EXHIBIT 10.44
EXECUTION COPY
CREDIT AGREEMENT
DATED AS OF FEBRUARY 24, 2004
AMONG
ROTO-ROOTER, INC.
THE LENDERS FROM TIME TO TIME PARTIES HERETO
AND
BANK ONE, NA (MAIN OFFICE CHICAGO),
AS ADMINISTRATIVE AGENT
===============================================================================
BANC ONE CAPITAL MARKETS, INC.,
AS LEAD ARRANGER AND SOLE BOOK RUNNER
===============================================================================
SIDLEY XXXXXX XXXXX & XXXX LLP
Bank One Plaza
00 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
TABLE OF CONTENTS
ARTICLE I DEFINITIONS.................................................. 1
1.1. Certain Defined Terms........................................... 1
1.2. Plural Forms.................................................... 24
ARTICLE II THE CREDITS.................................................. 25
2.1. Revolving Loan Commitments and Term Loan Commitments............. 25
2.2. Required Payments; Termination................................... 25
2.3. Ratable Loans; Types of Advances................................. 28
2.4. Swing Line Loans............................................ .... 28
2.5. Commitment Fee; Aggregate Revolving Loan Commitment.............. 30
2.6. Minimum Amount of Each Advance................................... 30
2.7. Optional Principal Payments...................................... 31
2.8. Method of Selecting Types and Interest Periods for New Advances.. 31
2.9. Conversion and Continuation of Outstanding Advances; No
Conversion or Continuation of Eurodollar Advances After Event
of Default...................................................... 31
2.10. Changes in Interest Rate, etc................................... 32
2.11. Rates Applicable After Event of Default......................... 33
2.12. Method of Payment............................................... 33
2.13. Noteless Agreement; Evidence of Indebtedness.................... 33
2.14. Telephonic Notices.............................................. 34
2.15. Interest Payment Dates; Interest and Fee Basis.................. 34
2.16. Notification of Advances, Interest Rates, Prepayments and
Revolving Loan Commitment Reductions; Availability of Loans..... 35
2.17. Lending Installations........................................... 35
2.18. Non-Receipt of Funds by the Administrative Agent................ 35
2.19. Replacement of Lender........................................... 36
2.20. Facility LCs.................................................... 36
2.21. Financial Contracts............................................. 42
ARTICLE III YIELD PROTECTION; TAXES...................................... 42
3.1. Yield Protection................................................ 42
3.2. Changes in Capital Adequacy Regulations......................... 43
3.3. Availability of Types of Advances............................... 44
3.4. Funding Indemnification......................................... 44
3.5. Taxes........................................................... 44
3.6. Lender Statements; Survival of Indemnity........................ 47
3.7. Alternative Lending Installation................................ 48
ARTICLE IV CONDITIONS PRECEDENT......................................... 48
4.1. Initial Credit Extension........................................ 48
4.2. Each Credit Extension........................................... 50
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ARTICLE V REPRESENTATIONS AND WARRANTIES............................... 51
5.1. Existence and Standing.......................................... 51
5.2. Authorization and Validity...................................... 51
5.3. No Conflict; Government Consent................................. 51
5.4. Financial Statements............................................ 52
5.5. Material Adverse Change......................................... 52
5.6. Taxes........................................................... 52
5.7. Litigation and Contingent Obligations........................... 52
5.8. Subsidiaries.................................................... 52
5.9. ERISA........................................................... 53
5.10. Accuracy of Information......................................... 53
5.11. Regulation U.................................................... 53
5.12. Material Agreements; Restrictions on Dividends.................. 53
5.13. Compliance With Laws............................................ 53
5.14. Ownership of Properties; Priority of Liens...................... 54
5.15. Plan Assets; Prohibited Transactions............................ 54
5.16. Environmental Matters........................................... 54
5.17. Investment Company Act.......................................... 54
5.18. Public Utility Holding Company Act.............................. 54
5.19. Insurance....................................................... 54
5.20. No Event of Default or Unmatured Event of Default............... 54
5.21. SDN List Designation............................................ 54
5.22. Solvency........................................................ 55
ARTICLE VI COVENANTS.................................................... 55
6.1. Financial Reporting............................................. 55
6.2. Use of Proceeds................................................. 57
6.3. Notice of Event of Default...................................... 57
6.4. Conduct of Business............................................. 57
6.5. Taxes........................................................... 58
6.6. Insurance....................................................... 58
6.7. Compliance with Laws............................................ 58
6.8. Maintenance of Properties....................................... 58
6.9. Inspection; Keeping of Books and Records........................ 58
6.10. Restricted Payments............................................. 59
6.11. Merger or Dissolution........................................... 60
6.12. Sale of Assets.................................................. 61
6.13. Investments and Acquisitions.................................... 62
6.14. Indebtedness.................................................... 65
6.15. Liens........................................................... 67
6.16. Transactions with Affiliates.................................... 71
6.17. Financial Contracts............................................. 71
6.18. Subsidiary Covenants............................................ 71
6.19. Contingent Obligations.......................................... 72
6.20. Leverage Ratio; Senior Leverage Ratio........................... 72
6.21. Fixed Charge Coverage Ratio..................................... 74
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6.22. Minimum Consolidated Net Worth.................................. 75
6.23. Capital Expenditures............................................ 75
6.24. Operating Leases................................................ 75
6.25. Guarantors...................................................... 76
6.26. Collateral...................................................... 76
6.27. Sale and Leaseback Transactions................................. 77
6.28. Intentionally Omitted........................................... 77
6.29. Revolving Credit Availability................................... 77
6.30. Prepayment of Indebtedness...................................... 77
6.31. Amendments to Senior Secured Indenture Documents and Senior
Unsecured Indenture Documents................................... 77
ARTICLE VII EVENTS OF DEFAULT............................................ 78
ARTICLE VIII ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES............... 81
8.1. Acceleration.................................................... 81
8.2. Amendments...................................................... 82
8.3. Preservation of Rights.......................................... 83
ARTICLE IX GENERAL PROVISIONS........................................... 84
9.1. Survival of Representations..................................... 84
9.2. Governmental Regulation......................................... 84
9.3. Headings........................................................ 84
9.4. Entire Agreement................................................ 84
9.5. Several Obligations; Benefits of this Agreement................. 84
9.6. Expenses; Indemnification....................................... 84
9.7. Numbers of Documents............................................ 85
9.8. Accounting...................................................... 85
9.9. Severability of Provisions...................................... 86
9.10. Nonliability of Lenders......................................... 86
9.11. Confidentiality................................................. 86
9.12. Lenders Not Utilizing Plan Assets............................... 87
9.13. Nonreliance..................................................... 87
9.14. Disclosure...................................................... 87
9.15. Performance of Obligations...................................... 87
9.16. USA Patriot Act Notification.................................... 88
IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW
ACCOUNT......................................................... 88
9.17. Subordination of Intercompany Indebtedness...................... 88
ARTICLE X THE ADMINISTRATIVE AGENT..................................... 89
10.1. Appointment; Nature of Relationship............................. 89
10.2. Powers.......................................................... 90
10.3. General Immunity................................................ 90
10.4. No Responsibility for Loans, Recitals, etc...................... 90
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10.5. Action on Instructions of Lenders............................... 90
10.6. Employment of Agents and Counsel................................ 91
10.7. Reliance on Documents; Counsel.................................. 91
10.8. Administrative Agent's Reimbursement and Indemnification........ 91
10.9. Notice of Event of Default...................................... 92
10.10.Rights as a Lender.............................................. 92
10.11.Lender Credit Decision.......................................... 92
10.12.Successor Administrative Agent.................................. 92
10.13.Administrative Agent and Arranger Fees.......................... 93
10.14.Delegation to Affiliates........................................ 93
10.15.Intentionally Omitted........................................... 93
10.16.Collateral Documents............................................ 93
ARTICLE XI SETOFF; RATABLE PAYMENTS..................................... 95
11.1. Setoff.......................................................... 95
11.2. Ratable Payments................................................ 95
ARTICLE XII BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS............ 95
12.1. Successors and Assigns.......................................... 95
12.2. Participations.................................................. 96
12.3. Assignments..................................................... 97
12.4. Dissemination of Information.................................... 99
12.5. Tax Treatment................................................... 99
ARTICLE XIII NOTICES...................................................... 99
13.1. Notices; Effectiveness; Electronic Communication................ 99
13.2. Change of Address, Etc......................................... 100
ARTICLE XIV COUNTERPARTS; INTEGRATION; EFFECTIVENESS; ELECTRONIC
EXECUTION................................................... 100
14.1. Counterparts; Effectiveness.................................... 100
14.2. Electronic Execution of Assignments............................ 100
ARTICLE XV CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY
TRIAL....................................................... 101
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SCHEDULES
Commitment Schedule
Pricing Schedule
Schedule 2.20 - Existing Letters of Credit
Schedule 5.8- Subsidiaries
Schedule 6.13- Existing Investments
Schedule 6.14 - Existing Indebtedness
Schedule 6.15- Existing Liens; Closing Date Surety Bond Liens
Schedule 6.16- Transactions with Affiliates
Schedule 6.18- Subsidiary Covenants
EXHIBITS
Exhibit A-1 - Form of Borrower's In-House Counsel's Opinion
Exhibit A-2 - Form of Cravath, Swaine & Xxxxx LLP (Special New York
Counsel) Opinion
Exhibit A-3 - Form of Xxxxxxxx Xxxxxx & Finger, P.A. (Special Delaware
Counsel) Opinion
Exhibit B - Form of Compliance Certificate
Exhibit C - Form of Assignment and Assumption Agreement
Exhibit D - Form of Loan/Credit Related Money Transfer Instruction
Exhibit E-1 - Form of Promissory Note for Revolving Loan (if requested)
Exhibit E-2 - Form of Promissory Note for Term Loan (if requested)
Exhibit F - Officer's Certificate
Exhibit G - List of Closing Documents
Exhibit H - Form of Intercreditor Agreement
Exhibit I - Form of Senior Secured Note and Senior Secured Indenture
Exhibit J - Form of Senior Unsecured Note and Senior Unsecured Indenture
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CREDIT AGREEMENT
This Credit Agreement, dated as of February 24, 2004, is entered into by
and among Roto-Rooter, Inc., a Delaware corporation, the Lenders, the LC Issuer,
and Bank One, NA, a national banking association having its principal office in
Chicago, Illinois, as Administrative Agent. The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1. CERTAIN DEFINED TERMS. As used in this Agreement:
"ACCOUNTING CHANGES" is defined in Section 9.8 hereof.
"ACQUISITION" means any transaction, or any series of related transactions,
consummated on or after the Closing Date, by which the Borrower or any of its
Subsidiaries (i) acquires any going business or all or substantially all of the
assets of any firm, corporation or limited liability company, or division
thereof, whether through purchase of assets, merger or otherwise or (ii)
directly or indirectly acquires (in one transaction or as the most recent
transaction in a series of transactions) at least a majority (in number of
votes) of the securities of a corporation which have ordinary voting power for
the election of directors (other than securities having such power only by
reason of the happening of a contingency) or a majority (by percentage of voting
power) of the outstanding ownership interests of a partnership or limited
liability company of any Person.
"ADMINISTRATIVE AGENT" means Bank One in its capacity as contractual
representative of the Lenders pursuant to Article X, and not in its individual
capacity as a Lender, as Administrative Agent, and any successor Administrative
Agent appointed pursuant to Article X.
"ADVANCE" means a borrowing hereunder consisting of the aggregate amount of
several Revolving Loans or Term Loans, as the case may be (i) made by some or
all of the Lenders on the same Borrowing Date, or (ii) converted or continued by
the Lenders on the same date of conversion or continuation, consisting, in
either case, of the aggregate amount of the several Loans of the same Type and,
in the case of Eurodollar Loans, for the same Interest Period. The term
"Advance" shall include Swing Line Loans unless otherwise expressly provided.
"AFFILIATE" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person is the
"beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934) of 10% or more of any class of voting securities (or other ownership
interests) of the controlled Person or possesses, directly or indirectly, the
power to direct or cause the direction of the management or policies of the
controlled Person, whether through ownership of voting securities, by contract
or otherwise.
"AGGREGATE OUTSTANDING REVOLVING CREDIT EXPOSURE" means, at any time, the
aggregate of the Outstanding Revolving Credit Exposure of all the Lenders.
"AGGREGATE REVOLVING LOAN COMMITMENT" means the aggregate of the Revolving
Loan Commitments of all the Lenders, as may be increased or reduced from time to
time pursuant to the terms hereof. The initial Aggregate Revolving Loan
Commitment is One Hundred Million and 00/100 Dollars ($100,000,000).
"AGGREGATE TERM LOAN COMMITMENT" means the aggregate of the Term Loan
Commitments of all the Lenders, as may be reduced from time to time pursuant
hereto. The initial Aggregate Term Loan Commitment is Thirty-Five Million and
00/100 Dollars ($35,000,000).
"AGREEMENT" means this Credit Agreement, as it may be amended, restated,
supplemented or otherwise modified and as in effect from time to time.
"AGREEMENT ACCOUNTING PRINCIPLES" means generally accepted accounting
principles as in effect in the United States from time to time, applied in a
manner consistent with that used in preparing the financial statements of the
Borrower referred to in Section 5.4; provided, however, that except as provided
in Section 9.8, with respect to the calculation of the financial covenants set
forth in Sections 6.20 through 6.24 (and the defined terms used in such
Sections), "Agreement Accounting Principles" means generally accepted accounting
principles as in effect in the United States as of the Closing Date, applied in
a manner consistent with that used in preparing the financial statements of the
Borrower referred to in Section 5.4.
"ALTERNATE BASE RATE" means, for any day, a rate of interest per annum
equal to the higher of (i) the Prime Rate for such day and (ii) the sum of the
Federal Funds Effective Rate for such day plus 1/2% per annum.
"APPLICABLE FEE RATE" means, with respect to the Commitment Fee at any
time, the percentage rate per annum which is applicable at such time with
respect to such fee as set forth in the Pricing Schedule.
"APPLICABLE MARGIN" means, with respect to Advances of any Type at any
time, the percentage rate per annum which is applicable at such time with
respect to Advances of such Type as set forth in the Pricing Schedule.
"APPLICABLE PLEDGE PERCENTAGE" means 100%, but (x) 65% in the case of a
pledge of capital stock of a Foreign Subsidiary or (y) 0% in the case of a
pledge of capital stock of a Foreign Subsidiary to the extent a pledge would
cause a Financial Assistance Problem.
"APPROVED FUND" means any Fund that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.
"ARRANGEr" means Banc One Capital Markets, Inc., a Delaware corporation,
and its successors, in its capacity as Lead Arranger and Sole Book Runner.
"ARTICLE" means an article of this Agreement unless another document is
specifically referenced.
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"ASSET SALE" means, with respect to the Borrower or any Subsidiary, the
sale, lease, conveyance, disposition or other transfer by such Person of any of
its assets (including by way of a sale-leaseback transaction, and including the
sale or other transfer of any of the capital stock or other equity interests of
such Person or any Subsidiary of such Person but excluding cash and cash
equivalents other than Cash Equivalent Investments) to any Person other than the
Borrower or any of its Wholly-Owned Subsidiaries other than (i) the sale or
other disposition of inventory in the ordinary course of business, (ii) the sale
or other disposition of any obsolete, excess, damaged, surplus or worn-out
Equipment or overdue Receivables disposed of in the ordinary course of business,
(iii) leases or licenses of assets in the ordinary course of business consistent
with past practice, (iv) transfers consisting of Restricted Payments permitted
under Section 6.10, dispositions permitted by Section 6.12.11, Investments
permitted under Section 6.13 and Liens permitted under Section 6.15, and (v)
sales or liquidiations of Cash Equivalent Investments.
"ASSIGNMENT AGREEMENT" is defined in Section 12.3.1.
"AUTHORIZED OFFICER" means any of the Chief Executive Officer, President,
Chief Financial Officer, Treasurer or Controller of the Borrower, or such other
officer of the Borrower as may be designated by the Borrower in writing to the
Administrative Agent from time to time, acting singly.
"BANK ONE" means Bank One, NA, a national banking association having its
principal office in Chicago, Illinois, in its individual capacity, and its
successors.
"BORROWER" means Roto-Rooter, Inc., a Delaware corporation, and its
permitted successors and assigns (including, without limitation, a debtor in
possession on its behalf).
"BORROWING DATE" means a date on which an Advance is made hereunder.
"BORROWING NOTICE" is defined in Section 2.8.
"BUSINESS DAY" means (i) with respect to any borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in Chicago, Illinois for the conduct of
substantially all of their commercial lending activities, interbank wire
transfers can be made on the Fedwire system and dealings in Dollars are carried
on in the London interbank market and (ii) for all other purposes, a day (other
than a Saturday or Sunday) on which banks generally are open in Chicago,
Illinois for the conduct of substantially all of their commercial lending
activities and interbank wire transfers can be made on the Fedwire system.
"CAPITAL EXPENDITURES" means, without duplication, any expenditures for any
purchase or other acquisition of any asset which would be classified as a fixed
or capital asset on a consolidated balance sheet of the Borrower and its
Subsidiaries prepared in accordance with Agreement Accounting Principles.
"CAPITALIZED LEASE" of a Person means any lease of Property by such Person
as lessee which would be capitalized on a balance sheet of such Person prepared
in accordance with Agreement Accounting Principles.
3
"CAPITALIZED LEASE OBLIGATIONS" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be classified as
a liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.
"CASH EQUIVALENT INVESTMENTS" means (i) direct obligations of, or fully
guaranteed by, the United States of America, (ii) commercial paper rated A-1 or
better by S&P or P-1 or better by Moody's, (iii) demand deposit accounts
maintained in the ordinary course of business, (iv) certificates of deposit,
bankers' acceptances, money market deposit accounts, and time deposits issued by
or maintained with, as applicable, commercial banks (whether domestic or
foreign) having capital and surplus in excess of $100,000,000, (v) fully
collateralized repurchase agreements with a term of not more than 30 days for
securities described in clause (i) above and entered into with a financial
institution satisfying the criteria described in clause (iv) above, and (vi) in
the case of any Foreign Subsidiary, (A) marketable direct obligations issued by,
or unconditionally guaranteed by, the sovereign nation in which such Foreign
Subsidiary is organized and is conducting business or issued by any agency of
such sovereign nation and backed by the full faith and credit of such sovereign
nation, in each case maturing within one year from the date of acquisition, so
long as the Indebtedness of such sovereign nation is rated at least A-1 or
better by S&P or P-1 or better by Moody's or carries an equivalent rating from a
comparable foreign rating agency or (B) Investments of the type and maturity
described in clauses (ii) through (v) above of foreign obligors, which
Investments or obligors have ratings described in such clauses or equivalent
ratings from comparable foreign rating agencies..
"CASH FLOW PERIOD" means each fiscal year of the Borrower, beginning with
the fiscal year ending 2004.
"CHAMPVA" means, collectively, the Civilian Health and Medical Program of
the Department of Veteran Affairs, a program of medical benefits covering
retirees and dependents of former members of the armed services administered by
the United States Department of Veteran Affairs, and all laws, rules,
regulations, manuals, orders, guidelines or requirements pertaining to such
program including (a) all federal statutes (whether set forth in 38 U.S.C.
{section} 1713 or elsewhere) affecting such program or, to the extent applicable
to CHAMPVA; and (b) all rules, regulations (including 38 C.F.R. {section}
17.54), manuals, orders and administrative, reimbursement and other guidelines
of all governmental authorities promulgated in connection with such program
(whether or not having the force of law), in each case as the same may be
amended, supplemented or otherwise modified from time to time.
"CHAMPVA RECEIVABLE" means a Receivable payable pursuant to the CHAMPVA
program.
"CHANGE OF CONTROL" means (i) the acquisition by any Person, or any group
of Persons (within the meaning of Section 13 or 14 of the Securities Exchange
Act of 1934, as amended) acting in concert, of beneficial ownership (within the
meaning of Rule 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as amended) of 50% or more of the outstanding
shares of common stock of the Borrower; or (ii) the occurrence of a "Change of
Control" as defined in the Senior Secured Indenture Documents.
4
"CHEMED CAPITAL TRUST" means Chemed Capital Trust, a Delaware statutory
business trust and a Wholly-Owned Subsidiary of the Borrower, together with its
permitted successors and assigns.
"CHEMED TRUST SECURITIES" means the 575,503 convertible trust preferred
securities of Chemed Capital Trust issued in exchange for shares of the
Borrower's capital stock pursuant to an exchange offer completed on February 1,
2000.
"CLOSING DATE" means February 24, 2004.
"CLOSING DATE STOCK AWARD PLAN" means the Borrower's employee stock award
plan in existence on the Closing Date.
"CODE" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time, and any rule or regulation issued
thereunder.
"COLLATERAL" means all Property and interests in Property now owned or
hereafter acquired by the Borrower or any of its Domestic Subsidiaries in or
upon which a security interest, lien or mortgage is granted to the Collateral
Agent, for the benefit of the Holders of Secured Obligations and the other
creditors of the Borrower subject to the Intercreditor Agreement, whether under
the Pledge and Security Agreement, under any of the other Collateral Documents
or under any of the other Loan Documents.
"COLLATERAL AGENT" means Bank One, together with its permitted successors
and assigns.
"COLLATERAL DOCUMENTS" means all agreements, instruments and documents
executed in connection with this Agreement or the Intercreditor Agreement that
are intended to create or evidence Liens to secure the Secured Obligations,
including, without limitation, the Pledge and Security Agreement, the
Intellectual Property Security Agreements, and all other security agreements,
mortgages, deeds of trust, loan agreements, notes, guarantees, subordination
agreements, pledges, powers of attorney, consents, assignments, contracts, fee
letters, notices, leases, financing statements and all other written matter
whether heretofore, now, or hereafter executed by the Borrower or any of its
Subsidiaries and delivered to the Collateral Agent.
"COLLATERAL SHORTFALL AMOUNT" is defined in Section 8.1.
"COMMITMENT FEE" is defined in Section 2.5.1.
"COMMITMENT SCHEDULE" means the Schedule identifying each Lender's
Revolving Loan Commitment and Term Loan Commitment as of the Closing Date
attached hereto and identified as such.
"CONSOLIDATED CAPITAL EXPENDITURES" means, with reference to any period,
the Capital Expenditures of the Borrower and its consolidated Subsidiaries
calculated on a consolidated basis for such period.
5
"CONSOLIDATED CURRENT MATURITIES" means, with reference to any period, all
payments of principal due within twelve (12) calendar months on and after the
last day of such period with respect to all Consolidated Indebtedness of the
Borrower.
"CONSOLIDATED EBITDA" means Consolidated Net Income plus, to the extent
deducted from revenues in determining Consolidated Net Income, (i) Consolidated
Interest Expense, (ii) expense for taxes paid or accrued, (iii) depreciation,
(iv) amortization expense of the Borrower and its consolidated Subsidiaries
(including amortization recorded in connection with the application of Financial
Accounting Standard No. 142 (Goodwill and Other Intangibles)), (v) payments made
in connection with the Xxxxxxxxx Agreement in the amount of $25,000,000 and
transaction fees and expenses paid in connection with the Transactions, (vi) any
severance payments related to the Target Acquisition not to exceed $14,500,000
plus any employment taxes and employee benefit charges payable in connection
therewith, (vii) dividends, distributions and payments not in excess of
$2,800,000 under the Closing Date Stock Award Plan plus any employment taxes and
employee benefit charges payable in connection therewith, and (viii) all other
non-cash charges of the Borrower and its consolidated Subsidiaries (excluding
any such non-cash charge to the extent it represents an accrual of or reserve
for cash expenditures in any future period) less interest income and all
non-cash items of income of the Borrower and its consolidated Subsidiaries in
each case for such period. For purposes of calculating Consolidated EBITDA for
the Borrower and its consolidated Subsidiaries for those periods that require
financial information for the fiscal quarter ending March 31, 2004, the Borrower
shall include the Target on a pro forma basis as though the Target Acquisition
had occurred on January 1, 2004.
"CONSOLIDATED FUNDED INDEBTEDNESS" means, at any time, with respect to any
Person, without duplication, (i) the aggregate Dollar amount of Consolidated
Indebtedness which would be classified on the balance sheet of such Person, as
of the applicable determination date, as long-term Indebtedness, plus (ii) the
aggregate stated or face amount of all Letters of Credit at such time for which
such Person is the account party or is otherwise liable.
"CONSOLIDATED INDEBTEDNESS" means, at any time, with respect to any Person,
the Indebtedness of such Person and its consolidated Subsidiaries calculated on
a consolidated basis as of such time.
"CONSOLIDATED INTEREST EXPENSE" means, with reference to any period, the
interest expense of the Borrower and its consolidated Subsidiaries calculated on
a consolidated basis for such period, in accordance with Agreement Accounting
Principles. Notwithstanding anything to the contrary herein, any premium paid in
connection with the repayment of Indebtedness of the Borrower in connection with
the Transactions and interest on the Trust Securities paid on or prior to
January 1, 2005 shall not be included in Consolidated Interest Expense.
"CONSOLIDATED NET INCOME" means, with reference to any period, the net
income (or loss) of the Borrower and its consolidated Subsidiaries calculated on
a consolidated basis for such period in accordance with Agreement Accounting
Principles.
"CONSOLIDATED NET WORTH" means at any time, with respect to any Person, the
consolidated stockholders' equity of such Person and its consolidated
Subsidiaries, plus minority
6
interests in Subsidiaries, calculated on a consolidated basis in accordance with
Agreement Accounting Principles.
"CONSOLIDATED SENIOR FUNDED DEBT" means Indebtedness outstanding under the
Loan Documents and the Senior Secured Notes.
"CONTINGENT OBLIGATION" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any operating agreement,
take-or-pay contract or the obligations of any such Person as general partner of
a partnership with respect to the liabilities of the partnership (except to the
extent expressly without recourse to such Person).
"CONTINUING DIRECTOR" means, with respect to any Person as of any date of
determination, any member of the board of directors of such Person who (i) was a
member of such board of directors on the Closing Date, or (ii) was nominated for
election or elected to such board of directors with the approval of the required
majority of the Continuing Directors who were members of such board at the time
of such nomination or election.
"CONTROLLED GROUP" means all members of a controlled group of corporations
or other business entities and all trades or businesses (whether or not
incorporated) under common control which, together with the Borrower or any of
its Subsidiaries, are treated as a single employer under Section 414 of the
Code.
"CONVERSION/CONTINUATION NOTICE" is defined in Section 2.9.
"CREDIT EXTENSION" means the making of an Advance or the issuance of a
Facility LC hereunder.
"CREDIT EXTENSION DATE" means the Borrowing Date for an Advance or the
issuance date for a Facility LC.
"CREDIT PARTY" means, at any time, any of the Borrower and any Person which
is a Guarantor at such time; provided, however, that neither VNF nor Chemed
Capital Trust shall be deemed a Credit Party.
"DEEMED DIVIDEND PROBLEM" means, with respect to any Foreign Subsidiary,
such Foreign Subsidiary's accumulated and undistributed earnings and profits
being deemed to be repatriated to the Borrower or the applicable parent Domestic
Subsidiary for U.S. federal income tax purposes and the effect of such
repatriation causing adverse tax consequences to the Borrower or such parent
Domestic Subsidiary, in each case as determined by the Borrower in its
commercially reasonable judgment acting in good faith and, if applicable, in
consultation with its legal and tax advisors.
"DISQUALIFIED STOCK" means any capital stock or other equity interest that,
by its terms (or by the terms of any security into which it is convertible or
for which it is exchangeable), matures
7
or is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, or redeemable at the option of the holder thereof, in whole or in
part, on or prior to the date that is 91 days after the later of the (i) the
Revolving Loan Termination Date and (ii) the Term Loan Maturity Date.
"DIVIDEND COVERAGE AMOUNT" means, for the fourth fiscal quarter of any
fiscal year of the Borrower, an amount equal to $1,250,000 plus such amount as
is required to cause the aggregate principal amount of Term Loan payments made
or required to be made during such fiscal year to equal or exceed the aggregate
amount of cash dividends paid by the Borrower to the holders of its common stock
during such fiscal year.
"DOLLAR", "dollar" and "$" means the lawful currency of the United States
of America.
"DOMESTIC SUBSIDIARY" means any Subsidiary of any Person organized under
the laws of a jurisdiction located in the United States of America.
"ENVIRONMENTAL LAWS" means any and all federal, state, local and foreign
statutes, laws, judicial decisions, regulations, ordinances, rules, judgments,
orders, decrees, injunctions, permits, and legally enforceable governmental
concessions, grants, franchises, licenses, agreements and other governmental
restrictions relating to (i) the protection of the environment, (ii) emissions,
discharges or releases of pollutants, contaminants, hazardous substances or
wastes into surface water, ground water or land, or (iii) the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, hazardous substances or wastes or the
clean-up or other remediation thereof.
"EQUIPMENT" means all of the Borrower's and each Subsidiary's present and
future (i) equipment, including, without limitation, machinery, manufacturing,
distribution, data processing and office equipment, assembly systems, tools,
molds, dies, fixtures, appliances, furniture, furnishings, vehicles, vessels,
aircraft, aircraft engines, and trade fixtures, (ii) other tangible personal
property (other than inventory), and (iii) any and all accessions, parts and
appurtenances attached to any of the foregoing or used in connection therewith,
and any substitutions therefor and replacements, products and proceeds thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rules or regulations promulgated thereunder.
"EURODOLLAR ADVANCE" means an Advance which, except as otherwise provided
in Section 2.11, bears interest at the applicable Eurodollar Rate.
"EURODOLLAR BASE RATE" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the applicable British Bankers' Association LIBOR rate
for deposits in Dollars as reported by any generally recognized financial
information service as of 11:00 a.m. (London time) two (2) Business Days prior
to the first day of such Interest Period, and having a maturity equal to such
Interest Period, provided that, if no such British Bankers' Association LIBOR
rate is available to the Administrative Agent, the applicable Eurodollar Base
Rate for the relevant Interest Period shall instead be the rate determined by
the Administrative Agent to be the rate at which Bank One or one of its
affiliate banks offers to place deposits in Dollars with first-class banks in
the London interbank market at approximately 11:00 a.m. (London time) two (2)
8
Business Days prior to the first day of such Interest Period, in the approximate
amount of Bank One's relevant Eurodollar Loan and having a maturity equal to
such Interest Period.
"EURODOLLAR LOAN" means a Loan which, except as otherwise provided in
Section 2.11, bears interest at the applicable Eurodollar Rate.
"EURODOLLAR RATE" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the sum of (i) the quotient of (a) the Eurodollar Base
Rate applicable to such Interest Period, divided by (b) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Interest Period, plus
(ii) the Applicable Margin then in effect, changing as and when the Applicable
Margin changes.
"EVENT OF DEFAULT" means an event described in Article VII.
"EVENT OF LOSS" means, with respect to any Property, any of the following:
(i) any loss, destruction or damage of such Property or (ii) any condemnation,
seizure, or taking, by exercise of the power of eminent domain or otherwise, of
such Property, or confiscation of such Property or the requisition of the use of
such Property by any Governmental Authority.
"EXCESS CASH FLOW" means, for any Cash Flow Period, an amount, determined
without duplication for any items or components thereof, equal to the Borrower's
Consolidated EBITDA plus the sum of (i) the amount, if any, by which Net Working
Capital decreased during such Cash Flow Period plus (ii) the net amount, if any,
by which the consolidated deferred revenues of the Borrower and its consolidated
Subsidiaries increased during such Cash Flow Period minus income taxes paid in
cash during such period minus Capital Expenditures permitted under this
Agreement that are paid in cash during such period minus Interest Expense for
such period minus repaid and prepaid principal payments in respect of
Indebtedness (including Indebtedness in respect of Revolving Loans to the extent
accompanied by a permanent reduction in Revolving Loan Commitments) owing by the
Borrower and its Subsidiaries during such period other than pursuant to Section
2.7 minus the cash portion of the Purchase Price paid in connection with any
Permitted Acquisition during such Cash Flow Period and minus the sum of (i) any
non-cash gains included in determining such consolidated net income (or loss)
for such Cash Flow Period plus (ii) the amount, if any by which Net Working
Capital increased during such fiscal year plus (iii) the net amount, if any, by
which the consolidated deferred revenues of the Borrower and its consolidated
Subsidiaries decreased during such fiscal year.
"EXCLUDED TAXES" means, in the case of each Lender or applicable Lending
Installation and the Administrative Agent, (i) taxes imposed on its overall net
income, and franchise taxes imposed on it, by (a) the jurisdiction under the
laws of which such Lender or the Administrative Agent is incorporated or
organized or any political combination or subdivision or taxing authority
thereof or (b) the jurisdiction in which the Administrative Agent's or such
Lender's principal executive office or such Lender's applicable Lending
Installation or office making or booking a Loan or Facility LC is located, (ii)
any branch profits taxes imposed by the United States of America or any similar
tax imposed by any other jurisdiction in which the Borrower is located and (iii)
in the case of a Non U.S. Lender (as defined in Section 3.5), any withholding
tax that is imposed on amounts payable to such Non U.S. Lender at the time such
Non U.S. Lender becomes a party to this Agreement (or designates a new lending
office).
9
"EXHIBIT" refers to an exhibit to this Agreement, unless another document
is specifically referenced.
"EXISTING CREDIT AGREEMENTS" means (i) that certain Credit Agreement dated
as of December 24, 2001 by and between the Borrower (formerly known as Chemed
Corporation) and Bank One, NA, as the same has been amended or supplemented
prior to the Closing Date, and (ii) that certain Amended and Restated Credit
Agreement dated as of August 6, 2003 by and among Vitas Hospice Services,
L.L.C., the Target, the institutions party thereto as lenders and BNP Paribas as
the Agent, as the same has been amended or supplemented prior to the Closing
Date.
"EXISTING LETTERS OF CREDIT" means those Letters of Credit identified in
Schedule 2.20.
"FACILITY LC" is defined in Section 2.20.1.
"FACILITY LC APPLICATION" is defined in Section 2.20.3.
"FACILITY LC COLLATERAL ACCOUNT" is defined in Section 2.20.11.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m.
(Chicago, Illinois time) on such day on such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by the Administrative Agent in its sole discretion.
"FINANCIAL CONTRACT" of a Person means (i) any exchange-traded or over-
the-counter future, forward, swap or option contract or other financial
instrument with similar characteristics or (ii) any Rate Management Transaction.
"FINANCIAL ASSISTANCE PROBLEM" means, with respect to any Foreign
Subsidiary, the inability of such Foreign Subsidiary to become a Subsidiary
Guarantor or to permit its assets from being pledged pursuant to a pledge or
security agreement on account of legal or financial limitations imposed by the
jurisdiction of organization of such Foreign Subsidiary or other relevant
jurisdictions having authority over such Foreign Subsidiary, in each case as
determined by the Borrower in its commercially reasonable judgment acting in
good faith and in consultation with its legal and tax advisors.
"FINANCING" means, with respect to any Person, (i) the issuance or sale by
such Person of any equity interests in such Person, or (ii) the issuance or sale
by such Person of any Indebtedness other than Indebtedness permitted under
Section 6.14; provided, however, that the foregoing clause (ii) shall not permit
the incurrence by the Borrower or any Subsidiary of any Indebtedness if such
incurrence is not otherwise permitted by Section 6.14.
"FIRREA" means the Financial Institutions Reform, Recovery, and Enforcement
Act of 1989, as amended, modified or supplemented from time to time.
10
"FIRST TIER FOREIGN SUBSIDIARY" means each Foreign Subsidiary with respect
to which any one or more of the Borrower and its Domestic Subsidiaries directly
owns more than 50% of such Foreign Subsidiary's issued and outstanding ordinary
equity interests.
"FLOATING RATE" means, for any day, a rate per annum equal to the sum of
(i) the Alternate Base Rate for such day, changing when and as the Alternate
Base Rate changes plus (ii) the Applicable Margin then in effect, changing as
and when the Applicable Margin changes.
"FLOATING RATE ADVANCE" means an Advance which, except as otherwise
provided in Section 2.11, bears interest at the Floating Rate.
"FLOATING RATE LOAN" means a Loan which, except as otherwise provided in
Section 2.11, bears interest at the Floating Rate.
"FOREIGN SUBSIDIARY" means any Subsidiary of any Person which is not a
Domestic Subsidiary of such Person.
"FUND" means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.
"GOVERNMENTAL AUTHORITY" means any nation or government, any foreign,
federal, state, local or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"GOVERNMENTAL RECEIVABLES" means, collectively, any and all Receivables
which are (a) Medicare Receivables, (b) Medicaid Receivables, (c) CHAMPVA
Receivables, (d) TRICARE Receivables, or (e) any other Receivables payable by a
Governmental Authority approved by the Administrative Agent.
