and (y) contingent payments based on
future operating performances so long as the aggregate of all such contingent
payments does not exceed $2,500,000) or (ii) the purchase by any ADS Lessee
of any ADS Mortgaged Property pursuant to Section 15.1,18.1(a) or 18.1(b) of
the ADS Synthetic Lease; (b) such Acquisition has been approved in good faith
by the Board of Directors of the Person making the Acquisition on an
individual basis or in accordance with a master Acquisition plan; (c) no
Default or Event of Default exists or would exist after giving effect to such
Acquisition; and (d) after reviewing historical financial statements of the
business being acquired and considering the pro forma position of the
Consolidated Entities subsequent to such Acquisition, the Borrower believes
in good faith that the Consolidated Entities will continue to be in
compliance with the financial covenants contained in Article 9 on a pro forma
basis.
"Acquisition" means any transaction (excluding any transaction in which
any Consolidated Entity acquires an interest in undeveloped realty or a
project under construction, and in related regulatory approvals, so long as
such transaction is reflected in Consolidated Capital Expenditures) pursuant
to which any Consolidated Entity (a) acquires equity securities (or warrants,
options or other rights to acquire such securities) of any Person or debt
securities or instruments of any Person where such Consolidated Entity
believes that it is likely to acquire a controlling interest in such Person
or such Health Care Facility, (b) causes or permits any Person to be merged
into any Consolidated Entity, in any case pursuant to a merger, purchase of
assets or any reorganization providing for the delivery or issuance to the
holders of such Person's then outstanding securities, in exchange for such
securities, of cash or securities of any Consolidated Entity, or a
combination thereof, or (c) purchases all or substantially all of the
business or assets of any Person or any Health Care Facility.
"Additional Costs" shall have the meaning assigned to such term in
Section 4.01(a).
"Administrative Agent" shall have the meaning assigned to such term in
the introductory paragraph.
"ADS Acquisition" means the Acquisition by the ADS Buyers of the Health
Care Facilities owned or managed by the ADS Seller Entities, or of the equity
interests in the owners or managers thereof, pursuant to the terms of the ADS
Acquisition Agreement.
"ADS Acquisition Agreement" means that certain Acquisition Agreement
dated as of June 17, 1996 among ADS/Multicare, the ADS Owner Parties and the
ADS Seller Entities (including all exhibits, schedules and disclosure letters
referred to therein or delivered pursuant thereto), as amended by that
certain Amendment No. 1 to Acquisition Agreement dated as of August 12, 1996,
as further amended by that certain Amendment No. 2 to Acquisition Agreement
dated as of September 25, 1996, as further amended by that certain Amendment
No. 3 to Acquisition Agreement dated as of October 29, 1996 and as further
amended by that certain Amendment No. 4 to Acquisition Agreement dated as of
December 11, 1996.
"ADS Acquisition Documents" means (a) the ADS Acquisition Agreement,
(b) the Guaranty dated June 17, 1996 of the Borrower, (c) the Escrow
Agreement dated as of December 11, 1996 among ADS/Multicare, Xxxx X.
Xxxxxxxx, as "Seller Representative" for the ADS Owner Parties and the ADS
Seller Entities, and the "Escrow Agent" named therein, (d) the Employment
Agreements dated as of December 11, 1996 between the Borrower and Xxxx X.
Xxxxxxxx and Xxxxx X. Xxxxxx, respectively, and (e) each of the other
agreements and instruments to be executed pursuant to the terms of each such
ADS Acquisition Document, as each may be amended or modified from time to
time.
"ADS Assignment of Lease" means the Assignment of Lease and Rents dated
as of December 11, 1996 by the Lessor in favor of the Collateral Agent.
"ADS Buyers" means, collectively, ADS/Multicare, ADS Consulting
Acquisition Corp., a Massachusetts corporation, ADS Senior Housing
Acquisition Corp., a Massachusetts corporation, Senior Source Acquisition
Corp., a Massachusetts corporation, and ADS Group Acquisition Corp., a
Massachusetts corporation, each of which is a wholly-owned Subsidiary of the
Borrower.
"ADS Lease Agent" means NationsBank, N.A., as agent for the ADS Lease
Banks and the ADS Lessor.
"ADS Lease Banks" means each of the financial institutions a party to
the ADS Lessor Loan Agreement.
"ADS Lessees" means, collectively, Academy Nursing Home, Inc., a
Massachusetts corporation, Nursing and Retirement Center of the Andovers,
Inc., a Massachusetts corporation, Prescott Nursing Home, Inc., a
Massachusetts corporation, Willow Manor Nursing Home, Inc., a Massachusetts
corporation, and ADS/Multicare, each of which is a wholly-owned Subsidiary of
the Borrower.
"ADS Lessor" means SELCO Service Corporation, an Ohio corporation.
"ADS Lessor Loan Agreement" means that certain Loan Agreement dated as
of December 11, 1996 among the ADS Lessor, the ADS Lease Banks and the ADS
Lease Agent.
"ADS Lessor Notes" means the promissory notes dated December 11, 1996
in the aggregate principal amount of $58,200,000 issued by the ADS Lessor in
favor of the ADS Lease Banks.
"ADS Mortgaged Properties" means, collectively, each of the Health Care
Facilities leased under the ADS Synthetic Lease, the real Property on which
each such Health Care Facility is located and all other interests in real
Property related thereto.
"ADS Mortgages" means, collectively, (a) the Open-End Mortgages dated
as of December 11, 1996 delivered by the ADS Lessees and the ADS Lessor in
favor of the Collateral Agent and (b) the other mortgages that may from time
to time be delivered to the Collateral Agent under the Participation
Agreement.
"ADS/Multicare" means ADS/Multicare, Inc., a Delaware corporation and
a wholly-owned Subsidiary of the Borrower.
"ADS Owner Parties" means, collectively, Xxxx X. Xxxxxxxx, Xxxxx
Xxxxxxxx of Brookline, Xxxxx X. Xxxxxxxx, Xxx X. Xxxxxxxx, Xxxxx Xxxxxxxx of
Xxxxxx, Xxxxx Xxxxxxxx and Xxxxx X. Xxxxxx.
"ADS Participation Agreement" means that certain Participation
Agreement dated as of December 11, 1996 among the Borrower, the ADS Lessees,
the ADS Lessor, the ADS Lease Banks, the ADS Lease Agent and the Collateral
Agent.
"ADS Seller Entities" means, collectively, Academy Nursing Home, Inc.,
Academy Realty Associates, ADS Apple Valley, Inc., ADS Apple Valley Limited
Partnership, ADS Consulting, Inc., ADS Hingham Limited Partnership, ADS
Hingham Nursing Facility, Inc., ADS Management, Inc., ADS Palm Chelmsford,
Inc., ADS Recuperative Center, Inc., ADS Recuperative Center Limited
Partnership, ADS Reservoir Waltham, Inc., ADS Senior Housing, Inc., Arcadia
Associates (but only if and when the Heritage Health Care Facility is
purchased or leased by ADS/Multicare), ASL, Inc. (but only if and when the
Heritage Health Care Facility is purchased or leased by ADS/Multicare),
Encare of Massachusetts, Inc., North Andover Associates, Nursing and
Retirement Center of the Andovers, Inc., Prescott Nursing Home Associates,
Prescott Nursing Home, Inc., Senior Source, Inc., Solomont Brookline Limited
Partnership, Solomont Family Brookline Venture, Inc., Solomont Family
Brookline Venture Limited Partnership, Solomont Family Fall River Venture,
Inc., Solomont Family Medford Venture, Inc., The ADS Group, Inc., Westford
Nursing and Retirement Center, Inc., Westford Nursing and Retirement Center
Limited Partnership and Willow Manor Nursing Home, Inc.
"ADS Synthetic Lease" means the Master Lease dated as of December 11,
1996 among the ADS Lessor and the ADS Lessees, pursuant to which certain
Health Care Facilities previously owned by certain of the ADS Seller Entities
are being leased under a Synthetic Lease.
"ADS Synthetic Lease Documents" means (a) the ADS Synthetic Lease,
(b) the ADS Participation Agreement, (c) the ADS Lessor Loan Agreement, (d)
the ADS Lessor Notes, (e) the ADS Mortgages, (f) the ADS Assignment of Lease
and (g) each of the other agreements and instruments to be executed pursuant
to the terms of each such ADS Synthetic Lease Document.
"Affected Loans" shall have the meaning assigned to such term in
Section 4.04.
"Affected Type" shall have the meaning assigned to such term in Section
4.04.
"Affiliate" means any Person (other than an Obligor): (a) which
directly or indirectly controls, or is controlled by, or is under common
control with, any Consolidated Entity; (b) which directly or indirectly
beneficially owns or holds 10% or more of any class of voting stock of any
Consolidated Entity; (c) 10% or more of the voting stock of which is directly
or indirectly beneficially owned or held by any Consolidated Entity; or (d)
which is a partnership in which any Consolidated Entity is a general partner.
The term "control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract, or
otherwise.
"Agreement" means this Third Amended and Restated Credit Agreement, as
amended or supplemented from time to time. References to Articles, Sections,
Exhibits, Schedules and the like refer to the Articles, Sections, Exhibits,
Schedules and the like of this Agreement unless otherwise indicated.
"Applicable Margin" means, with respect to each type of Loan, the
commitment fee under Section 2.11 and the Letter of Credit fee under Section
3.09, the applicable percentage for such Senior Obligation set forth opposite
the range for the applicable Pricing Level then in effect as determined as of
the last day of each fiscal quarter of the Consolidated Entities:
Mixed Margin Margin Margin
Fixed Rate Variable Rate Commitment Letter of
Loans Loans Fee Credit Fee
Pricing Level I 0.75% 0.00% .200% 0.75%
Pricing Level II 1.00% 0.00% .250% 1.00%
Pricing Level III 1.25% 0.00% .250% 1.25%
Pricing Level IV 1.50% 0.00% .375% 1.50%
The initial Applicable Margin shall be determined by reference to
Pricing Level II. The Applicable Margin shall be adjusted on and effective
from and after the date that is three Banking Days after the receipt by the
Administrative Agent of the most recent financial statements required to be
furnished under Section 7.08(a) or Section 7.08(b). No adjustments to the
Applicable Margin shall be made prior to the date that is three Banking Days
after the receipt of the Administrative Agent of the financial statements for
the fiscal period ending on December 31, 1996. If the Borrower fails to
deliver the financial statements required to be furnished under Section
7.08(a) or Section 7.08(b) within the due date thereof, the Applicable Margin
shall be determined by reference to Pricing Level IV until three Banking Days
after delivery of the same.
For the purposes of the definition of Applicable Margin, the following
terms have the following meanings:
"Pricing Level" means Pricing Level I, Pricing Level II,
Pricing Level III or Pricing Level IV.
"Pricing Level I" means the Interest Coverage Ratio is
greater than 4.00 to 1.00 and the Senior Leverage Ratio is less
than 2.50 to 1.00.
"Pricing Level II" means (a) the Interest Coverage Ratio is
greater than 3.25 to 1.00 and the Senior Leverage Ratio is less
than 3.25 to 1.00 and (b) no better Pricing Level applies.
"Pricing Level III" means (a) the Interest Coverage Ratio
is greater than 2.50 to 1.00 and the Senior Leverage Ratio is
less than 3.75 to 1.00 and (b) no better Pricing Level applies.
"Pricing Level IV" means no other Pricing Level applies.
Notwithstanding the foregoing, the Pricing Level determined as of
December 31, 1996 shall be determined solely in reference to the
Interest Coverage Ratio and without regard to the Senior Leverage
Ratio.
"Assumption Agreements" means, collectively, the Assumption Agreements
in the form of Exhibit K to be delivered in accordance with Section 7.09.
"Banking Day" means any day on which commercial banks are not
authorized or required to close in New York, New York or Charlotte, North
Carolina and whenever such day relates to a Fixed Rate Loan or notice with
respect to any Fixed Rate Loan, a day on which dealings in Dollar deposits
are also carried out in the London interbank market.
"Banks" shall have the meaning assigned to such term in the
introductory paragraph hereof.
"Borrower" shall have the meaning assigned to such term in the
introductory paragraph hereof.
"Capital Expenditures" means, with respect to any Person, any
expenditure of such Person to acquire or construct fixed assets, plant and
equipment (including renewals, improvements, replacements and incurrence of
obligations under Capital Leases but excluding repairs and Acquisitions)
which has been or should be capitalized on the books of such Person in
accordance with GAAP.
"Capital Lease" means any lease which has been or should be capitalized
on the books of the lessee in accordance with GAAP.
"Cash Equivalents" means: (a) direct obligations of, or obligations
fully guarantied or insured by, the United States of America or any agency or
instrumentality thereof with maturities of one year or less from the date of
acquisition; (b) commercial paper of a domestic issuer rated at least "A-1"
by Standard & Poor's Corporation or "P-1" by Xxxxx'x Investors Service, Inc.;
(c) time deposits or certificates of deposit with maturities of one year or
less from the date of acquisition issued by any commercial bank operating
within the United States of America having capital and surplus in excess of
$500,000,000; and (d) money market or mutual funds whose sole investments are
comprised of investments permitted under the foregoing clauses (a) through
(c).
"Class of Loans" shall have the meaning assigned to such term in
Section 2.01(c).
"Closing Date" means the date upon which the initial borrowing or the
initial issuance of a Letter of Credit under this Third Amended and Restated
Credit Agreement occurs.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral" means all of each Obligation Party's right, title and
interest in and to Property in which such Obligation Party has granted a Lien
to the Collateral Agent under any Senior Obligation Document.
"Collateral Agent" means NationsBank, N.A., in its capacity as
Collateral Agent under the terms of the Intercreditor Agreement, together
with its successors in such capacity.
"Commitment" means any Revolving Credit Commitment or Term Loan
Commitment.
"Compliance Certificate" means the compliance certificate in the form
of Exhibit D to be delivered by the Borrower under the terms of this
Agreement.
"Consolidated Capital Expenditures" means, with respect to any fiscal
period, the aggregate amount of Capital Expenditures made by the Consolidated
Entities for such period, as determined on a consolidated basis in accordance
with GAAP.
"Consolidated Debt" means, at any date of determination thereof, the
aggregate amount of Debt of the Consolidated Entities (but in any event
excluding the obligations of ADS Apple Valley, Inc., Solomont Family Fall
River Venture, Inc., Solomont Family Medford Venture, Inc., ADS Hingham
Nursing Facility, Inc. and ADS Recuperative Center, Inc. described in
Schedule IV in which such Person is solely liable on account of its status as
a general partner of The Apple Valley Limited Partnership, Charlton Nursing
Care Center, Courtyard Nursing Care Center Partnership, Hingham Healthcare
Limited Partnership and Recuperative Center Limited Partnership,
respectively), as determined on a consolidated basis in accordance with GAAP.
"Consolidated EBIT" means, with respect to any fiscal period, the sum
of (a) Consolidated Net Income From Continuing Operations Before
Extraordinary Items for such period, plus (b) the aggregate amount of (i)
income taxes and (ii) Consolidated Interest Expense, to the extent that such
aggregate amount was deducted in the computation of Consolidated Net Income
From Continuing Operations Before Extraordinary Items for such period.
"Consolidated EBITDA" means, with respect to any fiscal period, the sum
of (a) Consolidated EBIT for such period, plus (b) the aggregate amount of
depreciation, amortization and other non-cash charges, to the extent that
such amount was deducted in the computation of Consolidated EBIT for such
period.
"Consolidated EBITDAR" means, with respect to any fiscal period, the
sum of (a) Consolidated EBITDA for such period, plus (b) the aggregate amount
of Consolidated Rental Expense, to the extent that such amount was deducted
in the computation of Consolidated EBITDA for such period.
"Consolidated Entity" means the Borrower or any Subsidiary of the
Borrower whose accounts are or are required to be consolidated or included
with the accounts of the Borrower in accordance with GAAP.
"Consolidated Fixed Charges" means, with respect to any fiscal period,
the sum of (a) Consolidated Interest Expense during such period, plus (b)
Consolidated Principal Payments due during such period, plus (c) Consolidated
Rental Expense during such period.
"Consolidated Funded Debt" means, at any date of determination thereof,
the aggregate amount of Funded Debt of the Consolidated Entities (but in any
event excluding the obligations of ADS Apple Valley, Inc., Solomont Family
Fall River Venture, Inc., Solomont Family Medford Venture, Inc., ADS Hingham
Nursing Facility, Inc. and ADS Recuperative Center, Inc. described in
Schedule IV in which such Person is solely liable on account of its status as
a general partner of The Apple Valley Limited Partnership, Charlton Nursing
Care Center, Courtyard Nursing Care Center Partnership, Hingham Healthcare
Limited Partnership and Recuperative Center Limited Partnership,
respectively), as determined on a consolidated basis in accordance with
GAAP;.
"Consolidated Interest Expense" means, with respect to any fiscal
period, the amount of interest accrued on, and with respect to, Consolidated
Debt (including, without limitation, amortization of debt discount and
imputed interest on Capital Leases but excluding rent under Synthetic Leases)
during such period, as determined on a consolidated basis in accordance with
GAAP (it being understood that for the purposes of all calculations and
definitions hereunder rent under Synthetic Leases shall in all events be
excluded from the definition of "Consolidated Interest Expense" regardless of
GAAP).
"Consolidated Net Income" means, with respect to any fiscal period, net
income for the Consolidated Entities for such fiscal period, as determined on
a consolidated basis in accordance with GAAP.
"Consolidated Net Income From Continuing Operations Before
Extraordinary Items" means, with respect to any fiscal period, net income
from continuing operations before extraordinary items for the Consolidated
Entities for such fiscal period, as determined on a consolidated basis in
accordance with GAAP.
"Consolidated Net Worth" means, at any date of determination thereof,
all amounts which would be included under stockholders' equity on a
consolidated balance sheet of the Consolidated Entities, as determined on a
consolidated basis in accordance with GAAP.
"Consolidated Principal Payments" means, with respect to any fiscal
period, all scheduled principal payments made or required to be made on
Consolidated Debt during such period (including, without limitation, imputed
principal on Capital Leases but excluding rent under Synthetic Leases), as
determined on a consolidated basis in accordance with GAAP (it being
understood that for the purposes of all calculations and definitions
hereunder rent under Synthetic Leases shall in all events be excluded from
the definition of "Consolidated Principal Payments" regardless of GAAP).
"Consolidated Rental Expense" means, with respect to any fiscal period,
the aggregate amount of rental expense of the Consolidated Entities incurred
during such period (including, without limitation, all rental expense
incurred under Synthetic Leases), as determined on a consolidated basis in
accordance with GAAP (it being understood that for the purposes of all
calculations and definitions hereunder rent under Synthetic Leases shall in
all events be included in the definition of "Consolidated Rentals" regardless
of GAAP).
"Consolidated Senior Funded Debt" means, at any date of determination
thereof, the result of (a) Consolidated Funded Debt minus (b) Consolidated
Subordinated Debt.
"Consolidated Subordinated Debt" means, at any date of determination
thereof, the Multicare Subordinated Notes, the Multicare Subordinated
Debentures and any other Debt of the Borrower which is subordinated to all
obligations owed to the Banks on terms and conditions respecting
subordination and events of default substantially similar to the Multicare
Subordinated Debentures.
"Converted Synthetic Lease Commitments" means, with respect to each
Bank, the obligation of such Bank to make capital contributions, loans or
other advances to a lessor for the purpose of acquiring Properties or
constructing improvements on Properties to be leased to a Consolidated Entity
under the Converted Synthetic Lease upon the optional election by such Bank
to convert all or a portion of its Revolving Credit Commitment in accordance
with Section 2.14.
"Converted Synthetic Leases" means the Synthetic Leases funded in
accordance with the Converted Synthetic Lease Commitments (which may include
the ADS Synthetic Lease to the extent so funded).
"Credit Arrangements" shall have the meaning assigned to such term in
Section 6.10.
"Debt" means, with respect to any Person: (a) indebtedness of such
Person for borrowed money; (b) indebtedness for the deferred purchase price
of Property or services (except trade payables and accrued expenses in the
ordinary course of business); (c) the face amount of any outstanding letters
of credit issued for the account of such Person; (d) obligations arising
under acceptance facilities; (e) Guaranties of such Person; (f) obligations
secured by any Lien on Property of such Person other than obligations secured
by Liens permitted under clauses (b) through (h) of Section 8.03, inclusive;
(g) obligations of such Person as lessee under Capital Leases; and (h) all
amounts funded under Synthetic Leases as to which such Person is lessee.
"Default" means any event which with the giving of notice or lapse of
time, or both, would become an Event of Default.
"Default Rate" means, with respect to the principal of any Loan and, to
the extent permitted by law, any other amount payable by any Obligor under
this Agreement or any other Facility Document, or any Note that is not paid
when due (whether at stated maturity, by acceleration or otherwise), a rate
per annum during the period from and including the due date, to, but
excluding the date on which such amount is paid in full equal to one percent
(1%) above the Variable Rate as in effect from time to time plus the
Applicable Margin (if any); provided that, if the amount so in default is
principal of a Fixed Rate Loan and the due date thereof is a day other than
the last day of the Interest Period therefor, the "Default Rate" for such
principal shall be, for the period from and including the due date and to but
excluding the last day of the Interest Period therefor, two percent (2%)
above the interest rate for such Loan as provided in Section 2.10 hereof and,
thereafter, the rate provided for above in this definition.
"Dollars" and the sign "$" mean lawful money of the United States of
America.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, licenses, agreements with Governmental Authorities or other
governmental restrictions relating to the environment or to emissions,
discharges, releases or threatened releases of pollutants, contaminants, or
industrial, toxic or hazardous substances or wastes into the environment
including, without limitation, ambient air, surface water, ground water, or
land, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport, or handling of pollutants,
contaminants, or industrial, toxic or hazardous substances or wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, including any rules and regulations promulgated
thereunder.
"ERISA Affiliate" means any corporation or trade or business which is
a member of any group of organizations (i) described in Section 414(b) or (c)
of the Code of which any Consolidated Entity is a member, or (ii) solely for
purposes of potential liability under Section 302(c)(11) of ERISA and Section
412(c)(11) of the Code and the lien created under Section 302(f) of ERISA and
Section 412(n) of the Code, described in Section 414(m) or (o) of the Code of
which any Consolidated Entity is a member.
"Event of Default" shall have the meaning assigned to such term in
Section 10.01.
"Existing Credit Agreement" shall have the meaning assigned to such
term in the recitals hereof.
"Existing Notes" shall have the meaning assigned to such term in the
recitals hereof.
"Facility Documents" means, collectively, this Agreement, the Notes,
the Letters of Credit, the Intercreditor Agreement, the Assumption
Agreements, the Interest Rate Protection Agreements and the Security
Documents, as each may be amended from time to time.
"Federal Funds Rate" means, for any day, the rate per annum (expressed
on a 360 day basis of calculation, if the rate on Variable Rate Loans is so
calculated) equal to the weighted average of the rates on overnight federal
funds transactions as published by the Federal Reserve Bank of New York for
such day (or for any day that is not a Banking Day, for the immediately
preceding Banking Day).
"Fee Owner" means any Consolidated Entity which holds legal title to
any Health Care Facility which is operated and managed by another
Consolidated Entity.
"Fiscal Quarter Net Worth Increase Amounts" means, with respect to each
fiscal quarter of the Consolidated Entities, the sum of (a) the greater of
(i) Zero Dollars ($0) and (ii) 50% of Consolidated Net Income for such fiscal
quarter plus (b) 75% of the cash and noncash proceeds (net of underwriting
commissions and discounts and reasonable fees and expenses) from the issuance
of capital stock of the Borrower (including, without limitation, capital
stock issued upon the conversion of Consolidated Subordinated Debt and in
connection with Acceptable Acquisitions).
"Fixed Base Rate" means with respect to any Interest Period for a Fixed
Rate Loan: the rate per annum (rounded upwards, if necessary, to the nearest
1/16 of one percent (1%)) quoted at approximately 11:00 a.m. London time by
the principal London branch of the Reference Bank two Banking Days prior to
the first day of such Interest Period for the offering to leading banks in
the London interbank market of Dollar deposits in immediately available
funds, for a period, and in an amount, comparable to the Interest Period and
principal amount of the Fixed Rate Loan which shall be made.
"Fixed Charge Coverage Ratio" means, at any date of determination
thereof, the ratio of (a) Consolidated EBITDAR for the most recently ended
four (4) fiscal quarters to (b) Consolidated Fixed Charges for such most
recently ended four (4) fiscal quarters.
"Fixed Rate" means, for any Fixed Rate Loan for any Interest Period
therefor, a rate per annum (rounded upwards, if necessary, to the nearest
1/16 of one percent (1%)) determined by the Administrative Agent to be equal
to the quotient of (i) the Fixed Base Rate for such Loan for such Interest
Period, divided by (ii) one minus the Reserve Requirement for such Loan for
such Interest Period.
"Fixed Rate Loan" means any Loan when and to the extent the interest
rate therefor is determined on the basis of the definition "Fixed Rate."
