EXHIBIT 10.28
TOTAL RENAL CARE HOLDINGS, INC.
SECOND AMENDMENT
TO TERM LOAN AGREEMENT
This SECOND AMENDMENT TO TERM LOAN AGREEMENT (this "AMENDMENT") is dated as
of January 13, 1998, and entered into by and among TOTAL RENAL CARE HOLDINGS,
INC., a Delaware corporation (the "Borrower"), the financial institutions
listed on the signature pages hereof and their respective successors and
assigns (the "Lenders", each a "Lender"), DLJ CAPITAL FUNDING, INC., as
Syndication Agent (the "Syndication Agent"), THE BANK OF NEW YORK, as
administrative agent for the Lenders (in such capacity, the "Administrative
Agent"), and, for purposes of Section 4 hereof, the Credit Support Parties (as
defined in Section 4 hereof) listed on the signature pages hereof, and is made
with reference to that certain Term Loan Agreement dated as of October 24,
1997, as amended by that certain First Amendment to Term Loan Agreement dated
as of December 1, 1997 (said agreement, as so amended, being the "TERM LOAN
AGREEMENT"), by and among Borrower, Lenders, Syndication Agent and
Administrative Agent. Capitalized terms used herein without definition shall
have the same meanings herein as set forth in the Term Loan Agreement.
RECITALS
WHEREAS, Borrower and Lenders desire to amend the Term Loan Agreement in
order to (i) revise the definition of "Subordinated Indebtedness" contained
therein, (ii) revise certain negative covenants regarding amendments to
Subordinated Indebtedness and (iii) make certain other changes as set forth
herein.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as
follows:
SECTION 1. AMENDMENTS TO THE TERM LOAN AGREEMENT
1.1 Amendments to Section 1: Provisions Relating to Defined Terms
A. Subsection 1.1 of the Term Loan Agreement is hereby amended by the
definition of "Subordinated Indebtedness" therefrom in its entirety and
substituting the following therefor:
"Subordinated Indebtedness": any unsecured Indebtedness of the Borrower
subordinated in right of payment to the payment in full of the Obligations
of the Borrower and other senior obligations of the Borrower; provided that
(i) the negative covenants in such Indebtedness are less restrictive than
the negative covenants in this Agreement as in effect at the time such
Indebtedness is incurred, (ii) the affirmative covenants in such
Indebtedness are no more restrictive than the affirmative covenants in this
Agreement as in effect at the time such Indebtedness is incurred, (iii) the
events of default in such Indebtedness relating to insolvency and
nonpayment of amounts owed thereunder are no more restrictive than the
corresponding defaults in this Agreement as in effect at the time such
Indebtedness is incurred, and the other events of default in such
Indebtedness are less restrictive than the corresponding defaults in this
Agreement as in effect at the time such Indebtedness is incurred, (iv) such
Indebtedness does not cross-default to other Indebtedness (but may cross-
accelerate to other Indebtedness of Borrower or any Subsidiary Guarantor
that has guarantied such Indebtedness), (v) the subordination provisions in
such Indebtedness are on market terms for subordinated debt instruments
prevailing at or around the time such Indebtedness is incurred and (vi)
such Indebtedness provides for no scheduled payment or mandatory
prepayments of principal before March 30, 2008, other than (x) redemptions
made at the option of the holders of such Indebtedness upon a change in
control of the Borrower in circumstances where the holders of the Term
Loans would have rights to prepayment under Section 2.4(c), provided that
any such redemptions are made not fewer than 30 days after such change in
control and (y) mandatory prepayments required as a result of asset
dispositions if such
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Indebtedness allows the Borrower to satisfy such mandatory prepayment
requirement by prepayment of senior obligations of the Borrower or
reinvestment of the asset disposition proceeds within a specified period of
time.
1.2 Amendments to Section 8: Negative Covenants
A. Section 8.1(b) of the Term Loan Agreement is hereby amended by (i)
deleting the "and" at the end of clause (xii) thereof, (ii) relabeling clause
(xiii) thereof as clause (xiv) and (iii) adding a new clause (xiii) thereto as
follows:
"(xiii) Guaranties by any Guarantor of Borrower's obligations under any
Subordinated Indebtedness permitted hereunder, provided that (a) all
Obligations of Borrower are guarantied by such Guarantor under the
Subsidiary Guaranty, (b) each such Guaranty is subordinated to at least the
same extent as the Subordinated Indebtedness guarantied thereby is
subordinated to the Obligations of Borrower, (c) each such Guaranty
contains a limitation as to maximum amount guarantied thereby similar to
that set forth in subsection 2.2(a) of the Subsidiary Guaranty, provided
that in no event shall the liability of the Guarantor under such Guaranty
exceed the maximum amount permissible under applicable fraudulent
conveyance or similar law, and (d) each such Guaranty is otherwise on
market terms for guaranties of subordinated debt instruments prevailing at
or around the time such Guaranties are entered into; and".