"GUARANTOR" means each Subsidiary (other than VNF and Chemed Capital Trust)
of the Borrower which is a party to the Guaranty Agreement, including each
Subsidiary of the Borrower which becomes a party to the Guaranty Agreement
pursuant to a joinder or other supplement thereto.
"GUARANTY AGREEMENT" means the Guaranty Agreement, dated as of the Closing
Date, made by the Guarantors in favor of the Administrative Agent for the
benefit of the Holders of Secured Obligations, as the same may be amended,
restated, supplemented or otherwise modified from time to time.
"HOLDERS OF SECURED OBLIGATIONS" means the holders of the Secured
Obligations from time to time and shall refer to (i) each Lender in respect of
its Loans, (ii) the LC Issuer in respect of Reimbursement Obligations, (iii) the
Administrative Agent, the Lenders and the LC Issuer in respect of all other
present and future obligations and liabilities of the Borrower or any of its
Domestic Subsidiaries of every type and description arising under or in
connection with this Agreement or any other Loan Document, (iv) each Lender (or
affiliate thereof), in respect of all Rate Management Obligations of the
Borrower to such Lender (or such affiliate) as exchange party or counterparty
under any Rate Management Transaction, unless the Borrower and such
11
Lender mutually agree that such Rate Management Obligations do not constitute
Secured Obligations, (v) each Person benefiting from indemnities made by the
Borrower or any Subsidiary hereunder or in any Loan Document in respect of the
obligations and liabilities of the Borrower or such Subsidiary to such Person,
and (vi) their respective permitted successors, transferees and assigns.
"INDEBTEDNESS" of a Person means, at any time, without duplication, such
Person's (i) obligations for borrowed money, (ii) obligations representing the
deferred purchase price of Property or services (other than current accounts
payable arising in the ordinary course of such Person's business), (iii)
obligations, whether or not assumed, secured by Liens or payable out of the
proceeds or production from Property now or hereafter owned or acquired by such
Person, (iv) obligations which are evidenced by notes, bonds, debentures,
acceptances, or other similar instruments, (v) obligations to purchase
securities or other Property arising out of or in connection with the sale of
the same or substantially similar securities or Property, (vi) Capitalized Lease
Obligations, (vii) Contingent Obligations of such Person in respect of
Indebtedness, (viii) reimbursement obligations under Letters of Credit, bankers'
acceptances, surety bonds and similar instruments, (ix) for purposes of Section
6.14 only, Net Xxxx-to-Market Exposure under Rate Management Transactions and
other Financial Contracts, and (x) any other obligation for borrowed money which
in accordance with Agreement Accounting Principles would be classified as
indebtedness on the consolidated balance sheet of such Person.
"INTELLECTUAL PROPERTY SECURITY AGREEMENTS" means the intellectual property
security agreements as any Credit Party may from time to time make in favor of
the Collateral Agent for the benefit of the Holders of Secured Obligations and
the other creditors of the Borrower subject to the Intercreditor Agreement, in
each case as the same may be amended, restated, supplemented or otherwise
modified from time to time.
"INTERCREDITOR AGREEMENT" means the Collateral Sharing Agreement, dated as
of February 24, 2004, substantially similar in form and substance to Exhibit H
hereto, by and among the Administrative Agent on behalf of the Lenders, Xxxxx
Fargo Bank, National Association, as Trustee on behalf of the holders of the
Senior Secured Notes, the Collateral Agent, and the Borrower, as the same may be
amended, restated, supplemented or otherwise modified from time to time.
"INTEREST PERIOD" means, with respect to a Eurodollar Advance, a period of
one, two, three or six months, or, to the extent available as determined by the
Administrative Agent in its reasonable judgment, nine or twelve months,
commencing on a Business Day selected by the Borrower pursuant to this
Agreement. Such Interest Period shall end on but exclude the day which
corresponds numerically to such date one, two, three, six, or, if applicable,
nine or twelve months thereafter, provided, however, that if there is no such
numerically corresponding day in such next, second, third, sixth or, if
applicable, ninth or twelfth succeeding month, such Interest Period shall end on
the last Business Day of such next, second, third, sixth or, if applicable,
ninth or twelfth succeeding month. If an Interest Period would otherwise end on
a day which is not a Business Day, such Interest Period shall end on the next
succeeding Business Day, provided, however, that if said next succeeding
Business Day falls in a new calendar month, such Interest Period shall end on
the immediately preceding Business Day.
12
"INVESTMENT" of a Person means any loan, advance (other than commission,
travel, relocation and other loans and advances to officers or employees made in
the ordinary course of business), extension of credit (other than Receivables
arising in the ordinary course of business) or contribution of capital by such
Person; stocks, bonds, mutual funds, partnership interests, notes, debentures or
other securities owned by such Person; any deposit accounts and certificate of
deposit owned by such Person; and structured notes, derivative financial
instruments and other similar instruments or contracts owned by such Person.
"LC FEE" is defined in Section 2.20.4.
"LC ISSUER" means Bank One (or any subsidiary or affiliate of Bank One
designated by Bank One) in its capacity as issuer of Facility LCs hereunder.
"LC OBLIGATIONS" means, at any time, the sum, without duplication, of (i)
the aggregate undrawn stated amount under all Facility LCs outstanding at such
time plus (ii) the aggregate unpaid amount at such time of all Reimbursement
Obligations. No amount owing under a Letter of Credit issued under the Existing
Credit Agreements that is not an Existing Letter of Credit and that is cash
collateralized or supported by a back-to-back Letter of Credit in accordance
with the terms of this Agreement shall constitute an LC Obligation.
"LC PAYMENT DATE" is defined in Section 2.20.5.
"LENDERS" means the lending institutions listed on the signature pages of
this Agreement and their respective permitted successors and assigns. Unless
otherwise specified, the term "Lenders" includes the Swing Line Lender and the
LC Issuer.
"LENDING INSTALLATION" means, with respect to a Lender or the
Administrative Agent, the office, branch, subsidiary or affiliate of such Lender
or the Administrative Agent listed on the signature pages hereof or on the
administrative information sheets provided to the Administrative Agent in
connection herewith or on a Schedule or otherwise selected by such Lender or the
Administrative Agent pursuant to Section 2.17.
"LETTER OF CREDIT" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"LEVERAGE RATIO" has the meaning set forth in Section 6.20.1.
"LIEN" means any lien (statutory or other), security interest, mortgage,
pledge, hypothecation, assignment, deposit arrangement, or encumbrance of any
kind or nature whatsoever (including, without limitation, the interest of a
vendor or lessor under any conditional sale, Capitalized Lease or other title
retention agreement, and, in the case of stock agreements, any purchase option,
call or similar right of a Person with respect to such stock).
"LOAN" means, with respect to a Lender, such Lender's loan made pursuant to
Article II (or any conversion or continuation thereof), whether constituting a
Term Loan, Revolving Loan or a Swing Line Loan.
13
"LOAN DOCUMENTS" means this Agreement, the Facility LC Applications, the
Intercreditor Agreement, the Collateral Documents, the Guaranty Agreement and
all other documents, instruments, notes (including any Notes issued pursuant to
Section 2.13 (if requested)) and agreements executed in connection herewith or
therewith or contemplated hereby or thereby, as the same may be amended,
restated or otherwise modified and in effect from time to time.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) the
business, condition (financial or otherwise), operations, performance or
Property of the Borrower and its Subsidiaries taken as a whole, (ii) the ability
of the Borrower or any Subsidiary to perform its material obligations under the
Loan Documents, or (iii) the validity or enforceability of the Loan Documents or
the rights or remedies of the Administrative Agent, the Collateral Agent, the LC
Issuer or the Lenders thereunder or their rights with respect to the Collateral.
"MATERIAL INDEBTEDNESS" means any Indebtedness in an outstanding principal
amount of $10,000,000 or more in the aggregate (or the equivalent thereof in any
currency other than Dollars).
"MATERIAL INDEBTEDNESS AGREEMENT" means any agreement under which any
Material Indebtedness is outstanding or is governed.
"MEDICAID" shall mean, collectively, the health care assistance program
established by Title XIX of the Social Security Act (42 U.S.C.
{section}{section} 1396 et seq.) and any statutes succeeding thereto, and all
laws, rules, regulations, manuals, orders, guidelines or requirements pertaining
to such program including (a) all federal statutes (whether set forth in Title
XIX of the Social Security Act or elsewhere) affecting such program; (b) all
state statutes and plans for medical assistance enacted in connection with such
program and federal rules and regulations promulgated in connection with such
program; and (c) all applicable provisions of all rules, regulations, manuals,
orders and administrative reimbursement guidelines and requirements of all
government authorities promulgated in connection with such program (whether or
not having the force of law), in each case as the same may be amended,
supplemented or otherwise modified from time to time.
"MEDICAID RECEIVABLE" shall mean a Receivable payable pursuant to the
Medicaid program.
"MEDICARE" shall mean, collectively, the health insurance program for the
aged and disabled established by Title XVIII of the Social Security Act (42
U.S.C. {section}{section} 1395 et seq.) and any statutes succeeding thereto, and
all laws, rules, regulations, manuals, orders or guidelines pertaining to such
program including (a) all federal statutes (whether set forth in Title XVIII of
the Social Security Act or elsewhere) affecting such program; and (b) all
applicable provisions of all rules, regulations, manuals, orders and
administrative reimbursement guidelines and requirements of all governmental
authorities promulgated in connection with such program (whether or not having
the force of law), in each case as the same may be amended, supplemented or
otherwise modified from time to time.
"MEDICARE RECEIVABLE" shall mean a Receivable payable pursuant to the
Medicare program.
14
"MODIFY" and "MODIFICATION" are defined in Section 2.20.1.
"MOODY'S" means Xxxxx'x Investors Services, Inc. and any successor thereto.
"MULTIEMPLOYER PLAN" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, which is covered by Title IV of ERISA and to which the
Borrower or any member of the Controlled Group is obligated to make
contributions.
"NET CASH PROCEEDS" means, (1) with respect to any Asset Sale or any
Financing by any Person, (a) cash (freely convertible into Dollars) received by
such Person from such Asset Sale (including cash received as consideration for
the assumption or incurrence of liabilities incurred in connection with or in
anticipation of such Asset Sale) or such Financing, after (i) provision for all
income or other taxes measured by or resulting from such sale of Property
(including reasonably estimated taxes), and the amount of any reserves
established by such Person to fund contingent liabilities reasonably estimated
to be payable that are directly attributable to such Asset Sale or Financing (as
determined reasonably and in good faith by the chief financial officer of such
Person), (ii) payment of all reasonable brokerage commissions or discounts and
other fees and expenses related to such Asset Sale or Financing, (iii) all
amounts used to repay, redeem or repurchase Indebtedness secured by a Lien on
any asset disposed of, sold, leased, conveyed or otherwise transferred in such
Asset Sale or which is or may be required (by the express terms of the
instrument governing such Indebtedness) to be repaid, redeemed or repurchased in
connection with such Asset Sale (including payments made to obtain or avoid the
need for the consent of any holder of such Indebtedness) or Financing and (2)
with respect to an Event of Loss of a Person, cash (freely convertible in
Dollars) received by or for such Person's account, net of (i) reasonable costs
or expenses incurred in connection with such Event of Loss, including those
costs and expenses incurred in investigating or recovering such cash and
reasonable reserves associated therewith in accordance with Agreement Accounting
Principles, (ii) amounts required to repay, redeem or repurchase any
Indebtedness or statutory or other obligations secured by any Lien on the
property (or portion thereof) so damaged or taken (other than the Secured
Obligations) or which is required to be and is repaid, redeemed or repurchased
in connection with such Event of Loss, and (iii) provision for all income or
other taxes measured by or resulting from such Event of Loss (including
reasonably estimated taxes), and the amount of any reserves established by such
Person to fund contingent liabilities reasonably estimated to be payable that
are directly attributable to such Event of Loss (as determined reasonably and in
good faith by the chief financial officer of such Person).
"NET XXXX-TO-MARKET EXPOSURE" of a Person means, as of any date of
determination, the excess (if any) of all unrealized losses over all unrealized
profits of such Person arising from Rate Management Transactions, as determined
by such Person in good faith. "Unrealized losses" means the fair market value of
the cost to such Person of replacing such Rate Management Transaction as of the
date of determination (assuming the Rate Management Transaction were to be
terminated as of that date), and "unrealized profits" means the fair market
value of the gain to such Person of replacing such Rate Management Transaction
as of the date of determination (assuming such Rate Management Transaction were
to be terminated as of that date).
15
"NET WORKING CAPITAL" means, at any date, (a) the consolidated current
assets of the Borrower and its consolidated Subsidiaries as of such date
(excluding cash, Cash Equivalent Investments, and Unapplied PIP) minus (b) the
consolidated current liabilities of the Borrower and its consolidated
Subsidiaries as of such date (excluding current liabilities in respect of
Indebtedness and PIP Settlements). Net Working Capital at any date may be a
positive or negative number. Net Working Capital increases when it becomes more
positive or less negative and decreases when it becomes less positive or more
negative.
"NON-U.S. LENDER" is defined in Section 3.5(iv).
"NOTE" is defined in Section 2.13.
"OBLIGATIONS" means all Loans, all Reimbursement Obligations, advances,
debts, liabilities, obligations, covenants and duties owing by the Borrower to
the Administrative Agent, any Lender, the Swing Line Lender, the LC Issuer, the
Arranger, or any indemnitee under the provisions of Section 9.6 or any other
provisions of the Loan Documents, in each case of any kind or nature, present or
future, arising under this Agreement or any other Loan Document, whether or not
evidenced by any note, guaranty or other instrument, whether or not for the
payment of money, whether arising by reason of an extension of credit, loan,
foreign exchange risk, guaranty, indemnification, or in any other manner,
whether direct or indirect (including those acquired by assignment), absolute or
contingent, due or to become due, now existing or hereafter arising and however
acquired. The term includes, without limitation, all interest, charges,
expenses, fees, attorneys' fees and disbursements (in each case whether or not
allowed), and any other sum chargeable to the Borrower or any of its
Subsidiaries under this Agreement or any other Loan Document.
"OPERATING LEASE" of a Person means any lease of Property (other than a
Capitalized Lease) by such Person as lessee which has an original term
(including any required renewals and any renewals effective at the option of the
lessor) of one year or more.
"OPERATING LEASE OBLIGATIONS" means, as at any date of determination, the
amount obtained by aggregating the present values, determined in the case of
each particular Operating Lease, by applying a discount rate (which discount
rate shall equal the discount rate which would be applied under Agreement
Accounting Principles if such Operating Lease were a Capitalized Lease) from the
date on which each fixed lease payment is due under such Operating Lease to such
date of determination, of all fixed lease payments due under all Operating
Leases of the Borrower and its Subsidiaries.
"OTHER TAXES" is defined in Section 3.5(ii).
"OUTSTANDING REVOLVING CREDIT EXPOSURE" means, as to any Lender at any
time, the sum of (i) the aggregate principal amount of its Revolving Loans
outstanding at such time, plus (ii) an amount equal to its ratable obligation to
purchase participations in the aggregate principal amount of Swing Line Loans
outstanding at such time, plus (iii) an amount equal to its ratable obligation
to purchase participations in the LC Obligations at such time.
"PARTICIPANTS" is defined in Section 12.2.1.
16
"PAYMENT DATE" means the last day of each March, June, September and
December, the Revolving Loan Termination Date and the Term Loan Maturity Date.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"PERMITTED ACQUISITION" is defined in Section 6.13.21.
"PERSON" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.
"PIP" means periodic interim payments (or similar payments) made by any
Governmental Authority to any Credit Party under the Medicare, Medicaid, TRICARE
or CHAMPVA programs or any similar program of any Governmental Authority.
"PIP SETTLEMENTS" has the meaning ascribed to such term in Section 6.9(ii)
hereof.
"PLAN" means an employee pension benefit plan, excluding any Multiemployer
Plan, which is covered by Title IV of ERISA or subject to the minimum funding
standards under Section 412 of the Code as to which the Borrower or any member
of the Controlled Group may have any liability.
"PLEDGE AND SECURITY AGREEMENT" means that certain Pledge and Security
Agreement, dated as of the Closing Date, by and between the Credit Parties and
the Collateral Agent for the benefit of the Holders of Secured Obligations and
the other creditors of the Borrower subject to the Intercreditor Agreement, as
the same may be amended, restated, supplemented, or otherwise modified from time
to time.
"PLEDGE SUBSIDIARY" means each Domestic Subsidiary and, at the option of
the Administrative Agent, each First Tier Foreign Subsidiary.
"PRICING SCHEDULE" means the Schedule identifying the Applicable Margin and
Applicable Fee Rate attached hereto and identified as such.
"PRIME RATE" means a rate per annum equal to the prime rate of interest
announced from time to time by Bank One or its parent (which is not necessarily
the lowest rate charged to any customer), changing when and as said prime rate
changes.
"PROPERTY" of a Person means any and all property, whether real, personal,
tangible, intangible, or mixed, of such Person.
"PRO RATA SHARE" means, with respect to any Lender, the percentage obtained
by multiplying 100% by the quotient of (i) the sum of such Lender's Revolving
Loan Commitment and Term Loans at such time divided by (ii) the sum of the
Aggregate Revolving Loan Commitment and the aggregate amount of all of the Term
Loans at such time; provided, however, if all of the Revolving Loan Commitments
and Term Loan Commitments are terminated pursuant to the terms of this
Agreement, then "Pro Rata Share" means the percentage obtained by multiplying
100% by the quotient of (a) the sum of such Lender's Outstanding
17
Revolving Credit Exposure and outstanding Term Loans at such time divided by (b)
the sum of the Aggregate Outstanding Revolving Credit Exposure and the aggregate
outstanding amount of all Term Loans at such time.
"PURCHASE PRICE" means the total consideration and other amounts payable in
connection with any Acquisition, including, without limitation, any portion of
the consideration payable in cash, all Indebtedness, liabilities and contingent
obligations incurred or assumed in connection with such Acquisition and all
transaction costs and expenses incurred in connection with such Acquisition, but
exclusive of the value of any capital stock or other equity interests of the
Borrower or any Subsidiary issued as consideration for such Acquisition.
"PURCHASERS" is defined in Section 12.3.1.
"RATE MANAGEMENT OBLIGATIONS" of a Person means any and all obligations of
such Person, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all Rate
Management Transactions, and (ii) any and all cancellations, buy backs,
reversals, terminations or assignments of any Rate Management Transactions.
"RATE MANAGEMENT TRANSACTION" means any transaction (including an agreement
with respect thereto) now existing or hereafter entered by the Borrower or a
Subsidiary which is a rate swap, basis swap, forward rate transaction, commodity
swap, commodity option, equity or equity index swap, equity or equity index
option, bond option, interest rate option, foreign exchange transaction, cap
transaction, floor transaction, collar transaction, forward transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar transaction (including any option with respect to any of
these transactions) or any combination thereof, whether linked to one or more
interest rates, foreign currencies, commodity prices, equity prices or other
financial measures.
"RECEIVABLE(s)" means and includes all of the Borrower's and each
Subsidiary's presently existing and hereafter arising or acquired accounts,
accounts receivable, and all present and future rights of the Borrower or such
Subsidiary to payment for goods sold or leased or for services rendered (except
those evidenced by instruments or chattel paper), whether or not they have been
earned by performance, and all rights in any merchandise or goods which any of
the same may represent, and all rights, title, security and guarantees with
respect to each of the foregoing, including, without limitation, any right of
stoppage in transit.
"REGULATION D" means Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor thereto or other
regulation or official interpretation of said Board of Governors relating to
reserve requirements applicable to member banks of the Federal Reserve System.
"REGULATION U" means Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks, non-banks
18
and non-broker lenders for the purpose of purchasing or carrying margin stocks
applicable to member banks of the Federal Reserve System.
"REGULATION X" means Regulation X of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by foreign lenders for the purpose of purchasing or carrying
margin stock (as defined therein).
"REIMBURSEMENT OBLIGATIONS" means, at any time, the aggregate of all
obligations of the Borrower then outstanding under Section 2.20 to reimburse the
LC Issuer for amounts paid by the LC Issuer in respect of any one or more
drawings under Facility LCs.
"REPORTABLE EVENT" means a reportable event, as defined in Section 4043 of
ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC has by regulation waived
the requirement of Section 4043(a) of ERISA that it be notified within thirty
(30) days of the occurrence of such event, provided, however, that a failure to
meet the minimum funding standard of Section 412 of the Code and of Section 302
of ERISA shall be a Reportable Event regardless of the issuance of any such
waiver of the notice requirement in accordance with either Section 4043(a) of
ERISA or Section 412(d) of the Code.
"REPORTS" is defined in Section 9.6.
"REQUIRED LENDERS" means Lenders in the aggregate having more than 50% of
the sum of the Aggregate Revolving Loan Commitment and the Aggregate Term Loan
Commitment (or, if all of the Revolving Loan Commitments and Term Loan
Commitments are terminated pursuant to the terms of this Agreement, the
Aggregate Outstanding Revolving Credit Exposure and aggregate outstanding
principal amount of Term Loans at such time).
"REQUIRED MANDATORY PREPAYMENT AMOUNT" means, with respect to any mandatory
prepayment of the Loans made in accordance with Section 2.2(c)(ii), an amount,
based on the then applicable Leverage Ratio, equal to the Net Cash Proceeds
allocable to the Loans in respect of such prepayment times the then applicable
percentage set forth below.
PERCENTAGE OF NET CASH PROCEEDS TO BE APPLIED
LEVERAGE RATIO IN REDUCTION OF OUTSTANDING LOANS
---------------------------------- ---------------------------------------------
Greater than 3.50 to 1.00 75%
Less than or equal to 3.50 to 1.00 50%
"RESERVE REQUIREMENT" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on
"Eurocurrency liabilities" (as defined in Regulation D) for such Interest
Period.
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"RESTRICTED PAYMENT" means (i) any dividend or other distribution, direct
or indirect, on account of any equity interests of the Borrower or the Target
now or hereafter outstanding, except a dividend payable solely in the Borrower's
or the Target's capital stock (other than Disqualified Stock) or in options,
warrants or other rights to purchase such capital stock, or (ii) any redemption,
retirement, purchase or other acquisition for value, direct or indirect, of any
equity interests of the Borrower or any of its Subsidiaries now or hereafter
outstanding, other than in exchange for, or out of the proceeds of, the
substantially concurrent sale (other than to a Subsidiary of the Borrower) of
other equity interests of the Borrower (other than Disqualified Stock).
"REVOLVING LOAN" means, with respect to a Lender, such Lender's loan made
pursuant to its commitment to lend set forth in Section 2.1.1 (and any
conversion or continuation thereof).
"REVOLVING LOAN COMMITMENT" means, for each Lender, including without
limitation, each LC Issuer, such Lender's obligation to make Revolving Loans to,
and participate in Facility LCs issued upon the application of, the Borrower in
an aggregate amount not exceeding the amount set forth for such Lender on the
Commitment Schedule or in any Assignment Agreement delivered pursuant to Section
12.3, as such amount may be modified from time to time pursuant to the terms
hereof.
"REVOLVING LOAN PRO RATA SHARE" means, with respect to any Lender, the
percentage obtained by multiplying 100% by the quotient of (i) such Lender's
Revolving Loan Commitment at such time divided by (ii) the Aggregate Revolving
Loan Commitment at such time; provided, however, if all of the Revolving Loan
Commitments are terminated pursuant to the terms of this Agreement, then
"Revolving Loan Pro Rata Share" means the percentage obtained by multiplying
100% by the quotient of (a) such Lender's Outstanding Revolving Credit Exposure
at such time divided by (b) the Aggregate Outstanding Revolving Credit Exposure
at such time.
"REVOLVING LOAN TERMINATION DATE" means the earlier of (a) February 24,
2009, and (b) the date of termination in whole of the Aggregate Revolving Loan
Commitment pursuant to Section 2.2 hereof or the Revolving Loan Commitments
pursuant to Section 8.1 hereof.
"ROTO-ROOTER STOCK ISSUANCE" means any issuance of equity interests in the
Borrower to non-Affiliates.
"S&P" means Standard and Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc., and any successor thereto.
"SALE AND LEASEBACK TRANSACTION" means any sale or other transfer of
Property by any Person with the intent to lease such Property as lessee.
"SCHEDULE" refers to a specific schedule to this Agreement, unless another
document is specifically referenced.
"SECTION" means a numbered section of this Agreement, unless another
document is specifically referenced.
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"SECURED OBLIGATIONS" means, collectively, (i) the Obligations and (ii) all
Rate Management Obligations owing in connection with Rate Management
Transactions to any Lender or any affiliate of any Lender, unless the Borrower
and any such Lender mutually agree that such Rate Management Obligations do not
constitute Secured Obligations.
"SENIOR SECURED INDENTURE" means the Indenture, dated as of February 24,
2004, in form and substance substantially similar to Exhibit I, by and between
the Borrower and Xxxxx Fargo Bank, National Association as Trustee for the
purchasers of the Senior Secured Notes, as the same may be amended, restated,
supplemented or otherwise modified from time to time.
"SENIOR SECURED INDENTURE DOCUMENTS" means the Senior Secured Notes, the
Senior Secured Indenture, the "Security Documents" as defined in the Senior
Secured Indenture, the Intercreditor Agreement, the "Intellectual Property
Security Agreements" as defined in the Senior Secured Indenture, and the
agreements, documents, and instruments delivered in connection therewith, as
each of the foregoing may be amended, restated, supplemented or otherwise
modified from time to time.
"SENIOR SECURED NOTES" means those certain Floating Rate Senior Secured
Notes due 2010, in form and substance substantially similar to Exhibit I, in an
initial aggregate principal amount equal to $110,000,000, issued by the Borrower
pursuant to the Senior Secured Indenture, as such Notes may be amended,
restated, supplemented or otherwise modified from time to time.
"SENIOR UNSECURED INDENTURE" means the Indenture, dated as of February 24,
2004, in form and substance substantially similar to Exhibit J, by and between
the Borrower and LaSalle Bank National Association, as Trustee for the
purchasers of the Senior Unsecured Notes, as the same may be amended, restated,
supplemented or otherwise modified from time to time.
"SENIOR UNSECURED INDENTURE DOCUMENTS" means the Senior Unsecured Notes,
the Senior Unsecured Indenture, and the agreements, documents, and instruments
delivered in connection therewith, as each of the foregoing may be amended,
restated, supplemented or otherwise modified from time to time.
"SENIOR UNSECURED NOTES" means those certain unsecured 8-3/4% Senior
Unsecured Notes due 2011, in form and substance substantially similar to Exhibit
J, in an initial aggregate principal amount equal to $150,000,000, issued by the
Borrower pursuant to the Senior Unsecured Indenture, as such Notes may be
amended, restated, supplemented, or otherwise modified from time to time.
"SERVICE AMERICA WRITE-DOWN" means the write-down, in accordance with
generally accepted accounting principles in effect on the date of such write-
down, of $15,000,000 of goodwill associated with Service America Network, Inc.
"SINGLE EMPLOYER PLAN" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.
"SUBORDINATED CHEMED DEBENTURES" means the Convertible Junior Subordinated
Debentures due 2030, issued by the Borrower pursuant to the Indenture, dated as
of February 7,
21
2000, between the Borrower and Firstar Bank, National Association, as trustee,
as the same may be amended, restated, supplemented or otherwise modified from
time to time.
"SUBSIDIARY" of a Person means (i) any corporation of which more than 50%
of the outstanding securities having ordinary voting power shall at the time be
owned or controlled, directly or indirectly, by such Person or by one or more of
its Subsidiaries or by such Person and one or more of its Subsidiaries, or (ii)
any partnership, limited liability company, association, joint venture or
similar business organization of which more than 50% of the ownership interests
having ordinary voting power shall at the time be so owned or controlled. Unless
otherwise expressly provided, all references herein to a "Subsidiary" shall mean
a Subsidiary of the Borrower, including, without limitation, the Target.
"SUBSTANTIAL PORTION" means, with respect to the Property of the Borrower
and its Subsidiaries, Property which represents more than 10% of the
consolidated tangible assets of the Borrower and its Subsidiaries or Property
which is responsible for more than 10% of the consolidated net revenues of the
Borrower and its Subsidiaries, in each case, as would be shown in the
consolidated financial statements of the Borrower and its Subsidiaries as at the
beginning of the twelve-month period ending with the month in which such
determination is made (or if financial statements have not been delivered
hereunder for that month which begins the twelve-month period, then the
financial statements delivered hereunder for the quarter ending immediately
prior to that month).
"SWING LINE BORROWING NOTICE" is defined in Section 2.4.2.
"SWING LINE COMMITMENT" means the obligation of the Swing Line Lender to
make Swing Line Loans up to a maximum principal amount of $5,000,000 at any one
time outstanding.
"SWING LINE LENDER" means Bank One.
"SWING LINE LOAN" means a Loan made available to the Borrower by the Swing
Line Lender pursuant to Section 2.4.
"TARGET" means Vitas Healthcare Corporation, a Delaware corporation.
"TARGET ACQUISITION" means the direct or indirect Acquisition of the Target
by the Borrower or a Subsidiary thereof pursuant to the Agreement and Plan of
Merger, dated as of December 18, 2003, by and among the Borrower, the Target and
Xxxxxx Merger Corp., as the same may be amended, restated, supplemented or
otherwise modified from time to time prior to the Closing Date.
"TARGET SEVERANCE PROGRAM" means the termination or reassignment of
Target's management team upon the effectiveness of the Target Acquisition and
the payments received by the members of such management team as a result of such
termination or reassignment.
"TARGET STOCK ISSUANCE" means any sale of the Target's equity interests to
non-Affiliates in conjunction with a public offering of such equity interests.
22
"TAXES" means any and all present or future taxes, duties, levies, imposts,
deductions, charges or withholdings, and any and all liabilities with respect to
the foregoing, but excluding Excluded Taxes and Other Taxes.
"TERM LOAN" and "TERM LOANS" are defined in Section 2.1.2.
"TERM LOAN COMMITMENT" means, as to each Lender, its obligation to make
Term Loans to the Borrower pursuant to Section 2.1.2 in an aggregate principal
amount set forth for such Lender on the Commitment Schedule.
"TERM LOAN MATURITY DATE" means February 24, 2009.
"TERM LOAN PRO RATA SHARE" means, with respect to any Lender, the
percentage obtained by multiplying 100% by the quotient of (a) such Lender's
Term Loans at such time divided by (b) the aggregate amount of all of the Term
Loans at such time.
"THIRD PARTY PAYOR" shall mean any Governmental Authority, insurance
company, health maintenance organization, preferred provider organization or
similar entity that is obligated to make payments with respect to a Receivable.
"TRANSACTIONS" means, collectively, the following transactions, which shall
be consummated on or about the Closing Date: (i) the consummation of the Target
Acquisition, (ii) the repayment of approximately $74,400,000 of existing
Indebtedness of the Target, plus accrued interest thereon, (iii) the repayment
of approximately $30,400,000 of existing Indebtedness of the Borrower (including
a $4,000,000 make whole premium), plus accrued interest thereon, (iv) the
assignment of the Xxxxxxxxx Agreement by the Borrower to the Target, the payment
of $25,000,000 by the Target to Xxxx Xxxxxxxxx pursuant to the Xxxxxxxxx
Agreement and the performance of the other obligations under the Xxxxxxxxx
Agreement, (v) the consummation of the offering and sale of the Senior Secured
Notes, the Senior Unsecured Notes and the capital stock of the Borrower and the
execution and delivery of notes, indentures and other agreements in connection
therewith, (vi) the Company and certain of its Subsidiaries entering into the
this Agreement and the other Loan Documents and the borrowing on the Closing
Date of $75,000,000 hereunder (vii) the issuance or deemed issuance of Facility
LCs under this Agreement to replace or backstop, or the cash collateralization
of, Letters of Credit issued to the account of the Borrower or any of its
Subsidiaries or the Target or any of its Subsidiaries, (viii) the cancellation
of a warrant held by the Borrower for shares of the stock of the Target and (ix)
the payment of fees and expenses in connection with the foregoing.
"TRANSFEREE" is defined in Section 12.4.
"TRICARE" means, collectively, a program of medical benefits covering
former and active members of the uniformed services and certain of their
dependents, financed and administered by the United States Departments of
Defense, Health and Human Services and Transportation, which program was
formerly known as the Civilian Health and Medical Program of the Uniformed
Services (CHAMPUS), and all laws, rules, regulations, manuals, orders and
administrative, reimbursement and other guidelines of all governmental
authorities promulgated in connection with such program (whether or not having
the force of law), in each case as the same may be amended, supplemented or
otherwise modified from time to time.
23
"TRICARE Receivable" means a Receivable payable pursuant to the TRICARE
program.
"TRUST SECURITIES" means the Chemed Preferred Securities, the Subordinated
Chemed Debentures, and the guarantee by the Borrower to the holders of the
Chemed Preferred Securities of amounts payable thereunder.
"TYPE" means, with respect to any Advance, its nature as a Floating Rate
Advance or a Eurodollar Advance and with respect to any Loan, its nature as a
Floating Rate Loan or a Eurodollar Loan.
"UNAPPLIED PIP" has the meaning ascribed to such term in Section 6.9(ii).
"UNFUNDED LIABILITIES" means the amount (if any) by which the present value
of all vested and unvested accrued benefits under each Single Employer Plan
exceeds the fair market value of all such Plan's assets allocable to such
benefits, all determined as of the then most recent valuation date for such Plan
for which a valuation report is available, using actuarial assumptions for
funding purposes as set forth in such report.
"UNMATURED EVENT OF DEFAULT" means an event which but for the lapse of time
or the giving of notice, or both, would constitute an Event of Default.
"VNF" means Vitas of North Florida, Inc., a Florida not-for-profit
corporation and a Wholly-Owned Subsidiary of the Target.
"XXXXXXXXX AGREEMENT" means the Non-Compete and Consulting Agreement dated
as of December 18, 2003 between the Borrower and Xxxx Xxxxxxxxx.
"WHOLLY-OWNED SUBSIDIARY" of a Person means (i) any Subsidiary all of the
outstanding voting securities of which (other than directors' qualifying shares
or shares issued to third parties to the extent necessary to satisfy any
licensing requirements under applicable law with respect to the Borrower's or
any of its Subsidiaries' businesses) shall at the time be owned or controlled,
directly or indirectly, by such Person or one or more Wholly-Owned Subsidiaries
of such Person, or by such Person and one or more Wholly-Owned Subsidiaries of
such Person, or (ii) any partnership, limited liability company, association,
joint venture or similar business organization 100% of the ownership interests
having ordinary voting power of which (other than directors' qualifying shares
or shares issued to third parties to the extent necessary to satisfy any
licensing requirements under applicable law with respect to the Borrower's or
any of its Subsidiaries' businesses) shall at the time be so owned or
controlled.
1.2. PLURAL FORMS. The foregoing definitions shall be equally applicable to
both the singular and plural forms of the defined terms.
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ARTICLE II
THE CREDITS
2.1. REVOLVING LOAN COMMITMENTS AND TERM LOAN COMMITMENTS.
2.1.1 REVOLVING LOANS. From and including the Closing Date and prior to the
Revolving Loan Termination Date, upon the satisfaction of the conditions
precedent set forth in Section 4.1 and 4.2, as applicable, each Lender severally
and not jointly agrees, on the terms and conditions set forth in this Agreement,
to (i) make Revolving Loans to the Borrower from time to time and (ii)
participate in Facility LCs issued upon the request of the Borrower, in each
case in an amount not to exceed in the aggregate at any one time outstanding of
its Revolving Loan Pro Rata Share of the excess of the Aggregate Revolving Loan
Commitment over the Aggregate Outstanding Revolving Credit Exposure; provided
that at no time shall the Aggregate Outstanding Revolving Credit Exposure
hereunder exceed the Aggregate Revolving Loan Commitment. Subject to the terms
of this Agreement, the Borrower may borrow, repay and reborrow Revolving Loans
at any time prior to the Revolving Loan Termination Date. The commitment of each
Lender to lend hereunder shall automatically expire on the Revolving Loan
Termination Date. The LC Issuer will issue Facility LCs hereunder on the terms
and conditions set forth in Section 2.20.
2.1.2 TERM LOANS. Each Lender severally and not jointly agrees to make
a term loan, in Dollars, to the Borrower on the Closing Date in an amount
equal to such Lender's Term Loan Commitment (each such loan being referred
to herein individually as a "Term Loan" and collectively as the "Term
Loans"). The unpaid principal balance of the Term Loans shall be repaid in
twenty (20) consecutive quarterly principal installments, payable on the
last Business Day of each fiscal quarter of the Borrower, commencing on
June 30, 2004, and continuing thereafter until the Term Loan Maturity Date,
and the Term Loans shall be permanently reduced by the amount of each
installment on the date payment thereof is made hereunder. Each such
installment, other than the installment due on the last Business Day of the
fourth fiscal quarter of each fiscal year, shall be in an amount equal to
$1,250,000. The Term Loan installment due on the last Business Day of the
fourth fiscal quarter of each fiscal year shall be in an amount equal to
the Dividend Coverage Amount. Notwithstanding the foregoing, the final
installment for the Term Loans shall be in the amount of the then
outstanding principal balance of the Term Loans. In addition,
notwithstanding the immediately preceding sentence, the then outstanding
principal balance of the Term Loans, if any, shall be due and payable on
the Term Loan Maturity Date. No installment of any Term Loan shall be
reborrowed once repaid. In addition to the scheduled payments on the Term
Loans, the Borrower (a) may make the voluntary prepayments described in
Section 2.7 for credit against the scheduled payments on the Term Loans
pursuant to Section 2.7 and (b) shall make the mandatory prepayments
prescribed in Section 2.2 for credit against the scheduled payments on the
Term Loans pursuant to Section 2.2.