"Forfeiture Proceeding" means any action, proceeding or investigation
affecting any Consolidated Entity or any of its Affiliates before any
Governmental Authority, or the receipt of notice by any such party that any
of them is a suspect in or a target of any governmental inquiry or
investigation, which may result in an indictment of any of them or the
seizure or forfeiture of any of their respective Properties.
"Funded Debt" means, with respect to any Person, at any date of
determination thereof, (a) indebtedness of such Person for borrowed money,
other than indebtedness payable on demand or within one year from such date
unless the repayment of such indebtedness shall have been accelerated other
than at the option of such Person; provided that, in any event, Funded Debt
shall include all principal outstanding under the Notes, (b) indebtedness for
the deferred purchase price of Property or services (except trade payables
and accrued expenses in the ordinary course of business), other than
indebtedness payable on demand or within one year from such date, (c)
liabilities under Guaranties of Funded Debt of any other Person, (d)
obligations secured by any Lien on the Property of such Person, other than
obligations payable on demand or within one year from such date and other
than obligations secured by Liens permitted under clauses (b) through (h) of
Section 8.03, inclusive, (e) obligations of such Person as lessee under
Capital Leases, other than obligations payable on demand or within one year
from such date, (f) all amounts funded under Synthetic Leases as to which
such Person is lessee (other than amounts funded under the Synthetic Lease
contemplated in Item 8 of Schedule IV on the terms and conditions set forth
therein) and (g) any other obligations that are required by GAAP to be shown
as long term liabilities on its balance sheet.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time, applied on a basis
consistent with those used in the preparation of the financial statements
referred to in Section 6.05 (except for immaterial changes determined
preferable by the Consolidated Entities' independent public accountants).
"Glenmark Partnerships" shall have the meaning assigned to such term in
Section 7.09.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guaranty" means, with respect to any Person, guaranties, endorsements
(other than for collection in the ordinary course of business) and other
contingent obligations of such Person with respect to the obligations of any
other Person (including, but not limited to, an agreement to purchase any
obligation, stock, assets, goods or services or to supply or advance any
funds, assets, goods or services, or an agreement to maintain or cause such
Person to maintain a minimum working capital or net worth or otherwise to
assure the creditors of any such other Person against loss).
"Hazardous Materials" means any and all pollutants, contaminants, toxic
or hazardous wastes or any other substances, the removal of which is required
or the generation, manufacture, refining, production, processing, treatment,
storage, handling, transportation, transfer, use, disposal, release,
discharge, spillage, seepage, or filtration of which is restricted,
prohibited or penalized by any applicable Environmental Law.
"Health Care Facility" means a long term or specialized health care
facility owned or leased by any Consolidated Entity or any Managed Company.
"Initial Closing Date" means April 1, 1994.
"Initial Revolving Credit Commitment" means, with respect to each Bank,
the obligation of such Bank as of the date hereof to make its Revolving
Credit Loans to the Borrower under this Agreement in the aggregate principal
amount set forth in Schedule I.
"Intercreditor Agreement" means the Intercreditor and Collateral Agency
Agreement in the form of Exhibit G among the Borrower, the Subsidiary
Guarantors, the Banks, the Administrative Agent, the ADS Lease Banks, the ADS
Lease Agent, the ADS Lessor and the Collateral Agent, as amended or
supplemented from time to time.
"Interest Coverage Ratio" means, at any date of determination thereof,
the ratio of (a) Consolidated EBITDA for the most recently ended four (4)
fiscal quarters to (b) Consolidated Interest Expense for such most recently
ended four (4) fiscal quarters.
"Interest Period" means, with respect to any Fixed Rate Loan, the
period commencing on the date such Loan is made, converted from another type
of Loan or renewed, as the case may be, and ending, as the Borrower may
select pursuant to Section 2.06: on the numerically corresponding day in the
first, second, third, or sixth calendar month thereafter, provided that each
such Interest Period which commences on the last Banking Day of a calendar
month (or on any day for which there is no numerically corresponding day in
the appropriate subsequent calendar month) shall end on the last Banking Day
of the appropriate calendar month.
"Interest Rate Protection Agreement" means, with respect to any Person,
an interest rate swap, cap or collar agreement or similar arrangement between
one or more Banks and a Consolidated Entity providing for the transfer or
mitigation of interest risks either generally or under specific
contingencies.
"Issuing Bank" means NationsBank, N.A., a national banking association
organized under the laws of the United States of America, acting in its
capacity as a Bank hereunder.
"Lending Office" means, for each Bank and for each type of Loan, the
lending office of such Bank (or of an affiliate of such Bank) designated as
such for such type of Loan on its signature page hereof or such other office
of such Bank (or of an affiliate of such Bank) as such Bank may from time to
time specify to the Administrative Agent and the Borrower as the office by
which its Loans of such type are to be made and maintained.
"Lessor Amount" shall have the meaning assigned to such term in the ADS
Participation Agreement.
"Letter of Credit Availability" means, at any date of determination
thereof, the amount by which (a) the lesser of (i) the result of (A) the
aggregate amount of the Revolving Credit Commitments as of such date, minus
(B) the unpaid aggregate principal amount of the Revolving Credit Loans then
outstanding and (ii) $15,000,000 exceeds (b) the aggregate amount of the
Letter of Credit Obligations at such date.
"Letter of Credit Funding" shall have the meaning assigned to such term
in Section 3.05(b) hereof.
"Letter of Credit Obligations" means, at any date of determination
thereof, all liabilities of the Borrower with respect to Letters of Credit,
whether or not any liability is contingent, including (without limitation)
the sum (without duplication) of (a) the aggregate amount available to be
drawn under the Letters of Credit then outstanding plus (b) the aggregate
amount of all unpaid Reimbursement Obligations.
"Letters of Credit" shall have the meaning assigned to such term in
Section 3.01(a) hereof.
"Licenses" means any and all licenses, certificate of need, operating
permits, franchises, and other licenses, authorizations, certifications,
permits, or approvals issued by, or on behalf of, any Governmental Authority,
now existing or at any time hereafter issued, with respect to the
acquisition, construction, renovation, expansion, leasing, ownership or
operation of any Health Care Facility or related facilities or the
participation or eligibility for participation in any third party payment or
reimbursement programs, including, without limitation, any and all operating
licenses issued by any state Governmental Authority, any and all
pharmaceutical licenses and other licenses related to the purchase,
dispensing, storage, prescription or use of drugs, medications, and other
"controlled substances", any and all licenses relating to the operation of
food or beverage facilities or amenities, if any, and any and all
certifications and eligibility for participation in Medicare, Medicaid,
CHAMPUS, Blue Cross or Blue Shield, or any of the Managed Care Plans, as the
same may from time to time be amended, renewed, restated, reissued,
restricted, supplemented or otherwise modified.
"Lien" means any lien (statutory or otherwise), security interest,
mortgage, deed of trust, priority, pledge, charge, conditional sale, title
retention agreement, financing lease or other similar encumbrance or right of
others, or any agreement to give any of the foregoing.
"Loan" means any loan made by a Bank pursuant to Section 2.01.
"Managed Care Plans" means any health maintenance organization,
preferred provider organization, individual practice association, competitive
medical plan, or similar arrangement, entity, organization, or Person.
"Managed Company" means any Person not a Consolidated Entity receiving
management services under Operating Agreements from time to time.
"Management Fees" means, with respect to any fiscal period, all fees
and other amounts payable to the Consolidated Entities under Operating
Agreements with Managed Companies during such period.
"Material Adverse Effect" means any material adverse effect on (a) the
business, profits, properties or condition of the Consolidated Entities,
taken as a whole, (b) the ability of the Borrower to perform its obligations
under each of the Facility Documents to which it is a party or (c) the
ability of the Secured Parties to collect the aggregate amount of the Senior
Obligations.
"Modified Leverage Ratio" means, at any date of determination thereof,
the ratio of (a) the sum of (i) Consolidated Funded Debt at such date, plus
(ii) the product of (A) Consolidated Rental Expense for the most recently
ended four (4) fiscal quarters (exclusive of rental expense incurred under
the ADS Synthetic Lease and under the Converted Synthetic Leases) times (B)
eight (8), to (b) Consolidated EBITDAR for such most recently ended four (4)
fiscal quarters. For the purposes of determining Consolidated EBITDAR in the
Modified Leverage Ratio, (a) there shall be included in Consolidated Net
Income From Continuing Operations Before Extraordinary Items net income of
any Person accrued from the beginning of the period in which Consolidated Net
Income From Continuing Operations Before Extraordinary Items is being
measured to the date it became a Consolidated Entity, or to the date it
merged into or consolidated with any Consolidated Entity, or to the date
substantially all of its assets were acquired by any Consolidated Entity and
(b) there shall be excluded from Consolidated Net Income From Continuing
Operations Before Extraordinary Items net income of any Consolidated Entity,
accrued from the beginning of such period to the date it ceases to be a
Consolidated Entity, or to the date it merged into or consolidated with any
other Person other than another Consolidated Entity, or to the date
substantially all of its assets were sold to any Person other than another
Consolidated Entity. For the purposes of determining Consolidated Rental
Expense in the Modified Leverage Ratio, (a) there shall be included in
Consolidated Rental Expense rental expense of any Person accrued from the
beginning of the period in which Consolidated Rental Expense is being
measured to the date it became a Consolidated Entity, or to the date it
merged into or consolidated with any Consolidated Entity, or to the date
substantially all of its assets were acquired by any Consolidated Entity and
(b) there shall be excluded from Consolidated Rental Expense rental expense
of any Consolidated Entity, accrued from the beginning of such period to the
date it ceases to be a Consolidated Entity, or to the date it merged into or
consolidated with any other Person other than another Consolidated Entity, or
to the date substantially all of its assets were sold to any Person other
than another Consolidated Entity.
"Modified Senior Leverage Ratio" means, at any date of determination
thereof, the ratio of (a) the sum of (i) Consolidated Senior Funded Debt at
such date, plus (ii) the product of (A) Consolidated Rental Expense
(exclusive of rental expense incurred under the ADS Synthetic Lease and under
the Converted Synthetic Leases) for the most recently ended four (4) fiscal
quarters times (B) eight (8), to (b) Consolidated EBITDAR for such most
recently ended four (4) fiscal quarters. For the purposes of determining
Consolidated EBITDAR in the Modified Senior Leverage Ratio, (a) there shall
be included in Consolidated Net Income From Continuing Operations Before
Extraordinary Items net income of any Person accrued from the beginning of
the period in which Consolidated Net Income From Continuing Operations Before
Extraordinary Items is being measured to the date it became a Consolidated
Entity, or to the date it merged into or consolidated with any Consolidated
Entity, or to the date substantially all of its assets were acquired by any
Consolidated Entity and (b) there shall be excluded from Consolidated Net
Income From Continuing Operations Before Extraordinary Items net income of
any Consolidated Entity, accrued from the beginning of such period to the
date it ceases to be a Consolidated Entity, or to the date it merged into or
consolidated with any other Person other than another Consolidated Entity, or
to the date substantially all of its assets were sold to any Person other
than another Consolidated Entity. For the purposes of determining
Consolidated Rental Expense in the Modified Senior Leverage Ratio, (a) there
shall be included in Consolidated Rental Expense rental expense of any Person
accrued from the beginning of the period in which Consolidated Rental Expense
is being measured to the date it became a Consolidated Entity, or to the date
it merged into or consolidated with any Consolidated Entity, or to the date
substantially all of its assets were acquired by any Consolidated Entity and
(b) there shall be excluded from Consolidated Rental Expense rental expense
of any Consolidated Entity, accrued from the beginning of such period to the
date it ceases to be a Consolidated Entity, or to the date it merged into or
consolidated with any other Person other than another Consolidated Entity, or
to the date substantially all of its assets were sold to any Person other
than another Consolidated Entity.
"Mortgages" means the Second Amended and Restated Open-End Mortgages in
the form of Exhibit J hereto to be delivered by PHC Operating Corp. and
Providence Health Care, Inc. in accordance with the terms hereof, as amended
or supplemented from time to time.
"Multicare Fiscal Agency Agreement" means the Fiscal Agency Agreement
dated as of March 16, 1995 between the Borrower and The Chase Manhattan Bank,
N.A., as Fiscal Agent, as in effect on the Closing Date.
"Multicare Guaranty" means the Unconditional Guaranty in the form of
Exhibit C to be delivered by each of the Obligors in accordance with the
terms hereof, as amended or supplemented from time to time.
"Multicare Indenture" means the Indenture dated as of November 18, 1992
between the Borrower and United Jersey Bank, as Trustee, as in effect on the
Closing Date.
"Multicare Subordinated Debentures" means the $86,250,000 7%
Convertible Subordinated Debentures due 2003 issued pursuant to the Multicare
Fiscal Agency Agreement.
"Multicare Subordinated Notes" means the $100,000,000 12.5% Senior
Subordinated Notes due 2002 issued pursuant to the Multicare Indenture.
"Multiemployer Plan" means a Plan defined as such in Section 3(37) of
ERISA to which contributions have been made by the Consolidated Entities or
any ERISA Affiliate and which is covered by Title IV of ERISA.
"Notes" means the Revolving Credit Notes and the Term Notes.
"Obligation Party" means the Borrower, each ADS Lessee, each Subsidiary
Co-Borrower, each Subsidiary Guarantor and the ADS Lessor (in its capacity as
issuer of the ADS Lessor Notes under the ADS Lessor Loan Agreement, mortgagor
under the ADS Mortgages and assignor under the ADS Assignment of Lease), as
the case may be.
"Obligor" means, collectively, the Borrower and the Subsidiary
Guarantors.
"Operating Agreements" shall have the meaning assigned to such term in
Section 6.12.
"Participating Interest" means, with respect to each Letter of Credit,
(a) in the case of the Issuing Bank, its interest in such Letter of Credit
after giving effect to the granting of any participating interest therein
pursuant hereto and (b) in the case of each Participating Bank, its undivided
participating interest in such Letter of Credit.
"Participating Bank" means, with respect to any Letter of Credit, any
Bank (other than the Issuing Bank) with respect to its Participating Interest
in each Letter of Credit.
"Participation Agreements" means any and all third party payor
participation or reimbursement agreements now or at any time hereafter
existing for the benefit of any Consolidated Entity relating to rights to
payments or reimbursement from, and claims against, private insurers, Managed
Care Plans, employee assistance programs, Blue Cross or Blue Shield, federal,
state and local Governmental Authorities, or other public or quasi-public
insurers and third party payors, as the same may from time to time be
amended, restated, extended, supplemented or modified.
"Payor" shall have the meaning assigned to such term in Section 11.13.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Permitted Acquisition Debt" means Debt of any Person, and any
renewals, extensions or refinancings thereof, secured by Purchase Money Liens
permitted under Section 8.01(g) (other than Debt secured by Purchase Money
Liens incurred in connection with any conditional sale or other title
retention agreement or a Capital Lease) that is secured by all or
substantially all of the Property of such Person.
"Permitted Adjustment Amount" means, with respect to each Bank, the sum
of the principal amounts of each Term Loan made by such Bank to the Borrower
and the respective Subsidiary Co-Borrower that has been prepaid in full in
connection with the sale of the Health Care Facility owned by such Subsidiary
Co-Borrower to a Person other than an Affiliate.
"Permitted Mortgage Debt" means Debt of any Person (other than Debt
secured by Purchase Money Liens), and any renewals, extensions or
refinancings thereof, permitted under Section 8.01(f) (a) the net proceeds of
which are used to prepay Senior Obligations, (b) that is secured by all or
substantially all of the Property of such Person, (c) that has a scheduled
final maturity that is at least six months subsequent to the maturity of the
Notes and (d) that requires no more than 20% of the principal of such Debt to
be paid prior to the maturity of the Notes.
"Person" means an individual, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.
"Plan" means any employee benefit or other plan established or
maintained, or to which contributions have been made, by the Consolidated
Entities or any ERISA Affiliate and which is covered by Title IV of ERISA,
other than a Multiemployer Plan.
"Pledge Agreement" means the Second Amended and Restated Pledge
Agreement in the form of Exhibit I to be delivered by each of the Obligors in
accordance with the terms hereof, as amended or supplemented from time to
time.
"Primary Obligor" shall have the meaning assigned to such term in the
introductory paragraph.
"Prime Rate" means that rate of interest from time to time announced by
the Reference Bank at its principal office as its prime commercial lending
rate.
"Principal Office" means the principal office of the Administrative
Agent, presently located at 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx
00000.
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, and whether tangible or intangible.
"Purchase Money Lien" means a Lien on any Property acquired by any
Consolidated Entity or placed on any Property in order to finance the
acquisition or construction of such Property or the construction of
improvements located on such Property, or the assumption of any Lien on
Property existing at the time of the acquisition of such Property or of the
Person holding such Property or a Lien incurred in connection with any
conditional sale or other title retention agreement or a Capital Lease.
"Reference Bank" means NationsBank, N.A. (or if NationsBank, N.A. no
longer quotes on the London interbank market, such successor leading bank in
the London interbank market which shall be reasonably appointed by the
Administrative Agent).
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as the same may be amended or supplemented from time
to time.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as the same may be amended or supplemented from time
to time.
"Regulatory Change" means any change after the date of this Agreement
in United States federal, state, municipal or foreign laws or regulations
(including without limitation Regulation D) or the adoption or making after
such date of any interpretations, directives or requests applying to a class
of banks of which such bank is a member, of or under any United States,
federal, state, municipal or foreign laws or regulations (whether or not
having the force of law) by any court or governmental or monetary authority
charged with the interpretation or administration thereof.
"Reimbursement Obligation" means the obligation of the Borrower to
reimburse the Issuing Bank in accordance with the terms of this Agreement for
the payment made by the Issuing Bank under any Letter of Credit.
"Rent" shall have the meaning assigned to such term in Appendix A to
the Participation Agreement.
"Required Banks" means, at any time while any Loans or Letters of
Credit are outstanding, Banks holding at least 51% of the aggregate principal
amount of the Loans and the Letter of Credit Obligations and, at any time
while no Loan or Letter of Credit is outstanding, Banks holding at least 51%
of the Commitments.
"Required Secured Parties" means (a) at any time prior to the
occurrence of an Acceleration Event, Secured Parties holding at least 51% of
the Secured Party Commitments and (b) at any time after the occurrence of an
Acceleration Event, Secured Parties holding at least 51% of the aggregate
outstanding principal amount of the Senior Principal Obligations.
"Required Payment" shall have the meaning assigned to such term in
Section 11.13.
"Reserve Requirement" means, for any Fixed Rate Loan for any Interest
Period therefor, the average maximum rate at which reserves (including any
marginal, supplemental or emergency reserves) are required to be maintained
during such Interest Period under Regulation D by member banks of the Federal
Reserve System in New York City with deposits exceeding $1,000,000,000
against in the case of Fixed Rate Loans, "Eurocurrency liabilities" (as such
term is used in Regulation D). Without limiting the effect of the foregoing,
the Reserve Requirement shall reflect any other reserves required to be
maintained by such member banks by reason of any Regulatory Change against
(i) any category of liabilities which includes deposits by reference to which
the Fixed Base Rate for Fixed Rate Loans is to be determined as provided in
the definition of "Fixed Base Rate" in this Section 1.01 or (ii) any category
of extensions of credit or other assets which include Fixed Rate Loans.
"Revolving Credit Commitment" means, with respect to each Bank, the
obligation of such Bank to make its Revolving Credit Loans to the Borrower
under this Agreement in the aggregate principal amount equal to the sum of
(a) the amount of the Initial Revolving Credit Commitment of such Bank plus
(b) the Permitted Adjustment Amount of such Bank, as such amount may be
reduced or otherwise modified from time to time.
"Revolving Credit Commitment Percentage" means, as to any Bank at any
date of determination thereof, the percentage of the aggregate Revolving
Credit Commitments constituted by such Bank's Revolving Credit Commitment at
such date.
"Revolving Credit Loans" shall have the meaning assigned to such term
in Section 2.01(a).
"Revolving Credit Notes" means the promissory notes of the Borrower in
the form of Exhibit A hereto evidencing the Revolving Credit Loans made by a
Bank hereunder and all promissory notes delivered in substitution or exchange
therefor, as amended or supplemented from time to time.
"Revolving Credit Termination Date" means February 28, 2000.
"Secured Party" means the Collateral Agent, the Administrative Agent,
the ADS Lease Agent, each Bank, each ADS Lease Bank and the ADS Lessor (in
its capacity as lessor under the ADS Lease), as the case may be.
"Secured Party Commitment" means (a) any Commitment, (b) any Converted
Synthetic Lease Commitment, (c) any "Loan Commitment" or "Lessor Commitment"
(each as defined in Appendix A to the Participation Agreement) or (d) any
other commitment by any Secured Party to extend credit through any Senior
Obligation to any Obligation Party.
"Security Agreement" means the Second Amended and Restated Security
Agreement in the form of Exhibit H to be delivered by each of the Obligors in
accordance with the terms hereof, as amended or supplemented from time to
time.
"Security Documents" means the Multicare Guaranty, the Security
Agreement, the Pledge Agreement, the Mortgages, the ADS Mortgages, the ADS
Assignment of Lease and each other security document that may from time to
time be delivered to the Collateral Agent in connection herewith or therewith
(including all financing statements, fixture filings, mortgages, assignments
and stock certificates delivered to the Collateral Agent).
"Senior Leverage Ratio" means, at any date of determination thereof,
the ratio of (a) Consolidated Senior Funded Debt at such date, to (b) the sum
of (i) Consolidated EBITDA for the most recently ended four (4) fiscal
quarters, plus (ii) rental expense incurred under Synthetic Leases for such
most recently ended four (4) fiscal quarters to the extent that such amount
was deducted in the computation of Consolidated EBITDA for such period. For
the purposes of determining Consolidated EBITDA in the Senior Leverage Ratio,
(a) there shall be included in Consolidated Net Income From Continuing
Operations Before Extraordinary Items net income of any Person accrued from
the beginning of the period in which Consolidated Net Income From Continuing
Operations Before Extraordinary Items is being measured to the date it became
a Consolidated Entity, or to the date it merged into or consolidated with any
Consolidated Entity, or to the date substantially all of its assets were
acquired by any Consolidated Entity and (b) there shall be excluded from
Consolidated Net Income From Continuing Operations Before Extraordinary Items
net income of any Consolidated Entity, accrued from the beginning of such
period to the date it ceases to be a Consolidated Entity, or to the date it
merged into or consolidated with any other Person other than another
Consolidated Entity, or to the date substantially all of its assets were sold
to any Person other than another Consolidated Entity. For the purposes of
determining Consolidated Rental Expense in the Senior Leverage Ratio, (a)
there shall be included in Consolidated Rental Expense rental expense of any
Person accrued from the beginning of the period in which Consolidated Rental
Expense is being measured to the date it became a Consolidated Entity, or to
the date it merged into or consolidated with any Consolidated Entity, or to
the date substantially all of its assets were acquired by any Consolidated
Entity and (b) there shall be excluded from Consolidated Rental Expense
rental expense of any Consolidated Entity, accrued from the beginning of such
period to the date it ceases to be a Consolidated Entity, or to the date it
merged into or consolidated with any other Person other than another
Consolidated Entity, or to the date substantially all of its assets were sold
to any Person other than another Consolidated Entity.
"Senior Obligation Documents" means, collectively, the Facility
Documents, the ADS Lessor Loan Agreement, the ADS Participation Agreement,
the ADS Synthetic Lease, the ADS Lessor Notes, the Converted Synthetic Leases
and each other document made, delivered or given in connection therewith or
herewith and each other document that replaces, renews, extends, refinances
or refunds indebtedness under any of the foregoing.
"Senior Obligations" means the unpaid principal of, interest on and
Yield on (including interest and Yield accruing on or after the filing of any
petition in bankruptcy, or the commencement of any insolvency, reorganization
or like proceeding, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) the Notes, the ADS Lessor Notes, the
Lessor Amount, the Letter of Credit Obligations, the obligations under the
Interest Rate Protection Agreements, the obligations under the Converted
Synthetic Leases and all other obligations and liabilities of any Obligation
Party to any Secured Party, whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred,
which may arise under, out of, or in connection with, this Agreement, the ADS
Lessor Loan Agreement, the ADS Participation Agreement, the ADS Synthetic
Lease, the Notes, the ADS Lessor Notes, the Letters of Credit, the Interest
Rate Protection Agreements, the Multicare Guaranty, the Converted Synthetic
Leases and the other Senior Obligation Documents, whether on account of
principal, interest, Yield, rentals (including Rent), guaranties,
reimbursement obligations, fees, indemnities, costs, expenses (including,
without limitation, all fees and disbursements of counsel to any Secured
Party) or otherwise.
"Senior Principal Obligations" means, collectively, the aggregate of
(a) the outstanding principal amounts of the Notes, (b) the outstanding
"Lessor Amounts" (as defined in Appendix A to the ADS Participation
Agreement) and the outstanding principal amounts of the ADS Lessor Notes, (c)
all outstanding amounts funded under the Converted Synthetic Leases, (d) all
Reimbursement Obligations and (e) all net amounts due under Interest Rate
Protection Agreements.
"Significant Recent Acquisitions" shall have the meaning assigned to
such term in Section 6.05(c).