B. Section 8.5 of the Term Loan Agreement is hereby amended by (i) deleting
the "and" at the end of clause (k) thereof, (ii) relabeling clause (l) thereof
as clause (m) and (iii) adding a new clause (l) thereto as follows:
"(l) Contingent Obligations to the extent permitted by Section 8.1(b);
and".
C. Section 8.15 of the Term Loan Agreement is hereby amended by adding a new
subsection (d) thereto as follows:
"(d) The Borrower will not, and will not permit any of its Subsidiaries
to, amend or otherwise change the terms of any Subordinated Indebtedness,
or make any payment consistent with an amendment thereof or change thereto,
if the effect of such amendment or change is to change (to any date before
March 30, 2008) any dates upon which payments of principal are due thereon,
change the redemption, prepayment or defeasance provisions thereof (unless
the redemption or prepayment provisions as so changed would be permitted
under clause (vi) of the definition of "Subordinated Indebtedness"), change
the subordination provisions thereof (or of any guaranty thereof), or grant
any Lien to secure payment thereof, or if the effect of such amendment or
change, together with all other amendments or changes made, is to increase
materially the obligations of the obligor thereunder or to confer any
additional rights on the holders of such Subordinated Indebtedness (or a
trustee or other representative on their behalf) which would be adverse to
the Borrower or Lenders."
SECTION 2. CONDITIONS TO EFFECTIVENESS
Section 1 of this Amendment shall become effective only upon the
satisfaction of all of the following conditions precedent (the date of
satisfaction of such conditions being referred to herein as the "SECOND
AMENDMENT EFFECTIVE DATE"):
A. All fees and expenses incurred by Syndication Agent and its counsel,
O'Melveny & Xxxxx LLP, in connection with the preparation, negotiation and
closing of this Amendment shall have been paid by Borrower.
B. All fees and expenses incurred by Administrative Agent and its
counsel, Xxxxx, Xxxxxx & Xxxxxx, LLP, in connection with the preparation,
negotiation and closing of this Amendment shall have been paid by Borrower.
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SECTION 3. BORROWER'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Amendment and to amend the
Term Loan Agreement in the manner provided herein, Borrower represents and
warrants to each Lender that the following statements are true, correct and
complete:
A. CORPORATE POWER AND AUTHORITY. Each Credit Party has all requisite
corporate power and authority to enter into this Amendment and to carry out
the transactions contemplated by, and perform its obligations under, the Term
Loan Agreement as amended by this Amendment (the "AMENDED AGREEMENT").
B. AUTHORIZATION OF AGREEMENTS. The execution and delivery of this Amendment
have been duly authorized by all necessary corporate action on the part of
each Credit Party. The performance of the Amended Agreement has been duly
authorized by all necessary corporate action on the part of each Credit Party.
C. NO CONFLICT. The execution and delivery by each Credit Party of this
Amendment, and the performance by each Credit Party of the Amended Agreement
do not and will not (i) violate any provision of any law or any governmental
rule or regulation applicable to Borrower or any of its Subsidiaries, the
Certificate or Articles of Incorporation or Bylaws of Borrower or any of its
Subsidiaries or any order, judgment or decree of any court or other agency of
government binding on Borrower or any of its Subsidiaries, (ii) conflict with,
result in a breach of or constitute (with due notice or lapse of time or both)
a default under any contractual obligation of Borrower or any of its
Subsidiaries, (iii) result in or require the creation or imposition of any
Lien upon any of the properties or assets of Borrower or any of its
Subsidiaries (other than Liens created under any of the Loan Documents in
favor of Administrative Agent on behalf of Lenders), or (iv) require any
approval of stockholders or any approval or consent of any Person under any
contractual obligation of Borrower or any of its Subsidiaries.
D. GOVERNMENTAL CONSENTS. The execution and delivery by each Credit Party of
this Amendment, and the performance by each Credit Party of the Amended
Agreement do not and will not require any registration with, consent or
approval of, or notice to, or other action to, with or by, any federal, state
or other governmental authority or regulatory body.
E. BINDING OBLIGATION. This Amendment and the Amended Agreement have been
duly executed and delivered by each Credit Party and are the legally valid and
binding obligations of each Credit Party, enforceable against each Credit
Party in accordance with their respective terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors' rights generally or by equitable principles relating to
enforceability.
F. INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM TERM LOAN
AGREEMENT. The representations and warranties contained in Section 4 of the
Term Loan Agreement are and will be true, correct and complete in all material
respects on and as of the Second Amendment Effective Date to the same extent
as though made on and as of that date, except to the extent such
representations and warranties specifically relate to an earlier date, in
which case they were true, correct and complete in all material respects on
and as of such earlier date.
G. ABSENCE OF DEFAULT. No event has occurred and is continuing or will
result from the consummation of the transactions contemplated by this
Amendment that would constitute an Event of Default.
SECTION 4. ACKNOWLEDGEMENT AND CONSENT
Borrower is a party to the Borrower Pledge Agreement pursuant to which
Borrower has pledged certain Collateral to Administrative Agent to secure the
Obligations. TRC is a party to the Subsidiary Guaranty and the Subsidiary
Pledge Agreement pursuant to which TRC has (i) guarantied the Obligations and
(ii) pledged certain Collateral to Administrative Agent to secure the
Obligations and to secure the obligations of TRC under the Subsidiary
Guaranty. TRC West, Inc. is a party to the Subsidiary Guaranty pursuant to
which TRC West, Inc. has guarantied the Obligations. Total Renal Care
Acquisition Corp. is a party to the Subsidiary Guaranty pursuant
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to which Total Renal Care Acquisition Corp. has guarantied the Obligations.
Borrower, TRC, TRC West, Inc. and Total Renal Care Acquisition Corp. are
collectively referred to herein as the "CREDIT SUPPORT PARTIES", and the
Borrower Pledge Agreement, the Subsidiary Pledge Agreement and the Subsidiary
Guaranty are collectively referred to herein as the "CREDIT SUPPORT
DOCUMENTS".
Each Credit Support Party hereby acknowledges that it has reviewed the terms
and provisions of the Term Loan Agreement and this Amendment and consents to
the amendment of the Term Loan Agreement effected pursuant to this Amendment.
Each Credit Support Party hereby confirms that each Credit Support Document to
which it is a party or otherwise bound and all Collateral encumbered thereby
will continue to guaranty or secure, as the case may be, to the fullest extent
possible the payment and performance of all "Guarantied Obligations" and
"Secured Obligations," as the case may be (in each case as such terms are
defined in the applicable Credit Support Document), including without
limitation the payment and performance of all such "Guarantied Obligations"
and "Secured Obligations," as the case may be, in respect of the Obligations
of Borrower now or hereafter existing under or in respect of the Amended
Agreement and the Notes defined therein.
Each Credit Support Party acknowledges and agrees that any of the Credit
Support Documents to which it is a party or otherwise bound shall continue in
full force and effect and that all of its obligations thereunder shall be
valid and enforceable and shall not be impaired or limited by the execution or
effectiveness of this Amendment. Each Credit Support Party represents and
warrants that all representations and warranties contained in the Amended
Agreement and the Credit Support Documents to which it is a party or otherwise
bound are true, correct and complete in all material respects on and as of the
Second Amendment Effective Date to the same extent as though made on and as of
that date, except to the extent such representations and warranties
specifically relate to an earlier date, in which case they were true, correct
and complete in all material respects on and as of such earlier date.
Each Credit Support Party acknowledges and agrees that (i) notwithstanding
the conditions to effectiveness set forth in this Amendment, such Credit
Support Party is not required by the terms of the Term Loan Agreement or any
other Loan Document to consent to the amendments to the Term Loan Agreement
effected pursuant to this Amendment and (ii) nothing in the Term Loan
Agreement, this Amendment or any other Loan Document shall be deemed to
require the consent of such Credit Support Party to any future amendments to
the Term Loan Agreement.
SECTION 5. MISCELLANEOUS
A. REFERENCE TO AND EFFECT ON THE TERM LOAN AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
(i) On and after the Second Amendment Effective Date, each reference in
the Term Loan Agreement to "this Agreement", "hereunder", "hereof",
"herein" or words of like import referring to the Term Loan Agreement, and
each reference in the other Loan Documents to the "Term Loan Agreement",
"thereunder", "thereof" or words of like import referring to the Term Loan
Agreement shall mean and be a reference to the Amended Agreement.
(ii) Except as specifically amended by this Amendment, the Term Loan
Agreement and the other Loan Documents shall remain in full force and
effect and are hereby ratified and confirmed.
(iii) The execution, delivery and performance of this Amendment shall
not, except as expressly provided herein, constitute a waiver of any
provision of, or operate as a waiver of any right, power or remedy of
Administrative Agent or any Lender under, the Term Loan Agreement or any of
the other Loan Documents.