2.2. REQUIRED PAYMENTS; TERMINATION. (a) Any outstanding Revolving Loans
shall be paid in full by the Borrower on the Revolving Loan Termination Date,
any outstanding Term
25
Loans shall be paid in full by the Borrower on the Term Loan Maturity Date, and
all other due and unpaid Secured Obligations shall be paid in full by the
Borrower on the later of the date when due or the Revolving Loan Termination
Date and the Term Loan Maturity Date, as applicable. In addition, if at any time
the Aggregate Outstanding Revolving Credit Exposure hereunder exceeds the
Aggregate Revolving Loan Commitment, the Borrower shall promptly repay
outstanding Revolving Loans and Swing Line Loans (or, if no Revolving Loans or
Swing Line Loans are outstanding, cash collateralize the outstanding LC
Obligations by depositing funds in the Facility LC Collateral Account in
accordance with Section 2.20.11) in an aggregate amount equal to the excess of
the Aggregate Outstanding Revolving Credit Exposure over the Aggregate Revolving
Loan Commitment. Notwithstanding the termination of the Revolving Loan
Commitments under this Agreement on the Revolving Loan Termination Date, until
all of the Obligations (other than obligations to pay fees and expenses with
respect to which the Borrower has not received an invoice and contingent
indemnity obligations) shall have been fully paid and satisfied, all of the
rights and remedies under this Agreement and the other Loan Documents shall
survive to the extent provided herein.
(b) ASSET SALES AND CASUALTY EVENTS. Upon (1) the consummation of any Asset
Sale (including sales of equity interests in the Borrower's Subsidiaries (other
than a Target Stock Issuance), but excluding sales, dispositions or transfers
permitted under Sections 6.12.1, 6.12.2, or 6.12.3), by the Borrower or any
Subsidiary or (2) the Borrower or any Subsidiary suffering an Event of Loss, in
each case within five (5) Business Days after the Borrower's or any of its
Subsidiaries' receipt of any Net Cash Proceeds (or conversion to cash of
non-cash proceeds (whether principal or interest and including securities and
release of escrow arrangements)) received from any such Asset Sale or Event of
Loss, the Borrower shall do one or more of the following, at its option: (x)
redeem or make an offer to repurchase Indebtedness outstanding under the Senior
Secured Indenture Documents or Indebtedness outstanding under the Senior
Unsecured Indenture Documents and (y) make a mandatory prepayment of Loans
outstanding hereunder (with prepayments of Loans hereunder being first applied
to reduce outstanding Term Loans, then applied to reduce outstanding Revolving
Loans, if any, and otherwise applied in accordance with Section 2.2(e)), in an
amount equal to one hundred percent (100%) of such Net Cash Proceeds; provided,
however, that the amount of such Net Cash Proceeds applied pursuant to clause
(y) shall be at least equal to, but may be greater than, the lesser of (A) the
aggregate outstanding Term Loans and (B) the ratable portion of such Net Cash
Proceeds so applied pursuant to clauses (x) and (y) that is allocable to the
Term Loans based upon Indebtedness outstanding under the Senior Secured
Indenture Documents, Indebtedness outstanding under the Senior Unsecured
Indenture Documents, and the principal amount of the Term Loans outstanding on
the date of such prepayment. To the extent that an offer to repurchase
Indebtedness outstanding under the Senior Secured Indenture Documents or the
Senior Unsecured Indenture Documents is rejected, the Borrower shall not then be
required to use such Net Cash Proceeds to prepay the Loans. Notwithstanding the
foregoing, Net Cash Proceeds of Asset Sales or Events of Loss, with respect to
which the Borrower shall have given the Administrative Agent written notice of
its intention to repair or replace the Property subject to any such Asset Sale
or Event of Loss or invest such Net Cash Proceeds in the purchase of assets
(other than securities, unless those securities represent equity interests in an
entity that becomes a Guarantor) to be used by one or more of the Borrower or
the Guarantors in their businesses within one year following such Event of Loss,
shall not be subject to the provisions of
26
the first sentence of this Section 2.2(b) unless and to the extent that such
applicable period shall have expired without such repair, replacement or
investment having been made.
(c) FINANCINGS.
(i) INDEBTEDNESS FINANCINGS. Upon the consummation of any Financing
constituting an issuance of Indebtedness by the Borrower or any Subsidiary of
the Borrower, within three (3) Business Days after the Borrower's or any of its
Subsidiaries' receipt of any Net Cash Proceeds, the Borrower shall do one or
more of the following at its option: (x) redeem or make an offer to repurchase
Indebtedness outstanding under the Senior Secured Indenture Documents or
Indebtedness outstanding under the Senior Unsecured Indenture Documents and (y)
make a mandatory prepayment of Loans outstanding hereunder (with prepayments of
Loans hereunder being first applied to reduce outstanding Term Loans, then
applied to reduce outstanding Revolving Loans, if any, and otherwise applied in
accordance with Section 2.2(e)), in an amount equal to one hundred percent
(100%) of such Net Cash Proceeds; provided, however, that the amount of such Net
Cash Proceeds applied pursuant to clause (y) shall be at least equal to, but may
be greater than, the lesser of (A) the aggregate outstanding Term Loans and (B)
the ratable portion of such Net Cash Proceeds so applied pursuant to clauses (x)
and (y) that is allocable to the Term Loans based upon Indebtedness outstanding
under the Senior Secured Indenture Documents, Indebtedness outstanding under the
Senior Unsecured Indenture Documents, and the principal amount of the Term Loans
outstanding on the date of such prepayment. To the extent that an offer to
repurchase Indebtedness outstanding under the Senior Secured Indenture Documents
or the Senior Unsecured Indenture Documents is rejected, the Borrower shall not
then be required to use such Net Cash Proceeds to prepay the Loans.
(ii) FINANCINGS CONSTITUTING ROTO-ROOTER STOCK ISSUANCES OR TARGET STOCK
ISSUANCES. Upon the consummation of a Roto-Rooter Stock Issuance or a Target
Stock Issuance, within three (3) Business Days after the Borrower's or any of
its Subsidiaries' receipt of any Net Cash Proceeds, the Borrower shall do one or
more of the following: (x) redeem or make an offer to repurchase Indebtedness
outstanding under the Senior Secured Indenture Documents or Indebtedness
outstanding under the Senior Unsecured Indenture Documents and (y) make a
mandatory prepayment of Loans outstanding hereunder (with prepayments of Loans
hereunder being first applied to reduce outstanding Term Loans, then applied to
reduce outstanding Revolving Loans, if any, and otherwise applied in accordance
with Section 2.2(e)), in an amount equal to the Required Mandatory Prepayment
Amount; provided, however, that the Required Mandatory Prepayment Amount payable
under clause (y) shall be at least equal to, but may be greater than, the lesser
of, after giving effect to the percentage of total Net Cash Proceeds used to
determine the Required Mandatory Prepayment Amount, (A) the aggregate
outstanding Term Loans and (B) the ratable portion of such Net Cash Proceeds so
applied pursuant to clauses (x) and (y) that is allocable to the Term Loans
based upon Indebtedness outstanding under the Senior Secured Indenture
Documents, Indebtedness outstanding under the Senior Unsecured Indenture
Documents, and the principal amount of the Term Loans outstanding on the date of
such prepayment. To the extent that an offer to repurchase Indebtedness
outstanding under the Senior Secured Indenture Documents or the Senior Unsecured
Indenture Documents is rejected, the Borrower shall not then be required to use
such Net Cash Proceeds to prepay the Loans.
27
(d) EXCESS CASH FLOW. Within 90 days after the end of each Cash Flow Period
that occurs while Term Loans are outstanding, the Borrower shall calculate
Excess Cash Flow for such Cash Flow Period and shall make a mandatory prepayment
of the Term Loans, payable not later than 90 days after the end of such Cash
Flow Period, in an amount equal to the excess of (i) fifty percent (50%) of such
Excess Cash Flow over (ii) prepayments of Term Loans pursuant to Section 2.7
that were made during such Cash Flow Period. Each such prepayment shall be
subject to the provisions governing the application of payments set forth in
Section 2.2(e)
(e) APPLICATION OF DESIGNATED PREPAYMENTS. Each mandatory prepayment
required by clauses (b) and (c) (in each case to the extent payable with respect
to the Term Loans), and (d) of this Section 2.2 shall be referred to herein as a
"Designated Prepayment." Designated Prepayments shall be applied to reduce the
subsequent scheduled repayments of Term Loans ratably. Designated Prepayments of
Term Loans shall first be applied to Floating Rate Loans and to any Eurodollar
Rate Loans maturing on such date and then to subsequently maturing Eurodollar
Rate Loans in order of maturity. Notwithstanding the foregoing, so long as no
Event of Default has occurred and is then continuing and at the Borrower's
option, the Administrative Agent shall hold all Designated Prepayments to be
applied to Eurodollar Rate Loans in escrow for the benefit of the Lenders and
shall release such amounts upon the expiration of the Interest Periods
applicable to any such Eurodollar Rate Loans being prepaid (it being understood
and agreed that interest shall continue to accrue on the Obligations until such
time as such prepayments are released from escrow and applied to reduce the
Obligations); provided, however, that upon the occurrence and continuance of an
Event of Default, such escrowed amounts may be applied to Eurodollar Rate Loans
without regard to the expiration of any Interest Period and the Borrower shall
make all payments under Section 3.4 resulting therefrom. No mandatory prepayment
made pursuant to clause (b) or (c) of this Section 2.2 shall result in a
corresponding reduction of the Revolving Loan Commitments unless so requested by
the Borrower or required on the date of such mandatory prepayment by the
Required Lenders.
2.3. RATABLE LOANS; TYPES OF ADVANCES. (a) Each Advance hereunder (other
than a Swing Line Loan) shall consist of Loans made from the several Lenders.
Such Loans shall be made ratably in proportion to their respective Revolving
Loan Pro Rata Shares or Term Loan Pro Rata Shares, as applicable.
(b) The Advances may be Floating Rate Advances or Eurodollar Advances, or a
combination thereof, selected by the Borrower in accordance with Sections 2.8
and 2.9, or Swing Line Loans selected by the Borrower in accordance with Section
2.4.
2.4. SWING LINE LOANS.
2.4.1 AMOUNT OF SWING LINE LOANS. Upon the satisfaction of the
conditions precedent set forth in Section 4.2 and, if such Swing Line Loan
is to be made on the date of the initial Credit Extension hereunder, the
satisfaction of the conditions precedent set forth in Section 4.1 as well,
from and including the date of this Agreement and prior to the Revolving
Loan Termination Date, the Swing Line Lender agrees, on the terms and
conditions set forth in this Agreement, to make Swing Line Loans to the
Borrower from
28
time to time in an aggregate principal amount not to exceed the Swing Line
Commitment, provided that the Aggregate Outstanding Revolving Credit
Exposure shall not at any time exceed the Aggregate Revolving Loan
Commitment, and provided further that at no time shall the sum of (i) the
Swing Line Lender's Pro Rata Share of the Swing Line Loans then
outstanding, plus (ii) the outstanding Revolving Loans made by the Swing
Line Lender pursuant to Section 2.1 (including its participation in any
Facility LCs), exceed the Swing Line Lender's Revolving Loan Commitment at
such time. Subject to the terms of this Agreement, the Borrower may borrow,
repay and reborrow Swing Line Loans at any time prior to the Revolving Loan
Termination Date.
2.4.2 BORROWING NOTICE. The Borrower shall deliver to the
Administrative Agent and the Swing Line Lender irrevocable notice (a "Swing
Line Borrowing Notice") not later than 12:00 noon (Chicago, Illinois time)
on the Borrowing Date of each Swing Line Loan, specifying (i) the
applicable Borrowing Date (which date shall be a Business Day), and (ii)
the aggregate amount of the requested Swing Line Loan which shall be an
amount not less than $100,000. The Swing Line Loans shall bear interest at
the Floating Rate or at such other rate as is agreed upon by the Borrower
and the Swing Line Lender.
2.4.3 MAKING OF SWING LINE LOANS. Promptly after receipt of a Swing
Line Borrowing Notice, the Administrative Agent shall notify each Lender by
fax or other similar form of transmission, of the requested Swing Line
Loan. Not later than 2:00 p.m. (Chicago, Illinois time) on the applicable
Borrowing Date, the Swing Line Lender shall make available the Swing Line
Loan, in funds immediately available in Chicago, to the Administrative
Agent at its address specified pursuant to Article XIII. The Administrative
Agent will promptly make the funds so received from the Swing Line Lender
available to the Borrower on the Borrowing Date at the Administrative
Agent's aforesaid address.
2.4.4 REPAYMENT OF SWING LINE LOANS. Each Swing Line Loan shall be
paid in full by the Borrower on or before the fifth (5th) Business Day
after the Borrowing Date for such Swing Line Loan. In addition, the Swing
Line Lender (i) may at any time in its sole discretion with respect to any
outstanding Swing Line Loan, or (ii) shall, on the fifth (5th) Business Day
after the Borrowing Date of any Swing Line Loan, require each Lender
(including the Swing Line Lender) to make a Revolving Loan in the amount of
such Lender's Revolving Loan Pro Rata Share of such Swing Line Loan
(including, without limitation, any interest accrued and unpaid thereon),
for the purpose of repaying such Swing Line Loan. Not later than 1:00 p.m.
(Chicago, Illinois time) on the date of any notice received pursuant to
this Section 2.4.4, each Lender shall make available its required Revolving
Loan, in funds immediately available in Chicago to the Administrative Agent
at its address specified pursuant to Article XIII. Revolving Loans made
pursuant to this Section 2.4.4 shall initially be Floating Rate Loans and
thereafter may be continued as Floating Rate Loans or converted into
Eurodollar Loans in the manner provided in Section 2.9 and subject to the
other conditions and limitations set forth in Article II. Unless a Lender
shall have notified the Swing Line Lender, prior to its making any Swing
Line Loan, that any applicable condition precedent set forth in Sections
4.1 or 4.2, as applicable, had not been satisfied, such Lender's obligation
to make Revolving Loans pursuant to this Section 2.4.4 to repay Swing Line
Loans shall be
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unconditional, continuing, irrevocable and absolute and shall not be
affected by any circumstances, including, without limitation, (a) any
set-off, counterclaim, recoupment, defense or other right which such Lender
may have against the Swing Line Lender or any other Person, (b) the
occurrence or continuance of an Event of Default or Unmatured Event of
Default, (c) any adverse change in the condition (financial or otherwise)
of the Borrower, or (d) any other circumstances, happening or event
whatsoever. In the event that any Lender fails to make payment to the
Administrative Agent of any amount due under this Section 2.4.4, the
Administrative Agent shall be entitled to receive, retain and apply against
such obligation the principal and interest otherwise payable to such Lender
hereunder until the Administrative Agent receives such payment from such
Lender or such obligation is otherwise fully satisfied. In addition to the
foregoing, if for any reason any Lender fails to make payment to the
Administrative Agent of any amount due under this Section 2.4.4, such
Lender shall be deemed, at the option of the Administrative Agent, to have
unconditionally and irrevocably purchased from the Swing Line Lender,
without recourse or warranty, an undivided interest and participation in
the applicable Swing Line Loan in the amount of such Revolving Loan, and
such interest and participation may be recovered from such Lender together
with interest thereon at the Federal Funds Effective Rate for each day
during the period commencing on the date of demand and ending on the date
such amount is received. On the Revolving Loan Termination Date, the
Borrower shall repay in full the outstanding principal balance of the Swing
Line Loans.
2.5. COMMITMENT FEE; AGGREGATE REVOLVING LOAN COMMITMENT.
2.5.1 COMMITMENT FEE. The Borrower shall pay to the Administrative
Agent, for the account of the Lenders with Revolving Loan Commitments in
accordance with their Revolving Loan Pro Rata Shares, from and after the
Closing Date until the date on which the Aggregate Revolving Loan
Commitment shall be terminated in whole, a commitment fee (the "Commitment
Fee") accruing at the rate of the then Applicable Fee Rate on the average
daily excess of the Aggregate Revolving Loan Commitment over the Aggregate
Outstanding Revolving Credit Exposure. All such Commitment Fees payable
hereunder shall be payable quarterly in arrears on each Payment Date.
2.5.2 REDUCTIONS IN AGGREGATE REVOLVING LOAN COMMITMENT. The Borrower
may permanently reduce the Aggregate Revolving Loan Commitment in whole, or
in part, ratably among the Lenders in the minimum amount of $5,000,000 (and
in multiples of $1,000,000 in excess thereof), upon at least three (3)
Business Days' written notice to the Administrative Agent, which notice may
be conditional and shall specify the amount of any such reduction,
provided, however, that the amount of the Aggregate Revolving Loan
Commitment may not be reduced below the Aggregate Outstanding Revolving
Credit Exposure. All accrued Commitment Fees shall be payable on the
effective date of any termination of the obligations of the Lenders to make
Credit Extensions hereunder and on the final date upon which all Loans are
repaid.
2.6. MINIMUM AMOUNT OF EACH ADVANCE. Each Eurodollar Advance shall be
in the minimum amount of $2,000,000 (and in multiples of $500,000 if in
excess thereof), and each Floating Rate Advance (other than an Advance to
repay Swing Line Loans) shall be in the
30
minimum amount of $1,000,000 (and in multiples of $250,000 if in excess
thereof), provided, however, that any Floating Rate Advance may be (i) in
the amount of the excess of the Aggregate Revolving Loan Commitment over
the Aggregate Outstanding Revolving Credit Exposure or (ii) in such amount
as is required, in accordance with Section 2.20.6, to finance the
reimbursement of a draw under a Facility LC.
2.7. OPTIONAL PRINCIPAL PAYMENTS. The Borrower may from time to time pay,
without penalty or premium, all outstanding Floating Rate Advances (other than
Swing Line Loans), or any portion of the outstanding Floating Rate Advances
(other than Swing Line Loans), in a minimum aggregate amount of $500,000 or any
integral multiple of $100,000 in excess thereof, with notice to the
Administrative Agent by 11:00 a.m. (Chicago, Illinois time) on the date of
repayment, which notice may be conditional. The Borrower may at any time pay,
without penalty or premium, all outstanding Swing Line Loans, or, in a minimum
amount of $100,000 and increments of $50,000 in excess thereof, any portion of
the outstanding Swing Line Loans, with notice to the Administrative Agent and
the Swing Line Lender by 11:00 a.m. (Chicago, Illinois time) on the date of
repayment, which notice may be conditional. The Borrower may from time to time
pay, subject to the payment of any funding indemnification amounts required by
Section 3.4 but without penalty or premium, all outstanding Eurodollar Advances,
or, in a minimum aggregate amount of $1,000,000 or any integral multiple of
$500,000 in excess thereof, any portion of the outstanding Eurodollar Advances
upon three (3) Business Days' prior notice to the Administrative Agent, which
notice may be conditional.
2.8. METHOD OF SELECTING TYPES AND INTEREST PERIODS FOR NEW ADVANCES. The
Borrower shall select the Type of Advance and, in the case of each Eurodollar
Advance, the Interest Period applicable thereto from time to time; provided that
there shall be no more than 5 Interest Periods in effect with respect to all of
the Loans at any time, unless such limit has been waived by the Administrative
Agent in its sole discretion. The Borrower shall give the Administrative Agent
irrevocable notice (a "Borrowing Notice") not later than 10:00 a.m. (Chicago,
Illinois time) at least one Business Day before the Borrowing Date of each
Floating Rate Advance (other than a Swing Line Loan) and three (3) Business Days
before the Borrowing Date for each Eurodollar Advance, specifying:
(i) the Borrowing Date, which shall be a Business Day, of such Advance,
(ii) the aggregate amount of such Advance,
(iii) the Type of Advance selected, and
(iv) in the case of each Eurodollar Advance, the Interest Period
applicable thereto.
Not later than 12:00 noon (Chicago, Illinois time) on each Borrowing Date, each
Lender shall make available its Loan or Loans in Federal or other funds
immediately available in Chicago to the Administrative Agent at its address
specified pursuant to Article XIII. The Administrative Agent will promptly make
the funds so received from the Lenders available to the Borrower at the
Administrative Agent's aforesaid address.
2.9. CONVERSION AND CONTINUATION OF OUTSTANDING ADVANCES; NO CONVERSION OR
CONTINUATION OF EURODOLLAR ADVANCES AFTER EVENT OF DEFAULT. Floating Rate
Advances (other
31
than Swing Line Advances) shall continue as Floating Rate Advances unless and
until such Floating Rate Advances are converted into Eurodollar Advances
pursuant to this Section 2.9 or are repaid in accordance with Section 2.7. Each
Eurodollar Advance shall continue as a Eurodollar Advance until the end of the
then applicable Interest Period therefor, at which time such Eurodollar Advance
shall be automatically converted into a Floating Rate Advance unless (x) such
Eurodollar Advance is or was repaid in accordance with Section 2.7 or (y) the
Borrower shall have given the Administrative Agent a Conversion/Continuation
Notice (as defined below) requesting that, at the end of such Interest Period,
such Eurodollar Advance continue as a Eurodollar Advance for the same or another
Interest Period. Subject to the terms of Section 2.6, the Borrower may elect
from time to time to convert all or any part of an Advance of any Type (other
than a Swing Line Advance) into any other Type or Types of Advances; provided
that any conversion of any Eurodollar Advance shall be made on, and only on, the
last day of the Interest Period applicable thereto. Notwithstanding anything to
the contrary contained in this Section 2.9, during the continuance of an Event
of Default or an Unmatured Event of Default, the Administrative Agent may (or
shall at the direction of the Required Lenders), by notice to the Borrower,
declare that no Advance may be made, converted or continued as a Eurodollar
Advance. The Borrower shall give the Administrative Agent irrevocable notice (a
"Conversion/Continuation Notice") of each conversion of an Advance or
continuation of a Eurodollar Advance not later than 10:00 a.m. (Chicago,
Illinois time) at least one (1) Business Day, in the case of a conversion into a
Floating Rate Advance, or three (3) Business Days, in the case of a conversion
into or continuation of a Eurodollar Advance, prior to the date of the requested
conversion or continuation, specifying:
(i) the requested date, which shall be a Business Day, of such
conversion or continuation,
(ii) the aggregate amount and Type of the Advance which is to be
converted or continued, and
(iii) the amount of such Advance which is to be converted into or
continued as a Eurodollar Advance and the duration of the Interest
Period applicable thereto.
2.10. CHANGES IN INTEREST RATE, ETC. Each Floating Rate Advance (other than
a Swing Line Advance) shall bear interest on the outstanding principal amount
thereof, for each day from and including the date such Advance is made or is
automatically converted from a Eurodollar Advance into a Floating Rate Advance
pursuant to Section 2.9, to but excluding the date it is paid or is converted
into a Eurodollar Advance pursuant to Section 2.9 hereof, at a rate per annum
equal to the Floating Rate for such day. Each Swing Line Loan shall bear
interest on the outstanding principal amount thereof, for each day from and
including the day such Swing Line Loan is made to but excluding the date it is
fully paid at a rate per annum equal to the Floating Rate for such day. Changes
in the rate of interest on that portion of any Advance maintained as a Floating
Rate Advance will take effect simultaneously with each change in the Alternate
Base Rate. Each Eurodollar Advance shall bear interest on the outstanding
principal amount thereof from and including the first day of the Interest Period
applicable thereto to (but not including) the last day of such Interest Period
at the interest rate determined by the Administrative Agent as applicable to
such Eurodollar Advance based upon the Borrower's selections under Sections 2.8
and 2.9 and otherwise in accordance with the terms hereof. No Interest Period in
respect of any
32
Revolving Loan may end after the Revolving Loan Termination Date. No Interest
Period in respect of any Term Loan may end after the Term Loan Maturity Date.
2.11. RATES APPLICABLE AFTER EVENT OF DEFAULT. During the continuance of an
Event of Default (including the Borrower's failure to pay any Loan at maturity)
the Required Lenders may, at their option, by notice to the Borrower (which
notice may be revoked at the option of the Required Lenders notwithstanding any
provision of Section 8.2 requiring unanimous consent of the Lenders to changes
in interest rates), declare that (i) each Eurodollar Advance shall bear interest
for the remainder of the applicable Interest Period at the rate otherwise
applicable to such Interest Period plus 2% per annum, (ii) each Floating Rate
Advance shall bear interest at a rate per annum equal to the Floating Rate in
effect from time to time plus 2% per annum, and (iii) the LC Fee shall be
increased by 2% per annum; provided that, during the continuance of an Event of
Default under Section 7.6 or 7.7, the interest rates set forth in clauses (i)
and (ii) above and the increase in the LC Fee set forth in clause (iii) above
shall be applicable to all Credit Extensions, Advances, fees and other
Obligations hereunder without any election or action on the part of the
Administrative Agent or any Lender.
2.12. METHOD OF PAYMENT. All payments of the Obligations hereunder shall be
made, without setoff, deduction, or counterclaim, in immediately available funds
to the Administrative Agent at the Administrative Agent's address specified
pursuant to Article XIII, or at any other Lending Installation of the
Administrative Agent specified in writing by the Administrative Agent to the
Borrower, by 12:00 noon (Chicago, Illinois time) on the date when due and shall
(except with respect to repayments of Swing Line Loans, and except in the case
of Reimbursement Obligations for which the LC Issuer has not been fully
indemnified by the Lenders, or as otherwise specifically required hereunder) be
applied ratably by the Administrative Agent among the Lenders. Each payment
delivered to the Administrative Agent for the account of any Lender shall be
delivered promptly by the Administrative Agent to such Lender in the same type
of funds that the Administrative Agent received at its address specified
pursuant to Article XIII or at any Lending Installation specified in a notice
received by the Administrative Agent from such Lender. The Administrative Agent
is hereby authorized to charge the account of the Borrower maintained with Bank
One for each payment of the Obligations as it becomes due hereunder. Each
reference to the Administrative Agent in this Section 2.12 shall also be deemed
to refer, and shall apply equally, to the LC Issuer in the case of payments
required to be made by the Borrower to the LC Issuer pursuant to Section 2.20.6.
2.13. NOTELESS AGREEMENT; EVIDENCE OF INDEBTEDNESS.
(i) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness
of the Borrower to such Lender resulting from each Loan made
by such Lender from time to time, including the amounts of
principal and interest payable and paid to such Lender from
time to time hereunder.
(ii) The Administrative Agent shall also maintain accounts in
which it will record (a) the date and the amount of each
Loan made hereunder, the Type thereof and the Interest
Period (in the case of a Eurodollar Advance) with respect
thereto, (b) the amount of any principal or interest due and
payable or to become due and payable
33
from the Borrower to each Lender hereunder, (c) the original
stated amount of each Facility LC and the amount of LC
Obligations outstanding at any time, (d) the effective date
and amount of each Assignment Agreement delivered to and
accepted by it and the parties thereto pursuant to Section
12.3, (e) the amount of any sum received by the
Administrative Agent hereunder from the Borrower and each
Lender's share thereof, and (f) all other appropriate debits
and credits as provided in this Agreement, including,
without limitation, all fees, charges, expenses and
interest.
(iii) The entries maintained in the accounts maintained pursuant
to paragraphs (i) and (ii) above shall be prima facie
evidence of the existence and amounts of the Obligations
therein recorded; provided, however, that the failure of the
Administrative Agent or any Lender to maintain such accounts
or any error therein shall not in any manner affect the
obligation of the Borrower to repay the Obligations in
accordance with their terms.
(iv) Any Lender may request that its Term Loans, Revolving Loans
or, in the case of the Swing Line Lender, the Swing Line
Loans, be evidenced by promissory notes (the "Notes") in
substantially the form of Exhibit E-1 or E-2, with
appropriate changes for notes evidencing Swing Line Loans.
In such event, the Borrower shall prepare, execute and
deliver to such Lender such Note(s) payable to such Lender.
Thereafter, the Loans evidenced by such Note(s) and interest
thereon shall at all times (prior to any assignment pursuant
to Section 12.3) be represented by one or more Notes payable
to the payee named therein, except to the extent that any
such Lender subsequently returns any such Note(s) for
cancellation and requests that such Loans once again be
evidenced as described in paragraphs (i) and (ii) above.
2.14. TELEPHONIC NOTICES. The Borrower hereby authorizes the Lenders and
the Administrative Agent to extend, convert or continue Advances, effect
selections of Types of Advances and to transfer funds based on telephonic
notices made by any person or persons the Administrative Agent or any Lender in
good faith believes to be acting on behalf of the Borrower, it being understood
that the foregoing authorization is specifically intended to allow Borrowing
Notices and Conversion/Continuation Notices to be given telephonically. The
Borrower agrees to deliver promptly to the Administrative Agent a written
confirmation, signed by an Authorized Officer, if such confirmation is requested
by the Administrative Agent or any Lender, of each telephonic notice. If the
written confirmation differs in any material respect from the action taken by
the Administrative Agent and the Lenders, the records of the Administrative
Agent and the Lenders shall govern absent manifest error.
2.15. INTEREST PAYMENT DATES; INTEREST AND FEE BASIS. Interest accrued on
each Floating Rate Advance shall be payable in arrears on each Payment Date,
commencing with the first such date to occur after the Closing Date, on any date
on which the Floating Rate Advance is prepaid, whether due to acceleration or
otherwise, and at maturity. Interest accrued on that portion of the outstanding
principal amount of any Floating Rate Advance converted into a Eurodollar
Advance on a day other than a Payment Date shall be payable on the date of
conversion. Interest accrued on each Eurodollar Advance shall be payable on the
last day of its applicable Interest Period, on
34
any date on which the Eurodollar Advance is prepaid, whether by acceleration or
otherwise, and at maturity. Interest accrued on each Eurodollar Advance having
an Interest Period longer than three months shall also be payable on the last
day of each three-month interval during such Interest Period. Interest on
Eurodollar Advances, LC Fees and all other fees hereunder shall be calculated
for actual days elapsed on the basis of a 360-day year. Interest on Floating
Rate Advances shall be calculated for actual days elapsed on the basis of a
365/366- day year. Interest shall be payable for the day an Advance is made but
not for the day of any payment on the amount paid if payment is received prior
to 12:00 noon (Chicago, Illinois time) at the place of payment. If any payment
of principal of or interest on an Advance, any fees or any other amounts payable
to the Administrative Agent or any Lender hereunder shall become due on a day
which is not a Business Day, such payment shall be made on the next succeeding
Business Day and, in the case of a principal payment, such extension of time
shall be included in computing interest, fees and commissions in connection with
such payment.
2.16. NOTIFICATION OF ADVANCES, INTEREST RATES, PREPAYMENTS AND REVOLVING
LOAN COMMITMENT REDUCTIONS; AVAILABILITY OF LOANS. Promptly after receipt
thereof, the Administrative Agent will notify each Lender of the contents of
each Aggregate Revolving Loan Commitment reduction notice, Borrowing Notice,
Swing Line Borrowing Notice, Conversion/Continuation Notice, and repayment
notice received by it hereunder. Promptly after notice from the LC Issuer, the
Administrative Agent will notify each Lender of the contents of each request for
issuance of a Facility LC hereunder. The Administrative Agent will notify the
Borrower and each Lender of the interest rate applicable to each Eurodollar
Advance promptly upon determination of such interest rate and will give the
Borrower and each Lender prompt notice of each change in the Alternate Base
Rate. Not later than 12:00 noon (Chicago, Illinois time) on each Borrowing Date,
each Lender shall make available its Revolving Loan or Revolving Loans in funds
immediately available in Chicago to the Administrative Agent at its address
specified pursuant to Article XIII. The Administrative Agent will promptly make
the funds so received from the Lenders available to the Borrower at the
Administrative Agent's aforesaid address.
2.17. LENDING INSTALLATIONS. Each Lender may book its Loans and its
participation in any LC Obligations and the LC Issuer may book the Facility LCs
at any Lending Installation selected by such Lender or the LC Issuer, as
applicable, and may change its Lending Installation from time to time. All terms
of this Agreement shall apply to any such Lending Installation and the Loans,
Facility LCs, participations in LC Obligations and any Notes issued hereunder
shall be deemed held by each Lender or the LC Issuer, as applicable, for the
benefit of any such Lending Installation. Each Lender and the LC Issuer may, by
written notice to the Administrative Agent and the Borrower in accordance with
Article XIII, designate replacement or additional Lending Installations through
which Loans will be made by it or Facility LCs will be issued by it and for
whose account Loan payments or payments with respect to Facility LCs are to be
made.
2.18. NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE AGENT. Unless the Borrower
or a Lender, as the case may be, notifies the Administrative Agent prior to the
date on which it is scheduled to make payment to the Administrative Agent of (i)
in the case of a Lender, the proceeds of a Loan or (ii) in the case of the
Borrower, a payment of principal, interest or fees to the Administrative Agent
for the account of the Lenders, that it does not intend to make such
35
payment, the Administrative Agent may assume that such payment has been made.
The Administrative Agent may, but shall not be obligated to, make the amount of
such payment available to the intended recipient in reliance upon such
assumption. If such Lender or the Borrower, as the case may be, has not in fact
made such payment to the Administrative Agent, the recipient of such payment
shall, on demand by the Administrative Agent, repay to the Administrative Agent
the amount so made available together with interest thereon in respect of each
day during the period commencing on 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 (x) in the case of payment by a Lender,
the Federal Funds Effective Rate for such day for the first three (3) days and,
thereafter, the interest rate applicable to the relevant Loan or (y) in the case
of payment by the Borrower, the interest rate applicable to the relevant Loan.
2.19. REPLACEMENT OF LENDER. If the Borrower is required pursuant to
Section 3.1, 3.2 or 3.5 to make any additional payment to any Lender or if any
Lender's obligation to make or continue, or to convert Floating Rate Advances
into, Eurodollar Advances shall be suspended pursuant to Section 3.3, or if any
Lender defaults in its obligations to extend Loans or participate in Facility
LCs hereunder (any Lender so affected an "Affected Lender"), the Borrower may
elect to terminate or replace the Revolving Loan Commitment, Term Loan
Commitment and Loans of such Affected Lender, provided that no Event of Default
shall have occurred and be continuing at the time of such termination or
replacement, and provided further that, concurrently with such termination or
replacement, (i) if the Affected Lender is being replaced, another bank or other
entity which is reasonably satisfactory to the Borrower and the Administrative
Agent shall agree, as of such date, to purchase for cash the Outstanding
Revolving Credit Exposure and Term Loans of the Affected Lender pursuant to an
Assignment Agreement substantially in the form of Exhibit C and to become a
Lender for all purposes under this Agreement and to assume all obligations of
the Affected Lender to be terminated as of such date and to comply with the
requirements of Section 12.3 applicable to assignments, and (ii) the Borrower
shall pay to such Affected Lender in immediately available funds on the day of
such replacement (A) all interest, fees and other amounts then accrued but
unpaid to such Affected Lender by the Borrower hereunder to and including the
date of termination, including without limitation payments due to such Affected
Lender under Sections 3.1, 3.2 and 3.5, and (B) an amount, if any, equal to the
payment which would have been due to such Lender on the day of such replacement
under Section 3.4 had the Loans of such Affected Lender been prepaid on such
date rather than sold to the replacement Lender, in each case to the extent not
paid by the purchasing lender and (iii) if the Affected Lender is being
terminated, the Borrower shall pay to such Affected Lender all Obligations due
to such Affected Lender (including the amounts described in the immediately
preceding clauses (i) and (ii) plus, to the extent not paid by the replacement
Lender, the outstanding principal balance of such Affected Lender's Credit
Extensions). The Administrative Agent shall record such payments made by the
Borrower in accordance with Section 2.13.