"Subsidiary" means, with respect to any Person, any corporation or
other entity of which at least a majority of the securities or other
ownership interest having ordinary voting power for the election of directors
or other persons performing similar functions are at the time owned directly
or indirectly by such Person.
"Subsidiary Co-Borrowers" shall have the meaning assigned to such term
in the introductory paragraph hereof.
"Subsidiary Guarantor" means, collectively, the Subsidiaries of the
Borrower that are parties to the Multicare Guaranty (including, without
limitation, the Subsidiary Co-Borrowers).
"Synthetic Lease" means any lease which is intended to be treated as an
operating lease under GAAP but which under tax law or commercial law may be
treated as secured Debt of such Person and not as a true lease.
"Term Loan Commitments" means, with respect to each Bank, the
obligation of such Bank to make its Term Loans under this Agreement to the
Borrower and the respective Subsidiary Co-Borrowers set forth on Schedule I
in the aggregate principal amount set forth in Schedule I, as such amount may
be reduced or otherwise modified from time to time.
"Term Loan Termination Date" means February 28, 2000.
"Term Loans" shall have the meaning assigned to such term in Section
2.01(b).
"Term Notes" means the promissory notes of the Borrower and the
respective Subsidiary Co-Borrower in the form of Exhibit B hereto evidencing
the Term Loans made by a Bank hereunder and all promissory notes delivered in
substitution or exchange therefor, as amended or supplemented from time to
time.
"Termination Date" means, with respect to any Revolving Credit Loan,
the Revolving Credit Termination Date and, with respect to any Term Loan, the
Term Loan Termination Date.
" type' of Loans" shall have the meaning assigned to such term in
Section 2.01(c).
"UCP" means the Uniform Customs and Practice for Documentary Credits
(1993 Revision), International Chamber of Commerce, Publication No. 500.
"Unfunded Benefit Liabilities" means, with respect to any Plan, the
amount (if any) by which the present value of all benefit liabilities (within
the meaning of Section 4001(a)(16) of ERISA) under the Plan exceeds the fair
market value of all Plan assets allocable to such benefit liabilities, as
determined on the most recent valuation date of the Plan and in accordance
with the provisions of ERISA for calculating the potential liability of any
Consolidated Entity or any ERISA Affiliate under Title IV of ERISA.
"Variable Rate" means, for any day, the higher of (a) the Federal Funds
Rate for such day plus 1/4 of one percent and (b) the Prime Rate for such
day.
"Variable Rate Loan" means any Loan when and to the extent the interest
rate for such Loan is determined in relation to the Variable Rate.
"Yield" shall have the meaning assigned to such term in Appendix A to
the ADS Participation Agreement.
Section 1.02. Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP, and all financial
data required to be delivered hereunder shall be prepared in accordance with
GAAP.
ARTICLE 2. THE CREDIT.
Section 2.01. Loans. (a) Subject to the terms and conditions of this
Agreement, each of the Banks severally agrees to make revolving credit loans
(the "Revolving Credit Loans") to the Borrower from time to time from and
including the date hereof to and including the Revolving Credit Termination
Date, in such amounts that the sum of (i) the aggregate principal amount of
such Bank's Revolving Credit Loans at any one time outstanding plus (ii) such
Bank's pro rata share of the Letter of Credit Obligations then outstanding,
does not exceed the amount of its Revolving Credit Commitment. The Revolving
Credit Loans shall be due and payable on the Revolving Credit Termination
Date.
(b) Subject to the terms and conditions of this Agreement,
each of the Banks severally agrees to make term loans (the "Term Loans") to
the Borrower and the respective Subsidiary Co-Borrower on the Closing Date,
up to but not exceeding in the aggregate principal amount, the amount of its
respective Term Loan Commitments. The Term Loans shall be due and payable on
the Term Loan Termination Date.
(c) The Loans may be outstanding as Variable Rate Loans or
Fixed Rate Loans (each a "type" of Loans) and as Revolving Credit Loans or
Term Loans (each a "class" of Loans). Each type of Loans of each Bank shall
be made and maintained at such Bank's Lending Office for such type of Loans.
Section 2.02. The Notes. The Revolving Credit Loans of each Bank
shall be evidenced by a single promissory note in favor of such Bank in the
form of Exhibit A, dated the Closing Date, duly completed and executed by the
Borrower. The Term Loans of each Bank shall each be evidenced by a
promissory note in favor of such Bank in the form of Exhibit B, dated the
Closing Date, duly completed and executed by the Borrower and the respective
Subsidiary Co-Borrower.
Section 2.03. Purpose. The Borrower and the Subsidiary Co-Borrowers
shall use the proceeds of the Loans for general corporate purposes
(including, without limitation, working capital and to finance Acceptable
Acquisitions). Such proceeds shall not be used for the purpose, whether
immediate, incidental or ultimate, of buying or carrying "margin stock" in
violation of Regulation U.
Section 2.04. Borrowing Procedures. The Borrower shall give the
Administrative Agent notice of each borrowing to be made hereunder as
provided in Section 2.08, not later than 12:00 noon New York, New York time
on the date of such borrowing in the case of a Variable Rate Loan or 12:00
noon New York, New York time on the Banking Day three Banking Days prior to
the date of such borrowing in the case of a Fixed Rate Loan. Each Bank
shall, through its Lending Office and subject to the conditions of this
Agreement, make the amount of the Loan to be made by it on such day available
to the Administrative Agent at the Principal Office and in immediately
available funds for the account of the Administrative Agent. The amount so
received by the Administrative Agent shall, subject to the conditions of this
Agreement, be made available to the Borrower, in immediately available funds,
by the Administrative Agent crediting an account of the Borrower designated
by the Borrower and maintained with the Administrative Agent at the Principal
Office.
Section 2.05. Prepayments and Conversions. The Borrower shall have
the right to make prepayments of principal, or to convert one type of Loans
into another type of Loans, at any time or from time to time; provided that:
(a) the Borrower shall give the Administrative Agent notice of each such
prepayment or conversion as provided in Section 2.08; and (b) Fixed Rate
Loans may be prepaid or converted only on the last day of an Interest Period
for such Loans unless the Borrower agrees to provide to the Administrative
Agent for the account of each Bank compensation in accordance with Section
4.05.
Section 2.06. Interest Periods; Renewals. (a) In the case of each
Fixed Rate Loan, the Borrower shall select an Interest Period of any duration
in accordance with the definition of Interest Period in Section 1.01, subject
to the following limitations: (i) no Interest Period may extend beyond the
respective Termination Dates for such class of Loans; (ii) notwithstanding
clause (i) above, no Interest Period shall have a duration less than one
month, and if any such proposed Interest Period would otherwise be for a
shorter period, such Interest Period shall not be available; (iii) if an
Interest Period would end on a day which is not a Banking Day, such Interest
Period shall be extended to the next Banking Day, unless such Banking Day
would fall in the next calendar month in which event such Interest Period
shall end on the immediately preceding Banking Day; and (iv) no more than
fifteen Interest Periods may be outstanding at any one time.
(b) Upon notice to the Administrative Agent as provided in
Section 2.08, the Borrower may renew any Fixed Rate Loan on the last day of
the Interest Period therefor as the same type of Loan with an Interest Period
of the same or different duration in accordance with the limitations provided
above. If the Borrower shall fail to give notice to the Administrative Agent
of such a renewal, such Fixed Rate Loan shall automatically become a Variable
Rate Loan on the last day of the current Interest Period.
Section 2.07. Changes of Commitments. (a) The Borrower shall have the
right to reduce or terminate the amount of unused Revolving Credit
Commitments at any time or from time to time, provided that: (i) the Borrower
shall give notice of each such reduction or termination to the Administrative
Agent as provided in Section 2.08; and (ii) each partial reduction shall be
in an aggregate amount at least equal to $1,000,000. The Revolving Credit
Commitments once reduced or terminated may not be reinstated.
(b) The Term Loan Commitments shall be terminated on the
Closing Date and shall not be reinstated.
Section 2.08. Certain Notices. Notices by the Borrower to the
Administrative Agent of each borrowing pursuant to Section 2.04, and each
prepayment or conversion pursuant to Section 2.05 and each renewal pursuant
to Section 2.06(b), and each reduction or termination of the Revolving Credit
Commitments pursuant to Section 2.07(a) shall be irrevocable and shall be
effective only if received by the Administrative Agent not later than 12:00
noon New York, New York time, and (a) in the case of borrowings and
prepayments of, conversions into and (in the case of Fixed Rate Loans)
renewals of (i) Variable Rate Loans, given the same Banking Day; and (ii)
Fixed Rate Loans, given three Banking Days prior thereto; and (b) in the case
of reductions or termination of the Revolving Credit Commitments, given the
same Banking Day. Each such notice shall specify the Loans to be borrowed,
prepaid, converted or renewed and the amount (subject to Section 2.09) and
type and class of the Loans to be borrowed, or converted, or prepaid or
renewed (and, in the case of a conversion, the type of Loans to result from
such conversion and, in the case of a Fixed Rate Loan, the Interest Period
therefor) and the date of the borrowing or prepayment, or conversion or
renewal (which shall be a Banking Day). Each such notice of reduction or
termination shall specify the amount of the Revolving Credit Commitments to
be reduced or terminated. The Administrative Agent shall promptly notify the
Banks of the contents of each such notice.
Section 2.09. Minimum Amounts. Except for borrowings which exhaust
the full remaining amount of the Commitments, prepayments or conversions
which result in the prepayment or conversion of all Loans of a particular
type or conversions made pursuant to Section 3.04, each borrowing,
prepayment, conversion and renewal of principal of Loans of a particular type
shall be in an amount not less than (i) $100,000 in the aggregate for all
Banks in the case of Variable Rate Loans and (ii) $1,000,000 in the aggregate
and in increments of $100,000 in the case of Fixed Rate Loans unless such
minimum amount is waived by the Required Banks (borrowings, prepayments,
conversions or renewals of or into Loans of different types or, in the case
of Fixed Rate Loans, having different Interest Periods at the same time
hereunder to be deemed separate borrowings, prepayments, conversions and
renewals for the purposes of the foregoing, one for each type of Interest
Period). Anything in this Agreement to the contrary notwithstanding, the
aggregate principal amount of Fixed Rate Loans of each type having concurrent
Interest Periods shall be at least equal to $1,000,000.
Section 2.10. Interest. (a) Interest shall accrue on the outstanding
and unpaid principal amount of each Loan for the period from and including
the date of such Loan to but excluding the date such Loan is due at the
following rates per annum: (i) for a Variable Rate Loan, at a variable rate
per annum equal to the Variable Rate plus the Applicable Margin and (ii) for
a Fixed Rate Loan, at a fixed rate equal to the Fixed Rate plus the
Applicable Margin. If the principal amount of any Loan and any other amount
payable by any Obligor hereunder, under the Notes or under the other Facility
Documents shall not be paid when due (at stated maturity, by acceleration or
otherwise), interest shall accrue on such amount to the fullest extent
permitted by law from and including such due date to but excluding the date
such amount is paid in full at the Default Rate.
(b) The interest rate on each Variable Rate Loan shall change
when the Variable Rate changes and interest on each such Loan shall be
calculated on the basis of a year of 360 days for the actual number of days
elapsed. Interest on each Fixed Rate Loan shall be calculated on the basis
of a year of 360 days for the actual number of days elapsed. Promptly after
the determination of any interest rate provided for herein or any change
therein, the Administrative Agent shall notify the Borrower and the Banks.
(c) Accrued interest shall be due and payable in arrears upon
any full payment of principal or conversion and (i) for each Variable Rate
Loan, on the 1st day of each month commencing the first such date after the
making of such Loan; and (ii) for each Fixed Rate Loan, on the last day of
the Interest Period with respect thereto and, in the case of an Interest
Period greater than three months or 90 days, at three-month intervals after
the first day of such Interest Period; provided that interest accruing at the
Default Rate shall be due and payable from time to time on demand of the
Administrative Agent.
Section 2.11. Fees. (a) The Borrower shall pay to the Administrative
Agent for the account of each Bank a commitment fee on the daily average of
the result of the unused Revolving Credit Commitments of such Bank minus such
Bank's pro rata share of the Letter of Credit Obligations, for the period
from and including the date hereof to the earlier of the date the Revolving
Credit Commitments are terminated or the Revolving Credit Termination Date at
a rate per annum equal to the Applicable Margin calculated in each case on
the basis of a year of 360 days for the actual number of days elapsed. The
accrued commitment fee shall be due and payable in arrears upon any reduction
or termination of the Revolving Credit Commitments and on the 1st day of each
March, June, September and December, commencing on the first such date after
the Closing Date.
(b) The Borrower shall pay to the Administrative Agent for its
own account the fees set forth in the fee letter dated November 7, 1996
between the Borrower and the Administrative Agent.
Section 2.12. Payments Generally. All payments under this Agreement,
the Notes and the other Facility Documents shall be made in Dollars in
immediately available funds not later than 12:00 noon New York, New York time
on the relevant dates specified above or in such Facility Document (each such
payment made after such time on such due date to be deemed to have been made
on the next succeeding Banking Day) to the Administrative Agent's account
number 136621-22506 maintained at the Principal Office for the account of the
applicable Lending Office of each Bank. The Administrative Agent, or any
Bank for whose account any such payment is to be made, may (but shall not be
obligated to) debit the amount of any such payment which is not made by such
time to any ordinary deposit account of the Borrower with the Administrative
Agent or such Bank, as the case may be, and any Bank so doing shall promptly
notify the Administrative Agent. The Borrower shall, at the time of making
each payment under this Agreement, any Note or any other Facility Document,
specify to the Administrative Agent the principal or other amount payable by
the Borrower under this Agreement, such Note or such other Facility Document
to which such payment is to be applied (and in the event that it fails to so
specify, or if a Default or Event of Default has occurred and is continuing,
the Administrative Agent may apply such payment as it may elect in its sole
discretion (subject to Section 11.16)). If the due date of any payment under
this Agreement, any Note or any other Facility Document would otherwise fall
on a day which is not a Banking Day, such date shall be extended to the next
succeeding Banking Day (unless such succeeding Banking Day falls in a
subsequent calendar month, in which case such payment shall be due on the
preceding Banking Day) and interest shall be payable for any principal so
extended for the period of such extension. Each payment received by the
Administrative Agent under this Agreement, any Note or any other Facility
Document for the account of a Bank shall be paid promptly to such Bank, in
immediately available funds, for the account of such Bank's Lending Office.
Section 2.13. Restatement. The terms and conditions of, and the
agreements, representations and warranties set forth in the Existing Credit
Agreement are hereby replaced and superseded in their entirety by the terms,
conditions, agreements, representations and warranties set forth in this
Agreement and the other Facility Documents and the Existing Credit Agreement
shall be of no further force and effect. Nothing contained herein or in any
of the other Facility Documents shall impair, limit or affect the
continuation of the liability of each Obligor for the Senior Obligations
heretofore incurred and the security interests, Liens and other collateral
interests heretofore granted, pledged and assigned to the Administrative
Agent by such Obligor. All loans, advances and other financial
accommodations under the Existing Credit Agreement and all other Senior
Obligations of the Obligors to the Banks outstanding and unpaid as of the
date hereof pursuant to the Existing Credit Agreement shall be deemed to be
Senior Obligations pursuant to the terms hereof and shall constitute and be
deemed a Loan by the Banks to the Borrower and the Subsidiary Co-Borrowers
and shall be repayable in accordance with the terms of this Agreement.
Section 2.14. Optional Conversion of Revolving Credit Commitments to
Synthetic Lease Commitments. The Borrower shall have the right to offer to
the Banks the right to convert up to $30,000,000 of Revolving Credit
Commitments to Converted Synthetic Lease Commitments. Each Bank shall have
the right to convert a portion of its Revolving Credit Commitment to a
Converted Synthetic Lease Commitment, such portion to be equal to the amount
requested to be converted multiplied by such Bank's Revolving Credit
Commitment Percentage. The Banks shall have a right of oversubscription such
that, if any Bank fails to accept the offer as to its pro rata share of the
Converted Synthetic Lease Commitments, the remaining Banks shall among them
have the right to convert their Revolving Credit Commitments up to the
balance of Converted Synthetic Lease Commitments requested to be converted.
If, as a result thereof, such oversubscriptions exceed the maximum amount of
Converted Synthetic Lease Commitments, the oversubscriptions shall be cut
back on a pro rata basis in accordance with the respective Revolving Credit
Commitment Percentages of the Banks participating in such oversubscription.
Upon any conversion of Revolving Credit Commitments of any Bank to Converted
Synthetic Lease Commitments pursuant to this Section 2.14, the Revolving
Credit Commitment of such Bank shall be permanently reduced in an amount
equal to the amount so converted.
ARTICLE 3. THE LETTERS OF CREDIT.
Section 3.01. Letters of Credit. (a) Subject to the terms and
conditions of this Agreement, the Issuing Bank, on behalf of the Banks, and
in reliance on the agreement of the Banks set forth in Section 3.04, agrees
to issue on any Banking Day prior to the Revolving Credit Termination Date,
for the account of the Borrower, irrevocable standby letters of credit in
such form as may from time to time be approved by the Issuing Bank acting
reasonably (together with the applications therefor, the "Letters of
Credit"); provided that on the date of the issuance of any Letter of Credit,
and after giving effect to such issuance, the Letter of Credit Obligations
shall not exceed the Letter of Credit Availability.
(b) Each Letter of Credit shall (i) have an expiry date no
later than the earlier of (A) one year from the date of issuance provided
that such Letter of Credit may automatically renew for subsequent one year
terms upon the failure of the Issuing Bank to provide sixty days' prior
written notice of termination to the Borrower and (B) the Revolving Credit
Termination Date, (ii) be denominated in Dollars, (iii) be in a minimum face
amount of $100,000 and (iv) provide for the payment of sight drafts when
presented for honor thereunder in accordance with the terms thereof and when
accompanied by the documents described therein or when such documents are
presented, as the case may be.
Section 3.02. Purposes. The Borrower shall use the Letters of Credit
for the purpose of securing obligations incurred in the ordinary course of
business.
Section 3.03. Procedures for Issuance of Letters of Credit. The
Borrower may from time to time request that the Issuing Bank issue a Letter
of Credit by delivering to the Issuing Bank at its address for notices
specified herein an application therefor in such form as may from time to
time be approved by the Issuing Bank acting reasonably, completed to the
reasonable satisfaction of the Issuing Bank, and such other certificates,
documents and other papers and information as the Issuing Bank may reasonably
request. Upon receipt of any application, the Issuing Bank will process such
application and the certificates, documents and other papers and information
delivered to it in connection therewith in accordance with its customary
procedures and shall promptly issue the requested Letter of Credit in such
customized form as may reasonably be requested by the Borrower (but in no
event shall the Issuing Bank issue any Letter of Credit later than five
Banking Days after receipt of the application therefor and all such other
certificates, documents and other papers and information relating thereto) by
issuing the original of such Letter of Credit to the beneficiary thereof or
as otherwise may be agreed by the Issuing Bank and the Borrower. The Issuing
Bank shall furnish a copy of such Letter of Credit to the Borrower promptly
following the issuance thereof.
Section 3.04. Participating Interests. In the case of each Letter of
Credit, effective as of the date of the issuance thereof, the Issuing Bank
agrees to allot and does allot to each other Bank, and each such Bank
severally and irrevocably agrees to take and does take a Participating
Interest in such Letter of Credit in a percentage equal to such Bank's pro
rata share of the Letter of Credit Obligations (calculated based on its
Revolving Credit Commitment Percentage). On the date that any Bank becomes
a party to this Agreement in accordance with Section 12.05, Participating
Interests in any outstanding Letter of Credit held by the transferor Bank
from which such transferee Bank acquired its interest hereunder shall be
proportionately reallotted between such transferee Bank and such transferor
Bank. Each Participating Bank hereby agrees that its obligation to
participate in each Letter of Credit, and to pay or to reimburse the Issuing
Bank for its participating share of the drafts drawn thereunder, is absolute,
irrevocable and unconditional and shall not be affected by any circumstances
whatsoever, including, without limitation, the occurrence and continuance of
any Default or Event of Default, and that each such payment shall be made
without any offset, abatement, withholding or other reduction whatsoever.
Upon request of any Participating Bank, the Issuing Bank shall provide to
such Participating Bank a monthly statement of all Letters of Credit and all
Letter of Credit Obligations outstanding as of such time.
Section 3.05. Payments. (a) In order to induce the Issuing Bank to
issue the Letters of Credit, the Borrower hereby agrees to reimburse the
Issuing Bank, unless such Reimbursement Obligation has been accelerated
pursuant to Section 10.02, by not later than 12:00 noon, New York City time,
on each date that the Borrower has been notified by the Issuing Bank that any
draft presented under any Letter of Credit is paid by the Issuing Bank, for
(i) the amount of the draft paid by the Issuing Bank and (ii) the amount of
any taxes, fees, charges or other reasonable costs or expenses whatsoever
incurred by the Issuing Bank in connection with any payment made by the
Issuing Bank under, or with respect to, such Letter of Credit. Each such
payment shall, subject to the next sentence hereof, be made to the Issuing
Bank at its office specified in Section 12.06, in lawful money of the United
States and in immediately available funds by not later than 12:00 noon, New
York City time, on the day that payment is made by the Issuing Bank (or, if
such drawing occurs after 12:00 noon New York City time, on the next
succeeding Banking Day). If such payment is not made in full, all amounts
remaining unpaid by the Borrower under this Section 3.05 shall, to the extent
otherwise permitted hereunder, automatically be deemed to be a borrowing as
Revolving Credit Loans bearing interest at the Variable Rate plus the
Applicable Margin. Except as otherwise permitted by the preceding sentence,
interest on any and all amounts remaining unpaid by the Borrower under this
Section 3.05 at any time from the date such amounts become payable (whether
at stated maturity, by acceleration or otherwise) until payment in full shall
be payable to the Issuing Bank on demand at a fluctuating rate per annum
equal to the Default Rate.
(b) In the event that the Issuing Bank makes a payment (a
"Letter of Credit Funding") under any Letter of Credit and is not reimbursed
in full therefor on the date of such Letter of Credit Funding, in accordance
with the terms hereof, the Issuing Bank will promptly through the
Administrative Agent notify each Participating Bank that acquired its
Participating Interest in such Letter of Credit from the Issuing Bank. No
later than the close of business on the date such notice is given if such
notice is given prior to 12:00 noon New York City time (or, if such notice is
sent after 12:00 noon New York City time, on the next succeeding Banking
Day), each such Participating Bank will transfer to the Administrative Agent,
for the account of the Issuing Bank, in immediately available funds, an
amount equal to such Participating Bank's pro rata share of the unreimbursed
portion of such Letter of Credit Funding (calculated based on its Revolving
Credit Commitment Percentage), together with interest, if any, accrued
thereon from and including the date of such Letter of Credit Funding at a
rate per annum equal to the Federal Funds Rate and, if such date of transfer
is more than three Banking Days subsequent to such notice, plus two percent
(2%).
(c) Whenever, at any time after the Issuing Bank has made a
Letter of Credit Funding and has received from any Participating Bank such
Participating Bank's pro rata share of the unreimbursed portion of such
Letter of Credit Funding, the Issuing Bank receives any reimbursement on
account of such unreimbursed portion or any payment of interest on account
thereof, the Issuing Bank will distribute to the Administrative Agent, for
the account of such Participating Bank, its pro rata share thereof; provided,
however, that in the event that the receipt by the Issuing Bank of such
reimbursement or such payment of interest (as the case may be) is required to
be returned, such Participating Bank will promptly return to the
Administrative Agent, for the account of the Issuing Bank, any portion
thereof previously distributed by the Issuing Bank to it.
Section 3.06. Further Assurances. The Borrower hereby agrees to do
and perform any and all acts and to execute any and all further instruments
from time to time reasonably requested by the Issuing Bank more fully to
effect the purposes of this Agreement and the issuance of the Letters of
Credit hereunder.
Section 3.07. Obligations Absolute. The payment obligations of the
Borrower under Section 3.05 shall be unconditional and irrevocable and shall
be paid strictly in accordance with the terms of this Agreement under all
circumstances, including, without limitation, the following circumstances:
(a) the existence of any claim, set-off, defense or other
right which the Borrower may have at any time against any beneficiary, or any
transferee, of any Letter of Credit (or any Persons for whom any such
beneficiary or any such transferee may be acting), the Issuing Bank or any
Participating Bank, or any other Person, whether in connection with this
Agreement, any other Facility Document, the transactions contemplated herein,
or any unrelated transaction;
(b) any statement 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;
(c) payment by the Issuing Bank under any Letter of Credit
against presentation of a draft or certificate which does not comply with the
terms of such Letter of Credit; or
(d) any other circumstances or happening whatsoever, whether
or not similar to any of the foregoing.