B. FEES AND EXPENSES. Borrower acknowledges that all costs, fees and
expenses as described in Section 11.5 of the Term Loan Agreement incurred by
Administrative Agent, Syndication Agent, Co-Arrangers, Special Counsel, and
Xxxxx, Xxxxxx and Xxxxxx, LLP with respect to this Amendment and the documents
and transactions contemplated hereby shall be for the account of Borrower.
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C. HEADINGS. Section and subsection headings in this Amendment are included
herein for convenience of reference only and shall not constitute a part of
this Amendment for any other purpose or be given any substantive effect.
D. APPLICABLE LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
E. COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed an original, but all
such counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and
attached to a single counterpart so that all signature pages are physically
attached to the same document. This Amendment (other than the provisions of
Section 1 hereof, the effectiveness of which is governed by Section 2 hereof)
shall become effective upon the execution of a counterpart hereof by Borrower,
Required Lenders, Administrative Agent, and each of the Credit Support Parties
and receipt by Borrower and Administrative Agent of written or telephonic
notification of such execution and authorization of delivery thereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered by their respective officers thereunto duly authorized
as of the date first written above.
BORROWER: TOTAL RENAL CARE HOLDINGS, INC.
By: _________________________________
Title: V/P Finance & CFO
CREDIT SUPPORT PARTIES: TOTAL RENAL CARE, INC., (for
purposes of
Section 4 only) as a Credit Support
Party
By: _________________________________
Title: V/P Finance & CFO
TRC WEST, INC., (for purposes of
Section 4 only) as a Credit Support
Party
By: _________________________________
Title: President
TOTAL RENAL CARE ACQUISITION CORP.,
(for purposes of Section 4 only) as
a Credit Support Party
By: _________________________________
Title: V/P Finance & CFO
AGENTS: THE BANK OF NEW YORK, Individually
and as
Administrative Agent
By: _________________________________
Title: Vice President
X-0
XXX XXXXXXX XXXXXXX, XXX.,
Individually and as Syndication
Agent
By: _________________________________
Title: ______________________________
LENDERS:
BDC FINANCE, LLC
By: _________________________________
Title: ______________________________
CITIBANK, N.A.
By: _________________________________
Title: ______________________________
CONTINENTAL ASSURANCE COMPANY
Separate Account (E)
By: TCW Asset Management Company, as
Attorney-In-Fact, as Assignee
By: _________________________________
Title: ______________________________
By: _________________________________
Title: ______________________________
DEBT STRATEGIES FUND, INC.
By: _________________________________
Title: ______________________________
S-2
DEEPROCK & COMPANY
By: Xxxxx Xxxxx Management as
Investment Advisor
By: _________________________________
Title: Vice President
FRANKLIN FLOATING RATE TRUST
By: _________________________________
Title: ______________________________
KZH HOLDING CORPORATION III
By: _________________________________
Title: Authorized Agent
KZH--CRESCENT CORPORATION
By: _________________________________
Title: Authorized Agent
KZH--SOLEIL CORPORATION
By: _________________________________
Title: Authorized Agent
XXXXXX COMMERCIAL PAPER INC.
By: _________________________________
Title: ______________________________
S-3
XXXXXXX XXXXX SENIOR FLOATING RATE
FUND, INC.
By: _________________________________
Title: ______________________________
XXXXXX XXXXXXX SENIOR FUNDING, INC.
By: _________________________________
Title: Vice President
OCTAGON CREDIT INVESTORS LOAN
PORTFOLIO (a unit of The Chase
Manhattan Bank)
By: _________________________________
Title: Managing Director
ORIX USA CORP.
By: _________________________________
Title: Executive Vice President
PARIBAS CAPITAL FUNDING LLC
By: _________________________________
Title: Director
PILGRIM AMERICA PRIME RATE TRUST
By: _________________________________
Title: ______________________________
S-4
PIMCO HIGH YIELD FUND (Acct 705)
By: Pacific Investment Management
Company, as its Investment
Advisor acting through Investors
Fiduciary Trust Company in the
Nominee Name of IFTCO
By: _________________________________
Title: ______________________________
SENIOR DEBT PORTFOLIO
By: Boston Management and Research,
as Investment Advisor
By: _________________________________
Title: Vice President
SENIOR HIGH INCOME PORTFOLIO, INC.
By: _________________________________
Title: ______________________________
X. XXXX PRICE HIGH YIELD FUND INC.
By: _________________________________
Title: ______________________________
XXX XXXXXX AMERICAN CAPITAL PRIME
RATE INCOME TRUST
By: _________________________________
Title: Vice President
S-5