2.20. FACILITY LCs.
2.20.1 EXISTING LETTERS OF CREDIT; ISSUANCE. The Borrower, the
Lenders, the Administrative Agent and the LC Issuer agree and confirm that,
as of the Closing Date, and subject to the satisfaction of the condition
precedent set forth in Section 4.1, the
36
Existing Letters of Credit shall (x) be deemed to have been issued pursuant
to this Agreement, (y) constitute Facility LCs, and (z) be governed by this
Section 2.20, together with the other terms and conditions of this
Agreement. The LC Issuer hereby agrees, on the terms and conditions set
forth in this Agreement, to issue standby Letters of Credit (each, a
"Facility LC") and to renew, extend, increase, decrease or otherwise modify
each Facility LC ("Modify," and each such action, a "Modification"), from
time to time from and including the date of this Agreement and prior to the
Revolving Loan Termination Date upon the request of the Borrower; provided
that immediately after each such Facility LC is issued or Modified, (i) the
aggregate amount of the outstanding LC Obligations shall not exceed
$40,000,000 and (ii) the Aggregate Outstanding Revolving Credit Exposure
shall not exceed the Aggregate Revolving Loan Commitment. Subject to the
remaining terms of this Section 2.20.1, no Facility LC shall have an expiry
date later than the earlier of (x) the fifth Business Day prior to the
Revolving Loan Termination Date and (y) one year after its issuance;
provided that any Facility LC with a one-year term may provide for the
renewal thereof for additional one-year periods (which in no event shall
extend beyond the date referred to in the preceding clause (x)); provided,
further, that so long as approved by the Administrative Agent and the LC
Issuer (which approvals shall not be unreasonably withheld), Facility LCs
with stated face amounts not in excess of $250,000 in the aggregate may
have expiry dates that occur within three years of the dates of issuance
thereof but in any event no later than the date referred to in the
preceding clause (x)). Notwithstanding anything to the contrary set forth
in this Agreement, a Facility LC may have an expiry date which occurs after
the Revolving Loan Termination Date so long as the Administrative Agent
receives from the Borrower, at least five (5) Business Days prior to the
Revolving Loan Termination Date, an amount in immediately available funds
equal to at least 105% of the LC Obligations owing under or in connection
with such Facility LC. Such funds shall secure the repayment of such LC
Obligations and any other then outstanding Secured Obligations, if any, in
respect of such Facility LC and shall be deposited in a deposit account
maintained by Bank One. The Borrower shall ensure that the Collateral Agent
for the benefit of the LC Issuer and the Lenders at all times maintains a
perfected first priority Lien upon and control over such deposit account.
Such funds and any interest accrued thereon (to the extent not applied to
reimburse the LC Issuer for any draw under a Facility LC) shall be returned
to the Borrower within three Business Days after the expiration of the
Facility LC relating to the LC Obligations secured by such funds.
2.20.2 PARTICIPATIONS. Upon the issuance or Modification by the LC
Issuer of a Facility LC in accordance with this Section 2.20, the LC Issuer
shall be deemed, without further action by any party hereto, to have
unconditionally and irrevocably sold to each Lender, and each Lender shall
be deemed, without further action by any party hereto, to have
unconditionally and irrevocably purchased from the LC Issuer, a
participation in such Facility LC (and each Modification thereof) and the
related LC Obligations in proportion to its Revolving Loan Pro Rata Share.
2.20.3 NOTICE. Subject to Section 2.20.1, the Borrower shall give the
LC Issuer notice prior to 10:00 a.m. (Chicago, Illinois time) at least five
(5) Business Days prior to the proposed date of issuance or Modification of
each Facility LC, specifying the beneficiary, the proposed date of issuance
(or Modification) and the expiry date of such
37
Facility LC, and describing the proposed terms of such Facility LC and the
nature of the transactions proposed to be supported thereby. Upon receipt
of such notice, the LC Issuer shall promptly notify the Administrative
Agent, and, upon issuance only, the Administrative Agent shall promptly
notify each Lender, of the contents thereof and of the amount of such
Lender's participation in such proposed Facility LC. The issuance or
Modification by the LC Issuer of any Facility LC shall, in addition to the
conditions precedent set forth in Article IV (the satisfaction of which the
LC Issuer shall have no duty to ascertain), be subject to the conditions
precedent that such Facility LC shall be satisfactory to the LC Issuer and
that the Borrower shall have executed and delivered such application
agreement and/or such other instruments and agreements relating to such
Facility LC as the LC Issuer shall have reasonably requested (each, a
"Facility LC Application"). In the event of any conflict between the terms
of this Agreement and the terms of any Facility LC Application, the terms
of this Agreement shall control.
2.20.4 LC FEES. The Borrower shall pay to the Administrative Agent,
for the account of the Lenders ratably in accordance with their respective
Revolving Loan Pro Rata Shares, a letter of credit fee at a per annum rate
equal to 1.50% on the average daily undrawn stated amount under such
Facility LC, such fee to be payable in arrears on each Payment Date. The
Borrower shall also pay to the LC Issuer for its own account (x) at the
time of issuance of each Facility LC, a fronting fee in an amount equal to
0.125% times the face amount of such Facility LC, and (y) documentary and
processing charges in connection with the issuance or Modification of and
draws under Facility LCs in accordance with the LC Issuer's standard
schedule for such charges as in effect from time to time. Each fee
described in this Section 2.20.4 shall constitute an "LC Fee".
2.20.5 ADMINISTRATION; REIMBURSEMENT BY LENDERS. Upon receipt from the
beneficiary of any Facility LC of any demand for payment under such
Facility LC, the LC Issuer shall notify the Administrative Agent and the
Administrative Agent shall promptly notify the Borrower and each other
Lender as to the amount to be paid by the LC Issuer as a result of such
demand and the proposed payment date (the "LC Payment Date"). The
responsibility of the LC Issuer to the Borrower and each Lender shall be
only to determine that the documents (including each demand for payment)
delivered under each Facility LC in connection with such presentment shall
be in conformity in all material respects with such Facility LC. The LC
Issuer shall endeavor to exercise the same care in the issuance and
administration of the Facility LCs as it does with respect to letters of
credit in which no participations are granted, it being understood that in
the absence of any gross negligence or willful misconduct by the LC Issuer,
each Lender shall be unconditionally and irrevocably liable without regard
to the occurrence of any Event of Default or any condition precedent
whatsoever, to reimburse the LC Issuer on demand for (i) such Lender's
Revolving Loan Pro Rata Share of the amount of each payment made by the LC
Issuer under each Facility LC to the extent such amount is not reimbursed
by the Borrower pursuant to Section 2.20.6 below, plus (ii) interest on the
foregoing amount to be reimbursed by such Lender, for each day from the
date of the LC Issuer's demand for such reimbursement (or, if such demand
is made after 11:00 a.m. (Chicago, Illinois time) on such date, from the
next succeeding Business Day) to the date on which such Lender pays the
amount to be reimbursed by it, at a rate of interest per
38
annum equal to the Federal Funds Effective Rate for the first three (3)
days and, thereafter, at a rate of interest equal to the rate applicable to
Floating Rate Advances.
2.20.6 REIMBURSEMENT BY BORROWER. The Borrower shall be irrevocably
and unconditionally obligated to reimburse the LC Issuer for any amounts to
be paid by the LC Issuer. Upon any drawing under any Facility LC, a
reimbursement in respect thereof shall be made by the Borrower on the date
of the drawing if the Borrower shall have received written notice of such
drawing prior to 10:00 a.m. Chicago time on such date, or, if such notice
has not been received by the Borrower prior to such time on such date, then
not later than 12:00 noon Chicago time on (i) the Business Day that the
Borrower receives such notice, if such notice is received prior to 10:00
a.m. Chicago time on the day of receipt or (ii) the Business Day
immediately following the day that the Borrower receives such notice, if
such notice is not received prior to such time on the day of receipt;
provided that neither the Borrower nor any Lender shall hereby be precluded
from asserting any claim for direct (but not consequential) damages
suffered by the Borrower or such Lender to the extent, but only to the
extent, caused by (i) the willful misconduct or gross negligence of the LC
Issuer in determining whether a request presented under any Facility LC
issued by it complied with the terms of such Facility LC or (ii) the LC
Issuer's failure to pay under any Facility LC issued by it after the
presentation to it of a request strictly complying with the terms and
conditions of such Facility LC. Whether or not an Event of Default or
Unmatured Event of Default has occurred and is continuing, unless the
Borrower elects to repay a Reimbursement Obligation, regardless of whether
the conditions for making a Revolving Loan under Section 4.2 have been
satisfied, such unpaid Reimbursement Obligation shall be automatically
converted into a Revolving Loan as of the date of the payment by the LC
Issuer giving rise to the Reimbursement Obligation. Such Revolving Loan
shall be in an amount equal to the amount of the unpaid Reimbursement
Obligation. Such Revolving Loan shall initially constitute a Floating Rate
Advance and the proceeds of such Advance shall be used to repay such
Reimbursement Obligation. Such Floating Rate Advance may be converted into
a Eurodollar Advance in accordance with the terms of Section 2.9. If the
Borrower at any time fails to repay a Reimbursement Obligation pursuant to
this Section 2.20, such unpaid Reimbursement Obligation shall at that time
be automatically converted into an Obligation and the Borrower shall be
deemed to have elected to borrow a Revolving Loan from the Lenders, as of
the date of the payment by the LC Issuer giving rise to the Reimbursement
Obligation, in an amount equal to the amount of the unpaid Reimbursement
Obligation. Such Revolving Loan shall be made as of the date of the payment
giving rise to such Reimbursement Obligation, automatically, without notice
and without any requirement to satisfy the conditions precedent otherwise
applicable to a Revolving Loan if the Borrower shall have failed to make
such payment to the Administrative Agent for the account of the LC Issuer
prior to such time. Such Revolving Loan shall constitute a Floating Rate
Advance and the proceeds of such Advance shall be used to repay such
Reimbursement Obligation. If, for any reason, the Borrower fails to repay a
Reimbursement Obligation on the day such Reimbursement Obligation arises
and, for any reason, the Lenders are unable to make or have no obligation
to make a Revolving Loan, then such Reimbursement Obligation shall bear
interest from and after such day, until paid in full, at the interest rate
applicable to a Floating Rate Advance. The Borrower agrees to indemnify the
LC Issuer against any
39
loss or expense determined by the LC Issuer in good faith to have resulted
from any conversion pursuant to this Section 2.20 by reason of the
inability of the LC Issuer to convert the amount received from the Borrower
or from the Lenders, as applicable, into an amount equal to the amount of
such Reimbursement Obligation. The LC Issuer will pay to each Lender
ratably in accordance with its Revolving Loan Pro Rata Share all amounts
received by it from the Borrower for application in payment, in whole or in
part, of the Reimbursement Obligation in respect of any Facility LC issued
by the LC Issuer, but only to the extent such Lender has made payment to
the LC Issuer in respect of such Facility LC pursuant to Section 2.20.5.
2.20.7 OBLIGATIONS ABSOLUTE. The Borrower's obligations under this
Section 2.20 shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to
payment which the Borrower may have or have had against the LC Issuer, any
Lender or any beneficiary of a Facility LC. The Borrower further agrees
with the LC Issuer and the Lenders that the LC Issuer and the Lenders shall
not be responsible for, and the Borrower's Reimbursement Obligation in
respect of any Facility LC shall not be affected by, among other things,
the validity or genuineness of documents or of any endorsements thereon,
even if such documents should in fact prove to be in any or all respects
invalid, fraudulent or forged, or any dispute between or among the
Borrower, any of its Affiliates, the beneficiary of any Facility LC or any
financing institution or other party to whom any Facility LC may be
transferred or any claims or defenses whatsoever of the Borrower or of any
of its Affiliates against the beneficiary of any Facility LC or any such
transferee. The LC Issuer shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message
or advice, however transmitted, in connection with any Facility LC. The
Borrower agrees that any action taken or omitted by the LC Issuer or any
Lender under or in connection with each Facility LC and the related drafts
and documents, if done without gross negligence or willful misconduct,
shall be binding upon the Borrower and shall not put the LC Issuer or any
Lender under any liability to the Borrower. Nothing in this Section 2.20.7
is intended to limit the right of the Borrower to make a claim against the
LC Issuer for damages as contemplated by the proviso to the first sentence
of Section 2.20.6.
2.20.8 ACTIONS OF LC ISSUER. The LC Issuer shall be entitled to rely,
and shall be fully protected in relying, upon any Facility LC, draft,
writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, telecopy, telex or teletype message, statement, order
or other document believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons, and upon advice and
statements of legal counsel, independent accountants and other experts
selected by the LC Issuer. The LC Issuer shall be fully justified in
failing or refusing to take any action under this Agreement unless it shall
first have received such advice or concurrence of the Required Lenders as
it reasonably deems appropriate or it shall first be indemnified to its
reasonable satisfaction by the Lenders against any and all liability and
expense which may be incurred by it by reason of taking or continuing to
take any such action. Notwithstanding any other provision of this Section
2.20, the LC Issuer shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement in accordance with a request
of the Required Lenders, and such request and any action taken
40
or failure to act pursuant thereto shall be binding upon the Lenders and
any future holders of a participation in any Facility LC.
2.20.9 INDEMNIFICATION. The Borrower hereby agrees to indemnify and
hold harmless each Lender, the LC Issuer and the Administrative Agent, and
their respective directors, officers, agents and employees from and against
any and all claims and damages, losses, liabilities and related reasonable
out-of-pocket costs or expenses which such Lender, the LC Issuer or the
Administrative Agent may incur (or which may be claimed against such
Lender, the LC Issuer or the Administrative Agent by any Person whatsoever)
by reason of or in connection with the issuance, execution and delivery or
transfer of or payment or failure to pay under any Facility LC or any
actual or proposed use of any Facility LC, including, without limitation,
any such claims, damages, losses, liabilities, costs or expenses which the
LC Issuer may incur by reason of or in connection with (i) the failure of
any other Lender to fulfill or comply with its obligations to the LC Issuer
hereunder (but nothing herein contained shall affect any rights the
Borrower may have against any defaulting Lender) or (ii) by reason of or on
account of the LC Issuer issuing any Facility LC which specifies that the
term "Beneficiary" included therein includes any successor by operation of
law of the named Beneficiary, but which Facility LC does not require that
any drawing by any such successor Beneficiary be accompanied by a copy of a
legal document, satisfactory to the LC Issuer, evidencing the appointment
of such successor Beneficiary; provided that the Borrower shall not be
required to indemnify any Lender, the LC Issuer or the Administrative Agent
for any claims, damages, losses, liabilities, costs or expenses to the
extent, but only to the extent, caused by (x) the willful misconduct or
gross negligence of the LC Issuer in determining whether a request
presented under any Facility LC complied with the terms of such Facility LC
or (y) the LC Issuer's failure to pay under any Facility LC after the
presentation to it of a request strictly complying with the terms and
conditions of such Facility LC. Nothing in this Section 2.20.9 is intended
to limit the obligations of the Borrower under any other provision of this
Agreement.
2.20.10 LENDERS' INDEMNIFICATION. Each Lender shall, ratably in
accordance with its Revolving Loan Pro Rata Share, indemnify the LC Issuer,
its affiliates and their respective directors, officers, agents and
employees (to the extent not reimbursed by the Borrower) against any cost,
expense (including reasonable counsel fees and disbursements), claim,
demand, action, loss or liability (except such as result from such
indemnitees' gross negligence or willful misconduct or the LC Issuer's
failure to pay under any Facility LC after the presentation to it of a
request strictly complying with the terms and conditions of the Facility
LC) that such indemnitees may suffer or incur in connection with this
Section 2.20 or any action taken or omitted by such indemnitees hereunder.
2.20.11 FACILITY LC COLLATERAL ACCOUNT. The Borrower agrees that it
will, upon the request of the Administrative Agent or the Required Lenders
and until the final expiration date of any Facility LC and thereafter as
long as any amount is payable to the LC Issuer or the Lenders in respect of
any Facility LC, maintain a special collateral account pursuant to
arrangements reasonably satisfactory to the Administrative Agent and the
Borrower (the "Facility LC Collateral Account") at the Administrative
Agent's
41
office at the address specified pursuant to Article XIII, in the name of
the Borrower but under the sole dominion and control of the Collateral
Agent for the benefit of the LC Issuers and the Lenders and in which the
Borrower shall have no interest other than as set forth in Section 8.1. The
Borrower hereby pledges, assigns and grants to the Collateral Agent, on
behalf of and for the ratable benefit of the Lenders and the LC Issuer, a
security interest in all of the Borrower's right, title and interest in and
to all funds which may from time to time be on deposit in the Facility LC
Collateral Account to secure the prompt and complete payment and
performance of the Secured Obligations in respect of Facility LCs. The
Borrower shall deposit cash collateral pursuant to this paragraph as and to
the extent required by Section 2.2 as collateral for the payment and
performance of the LC Obligations and the other Secured Obligations in
respect of Facility LCs. Each such deposit shall be held by the Collateral
Agent as collateral for the payment and performance of the obligations of
the Borrower for the portion of the LC Obligations relating to Facility LCs
issued for the account of the Borrower under this Agreement. The Collateral
Agent will invest any funds on deposit from time to time in the Facility LC
Collateral Account in certificates of deposit of Bank One having a maturity
not exceeding thirty (30) days. Interest or profits, if any, on such
investments shall accumulate in such account. Moneys in such account shall
be applied to reimburse the LC Issuer for Reimbursement Obligations for
which it has not been reimbursed and as collateral for the remaining LC
Obligations. If the Borrower is required to provide an amount of cash
collateral hereunder pursuant to Section 8.1, such amount (to the extent
not applied) shall be returned to such Borrower within three Business Days
after all Events of Default have been cured or waived. If the Borrower is
required to provide an amount of cash collateral hereunder pursuant to
Section 2.2, such amount (to the extent not applied as aforesaid) shall be
returned to the Borrower as and to the extent that, after giving effect to
such return, the Borrower would remain in compliance with Section 2.2.
Nothing in this Section 2.20.11 shall either require the Borrower or any
Guarantor to deposit any funds in the Facility LC Collateral Account or
limit the right of the Administrative Agent or the Collateral Agent to
release any funds held in the Facility LC Collateral Account in each case
other than as required by this Section, Section 2.2 or Section 8.1.
2.20.12 RIGHTS AS A LENDER. In its capacity as a Lender, the LC Issuer
shall have the same rights and obligations as any other Lender.
2.21. FINANCIAL CONTRACTS. The Borrower confirms that all Rate Management
Obligations owed to Lenders shall for purposes of the Senior Secured Indenture
constitute "Credit Agreement Obligations" as defined therein (unless the
Borrower and any applicable Lender mutually agree that such Rate Management
Obligations do not constitute "Credit Agreement Obligations").
ARTICLE III
YIELD PROTECTION; TAXES
3.1. YIELD PROTECTION. If, on or after the Closing Date, the adoption of
any law or any governmental or quasi-governmental rule, regulation, policy,
guideline or directive (whether or
42
not having the force of law), or any change in any such law, rule, regulation,
policy, guideline or directive or in the interpretation or administration
thereof by any governmental or quasi- governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by any Lender or applicable Lending Installation or the LC Issuer
with any request or directive (whether or not having the force of law) of any
such authority, central bank or comparable agency:
(i) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar
requirement against assets of, deposits with or for the
account of, or credit extended by, any Lender or any
applicable Lending Installation or the LC Issuer (other than
reserves and assessments taken into account in determining
the interest rate applicable to Eurodollar Advances), or
(ii) imposes any other condition the result of which is to
increase the cost to any Lender or any applicable Lending
Installation of making, funding or maintaining its Revolving
Loan Commitment or Eurodollar Loans or of issuing or
participating in Facility LCs, or reduces any amount
receivable by any Lender or any applicable Lending
Installation or the LC Issuer in connection with its
Revolving Loan Commitment or Eurodollar Loans or Facility
LCs (including participations therein), or requires any
Lender or any applicable Lending Installation or the LC
Issuer to make any payment calculated by reference to the
amount of Revolving Loan Commitment or Eurodollar Loans or
Facility LCs (including participations therein) held or
interest or LC Fees received by it, by an amount deemed
material by such Lender or the LC Issuer, as applicable.
and the result of any of the foregoing is to increase the cost to such Lender or
applicable Lending Installation or the LC Issuer of making or maintaining its
Eurodollar Loans or Revolving Loan Commitment or of issuing or participating in
Facility LCs, as applicable, or to reduce the return received by such Lender or
applicable Lending Installation or LC Issuer in connection with such Eurodollar
Loans or Revolving Loan Commitment, or Facility LCs (including participations
therein), then, within fifteen (15) days of demand, accompanied by the written
statement required by Section 3.6, by such Lender or LC Issuer, the Borrower
shall pay such Lender or LC Issuer such additional amount or amounts as will
compensate such Lender or LC Issuer for such increased cost or reduction in
amount received.
3.2. CHANGES IN CAPITAL ADEQUACY REGULATIONS. If a Lender or LC Issuer
determines the amount of capital required or expected to be maintained by such
Lender or LC Issuer, any Lending Installation of such Lender or LC Issuer or any
corporation controlling such Lender or LC Issuer is increased as a result of a
Change (as defined below), then, within fifteen (15) days of demand, accompanied
by the written statement required by Section 3.6, by such Lender or LC Issuer,
the Borrower shall pay such Lender or LC Issuer the amount necessary to
compensate for any shortfall in the rate of return on the portion of such
increased capital which such Lender or LC Issuer determines is attributable to
this Agreement, its Outstanding Revolving Credit Exposure, its Term Loans, its
Term Loan Commitment to make Term Loans, its Revolving Loan Commitment to make
Revolving Loans and issue or participate in Facility LCs, as applicable,
hereunder (after taking into account such Lender's or LC Issuer's policies as to
capital adequacy). "Change" means (i) any change after the Closing Date in the
Risk-Based Capital
43
Guidelines or (ii) any adoption of, or change in, or change in the
interpretation or administration of any other law, governmental or
quasi-governmental rule, regulation, policy, guideline, interpretation, or
directive (whether or not having the force of law) after the Closing Date which
affects the amount of capital required or expected to be maintained by any
Lender or LC Issuer or any Lending Installation or any corporation controlling
any Lender or LC Issuer. "Risk-Based Capital Guidelines" means (i) the
risk-based capital guidelines in effect in the United States on the Closing
Date, including transition rules, and (ii) the corresponding capital regulations
promulgated by regulatory authorities outside the United States implementing the
July 1988 report of the Basle Committee on Banking Regulation and Supervisory
Practices Entitled "International Convergence of Capital Measurements and
Capital Standards," including transition rules, and any amendments to such
regulations adopted prior to the Closing Date.
3.3. AVAILABILITY OF TYPES OF ADVANCES. If the Administrative Agent
determines that maintenance of its Eurodollar Loans at a suitable Lending
Installation would violate any applicable law, rule, regulation, or directive,
whether or not having the force of law, or no reasonable basis exists for
determining the Eurodollar Base Rate, then the Administrative Agent shall
suspend the availability of Eurodollar Advances and require any affected
Eurodollar Advances to be repaid or converted to Floating Rate Advances on the
respective last days of the then current Interest Periods with respect to such
Revolving Loans or within such earlier period as required by law, subject to the
payment of any funding indemnification amounts required by Section 3.4.
3.4. FUNDING INDEMNIFICATION. If any payment of a Eurodollar Advance occurs
on a date which is not the last day of the applicable Interest Period, whether
because of acceleration, prepayment or otherwise, or a Eurodollar Advance is not
made or continued, or a Floating Rate Advance is not converted into a Eurodollar
Advance, on the date specified by the Borrower for any reason other than default
by the Lenders, or a Eurodollar Advance is not prepaid on the date specified by
the Borrower for any reason, the Borrower will indemnify each Lender for any
loss or cost (excluding lost profit) incurred by it resulting therefrom,
including, without limitation, any loss or cost in liquidating or employing
deposits acquired to fund or maintain such Eurodollar Advance.
3.5. TAXES.
(i) All payments by the Borrower to or for the account of any
Lender or the LC Issuer or the Administrative Agent
hereunder or under any Note shall be made free and clear of
and without deduction for any and all Taxes. If the Borrower
shall be required by law to deduct any Taxes from or in
respect of any sum payable hereunder to any Lender, LC
Issuer or the Administrative Agent, (a) the sum payable
shall be increased as necessary so that after making all
required deductions (including deductions applicable to
additional sums payable under this Section 3.5) such Lender,
LC Issuer or the Administrative Agent (as the case may be)
receives an amount equal to the sum it would have received
had no such deductions been made, (b) the Borrower shall
make such deductions, (c) the Borrower shall pay the full
amount deducted to the relevant authority in accordance with
applicable law and (d) the Borrower shall furnish to the
Administrative Agent the original copy of a receipt
evidencing payment thereof
44
or, if a receipt cannot be obtained with reasonable efforts, such
other evidence of payment as is reasonably acceptable to the
Administrative Agent, in each case within thirty (30) days after
such payment is made.
(ii) In addition, the Borrower shall pay any present or future stamp or
documentary taxes and any other excise or property taxes, charges
or similar levies which arise from any payment made hereunder or
under any Note or Facility LC Application or from the execution or
delivery of, or otherwise with respect to, this Agreement or any
Note or Facility LC Application ("Other Taxes").
(iii) The Borrower shall indemnify the Administrative Agent, the LC
Issuer and each Lender for the full amount of Taxes or Other
Taxes (including, without limitation, any Taxes or Other Taxes
imposed on amounts payable under this Section 3.5) paid by the
Administrative Agent, the LC Issuer or such Lender as a result of
its Revolving Loan Commitment, any Credit Extensions made by it
hereunder, any Facility LC issued or participated in by it
hereunder, or otherwise in connection with its participation in
this Agreement and any liability (including penalties, interest
and expenses) arising therefrom or with respect thereto;
provided, however, that the Borrower shall not be obligated to
reimburse the Administrative Agent, the LC Issuer or a Lender in
respect of penalties, interest or similar liabilities
attributable to such Taxes or Other Taxes if such penalties,
interest or similar liabilities are attributable to a failure or
delay by the Administrative Agent, the LC Issuer or a Lender to
make a written request therefore pursuant to Section 3.6;
provided, further, that no request delivered within the ninety
(90) day period described in Section 3.6 shall constitute a
delayed request. Payments due under this indemnification shall be
made within thirty (30) days of the date the Administrative
Agent, the LC Issuer or such Lender makes demand therefor
pursuant to Section 3.6.
(iv) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof (each a "Non-U.S. Lender")
agrees that it will, not more than ten (10) Business Days after
the date on which it becomes a party to this Agreement or changes
its lending office under this Agreement (but in any event before
a payment is due to it hereunder), (i) deliver to each of the
Borrower and the Administrative Agent two duly completed copies
of United States Internal Revenue Service Form W-8BEN or W-8ECI,
certifying in either case that such Lender is entitled to receive
payments under this Agreement without deduction or withholding of
any United States federal income taxes (including backup
withholding taxes), or (ii) in the case of a Non-U.S. Lender that
is fiscally transparent, deliver to the Administrative Agent a
United States Internal Revenue Form W-8IMY together with the
applicable accompanying forms, W-8 or W-9, as the case may be,
and certify that it is entitled to an exemption from United
States Federal income tax (including backup withholding taxes).
Each Non- U.S. Lender further undertakes to deliver to each of
the Borrower and the Administrative Agent (x) renewals or
additional copies of such form (or any successor form) on or
before the date that such form expires or becomes obsolete, and
(y) after the occurrence of any event requiring a change in the
most recent forms so delivered
45
by it, such additional forms or amendments thereto as may be
reasonably requested by the Borrower or the Administrative Agent.
All forms or amendments described in the preceding sentence shall
certify that such Lender is entitled to receive payments under
this Agreement without deduction or withholding of any United
States federal income taxes, unless an event (including without
limitation any change in treaty, law or regulation) has occurred
prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would
prevent such Lender from duly completing and delivering any such
form or amendment with respect to it and such Lender advises the
Borrower and the Administrative Agent that it is not capable of
receiving payments without any deduction or withholding of United
States federal income tax.
(v) For any period during which a Non-U.S. Lender has failed to provide
the Borrower with an appropriate form pursuant to clause (iv) above
(unless such failure is due to a change in treaty, law or
regulation, or any change in the interpretation or administration
thereof by any governmental authority, occurring subsequent to the
date on which a form originally was required to be provided), such
Non-U.S. Lender shall not be entitled to indemnification under this
Section 3.5 with respect to Taxes imposed by the United States;
provided that, should a Non-U.S. Lender which is otherwise exempt
from or subject to a reduced rate of withholding tax become subject
to Taxes because of its failure to deliver a form required under
clause (iv) above, the Borrower shall take such steps as such Non-
U.S. Lender shall reasonably request to assist such Non-U.S. Lender
to recover such Taxes.
(vi) Any Lender that is entitled to an exemption from or reduction of
withholding tax with respect to payments under this Agreement or
any Note pursuant to the law of any relevant jurisdiction or any
treaty shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by
applicable law, such properly completed and executed documentation
prescribed by applicable law or reasonably requested by the
Borrower as will permit such payments to be made without
withholding or at a reduced rate.
(vii) If the U.S. Internal Revenue Service or any other governmental
authority of the United States or any other country or any
political subdivision thereof asserts a claim that the
Administrative Agent did not properly withhold tax from amounts
paid to or for the account of any Lender (because the appropriate
form was not delivered or properly completed, because such Lender
failed to notify the Administrative Agent of a change in
circumstances which rendered its exemption from withholding
ineffective, or for any other reason), such Lender shall indemnify
the Administrative Agent fully for all amounts paid, directly or
indirectly, by the Administrative Agent as tax, withholding
therefor, or otherwise, including penalties and interest, and
including taxes imposed by any jurisdiction on amounts payable to
the Administrative Agent under this subsection, together with all
costs and expenses related thereto (including attorneys fees and
time charges of attorneys for the Administrative Agent, which
attorneys may be
46
employees of the Administrative Agent). The obligations of the
Lenders under this Section 3.5(vii) shall survive the payment of
the Obligations and termination of this Agreement.
(viii) The Administrative Agent, the LC Issuer and each Lender shall take
such steps as the Borrower reasonably requests to apply or
otherwise take advantage of any tax refund or offsetting tax credit
or other similar tax benefit arising out of or in conjunction with
any amounts for which they have been indemnified by the Borrower or
with respect to which the Borrower has paid additional amounts
pursuant to this Section 3.5. If the Administrative Agent, the LC
Issuer or a Lender determines that it has received a tax benefit
arising out of or in conjunction with any amounts as to which it
has been indemnified by the Borrower or with respect to which the
Borrower has paid additional amounts pursuant to this Section 3.5,
it shall pay over such refund to the Borrower (but only to the
extent of indemnity payments made, or additional amounts paid by
the Borrower under this Section 3.5 with respect to the amounts
giving rise to such refund); provided, however, that during the
continuance of an Event of Default, any such refund shall be
applied in reduction of the Secured Obligations.
(ix) The Administrative Agent, the LC Issuer, and each Lender shall take
reasonable steps to avoid the need for the Borrower to pay any
amounts under this Section 3.5, but they shall not be required to
take any steps that would impose material costs or other detriments
on them. Any such cost incurred by the Administrative Agent, the LC
Issuer or any Lender shall constitute a Secured Obligation and the
Borrower shall reimburse such Person for such cost.
3.6. LENDER STATEMENTS; SURVIVAL OF INDEMNITY. Each Lender shall deliver a
written statement of such Lender to the Borrower (with a copy to the
Administrative Agent) as to the amount due, if any, under Section 3.1, 3.2, 3.4
or 3.5. Such written statement shall set forth in reasonable detail the
calculations upon which such Lender determined such amount and shall be final,
conclusive and binding on the Borrower in the absence of manifest error.
Determination of amounts payable under such Sections in connection with a
Eurodollar Loan shall be calculated as though each Lender funded its Eurodollar
Loan through the purchase of a deposit of the type, currency and maturity
corresponding to the deposit used as a reference in determining the Eurodollar
Rate applicable to such Loan, whether in fact that is the case or not. Unless
otherwise provided herein, the amount specified in the written statement of any
Lender shall be payable on demand after receipt by the Borrower of such written
statement. The obligations of the Borrower under Sections 3.1, 3.2, 3.4 and 3.5
shall survive payment of the Obligations and termination of this Agreement;
provided that the Borrower shall not be required to make any payments pursuant
to Section 3.1, 3.2, 3.4 or 3.5 to a Lender or LC Issuer for any increased costs
incurred or reductions suffered more than ninety (90) days prior to the date
that such Lender or LC Issuer, as the case may be, notifies the Borrower of the
circumstances giving rise to such increased costs or reductions and of such
Lender's or the LC Issuer's intention to claim compensation therefor (except
that, if the circumstances giving rise to such increased costs or reductions are
retroactive, then the ninety (90) day period referred to above shall be extended
to include the period of retroactive effect thereof).
47
3.7. ALTERNATIVE LENDING INSTALLATION. To the extent reasonably possible,
each Lender shall designate an alternate Lending Installation with respect to
its Eurodollar Loans to reduce any liability of the Borrower to such Lender
under Sections 3.1, 3.2 and 3.5 or to avoid the unavailability of Eurodollar
Advances under Section 3.3, so long as such designation is not, in the judgment
of such Lender, reasonably disadvantageous to such Lender. A Lender's
designation of an alternative Lending Installation shall not affect the
Borrower's rights under Section 2.19 to replace a Lender.
ARTICLE IV
CONDITIONS PRECEDENT
4.1. INITIAL CREDIT EXTENSION. The Lenders shall not be required to make
the initial Credit Extension hereunder, which initial Credit Extension shall
occur no later than March 15, 2004, unless the following conditions precedent
are satisfied (or waived by the Administrative Agent) immediately prior to or
substantially concurrent with such initial Credit Extension:
4.1.1 Copies of the articles or certificate of incorporation (or the
equivalent thereof) of each Credit Party, in each case, together with all
amendments thereto, and a certificate of good standing, each certified by
the appropriate governmental officer in its jurisdiction of organization.
4.1.2 Copies, certified by the Secretary or Assistant Secretary (or
the equivalent thereof) of each Credit Party, in each case, of its by-laws
and of its Board of Directors' resolutions and of resolutions or actions of
any other body authorizing the execution of the Loan Documents to which
such Credit Party is a party.
4.1.3 An incumbency certificate, executed by the Secretary or
Assistant Secretary (or the equivalent thereof) of each Credit Party, in
each case, which shall identify by name and title and bear the signatures
of the Authorized Officers and any other officers of such Credit Party
authorized to sign the Loan Documents to which such Credit Party is party,
upon which certificate the Administrative Agent and the Lenders shall be
entitled to rely until informed of any change in writing by such Credit
Party.
4.1.4 A certificate signed by the chief financial officer of the
Borrower, stating that on the initial Credit Extension Date (i) no Event of
Default or Unmatured Event of Default has occurred and is continuing, (ii)
all of the representations and warranties in Article V shall be true and
correct in all material respects as of such date and (iii) other than (A)
the Service America Write-down and (B) as disclosed in public filings with
the Securities and Exchange Commission prior to the initial Credit
Extension Date, no material adverse change in the business, condition
(financial or otherwise), operations, performance or Property of (1) the
Borrower and its Subsidiaries, taken as a whole, or (2) the Target and its
Subsidiaries, taken as a whole, has occurred since December 31, 2002.
4.1.5 (a) A written opinion of the Borrower's in-house counsel, in
form and substance reasonably satisfactory to the Administrative Agent and
addressed to the Administrative Agent and the Lenders, in substantially the
form of Exhibit A-1, (b) a
48
written opinion of Cravath, Swaine & Xxxxx LLP, special New York counsel to
the Borrower, in form and substance reasonably satisfactory to the
Administrative Agent and addressed to the Administrative Agent and the
Lenders, in substantially the form of Exhibit A-2, and (c) a written
opinion of Xxxxxxxx, Xxxxxx & Finger, P.A., special counsel to the
Borrower, in form and substance reasonably satisfactory to the
Administrative Agent and addressed to the Administrative Agent and the
Lenders, in substantially the form of Exhibit A-3.
4.1.6 Any Notes requested by a Lender pursuant to Section 2.13 payable
to the order of each such requesting Lender.
4.1.7 Written money transfer instructions, in substantially the form
of Exhibit D, addressed to the Administrative Agent and signed by an
Authorized Officer, together with such other related money transfer
authorizations as the Administrative Agent may have reasonably requested.
4.1.8 The Administrative Agent shall have received the consolidated
financial statements of the Borrower and its Subsidiaries for the
Borrower's fiscal quarter ended September 30, 2003 and the audited
financial statements of the Target for the Target's fiscal year ended
September 30, 2003.
4.1.9 The Administrative Agent and the Lenders shall have received pro
forma opening financial statements ("Pro Forma Opening Statements") giving
effect to the Target Acquisition and five year financial statement
projections ("Projections"), together with such information as the
Administrative Agent may reasonably request to confirm the tax, legal, and
business assumptions made in such Pro Forma Opening Statements and
Projections, such Pro Forma Opening Statements and Projections
demonstrating, in the reasonable judgment of the Administrative Agent,
together with all other information then available to the Administrative
Agent, that the Borrower and its Subsidiaries have the ability to repay
their debts and satisfy their other respective obligations as and when due
and to comply with Sections 6.20 through 6.24.