Section 3.08. Cash Collateral Account. If the Commitments are duly
terminated and all amounts owing under this Agreement, the Notes and the
Reimbursement Obligations become due and payable pursuant to Section 10, the
Borrower shall deposit with the Administrative Agent, on the date such
obligations become due and payable, an amount in cash equal to the Letter of
Credit Obligations as of such date and the Letter of Credit fees in
accordance with Section 3.09. Such amount shall be deposited in a cash
collateral account to be established by the Administrative Agent, for the
benefit of the Issuing Bank and the Participating Banks, and shall constitute
collateral security for the Letter of Credit Obligations and other amounts
owing hereunder. All amounts in such cash collateral account shall be
maintained pursuant to a cash collateral account agreement which shall grant
to the Administrative Agent a security interest in all such funds and in any
investments made therewith or proceeds thereof to secure payment to the
Administrative Agent of Reimbursement Obligations with respect to outstanding
Letters of Credit. In the event that the Administrative Agent makes any
Letter of Credit Funding, the Administrative Agent may withdraw funds on
deposit to make reimbursement of such Letter of Credit Funding, in an amount
equal to such Letter of Credit Funding. Upon payment by the Borrower of all
Reimbursement Obligations with respect to Letters of Credit or the
termination or other expiration of all Letters of Credit, remaining funds on
deposit in the cash collateral account shall be returned promptly to the
Borrower.
Section 3.09. Letter of Credit Fees. (a) The Borrower agrees to pay
the Administrative Agent, for the account of the Issuing Bank and the
Participating Banks, a non-refundable letter of credit fee computed at a rate
per annum equal to the Applicable Margin of the aggregate undrawn amount
under each standby Letter of Credit, calculated on the basis of a year of 360
days for the actual number of days elapsed, payable in arrears on the 1st day
of each March, June, September and December, commencing on the first such
date after the Closing Date.
(b) The Borrower agrees to pay the Issuing Bank, for its own account,
its normal and customary administration, amendment, transfer, payment and
negotiation fees charged in connection with its issuance and administration
of letters of credit.
ARTICLE 4. YIELD PROTECTION; ILLEGALITY; ETC.
Section 4.01. Additional Costs. (a) The Borrower and each respective
Subsidiary Co-Borrower (as applicable) shall pay directly to each Bank from
time to time on demand such amounts as such Bank may determine to be
necessary to compensate it for any costs which such Bank determines are
attributable to its making or maintaining any Fixed Rate Loans to the
Borrower and/or such Subsidiary Co-Borrower under this Agreement or its Notes
of the Borrower and/or such Subsidiary Co-Borrower or its obligation to make
any such Loans hereunder, or any reduction in any amount receivable by such
Bank hereunder in respect of any such Loans or such obligation (such
increases in costs and reductions in amounts receivable being herein called
"Additional Costs"), resulting from any Regulatory Change which: (i) changes
the basis of taxation of any amounts payable to such Bank under this
Agreement or its Notes in respect of any of such Loans (other than taxes
imposed on the overall net income or profits of such Bank or of its Lending
Office for any of such Loans by the jurisdiction in which such Bank has its
principal office or such Lending Office, or any branch or franchise tax
applicable thereto); or (ii) imposes or modifies any reserve, special
deposit, deposit insurance or assessment, minimum capital, capital ratio or
similar requirements relating to any extensions of credit or other assets of,
or any deposits with or other liabilities of, such Bank (including any of
such Loans or any deposits referred to in the definition of "Fixed Base Rate"
in Section 1.01); or (iii) imposes any other condition affecting this
Agreement or its Notes (or any of such extensions of credit or liabilities).
Each Bank will notify the Borrower of any event occurring after the date of
this Agreement which will entitle such Bank to compensation pursuant to this
Section 4.01(a) as promptly as practicable after it obtains knowledge thereof
and determines to request such compensation. If any Bank requests
compensation from the Borrower or any Subsidiary Co-Borrower under this
Section 4.01(a), or under Section 4.01(c), the Borrower may, by notice to
such Bank (with a copy to the Administrative Agent), require that such Bank's
Loans of the type with respect to which such compensation is requested be
converted in accordance with Section 4.04.
(b) Without limiting the effect of the foregoing provisions
of this Section 4.01, in the event that, by reason of any Regulatory Change,
any Bank either (i) incurs Additional Costs based on or measured by the
excess above a specified level of the amount of a category of deposits or
other liabilities of such Bank which includes deposits by reference to which
the interest rate on Fixed Rate Loans is determined as provided in this
Agreement or a category of extensions of credit or other assets of such Bank
which includes Fixed Rate Loans or (ii) becomes subject to restrictions on
the amount of such a category of liabilities or assets which it may hold,
then, if such Bank so elects by notice to the Borrower (with a copy to the
Administrative Agent), the obligation of such Bank to make or renew, and to
convert Loans of any other type into, Loans of such type hereunder shall be
suspended until the date such Regulatory Change ceases to be in effect (and
all Loans of such type held by such Bank then outstanding shall be converted
in accordance with Section 4.04).
(c) Without limiting the effect of the foregoing provisions
of this Section 4.01 (but without duplication), the Borrower and each
respective Subsidiary Co-Borrower (as applicable) shall pay directly to each
Bank from time to time on request such amounts as such Bank may determine to
be necessary to compensate such Bank for any costs which it determines are
attributable to the maintenance by it or any of its affiliates pursuant to
any law or regulation of any jurisdiction or any interpretation, directive or
request (whether or not having the force of law and whether in effect on the
date of this Agreement or thereafter) of any court or governmental or
monetary authority of capital in respect of its Loans to the Borrower and/or
such Subsidiary Co-Borrower hereunder or its obligation to make Loans
hereunder or its obligation to issue, or participate in, any Letters of
Credit (such compensation to include, without limitation, an amount equal to
any reduction in return on assets or equity of such Bank to a level below
that which it could have achieved but for such law, regulation,
interpretation, directive or request). Each Bank will notify the Borrower if
it is entitled to compensation pursuant to this Section 4.01(c) as promptly
as practicable after it determines to request such compensation.
(d) Determinations and allocations by a Bank for purposes of
this Section 4.01 of the effect of any Regulatory Change pursuant to
subsections (a) or (b), or of the effect of capital maintained pursuant to
subsection (c), on its costs of making or maintaining Loans or its obligation
to make Loans, or on amounts receivable by, or the rate of return to, it in
respect of Loans or such obligation, and of the additional amounts required
to compensate such Bank under this Section 4.01, shall be conclusive absent
manifest error, provided that such determinations and allocations are made on
a reasonable basis.
Section 4.02. Limitation on Types of Loans. Anything herein to the
contrary notwithstanding, if:
(a) the Administrative Agent determines (which determination
shall be conclusive) that quotations of interest rates for the relevant
deposits referred to in the definition of "Fixed Base Rate" in Section 1.01
are not being provided in the relevant amounts or for the relevant maturities
for purposes of determining the rate of interest for any type of Fixed Rate
Loans as provided in this Agreement; or
(b) the Required Banks determine (which determination shall
be conclusive) and notify the Administrative Agent that the relevant rates of
interest referred to in the definition of "Fixed Base Rate" in Section 1.01
upon the basis of which the rate of interest for any type of Fixed Rate Loans
is to be determined do not adequately cover the cost to the Banks of making
or maintaining such Loans;
then the Administrative Agent shall give the Borrower and each Bank prompt
notice thereof, and so long as such condition remains in effect, the Banks
shall be under no obligation to make or renew Loans of such type or to
convert Loans of any other type into Loans of such type and the Borrower and
each respective Subsidiary Co-Borrower (as applicable) shall, on the last
day(s) of the then current Interest Period(s) for the outstanding Loans of
the affected type, either prepay such Loans or convert such Loans into
another type of Loans in accordance with Section 2.05.
Section 4.03. Illegality. Notwithstanding any other provision in this
Agreement, in the event that it becomes unlawful for any Bank or its Lending
Office to (a) honor its obligation to make or renew Fixed Rate Loans
hereunder or convert Loans of any type into Loans of such type, or (b)
maintain Fixed Rate Loans hereunder, then such Bank shall promptly notify the
Borrower thereof (with a copy to the Administrative Agent) and such Bank's
obligation to make or renew Fixed Rate Loans and to convert other types of
Loans into Loans of such type hereunder shall be suspended until such time as
such Bank may again make, renew, or convert and maintain such affected Loans
and such Bank's outstanding Fixed Rate Loans, as the case may be, shall be
converted in accordance with Section 4.04.
Section 4.04. Certain Conversions pursuant to Sections 4.01 and 4.03.
If the Loans of any Bank of a particular type (Loans of such type being
herein called "Affected Loans" and such type being herein called the
"Affected Type") are to be converted pursuant to Section 4.01 or 4.03, such
Bank's Affected Loans shall be automatically converted into Variable Rate
Loans on the last day(s) of the then current Interest Period(s) for the
Affected Loans (or, in the case of a conversion required by Section 4.01(b)
or 4.03, on such earlier date as such Bank may specify to the Borrower with
a copy to the Administrative Agent) and, unless and until such Bank gives
notice as provided below that the circumstances specified in Section 4.01 or
4.03 which gave rise to such conversion no longer exist:
(a) to the extent that such Bank's Affected Loans have been
so converted, all payments and prepayments of principal which would otherwise
be applied to such Bank's Affected Loans shall be applied instead to its
Variable Rate Loans;
(b) all Loans which would otherwise be made or renewed by such
Bank as Loans of the Affected Type shall be made instead as Variable Rate
Loans and all Loans of such Bank which would otherwise be converted into
Loans of the Affected Type shall be converted instead into (or shall remain
as) Variable Rate Loans; and
(c) if Loans of other Banks of the Affected Type are
subsequently converted into Loans of another type (other than Variable Rate
Loans), such Bank's Variable Rate Loans shall be automatically converted on
the conversion date into Loans of such other type to the extent necessary so
that, after giving effect thereto, all Loans held by such Bank and the Banks
whose Loans are so converted are held pro rata (as to principal amounts,
types and Interest Periods) in accordance with their respective Commitments.
If such Bank gives notice to the Borrower (with a copy to the
Administrative Agent) that the circumstances specified in Section 4.01 or
4.03 which gave rise to the conversion of such Bank's Affected Loans pursuant
to this Section 4.04 no longer exist (which such Bank agrees to do promptly
upon such circumstances ceasing to exist) at a time when Loans of the
Affected Type are outstanding, such Bank's Variable Rate Loans shall be
automatically converted, on the first day(s) of the next succeeding Interest
Period(s) for such outstanding Loans of the Affected Type to the extent
necessary so that, after giving effect thereto, all Loans held by the Banks
holding Loans of the Affected Type and by such Bank are held pro rata (as to
principal amounts, types and Interest Periods) in accordance with their
respective Commitments.
Section 4.05. Certain Compensation. The Borrower and each respective
Subsidiary Co-Borrower (as applicable) shall pay to the Administrative Agent
for the account of each Bank, upon the request of such Bank through the
Administrative Agent, such amount or amounts as shall be sufficient (in the
reasonable opinion of such Bank) to compensate it for any loss, cost or
expense which such Bank determines is attributable to:
(a) any payment, prepayment, conversion or renewal of a Fixed
Rate Loan to the Borrower and/or such Subsidiary Co-Borrower made by such
Bank on a date other than the last day of an Interest Period for such Loan
(whether by reason of acceleration or otherwise); or
(b) any failure by the Borrower and/or such Subsidiary Co-Borrower to
borrow, convert into, prepay or renew a Fixed Rate Loan to be
made, converted into, prepaid or renewed by such Bank on the date specified
therefor in the relevant notice under Sections 2.04, 2.05 or 2.06, as the
case may be.
Without limiting the foregoing, such compensation shall include an
amount equal to the excess, if any, of: (i) the amount of interest which
otherwise would have accrued on the principal amount so paid, prepaid,
converted or renewed or not borrowed, converted, prepaid or renewed for the
period from and including the date of such payment, prepayment or conversion
or failure to borrow, convert, prepay or renew to but excluding the last day
of the then current Interest Period for such Loan (or, in the case of a
failure to borrow, convert, prepay or renew, to but excluding the last day of
the Interest Period for such Loan which would have commenced on the date
specified therefor in the relevant notice) at the applicable rate of interest
for such Loan provided for herein; over (ii) the amount of interest (as
reasonably determined by such Bank) such Bank would have bid in the London
interbank market (if such Loan is a Fixed Rate Loan) for Dollar deposits for
amounts comparable to such principal amount and maturities comparable to such
period. A determination of any Bank as to the amounts payable pursuant to
this Section 4.05 shall be conclusive absent manifest error; provided that
such determination is made on a reasonable basis.
ARTICLE 5. CONDITIONS PRECEDENT.
Section 5.01. Documentary Conditions Precedent. The obligations of
the Banks to make the Loans constituting the initial borrowing and of the
Issuing Bank to issue the initial Letter of Credit are subject to the
condition precedent that the Administrative Agent shall have received on or
before the Closing Date each of the following, in form and substance
satisfactory to the Administrative Agent and its counsel:
(a) counterparts of this Agreement duly executed by each of
the Borrower, the Subsidiary Co-Borrowers, the Banks and the Administrative
Agent;
(b) the Revolving Credit Notes duly executed by the Borrower;
(c) the Term Notes duly executed by the Borrower and the
respective Subsidiary Co-Borrower;
(d) the Multicare Guaranty duly executed by each of the
Obligors;
(e) the Intercreditor Agreement duly executed by each of the
Borrower, the Subsidiary Guarantors, the Banks, the Administrative Agent, the
ADS Lease Banks, the ADS Lease Agent, the ADS Lessor and the Collateral
Agent;
(f) the Mortgages duly executed by PHC Operating Corp. or
Providence Health Care, Inc., respectively;
(g) the Security Agreement and the Pledge Agreement duly
executed by each of the Obligors and the Collateral Agent;
(h) [Intentionally Omitted];
(i) commitments to issue endorsements to each policy of
mortgagee title insurance with respect to each of the Health Care Facilities
owned by PHC Operating Corp. or Providence Health Care, Inc. insuring the
fully perfected and first priority Lien of the Collateral Agent in such
Health Care Facility;
(j) (i) executed copies of the financing statements (UCC-1)
duly filed or to be filed under the Uniform Commercial Code of all
jurisdictions necessary or, in the opinion of the Secured Parties, desirable
to perfect the security interests created by the Security Agreement and the
Pledge Agreement; (ii) executed copies of the assignment statements (UCC-3)
to be filed under the Uniform Commercial Code of all jurisdictions necessary
to assign the security interest of The Chase Manhattan Bank, N.A., as Agent,
in and to the Collateral to the Collateral Agent; (iii) executed copies of
the termination statements (UCC-3) to be filed under the Uniform Commercial
Code of all jurisdictions necessary to terminate the security interests of
all other Persons in and to the Collateral; and (iv) copies of searches
identifying all of the financing statements on file with respect to each of
the Obligors in all jurisdictions referred to under (i) of this Section
5.01(j);
(k) (i) stock certificates representing all of the outstanding
capital stock held by each Obligor in each other Person in which such Obligor
holds an interest together with undated stock powers executed in blank; (ii)
evidence of the registration of the pledge of all partnership interests and
limited liability company interests held by each Obligor in each other Person
in which such Obligor holds an interest (to the extent that such interest is
pledged under the Pledge Agreement); and (iii) promissory notes or other
instruments held by each Obligor in suitable form for transfer by endorsement
and delivery;
(l) certificates or other evidence of casualty insurance
policies with appropriate loss payable endorsements indicating assignment of
proceeds thereunder to the Collateral Agent for the ratable benefit of the
Secured Parties and certificates or other evidence of liability insurance
with appropriate endorsements indicating the coverage of the Collateral Agent
for the ratable benefit of the Secured Parties as an additional insured;
(m) (i) the ADS Mortgages duly executed by each of the ADS
Lessees and the ADS Lessor and the ADS Assignment of Lease duly executed by
the ADS Lessor; (ii) commitments to issue policies of mortgagee title
insurance with respect to each ADS Mortgaged Property insuring the fully
perfected and first priority Lien of the Collateral Agent in such ADS
Mortgaged Property; (iii) a survey of each ADS Mortgaged Property certified
to the Secured Parties by a surveyor reasonably satisfactory to the Secured
Parties containing the Minimum Standard Detail Requirements for ALTA/ASCM
Land Title Surveys; (iv) an independent appraisal from a state certified
appraiser engaged by the Secured Parties indicating the fair market value of
each ADS Mortgaged Property; and (v) an environmental site assessment report
certified to the Secured Parties by a consultant reasonably satisfactory to
the Secured Parties with respect to each ADS Mortgaged Property;
(n) certificates of the Secretary or Assistant Secretary of
each of the Consolidated Entities, dated the Closing Date, (i) attesting to
all corporate, partnership or limited liability company action taken by such
Consolidated Entity, including resolutions of its Board of Directors, the
Board of Directors of its general partner or its Board of Managers
authorizing the execution, delivery and performance of each of the Facility
Documents to which it is a party and each other document to be delivered
pursuant to this Agreement, (ii) certifying the names and true signatures of
the officers of such Consolidated Entity authorized to sign the Facility
Documents to which it is a party and the other documents to be delivered by
such Consolidated Entity under this Agreement and (iii) verifying that the
charter and by-laws or partnership or operating agreement of such
Consolidated Entity attached thereto are true, correct and complete as of the
date thereof;
(o) a certificate of a duly authorized officer of each of the
Obligors, dated the Closing Date, stating that the representations and
warranties in Article 6 are true and correct in all material respects on such
date as though made on and as of such date and that no event has occurred and
is continuing which constitutes a Default or Event of Default;
(p) a certificate of a duly authorized officer of the
Borrower, dated the Closing Date, attaching true and complete copies of all
material consents, authorizations and filings made under any law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award
or any indenture, agreement, lease or instrument relating to the ADS
Acquisition or the ADS Synthetic Lease, as reasonably requested by the
Administrative Agent;
(q) good standing certificates with respect to each
Consolidated Entity issued by the Secretary of State of its jurisdiction of
organization and evidence that each of the Consolidated Entities is qualified
as a foreign corporation, partnership or limited liability company in every
other jurisdiction in which it does business;
(r) a favorable opinion of Xxxx, Weiss, Rifkind, Xxxxxxx &
Xxxxxxxx, outside counsel to each of the Consolidated Entities, dated the
Closing Date, in substantially the form of Exhibit E and as to such other
matters as the Administrative Agent or any Bank may reasonably request;
(s) favorable opinions of (i) Benesch, Friedlander, Xxxxxx &
Xxxxxxx, (ii) Duane, Morris & Heckscher, (iii) Katten, Muchin & Zavis, (iv)
Xxxxxx, Xxxxxxxxx & Xxxxxx, Ltd., (v) Xxxxxx & Desmond, S.C., (vi) Ropes &
Xxxx, (vii) Steptoe & Xxxxxxx, (viii) Xxxxxx, Xxxxx & Segaloff and (ix) Xxxxx
& Xxxxxx, local counsel to each of the Consolidated Entities, dated the
Closing Date, in substantially the form of Exhibit F and as to such other
matters as the Secured Parties may request;
(t) certified complete and correct copies of each of the
financial statements referred to in Section 6.05;
(u) evidence that all actions to consummate, complete and
effectuate the ADS Acquisition and the ADS Synthetic Lease shall have been
taken to be accompanied by favorable opinions of Goulston & Storrs, counsel
to the ADS Seller Entities and the ADS Owner Parties;
(v) evidence of the repayment of all Debt outstanding to any
ADS Seller Entity (other than the Debt described in Schedule IV) and the
release of all collateral granted in connection therewith including, without
limitation, all amounts owed to (i) BayBank Boston, N.A., (ii) Fleet Bank of
Massachusetts, N.A. (now known as Fleet National Bank), (iii) Northmark Bank
and (iv) Enterprise Bank and Trust Company;
(w) certified complete and correct copies of the ADS
Acquisition Documents, the ADS Synthetic Lease Documents and all Credit
Arrangements, Operating Agreements, Participation Agreements and Licenses of
the ADS Seller Entities; and
(x) a borrowing notice of the Borrower relating to the Loans
to be made and the Letters of Credit to be issued on the Closing Date
together with a letter from the Borrower containing wire transfer
instructions and account information relating to the funds to be made
available by the Banks to the Borrower on the Closing Date.
On the Closing Date, the Banks party to the Existing Credit Agreement
shall surrender to the Borrower the Existing Notes held by them under the
Existing Credit Agreement, in each case marked "Replaced".
Section 5.02. Additional Conditions Precedent. The obligations of the
Banks to make any Loans pursuant to a borrowing which increases the amount
outstanding hereunder (including the initial borrowing) or of the Issuing
Bank to issue any Letters of Credit shall be subject to the further
conditions precedent that on the date of such Loans or the issuance of such
Letters of Credit, the following statements shall be true: (i) in the case of
the initial borrowing or the initial issuance of a Letter of Credit, the
representations and warranties contained in Article 6, in Article 2 of the
Multicare Guaranty, in Article 3 of the Security Agreement and in Article 3
of the Pledge Agreement are true and correct as of the Closing Date, (ii) in
the case of subsequent borrowings and issuances of Letters of Credit, such
representations and warranties are true and correct as of the date of such
Loans or the issuance of such Letter of Credit as though made on and as of
such date unless the failure of such representations and warranties to be
true and correct could not reasonably be expected to have a Material Adverse
Effect; provided that if any such representation or warranty is expressly
stated to have been made as of a specific date, as of such specific date; and
(iii) no Default or Event of Default has occurred and is continuing, or would
result from such Loans or the issuance of Letters of Credit.
Section 5.03. Deemed Representations. Each notice of borrowing or
request for the issuance of a Letter of Credit hereunder and acceptance by
the Borrower of the proceeds of such borrowing or the benefit of such Letter
of Credit shall constitute a representation and warranty that the statements
contained in Section 5.02 are true and correct both on the date of such
notice or request and, unless the Borrower otherwise notifies the
Administrative Agent prior to such borrowing or such issuance (in which case
the Banks shall be under no obligation to make available the proceeds of such
borrowing and the Issuing Bank shall be under no obligation to issue such
Letter of Credit), as of the date of such borrowing or such issuance.
ARTICLE 6. REPRESENTATIONS AND WARRANTIES.
Each of the Borrower and the Subsidiary Co-Borrowers (as to itself and
its Subsidiaries) hereby represents and warrants that (after giving effect to
the ADS Acquisition):
Section 6.01. Organization, Good Standing and Due Qualification. Each
of the Consolidated Entities is a corporation, partnership or limited
liability company duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, has the corporate,
partnership or limited liability company power and authority to own its
assets and to transact the business in which it is now engaged or proposed to
be engaged, and is duly qualified as a foreign corporation, partnership or
limited liability company and in good standing under the laws of each other
jurisdiction in which such qualification is required and where such failure
to qualify could reasonably be expected to have a Material Adverse Effect.
Section 6.02. Power and Authority; No Conflicts. The execution,
delivery and performance by each of the Obligors of the Facility Documents to
which it is a party have been duly authorized by all necessary corporate,
partnership or limited liability company action and do not and will not: (a)
require any consent or approval of its stockholders, partners or members; (b)
contravene its charter or by-laws or partnership or operating agreement; (c)
violate any provision of, or require any filing (other than the filings
required under the Security Documents), registration, consent or approval
under, any law, rule, regulation (including, without limitation, Regulation
U), order, writ, judgment, injunction, decree, determination or award
presently in effect having applicability to any Consolidated Entity; (d)
result in a breach of or constitute a default or require any consent under
any indenture or loan or credit agreement or any other agreement, lease or
instrument to which any Consolidated Entity is a party or by which it or its
properties may be bound or affected if such breach, default or failure to
obtain consent could reasonably be expected to have a Material Adverse
Effect; (e) result in, or require, the creation or imposition of any Lien
(other than as created under the Security Documents), upon or with respect to
any of the properties now owned or hereafter acquired by any Consolidated
Entity; or (f) cause any Consolidated Entity to be in default under any such
law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award or, if such default could reasonably be expected to
have a Material Adverse Effect, any such indenture, agreement, lease or
instrument.
Section 6.03. Legally Enforceable Agreements. Each Facility Document
to which any Obligor is a party is, or when delivered under this Agreement
will be, a legal, valid and binding obligation of such Obligor enforceable
against such Obligor in accordance with its terms, except to the extent that
such enforcement may be limited by applicable bankruptcy, insolvency and
other similar laws affecting creditors' rights generally.
Section 6.04. Litigation. Except as set forth on Schedule II hereto,
there are no actions, suits or proceedings pending or, to the knowledge of
any Obligor, threatened, against or affecting any Consolidated Entity before
any court, Governmental Authority or arbitrator which could reasonably be
expected to have a Material Adverse Effect.
Section 6.05. Financial Statements. (a) The consolidated balance
sheets of the Consolidated Entities as at December 31, 1995, 1994, 1993, 1992
and 1991 and the consolidating balance sheets of each of the Subsidiary
Co-Borrowers as at December 31, 1995, and the related consolidated income
statements and statements of cash flows and changes in stockholders' equity
of the Consolidated Entities and consolidating income statements of each of
the Subsidiary Co-Borrowers, for the fiscal years then ended, and the
accompanying footnotes, together with the opinion on the consolidated
statements of KPMG Peat Marwick LLP, independent certified public
accountants, and the interim consolidated balance sheet of the Consolidated
Entities as at September 30, 1996, and the related consolidated income
statement and statements of cash flows and changes in stockholders' equity of
the Consolidated Entities, for the nine month period then ended, copies of
which have been furnished to each of the Banks, are complete and correct and
fairly present the financial condition of the Consolidated Entities at such
dates and the results of the operations of the Consolidated Entities for the
periods covered by such statements, all in accordance with GAAP consistently
applied (subject to year-end adjustments).