4.1.10 The Administrative Agent shall have received evidence
reasonably satisfactory to the Administrative Agent of the payment of all
principal, interest, fees and premiums, if any, on all Indebtedness under
the Existing Credit Agreements, and the agreement to release all Liens and
the termination of the applicable agreements relating thereto, all taking
effect concurrently with the effectiveness of this Agreement; provided,
however, that any Existing Letters of Credit incorporated into and governed
by the terms of this Agreement shall not be required to be terminated in
connection with the termination of the Existing Credit Agreements and the
agreements, documents, and instruments related thereto; provided, further,
that Letters of Credit issued under the Existing Credit Agreements that do
not constitute Existing Letters of Credit and that are either cash
collateralized or supported by back-to- back Letters of Credit in a manner
reasonably acceptable to the Administrative Agent, together with
agreements, documents and instruments directly related to such Letters of
Credit, shall not be required to be terminated in connection with the
termination of the Existing Credit Agreements and the agreements,
documents, and instruments related thereto.
49
4.1.11 All legal matters shall be reasonably satisfactory to the
Administrative Agent.
4.1.12 The Borrower shall have received capital contributions,
proceeds from the issuance of the Senior Secured Notes, and proceeds from
the issuance of the Senior Unsecured Notes in an aggregate amount equal to
or greater than $260,000,000 or such other amount reasonably satisfactory
to the Administrative Agent.
4.1.13 The Administrative Agent shall have received a fully executed
copy of the Intercreditor Agreement.
4.1.14 The Administrative Agent shall have received fully executed
copies of the Senior Secured Indenture, the Senior Unsecured Indenture, and
the Senior Secured Notes and Senior Unsecured Notes issued pursuant to the
foregoing, in each case on or prior to the Closing Date.
4.1.15 The Target Acquisition shall be consummated, on the Closing
Date, pursuant to the terms of the Agreement and Plan of Merger, dated as
of December 18, 2003, by and among the Borrower, the Target, and Xxxxxx
Merger Corp., as such agreement was in effect on December 18, 2003;
provided, however, that amendments or modifications to such agreement
subsequent to December 18, 2003 shall not preclude the Borrower's
satisfaction of the condition set forth in this Section 4.1.15 so long as
any such amendment or modification that is materially adverse to the
Lenders has been approved by the Administrative Agent (such approval not to
be unreasonably withheld).
4.1.16 The Administrative Agent shall have received evidence
reasonably satisfactory to it that the Collateral Agent, on behalf of the
creditors of the Borrower party to the Intercreditor Agreement, holds a
perfected first-priority Lien upon the Collateral or that arrangements
reasonably satisfactory to the Administrative Agent for perfecting such
Liens are in place.
4.1.17 Such other documents as the Administrative Agent or its counsel
may have reasonably requested, including, without limitation, the
Collateral Documents and those other documents set forth in Exhibit G
hereto.
4.2. EACH CREDIT EXTENSION. The Lenders shall not (except as otherwise set
forth in Section 2.4.4 or Section 2.20.6 with respect to Revolving Loans
extended for the purpose of repaying Swing Line Loans or reimbursing draws under
Facility LCs, as the case may be) be required to make any Credit Extension
unless on the applicable Credit Extension Date:
4.2.1 There exists no Event of Default or Unmatured Event of Default.
4.2.2 The representations and warranties contained in Article V are
true and correct as of such Credit Extension Date in all material respects
except to the extent any such representation or warranty is stated to
relate solely to an earlier date, in which case such representation or
warranty shall have been true and correct in all material respects on and
as of such earlier date.
50
Each Borrowing Notice or Swing Line Borrowing Notice, as the case may be,
or request for issuance of a Facility LC, with respect to each such Credit
Extension shall constitute a representation and warranty by the Borrower that
the conditions contained in Sections 4.2.1 and 4.2.2 have been satisfied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to each Lender and the Administrative
Agent as of each of (i) the date of the initial Credit Extension hereunder and
(ii) each date as required by Section 4.2:
5.1. EXISTENCE AND STANDING. Each of the Borrower and its Subsidiaries is a
corporation, partnership (in the case of Subsidiaries only) or limited liability
company duly incorporated or organized, as the case may be, validly existing and
(to the extent such concept applies to such entity) in good standing under the
laws of its jurisdiction of incorporation or organization and has all requisite
authority to conduct its business in each jurisdiction in which its business is
conducted.
5.2. AUTHORIZATION AND VALIDITY. The Borrower has the power and authority
and legal right to execute and deliver the Loan Documents to which it is a party
and to perform its obligations thereunder. The execution and delivery by the
Borrower of the Loan Documents to which it is a party and the performance of its
obligations thereunder have been duly authorized by proper proceedings, and the
Loan Documents to which the Borrower is a party constitute legal, valid and
binding obligations of the Borrower enforceable against the Borrower in
accordance with their terms, except as enforceability may be limited by (i)
bankruptcy, insolvency, fraudulent conveyances, reorganization or similar laws
relating to or affecting the enforcement of creditors' rights generally; (ii)
general equitable principles (whether considered in a proceeding in equity or at
law); and (iii) requirements of reasonableness, good faith and fair dealing.
5.3. NO CONFLICT; GOVERNMENT CONSENT. Neither the execution and delivery by
the Borrower or its Subsidiaries, as applicable, of the Loan Documents to which
such Person is a party, nor the consummation of the transactions therein
contemplated, nor compliance with the provisions thereof will violate (i) any
law, rule, regulation, order, writ, judgment, injunction, decree or award
binding on the Borrower or any of its Subsidiaries except for violations which
individually or in the aggregate would not reasonably be expected to result in a
Material Adverse Effect, or (ii) the Borrower's or any Subsidiary's articles or
certificate of incorporation, partnership agreement, certificate of partnership,
articles or certificate of organization, by-laws, or operating agreement or
other management agreement, as the case may be, or (iii) the provisions of any
indenture, instrument or agreement to which the Borrower or any of its
Subsidiaries is a party or is subject, or by which it, or its Property, is
bound, or conflict with, or constitute a default thereunder, or result in, or
require, the creation or imposition of any Lien in, of or on the Property of the
Borrower or a Subsidiary pursuant to the terms of, any such indenture,
instrument or agreement, other than indentures, instruments or agreements which
will be terminated on the Closing Date in connection with the full repayment of
Indebtedness
51
outstanding under such indentures, instruments or agreements, and except for
violations which individually or in the aggregate would not reasonably be
expected to result in a Material Adverse Effect. No material order, consent,
adjudication, approval, license, authorization, or validation of, or filing,
recording or registration with, or exemption by, or other material action in
respect of any governmental or public body or authority, or any subdivision
thereof, which has not been obtained by the Borrower or any of its Subsidiaries,
is required to be obtained by the Borrower or any of its Subsidiaries in
connection with the execution and delivery of the Loan Documents, the borrowings
under this Agreement, the payment and performance by the Borrower of the
Obligations or the legality, validity, binding effect or enforceability of any
of the Loan Documents, except filings necessary to perfect Liens created under
the Loan Documents.
5.4. FINANCIAL STATEMENTS. The December 31, 2002 audited consolidated
financial statements of the Borrower and its Subsidiaries heretofore delivered
to the Administrative Agent and the Lenders were prepared in accordance with
generally accepted accounting principles in effect on the date such statements
were prepared and fairly present in all material respects the consolidated
financial condition and operations of the Borrower and its Subsidiaries at such
date and the consolidated results of their operations for the period then ended
in accordance with generally accepted accounting principles in effect on the
date such statements were prepared.
5.5. MATERIAL ADVERSE CHANGE. Other than (i) the Service America Write-
down and (ii) as disclosed in public filings with the Securities and Exchange
Commission prior to the initial Credit Extension Date, since December 31, 2002,
there has been no change in the business, condition (financial or otherwise),
operations, performance or Property of the Borrower and its Subsidiaries taken
together, in each case which could reasonably be expected to have a Material
Adverse Effect.
5.6. TAXES. The Borrower and its Subsidiaries have filed all United States
federal tax returns and all other tax returns which are required to be filed and
have paid all taxes due pursuant to said returns or pursuant to any assessment
received by the Borrower or any of its Subsidiaries, except (i) in respect of
such taxes, if any, as are being contested in good faith and as to which
adequate reserves have been provided in accordance with Agreement Accounting
Principles or (ii) to the extent that the failure to do so would not reasonably
be expected to have a Material Adverse Effect. The United States federal income
tax returns of the Borrower and its Subsidiaries have been audited by the
Internal Revenue Service through the 1997 fiscal year. No Liens have been filed
and no claims are being asserted with respect to such taxes that would
reasonably be expected to have a Material Adverse Effect. The charges, accruals
and reserves on the books of the Borrower and its Subsidiaries in respect of any
taxes or other governmental charges are adequate.
5.7. LITIGATION AND CONTINGENT OBLIGATIONS. There is no litigation,
arbitration, governmental investigation, proceeding or inquiry pending or, to
the knowledge of any of their officers, threatened against or affecting the
Borrower or any of its Subsidiaries which could reasonably be expected to have a
Material Adverse Effect or which seeks to prevent, enjoin or delay the making of
any Credit Extensions.
5.8. SUBSIDIARIES. Schedule 5.8 contains an accurate list of all
Subsidiaries of the Borrower as of the date of this Agreement, setting forth
their respective jurisdictions of
52
organization and the percentage of their respective capital stock or other
ownership interests owned by the Borrower or other Subsidiaries. All of the
issued and outstanding shares of capital stock or other ownership interests of
such Subsidiaries have been (to the extent such concepts are relevant with
respect to such ownership interests) duly authorized and issued and are fully
paid and non-assessable.
5.9. ERISA. The Unfunded Liabilities of all Single Employer Plans would not
reasonably be expected to have a Material Adverse Effect. Neither the Borrower
nor any other member of the Controlled Group has incurred, or reasonably expects
to incur, pursuant to Section 4201 of ERISA, any withdrawal liability to
Multiemployer Plans that in the aggregate would reasonably be expected to have a
Material Adverse Effect. Each Plan complies in all material respects with all
applicable requirements of law and regulations. No Reportable Event has occurred
with respect to any Plan that would reasonably be expected to have a Material
Adverse Effect. No steps have been taken to reorganize or terminate, within the
meaning of Title IV of ERISA, any Multiemployer Plan.
5.10. ACCURACY OF INFORMATION. The Loan Documents and other written
statements furnished by the Borrower and its Subsidiaries to the Administrative
Agent in connection with the negotiation of, and compliance with, the Loan
Documents (as modified or supplemented by information so furnished) taken as a
whole do not contain any material misstatement of fact or omit to state a
material fact necessary to make the statements contained therein, in light of
the circumstances under which they were made, not misleading; provided, however,
that with respect to projected financial information, the Borrower and its
Subsidiaries represent only that such information was prepared in good faith
based upon assumptions believed to be reasonable at the time.
5.11. REGULATIONS T, U, AND X. The Borrower will ensure that no use of
Advances or proceeds thereof will violate Regulation T, U or X.
5.12. MATERIAL AGREEMENTS; RESTRICTIONS ON DIVIDENDS. As of the Closing
Date, neither the Borrower nor any Subsidiary is a party to any agreement or
instrument or subject to any charter or other corporate restriction which could
reasonably be expected to have a Material Adverse Effect. As of the Closing
Date, neither the Borrower nor any Subsidiary is in default in the performance,
observance or fulfillment of any of the obligations, covenants or conditions
contained in any agreement or instrument to which it is a party, which default
could reasonably be expected to have a Material Adverse Effect (other than any
agreement or instrument evidencing or governing Indebtedness).
5.13. COMPLIANCE WITH LAWS. The Borrower and its Subsidiaries have complied
with all applicable statutes, rules, regulations, orders and restrictions of any
domestic or foreign government or any instrumentality or agency thereof having
jurisdiction over the conduct of their respective businesses or the ownership of
their respective Property, except such non- compliances that would not, either
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. This Section 5.13 does not relate to taxes which are the subject
of Section 5.6, to employee benefits or ERISA matters which are the subject of
Section 5.9 and environmental matters which are the subject of Section 5.16.
53
5.14. OWNERSHIP OF PROPERTIES; PRIORITY OF LIENS. The Borrower and its
Subsidiaries have good title, free of all Liens other than those permitted by
Section 6.15, to all of the material Property and assets reflected in the
Borrower's most recent consolidated financial statements provided to the
Administrative Agent, as owned by the Borrower and its Subsidiaries. To the
extent governed by Article 8 or Article 9 of the UCC, when financing statements
have been filed in the appropriate offices, the Collateral Agent has a perfected
first priority Lien upon all of the Collateral, subject to (i) Liens permitted
by Section 6.15, (ii) filings under any federal statute for patents, trademarks,
and copyrights, and (iii) Collateral in which security interests or liens can
only be perfected through compliance with the terms of the Federal Assignment of
Claims Act.
5.15. PLAN ASSETS; PROHIBITED TRANSACTIONS. The Borrower is not an entity
deemed to hold "plan assets" within the meaning of 29 C.F.R. {section}
2510.3-101 of an employee benefit plan (as defined in Section 3(3) of ERISA)
which is subject to Title I of ERISA or any plan (within the meaning of Section
4975 of the Code).
5.16. ENVIRONMENTAL MATTERS. In the ordinary course of its business, the
officers of the Borrower consider the effect of Environmental Laws applicable to
the business of the Borrower and its Subsidiaries, in the course of which they
identify and evaluate potential risks and liabilities accruing to the Borrower
due to Environmental Laws. On the basis of this consideration, the Borrower has
concluded that the status of the Borrower's compliance with Environmental Laws
cannot reasonably be expected to have a Material Adverse Effect. Neither the
Borrower nor any Subsidiary has received any notice to the effect that its
operations are not in material compliance with any of the requirements of
applicable Environmental Laws or are the subject of any federal or state
investigation evaluating whether any remedial action is needed to respond to a
release of any toxic or hazardous waste or substance into the environment, which
non-compliance or remedial action could reasonably be expected to have a
Material Adverse Effect.
5.17. INVESTMENT COMPANY ACT. Neither the Borrower nor any Subsidiary is
required to register as an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
5.18. PUBLIC UTILITY HOLDING COMPANY ACT. Neither the Borrower nor any
Subsidiary is a "holding company" or a "subsidiary company" of a "holding
company" within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
5.19. INSURANCE. The Borrower maintains, and has caused each Subsidiary to
maintain, with financially sound and reputable insurance companies, or pursuant
to self-insurance arrangements, insurance on all their material Property in such
amounts, subject to such deductibles and self-insurance retentions and covering
such properties and risks as is reasonably consistent with sound business
practice.
5.20. NO EVENT OF DEFAULT OR UNMATURED EVENT OF DEFAULT. No Event of
Default or Unmatured Event of Default has occurred and is continuing.
5.21. SDN LIST DESIGNATION. Neither the Borrower nor any of its
Subsidiaries or Affiliates is a country, individual or entity named on the
Specifically Designated National and
54
Blocked Persons (SDN) list issued by the Office of Foreign Asset Control of the
Department of the Treasury of the United States of America.
5.22. SOLVENCY. Immediately after the consummation of the transactions to
occur as of the initial Credit Extension Date, including, without limitation,
the Target Acquisition, and immediately following the making of each Credit
Extension on the initial Credit Extension Date, including, without limitation,
Credit Extensions to fund the Target Acquisition, and after giving effect to the
application of the proceeds of such Credit Extensions: (i) the fair value of the
assets of the Borrower and its Subsidiaries on a consolidated basis, at fair
valuation, will exceed the debts and liabilities, subordinated, contingent, or
otherwise, of the Borrower and its Subsidiaries on a consolidated basis, (ii)
the present fair saleable value of the Property of the Borrower and its
Subsidiaries on a consolidated basis will be greater than the amount that will
be required to pay the probable liability of the Borrower and its Subsidiaries
on a consolidated basis on their debts and other liabilities, subordinated,
contingent or otherwise, as such debts and other liabilities become absolute and
matured, (iii) the Borrower and its Subsidiaries on a consolidated basis will be
able to pay their debts and liabilities, subordinated, contingent or otherwise,
as such debts and liabilities become absolute and matured, and (iv) the Borrower
and its Subsidiaries on a consolidated basis will not have unreasonably small
capital with which to conduct the businesses in which they are engaged as such
businesses are now conducted and are proposed to be conducted after the Closing
Date and after the initial Credit Extension Date.
ARTICLE VI
COVENANTS
Until the Revolving Loan Commitments have expired or been terminated, the
LC Obligations have expired, been reimbursed or been cash collateralized (in
each case in accordance with the terms of this Agreement), and the other
Obligations have been paid in full (other than obligations to pay fees and
expenses with respect to which the Borrower has not received an invoice,
contingent indemnity obligations, other contingent obligations, and Rate
Management Obligations), unless the Required Lenders shall otherwise consent in
writing:
6.1. FINANCIAL REPORTING. The Borrower will maintain, for itself and each
Subsidiary, a system of accounting established and administered in accordance
with generally accepted accounting principles, and furnish to the Lenders:
6.1.1 Within ninety (90) days after the close of each of its fiscal
years, financial statements prepared in accordance with Agreement
Accounting Principles on a consolidated and consolidating basis for itself
and its consolidated Subsidiaries, including balance sheets as of the end
of such period, statements of income and statements of cash flows,
accompanied by (a) an audit report, unqualified as to scope, of a
nationally recognized firm of independent public accountants or other
independent public accountants reasonably acceptable to the Required
Lenders (it being understood and agreed that consolidating financial
statements need not be certified by such accountants); (b) any management
letter prepared by said accountants and (c) a certificate of said
accountants (which certificate may be limited to the extent required by
generally accepted accounting principles, rules or guidelines) that, in the
course of their audit of the financial
55
statements of the Borrower and its consolidated Subsidiaries, which audit
was conducted in accordance with generally accepted accounting standards,
they have obtained no knowledge of any Event of Default or Unmatured Event
of Default, or if, in the opinion of such accountants, any Event of Default
or Unmatured Event of Default shall exist, stating the nature and status
thereof.
6.1.2 Within forty-five (45) days after the close of the first three
quarterly periods of each of its fiscal years, for itself and its
consolidated Subsidiaries, consolidated and consolidating unaudited balance
sheets as at the close of each such period and consolidated and
consolidating statements of income and a statement of cash flows for the
period from the beginning of such fiscal year to the end of such quarter,
all certified as to fairness of presentation in all material respects in
accordance with Agreement Accounting Principles, compliance with Agreement
Accounting Principles, and consistency by its chief financial officer or
treasurer, except for normal year-end audit adjustments and the absence of
footnotes.
6.1.3 Together with the financial statements required under Sections
6.1.1 and 6.1.2, a compliance certificate in substantially the form of
Exhibit B signed by its chief financial officer or treasurer showing the
calculations necessary to determine compliance with Sections 6.20 through
6.24, an officer's certificate in substantially the form of Exhibit F
stating that, to such officer's knowledge, no Event of Default or Unmatured
Event of Default exists, or if any Event of Default or Unmatured Event of
Default exists, stating the nature and status thereof.
6.1.4 As soon as possible and in any event within ten (10) days after
the Borrower knows that any material Reportable Event has occurred with
respect to any Plan, a statement, signed by the chief financial officer or
treasurer of the Borrower, describing said Reportable Event and the action
which the Borrower proposes to take with respect thereto.
6.1.5 As soon as possible and in any event within ten (10) days after
receipt by the Borrower, a copy of (a) any notice or claim to the effect
that the Borrower or any of its Subsidiaries is or may be liable to any
Person as a result of the release by the Borrower, any of its Subsidiaries,
or any other Person of any toxic or hazardous waste or substance into the
environment, and (b) any notice alleging any violation of any Environmental
Law by the Borrower or any of its Subsidiaries, which, in either case,
could reasonably be expected to have a Material Adverse Effect.
6.1.6 Promptly upon the filing thereof, copies of all registration
statements and copies of all filings on forms 10-K, 10-Q, or 8-K which the
Borrower or any of its Subsidiaries makes with the Securities and Exchange
Commission, including, without limitation, all certifications and other
filings required by Section 302 and Section 906 of the Xxxxxxxx-Xxxxx Act
of 2002 and all rules and regulations related thereto.
6.1.7 As soon as practicable, and in any event within thirty (30) days
after the beginning of each fiscal year of the Borrower, a copy of the plan
and forecast (including
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a projected consolidated balance sheet, income statement and funds flow
statement) of the Borrower for such fiscal year.
6.1.8 As soon as possible, and in any event within three (3) Business
Days (in the case of the Borrower) and fifteen (15) days (in the case of
any Guarantor) after the occurrence thereof, a reasonably detailed
notification to the Administrative Agent and its counsel of any change in
the jurisdiction of organization of the Borrower or any Guarantor.
6.1.9 Such other information (including non-financial information) as
the Administrative Agent or any Lender may from time to time reasonably
request.
If any information which is required to be furnished to the Lenders under
this Section 6.1 is required by law or regulation to be filed by the Borrower
with a government body on an earlier date, then the information required
hereunder shall be furnished to the Lenders promptly following such earlier
date.
6.2. USE OF PROCEEDS. The Borrower will, and will cause each Subsidiary to,
use (i) the proceeds of the Term Loans in compliance with Section 2.1.2 and
solely to refinance certain existing Indebtedness outstanding on the Closing
Date and to pay a portion of the consideration to be paid in connection with the
Target Acquisition, and (ii) the proceeds of the Revolving Loans to pay a
portion of the consideration to be paid in connection with the Target
Acquisition, to refinance certain Indebtedness outstanding on the Closing Date,
to provide cash collateral for certain Letters of Credit not constituting
Facility LCs or Existing Letters of Credit, and for general corporate purposes,
including, without limitation, for working capital, commercial paper liquidity
support, Permitted Acquisitions, and to pay fees and expenses incurred in
connection with this Agreement. The Borrower shall use the proceeds of Credit
Extensions in compliance with all applicable legal and regulatory requirements
and any such use shall not result in a violation of any such requirements,
including, without limitation, Regulation T, U and X, the Securities Act of
1933, as amended, and the Securities Exchange Act of 1934, as amended, and the
regulations promulgated thereunder.
6.3. NOTICE OF EVENT OF DEFAULT. Within three (3) Business Days after an
Authorized Officer becomes aware thereof, the Borrower will give notice in
writing to the Lenders of the occurrence of any Event of Default or Unmatured
Event of Default.
6.4. CONDUCT OF BUSINESS. The Borrower will, and will cause each Subsidiary
to, carry on and conduct its business in substantially the same manner and in
substantially the same fields of enterprise as it is presently conducted
(including, without limitation, the business currently conducted by the Target),
and do all things necessary to remain duly incorporated or organized, validly
existing and (to the extent such concept applies to such entity) in good
standing as a domestic corporation, partnership or limited liability company in
its jurisdiction of incorporation or organization, as the case may be, as in
effect on the Closing Date, and maintain all requisite authority to conduct its
business in each jurisdiction in which its business is conducted; provided,
however, that the foregoing shall not prohibit any merger, dissolution, or
consolidation permitted under Section 6.11.
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6.5. TAXES. The Borrower will, and will cause each Subsidiary to, timely
file complete and correct United States federal and applicable foreign, state
and local tax returns required by law and pay all material taxes, assessments
and governmental charges and levies before the same shall become delinquent or
in default upon it or its income, profits or Property, except those which are
being contested in good faith by appropriate proceedings and with respect to
which adequate reserves have been set aside in accordance with Agreement
Accounting Principles.
6.6. INSURANCE. The Borrower will, and will cause each Subsidiary to,
maintain with financially sound and reputable insurance companies, or pursuant
to self-insurance arrangements, insurance on all their material Property in such
amounts, subject to such deductibles and self-insurance retentions, and covering
such risks as is consistent with sound business practice, and the Borrower will
furnish to any Lender upon request full information as to the insurance carried.
The Borrower shall deliver to the Collateral Agent and the Administrative Agent
endorsements in form and substance reasonably acceptable to the Collateral Agent
and the Administrative Agent (x) to all "All Risk" physical damage insurance
policies on all of the Borrower's and its Subsidiaries' tangible real and
personal property and assets and business interruption insurance policies naming
the Collateral Agent as loss payee and (y) to all general liability and other
liability policies naming the Collateral Agent as an additional insured. In the
event the Borrower or any of its Subsidiaries at any time or times hereafter
shall fail to obtain or maintain any of the policies or insurance required
herein or to pay any premium in whole or in part relating thereto, then the
Administrative Agent, without waiving or releasing any obligations or resulting
Event of Default hereunder, may at any time or times thereafter (but shall be
under no obligation to do so) obtain and maintain such policies of insurance and
pay such premiums and take any other action with respect thereto which the
Administrative Agent deems advisable. All sums so disbursed by the
Administrative Agent shall constitute part of the Obligations, payable as
provided in this Agreement.
6.7. COMPLIANCE WITH LAWS. The Borrower will, and will cause each
Subsidiary to, comply with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject including,
without limitation, all Environmental Laws, ERISA and Section 302 and Section
906 of the Xxxxxxxx-Xxxxx Act of 2002, except where the failure to do so
individually or in the aggregate would not reasonably be expected to result in a
Material Adverse Effect.
6.8. MAINTENANCE OF PROPERTIES. Subject to Section 6.12, the Borrower will,
and will cause each Subsidiary to, do all things necessary to maintain,
preserve, protect and keep its Property material to the operation of its
business in good repair, working order and condition (ordinary wear and tear
excepted), and make all necessary and proper repairs, renewals and replacements
to any such Property so that its business carried on in connection therewith may
be properly conducted at all times.
6.9. INSPECTION; KEEPING OF BOOKS AND RECORDS.
(i) The Borrower will, and will cause each Subsidiary to, permit (x)
the Administrative Agent at any time and (y) the Lenders during the
continuance of an Event of Default, in each case by their
respective representatives and agents, to inspect any of the
Property, including, without limitation, the Collateral, books
58
and financial records of the Borrower and each Subsidiary, to
examine and make copies of the books of accounts and other
financial records of the Borrower and each Subsidiary, and to
discuss the affairs, finances and accounts of the Borrower and
each Subsidiary with, and to be advised as to the same by, their
respective officers at such reasonable times and intervals as the
Administrative Agent or any Lender may designate (in each case
other than (x) records subject to attorney-client privilege and
(y) patent-related information the disclosure of which is
prohibited by applicable law or the rules and regulations of a
Governmental Authority). The Borrower shall keep and maintain,
and cause each of its Subsidiaries to keep and maintain, in all
material respects, proper books of record and account in which
entries in conformity with Agreement Accounting Principles shall
be made of all dealings and transactions in relation to their
respective businesses and activities.
(ii) Except to the extent the Administrative Agent may reasonably
consent to any change, the Borrower will, or will cause each
Subsidiary to, continue to account for PIP in the same manner as
the Credit Parties account for PIP as of the Closing Date which is
as follows: (i) when PIP is received by any Credit Parties, funds
are initially allocated (a) as a debit to cash on the Credit
Parties' general ledger; and (B) as a corresponding credit in a
contra-account reserve established with respect to the Credit
Parties' accounts, with the funds in such contra-account not
specifically allocated to identified accounts (the amount of funds
in such contra-account from time to time are referred to as
"Unapplied PIP"); (ii) at such time as the Borrower allocates any
portion of PIP to identified accounts, the contra-account for
Unapplied PIP is reduced by that amount and the identified account
is extinguished by that amount; and (iii) at such time as the
Borrower determines any portion of PIP represents an overpayment
under applicable Medicare, Medicaid, TRICARE, CHAMPVA or any other
program of any Governmental Authority, Borrower transfers such
overpaid portion on its books from the contra-account for Unapplied
PIP to a liability entry on its general ledger entitled "PIP
Settlements".
6.10. RESTRICTED PAYMENTS. The Borrower will not, nor will it permit any
Subsidiary to, make any Restricted Payment (other than dividends payable in its
own capital stock) except that,
6.10.1 Any Subsidiary may declare and pay dividends or make
distributions (i) payable solely in its capital stock to the direct or
indirect holders of its capital stock or (ii) payable in dividends and
distributions to the Borrower or to a Subsidiary that is a Guarantor (and
if such Subsidiary has shareholders other than the Borrower or a Subsidiary
that is a Guarantor, to its shareholders on a pro rata basis).
6.10.2 The Borrower may make dividends or distributions in respect of
capital stock subject to the Closing Date Stock Award Plan so long as the
aggregate amount of dividends or distributions made in cash in respect
thereof does not exceed $2,800,000 and the aggregate amount of dividends or
distributions made in capital stock in respect thereof does not exceed
$5,500,000.
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6.10.3 The Borrower may declare and pay dividends with respect to its
capital stock payable solely in additional shares of its capital stock (or
warrants, options, or other rights to acquire additional shares of its
capital stock).
6.10.4 Repurchases of capital stock deemed to occur upon exercise of
stock options if such capital stock represents a portion of the exercise
price of such options, and repurchases of capital stock of Subsidiaries
consisting of directors' qualifying shares or repurchases of shares issued
to third parties to the extent necessary to satisfy any licensing
requirements under applicable law with respect to the Borrower's or any of
its Subsidiaries' businesses.
6.10.5 Cash payments in lieu of the issuance of fractional shares in
connection with the exercise of warrants, options or other securities
convertible into or exchangeable for capital stock of the Borrower;
provided, however, that any such cash payment shall not be for the purpose
of evading the limitations of this Section 6.10.
6.10.6 The payment of scheduled, quarterly cash dividends on the
Chemed Trust Securities declared on or prior to December 31, 2004 in an
amount not to exceed $2.00 per share per year, and the redemption of the
Chemed Trust Securities and the Subordinated Chemed Debentures declared on
or prior to December 31, 2004 at the scheduled redemption price.
6.10.7 So long as no Event of Default or Unmatured Event of Default
exists at the time thereof, the Borrower may declare and pay dividends on
its capital stock so long as (x) the amount of any dividend for any share
of capital stock does not exceed $0.48, and (y) the aggregate amount of
dividends paid on such capital stock does not exceed $7,000,000 in any
fiscal year.
6.10.8 Any purchase, repurchase, redemption, retirement or other
acquisition for value of shares of, or options to purchase shares of,
common stock of the Borrower or any of its Subsidiaries from employees,
former employees, directors or former directors of the Borrower or any of
its Subsidiaries (or permitted transferees of such employees, former
employees, directors or former directors), pursuant to the terms of
agreements (including employment agreements) or plans (or amendments
thereto) approved by the Board of Directors under which such individuals
purchase or sell or are granted the option to purchase or sell, shares of
such common stock; provided, however, that the aggregate amount of such
purchases, repurchases, redemptions, retirements and other acquisitions for
value will not exceed $2,000,000 in any calendar year.
6.10.9 Additional Restricted Payments to the extent not otherwise
permitted under this 6.10 so long as the aggregate amount of such
additional Restricted Payments does not exceed $1,000,000 at any time.
6.11. MERGER OR DISSOLUTION. The Borrower will not, nor will it permit any
Subsidiary to, merge or consolidate into any other Person or dissolve, except
that:
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6.11.1 A Guarantor may merge into (x) the Borrower or (y) a
Wholly-Owned Subsidiary that is a Guarantor or becomes a Guarantor promptly
upon the completion of the applicable merger or consolidation.
6.11.2 A Subsidiary that is not a Guarantor and not required to be a
Guarantor may merge or consolidate with or into any other Person; provided,
however, that if the equity interests of such Subsidiary have been pledged
to the Collateral Agent as Collateral, then such merger or consolidation
shall not be permitted unless such Subsidiary is the surviving entity of
such merger or consolidation or such merger or consolidation is approved in
writing by the Administrative Agent prior to the consummation thereof (such
approval not to be unreasonably withheld).
6.11.3 The Borrower or any Subsidiary may consummate any merger or
consolidation in connection with the Target Acquisition or any Permitted
Acquisition.
6.11.4 Any Person may merge into the Borrower, provided that the
Borrower shall be the continuing or surviving entity resulting from such
merger.
6.11.5 Any Subsidiary may liquidate or dissolve if the Borrower
determines in good faith that such liquidation or dissolution is in the
best interests of the Borrower and the Subsidiaries and is not materially
disadvantageous to the Lenders.
6.12. SALE OF ASSETS. The Borrower will not, nor will it permit any
Subsidiary to, lease, sell or otherwise dispose of its Property (other than cash
or cash equivalents not constituting Cash Equivalent Investments) to any other
Person, except:
6.12.1 Sales or other dispositions of inventory in the ordinary course
of business.
6.12.2 A disposition or transfer of assets by a Subsidiary to the
Borrower or a Guarantor or by the Borrower to a Guarantor.
6.12.3 A disposition of obsolete, excess, damaged or worn-out
Property, Property no longer used or useful in the business of the Borrower
or its Subsidiaries or other assets in the ordinary course of business of
the Borrower or any Subsidiary.
6.12.4 The Target Stock Issuance so long as the form and substance
thereof is reasonably satisfactory to the Required Lenders.
6.12.5 Sales or liquidations of Cash Equivalent Investments.
6.12.6 Each of the Borrower and its Subsidiaries may grant licenses,
sublicenses, leases or subleases to other Persons not materially
interfering with the conduct of the business of the Borrower or any of its
Subsidiaries.
6.12.7 Restricted Payments permitted by Section 6.10.
6.12.8 Investments permitted by Section 6.13.
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6.12.9 Liens permitted by Section 6.15.
6.12.10 Sale and Leaseback Transactions permitted by Section 6.27.
6.12.11 Sales of directors' qualifying shares or shares issued to
third parties to the extent necessary to satisfy any licensing requirements
under applicable law with respect to the Borrower's or any of its
Subsidiaries' businesses.
6.12.12 Leases, sales or other dispositions of its Property that,
together with all other Property of the Borrower and its Subsidiaries
previously leased, sold or disposed of (other than dispositions otherwise
permitted by this Section 6.12) as permitted by this Section during any
fiscal year of the Borrower do not exceed $1,000,000 in the aggregate.
6.13. INVESTMENTS AND ACQUISITIONS. The Borrower will not, nor will it
permit any Subsidiary to, make or suffer to exist any Investments (including
without limitation, loans and advances to, and other Investments in,
Subsidiaries), or commitments therefor, or to create any Subsidiary or to become
or remain a partner in any partnership or joint venture, or to make any
Acquisition of any Person, except:
6.13.1 Cash Equivalent Investments.
6.13.2 Existing Investments in Subsidiaries and other Investments in
existence on the Closing Date and described in Schedule 6.13.
6.13.3 Investments permitted by Section 6.14.5.
6.13.4 Investments (x) by a Credit Party in any newly formed
Subsidiary so long as the newly formed Subsidiary promptly becomes a Credit
Party thereafter and (y) by the Borrower or a Guarantor in equity interests
in their respective Subsidiaries; provided, however, all such Investments
subject to this clause (y) that constitute contributions to capital shall
not, when aggregated with Indebtedness owing by such Subsidiaries to the
Borrower or any Guarantors as permitted by Section 6.14.5, exceed
$2,500,000 at any time outstanding (such amount, the "Permitted Non-Credit
Party Amount"); provided, further, that not more than $400,000 of the
Permitted Non-Credit Party Amount shall at any time consist of Investments
other than Investments in Roto-Rooter of Canada, Ltd. as further described
in Schedule 6.13.
6.13.5 Investments permitted by Section 6.17.
6.13.6 Investments consisting of Contingent Obligations not prohibited
by Section 6.14.
6.13.7 Investments arising out of deposits and pledges permitted by
Section 6.15.
6.13.8 Investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes with,
customers and suppliers.
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6.13.9 Investments resulting from transactions permitted by Section
6.11.
6.13.10 Investments resulting from transactions permitted by Section
6.12.
6.13.11 Investments in charitable foundations organized under Section
501(c) of the Code in an amount not to exceed $1,000,000 in the aggregate
in any fiscal year.
6.13.12 Loans and advances to employees, officers and directors of the
Borrower and its Subsidiaries not to exceed in the aggregate at any time
(x) $6,000,000 in respect of split-dollar policies and (y) $2,000,000 in
respect of other loans and advances.
6.13.13 Investments in VNF not exceeding $1,000,000 in the aggregate
in any fiscal year.
6.13.14 Payroll, travel and similar advances to cover matters that are
expected at the time of such advances ultimately to be treated as expenses
for accounting purposes and that are made in the ordinary course of
business.
6.13.15 Investments resulting from stock, obligations or securities
received in settlement of debts created in the ordinary course of business
and owing to the Borrower or any Subsidiary or in satisfaction of
judgments.
6.13.16 Investments in any Person consisting of the licensing of
intellectual property pursuant to joint ventures, strategic alliances or
joint marketing arrangements with such Person, in each case made in the
ordinary course of business.
6.13.17 Investments in a vendor or supplier consisting of loans or
advances to such vendor or supplier in connection with any guarantees to
the Borrower or any Guarantor of supply by, or to fund the supply capacity
of, such vendor or supplier, in any case not to exceed $2,000,000 at any
time outstanding.
6.13.18 Investments which constitute cash collateral securing
obligations outstanding under Letters of Credit issued under the Existing
Credit Agreements that do not constitute Existing Letters of Credit so long
as the form and substance of such cash collateralization is reasonably
acceptable to the Administrative Agent.
6.13.19 Investments consisting of loans or advances by the Borrower or
a Subsidiary thereof to independent contractors or subcontractors of the
Borrower or a Subsidiary thereof; provided, however, that (x) the proceeds
of such loans or advances are used for equipment purchases in the ordinary
course of business or for working capital expenditures in the ordinary
course of business, (y) the aggregate amount of loans and advances to any
individual independent contractor or subcontractor of the Borrower or a
Subsidiary thereof shall not exceed $250,000, and (z) the aggregate amount
of loans and advances to all independent contractors and subcontractors of
the Borrower and its Subsidiaries shall not exceed $4,000,000.
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6.13.20 Additional Investments to the extent not otherwise permitted
under Sections 6.13.1 through 6.13.19 so long as the aggregate amount of
such additional Investments does not exceed $1,000,000 at any time.
6.13.21 the Target Acquisition or any other Acquisitions meeting the
following requirements or otherwise approved by the Required Lenders (each
such Acquisition constituting a "Permitted Acquisition"):
(i) as of the date of the consummation of such Acquisition, no Event of
Default or Unmatured Event of Default shall have occurred and be
continuing or would result from such Acquisition, and the
representation and warranty contained in Section 5.11 shall be true
both before and after giving effect to such Acquisition;
(ii) such Acquisition is consummated on a non-hostile basis pursuant to
a negotiated acquisition agreement approved by the board of
directors or other applicable governing body of the seller or
entity to be acquired;
(iii) the business to be acquired in such Acquisition is similar or
related to one or more of the lines of business in which the
Borrower and its Subsidiaries, including, without limitation, the
Target, are engaged on the Closing Date;
(iv) as of the date of the consummation of such Acquisition, all
material governmental and corporate approvals required in
connection therewith shall have been obtained;
(v) the Purchase Price for each such Acquisition together with the
Purchase Price of all other Permitted Acquisitions shall not exceed
an amount equal to $3,000,000 during the period beginning on the
Closing Date and ending on the later of the Revolving Loan
Termination Date and the Term Loan Maturity Date;
(vi) prior to the consummation of such Permitted Acquisition, the
Borrower shall have delivered to the Administrative Agent a pro
forma consolidated balance sheet, income statement and cash flow
statement of the Borrower and its Subsidiaries (the "Acquisition
Pro Forma"), based on the Borrower's most recent financial
statements delivered pursuant to Section 6.1.1 and using historical
financial statements for the acquired entity provided by the
seller(s) or which shall be complete and shall fairly present, in
all material respects, the financial condition and results of
operations and cash flows of the Borrower and its Subsidiaries in
accordance with Agreement Accounting Principles, but taking into
account such Permitted Acquisition and the funding of all Credit
Extensions in connection therewith, and such Acquisition Pro Forma
shall reflect that, on a pro forma basis, the Borrower would have
been in compliance with the financial covenants set forth in
Sections 6.20 through 6.24 for the period of four fiscal quarters
reflected in the compliance certificate most recently delivered to
the Administrative Agent pursuant to Section 6.1.3 prior to the
consummation of such Permitted Acquisition (giving effect to such
Permitted Acquisition and all Credit Extensions funded in
connection therewith as if made on the first day of such period);
and
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(vii) prior to each such Permitted Acquisition, the Borrower shall
deliver to the Administrative Agent a documentation, information
and certification package in form and substance reasonably
acceptable to the Administrative Agent, including, without
limitation:
(A) a near-final version (with no amendments to be made thereto
that could reasonably be expected to be materially adverse to
the Lenders, without the approval of the Administrative
Agent) of the acquisition agreement for such Acquisition
together with drafts of the material schedules thereto;
(B) a near-final version (with no amendments to be made thereto
that could reasonably be expected to be materially adverse to
the Lenders, without the approval of the Administrative
Agent) of all documents, instruments and agreements with
respect to any Indebtedness to be incurred or assumed in
connection with such Acquisition; and
(C) such other documents or information as shall be reasonably
requested by the Administrative Agent in connection with such
Acquisition.
(viii) as of the date on which the Permitted Acquisition is consummated,
the Borrower shall deliver (or shall cause the delivery) to the
Administrative Agent and the Collateral Agent all of the Collateral
Documents necessary for the perfection of a first priority Lien
(subject to Liens permitted by Section 6.15) in all of the Property
to be acquired (including, as applicable, equity interests in the
Person being acquired and such Person's Subsidiaries), all in
accordance with the requirements of Section 6.26, and in each case
together with opinions of counsel in form and substance reasonably
acceptable to the Administrative Agent and the Collateral Agent.
The Borrower shall also deliver (or shall cause the delivery) to
the Administrative Agent a supplement to the Guaranty Agreement if
the Permitted Acquisition is an Acquisition of equities and the
Person being acquired is not being merged with the Borrower or any
other Person required to be a Guarantor under the terms of this
Agreement, the Guaranty Agreement, or the Collateral Documents;
6.14. INDEBTEDNESS. The Borrower will not, nor will it permit any
Subsidiary to, create, incur or suffer to exist any Indebtedness, except:
6.14.1 The Secured Obligations.
6.14.2 Indebtedness existing on the Closing Date and described in
Schedule 6.14 (and renewals, refinancings or extensions thereof on non-
pricing terms and conditions, taken as a whole, not materially less
favorable to the applicable obligor than such existing Indebtedness and in
a principal amount not in excess of that outstanding as of the date of such
renewal, refinancing or extension plus the amount of any interest, premium
or penalties required to be paid thereon plus fees and expenses associated
therewith).
6.14.3 Indebtedness arising under Rate Management Transactions
permitted under Section 6.17.
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6.14.4 Secured or unsecured purchase money Indebtedness (including
Capitalized Leases) and Indebtedness in respect of Sale and Leaseback
Transactions permitted under Section 6.27 that is incurred by the Borrower
or any of its Subsidiaries after the Closing Date to finance the
acquisition of assets used in its business, if (1) the total of all such
Indebtedness for the Borrower and its Subsidiaries taken together incurred
on or after the Closing Date shall not exceed an aggregate principal amount
of $1,000,000 at any one time outstanding, (2) such Indebtedness when
incurred shall not exceed the purchase price of the asset(s) financed, (3)
no such Indebtedness shall be refinanced for a principal amount in excess
of the principal balance outstanding thereon at the time of such
refinancing plus the amount of any interest, premium or penalties required
to be paid thereon plus fees and expenses associated therewith, and (4) any
Lien securing such Indebtedness is permitted under Section 6.15 (such
Indebtedness being referred to herein as "Permitted Purchase Money
Indebtedness").
6.14.5 Indebtedness arising from intercompany loans and advances (i)
made by any Credit Party to any other Credit Party, (ii) made by any
Subsidiary that is not a Credit Party to any Credit Party; provided that
all such Indebtedness described in this clause (ii) shall be expressly
subordinated to the Secured Obligations pursuant to subordination
provisions reasonably acceptable to the Administrative Agent, or (iii) made
by any Credit Party to any Subsidiary that is not a Credit Party; provided
that the aggregate of all such Indebtedness described in this clause (iii)
shall not exceed $250,000 at any time.
6.14.6 Contingent Obligations of the Borrower of any Indebtedness of
any Subsidiary permitted under this Section 6.14.
6.14.7 Contingent Obligations of any Subsidiary of the Borrower that
is a Guarantor with respect to any Indebtedness of the Borrower or any
other Subsidiary permitted under this Section 6.14.
6.14.8 Indebtedness outstanding under the Senior Secured Indenture
Documents and any extensions, renewals, refinancings or replacements of
such Indebtedness so long as the aggregate principal amount of the
Indebtedness resulting from such extension, renewal, refinancing, or
replacement does not exceed the aggregate principal amount of Indebtedness
outstanding under the Senior Secured Indenture Documents on the Closing
Date plus interest, premiums, penalties, fees and expenses paid in respect
of refinancing, renewing, extending or refunding such Indebtedness, (y) the
holders of the Indebtedness resulting from such extension, renewal,
refinancing or replacement are subject to the Intercreditor Agreement, and
(z) the Borrower and its Subsidiaries are in compliance with Section 6.31.
6.14.9 Indebtedness outstanding under the Senior Unsecured Indenture
Documents and any extensions, renewals, refinancings or replacements of
such Indebtedness plus interest, premiums, penalties, fees and expenses
paid in respect of refinancing, renewing, extending or refunding such
Indebtedness, so long as the Borrower and its Subsidiaries are in
compliance with Section 6.31.
66
6.14.10 Indebtedness of any Subsidiary of the Borrower at the time
such Subsidiary is merged or consolidated with or into the Borrower or any
Subsidiary and is not created in contemplation of such event.
6.14.11 Undrawn amounts under Letters of Credit that were issued under
the Existing Credit Agreements, that are not Existing Letters of Credit,
and that are cash collateralized or supported by back-to-back Letters of
Credit on terms reasonably acceptable to the Administrative Agent.
6.14.12 Indebtedness arising from judgments or orders in circumstances
not constituting an Event of Default.
6.14.13 Indebtedness incurred under Financial Contracts entered into
in the ordinary course of financial management and not for speculative
purposes.
6.14.14 Indebtedness in respect of performance bonds, bankers'
acceptances and surety or appeal bonds provided by the Borrower and its
Subsidiaries in the ordinary course of their business.
6.14.15 Indebtedness arising from the agreements of the Borrower or a
Subsidiary providing for indemnification, adjustment of purchase price or
similar obligations, in each case incurred in connection with the
disposition of any business, assets or a Subsidiary of the Borrower in
accordance with the terms of this Agreement other than guarantees of
Indebtedness incurred by any Person acquiring all or any portion of such
business, assets or Subsidiary for the purpose of financing such
acquisition.
6.14.16 Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument drawn against
insufficient funds in the ordinary course of business, provided that such
Indebtedness is extinguished within five Business Days of its incurrence.
6.14.17 Obligations arising from or representing deferred compensation
to employees of the Borrower or its Subsidiaries that constitute or are
deemed to be Indebtedness under Agreement Accounting Principles and that
are incurred in the ordinary course of business.
6.14.18 Indebtedness incurred by a Guarantor, to the extent that the
proceeds of such Indebtedness are used to repay Indebtedness under this
Agreement or the Senior Secured Notes.
6.14.19 Additional unsecured Indebtedness of the Borrower or any
Subsidiary, to the extent not otherwise permitted under this Section 6.14;
provided, however, that the aggregate principal amount of such Indebtedness
shall not exceed $5,000,000 at any time outstanding.
6.15. Liens. The Borrower will not, nor will it permit any Subsidiary to,
create, incur, or suffer to exist any Lien in, of or on the Property of the
Borrower or any of its Subsidiaries, except:
67
6.15.1 Liens securing (x) Secured Obligations and (y) Indebtedness
permitted under Section 6.14.8 so long as the holders of such Indebtedness
are bound by and subject to the terms of the Intercreditor Agreement.
6.15.2 Liens for taxes, assessments or governmental charges or levies
on its Property if the same shall not at the time be delinquent or
thereafter can be paid without penalty, or are being contested in good
faith and by appropriate proceedings and for which reserves, if any,
required in accordance with Agreement Accounting Principles shall have been
set aside on its books.
6.15.3 Liens imposed by law, such as landlords', wage earners',
carriers', warehousemen's and mechanics' liens and other similar liens
arising in the ordinary course of business which secure payment of
obligations not more than forty-five (45) days past due or which are being
contested in good faith by appropriate proceedings and for which reserves,
if any, required in accordance with Agreement Accounting Principles shall
have been set aside on its books.
6.15.4 Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions, or other
social security or retirement benefits, or similar legislation.
6.15.5 Liens existing on the Closing Date and described in Schedule
6.15.
6.15.6 Deposits securing liability to insurance carriers under
insurance or self-insurance arrangements.
6.15.7 Deposits to secure the performance of bids, contracts (other
than for borrowed money), leases, public or statutory obligations, surety
and appeal bonds, contested taxes, the payment of rent, performance bonds
and other obligations of a like nature incurred in the ordinary course of
business.
6.15.8 Easements, reservations, rights-of-way, zoning, building and
other restrictions, survey exceptions and other similar encumbrances as to
real property of the Borrower and its Subsidiaries which customarily exist
on properties of corporations engaged in similar activities and similarly
situated and which do not materially interfere with the conduct of the
business of the Borrower or such Subsidiary conducted at the property
subject thereto.
6.15.9 Purchase money Liens securing Permitted Purchase Money
Indebtedness (as defined in Section 6.14); provided, that such Liens shall
not apply to any property of the Borrower or its Subsidiaries other than
that purchased with the proceeds of such Permitted Purchase Money
Indebtedness.
6.15.10 Liens existing on any asset of any Subsidiary of the Borrower
at the time such Subsidiary becomes a Subsidiary and not created in
contemplation of such event.
6.15.11 Liens on any asset securing Indebtedness incurred or assumed
for the purpose of financing or refinancing all or any part of the cost of
acquiring or constructing
68
such asset; provided that such Lien attaches to such asset concurrently
with or within eighteen (18) months after the acquisition or completion or
construction thereof.
6.15.12 Liens existing on any asset of any Subsidiary of the Borrower
at the time such Subsidiary is merged or consolidated with or into the
Borrower or any Subsidiary and not created in contemplation of such event.
6.15.13 Liens existing on any asset prior to the acquisition thereof
by the Borrower or any Subsidiary and not created in contemplation thereof;
provided that such Liens do not encumber any other property or assets.
i 6.15.14 Liens arising out of the refinancing, extension, renewal or
refunding of any Indebtedness secured by any Lien permitted under this
Section 6.15; provided that (a) such Indebtedness is not secured by any
additional assets, and (b) the principal amount of such Indebtedness
secured by any such Lien is not increased, except to the extent such
increase includes interest, premiums, penalties, fees and expenses paid
in respect of refinancing, extending, renewing or refunding such
Indebtedness.
6.15.15 Bankers' liens and rights of set off with respect to customary
depositary arrangements entered into in the ordinary course of business.
6.15.16 Liens on assets of any Subsidiary of any Credit Party in favor
of any Credit Party securing borrowings from such Credit Party.
6.15.17 Liens to collateralize Letters of Credit issued under the
Existing Credit Agreements that remain outstanding after the Closing Date,
do not constitute Existing Letters of Credit, and are cash collateralized
or supported by back-to-back Letters of Credit on terms reasonably
acceptable to the Administrative Agent.
6.15.18 Liens in favor of customs and revenue authorities which secure
payment of customs duties in connection with the importation of goods.
6.15.19 Liens arising out of Capitalized Leases or Operating Leases.
6.15.20 Licenses, sublicenses, leases or subleases granted to others
in the ordinary course of business that do not interfere in any material
respect with the business of the Borrower and its Subsidiaries.
6.15.21 Liens arising from judgments, awards, orders or attachments in
circumstances not constituting an Event of Default.
6.15.22 Liens affecting the interest of the landlord of any ground
lease.
6.15.23 Liens securing Indebtedness permitted by Section 6.14.14.
6.15.24 Liens issued in favor of surety bonds in existence on the
Closing Date and identified on Schedule 6.15.
69
6.15.25 Liens of any landlord arising under a real property lease to
the extent such Liens arise in the ordinary course of business and secure
obligations not more than forty-five (45) days past due or which are being
contested in good faith by appropriate proceedings and for which reserves,
if any, required in accordance with Agreement Accounting Principles shall
have been set aside on its books.
6.15.26 Liens in favor of any Holder of Secured Obligations securing
Rate Management Obligations permitted under Section 6.17.
6.15.27 Liens deemed to exist in connection with Cash Equivalent
Investments of the type described in clause (v) of the definition thereof.
6.15.28 Rights of recoupment and any other Liens, rights and benefits
of any governmental Third Party Payor with respect to Governmental
Receivables.
6.15.29 Additional Liens to the extent not otherwise permitted under
this Section 6.15 so long as the aggregate amount of Indebtedness secured
thereby does not exceed $1,000,000 at any time and the aggregate value of
the Property subject thereto does not exceed $1,000,000 at any time.
If the Borrower or any Guarantor creates any initial or additional Lien on
any Property to secure the Senior Secured Notes, it must concurrently grant a
first-priority Lien that is equal and ratable with any other first-priority Lien
upon such Property as security for the Secured Obligations. In addition, neither
the Borrower nor any of its Subsidiaries shall become a party to any agreement,
note, indenture or other instrument, or take any other action, which would
prohibit the creation of a Lien on any of its Properties or other assets in
favor of the Collateral Agent or the Administrative Agent for the benefit of the
Holders of Secured Obligations; provided, that (i) any agreement, note,
indenture or other instrument in connection with (A) purchase money Indebtedness
(including Capitalized Leases) and Indebtedness in respect of Sale and Leaseback
Transactions for which the related Liens are permitted hereunder may prohibit
the creation of a Lien in favor of the Collateral Agent or the Administrative
Agent for the benefit of the Holders of Secured Obligations, with respect to the
assets or Property obtained with the proceeds of such Indebtedness, (B) the
Senior Unsecured Notes and other agreements with respect to unsecured
Indebtedness governed by indentures or credit agreements or note purchase
agreements with institutional investors permitted by this Agreement may contain
terms that are not materially more restrictive (as reasonably determined by the
Administrative Agent), taken as a whole, than those contained in the Senior
Unsecured Notes Documents, (C) the Senior Secured Notes and other agreements
with respect to secured Indebtedness governed by indentures or credit agreements
or note purchase agreements with institutional investors permitted by this
Agreement may contain terms that are not materially more restrictive (as
reasonably determined by the Administrative Agent), taken as a whole, than those
contained in the Senior Secured Indenture Documents, (ii) this paragraph shall
not prohibit (A) customary restrictions contained in purchase and sale
agreements limiting the transfer of the subject assets pending closing, (B)
customary non-assignment provisions in leases and other contracts entered into
in the ordinary course of business, (C) agreements in effect as of the Closing
Date and not entered into in contemplation of the transactions effected in
connection with the Target Acquisition, (D) any restriction existing under
agreements relating to assets acquired by the Borrower or a Subsidiary
70
in a transaction permitted hereby, and (E) any restriction or condition as
required by applicable law; provided that such agreements existed at the time of
such acquisition, were not put into place in anticipation of such acquisition
and are not applicable to any assets other than assets so acquired and (iii) any
restriction existing under any agreement of a Person acquired as a Subsidiary
pursuant to a transaction permitted hereby; provided that any such agreement
existed at the time of such acquisition, was not put into place in anticipation
of such acquisition and was not applicable to any Person or assets other than
the Person or assets so acquired.
6.16. TRANSACTIONS WITH AFFILIATES. The Borrower will not, and will not
permit any Subsidiary to, enter into any transaction (including, without
limitation, the purchase or sale of any Property or service) with, or make any
payment or transfer to, any Affiliate (other than the Borrower and its
Subsidiaries) except (i) pursuant to the reasonable requirements of the
Borrower's or such Subsidiary's business and upon terms no less favorable to the
Borrower or such Subsidiary than the Borrower or such Subsidiary would obtain in
a comparable arm's-length transaction, (ii) transactions between or among the
Credit Parties not involving any other Affiliate, (iii) transactions between or
among Subsidiaries that are not Guarantors not involving any other Affiliate,
(iv) the Borrower and its Subsidiaries may make loans and advances to directors,
officers, and employees of the Borrower and its Subsidiaries in the ordinary
course of business, (v) the Borrower and its Subsidiaries may make payments in
respect of transactions required to be made pursuant to agreements or
arrangements in effect on the Closing Date and set forth on Schedule 6.16, (vi)
the Borrower and its Subsidiaries may enter into, make payments under, or issue
securities, stock options or similar rights pursuant to employment arrangements,
employee benefit plans, equity option plans, indemnification provisions and
other compensatory arrangements with directors, officers, and employees of the
Borrower and its Subsidiaries in the ordinary course of business, so long as
such payments and issuances otherwise comply with the terms of this Agreement,
(vii) the Borrower and its Subsidiaries may make Restricted Payments permitted
by Section 6.10, (viii) the Borrower and its Subsidiaries may enter into
transactions permitted by Section 6.11, 6.12, 6.13 or 6.14, (ix) the
Transactions and (x) the making of severance payments to directors, officers or
employees of the Target that are required pursuant to arrangements in effect
prior to the date that the Borrower acquired the Target.
6.17. FINANCIAL CONTRACTS. The Borrower will not, nor will it permit any
Subsidiary to, enter into or remain liable upon any Rate Management
Transactions except for those entered into in the ordinary course of business
for bona fide hedging purposes and not for speculative purposes.
6.18. SUBSIDIARY COVENANTS. The Borrower will not, and will not permit any
Subsidiary to, create or otherwise cause to become effective any consensual
encumbrance or restriction of any kind on the ability of any Subsidiary (i) to
pay dividends or make any other distribution on its stock, (ii) to pay any
Indebtedness or other obligation owed to the Borrower or any other Subsidiary,
(iii) to make loans or advances or other Investments in the Borrower or any
other Subsidiary, or (iv) to sell, transfer or otherwise convey any of its
property to the Borrower or any other Subsidiary, except (A) any restriction
existing under (1) the Loan Documents, (2) agreements disclosed in Schedule
6.18, (3) the Senior Unsecured Notes Documents, the Senior Secured Notes
Documents and agreements with respect to Indebtedness permitted by this
Agreement containing provisions described in clauses (i), (ii) and (iii) above
that are not
71
materially more restrictive (as reasonably determined by the Administrative
Agent), taken as a whole, than those of the Senior Unsecured Notes Documents or
Senior Secured Notes Documents, (B) customary non- assignment, subletting or
transfer provisions in leases, licenses and other contracts entered into in the
ordinary course of business, (C) customary restrictions contained in purchase
and sale agreements limiting the transfer of the subject assets pending closing,
(D) any restriction or condition as required by applicable law, (E) any
restriction existing under agreements relating to assets acquired by the
Borrower or a Subsidiary in a transaction permitted hereby; provided that such
agreements existed at the time of such acquisition, were not put into place in
anticipation of such acquisition and are not applicable to any assets other than
assets so acquired, (F) any restriction existing under any agreement of a Person
acquired as a Subsidiary in a transaction permitted hereby; provided any such
agreement existed at the time of such acquisition, was not put into place in
anticipation of such acquisition and was not applicable to any Person or assets
other than the Person or assets so acquired, (G) agreements with respect to
Indebtedness secured by Liens permitted by Section 6.15 that restrict the
ability to transfer the assets securing such Indebtedness and (H) any
encumbrance or restriction pursuant to an agreement effecting a refinancing of
Indebtedness incurred pursuant to an agreement referred to in clause (A)(2)(E)
or (F) of this covenant or this clause (H) or contained in any amendment to an
agreement referred to in clause (A)(2)(E) or (F) of this covenant or this clause
(H); provided, however, that the encumbrances and restrictions contained in any
such refinancing agreement or amendment, taken as a whole, are not materially
more restrictive than the encumbrances and restrictions contained in such
predecessor agreements (as reasonably determined by the Administrative Agent).
6.19. CONTINGENT OBLIGATIONS. The Borrower will not, nor will it permit any
Subsidiary to, make or suffer to exist any Contingent Obligation in respect of
Indebtedness of another Person (including, without limitation, any Contingent
Obligation with respect to the obligations of a Subsidiary), except (i) by
endorsement of instruments for deposit or collection in the ordinary course of
business, (ii) the Reimbursement Obligations and any reimbursement obligations
in respect of Letters of Credit issued under the Existing Credit Agreements that
do not constitute Existing Letters of Credit and that are cash collateralized or
supported by back-to-back Letters of Credit in a manner reasonably acceptable to
the Administrative Agent, (iii) any Contingent Obligation in respect of the
Secured Obligations, (iv) any Indebtedness permitted by Section 6.14, and (v)
any Contingent Obligation in respect of any Indebtedness permitted by Section
6.14.
6.20. LEVERAGE RATIO; SENIOR LEVERAGE RATIO.
6.20.1 LEVERAGE RATIO. The Borrower will not permit the ratio (the
"Leverage Ratio"), determined as of the end of each of its fiscal quarters
set forth below, of (i) Consolidated Funded Indebtedness of the Borrower to
(ii) Consolidated EBITDA for the then most-recently ended four fiscal
quarters (subject to the remainder of this Section 6.20.1) to be greater
than the applicable "Maximum Leverage Ratio" set forth below:
72
FISCAL QUARTER ENDING MAXIMUM LEVERAGE RATIO
--------------------- ----------------------
Each of June 30, 2004, 5.50 to 1.00
September 30, 2004 and
December 31, 2004
Each of March 31, 2005, 4.75 to 1.00
June 30, 2005, September
30, 2005, and December 31,
2005
Each of March 31, 2006 and 4.25 to 1.00
each fiscal quarter thereafter
The first determination of the Leverage Ratio shall occur as of the end of
the Borrower's fiscal quarter ending June 30, 2004. For purposes of making
such determination, Consolidated EBITDA shall equal two (2) times
Consolidated EBITDA for the period beginning January 1, 2004 and ending
June 30, 2004. The second determination of the Leverage Ratio shall occur
as of the end of the Borrower's fiscal quarter ending September 30, 2004.
For purposes of making such determination, Consolidated EBITDA shall equal
four-thirds (4/3) times Consolidated EBITDA for the period beginning
January 1, 2004 and ending September 30, 2004. Thereafter, Consolidated
EBITDA shall be calculated using the actual amount thereof as of the last
day of each fiscal quarter for the most recently ended four consecutive
fiscal quarters. Consolidated Funded Indebtedness shall in all cases be
determined as of the last day of the applicable fiscal quarter.
6.20.2 SENIOR LEVERAGE RATIO. The Borrower will not permit the ratio
(the "Senior Leverage Ratio"), determined as of the end of each of its
fiscal quarters set forth below, of (i) Consolidated Senior Funded Debt of
the Borrower to (ii) Consolidated EBITDA for the then most recently ended
four fiscal quarters (subject to the remainder of this Section 6.20.2) to
be greater than the applicable "Maximum Senior Leverage Ratio" set forth
below:
73
FISCAL QUARTER ENDING MAXIMUM LEVERAGE RATIO
--------------------- ----------------------
Each of June 30, 2004, 3.375 to 1.00
September 30, 2004 and
December 31, 2004
Each of March 31, 2005, 2.875 to 1.00
June 30, 2005, September
30, 2005, and December
31, 2005
Each of March 31, 2006 2.624 to 1.00
and each fiscal quarter
thereafter
The first determination of the Senior Leverage Ratio shall occur as of the
end of the Borrower's fiscal quarter ending June 30, 2004. For purposes of
making such determination, Consolidated EBITDA shall equal two (2) times
Consolidated EBITDA for the period beginning January 1, 2004 and ending
June 30, 2004. The second determination of the Senior Leverage Ratio shall
occur as of the end of the Borrower's fiscal quarter ending September 30,
2004. For purposes of making such determination, Consolidated EBITDA shall
equal four-thirds (4/3) times Consolidated EBITDA for the period beginning
January 1, 2004 and ending September 30, 2004. Thereafter, Consolidated
EBITDA shall be calculated using the actual amount thereof as of the last
day of each fiscal quarter for the most recently ended four consecutive
fiscal quarters. Consolidated Senior Funded Debt shall in all cases be
determined as of the last day of the applicable fiscal quarter.
6.21. FIXED CHARGE COVERAGE RATIO. The Borrower will not permit the ratio
(the "Fixed Charge Coverage Ratio"), determined as of the end of each of its
fiscal quarters for the then most-recently ended four fiscal quarters of (i)
Consolidated EBITDA minus Consolidated Capital Expenditures to (ii) Consolidated
Interest Expense plus Consolidated Current Maturities during such period
(including, without limitation, Capitalized Lease Obligations) plus cash
dividends paid on the equity interests of the Borrower during such period plus
expenses for taxes paid or taxes accrued during such period, all calculated for
the Borrower and its Subsidiaries on a consolidated basis, to be less than the
applicable "Minimum Fixed Charge Coverage Ratio" below:
74
FISCAL QUARTER ENDING MAXIMUM LEVERAGE RATIO
--------------------- ----------------------
Each of June 30, 2004, 1.15 to 1.00
September 30, 2004 and
December 31, 2004
Each of March 31, 2005, 1.375 to 1.00
June 30, 2005, September
30, 2005, and December
31, 2005
Each of March 31, 2006 1.50 to 1.00
and each fiscal quarter
thereafter
Notwithstanding the foregoing, the first determination of the Fixed Charge
Coverage Ratio shall occur as of the end of the Borrower's fiscal quarter ending
June 30, 2004. For purposes of making such determination, Consolidated EBITDA
shall equal two (2) times Consolidated EBITDA for the period beginning January
1, 2004 and ending June 30, 2004. The second determination of the Fixed Charge
Coverage Ratio shall occur as of the end of the Borrower's fiscal quarter ending
September 30, 2004. For purposes of making such determination, Consolidated
EBITDA shall equal four-thirds (4/3) times Consolidated EBITDA for the period
beginning January 1, 2004 and ending September 30, 2004. Thereafter,
Consolidated EBITDA shall be calculated using the actual amount thereof as of
the last day of each fiscal quarter for the most recently ended four consecutive
fiscal quarters.
6.22. MINIMUM CONSOLIDATED NET WORTH. The Borrower will at all times
maintain Consolidated Net Worth of not less than (i) $232,000,000 plus (ii) 50%
of Consolidated Net Income (if positive) earned in each fiscal quarter beginning
with the fiscal quarter ending June 30, 2004 plus (iii) the amount of all Net
Cash Proceeds resulting from issuances of the Borrower's or any Subsidiary's
capital stock or other equity interests to a Person other than the Borrower or
any Subsidiary.
6.23. CAPITAL EXPENDITURES. The Borrower will not, nor will it permit any
Subsidiary to, expend, or be committed to expend, in excess of $20,000,000 (the
"Base Amount") for Capital Expenditures of the Borrower and its Subsidiaries
during any fiscal year of the Borrower; provided, however, that if the aggregate
amount of Capital Expenditures actually expended during any such fiscal year is
less than the Base Amount (the difference being the "Unused CapEx Amount"),
then, the permitted amount of Capital Expenditures during the immediately
succeeding fiscal year (and no other succeeding fiscal year) shall be an amount
equal to the Base Amount plus the Unused CapEx Amount, with the Unused Cap Ex
Amount being deemed utilized first with any excess Base Amount available to use
in the immediately succeeding fiscal year in accordance herewith.
6.24. OPERATING LEASES. The Borrower will not, nor will it permit any
Subsidiary to, enter into or remain liable upon any Operating Lease, synthetic
lease or tax ownership operating
75
lease, except for Operating Leases which give rise to Operating Lease
Obligations not in excess of $20,000,000 annually.
6.25. GUARANTORS. The Borrower shall cause each of its Domestic
Subsidiaries to guarantee pursuant to the Guaranty Agreement or supplement
thereto the Secured Obligations. In furtherance of the above, the Borrower shall
promptly (and in any event within forty-five (45) days thereof) (i) provide
written notice to the Administrative Agent upon any Person becoming a Domestic
Subsidiary, setting forth information in reasonable detail describing all of the
assets of such Person, (ii) cause such Person to execute a supplement to the
Guaranty Agreement and such other Collateral Documents as are necessary for the
Borrower and its Subsidiaries to comply with Section 6.26, (iii) cause the
Applicable Pledge Percentage of the issued and outstanding equity interests of
such Person to be delivered to the Collateral Agent (together with undated stock
powers signed in blank, if applicable) and pledged to the Collateral Agent
pursuant to an appropriate pledge agreement(s) in substantially the form of the
Pledge and Security Agreement (or joinder or other supplement thereto) and
otherwise in form reasonably acceptable to the Collateral Agent and (iv) deliver
such other documentation as the Collateral Agent may reasonably request in
connection with the foregoing, including, without limitation, certified
resolutions and other authority documents of such Person and, to the extent
requested by the Collateral Agent, favorable opinions of counsel to such Person
(which shall cover, among other things, the legality, validity, binding effect
and enforceability of the documentation referred to above), all in form, content
and scope reasonably satisfactory to the Collateral Agent; provided, however,
that in respect of subclause (iii), no Credit Party shall be required to pledge
(w) the equity interests of Roto-Rooter of Canada, Ltd., Chemed Capital Trust or
VNF, (x) more than 40% of the equity interests of RR Plumbing Services
Corporation, (y) more than 49% of the equity interests of Complete Plumbing
Services Inc., or (z) more than 80% of the equity interests of Nurotoco of New
Jersey, Inc.; provided, further, that, except to the extent necessary to satisfy
any licensing requirement under applicable law with respect to the Borrower's or
any Subsidiary's business, the Borrower will not permit, nor will it permit any
other Credit Party to, grant a security interest in, pledge or deliver to any
non-Credit Party those equity interests that are not pledged or delivered to the
Collateral Agent pursuant to this Section 6.25.
6.26. COLLATERAL. The Borrower will cause, and will cause each other Credit
Party to cause, all of its owned Property (other than real property) to be
subject at all times to first priority, perfected Liens in favor of the
Collateral Agent for the benefit of the creditors of the Borrower that are party
to the Intercreditor Agreement, including, without limitation, the Holders of
Secured Obligations, to secure the Secured Obligations and the other
Indebtedness subject to the Intercreditor Agreement in accordance with the terms
and conditions of the Collateral Documents, subject in any case to Liens
permitted by Section 6.15 hereof; provided, however, that the Borrower and the
other Credit Parties shall not be required to comply with the terms of the
Federal Assignment of Claims Act in connection with their pledge of any
Collateral to the Collateral Agent. Without limiting the generality of the
foregoing, the Borrower will cause the Applicable Pledge Percentage of the
issued and outstanding equity interests of each Pledge Subsidiary directly owned
by the Borrower or any other Credit Party to be subject at all times to a first
priority, perfected Lien in favor of the Collateral Agent in accordance with the
terms and conditions of this Agreement and the Collateral Documents or such
other security documents as the Collateral Agent shall reasonably request, in
each case to the extent, and within such time period as is, reasonably required
by the Collateral Agent, subject in any case to Liens permitted
76
by Section 6.15. Notwithstanding the foregoing, (i) no Credit Party shall be
required to pledge (A) the equity interests of Roto-Rooter of Canada, Ltd.,
Chemed Capital Trust or VNF, (B) more than 40% of the equity interests of RR
Plumbing Services Corporation, (C) more than 49% of the equity interests of
Complete Plumbing Services Inc., or (D) more than 80% of the equity interests of
Nurotoco of New Jersey, Inc.; provided, however, that, except to the extent
necessary to satisfy any licensing requirement under applicable law with respect
to the Borrower's or any Subsidiary's business, the Borrower will not permit,
nor will it permit any other Credit Party to, grant a security interest in,
pledge or deliver to any non-Credit Party those equity interests that are not
pledged or delivered to the Collateral Agent pursuant to this Section 6.26; and
(ii) no pledge agreement in respect of the equity interests of a Foreign
Subsidiary shall be required hereunder to the extent such pledge thereunder is
prohibited by applicable law or its counsel reasonably determines that such
pledge would not provide material credit support for the benefit of the
creditors of the Borrower that are party to the Intercreditor Agreement pursuant
to legally valid, binding and enforceable pledge agreements.
6.27. SALE AND LEASEBACK TRANSACTIONS. The Borrower shall not, nor shall it
permit any Subsidiary to, enter into any Sale and Leaseback Transaction, other
than Sale and Leaseback Transactions in respect of which the net cash proceeds
received in connection therewith does not exceed $250,000 in the aggregate
during any fiscal year of the Borrower, determined on a consolidated basis for
the Borrower and its Subsidiaries.
6.28. INTENTIONALLY OMITTED.
6.29. REVOLVING CREDIT AVAILABILITY. On the Closing Date, immediately after
giving effect to all Credit Extensions made on the Closing Date (including the
Existing Letters of Credit), the excess of the Aggregate Revolving Loan
Commitment over the Aggregate Outstanding Revolving Credit Exposure shall equal
or exceed $10,000,000.
6.30. PREPAYMENT OF INDEBTEDNESS. The Borrower will not, and will not
permit any Subsidiary, to voluntarily prepay any Indebtedness other than (i) the
Obligations and Indebtedness permitted by Section 6.14.4, 6.14.5, 6.14.8 and
6.14.9, (ii) any other Indebtedness so long as such other Indebtedness is
voluntarily prepaid with cash proceeds resulting from the sale to non-
Affiliates of equity interests in the Borrower or any Subsidiary thereof, (iii)
pursuant to renewals, refinancings and extensions of Indebtedness permitted by
Section 6.14, and (iv) payments of Indebtedness that would become due or would
be required to be redeemed or repurchased as a result of the voluntary sale or
transfer of Property that is being sold or transferred.