(b) To the best knowledge of the Borrower, the combined
balance sheet of the ADS Seller Entities at December 31, 1995 and the related
combined income statements and statements of cash flows and changes in
stockholders' equity of the ADS Seller Entities, for the fiscal year then
ended, and the accompanying footnotes, together with the opinion thereon of
Xxxxx & Xxxxxxx, P.C., independent certified public accountants, and the
interim consolidated balance sheet of the Consolidated Entities as at
September 30, 1996, and the related consolidated income statement and
statements of cash flows and changes in stockholders' equity of the
Consolidated Entities, for the nine month period then ended, copies of which
have been furnished to each of the Banks, are complete and correct and fairly
present the financial condition of the ADS Seller Entities at such dates and
the results of the operations of the ADS Seller Entities for periods covered
by such statements, all in accordance with GAAP consistently applied (subject
to year-end adjustments).
(c) After giving effect to (i) the ADS Acquisition, (ii) the
Acquisition of Concord Health Group, Inc. and its Subsidiaries, and (iii) the
Acquisition of Glenmark Associates, Inc. and its Subsidiaries (the
"Significant Recent Acquisitions"), the pro forma condensed consolidated
balance sheet of the Consolidated Entities as at September 30, 1996 and as at
December 31, 1995 and the related pro forma condensed consolidated income
statements of the Consolidated Entities for the fiscal periods then ended,
copies of which have been furnished to each of the Banks, are complete and
correct and fairly present the financial condition of the Consolidated
Entities at such dates and the results of the operations of the Consolidated
Entities for periods covered by such statements, all in accordance with GAAP
consistently applied.
(d) As of the date thereof, the projections and pro forma
financial information provided by the Borrower giving effect to the
Significant Recent Acquisitions are based on good faith estimates and
assumptions by the management of the Borrower, it being recognized by the
Banks, however, that projections as to future events are not to be viewed as
fact and that actual results during the period or periods covered by any such
projections may differ from the projected results and that the differences
may be material. After reviewing historical financial statements of the ADS
Sellers, Concord Health Group, Inc. and its Subsidiaries and Glenmark
Associates, Inc. and its Subsidiaries and considering the pro forma position
of the Consolidated Entities subsequent to the Significant Recent
Acquisitions, the Borrower believes in good faith that the Consolidated
Entities will continue to be in compliance with the financial covenants
contained in Article 9.
(e) Except as set forth on the pro forma condensed
consolidated balance sheet of the Consolidated Entities as at September 30,
1996, there are no liabilities of any Consolidated Entity, fixed or
contingent, which are material but are not reflected in the consolidated
financial statements or in the notes thereto and which would be required to
be recorded in such financial statements or notes in accordance with GAAP.
No written information, exhibit or report furnished by any Consolidated
Entity to the Banks in connection with the negotiation of this Agreement
(after giving effect to information so furnished that corrects, supplements
or supersedes information previously furnished) contained any material
misstatement of fact or omitted to state a material fact or any fact
necessary to make the statements contained therein not materially misleading
in each case as determined as of the date of the provision of such
information, exhibit or report. Since September 30, 1996, there has been no
change which could reasonably be expected to have a Material Adverse Effect.
Section 6.06. Ownership and Liens. Each of the Consolidated Entities
has title to, or valid leasehold interests in, all of its Property, including
the Property reflected in the financial statements referred to in Section
6.05 (other than any Property disposed of in the ordinary course of
business), and none of the Property owned by any Consolidated Entity and none
of its leasehold interests is subject to any Lien, except as may be permitted
hereunder and except for the Liens created by the Security Documents;
provided that no Obligor is making any representation or warranty with
respect to Liens affecting the fee interest in real Property leased to any
Consolidated Entity and not owned by another Consolidated Entity.
Section 6.07. Taxes. Each of the Consolidated Entities has filed (or
obtained extensions for) all tax returns (federal, state and local) required
to be filed and has paid all taxes, assessments and governmental charges and
levies shown thereon to be due, including interest and penalties.
Section 6.08. ERISA. Each Plan and, to the best knowledge of each
Obligor, Multiemployer Plan, is in compliance in all material respects with,
and has been administered in all material respects in compliance with, the
applicable provisions of ERISA, the Code and any other applicable Federal or
state law, and no event or condition is occurring or exists concerning which
any Consolidated Entity would be under an obligation to furnish a report to
the Bank in accordance with Section 7.08(g) hereof. As of the most recent
valuation date for each Plan, each Plan other than The Breyut Convalescent
Center, Inc. Pension Fund was "fully funded", which for purposes of this
Section 6.08 shall mean that the fair market value of the assets of the Plan
is not less than the present value of the accrued benefits of all
participants in the Plan, computed on a Plan termination basis. To the best
knowledge of each Obligor, no such Plan has ceased being fully funded as of
the date these representations are made with respect to any Loan under this
Agreement. With respect to The Breyut Convalescent Center, Inc. Pension
Fund, benefit accruals were frozen as of December 31, 1990 and the Unfunded
Benefit Liabilities as projected by such Plan's enrolled actuary as of August
1, 1993 were $1,139,854.
Section 6.09. Subsidiaries and Ownership of Stock. As of the date
hereof and as of the Closing Date, Schedule III sets forth the name of (a)
each Subsidiary of the Borrower and (b) each Affiliate that is owned by a
Consolidated Entity, that has an ownership interest in a Consolidated Entity
or that has entered into a transaction with any Consolidated Entity, in each
case showing the jurisdiction of its incorporation or organization and
showing the percentage of each Person's ownership of the outstanding stock or
partnership interests of such Subsidiary or Affiliate. All of the
outstanding shares of capital stock and all of the partnership and limited
liability company interests of each Subsidiary owned by the Borrower, either
directly or indirectly, are validly issued, fully paid and nonassessable, and
all such shares or interests are owned free and clear of all Liens (other
than as created under the Security Documents). As of the date hereof and as
of the Closing Date, except as set forth in Schedule III, no Consolidated
Entity owns or holds the right to acquire any shares of stock or any other
security or interest in any other Person.
Section 6.10. Credit Arrangements. As of the date hereof and as of
the Closing Date, Schedule IV is a complete and correct list of all credit
agreements, indentures, note purchase agreements, guaranties, Capital Leases
and other investments, agreements and arrangements constituting Debt (the
"Credit Arrangements") providing for or relating to extensions of credit
(including agreements and arrangements for the issuance of letters of credit
or for acceptance financing) in respect of which any Consolidated Entity is
in any manner directly or contingently obligated; and the maximum principal
or face amounts of the credit in question, outstanding and which can be
outstanding, are correctly stated, and all Liens of any nature given or
agreed to be given as security therefor are correctly described or indicated
in such Schedule.
Section 6.11. Operation of Business.
(a) Each of the Consolidated Entities possesses all
certificates of need and licenses necessary to operate the Health Care
Facilities as long term or specialized health care facilities and all
Medicare and Medicaid provider agreements relating to the operation of such
Health Care Facilities and all other Licenses, permits, franchises, patents,
copyrights, trademarks and trade names, or rights thereto, to conduct its
business substantially as now conducted and as presently proposed to be
conducted and where the failure to possess such other Licenses, permits,
franchises, patents, copyrights, trademarks and trade names could have a
Material Adverse Effect, and no Consolidated Entity is in material violation
of any valid rights of others with respect to any of the foregoing where such
violation could have a Material Adverse Effect. As of the date hereof and as
of the Closing Date, Schedule V is a complete and correct list of all
certificates of need and licenses necessary to operate the Health Care
Facilities owned or leased by any Consolidated Entity as long term or
specialized health care facilities and all Medicare and Medicaid provider
agreements relating to the operation of such Health Care Facilities.
(b) Except for revocations, suspensions, terminations,
probations, restrictions, limitations or non-renewals which, individually or
in the aggregate, could not reasonably be expected to have a Material Adverse
Effect, there is no threatened or pending revocation, suspension,
termination, probation, restriction, limitation, or non-renewal of any
material License, Participation Agreement (including, Medicare, Medicaid,
CHAMPUS, Blue Cross and Blue Shield, and all current private commercial
insurance and employee assistance programs in which any Consolidated Entity
presently participates) or accreditation or certification by any
accreditation or approval organization or Governmental Authority for health
care providers, including, without limitation, of any provisional License or
other License with a term of less than twelve (12) months with respect to any
Consolidated Entity.
(c) Each of the Consolidated Entities has caused there to be
prepared and filed (or obtained extensions for) all applicable cost reports
to Medicare, Medicaid, CHAMPUS, Blue Cross, Blue Shield and such other third
party payors that are material to conduct its business substantially as now
conducted.
Section 6.12. Operating Agreements and Leases. As of the date hereof
and as of the Closing Date, Schedule VI is a complete and correct list of all
management agreements and leases (collectively, the "Operating Agreements")
relating to the operation and management of each Health Care Facility and to
the operation or management of each Health Care Facility owned by a Person
other than a Consolidated Entity.
Section 6.13. Health Care Facilities. As of the date hereof and as of
the Closing Date, Schedule VII is a complete and correct list of all Health
Care Facilities and the locations thereof.
Section 6.14. Hazardous Materials. Each of the Consolidated Entities
is in compliance in all material respects with all Environmental Laws in
effect in each jurisdiction where it is presently doing business. No
Consolidated Entity is subject to any material liability under any
Environmental Law.
In addition, no Consolidated Entity has received any (i) notice from
any Governmental Authority by which any of its present or previously-owned or
leased real Properties has been designated, listed, or identified in any
manner by any Governmental Authority charged with administering or enforcing
any Environmental Law as a Hazardous Material disposal or removal site,
"Super Fund" clean-up site, or candidate for removal of Hazardous Materials
or closure of a Hazardous Material disposal site pursuant to any
Environmental Law, (ii) notice of any Lien arising under or in connection
with any Environmental Law that has attached to any revenues of, or to, any
of its owned or leased real Properties, or (iii) summons, citation, notice,
directive, letter, or other written communication from any Governmental
Authority concerning any intentional or unintentional action or omission by
such Consolidated Entity in connection with its ownership or leasing of any
real Property resulting in the releasing, spilling, leaking, pumping,
pouring, emitting, emptying, dumping, or otherwise disposing of any Hazardous
Material into the environment resulting in any violation of any Environmental
Law.
Section 6.15. No Default on Outstanding Judgments or Orders. Each of
the Consolidated Entities has satisfied all judgments and no Consolidated
Entity is in default with respect to any final judgment (except such as have
been appropriately stayed), writ, injunction or decree of any Governmental
Authority.
Section 6.16. No Defaults on Other Agreements. No Consolidated Entity
is a party to any indenture, loan or credit agreement or any lease or other
agreement or instrument or subject to any charter or corporate restriction
which could have a Material Adverse Effect. No Consolidated Entity is in
default in any material respect in the performance, observance or fulfillment
of any of the obligations, covenants or conditions contained in any agreement
or instrument material to its business to which it is a party.
Section 6.17. Labor Disputes and Acts of God. Neither the business
nor the properties of any Consolidated Entity are affected by any fire,
explosion, accident, strike, lockout or other labor dispute, drought, storm,
hail, earthquake, embargo, act of God or of the public enemy or other
casualty (whether or not covered by insurance), which could have a Material
Adverse Effect.
Section 6.18. Governmental Regulation. No Consolidated Entity is
subject to regulation under the Public Utility Holding Company Act of 1935,
the Investment Company Act of 1940, the Interstate Commerce Act, the Federal
Power Act or any statute or regulation limiting its ability to incur
indebtedness for money borrowed as contemplated hereby.
Section 6.19. No Forfeiture. Neither any Consolidated Entity nor any
of its Affiliates is engaged in or proposes to be engaged in the conduct of
any business or activity which could result in a Forfeiture Proceeding which
could reasonably be expected to have a Material Adverse Effect and no
Forfeiture Proceeding against any of them is pending or threatened.
Section 6.20. Solvency. The present fair saleable value of the assets
of each Obligor after giving effect to all the transactions contemplated by
the Facility Documents and the funding of the Commitments and the issuance of
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 Obligor as they mature. The Property of each
Obligor does not constitute unreasonably small capital for such Obligor to
carry out its business as now conducted and as proposed to be conducted
including the capital needs of such Obligor. Each Obligor does not intend
to, nor does such Obligor 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 such Obligor, and of amounts to be payable
on or in respect of debt of such Obligor). The cash available to such
Obligor after taking into account all other anticipated uses of the cash of
such Obligor, is anticipated to be sufficient to pay all such amounts on or
in respect of debt of such Obligor when such amounts are required to be paid.
Each Obligor does not believe that final judgments against it in actions for
money damages will be rendered at a time when, or in an amount such that,
such Obligor will be unable to satisfy any such judgments promptly in
accordance with their terms (taking into account the maximum reasonable
amount of such judgments in any such actions and the earliest reasonable time
at which such judgments might be rendered). The cash available to such
Obligor after taking into account all other anticipated uses of the cash of
such Obligor (including the payments on or in respect of debt referred to in
this Section 6.20), is anticipated to be sufficient to pay all such judgments
promptly in accordance with their terms.
Section 6.21. Security Documents. The Security Documents are
effective to create in favor of the Collateral Agent for the ratable benefit
of the Secured Parties a legal, valid and enforceable Lien on and security
interest in all right, title and interest of each Obligor in the Collateral
securing the Senior Obligations. Except for Liens permitted under Section
8.03 entitled to priority by law, the Collateral Agent has a fully perfected
and continuing first priority Lien on and security interest in the
Collateral, free from all Liens other than Liens permitted under Section
8.03.
Section 6.22. Senior Indebtedness. The obligations of the Borrower
hereunder and under the other Facility Documents constitute "Senior
Indebtedness" under and as defined in (a) the Multicare Indenture with
respect to the Multicare Subordinated Notes and (b) the Multicare Fiscal
Agency Agreement with respect to the Multicare Subordinated Debentures.
Section 6.23. Representations and Warranties in the ADS Acquisition
Documents. The Administrative Agent has received a complete and correct copy
of the ADS Acquisition Documents and all amendments thereto, waivers relating
thereto and other side letters or agreements affecting the terms thereof.
The ADS Acquisition Agreement has been duly executed and delivered by
ADS/Multicare, and to the best knowledge of the Borrower, each of the ADS
Owner Parties and the ADS Seller Entities. Each of the ADS Acquisition
Documents is in full force and effect. Each of the representations and
warranties of ADS/Multicare and, to the best knowledge of the Borrower, of
each of the ADS Owner Parties and the ADS Seller Entities set forth in the
ADS Acquisition Agreement is true and correct in all material respects.
Except as otherwise disclosed in Schedule 6.1.3 to the ADS Acquisition
Agreement, the execution, delivery and performance of the ADS Acquisition
Agreement by ADS/Multicare, and to the best knowledge of the Borrower, each
of the ADS Owner Parties and the ADS Seller Entities do not and will not
violate any provision of, or require any filing, registration, consent or
approval under any law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award or any indenture, agreement, lease or
instrument to which such Person is a party or by which they or their
Properties may be bound or affected. All transactions contemplated by the
ADS Acquisition Documents consummated on or prior to the Closing Date have
been consummated without any material amendment, waiver or modification of
the terms thereof.
Section 6.24. Representations and Warranties in the ADS Synthetic Lease
Documents. The Administrative Agent has received a complete and correct copy
of the ADS Synthetic Lease Documents and all amendments thereto, waivers
relating thereto and other side letters or agreements affecting the terms
thereof. The ADS Participation Agreement has been duly executed and
delivered by each of the Borrower and the ADS Lessees. Until such time as
the ADS Lessees shall have exercised their "Purchase Option" or "Remarketing
Option" (as each such term is defined in Appendix A to the ADS Participation
Agreement) as to the ADS Mortgaged Properties under the ADS Synthetic Lease,
each of the ADS Synthetic Lease Documents is in full force and effect. Each
of the representations and warranties of each of the Borrower and the ADS
Lessees set forth in the ADS Participation Agreement is true and correct in
all material respects. The execution, delivery and performance of the ADS
Participation Agreement by each of the Borrower and the ADS Lessees do not
and will not violate any provision of, or require any filing (other than the
filings required under the Security Documents), registration, consent or
approval under any law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award or any indenture, agreement, lease or
instrument to which such Person is a party or by which they or their
Properties may be bound or affected. All transactions contemplated by the
ADS Participation Agreement consummated on or prior to the Closing Date have
been consummated without amendment, waiver or modification of the terms
thereof.
ARTICLE 7. AFFIRMATIVE COVENANTS.
So long as any Note shall remain unpaid, any Letter of Credit shall
remain outstanding or any Bank shall have any Commitment under this
Agreement, the Borrower shall:
Section 7.01. Maintenance of Existence. Preserve and maintain, and
cause each of its Subsidiaries to preserve and maintain, its corporate,
partnership or limited liability company existence and good standing in the
jurisdiction of its incorporation, and qualify and remain qualified as a
foreign corporation or partnership in each jurisdiction in which such
qualification is required except with respect to sales or other dispositions
by the Borrower or such Subsidiary permitted under Section 8.07.
Section 7.02. Conduct of Business. Continue, and cause each of its
Subsidiaries to continue, to engage in the business of the same general type
as conducted by it on the date of this Agreement; except where such failure
to so participate could not reasonably be expected to have a Material Adverse
Effect, continue, and cause each of its Subsidiaries to continue, its
participation in any and all plans and programs for third party payment and
reimbursement from, and claims against, private insurers and employee
assistance programs, and plans or programs for payment and reimbursement from
federal, state or local governmental agencies, or private or quasi-public
insurers, including, without limitation, Managed Care Plans, Medicaid,
Medicare, CHAMPUS, Blue Cross and Blue Shield; except where such failure to
so comply could not reasonably be expected to have a Material Adverse Effect,
comply, and cause each of its Subsidiaries to comply, with any and all rules,
regulations, standards, procedures and decrees necessary to maintain its or
any of its participation in any such third party payment or reimbursement
programs or plans; and prepare and file, and cause each of its Subsidiaries
to prepare and file, all applicable cost reports to all third party payors to
the extent required by third party payors.
Section 7.03. Maintenance of Properties. Maintain, keep and preserve,
and cause each of its Subsidiaries to maintain, keep and preserve, all of its
Property (including, without limitation, all Licenses, accreditations,
rights, privileges and franchises) necessary or useful in the proper conduct
of its business in good working order and condition, ordinary wear and tear
excepted and except for sales, leases, assignments, transfers or other
dispositions of Property permitted under Section 8.07.
Section 7.04. Maintenance of Records. Keep, and cause each of its
Subsidiaries to keep, adequate records and books of account, in which
complete entries will be made in accordance with GAAP, reflecting all
financial transactions of the Consolidated Entities.
Section 7.05. Maintenance of Insurance. Maintain, and cause each of
its Subsidiaries to maintain, insurance with financially sound and reputable
insurance companies or associations in such amounts and covering such risks
as are usually carried by companies engaged in the same or a similar business
and similarly situated, which insurance may provide for reasonable
deductibility from coverage thereof; provided that the Borrower or such
Subsidiary may maintain a system of self-insurance with respect to health
insurance for its employees so long as such system is in accord with sound
financial practices of similar businesses maintaining similar systems and so
long as the Borrower or such Subsidiary shall maintain adequate insurance
reserves in accordance with GAAP and in accordance with sound actuarial and
insurance principles.
Section 7.06. Compliance with Laws. Comply, and cause each of its
Subsidiaries to comply, in all material respects with all applicable laws,
rules, regulations and orders (including, without limitation, any
Environmental Law), such compliance to include, without limitation, paying
before the same become delinquent all taxes, assessments and governmental
charges imposed upon it or upon its Property; provided that items of the
foregoing description need not be paid while being contested in good faith
and by appropriate proceedings diligently pursued as long as adequate book
reserves have been established with respect thereto.
Section 7.07. Right of Inspection. 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 then exists, permit the
Administrative Agent or any Bank or any agent or representative thereof, to
examine and make copies and abstracts from the records and books of account
of, and visit the properties of, any Consolidated Entity, and to discuss the
affairs, finances and accounts of such Consolidated Entity with any of their
respective officers and directors and independent accountants.
Section 7.08. Reporting Requirements. Furnish directly to each of the
Banks:
(a) as soon as available and in any event within 90 days after
the end of each fiscal year of the Consolidated Entities, a consolidated
balance sheet of the Consolidated Entities and consolidating balance sheets
of each of the Subsidiary Co-Borrowers as of the end of such fiscal year and
a consolidated income statement and statement of cash flows and changes in
stockholders' equity of the Consolidated Entities and consolidating income
statements of each of the Subsidiary Co-Borrowers for such fiscal year, all
in reasonable detail and stating in comparative form the respective
consolidated figures for the corresponding date and period in the prior
fiscal year and all prepared in accordance with GAAP and as to the
consolidated statements accompanied by an opinion thereon acceptable to the
Administrative Agent and each of the Banks by KPMG Peat Marwick or other
independent accountants of national standing selected by the Consolidated
Entities; provided that delivery within the period specified above of copies
of the Annual Report on Form 10-K of the Borrower filed with the Securities
and Exchange Commission, together with the adjustments to such consolidated
statements necessary to provide consolidating information for each of the
Subsidiary Co-Borrowers, shall be deemed to satisfy the requirements of this
Section 7.08(a) so long as such Form 10-K as so adjusted shall contain the
information referred to in this Section 7.08(a);
(b) as soon as available and in any event within 45 days after
the end of each of the first three quarters of each fiscal year of the
Consolidated Entities, a consolidated balance sheet of the Consolidated
Entities as of the end of such quarter and a consolidated income statement
and statement of cash flows and changes in stockholders' equity of the
Consolidated Entities for the period commencing at the end of the previous
fiscal year and ending with the end of such quarter, all in reasonable detail
and stating in comparative form the respective consolidated figures for the
corresponding date and period in the previous fiscal year and all prepared in
accordance with GAAP and certified by a senior officer of the Consolidated
Entities (subject to year-end adjustments); provided that delivery within the
period specified above of copies of the Quarterly Report on Form 10-Q of the
Borrower filed with the Securities and Exchange Commission shall be deemed to
satisfy the requirements of this Section 7.08(b) so long as such Form 10-Q
shall contain the information referred to in this Section 7.08(b);
(c) simultaneously with the delivery of the financial
statements referred to above, a Compliance Certificate of a senior officer of
the Borrower (i) certifying that to the best of his knowledge no Default or
Event of Default has occurred and is continuing or, if a Default or Event of
Default has occurred and is continuing, a statement as to the nature thereof
and the action which is proposed to be taken with respect thereto, and (ii)
with computations demonstrating compliance with the covenants contained in
Article 9;
(d) simultaneously with the delivery of the annual financial
statements referred to in Section 7.08(a), a certificate of the independent
public accountants who audited such statements to the effect that, in making
the examination necessary for the audit of such statements, they have
obtained no knowledge of any condition or event which constitutes a Default
or Event of Default, or if such accountants shall have obtained knowledge of
any such condition or event, specifying in such certificate each such
condition or event of which they have knowledge and the nature and status
thereof;
(e) promptly after the commencement thereof, notice of all
actions, suits, and proceedings before any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign,
affecting any Consolidated Entity which, if determined adversely to such
Consolidated Entity, could have a Material Adverse Effect;
(f) as soon as possible and in any event within 10 days after
becoming aware of or having reason to become aware of the occurrence of each
Default or Event of Default a written notice setting forth the details of
such Default or Event of Default and the action which is proposed to be taken
by the Consolidated Entities with respect thereto;
(g) as soon as possible, and in any event within ten days
after any Consolidated Entity knows or has reason to know that any of the
events or conditions specified below with respect to any Plan or
Multiemployer Plan have occurred or exist, a statement signed by a senior
officer of such Consolidated Entity setting forth details respecting such
event or condition and the action, if any, which such Consolidated Entity or
an ERISA Affiliate proposes to take with respect thereto (and a copy of any
report or notice required to be filed with or given to PBGC by such
Consolidated Entity or an ERISA Affiliate with respect to such event or
condition): (i) any reportable event, as defined in Section 4043(b) of ERISA,
with respect to a Plan, as to which PBGC has not by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days of
the occurrence of such event (provided that a failure to meet the minimum
funding standard of Section 412 of the Code or Section 302 of ERISA
including, without limitation, the failure to make on or before its due date
a required installment under Section 412(m) of the Code or Section 302(e) of
ERISA, shall be a reportable event regardless of the issuance of any waivers
in accordance with Section 412(d) of the Code) and any request for a waiver
under Section 412(d) of the Code for any Plan; (ii) the distribution under
Section 4041 of ERISA of a notice of intent to terminate any Plan or any
action taken by such Consolidated Entity or an ERISA Affiliate to terminate
any Plan; (iii) the institution by PBGC of proceedings under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer,
any Plan, or the receipt by such Consolidated Entity or any ERISA Affiliate
of a notice from a Multiemployer Plan that such action has been taken by PBGC
with respect to such Multiemployer Plan; (iv) the complete or partial
withdrawal from a Multiemployer Plan by such Consolidated Entity or any ERISA
Affiliate that results in liability under Section 4201 or 4204 of ERISA
(including the obligation to satisfy secondary liability as a result of a
purchaser default) or the receipt of such Consolidated Entity or any ERISA
Affiliate of notice from a Multiemployer Plan that it is in reorganization or
insolvency pursuant to Section 4241 or 4245 of ERISA or that it intends to
terminate or has terminated under Section 4041A of ERISA; (v) the institution
of a proceeding by a fiduciary or any Multiemployer Plan against such
Consolidated Entity or any ERISA Affiliate to enforce Section 515 of ERISA,
which proceeding is not dismissed within 30 days; (vi) the adoption of an
amendment to any Plan that pursuant to Section 401(a)(29) of the Code or
Section 307 of ERISA would result in the loss of tax-exempt status of the
trust of which such Plan is a part if such Consolidated Entity or an ERISA
Affiliate fails to timely provide security to the Plan in accordance with the
provisions of said Sections; (vii) any event or circumstance exists which may
reasonably be expected to constitute grounds for such Consolidated Entity or
any ERISA Affiliate to incur liability under Title IV of ERISA or under
Sections 412(c)(11) or 412(n) of the Code with respect to any Plan; and
(viii) the Unfunded Benefit Liabilities of one or more Plans increase after
the date of this Agreement in an amount which is material in relation to the
financial condition of the Consolidated Entities; provided, however, that
such increase shall not be deemed to be material so long as it does not
exceed during any consecutive 3 year period $500,000;
(h) promptly after the request of any Bank, copies of each
annual report filed pursuant to Section 104 of ERISA with respect to each
Plan (including, to the extent required by Section 104 of ERISA, the related
financial and actuarial statements and opinions and other supporting
statements, certifications, schedules and information referred to in Section
103) and each annual report filed with respect to each Plan under Section
4065 of ERISA; provided, however, that in the case of a Multiemployer Plan,
such annual reports shall be furnished only if they are available to such
Consolidated Entity or an ERISA Affiliate;
(i) promptly after the sending or filing thereof, copies of
all proxy statements, financial statements and reports which any Consolidated
Entity sends to its stockholders, and copies of all regular, periodic and
special reports, and all registration statements which such Consolidated
Entity files with the Securities and Exchange Commission or any Governmental
Authority which may be substituted therefor, or with any national securities
exchange;
(j) promptly after becoming aware of the existence of any
violation or alleged violation in any material respect of any law, rule,
regulation or order (including, without limitation, any Environmental Law) by
any Consolidated Entity and with respect to any Health Care Facility, prompt
written notice of and a description of the nature of such violation or
alleged violation, what action such Consolidated Entity is taking or proposes
to take with respect thereto and, when known, any action taken, or proposed
to be taken, by any Governmental Authority with respect thereto;
(k) promptly after the commencement thereof or promptly after
any Consolidated Entity knows of the commencement or threat thereof, notice
of any Forfeiture Proceeding; and
(l) such other information respecting the condition or
operations, financial or otherwise, of any Consolidated Entity as the
Administrative Agent or any Bank may from time to time reasonably request.