6.31. AMENDMENTS TO SENIOR SECURED INDENTURE DOCUMENTS AND SENIOR UNSECURED
INDENTURE DOCUMENTS. The Borrower will not, and will not permit any Subsidiary
to, amend the Senior Secured Notes, the other Senior Secured Indenture
Documents, the Senior Unsecured Notes, the other Senior Unsecured Indenture
Documents or any document, agreement or instrument evidencing any Indebtedness
incurred pursuant to the Senior Secured Indenture Documents or the Senior
Unsecured Indenture Documents (or any replacements, substitutions, extensions or
renewals thereof) or pursuant to which such Indebtedness is issued to the extent
such amendment, modification or supplement provides for the following or which
has any of the following effects: (i) results in the Indebtedness outstanding
under the Senior Unsecured
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Indenture Documents being secured by the Borrower's or any Subsidiary's
Property; (ii) prohibits the Borrower or any Subsidiary from securing the
Secured Obligations or the Indebtedness outstanding under the Senior Secured
Indenture Documents; (iii) shortens the final maturity date of the Indebtedness
outstanding under the Senior Secured Indenture Documents or the Senior Unsecured
Indenture Documents or otherwise accelerates the amortization schedule for
Indebtedness outstanding under the Senior Secured Indenture Documents or the
Senior Unsecured Indenture Documents; (iv) increases the overall principal
amount of the Indebtedness outstanding under the Senior Secured Indenture
Documents or the Senior Unsecured Indenture Documents or increases the amount of
any single scheduled installment of principal or interest other than in
connection with issuances of additional Senior Secured Notes and Senior
Unsecured Notes permitted by Sections 6.14.8 and 6.14.9, respectively; (v)
shortens or accelerates the date upon which any installment of principal or
interest becomes due or adds any additional mandatory prepayment or redemption
provisions not set forth in the Senior Secured Indenture Documents or the Senior
Unsecured Indenture Documents on the Closing Date; or (vi) adds to or otherwise
includes in any Senior Unsecured Indenture Document a default or event of
default provision, including, without limitation, a cross-default, that is
triggered by the occurrence of an Event of Default or Unmatured Event of Default
under the Loan Documents or a default, event of default, unmatured default,
unmatured event of default, or other similar event under the Senior Secured
Indenture Documents, unless such Event of Default hereunder or comparable event
under the Senior Secured Indenture Documents results from the non-payment of the
Obligations upon the maturity thereof or the non-payment of the Indebtedness
outstanding under the Senior Secured Indenture Documents upon the maturity
thereof or the acceleration of the Obligations or the acceleration of the
repayment of the Indebtedness outstanding under the Senior Secured Indenture
Documents.
ARTICLE VII
EVENTS OF DEFAULT
The occurrence of any one or more of the following events shall constitute
an Event of Default:
7.1 Any representation or warranty made or deemed made by or on behalf of
the Borrower or any of its Subsidiaries to the Lenders or the Administrative
Agent under or in connection with this Agreement, any Credit Extension, or any
certificate or information delivered in connection with this Agreement or any
other Loan Document shall be false in any material respect on the date as of
which made or deemed made.
7.2 Nonpayment of (i) principal of any Loan when due, (ii) any
Reimbursement Obligation within one Business Day after the same becomes due, or
(iii) interest upon any Loan or any Commitment Fee, LC Fee or other Obligations
under any of the Loan Documents within five (5) Business Days after such
interest, fee or other Obligation becomes due.
7.3 The breach by the Borrower of any of the terms or provisions of Section
6.2, 6.10, 6.11, 6.12, 6.13, 6.14, 6.15, 6.16, 6.17, 6.18, 6.19, 6.20, 6.21,
6.22, 6.23, 6.24, 6.25, 6.26, 6.27, 6.28, 6.29, 6.30, and 6.31.
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7.4 The breach by the Borrower (other than a breach which constitutes an
Event of Default under another Section of this Article VII) of any of the terms
or provisions of (i) this Agreement or (ii) any other Loan Document (beyond the
applicable grace period with respect thereto, if any), in each case which is not
remedied within thirty (30) days after the earlier to occur of (x) written
notice thereof from the Administrative Agent or any Lender to the Borrower or
(y) an Authorized Officer otherwise becomes aware of any such breach.
7.5 Failure of the Borrower or any of its Subsidiaries to pay when due any
Material Indebtedness (subject to any applicable grace period with respect
thereto, if any, set forth in the Material Indebtedness Agreement evidencing
such Material Indebtedness) which failure has not been (i) timely cured or (ii)
waived in writing by the requisite holders of such Material Indebtedness; or the
default by the Borrower or any of its Subsidiaries in the performance (beyond
the applicable grace period with respect thereto, if any) of any term, provision
or condition contained in any Material Indebtedness Agreement and such default
has not been (x) timely cured or (y) waived in writing by the requisite holders
of the Material Indebtedness in respect thereof, or any other event shall occur
or condition exist, the effect of which default, event or condition is to cause,
or to permit the holder(s) of such Material Indebtedness or the lender(s) under
any Material Indebtedness Agreement to cause, such Material Indebtedness to
become due prior to its stated maturity or any commitment to lend under any
Material Indebtedness Agreement to be terminated prior to its stated expiration
date; or any Material Indebtedness of the Borrower or any of its Subsidiaries
shall be declared to be due and payable or required to be prepaid or repurchased
(other than by a regularly scheduled payment) prior to the stated maturity
thereof, in each case other than secured Indebtedness that becomes due as a
result of the voluntary sale or transfer of the Property securing such
Indebtedness; or the Borrower or any of its Subsidiaries shall not pay, or admit
in writing its inability to pay, its debts generally as they become due.
7.6 The Borrower or any of its Subsidiaries shall (i) have an order for
relief entered with respect to it under the Federal bankruptcy laws as now or
hereafter in effect, (ii) make an assignment for the benefit of creditors, (iii)
apply for, seek, consent to, or acquiesce in, the appointment of a receiver,
custodian, trustee, examiner, liquidator or similar official for it or any
Substantial Portion of its Property, (iv) institute any proceeding seeking an
order for relief under the Federal bankruptcy laws as now or hereafter in effect
or seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution,
winding up, liquidation, reorganization, arrangement, adjustment or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors or fail to file an answer or other pleading
denying the material allegations of any such proceeding filed against it, or (v)
take any corporate or partnership action to authorize or effect any of the
foregoing actions set forth in this Section 7.6.
7.7 Without the application, approval or consent of the Borrower or any of
its Subsidiaries, a receiver, trustee, examiner, liquidator or similar official
shall be appointed for the Borrower or any of its Subsidiaries or any
Substantial Portion of its Property, or a proceeding described in Section
7.6(iv) shall be instituted against the Borrower or any of its Subsidiaries and
such appointment continues undischarged or such proceeding continues undismissed
or unstayed for a period of sixty (60) consecutive days.
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7.8 The Borrower or any of its Subsidiaries shall fail within thirty (30)
days to pay, bond or otherwise discharge one or more judgments or orders for the
payment of money in excess of $10,000,000 (or the equivalent thereof in
currencies other than Dollars) in the aggregate, which judgment(s), in any such
case, is/are not stayed on appeal or otherwise being appropriately contested in
good faith.
7.9 The Unfunded Liabilities of all Single Employer Plans shall exceed
$5,000,000 in the aggregate, or any Reportable Event shall occur in connection
with any Plan and such Reportable Event would reasonably be expected to have a
Material Adverse Effect.
7.10 Any Change of Control shall occur.
7.11 The Borrower or any other member of the Controlled Group shall have
been notified by the sponsor of a Multiemployer Plan that it has incurred,
pursuant to Section 4201 of ERISA, withdrawal liability to such Multiemployer
Plan in an amount which, when aggregated with all other amounts required to be
paid to Multiemployer Plans by the Borrower or any other member of the
Controlled Group as withdrawal liability (determined as of the date of such
notification), exceeds $5,000,000 or requires payments exceeding $5,000,000 per
annum.
7.12 The Borrower or any other member of the Controlled Group shall have
been notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or is being terminated, within the meaning of Title IV
of ERISA, if as a result of such reorganization or termination the aggregate
annual contributions of the Borrower and the other members of the Controlled
Group (taken as a whole) to all Multiemployer Plans which are then in
reorganization or being terminated have been or will be increased, in the
aggregate, over the annual amounts contributed to such Multiemployer Plans for
the respective plan years of such Multiemployer Plans immediately preceding the
plan year in which the reorganization or termination occurs by an amount
exceeding $5,000,000.
7.13 Other than with respect to environmental proceedings, investigations,
violations, or liabilities disclosed by the Borrower to the Administrative Agent
and the Lenders prior to the Closing Date, the Borrower or any of its
Subsidiaries shall (i) be the subject of any proceeding or investigation
pertaining to the release by the Borrower, any of its Subsidiaries or any other
Person of any toxic or hazardous waste or substance into the environment, or
(ii) violate any Environmental Law, which, in the case of an event described in
clause (i) or clause (ii), has resulted in liability to the Borrower or any of
its Subsidiaries in an amount equal to $5,000,000 or more, which liability is
not paid, bonded or otherwise discharged within forty- five (45) days or which
is not stayed on appeal and being appropriately contested in good faith.
7.14 Any Loan Document shall fail to remain in full force or effect or any
action shall be taken by the Borrower to assert the invalidity or
unenforceability of, or which results in the invalidity or unenforceability of,
any Loan Document or any Lien in favor of the Collateral Agent or the
Administrative Agent under the Loan Documents as to assets that are material to
the Borrower and its Subsidiaries taken as a whole, or such Lien shall not have
the priority contemplated by the Loan Documents, except (i) as a result of the
sale or other disposition of the applicable Collateral in a transaction
permitted under the Loan Documents or (ii) as a result of the Collateral Agent's
failure to maintain possession of any stock certificates, promissory notes
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or other instruments delivered to it under any Loan Document or as a result of
the negligent or willful failure of the Collateral Agent to take such action as
is necessary to continue such Liens.
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1. Acceleration.
(i) If any Event of Default described in Section 7.6 or 7.7 occurs with
respect to the Borrower, the obligations of the Lenders to make
Loans hereunder and the obligation and power of the LC Issuer to
issue Facility LCs shall automatically terminate and the Secured
Obligations shall immediately become due and payable without any
election or action on the part of the Administrative Agent, the LC
Issuer or any Lender, and the Borrower will be and become thereby
unconditionally obligated, without any further notice, act or
demand, to pay the Administrative Agent an amount in immediately
available funds, which funds shall be held in the Facility LC
Collateral Account, equal to the difference of (x) the amount of LC
Obligations at such time less (y) the amount or deposit in the
Facility LC Collateral Account at such time which is free and clear
of all rights and claims of third parties and has not been applied
against the Secured Obligations (the "Collateral Shortfall
Amount"). If any other Event of Default occurs, the Required
Lenders (or the Administrative Agent with the consent of the
Required Lenders) may (a) terminate or suspend the obligations of
the Lenders to make Loans hereunder and the obligation and power of
the LC Issuer to issue Facility LCs, or declare the Secured
Obligations to be due and payable, or both, whereupon the Secured
Obligations shall become immediately due and payable, without
presentment, demand, protest or notice of any kind, all of which
the Borrower hereby expressly waives and (b) upon notice to the
Borrower and in addition to the continuing right to demand payment
of all amounts payable under this Agreement, make demand on the
Borrower to pay, and the Borrower will forthwith upon such demand
and without any further notice or act pay to the Administrative
Agent the Collateral Shortfall Amount which funds shall be
deposited in the Facility LC Collateral Account.
(ii) If at any time while any Event of Default is continuing, the
Administrative Agent determines that the Collateral Shortfall
Amount at such time is greater than zero, the Administrative Agent
may make demand on the Borrower to pay, and the Borrower will,
forthwith upon such demand and without any further notice or act,
pay to the Administrative Agent the Collateral Shortfall Amount,
which funds shall be deposited in the Facility LC Collateral
Account.
(iii) While an Event of Default is continuing, the Administrative Agent
may at any time or from time to time after funds are deposited in
the Facility LC Collateral Account, apply such funds to the payment
of the Secured Obligations in respect of Facility LCs and any other
amounts as shall from time to time have become due
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and payable by the Borrower to the Lenders or the LC Issuer under
the Loan Documents.
(iv) At any time while any Event of Default is continuing, neither the
Borrower nor any Person claiming on behalf of or through the
Borrower shall have any right to withdraw any of the funds held in
the Facility LC Collateral Account. After all of the Secured
Obligations have been indefeasibly paid in full and the Aggregate
Revolving Loan Commitment and Aggregate Term Loan Commitment have
been terminated, any funds remaining in the Facility LC Collateral
Account shall be paid to the Collateral Agent or paid to whomever
may be legally entitled thereto at such time.
(v) If, after acceleration of the maturity of the Obligations or
termination of the obligations of the Lenders to make Loans and the
obligation and power of the LC Issuer to issue Facility LCs
hereunder as a result of any Event of Default (other than any Event
of Default as described in Section 7.6 or 7.7 with respect to the
Borrower) and before any judgment or decree for the payment of the
Obligations due shall have been obtained or entered, the Required
Lenders (in their sole discretion) shall so direct, the
Administrative Agent shall, by notice to the Borrower, rescind and
annul such acceleration and/or termination.
8.2. AMENDMENTS. Subject to the provisions of this Section 8.2 and the
Intercreditor Agreement, the Required Lenders (or the Administrative Agent with
the consent in writing of the Required Lenders) and the Borrower may enter into
agreements supplemental hereto for the purpose of adding or modifying any
provisions to the Loan Documents or changing in any manner the rights of the
Lenders or the Borrower hereunder or thereunder or waiving any Event of Default
hereunder or thereunder; provided, however, that no such supplemental agreement
shall, without the consent of each Lender directly affected thereby:
8.2.1 Extend the Revolving Loan Termination Date, extend the final
maturity of any Revolving Loan or extend the expiry date of any Facility LC
to a date after the Revolving Loan Termination Date (except as expressly
permitted in Section 2.20.1), extend the final maturity date of any Term
Loan to a date after the Term Loan Maturity Date, or postpone any regularly
scheduled payment of principal of any Loan or forgive all or any portion of
the principal amount thereof, or any Reimbursement Obligation related
thereto, or reduce the rate or extend the time of payment of interest or
fees thereon or Reimbursement Obligations related thereto (other than (x) a
waiver of the application of the default rate of interest pursuant to
Section 2.11 hereof and (y) any reduction of the amount of or any
modification of the payment date for the mandatory payments required under
Section 2.2, in each case which shall only require the approval of the
Required Lenders).
8.2.2 Reduce the percentage specified in the definition of Required
Lenders or any other percentage of Lenders specified to be the applicable
percentage in this Agreement to act on specified matters or amend the
definition of "Pro Rata Share", "Revolving Loan Pro Rata Share" or "Term
Loan Pro Rata Share".
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8.2.3 Increase the amount of the Revolving Loan Commitment or Term
Loan Commitment of any Lender hereunder, or permit the Borrower to assign
its rights or obligations under this Agreement.
8.2.4 Amend this Section 8.2.
8.2.5 Other than in connection with a transaction permitted under this
Agreement, release all or substantially all of the Collateral.
8.2.6 Other than in connection with a transaction permitted under this
Agreement, release all or substantially all of the Guarantors from their
obligations under the Guaranty Agreement or any other agreement pursuant to
which such Guarantors guarantee the repayment of the Secured Obligations.
Notwithstanding the foregoing, no Lender's consent shall be required for any
amendment, modification or waiver if (i) by the terms of such amendment,
modification or waiver the Revolving Loan Commitment and the Term Loan
Commitment, as applicable, of such Lender shall terminate upon the effectiveness
of such amendment, modification or waiver and (ii) at the time such amendment,
modification or waiver becomes effective, such Lender receives payment in full
of all of the Obligations (other than obligations to pay fees and expenses with
respect to which the Borrower has not received an invoice, Rate Management
Obligations, contingent indemnity obligations and other contingent obligations)
owing to it under the Loan Documents. No amendment of any provision of this
Agreement relating to the Administrative Agent shall be effective without the
written consent of the Administrative Agent. The Administrative Agent may waive
payment of the fee required under Section 12.3.3 without obtaining the consent
of any other party to this Agreement. No amendment of any provision of this
Agreement relating to the Swing Line Lender or any Swing Line Loan shall be
effective without the written consent of the Swing Line Lender. No amendment of
any provision of this Agreement relating to the LC Issuer shall be effective
without the written consent of the LC Issuer.
8.3. PRESERVATION OF RIGHTS. No delay or omission of the Lenders, the LC
Issuer or the Administrative Agent to exercise any right under the Loan
Documents shall impair such right or be construed to be a waiver of any Event of
Default or an acquiescence therein, and the making of a Credit Extension
notwithstanding the existence of an Event of Default or Unmatured Event of
Default or the inability of the Borrower to satisfy the conditions precedent to
such Credit Extension shall not constitute any waiver or acquiescence. Any
single or partial exercise of any such right shall not preclude other or further
exercise thereof or the exercise of any other right, and no waiver, amendment or
other variation of the terms, conditions or provisions of the Loan Documents
whatsoever shall be valid unless in writing signed by, or by the Administrative
Agent with the consent of, the requisite number of Lenders required pursuant to
Section 8.2, and then only to the extent in such writing specifically set forth.
All remedies contained in the Loan Documents or by law afforded shall be
cumulative and all shall be available to the Administrative Agent, the LC Issuer
and the Lenders until all of the Secured Obligations have been paid in full.
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ARTICLE IX
GENERAL PROVISIONS
9.1. SURVIVAL OF REPRESENTATIONS. All representations and warranties of the
Borrower contained in this Agreement shall survive the making of the Credit
Extensions herein contemplated.
9.2. GOVERNMENTAL REGULATION. Anything contained in this Agreement to the
contrary notwithstanding, neither the LC Issuer nor any Lender shall be
obligated to extend credit to the Borrower in violation of any limitation or
prohibition provided by any applicable statute or regulation.
9.3. HEADINGS. Section headings in the Loan Documents are for convenience
of reference only, and shall not govern the interpretation of any of the
provisions of the Loan Documents.
9.4. ENTIRE AGREEMENT. The Loan Documents embody the entire agreement and
understanding among the Borrower, the Administrative Agent, the Collateral
Agent, the LC Issuer and the Lenders and supersede all prior agreements and
understandings among the Borrower, the Administrative Agent, the Collateral
Agent, the LC Issuer and the Lenders relating to the subject matter thereof
other than those contained in the fee letter described in Section 10.13 which
shall survive and remain in full force and effect during the term of this
Agreement.
9.5. SEVERAL OBLIGATIONS; BENEFITS OF THIS AGREEMENT. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other (except to the extent to which the
Administrative Agent is authorized to act as such). The failure of any Lender to
perform any of its obligations hereunder shall not relieve any other Lender from
any of its obligations hereunder. This Agreement shall not be construed so as to
confer any right or benefit upon any Person other than the parties to this
Agreement and their respective successors and assigns, provided, however, that
the parties hereto expressly agree that the Arranger shall enjoy the benefits of
the provisions of Sections 9.6, 9.10 and 10.11 to the extent specifically set
forth therein and shall have the right to enforce such provisions on its own
behalf and in its own name to the same extent as if it were a party to this
Agreement.
9.6. EXPENSES; INDEMNIFICATION. (i) The Borrower shall reimburse the
Administrative Agent and the Arranger for any reasonable out-of-pocket costs and
expenses (including reasonable out-of-pocket attorneys' fees and out-of- pocket
expenses of and fees for other advisors and professionals engaged by the
Administrative Agent or the Arranger) paid or incurred by the Administrative
Agent or the Arranger in connection with the investigation, preparation,
negotiation, documentation, execution, delivery, syndication, distribution
(including, without limitation, via the internet), review, amendment,
modification and administration of the Loan Documents. The Borrower also agrees
to reimburse the Administrative Agent, the Arranger, the LC Issuer and the
Lenders for any reasonable out-of-pocket costs and expenses (including
reasonable out-of-pocket attorneys' fees and expenses) paid or incurred by the
Administrative Agent, the Arranger, the LC Issuer or any Lender in connection
with the collection and enforcement of the Loan Documents. Expenses being
reimbursed by the
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Borrower under this Section include, without limitation, costs and expenses
incurred in connection with the Reports described in the following sentence. The
Borrower acknowledges that from time to time Bank One may prepare and may
distribute to the Lenders (but shall have no obligation or duty to prepare or to
distribute to the Lenders) certain audit reports (the "Reports") pertaining to
the Borrower's assets for internal use by Bank One from information furnished to
it by or on behalf of the Borrower, after Bank One has exercised its rights of
inspection pursuant to this Agreement.
(ii) The Borrower hereby further agrees to indemnify the Administrative
Agent, the Arranger, the LC Issuer, each Lender, their respective affiliates,
and each of their directors, officers and employees against all losses, claims,
damages, penalties, judgments, liabilities and related reasonable out-of-pocket
expenses (including, without limitation, all reasonable out-of-pocket expenses
of litigation or preparation therefor whether or not the Administrative Agent,
the Arranger, the LC Issuer, any Lender or any affiliate is a party thereto, and
all reasonable out-of-pocket attorneys' fees and expenses) which any of them may
pay or incur arising out of or relating to this Agreement, the other Loan
Documents, the transactions contemplated hereby or the direct or indirect
application or proposed application of the proceeds of any Credit Extension
hereunder except to the extent that they are determined in a final
non-appealable judgment by a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of the party seeking
indemnification. The obligations of the Borrower under this Section 9.6 shall
survive the termination of this Agreement.
(iii) The Collateral Agent shall receive the benefits of the provisions of
this Section 9.6 with respect to all losses, claims, damages, penalties,
judgments, liabilities and expenses resulting under or in connection with the
Collateral Documents.
9.7. NUMBERS OF DOCUMENTS. All statements, notices, closing documents, and
requests hereunder shall be furnished to the Administrative Agent with
sufficient counterparts so that the Administrative Agent may furnish one to each
of the Lenders, to the extent that the Administrative Agent deems appropriate.
9.8. ACCOUNTING. Except as provided to the contrary herein, all accounting
terms used in the calculation of any financial covenant or test shall be
interpreted and all accounting determinations hereunder in the calculation of
any financial covenant or test shall be made in accordance with Agreement
Accounting Principles. If any changes in generally accepted accounting
principles are hereafter required or permitted and are adopted by the Borrower
or any of its Subsidiaries with the agreement of its independent certified
public accountants and such changes result in a change in the method of
calculation of any of the financial covenants, tests, restrictions or standards
herein or in the related definitions or terms used therein ("Accounting
Changes"), the parties hereto agree, at the Borrower's request, to enter into
negotiations, in good faith, in order to amend such provisions in a credit
neutral manner so as to reflect equitably such changes with the desired result
that the criteria for evaluating the Borrower's and its Subsidiaries' financial
condition shall be the same after such changes as if such changes had not been
made; provided, however, until such provisions are amended in a manner
reasonably satisfactory to the Administrative Agent and the Required Lenders, no
Accounting Change shall be given effect in such calculations. In the event such
amendment is entered into, all references in this Agreement to Agreement
Accounting Principles shall mean generally accepted accounting principles as of
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the date of such amendment. Notwithstanding the foregoing, all financial
statements to be delivered by the Borrower pursuant to Section 6.1 shall be
prepared in accordance with generally accepted accounting principles in effect
at such time.
9.9. SEVERABILITY OF PROVISIONS. Any provision in any Loan Document that is
held to be inoperative, unenforceable, or invalid in any jurisdiction shall, as
to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and to
this end the provisions of all Loan Documents are declared to be severable.
9.10. NONLIABILITY OF LENDERS. The relationship between the Borrower on the
one hand and the Lenders, the LC Issuer and the Administrative Agent on the
other hand shall be solely that of borrower and lender. Neither the
Administrative Agent, the Arranger, the LC Issuer nor any Lender shall have any
fiduciary responsibilities to the Borrower. Neither the Administrative Agent,
the Arranger, the LC Issuer nor any Lender undertakes any responsibility to the
Borrower to review or inform the Borrower of any matter in connection with any
phase of the Borrower's business or operations. The Borrower agrees that neither
the Administrative Agent, the Arranger, the LC Issuer nor any Lender shall have
liability to the Borrower (whether sounding in tort, contract or otherwise) for
losses suffered by the Borrower in connection with, arising out of, or in any
way related to, the transactions contemplated and the relationship established
by the Loan Documents, or any act, omission or event occurring in connection
therewith, unless it is determined in a final non- appealable judgment by a
court of competent jurisdiction that such losses resulted from the gross
negligence or willful misconduct of the party from which recovery is sought.
Neither the Administrative Agent, the Arranger, the LC Issuer nor any Lender
shall have any liability to the Borrower with respect to, and the Borrower
hereby waives, releases and agrees not to xxx for, any special, indirect,
consequential or punitive damages suffered by the Borrower in connection with,
arising out of, or in any way related to the Loan Documents or the transactions
contemplated thereby.
9.11. CONFIDENTIALITY. The Administrative Agent and each Lender agrees to
hold the "Information" (as defined below) which it may receive from the Borrower
in connection with this Agreement in confidence, except for disclosure (i) on a
confidential basis to its Affiliates and to any other party to this Agreement,
(ii) on a confidential basis to legal counsel, accountants, and other
professional advisors to such Lender, (iii) to regulatory officials as
requested, (iv) to any Person as required by law, regulation, or legal process,
(v) to any Person as required in connection with any legal proceeding to which
it is a party, (vi) subject to an agreement containing provisions substantially
the same as those of this Section, on a confidential basis to its direct or
indirect contractual counterparties in swap agreements or to legal counsel,
accountants and other professional advisors to such counterparties, and (vii)
permitted by Section 12.4. Without limiting Section 9.4, the Borrower agrees
that the terms of this Section 9.11 shall set forth the entire agreement between
the Borrower and each Lender (including the Administrative Agent) with respect
to any confidential information previously or hereafter received by such Lender
in connection with this Agreement, and this Section 9.11 shall supersede any and
all prior confidentiality agreements entered into by such Lender with respect to
such confidential information. For the purposes of this Section, "Information"
means all information received from the Borrower or any of its Subsidiaries
relating to the Borrower or any of its Subsidiaries or their respective
businesses, as the case may be, other than any such information that is
available
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to the Administrative Agent, the Collateral Agent, the LC Issuer or any Lender
on a nonconfidential basis.
9.12. LENDERS NOT UTILIZING PLAN ASSETS. Each Lender represents and
warrants that none of the consideration used by such Lender to make its Credit
Extensions constitutes for any purpose of ERISA or Section 4975 of the Code
assets of any "plan" as defined in Section 3(3) of ERISA or Section 4975 of the
Code and the rights and interests of such Lender in and under the Loan Documents
shall not constitute such "plan assets" under ERISA.
9.13. NONRELIANCE. Each Lender hereby represents that it is not relying on
or looking to any margin stock (as defined in Regulation U) as collateral in the
extension or maintenance of the credit provided for herein.
9.14. DISCLOSURE. The Borrower and each Lender, including the LC Issuer,
hereby acknowledge and agree that each Lender and/or its Affiliates from time to
time may hold investments in, make other loans to or have other relationships
with the Borrower and its Affiliates.
9.15. PERFORMANCE OF OBLIGATIONS. Subject to the terms of the Intercreditor
Agreement, the Borrower agrees that the Collateral Agent or the Administrative
Agent may, but shall have no obligation to (i) after the occurrence and during
the continuance of an Event of Default, pay or discharge taxes, liens, security
interests or other encumbrances levied or placed on or threatened against any
Collateral and (ii) after the occurrence and during the continuance of an Event
of Default make any other payment or perform any act required of the Borrower
under any Loan Document or take any other action which the Collateral Agent or
the Administrative Agent in its discretion deems necessary or desirable to
protect or preserve the Collateral, including, without limitation, any action to
(x) effect any repairs or obtain any insurance called for by the terms of any of
the Loan Documents and to pay all or any part of the premiums therefor and the
costs thereof and (y) pay any rents payable by the Borrower which are more than
thirty (30) days past due, or as to which the landlord has given notice of
termination, under any lease. The Administrative Agent shall use its best
efforts to give or cause the Collateral Agent to give the Borrower notice of any
action taken under this Section 9.15 prior to the taking of such action or
promptly thereafter provided the failure to give such notice shall not affect
the Borrower's obligations in respect thereof. The Borrower agrees to pay the
Administrative Agent, upon demand, the principal amount of all funds advanced by
the Administrative Agent under this Section 9.15 together with interest thereon
at the rate from time to time applicable to Floating Rate Loans from the date of
such advance until the outstanding principal balance thereof is paid in full. If
the Borrower fails to make payment in respect of any such advance under this
Section 9.15 within one (1) Business Day after the date the Borrower receives
written demand therefor from the Administrative Agent, the Administrative Agent
shall promptly notify each Lender and each Lender agrees that it shall thereupon
make available to the Administrative Agent, in Dollars in immediately available
funds, the amount equal to such Lender's Pro Rata Share of such advance. If such
funds are not made available to the Administrative Agent by such Lender within
one (1) Business Day after the Administrative Agent's demand therefor, the
Administrative Agent will be entitled to recover any such amount from such
Lender together with interest thereon at the Federal Funds Effective Rate for
each day during the period commencing on the date of such demand and ending on
the date such amount is received. The
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failure of any Lender to make available to the Administrative Agent its Pro Rata
Share of any such unreimbursed advance under this Section 9.15 shall neither
relieve any other Lender of its obligation hereunder to make available to the
Administrative Agent such other Lender's Pro Rata Share of such advance on the
date such payment is to be made nor increase the obligation of any other Lender
to make such payment to the Administrative Agent. All outstanding principal of,
and interest on, advances made under this Section 9.15 shall constitute
Obligations secured by the Collateral until paid in full by the Borrower.
9.16. USA PATRIOT ACT NOTIFICATION. The following notification is provided
to the Borrower pursuant to Section 326 of the USA Patriot Act of 2001, 31
U.S.C. Section 5318:
IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT. To help
the government of the United States of America fight the funding of terrorism
and money laundering activities, Federal law requires all financial institutions
to obtain, verify, and record information that identifies each Person that opens
an account, including any deposit account, treasury management account, loan,
other extension of credit, or other financial services product. Accordingly,
when the Borrower opens an account, the Administrative Agent and the Lenders
will ask for the Borrower's name, tax identification number, business address,
and other information that will allow the Administrative Agent and the Lenders
to identify the Borrower. The Administrative Agent and the Lenders may also ask
to see the Borrower's legal organizational documents or other identifying
documents.
9.17. SUBORDINATION OF INTERCOMPANY INDEBTEDNESS. The Borrower agrees
that any and all claims of the Borrower against any Guarantor with respect to
any "Intercompany Indebtedness" (as hereinafter defined) shall be subordinate
and subject in right of payment to the prior payment, in full and in cash, of
all Secured Obligations; provided that, and not in contravention of the
foregoing, unless an Event of Default has occurred and is continuing and the
Borrower receives from the Administrative Agent a payment blockage notice
pursuant to this Section 9.17 that has not been withdrawn, the Borrower may
make loans to and receive payments in the ordinary course with respect to such
Intercompany Indebtedness from the Guarantors, to the extent permitted by the
terms of this Agreement and the other Loan Documents. Notwithstanding any
right of the Borrower to ask, demand, xxx for, take or receive any payment
from the Guarantors, all rights, liens and security interests of the Borrower,
whether now or hereafter arising and howsoever existing, in any assets of any
such guarantor shall be and are subordinated to the rights of the Holders of
Secured Obligations in those assets. The Borrower shall not have any right to
possession of any such asset or to foreclose upon any such asset, whether by
judicial action or otherwise, unless and until all of the Secured Obligations
(other than obligations to pay fees and expenses with respect to which the
Borrower has not received an invoice, Rate Management Obligations, contingent
indemnity obligations, and other contingent obligations) shall have been fully
paid and satisfied (in cash). If all or any part of the assets of any such
guarantor, or the proceeds thereof, are subject to any distribution, division
or application to the creditors of such guarantor, whether partial or
complete, voluntary or involuntary, and whether by reason of liquidation,
bankruptcy, arrangement, receivership, assignment for the benefit of creditors
or any other similar action or proceeding, then, and in any such event (such
events being herein referred to as an "Insolvency Event"), any payment or
distribution of any kind or character, either in cash, securities or other
property, which shall be payable or deliverable upon or with respect to any
Indebtedness of any Guarantor, to the
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Borrower ("Intercompany Indebtedness") shall be paid or delivered directly to
the Administrative Agent, who shall remit it to the Collateral Agent if required
under the Intercreditor Agreement for application in accordance with the
Intercreditor Agreement, or, if not required under the Intercreditor Agreement,
for application to any of the Secured Obligations, due or to become due, until
such Secured Obligations (other than obligations to pay fees and expenses with
respect to which the Borrower has not received an invoice, Rate Management
Obligations, contingent indemnity obligations, and other contingent obligations)
shall have first been fully paid and satisfied (in cash). Should any payment,
distribution, security or instrument or proceeds thereof be received by the
Borrower upon or with respect to the Intercompany Indebtedness after an
Insolvency Event prior to the satisfaction of all of the Secured Obligations
(other than obligations to pay fees and expenses with respect to which the
Borrower has not received an invoice, Rate Management Obligations, contingent
indemnity obligations and other contingent obligations), the Borrower shall
receive and hold the same in trust, as trustee, for the benefit of the Holders
of Secured Obligations and the holders of obligations under the Senior Secured
Indenture Documents and shall forthwith deliver the same to the Administrative
Agent, who shall remit it to the Collateral Agent if required under the
Intercreditor Agreement for application in accordance with the Intercreditor
Agreement or, if not required under the Intercreditor Agreement, for application
to any of the Secured Obligations, in precisely the form received (except for
the endorsement or assignment of the Borrower where necessary), and, until so
delivered, the same shall be held in trust by the Borrower as the property of
the Administrative Agent or the Collateral Agent, as applicable. If the Borrower
fails to make any such endorsement or assignment to the Collateral Agent or the
Administrative Agent, the Collateral Agent or the Administrative Agent or any of
its officers or employees are irrevocably authorized to make the same. The
Borrower agrees that until the Secured Obligations (other than obligations to
pay fees and expenses with respect to which the Borrower has not received an
invoice, Rate Management Obligations, contingent indemnity obligations, and
other contingent obligations) have been paid in full (in cash) and satisfied,
the Borrower will not assign or transfer to any Person (other than the Agent)
any claim the Borrower has or may have against any Guarantor except as otherwise
permitted by the Loan Documents.
ARTICLE X
THE ADMINISTRATIVE AGENT
10.1. APPOINTMENT; NATURE OF RELATIONSHIP. Bank One, NA is hereby appointed
by each of the Lenders as its contractual representative (herein referred to as
the "Administrative Agent") hereunder and under each other Loan Document, and
each of the Lenders irrevocably authorizes the Administrative Agent to act as
the contractual representative of such Lender with the rights and duties
expressly set forth herein and in the other Loan Documents. The Administrative
Agent agrees to act as such contractual representative upon the express
conditions contained in this Article X. Notwithstanding the use of the defined
term "Administrative Agent," it is expressly understood and agreed that the
Administrative Agent shall not have any fiduciary responsibilities to any of the
Holders of Secured Obligations by reason of this Agreement or any other Loan
Document and that the Administrative Agent is merely acting as the contractual
representative of the Lenders with only those duties as are expressly set forth
in this Agreement and the other Loan Documents. In its capacity as the Lenders'
contractual representative, the Administrative Agent (i) does not hereby assume
any
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fiduciary duties to any of the Holders of Secured Obligations, (ii) is a
"representative" of the Holders of Secured Obligations within the meaning of the
term "secured party" as defined in the Illinois Uniform Commercial Code and
(iii) is acting as an independent contractor, the rights and duties of which are
limited to those expressly set forth in this Agreement and the other Loan
Documents. Each of the Lenders, for itself and on behalf of its Affiliates as
Holders of Secured Obligations, hereby agrees to assert no claim against the
Administrative Agent on any agency theory or any other theory of liability for
breach of fiduciary duty, all of which claims each Holder of Secured Obligations
hereby waives.
10.2. POWERS. The Administrative Agent shall have and may exercise such
powers under the Loan Documents as are specifically delegated to the
Administrative Agent by the terms of each thereof, together with such powers as
are reasonably incidental thereto. The Administrative Agent shall have no
implied duties or fiduciary duties to the Lenders, or any obligation to the
Lenders to take any action thereunder except any action specifically provided by
the Loan Documents to be taken by the Administrative Agent.
10.3. GENERAL IMMUNITY. Neither the Administrative Agent nor any of its
directors, officers, agents or employees shall be liable to the Borrower, or any
Lender or Holder of Secured Obligations for any action taken or omitted to be
taken by it or them hereunder or under any other Loan Document or in connection
herewith or therewith except to the extent such action or inaction is determined
in a final, non-appealable judgment by a court of competent jurisdiction to have
arisen from the gross negligence or willful misconduct of such Person.
10.4. NO RESPONSIBILITY FOR LOANS, RECITALS, ETC. Neither the
Administrative Agent nor any of its directors, officers, agents or employees
shall be responsible for or have any duty to ascertain, inquire into, or verify
(a) any statement, warranty or representation made in connection with any Loan
Document or any borrowing hereunder; (b) the performance or observance of any of
the covenants or agreements of any obligor under any Loan Document, including,
without limitation, any agreement by an obligor to furnish information directly
to each Lender; (c) the satisfaction of any condition specified in Article IV,
except receipt of items required to be delivered solely to the Administrative
Agent; (d) the existence or possible existence of any Event of Default or
Unmatured Event of Default; (e) the validity, enforceability, effectiveness,
sufficiency or genuineness of any Loan Document or any other instrument or
writing furnished in connection therewith; (f) the value, sufficiency, creation,
perfection or priority of any Lien in any Collateral; or (g) the financial
condition of the Borrower or any guarantor of any of the Obligations or of any
of the Borrower's or any such guarantor's respective Subsidiaries. The
Administrative Agent shall have no duty to disclose to the Lenders information
that is not required to be furnished by the Borrower to the Administrative Agent
at such time, but is voluntarily furnished by the Borrower to the Administrative
Agent (either in its capacity as Administrative Agent or in its individual
capacity).
10.5. ACTION ON INSTRUCTIONS OF LENDERS. The Administrative Agent shall in
all cases be fully protected in acting, or in refraining from acting, hereunder
and under any other Loan Document in accordance with written instructions signed
by the Required Lenders (or all of the Lenders in the event that and to the
extent that this Agreement expressly requires such), and such instructions and
any action taken or failure to act pursuant thereto shall be binding on all of
the Lenders. The Lenders hereby acknowledge that the Administrative Agent shall
be under no duty
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to take any discretionary action permitted to be taken by it pursuant to the
provisions of this Agreement or any other Loan Document unless it shall be
requested in writing to do so by the Required Lenders (or all of the Lenders in
the event that and to the extent that this Agreement expressly requires such).
The Administrative Agent shall be fully justified in failing or refusing to take
any action hereunder and under any other Loan Document unless it shall first be
indemnified to its satisfaction by the Lenders pro rata against any and all
liability, cost and expense that it may incur by reason of taking or continuing
to take any such action.
10.6. EMPLOYMENT OF AGENTS AND COUNSEL. The Administrative Agent may
execute any of its duties as Administrative Agent hereunder and under any other
Loan Document by or through employees, agents, and attorneys-in-fact and shall
not be answerable to the Lenders, except as to money or securities received by
it or its authorized agents, for the default or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. The Administrative Agent
shall be entitled to advice of counsel concerning the contractual arrangement
between the Administrative Agent and the Lenders and all matters pertaining to
the Administrative Agent's duties hereunder and under any other Loan Document.
10.7. RELIANCE ON DOCUMENTS; COUNSEL. The Administrative Agent shall be
entitled to rely upon any Note, notice, consent, certificate, affidavit, letter,
telegram, facsimile, telex, electronic mail message, statement, paper or
document believed by it to be genuine and correct and to have been signed or
sent by the proper person or persons, and, in respect to legal matters, upon the
opinion of counsel selected by the Administrative Agent, which counsel may be
employees of the Administrative Agent. For purposes of determining compliance
with the conditions specified in Sections 4.1 and 4.2, each Lender that has
signed this Agreement shall be deemed to have consented to, approved or accepted
or to be satisfied with, each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to a Lender unless the
Administrative Agent shall have received notice from such Lender prior to the
applicable date specifying its objection thereto.
10.8. ADMINISTRATIVE AGENT'S REIMBURSEMENT AND INDEMNIFICATION. The Lenders
agree to reimburse and indemnify the Administrative Agent ratably in proportion
to the Lenders' Pro Rata Shares (i) for any amounts not reimbursed by the
Borrower for which the Administrative Agent is entitled to reimbursement by the
Borrower under the Loan Documents, (ii) for any other expenses incurred by the
Administrative Agent on behalf of the Lenders, in connection with the
preparation, execution, delivery, administration and enforcement of the Loan
Documents (including, without limitation, for any expenses incurred by the
Administrative Agent in connection with any dispute between the Administrative
Agent and any Lender or between two or more of the Lenders) and (iii) for any
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 the Loan Documents or any other document delivered
in connection therewith or the transactions contemplated thereby (including,
without limitation, for any such amounts incurred by or asserted against the
Administrative Agent in connection with any dispute between the Administrative
Agent and any Lender or between two or more of the Lenders), or the enforcement
of any of the terms of the Loan Documents or of any such other documents,
provided that (i) no Lender shall be liable for any of the foregoing to the
extent any of the foregoing is found in a final, non-appealable judgment by a
court of competent jurisdiction to
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have resulted from the gross negligence or willful misconduct of the
Administrative Agent and (ii) any indemnification required pursuant to Section
3.5(vii) shall, notwithstanding the provisions of this Section 10.8, be paid by
the relevant Lender in accordance with the provisions thereof. The obligations
of the Lenders under this Section 10.8 shall survive payment of the Secured
Obligations and termination of this Agreement.
10.9. NOTICE OF EVENT OF DEFAULT. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Event of Default or
Unmatured Event of Default hereunder unless the Administrative Agent has
received written notice from a Lender or the Borrower referring to this
Agreement describing such Event of Default or Unmatured Event of Default and
stating that such notice is a "notice of default". In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall give
prompt notice thereof to the Lenders.
10.10.RIGHTS AS A LENDER. In the event the Administrative Agent is a
Lender, the Administrative Agent shall have the same rights and powers hereunder
and under any other Loan Document with respect to its Revolving Loan Commitment
and its Credit Extensions as any Lender and may exercise the same as though it
were not the Administrative Agent, and the term "Lender" or "Lenders" shall, at
any time when the Administrative Agent is a Lender, unless the context otherwise
indicates, include the Administrative Agent in its individual capacity. The
Administrative Agent and its Affiliates may accept deposits from, lend money to,
and generally engage in any kind of trust, debt, equity or other transaction, in
addition to those contemplated by this Agreement or any other Loan Document,
with the Borrower or any of its Subsidiaries in which the Borrower or such
Subsidiary is not restricted hereby from engaging with any other Person. The
Administrative Agent, in its individual capacity, is not obligated to remain a
Lender.
10.11. LENDER CREDIT DECISION. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent, the Arranger
or any other Lender and based on the financial statements prepared by the
Borrower and such other documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement and the
other Loan Documents. Each Lender also acknowledges that it will, independently
and without reliance upon the Administrative Agent, the Arranger or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement and the other Loan Documents.
10.12. SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may resign
at any time by giving written notice thereof to the Lenders and the Borrower,
such resignation to be effective upon the appointment of a successor
Administrative Agent or, if no successor Administrative Agent has been
appointed, forty-five (45) days after the retiring Administrative Agent gives
notice of its intention to resign. The Administrative Agent may be removed at
any time with or without cause by written notice received by the Administrative
Agent from the Required Lenders, such removal to be effective on the date
specified by the Required Lenders. Upon any such resignation or removal, the
Required Lenders shall have the right to appoint, on behalf of the Borrower and
the Lenders, a successor Administrative Agent reasonably acceptable to the
Borrower. If no successor Administrative Agent shall have been so appointed by
the
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Required Lenders within thirty (30) days after the resigning Administrative
Agent's giving notice of its intention to resign, then the resigning
Administrative Agent may appoint, on behalf of the Borrower and the Lenders, a
successor Administrative Agent reasonably acceptable to the Borrower.
Notwithstanding the previous sentence, the Administrative Agent may at any time
without the consent of the Borrower or any Lender, appoint any of its Affiliates
which is a commercial bank as a successor Administrative Agent hereunder. If the
Administrative Agent has resigned or been removed and no successor
Administrative Agent has been appointed, the Lenders may perform all the duties
of the Administrative Agent hereunder and the Borrower shall make all payments
in respect of the Obligations to the applicable Lender and for all other
purposes shall deal directly with the Lenders. No successor Administrative Agent
shall be deemed to be appointed hereunder until such successor Administrative
Agent has accepted the appointment. Any such successor Administrative Agent
shall be a commercial bank having capital and retained earnings of at least
$100,000,000. 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 resigning or removed Administrative Agent. Upon the
effectiveness of the resignation or removal of the Administrative Agent, the
resigning or removed Administrative Agent shall be discharged from its duties
and obligations hereunder and under the Loan Documents. After the effectiveness
of the resignation or removal of an Administrative Agent, the provisions of this
Article X shall continue in effect for the benefit of such Administrative Agent
in respect of any actions taken or omitted to be taken by it while it was acting
as the Administrative Agent hereunder and under the other Loan Documents. In the
event that there is a successor to the Administrative Agent by merger, or the
Administrative Agent assigns its duties and obligations to an Affiliate pursuant
to this Section 10.12, then the term "Prime Rate" as used in this Agreement
shall mean the prime rate, base rate or other analogous rate of the new
Administrative Agent.
10.13. ADMINISTRATIVE AGENT AND ARRANGER FEES. The Borrower agrees to pay
to the Administrative Agent and the Arranger, for their respective accounts, the
fees agreed to by the Borrower, the Administrative Agent and the Arranger
pursuant to that certain letter agreement dated January 12, 2004, or as
otherwise agreed from time to time.
10.14. DELEGATION TO AFFILIATES. The Borrower and the Lenders agree that
the Administrative Agent may delegate any of its duties under this Agreement to
any of its Affiliates. Any such Affiliate (and such Affiliate's directors,
officers, agents and employees) which performs duties in connection with this
Agreement shall be entitled to the same benefits of the indemnification, waiver
and other protective provisions to which the Administrative Agent is entitled
under Articles IX and X.
10.15. INTENTIONALLY OMITTED
10.16. COLLATERAL DOCUMENTS. (a) Each Lender authorizes the Administrative
Agent and the Collateral Agent to enter into, on behalf of each such Lender, the
Intercreditor Agreement and each of the Collateral Documents to which it is a
party and to take all action contemplated by such documents. Each Lender agrees
that no Holder of Secured Obligations (other than the Administrative Agent)
shall have the right individually to seek to realize upon the security granted
by any Collateral Document, it being understood and agreed that such rights and
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remedies may be exercised solely by the Administrative Agent for the benefit of
the Holders of Secured Obligations or the Collateral Agent for the benefit of
the Holders of Secured Obligations and the Borrower's other creditors subject to
the Intercreditor Agreement and upon the terms of the Collateral Documents.
(b) In the event that any Collateral is hereafter pledged by any Person as
collateral security for the Secured Obligations, the Administrative Agent is
hereby authorized to execute and deliver on behalf of the Holders of Secured
Obligations any Loan Documents necessary or appropriate to grant and perfect a
Lien on such Collateral in favor of the Collateral Agent; provided, however,
that any such Person also shall have pledged and granted a Lien in such
Collateral on an equal and ratable basis for the benefit of the holders of the
obligations outstanding under the Senior Secured Indenture Documents.
(c) Subject to the Intercreditor Agreement, the Lenders hereby authorize
the Administrative Agent, at its option and in its discretion, to direct the
Collateral Agent to release any Lien granted to or held by the Collateral Agent
upon any Collateral (i) upon termination of the Revolving Loan Commitments, Term
Loan Commitments and payment and satisfaction of all of the Obligations (other
than obligations to pay fees and expenses with respect to which the Borrower has
not received an invoice, contingent indemnity obligations, and Rate Management
Obligations) at any time arising under or in respect of this Agreement or the
Loan Documents or the transactions contemplated hereby or thereby; (ii) as
permitted by, but only in accordance with, the terms of the applicable Loan
Document; or (iii) if approved, authorized or ratified in writing by the
Required Lenders, unless such release is required to be approved by all of the
Lenders hereunder. Upon request by the Administrative Agent at any time, the
Lenders will confirm in writing the Administrative Agent's authority to direct
the Collateral Agent to release particular types or items of Collateral pursuant
to this Section 10.16. The Lenders confirm that the Collateral Agent may take
actions described in this Section 10.16(c) so long as such actions are permitted
under and comply with the terms of the Intercreditor Agreement.
(d) Subject to the terms of the Intercreditor Agreement, upon any sale or
transfer of assets constituting Collateral which is permitted pursuant to the
terms of any Loan Document, or consented to in writing by the Required Lenders
or all of the Lenders, as applicable, the security interest in such Collateral
shall be automatically released. In connection with any such release, the
Administrative Agent shall (and is hereby irrevocably authorized by the Lenders
to) direct the Collateral Agent to execute such documents as may be necessary to
evidence the release of the Liens granted to the Collateral Agent for the
benefit of the Holders of Secured Obligations herein or pursuant hereto upon the
Collateral that was sold or transferred; provided, however, that (i) the
Administrative Agent shall not be required to direct the Collateral Agent to
execute any such document on terms which, in the Administrative Agent's opinion,
would expose the Administrative Agent to liability or create any obligation or
entail any consequence other than the release of such Liens without recourse or
warranty, and (ii) such release shall not in any manner discharge, affect or
impair the Secured Obligations or any Liens upon (or obligations of the Borrower
or any Subsidiary in respect of) all interests retained by the Borrower or any
Subsidiary, including (without limitation) the proceeds of the sale, all of
which shall continue to constitute part of the Collateral.
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ARTICLE XI
SETOFF; RATABLE PAYMENTS
11.1. SETOFF. In addition to, and without limitation of, any rights of the
Lenders under applicable law, if the Borrower becomes insolvent, however
evidenced, or any other Event of Default occurs, any and all deposits (including
all account balances, whether provisional or final and whether or not collected
or available) and any other Indebtedness at any time held or owing by any Lender
or any Affiliate of any Lender to or for the credit or account of the Borrower
may be offset and applied toward the payment of the Secured Obligations owing to
such Lender, whether or not the Secured Obligations, or any part thereof, shall
then be due.
11.2. RATABLE PAYMENTS. If any Lender, whether by setoff or otherwise, has
payment made to it upon its Outstanding Revolving Credit Exposure or its Term
Loans (other than payments received pursuant to Section 3.1, 3.2, 3.4 or 3.5) in
a greater proportion than that received by any other Lender, such Lender agrees,
promptly upon demand, to purchase a participation in the Aggregate Outstanding
Revolving Credit Exposure and Term Loans held by the other Lenders so that after
such purchase each Lender will hold its Pro Rata Share, Revolving Loan Pro Rata
Share and Term Loan Pro Rata Share. If any Lender, whether in connection with
setoff or amounts which might be subject to setoff or otherwise, receives
collateral or other protection for its Obligations or such amounts which may be
subject to setoff, such Lender agrees, promptly upon demand, to take such action
necessary such that all Lenders share in the benefits of such collateral ratably
in proportion to their respective Pro Rata Shares. In case any such payment is
disturbed by legal process, or otherwise, appropriate further adjustments shall
be made.
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1. SUCCESSORS AND ASSIGNS. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower, the
Administrative Agent and the Lenders and their respective successors and assigns
permitted hereby, except that (i) the Borrower shall not have the right to
assign its rights or obligations under the Loan Documents without the prior
written consent of each Lender, (ii) any assignment by any Lender must be made
in compliance with Section 12.3, and (iii) any transfer by Participation must be
made in compliance with Section 12.2. Any attempted assignment or transfer by
any party not made in compliance with this Section 12.1 shall be null and void,
unless such attempted assignment or transfer is treated as a participation in
accordance with Section 12.3.2. The parties to this Agreement acknowledge that
clause (ii) of this Section 12.1 relates only to absolute assignments and this
Section 12.1 does not prohibit assignments creating security interests,
including, without limitation, (x) any pledge or assignment by any Lender of all
or any portion of its rights under this Agreement and any Note to a Federal
Reserve Bank, (y) in the case of a Lender which is a Fund, any pledge or
assignment of all or any portion of its rights under this Agreement and any Note
to its trustee in support of its obligations to its trustee or (z) any pledge or
assignment by any Lender of all or any portion of its rights under this
Agreement and any Note to direct or indirect contractual counterparties in swap
agreements relating to the Loans; provided, however,
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that (i) no such pledge or assignment creating a security interest shall release
the transferor Lender from its obligations hereunder or substitute any such
pledgee or assignee for such Lender as a party hereto, (ii) the Lender making
such pledge or assignment shall retain the sole right to approve, without
consent of any pledgee or assignee, any amendment, modification or waiver of any
provisions of the Loan Documents, and (iii) the Borrower shall continue to deal
solely and directly with such Lenders in connection such Lenders' rights and
obligations under the Loan Documents unless and until the parties thereto have
complied with the provisions of Section 12.3. The Administrative Agent may treat
the Person which made any Loan or which holds any Note as the owner thereof for
all purposes hereof unless and until such Person complies with Section 12.3;
provided, however, that the Administrative Agent may in its discretion (but
shall not be required to) follow instructions from the Person which made any
Loan or which holds any Note to direct payments relating to such Loan or Note to
another Person. Any assignee of the rights to any Loan or any Note agrees by
acceptance of such assignment to be bound by all the terms and provisions of the
Loan Documents. Any request, authority or consent of any Person, who at the time
of making such request or giving such authority or consent is the owner of the
rights to any Loan (whether or not a Note has been issued in evidence thereof),
shall be conclusive and binding on any subsequent holder or assignee of the
rights to such Loan.
12.2. PARTICIPATIONS.
12.2.1 PERMITTED PARTICIPANTS; EFFECT. Any Lender may at any time sell
to one or more banks or other entities ("Participants") participating
interests in any Outstanding Revolving Credit Exposure of such Lender, any
Term Loans of such Lender, any Note held by such Lender, any Revolving Loan
Commitment of such Lender or any other interest of such Lender under the
Loan Documents. In the event of any such sale by a Lender of participating
interests to a Participant, such Lender's obligations under the Loan
Documents shall remain unchanged, such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, such Lender shall remain the owner of its Outstanding
Revolving Credit Exposure and Term Loans and the holder of any Note issued
to it in evidence thereof for all purposes under the Loan Documents, all
amounts payable by the Borrower under this Agreement shall be determined as
if such Lender had not sold such participating interests, and the Borrower
and the Administrative Agent shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations
under the Loan Documents.
12.2.2 VOTING RIGHTS. Each Lender shall retain the sole right to
approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents other than
any amendment, modification or waiver with respect to any Credit Extension
or Revolving Loan Commitment in which such Participant has an interest
which would require consent of all of the Lenders pursuant to the terms of
Section 8.2.
12.2.3 BENEFIT OF CERTAIN PROVISIONS. To the extent permitted by law,
the Borrower agrees that each Participant shall be deemed to have the right
of setoff provided in Section 11.1 in respect of its participating interest
in amounts owing under the Loan Documents to the same extent as if the
amount of its participating interest were owing directly to it as a Lender
under the Loan Documents, provided that each Lender shall
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retain the right of setoff provided in Section 11.1 with respect to the
amount of participating interests sold to each Participant. The Lenders
agree to share with each Participant, and each Participant, by exercising
the right of setoff provided in Section 11.1, agrees to share with each
Lender, any amount received pursuant to the exercise of its right of
setoff, such amounts to be shared in accordance with Section 11.2 as if
each Participant were a Lender. The Borrower further agrees that each
Participant shall be entitled to the benefits of Sections 3.1, 3.2, 3.4 and
3.5 to the same extent as if it were a Lender and had acquired its interest
by assignment pursuant to Section 12.3, provided that (i) a Participant
shall not be entitled to receive any greater payment under Section 3.1, 3.2
or 3.5 than the Lender who sold the participating interest to such
Participant would have received had it retained such interest for its own
account, unless the sale of such interest to such Participant is made with
the prior written consent of the Borrower, and (ii) any Participant not
incorporated under the laws of the United States of America or any State
thereof agrees to comply with the provisions of Section 3.5 to the same
extent as if it were a Lender.
12.3. ASSIGNMENTS.
12.3.1 PERMITTED ASSIGNMENTS. Any Lender may at any time assign to one
or more banks or other entities ("Purchasers") all or any part of its
rights and obligations under the Loan Documents. Such assignment shall be
evidenced by an agreement substantially in the form of Exhibit C or in such
other form as may be agreed to by the parties thereto (each such agreement,
an "Assignment Agreement"). Each such assignment with respect to a
Purchaser which is not a Lender or an Affiliate of a Lender or an Approved
Fund shall either be in an amount equal to the entire applicable Revolving
Loan Commitment, Term Loan Commitment and Outstanding Revolving Credit
Exposure and/or Term Loans, as applicable, of the assigning Lender or
(unless each of the Borrower and the Administrative Agent otherwise
consents) be in an aggregate amount not less than $5,000,000. The amount of
the assignment shall be based on the Revolving Loan Commitment, Term Loan
Commitment, Outstanding Revolving Credit Exposure (if the Revolving Loan
Commitment has been terminated) and/or outstanding Term Loans (if the Term
Loan Commitment has been terminated), as applicable, subject to the
assignment, determined as of the date of such assignment or as of the
"Trade Date," if the "Trade Date" is specified in the Assignment Agreement.
12.3.2 CONSENTS. The consent of the Borrower shall be required prior
to an assignment becoming effective unless the Purchaser is a Lender, an
Affiliate of a Lender or an Approved Fund; provided that the consent of the
Borrower shall not be required if (i) an Event of Default or an Unmatured
Event of Default has occurred and is continuing or (ii) if such assignment
is in connection with the physical settlement of any Lender's obligations
to direct or indirect contractual counterparties in swap agreements
relating to the Loans. The consent of the Administrative Agent shall be
required prior to an assignment becoming effective unless the Purchaser is
a Lender, an Affiliate of a Lender or an Approved Fund. Any consent
required under this Section 12.3.2 shall not be unreasonably withheld or
delayed.
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12.3.3 EFFECT; EFFECTIVE DATE. Upon (i) delivery to the Administrative
Agent of an Assignment Agreement, together with any consents required by
Sections 12.3.1 and 12.3.2, and (ii) payment of a $3,500 fee to the
Administrative Agent for processing such assignment (unless such fee is
waived by the Administrative Agent), such assignment shall become effective
on the effective date specified in such assignment. The Assignment
Agreement shall contain a representation by the Purchaser to the effect
that none of the consideration used to make the purchase of the Revolving
Loan Commitment and Outstanding Revolving Credit Exposure and/or Term
Loans, as applicable, under the applicable Assignment Agreement constitutes
"plan assets" as defined under ERISA or Section 4975 of the Code and that
the rights and interests of the Purchaser in and under the Loan Documents
will not be "plan assets" under ERISA or Section 4975 of the Code. On and
after the effective date of such assignment, such Purchaser shall for all
purposes be a Lender party to this Agreement and any other Loan Document
executed by or on behalf of the Lenders and shall have all the rights and
obligations of a Lender under the Loan Documents, to the same extent as if
it were an original party thereto, and the transferor Lender shall be
released with respect to the Revolving Loan Commitment and Outstanding
Revolving Credit Exposure and/or Term Loans, as applicable, assigned to
such Purchaser without any further consent or action by the Borrower, the
Lenders or the Administrative Agent. In the case of an assignment covering
all of the assigning Lender's rights and obligations under this Agreement,
such Lender shall cease to be a Lender hereunder but shall continue to be
entitled to the benefits of, and subject to, those provisions of this
Agreement and the other Loan Documents which survive payment of the
Obligations and termination of the applicable agreement. Any assignment or
transfer by a Lender of rights or obligations under this Agreement that
does not comply with this Section 12.3 shall be treated for purposes of
this Agreement as a sale by such Lender of a participation in such rights
and obligations in accordance with Section 12.2. Upon the consummation of
any assignment to a Purchaser pursuant to this Section 12.3.3, the
transferor Lender, the Administrative Agent and the Borrower shall, if the
transferor Lender or the Purchaser desires that its Loans be evidenced by
Notes, make appropriate arrangements so that new Notes or, as appropriate,
replacement Notes are issued to such transferor Lender, if applicable, and
new Notes or, as appropriate, replacement Notes, are issued to such
Purchaser, in each case in principal amounts reflecting their respective
Revolving Loan Commitments (or, if the Revolving Loan Termination Date has
occurred, their respective Outstanding Revolving Credit Exposure) or Term
Loan Commitments (or, if the Term Loan Commitments have been terminated,
outstanding Term Loans), as applicable, as adjusted pursuant to such
assignment.
12.3.4 REGISTER. The Administrative Agent, acting solely for this
purpose as an agent of the Borrower, shall maintain at one of its offices
in Chicago, Illinois a copy of each Assignment Agreement delivered to it
and a register for the recordation of the names and addresses of the
Lenders, and the Revolving Loan Commitments of, and principal amounts of
the Credit Extensions owing to, each Lender pursuant to the terms hereof
from time to time (the "Register"). The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent and the Lenders may
treat each Person whose name is recorded in the Register pursuant to the
terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The
98
Register shall be available for inspection by the Borrower at any
reasonable time and from time to time upon reasonable prior notice.
12.4. DISSEMINATION OF INFORMATION. The Borrower authorizes each Lender to
disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "Transferee") and any
prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of the Borrower and its Subsidiaries, including
without limitation any information contained in any Reports; provided that each
Transferee and prospective Transferee agrees to be bound by Section 9.11 of this
Agreement.
12.5. TAX TREATMENT. If any interest in any Loan Document is transferred to
any Transferee which is not incorporated under the laws of the United States or
any State thereof, the transferor Lender shall cause such Transferee,
concurrently with the effectiveness of such transfer, to comply with the
provisions of Section 3.5(iv).
ARTICLE XIII
NOTICES
13.1. NOTICES; EFFECTIVENESS; ELECTRONIC COMMUNICATION
13.1.1 NOTICES GENERALLY. Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in Section 13.1.2 below), all notices and other communications
provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent
by telecopier as follows:
(i) if to the Borrower, at its address or telecopier number set
forth on the signature page hereof;
(ii) if to the Administrative Agent, at its address or telecopier
number set forth on the signature page hereof;
(iii) if to the LC Issuer, at its address or telecopier number set
forth on the signature page hereof;
(iv) if to a Lender, to it at its address (or telecopier number)
set forth in its Administrative Questionnaire.
Notices sent by hand or overnight courier service, or mailed by certified
or registered mail, shall be deemed to have been given when received;
notices sent by telecopier shall be deemed to have been given when sent
(except that, if not given during normal business hours for the recipient,
shall be deemed to have been given at the opening of business on the next
Business Day for the recipient). Notices delivered through electronic
communications to the extent provided in Section 13.1.2 below, shall be
effective as provided in said Section 13.1.2.
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13.1.2 ELECTRONIC COMMUNICATIONS. Notices and other communications to
the Lenders and the LC Issuer hereunder may be delivered or furnished by
electronic communication (including e-mail and internet or intranet
websites) pursuant to procedures approved by the Administrative Agent or as
otherwise determined by the Administrative Agent; provided that the
foregoing shall not apply to notices to any Lender or the LC Issuer
pursuant to Article II if such Lender or the LC Issuer, as applicable, has
notified the Administrative Agent that it is incapable of receiving notices
under such Article by electronic communication. The Administrative Agent or
the Borrower may, in its respective discretion, agree to accept notices and
other communications to it hereunder by electronic communications pursuant
to procedures approved by it or as it otherwise determines, provided that
such determination or approval may be limited to particular notices or
communications. Unless the Administrative Agent otherwise prescribes, (i)
notices and other communications sent to an e-mail address shall be deemed
received upon the sender's receipt of an acknowledgement from the intended
recipient (such as by the "return receipt requested" function, as
available, return e-mail or other written acknowledgement), provided that
if such notice or other communication is not given during the normal
business hours of the recipient, such notice or communication shall be
deemed to have been given at the opening of business on the next Business
Day for the recipient, and (ii) notices or communications posted to an
Internet or intranet website shall be deemed received upon the deemed
receipt by the intended recipient at its e-mail address as described in the
foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.
13.2. CHANGE OF ADDRESS, ETC. Any party hereto may change its address or
telecopier number for notices and other communications hereunder by notice to
the other parties hereto.
ARTICLE XIV
COUNTERPARTS; INTEGRATION; EFFECTIVENESS; ELECTRONIC EXECUTION
14.1. COUNTERPARTS; EFFECTIVENESS. This Agreement may be executed in
counterparts (and by different parties hereto in different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract. Except as provided in Article IV, this
Agreement shall become effective when it shall have been executed by the
Borrower, the Administrative Agent, the LC Issuer and the Lenders and when the
Administrative Agent shall have received counterparts hereof which, when taken
together, bear the signatures of each of such parties hereto, and thereafter
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns. Delivery of an executed counterpart of a
signature page of this Agreement by telecopy shall be effective as delivery of a
manually executed counterpart of this Agreement.
14.2. ELECTRONIC EXECUTION OF ASSIGNMENTS. The words "execution," "signed,"
"signature," and words of like import in any Assignment Agreement shall be
deemed to include electronic signatures or the keeping of records in electronic
form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any
100
applicable law, including the Federal Electronic Signatures in Global and
National Commerce Act, or any other state laws based on the Uniform Electronic
Transactions Act.
ARTICLE XIV
CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
15.1 CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS (INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW BUT
OTHERWISE WITHOUT REGARD TO CONFLICTS OF LAW PROVISIONS OR PRINCIPLES) OF THE
STATE OF NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL
BANKS.
15.2 CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY SUBMITS TO
THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK STATE
COURT SITTING IN THE BOROUGH OF MANHATTAN IN NEW YORK, NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER
HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES
ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM. ANY JUDICIAL PROCEEDING BY THE BORROWER AGAINST THE
ADMINISTRATIVE AGENT, THE LC ISSUER, ANY LENDER OR ANY HOLDER OF SECURED
OBLIGATIONS OR ANY AFFILIATE OF THE ADMINISTRATIVE AGENT, THE LC ISSUER, ANY
LENDER OR ANY HOLDER OF SECURED OBLIGATIONS INVOLVING, DIRECTLY OR INDIRECTLY,
ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN
DOCUMENT MAY BE BROUGHT IN A COURT IN THE BOROUGH OF MANHATTAN IN NEW YORK, NEW
YORK. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE ADMINISTRATIVE AGENT, THE LC
ISSUER, ANY LENDER OR ANY HOLDER OF SECURED OBLIGATIONS TO BRING PROCEEDINGS
AGAINST THE BORROWER OR LIMIT THE RIGHTS OF THE BORROWER TO BRING PROCEEDINGS
AGAINST SUCH OTHER PARTY IN THE COURTS OF ANY OTHER JURISDICTION.
15.3 WAIVER OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT, THE LC
ISSUER, EACH LENDER, AND EACH OTHER HOLDER OF SECURED OBLIGATIONS HEREBY WAIVE
TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT
OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP
ESTABLISHED THEREUNDER.
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The remainder of this page is intentionally blank.
102
IN WITNESS WHEREOF, the Borrower, the Lenders, the LC Issuer and the
Administrative Agent have executed this Agreement as of the date first above
written.
ROTO-ROOTER, INC.
as the Borrower
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Print Name: Xxxxx X. Xxxxxx
Title: Secretary
2600 Chemed Center
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. X'Xxxxx
Telephone: (000) 000-0000
FAX: (000) 000-0000
BANK ONE, NA (MAIN OFFICE
CHICAGO), as a Lender, as Swing Line
Lender, as LC Issuer, and as Administrative
Agent
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------
Print Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
0000 Xxxxxxxxxx Xxxx
XX0-0000
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
COMMITMENT SCHEDULE
REVOLVING LOAN COMMITMENTS
Amount of Revolving Loan % of Aggregate Revolving
Lender Commitment Loan Commitment
------ ------------------------ --------------------------
Bank One, NA $100,000,000.00 100%
TOTAL $100,000,000.00 100%
TERM LOAN COMMITMENTS ON FOLLOWING PAGE
TERM LOAN COMMITMENTS
Amount of Term Loan % of Aggregate Term Loan
Lender Commitment Loan Commitment
------ ------------------- ------------------------
Bank One, NA $35,000,000.00 100%
TOTAL $35,000,000.00 100%
PRICING SCHEDULE
APPLICABLE LEVEL I LEVEL II LEVEL III XXXXX XX XXXXX X XXXXX XX XXXXX XXX
MARGIN STATUS STATUS STATUS STATUS STATUS STATUS STATUS
------------------------------------------------------------------------------------------------------------
Eurodollar 3.75% 3.50% 3.25% 3.00% 2.75% 2.50% 2.00%
Rate for
Revolving
Loans
------------------------------------------------------------------------------------------------------------
Eurodollar 4.00% 3.75% 3.50% 3.25% 3.00% 2.75% 2.25%
Rate for Term
Loans
------------------------------------------------------------------------------------------------------------
Floating Rate 2.50% 2.25% 2.00% 1.75% 1.50% 1.25% 0.75%
for Revolving
Loans and
Term Loans
------------------------------------------------------------------------------------------------------------
APPLICABLE LEVEL I LEVEL II LEVEL III XXXXX XX XXXXX X XXXXX XX XXXXX XXX
MARGIN STATUS STATUS STATUS STATUS STATUS STATUS STATUS
------------------------------------------------------------------------------------------------------------
Commitment Fee 0.50% 0.50% 0.50% 0.50% 0.50% 0.375% 0.375%
For the purposes of this Schedule, the following terms have the following
meanings, subject to the final paragraph of this Schedule:
"FINANCIALS" means the annual or quarterly financial statements of the
Borrower delivered pursuant to Section 6.1.
"LEVEL I STATUS" exists at any date if, as of the last day of the fiscal
quarter of the Borrower referred to in the most recent Financials, the Leverage
Ratio is equal to or greater than 5.00 to 1.00.
"LEVEL II STATUS" exists at any date if, as of the last day of the fiscal
quarter of the Borrower referred to in the most recent Financials, (i) the
Borrower has not qualified for Level I Status and (ii) the Leverage Ratio is
equal to or greater than 4.75 to 1.00 but less than 5.00 to 1.00.
"LEVEL III STATUS" exists at any date if, as of the last day of the fiscal
quarter of the Borrower referred to in the most recent Financials, (i) the
Borrower has not qualified for Level I Status or Level II Status and (ii) the
Leverage Ratio is equal to or greater than 4.00 to 1.00 but less than 4.75 to
1.00.
2
"LEVEL IV STATUS" exists at any date if, as of the last day of the fiscal
quarter of the Borrower referred to in the most recent Financials, (i) the
Borrower has not qualified for Level I Status, Level II Status or Level III
Status and (ii) the Leverage Ratio is equal to or greater than 3.50 to 1.00 but
less than 4.00 to 1.00.
"LEVEL V STATUS" exists at any date if, as of the last day of the fiscal
quarter of the Borrower referred to in the most recent Financials, (i) the
Borrower has not qualified for Level I Status, Level II Status, Level III Status
or Level IV Status and (ii) the Leverage Ratio is equal to or greater than 3.00
to 1.00 but less than 3.50 to 1.00.
"LEVEL VI STATUS" exists at any date if, as of the last day of the fiscal
quarter of the Borrower referred to in the most recent Financials, (i) the
Borrower has not qualified for Level I Status, Level II Status, Level III
Status, Level IV Status or Level V Status and (ii) the Leverage Ratio is equal
to or greater than 2.50 to 1.00 but less than 3.00 to 1.00.
"LEVEL VII STATUS" exists at any date if, as of the last day of the fiscal
quarter of the Borrower referred to in the most recent Financials, the Borrower
has not qualified for Level I Status, Level II Status, Level III Status, Level
IV Status, Level V Status, or Level VI Status.
"STATUS" means either Level I Status, Level II Status, Level III Status,
Level IV Status, Level V Status, Level VI Status or Level VII Status.
The Applicable Margin and Applicable Fee Rate shall be determined in
accordance with foregoing table based on the Borrower's Status as reflected in
the then most recent Financials. Adjustments, if any, to the Applicable Margin
or Applicable Fee Rate shall be effective five Business Days after the
Administrative Agent has received the applicable Financials. If the Borrower
fails to deliver the Financials to the Administrative Agent at the time required
pursuant to Section 6.1, then the Applicable Margin and Applicable Fee Rate
shall be the highest Applicable Margin and Applicable Fee Rate set forth in the
foregoing table until five days after such Financials are so delivered.
Notwithstanding the foregoing, Level III Status shall be in effect until
the Administrative Agent receives the Financials for the Borrower's fiscal
quarter ending on June 30, 2004 and adjustments to the Applicable Margin and
Applicable Fee Rate shall thereafter be effected in accordance with the
preceding paragraph.
3