Section 7.09. Additional Subsidiary Guarantors. Cause each of its
Subsidiaries acquired or formed after the date hereof to become a "Subsidiary
Guarantor" under the Multicare Guaranty and thereby an "Obligor" hereunder
pursuant to an Assumption Agreement, and shall deliver such proof of
corporate action, incumbency of officers, opinions of counsel and other
documents as is consistent with those delivered by the Obligors pursuant to
Article 5 hereof upon the Closing Date or as the Administrative Agent shall
have reasonably requested; provided that (a) each of Berkeley Haven Limited
Partnership, Canterbury of Shepherdstown Limited Partnership, Care Haven
Associates Limited Partnership, Glenmark Properties I, Limited Partnership
and Marlinton Associates Limited Partnership (collectively, the "Glenmark
Partnerships") shall not be required to become a "Subsidiary Guarantor"
hereunder until such time as such Glenmark Partnership shall become a
wholly-owned Subsidiary of any Obligor and (b) any Subsidiary acquired or
formed after the date hereof shall not be required to become a "Subsidiary
Guarantor" under the Multicare Guaranty and an "Obligor" hereunder if such
Subsidiary shall be liable with respect to Permitted Acquisition Debt
provided that (i) the original principal amount of such Permitted Acquisition
Debt shall not be less than 66 2/3% of the value of all Property held by such
Subsidiary (such value to be reasonably determined by the Administrative
Agent and, unless such valuation shall be unreasonable, such value shall be
deemed to be the acquisition price), (ii) the aggregate value of all Property
held by such Subsidiary and all other Consolidated Entities who are liable
for Permitted Acquisition Debt (such value to be reasonably determined by the
Administrative Agent and, unless such valuation shall be unreasonable, such
value shall be deemed to be the respective acquisition prices) shall not
exceed the result of (A) $30,000,000 minus (B) the product of (x) 1.50 times
(y) the value of all Property subject to any conditional sale or other title
retention agreement or a Capital Lease entered into after the Initial Closing
Date (such value to be reasonably determined by the Administrative Agent and,
unless such valuation shall be unreasonable, such valuation shall be deemed
to be the acquisition price), (iii) no Default or Event of Default exists or
would exist after giving effect to such Acquisition and (iv) if such
Subsidiary shall cease to be liable for such Permitted Acquisition Debt, it
shall then become a "Subsidiary Guarantor" and an "Obligor" hereunder.
ARTICLE 8. NEGATIVE COVENANTS.
So long as any Note shall remain unpaid, any Letter of Credit shall
remain outstanding or any Bank shall have any Commitment under this
Agreement, the Borrower shall not:
Section 8.01. Debt. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to exist,
any Debt, except:
(a) Debt of the Obligors under this Agreement, the Notes, the
Letters of Credit, the Interest Rate Protection Agreements and the other
Facility Documents;
(b) Debt described in Schedule IV and, to the extent indicated
on Schedule IV, any renewals, extensions or refinancings thereof, provided
that the principal amount thereof does not increase;
(c) Debt consisting of Guaranties permitted pursuant to
Section 8.02;
(d) Debt of any Obligor to any other Obligor so long as (i)
if such Debt is secured, such Debt is evidenced by a promissory note and such
note together with such security is pledged as collateral for the Loans and
the other obligations under the Facility Documents and (ii) if such Debt is
evidenced by a promissory note or other instrument, such note or other
instrument is pledged to the Administrative Agent as collateral for the Loans
and the other obligations under the Facility Documents;
(e) accounts payable to trade creditors for goods or services
and current operating liabilities (other than for borrowed money), in each
case incurred in the ordinary course of business and paid within prescribed
time limits that are in the ordinary course of business, unless contested in
good faith and by appropriate proceedings;
(f) Permitted Mortgage Debt of any Consolidated Entity other
than a Subsidiary Co-Borrower incurred pursuant to this Section 8.01(f)
provided that the aggregate principal amount of such Debt for all
Consolidated Entities does not exceed at any time $26,000,000;
(g) Debt of any Consolidated Entity other than a Subsidiary
Co-Borrower incurred pursuant to this Section 8.01(g) secured by Purchase
Money Liens permitted by Section 8.03(k) provided that the aggregate
principal amount of such Debt for all Consolidated Entities does not exceed
at any time $20,000,000;
(h) Debt under the ADS Synthetic Lease Documents so long as
the aggregate principal amount of such Debt does not exceed $60,000,000;
(i) Debt under the Converted Synthetic Lease so long as the
aggregate principal amount of such Debt does not exceed $30,000,000;
(j) Debt of the Borrower under documentary and standby letters
of credit so long as the aggregate reimbursement obligations under such
letters of credit does not exceed at any time $15,000,000;
(k) Consolidated Subordinated Debt; and
(l) Debt of each of the Glenmark Partnerships in favor of
Century Care Management, Inc. so long as (i) the aggregate amount of such
Debt of each such Glenmark Partnership does not exceed $2,500,000 and (ii)
such Debt is evidenced by a promissory note on terms reasonably acceptable to
the Administrative Agent which shall be secured by a first priority Lien on
all of the personal Property of such Glenmark Partnership and pledged to the
Administrative Agent as collateral for the Senior Obligations.
Section 8.02. Guaranties, Etc. Create, incur, assume or suffer to
exist, or permit any of its Subsidiaries to create, incur, assume or suffer
to exist, any Guaranty, except:
(a) the Multicare Guaranty;
(b) Guaranties by endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary course of
business;
(c) Guaranties by the Borrower of Debt permitted under Section
8.01 and leases permitted under Section 8.04; and
(d) Guaranties constituting Debt so long as such Debt is
permitted under Section 8.01.
Section 8.03. Liens. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to exist,
any Lien upon or with respect to any of its Property, now owned or hereafter
acquired, except:
(a) Liens in favor of the Collateral Agent on behalf of the
Secured Parties securing the Senior Obligations;
(b) Liens for taxes or assessments or other government charges
or levies if not yet due and payable or if due and payable if they are being
contested in good faith by appropriate proceedings and for which appropriate
reserves are maintained;
(c) Liens imposed by law, such as mechanic's, materialmen's,
landlord's, warehousemen's and carrier's Liens, and other similar Liens,
securing obligations incurred in the ordinary course of business which are
not past due for more than 90 days, or which are being contested in good
faith by appropriate proceedings and for which appropriate reserves have been
established;
(d) Liens under workmen's compensation, unemployment
insurance, social security or similar legislation (other than ERISA);
(e) Liens, deposits or pledges to secure the performance of
bids, tenders, contracts (other than contracts for the payment of money),
leases (permitted under the terms of this Agreement), public or statutory
obligations, surety, stay, appeal, indemnity, performance or other similar
bonds, or other similar obligations arising in the ordinary course of
business;
(f) judgment and other similar Liens arising in connection
with court proceedings; provided that the execution or other enforcement of
such Liens is effectively stayed and the claims secured thereby are being
actively contested in good faith and by appropriate proceedings;
(g) easements, rights-of-way, restrictions and other similar
encumbrances which, in the aggregate, do not materially interfere with the
occupation, use and enjoyment by any Consolidated Entity of the Property
encumbered thereby in the normal course of its business or materially impair
the value of the Property subject thereto;
(h) Liens securing obligations of any Obligor to any other
Obligor;
(i) Liens described on Schedule IV and, to the extent such
Lien secures Debt permitted under Section 8.01(b), Liens that secure any
renewals, extensions or refinancings of such Debt, but not the extension of
such Lien to other Property; and
(j) Liens securing Permitted Mortgage Debt; provided that the
obligations secured by each such Lien are permitted by the provisions of
Section 8.01(f);
(k) Purchase Money Liens; provided that: (i) the Person owning
any Property subject to such Lien is acquired or any Property subject to such
Lien is acquired or constructed by any Consolidated Entity and the Lien on
any such Property is created within 180 days of such acquisition or
construction; (ii) the obligation secured by any Lien so created, assumed or
existing shall not exceed 100% of the lesser of cost or fair market value as
of the time of acquisition or construction of the Property covered thereby to
such Consolidated Entity acquiring or constructing the same; (iii) each such
Lien shall attach, in the case of an acquisition, only to the Property so
acquired, personal Property associated with such Property and fixed
improvements thereon and, in the case of construction, only to the Property
so constructed, personal Property associated with such Property, the land
thereunder and the fixed improvements attached thereto; and (iv) the
obligations secured by such Lien are permitted by the provisions of Section
8.01(g) and the related expenditure is permitted under Section 8.13; and
(l) Liens in any Health Care Facility, including, without
limitation, in all real Property or personal Property used or to be used in
connection with such Health Care Facility (other than any "accounts" as such
term is defined in the Uniform Commercial Code as in effect in the
jurisdiction in which such security interest is to be perfected), all
equipment and fixtures therein and thereon and all general intangibles,
including, without limitation, all Operating Agreements and Licenses related
thereto, granted in connection with the sale and simultaneous leaseback of
such Health Care Facility otherwise permitted hereunder by any Subsidiary of
the Borrower to any Person other than an Affiliate, which Liens secure the
obligations of such Subsidiary under such lease.
Section 8.04. Leases. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to exist,
any obligation as lessee for the rental or hire of any Property, except:
(a) leases (other than Capital Leases and Synthetic Leases)
which do not in the aggregate require the Consolidated Entities on a
consolidated basis to make payments (excluding taxes, insurance, maintenance
and similar expense which any Consolidated Entity is required to pay under
the terms of any lease) in any fiscal year of the Consolidated Entities in
excess of $25,000,000;
(b) leases between any Obligor and any other Obligor so long
as such lease is subordinated to the Liens of the Collateral Agent under the
Security Documents; and
(c) Capital Leases and Synthetic Leases permitted by Section
8.01, Section 8.03 and Section 8.13.
Section 8.05. Investments. Make, or permit any of its Subsidiaries to
make, any loan or advance to any Person or purchase or otherwise acquire, or
permit any of its Subsidiaries to purchase or otherwise acquire, any capital
stock, assets, obligations or other securities of, make any capital
contribution to, or otherwise invest in, or acquire any interest in, any
Person, except:
(a) cash or Cash Equivalents;
(b) Property to be used or useful in the ordinary course of
business of the Consolidated Entities;
(c) for stock, obligations or securities received in
settlement of debts (created in the ordinary course of business) owing to any
Consolidated Entity and stock, obligations or securities received in
connection with sales and leases of Property to the extent permitted under
Section 8.07(d);
(d) to or in any Obligor or in any corporation that
concurrently with such investment becomes an Obligor;
(e) in connection with an Acceptable Acquisition;
(f) Guaranties permitted by Section 8.02;
(g) Capital Expenditures permitted by Section 8.13;
(h) in connection with acquisition of the ownership interests
in ADS Palm Chelmsford, Inc., ADS Reservoir Waltham, Inc., Hingham Healthcare
Limited Partnership, The Apple Valley Limited Partnership, The Recuperative
Center Limited Partnership, Courtyard Nursing Care Center Partnership and
Charlton Nursing Care Center pursuant to the terms to the ADS Acquisition
Documents; and
(i) for other investments not listed in clauses (a) through
(h), inclusive, provided that the aggregate amount of such investments for
all Consolidated Entities does not exceed at any time $10,000,000.
Section 8.06. Dividends. Declare or pay any dividends, purchase,
redeem, retire or otherwise acquire for value any of its capital stock now or
hereafter outstanding, or make any distribution of assets to its stockholders
as such whether in cash, assets or in obligations of the Borrower, or
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, or make any other distribution by reduction of capital
or otherwise in respect of any shares of its capital stock, or make, or
permit any of its Subsidiaries to make, payments of interest on, or payments
or prepayments of principal of, or payments (or setting apart of money for a
sinking or other analogous fund) for the purchase, redemption, retirement or
other acquisition of principal or interest, on Consolidated Subordinated
Debt, except that so long as no Default or Event of Default exists or would
exist after giving effect to such payment:
(a) the Borrower may declare and deliver dividends and make
distributions payable solely in its common stock;
(b) the Borrower may purchase or otherwise acquire shares of
its capital stock by exchange for or out of the proceeds received from a
substantially concurrent issue of new shares of its capital stock;
(c) the Borrower may prepay, redeem, retire or otherwise
acquire Multicare Subordinated Notes and Multicare Subordinated Debentures by
exchange for or out of the proceeds received from a substantially concurrent
issue of new shares of its capital stock or from a substantially concurrent
incurrence of new Consolidated Subordinated Debt;
(d) the Borrower may prepay, redeem, retire or otherwise
acquire Multicare Subordinated Notes so long as for each fiscal year of the
Consolidated Entities, the aggregate face amount of Multicare Subordinated
Notes subject to acquisition for such fiscal year does not exceed (i) with
respect to the fiscal year ending on December 31, 1996, $7,500,000 and (ii)
with respect to each fiscal year ending thereafter, 25% of Consolidated Net
Income for the immediately preceding fiscal year;
(e) the Borrower may make payments of interest on the
Multicare Subordinated Notes in accordance with the terms of the Multicare
Indenture; and
(f) the Borrower may make payments of interest on the
Multicare Subordinated Debentures in accordance with the terms of the
Multicare Fiscal Agency Agreement.
Section 8.07. Sale of Assets. Sell, lease, assign, transfer or
otherwise dispose of, or permit any of its Subsidiaries to sell, lease,
assign, transfer or otherwise dispose of, any of its now owned or hereafter
acquired Property (including, without limitation, shares of stock and
indebtedness, receivables and leasehold interests); except:
(a) for inventory disposed of in the ordinary course of
business;
(b) the sale or other disposition of Property no longer used
or useful in the conduct of its business;
(c) any Obligor other than a Subsidiary Co-Borrower may sell,
lease, assign, or otherwise transfer its Property to any other Obligor;
(d) any Consolidated Entity (including, without limitation,
any Subsidiary Co-Borrower so long as the Term Note to which it is a party is
paid off in connection with any such sale or lease) may sell or lease any
Property to a Person other than an Affiliate for consideration consisting of
not less then 80% cash provided that (i) the fair market value of such
Property together with the fair market value of all other Property sold or
leased during the same fiscal year of the Consolidated Entities does not
exceed $40,000,000, (ii) such sale or lease has been approved in good faith
by the Board of Directors of such Consolidated Entity, (iii) no Default or
Event of Default exists or would exist after giving effect to such
disposition and (iv) the Borrower believes in good faith that the
Consolidated Entities will continue to be in compliance with the financial
covenants contained in Article 9 on a pro forma basis;
(e) leases of portions of the Health Care Facilities to
tenants which use such leased premises for specialty use or uses incidental
to the operation of a Health Care Facility (including, without limitation, a
pharmacy, gift shop, or physical or occupational therapy and rehabilitation);
and
(f) transfer of Property in connection with an investment
permitted under Section 8.05.
Section 8.08. Stock of Subsidiaries, Etc. Except as permitted by
Section 8.07 or Section 8.10, sell or otherwise dispose of any shares of
capital stock of any of its Subsidiaries, or permit any such Subsidiary to
issue any additional shares of its capital stock, except directors'
qualifying shares.
Section 8.09. Transactions with Affiliates. Enter, or permit any
Subsidiary to enter, into any transaction, including, without limitation, the
purchase, sale or exchange of Property or the rendering of any service, with
any Affiliate, except in the ordinary course of and pursuant to the
reasonable requirements of the Borrower's or such Subsidiary's business and
upon fair and reasonable terms no less favorable to the Borrower or such
Subsidiary than would obtain in a comparable arm's length transaction with a
Person not an Affiliate. Without limiting the generality of the foregoing,
this Section 8.09 shall not prohibit any transaction described on Schedule
VIII.
Section 8.10. Mergers, Etc. Except as permitted under Section 8.07,
merge or consolidate with, or sell, assign, lease or otherwise dispose of
(whether in one transaction or in a series of transactions) all or
substantially all of its assets (whether now owned or hereafter acquired) to,
any Person, or acquire all or substantially all of the assets or the business
of any Person (or enter into any agreement to do any of the foregoing), or
permit any of its Subsidiaries to do so, except that:
(a) any Obligor other than a Subsidiary Co-Borrower may merge
into or consolidate with or transfer assets to any other Obligor; and
(b) any Consolidated Entity may effect any Acquisition not
prohibited by Section 8.11.
Section 8.11. Acquisitions. Make, or permit any of its Subsidiaries
to make, any Acquisition other than an Acceptable Acquisition.
Section 8.12. No Activities Leading to Forfeiture. Engage in or
propose to be engaged in, or permit any of its Subsidiaries to engage in or
propose to be engaged in, the conduct of any business or activity which could
result in a Forfeiture Proceeding which could have a Material Adverse Effect.
Section 8.13. Capital Expenditures. Make or commit to make, or permit
any of its Subsidiaries to make or commit to make, any Capital Expenditure if
the aggregate amount of Consolidated Capital Expenditures incurred during any
fiscal year of the Consolidated Entities would exceed (a) during the fiscal
year ending on December 31, 1997, $70,000,000, (b) during the fiscal year
ending on December 31, 1998, $75,000,000, (c) during the fiscal year ending
on December 31, 1999, $80,000,000 or (d) during the fiscal year ending on
December 31, 2000, $85,000,000.
Section 8.14. Amendments or Waivers of Certain Documents. (a) Defease
or make, or permit any of its Subsidiaries to defease or make, any payments
the effect of which is to defease, or make any voluntary or optional payment
or prepayment on, or redemption of, any Permitted Mortgage Debt (except in
connection with dispositions of any Health Care Facility permitted under
Section 8.07 or refinancings of Permitted Mortgage Debt permitted hereunder)
or Consolidated Subordinated Debt (except as permitted under Section 8.06) in
whole or in part or (b) amend, supplement or otherwise change (or agree to
any amendment or other change of), or permit any of its Subsidiaries to
amend, supplement or otherwise change (or agree to any amendment or other
change of), the terms of any Permitted Mortgage Debt or Consolidated
Subordinated Debt, if the effect of such amendment, supplement or change is
to increase the interest rate on such Consolidated Subordinated Debt, advance
the dates upon which payments of principal or interest are due on such
Permitted Mortgage Debt or such Consolidated Subordinated Debt (including any
change that adds or modifies mandatory prepayments), change, in a manner
materially adverse to the Consolidated Entities or which confers additional
rights on the holders thereof, any event of default or covenant (or any
definition relating thereto) with respect to such Consolidated Subordinated
Debt, change the redemption or repurchase provisions with respect to such
Permitted Mortgage Debt or Consolidated Subordinated Debt in a manner
materially adverse to the Consolidated Entities or which confers additional
rights on the holders thereof, change the subordination provisions of such
Consolidated Subordinated Debt or otherwise increase the obligations of the
obligor or confer additional rights on the holders of any Permitted Mortgage
Debt or Consolidated Subordinated Debt without, in each case, obtaining the
prior written consent of the Required Banks to such amendment or change.
Section 8.15. Rights under Other Agreements. Amend, waive or
otherwise relinquish, or permit any of its Subsidiaries to amend, waive or
otherwise relinquish, any of its rights or causes of action under or arising
out of, any material provisions, if such amendment, waiver or relinquishment
could reasonably be expected to have a Material Adverse Effect, of any
Operating Agreement.
Section 8.16. Restrictions. Enter into, or suffer to exist, or permit
any of its Subsidiaries to enter into, or suffer to exist, any agreement with
any Person other than the Banks that (a) prohibits, requires the consent of
such Person for or limits the ability of (i) any Obligor to pay dividends or
make other distributions or pay Debt owed to any other Obligor, make loans or
advances to any other Obligor or transfer any of its Property which
constitute Collateral under the Security Documents to any other Obligor, (ii)
any Obligor to create, incur, assume or suffer to exist any Lien upon any of
its Property or revenues which constitute Collateral under the Security
Documents, whether now owned or hereafter acquired, or (iii) any Obligor to
enter into any modification or supplement of the Facility Documents; or (b)
contains financial covenants which, taken as a whole, are more restrictive on
the Consolidated Entities than the financial covenants contained in Article
9. Notwithstanding Section 8.16(a)(ii) and (a)(iii), the Subsidiaries of the
Borrower may enter into or suffer to exist (w) encumbrances permitted under
Section 8.03 or restrictions binding upon any Person at the time such Person
becomes a Subsidiary so long as such encumbrances or restrictions were not
incurred or assumed in contemplation of such Person becoming a Subsidiary,
(x) restrictions contained in security agreements or mortgages permitted
under this Agreement, (y) customary anti-assignment and encumbrance clauses
in contracts or leases prohibiting the assignment of such leases or contracts
or (z) encumbrances or restrictions in effect on the date of this Agreement
and renewals thereof.
ARTICLE 9. FINANCIAL COVENANTS.
So long as any Note shall remain unpaid, any Letter of Credit shall
remain outstanding or any Bank shall have any Commitment under this Agreement
and as determined as of the end of each fiscal quarter of the Consolidated
Entities:
Section 9.01. Fixed Charge Coverage Ratio. The Borrower shall
maintain at all times a Fixed Charge Coverage Ratio of not less than 2.00 to
1.00.
Section 9.02. Modified Senior Leverage Ratio. The Borrower shall
maintain at all times a Modified Senior Leverage Ratio of not greater than
(a) if such time is before December 31, 1997, 4.00 to 1.00, (b) if such time
is on or after December 31, 1997 and before December 31, 1998, 3.75 to 1.00
or (c) if such time is on or after December 31, 1998, 3.50 to 1.00.
Section 9.03. Modified Leverage Ratio. The Borrower shall maintain at
all times a Modified Leverage Ratio of not greater than (a) if such time is
before December 31, 1997, 5.00 to 1.00, (b) if such time is on or after
December 31, 1997 and before December 31,1998, 4.75 to 1.00 or (c) if such
time is on or after December 31, 1998, 4.50 to 1.00.
Section 9.04. Interest Coverage Ratio. The Borrower shall maintain at
all times an Interest Coverage Ratio of not less than 3.00 to 1.00.
Section 9.05. Minimum Net Worth. The Borrower shall maintain at all
times Consolidated Net Worth of not less than the sum of (a) $185,000,000
plus (b) the aggregate sum of the Fiscal Quarter Net Worth Increase Amounts
calculated for each fiscal quarter of the Consolidated Entities ending after
December 31, 1996.
ARTICLE 10. EVENTS OF DEFAULT.
Section 10.01. Events of Default. Any of the following events shall
be an "Event of Default":
(a) the Borrower shall: (i) fail to pay the principal of any
Note or any Reimbursement Obligation on or before the date when due and
payable; or (ii) fail to pay interest on any Note or any fee or other amount
due hereunder on or before five (5) days after the date when due and payable;
(b) any representation or warranty made or deemed made by any
Consolidated Entity in this Agreement or in any other Facility Document or
which is contained in any certificate, document, opinion, financial or other
statement furnished at any time under or in connection with any Facility
Document shall prove to have been incorrect in any material respect on or as
of the date made;
(c) (i) the Borrower shall fail to perform or observe any
term, covenant or agreement contained in Section 2.03 or 3.02 or Articles 8
or 9; or (ii) any Obligor shall fail to perform or observe any term, covenant
or agreement on its part to be performed or observed (other than the
obligations specifically referred to elsewhere in this Section 10.01) in any
Facility Document to which it is a party and such failure shall continue for
30 consecutive days;
(d) any Consolidated Entity shall: (i) fail to pay any Debt
and/or obligations under any lease aggregating in excess of 5% of
Consolidated Net Worth (other than the payment obligations described in (a)
above), or any interest or premium thereon, when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise); (ii) fail
to perform or observe any term, covenant or condition on its part to be
performed or observed under any agreement or instrument relating to any such
Debt or any such lease, when required to be performed or observed, if the
effect of such failure to perform or observe is to accelerate, or to permit
the acceleration of, after the giving of notice or passage of time, or both,
the maturity of such Debt or of the obligations under such lease; or any such
Debt or any such obligations shall be declared to be due and payable, or
required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof; or (iii) a "Default" or
"Event of Default" shall have occurred under and as defined in the ADS
Synthetic Lease Documents;
(e) any Consolidated Entity: (i) shall generally not, or be
unable to, or shall admit in writing its inability to, pay its debts as such
debts become due; or (ii) shall make an assignment for the benefit of
creditors, petition or apply to any tribunal for the appointment of a
custodian, receiver or trustee for it or a substantial part of its assets; or
(iii) shall commence any proceeding under any bankruptcy, reorganization,
arrangement, readjustment of debt, dissolution or liquidation law or statute
of any jurisdiction, whether now or hereafter in effect; or (iv) shall have
had any such petition or application filed or any such proceeding shall have
been commenced, against it, in which an adjudication or appointment is made
or order for relief is entered, or which petition, application or proceeding
remains undismissed for a period of 30 days or more; or shall be the subject
of any proceeding under which its assets may be subject to seizure,
forfeiture or divestiture (other than a proceeding in respect of a Lien
permitted under Section 8.03(b)); or (v) by any act or omission shall
indicate its consent to, approval of or acquiescence in any such petition,
application or proceeding or order for relief or the appointment of a
custodian, receiver or trustee for all or any substantial part of its
Property; or (vi) shall suffer any such custodianship, receivership or
trusteeship to continue undischarged for a period of 30 days or more;
(f) one or more judgments, decrees or orders for the payment
of money in excess of 5% of Consolidated Net Worth in the aggregate shall be
rendered against any Consolidated Entity and such judgments, decrees or
orders shall continue unsatisfied and in effect for a period of 60
consecutive days without being vacated, discharged, satisfied or stayed or
bonded pending appeal;
(g) any event or condition shall occur or exist with respect
to any Plan or Multiemployer Plan concerning which any Consolidated Entity is
under an obligation to furnish a report to the Bank in accordance with
Section 7.08(g) hereof and as a result of such event or condition, together
with all other such events or conditions, such Consolidated Entity or any
ERISA Affiliate has incurred or in the opinion of the Banks is reasonably
likely to incur a liability to a Plan, a Multiemployer Plan, the PBGC, or a
Section 4042 Trustee (or any combination of the foregoing) which is material
in relation to the financial position of the Consolidated Entities; provided,
however, that any such amount shall not be deemed to be material so long as
all such amounts do not exceed $500,000 in the aggregate during the term of
this Agreement;
(h) the Unfunded Benefit Liabilities of one or more Plans have
increased after the date of this Agreement in an amount which is material (as
specified in Section 7.08(g)(viii) hereof);
(i) (i) any Person (other than Xxxxxx Xxxxxx or Xxxxxxx
Xxxxxx) or two or more Persons acting in concert shall have acquired
beneficial ownership (within the meaning of Rules 13d-3 of the Securities and
Exchange Commission under the Securities Exchange Act of 1934) of 25% or more
of the outstanding shares of voting stock of the Borrower; (ii) Xxxxxx Xxxxxx
or Xxxxxxx Xxxxxx shall have ceased to continue to serve as an executive
officer and director of the Borrower and shall have ceased to continue in the
operational and managerial capacities in which he now serves or in enhanced
operational or managerial capacities with the Borrower; provided the Borrower
shall have 180 days to replace Xxxxxx Xxxxxx or Xxxxxxx Xxxxxx with an
appropriate executive officer and director who shall be satisfactory in all
respects to the Required Banks or otherwise satisfy the Required Banks with
respect to the continuity of management; or (iii) during any period of 12
consecutive months, commencing before or after the date of this Agreement,
individuals who at the beginning of such 12-month period were directors (or
persons nominated by such individuals) of the Borrower cease for any reason
to constitute a majority of the board of directors of the Borrower;
(j) any Forfeiture Proceeding shall have been commenced or any
Consolidated Entity shall have given any Bank written notice of the
commencement of any Forfeiture Proceeding as provided in Section 7.08(k)
which, in either case, could reasonably be expected to have a Material
Adverse Effect;
(k) (i) any of the Security Documents shall at any time after
its execution and delivery and for any reason cease to create a valid and
perfected first priority security interest in and to the Property purported
to be subject to such Agreement; or (ii) any Facility Document shall cease to
be in full force and effect or shall be declared null and void, or the
validity or enforceability thereof shall be contested by any Obligor or any
Obligor shall deny it has any further liability or obligation under the
Security Documents or any Obligor shall fail to perform any of its
obligations thereunder;
(l) any of the Fee Owners shall at any time (i) own any asset
except for a Health Care Facility; (ii) create, incur, assume or have
outstanding any Debt or other liabilities or obligations except for (A) Debt
permitted by Section 8.01, (B) liabilities as lessor arising under leases of
such Health Care Facility to another Obligor plus related liabilities that
arise solely from the interest of such Fee Owner in real Property and (C)
Permitted Mortgage Debt; (iii) enter into any transaction of merger,
consolidation or amalgamation other than with or into another Obligor, or
liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution) except as otherwise permitted under this Agreement; or (iv)
engage in any other business other than the holding of title to the Health
Care Facilities; or
(m) Management Fees during any fiscal year of the Consolidated
Entities shall exceed 40% of Consolidated EBITDA for such year.
Section 10.02. Remedies. If any Event of Default shall occur and be
continuing, the Administrative Agent shall, upon request of the Required
Banks, by notice to the Borrower (a) declare the Commitments to be
terminated, whereupon the same shall forthwith terminate and so shall the
obligations of the Issuing Bank to issue any Letters of Credit, (b) declare
the outstanding principal of the Notes, all interest thereon and all other
amounts payable under this Agreement and the Notes to be forthwith due and
payable, whereupon the Notes, all such interest and all such amounts shall
become and be forthwith due and payable, without presentment, demand, protest
or further notice of any kind, all of which are hereby expressly waived by
the Borrower and the Subsidiary Co-Borrowers and (c) direct the Borrower to
pay to the Administrative Agent an amount, to be held as cash security in the
cash collateral account held by the Administrative Agent under Section 3.08
equal to the Letter of Credit Obligations then outstanding; provided that, in
the case of an Event of Default referred to in Section 10.01(e) or Section
10.01(i)(i) above, the Commitments shall be immediately terminated, and the
Notes, all interest thereon and all other amounts payable under this
Agreement shall be immediately due and payable without notice, presentment,
demand, protest or other formalities of any kind, all of which are hereby
expressly waived by the Borrower and the Subsidiary Co-Borrowers. If an
Event of Default shall occur and be continuing, the Administrative Agent and
each Bank may exercise all of the rights and remedies conferred in this
Agreement and in each of the other Facility Documents; it being expressly
understood that no such remedy is intended to be exclusive of any other
remedy or remedies; but each and every remedy shall be cumulative and shall
be in addition to every other remedy given in this Agreement or the other
Facility Documents or now or hereafter existing at law or in equity or by
statute, and may be exercised from time to time as often as may be deemed
expedient by the Administrative Agent and such Bank.
ARTICLE 11. THE ADMINISTRATIVE AGENT.
Section 11.01. Appointment, Powers and Immunities of Administrative
Agent. Each Bank hereby irrevocably (but subject to removal by the Required
Banks pursuant to Section 11.09) appoints and authorizes the Administrative
Agent to act as its Administrative Agent hereunder and under any other
Facility Document with such powers as are specifically delegated to the
Administrative Agent by the terms of this Agreement and any other Facility
Document, together with such other powers as are reasonably incidental
thereto. The Administrative Agent shall have no duties or responsibilities
except those expressly set forth in this Agreement and any other Facility
Document, and shall not by reason of this Agreement be a trustee for any
Bank. The Administrative Agent shall not be responsible to the Banks for any
recitals, statements, representations or warranties made by any Consolidated
Entity or any officer or official of such Consolidated Entity or any other
Person contained in this Agreement or any other Facility Document, or in any
certificate or other document or instrument referred to or provided for in,
or received by any of them under, this Agreement or any other Facility
Document, or for the value, legality, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Facility
Document or any other document or instrument referred to or provided for
herein or therein, for the perfection or priority of any collateral security
for the Senior Obligations or for any failure by any Obligor to perform any
of its obligations hereunder or thereunder. The Administrative Agent may
employ agents and attorneys-in-fact and shall not be responsible, except as
to money or securities received by it or its authorized agents, for the
negligence or misconduct of any such agents or attorneys-in-fact selected by
it with reasonable care. Neither the Administrative Agent nor any of its
directors, officers, employees or agents shall be liable or responsible for
any action taken or omitted to be taken by it or them hereunder or under any
other Facility Document or in connection herewith or therewith, except for
its or their own gross negligence or willful misconduct.
Section 11.02. Reliance by Administrative Agent. The Administrative
Agent shall be entitled to rely upon any certification, notice or other
communication (including any thereof by telephone, telex, telegram or cable)
believed by it to be genuine and correct and to have been signed or sent by
or on behalf of the proper Person or Persons, and upon advice and statements
of legal counsel, independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent may deem and treat each Bank
as the holder of the Senior Obligations attributable to it for all purposes
hereof unless and until a notice of the assignment or transfer thereof
satisfactory to the Administrative Agent signed by such Bank shall have been
furnished to the Administrative Agent but the Administrative Agent shall not
be required to deal with any Person who has acquired a participation in any
Senior Obligation from a Bank. As to any matters not expressly provided for
by this Agreement or any other Facility Document, the Administrative Agent
shall in all cases be fully protected in acting, or in refraining from
acting, hereunder in accordance with instructions signed by the Required
Banks, and such instructions of the Required Banks and any action taken or
failure to act pursuant thereto shall be binding on all of the Banks and any
other holder of all or any portion of any Senior Obligation.
Section 11.03. Defaults. The Administrative Agent shall not be deemed
to have knowledge of the occurrence of a Default or Event of Default (other
than the non-payment of principal of or interest on the Loans to the extent
the same is required to be paid to the Administrative Agent for the account
of the Banks) unless the Administrative Agent has received notice from a Bank
or any Obligor specifying such Default or Event of Default and stating that
such notice is a "Notice of Default." In the event that the Administrative
Agent receives such a notice of the occurrence of a Default or Event of
Default, the Administrative Agent shall give prompt notice thereof to the
Banks (and shall give each Bank prompt notice of each such non-payment). The
Administrative Agent shall (subject to Section 11.08) take such action with
respect to such Default or Event of Default which is continuing as shall be
directed by the Required Banks; provided that, unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interest of the Banks; and provided further that the Administrative Agent
shall not be required to take any such action which it determines to be
contrary to law.
Section 11.04. Rights of Administrative Agent as a Bank. With respect
to its Commitment and the Senior Obligations held by it, NationsBank, N.A. in
its capacity as a Bank hereunder shall have the same rights and powers
hereunder as any other Bank and may exercise the same as though it were not
acting as the Administrative Agent, and the term "Bank" or "Banks" shall,
unless the context otherwise indicates, include NationsBank, N.A. in its
capacity as a Bank. NationsBank, N.A. and its affiliates may (without having
to account therefor to any Bank) accept deposits from, lend money to (on a
secured or unsecured basis), and generally engage in any kind of banking,
trust or other business with, any Consolidated Entity (and any of its
affiliates) as if it were not acting as the Administrative Agent, and
NationsBank, N.A. may accept fees and other consideration from any
Consolidated Entity for services in connection with this Agreement or
otherwise without having to account for the same to the Banks. Although
NationsBank, N.A. and its affiliates may in the course of such relationships
and relationships with other Persons acquire information about any
Consolidated Entity, its Affiliates and such other Persons, the
Administrative Agent shall have no duty to disclose such information to the
Banks.
Section 11.05. Indemnification of Administrative Agent. The Banks
agree to indemnify the Administrative Agent (to the extent not reimbursed
under Section 12.03 or under the applicable provisions of any other Facility
Document, but without limiting the obligations of the Primary Obligors under
Section 12.03 or such provisions), ratably in accordance with the aggregate
unpaid amount of the Senior Obligations held by the Banks (without giving
effect to any participations, in all or any portion of such Senior
Obligations, sold by them to any other Person) (or, if no Senior Obligations
are at the time outstanding, ratably in accordance with their respective
Commitments), for any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind and nature whatsoever which may be imposed on, incurred by or asserted
against the Administrative Agent in any way relating to or arising out of
this Agreement, any other Facility Document or any other documents
contemplated by or referred to herein or the transactions contemplated hereby
or thereby (including, without limitation, the costs and expenses which the
Primary Obligors are obligated to pay under Section 12.03 or under the
applicable provisions of any other Facility Document but excluding, unless a
Default or Event of Default has occurred, normal administrative costs and
expenses incident to the performance of its agency duties hereunder) or the
enforcement of any of the terms hereof or thereof or of any such other
documents or instruments; provided that no Bank shall be liable for any of
the foregoing to the extent they arise from the gross negligence or willful
misconduct of the party to be indemnified.
Section 11.06. Documents. The Administrative Agent will forward to
each Bank, promptly after the Administrative Agent's receipt thereof, a copy
of each report, notice or other document required by this Agreement or any
other Facility Document to be delivered to the Administrative Agent for such
Bank.
Section 11.07. Non-Reliance on Administrative Agent and Other Banks.
Each Bank agrees that it has, independently and without reliance on the
Administrative Agent or any other Bank, and based on such documents and
information as it has deemed appropriate, made its own credit analysis of the
Consolidated Entities and decision to enter into this Agreement and that it
will, independently and without reliance upon the Administrative Agent or any
other Bank, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under this Agreement or any other Facility
Document. The Administrative Agent shall not be required to keep itself
informed as to the performance or observance by the Consolidated Entities of
this Agreement or any other Facility Document or any other document referred
to or provided for herein or therein or to inspect the properties or books of
any Consolidated Entity. Except for notices, reports and other documents and
information expressly required to be furnished to the Banks by the
Administrative Agent hereunder, the Administrative Agent shall not have any
duty or responsibility to provide any Bank with any credit or other
information concerning the affairs, financial condition or business of any
Consolidated Entity (or any of their Affiliates) which may come into the
possession of the Administrative Agent or any of its affiliates. The
Administrative Agent shall not be required to file this Agreement, any other
Facility Document or any document or instrument referred to herein or
therein, for record or give notice of this Agreement, any other Facility
Document or any document or instrument referred to herein or therein, to
anyone.
Section 11.08. Failure of Administrative Agent to Act. Except for
action expressly required of the Administrative Agent hereunder, the
Administrative Agent shall in all cases be fully justified in failing or
refusing to act hereunder unless it shall have received further assurances
(which may include cash collateral) of the indemnification obligations of the
Banks under Section 11.05 in respect of any and all liability and expense
which may be incurred by it by reason of taking or continuing to take any
such action.
Section 11.09. Resignation or Removal of Administrative Agent.
Subject to the appointment and acceptance of a successor Administrative Agent
as provided below, the Administrative Agent may resign at any time by giving
written notice thereof to the Banks and the Borrower, and the Administrative
Agent may be removed at any time with or without cause by the Required Banks;
provided that the Borrower and the other Banks shall be promptly notified
thereof. Upon any such resignation or removal, the Required Banks shall have
the right to appoint a successor Administrative Agent. If no successor
Administrative Agent shall have been so appointed by the Required Banks and
shall have accepted such appointment within 30 days after the retiring
Administrative Agent's giving of notice of resignation or the Required Banks'
removal of the retiring Administrative Agent, then the retiring
Administrative Agent may, on behalf of the Banks, appoint a successor
Administrative Agent, which shall be a bank which has an office in the State
of New Jersey or the State of New York. The Required Banks or the retiring
Administrative Agent, as the case may be, shall upon the appointment of a
successor Administrative Agent promptly so notify the Borrower and the other
Banks. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Administrative Agent, and the
retiring Administrative Agent shall be discharged from its duties and
obligations hereunder. After any retiring Administrative Agent's resignation
or removal hereunder as Administrative Agent, the provisions of this Article
11 shall continue in effect for its benefit in respect of any actions taken
or omitted to be taken by it while it was acting as the Administrative Agent.
Section 11.10. Amendments Concerning Agency Function. The
Administrative Agent shall not be bound by any waiver, amendment, supplement
or modification of this Agreement or any other Facility Document which
affects its duties hereunder or thereunder unless it shall have given its
prior consent thereto.
Section 11.11. Liability of Administrative Agent. The Administrative
Agent shall not have any liabilities or responsibilities to any Obligor on
account of the failure of any Bank to perform its obligations hereunder or to
any Bank on account of the failure of any Obligor to perform its obligations
hereunder or under any other Facility Document.
Section 11.12. Transfer of Agency Function. Without the consent of
the Obligor or any Bank, the Administrative Agent may at any time or from
time to time transfer its functions as Administrative Agent hereunder to any
of its offices in the United States wherever located, provided that the
Administrative Agent shall promptly notify the Borrower and the Banks
thereof.
Section 11.13. Non-Receipt of Funds by the Administrative Agent.
Unless the Administrative Agent shall have been notified by a Bank, the
Borrower or any Subsidiary Co-Borrower (any as appropriate being the "Payor")
prior to (or, if the Payor is a Bank making a Variable Rate Loan, on) the
date on which such Bank is to make payment hereunder to the Administrative
Agent of the proceeds of a Loan or the Borrower or any Subsidiary Borrower is
to make payment to the Administrative Agent, as the case may be (either such
payment being a "Required Payment"), which notice shall be effective upon
receipt, that the Payor does not intend to make the Required Payment to the
Administrative Agent, the Administrative Agent may assume that the Required
Payment has been made and may, in reliance upon such assumption (but shall
not be required to), make the amount thereof available to the intended
recipient on such date and, if the Payor has not in fact made the Required
Payment to the Administrative Agent, the recipient of such payment (and, if
such recipient is the Borrower or any Subsidiary Co-Borrower and the Payor
Bank fails to pay the amount thereof to the Administrative Agent forthwith
upon demand, the Borrower or such Subsidiary Co-Borrower) shall, on demand,
repay to the Administrative Agent the amount made available to it together
with interest thereon for the period from the date such amount was so made
available by the Administrative Agent until the date the Administrative Agent
recovers such amount at a rate per annum equal to the average daily Federal
Funds Rate for such period.
Section 11.14. Withholding Taxes. Each Bank represents that as of the
Closing Date it is entitled to receive any payments to be made to it
hereunder without the withholding of any tax and will furnish to the
Administrative Agent such forms, certifications, statements and other
documents as the Administrative Agent may request from time to time to
evidence such Bank's exemption from the withholding of any tax imposed by any
jurisdiction or to enable the Administrative Agent to comply with any
applicable laws or regulations relating thereto. Without limiting the effect
of the foregoing, if any Bank is not created or organized under the laws of
the United States of America or any state thereof, in the event that the
payment of interest by the Borrower is treated for U.S. income tax purposes
as derived in whole or in part from sources from within the U.S., such Bank
will furnish to the Administrative Agent Form 4224 or Form 1001 of the
Internal Revenue Service, or such other forms, certifications, statements or
documents, duly executed and completed by such Bank as evidence of such
Bank's exemption from the withholding of U.S. tax with respect thereto. The
Administrative Agent shall not be obligated to make any payments hereunder to
such Bank in respect of any Senior Obligation or such Bank's Commitment until
such Bank shall have furnished to the Administrative Agent the requested
form, certification, statement or document. Each Primary Obligor agrees to
pay to any such Bank such additional amounts as are necessary in order that
the net payment of any amount due to such Bank in respect of any U.S. tax
imposed with respect to such payment will not be less than the amount stated
herein to be then due and payable.
Section 11.15. Several Obligations and Rights of Banks. The failure
of any Bank to make any Loan to be made by it on the date specified therefor
shall not relieve any other Bank of its obligation to make its Loan on such
date, but no Bank shall be responsible for the failure of any other Bank to
make a Loan to be made by such other Bank. The amounts payable at any time
hereunder to each Bank shall be a separate and independent debt, and each
Bank shall be entitled to protect and enforce its rights arising out of this
Agreement, and it shall not be necessary for any other Bank to be joined as
an additional party in any proceeding for such purpose.
Section 11.16. Pro Rata Treatment of Loans, Etc. Except to the extent
otherwise provided: (a) each borrowing under Section 2.04 shall be made from
the Banks, each reduction or termination of the amount of the Commitments
under Section 2.07 shall be applied to the Commitments of the Banks (except
as otherwise provided under Section 2.14), and each payment of commitment fee
accruing under Section 2.11 shall be made for the account of the Banks, pro
rata according to the amounts of their respective unused Commitments; (b)
each conversion under Section 2.05 of Loans of a particular type (but not
conversions provided for by Section 4.04), shall be made pro rata among the
Banks holding Loans of such type according to the respective principal
amounts of such Loans by such Banks; (c) each prepayment and payment of
principal of or interest on Loans of a particular type, particular class and
a particular Interest Period shall be made to the Administrative Agent for
the account of the Banks holding Loans of such type and Interest Period pro
rata in accordance with the respective unpaid principal amounts of such Loans
of such Interest Period held by such Banks; and (d) each prepayment and
payment of fees under Section 3.09(a) and Letter of Credit Obligations shall
be made pro rata in accordance with the pro rata share of the Banks in the
Letter of Credit Obligations held by each of them.
Section 11.17. Sharing of Payments Among Banks. If a Bank shall
obtain payment of any principal of or interest on any Senior Obligation made
by it through the exercise of any right of setoff, banker's lien,
counterclaim, or by any other means, it shall promptly purchase from the
other Banks participations in (or, if and to the extent specified by such
Bank, direct interests in) the Senior Obligations made by the other Banks in
such amounts, and make such other adjustments from time to time as shall be
equitable to the end that all the Banks shall share the benefit of such
payment (net of any expenses which may be incurred by such Bank in obtaining
or preserving such benefit) pro rata in accordance with the unpaid amount of
the Senior Obligations held by each of them. To such end the Banks shall
make appropriate adjustments among themselves (by the resale of
participations sold or otherwise) if such payment is rescinded or must
otherwise be restored. The Primary Obligors agree that any Bank so
purchasing a participation (or direct interest) in the Senior Obligations
held by other Banks may exercise all rights of setoff, banker's lien,
counterclaim or similar rights with respect to such participation (or direct
interest). Nothing contained herein shall require any Bank to exercise any
such right or shall affect the right of any Bank to exercise, and retain the
benefits of exercising, any such right with respect to any other indebtedness
of any Obligor.
Section 11.18. Co-Agents. Each of the Borrower, the Administrative
Agent and the Banks agree that each of Summit Bank, The Bank of Montreal,
Credit Lyonnais New York Branch, CoreStates Bank, N.A. and PNC Bank, National
Association are appointed as "co-agents" hereunder. None of Summit Bank, The
Bank of Montreal, Credit Lyonnais New York Branch, CoreStates Bank, N.A. and
PNC Bank, National Association, as a "co-agent", shall have any right, power,
obligation, liability, responsibility or duty hereunder or under any other
Facility Document other than those applicable to all Banks. Each Bank
acknowledges that it has not relied, and will not rely, on any of the Banks
so identified as co-agents in taking or not taking action hereunder or under
the other Facility Documents.
ARTICLE 12. MISCELLANEOUS.
Section 12.01. Amendments and Waivers. Except as otherwise expressly
provided in this Agreement, any provision of this Agreement may be amended or
modified only by an instrument in writing signed by the Borrower (and if such
amendment or waiver affects the Term Note to which it is a party, the
affected Subsidiary Co-Borrowers), the Administrative Agent and the Required
Secured Parties, or by the Borrower (and if such amendment or waiver affects
the Term Note to which it is a party, the affected Subsidiary Co-Borrowers)
and the Administrative Agent acting with the consent of the Required Secured
Parties and any provision of this Agreement may be waived by the Required
Secured Parties or by the Administrative Agent acting with the consent of the
Required Secured Parties; provided that no amendment, modification or waiver
shall, unless by an instrument signed by all of the Banks or by the
Administrative Agent acting with the consent of all of the Banks:
(a) increase or extend the term, or extend the time or waive any requirement
for the reduction or termination, of the Commitments (provided that the Banks
acknowledge that Revolving Credit Commitments may be converted into Converted
Synthetic Lease Commitments in accordance with Section 2.14), (b) extend the
date fixed for the payment of principal of or interest on any Loan, any
Letter of Credit Obligation or any fee payable hereunder, (c) reduce the
amount of any payment of principal thereof or the rate at which interest is
payable thereon or any fee payable hereunder, (d) reduce, modify, amend or
waive fees or indemnities, including amounts payable pursuant to Section
2.11, Section 3.09, Article 4 or Section 12.03, (e) alter the terms of this
Section 12.01, (f) amend the definition of the term "Required Banks", the
term "Required Secured Parties" or the term "Senior Obligations" or amend,
waive or modify any provision of any Senior Obligation Document requiring
action by the "Required Banks" or the "Required Secured Parties", (g) waive
any of the conditions precedent set forth in Section 5.01 or, only with
respect to Defaults or Events of Default arising under Section 10.01(a) or
Section 10.01(e), Section 5.02, (h) discharge any Subsidiary Guarantor from
the Multicare Guaranty or release any Primary Obligor from its obligations
hereunder (except for releases otherwise required under the Intercreditor
Agreement), (i) consent to the assignment or transfer by any Obligation Party
of its rights or obligations hereunder or under any Facility Document or
(j) release all or any part of the "Collateral" under and as defined in each
of the Security Documents (except for releases otherwise required under the
Intercreditor Agreement) and provided, further, that any amendment of Article
11 hereof or any amendment which increases the obligations of the
Administrative Agent hereunder shall require the consent of the
Administrative Agent. No failure on the part of the Administrative Agent or
any Bank to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof or preclude any other or further exercise thereof
or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
Section 12.02. Usury. Anything herein to the contrary
notwithstanding, the obligations of the Borrower and the Subsidiary Co-Borrowers
under this Agreement, the Notes and the other Facility Documents
shall be subject to the limitation that payments of interest shall not be
required to the extent that receipt thereof would be contrary to provisions
of law applicable to a Bank limiting rates of interest which may be charged
or collected by such Bank.
Section 12.03. Expenses. The Borrower (and, insofar it is responsible
for such expenses, each Subsidiary Co-Borrower) shall reimburse the
Administrative Agent and the Banks on demand for all reasonable costs,
expenses, and charges (including, without limitation, fees and charges of
external legal counsel) incurred by the Administrative Agent in connection
with the preparation and the performance, or by the Administrative Agent or
any Bank in connection with the enforcement of this Agreement or the other
Facility Documents. The Borrower (and, insofar it is responsible for such
expense, each Subsidiary Co-Borrower) agrees to indemnify the Administrative
Agent and each Bank and their respective directors, officers, employees,
affiliates and agents from, and hold each of them harmless against, any and
all losses, liabilities, claims, damages or expenses incurred by any of them
arising out of or by reason of any investigation or litigation or other
proceedings (including any threatened investigation or litigation or other
proceedings) relating to or arising out of this Agreement or the other
Facility Documents or to any actual or proposed use by the Borrower and the
Subsidiary Co-Borrowers of the proceeds of the Loans or the Letters of
Credit, including without limitation, the reasonable fees and disbursements
of counsel incurred in connection with any such investigation or litigation
or other proceedings (but excluding any such losses, liabilities, claims,
damages or expenses incurred by reason of the gross negligence or wilful
misconduct of the Person to be indemnified).
Section 12.04. Survival. The obligations of the Primary Obligors
under Sections 4.01, 4.05 and 12.03 shall survive the repayment of the Senior
Obligations and the termination of the Commitments and the Letters of Credit.
Section 12.05. Assignment; Participations.
(a) This Agreement shall be binding upon, and shall inure to
the benefit of, the Borrower, the Subsidiary Co-Borrowers, the Administrative
Agent, the Banks and their respective successors and assigns, except that the
Primary Obligors may not assign or transfer their rights or obligations
hereunder. Each Bank may assign, or sell participations in, all or any part
of any Senior Obligation to another bank or other entity provided that any
assignment or participation by any Bank of its rights and obligations in
respect of the Letters of Credit shall require the prior consent of the
Issuing Bank, such consent not to be unreasonably withheld, in which event
(i) in the case of an assignment, upon notice thereof by the Bank to the
Borrower with a copy to the Administrative Agent, the assignee shall have, to
the extent of such assignment (unless otherwise provided therein), the same
rights, benefits and obligations as it would have if it were a Bank
hereunder; and (ii) in the case of a participation, the participant shall
have no rights under the Facility Documents and all amounts payable by the
Borrower and the Subsidiary Co-Borrowers under Article 4 shall be determined
as if such Bank had not sold such participation. The agreement executed by
such Bank in favor of the participant shall not give the participant the
right to require such Bank to take or omit to take any action hereunder
except action directly relating to (i) the extension of a payment date with
respect to any portion of the principal of or interest on any amount
outstanding hereunder allocated to such participant, (ii) the reduction of
the principal amount outstanding hereunder or (iii) the reduction of the rate
of interest payable on such amount or any amount of fees payable hereunder to
a rate or amount, as the case may be, below that which the participant is
entitled to receive under its agreement with such Bank. Such Bank may
furnish any information concerning the Consolidated Entities in the
possession of such Bank from time to time to assignees and participants
(including prospective assignees and participants); provided that such Bank
shall require any such prospective assignee or such participant (prospective
or otherwise) to agree in writing to maintain the confidentiality of such
information. In connection with any assignment pursuant to this paragraph
(a), the assigning Bank shall pay the Administrative Agent an administrative
fee for processing such assignment in the amount of $3,500.
(b) In addition to the assignments and participations
permitted under paragraph (a) above, any Bank may assign and pledge all or
any portion of the Senior Obligations held by it to (i) any affiliate of such
Bank or (ii) any Federal Reserve Bank as collateral security pursuant to
Regulation A of the Board of Governors of the Federal Reserve System and any
Operating Circular issued by such Federal Reserve Bank. No such assignment
shall release the assigning Bank from its obligations hereunder.
Section 12.06. Notices. Unless the party to be notified otherwise
notifies the other party in writing as provided in this Section, and except
as otherwise provided in this Agreement, notices shall be given to the
Administrative Agent by telephone, confirmed by telex, telecopy or other
writing, and to the Banks and to the Primary Obligor by ordinary mail or
telecopier addressed to such party at its address on the signature page of
this Agreement. Notices shall be effective: (a) if given by mail, 72 hours
after deposit in the mails with first class postage prepaid, addressed as
aforesaid; and (b) if given by telecopier, when the telecopy is transmitted
to the telecopier number as aforesaid; provided that notices to the
Administrative Agent and the Banks shall be effective upon receipt.
Section 12.07. Setoff. Each Primary Obligor agrees that, in addition
to (and without limitation of) any right of setoff, banker's lien or
counterclaim a Bank may otherwise have, each Bank shall be entitled, at its
option, to offset balances (general or special, time or demand, provisional
or final) held by it for the account of such Primary Obligor at any of such
Bank's offices, in Dollars or in any other currency, against any amount
payable by such Primary Obligor to such Bank under this Agreement, such
Bank's Note, any Letter of Credit or any other Facility Document which is not
paid when due (regardless of whether such balances are then due to such
Primary Obligor), in which case it shall promptly notify such Primary Obligor
and the Administrative Agent thereof; provided that such Bank's failure to
give such notice shall not affect the validity thereof. Payments by the
Primary Obligors hereunder shall be made without setoff or counterclaim.
Section 12.08. JURISDICTION; IMMUNITIES. (a) EACH OF THE PRIMARY
OBLIGORS, THE ADMINISTRATIVE AGENT AND THE BANKS HEREBY IRREVOCABLY SUBMITS
TO THE JURISDICTION OF ANY NEW YORK STATE OR UNITED STATES FEDERAL COURT
SITTING IN NEW YORK COUNTY OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT ANY NOTE, ANY LETTER OF CREDIT OR ANY OTHER
FACILITY DOCUMENT, AND EACH OF THE PRIMARY OBLIGORS, THE ADMINISTRATIVE AGENT
AND THE BANKS HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR
FEDERAL COURT. EACH OF THE PRIMARY OBLIGORS, THE ADMINISTRATIVE AGENT AND
THE BANKS IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY
SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES OF SUCH PROCESS TO SUCH
PERSON AT ITS ADDRESS SPECIFIED IN SECTION 12.06. EACH OF THE PRIMARY
OBLIGORS, THE ADMINISTRATIVE AGENT AND THE BANKS AGREES THAT A FINAL JUDGMENT
IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN
OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED
BY LAW. EACH OF THE PRIMARY OBLIGORS FURTHER AGREES THAT TO THE EXTENT AN
ACTION OR PROCEEDING BROUGHT AGAINST THE ADMINISTRATIVE AGENT OR ANY BANK MAY
BE BROUGHT IN NEW YORK STATE OR UNITED STATES FEDERAL COURT SITTING IN NEW
YORK COUNTY, THEN SUCH ACTION OR PROCEEDING SHALL BE BROUGHT ONLY IN NEW YORK
STATE OR UNITED STATES FEDERAL COURT SITTING IN NEW YORK COUNTY. EACH OF THE
PRIMARY OBLIGORS, THE ADMINISTRATIVE AGENT AND THE BANKS FURTHER WAIVES ANY
OBJECTION TO VENUE IN SUCH STATE AND ANY OBJECTION TO AN ACTION OR PROCEEDING
IN SUCH STATE ON THE BASIS OF FORUM NON CONVENIENS. EACH OF THE PRIMARY
OBLIGORS, THE ADMINISTRATIVE AGENT AND THE BANKS WAIVES ANY RIGHT IT MAY HAVE
TO JURY TRIAL.
(b) Nothing in this Section 12.08 shall affect the right of
the Administrative Agent, any Bank or any Primary Obligor to serve legal
process in any other manner permitted by law or affect the right of the
Administrative Agent or any Bank to bring any action or proceeding against
any Primary Obligor or its Property in the courts of any other jurisdictions.
(c) To the extent that the Administrative Agent, any Bank or
any Primary Obligor has or hereafter may acquire any immunity from
jurisdiction of any court or from any legal process (whether from service or
notice, attachment prior to judgment, attachment in aid of execution,
execution or otherwise) with respect to itself or its Property, the
Administrative Agent, such Bank or such Primary Obligor hereby irrevocably
waives such immunity in respect of its obligations under this Agreement, the
Notes and the other Facility Documents.
Section 12.09. Table of Contents; Headings. Any table of contents and
the headings and captions hereunder are for convenience only and shall not
affect the interpretation or construction of this Agreement.
Section 12.10. Severability. The provisions of this Agreement are
intended to be severable. If for any reason any provision of this Agreement
shall be held invalid or unenforceable in whole or in part in any
jurisdiction, such provision shall, as to such jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without in any manner
affecting the validity or enforceability thereof in any other jurisdiction or
the remaining provisions hereof in any jurisdiction.
Section 12.11. Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and
the same instrument, and any party hereto may execute this Agreement by
signing any such counterpart.
Section 12.12. Integration. The Facility Documents set forth the
entire agreement among the parties hereto relating to the transactions
contemplated thereby and supersede any prior oral or written statements or
agreements with respect to such transactions.
Section 12.13. GOVERNING LAW. EACH OF THIS AGREEMENT AND THE NOTES
SHALL BE GOVERNED BY, AND INTERPRETED AND CONSTRUED IN ACCORDANCE WITH, THE
LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS. EACH
LETTER OF CREDIT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED IN ACCORDANCE
WITH, THE LAWS OR RULES DESIGNATED IN SUCH LETTER OF CREDIT, OR IF NO SUCH
LAWS OR RULES ARE DESIGNATED, THE UCP AND AS TO MATTERS NOT GOVERNED BY THE
UCP, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS.
Section 12.14. Confidentiality. Each Bank and the Administrative
Agent agrees (on behalf of itself and each of its affiliates, directors,
officers, employees and representatives) to use reasonable precautions to
keep confidential, in accordance with safe and sound banking practices, any
non-public information supplied to it by the Consolidated Entities pursuant
to this Agreement which is identified by the Consolidated Entities as being
confidential at the time the same is delivered to the Banks or the
Administrative Agent, provided that nothing herein shall limit the disclosure
of any such information (i) to the extent required by statute, rule,
regulation or judicial process, (ii) to counsel for any of the Banks or the
Administrative Agent, (iii) to bank examiners, auditors or accountants, (iv)
in connection with any litigation to which any one or more of the Banks is a
party or (v) to any assignee or participant (or prospective assignee or
participant) so long as such assignee or participant (or prospective assignee
or participant) agrees to use reasonable precautions to keep such information
confidential; and provided finally that in no event shall any Bank or the
Administrative Agent be obligated or required to return any materials
furnished by the Consolidated Entities.
Section 12.15. Treatment of Certain Information. The Primary Obligors
(a) acknowledge that services may be offered or provided to it (in connection
with this Agreement or otherwise) by each Bank or by one or more of their
respective subsidiaries or affiliates and (b) acknowledge that information
delivered to each Bank by the Consolidated Entities may be provided to each
such subsidiary and affiliate.
Section 12.16. Certain Subsidiary Co-Borrower Waivers and Releases.
To the fullest extent permitted by law, each Subsidiary Co-Borrower does
hereby waive: notice of any borrowings under this Agreement; notice of
adverse change in the financial condition of any Obligation Party or any
other fact that might increase such Subsidiary Co-Borrower's risk hereunder;
notice of presentment for payment, demand, protest, and notice thereof as to
the Notes or any other instrument; notice of any Default or Event of Default;
all other notices and demands to which such Subsidiary Co-Borrower might
otherwise be entitled (except if such notice or demand is specifically
otherwise required to be given to such Subsidiary Co-Borrower hereunder or
under the other Facility Documents); the right by statute or otherwise to
require any Secured Party to institute suit against any Obligation Party or
to exhaust the rights and remedies of any Secured Party or any Obligation
Party; any defense arising by reason of any disability or other defense
(other than the defense that the Senior Obligations shall have been fully and
finally performed and indefeasibly paid) of any Obligation Party or by reason
of the cessation from any cause whatsoever of the liability of any Obligation
Party in respect thereof; and any stay (except in connection with a pending
appeal), valuation, appraisal, redemption or extension law now or at any time
hereafter in force which, but for this waiver, might be applicable to any
sale of Property of such Subsidiary Co-Borrower made under any judgment,
order or decree based on this Agreement, and such Subsidiary Co-Borrower
covenants that it will not at any time insist upon or plead, or in any manner
claim or take the benefit or advantage of such law. Until all of the Senior
Obligations shall have been paid in full, none of the Subsidiary Co-Borrowers
shall have any right of subrogation, reimbursement, or indemnity whatsoever
in respect thereof and no right of recourse to or with respect to any assets
or Property of any Obligation Party. Each Subsidiary Co-Borrower consents
and agrees that, without notice to or by such Subsidiary Co-Borrower and
without affecting or impairing the obligations of such Subsidiary Co-Borrower
hereunder, each Secured Party, in the manner provided herein, by action or
inaction, may: compromise or settle, extend the period of duration or the
time for the payment, or discharge the performance of, or may refuse to, or
otherwise not, enforce, or may, by action or inaction, release all or any one
or more parties to, any one or more of the Notes or the other Facility
Documents; grant other indulgences to any Obligation Party in respect
thereof; amend or modify in any manner and at any time (or from time to time)
any one or more of the Notes, the Letters of Credit and the other Facility
Documents in accordance with Section 12.01 or otherwise; release or
substitute any one or more of the endorsers or guarantors of the Senior
Obligations whether parties hereto or not; and exchange, enforce, waive, or
release, by action or inaction, any security for the Senior Obligations
(including, without limitation, any of the collateral therefor) or any other
guaranty of any of the Senior Obligations. IN WITNESS WHEREOF, the parties
hereto have caused this Agreement to be duly executed as of the day and year
first above written.
BORROWER:
THE MULTICARE COMPANIES, INC.,
a Delaware corporation
By XXXXXXXX X. XXXXXXX
Name: Xxxxxxxx X. Xxxxxxx
Title: Vice-President
SUBSIDIARY CO-BORROWERS:
BREYUT CONVALESCENT CENTER, INC.,
a New Jersey corporation
By: XXXXXXXX X. XXXXXXX
Name: Xxxxxxxx X. Xxxxxxx
Title: Vice-President
ENCARE OF MENDHAM, INC., a New
Jersey corporation
By: XXXXXXXX X. XXXXXXX
Name: Xxxxxxxx X. Xxxxxxx
Title: Vice-President
HEALTH RESOURCES OF CEDAR GROVE,
INC., a New Jersey corporation
By: XXXXXXXX X. XXXXXXX
Name: Xxxxxxxx X. Xxxxxxx
Title: Vice-President
HEALTH RESOURCES OF CINNAMINSON,
INC., a New Jersey corporation
By: XXXXXXXX X. XXXXXXX
Name: Xxxxxxxx X. Xxxxxxx
Title: Vice-President
HEALTH RESOURCES OF XXXXX, INC., a
Delaware corporation
By: XXXXXXXX X. XXXXXXX
Name: Xxxxxxxx X. Xxxxxxx
Title: Vice-President
HEALTH RESOURCES OF EWING, INC., a
New Jersey corporation
By: XXXXXXXX X. XXXXXXX
Name: Xxxxxxxx X. Xxxxxxx
Title: Vice-President
HEALTH RESOURCES OF FAIR LAWN,
INC., a Delaware corporation
By: XXXXXXXX X. XXXXXXX
Name: Xxxxxxxx X. Xxxxxxx
Title: Vice-President
HEALTH RESOURCES OF MORRISTOWN,
INC., a New Jersey corporation
By: XXXXXXXX X. XXXXXXX
Name: Xxxxxxxx X. Xxxxxxx
Title: Vice-President
HEALTH RESOURCES OF RIDGEWOOD,
INC., a New Jersey corporation
By: XXXXXXXX X. XXXXXXX
Name: Xxxxxxxx X. Xxxxxxx
Title: Vice-President
HEALTH RESOURCES OF WEST ORANGE, INC., a Delaware corporation
By: XXXXXXXX X. XXXXXXX
Name: Xxxxxxxx X. Xxxxxxx
Title: Vice-President
XXXXX XXXXX ASSOCIATES OF NEW
JERSEY, L.P., a Delaware limited
partnership
By Encare of Mendham, Inc., its
General Partner
By: XXXXXXXX X. XXXXXXX
Name: Xxxxxxxx X. Xxxxxxx
Title: Vice-President
MERCERVILLE ASSOCIATES OF NEW
JERSEY, L.P., a Delaware limited
partnership
By Breyut Convalescent Center,
Inc., its General Partner
By: XXXXXXXX X. XXXXXXX
Name: Xxxxxxxx X. Xxxxxxx
Title: Vice-President
POMPTON ASSOCIATES L.P., a New
Jersey limited partnership
By Pompton Care, Inc.,
its General Partner
By: XXXXXXXX X. XXXXXXX
Name: Xxxxxxxx X. Xxxxxxx
Title: Vice-President
POMPTON CARE, INC., a New Jersey
corporation
By: XXXXXXXX X. XXXXXXX
Name: Xxxxxxxx X. Xxxxxxx
Title: Vice-President
ROEPHEL CONVALESCENT CENTER, INC.,
a New Jersey corporation
By: XXXXXXXX X. XXXXXXX
Name: Xxxxxxxx X. Xxxxxxx
Title: Vice-President
THE XXXXXX GROUP-OLD BRIDGE,
L.P., a New Jersey limited
partnership
By Health Resources of Xxxxx, Inc.,
its General Partner
By: XXXXXXXX X. XXXXXXX
Name: Xxxxxxxx X. Xxxxxxx
Title: Vice-President
THE XXXXXX GROUP-RIDGEWOOD L.P.,
a New Jersey limited partnership
By Health Resources of Ridgewood,
Inc., its General Partner
By: XXXXXXXX X. XXXXXXX
Name: Xxxxxxxx X. Xxxxxxx
Title: Vice-President
ADMINISTRATIVE AGENT:
NATIONSBANK, N.A.
By_____________________________________
Name:
Title:
Address for Notices:
NationsBank Corporate Center
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Agency Services
Telecopier No.: (000) 000-0000
with a copy to:
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxx
Telecopier No.: (000) 000-0000
BANKS:
NATIONSBANK, N.A.
By_____________________________________
Name:
Title:
Lending Office and Address for
Notices:
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxx
Telecopier No.: (000) 000-0000
BANKS:
SUMMIT BANK
By_____________________________________
Name:
Title:
Lending Office and Address for
Notices:
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxx
Telecopier No.: (000) 000-0000
BANKS:
FLEET BANK, N.A.
By_____________________________________
Name:
Title:
Lending Office and Address for
Notices:
0000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx XxXxxx
Telecopier No.: (000) 000-0000
BANKS:
THE BANK OF MONTREAL
By_____________________________________
Name:
Title:
Lending Office and Address for
Notices:
000 X. Xxxxxxx Xxxxxx
00 Xxxx
Xxxxxxx, XX 00000
Attention: Xxxxxx Xxxxx
Telecopier No.: (000) 000-0000
BANKS:
CREDIT LYONNAIS NEW YORK BRANCH
By_____________________________________
Name:
Title:
Lending Office and Address for
Notices:
Credit Lyonnais Building
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxx Xxxxxx
Telecopier No.: (000) 000-0000
BANKS:
MELLON BANK, N.A.
By_____________________________________
Name:
Title:
Lending Office and Address for
Notices:
000 Xxxx Xxxxxxxxxx Xxxx
Room 19E-0246, Xxxxx 000
Xxxxxxxx Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxx
Telecopier No.: (000) 000-0000
BANKS:
KEY BANK
By_____________________________________
Name:
Title:
Lending Office and Address for
Notices:
000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxx
Telecopier No.: (000) 000-0000
BANKS:
THE FIRST NATIONAL BANK OF
CHICAGO
By_____________________________________
Name:
Title:
Lending Office and Address for
Notices:
Public Banking Department
One First Xxxxxxxx Xxxxx
Xxxx Xxxxx 0000
Xxxxxxx, XX 00000-0000
Attention: Xxxxxxxx Xxxxxxxxxxxx
Telecopier No.: (000) 000-0000
BANKS:
THE BANK OF NOVA SCOTIA
By_____________________________________
Name:
Title:
Lending Office and Address for
Notices:
Xxxxx 0000
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxx
Telecopier No.: (000) 000-0000
BANKS:
CORESTATES BANK, N.A.
By_____________________________________
Name:
Title:
Lending Office and Address for
Notices:
0000 Xxxxxxxx Xxxxxx
X.X. Xxx 0000, FC 1-8-3-22
Philadelphia, PA 19107-7618
Attention: Xxxxxxxx Xxxxx
Telecopier No.: (000) 000-0000
BANKS:
FIRST UNION NATIONAL BANK OF NORTH
CAROLINA
By_____________________________________
Name:
Title:
Lending Office and Address for
Notices:
Capital Markets Group
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxxxxx Xxxx
Telecopier No.: (000) 000-0000
BANKS:
TORONTO DOMINION (NEW YORK), INC.
By_____________________________________
Name:
Title:
Lending Office:
The Toronto Dominion Bank
Houston Agency
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxxxx
Telecopier: (000) 000-0000
Address for Notices:
Health Care Finance, U.S.A. Division
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxx Xxxxxx
Telecopier No.: (000) 000-0000
with a copy to:
The Toronto Dominion Bank
Houston Agency
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxxxx
Telecopier: (000) 000-0000
BANKS:
PNC BANK, NATIONAL ASSOCIATION
By_____________________________________
Name:
Title:
Lending Office and Address for
Notices:
MS: J2-JTTC-16-1
0 Xxxxx Xxxxxx
Xxxx Xxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxx
Telecopier No.: (000) 000-0000
BANKS:
LTCB TRUST COMPANY
By_____________________________________
Name:
Title:
Lending Office and Address for
Notices:
000 Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxxx Xxxxxxxx
Telecopier No.: (000) 000-0000
BANKS:
THE SANWA BANK, LIMITED
(NEW YORK BRANCH)
By_____________________________________
Name:
Title:
Lending Office and Address for
Notices:
Park Avenue Plaza
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxxxx
Telecopier No.: (000) 000-0000
